Appeal No 792 of 1975
Appeal by special heave from the judgment and order dated the 12th March 1974 of the Orissa High Court in OJC No 336 of 1972 B Sen B V Desai and RH Dhebar for the appellant
Mrs section Bhandare
MSNarasimhan AK Mathur and A K Sharma for respondent No 1
SK Mehta for Girish Chandra for respondent No 2
Gobind Das B Parthasarthi for respondent No 3
704 The Judgment of the Court was delivered by BEG J
The appellant before us applied on 14th October 1961 for a prospecting licence for an area of 83353 acres in the requisite form B  under rule 91 of the Mineral Concessions Rules 1960 made under Section 13 of the herein after referred to as the Act
The application was filled in correctly
But a sum of Rs 24 only instead of Rs 32  accompanied the application
It appears that the appellant realised the mistake in calculating later and paid the deficit of Rs 8 on 28th December 1961
By way of abundant caution he made a fresh application also on 26th February 1962
In the meantime the respondent No 1 had applied on 2nd November 1961 for a prospecting licence for 74816 acres out of which 27240 acres were common with those for which the appellant had already applied
No orders were passed disposing of the application of the appellant within 90 days of the making of it
The appel lant treated this omission to be tantamount to refusal of his application as provided by rule 11 1  and preferred a revision application before the Central Government under Section 30 of the Act
On 20th October 1964 the Central Government asked the State Government to consider the appli cation of the appellant dated 14th October 1961 within the next nine months
On 13th January 1965 the State Govern ment offered the appellant a prospecting licence for an area of 365 acres
On 12th February 1965 the appellant moved the Central Government for revision of the order making the offer
On 19th March 1965 the Central Government in formed the appellant that his application was premature since neither nine months had elapsed nor final orders had been passed by the State Government
On 9th May 1965 the Central Government actually rejected the revision applica tion of the appellant presumably for reasons found in the above mentioned communication
On 22nd June 1965 the State Government directed the grant of a prospecting licence to respondent No 1 for an area including 27240 acres in dispute
On 7th July 1965 the State Government again offered the appellant the grant of a licence for 365 acres
On 2nd January 1967 the High Court dismissed the Writ Petition of the appellant filed against the abovementioned order of the Central Government dated 9th May 1965 reject ing his revision application
On 2nd April 1970 the State Government again offered the appellant a prospecting licence for an area of 365 acres
On 30th April 1970 a prospecting licence was actually executed in favour of respondent No 1 for an area which included the disputed 27240 acres
The appellant s objections before the Collec tor were rejected
On 27th May 1970 the appellant again filed a revision application before the Central Government against the offer dated 2nd April 1970 for the third time
by the State Government of the smaller area of 365 acres
On 23rd November 1970
the respondent No 1 actually applied for a mining lease
but on 12th April 1973 the Central Government accepted the appellant s objec tion relating to 27240 acres
Hence
the respondent No 1 went to the High Court under Article 226 of the Constitu tion
The High Court quashed the order of the Central Government by its order dated 12th March 1974 on the ground that the original application of the 705 appellant dated 14th October 1961 not having been accom panied by the correct fee was no application at all in the eye of law
Hence on the view taken by the High Court the appellant not having complied with mandatory provisions had not filed any application which could be accepted by the State Government
The High Court took the view that the Central Government s order dated 12th April 1973 suffers from a patent error
The appellant having obtained special leave to appeal the case is now before us
It has to be remembered that the special jurisdiction of the High Court under Article 226 had been invoked by the respondent
The High Court had before it a very detailed statement of reasons for the order of the Central Government in exercise of its powers under Section 30 of the Act
We have also been taken through these reasons contained in the letter dated 12th April 1973 sent to the appellant
It shows that both the parties between whom the dispute relat ing to 27240 acres of land for grant of a prospecting licence had gone before the Central Government several times and the matter was not finally decided by the State Government
Even though the State Government may have according to its own erroneous view disabled itself from granting a prospecting licence to the respondent in respect of disputed 27240 acres due to its decision to grant this area to the respondent yet as the letter from the Central Government points out the prospecting licence of the re spondent who was impleaded in the revision proceedings before the Central Government and duly heard on all ques tions was due to expire on 30th April 1972
After con sidering the legal position and all the facts and equities of the case the Central Government correctly held on the question law before it that the appellants application before the State Government was a valid one as it had been entertained without objection even if it was not accompa nied when flied by the correct amount of fee
In a communication sent the Central Government stated its rea sons to the appellant as follows The question arises whether you were indeed or can indeed be deemed to be the prior application for the area
