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1967 DIGILAW 248 (SC)

Pragdas Vaishya v. Union of India

1967-08-17

J.C.Shah, J.M.Shelat, S.M.Sikri

body1967
JUDGMENT Shah, J. 1. The appellant Pragdas was granted by the State Government of Madhya Pradesh a lease for mining "corrundum" from an area of 2,660 acres in villages Phora and Karkota, Tahsil Singarauli, District Sidhi. Sometime thereafter respondents 2 & 3 were granted a lease for mining "Sillimanite" from an area of 488.21 acres out of the area for which a mining lease was granted to the appellant. On September 26, 1962, the appellant applied to the State Government for a lease for mining "kaolinite". The application dated September 26, 1962 was defective in that it was not accompanied by the full deposit of Rs. 700 required by R. 22 of the Mineral Concession Rules, 1960. The appellant rectified that defect by depositing on March 21, 1963, the amount of Rs. 100 by which the deposit was short. In the meanwhile respondent 2 had applied on December 22, 1962 for a lease for milling "refractory clay" from the area demised to them. It is common ground that "kaolinite" and "refractory clay" are the same minerals known by different names. On April 23, 1963 the State Government granted a mining lease to the appellant for "kaolinite" over 86.48 acres and rejected the application of the second respondent dated September 18, 1962. In reply to a letter dated November 26, 1963, the Government of Madhya Pradesh informed the second respondent on December 5, 1963 that his application "was delayed in the office of the Director of Geology and Mining and could not be proceeded with ''properly". and since a mining lease for "kaolinite" was already granted to the appellant, the application for a lease for "refractory clay" stood rejected. The respondents 2 & 3 moved the Central Government by an application under R. 54 of the Mineral Concession Rules, 1960, against the orders of the State Government. On that application the Central Government asked for the "comments" of the appellant, the respondents 2 & 3 and of the State Government and on February 3, 1966 set aside the order of the State Government dated December 5, 1963 and directed the State Government to include "refractory clay" as an additional mineral in the existing mining lease for "sillimanite" granted to respondents 2 & 3 after cancelling the mining lease for "kaolinite" granted to the appellant. 2. 2. The appellant then moved a petition before the High Court of Madhya Pradesh under Art. 226 of the Constitution for a writ in the nature of Certiorari quashing the order of the Central Government, and for a writ in the nature of Mandamus directing the Union of India and the State of Madhya Pradesh not to give effect to the impugned order, and to restore to the appellant the mining lease for "kaolinite" granted to him by the State Government. The High Court dismissed the petition, and against that order the appellant has approached this Court, with special leave. 3. The order passed by the Central Government in exercise of the powers under R. 55 of the Mineral Concession Rules, 1960 is not a "speaking order". This Court has, in a recent judgment Bhagat Raja Vs. The Union of India and Ors. CAS Nos. 2596 & 2597 of 1966; decided on March 29, 1967 held, after a review of the relevant authorities, that the power exercised by the Central Government under R. 55 of the Mineral Concession Rules, 1960, has to be exercised judicially, and in disposing of the revision application the Central Government must record its reasons and communicate those reasons to the parties affected thereby. Mitter, J., speaking for the Court, observed : "x x x it will be amply clear that in exercising its powers of revision under R. 55 the Central Government must take into consideration not only the material which was before the State Government but comments and counter-comments, if any, which the parties may make regarding the order of the State Government. In other words, it is open to the parties to show how and where the State Government had gone wrong or, why the order of the Slate Government should be confirmed ". Mitter, J., further observed. "After all a tribunal which exercises judicial or quasi-judicial powers can certainly indicate its mind as to why it acts in a particular way and when important rights of parties of far reaching consequence to them are adjudicated upon in a summary fashion, without giving a personal hearing where proposals and counter-proposals are made and examined, the least that can be expected is that the tribunal should tell the party why the decision is going against him in all cases where the law gives a further right of appeal". The Court in that case expressly rejected the contention raised on behalf of the Union of India that the Central Government was not obliged to disclose the grounds of its decision. 