Case: Shivji Nathubhai Vs. The Union Of India &amp; Others

The brief facts necessary for this purpose are these. The appellant was granted a mining lease by the then Ruler of Gangapur State on 30-12-1947, shortly before the merger of that State with the State of Orissa on 1-1-1948. This leave was annulled on 29-6-1949. Thereafter the appellant was granted certificates of approval in respect of prospecting licences and mining leases. Eventually, the appellant applied on 19-12-1949, for mining leases for manganese in respect of five areas in the district of Sundergarh (Orissa). He was asked on 4-7-1950, to submit a separate application for each area which he did on July 27, 1950. Some defects were pointed out in these applications and therefore the appellant submitted fresh applications on 6-9-1950, after removing the defects. In the meantime, the third respondent also made applications for mining leases for manganese for the same area on 10-7-1950. These applications were not accompanied by the deposit required under R. 29 of the Rules. Consequently, the third respondent was asked on 24-7-1950, to deposit a sum of Rs. 500, which he did on 3-8-1950. It was then found that the third respondents applications were defective. It was therefore asked on 5-9-1950, to send a separate application in the prescribed form for each block and thereupon it submitted fresh applications on 6-9-1950. Eventually. On 22-12-1952, the State of Orissa granted the mining leases of the five areas to the appellant taking into account R. 32 of the Rules, which prescribed priority. It was held that the appellants applications were prior and therefore the leases were granted to him. Thereafter on 21-4-1953, possession of the areas leased was delivered to the appellant. It seems however, that the third respondent had applied for review to the Central Government under R. 52 of the Rules. This review application was allowed by the Central Government on 28-1-1954, and the Government of Orissa was directed to grant a mining lease to the third respondent with respect to two out of the five areas2. The appellants complaint is that he came to know in February, 1954, that the third respondent had applied to the Central Government under R. 52 for review. He thereupon addressed a letter to the Central Government praying that he might be given a hearing before any order was passed on the review application. He was, however, informed on 5-7-1955, by Government of Orissa of the order passed by the Central Government on 28-1-1954, by which the lease granted to him by the State of Orissa with respect to two areas was cancelled. Consequently, he made an application under Art. 226 of the Constitution to the Punjab High Court praying for quashing the order of January 28, 1954, on the ground that it was a quasi-judicial order and the rules of natural justice had not been followed inasmuch as he had not bee given a hearing before the review application was allowed by the Central Government, thus affecting his rights to the least granted by the State of Orissa. The writ petition was heard by a learned Single Judge of the High Court and it was held that the order was not a quasi-judicial order but merely an administrative one and that there being no lis, the appellant was not entitled to a hearing. In the result, the writ petition failed. The appellant went up in Letters Patent Appeal to a Division Bench of the High Court, which upheld the order of the learned Single Judge. The appellant then applied for a certificate to permit him to appeal to this Court which was granted; and that is how the matter has come up before us.

Reasoning:
Now when a lease is granted by the State Government, it is quite possible that there may be no application for review by those whose applications have been refused. In such a case the order of the State Government would be final. It would not therefore be in our opinion right to say that no right of any kind is created in favour of a person to whom the lease is granted by the State Government. The matter would be different if the order of the State Government were not to be effective until confirmation by the Central Government; for in that case no right would arise until the confirmation was received from the Central Government. But R. 54 does not provide for confirmation by the Central Government. It gives power to the Central Government to act only when there is an application for review before it under R. 54. This is why we have not accepted Mr. Pathaks argument that in substance the State Governments order becomes effective only after it is confirmed; R. 54 does not support this: We have no found any provision in the Rules or in the Act which gives any power to the Central Government to review suo motu the order of the State Government granting a lease. That some kind of right is created on the passing of an order granting a lease is clear from the facts of this case also. The order granting the lease was made in December 1952. In April 1953 the appellant was put in possession of the areas granted to him and actually worked them thereafter. At any rate, when the statutory rule grants a right to any party aggrieved to make a review application to the Central Government it certainly follows that the person in whose favour the order is made has also a right to represent his case before the authority to whom the review application is made. It is in the circumstances apparent that as soon as R. 52 gives a right to an aggrieved party to apply for review a lis is created between him and the party in whose favour the grant has been made. Unless therefore there is anything in the statute to the contrary it will be the duty of the authority to act judicially and its decision would be a quasi-judicial actThat is undoubtedly so. But that in our opinion does not show that the statutory Rules negative the duty to act judicially. What the Rules require is that the Central Government should act justly and properly; and that is what an authority which is required to act judicially must do. The fact that the Central Government is not bound even to call for records again does not negative the duty case upon it to act judicially, for even courts have the power to dismiss appeals without calling for records. Thus R. 54 lays down nothing to the contrary.We are therefore of opinion that there is prima facie a lis in this case as between the person to whom the lease has been granted and the person who is aggrieved by the refusal and therefore prima facie it in the duty of the authority which has to review the matter to act judicially and there is nothing in R. 54 to the contrary.It must therefore be held that on the Rules and the Act, as they stood at the relevant time, the Central Government was acting in a quasi-judicial capacity while deciding an application under R. 54. As such it was incumbent upon it before coming to a decision to give a reasonable opportunity to the appellant, who was the other party in the review application whose rights were being affected, to represent his case. Inasmuch as this was not done, the appellant is entitled to ask us to issue a writ in the nature of certiorari quashing the order of 28-1-1954, passed by the Central Government.