State of Rajasthan v. Union of India — 1978 DIGILAW 318 (RAJ)

AGRAWAL, J In this petition, under Article 226 of the Constitution of India, the State of Rajasthan, petitioner here in, seeks to challenge the order dated 17th December, 1971, whereby the Central Government, in exercise of its powers under Rules 54 and 55 of the Mineral Concession Rules, 1960, (hereinafter referred to as the 1960 Rules), set aside the order of the State Government dated 2nd July, 1970 and directed the State Government to re-examine the matter in the light of the finding of the Central Government contained in the impugned order dated 17th December, 1971. 2. On 1st November, 1937 a mining lease for mica over an area measuring about 300 Sq. miles was granted to Shri Govind Ram Saksoria for a period of 5 years by the then State of Mewar. Before the expiry of the term of said lease, the rights of the lessee were transferred in favour of Shri Pusa Lal Man-singhka, respondent No.2 herein. The term of the lease was extended for a further period of 10 years upto 31st October, 1952 by the then State of Mewar. During the pendency of the aforesaid lease, the Central legislature enacted the Mines and Minerals (Regulation and Development) Act, 1948 (hereinafter referred to as 1948 Act) and in excercise of the powers conferred by the said Act, the Mineral Concession Rules, 1949 (hereinafter referred to as 1949 Rules) were framed. After the expiry of the term of the lease on 31st October, 1952, respondent No 2 was allowed to work in 23 mines subject to grant of final lease under the 1949 Rules and by letter of the Mining Engineer, Udaipur, dated 10th March, 1954, he was asked to select an area of 10 Sq. Miles comprising about 40 plots and to submit formal application for the grant of mining lease for the same in accordance with the provisions of the 1949 Rules. Miles comprising about 40 plots and to submit formal application for the grant of mining lease for the same in accordance with the provisions of the 1949 Rules. In pursuance of the aforesaid direction, respondent No 2 submitted an application and lease for a total area of 4223 Acres comprising of 40 plots was granted in favour of the respondent No 2 The said lease was for a period of 20 years to be counted from 1st November, 1952 As a question had arisen whether respondent No. 2 was liable to pay dead rent for the first year i.e. from 1st November, 1952 to 3Ist October, 1953, a reference was made to the Central Government and the Central Government by its order dated 2nd February, 1959, observed that as the latter lease was in continuance of the former one, the State Government were entitled to realise dead rent from respondent No. 2 from the very first year. Subsequently, a dispute arose between the State Government and respondent No. 2 with regard to the liability of respondent No. 2 for payment of dead rent for first year. Another dispute arose between respondent No. 2 and State Government with regard to the payment of royalty on the mineral which had been excavated by respondent No 2 prior to the expiry of the old lease, i.e. prior to 31st October, 1952, but which was removed from the site after the expiry of the said lease. The State Government was claiming royalty at the rates prescribed under the old lease which were higher, whereas respondent No. 2 was claiming that he was liable to pay royalty on the basis of the rates prescribed under the new lease. Respondent No. 2, therefore, Bled a civil suit (Suit No. 2 of 1959) against the State Government in the court of District Judge, Bhilwara, wherein he claimed that the State Government was not entitled to charge Head rent for the first year of the new lease i.e. for the period from 1st November, 1952 to 31st October, 1953 and that the State Government was entitled to recover royalty only on the bans of the rates prescribed under the new lease and not the basis of rates prescribed under the old lease. The District Judge Bhilwara by his judgment dated 29th August, 1960, dismissed the said suit of respondent No. 2 Aggrieved by the aforesaid judgment, respondent No. 2 filed an appeal (D B. Regular First Appeal No. 140/1969) in this Court The said appeal was withdrawn by respondent No 2 and was, therefore, dismissed as withdrawn by the order of this Court dated 14fh December, 1968. During the pendency of the aforesaid appeal, respondent No. 2 had also filed a suit for accounts (Suit No. 327 of 1965) in the Court of Civil Judge, Bhilwara and the said suit was also dismissed as withdrawn by the Civil Judge, Bhilwara, by his order dated 22nd November, 1968. It appears that after the dismissal of the appeal as well as suit for accounts, respondent No. 2 submitted a representation to the State Government against the demand raised by the Mining Engineer in connection with the charging of royalty on the mineral which had been excavated by respondeat No. 2 prior to the expiry of the old lease but which was removed by him from the site after the expiry of the said lease. The said representation of respondent No. 2 was rejected by the State Government by its order dated 2nd July, 1970. Aggrieved by the aforesaid order of the State Government dated 2nd July, 1970 respondent No. 2 filed a revision petition before the Central Government under Rules 54 and 