IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE FIRST DAY OF OCTOBER TWO THOUSAND AND TEN PRESENT HON'BLE SRI JUSTICE R.SUBHASH REDDY WRIT PETITION No.2463 of 2007 Between: Ch.V.Girish, S/o.C.P.Raju, aged about 43 years, R/o.Plot No.25A, Santhinagar Postal Colony, Kakinada, East Godavari District. … Petitioner And The Government of Andhra Pradesh, represented by its Secretary, Industries and Commerce Department, Secretariat, Hyderabad, and 7 others … Respondents Order: In this Writ Petition, the petitioner, while questioning order dated 06-02-2007 passed, in Memo No.13991/M.II (1)/2006-1, by the first respondent-Government, seeks declaration that the aforesaid order is illegal, in violation of principles of natural justice and contrary to the provisions under the Mines and Minerals (Development and Regulation) Act, 1957 and the Rules, namely Andhra Pradesh Minor Mineral Concession Rules, 1966, framed under the aforesaid Act. The dispute in this Writ Petition relates to grant of quarry lease for colour granite, which is a minor mineral, governed by Andhra Pradesh Minor Mineral Concession Rules, 1966, framed under the Mines and Minerals (Development and Regulation) Act, 1957. By the impugned order, in exercise of powers under first proviso to Rule 12(5) (b) of Andhra Pradesh Minor Mineral Concession Rules, 1966, the first respondent-Government permitted the Director of Mines and Geology to issue necessary orders for grant of quarry lease for colour granite, in Sy.Nos.305, 306 and 307 of Thotakurapalem village, Ravikamatam Mandal, Visakhapatnam District, in favour of respondents 6 to 8 herein, by overlooking prior applications. The petitioner submitted application for grant of quarry lease for colour granite over an extent of 6 hectares in Sy.Nos.305, 306 and 307 of Thotakurapalem village, Ravikamatam Mandal, Visakhapatnam District, on 07-11- 2003, in Form ‘P’, duly following all the formalities as contemplated under the Rules and by depositing an amount of Rs.67,500/-. The said application was received by the Assistant Director of Mines and Geology and acknowledged vide Lr.No.2659/Q/2004, dated 18-12- 2004. On receipt of the said application, it was forwarded to the Mandal Revenue Officer, Ravikamatam Mandal to know the availability and classification of the land and also to know whether the said land is a Government or Patta land, with reference to the entries in revenue records. The Government has issued orders, in G.O.Ms.No.181, Industries & Commerce Department, dated 25-08-1998, which are in the nature of executive instructions, fixing time limits at different levels for disposal of the applications filed for prospecting licence/mining lease; as per which, on receipt of application, the Assistant Director of Mines and Geology concerned shall fix the date of inspection and send one set thereof to the Mandal Revenue Officer concerned. The Mandal Revenue Officer has to send a report to the Assistant Director of Mines and Geology within a period of 30 days by duly marking a copy to the District Collector. If the District Collector is in agreement with the report of the Mandal Revenue Officer, he need not make any further report to the Director of Mines and Geology; however, if the District Collector disagrees with the recommendation of the Mandal Revenue Officer, he will send his recommendation to the Director of Mines and Geology. It appears, the Mandal Revenue Officer, Ravikamatam vide proceedings dated 09-07-2004, addressed letter to the District Collector, Visakhapatnam informing that the Gram Panchayat, Thotakurapalem, has given consent for grant of quarry lease, for colour granite in favour of respondents 6 to 8 herein and has not given consent in favour of the petitioner as he is a non-local, hailing from Kakinada in East Godavari District. Further, the District Collector, Visakhapatnam also addressed letter dated 06-05-2006 in Rc.No.4381/2004 E.5, to the Director of Mines and Geology informing that the Gram Panchayat has given consent in favour of respondents 6 to 8, as they are locals of Visakhapatnam District and not given consent in favour of the petitioner. When the application of the petitioner was not considered, he approached this court and filed W.P.No.18172 of 2005, which was disposed of with a direction for consideration of his application in the light of Rule 12(5) of the Rules. In view of the communications made by the District Collector to the Director of Mines and Geology, who, in turn, addressed to the Government, the Government passed the impugned order mainly on the ground that the Gram Panchayat, Thotakurapalem passed unanimous resolution dated 08-07-2004 stating that since non-locals do not have proper understanding of the problems of the Gram Panchayat and natural resources are to be exploited by only locals, preference should be given to local people belonging to Visakhapatnam District, for grant of lease. In the impugned order, it was observed that in absence of any consent and cooperation from the Gram Panchayat, Thotakurapalem, non-locals cannot carry on quarrying operations and accordingly directions were issued to the Director of Mines and Geology to consider the applications of respondents 6 to 8 by overlooking priority. In this Writ Petition, it is the case of the petitioner that as much as it is not in dispute that the application made by him was at the earliest point of time and the same was received on 07-11-2003, whereas the applications of respondents 6 to 8 were received on 16-06-2004, 16-06-2004 and 17-06-2004 respectively, in that view of the matter, it is obligatory on the part of the Director of Mines and Geology to consider the applications received, in order