Mahendra Bhushan, J.
1. This is a writ petition, which was initially moved by one Ram Pershad Rajgaria, who died during the pendency of the writ petition, and is now being represented by the legal representatives. It seeks quashing of the order dated October 4, 1971, of the Government of India, Ministry of Steel and Mines, Department of Mines, passed under Rule 54 of the Mineral Concession Rules, 1960, (hereinafter referred to as the Rules).
2. The question involved in this writ petition is, as to whether the State Government has a right to reserve the mineral for exploitation by itself or for any other purpose. To decide this controversy, the facts need be stated so far as they are relevant for the present purposes. They are as follows.
3. Laxmi Narain Pandey (respondent 3) made an application on 2-1-1967, for the grant of prospecting licence in respect of 640 Acres or one square mile out of the area situated near villages Karowali, Piplawa, Naraina and Bhakharia, situated in Tehsil Nathdwara and District Udaipur. The area applied for by the respondent (3) is shown, in Schedule 'A' by letters EFGH, and the application was for the mineral Fluoritc. But, the State Government vide its order dated Udaipur, January 17, 1967, notified for general information of the public that an area of 57.715 Sq, K. M. which included the area applied for by respondent (3) is reserved for departmental prospecting for Barytes and other economic and associated minerals. It was further made clear in the notification that no application for such minerals can be entertained for grant of any mineral concession till the area is declared free for regrant by Gazette Notification.
It may also be mentioned here that the respondent (3) made an application on January 19, 1967, for including mineral Barytes in his original application for prospecting licence dated January 16, (sic) 1967. The application of the respondent for prospecting licence came to be considered by the State Government on 20-7-1967, and the State Government rejected the application of respondent (3) on the ground that the area applied for was reserved for departmental prospecting as notified vide Notification dated January 17, 1967. The respondent (3) filed a revision application under Rule 54 of the Rules before the Central Govt. on September 4, 1967. The revision was accepted by the Central Government vide its order dated October 4, 1971, as aforesaid. That order of the Central Government has been challenged in the writ petition, as already stated above.
4. To complete the narration of facts, it may be mentioned here that when the revision petition of respondent (3) was pending with the Central Government, under Notification dated December 2, 1968, published in Rajasthan Rajpatra dated December 26, 1968, the State Government declared two areas measuring 57.715 and 25.739 Sq. Km. situated near village Karowali, Piplawa, Naraina and Bakharia, situated in Tehsil Nathdwara, District Udaipur, which included the area applied for by respondent (3) as free for grant and invited applications for the grant of mineral concessions in respect of the aforesaid areas. 19 applications, including the one of Ram Per-shad Rajgaria, the deceased, for a mineral lease were submitted. Shri Mehtab Chand Golecha had also applied. The applications made by Rajgaria as well as by A.C. Datta, M.C. Golecha and Smt. Kalawati wife of Ranjitlal Agarwal were not disposed of by the State Government, though a period of more than 12 months had elapsed.
Under the deeming clause contained in Rule 24 (3) of the Rules, which provides that if the applications are not disposed of within 12 months, then they shall be deemed to have been refused, Shri Rajgaria taking his application to have been refused, preferred a revision to the Central Government under Rule 54 of the Rules. That revision petition was dismissed vide order dated December 29. 1971. A writ petition was filed in this Court by Rajgaria, and was registered as S. B. Civil Writ Petition No. 1458/72. The same was disposed of vide order dated August 14, 1978, observing therein that as the case of the petitioner, who is an applicant, for a mining lease is covered by order dated Dec. 15, 1976, his application will also be considered by the State Government along with other applications in pursuance of the order of the Central Government dated 15-12-76. That order was passed by the Central Government on the revision petition filed by the revisioner Mr. M.C. Golecha, one of the applicants for the mining lease.
5. The revision petition of the respondent (3) had not till then been disposed of, and, therefore, respondent (3) filed a writ of mandamus in this court, which was registered as Civil Writ Petition No. 208/69. This Court accepted the same on August 5, 1971, and directed the State (Sic) Government to dispose of the revision petition of respondent (3) within two months from that date. It was thereafter that the revision was heard, decided and accepted and the State Government was directed to give prospecting licence to respondent (3). It is that order which is under challenge in this writ petition.
