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1981 DIGILAW 268 (KAR)

D. S. LAKSHMIDEVI v. STATE OF KARNATAKA

1981-08-24

K.S.PUTTASWAMY

body1981
K. S. PUTTASWAMY, J. ( 1 ) AS common questions of law arise for determination in all these cases, I propose to dispose of them by a common order. ( 2 ) IN these petitions under Art. 226 of the Constitution, the petitioners have principally challenged the validity of Rule 3a~of Karnataka minor mineral concession Rules, 1969 (hereinafter referred to as the Rules ). ( 3 ) IN exercise of the powers conferred by S. 15 of the Mines and Minerals (Regulation and Development) Act ot 1957 (Central Act 67 of 1957) (hereinafter referred to as the Act), Goverrir- ment of Karnataka by its notification no. G. S. R. 144 dated 19th April, 1969 promulgated the Rules. The Rules made elaborate provisions for the grant of leases of minor minerals to individuals within the State. Black granite as a minor mineral was regulated by the Rules. Prior to 5. 9. 79 leases of black granite or their renewal to individuals was not prohibited. In that view, the competent authorities under the Rules had granted leases for exploiting black granite in different parts of the State to various individuals. A lease granted to an individual under the Rules is normally valid for a period of 5 years and is generally renewed before the expiry of the lease for a similar period. ( 4 ) ON various dates, but all of them before 13. 9. 79, the petitioners who are either engaged in the business of mining black granite or proposing to engage-themselves in that business, made applications under the Rules before the appropriate competent authorities for grant of mining lease to exploit black granite on the areas mentioned in their respective applications. On th,e promulgation of Rule sa of the Rules, the authorities have rejected most of the applications made before them on the ground that the same is prohibited by the said rule. In a few cases, like W. P. Nos. 553, 15857 of 1980 etc. the authorities have not made express orders rejecting applications made by the said petitioners. Even though, there is no express order rejecting their applica tions these and other petitioners have approached this Court challenging the vires of Rule 3a of the Rules. ( 5 ) RULE 3a of the Rules promulgated" by Government on 5. 9. the authorities have not made express orders rejecting applications made by the said petitioners. Even though, there is no express order rejecting their applica tions these and other petitioners have approached this Court challenging the vires of Rule 3a of the Rules. ( 5 ) RULE 3a of the Rules promulgated" by Government on 5. 9. 79 reads thus:"3 A. Lease of quarries in respect of Black Granite to Government corporation etc:- (1) Notwithstanding anything to the contrary contained in these rules, no lease for quarrying black granite shall be granted to private persons. (2) The State Government themselves may engage in quarrying black granite or grant leases for quarrying black granite in favour of any corporation wholly owned by the state Government; provided that in respect of any land belonging to any private person, the consent of such person shall be obtained for such quarrying or granting of lease. "sub-rule (1) of the said Rule in clear, unambiguous and emphatic terms prohibits the lease of black granite to private persons. Sub-rule (1) which prohibits the lease of black granite to private persons is mandatory. So long as the said rule is in force, it is not open to any authority in the State to grant a lease of black granite to any private individual. Sub-rule (2) carries out the object of sub-rule (1) and reserves the exploitation of black granite exclusively to Government or to a Corporation wholly owned by government. The proviso to sub-rule (2) requires the consent of the land holder if quarrying or grant of lease has to be made on the land of such person. ( 6 ) IN a few cases like WP 7945, 9-830, 9831 of 1980 etc. the petitioners have filed their additional affidavits alleging that even after the said Rule came into force, the competent authorities have made fresh grants or renewals in favour of persons detailed in their affidavits. On this plea, the petitioners in those cases which was adopted by the other petitioners, have urged that they have been subjected to hostile discrimination offending Art.