THE HON’BLE SRI JUSTICE G.RAGHURAM AND THE HON’BLE SRI JUSTICE G.CHANDRAIAH WRIT APPEAL NO.784 OF 2010 Dated: 02-11-2010 BETWEEN: S.G.V.S.TRINADA RAO AND OTHERS .. APPELLANTS AND CH.V.GIRISH AND OTHERS .. RESPONDENTS THE HON’BLE SRI JUSTICE G.RAGHURAM AND THE HON’BLE SRI JUSTICE G.CHANDRAIAH WRIT APPEAL NO.784 OF 2010 O R D E R: (Per Hon’ble Sri Justice G.Raghuram) Respondents 6 to 8 in the writ petition have preferred this appeal against the order of the learned single Judge dated 01-10-2010 allowing the writ petition and setting aside the Memo.No.13991/ M.II(1)/2006-1, dated 6-2- 2007 passed by the 2nd respondent-State Government in purported exercise of its power under section 12 (5) (b) of the Andhra Pradesh Minor Mineral Concession Rules, 1966 ( for short, ‘the Rules’). The writ petition was filed by the 1st respondent herein. The dispute relates to the grant of quarry lease for colour granite, a minor mineral, governed by Rules framed under the Mines and Minerals (Development and Regulation) Act, 1957 (for short, ‘the Act’), a federal legislation made under the legislative field enumerated in Entry 54 of List I of Seventh Schedule to the Constitution. Rule 12 of the Rules deals with grant of leases in respect of minor minerals; Rule 12(5) of the Rules sets out the provisions with regard to grant of prospecting licence or quarry lease for granite useful for cutting and polishing and marble. Clause (b) of Rule 12(5) of the Rules enjoins that the application for grant of a prospecting licence or quarry lease for granite and marble shall be disposed off by the Director in the order of their receipt; and that whenever more than one application is received on the same day, the Director shall grant licence or lease to the deserving applicant on merits to be recorded in writing. Proviso to clause (b) of Rule 12(5) of the Rules empowers the Director to grant a prospecting licence or a quarry lease to an applicant whose application is received later, in preference to earlier application with the prior approval of the Government for any special reasons to be recorded in writing. On the admitted factual scenario, the writ petitioner applied on 7.11.2003 for grant of quarry lease for colour granite in Sy.Nos.305, 306 and 307 of Thotakurapalem village, Revikamatham Mandal, Visakhapatnam District, while the appellants, who are respondents 6 to 8 in the writ petition, submitted their applications in June, 2004 (dates not being relevant). In view of the proviso to Rule 12(5)(b) of the Rules, the application of the writ petitioner must receive priority. However, the State Government issued the Memo.No.13991/ M.II(1)/2006-1, dated 6-2-2007 (impugned successfully in the writ petition) whereby the State accorded permission to the Director of Mines and Geology, Hyderabad to issue necessary orders for grant of quarry lease in respect of the minor mineral in question in favour of the appellants for the different survey numbers for which they had applied. The reasons recorded by the State Government, in brief, for exercising its discretion under the proviso to Rule 12(5)(b) of the Rules are that - a) The District Collector decided to reject the application of Sri.Ch.V.Girish and other prior applications with a view to give preference to local people belonging to Visakhapatnam District and recommended to consider the later applications of Sri.S.G.V.S.Trinath, Sri.N.Varahala Naidu and Smt.Y.Nagamani under the provisions of BSO 24-A for a period of 5 years; b) The Director of Mines and Geology has the power to overlook the priority of first application and can accord permission to grant subsequent applications on recorded reasons as per the 1st proviso under Rule 12(5)(b) of the Rules; c) The Director of Mines and Geology had reported that the writ petitioner had filed a writ petition in this court which passed an interim direction to consider his case within six weeks and that though the Director of Mines and Geology had reported that under the Rules there is no priority accorded to locals in the matter of grant of lease, considering the special request of the District Collector and the resolution of the Gram Panchayat, Thotakurapalem in favour of local entrepreneurs, the Government considers it appropriate to overlook the priority mandated by the Rules and grant preference for the locals (the appellants herein); d) The Gram Panchayat concerned unanimously resolved on 8.7.2004 to the effect that non-locals did not have proper understanding of the problems of Gram Panchayat and the natural resources are to be exploited by only locals as per the Andhra Pradesh Panchayat Raj Act and cannot be given to others and locals can understand the local problems better and will provide employment to locals in the quarrying operations. The learned single Judge rejected the reasons recorded by the State Government in the memo impugned in the writ petition by holding that neither the provisions of the Act nor the Rules accommodate a preference for locals; that the reasons to be recorded while overlooking the priority fixed by Rule 12(5) of the Rules must be valid and sound and the Constitution mandates equality before law and equal participation of all citizens in the matter of public largesse subject to permissible reservations of any nature; that the priority regarding consideration of a prior application mandated by Rule 12 (5) of the Rules has been subverted by the reasons recorded by the Government in the memo impugned in the writ petition; and that the writ petitioner being a non-local is an irrelevant reason which runs counter to the restriction imposed under