55 of the 1960 Rules. The State Government was required by the Central Government to send its comments on the said revision petition and in the comments sent by it the State Government raised an objection that revision petition filed by respondent No 2 was not maintainable. The State Government was required by the Central Government to send its comments on the said revision petition and in the comments sent by it the State Government raised an objection that revision petition filed by respondent No 2 was not maintainable. The Central Government thereafter passed the impugned order dated 17th December, 1971, wherein it has held that royalty was payable by respondent No. 2 on the basis of the removal by him of the mineral from the lease area in accordance with the rule 41 (1) (i) of the 1949 Rules,the State Government could nor recover bath royalty and dead rent for a particular year and that respondent No. 2 was not liable to pay dead rent for the first year i. e. for the period from 1st November, 1952 to 31st October, 1953 as the lease granted to respondent No 2 was not a renewal of the old lease but was a new lease granted under the 1948 Act read with the 1949 Rules. The Central Government, by its order aforesaid, set aside the order of the State Government dated 2nd July, 1970 and d rected the Sate Government to re-examine the matter in the light of the findings of the Central Government contained in its order dated 17th December, 1971. Aggrieved by the aforesaid order of the Central Government, the State Government has filed this writ petition. 3. The validity of the impugned order of the Central Government has been challenged by the learned Deputy Government Advocate on the following grounds:— (1) No revision petition was maintainable with the Central Government against the order of the State Government dated 2nd July, 1970 either under provisions of the 1948 Act read with 1949 Rules or under the provisions of the 1957 Act read with 1960 Rules and that the order of the Central Government was, therefore, completely without jurisdiction. (2). The earlier judgment of the District Judge, Bhilwara, in the Civil Suit filed by respondent No. 2, rejecting the claim of respondent No. 2 both with regards to the liability for payment of dead rent as well as royalty, operates as res judicata and it was not open to the Central Government to arrive at a finding different from that arrived at by the District Judge in the said suit. The impugned order of the Central Government thus suffers from an error of law apparent on the face of the said order. (3) The Central Government, in its order dated 2nd February 1959, had expressed the view that the later case was in continuance of the former one and the State Government was entitled to realise dead rent from respondent No. 2 from the very first year and it was not permissible for the Central Government to take a different view subsequently in the impugned order dated 17th December, 1971. 4. Shri H.M. Parakh, the learned counsel for respondent No. 2, has raised a preliminary objection with regard to the maintainability of the writ petition and has submitted that the State Government, being an authority sub-ordinate to the Central Government, could not challenge the order of the Central Government by means of the petition under Article 226 of the Constitution. As regards the merits the submission of the learned counsel for respondent No 2 is that the revision petition of respondent No. 2 against the order of the State Government dated 2nd July, 1970 was maintainable under Section 30 of the Mines & Mineral (Regulation of development) Act, 1957 (hereinafter referred to as the 4957 Act) and Rules 54 and 55 of 1960 Rules. The learned counsel has also submitted that the plea of res-judicata was not raised by the State Government in the comments sent by it to the Central Government in reply to the revision petition of respondent No. 2 and moreover the State Government, having itself considered the representation of respondent No. 2 on merits, had waived the plea of res judicata arising out of the judgment of the District Judge in the Civil Suit filed by respondent No. 2. 5. In so far as the preliminary objection raised by the counsel for respondent No. 2 is concerned, I am of the view that there is no merit in the said objection. The position of the State Government in the present case is not merely that of a Tribunal deciding a dispute with regard to the respective rights of two contesting parties. The position of the State Government in the present case is not merely that of a Tribunal deciding a dispute with regard to the respective rights of two contesting parties. In the present case the dispute was between the State Government on the one hand and respondent No. 2 on the other hand with regard to the liability for the dead rend royalty payable by the respondent No. 2 and by its order dated 2nd July, 1970, the State Government had decided the said dispute against respondent No. 2. By the impugned order the Central Government has set aside the said order of the State Government. It cannot be said that the State Government cannot be regarded as a person aggrieved by the impugned order and that it is not open to the State Govern-ment to challenge the validity of the said order by means