THE HON’BLE SRI JUSTICE P.S. NARAYANA WRIT PETITION No.16297 of 2007 Date: .11.2007 Between: M/s. Sri Gayatri Granites Palakonda, Srikakulam District. … PETITIONER AND Government of A.P., rep., by its Secretary, Industries & Commerce M.II (1) Department, Secretariat, Hyderabad & others. … RESPONDENTS THE HON’BLE SRI JUSTICE P.S. NARAYANA WRIT PETITION No.16297 of 2007 ORDER:- Heard Sri P. Venugopal, learned counsel representing the petitioner, the learned Assistant Government Pleader for Industries, Smt. Shoba and Sri Raghu representing the respondents. 2. This Court issued Rule Nisi on 31.07.2007. Counter-affidavit of respondent No.4 is filed. 3. Sri Venugopal, learned counsel representing the petitioner had taken this Court through the averments made in the affidavit filed in support of the writ petition and would maintain that in the facts and circumstances of the case, it cannot be said that the order made by this Court in WP.Nos.1883, 1884 and 4483 of 2006 had been complied with since the petitioner though interested party was not put on notice at all. Even otherwise, the learned counsel would submit that in matters of this nature three cannot be any compromise at all and the Government is expected to consider the case of the petitioner for grant of mining lease for colour granite in the light of the judgment and in view of the facts and circumstances the writ petition to be allowed. 4. On the contrary, the learned Assistant Government Pleader for Industries had taken this Court through the contents of the counter-affidavit and would maintain that in the facts and circumstances of the case, the petitioner has no locus standi at all to maintain the writ petition since he had not availed the remedy of revision under Rule 35-A of the A.P. Mines and Minerals (Concession) Rules, 1966, hereinafter in short referred to as Rules for the purpose of convenience nor challenged the order of rejection made on 20.06.2005. Further, the learned Assistant Government Pleader would submit that the application of the petitioner was rejected on 20.06.2005 as it was for the grant of Road Metal and Building Stone and hence no notice was given to him for hearing. The further stand taken related to the conversion of the application being impermissible. Hence, the learned Assistant Government Pleader would submit that in the light of the stand taken in the counter-affidavit by the 4th respondent the petitioner is not entitled to any of the reliefs prayed for and the writ petition is liable to be dismissed. 5. Smt. Shoba and Sri C. Raghu, learned counsel representing certain contesting respondents would maintain that in the facts and circumstances of the case, the benefit, if any, under Rule 35-C of the Rules, cannot be taken aid of by the petitioner. The learned counsel also would submit that the order made in WP.Nos.1883, 1884 and 4483 of 2006 had been complied with in true spirit and since the ground on which the impugned order in the prior writ petitions had been set aside being in the light of Rule 35-C (5) of the Rules, the writ petitioner would not fall under the said category and hence, the question of violation of principles of natural justice would not arise in the present case. 6. M/s. Sri Gayatri Granites, a proprietary concern, represented by its proprietor filed the present writ petition for a writ of mandamus declaring memo No.12748/M.II (1)/2006 dated 02.04.2007 on the file of the 1st respondent as well as the proceedings in L.Dis. proceedings No.914/Q/2004 dated 20.06.2005 on the file of the 3rd respondent as illegal, arbitrary, contrary to the principles of natural justice, contrary to the order dated 08.08.2006 made in W.P.Nos.1883, 1884 and 4483 of 2006, and also violative of Article 14 of the Constitution of India and set aside the same and consequently stay all further proceedings pursuant to the said memo and pass suitable orders. 7. The petitioner states that he made an application on 27.02.2004 to the 4th respondent for grant of lease in respect of 5 hectares of land in Sy.No.178 of Konisa Village, Gajapathi Nagaram Mandal, Vizianagaram District for extraction of road metal and building stone in accordance with the provisions of the Rules. A copy of the said application is placed before this Court. 8. In furtherance of the said application, the 4th respondent had issued notice to the petitioner informing that he should attend for a joint survey to be held on 08.03.2004. Accordingly, on 08.03.2004, the petitioner was present for the joint survey, but the 4th respondent postponed the joint survey and stated that it would be conducted on 07.07.2004. Even on 07.07.2004, the petitioner attended, but once again the 4th respondent postponed the survey to 28.10.2004. Even on the said date, the petitioner attended, but the joint inspection could not take place. 