IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE TENTH DAY OF JULY TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MS JUSTICE G.ROHINI WRIT PETITION NO : 13434 of 2008 Between: Chirumamilla Srinivasa Rao S/o.Lakshmipathi R/o.Chandarlapadu Post & Village, Nandigama Mandal, Krishna District. ..... PETITIONER AND 1 The Government of Andhra Pradesh, rep. by Secretary, Industries and Commerce Department, Secretariat, Hyderabad. 2 The District Level Sand Committee rep. by its Chairman and Joint Collector, Krishna District, Machilipatnam. 3 The Director of Mines and Geology, 8th floor, BRKR Buildings, Tank Bund Road, Hyderabad. 4 The Assistant Director of Mines and Geology, Nandigama, Krishna District. 5 G.Venkateswara Rao S/o.G.Ranga Rao R/o.Gottumukkala (V) & (P), Kanchikacherla Mandal, Krishna District. .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue an order or writ one in the nature of writ of Mandamus, declaring the action of the respondents in Memo.No.15440/SPIU/SAND/2007-3, dt. 27.05.2008 issued by the 1st respondent extending the lease period up to 31.3.2009 in favour of Respondent No.5 without notifying the sand quarry reach of Kothapeta Sand Reach of Kanchikacherla Mandal, Krishna District for public auction and the consequential order of the Respondent No.4 in Proceedings No. 587/Q/2007, dt. 04.06.2008 as arbitrary, illegal, unjust, unconstitutional and contrary to A.P. Minor Mineral Concession Rules, 1966 and pass such other order or orders. Counsel for the Petitioner: SMT.N.SHOBA Counsel for the Respondent No.: GP FOR INDUSTRIES & COMMERCE The Court made the following : THE HON’BLE Ms. JUSTICE G. ROHINI WRIT PETITION NO.13434 OF 2008 ORDER : By Notice, dated 14.11.2006, issued by the District Level Sand Committee, Krishna, Machilipatnam, under G.O.Ms.No.1, dated 1.1.2001 the leasehold rights of sand quarry reach of Kothapeta of Kanchikacherla Mandal of Krishna District was notified for a period of one year. The 5th respondent herein, being the successful bidder in the auction held on 1.12.2006, was granted the lease commencing from 27.12.2006 to 26.12.2007. Accordingly, a lease agreement in Form-G1 was executed in favour of the 5th respondent. While so, on the basis of the resolution passed by the Kothapeta Gram Panchayat to form a new road outside the village, the Sarpanch, Kothapeta made a representation to the Government requesting to stop sand quarrying operations in Kothapeta Sand Reach till the new road is formed stating that the villagers as well as school-going children were being inconvenienced by the vehicles transporting sand through the only road available in the village. Having considered the same, the Government, by order dated 23.10.2007, stayed sand quarrying operations in Kothapeta Sand Reach until further orders and pursuant thereto the 5t h respondent stopped quarrying operations from 18.11.2007. Subsequently, a new road as proposed was laid between the villages of Kothapeta and Goniatkuru and having inspected the same on 23.4.2008, the Assistant Director of Mines & Geology, Nandigama, along with the other officials of the concerned Departments as well as Sarpanch of Kothapeta submitted a report recommending to allow the lessee to carry on the sand quarrying for the non-operation period of 38 days from 19.11.2007 to 26.12.2007. It appears that the 5th respondent also made a representation and having considered the same, the 1st respondent by order dated 27.5.2008 while vacating the stay dated 23.10.2007, also permitted renewal of second year lease in favour of the 5th respondent with 20% enhancement on the first year lease amount. In the said order, it was made clear that the second year lease commences from 1.4.2008 and concludes by 31.3.2009 and that any excess amount collected from the lessee for non- operation period of 38 days in the first year lease shall be adjusted proportionately to the total amount of second year lease. The said order dated 27.5.2008passed by the 1st respondent purportedly in exercise of powers conferred under Rule 9-K (3) of the A.P Minor Mineral Concession Rules, 1966 (for short, ‘the Rules, 1966’) is under challenge in this writ petition. It is mainly contended by the writ petitioner that since the Reach in question was notified only for one year, the 1st respondent has no power to renew the lease and the only course open is to notify the area for public auction for grant of fresh lease for the year 2008-09. The 5th respondent filed a counter-affidavit stating that as per G.O.Ms.No.84, Industries & Commerce (M1) Department, dated 10.4.2007, whereunder the existing Rules 9-B(2) to 9-X of the Rules, 1966 were substituted, the Government is competent to condone the delay in payment of second year lease amount and grant renewal. It is