The Hon’ble Sri Justice C.V.Nagarjuna Reddy Writ Petition Nos.10579 & 10582 of 2007 Dated 14th June, 2010 WP.No.10579 of 2007 Between: C.Ram Subba Reddy …Petitioner And The Government of Andhra Pradesh and 2 others. …Respondents Counsel for the petitioner : Smt.N.Shoba Counsel for the respondents: AGP for Mines & Geology The Court made the following: Order: At the interlocutory stage, the Writ Petitions are taken up for hearing and disposal with the consent of the learned Counsel for the parties. These two Writ Petitions raise identical facts and law and therefore, they are being disposed of together. The petitioners are lessees of sand quarries. The petitioner in W.P.No.10579 of 2007 applied for grant of quarry lease in pursuance of Notification, dated 07-02- 2006. The lease was for a period of two years from 07- 06-2006 to 06-06-2008. When the petitioner’s tender was accepted, Rules 9-B and 9-P of the A.P.Minor Mineral Concession Rules, 1966 (for short ‘the Rules’) provided for payment of enhanced lease amount by 10% for the second year lease period by the successful bidder. However, by the time of expiry of the first year lease period on 06-06-2007, the said Rule was amended whereby the 2nd year lease was enhanced to 20% above the 1st year lease amount. This amendment was brought into force vide GO.Ms.No.84, dated 10-04-2007. When a demand was made for payment of the enhanced lease amount by seeking to apply the amended Rule, the petitioner filed W.P.No.10579 of 2007. The petitioner in W.P.No.10582 of 2010 was also a successful bidder, in respect of one of the sand reaches covered by Notification, dated 07-02-2006, and its lease period was scheduled to expire on 22-11-2008. A similar demand was made against the petitioner in this Writ Petition as well for payment of the enhanced lease amount by purporting to apply the amended Rules 9-B and 9-P of the Rules. At the hearing, Smt.N.Shoba, learned Counsel for the petitioner, placed reliance on Clause 12 of G.O.Ms.No.24, dated 12-02-2007, which was issued some time prior to the amendment of the Rules. The said Clause reads as under: “The Auction shall be conducted for a period of one year from 1st January to 31st December, with a provision to renew for the 2nd year with 20% enhancement of bid amount in the 2nd year. The existing leases will be continued as notified earlier. On expiry of the existing leases for the balance period upto December of that particular year, the area will be auctioned for this limited period only. The notification process for this area will then be done on par with other areas.” On the basis of the above-clause, the learned Counsel stated that the words ‘The existing leases will be continued as notified earlier’, in the said clause clearly imply that the enhanced lease amount prescribed under the amended Rule does not apply to the existing lessees. I have heard the learned Assistant Government Pleader for Mines and Geology representing the respondents. It is not in dispute that Rule 9-P as it then stood prescribed enhancement of lease by 10% of the knocked down amount as a pre-condition for execution of lease for the second year in favour of the existing lessees. The amendment brought out by G.O.Ms.No.84, dated 10-04-2007, provided that all the sand bearing areas in the State shall be leased out by sealed tender-cum-public auction for not more than two years with an yearly enhancement of 20% of the knocked down amount. For deciding the issue whether the amended Rules operate retrospectively or not, it is necessary to reproduce Rules 9-B (1) and 9-P (a) hereunder: “9-B: Notification of the Sand Bearing areas, Constitution of the District Level Committee and its power :- (1) All the sand bearing areas in the State shall be leased out by Sealed Tender-cum- Public Auction Reach or Mandal wise wherever applicable by the Auctioning Authority as specified under rule 9-H (1) financial year wise in any case not more than 2 years with an yearly enhancement of 0% of the knocked down amount and subject to the conditions prescribed in the notice of Sealed Tender cum Public Auction as prescribed in Rule 9-D and subject to approval of the District Level Committee as specified under sub-rule (5). However, with the approval of the District Level Committee duly recording its reasons in writing, a village or a group of villages can independently be auctioned by the Auctioning Authority.” 9-P. Payment of Second year lease amounts :- (a) The lessee shall pay the knocked down amount along with 20% enhancement towards the second year lease amount. Out of the total amount, 95% shall be paid towards Zilla Parishad Head of Account and balance 5% amount towards state head of account and submit the challans to the Assistant Director of Mines & Geology concerned on or before 45 days of the expiry of the first year lease period. If no such payment is received the lease period gets expired by the first year ending itself and the Security Deposit gets forfeited to the Government. The Asst. Director of Mines & Geology shall make necessary arrangement for leasing out the area through sealed tender-cum- public auction. Provided, the Director of Mines & Geology may condone the delay in payment of second year lease amount on the request for the condonation of delay before the expiry of first year lease period. Provided further that the Government may condone the delay in payment of second year amount if the request is received after the expiry of the first year lease period but within 15 days from the date of expiry of the 1st year lease period in genuine cases.” There is nothing to suggest from the language of the above-reproduced amended provisions that the same are intended to apply to the existing lessees. On the other hand, Rule 9-B (1) speaks of the sand bearing areas “to be leased out”, which clearly indicates that it is intended to govern future leases. Irrespective of what G.O.Ms.No.24, dated 12-02-2007, provided for, unless the amended Rules are given retrospective operation either in express terms or by necessary implication, the same shall not be applied to existing leases, as the lessees under the leases were already vested with a right to enter into lease for the second year on payment of enhanced lease amount by 10% under the Rule, which existed when their tenders were accepted and agreements were entered. The law is well settled that an amendment dealing with the substantive rights of parties is always construed as prospective in operation unless a clear intention either expressly or by necessary implication is manifested in the amending statute unlike the statutes which deal with procedural aspects or statutes which are declaratory in nature. (Garikipati Veeraiah vs. M.Subbaiah[1], Dayavati vs. Inderjit[2] K.S.Paripornan vs. State of Kerala and others[3], Motiram vs. Suraj Bhan[4], Shamsunder and others vs. Ram Kumar[5], Ramvilas Bajaj and others vs. Ashok Kumar and others[6]). In the light of the settled legal position as above, the Writ Petitions deserve to be allowed. A Mandamus shall accordingly issue directing the respondents to refrain from applying Rules 9-B and 9-P of the Rules as amended, for the purpose of collecting enhanced lease amount from the petitioners in respect of the two leases, which were subsisting at the time of coming into force of the amended provisions. The Writ Petitions are accordingly allowed. C.V.NAGARJUNA REDDY, J Dated 14th June, 2010 lur [1] AIR 1957 SC 540 [2] AIR 1966 SC 1423 [3] (1994) 5 SCC 593 [4] AIR 1960 SC 655 [5] (2001) 8 SCC 24 [6] 2007 (4) ALT 348 (L.B.)