9. It is further stated that No Objection Certificate had been issued by the concerned Mandal Revenue Officer for grant of lease. The Mandal Revenue Officer, Gajapathinagaram Mandal vide letter dated 20.03.2004 issued No Objection Certificate in respect of the land for which the petitioner made an application and a copy of the said letter is also produced before this Court. 10. Further, it is stated that the petitioner was under the impression that the 4th respondent would call him for joint inspection and accordingly accord lease in his favour for extraction of road metal and building stone and to the utter surprise and disbelieve of the petitioner, a show cause notice dated 31.03.2005 was issued by the 3rd respondent. A copy of the said show cause notice is also produced before this Court. 11. It is also averred that on a reading of the show cause notice, it is stated that since the Geologist concerned had given a report stating that the land for which the petitioner made an application for extraction of road metal is useful for colour granite and as such why his application should not be rejected. On the said show cause notice the petitioner gave an explanation by letter dated 12.04.2005 wherein he requested the authorities to give one week time to convert his application for extraction of colour granite, since the application proforma for the said colour granite is different from road metal and the amount to be deposited is higher than the road metal. 12. Further, it is stated that the petitioner filed another application for colour granite on 15.04.2005 by remitting the fee of Rs.7,500/- by challan and deposited Rs.50,000/- by way of demand draft at the rate of Rs.10,000/- per each hector. The same had been cancelled by the 4th respondent by letter dated 15.04.2005. The said letter is also produced before this Court. 13. It is also stated that in utter breach of the provisions of the A.P. Mines and Minerals (Regulation & Development) Act, 1957 hereinafter in short referred to as the Act for the purpose of convenience and the Rules the rejection order dated 20.06.2005 was made by the 3rd respondent and a copy of the said rejection order is also placed before this Court. The said rejection order is per se illegal, arbitrary and contrary to the provisions of the Act and the Rules and the same is violative of Article 14 of the Constitution of India. In the said rejection letter names of the applicants are mentioned and this name is shown at Sl.No.6 in the table. In the said rejection letter it is stated that applications of applicant Nos.1 to 3 and 6 are rejected. It is further to state that though the petitioner made an application for colour granite on 15.04.2005, which had been cancelled, the same had not been mentioned for the reasons best known to the authorities. It is also stated that the names of 1st to 3rd applicants (6th to 8th respondents in the writ petition) had been mentioned twice at Sl.No.7 to 9 respectively and this would go to show that the authority had deliberately removed the application of the petitioner from the colour granite having cancelled the same, which is also within the time. 14. The 5th respondent and two others filed W.P.Nos.1883, 1884 and 4483 of 2006 before this Court questioning the memo dated 19.01.2006 issued by the 1st respondent. The learned judge allowed these writ petitions and the relevant portion of the order is hereunder: “It may be appropriate to have a look at the relevant rule, Rule 35-C(5), specifies that on receipt of the application the Director or State Government shall send a copy of the application to each of the parties impleaded under sub-rule (3) specifying a date on or before which he may make his representation if any against the appeal or revision application filed under sub-rule(1). On a careful analysis of the facts, this Court is of the considered opinion that the said rule had not been complied with and no appropriate opportunity had been given to all the parties who were interested in having a hearing. Several of the decisions referred to supra were cited and elaborate submissions were made both on factual aspects and also on certain questions of law involved in the matter. Quasi judicial authorities while dealing with the matters and disposing of matters are expected to be cautious in affording opportunity to the parties and also in following the Rules governing the field and in observing the principles of natural justice. The practice of making order in undue haste in disregard of the principles of natural justice and the relevant Rules governing the field, may have to be deprecated. Inasmuch as the common impugned order questioned in all these writ petitions, is being set aside on the ground that Rule 35-C(5) referred to supra had not been complied with and the same was made in violation of principles of