Case: State of Assam &amp; Others Vs. Om Prakash Mehta &amp; Others

1. This is an appeal by special leave against the judgment of the High Court of Assam allowing the petition filed by respondent questioning the validity of the order dated 27-6-1962 issued by the Deputy Commissioner, Khasi Jaintia Hills on behalf of the Government of Assam that their application for renewal of the mining lease granted to their father must be deemed to have been refused under sub-rule (3) of Rule 24 of the Mineral Concession Rules, 1960.2. The lease in question was granted by the Crown Representative on 29th April, 1942 to Bhagirath Mohta the father of the respondents for a period of 20 years to operate the coal-mines. Bhagirath Mohta died on 18-5-1961 and on 3-8-1961 the respondents applied for renewal of the lease. By his order earlier mentioned the Deputy Commissioner informed the respondents that the application for renewal must be deemed to have been refused. On 22-10-1962 the respondents filed a revision petition to the Central Government under Rule 54 of the Mineral Concession Rules, and this was rejected on 8-2-1963. On 7-5-1963 the respondents filed a petition before the High Court of Assam for quashing the order dated 27th June, 1962 and for a writ of Mandamus directing the renewal of the lease. The appellants contended that the rights of the respondents, if any, were wholly contractual and based on disputed facts and they could only establish them by filing a regular suit in a Civil Court.3. The High Court of Assam allowed the petition filed by the respondents holding that Rule 24 (3) of the Mineral Concession Rules, under which the application by the respondents was deemed to have been rejected, was unreasonable and ultra vires of Section 8 of the Minerals (Regulation and Development) Act, 1957, and the deemed refusal of the application for renewal had no legal effect, that the explanation to Rule 54 should also be struck down as repugnant to the main sections of the Act. It, therefore, quashed the order of the Deputy Commissioner dated 27th June, 1962 and issued a writ of Mandamus to the State Government to deal with and dispose of the application of the petitioners dated 3-8-1961 for renewal.

Court's reasoning:
12. We are unable to see how Rule 24 (3) and explanation to Rule 54 can be said to contravene the provisions of Section 8 of the Act. They are within the rule making powers of the Government. Clause (g) of Section 13 too enables the Government to make rules regarding the terms on which and conditions subject to which any prospecting licence or mining lease may be granted or renewed. It includes the power to make rules regarding conditions subject to which they may be refused. We do not see how the provisions of Rule 26 which lays down that where the State Government passes any order refusing to grant or renew a mining lease, it shall communicate in writing the reasons for such order militates against this conclusion. In view of the provisions of Rules 24 and 54 the only reason which the State Government can give under Rule 26 is that because 90 days are over the application should be deemed to have been refused.13. The High Courts view that Rule 24 (3) and the explanation to Rule 54 are in contravention of S. 8 is vitiated by its assumption that every order to be passed on an application for renewal should be approved by the Central Government. This is not correct. Only renewal cannot be granted without the Central Governments approval and not rejection.14. The only relevant decisions of this Court are reported in (1960) 2 SCR 775   = (AIR 1960 SC 606  ), Shivji Nathubhai v. Union of India and the decision in C. A. No. 657 of 1967, D/- 17-8-1967 (SC). In both of them it was held that the power of the Central Government under Rule 54 is a quasi-judicial power. They do not deal with the nature of the power exercised by the State Government in granting or refusing mining leases or renewals thereof. The decisions in Seeta Ramaiah v. State of Andhra Pradesh, AIR 1963 Andh Pra 54 and Shivji Nathubhai v. Union of India, AIR 1959 Punj 510 more or less take the same view of the matter as we have.15. We do not feel called upon to deal with the question whether as a result of the order passed by the Central Government there has been a merger and the application by the respondents before the High Court which did not ask for setting aside the order of the Central Government, cannot succeed as that point was not taken before the High Court; nor it is necessary to deal with the question in the view that we have taken of this case in its other aspects. In the result we hold that the High Court was in error in holding that Rule 24 (3) and the explanation to Rule 54 of the Mineral Concession Rules 1960 are contrary to the provisions of the Act and should be struck down.