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PETITIONER: JANAK LAL

       Vs.

RESPONDENT: STATE OF MAHARASHTRA & ORS.

DATE OF JUDGMENT10/08/1989

BENCH: SHARMA, L.M. (J) BENCH: SHARMA, L.M. (J) VERMA, JAGDISH SARAN (J)

CITATION:  1989 AIR 2225            1989 SCR  (3) 830  1989 SCC  (4) 121        JT 1989 (3)   371  1989 SCALE  (2)290

ACT:     Mineral Concession Rules, 1960: Rules 58 &  59--Reserved land granted for mining without public notification--Validi- ty of.     Words  and Phrases: ’reserved for any  purpose’--Meaning of-Mineral Concession Rules, 1960, Rule 59.

HEADNOTE:     Rule  58  of the Mineral Concession Rules,  1960,  which deals  with  availability of areas for regrant of  a  mining lease, requires a notification to be published in the  offi- cal gazette at least 30 days in advance. Rule 59 directs the procedure laid down in Rule 58 to be followed in the case of any  land in respect of which the State Government  had  re- fused  to grant a prospecting licence or a mining  lease  on the  ground  that- it was required to be  reserved  for  any purpose.  The  expression  "reserved for  any  purpose"  was earlier  followed  by the words "other than  prospecting  or mining  for minerals", which was omitted by an amendment  in 1963.     An  application for grant of mining lease in respect  of the  disputed area had been rejected earlier on  the  ground that  it was reserved for some other purpose.  Subsequently, however,  a  mining  lease in regard to the  said  area  was granted  in favour of respondent No. 4. The appellant  chal- lenged  the allotment on the ground that the  procedure  for settlement as laid down in Rule 59 read with Rule 58 was not followed  before  the grant. The High Court  dismissed  that application  on  the ground that Rule 59  was  confirmed  to cases  where  earlier reservation was made for  mining  pur- poses. Allowing the appeal,     HELD: 1. The grant of mining lease in favour of respond- ent No. 4 was illegally made in violation of Rule 58 of  the Mineral Concession Rules, 1960. [833E-F]     2.1  Rule 59 covered the instant case. Earlier the  only category  which  was excluded from the application  of  this Rule was prospecting 831 or  mining leases. The effect of the 1963 amendment is  that by omitting the words "other than prospecting or mining  for

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minerals",  prospecting  and mining leases  have  also  been placed  in the same position as the other cases.  The  other cases  to which the Rule applied earlier have not thus  been excluded. [833E-B]     2.2  It is clearly in the public interest to notify  the proposal to grant a mining lease. The State and its authori- ties  will, in that case, have the choice of  selecting  the most  suitable  person by following the just  and  equitable criteria laid down by the Rules. [833D]

JUDGMENT:     CIVIL  APPELLATE JURISDICTION: Civil Appeal No. 3255  of 1989.     From  the  Judgment  and Order dated  29.7.1985  of  the Bombay High Court in W.P. No. 2137 of 1979.     V.A.  Bobde, S.D. Mudaliar and A.G. Ratnapaxkhi for  the Appellant.     S.K.  Dholakia, A.S. Bhasme and A.M. Khanwilkar for  the Respondents. For the Respondent No. 4 in person (not present). The Judgment of the Court was delivered by     SHARMA,  J.  Notice for final disposal of the  case  was served on the respondents. Heard the learned counsel for the parties. Special leave is granted.     2.  This  case is dependent on the correct  meaning  and scope  of  Rule  59 of the Mineral  Concession  Rules,  1960 (hereinafter  referred to as the Rules). A certain  area  in village  Bazargaon, District Nagpur was reserved for  Nistar purposes (that is, for grazing of cattle etc.). The respond- ent  No. 4 applied for grant of a mining lease in regard  to the  said  area which was allowed. The appellant, who  is  a local resident, challenged the allotment on the ground  that the  procedure for settlement as laid down in Rule  59  read with Rule 58 was not followed before the grant.     3. Rule 58 deals with availability of areas for re-grant of a mining lease and requires an entry to that effect to be made in a 832 register  referred  to  in Rule 21(2) of the  Rules,  and  a notification  to  be published in the  official  gazette  at least 30 days in advance. The purpose obviously is to enable the  members  of general public to apply  for  the  proposed lease.  Rule 59 directs the procedure in Rule 58 to be  fol- lowed  in  the cases mentioned thereunder in  the  following terms:               "59.  Availability of certain areas for  grant               to  be notified-In the case of any land  which               is  otherwise  available for the  grant  of  a               prospecting  licence or a mining lease but  in               respect  of  which the  State  Government  has               refused  to grant a prospecting licence  or  a               mining  lease  on  the ground  that  the  land               should be reserved for any purpose, the  State               Government shall, as soon as such land becomes               again available for the grant of a prospecting               licence or mining lease, grant the licence  or               lease after following the procedure laid  down               in rule 58." The appellant contends that as the prescribed procedure  had not been followed, the grant in favour of the respondent No. 4 is illegal and fit to be set aside. ’     4. Admittedly the disputed area was reserved for  Nistar purposes  and when an application for grant of mining  lease

