IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.7204 of 2008 MADAN MOHAN SINGH SON OF SHRI KUBER SINGH, RESIDENT OF VILLAGE MADUERANA, P.S. CHAINPUR, DISTRICT- KAIMUR (BHABHUA) -------------------- Petitioner Versus 1. THE STATE OF BIHAR 2. Director of Minies, New Secretariat, Bihar, Patna. 3. Commissioner of Mines & Geology, Bihar, Patna New Secretariat. 4. Collector, Kaimur. 5. Assistant Mining Officer, Kaimur. -------------- Respondents ---------------- For the Petitioner:- Mr. Radheshyam Prasad, Adv. Mr. Gansh Kumar, Adv. For the State :- Mr. V.M.K. Sinha, Spl. P. KumarP. Mines ---------------- 7. 18.11.2008 Heard learned counsel for the parties. The petitioner seeks direction for quashing of the order dated 20.3.2008 of the Collector, Kaimur by which he has refused to renew the mining lease of the petitioner and further the order dated 24.3.2008 passed by the Assistant Mining Officer , Kaimur, Bhabhua communicating the said decision of the Collector (Annexure-4) and also the order dated 11.4.2008 passed by the Mines Commissioner in Revision Case No. 10/2008 by which he has rejected the revision application of the petitioner and for a consequential direction upon the respondents for renewal of his lease. The petitioner was granted lease of minor mineral dated 13.3.2003 for five years with respect to Madurana Pahari measuring an area of 1.53 acres bearing Plot No. 4084 within Mauza Madurana, P. S. Chainpur, District- Kaimur. On 12.10.2007 the petitioner applied for renewal of the mining lease before the - 2 - Assistant Mining Officer. However by the impugned order dated 20.3.2008, the Collector, Kaimur has rejected the application for renewal of mining lease of the petitioner on the basis of the office note put up by the Additional Collector that the lease of the petitioner has expired and in the light of the new policy of the Government it would be better to make settlement by auction. Thereafter by his letter dated 24.3.2008 the Assistant Mining Officer directed the petitioner to vacate the lease area and the revision application filed by the petitioner has also been rejected by the Commissioner of Mines, Bihar, Patna holding that the main prayer of the petitioner is for renewal of the lease for crushing stones whereas Rule 22A(1),(2) and (3) have been deleted by notification no. 641 dated 27.3.2008 and thereafter the lease cannot be renewed and the question of extension of time for renewal of lease does not arise. Learned counsel for the petitioner submits that on the date when the order of the Collector was passed on his pending renewal application that is on 20.3.2008 no rules deleting the provisions of Rule 22A (1),(2) and (3) had yet come into force since the notification itself is dated 27.3.2008 and thus the application for renewal of lease of the petitioner ought to have been considered on the basis of the rules then in force. It is submitted that as a matter of fact the said rules had not been published in the official gazette but it appears from the gazette notification brought on the record subsequently by the State respondents that it has been published on - 3 - 15.4.2008. However, learned counsel for the petitioner points out that even when the first counter affidavit was filed in July, 2008 it was stated that the rules have been sent for publication in the gazette and thus according to him the gazette notification appears to be back dated. It is thus submitted by learned counsel, on the basis of several decisions of the Supreme Court and of this Court, that the rules could be stated to have come into operation only after they were duly published in the official gazette and hence on the date of the order of the Collector or even of the Mines Commissioner no such rules were in force. Learned counsel further contends that the Bihar Minor Minerals Rules are statutory rules and they cannot be over-ridden by any policy decision of the State Government, which is the basis of the note put up by the Additional Collector and hence the order of the Collector is contrary to well established proposition of law that executive instruction cannot override the statutory rules. It is argued that on the basis of anticipation of new rules the application for renewal of lease could not have been refused. It is further submitted by learned counsel that Rule 22A is mandatory in view of the words “shall be considered “used in the said rules and thus once the petitioner had filed his application fulfilling the conditions, the authorities were bound to have approved his application for renewal of` lease. In support of the said proposition learned counsel relies upon a decision of a Division Bench of this Court in the case of Bindeshwari Jha vs. The Union of - 4 - India and Ors.: 1985 PLJR 256, para 6 of which is quoted below:- “From a mere perusal of Section 8(2)(b)of the Act read with rule 28(3) of M.C. Rule, 1960 it is abundantly clear that in respect of non-schedule