Case: M/s. Hindustan Aluminium Corporation Limited Vs. State of Bihar and Others

to execute a mining lease in favour of the respondent company in respect of the lands as applied by the respondent company and to take all necessary steps to put the respondent company in possession thereof. The High Court held that the deed of lease executed by the State of Bihar in favour of Hindalco was ineffective and inoperative in respect of that part of the area which was allowed in favour of the respondent company. Aggrieved, the Hindalco has preferred appeal before this Court 6. The High Court allowed the writ petition filed by the respondent company and direct the State Government to execute mining lease in favour of the respondent company in respect of the area of 362 acres and it further declared that the mining lease executed in favour of the appellant was ineffective and inoperative with regard to that part of the area which was included in the respondent companys area. The result of these directions was that the mining lease already granted in favour of the appellant stood modified. These directions were issued by the High Court on the finding that the appellant had not applied for a mining lease in respect of any area covered by the respondent companys application and further the respondent company was not a party to the negotiations and agreement between the State of Bihar and the appellant company, therefore, the State Government was bound to execute and carry out the Central Governments direction dated April 20, 1971, by executing a lease in favour of the respondent company in respect of the entire area, in respect of which respondent had made an application. The High Court further held that the State had no authority in law to grant lease in appellants favour in respect of the area for which respondent company had made application for grant of mining lease. These findings of the High Court were challenged before us by the learned counsel appearing for the appellant. He took us through the record and pointed out that High Court committed error in recording these findings 7. Before we consider the findings recorded by the High Court it is necessary to bear in mind that the appellant as well as the respondent company both had annexed maps showing the details of plots and the area in respect of which they had applied for mining lease but the same are not on record. In the absence of the maps it is difficult to uphold the findings recorded by the High Court that the area which was lease out to the appellant for mining purposes was the same as had been claimed by the respondent company. But, even assuming that the respondent company had also applied for the same area in respect of which a mining lease was granted to the appellant the order of the State Government could not be vitiated. If two parties apply for grant of mining lease in respect of the same area, it is open to the State Government to grant mining lease to the party for the whole area or in respect of lesser area. The State Government is not bound to grant mining lease in respect of the entire area claimed by a party. Moreover, the appellants application dated March 3, 1965 was prior in time and, therefore, the State Government was justified in granting mining lease in respect of the area claimed by the appellant even though a part of the same area may have been claimed by the respondent company. It is relevant to note that the respondent company was closed and there was a lock-out in the company from September 15, 1973 till the date of the decision of the High court. It is further noteworthy that the respondent company in spite of service of notice of this Court has not put in appearance either at the time of the interim order or at the time of final hearing of the appeal. On behalf of the State Government also it has been submitted before us that the respondent company has not carried out mining operation in the area and it does not appear to have interest in the matter. These facts clearly show that the respondent company is not taking interest in these proceedings as it is no longer interested in the litigation8. On a careful scrutiny of the records, we find that the Central Government had by its order dated April 20, 1971 merely directed the State Government to grant a mining lease to the respondent company. The order did not specify any particular plot or area for the purpose. The State Government had challenged the validity of the Central Governments order and during the pendency of the petition there was a compromise between the State Government and the respondent company as a result of which latter agreed to accept mining lease for a reduced area of 327 acres instead of 362 acres. Since, the respondent company entered into compromise with the State Government and agreed to a lesser area, the order of the Central Government dated April 20, 1971 stood modified to that extent. The High Court in our opinion rightly directed the State Government to execute the mining lease in favour of the respondent company with regard to the reduced area, but the High Court committed error in interfering with the mining lease granted to the appellant earlier in time. The Central Governments order could not and did not affect the validity of the mining lease granted in appellants favour. Section 11 of the Act confers a preferential right on the party making application prior in time. Since the appellants application for the grant of lease was earlier in time the State Government was justified in granting lease in appellants favour in respect of even that portion of area in respect of which the respondent company may have also applied. We are, therefore, of the opinion that the High Court was not justified in interfering with the appellants mining lease

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]The State Government is not bound to grant mining lease in respect of the entire area claimed by a party. Moreover, the appellants application dated March 3, 1965 was prior in time and, therefore, the State Government was justified in granting mining lease in respect of the area claimed by the appellant even though a part of the same area may have been claimed by the respondent company. It is relevant to note that the respondent company was closed and there was ain the company from September 15, 1973 till the date of the decision of the High court. It is further noteworthy that the respondent company in spite of service of notice of this Court has not put in appearance either at the time of the interim order or at the time of final hearing of the appeal. On behalf of the State Government also it has been submitted before us that the respondent company has not carried out mining operation in the area and it does not appear to have interest in the matter. These facts clearly show that the respondent company is not taking interest in these proceedings as it is no longer interested in the litigation8. On a careful scrutiny of the records, we find that the Central Government had by its order dated April 20, 1971 merely directed the State Government to grant a mining lease to the respondent company. The order did not specify any particular plot or area for the purpose. The State Government had challenged the validity of the Central Governments order and during the pendency of the petition there was a compromise between the State Government and the respondent company as a result of which latter agreed to accept mining lease for a reduced area of 327 acres instead of 362 acres. Since, the respondent company entered into compromise with the State Government and agreed to a lesser area, the order of the Central Government dated April 20, 1971 stood modified to that extent. The High Court in our opinion rightly directed the State Government to execute the mining lease in favour of the respondent company with regard to the reduced area, but the High Court committed error in interfering with the mining lease granted to the appellant earlier in time. The Central Governments order could not and did not affect the validity of the mining lease granted in appellants favour. Section 11 of the Act confers a preferential right on the party making application prior in time. Since the appellants application for the grant of lease was earlier in time the State Government was justified in granting lease in appellants favour in respect of even that portion of area in respect of which the respondent company may have also applied. We are, therefore, of the opinion that the High Court was not justified in interfering with the appellants mining lease