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1980 DIGILAW 1128 (ALL)

Shiv Charan Sharma v. Union of India

1980-11-24

N.D.OJHA, S.D.AGARWAL

body1980
JUDGMENT N.D. Ojha, J. - Sand is one of the minor minerals within the meaning of Rule 2 (7) of the Uttar Pradesh Minor Minerals (Concession) Rules, 1963 framed by the State Government in exercise of the powers conferred on it by S. 15 of the Mines and Minerals (Regulation and Development) Act, 1957, hereinafter referred to as the Rules and the Act respectively. The petitioner made an application for the grant of a mining lease for mining sand in respect of the entire Tahsil Baghpat on 9th July, 1979. A subsequent application was made by him on 6th February, 1980. Likewise respondent Nos. 3 and 4 also made a similar application on 12th September, 1979 and another on 6th January,1980. An order was passed by the State of U.P. Respondent No. 2 on 16th February, 1980, granting lease to respondents Nos. 3 and 4. Aggrieved by the order the petitioner filed a revision before the Central Government under Section 30 of the Act which was dismissed on 25th July, 1980. This order of the Central Government is stated by the petitioner to have been served on him on 8th August. It is these two orders dated 16th February, 1980 and 25th July, 1980, passed by the State of Uttar Pradesh and the Union of India respectively which were sought to be quashed. 2. It was urged by counsel for the petitioner that on 16th February, 1980 when the order granting mining lease to respondents Nos. 3 and 4 was passed a notification issued under Rule 23 of the Rules was in force and consequently the said order could not have been passed, no auction as contemplated by Rule 23 having taken place. It is true that a notification was issued by the State Government on 15th March, 1980 under Rule 24 of the Rules withdrawing relevant areas notified earlier under Rule 23 but according to the counsel for the petitioner the said notification was of no significance inasmuch as the order granting lease to respondents Nos. 3 and 4 had already been passed about a month earlier on 16th February, 1980. According to counsel for the petitioner it was not open to the State Government to grant any lease to respondents Nos. 3 and 4 except either by proceeding under Chapter II of the Rules or taking recourse to the procedure prescribed by Chap. IV thereof. 3. According to counsel for the petitioner it was not open to the State Government to grant any lease to respondents Nos. 3 and 4 except either by proceeding under Chapter II of the Rules or taking recourse to the procedure prescribed by Chap. IV thereof. 3. Counsel for the respondent on the other hand, seeks to justify the order dated 16th February, 1980 on the ground that the State of Uttar Pradesh respondent No. 2 was competent to pass the impugned order dated 16th February, 1980 in the exercise of the power conferred On it by Rule 68 of the Rules. 4. Having heard counsel for the parties we are of the opinion that the submission made by the counsel for the petitioner is well founded. 5. Section 2 of the Act provides: "Declaration as to expediency of Union control - It is hereby declared that it is expedient in the public interest that the Union should take under its control the regulation of mines and the development of minerals to the extent hereinafter provided." 6. Section 15 (1) of the Act, however, permits the State Government by issuing a notification in the official Gazette to make rules for regulating the grant of prospecting licences and mining lease in respect of minor minerals and for purposes connected therewith. As already pointed out above rules were framed by the State Government in exercise of the power conferred on it by this section. Rule 3 (1) of the Rules contemplated that no person shall undertake any mining operations in any area within the State of any minor mineral to which these rules are applicable except under and in accordance with the terms and conditions of a mining lease or a mining permit granted under these rules. There is proviso to Rule 3 (1) which contemplates that nothing shall affect any mining operations undertaken in accordance with the terms and conditions of a mining lease or permit duly granted before the commencement of these rules. Sub-rule (2) of Rule 3 is important. It reads: "(2) No mining lease or mining permit shall be granted otherwise than in accordance with the provisions of these rules." 7. Chapter II of the Rules deals with grant of mining lease. Rule 4 deals with restriction on the grant of mining lease. Rule 5 contemplates an application for the grant of mining lease. It reads: "(2) No mining lease or mining permit shall be granted otherwise than in accordance with the provisions of these rules." 