IN THE HIGH COURT OF JUDICATURE AT PATNA Letters Patent Appeal No.798 of 2010 IN (CWJC 16998/2008) With I.A. No. 4260 of 2010 & I.A. No. 8462 of 2010 ====================================================== 1. The State of Bihar, through Secretary, Mines & Minerals Department, Government of Bihar, Patna. 2. The Additional Secretary, Mines and Geology, Government of Bihar, Patna. 3. The District Magistrate, Lakhisarai. 4. The Mineral Development District Officer, Lakhisarai. .... .... Appellant/s Versus 1. IDIO Construction and Industry (India) Ltd., its registered office at Shristhi, 5, D/21, North Shri Krishnapuri, Boring Road, Patna-800 013 through Krishna Nand Singh, C.E.O.-cum-Director, resident of Mohalla- Shri Krishna Nagar, Plot No. 176, Road No. 23, P.S. Budha Colony, District and in the town of Patna. 2. The Union of India, through the Joint Secretary, Department of Mines, Government of India, Shastri Bhawan, New Delhi. 3. The Joint Secretary & Legal Advisor, Department of Mines, Government of India, Shastri Bhawan, New Delhi .... .... Respondent/s ====================================================== Appearance : For the Appellant/s : Mr. V.M.K.Sinha(Spl.PP.)Mines For the Respondent/s : Mr. U.P. Singh, Sr. Advocate with Mr. Shankar Dayal Singh, Mr. Tripurari Sharan Pandey, Advocates For the Union of India : Mr. Kameshwar Pd. Gupta, C.G.C. For the intervener Respondent : Ms. Sushmita Mishra, Advocate ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE BIRENDRA PRASAD VERMA ORAL ORDER Patna High Court LPA No.798 of 2010 (12) dt.20-06-2011 2 (Per: HONOURABLE THE CHIEF JUSTICE) 12 20-06-2011 This appeal under clause 10 of the Letters Patent is filed by the State of Bihar and others against the judgment and order dated 25th March 2010 passed by the learned single Judge in above CWJC No. 16998 of 2008. The matter relates to illegal mining of major minerals - quartz and quartzite (silica stone) by the respondents M/S IDIO Construction and Industry (India) Ltd., Lakhisarai (hereinafter referred to as “the lessee”). The lessee has been granted lease for major minerals (quartz and quartzite) at Village- Bishunpur, District-Lakhisarai in respect of land measuring 48.92 acres. The lease was granted on 28th March 2001 for a period of 30 years. According to the State Government, the lessee, instead of mining the major minerals (quartz and quartzite) lifted Silica, a minor mineral controlled by the State Government. For disposal of the minor minerals the State Government has framed the Bihar Minor Mineral Concession Rules, 1972. Mining lease for excavation of minor minerals can be granted by the State Government by auction. The lessee has, in violation of the terms and conditions of the lease, despatched the minor minerals. For the said breach of lease agreement, Patna High Court LPA No.798 of 2010 (12) dt.20-06-2011 3 the State Government took action against the lessee. Challenge to the said action in CWJC No.7374 of 2007 before this Court has failed. Since then the State Government gave notice to the lessee under Rule 27 (5) of the Mineral Concession Rules, 1960 on 12th October 2007. Pursuant to the said notice, the lessee having failed to comply with the directions within sixty days, the lease has been cancelled by order dated 28th January 2008. Feeling aggrieved the lessee filed writ petition CWJC No. 16998 of 2008. The petition was contested by the State Government. According to the State Government, the lessee not only committed breach of the terms and conditions of the lease, it has excavated the minor minerals illegally. Despite issuance of several notices, the lessee continued to despatch minor minerals in breach of the terms and conditions of the lease. According to the terms and conditions of the lease, the lessee was supposed to mine quartz and quartzite (silica stone) for use in construction work. Neither the lessee has mined the silica stone nor such mineral is used in construction work. Despite notice the lessee did not cure the defect. Therefore, the order of cancellation of lease. Learned single Judge has upheld the finding of the Patna High Court LPA No.798 of 2010 (12) dt.20-06-2011 4 State Government that the lessee did not mine quartz and quartzite nor were such minerals used for construction work. Contrary to the terms of lease it has despatched minor