Case: State Of Haryana Vs. Ram Kishan &amp; Ors

The present appeals by the State of Haryana and the Haryana Minerals Limited are directed against the common judgment of t he Delhi High Court disposing of 6 writ applications filed by different petitioners impleaded as respondent No. 1 herein2. Separate mining leases were executed on behalf of the State of Haryana with respect to Silica sand and ordinary sand in favour of the writ petitioners for a period of 10 years, in accordance with the provisions of the Mines &Minerals (Regulation &Development) Act, 1957, hereinafter referred to as the Act. The State of Haryana, in purported exercise of powers under Section 4A of the Act prematurely terminated the leases by its order dated 1st October, 1986 which is quoted in the judgment of the High Court, stating that it was proper to do so as the Haryana Minerals Limited, respondent No. 4 (appellant No . 2 herein) a public sector undertaking had informed that it had fully equipped itself to undertake the mining operation and that necessary permission in terms of the Section had been obtained from the Central Government to prematurely terminate the leases. Admittedly no prior notice to the writ petitioners or any opportunity to them to place their case was given3. The lessees contended before the High Court that essential conditions for exercises of the powers under Section 4A are not satisfied in the present cases and further, the impugned decision is violative of the principles of natural justice. It was also urged that so far as the lease in respect of ordinary sand which is a minor mineral under the Act, is concerned, Section 4A being excluded by the provisions of Section 14 is not applicable. It was also averred that forcible possession of the mining areas was taken even before communicating the impugned order. The High Court agree d with these contentions and allowed the writ petitions. The State of Haryana and the Haryana Minerals Limited, respondents No. 2 and 4, respectively, in the writ cases were allowed special leave to appeal under Article 136. Hence these appeals.

Court's reasoning:
We, therefore, held that a final decision to prematurely terminate a lease can be taken only after notice to the leassee9. Coming to the facts of the present case it will be observed that the question of terminating the mining leases in question before us was introduced for the first time under the letter dated 14.7.1986 (page 80) of the State of Haryana. The earlier letter dated 20.4.1985 and 8.7.1985, of the Department of Mines, Union of India sent to the State Government discussed the general question about the desired improvement in the mining field and referred to the report of the Indian Bureau of Mines on silica sand mining in Haryana. The report had highlighted various aspects of silica sand mining in the State and made several positive suggestions. It was stated in the letter dated 20th April, 1985 that if the lessees did not comply with the requirements mentioned therein, their leases "deserve to be terminated in accordance with the procedure established under law." In the letter dated 8th July, 1985, further emphasis was laid on ensuring scientific mining of optimum utilisation of natural resources, ensuring safety in operation and ensuring payment of fair wages to the mine workers. In this letter the desirability of entrusting mining operations to the public sector was mentioned but it was also stated that the representatives of the Government of Haryana had in the earlier meetings expressed their inability to entrust the Haryana Minerals Ltd. (appellant No. 2 before us) with the mining operations in the entire State immediately. Additional terms and condition s were also suggested to be imposed in the future mining leases to be granted in favour of private parties. Later on, it appears that the Haryana Minerals Ltd. became ready to take over the mining operations and intimated its preparedness by letter dated 10.7.1986 and thereupon the State of Haryana wrote on 14.7.1986 to the Union of India that it was appropriate to prematurely terminate the 6 leases mentioned in the letter of the date. It will be significant to note that the State Government did not take a decision to terminate all the mining leases; on the contrary, fresh mining leases in favour of private individuals were in contemplation of the State authorities, as indicated by the aforementioned letter s and by Annexure P-5 (page 273) to the Writ Petition of Ram Kishan in the High Court. The States letter dated the 14th July, 1986 was followed by another letter dated 5.9.1986 and in reply to it, the Central Government asked for a report on several specific points mentioned in their letter which is at page 85 of the paper-book. In place of sending the required information, the State Government, in its letter dated 17.9.1986, took the erroneous stand that the information sought for w as not relevant. Instead of pointing out that the information demanded was very pertinent in the context of the proposed termination of the mining lease, the Central Government by its letter dated 26th November, 1986 agreed to the proposal , but took care to advice that while taking any action for premature termination of the leases the authority should "ensure that the provisions of Section 4A of the Act are complied with". As has been mentioned earlier, the Union of India do es not deny the right of hearing to the affected lessees and is ready, even now, to give an opportunity to them. Admittedly, the writ petitioners who are respondents before us were never given any such opportunity and according to their assertion if such an opportunity had been afforded, they would have shown that the standard of their mining operation was very high and favourably measured against the expected standard suggested in the report of the Indian Bureau of Mines and mention ed in the letter of the Mines Department of the Central Government and that it was definitely superior to that of Haryana Minerals Limited10. On a consideration of the facts and circumstances of the present case, we are of the opinion t hat there was no effective consultation between the Union of India and the State Government, and the Central Government did not form any opinion as required under Section 4A of the Act. We are further of the view that the lessees, the respondents before us, were entitled to be heard before a decision to prematurely terminate their leases was taken but they were not given any opportunity to place their case11. Mr. Sen, the learned counsel for the respondents, very fairly state d that he could not support the plea that leases in respect of minor minerals are saved from the application of Section 4A altogether by reason of Section 14. This Court in State of Tamil Nadu v. Hind Stone, [1981] 2 SCR 742 ( at pages 746H and 747A) pointed out that perhaps since Section 4A(1) is inapplicable to minor minerals because of the provisions of Section 14, Section 4A(2) has been specially enacted making somewhat similar provision. It must, therefore, be held that leases in respect of minor minerals also can be prematurely terminated in appropriate cases.