section 5 of the Act. Section 5 (1) of the Act enumerates restrictions on the grant of prospecting licences or mining leases and enjoins that the State shall not grant, inter alia, a lease or prospecting licence to any person unless such person is an Indian national or a company as defined in sub-section (1) of Section 3 of the Companies Act, 1956. Presumptively, the provisions of the Act do not enjoin or accommodate a distinction between citizens on the ground of local residence though reasonable restrictions may be imposed, the right to participate in the public largesse is a right vouchsafed to all citizens under Articles 14 and 15 of the Constitution. Part XIII of the Constitution, in Article 301 enjoins that subject to the other provisions of this Part, trade, commerce and intercourse throughout the territory of India shall be free. It is an established legal principle that India is treated as one commercial and economic unit for the purpose of ensuring freedom throughout the territory of India in the matters of trade, commerce or intercourse. Creating economic ghettos would undermine such constitutionally enjoined freedom across State barriers or geo-specific barriers. The vastness and diversity of the Nation is undermined by parochial considerations, which do not have a nexus with the object sought to be achieved by the grant of public largesse in the matter of prospecting licences or quarry leases. What the Legislation or the Statute does not permit or accommodate, the State cannot introduce by an executive fiat. It also requires to be noticed that the role of the State in the matter of granting of prospecting licences or quarry leases in respect of minor minerals is a grant of the Union Legislation made in exercise of the legislative field under Entry 54 of List I of VII Schedule of the Constitution, which in view of the legislative declaration of expediency of Union control of the Act (Section 2 of the Act) has eclipsed the legislative and pro tanto the complementary executive field and authority vouchsafed to the State under Entry 23 of List II of VII Schedule of the Constitution. However, qua Section 15 of the Act the Act enables the State by a notification in the official gazette to make rules for regulating the grant of quarry leases, mining leases or other concessions in respect of minor minerals and for purposes connected therewith. It is in the context of the power granted under section 15 of the Act that the Rules have been made and as we have noticed Rule 12(5)(b) of the Rules enjoins that the application for prospecting licences or quarry leases for the mineral granite or marble shall be considered in the order of priority of the applications. Though a power is available to the Director of Mines and Geology, with the prior approval of the State Government to make a departure to this ordained policy, the reasons recorded must be germane to the scheme of the Constitution, the purposes of the parent legislation and the general constitutional architecture that governs a field of trade, commerce and intercourse in the territory of India. As rightly found by the learned single Judge the reasons recorded by the State Government in the memo dated 6.2.2007 run counter to and are subversive of the Constitutional principles set out in Article 301 in Part XIII of the Constitution and are at variance with the scheme of the provisions of the Act and make an irrational exception to the mandated principle of Rule 12(5) (b) of the Rules which enjoins that the applications for minor lease for granite should be considered in the order of priority of the receipt of applications. No countervailing Constitutionally recognised public interest has been set out in the order of the Government, which saves the reasons recorded from the vice of irrationality and irregular exercise of power. The learned counsel for the appellants would strenuously contend relying on the decisions of the Supreme Court in BACHAN SINGH v. UNION OF INDIA[1] and SETHI AUTO SERVICE STATION AND ANOTHER v. DELHI DEVELOPMENT AUTHORITY AND OTHERS,[2] that the court exercising power, authority and jurisdiction under Article 226 of the Constitution must not arrogate to itself the power of acute scrutiny to sit over the judgment by the executive authorities within the plenitude of their discretion; and that judicial review is available only against a decision making process and not the actual decision. Reliance is placed on paragraphs 15 and 32 of the respective judgments. We are in respectful agreement with the settled legal principles delineated in the above judgments which are also binding on this court. The question, however, is whether the memo of the State Government impugned in the writ petition and the reasons recorded therein are reasons which can be sustained under a non-derogable obligation of the State and the mandate of the provisions of the Act and Rule 12(5)(b) of the Rules. Our analysis above persuades us that the reasons are illegal. Illegal conduct of an executive authority must perish. That is a Constitutional mandate and such mandate we execute. For the aforesaid reasons, there are no merits in the writ appeal. The order of the learned single Judge is impeccable and warrants no interference. Consequently, this writ appeal fails and the same is dismissed. No order as to costs. ( G.RAGHURAM, J ) Dt: 02-11-2010. ( G.CHANDRAIAH, J ) tnb THE HON’BLE SRI JUSTICE G.RAGHURAM AND THE HON’BLE SRI JUSTICE G.CHANDRAIAH WRIT APPEAL NO.784 OF 2010 ( Order of the Division Bench as per Justice G.Raghuram ) Dated: 02-11-2010 [1] (2008) 9 SCC 161 [2] (2009) 1 SCC 180