of their receipt. It is the case of the petitioner that priority of applications cannot be overlooked on the ground that he is a non-local. It is stated that though the Government is empowered to order overlooking of applications for special reasons to be recorded in writing, but the reason namely that the petitioner is a non-local is no valid reason, at all and the same is in contravention of the provisions of the Mines and Minerals (Development and Regulation) Act, 1957 and the Rules made thereunder. Separate counter-affidavits are filed by respondents 1, 2 and 5 and also by respondents 6 to 8. While denying various allegations made by the petitioner, in the counter- affidavit filed by respondents 1, 2 and 5, it is stated that the petitioner has deposited an amount of Rs.10,000/- only against the security deposit of Rs.75,000/-. Further, referring to the proposals submitted by the Mandal Revenue Officer to the District Collector and further proposals submitted by the District Collector to the Director of Mines and Geology, who, in turn, submitted report to the Government, it is stated that though the petitioner, Sri Ch.V.Girish stands priority for consideration, but, since no- objection was not issued by the Gram Panchayat, on the ground that the petitioner is a non-local, his application could not be considered. Further, the counter-affidavit refers to the resolution of the Gram Panchayat, Thotakurapalem and the reasons for giving consent in favour of respondents 6 to 8, on the ground that they are locals and residents of Visakhapatnam District, whereas the petitioner hails from Kakinada in East Godavari District. In similar lines is the counter-affidavit filed by respondents 6 to 8. In the counter-affidavit filed by respondents 6 to 8, supporting the orders of the Government, it is stated that orders issued by the Government are in conformity with the Rules. The counter-affidavit refers to the resolution and consent of the Gram Panchayat wherein it is stated that non-locals do not have proper understanding of the problems of the Gram Panchayat and natural resources are to be exploited by locals only as per the A.P. Panchayat Raj Act, 1994 and others cannot be allowed to do so. Heard Smt.N.Shoba, learned counsel for the petitioner, learned Government Pleader for Mines and Geology for respondents 2 and 5 and also Sri K.Rama Koteswara Rao, appearing for respondents 6 to 8. It is submitted by Smt.N.Shoba, learned counsel for the petitioner, that grant of mining lease is governed by the provisions under the Mines and Minerals (Development and Regulation) Act, 1957 and it does not permit any distinction between a local and a non-local for grant of lease. It is submitted that merely because consent is given in favour of respondents 6 to 8 by the local Gram Panchayat, the same is no reason at all to overlook the priority of the applications received for grant of lease. It is further submitted that though the petitioner has complied all the conditions; in absence of any valid reason, the Government, by the impugned order, has issued orders to consider for grant of lease in favour of respondents 6 to 8 in spite of the fact that the application of the petitioner is a prior one than that of respondents 6 to 8. Learned counsel would submit that the petitioner has submitted application in the prescribed Form by paying necessary deposit as per the Rules and the respondents have taken into consideration the consent of the Gram Panchayat, Thotakurapalem, which is not required under the provisions of the Mines and Minerals (Development and Regulation) Act, 1957 and the Rules thereunder, and passed the impugned order. On the other hand, it is submitted by the learned Government Pleader and also the learned counsel appearing for respondents 6 to 8 that as much as the land which is the subject-matter of applications falls within the limits of the Gram Pancahyat, Thotakurapalem, the Gram Panchayat has considered the issue and passed a unanimous resolution to give consent only in favour of respondents 6 to 8, for grant of lease. It is submitted by the learned counsels that as the petitioner is not a resident of Visakhapatnam, he cannot understand the problems of the local Gram Panchayat, as such, he cannot be allowed to extract mineral from the local area of the Gram Panchayat. Under the scheme of the Mines and Minerals (Development and Regulation) Act, 1957, particularly under Section 5, there are restrictions on the grant of prospecting licences or mining leases. The only restriction is that the State Government shall not grant prospecting licence or mining lease to any person unless such person is an Indian National. As per the explanation, in case of an individual, a person shall be deemed to be an Indian National if he is a Citizen of India. Granite is a minor mineral and grant of prospecting licence and mining lease is governed by Andhra Pradesh Minor Mineral Concession Rules, 1966, which are framed in exercise of powers under Section 15(1) of the Mines and Minerals (Development and Regulation) Act, 1957. So far as colour granite is concerned, it is covered by Rule 12(5) of the Rules. Rule 12(5) (b) of the Rules and the proviso, which are relevant for the purpose of consideration of the issue in the present Writ Petition, read as under: “The application for grant of P.L. or Q.L. for granite shall be disposed off by the Director in the order of their receipt. 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: Provided further that where a P.L. or Q.L. 