natural justice and also in undue haste, this Court directs the competent authority to give reasonable opportunity to all the parties by complying with the Rule aforesaid and pass appropriate orders by taking all the facts and circumstances into consideration and also the decisions cited by both the parties and also taking into consideration the respective stand taken by the parties in the respective grounds of the pleadings of the parties before this Court. With the above observations, the impugned order in Memo No.14796/M.II(1)/2005-06 dated 19.1.2006 is hereby quashed as being violative of principles of natural justice and also contrary to rule 35 of the Rules referred to supra and the matter is remitted to the Government for the purpose deciding the matter afresh in the light of the observations specified supra. Accordingly the writ petitions are allowed to the extent indicated above. Inasmuch the matter is being remitted again to the Government, for the purpose of affording opportunity to all the parties concerned and to make orders afresh in accordance with law, the parties to the litigation to bear their own costs. It is needless to say that the Government, the 1st respondent in W.P.No.1883 of 2006 to dispose of the matter, in accordance with law, at an early date.” 15. The petitioner also had taken a stand that the learned judge while setting aside the order in memo dated 19.01.2006 made by the Government in exercise of its revisional power directed the Government to give reasonable opportunity to all the parties that means that learned judge is aware of the fact that there are others, who had not approached this Court and hence, the learned Judge had given such a direction. Further, it is stated that after the matters are remanded to the Government in terms of the order made by the learned Judge of this Court, the Government had issued memo dated 02.04.2007. The said memo No.12748/M.II(1)/2006 dated 02.04.2007 reads as under: “GOVERNMENT OF ANDHRA PRADESH INDUSTRIES AND COMMERCE M.II(1) DEPARTMENT Memo.No.1748/M.II(1)/2006 Dated 02.04.2007 Sub:- Mines and Quarries – Revision Applications filed by M/s. Sri Surya Constructions, M/s. sunitha Constructions, M/s. Laxmi Constructions, against proceedings dated 20.06.2005 of Deputy Director o f Mines and Geology, Visakhapatnam and proceedings dated 29.07.2005 of Director of Mines and Geology, Hyderabad – Orders of High Court of A.P. in W.P.Nos.1883, 1884 and 4483 of 2006, dated 08.08.2006 – Heard the case inpursuance of orders of High Court – Revised Orders – Reg. Ref:- 1) Govt. Memo.No.14796/M.II(1)/2005-5, dated 19.01.2006. 2) Orders of High Court in W.P.Nos.1883, 1884 and 4483/06, dated 08.08.2006. *** The Director of Mines and Geology vide his proceedings dt. 29.07.2005 granted quarry lease in favour of M/s. Galaxy Rockmin Pvt. Ltd., and M/s. Natraj Enterprises Granites for Colour Granite over an extent of 17.00 hects., and 14,000 hects., respectively in the Sy.No.178 of Konisa Village, Gajapathinagaram Mandal, Vizianagaram District for a period of 20 years under Rule 12(5)(a)(1) of APMMC Rules, 1966 while rejecting the subsequent application of M/s. Laxmi Constructions, M/s. Surya Constructions, and M/s. Sunitha constructions. 2. Aggrieved by the rejection orders issued vide proceedings No.35464/R1- 2/2003, dated 29.07.2005 by the Director of Mines and Geology, M/s. Sri Surya Constructions, M/s. Sunitha Constructions, M/s. Laxmi Constructions filed revision application before the Government under Rule 35-A of APMMC Rules, 1966. 3. The Government after examining the revision applications and after hearing the revision applicants, issued orders vide reference 1st cited on the revision applications filed by M/s. Sri Surya Constructions, M/s. Sunitha Constructions and M/s. Laxmi Constructions as follows. “The Revision Applications filed by M/s. Sri Surya Constructions, M/s. Sunitha Constructions, M/s. Laxmi Constructions, have been examined by Government in detail in consultation with the Director of Mines and Geology and in order to dispose of the revision applications, a personal hearing was conducted on 15.10.2005 with all concerned. The revision petitioners as well as impleaded party have attended the hearing and presented their grievances. The Director of Mines and Geology, Hyderabad also explained the issue. After hearing the arguments of the petitioners, implead party and going through the material on record, it is observed that orders issued by both the Deputy Director of Mines and Geology, Visakhapatnam and Director of Mines and Geology, Hyderabad are not in conformity with rules and against the principles of natural justice and the applications filed by the revision petitioners are prior to the applications of the impleaded party. Even though they applied for road metal and building stone, when the material