It has been seen that your application dated 14101961 was not perfect in the sense that fee paid into the treasury fell short of Rs 8 
However the State Government itself by giving a chance to you to rectify this mistake ac knowledged implicity that it had in its hands an application otherwise valid
Therefore the appropriate date which should be taken into consideration is 141061 and not 28 12 1961 as interpreted by the State Gov ernment
The State Government s order permit ting you to make good the deficit in the amount of fees originally paid into the treas ury has nothing to do with the submission of the application which was done on 141061
The Stale Government could if it so wished have refused the application dated 141061 as being imperfect
But since it did not do so and permitted the application to remain under consideration it recognised your right as an applicant
Therefore the State Govern 706 ment cannot argue that impleaded party Phul chand Agarwal by submitting his application on 21161 becomes a prior applicant
In other words the Central Government had correctly in our opinion relied upon an estoppel against the State Govern ment
After giving the above mentioned reasons the Cen tral Government considered it fair that the appellant should be
granted a prospective licence in respect of 27240 acres also over and above the 365 acres already granted to him by the State Government
The operative part of the order passed by the Central Government is In the circumstances of the case the Central Government in exercise of their revisional powers under Rule 55 of of the Mineral Concessions Rules 1960 and of all other powers enabling in this behalf hereby set aside the order of the State Government contained in their letter No IIEM 8270 3015MG dated 241970 and further direct the State Government to grant the overlapping of 27240 acres to you over and above the area of 365 acres already granted to you The only question which arises beforeus is whether the order of the Central Government suffers from an error appar ent upon the face of the record so as to furnish a ground for interference by the High Court on the purest of pure technicalities which as had been pointed out in the letter sent from the Central Government to the appellant had ceased to matter
The deficiency in the fees having been duly accepted on behalf of the State Government it was bound to proceed on the assumption that there was a proper application before it valid from the date of filing it
It was precluded by its own dealings from denying the validity of the application
It is not very becoming for governmental authorities when duties laid down by statutory rules
have not been performed by them to take shelter behind such technicality for denying a citizen s rights to have his application considered and decided
Rule 11 1 of the Rules framed was a recognition of that right so that an applicant for a licence under the rules could approach the Central Government in case the State Government did not pass the required orders within a reasonable time
The Central Government had passed a very fair order after considering the matters  before it
We have been taken very laboriously through all the relevant provisions of the Act and the Rules to convince us that the High Court s view was correct that there was an error apparent upon the face of the record in the view of the Central Government which the High Court had corrected in exercise of its extraordinary jurisdiction under Article 226 of the Constitution
We are unable to detect such on error on the part of the Central Government
On the other hand we find that the High Court itself committed an error which seems to us to be very apparent in holding that an applica tion which had only to be accompanied by the fee would be considered validly filed on the date on which 707 it was made only if proper fee had been tendered with it when it was filed
A right and reasonable procedure looks to substance rather than form of a transaction in order to determine its nature
The statute and the rules made there under would have said so if the application itself was to be deemed to be void ab initio for non compliance with a par ticular technical requirement if that was the intention behind them
All that we have here is the word shall  used in Rule 92
But this Court has repeatedly held that the use of the word shall  in imposing a duty is not conclusive on the question whether the duty imposed is mandatory or directory
Moreover that question was only incidentally involved here
It is not the breach of every mandatory duty in performing a prescribed act that could make an action total ly ineffective or void ab initio
The filing of the appli cation is one thing and completion of some annexed duty which is legally separable is another unless a statute or a rule provides otherwise
Rule 9 reads 9 2 Every such application shall be accom panied by a a fee calculated in accordance with the provisions of Schedule II and b an income tax clearance certificate in Form C the from Income tax Officer concerned and c a certificate of approval in Form A or if the certificate of approval has expired a copy of application made to the State Govern ment for its renewal  It is not disputed that all the requirements of the rule except that a properly calculated fee should have accompanied the application were fulfilled
Apparently Rule 10 was also complied with and the application was duly received and acknowledged
Rule 10 reads as follows 10
Acknowledgement of application  1 Where an application for the grant or renewal of a prospecting licence is delivered personally its receipt shall be acknowledged forthwith
2 Where such application is received by registered post its receipt shall be acknowl edged on the same day
