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Allahabad High Court · body

2007 DIGILAW 1151 (ALL)

RAI BHARAT DAS v. STATE OF U. P.

2007-04-24

R.P.MISRA, SHISHIR KUMAR

body2007
( 1 ) THE present writ petition has been filed for quashing the order dated 11. 9. 2006 passed by the respondent No. 2. Further a writ in the nature of mandamus directing the respondents Nos. 2 to 3 not to issue or hand over Form MM-11 to the respondent No. 10 with respect to the Firm M/s Rai Bharat Das and Brothers and further direct to issue or hand over Form MM-11 to the petitioners who are partners and attorney of the firm M/s Rai Bharat Das and Brothers. Further a writ in the nature of mandamus commanding the respondent No. 10 not to interfere in the working of the petitioners. ( 2 ) THE facts arises out of the present writ petition are that one Sri Lalta Prasad Agarwal S/o Late Sri Mahadeo Prasad, Sri Nar Singh Das Agarwal son of Sri Lalta Prasad Agarwal, Sri Ganesh Das Agarwal son of Sri Lalta Prasad Agarwal and Sri Shaym Das Agarwal son of Sri Bharat Das Agarwal constituted a registered firm in the name and style of M/s Rai Bharat Das and Brother, office situated at 84, Jhonstonganj, Allahabad. A mining lease was granted to the aforesaid partners and a lease deed was executed with effect from 18. 1. 1973 for excavation and transportation of silica sand to area 93. 15 hectares situated in village Parduan in Pargana Mau in District of Banda (now Chitrakoot ). Sri Lalta Prasad, one of the partner of the aforesaid firm M/s Rai Bharat Das and Brothers died on 27. 11. 1982 leaving behind Sri Bharat Das Agarwal, Sri Nar Singh Das Agarwal and Sri Ganesh Das Agarwal as his legal heirs and legal representatives. Sri Nar Singh Das Agarwal, Sri Ganesh Das Agarwal and Sri Shayam Das Agarwal, the legal heirs of Late Sri Lalta Prasad Agarwal were already partners of the aforesaid firm and after the death of Sri Lalta Prasad Agarwal, Sri Bharat Das Agarwal, one of his legal heirs became the partner of the aforesaid firm and they were continuing the business in the name and style of the same Firm M/s Rai Bharat Das and Brothers. Sri Nar Singh Das Agarwal one of the partner of the firm died on 4. 4. Sri Nar Singh Das Agarwal one of the partner of the firm died on 4. 4. 1986 leaving behind his sons Sri Sri Ram Agarwal, Sri Jai Ram Agarwal, Sri Jai Jai Ram Agarwal and Sri Sita Ram Agarwal as his legal heirs and representatives. Out of four brothers only Sri Ram Agarwal was interested in mining business which was carrying on by his father and other partners of the aforesaid firm has relinquished their rights/interest whatsoever with respect to the Firm M/s Rai Bharat Das and Brothers. In such situation, the petitioners become the partners of the aforesaid firm. The aforesaid partners of the firm informed the respondent Nos. 2 and 3 for the purposes of issuance of Form MM-11 with respect to the excavation and transportation of silica sand. ( 3 ) THE respondent no. 10 approached the respondent No. 3 for issuance of Form MM-11 on the basis of power of attorney dated 7. 4. 2001 executed by the respondents Nos. 6 to 9. As Ram Das Agarwal, Ghanshayam Das Agarwal and Mohan Agarwal are not the partners of the firm and on this basis the respondent No. 2 issued Form MM-11 to the respondent No. 10. The respondents Nos. 6 and 7 came to know about the irregularities committed by the respondent No. 10, the respondent No. 6 cancelled the power of attorney on 3. 5. 2006. The respondent No. 7 informed about the withdrawal of the said power of attorney through a letter dated 17. 3. 2006 to the respondents Nos. 2 and requested him not to issue form MM-11. Petitioner No. 3 Sri Rai Bharat Das Agarwal son of Late Sri Lalta Prasad Agrawal, one of the partner has executed a power of attorney in favour of Sri Sri Ram Agarwal, the petitioner No. 2 and appointed him his attorney through power of attorney deed dated 27. 5. 2006 and cancelled the power of attorney executed by his sons. The petitioner No. 3 Sri Rai BharatDas Agarwal informed about the execution of power of attorney in favour of the petitioner No. 2 and also about the cancellation of power of attorney. The petitioner No. 2 on behalf of the firm approached the respondents Nos. 2 and 3 for getting Form MM-11 for the purposes of excavation. The petitioner No. 3 Sri Rai BharatDas Agarwal informed about the execution of power of attorney in favour of the petitioner No. 2 and also about the cancellation of power of attorney. The petitioner No. 2 on behalf of the firm approached the respondents Nos. 2 and 3 for getting Form MM-11 for the purposes of excavation. The respondent No. 10 is not the partner of the aforesaid firm neither he has been authorised by any one of the partners of the said firm, as such, the respondent No. 2 in collusion with the respondent No. 10 has issued form MM-11. That due to the collusion with the respondent Nos. 2 and 3, the respondent No. 10 interfering in obtaining the Form MM-11 for the purposes of excavation. The respondent No. 10 has got no right to interfere in the business of the petitioners. The petitioners aggrieved by the action of the respondents Nos. 2 and 3 approached this Court by way of Writ Petition No. 38195 of 2006. The said writ petition was finally disposed of by order dated 28. 