is found to be useful for better purposes, they are also inclined to make use of the said material for better purpose. The principles of natural justice require an opportunity to the earlier applicants to opt the usage of the mineral and if they are not prepared to take granite useful for cutting and polishing, the subsequent applications would have been considered. Whereas when they are interested to make use of the material for better purpose, their case would have been first considered. Incidentally in a granite quarry, lot of waste is generated and the waste can be used for road metal and building stone and the useful material will be used for cutting and polishing. In the circumstances, the rejection proceedings dated 20.06.2005 of the Deputy Director of Mines and Geology, Visakhapatnam and the orders issued by the Director of Mines and Geology, vide his proceedings No.35464/R1-1/2003 dated 29.07.2005 are hereby set aside. Considering these facts, since already the Director of Mines and Geology has granted the leases to the impleaded party, it is decided to divide the area as indicated below: 1. The entire area available including the excess area arrived at by the Department after grant of the leases may be divided into equal parts, i.e., eastern portion and west portion. 2. The present grantees may be allocated one half of the said area and the other half area may be granted to the revision petitioners, since they are the first applicants for this area. 3. The first option may be given to the applicants at Sl.No.4 and 5 to select the area (i.e., either Eastern half or Western half of the total area) as per priority of serial number of application between them and the rest of the area may be reallocated to the Revision Petitioners as per the priority of serial number of application among them. The Director of Mines and Geology, is directed to issue modified orders to this effect accordingly and ensure that all the parties have proper path to approach their respective quarry areas. The Director of Mines and Geology is directed to dispose off the implead petitioner as per priority. All the Revision Applications are disposed of accordingly.” 4. Aggrieved by the above, W.P.Nos.1883, 1884 and 4483 of 2006 have been filed by M/s. Galaxy Rockmin Pvt. Ltd., M/s. Natraj Enterprises and M/s. Orion Granites respectively. 5. The petitioners have prayed the Hon’ble High Court 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 Certiorari calling for records in Memo No.14796/M.II(1)/2005-06 dated 19.1.2006 and quash the same as arbitrary, illegal, unjust and violative of principles of natural justice and contrary to A.P.Minor Mineral Concession Rules, 1966 and Granite Conservation Rules 1999. 6. The Hon’ble High Court in its order dated 08.08.2006 in the said W.Ps. have issued common order as follows: “It may be appropriate to have a look at the relevant rule, Rule 35-C(5), specifies that on receipt of the application the Director or State Government shall send a copy of the application to each of the parties impleaded under sub- rule (3) specifying a date on or before which he may make his representation if any against the appeal or revision application filed under sub-rule(1). On a careful analysis of the facts, this Court is of the considered opinion that the said rule had not been complied with and no appropriate opportunity had been given to all the parties who were interested in having a hearing. Several of the decisions referred to supra were cited and elaborate submissions were made both on factual aspects and also on certain questions of law involved in the matter. Quasi judicial authorities while dealing with the matters and disposing of matters are expected to be cautious in affording opportunity to the parties and also in following the Rules governing the field and in observing the principles of natural justice. The practice of making order in undue haste in disregard of the principles of natural justice and the relevant Rules governing the field, may have to be deprecated. Inasmuch as the common impugned order questioned in all these writ petitions, is being set aside on the ground that Rule 35-C(5) referred to supra had not been complied with and the same was made in violation of principles of natural justice and also in undue haste, this Court directs the competent authority to give reasonable opportunity to all the parties by complying with the Rule aforesaid and pass appropriate orders by taking all the facts and circumstances into consideration and also the decisions cited by both the parties and also taking into consideration the respective stand taken by the parties in the respective grounds of the pleadings of the parties before this Court. With the above observations, the impugned order in Memo No.14796/M.II(1)/2005-06 dated 19.1.2006 is hereby quashed