mineral (silica). The learned single Judge relying upon Rule 27 (1) (o) of the Mineral Concession Rules, 1960 (hereinafter referred to as “ the 1960 Rules”) held that while winning a major mineral if a lessee obtains minor minerals then he has to move the State Government to obtain the order to dispose off the mineral as minor mineral. The lessee approached the State Government by filing application for permission to utilize the minor mineral. The said application was not disposed of. Instead an action was initiated against the lessee restraining it from mining the minor mineral in view of the decision in CWJC No.7374 of 2007. According to the State Government, the lessee had acted in violation of Rule 27 (1) (o) of the 1960 Rules and the lease was liable to be cancelled in accordance with Rules 27 (5) of the 1960 Rules. Eventually by the aforesaid order dated 28th January 2008 the lease came to be cancelled. The revision application preferred by the lessee before the Central Government (Mines Tribunal) came to be rejected. In challenge to the said order in CWJC No. 16998 of Patna High Court LPA No.798 of 2010 (12) dt.20-06-2011 5 2008 the learned single Judge though upheld the said finding held that the purported exercise of power under Rules 27 (5) of the 1960 Rules was in violation of principle of natural justice. Consequently, the learned single Judge set aside the order of the State Government. In the given facts and circumstances the learned single Judge reserved the liberty to the State Government to take appropriate action in case the lessee failed to win 60 per cent of major minerals in consonance with the terms and conditions of the lease. Feeling aggrieved the State Government has preferred the present appeal. Mr. V.M.K. Sinha, learned Special Public Prosecutor appeared for the State. He has submitted that prior to cancellation of the lease agreement the State Government had given adequate notice of 60 days in terms of Rules 27 (5) of the 1960 Rules. He has submitted that though lease has been granted to the lessee for mining quartz and quartzite, the major minerals, still the lessee has failed to win the quartz and quartzite. Instead, it has illegally despatched the minor minerals. The State Government was, therefore, wholly justified in cancelling the lease agreement. Learned Advocate Mr. U.P. Singh has appeared for Patna High Court LPA No.798 of 2010 (12) dt.20-06-2011 6 the respondent no.1. He has admitted that the lessee has despatched the silica recovered by it in the mining operations. He has, however, disputed that the silica is a minor mineral. He has submitted that the silica is a lower grade quartz and quartzite for which the lease has been granted. He has also submitted that despatch was made after obtaining permission from the District Mining Officer. The question whether the silica despatched by the lessee is a minor or a major mineral cannot be decided in a writ petition filed under Article 226 of the Constitution. If, at all, it is a minor mineral or is considered to be a minor mineral by the State Government, the lessee has to follow the procedure provided under Rule 27 of the 1960 Rules. In case the lessee makes an application as envisaged by Rules 27 of the 1960 Rules, it is the duty of the State Government to decide such application in accordance with law. In the present case, as the State Government has not decided the application made by the lessee. We have perused the notice dated 12th October 2007 purportedly issued under Rule 27 (5) of the 1960 Rules. We do agree with the learned single Judge the said notice does not answer the requirement of Rule 27 (5) of the 1960 Rules. Patna High Court LPA No.798 of 2010 (12) dt.20-06-2011 7 Rule 27 (5) of the 1960 Rules envisages a notice to the lessee to cure the defect within 60 days failing which the State Government may cancel the lease. The notice dated 12th October 2007 though has granted 60 days’ time to the lessee to show cause, it did not refer to cancellation of the lease in exercise of power conferred by Section 27 (1) of the 1960 Rules. For the aforesaid reasons, we agree with the learned single Judge. No interference is made out. The appeal is dismissed in limine. I.A. No. 4260 of 2010 and I.A. No. 8462 of 2010 stand disposed of. Rahman/Anjani/- (R.M.Doshit, CJ) (Birendra Prasad Verma, J)