7. 2006 with a direction that the petitioners will submit a detail representation before the authorities concerned who will pass a detailed and reasoned order on the basis of the order passed by this Court. A detailed representation was submitted before the respondent No. 2. ( 4 ) NOTICES were issued to the respondent No. 10 calling him to file a reply. An objection was filed stating therein that on the basis of family settlement dated 1. 9. 1988 the respondents Nos. 6 to 9 are the partners of the firm M/s Rai Bharat Das and Brothers and they have executed irrevocable power of attorney in his favour. The petitioners were also directed to file the reply and the same was filed by the petitioners. The respondent No. 10 has also filed a unregistered agreement entered between him and Sri Shayam Das Agarwal, Ram Das Agarwal, Sri Ghanshyam Das and Sri Mohan Agarwal sons of Rai Bharat Das Agarwal in which it has been agreed between the parties that the aforesaid partners have received a sum of Rs. 2 lacs from the respondent No. 10 and transfer the lease rights in his favour for the purposes of excavation and transportation of silica sand. 2 lacs from the respondent No. 10 and transfer the lease rights in his favour for the purposes of excavation and transportation of silica sand. On the basis of reply submitted by the petitioners as well as the respondents the respondents have passed an order dated 11. 9. 2006 rejecting the claim of the petitioners. ( 5 ) IT has been submitted on behalf of the petitioners that the impugned order dated 11. 9. 2006 has been passed by the respondent No. 2 is based on unregistered family settlement dated 1. 9. 1988. A bare perusal of the family settlement clearly shows that it is not a memorandum of family settlement but is in fact a partition deed. Partnership cannot be changed by means of family settlement. A firm which is carrying on business is not the property of the family. It can only be runs by the partners. The further submission has been made that the power of attorney purports to be irrevocable. It cannot be revoked by the principal. Power of attorney cannot operates as transfer of property. As the power of attorney is not registered it cannot be taken into account by the respondent No. 2. ( 6 ) GRANT of mining lease is governed by the provision of Chapter II of Minor Minerals (Concession) Rules 1963, which does not provide for alteration of any terms of lease deed and it is not open to change the terms of lease by an unilateral act of the lessee. The objection filed by the petitioners has been ignored. ( 7 ) SRI Shashi Nandan, learned Senior Advocate who appeared on behalf of the petitioners has submitted that there is no provision under the Act and Rules to transfer the lease in favour of any person. This fact has been ignored by the respondent No. 2. In Minor and Minerals (Regulation and Development) Act, 1957, there is no provision that by way of executing the power of attorney, lease for the purposes of issuance of Form MM-11 can be transferred. This fact has been ignored by the respondent No. 2. In Minor and Minerals (Regulation and Development) Act, 1957, there is no provision that by way of executing the power of attorney, lease for the purposes of issuance of Form MM-11 can be transferred. In support of his contention he has submitted that Section 4 of 1957 Act clearly prohibits that no person shall undertake any reconnaissance, prospecting or mining operation in any area, except under and in accordance with the terms and condition of reconnaissance permit or of prospecting licence or as the case may be, of a mining lease, granted under this Act and Rules made therein. Section 4 is being quoted below:- "4. Prospecting or mining operations to be under licence or lease- (1) No person shall undertake any reconnaissance, prospecting or mining operations in any area, except under and in accordance with the terms and conditions of a reconnaissance permit or of a prospecting licence or, as the case may be, of a mining lease, granted under this Act and the rules made thereunder; provided that nothing in the sub-section shall effect any prospecting or mining operations undertaken in any area in accordance with the terms and conditions of a prospecting licence or mining lease granted before the commencement of this Act which is in force at such commencement: (Provided further that nothing in this sub-section shall apply to any prospecting operations undertaken by the Geological Survey of India, the Indian Bureau of Mines, the Atomic Minerals Directorate for Explorations and Research of the Department of Atomic Energy of the Central Government, the Directorate of Mining and Geology of any State Government (by whatever name called), and the Mineral Exploration Corporation Limited, a Government company within the meaning of Section 617 of the Companies Act, 1956 (1 of 1956 ). (1-A) No person shall transport or store or cause to be transported or stored any mineral otherwise than in accordance with the provisions of this Act and the rules made thereunder. 