7. Chapter II of the Rules deals with grant of mining lease. Rule 4 deals with restriction on the grant of mining lease. Rule 5 contemplates an application for the grant of mining lease. Rule 6 deals with application fee and deposit. Rule 7 provides for an inquiry and report by the District Officer. Rule 8 deals with disposal of application for mining lease. It provides that the State Government or the officer authorised by it in this behalf may, having regard to the provisions of these rules and after making such further enquiries as may be deemed necessary, refuse to grant mining lease or grant it for the whole or a part of the area applied for Rule 9 deals with preferential rights of certain persons. Rule 12 provides that except as provided in sub-rule (2), the period for which a mining lease may be granted shall not exceed ten years. Sub-rule (2) on the other hand provides that if the State Government is of opinion that in the interest of mineral development it is necessary so to do, it may, for reasons to be recorded, grant a mining lease for any period exceeding 10 years but not exceeding 15 years. Chapter IV deals with "auction lease". Considerable reliance has been placed on Rule 23 and as such it would be useful to quote it. It reads: "Notification of area for auction lease - (1) The State Government may notify in the Gazette specific areas which may be leased out by auction. (2) No area shall be leased out by auction for more than three years at a time. (3) On the publication of a notification under sub-rule (1) the provisions of Chapters II, III and IV of these rules shall not apply to the area or areas in respect of which the notification was issued. Such area or areas may be leased out according to the procedure described in this Chapter." 8. Rule 24 contemplates a notification being issued by the State Government in the Gazette withdrawing any area notified under sub-rule (1) of Rule 23, or part thereof from the system of lease by auction. Such area or areas may be leased out according to the procedure described in this Chapter." 8. Rule 24 contemplates a notification being issued by the State Government in the Gazette withdrawing any area notified under sub-rule (1) of Rule 23, or part thereof from the system of lease by auction. It further provides that from the date of withdrawal specified in the notification, which shall not be the date during the subsistence of an auction lease granted under this Chapter, the provisions of Chapters II, III and IV of these Rules shall become applicable to such area. Rule 28 inter alia provides that the lease shall be granted to the highest bidder provided that the State Government may, after taking into consideration the matters specified in the rule, accept any other bid made at the auction. Chapter V of the Rules deals with conditions of a mining lease. The only other rule on which emphasis has been placed by the counsel for the respondents is Rule 68. It reads: "Relaxation of rules in special cases.- The State Government may, if it is of opinion that in the interest of mineral development it is necessary so to do, by order in writing and for reasons to be recorded authorise in any case the grant of any mining lease on the working of any mine for the purpose of winning any mineral on terms and conditions different from those laid down in these Rules." 9. On a conspectus of the various rules referred to above and particularly in view of the mandatory provisions contained in sub-rule (2) of Rule 3 we are of opinion that in the matter of the grant of a mining lease in respect of a minor mineral by the State Government the procedure prescribed in Chapter II or Chapter IV, as the case may be is exhaustive and any manner for grant of such a lease other than the manner prescribed in these chapters is by necessary implication forbidden. In Ramchandra v. Govind ( AIR 1975 SC 915 ) it was held in para 25 of the report that where a power is given to do a certain thing in a certain way the thing must be done in that way or not at all and that other methods of performance are necessarily forbidden. In Ramchandra v. Govind ( AIR 1975 SC 915 ) it was held in para 25 of the report that where a power is given to do a certain thing in a certain way the thing must be done in that way or not at all and that other methods of performance are necessarily forbidden. It was further held that failure to comply with the provisions made for doing a particular act renders the action nonest. Rule 68 on which considerable reliance has been placed by counsel for the respondent in our opinion does hot provide for a third procedure in the matter of granting a mining lease, apart from the two procedures contained, as already pointed out above, in Chapter II and Chapter IV of the Rules. On a plain reading of Rule 68 it is apparent that it only gives the State Government a power if it is of opinion that in the interest of mineral development it is necessary so to do to authorise by order in writing and for reasons to be recorded in any case the grant of any mining lease or the working of any mine for the purposes of winning any mineral on terms and conditions different from those laid down in these rules. The words 'if it is of opinion that in the interest of mineral development it, is necessary so to do' as also the words 'on terms and conditions different from those laid down in these rules' are important in Rule 68. This rule, in our opinion, does not permit the State Government to grant a mining lease to any person of its choice ignoring the requirements of Chapter II or Chapter IV, as the case may be. It only entitles the State Government to make relaxation in regard to the terms and conditions laid down in these rules in respect of a grant to be made if the State Government is of the opinion that it is necessary so to do in the interest of mineral development. The procedure for the grant contemplated either in Chapter II or Chapter IV will have to be followed even if relaxation of the rules is to be granted. The procedure for the grant contemplated either in Chapter II or Chapter IV will