4. The order passed by the Central Government in exercise of its revisional authority under R. 55 of the Mineral Concession Rules, is subject to appeal to this Court; Shivji Nathubhai Vs. The Union of India & ors. (1960) 2 SCR 775 . If the right to appeal is intended to be effective, the Tribunal must record its reasons and make them available to the parties to the dispute. In the present case the reasons in support of the order of the Central Government were apparently not recorded and were not made available to the parties concerned in the dispute. But, it was urged by counsel for respondents 2 & 3, the High Court had looked into the file of the Central Government and it appeared that the revision petition filed by respondents 2 & 3 was granted by the Central Government because their application for a mining lease for "refractory clay" was prior in time to the application filed by the appellant, and the Central Government was satisfied that the revision application filed by respondents 2 & 3 on February 4, 1964 was within the prescribed time. 5. In our view the procedure followed by the. High Court was irregular; it is not for the High Court to give reasons which the Government might have, but has not chosen to give, in support of its conclusion. Since no reasons were given in support of the order passed by the Central Government, the order was Ex facie defective, and the defect could not be remedied by looking into the file maintained by the Government and constructing the reasons in support of that order. The reasons in support of the order had to be recorded and disclosed to the parties concerned by the Central Government; the reasons could not be gathered from the "notings" made in the files of the Central Government. Recording of reasons and disclosure thereof is not a mere formality. The party affected by the order has a right to approach this Court in appeal, and an effective challenge against the order may be raised only if the party aggrieved is apprised of the reasons in support of the order. 6. Recording of reasons and disclosure thereof is not a mere formality. The party affected by the order has a right to approach this Court in appeal, and an effective challenge against the order may be raised only if the party aggrieved is apprised of the reasons in support of the order. 6. The observations made by the High Court that is the view of the Central Government, the application filed by respondents 2 & 3 was prior in point of time to the application filed by the appellant, and that the application filed by respondents 2 & 3 on February 4, 1964, was within the period of limitation prescribed by the Rules, are again not adjudications by the Central Government. The observations are made presumably as inferences from the record or the Central Government; such inferences the High Court was incompetent to make 7. It was urged by counsel for the appellant that since the order of the State Government granting a mining lease to the appellant for "kaolinite" was not challenged in a revision petition before the Central Government, it became final and could not be challenged in a petition filed against the communication by the Madhya Pradesh Government dated Dec. 5, 1963. It appears, however, from the petition filed on February 4, 1964 that respondents 2 & 3 had challenged the communication dated December 5, 1963 as well as the order dated April 23, 1963. Whether the order dated April 23, 1963, may be permitted to be challenged in the petition before the Central Government because it was not presented within a period of three months prescribed by R. 54 from the date of the communication of the order could be decided by the Central Government alone. By the proviso to R. 54 (1) the Central Government has the power, if the applicant satisfies the Central Government that he had sufficient cause for not making the application within time, to condone the delay. Sufficiency or otherwise of the cause for condoning the delay had to be determined by the Central Government, it could not be determined by the High Court or this Court. 8. Sufficiency or otherwise of the cause for condoning the delay had to be determined by the Central Government, it could not be determined by the High Court or this Court. 8. Counsel for respondents 2 & 3 submitted that if the appellant had appealed against the order of the Central Government dated February 3, 1966, in exercise of the power conferred upon this Court under Art. 136 of the Constitution, this Court may have set aside the order following the judgment in Bhagat Raja's case CAS No. 2596 & 2597 of 1966; Decided on March 29, 1967. But when the appellant chose to approach the High Court against the order of the Central Government by a petition for the issue of a writ of Certiorari, the High Court was entitled to scrutinise the record of the Government and if on a consideration of the materials disclosed by the record, the High Court reached Its decision to reject the petition, interference by this Court against the order passed by the High Court will not be warranted. We are unable to agree with that contention. If the order passed by the Government in a revision application under R. 55 of the Mineral Concession Rules is defective, because it does not comply with the requirements of R. 55, the validity of the order could be challenged by a substantive appeal to this Court with special leave under Art. 136 of the Constitution, or by a petition before the High Court under Art. 226 of the Constitution. 9. The High Court's view that the grant made in favour of the appellant by the State Government by its order dated April 23, 1963, was a “nullity" proceeds on the assumption that an application for a mining lease under R. 22, which is defective is Non est, and an order made on such an application may be ignored. It is, however, difficult to appreciate the validity of the conclusion that an order passed by an authority which is subject to correction by a higher authority may be ignored, merely because it appears that there was some defect in the proceeding which initiated it. 10. The appeal must be allowed and the order of the High Court dismissing the petition filed by the appellant set aside. 10. The appeal must be allowed and the order of the High Court dismissing the petition filed by the appellant set aside. The order passed by the Central Government on February 3, 1966 is also set aside, and it is directed that the Central Government do deal with the revision application filed by respondents 2 & 3 according to law. Parties will bear their own costs throughout.