2. No reconnaissance permit prospecting licence or mining lease shall be granted otherwise than in accordance with the provisions of this Act and the rules made thereunder. 1. (1-A) No person shall transport or store or cause to be transported or stored any mineral otherwise than in accordance with the provisions of this Act and the rules made thereunder. 2. No reconnaissance permit prospecting licence or mining lease shall be granted otherwise than in accordance with the provisions of this Act and the rules made thereunder. 1. Any State Government may, after prior consultation with the Central Government and in accordance with the rules made under Section 18, (undertake reconnaissance, prospecting or mining operations with respect to any mineral specified in the First Schedule in any area within that State which is not already held under any reconnaissance permit, prospecting licence or mining lease. " ( 8 ) FURTHER submission has been made that in view of Rule 37 of The Minerals Concession Rules 1960, there is a provision regarding transfer of lease. Unless and until there is a previous consent of the State. Rule 37 is being quoted below:- "transfer of lease- (1) The lease shall not, without the previous consent in writing of the State Government, (and in the case of mining lease in respect of any mineral (Part "a" and Part "b" of ) the First Schedule of the Act, without the previous approval of the Central Government- (a) assign, sublet, mortgage, or in any other manner transfer the mining lease, or any right, title or interest therein; or (b) enter into or make any (bona fide) arrangement, contract or understanding where by the lesseee will or may be directly or indirectly financed to a substantial extent by, or under which the lesseees operations or undertaking will or may be substantially controlled by, any person or body of persons other than the lessee : (Provided further that where the mortgage is an institution or a Bank or a Corporation specified in Schedule V it shall not be necessary for the lessee to obtain any such consent of the State Government.) (1-A) The State Government shall not give its consent to transfer of mining lease unless the transferee has accepted all the conditions and liabilities which the transferor was having in respect of such mining lease. (2) Without prejudice to the provisions of sub-rule (1), the lessee may, 9 subject to the conditions specified in the proviso to Rule 35,) transfer his lease or any right, title or interest therein, to a person (who has filed an affidavit stating that he has filed an up-to-date Income tax returns, paid the income-tax assessed on him and paid the income-tax on the basis of self assessment as provided in the Income Tax Act, 1961 (43 of 1961) on payment of a fee of five hundred rupees) to the State Government: provided that the lessee shall make available to the transferee the original or certified copies of all plans of abandoned workings in the area and in a belt 65 meters wide surrounding it: (Provided further that where the mortgage is an institution or a Bank or a Corporation specified in Schedule V, it shall not be necessary for any such institution or Bank or Corporation ( to meet with the requirement relating to income tax) and a valid clearance certificate:) (Provided further also that the lessee shall not charge or accept from the transferee any premium in addition to the sum spent by him, in obtaining the lease, and for conducting all or any of the operations referred to in Rule 30 in or over land leased to him:) (Provided further that where the lessee is a Government Company defined in the Indian Companies Act, 1965 or a Corporation wholly owned or controlled by Central or State Government, it may collect or arrange to collect with the prior approval of Central Government, as the case may be, an agreed sum per agreed unit of the ore or mineral extracted or to be extracted, and such lump sum amount, if any, as consideration from the transferee.) (3) The State Government may, by order in writing determine any lease at any time if the lessee has, in the opinion of the State Government, committed a breach of any of the provisions of sub-rule (1) (or sub-rule (1-A) or has transferred any lease or any right, title or interest therein otherwise than in accordance with sub-rule (2): provided that no such shall be made without giving the lessee a reasonable opportunity of stating his case. " ( 9 ) IT has further been submitted that partnership cannot be changed by means of family settlement. " ( 9 ) IT has further been submitted that partnership cannot be changed by means of family settlement. Even the power of attorney executed in favour of the respondent No. 10 has not been registered but the respondent No. 2 has not taken into consideration all these facts and has given a finding that Sri Bharat Das Agarwal is not the partner of the firm and his sons are the partners and his sons has executed a power of attorney on 7. 