have to be followed even if relaxation of the rules is to be granted. In other words if no notification under Rule 23 had been issued applications will have to be invited for the grant of a mining lease as provided by Chapter II and these applications will have to be considered in accordance with the procedure prescribed by that Chapter. If it has been decided that lease in accordance with Chapter II deserves to be granted to a particular person and the State Government is of opinion that in the interest of mineral development it is necessary so to do as contemplated by Rule 68 it may authorise the grant of lease to such a person on terms and conditions different from those laid down in the rules. Likewise if a notification under Rule 23 (1) has been issued and the Government proposes to grant a mining lease it will have to conduct an auction and the person to whom the mining lease is to be granted will have to be determined in accordance with Chapter IV of the Rules. If it has been decided that the lease has to be granted to a particular person the Government may again, if it is of opinion that in the interest of mineral development it is necessary so to do, as contemplated by Rule 68, authorise the grant of any mining lease on terms and conditions different from those laid down in these rules. The view which we take finds support from the decision of a Division Bench of this Court dated 23.1.1978, in Civil Misc. Writ Petn. No. 1079 of 1977 Shiv Charan Sharma v. State of U.P. Where in regard to the scope of Rule 68 it was held :- "A perusal of the above rule would show that it does not contain any provisions for making an application Any person desirous to obtain mining lease has to make an application in accordance with Rules 5, 6 and 7. Rule 68 only states that, while dealing with such an application the State Government may, by an order in writing and for reasons to be recorded, authorise the grant of mining lease on terms and conditions different from those laid down in this rule. Rule 68 only states that, while dealing with such an application the State Government may, by an order in writing and for reasons to be recorded, authorise the grant of mining lease on terms and conditions different from those laid down in this rule. In other words, Rule 68 provides for relaxation of terms and conditions subject to which the lease can be granted and not for making an application for mining lease." Even at the risk of repetition we wish to emphasise that it is not open to the State Government to pick out any person of its choice under Rule 68 by ignoring the requirements of Chapter II or Chapter IV and to grant a mining lease to such a person and thereby shut the door for everyone else to obtain a mining lease either by making an application for grant of such a lease as contemplated by Chapter II of the Rules or from participating in the auction which may be held under Chapter IV of the Rules as the case may be. This deprives a citizen of the opportunity even for making an effort to obtain a mining lease from the State Government. 10. It was then urged by the counsel for the respondents that the State Government in view of Article 298 of the Constitution has the power to dispose of property and that power includes the power of making of contracts for any purpose. It was also pointed out that the power to dispose of property includes the power not to dispose it of. In our opinion no exception can be taken to the proposition of law propounded by the counsel. However, the power of disposal of property or the power not to dispose of property to be exercised by the Union or the State Government is not absolute and can be regulated by statutory provisions. To the extent that this power has been regulated by statutory provisions the absolute power of the State Government to dispose of or not to dispose of property stands curbed or circumscribed. To the extent that this power has been regulated by statutory provisions the absolute power of the State Government to dispose of or not to dispose of property stands curbed or circumscribed. By Section 2 of the Act it has been declared, "In the public interest that the Union should take under its control the regulation of mines and the development of minerals to the extent hereinafter provided." The power of the State Government to deal with its property in any manner it likes is to that extent curbed. In other words even though regulation of mines and the development of minerals in land belonging to the State Government is one of the various facets of the powers of the State Government in regard to its property, that power to the extent as it concerns the regulation of mines and the development of minerals stands curbed. Likewise if in the matter, inter alia, of granting mining lease the rules framed by the State Government under Sec. 15 (1) of the Act provide a procedure for this purpose the power of the State Government to grant a mining lease stands curbed by the procedure prescribed by the rules. Of course, it is always open to the State Government in the exercise of the power conferred on it by Article 298 of the Constitution to decide that in national interest or as a matter of public policy or for some other cogent reason no mining lease should be granted at all in respect of a particular land. In such a situation no one can compel the State Government to grant a mining lease. If, however, the State Government decides