JUDGMENT 1. - This writ petition is directed against order dated 15.10.2009 passed by the Central Government, whereby revision application preferred by the petitioner and proforma respondent GKW Ltd., challenging the order dated 4.1.2006 passed by the Government of Rajasthan, cancelling the mining lease originally issued in favour of M/s. Graphite India Ltd. and later Transferred in favour of M/s. GKW Ltd., has been dismissed. 2. Briefly stated, the facts of the case are that M/s. Graphite India Ltd., a company incorporated under the Companies Act, 1956 (in short the "Act of 1956"), was granted a.lease of mining area comprising 9.98 sq. kms., near village Sita Ramji Ka Keda, Tehsil and District Chittorgarh, for excavation of mineral lime stone (cement grade), vide order dated 3.3.1993, as amended vide order dated 21.8.1993, for a period of 20 years. Later, the said company while surrendering 3.96 sq. kms. area to the State Government made an application seeking permission to transfer the remaining mining area comprising 6.02 sq. kms. to M/s. GKW Ltd., proforma respondent No. 7 herein. The transfer of mining lease was sanctioned by the State Government vide order dated 28.3.1996 and accordingly, a statutory deed in conformity with Rule 37A of the Mineral Concession Rule, 1960 ('MCR'), was executed between the parties. The lease deed executed was valid up to the year 2013 being the time originally fixed under the mining lease granted in favour of original lessee M/s. Graphite India Ltd. The transfer of the mining lease as aforesaid, was sanctioned on the condition that the transferee company shall set up a cement plant within a period of 2 years from the date of execution of the contract for transfer. However, on the request being made by the petitioner, the period for setting up the cement plant was extended upto 24.6.001, imposing an additional condition that if the company fails to set up a cement plant, it shall be liable to pay penalty Rs. 1 crore per year. 3. The petitioner-GKW Cement Ltd., erstwhile subsidiary company of the respondent No. 7 GKW Ltd., is a separate company, which is solely handling the business of cement pursuant to order dated 13.10.1999 of the High Court of Calcutta. Now, the petitioner company has become 100% subsidiary of M/s. Lafarge India Pvt. Ltd. vide a share purchase agreement dated 28.2.2008, which is also a company duly incorporated under the Act of 1956. Now, the petitioner company has become 100% subsidiary of M/s. Lafarge India Pvt. Ltd. vide a share purchase agreement dated 28.2.2008, which is also a company duly incorporated under the Act of 1956. 4. The petitioner company failed to set up cement plant within the stipulated period of time and, therefore, the State Government being of opinion that on account of failure of company to set up the plant, there has been hold up of investment in the State and it is being deprived of the revenue and employment to be generated from setting up of cement plant, proceeded to cancel the mining lease existing in the name of respondent No. 7 GKW Ltd. vide order dated 4.1.2006. 5. Aggrieved by the order of cancellation of mining lease dated 4.1.2006, the petitioner and proforma respondent No. 7 preferred revision petition before the Central Government under Section 30 of the Mines and Minerals (Development and Regulation) Act, 1957, (MMDR Act) and Rule 54 of the MCR. 6. The validity of the said order was assailed by the revision petitioners inter alia on the ground that the order cancelling the lease has been passed by the State Government without any prior notice and, therefore, the same is illegal, arbitrary and violative of principle of natural justice. It was contended that the failure to set up the plant within the stipulated period was not due to any wilful default on the part of the petitioner. It was submitted that in February, 2008, the petitioner company has been taken over by M/s. Lafarge, which intends to do value addition in the new plant and is ready to pay Rs. 1 crore toward penalty for further extension of time, till the cement plant is commissioned. 7. Before the revisional authority the State Government submitted that in the interest of the State Government, the proposal can be considered in terms of petitioner's letter dated 10.4.2008. Accordingly, one of the members of the Tribunal (Mines) deciding the revision application opined that the matter observes to be remanded back to the State Government for reconsideration in view of commitment by M/s. Lafarge India Pvt. Ltd. for setting up cement plant within a fixed time frame as agreed by the State Government and pass a reasoned order as per provisions of MMDR Act and the MCR framed thereunder. However, yet another member of the Tribunal (Mines) did not agree with the opinion expressed by his brother member and opined that fresh ground regarding the financial position of the company which has taken over the revision applicant cannot be taken into account for the purpose of deciding the validity of the impugned order. The said member further observed that since, the revision applicant was not in position to fulfil the condition of setting up of cement plant within the period granted by the State Government, no relief can be granted to the applicant, whose company has been taken over by M/s. Lafarge India Pvt. Ltd. Accordingly, it was held that the order impugned in the revision application does not suffer from any patent or legal infirmity warranting interference. 