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1986 DIGILAW 312 (ORI)

FERRO ALLOYS CORPORATION LIMITED v. UNION OF INDIA (UOI)

1986-09-02

G.B.PATNAIK, L.RATH

body1986
JUDGMENT : L. Rath, J. - This petition under Article 226 of the Constitution of India seeks to quash the orders passed by the State of Orissa in Mining and Geology Department on 22-7-1976 refusing the application of the Petitioner for grant of mining lease of 54.58 hectares under Rule 60 of the Mineral Concession Rules, 1960, for brevity referred hereafter as the Rules, and the order of the Central Government rejecting the revision application of the Petitioner preferred as against the orders of the State Government. 2. The Petitioner's case is that it is a Public Limited Company which has set up a Ferro Manganese Plant manufacturing Ferro Manganese, at Shreeramnagar, District Srikakulam. Andhra Pradesh and for production of Ferro Manganese, manganese are being an essential raw material it made an application to the State of Orissa for grant of mining lease of the area in question which was previously held under lease of the area in question which was previously held under lease by M/s. M.A. Tullock & Co. Private Ltd. The application of the Petitioner was rejected by the State Government on 22-7-1976 on the ground that the same was premature as the area overlaps the previous leasehold area of M/s. M.A. Tullock & Co. (P) Ltd. The Petitioner preferred a revision under Rule 54 of Mineral Concession Rules before the Central Government and contended inter alia that the rejection of its application for mining lease by the State Government was not justified and that it was a fit case, where powers of the Central Government under Rule 58(2) of Mineral Concession Rules should be exercised for relaxing the provisions of Rule 58(1) of the Rules as a special case. It was further contended before the Central Government that Rules 58, 59 and 60 were only directory in nature and hence the State Government's action in rejecting the application as premature was ill conceived. In the revision a prayer was made that before any order is passed, the Petitioner should be granted a personal hearing. The revision of the Petitioner was dismissed by the Central Government by order dated 22-4-1978 holding that since the State Government had not notified the area for grant of mining lease under Rule 58 or 59, the action of the State Government was in accordance with with and therefore, no exception could be taken to it. The revision of the Petitioner was dismissed by the Central Government by order dated 22-4-1978 holding that since the State Government had not notified the area for grant of mining lease under Rule 58 or 59, the action of the State Government was in accordance with with and therefore, no exception could be taken to it. The State Government being owner of the mineral, it is within its discretion and competency to refuse to throw open an area and they cannot be compelled to take action to the contrary. 3. A counter affidavit has been filed by the opposite party No. 2, the State of Orissa contending that the area applied for by the Petitioner overlaps the previous leasehold area of M/s. M.A. Tullock & Co. (P) Ltd. for 621 acres. The renewal of M.L. Application of M/s. M.A. Tullock & Co. was rejected and thereafter the area in question has- not been thrown open for regrant as contemplated under the rules and therefore the application of the Petitioner for mining lease has been rightly rejected under Rule 60 as premature. Besides M/s. M.A. Tullock & Co. also filed a writ petition before the Delhi High Court which was allowed by judgment dated 8-11-1979 queuing the order of rejection of renewal application as also the revisional order dated 15-2-1977 of the Central government. The State Government have filed an appeal in the Delhi High Court against the Single Bench judgment which is still pending. In the event the judgment of the Single Judge of the Delhi High Court is upheld by the Division Bench, the renewal application its merit. Besides M/s. Orissa Mining Corporation Ltd. which is stated to be a public sector undertaking has also applied for mining lease in respect of the same area on 31-7-1976. As such the revision of the Petitioner before the Central Government has been rightly rejected. 4. Even though in the writ petition very many contentions had been raised, yet Mr. Besides M/s. Orissa Mining Corporation Ltd. which is stated to be a public sector undertaking has also applied for mining lease in respect of the same area on 31-7-1976. As such the revision of the Petitioner before the Central Government has been rightly rejected. 4. Even though in the writ petition very many contentions had been raised, yet Mr. Y.S.N. Murty appearing for the Petitioner has confined his submissions to two points: (i) The order passed by the Central Government rejecting the revision is violative of the principles of natural justice since the Petitioner had specifically asked for personal hearing and such opportunity was not afforded to him; and (ii) Even though the Petitioner in the revision application before the Central Government had also invoked the powers of the Central Government under Sections 30 and 31 of the Mines and Minerals (Regulation & Development) Act, 1957 (hereinafter called as the 'Act') and under Rule 58(2) to relax the provisions of Rule 58(1), yet the Central Government did not consider the matter at all and no order under Rule 58 having been passed on such prayer of the Petitioner, It should be held that the Central Government has failed to exercise its jurisdiction vested in it and a writ should be issued to the Central Government to reconsider the matter for relaxing the provisions of Rule 58(1) in respect of the applied area. 5. So far as the first consideration is concerned, it has been urged by Mr. Murty that