to grant a mining lease in respect of some land belonging to it, it cannot ignore the restrictions placed on its power by the Act or the Rules framed thereunder. After the procedure prescribed in Chapter II of the rules is followed it cannot, after inviting the applications for the grant of a mining lease choose to grant a mining lease to a person who has not made an application at all and cannot defend its action by placing reliance on Rule 68 or even on its power under Article 298 of the Constitution. Of course, even at the stage when the lease is to be granted to a particular person if the State Government comes to the conclusion that in the national interest or for some other cogent reason it would not be expedient to grant a mining lease it would be open to the Government not to grant any lease but in that event it shall be refused to one and all. For the sake of illustration take a case where a mining lease is going to be granted to A and it appears necessary for the defence of the country to construct an aerodrome on the land in respect of which the mining lease is contemplated to be granted. It would be open to the State Government even at that stage to refuse to grant any mining lease notwithstanding the fact that in the absence of such an exigency it would have been incumbent on it to grant the lease by following the procedure as contemplated by Chapter II of the Rules. The illustration given above will apply mutatis mutandis to the grant of a mining lease as contemplated by Chap. IV also. In our opinion, therefore, the impugned order dated 16th February, 1980, granting lease to respondents Nos. 3 and 4 cannot be justified under Article 298 of the Constitution. 11. It was then urged by counsel for the respondents that the petitioner had no locus standi to file the present writ petition. In this connection it was pointed out that both the applications which were made by the petitioner for the grant of a mining lease had been made at a point of time when a notification issued under Rule 23 (1) of the Rules was in force and consequently the procedure prescribed by Chapter II of the Rules was not applicable. It was urged that on this ground the petitioner was not entitled to the grant of any mining lease and consequently he has no locus standi to file the present writ petition. We find it difficult to agree with this submission either. If the Government decides not to grant any mining lease the matter ends. It was urged that on this ground the petitioner was not entitled to the grant of any mining lease and consequently he has no locus standi to file the present writ petition. We find it difficult to agree with this submission either. If the Government decides not to grant any mining lease the matter ends. If, however, the Government decides to grant a mining lease any person who is interested in having a mining lease has a locus standi to compel the State Government not to grant such lease except by following the procedure contemplated either by Chapter II or Chapter IV of the Rules as the case may be. It would be so in order to safeguard the interest of such person so that he may be in a position to make an application for the grant of a lease if the procedure as contemplated by Chap. II is to be followed or to participate in the auction if the procedure under Chap. IV is followed. If by ignoring the procedure prescribed by Chapter II or Chapter IV a mining lease is granted to a particular person every other person who may be interested in having a mining lease, is excluded from being considered for grant of a mining lease. It cannot be disputed that once the Government decides to grant a mining lease, any person interested in having a mining lease is entitled to be considered for the said grant. Whether or not ultimately he succeeds in getting a mining lease is a different matter. Consequently his right for being considered for the grant cannot be taken away by following a procedure not contemplated by the Act and the Rules and if this is done any person interested in having a mining lease has locus standi to file a writ petition with a prayer to require the State Government to act in accordance, with law. It is for this reason that we are not inclined to accept the submission made by the counsel for the respondents that the petitioner has no locus standi to file the writ petition. 12. It is for this reason that we are not inclined to accept the submission made by the counsel for the respondents that the petitioner has no locus standi to file the writ petition. 12. It was then urged that in these proceedings there has been a finding that the financial resources of the petitioner were not sound and that he had defaulted in payment of royalty contemplated by Chapter III of the Rules and consequently he was disentitled to the grant of are mining lease. As seen above the State Government purports to have passed the order on 16th Feb. 1980 in favour of respondents Nos. 3 and 4 under Rule 68 of the Rules. The two applications which had been made by the petitioner had been made, as already pointed out above, before the issue of notification on 15th March, 1980 under Rule 24 i.e. during the continuance of the notification issued earlier under R. 23 (1) of the Rules. The two applications which had been made by respondents Nos. 3 and 4 were dated 12th September, 1979 and 6th February, 1980. These two applications were also apparently made before the issue of