8. In view of difference of opinion amongst two members constituting the revisinoal authority, the matter was referred to third member, who agreeing with the reasoning adopted by the second member, opined that the order impugned does not warrant any interference and accordingly, as per the majority view, the revision petition preferred by the petitioner stands dismissed. Hence, this petition. 9. It is contended by the learned counsel for the petitioner that the order impugned dated 15.10.2009 of the revisional authority has been passed in gross violation of principles of natural justice. It is submitted that admittedly, on account of difference of opinion amongst the member constituting the Tribunal, the matter was referred to the third member for consideration but before passing the order, rejecting the revision application, no opportunity of hearing was given to the petitioner to present its case before the third member. The learned counsel submitted that the revision authority has seriously erred in not considering the contention of the petitioner that the order dated 4.1.2006, cancelling the mining lease passed by the State Government without any prior notice to the lease holder is ex-facie illegal, arbitrary and stands vitiated for non-compliance of principles of natural justice. The learned counsel submitted that the revision authority has seriously erred in not considering the contention of the petitioner that the order dated 4.1.2006, cancelling the mining lease passed by the State Government without any prior notice to the lease holder is ex-facie illegal, arbitrary and stands vitiated for non-compliance of principles of natural justice. Learned counsel submitted that the State Government had agreed before the revisional authority to consider the representation of the petitioner dated 10.4.2008 taking into account the subsequent developments, therefore, opinion expressed by one of the members of the Tribunal that the matter deserves to be remanded back to the State Government was absolutely justified and there was no occasion for the other member to disagree with the just and reasonable order intended to be passed. Learned counsel further submitted that the revisional authority has failed to exercise wide judicial discretion available to it under Rule 55(4) of the MCR in exercise whereof it ought to have taken into consideration the fact that the management. of the petitioner had been taken over by M/s. Lafarge India Pvt. Ltd., a world leader in manufacture of cement, which had represented to set up the cement plant within a span of 8 years from the date of restoration of mining lease. Learned counsel submitted that the Tribunal has also failed to consider the fact that the petitioner had cleared the dead rent and dues regarding surface right to the Government, the petitioner has already invested Rs. 94 crores in the project and the petitioner was agreeable to pay the penalty amount @ Rs. 1 crore per annum w.e.f. 24.6.2001 till date in terms of rider put to agreement dated 30.6.1999. Accordingly, learned counsel submitted that the orders impugned passed by the revisional authority dated 15.10.2009 and the order dated 4.1.2006 passed by the State Government, cancelling the lease deserves to be quashed and set aside and the matter deserves to be remanded to the State Government for consideration afresh taking into account the subsequent developments and the representation made by the petitioner dated 10.4.2008, which was agreed upon to be considered by the State Government before the revisional authority. 10. 10. On the other hand, learned Additional Advocate General submitted that admittedly, the transferee mining lease holder GKW Ltd. failed to set up the cement plant within the extended period and, therefore, the order cancelling the mining lease passed by the State Government cannot be faulted with. It is submitted by the Additional Advocate General that the mining lease was granted in favour of the petitioner with the specific condition that the lime stone to be excavated shall be used in manufacture of Cement in the plant to be set up by the company within the updated period ad therefore, if the company has tailed to adhere to the condition and could not set up the plant during the extended period, then, keeping in view the loss of revenue and the employment likely to be generated by the establishment of the cement plant, the State Government has acted well within its authority in cancelling the mining lease granted. On being pointedly asked by this Court that when the State Government agreed before the revisional authority to consider the representation of the petitioner dated 10.4.2008, then, why the revisional authority could not have justifiably remanded the matter to the State Government for fresh consideration, it is submitted by the learned Additional Advocate General that no such stand was taken by the State Government before the revisional authority. However, on being pointedly asked that is there any averment made in the reply to the writ petition that no such stand was taken by the State Government before the revisional authority, the learned Additional Advocate General frankly submitted that this is not the stand taken by the State in reply to the categorical stand taken by the petitioner in the writ petition. Lastly, it is submitted by the learned Additional Advocate General that the validity of the order cancelling the mining lease has to be adjudged on the basis of reasons assigned therein and the subsequent events showing the readiness and capacity of the petitioner to set up the cement plant on account of taking over of the petitioner company by M/s. Lafarge India Ltd. are of no relevance. 