3 In any other case the receipt of such application shall be acknowledged within three days of the receipt
4 The receipt of every such application shall be acknowledged in Form D
The next rule provides 11
Disposal 0f application for the grant and renewal 0f prospecting licence 1 An application for the grant of a prospecting licence shall be disposed of within nine months 11 112SCI77 708 from the date of its receipt and if it is not disposed of within that period it shall be deemed to have been refused
2 An application for the grant or renewal of a prospecting licence shall be made at least ninety days beore the expiry of the prospect ing licence and shall be disposed of before the expiry of the licence and if the applica tion is not so disposed of within that period it shall be deemed to have been refused
3 The State Government may for reasons to be recorded in writing and communicated to the applicant at the time of renewal reduce the area applied for Repeated offers of the State Government to the appellant show that it acknowledged the pendency of an application before it so that it offered a reduced area to him
Again the directions of the Central Government asking the State Government to consider the application and giving nine months for it implied that there was an application to consider before the State Government
The respondent did not question the validity of the Central Government s order of 20101964
It seems futile to urge now that there was no application at all of the appellant for the State Gov ernment to consider
Again rule 13 provides 13
Refund of fee  1 Where an application for the grant of a prospecting licence is refused or deemed to have been refused under these rules the fee paid by the applicant shall be refunded to the applicant
2 Where an applicant for the grant of a prospecting licence dies before the order granting him a prospecting licence is passed his application for the grant of a prospecting licence shall be deemed to have been rejected and the fee paid by him shall be refunded to his legal representative
3 In the case of an applicant in re spect of whom an order granting a prospecting licence is passed but who dies before the deed referred to in sub rule 1 of rule 15 is executed the order shall be deemed to have been revoked on occurrence of the death and the fee paid shall be refunded to the legal representative of the deceased
This rule also makes it clear that there is a distinction between an application and the fee which has to accompany it
The fee can be refunded but the application made remains
There is no rule whatsoever which rays that failure to submit the correct fee at the time of the filing of the application will make the 709 application void or invalid
Section 19 of the Act howev er says clearly  19  Any prospecting licence or mining lease granted renewed or acquired in contra vention of the provisions of this Act or any rules or orders made thereunder shall be void and of no effect
Hence it is clear that the Act itself provides what is void and ineffective where that is the intention
It would have been provided at least by the Rules that an application not accompanied by the correct fee is void if that had been the intention behind them
Section 19 attaches voidness only to a grant made without due compliance with all rules
It is nowhere said that the act of making an application will be similarly void for a breach of rules
Another submission made before us is that the grant of a prospecting licence in favour of Phulchand not having been set aside by the Central Government the High Court had rightly interfered
In view of the provisions of Section 19 of the Act the prospecting licence in favour of respondent No 1 was itself void to the extent of an area of 27240 acres for which a licence had already been properly applied for by the appellant
Unless the appellant s application had been properly refused for a valid reason he could not be denied the benefit of section 11 2 of the Act
Sec tion 11 2 reads as follows 112 Subject to the provisions of sub section where two or more persons have applied for a prospecting licence or a mining lease in respect of the same land the appli cant whose application was received earlier shall have a preferential right for the grant of the licence or lease as the case may be over an applicant whose application was re ceived later
 Reliance is placed on behalf of the respondent on the conditions for the grant of the licence contained in Rule 14 which does not govern the conditions for filing an applica tion at all
It may be that a licence cannot be granted without making good the deficiency in fee which should accompany the application but that does not mean that a bona fide application accompanied by an incorrectly calcu lated fee or a fee which is deficient by over sight could not be made at all or if made must be treated as void or of no effect whatsoever
On this question the view taken by the Central Government was in our opinion correct just and proper
On such a view it is not necessary to discuss any of the cases on the kind of error which could be corrected by the High Court as there was no error of any kind in the Central Government s order for the High Court to be able to correct it
On the other hand the error which we consider necessary to correct is in the High Court s order
Consequently we set aside the judgment and order of the High Court and restore those of the Central Government
The parties will bear their own costs
SR Appeal allowed


Summary:
The appellant applied on 14 10 1961 for a prospecting licence for an area of 83353 acres under rule 91 of the Mineral Concessions Rules 1960
The application was in order in all respects except to the extent that instead of Rs 32  the fees payable a sum of Rs 24 only was paid