mineral first renewal “shall be granted” by the State Government. The period for renewal, however, shall not exceed twenty years. This also follows from Rule 31 read with Form „K‟ part VIII note (3), which states “where the mining lease relates to any mineral not specified in First Schedule to the Act, it shall be renewable for one period not exceeding the period specified in sub- Section (2) of Section 8 at the option of the lessee. The lessee under the Act and Mineral Rules having been given to understand when he was granted the lease, that renewal would be at his option, non- renewal of the lease would seriously upset his plans and cause him economic loss. Section 19 of the Act, however, requires that grant, renewal or acquisition must, however, conform to the provisions of the Act or the rules, otherwise it would be void and of no effect. This provision is mandatory. Mr. L.S. Sinha, learned counsel for the respondent State, also fairly concedes to this legal position. I, therefore, hold that lessee of non-schedule mineral is entitled, as a matter of right, to the first renewal of a mining lease for a period not exceeding 20 years provided the renewal of the lease-hold area is not in contravention of the Act and the Rules made thereunder and further the lessee continues to be competent to the grant of the mining lease. Learned counsel also relies upon the decision of a Division Bench in the case of Dolwala Sehkari Shram Samvida Samiti Ltd. Vs. State of Uttaranchal and Ors.: 2007(11) SCC 641, para 21 of which is quoted below:- “It is thus seen that under the above amended rule, the rights of the Government to get the mining activities done - 5 - by the government departments, government corporations, etc. was not affected. The rights of the Government, as already noticed, mining trade in respect of the minor minerals and lease is regulated by Section 15 of the Mines and Minerals (Regulation and Development) Act, 1957 under which the State Government has been empowered to make rules to give effect to the provisions of the Act. There is no restriction under the Act that the minor minerals lease would be confined to State or its agencies and as such the policy decision of the State of Uttaranchal which creates an embargo on the right of the appellant is (sic not) ultra vires the provisions of the 1957 Act and the Rules. The right to trade is guaranteed under Article 19(6) of the Constitution of India and that can only be regulated by means of a valid law and not by the notification, which has been done by the State of Uttaranchal in the present case. It is also seen from the Notification dated 30.4.2001 that it did not deprive the appellants‟ right of consideration of his application as no monopoly or right was created excluding any private person.” Learned counsel argues that the petitioner having invested huge amount in the said business for a period of five years in anticipation of renewal in terms of the mandatory provisions of law, the action of the respondents is violative of Article 19 of the Constitution and the statutory provisions. Learned counsel for the State on the other hand relies upon the provisions of Rule 22A of the Bihar Minor Mineral Concession Rules, 1972 to argue that the renewal of a mining lease is not a matter of right. It is urged that even sub Rule (2) thereof merely speaks of the fact that the renewal of lease shall be considered when an application is made but the same does not mean that the renewal has to be granted, otherwise there was nothing to prevent the - 6 - legislature from using the said term. It is submitted that Sub rule (3) of Rule 22A further makes it clear that a quarry lease under Rule 52 “may be renewed” for two periods, each period not exceeding the period of original lease and thus the intention of the rule making authority was clear that the renewal is optional and not mandatory. Learned counsel also relies upon the note which was put up by the Assistant Mining Officer before the Additional Collector on the basis of the recommendation in which reference has been made to Department Letter No. 218 dated 29.1.2008 in terms of which a Departmental Committee had been constituted which had gone into the question of settlement amounts to be charged and had come to the conclusion that the minimum Reserve Jama should be Rs. 16,05,171/- per acre per annum instead of the one prevalent at the present time. It is submitted that renewal under the old terms would have caused a huge loss to the public exchequer and considering all the said facts the renewal has been refused and it was decided to settle by open auction the said mining lease on the basis of the new policy decision of the State Government. It is submitted that even if it is assumed that the Government notification dated 27.3.2008 was not in force on the said date yet upon proper consideration of the case of the petitioner and considering the interest of the public