of the petition under Article 226 of the Constitution In this context, it maybe relevant to take note of the observations of Das, J. (as he then was) in Province of Bombay vs. Khushal Das S. Advani (1): — "The Principles, as I apprehend them, are; (i) that if a statute empowers authority, not being a Court in the ordinary sense, to decide disputes arising out of a claim made by one party under the statute which claim is opposed by another party and to determine the respective rights of the contesting parties who are opposed to each other there is a lis and prima facie, and in the absence of anything in the statute to the contrary it is the duty of the authority to act judicially and the decision of the authority is a quasi-judicial act; and (ii) that if a statutory authority has powe to do any act which will prejudicially effect the subject, then although there are not two parties apart from the authority and the contest is between the authority proposing to do the act and the subject opposing it the final determination of the authority will yet be a quasijudicial act provided the authority is required by the statue to act judicially." 6. The aforesaid observations have been quoted with approval by the Supreme Court in Shivji Nathuhai vs. Union of India (2). The observations show that there are two types of cases in which a lis may arise which may have to be determined by a statutory authority. The aforesaid observations have been quoted with approval by the Supreme Court in Shivji Nathuhai vs. Union of India (2). The observations show that there are two types of cases in which a lis may arise which may have to be determined by a statutory authority. One type of cases may be those, where the authority is required to decide a dispute between two rival contesting parties opposed to each orber and has thus to determine the respective rights of the contesting par ties. The other type of cases where there are no two parties apart from the authority which decides the dispute and the contest is between the authority proposing to do the act and the subject opposing it. The present case is one which falls in the second category where there were no two contesting parties whose respective rights were to be determined by the State Govt. and the contest was only between State Govt. on the one hand and the respondent No. 2 on the other hand. It may be that in cases falling in the first category where the State Govt. determine the respective rights of two contesting parties, it would not be in fitness of things for the State Government to file a writ petition to challenge the order of the Central Government, setting aside an order passed by the State Government in as much as a Tribunal is not expected to take steps for defending its judicial order. But the position is different in cases falling in the second category and in such case there should be no impediment in the way of the State Government moving a petition under Article 226 of the Constitution for quashing the order of the Central Government if the said order prejudicially affects the rights of the State Government. In the present case there can be no doubt that the impugned order of the Central Government, whereby certain findings have been recorded in favour of respondent No. 2, prejudicially affects the rights of the State Government with regard to the recovery of the dead rent and royalty from respondent No. 2, and therefore, the State Government is entitled to challenge the validity of the said order of the Central Government. 7. 7. In support of his submissions with regard to the preliminary objection, the learned counsel for respondent No 2 has placed reliance on certain obsarvations of the Supreme Court in Dharam Chand Jain vs. State of Bihar (3) to the effect that: under Rule 54 of the 1960 Rules, the Central Government acts as a revisional tribunal against any order passed by the State Government and when the Central Government had allowed the revision application and directed the State Government to grant the licence to a particular person, no direction was left in the State Government to refuse the grant the mining lease to the said person. It may be noticed that in that case the Court was not concerned with the question as to whether it was open to the State Government to challenge the order of the Central Government passed in the revision petition and all that the court was concerned was whether in a case where the order of the Central Government has become final, it was open to the State Government to act in defiance of the said order. The observations in the said case have, therefore, no application to the facts of the present case. Another decision on which reliance was placed by the learned counsel for respondent No. 2 is the decision of the Orissa High Court in State of Orissa vs. Union of India (4), where in the State Government had filed a petition under Art. 226 of the Constitution to challenge the order of the Central Government, directing the State Government to grant mining cease to a particular person and the High Court has observed: — "The State Government being subordinate statutory authority cannot question the legality and correctness of the impugned order by maintaining a writ application. Though the contention is not supported by any authority, we are inclined to give full effect to it. A subordinate statutory authority unless the statute so expressly prescribes, cannot question the correctness and legality of the higher judicial or quasi-judicial authority if exercised whithin the jurisdiction." 