the function of the Central Government under Rule 54 of the Rules is quasi-judicial in nature and that when a revision Petitioner specifically asks for a personal hearing, it is incumbent on the part of the Central Government to grant such a hearing. If no opportunity is afforded, it would be in violation of natural justice and the order passed would be a void one. In support of such proposition Mr. Murty has placed reliance on Vrajlal Manilal and Co. Vs. Union of India (UOI) and Another. On reading the decision we are however afraid that it is of no service to Mr. Murty. It was a case in which the Appellant before the Supreme Court had filed a review petition under Rule 57(2) of the Mineral Concession Rules, 1949. Murty has placed reliance on Vrajlal Manilal and Co. Vs. Union of India (UOI) and Another. On reading the decision we are however afraid that it is of no service to Mr. Murty. It was a case in which the Appellant before the Supreme Court had filed a review petition under Rule 57(2) of the Mineral Concession Rules, 1949. Thereafter certain correspondence 'had ensued between the Central Government and the State Government in regard to the propriety of granting the application for review. The Appellants having come to know of it from a letter addressed to them by the Government of India that the State Government had been required to send a report with their remarks in connection with the application for review, made enquiries as to what had happened and requested the Central Government that they might be informed as to the progress of their application and that they may be given an opportunity to personal hearing at which they will be able to satisfy the Government about the genuineness of the case. The Appellants, however, had not been informed of the correspondence that had passed between the Government of India and the State Government. The application for review was rejected by the Central Government. Challenging such order of rejection it was urged before the Supreme Court that since the order was passed without affording the Appellants opportunity to know about the contents of the report submitted by the State Government and without affording them a reasonable opportunity to represent their case, it was void. Accepting the contention the Supreme Court held that if the report of the State Government made any point against the representations made by the Appellants and these were taken into consideration by the Union Government, in common fairness, the Appellants were entitled to be informed as to what these were and to an opportunity to point out how far they militate against the contentions raised by them. It was as such held that the order of the Government of India was vitiated as being contrary to the principles of natural justice since it was rendered without affording the applicants a reasonable opportunity of being heard which is sine qua non of a fair hearing. It was as such held that the order of the Government of India was vitiated as being contrary to the principles of natural justice since it was rendered without affording the applicants a reasonable opportunity of being heard which is sine qua non of a fair hearing. The ratio of the case is only that where an authority is vested with a quasi-judicial function, it would be acting contrary to the principles of natural justice if it relies upon some documents behind the back of a party in reaching the decision and it would be a case of refusal of reasonable opportunity to be heard. This is not an authority for the proposition that refusal to grant personal hearing where it is asked for is negation of natural justice. 6. The next case relied upon by Mr. Murty is Shivji Nathubhai Vs. Union of India (UOI) and Others. Discussing the nature of the functions of the Central Government under Rule 54 of the Mineral Concession Rules, 1949 as it stood prior to 1954, the Supreme Court held that the Central Government under the Rule had the duty to act judicially and as such it was incumbent upon it before coming to a decision, to give a reasonable opportunity to the party whose rights were being affected, to represent his case. The Supreme Court however was not considering in the case whether personal hearing is a part of the reasonable opportunity so required to be afforded to the party concerned. The question whether personal hearing is an essential aspect of the principles of natural justice has been considered by the Supreme Court in several cases. The matter was directly considered in Madhya Pradesh Industries Ltd. Vs. Union of India and Others (UOI) which was a case arising in relation to the powers of revision of the Central Government under Rule 55 of the Mineral Concession Rules, 1960. Answering an identical question now raised, their Lordships in the Supreme Court observed: As regards the second contention, I do not think that the Appellant is entitled as of right to a personal hearing. It is no doubt a principle of natural justice that a quasi-judicial tribunal cannot make any decision adverse to a party without giving him an effective opportunity of meeting any relevant allegations against him. It is no doubt a principle of natural justice that a quasi-judicial tribunal cannot make any decision adverse to a party without giving him an effective opportunity of meeting any relevant allegations against him. Indeed, Rule 55 of the Rules, quoted supra recognizes the said principle and stated that no order shall be passed against any Appellant unless he has been given an opportunity to make his representations against the comments, if any, received from the State Government or other authority. The said opportunity need not necessarily be by personal hearing. It can, be by written representation. Whether the said opportunity should be by written representation or by personal hearing depends upon the facts of each