also stated that since Clause-5 of the Lease Agreement enables the 5th respondent to pay the knocked down amount along with 10% enhancement towards second year lease amount 45 days before the expiry of the first year lease period, he is entitled to seek renewal of lease and that having considered the same, the 1st respondent had rightly granted renewal with 20% enhanced amount as stipulated in the new Rules under G.O.Ms.No.84, dated 10.04.2007. It is also alleged that the present writ petition, which was filed at the instance of the 5th respondent’s business rival by name N. Rambabu, is misconceived and liable to be dismissed in limine. I have heard the learned counsel for both the parties and perused the record produced by the learned Government Pleader for Mines & Geology. It is not in dispute that the auction notice dated 14.11.2006 was issued in exercise of the powers conferred under G.O.Ms.No.1, dated 1.1.2001 under which Rule 9-B to Rule 9-X of the Rules, 1966 relating to grant of leases of sand-bearing areas were substituted. As per sub-rule (1) of Rule 9-B of the Rules, 1966, the notification for grant of lease should be issued for a specified period in any case not more than two years with an yearly enhancement of 10% of knocked down amount. As per Rule 9-C, the District Level Committee shall issue such notification and under Rule 9-H a Lease Deed in Form-G1 shall be executed in favour of the successful tenderer. It was also made clear under Rule 9-H that the lease period shall commence with effect from the date of execution of the Lease Deed. So far as the lease for the second year is concerned, Rule 9-P mandated that the lessee shall pay the knocked down amount along with 10% enhancement towards the second year lease amount on or before 45 days of the expiry of the first year lease period. However, where the lessee failed to make such a request within the time prescribed but made a request for condonation of the delay before the expiry of the first year lease period, the Joint Collector was competent to condone the delay. Further, the District Level Committee was empowered to condone the delay in payment of the second year lease amount received even after the expiry of the first year lease period in genuine cases. Having interpreted the scope and object of the said Rules, 1966 made under G.O.Ms.No.1, dated 1.1.2001, a Division Bench of this Court in W.A.No.2156 of 2005 while considering the question whether a lease notified for a period of one year can be renewed for another year, held as under : “In view of the above analysis of the Rules, we hold that the competent authority can grant lease for a period of two years and, in that event, the second year lease amount has to be paid in accordance with Rule 9-P of the Rules, but if the lease is granted only for one year, then the concerned authority does not have the power or authority to renew the lease. The only course open to the competent authority in the second eventuality is to hold fresh auction in terms of Rule 9-B(1).” It is not in dispute that, in the case on hand the sand reach in question was notified for grant of lease only for a period of one year. Even Clause-4 of the Agreement, executed in Form-G I in favour of the 5th respondent specified that the land shall be held by the lessee for the term of one year from 27.12.2006 to 26.12.2007. In the circumstances, having regard to the ratio laid down by the Division Bench the question of renewal of lease for one more year in favour of the 5th respondent does not arise and consequently the impugned order dated 27.5.2008 cannot be sustained. However, the learned counsel for the 5th respondent sought to justify the impugned proceedings relying upon clause-5 of the agreement executed in his favour which runs as under : “The lessee hereby agrees, to pay during the paid term the knocked down amount along with 10% enhancement towards second yer lease amount 45 days before the expiry of the 1st lease period. In respect of registered Boats-man Co-operative Society who remove and carry sand by Boats shall pay the knocked down amount in your equal quarterly installments swell before the commencement of the quarter.” The learned counsel for the 5th respondent while placing reliance upon BEG RAJ SINGH v. STATE OF U.P. AND OTHERS[1] vehemently contended that the right for renewal acquired by the 5th respondent under the agreement cannot be curtailed on any ground whatsoever. It is also contended that the writ petitioner having failed to challenge the lease agreement entered into between the parties, cannot challenge the consequential order of renewal by the 1st respondent by condoning the delay in payment of the second year lese amount. It is relevant to note that Rule 9-B to Rule 9-X of the A.P. Minor Mineral