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:” In the light of the aforesaid Rule, it is clear that the applications for grant of mining lease for granite shall be disposed of by the Director in the order of their receipt. Further, as per the proviso, the Director of Mines and Geology is empowered to grant prospecting licence or quarry lease to an applicant whose application is received later, in preference to an earlier application with the prior approval of the Government for special reasons to be recorded in writing. Under the scheme of the Mines and Minerals (Development and Regulation) Act, 1957, consent of the local Gram Panchayat for grant of lease to a particular applicant is alien to the Rules. Even with regard to poramboke land, which vests with the Gram Panchayat, the Gram Panchayat may have a limited say, but there cannot be any authority or power vested in the Gram Panchayat under the scheme of the Mines and Minerals (Development and Regulation) Act, 1957 or the Rules made thereunder to recommend for grant of lease in favour of a particular individual applicant on the ground that, that particular individual is local and others are not. Special reasons which are required to be recorded in writing by the Government to approve the proposals of the Director of Mines and Geology as contemplated under 12(5) (b) of Andhra Pradesh Minor Mineral Concession Rules, 1966 to overlook the priority applications should be valid and sound reasons, in furtherance of the object and the provisions of the Mines and Minerals (Development and Regulation) Act, 1957 and the Rules made thereunder. Any reason which runs contrary to the provisions under the Mines and Minerals (Development and Regulation) Act, 1957 and the Rules made thereunder cannot be considered as a special reason within the meaning of the aforesaid proviso, to enable the Government to approve the proposals of the Director of Mines and Geology, for overlooking priority of applications. From a perusal of the impugned order and also the counter-affidavits filed by the respondents, it is clear that the application of the petitioner is at the earliest point of time and in view of Rule 12(5) (b) of the Rules, the Director of Mines and Geology has to dispose of the applications in the order of their receipt. The reason, namely that the petitioner is a non-local is an irrelevant reason which runs contrary to the restriction imposed under Section 5 of the Mines and Minerals (Development and Regulation) Act, 1957. When the provision in the substantive legislation restricts the State Government to grant mining lease to Indian Nationals, it is not open to the State Government to make a distinction between the applicants of the District, where the land which is the subject-matter of the applications is located and the applicants outside that District. Such distinction is not only illegal and arbitrary but also runs contrary to the provisions of the Mines and Minerals (Development and Regulation) Act, 1957 apart from infraction of equality clause guaranteed under Article 14 of the Constitution of India. The averments made in the counter-affidavit that the Gram Panchayat has passed a resolution to the effect that a local will understand the problems of the Gram Panchayat well, and it is the interest of the Gram Panchayat to allow only locals to exploit the mineral in the local area of the Gram Panchayat, appears to be illogical and runs contrary to the scheme of the Mines and Minerals (Development and Regulation) Act, 1957 and the Rules made thereunder. Though learned counsel appearing for respondents 6 to 8 contended that there is no illegality in the impugned order passed by Government and advanced arguments on the ground of legitimate expectancy, but, I do not find any substance in such arguments, as the Rules provide for disposal of the applications on first-come-first-serve basis. Undisputedly, the applications of respondents 6 to 8 are later in point of time to that of the application of the petitioner and the reasons recorded in the impugned order are no reasons in the eye of law. Although it is contended by the learned Government Pleader appearing on behalf of the respondents that the petitioner has not deposited the application as per the Rules, but, a reading of Rule 12(5) of the Rules indicates that the applicant has to deposit an amount of Rs.10,000/- per hectare apart from the application fee. In this case, it is to be noticed that the petitioner has deposited an amount of Rs.67,500/-, which appears to be in accordance with the Rules. In any event, it is to be seen that such issue has not come up for consideration and the impugned order is passed by the Government for overlooking the priority of applications by recording reasons to the effect that respondents 6 to 8 herein are locals of Visakhapatnam District. In that view of the matter, it is not for this court to examine, at this stage, whether the petitioner has made sufficient deposit as per the required Rules and the same is a matter to be examined at the stage of disposal of the application of the petitioner. For the foregoing reasons, order dated 06-02-2007 passed, in Memo No.13991/M.II (1)/2006-1, by the first respondent-Government, is hereby set-aside, with a direction to the second respondent-Director of Mines and Geology to consider the application of the petitioner, in terms of Rule 12(5) of Andhra Pradesh Minor Mineral Concession Rules, 1966, afresh and pass appropriate orders as expeditiously as possible in accordance with the provisions of the Mines and Minerals (Development and Regulation) Act, 1957, the aforesaid Rules and any other instructions in force in this regard. The Writ Petition is allowed to the extent indicated above. No order as to costs. ___________________ (R. SUBHASH REDDY, J) October 1, 2010 MRR Note: L.R. copy be marked //B.O//