4. 2001. The finding recorded by the respondents is based without considering the documents which were submitted by the parties. Relevant provision to this effect has not been taken into consideration whether the lease can be transferred in favour of a person by executing a power of attorney or not. In such situation, the petitioners submits that the order passed by the respondent No. 2 is liable to be quashed. ( 10 ) ON the other hand, Sri S. P. Singh, who appears for the respondent No. 10 has taken a preliminary objection to this effect that if the petitioners are aggrieved by the order passed by the respondents, he has got an alternative remedy by way of filing an appeal under Section 15 of the Uttar Pradesh Minerals (Prevention of illegal Mining, Transportation and Storage) Rules, 2002. It has been submitted on behalf of the respondents that being a factual controversy involved in the present writ petition, whether the power of attorney has rightly been executed by valid persons in favour of respondent No. 10 and whether the petitioners father who has already relinquished his share from the partnership deed which is apparent from the signature made by the father of the petitioners and the said document was before the District Magistrate, therefore, proper remedy to the petitioners will be to file an appeal as provided under Rule 15 of Rules 2002. As Section 23 C (2) of 1957 provides the power of the State Government to frame Rules for the purposes of regulating the minerals. Therefore, in exercise of powers the U. P. Minor and Minerals (Prevention of illegal Minings, Transportation and Storage) Rules, 2002 have been framed. It has further been submitted that Section 4 of the Contract Act is not applicable in the facts of the present case. Therefore, in exercise of powers the U. P. Minor and Minerals (Prevention of illegal Minings, Transportation and Storage) Rules, 2002 have been framed. It has further been submitted that Section 4 of the Contract Act is not applicable in the facts of the present case. Section 85-B of the Mines Act gives power that work can be done by the Working Manager and it can be delegated by a power of attorney. ( 11 ) WE have heard learned counsel for the petitioners and learned counsel for the respondent No. 10 as well as the learned Standing Counsel and have perused the record. ( 12 ) FROM the perusal of the record, it appears that the power of attorney was executed in favour of respondent No. 10 Sri Ghanshaym Das Agarwal, has signed the same and Rai Bharat Das Agarwal has also singed as witness. The petitioners are the sons of late Nar Singh Das Agarwal and Sri Nar Singh Das Agarwal is the son of late Sri Lalta Prasad Agarwal. In the year 1988, the firm was reconstituted and it has been mentioned that Sri Ghanshyam Das Agarwal and Sri Jai Ram Agarwal have retired from erstwhile business on 27. 8. 1988 and after 1988 the petitioners have not raised any objection at any point of time. The question involved in the present writ petition are whether the initial partners of the family have retired in the year 1988 or not. Whether Nar Singh Das Agarwal has relinquished himself from the partnership. These are the questions of facts to be decided by the authority concerned. The respondent No. 2 on the basis of representation and on the basis of pleadings of the parties has considered the matter and has passed the order. As the questions involved in the present writ petition are questions of facts to be appreciated on the basis of relevant record, therefore in our view, it will be appropriate that the petitioners may approach the appellate authority for the grievances which is to be adjudicated by the authority concerned. ( 13 ) AS the petitioners have a clear alternative remedy by way of filing an appeal under Section 15 of the Rules of 2002, therefore, in our opinion, it is not a fit case to be interfered by this Court under Article 226 of the Constitution of India. ( 13 ) AS the petitioners have a clear alternative remedy by way of filing an appeal under Section 15 of the Rules of 2002, therefore, in our opinion, it is not a fit case to be interfered by this Court under Article 226 of the Constitution of India. The writ petition is dismissed on the ground of alternative remedy. There shall be no order as to costs. .