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was  earlier  made by a third party it was rejected  on  the ground  that it was so˜ reserved. Further, there is no  dis- pute  that before the impugned grant was made in  favour  of the respondent No. 4 the procedure prescribed by Rule 58 was not  followed,  and no opportunity was given  to  any  other person before entertaining the request of the respondent No. 4.  The  question in this background is whether Rule  59  is attracted to the case.     5. The appellant’s application under Article 226 of  the Constitution  was dismissed by the Bombay High Court on  the ground  that  Rule 59 was confined to  cases  where  earlier reservation  was made for mining purposes. The stand of  the respondents  that the expression "reserved for any  purpose" in rule 59 does not cover a case where the area was reserved for  Nistar purposes or for any purpose other than  that  of mining was accepted.     6. Earlier the expression "reserved for any purpose" was followed by the words "other than prospecting or mining  for minerals",  which were omitted by an amendment in 1963.  Mr. Dholakia, learned counsel for the respondents, appearing  in support of the 833 impugned  judgment, has contended that as a result  of  this amendment  the expression must now be confined to  cases  of prospecting or mining for minerals and all other cases where the earlier reservation was for agricultural, industrial  or any  other  purpose must be excluded from the scope  of  the rule. We are not pursuaded to accept the suggested interpre- tation.  Earlier the only category which was  excluded  from the application of Rule 59 was prospecting or mining  leases and  the  effect of the amendment is that by  omitting  this exception, prospecting and mining leases are also placed  in the  same  position as the other cases. We do  not  see  any reason  as to why by including in the rule  prospecting  and mining  leases, the other cases to which it applied  earlier would get excluded. The result of the amendment is to extend the rule and not to curtail its area of operation. The words "any purpose" is of wide connotation and there is no  reason to restrict its meaning.     7.  We do not see any ground for limiting the  scope  of the  rule so as to deprive the members of general public  to approach the State with competitive terms. It is clearly  in the public interest to notify the proposal to grant a mining lease,  so that the best deserving person may have a  chance to  be  considered. The State and its authorities  will,  in that  case, have the choice of selecting the  most  suitable person  by  following the just and equitable  criteria  laid down  by the Rules. If, on the other hand, the rule is  con- strued as suggested by the respondents, a resourceful appli- cant  can succeed in striking an un-deserved bargain to  the prejudice of the public interest.     8.  We are, therefore, of the view that Rule 59  covered the  present case and the grant in favour of the  respondent No. 4 was illegally made in violation of Rule 58. According- ly, the appeal is allowed, the judgment of the High Court is set  aside  and the decision to grant the  mining  lease  in question  to  the  respondent No. 4 is  quashed.  The  State Government may now issue a notification and take other steps in accordance with law before proceeding further. There will be no order as to costs. P.S.S.                                 Appeal allowed. 834