11. I have considered the rival submissions and perused the material on record. 12. In the first instance it is to be noticed that on account of difference of opinion amongst the members constituting the Tribunal, the matter was referred to third member. 11. I have considered the rival submissions and perused the material on record. 12. In the first instance it is to be noticed that on account of difference of opinion amongst the members constituting the Tribunal, the matter was referred to third member. it is not in dispute that before passing the order, agreeing with the conclusions arrived at by one of the members deciding against the petitioner, neither the petitioner was informed about the split verdict nor an opportunity of hearing was afforded to it by the third member. In considered opinion of this Court, if there was difference of opinion amongst the members consisting the Tribunal and for the reason the matter was referred to third member, then, it has absolutely necessary for the third member to extend an opportunity of hearing to the petitioner before taking any decision in the matter. Thus, the order impugned passed by the Revisinoal Authority which is a composite order of all the three members passed without giving a proper opportunity of hearing to he petitioner stands vitiated on account of violation of principles of natural justice. 13. It has come on record that during the course of arguments, it was represented on behalf of the State Government that the proposal made by the petitioner herein vide communication dated 10.4.2008, can be considered in the interest of the State Government. Though, learned Additional Advocate General has orally submitted before this Court that no such stand was taken by the State Government but there is no denial in the reply filed to the specific averments made on behalf of the petitioner in this regard in the writ petition. It is to be noticed that one of the members constituting the Tribunal passed an order remanding the matter back to the State Government for reconsideration in view of the commitment by M; s. Lafarge India Pvt. Ltd. for setting up the cement plant within a specific time frame and agreed to by the State Government. It is to be noticed that one of the members constituting the Tribunal passed an order remanding the matter back to the State Government for reconsideration in view of the commitment by M; s. Lafarge India Pvt. Ltd. for setting up the cement plant within a specific time frame and agreed to by the State Government. The other member of the Tribunal declined to agree with the opinion expressed by one of the members for remanding the matter back on the ground that the validity of the order has to be judged on the basis of reasons -so mentioned in the order and cannot be supplemented by fresh reasons by way of affidavits or otherwise and not on the ground that the State Government never represented that the matter deserves reconsideration. Thus, the factual position on record that the State Government had offered before the Revisional Authority that the matter deserves to be reconsidered in the interest of the State Government in terms of letter dated 10.4.2008 (the date wrongly mentioned in the order as 10.4.2006/10.4.2001) remains uncontroverted. Even otherwise, there is nothing on record for this Court to believe that the factum of commitment of the State Government to reconsider the proposal in term of the petitioner's representation dated 10.4.2008 has been wrongly recorded by the revisional authority. 14. There can be no quarrel with the proposition of law that the validity of an order passed by a statutory authority has to be examined on the basis of the reasons so mentioned therein and the same cannot be permitted to be supplemented by an affidavit or otherwise. As a matter of fact, it was not even a case of sustaining the validity of the order on the basis of any fresh ground. The question which was required to be examined by the revisional authority was as to whether considering the grounds for challenge to the order made by the petitioner and in the changed circumstances when the authority whose order was under challenge agreed to consider the fresh proposal, the matter could be remanded for fresh consideration or not. The question which was required to be examined by the revisional authority was as to whether considering the grounds for challenge to the order made by the petitioner and in the changed circumstances when the authority whose order was under challenge agreed to consider the fresh proposal, the matter could be remanded for fresh consideration or not. It is pertinent to note that on a revision application being preferred by the person aggrieved by any order made by the State Government or other authority, the Central Government in exercise of revisional power, as per sub-rule (4) of Rule 55 of MCR, after considering the record the comments and counter-comments of the parties, may confirm, modify or set aside the order or pass such an order sin relation thereto as it