-14 of the Constitution. On this basis the petitioners have urged that they are also entitled for grant of leases despite the prohibition in Rule 3a of the Rules. ( 7 ) THE State and its subordinate authorities have filed a common return justifying the impugned rule. On this basis the petitioners have urged that they are also entitled for grant of leases despite the prohibition in Rule 3a of the Rules. ( 7 ) THE State and its subordinate authorities have filed a common return justifying the impugned rule. On the necessity to make the impugned rule, the respondents have stated thus in their return:"the black granite which is also known as ornamental stone is one of the important 'foreign exchange earning commodity. The private quarrying lease holders either by indiscriminate quarrying operation or by mutual competition have caused loss to both the mineral as well as for the foreign exchange. Wherefore, with an intention to safe-guard both these aspects the state Government have thought fit and proper not to permit such private persons to go on with the quarrying operation and it has directed thait such operations should be vested in. the Government to operate by themselves or may grant leases for quarrying black granite to Corporations wholly owned by the State Government. " ( 8 ) ON the plea of the petitioners thai fresh grants or renewals have been made after the promulgation of Rule 3a of the Rules, the learned Advocate general appearing for the respondents has filed a memo in these terms:"with reference to I. A. filed in w. P. No. 6480 of 1980 and connected cases, bringing to the kind notice of this Hon'ble Court that in some cases fresh leases had been granted and in some others, leases have been renewed after 13. 9. 79, the date on which the Karnataka Minor Minerals concession (Amendment) Rules, 1979 came into force, it is submitted that it is true that in one case a fresh lease has been granted (after the Government had approved of the same on 28. 8. 79) after 13. 9. 79 and in a few other cases, leases have been renewed after "13. 9. 79. It is ascertained that the authori- ies had granted leases before they had received communication in regard to the amendment to Rule 3 of the Rules. However, since the said leases and renewals granted after 13. 9. 79, would be contrary to law, the government will review the above cases and take appropriate action in accordance with law. 9. 79. It is ascertained that the authori- ies had granted leases before they had received communication in regard to the amendment to Rule 3 of the Rules. However, since the said leases and renewals granted after 13. 9. 79, would be contrary to law, the government will review the above cases and take appropriate action in accordance with law. "but on a close examination of the records produced by the learned advocate General on this aspect of the matter, the following facts emerge: (i) A firm called M s Obli Granites, mettur Dam had applied on 3. 8. 77 before the Conservator of Forests, mysore for grant of a quarrying lease of black granite over an area of 40 acres in Pachamalai Palar Belt, M. M. Range, who had rejected the same on 12. 4. 78. On a revision petition filed by the said firm, a minute was made by the then Minister for Mines on 17. 7. 79 to grant 4 acres of land to the said firm. In pursuance of the said minute of the Minister in charge of Mines, an order was issued by the Government on 20. 8. 79 and was communicated to the Conservator of Forests, Mysor for necessary action. On (the basis of the said order of Government, the conservator of Forests, Mysore issued Notification No. LND/ql/srj/04 77-78 dated 17. 9. 79 under Rule 9 of the rules incorporating the area and the terms and conditions of the grant of quarrying lease. On the very next day, a quarrying lease was also executed between the firm and Government and was registered on 19. 9. 79 by the Sub- registrar of Hanur; (ii) A firm called m/s Indian Overseas Traders, Bangalore held as many as three leases for quarrying black granite in three different areas of Ramapuram Range bearing registered lease Nos. 926, 929 and 956 which were due to expire on 25. 9. 79, 29. 9. 79 and 26. 11. 79 respectively. On applications made by the said firm for renewal under Rule 16 of the Rules, the Conservator of Forests mysore by three different orders made after 13. 9. 79 has renewed the aforesaid three leases for a period of five years from the date of expiry of the respective leases. On the basis of the renewals granted by the said officer, necessary registered renewal deeds have been executed on 18. 9. 9. 79 has renewed the aforesaid three leases for a period of five years from the date of expiry of the respective leases. On the basis of the renewals granted by the said officer, necessary registered renewal deeds have been executed on 18. 9. 79 and 13. 11. 79. ( 9 ) FROM the above facts, two things that clearly emerge are: (i) M|s Obli granites had been granted a lease by government prior to Rule 3a of " the rules came into force, but the deed of lease was executed after the said rule came into force; (ii) Three renewals have been granted and necessary renewal lease deeds have been ex- cuted in favour of M s Indian Overseas traders, Bangalore after the rule came into force. Except for the above, the assertion of some the petitioners that various other persons also have been granted fresh leases or renewals after the rule came into force, denied by the respondents, is not satisfactorily established. ( 10 ) A similar rule made by Government of Tamilnadu under S. 15 of the act for the same purpose on 7. 