Kalpnath Singh v.

Udai Nath & Ors. (Civil Appeal No. 6520 OF 2010)

August 11, 2010 [Altamas Kabir and A.K. Patnaik, JJ.]

2010(9) SCR 811

The Judgment of the Court was delivered by

A.K. PATNAIK, J. 1. Leave granted.

2. This is an appeal against the judgment and order dated 21.05.2008 passed by the  Allahabad High Court in Civil Miscellaneous Writ Petition No.49158 of 2007.

3. The facts very briefly are that on 04.01.2007, the District Magistrate, Varanasi,  issued a public notice inviting applications from the general public for settling six  vacant  sand  mining  areas  of  District  Varanasi  under  the  Uttar  Pradesh  Minor  Minerals  (Concession)  Rules,  1963  (for  short  “the  Rules”).  On  05.02.2007  the  appellant  and respondent No.1 and two others applied for one of the six mining  areas,  namely,  Mokalpur,  Khand-I,  Plot  No.349  measuring  about  30  acres  and  furnished the documents  mentioned in the public  notice.  By a  notification dated  15.02.2007, Rules 6(1)(g) was introduced in the Rules requiring that in case the area  applied for is having annual lease amount or dead rent, as the case may be, of rupees  two lacs or more, then the applicant shall also furnish ‘No Objection Certificate’  from the  authorities  mentioned  therein.  The Collector,  Varanasi,  issued a  notice  dated 02.04.2007 to all the applicants including the appellant and the respondent  No.1  to  submit  ‘No Objection  Certificate’  by 12.05.2007.  While  the  respondent  No.1 submitted ‘No Objection Certificate’ beyond the time stipulated in the notice  of  the  District  Magistrate,  the  appellant  did  not  submit  the  ‘No  Objection  Certificate’.  Thereafter,  the  Mine  Supervisor,  Varanasi,  submitted  a  verification  report on the merits of the four applicants and in this verification report inter-alia  stated that all the four applications were complete and have been received on the  same date and therefore their comparative preference will have to be determined  under Rule 9(2) (e) of the Rules and on such determination the appellant, who has a  better  financial  status  than the respondent  No.1 and who also has experience of  mining work and no other candidate had such experience in mining work, had to be  given  preference  for  grant  of  said  mining  lease.  On  03.08.2007  the  District  Magistrate, Varanasi, sent the recommendations of the Mine Supervisor, Varanasi,  to the State Government for grant of the mining lease for excavation of the sand area  in favour of the appellant. On 21.09.2007, the State Government granted permission  to the District Magistrate to execute lease in favour of the appellant for a period of 3  years for 30 acres in village Mokalpur, Khand-I, Plot No.349 subject to completion  of all formalities stipulated in the amendment to the Rules.

4.  Aggrieved,  the  respondent  No.1  filed  Writ  Petition  No.49158  of  2007  under  Article 226 of the Constitution of India in the Allahabad High Court and contended  inter-alia  that  he  belongs  to  the  Nishad  community,  which  is  a  Socially  Educationally Backward Class, and under Rule 9(2)(e) of the Rules was entitled to  preference in respect of mining lease of sand exclusively found in the river bed and  that the appellant did not submit ‘No Objection Certificate’ in accordance with the

amended Rule 6(1)(g) of the Rules by 12.05.2007 as stipulated in the notice dated  02.04.2007 of the District Magistrate and therefore his application was incomplete.  The High Court accepted the contentions of the respondent No.1 and quashed the  order dated 21.09.2007 of the State Government granting permission as well as the  recommendation dated 03.08.2007 of the District  Magistrate for grant  of mining  lease  of  the area in  favour of the appellant  and directed the District  Magistrate,  Varanasi to grant the mining lease of the area in favour of respondent No.1 as per  his entitlement under Rule 9(2)(e) of the Rules.

5.  Since  the  main  dispute  between  the  parties  in  this  case  is  with  regard  to  interpretation of Rule 9 of the Rules, we quote Rule 9 of the Rules herein below:

“9.  Preferential  right  of  certain  persons:-  (1)  Where  two  or  more  persons  have  applied  for  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 lease  over the applicant whose application was received later.

Provided  that  where  such  applications  are  received  on  the  same  day,  the  State  Government may after taking into consideration the matters specified in sub rule (2),  grant the mining lease to such one of the applicants as it may deem fit.

(2) The matters referred to in sub-rule (1) are:

(a)  Any special  knowledge or experience in mining operations possessed by the  applicant;

(b) The Financial resources for the applicant;

(c) The nature and quality of the technical staff employed or to be employed by the  applicant;

(d) The conduct of the applicant in carrying out mining operations on the basis of  any previous lease or permit  and in complying  with conditions of such lease or  permit or the provisions of any law in connection therewith; and

(e) In respect of mining lease for sand or morrum or bajari or boulder or any of these  in  mixed  state,  exclusively  found  in  the  river  bed,  if  other  things  are  equal,  preference shall be given to a person or group of persons, whether incorporated or  not  who  belong  to  Socially  Educationally  Backward  Classes  (such  as  Mallah,  Kewat,  Bind,  Nishad,  Manjhi,  Batham,  Dhiwar,  Themer,  Chai,  Sirahia,  Turha,  Raikwar,  Kaiwrt,  Khulwat,  Tiyar,  Gaudia,  Godia  and  Kashyap)  and  other  such  castes or citizens, as notified by the State Government from time to time who have  obtained a certificate in Form MM-14 from the concerned District Officer, or such  other officer authorized in this behalf by the State Government, certifying that such  person/persons is/are traditionally engaged in excavation of sand/morrum for their  livelihood and who are resident of the District for which the application has been  given;

(f) Such other matters as may be considered necessary by the State Government.