Concession Rules, 1966, as they stood on the date of the notification dated 14.11.2006 were substituted under G.O.Ms.No.84, Industries & Commerce (M1) Department, dated 10.04.2007. Even as per the said Rules, the maximum lease period shall be two years, however the yearly enhancement was increased from 10% to 20% of the knocked down amount. Further, as per the new Rules, the lease shall be as per financial year. It is also significant to note that as per the amended Rule 9-P which provides for payment of second year lease amounts, the knocked down amount along with 20% enhancement shall be paid to the concerned Assistant Director of Mines & Geology on or before 45 days of the expiry of the first year lease period and the power to condone the delay in payment of the second year amount after the expiry of the first year lease period is conferred on the Government in genuine cases. Thus, virtually, the difference between the old Rules under G.O.Ms.No.1, dated 1.1.2001 and the new Rules made under G.O.Ms.No.84, dated 10.04.2007, is only with regard to enhanced amount payable towards the second year lease and the authority who is empowered to condone the delay, if any, in such payment. The power to condone the delay which was conferred on the District Level Committee under the Old Rules is now conferred on the Government under the new Rules. Except that, there is no other change in the rule position. Therefore the ratio laid down by the Division Bench that grant of renewal of lease for another year where the lease was notified only for one year is impermissible squarely applies even as on today despite the amendment brought under G.O.Ms.No.84, dated 10.04.2007. Though the learned counsel for the 5th respondent sought to place much reliance upon clause-5 of the agreement and vehemently contended that the 5th respondent is entitled to seek renewal on payment of the knocked down amount along with the 20% enhancement and that the 1st respondent is competent to condone the delay in such payment in terms of Rule 9-P, I am unable to agree. The notification dated 14.11.2006 read with Clause-4 of the agreement made it clear that the lease was notified and granted in favour of the 5th respondent only for one year valid up to 26.12.2007. The original record produced before this Court contained the proceedings of the District Panchayat Officer who is the Convenor of the District Level Committee, Krishna, dated 26.12.2006 which also made it clear that the lease was notified only for a period of one year and the same was granted in favour of the 5th respondent herein who was the successful bidder. The record also reveals that the 5th respondent and all the authorities of the concerned Departments treated the lease granted under the notification dated 14.11.2006 only for a period of one year. Probably that is why the 5th respondent in his representation dated 19.11.2007 had only requested for extension of 38 days during which he could not operate quarrying. Thus, clause-5 of the agreement which is nothing but an extract of the Form-G I of the Rules is of no consequence and does not confer any right on the 5th respondent to claim renewal for another year. On a perusal of the original record placed before this Court, it is also found that except the representation dated 19.11.2007 in which the extension of period of lease was sought by the 5th respondent on the ground that he could not operate the quarry during the period of stay granted by the 1st respondent, the 5th respondent never sought for renewal of lease for another year. The only other representation of the 5th respondent found in the record was dated 29.5.2008 i.e., subsequent to the impugned proceedings dated 27.5.2008 in which the 5th respondent requested to issue the payment particulars for execution of the lease deed for the second year. Thus, it is apparent that there was not even a request for renewal of lease for the 2nd year. At any rate, grant of such renewal being impermissible under law, the impugned proceedings dated 27.5.2008 cannot be sustained and liable to be set aside. The decision of the Supreme Court cited by the learned counsel for the 5th respondent has no application to the facts in the case on hand since admittedly the lease notified and granted in favour of the 5th respondent was only for a period of one year. For the aforesaid reasons, the impugned order dated 27.5.2008 which is arbitrary and illegal is hereby set aside and the Writ Petition is allowed. No order as to costs. However, this shall not preclude the respondents 1 to 4 to consider the request of the 5th respondent for extension of 38 days lease period if it is permissible under law and pass appropriate orders afresh. ______________ G. ROHINI, J. Dt.10.07.2008 GBS [1] AIR 2003 SC 833