12. 77 had been challenged before the High court of Madras by M|s. Hind Stone and others in M/s Hind Stone v. Union of india ( AIR 1981 Mad. 82.) , On 20. 6. 80 a Division Bench of the High Court of Madras had struck down the said rule on the ground that the same was in excess of S. 15 of the act. On appeals filed by the State 01 tamilnadu. the Supreme Court by its judgment dated 5. 2. 81 since reported in (2) reversed the said judgment of the high Court of Madras and has upheld the validity of the said rule. While the high Court of Madras had invalidated the rule on only one ground, the supreme Court examined its validity on every ground that was urged before it and upheld its validity. But, despite this Sri B. R. G. K. Achar, of the supreme Court Bar appearing for some of the petitioners whose arguments were adopted by other counsel, urged that the decision rendered by the supreme Court was only a decision on the facts of 'that case and cannot be construed as a decision laying down a principle that is binding on this Court. ( 11 ) RULE 3a of the Rules made by government of Karnataka under S. 15 of the Act is in pari materia with Rule 8c made by Government of Tamilnadu under the very said provision. The purposes and objects on which both governments have made the said Rules are one and the same. The effect of the said Rules in the respective States is also the same. ( 12 ) THE grounds on which the petitioners have challenged Rule 3a are similar to the grounds on which rule 8c had been challenged before the High Court of Madras and tht supreme Court of India. Every one of the grounds urged by the petitioners in these cases had been urged before the Supreme Court and that court has repelled all those grounds and upheld the validity of Rule 8c made by Tamilnadu Government. When this is the position, it is impossible to hold that the decision of the supreme Court in Hind Stone's case ( AIR 1981 SC 711 .) is only a decision on the facts of that case and does not enunciate a binding principle as contended for the petitioners. I have, therefore, no hesitation in holding that Hind Stone's case decided by the Supreme Court cannot be distingushed on any ground much less on the grounds urged for the petitioners, and on the principles stated in that case, the challenge of the petitioners to Rule 3a of the Rules has no merit. I, therefore, reject the challenge of the petitioners to Rule 3a of the rules. ( 13 ) IN Hind Stone's case (2) the supreme Court dealing with the delay in the disposal of applications made for quarrying leases and their rejection after Rule 8c came into force observed thus:"while it is true that such applications should be dealt with within a reasonable time, it cannot on that account be said that the right to have an application disposed of in a reasonable time clothes an applicant for a lease with a right to have the application disposed of on the basis of the rules in force at the time of the making of the application. No one has a vested right to the grant or renewal of a lease and none can claim a vested right to have an application for the grant or renewal of a lease dealt with in a particular way, by applying particular provisions. In the absence of any vested rights in anyone, an application for a lease has necessarily to be dealt with according to the rules in force on the date of the disposal of the application despite the fact that there is a long delay since the making of the application. We are, therefore, unable to accept the submission of the learned counsel that applications for the grant or renewal of leases made long prior to the date of G. O. Ms. No. 1312 should be dealt with as if Rule 8c did not exist. "sri Achar urged that the above enunciation of the Supreme Court is opposed to the enunication made by a Bench of that Court in Ramana Dayaram- shetty v. International Airport ( AIR 1979 SC 1628 .) and cannot, therefore, be valid. In Ramana Dayaram Shetty's case ( AIR 1979 SC 1628 .) the Supreme Court was dealing with the award of contracts by the State and the neccessity to comply with the requirement of Art. 14 of the Constitution. But in Hind Stone's case (2) the Supreme Court had directly examined the right of an applicant to obtain a lease or a renewal and has srtated the above principle. As I apprehend, there is really no conflict in the principles enunciated in Ramana dayaram Shetty's case and Hind stone's case and, therefore, the question that the enunciation made by the larger bench alone is binding on this Court does riot arise. In any event, the decision in Hind Stone's ca,se that has examined the question directly is binding on this Court. For these reasons I do not see any merit in this contention of Sri Achar and I reject the same. ( 14 ) SRI Achar also urged that on the application of the principle of promissory estoppel enunciated by the supreme Court in Union of India v. Anglo Afghan Agencies AIR 1979 SC 621 . and the applications made by the petitioners before 5. 