5A. The order dated 4-10-71 is challenged by the learned Advocate for the petitioner on the ground that the State Government had power to reserve an area for exploitation of mineral, or for any other purpose, and this power of the Government does not flow from Section 17 of the Mines and Minerals (Regulation and Development) Act, 1957 (hereinafter referred to as the Act). A look at the order dated October 4, 1971, passed in revision by the Central Government will show that the only ground on which the revision petition of respondent (3) was accepted is that the reservation for purposes of departmental prospecting can only be done on the motion of the Central Government. It will be useful to extract the relevant portion of that order :--
'It is observed that under Section 17 of the Mines and Minerals (Regulation and Development) Act, 1957, it is the Central Government which may undertake prospecting in any area not already held under prospecting licence. As such, reservation for purposes of departmental prospecting could only be done on the motion of the Central Government. In this case, the State Government went beyond its power in reserving the area for departmental prospecting and that too was done after the State Government had received an application for prospecting licence from you'.
6. The very basis on which the orderof the Central Government is based iserroneous. Section 17 of the Act relates to the special powers of the CentralGovernment to undertake prospecting ormineral operations in certain lands.Under it, the Central Government, afterconsultation with the State Government,may undertake prospecting ormining operations in any area not alreadyheld under any prospecting licence ormining lease, and in case it proposes todo so, it has to comply with certainconditions laid in Section 17(2) of theAct. This section does not deal with thereservation of any area for exploitationof a mineral by the State Government orthe Central Government. Merely because, prospecting or mining operationsin any area not already held under anyprospecting licence or mining lease canbe undertaken by the Central Government after consultation with the State Government, it cannot be said that thepowers of reservation, if the same arevested in the State Government, canonly be exercised on motion by theCentral Government. All mineral wealthvests in the State and under Rule 59of the Mineral Rules, the State Government has powers to refuse to grant aprospecting licence or a mining lease onthe ground that the land should be reserved for any purpose.
The power of the State Government to reserve any area to itself for mining operations came to be considered in Armitlal v. Union of India, AIR 1973 Guj 117, where Mr. Bhagwati, C. J., as his Lordship then was, after reviewing the provisions of the Act and the Rules and the Constitution of India, held. 'It must, therefore, be held, and in view of the above discussion, it can hardly be disputed that the State Government has executive power to reserve any area of land for exploitation of Barytes in the public sector'. It was further held that there is also inherent evidence in the Mineral Concession Rules, 1960 which strongly supports this conclusion. Rule 59 contemplates a case where the State Government has refused to grant a prospecting licence or a mining lease on the ground 'that the land should be reserved for any purpose', and thus clearly recognises the executive power of the State Government to reserve land for any purpose. The petitioner in that case went to the Supreme Court against the decision of Gujarat High Court. The view of Gujarat High Court was upheld in Amritlal Nathulal Shah v. Union of India. AIR 1976 SC 2591. The Lordships of the Supreme Court in para 4 observed as follows:--
'Section 4 of the Act provides that no person shall undertake any prospecting or mining operations in any area except under and in accordance with the terms and conditions of a prospecting licence, or, as the case may be, a mining lease, granted under the Act and Rules made thereunder, and that no such licence or lease shall be granted 'otherwise than in accordance with the provisions of the Act and the Rules'. But, there is nothing in the Act or the Rules to require that the restrictions imposed by Chapter II, III or IV of the Rules would be applicable even if the State Government itself wanted to exploit a mineral for, as has been stated, it was its own property. There is, therefore, no reason why the State Government could not, if it so desired, 'reserve' any land for itself for any purpose, and such reserved land would then not be available for the grant of a prospecting licence or a mining lease to any person'.
Dealing with Section 17 of the Act, it was observed that the aforesaid section does not cover the entire field of the authority of refusing to grant a prospecting licence or a mining lease to anyone else, and does not deal with the State Government's authority to reserve any area for itself.
7. Therefore, it can be said that the State is the owner of the minerals and can reserve any area for exploitation of a mineral to itself and on that ground the area cannot be free for grant. The State Government can refuse to grant prospecting licence or the mining lease, as the case may be, on the ground that the area has been reserved for exploitation of a particular mineral. For exercising such powers, it is not necessary that there should be a motion to that effect from the Central Government. Therefore, there is error apparent on the face of the record in the order of the Central Government passed in revision on October 4, 1971. The order dated October 4, 1971, of the Central Government passed in revision is, therefore, liable to be quashed.
8. In the result, this writ petition is accepted, the order dated October 4, 1971 of the Central Government is hereby quashed and set aside. The parties shall bear their own costs of this writ petition.