Case: Chougule &amp; Company, Pvt., Limited Vs. Union of India &amp; Another

28,1955 for grant of the mining lease on the ground that he had already been holding this area and had invested considerable sums of money for a period of about two years in developing the mines and mining approach roads. He had already been operating upon a number of manganese mines in North Kanara District and he had good performance to his credit and under the interim orders of the High Court he was still in possession of the buildings put up by him and in the circumstances the Government proposed to sanction the lease to him.7. In reply to the comments of the State Government the appellant disputed some of the statements mentioned therein and stated that it was not to blame for not pursuing the prospecting operations as the authorities of the Central Excise Department did not permit them to conduct the operations in the area which was situate in the Goa border probably for preventing smuggling. The appellants were always ready to start prospecting operations but were unable to do so for causes beyond their control. When the Central Government cancelled the lease granted to Suthankar it was necessary for the State Government to consider the applications for the regrant on their merits and the Directorate of Mines and Geology should have considered the claims of the parties to such a grant and should not have directed the issue of a grant in favour of Suthankar merely because he claimed to have invested money in developing the mines and mining approach roads on the basis of a lease which was not properly granted. Suthankar never held the area under a prospecting licence nor had he done any prospecting operations in the area.8. Reference may be made to S. 11 of the Mines and Minerals (Regulation and Development) Act, 1957 which deals with preferential right in respect of certain persons. Under sub-section (1):-"Where a prospecting licence has been granted in respect of any land, the licensee shall have a preferential right for obtaining a mining lease in respect of that land over any other person".This is however subject to a proviso that the state Government must be satisfied that the licensee had not committed any breach of the terms and conditions of the prospecting licence and was otherwise a fit person for being granted the mining lease, sub-section (2) provides that:"Subject to the provisions of sub-section (1), where two or more persons have applied for a prospecting licence or a mining lease in respect of the same land, the applicant whose application was received earlier shall have a preferential right for the grant of the licence or lease, as the case may be, over an applicant whose application was received later:"and under sub-section (3) the matters referred to in sub-section (2) are as follows:-(a) any special knowledge of, or experience in prospecting operations or mining operations, as the case may be, possessed by the applicant;(b) the financial resources of the applicant;(c) the nature and quality of the technical staff employed or to be employed by the applicant; and(d) such other matters as may be prescribed.9. Learned counsel for the appellant urged that the State Government had nowhere stated that the appellant had committed any breach of the terms and conditions of the prospecting licence; neither had it ever suggested that the appellants were not persons fit for being granted a mining lease. Quite apart from the preferential claim it was necessary for the state Government to consider the relative merits of the claims to the lease put forward by the appellant and Suthankar. They should have considered which of the two applicants were to be preferred on account of its special knowledge or experience in prospecting operations or mining operations, the relative financial resources and the nature and quality of the technical staff employed by them. The Directorate of Mines of the State of Mysore preferred the claim of Suthankar merely because he had carried on some operations under a lease which was cancelled by the Government of India and had carried on some mining operations under that cancelled lease.10. Counsel further contended that the very text of the order of 4th April 1967 shows a complete non-application of mind by the authority rejecting the revision application. The order refers to "the decision of the Government of Mysore to reject" the applicants application for grant of a mining lease whereas in point of fact the Government of Mysore never came to any such decision nor passed any order thereon. It was as a result of the application of the Mineral Concession Rules that the appellants application to the State was deemed to be rejected because no order had been passed thereon for the space of nine months. Further according to learned counsel there was no reference to the comments of the State Government made on the revision application of the appellant and the order apparently was not based on the grounds given in such comment, unless it be held that a reference to the appellants letter dated 29th November, 1966 indirectly brought in the comments of the State Government.11. There is a striking similarity between the impugned order passed in this case and the one which was quashed in Bhagat Rajas case. It will be noted that excepting for the difference in the dates and the details of the lands in respect of which the lease was claimed the texts of the two orders are identical. One cannot but remark that orders rejecting such applications appear to be made on a formula which is well known to the department. In our view Departments cannot be allowed to perform their tasks so perfunctorily in disposing of claims of parties to valuable rights and it is incumbent on them to indicate the grounds on which the revision applications are disposed of unless the State Government had already in its order of rejection given the grounds and the Union Government referred to such grounds in its capacity as a revising authority.

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

Explanation:
1[ds]Quite apart from the preferential claim it was necessary for the state Government to consider the relative merits of the claims to the lease put forward by the appellant and Suthankar. They should have considered which of the two applicants were to be preferred on account of its special knowledge or experience in prospecting operations or mining operations, the relative financial resources and the nature and quality of the technical staff employed by them. The Directorate of Mines of the State of Mysore preferred the claim of Suthankar merely because he had carried on some operations under a lease which was cancelled by the Government of India and had carried on some mining operations under that cancelledorder refers to "the decision of the Government of Mysore to reject" the applicants application for grant of a mining lease whereas in point of fact the Government of Mysore never came to any such decision nor passed any order thereon. It was as a result of the application of the Mineral Concession Rules that the appellants application to the State was deemed to be rejected because no order had been passed thereon for the space of nine months. Further according to learned counsel there was no reference to the comments of the State Government made on the revision application of the appellant and the order apparently was not based on the grounds given in such comment, unless it be held that a reference to the appellants letter dated 29th November, 1966 indirectly brought in the comments of the State Government.11. There is a striking similarity between the impugned order passed in this case and the one which was quashed in Bhagat Rajas case. It will be noted that excepting for the difference in the dates and the details of the lands in respect of which the lease was claimed the texts of the two orders are identical. One cannot but remark that orders rejecting such applications appear to be made on a formula which is well known to the department. In our view Departments cannot be allowed to perform their tasks so perfunctorily in disposing of claims of parties to valuable rights and it is incumbent on them to indicate the grounds on which the revision applications are disposed of unless the State Government had already in its order of rejection given the grounds and the Union Government referred to such grounds in its capacity as a revising authority.