case and ordinarily it is in the discretion of the tribunal. In an earlier Constitution Bench decision reported in S. Kapur Singh Vs. Union of India (UOI) the Supreme Court, while considering the ambit of the opportunity required to be afforded to a civil servant of showing cause within the meaning of Article 311 of the Constitution; held that an opportunity of making an oral representation is not a necessary postulate of an opportunity of showing Cause and that hence the plea that the civil servant concerned was deprived of the constitutional protection of that Article because he was not given an oral hearing by the President cannot be sustained. In another Constitution Bench decision of the Supreme Court in F.N. Roy v. Collector of Customs, Calcutta and Ors. AIR 1957 S.C. 548, the question was in an appeal under the Sea Customs Act preferred to the Central Board of the Revenue and the application in revision to the Government of India, the Petitioner had right of being personally heard. It was held that there is no rule of natural justice that at every stage a person is entitled to a personal hearing. Again in The State of Maharashtra and Another Vs. Lok Shikshan Sansatha and Others it was urged before a Constitution Bench of the Supreme Court that rejection of applications for opening new schools by the Deputy Director of Education on recommendation of the District Committee, and the further direction in the order that if the Appellants start a school for which permission is refused a serious view of it would be taken, was vitiated since the order was passed without affording the Appellants a hearing. It was held: When the relevant circumstances have been taken into account by the District Committee and the educational authorities, there is no violation of any principle of natural justice merely for the reason that the Appellants were not given a hearing by the educational authorities before their applications were rejected. In Haradhan Saha Vs. The State of West Bengal and Others where a similar question cropped up under the Maintenance of Internal Security Act (1971) a Constitution Bench of the Supreme Court again held: The representation of a detenus is to be considered. There is an obligation on the State to consider the representation. The Advisory Board has adequate, power to examine the entire materials. The Board can also call for more materials. The Board may call the detenu at his request. The Constitution of the Board shows that it is to consist of Judges or persons qualified to be Judges of the High Court. The Constitution of the Board observed the fundamental of fair play and principles of natural justice. It is not requirement of principles of natural justice that there must be an oral hearing. 7. The question came up before the Supreme Court in a different context in P.N. Eswara Iyer etc. etc. v. The Registrar, Supreme Court of India AIR 1980 S.C. 808 , while dealing with the amendments to the Supreme Court Rules (1966) providing that an application for review shall be disposed of by circulation without any oral arguments and that the Court may either dismiss the petition or direct notice to the other party. Even though the judgment was delivered in connection with the proceedings before the highest judicial authority of the country, yet the ratio of the decision can be well applied to a quasi-judicial proceeding before the executive Government. Dealing with the question, Hon'ble Justice Krishna Iyer, speaking for himself and Justice Murtaza Fazal Ali & D.A. Desai, said: The right to be heard is of the essence but hearing does not mean more than fair opportunity to present one's point on a dispute, floowed by a fair consideration thereof by fair-minded Judges. Let us not remanticise this process nor stretch it to snap it. Presentation can be written or oral, depending on the justice of the situation. Where oral persuasiveness is necessary it is unfair to exclude it and therefore, arbitrary too. Let us not remanticise this process nor stretch it to snap it. Presentation can be written or oral, depending on the justice of the situation. Where oral persuasiveness is necessary it is unfair to exclude it and therefore, arbitrary too. But where oral presentation is not that essential, its exclusion is not obnoxious. What is crucial is the guarantee of the application of an instructed intelligent, impartial and open mind to the points presented. A blank Judge weared by oral aggression is prone to slumber while an alert mind probing the 'papered' argument may land on vital aspects. Thus the scuttling of personal hearing even in a judicial proceeding is not considered under the some circumstances, as antithesis to natural justice. The same rule would apply to an administrative/quasi-judicial proceeding with much more vigour. 8. However, while oral representation may not be a necessary concomitant of natural justice, yet in given cases failure to afford personal hearing if asked, for, may amount to negation of natural justice. There may be cases where, as has been held by the Supreme Court in Travancore Rayon Ltd. Vs. Union of India (UOI) complex and difficult questions requiring familiarity with technical problems may arise, and a personal hearing if given, would conduce to better administration and more satisfactory disposal of the grievances of the citizens. The case arose out of a revisional order passed by the Central Government u/s 36 of the Central Excise and Salt Act where the question to be considered was highly complex and technical one requiring familiarity with the chemical composition and physical properties of nitro-cellulose lacquers and of the substance produced by the revision Petitioner. The same consideration may also weight where the proceeding in question is one where the affected party maybe ultimately burdened with punishment or penalty as in the case of