9. 79, have to be considered and disposed of by the competent authority. ( 14 ) SRI Achar also urged that on the application of the principle of promissory estoppel enunciated by the supreme Court in Union of India v. Anglo Afghan Agencies AIR 1979 SC 621 . and the applications made by the petitioners before 5. 9. 79, have to be considered and disposed of by the competent authority. ( 15 ) RULE 3a of the Rules has the same effect of the Act (vide para 11 in hind Stone's case ). The law in express terms prohibits grant of licences to private persons. The principles of promissory estoppel for which there is absolutely no pleading, cannot operate in derogation of a law made by the competent legislature. In this view, the earlier applications made by the petitioners are required to be con- sidered despite the specific prohibition by law and the ruling of the Supreme court in Hind Stone's case, applying' the principles of promissory estoppel has no merit. I, therefore, reject this contention of Sri Achar. ( 16 ) SRI Achar lastly contended that in making fresh grants or renewals to certain persons even after Rule 3a came into force, but denying that' benefit to the petitioners' that had made applications earlier, the State had practised hostile discrimination offending Art. 14 of. the Constitution and, therefore, the State was bound to extend the same treatment to the petitioners also despite the prohibition contained in Rule 3a of the Rules. In support of his contention Sri Achar strongly relied on a large number of rulings explaining the true scope and ambit of Art. 14 of the Constitution in particular on the dissenting minority opinion of Subba Rao, J. (as he then was) in Lachman Doss v. State of punjab ( AIR 1963 SC 222 ). Sri B. S. Keshava lyengar, learned Advocate General appearing for the respondents, without disputing the invalidity of the grants or renewals, if any, made after Rule 3a came in,to force, urged that against those invalid grants or renewals, separate action is being taken to annul them and the same cannot be held as cases of hostile discrimination offending Art. 14 of the constitution and a mandamus to commit an illegality in violation of Rule 3a cannot be granted. In support of his contention Sri lyengar strongly relied on the observations of the Supreme court in M|s Narinder Chand hem Raj v. Lt. In support of his contention Sri lyengar strongly relied on the observations of the Supreme court in M|s Narinder Chand hem Raj v. Lt. Governor Administrator H. P. ( AIR 1971 SC 2399 . ). The true scope and ambit of Art. 14 of the Constitution has been explained by the Supreme Court in a large number of rulings and those principles have also been summarised in Ram Krishna Dalmia v. Tendolkar (8 ). Without needlessly restating all those principles but bearing them in mind, I propose to examine the con- tensions of Sri Achar. ( 17 ) RULE 3a (1) operates against all persons and does not provide for any person or class of persons. The rule operates equally against all, and therefore, question of classification or favourable treatment to any person or hostile descrimination against any person does not arise. When everybody is treated alike, the guarantee ot equality of treatment enshrined in art. 14 of the Constitution is fully achieved. So far as reservations made in favour (of the State or undertakings wholly owned by the State Government the same does not also offend Art. 14 of the Constitution. ( 18 ) WHAT is really complained by the petitioners is that an uniform and a valid rule has been or is being unevenly administered by Government or the other authorities. Even here also, it is not the case of the petitioners that Government and other authorities have intentionally and systematically administered the same and are even now continuing to do so in the same way. ( 19 ) SO far as fresh grants, the petitioners have adverted to a grant made to M|s Obli Granites, the facts of which I have already noticed in some de'ail. A lease deed was executed in favour of that party after Rule 3a came into force in pursuance of a grant made earlier to the said rule came into force, is borne out from the records. Whether a notification under Rule 9 of the Rules and deed of lease can be executed after Rule 3a came into force in pursuance of an earlier grant made, is not free from doubt and in any event that question cannot be decided without 8. AIR 1958 538. the presence of that party to these proceedings. Whether a notification under Rule 9 of the Rules and deed of lease can be executed after Rule 3a came into force in pursuance of an earlier grant made, is not free from doubt and in any event that question cannot be decided without 8. AIR 1958 538. the presence of that party to these proceedings. ( 20 ) ALL the three renewals in favour of Mis Indian Overseas Traders, have been granted after Rule 3a came into force viz. , on 13. 9. 