exchequer, the renewal has been refused. In support of the proposition that renewal of mining lease is not a matter of right, learned counsel relies upon a decision of the Supreme Court in the case of State of Tamil Nadu vs. M/s Hind - 7 - Stone etc.: A.I.R. 1981 SC 711, in para 12 and 13 of which it has been held as follows:- 12. The next question for consideration is whether Rule 8-C is attracted when applications for renewal of leases are dealt with. The argument was that Rule 9 itself laid down the criteria for grant of renewal of leases and therefore Rule 8-C should be confined, in its application, to grant of leases in the first instance. We are unable to see the force of the submission. Rule 9 makes it clear that a renewal is not to be obtained automatically for the mere asking. The applicant for the renewal has, particularly, to satisfy the Government that the renewal is in the interests of mineral development and that the lease amount is reasonable in the circumstances of the case. These conditions have to be fulfilled in addition to whatever criteria is applicable at the time of the grant of lease in the first instance, suitably adapted, of course, to grant of renewal. Not to apply the criteria applicable in the first instance may lead to absurd results. If as a result of experience gained after watching the performance of private entrepreneurs in the mining of minor minerals it is decided to stop grant of leases in the private sector in the interest of conservation of the particular mineral resource, attainment of the object sought will be frustrated if renewal is to be granted to private entrepreneurs without regard to the changed outlook. In fact, some of the applicants for renewal of leases may themselves be the persons who are responsible for the changed outlook. To renew leases in favour of such persons would make the making of Rule 8C a mere exercise in futility. It must be remembered that an application for the renewal of a lease is, in essence an application for the grant a lease for a fresh period. We are, therefore, of the view that Rule 8C is attracted in considering applications for renewal of leases also. 13. Another submission of the learned counsel in connection with the consideration of applications for renewal was that applications made sixty days or more before the date of G.O.Ms. No. 1312 (2.12.1977) should be dealt - 8 - with as if Rule 8C had not come into force. It was also contended that even applications for grant of leases made long before the date of G.O.Ms. No. 1312 should be dealt with as if Rule 8C had not come into force. The submission was that it was not open to the Government to keep applications for the grant of leases and applications for renewal pending for a long time and then to reject them on the basis of R. 8C notwithstanding the fact that the applications had been made long prior to the date on which Rule 8C came into force. While it is true that such applications should be dealt with within a reasonable time, it cannot on that account be said that the right to have an application disposed of in a reasonable time clothes an applicant for a lease with a right to have the application disposed of on the basis of the rules in force at the time of the making of the application. No one has a vested right to the grant or renewal of a lease and none can claim a vested right to have an application for the grant or renewal of a lease dealt with in a particular way, by applying particular provisions. In the absence of any vested rights in anyone, an application for a lease has necessarily to be dealt with according to the rules in force on the date of the disposal of the application despite the fact that there is a long delay since the making of the application. We are, therefore, unable to accept the submission of the learned counsel that applications for the grant or renewal of leases made long prior to the date of G.O.Ms. No. 1312 should be dealt with as if Rule 8C did not exist.” On a consideration of the rival submission there can hardly be any disagreement so far as the proposition raised by learned counsel for the petitioner regarding the over-ridding effect of statutory rule over any Government policy decision is concerned. It is well established that a executive instruction cannot over ride the statutory rule in existence so far as the applicability of statutory rules are concerned. With respect to the same, this Court is further in - 9 - agreement with the submission of learned counsel for the petitioner that the amendments to the rules can only take effect after their publication in the official gazette. However, this Court is not in agreement with the submission of learned counsel for the petitioner that Rule 22A prior to its deletion by Government notification dated 27.3.2008 made a mandatory provision for renewal of the lease for two terms. Rule 22A (1),(2) and (3) is quoted below:- (1) An application for