8. With great respect to the learned judges who decided the said case, I regret my inability to agree with the aforesaid observations. A subordinate statutory authority unless the statute so expressly prescribes, cannot question the correctness and legality of the higher judicial or quasi-judicial authority if exercised whithin the jurisdiction." 8. With great respect to the learned judges who decided the said case, I regret my inability to agree with the aforesaid observations. The Orissa High Court appears to have lost sight of the distinction between two types of cases which are to be considered by the State Government in relation to mines and minerals and the observations referred to above can have application only in those cases where the State Government has determined the competing claims of two contesting parties i.e. two applicants for the grant of a mining lease but these observations can have no application to a case, like the present one, where the contest is between the State Government on the one side and the lessee of a mine on the other side and the order of the State Government determining the said contest is set aside by the Central Government in a way as to prejudicially affect the rights of the State Government. I, therefore, reject the preliminary objection raised by the learned counsel for respondent No 2. 9. Now coming to the merits of the case, it may be observed that in so far as the old lease was concerned, there is no dispute that it was not governed by the provisions of the 1948 Act or the 1949 Rules. The new lease was, however, governed by the provisions of the 1948 Act and the 1949 Rules. Under the 1949 Rules only a limited right of revision was conferred on the Central Government by Rule 57 which provided as under: — "57. Application for review:- (1) Any person aggrieved by an order of a State Government:- (i) refusing to grant a certificate of approval, prospecting licence or mining lease; (iA) cancelling a prospecting licence of approval: (ii) cancelling a prospecting licence or mining lease; (iii) refusing to permit transfer of a prospecting licence under Rule 23. (iv) or a mining lease mining lease under rule 37; may within two months of the date of such order, apply to the Central Government for reviewing the same. (iv) or a mining lease mining lease under rule 37; may within two months of the date of such order, apply to the Central Government for reviewing the same. (2) An application for review under subrule (1) may be admitted after the period of limitation prescribed therein when the applicant satisfies the Central Government that he had sufficient cause for not making the application within the sid period. 10. The order of the State Government dated 2nd July, 1970, did not appertain to any of the matters mentioned in Sub rule (1) of Rule 57 of the 1949 Rules and, therefore, no revision lay against the said order under the 1949 Rules. 11. Now the question arises as to whether a revision against the order of the State Government dated 2nd July, 1970 could be entertained by the Central Government under the provisions of the 1957 Act and the 1960 Rules. The contention of the learned counsel for respondent No. 2 is that the right of revision is governed by the law which prevails on the date of the passing of the order and that in the present case, right of revision would be governed by the 1957 Act and the 1960 Rules which were operative on 2nd July, 1970, the date on which the order of the State Government was passed. The aforesaid submission of the learned counsel for respondent No. 2 finds support from the decision of the Supreme Court in Indira Sohanlal vs. Custodian of Evacuee Property Delhi (5). Wherein it has been held that revision stands on a different footing from an appeal and that in so far as revision is concerned, it has to be governed by the law prevailing on the date when the order was passed. It would be, therefore, necessary to consider the relevant provisions contained in the 1957 Act and the 1960 Rules which confer the right of revision on the Central Government against an order passed by the State Government. Section 30 of the 1957 Act provides as under:— "Section 30—power of revision of Central Government: The Central government may, of its own motion or on application made within the prescribed time by an aggrieved party, revise any order made by a State Government or other authority in exercise of the powers conferred on it by or under this Act." Rule 54 of 1960 Rules provides as under:— "54. Application for revision: (1) Any person aggrieved by any order made by the State Government or other authority in exercise of the powers conferred on it by the Act or these rules may, within two months of the date of communication of the order to him, apply to the Central Government in triplicate in Form N for revision of the order. The application should be accompanied by a treasury receipt showing that a fee of Rs. 100/ has been paid into a Government treasury or in any branch of the State Bank of India