79, on which day the said rule was published in Karna- taka Gazette, cannot be disputed. ( 21 ) IN Hind Stone's case the Supreme court has ruled that a renewal stands on the same footing as an application for a fresh grant and the same cannot therefore, be granted after the rule comes into force and on that principle the renewals granted to M/s indian Overseas Traders are illegal, cannot be doubted. But, those renewals had been granted before the Supreme Court rendered its decision and this Court had not expressed its opinion one way or the other, Even the decision of the Madras high Court had not been rendered by that time. However, from the renewals made in favour of M/s Indian Overseas traders, it is difficult to hold that government or its subordinate authorities have wilfully and persistently administrered the law with an evil eye and an uneven hand against the petitioners and others that were similarly situated. ( 22 ) A challenge to a law and an administrative action under a law are not on the same footing and there is a marked distinction between the two. ( 23 ) IN Joseph E. Snowden v. Edward j. Hughes (321 U. S. 1.) the American Supreme court examining a challenge ot an administrative action as violativ of the equality clause of the American constitutoin, stated the principle in these words:"the unlawful administration by state officers of a state statute fair on its face, resulting in its unequal application to those who are entitled to be treated alike, is not a denial of equal protection unless there is shown to be present in it an element of intentional or purposeful discrimination. " ( 24 ) IN State of W. B. v. Anwar AH sarkar (1952 SC 284.) a Constitution Bench of the supreme Court, had occasion to examine the true scope and ambit of Art. 14 of the Constitution in deciding 1he validity of the West Bengal 'special courts Act of 1950 that empowered the government and the relevant notification issued by Goverment thereto to refer cases for trial by Special courts. While the majority of the six learned Judges upheld the judgment of the Calcutta High Court invalidating the said Act as violative of Art. 14, patanjali Sastri, CJ was of the view that that Act arid the notification issued thereto were valid. In expressing that opinion, the learned Chief justice also expressed his concurrence with the above principle propoundeci in Snowden's case. In the same case. Mukherjea, j. (as he then was) while disagreeing with the learned Chief justice and agreeing with the majority expressed on the question that is relevant for these cases in these terms:"when discrimination is alleged against officials in carryting out the law, a question of intention may be material in ascertaining whether the officer acted mala fide or not; but no question of indention can arise when discrimination follows or arises on the express terms of the law itself. "chandrasekhara Aiyar, J. who was with the majority also expressed the same view on the question. ( 25 ) IN Ramanath Verma v. State of rajasthan (1963) 2 SCR 152 - AIR 1967 SC 603 , the point directly arose before the Supreme Court on tthese facts: A scheme framed under chrpter IV-A of the Motor Vehicles act of 1939 had not been uniformly implemented against all persons. In implementation of the said scheme, the appellants had been excluded from operating their. services on the routes covered by the, said scheme, but some other operators who were liable to be excluded by inadvertence, had not been excluded. The appellants contended that their exclusion was violative of Article 14 of the Constitution. In repelling that contention, a Constitute Bench of the Supreme Court speaking through wanchoo, J. (as he then was) stated the principle in the'se words: secondly, it is urged that in the case of some persons, the permits have neither been cancelled nor made ineffective over the over-lapping route and this amounts to discrimination'. In repelling that contention, a Constitute Bench of the Supreme Court speaking through wanchoo, J. (as he then was) stated the principle in the'se words: secondly, it is urged that in the case of some persons, the permits have neither been cancelled nor made ineffective over the over-lapping route and this amounts to discrimination'. The reply of the State to this contention is that it was - by oversight that permits of certain permit- holders on the overlapping routes have not been cancelled or made ineffective and it is further said that the State would have corrected this oversight but for the stay order obtained from this Court'. Discrimination envisaged. under Article 14 is conscious discrimination and a discrimination arising out of oversight is no discrimination at all. In the present case the discrimination has resulted because of an oversight which the State is prepared to rectify. It is not the case of the appellants that these few permitholders are being favoured deliberately for ulterior reasons. We, therefore accept the reply of the State