renewal of quarrying lease under rule 52 shall be made in Form “AA‟ to the competent officer at least ninety days before the expiry of the lease. The application shall be accompanied by all documents as referred in rule 52(2) and a treasury challan as a fee of Rs. 5,000 (Five thousand). (2) Renewal of the quarry lease shall be considered when the applicant offers to pay auction bid amount and twenty five percent or fifty percent of such amount shall be paid for the first and second renewal respectively. (3) A quarrying lease under rule 52 may be renewed for two periods, each period not exceeding the period of original lease. From a perusal of the said rule it is clear that application for renewal of quarrying lease under Rule 52 has to be made to the competent officer at least ninety days before the expiry of the lease along with a treasury challan as the fee of Rs. 5,000/- (Five thousand). The applicant should also offer to pay auction bid - 10 - amount and twenty five percent or fifty percent of such amount shall be paid as the case may be with respect to the first and second renewal respectively. So once the said condition is fulfilled by the applicant then the authorities are obliged to consider the application for renewal of quarrying lease. However from the tenor of Sub rule (3) it is evident that the renewal is not mandatory rather it is open to the authorities to consider the same since the term clearly envisages that it “may be renewed”. However the use of the directory “may be renewed” instead of mandatory “shall be renewed” does not mean that the authorities can brush aside the consideration of the application. The same must be considered keeping in view all the relevant facts which would include the benefit to the public exchequer and other aspects of public interest involved. Only on a consideration of all aspects of the matter, it would be open to the authorities to either accept or reject such application for renewal. The above also appears to be the view of the Supreme Court in its decision in M/s. Hind Stone case (supra). In the said decision it has been clearly held by the Apex Court that no one has a vested right to the grant or renewal of a lease and none can claim a vested right to have an application for the grant or renewal of a lease dealt with in a particular way by applying particular provisions and in absence of any vested rights in anyone, an application for a lease has necessarily to be dealt with according to the rules in force on the date of the dismissal of the application. It has also been pointed out that an application for renewal of a lease is in essence an application - 11 - for the grant of lease for a fresh period. In view of the said clear enunciation of law it is not open to the petitioner to contend that the authorities were bound to renew the lease irrespective of the fact that Rule 22A has subsequently been deleted by the notification dated 27.3.2008 through the gazette notification dated 15.4.2008. So far as reliance by learned counsel for the petitioner upon Bindeshwari Jha case (supra) is concerned, that case was decided on the basis of the clear provisions of Section 8(2)(b) of the Mines and Mineral Regulation Act read with Rule 28(3) of the Minor Mineral Concession Rules, 1960 in which it was clearly provided that in respect of non-schedule mineral first renewal “shall be granted” by the State Government. In view of the clear provision of the statutory rules the Division Bench of this Court had held that the authorities were obliged to grant first renewal of the mining lease as a matter of right to the petitioner of that case. So far as reliance upon Dolwala Sehkari Shram Samvida Samiti case (supra) is concerned, this Court does not find anything in the case which can sustain the stand of the petitioner. What was held in the said case by the Supreme Court was that the right to trade guaranteed by Article 19(6) of the Constitution of India can only be regulated by means of a valid law and not by a notification. However, on the facts the Supreme Court was of the view that the Government notification did not exclude any private person from the grant of lease for extraction of minor mineral and thus the same was not at all violative of the provisions of Article 19 of the Constitution - 12 - as it was not a provision which created a State monopoly or right to the exclusion of any private person. This Court fails to understand as to how Article 19 applies to the present matter where the application for renewal of mining lease has been rejected but the petitioner has not otherwise been prevented from participating in a fresh auction. Thus in the light of the aforesaid discussions, this Court does not find the action of the authorities upon justified in rejecting the application of the petitioner for renewal of lease. The writ application must therefore fail and it is, accordingly, dismissed. P. Kumar (Ramesh Kumar Datta, J.)