doing the treasury business to the Head of account-XXX II-Misacellaneous Social and Developmental Organizations—Central-Mineral Concession fees": Provided that any such application may be entertained after the said period of two months, if the applicant satisfies the Central Government that he had sufficient cause for not making the application within time. 2) In every application under Sub-rule (1) against the order of a State Government refusing to grant a prospecting licence or a mining lease any person to whom a prospecting licence or mining lease was granted in respect of the same area or for a part thereof, shall be impleaded as a party. (3) Alongwith the application under sub-rule (1), the applicant shall submit as many copies thereof as there are parties impleaded under sub-rule (2). (4) On receipt of the application and the copies thereof, the Central Government send a copy of the application to each of the parties impleaded under sub-rule (2) specifying a date on or before which he make his re resentations, if any, against the revision application. Explanation: - For the purposes of this rule, where a State Government has failed to dispose of an application for thegrant or renewal of a prospecting licence or a mining lease within the period specified in respect thereof in these rules, the State Government shall be deemed to have made an order refusing the grant or renewal of such licence of lease on the date which such period expires." 12. A perusal of Section 30 of the 1957 Act and Rule 54 of 1960 Rules shows that the right of revision which has been conferred under said provisions is only in respect of orders made by the State Government in exercises of the powers conferred on it by the 1957 Act or the i960 Rule3. A perusal of Section 30 of the 1957 Act and Rule 54 of 1960 Rules shows that the right of revision which has been conferred under said provisions is only in respect of orders made by the State Government in exercises of the powers conferred on it by the 1957 Act or the i960 Rule3. The order of the State Government dated 2nd July, 1970 cannot be regarded as a order passed in exercise of the powers conferred on it by the 1957 Act or the 1960 Rules. An examination of the provisions of 1957 Act and the 1960 Rules shows that neither the 1957 Act nor the 1950 Rules confer any right of revision as regards orders passed in respect of matters covered by the 1949 Rules. This position is further clarified by Rule 68 of the i960 Rules which reads as under:— 68. "Repeal:— On the commencement of these rules, the Mineral Concession rules, 1949, shall cease to be in force, except as regards things does or omitted to be done before such commencement." 13. The aforesaid rule is in the nature of saving clause which preserves the 1949 Rules as regards the things done before the Commencement of the 1960 Rules. The expression "things done" came up for consideration before the Supreme Court in M/s Universal Imports Agency Vs. The Chief Controller of Imports and Exports, (6) where the Supreme Court was required to construe the scope and ambit of this expression occurring in paragraph 6 of the French Establishments (Application of Laws) Order, (1954). The Supreme Court has observed:— "The words things done in paragraph 6 must be reasonablyinterpreted and if so interpreted they can mean not only things done but also the legal consequences flowing therefrom." The Supreme Court has further observed:— "We, therefore, hold that the words things done in paragraph 6 of the order are comprehensive enough to take in a transaction effected before the merger, thought some of its legal effects and consequences projected into the post merger period." 14. In view of the aforesaid observations of the Supreme Court, it is clear that Rule 68 covers orders passed in relation to mining leases which were covered by 1949 Rules, even though the said orders were passed after the repeal of the 1949 Rules and after the coming into force of 1960 Rules. In view of the aforesaid observations of the Supreme Court, it is clear that Rule 68 covers orders passed in relation to mining leases which were covered by 1949 Rules, even though the said orders were passed after the repeal of the 1949 Rules and after the coming into force of 1960 Rules. The result is that the scope of the power of revision conferred on the Central Government as regards the order dated 2nd July, 1970 passed by the State Government will have to be gathered from the provisions of the 1949 Rules. It has been already pointed out earlier that under Rule 57 of the 1949 Rules, no revision petition lay to the Central Government against the order of the State Government dated 2nd July, 1970. It is, therefore, held that the revision petition field by the respondent No. 2 was not maintainable and the order of the Central Gavern-ment dated 17-12-1971 was without jurisdiction. 15. In view of the finding aforesaid, I do not consider it necessary to examine the other contention urged by the learned Deputy Government Advocate in support of the writ petition. 16. The result is that the writ petition is allowed and the order of the Central Government dated 17th December, 1971 and corrigendum dated 9th March, 1972 are quashed. The parties will, however, bear their own costs of this writ petition.