a student facing a disciplinary proceeding in a mal-practice case. It was held in a Full Bench decision of this Court reported in Sanjaya Rath v. Vice-Chancellor, Utkal University and Ors. The same consideration may also weight where the proceeding in question is one where the affected party maybe ultimately burdened with punishment or penalty as in the case of a student facing a disciplinary proceeding in a mal-practice case. It was held in a Full Bench decision of this Court reported in Sanjaya Rath v. Vice-Chancellor, Utkal University and Ors. ILR 1971 Cutt 610, that in disciplinary proceedings against students conducted by the University, what procedure is to be followed, would vary according to the facts and circumstances of each case subject to observance of the basic principles of natural justice i.e. the person accused must know the nature of accusation, must be given an opportunity to state his case and the Tribunal must act in good faith and grant an opportunity to the delinquent to have the materials that are used against him and to make necessary comments on those material to convince the Tribunal that he is innocent. Beyond these, the principles of natural justice do not extend further unless the rules specifically direct otherwise, but however if the delinquent demands that the persons reporting adversely against him are to be examined so that he would get an opportunity for cross-examining them, refusal of the prayer would amount to denial of reasonable opportunity of defending. 9. Making a resume of the aforesaid authorities, it may be stated with emphasis that when a Tribunal is to decide a lis, it is under an obligation to grant reasonable opportunity to the parties to make their representation and further to provide them with all documents and materials proposed to be taken into consideration in making the decision so that they can press their own comments on such documents and materials, but however, the opportunity for such representation need not be an oral one unless the rules so prescribe or because' of the very nature of the proceedings or the complexity of the question involved for decision, the aid of an oral hearing is essential. Evidently while the test is uniform, yet its applicability will vary from case to case depending upon the facts. 10. So far as a revision under Rule 54 of the rules before the Central Government is concerned, no rules require that a personal hearing must be granted before orders are passed. Evidently while the test is uniform, yet its applicability will vary from case to case depending upon the facts. 10. So far as a revision under Rule 54 of the rules before the Central Government is concerned, no rules require that a personal hearing must be granted before orders are passed. The revision preferred by the Petitioner also was not such which inherently necessitated a personal hearing the lack of which stifled natural justice against the Petitioner. In this view of the matter, the first point urged by Mr. Murty must be held to have no merit. 11. So far as the second contention raised, it would be of profit to quote the provisions of Sections 30 and 31 of the Mines and Minerals (Regulation and Development) Act, 1957 as also Rules 58 to 60: 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. 31. Relaxation of rules in special cases: The Central Government may, if it is of opinion that in the interests 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, renewal or transfer of any prospecting licence or mining lease, or the working of any mine for the purpose of searching for or winning any mineral, on terms and conditions different from those laid down in the rules made u/s 13. 58. Availability of area for regrant to be notified: (1) No area which was previously held or which is being held under a prospecting licence or mining lease as the case may be or in respect of which the order granting licence or lease has been revoked under Sub-rule (1) of the Rule 15 or Sub-rule (1) of Rule 31, shall be available for grant unless (a) an entry to the effect is made in the register referred to in Sub-rule (2) of Rule 21 or Sub-rule (2) of Rule 40, as the case may be in ink; and (b) the date from which the area shall be available for grant is notified in the Official Gazette at least thirty days in advance. (2) The Central Government may for reasons to be recorded in writing, relax the provision of Sub-rule (1) in any special case. (No. MII-164(12)/61 dt. 16-10-1961). 59. Availability of certain areas for grant to be notified: In the case of any land which is otherwise available for the grant of a prospecting licence or a mining lease but in respect "of which the State Government has refused to grant a prospecting licence or a mining lease on the ground that the land should be reserved for any purpose the State Government shall, as soon as such land becomes again available for the grant of prospecting licence or mining lease, grant the licence or lease after following the procedure laid down in Rule 58. (No. MII-1 (23/63 dt. 9-7-63). 60. Premature applications: Applications for the grant of a prospecting licence or a mining lease in respect of the areas in which- (a) no notification has been issued under Rule 58 or Rule 59, or (b) if any such notification has been issued the period specified in the notification has not expired shall be deemed to be premature and shall not be entertained and the fee, if any paid in respect of any such application shall be refunded: It is urged that since the Central Government has the power to revise any order made by the State Government and it has also the power to relax the provisions of any rules and authorise the grant of mining lease, such powers should have been exercised by the Central Government to relax the provisions of Rule 58(1) in respect of the are, for which mining lease was applied for and since the Central Government failed to make the necessary relaxation or even consider the same, it must be held to have failed in its duty. The rejection of the revision was vitiated without such consideration and must be quashed and further the Central Government should be directed to take a decision regarding such relaxation. 