that a few permit holders on the overlapping routes have been left out by oversight and that their permits will be dealt with -in the same manner as of the appellants, as soon as thestay order passed by this Court comes to an end. There is therefore, no force in this contention also and it is hereby rejected. In Vishundas Hundumal v. State of m. P. ( (1981) 2 SCC 410 ) the Supreme Court has again reiterated this principle. ( 26 ) ON an examination of the above rulings and various other rulings bearing on the point, Dr. Durga Das Basu in his commentary on the Constitution of india (6th Edition) has neatly and correctly summarised the principles in these words: in short- (i) When. a law is challenged as discriminatory, the relevant consideration is the effect of the law, and not the intention of the Legislature. But' when a law is itself non-discrimina -. tory but its administration is challenged as discriminatory, the question of intention of the adminstrative authority becomes material; in such a case the administrative action cannot be said to have offended article 14 unless it was 'mala fide' or actuated by a hostile intention. In order to show such hostile discrimination, it is necessary to show that there has been a systematic discrimination against a particular class or persons. In order to show such hostile discrimination, it is necessary to show that there has been a systematic discrimination against a particular class or persons. If it results in discrimination in a few stray cases, that is not a discriminatory administration of the law. There is no discrimination if the officer has acted bona fide and the inequality is the result of a mere error of judgment. In the absence of mala fides, the mere fact that the Government has selected a particular industry as serving a public purpose, for the purpose of acquiring land for the industry at public expense, cannot be challenged as discriminatory. (ii) Such mala fide administration is never presumed, but has to be proved. On the other hand, the presumption is that public officials will discharge their duties honestly and in accordance with the rules of law. This presumption is heightened when the law vests a discretion in in high officials or authorities. (iii) If, however, the Executive exercises its power in disregard of the policy indicated by the Legislature then the exercise of the power by the executive can be annulled as discriminatory and being in contravenr- tion of Art'. 14. (iv) Where the statute itself is not discriminatory, but an order or notification, issued in pursuance of power conferred by the Statute is, the order or Notification being itself a 'law' within the meaning of Art. 13 (3) will be void under Art. 12 (2 ). In this case, no question of reasonableness of legislative classification arises and the executive order is directly hit by Art. 14 read with ' Art. 12, ' (v) But an ultra vires act on the part of an official or authority should be distinguished from a discriminatory application of a law. "bearing these principles in mind, it is necessary to examine the contention of the petitioners. ( 27 ) FIRSTLY, the pleadings of the petitioners are totally inadequate to sustain their challenge. Secondly, examining all the facts, it is difficult to hold that Government, and other subordinate competent authorities have administered Rule 3a mala fide, intentionally and systematically to favour others and have picked up the petitioners for hostile and discriminatory treatment offending Article 14 of the Constitution. Secondly, examining all the facts, it is difficult to hold that Government, and other subordinate competent authorities have administered Rule 3a mala fide, intentionally and systematically to favour others and have picked up the petitioners for hostile and discriminatory treatment offending Article 14 of the Constitution. Lastly, in the memo filed, the respondents withon seeking to justify the mistakes committed by them, have come forward to rectify the isolated mistakes so far committed in accordance with law. After all an illegal order also cannot be undone either by Government or such other competent authority without notice to the person affected which necessarily occupies some time. I have no doubt that Government will not allow grass to grow under its feet and take all necessary steps to undo the wrongs committed by it orother authorities in accordance with law. But, this by itself cannot be a ground to hold that the petitioners have been picked up for an hostile and discriminatory treatment. For all these reasons, i hold that there is no merit in this contention of Sri Achar and I, therefore, reject the same. ( 28 ) AS all the contentions urged for the petitioners fail, these writ petitions are liable to be dismissed. I, therefore, dismiss these writ petitions and discharge the rule issued in all these cases. But, in the circumstances of the cases, I direct the parties to bear their own costs. --- *** --- .