However on realisation of this mistake he paid the deficit of Rs 8 on 28 12 1961 and by way of abundant caution made a fresh application on_26 2 1962
Respondent No 1 had applied on 2 11 1961 for a prospecting licence for 74816 acres out of which 27240 acres were common with those for which the appellant had already applied
Since no orders were passed disposing of the applications of the appellant within 90 days of the making of it the appellant filed a revision before the Central Government treating this omis sion on the part of the State to be tentamount to refusal of his application as provided by rule 111
On 20 101964 the Central Government asked the State Government to con sider the application of the appellant dated 14 10 1961 within the next 9 months
The State Government instead of considering the application dated 14 10 1961 as directed offered thrice on 30 1 1965 7 7 1965 and 2 4 1970 a prospecting licence for an area of 365 acres which was not accepted by him and his attempts by way of revision against these orders to the Central Government and a writ petition in the High Court failed
The State Government however on 22 6 1965 directed the grant of a prospecting licence to respondent No 1 for an area including 27240 acres in dispute which was actually executed in his favour on 30 4 1970
The appellant s objection before the Collector against this was rejected
On 12 4 1973 the Central Government accepted the objection relating to 27240 acres and opined that his application dated 14 10 1961 was earlier in point of lime within the meaning of section 112 of the Mines  Minerals Regulation and Development Act 1957
Against this order the respondent No 1 went to the High Court under article 226 of the Constitution
The High Court quashed the orders of the Central Government by its order dated 12 3 1974 and held the application of the appellant dated 14 10 1961 not having been accompanied by the correct fee was no application at all in the eye of law
Accepting the appeal by special leave the Court HELD 1 After considering legal position and all the facts and equities of the case the Central Government correctly held on the question of law before it that the appellant s application before the State Government was a valid one as it had been entertained without objection even if it was not accompanied when filed by the correct amount of fee
706 A E 2 The Central Government had correctly relied upon an estoppel against the State Government
The deficiency in the fees having been duly accepted on behalf of the State Government it was bound to proceed on the assumption that there was a proper application before it valid from the date of filing it
The State Government was precluded by its own deeds from denying the validity of the application
706 A E 703 3 There is no patent error upon the face of the record warranting a correction in exercise of its extraordinary jurisdiction under article 226 of the Constitution by the High Court in the instant case
On the other hand High Court itself committed an apparent error in holding that an appli cation which has only to be accompanied by the fee would be considered validly filed on the date on which it was filed only if proper fees has been tendered with it when it was filed
706 G H 4 It is not very becoming for Governmental authorities when duties laid down by statutory rules having been per formed by them to take shelter behind such technicalities for denying a citizen s right to have his application con sidered and decided
Rule 111 of the Rules framed was a recognition of that right so that an applicant for a licence under the Rules could approach the Central Government in case the State Government did not pass the required orders within a reasonable time
706 E F 5 A right and reasonable procedure looks to substance rather than form of acts or transactions in order to deter mine their nature
There is no rule whatsoever which says that failure to submit the correct fee at the time of the filing of the application will make the application void or invalid
Rule 13 makes it clear by differentiating between an application and the fee by which it has to be accompa nied
The fee can be refunded but the application made remains
The filing of the application is one thing and compliance of some annexed duty which is legally separable is another unless a statute or a rule provides otherwise
707 A C 708 H 709 C 6 It is clear from section 19 that the Act itself provides what is void and ineffective where that is the intention
Section 19 attaches a voidness only to a grant made without due compliance
with all rules
It is nowhere said that the Act of making an application will be similarly void for breach of rules
709 B C 7 In the instant case in view of the provisions of section 19 of the Act a prospecting licence in favour of respond ent No 1 was itself void to the extent of an area of 27240 acres for which a licence had already been properly applied for by the appellant
Unless the applicant s application had been properly refused for a valid reason he could not be denied the benefit of section 112 of the Act
It may be that a licence cannot be granted without making good the deficiency in fee which should accompany the application but that does nor mean that a bona fide application accompa nied by an incorrectly calculated fee or a fee which is deficient by oversight could not be made at all or if made must be treated as void or of no effect whatsoever
709 C G 8 The use of the word shall in imposing a duty is not conclusive on the question whether the duty imposed is mandatory or directory
It is not the breach of every mandatory duty in performing a prescribed act that could make an action totally ineffective or void ab initio
The meaning of the word shall in Rule 92 of the Mineral Concessions Rules 1960 was only incidentally involved here
707 B C