12. It must be stated at the outset that the writ petition had not claimed any such relief for issue of direction to the Central Government in the matter. Even otherwise such relief is also not available to the Petitioner. 12. It must be stated at the outset that the writ petition had not claimed any such relief for issue of direction to the Central Government in the matter. Even otherwise such relief is also not available to the Petitioner. The powers of the Central Government u/s 31 and Rule 58 are merely enabling provisions vesting power in the Central Government to relax the provisions if it is of opinion that it is necessary to do so in the interest of mineral development. The power is completely discretionary and there is no legal duty imposed upon the Central Government to make any such relaxation. It is well known that a mandamus can only be issued to enforce a legal duty but where no such duty exists, a petition for issue of writ of mandamus does not lie. A command from the Court in the Extraordinary jurisdiction would not be directed unless it is shown that the authority whose action is impeached is guilty of either commission or omission of its duty which law enjoins upon it to perform. A mandamus would not issue where the authority is not burdened by law for the purpose of any such duty. Consequently, where the act or forebearance complained of is in the absolute discretion of the authority and depends upon its own subjective satisfaction or decision, a mandamus cannot be issued to compel that authority to take the desired action. Reference may be made to K.V. Rajlakshmiah Setty and Anr. v. State of Mysore and Anr. AIR 1967 S.C. 993 , where the charges was of discrimination against the Petitioners inasmuch as the same concession which was shown to junior officers in the matter of promotion was not shown to them. The Supreme Court held: No doubt some concession 'had been shown to the first batch of 41 persons and the batches of persons who had come in after the batch of 63 persons also received some concession, but after all these were concessions and not something which they could claim as of right. The State of Mysore might have shown some indulgence to this batch of 63 persons but we cannot issue a writ: of mandamus commanding it do so. In Halsbury's Laws of England, 1973 (Edition) Vol. 1 at para 118 it is stated: Permissive power. The State of Mysore might have shown some indulgence to this batch of 63 persons but we cannot issue a writ: of mandamus commanding it do so. In Halsbury's Laws of England, 1973 (Edition) Vol. 1 at para 118 it is stated: Permissive power. The court will not compel authority to exercise a power which is merely permissive, and which does not impose an obligation to act, Where, however, a statute has been interpreted and action taken in the light of matters which ought not to have been take into account, that is to say, which the court considers not to be proper for the guidance of the discretion entrusted to the persons concerned, the latter will be considered not to have exercised their discretion according to law, and a mandamus will issue commanding them to exercise the powers given to them under the statute in question. The court will not grant a mandamus commanding the Attorney General to issue his fiat if he has refused it in the exercise of his discretion, or commanding the Parliamentary Commission for Administration to Investigate a complaint nor will the order go to a visitor of a cathedral, or of a college who has exercised his discretion in good faith. A mandamus, however, was allowed to go to a visitor to hear and determine an appeal when he had heard evidence but had declined to act thereon. Mandamus does not lie to a bishop, who has by law the power of approval of disapproval in the matter, to admit a certain person to the office of deputy registrar of the diocess; or to the Medical Disciplinary Committee to restore to the medical register a name which has been removed for reasons in regard to which the Committee are by statute sale judges. The provisions of Section 31 and Rule 53(2) being wholly discretionary and subjective, the Central Government was under no obligation to consider or act upon the request of the Petitioner and failure to do so would not invite a judicial chastisement, The second ground raised by Mr. Murty thus also fails. 13. Besides, as disclosed in the counter affidavit filed by the State of Orissa, the opposite party No. 2, there was also good reason for not throwing open the area for regrant. The area applied for fully overlaps the previous leasehold area of Mis. M.A. Tullock & Co. Murty thus also fails. 13. Besides, as disclosed in the counter affidavit filed by the State of Orissa, the opposite party No. 2, there was also good reason for not throwing open the area for regrant. The area applied for fully overlaps the previous leasehold area of Mis. M.A. Tullock & Co. and refusal of the renewal of mining lease in favour of the said Company is pending before the Delhi High Court in letters patent appeal at the instance of the State Government. The State Government is right in contending before us that in the event the letters patent appeal before the Delhi High Court is dismissed then the area has to be restored back to M/s. M.A. Tullock & Co. and hence it would not be expedient to throw over the area. 14. In the result there is no merit in the petition and the same is dismissed with costs. Hearing fee is assessed at Rs. 200/-. G.B. Patnaik, J. 15. I agree. Final Result : Dismissed