as being violative of principles of natural justice and also contrary to rule 35 of the Rules referred to supra and the matter is remitted to the Government for the purpose deciding the matter afresh in the light of the observations specified supra. Accordingly the writ petitions are allowed to the extent indicated above. Inasmuch the matter is being remitted again to the Government, for the purpose of affording opportunity to all the parties concerned and to make orders afresh in accordance with law, the parties to the litigation to bear their own costs. It is needless to say that the Government, the 1st respondent in W.P.No.1883 of 2006 to dispose of the matter, in accordance with law, at an early date.” 7. Out of 7 applications filed for this area, previously the grant orders were issued in favour of 6th applicant i.e., Sri Gayatri Granites by dividing the area into two halves vide Memo.No.14796/M.II(1)/05-06, dated 19.01.2006. Aggrieved by these orders, the previous grantees have filed WP and the Hon’ble High Court directed for giving an opportunity to the respondents and to decide the issue afresh. 8. Pursuant to the directions of the Hon’ble High Court in WP.Nos.1883, 1884 and 4483 of 2006 dated 08.08.2006 the revision petitioner as well as respondents were called for hearing on 20.01.2007. During the time of hearing, the revision petitioner and the respondents have come to a compromise and filed a compromise petition. 9. According to the said compromise petition, the group of revision petitioner companies/firms and also the group of respondent companies would like to share the areas in the ratio of 60:40 (i.e., 60% to be held by M/s. Nataraj Enterprises Granites and Galaxy Rockmin Private Limited and 40% by M/s. Sri Surya Constructions, M/s. Sunitha Constructions and M/s. Laxmi Constructions as per the terms arrived in the said compromise proposals. Considering the said compromise proposals, the revision petition is disposed of with a direction to the Director of Mines and Geology to grant the leases strictly in conformity with the said compromise proposals among the revision petitioner as well as respondents to whom the leases were earlier granted. 10. As far as M/s. Orion Granite is concerned, the application deserves to be rejected since they do not have any priority. 11. The Director of Mines and Geology is directed to take necessary further action in the matter. Y. SRILAKSHMI SECRETARY TO GOVERNMENT To The Director of Mines and Geology, Hyderabad Copy to: M/s. Galaxy Rockmin Private Limited, No.78, Chaterdral Road, Chennai – 86.” 16. In para 7 of the said memo, the Government had stated as if other grantees had filed writ petition against the petitioner and that previously the petitioner had been granted orders by dividing the area into two halves. It is stated that the petitioner had neither received any granting order nor received any notice in the writ petition said to have been filed by the previous grantees. Further specific stand had been taken that directly speaking the petitioner need not question the rejection order inasmuch as the same had been set aside, the learned Judge had directed the Government to consider all the applicants after giving opportunity. As an abundant precaution, the petitioner is questioning the rejection order as well since application dated 15.04.2005 had not been mentioned in the rejection order. The impugned order in the instant writ petition is the rejection order dated 20.06.2005 and also the memo dated 02.04.2007. The rejection order is per se arbitrary and illegal and similar rejections were set aside by this Court in the writ petitions referred to supra. It is also stated that under the provisions of the Act and the Rules made therein, the authority cannot pass orders in the alleged compromise said to have been reached between the revision petitioner companies, firms and also the group of respondent companies. By virtue of the said compromise, no individual can be called upon to act on such a compromise and the Government cannot act upon such compromise since the State intends to distribute its largesse. By virtue of the impugned memo, the proposals of the unofficial respondents had been considered by the Government, which directed the 2nd respondent to grant lease in tune with the compromise proposal. The said action of the Government is arbitrary and illegal and liable to be set aside. There cannot be any compromise in such matters. The Government had to consider even the case of the petitioner for granting mining lease for colour granite since the learned Judge directed that all cases to be considered as per the Judgment. Since the same was not done and since the Government had not issued any notice or any opportunity to the petitioner, the impugned memo is violative of principles of natural justice and it is