may deem just and proper. Thus, in considered opinion of this Court, the Central Government while exercising the revisional power conferred upon it by the relevant statutes is not only empowered to confirm, modify or set aside the order impugned but it has discretion to pass any appropriate order which is deems just and proper on the facts and in the circumstances of the case. Including the order remanding the matter back to the original authority for consideration afresh in accordance with law. Thus, the order impugned passed by the Revisional Authority declining to interfere with the order, ignoring the changed circumstances and the commitment of the authority passing the order impugned before it to reconsider the matter deserves to be quashed and set aside for this reason also. 15. There is yet another aspect of the matter. It was a categorical stand taken by the petitioner before the Revisional Authority that the order cancelling the mining lease had been passed by the State Government without any prior notice whatsoever and, therefore, the same stands vitiated being illegal, arbitrary and violative of principles of natural justice. The order dated 4.1.2006, cancelling the lease makes a reference of a notice dated 6.11.2001 issued to the petitioner. A perusal of the said notice, which has been placed on record as Annexure-R6, reveals that it is a communication, directing the petitioner to deposit Rs. 1 crore as penalty for extension of time to set up the cement plant for the period commencing from 24.6.2001. A perusal of the said notice, which has been placed on record as Annexure-R6, reveals that it is a communication, directing the petitioner to deposit Rs. 1 crore as penalty for extension of time to set up the cement plant for the period commencing from 24.6.2001. The notice does not reflect at all that the proceeding for cancellation of lease was contemplated on account of petitioner's failure to set up the cement plant or non-payment of the penalty amount in terms of order dated 7.4.1999. Moreover, a perusal of the communication dated 7.4.1999 reveals that the period of setting up the cement plant was extended from 25.6.1999 to 24.6.2001 inter alia with the condition that after 24.6.2001 for further extension the petitioner shall be liable for penalty Rs. 1 crore per year. Thus, the extension of period for setting up the cement plant beyond 24.6.2001 was also agreed upon on the payment of Rs. 1 crore per year. In any case, automatic cancellation of lease which was valid up to year 2013, cannot be inferred either from the communication dated 7.4.1999 or the alleged notice dated 6.11.2001 (Annexure- R6). Of course, vide communication dated 16.1.2002, the petitioner was informed that it has not complied with the directions contained in the communication dated 6.11.2001 and in violation of transfer order, has failed to set up the cement plant and therefore, the amount of Rs. 1 crore per year payable as penalty for further extension may be deposited within 60/75 days failing which the proceedings for cancellation of mining lease and taking possession of the mining lease shall be taken. But, there is nothing on record to show that the order regarding the initiation of proceedings for cancellation of mining lease or extending an opportunity of hearing to the petitioner before cancellation of the mining lease was ever issued. In this view of the matter, the cancellation of the mining lease or extending an opportunity of hearing to the petitioner before cancellation of the mining lease was ever issued. In this view of the matter, the cancellation of the mining lease without giving an opportunity of hearing to the petitioner in gross violation of principles of natural justice cannot be countenanced by this Court. 16. In view of the discussion above the writ petition succeeds, it is hereby allowed. In this view of the matter, the cancellation of the mining lease without giving an opportunity of hearing to the petitioner in gross violation of principles of natural justice cannot be countenanced by this Court. 16. In view of the discussion above the writ petition succeeds, it is hereby allowed. The order passed by the revisional authority dated 15.10.2009 (Annexure-30) and order passed by the State Government dated 4.1.2006 (Annexure-11), cancelling the mining lease granted in favour of the petitioner are quashed and set aside. The matter with regard to extension of time for setting up the cement plant in light of the changed circumstances that the petitioner company has been taken over by M/s. Lafarge India Pvt. Ltd. is remanded to the State Government for consideration afresh in accordance with law. Needless to say that before the matter is considered by the State Government afresh, the petitioner shall be under an obligation to deposit the amount of penalty in terms of order dated 7.4.1999 passed by the State Government providing the extension of time beyond 24.6.2001 on payment of penalty Rs. 1 crone per year. The amount of penalty shall be deposited by the petitioner within a period of one month from the date of this order. The appropriate decision after giving an opportunity of hearing to the petitioner and objective consideration of all, the relevant aspects of the matter, shall be taken by the State Government within a period of one month thereafter by passing a speaking order. No order as to costs.Petition allowed. *******