the notification under Rule 24 of the Rules on 15th March, 1980. Even according to the counsel for the respondent prior to 15th March, 1980 these applications could not have been made nor could they be entertained by following the procedure, prescribed under Chap. II of the Rules. It is not disputed that the procedure prescribed by Chapter IV of the Rules was not taken recourse to. (Reliance has been placed in support of the order dated 16th February, 1980, as already seen above, on Rule 68 of the Rules in respect of which we have already held that rule cannot be taken recourse to as an alternative procedure for grant of a lease. The proceedings in which the findings referred to above were given by the State Government in regard to the financial resources etc. of the petitioner were, therefore, void and were non est as held by the Supreme Court in the case of Ramchandra v. Govind ( AIR 1975 SC 915 ) (supra). It is a settled principle of law that, any finding recorded by a court or a tribunal in proceedings which are void and non est are findings without jurisdiction and no reliance can be placed on such findings. It is a settled principle of law that, any finding recorded by a court or a tribunal in proceedings which are void and non est are findings without jurisdiction and no reliance can be placed on such findings. In Kiran Singh v. Chaman Paswan ( AIR 1954 SC 340 ) : (1954 All LJ 551) it was held that it is a fundamental principle that a decree passed by a court without jurisdiction is a nullity and that its invalidity could be set up whenever and wherever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings. What has been held in regard to a decree passed by a court without jurisdiction in our opinion, will apply with equal force in regard to a finding or order passed by even an authority in proceedings which it has no jurisdiction to entertain. For this reason we are unable to take the view that the petitioner has no locus standi to file the present writ petition on this ground either. 13. Lastly it was urged by counsel for the respondents that Rule 9 which deals with preferential claims cannot be made applicable in regard to the applications which may have been filed for the grant of a mining lease either by the petitioner or by respondent Nos. 3 and 4 at a stage when the notification under Rule 23 of the Rules was still in existence and the notification under R. 24 dated 15th March, 1980 had not been issued. In our opinion there is substance in this submission. Rule 23 (3) of the Rules specifically provides that on the publication of a notification under sub-rule (1) of Rule 23 of the Rules the provisions of Chapters II, III and IV of these Rules shall not apply to the area or areas in respect of which the notification had been issued. Likewise R. 24 of the Rules contemplates that provisions of Chapters II, III and IV shall become applicable to such area from the date of withdrawal specified in the notification that may be issued under R. 24 of the Rules. Likewise R. 24 of the Rules contemplates that provisions of Chapters II, III and IV shall become applicable to such area from the date of withdrawal specified in the notification that may be issued under R. 24 of the Rules. At a point of time when the provisions of Chapter II stood abrogated in view of the notification under Rule 23 (1) of the Rules having been issued and having been in force a person would be legally justified in not making any application for the grant of mining lease as contemplated by Rule 5 of the Rules. There may be another person who notwithstanding the legal position that an application is not maintainable under Rule 5 in view of subsisting notification under Rule 23 (1) may still make an application. If subsequently a notification under Rule 24 is issued and applications are thereafter filed under Rule 5 and the benefit of Rule 9 in the matter of preferential right is given to the person who had made an application during the subsistence of the notification under Rule 23 (1) it would not only work great hardship but would be against the letter and spirit of Rule 23 (1) of the Rules. Now once a notification under Rule 24 has been issued and the State Government still wants to grant a mining lease in respect of the area in question it will have to entertain fresh applications as contemplated by Rule 5 of the Rules and the applications filed either by the petitioner or by the respondents referred to above will have to be ignored. 14. In the result the writ petition succeeds and is allowed and the impugned orders dated 16th February, 1980 and 25th July, 1980 passed by the State of Uttar Pradesh and Union of India, respondents Nos. 2 and 1 respectively are quashed. In the circumstances of the case there will be no order as to costs. 15. An oral prayer has been made by counsel for respondents Nos. 3 and 4 for the grant of a certificate that the case is a fit one for appeal to the Supreme Court as contemplated by Article 133 (1) of the Constitution. Having heard counsel for the parties we are of opinion that no such substantial question of law of general importance is involved in the case which needs to be decided by the Supreme Court. Having heard counsel for the parties we are of opinion that no such substantial question of law of general importance is involved in the case which needs to be decided by the Supreme Court. The prayer made in this behalf is accordingly rejected.