(3)  Notwithstanding  anything  contained  in  sub-rule  (1)  and  (2),  the  State  Government may, for any special reasons to be recorded grant a mining lease to an

applicant whose application was received later in preference to an applicant whose  application was received earlier.”

6. Learned counsel for the appellant submitted that a reading of Rule 9 of the Rules  would show that  where the date of receipt  of applications for a  mining lease in  respect  of  the  same  land  is  the  same,  the  State  Government  has  to  take  into  consideration the matters mentioned in clauses (a), (b), (c) & (d) of sub-rule (2) of  Rule 9 of the Rules and on such consideration if merit of the applicants is found  equal,  preference  shall  have  to  be  given  to  a  person  belonging  to  a  Socially  Educationally Backward Class as provided in clause (e) of sub-rule (2) of Rule 9 of  the Rules. He further submitted that in the present case the Mine Supervisor had  clearly  indicated  in  the  verification  report  that  the  appellant  had  experience  in  mining operations whereas the respondent No.1 had no such experience and that the  appellant had financial resources worth of Rs.25 lacs whereas the respondent No.1  had financial resources worth of Rs.10 lacs only and therefore the application of the  appellant was superior in merit than that of respondent No.1 considering the matters  specified in clauses (a) and (b) of sub-rule (2) of Rule 9 of the Rules. He further  submitted that since the applications of the appellant and respondent No.1 were not  equal in merit, clause (e) of sub-rule (2) of Rule 9 of the Rules which provides that  “if  other things are equal”,  preference shall  be given to a person belonging to a  Socially Educationally Backward Class, had no application. He submitted that the  High Court, therefore, fell into error in applying clause (e) of sub-rule (2) of Rule 9  of the Rules to the facts of the present case and in directing the State Government to  grant the mining lease in favour of respondent No.1. Learned counsel for respondent  No.1, on the other hand, submitted that the interpretation given by the High Court of  Rule 9 of the Rules is correct.

7.  The  High  Court  has  held  in  the  impugned  judgment  that  when  two or  more  applications  for  grant  of  lease  are  received  on  the  same  day,  and  the  State  Government  is  satisfied  that  both  the  applicants  have  the  financial  resources  to  operate the lease and both the applicants have the requisite experience of mining  activities, then the person, who is a member of economically and socially backward  community such as ‘Nishad’, will be entitled to grant of lease under clause (e) of  sub-rule(2) of Rule 9 of the Rules. According to the High Court, the expression “if  other things are equal” in clause (e) of sub-rule (2) of Rule 9 of the Rules if is read  to mean that the applicants are equal in financial resources and length of experience  and other respects,  then there would hardly be any case in which a person of a  Socially Educationally Backward Class would get the benefit of clause (e) of sub- rule (2) of Rule 9 of the Rules. In the opinion of the High Court,  therefore,  the  District Magistrate and the State Government committed an error in understanding  the expression “if other things are equal” in clause (e) of sub-rule (2) of Rule 9 of  the Rules and they ought not to have denied the preference to respondent No.1 who  belongs to a Socially Educationally Backward Class.

8.  The interpretation  of Rule 9  of the Rules  adopted by the High Court,  in  our  considered opinion, was not correct. The proviso to sub-rule (1) of Rule 9 of the  Rules is clear that where applications for a mining lease in respect of the same land  are  received  on  the  same  day,  the  State  Government  may,  after  taking  into  consideration the matters specified in sub-rule (2), grant the mining lease to such  one  of  the  applicants  it  may deem fit.  Any special  knowledge or  experience  in  mining  operations  possessed  by  the  applicant  and the  financial  resources  of  the

applicant are two of the matters specified in clauses (a) and (b) in sub-rule (2) of  Rule 9 of the Rules. In clause (e) of sub-rule (2) of Rule 9 of the Rules, however, it  is stated that in respect of mining lease for sand exclusively found in river bed, “if  other things are equal”, preference shall be given to a person or group of persons  who belong to Socially Educationally Backward Classes and such other castes of  citizens as notified by the State Government.  The expression “if other things are  equal” in clause (e) of sub-rule (2) of Rule 9 of the Rules would obviously mean that  the  applicants  are  found  by  the  State  Government  to  be  equal  in  other  matters  specified in clauses (a), (b), (c) and (d) of sub-rule (2) of Rule 9 of the Rules. In  other words, the preference under clause (e) of sub-rule (2) of Rule 9 of the Rules is  to be given to a person or group of persons belonging to Socially Educationally  Backward  Classes,  if  only  such  person  or  group  of  persons  was  equal  to  other  applicants in matters specified in clauses (a), (b), (c) and (d) of sub-rule (2) of Rule  9 of the Rules.

9. The verification report of the Mine Supervisor and the recommendations of the  District  Magistrate placed before the State Government clearly indicated that the  appellant had more experience in mining operations as compared to respondent No.1  and had also better financial resources than that of respondent No.1 and therefore the  appellant and respondent No.1 were not equal in matters specified in clauses (a) and  (b) of sub-rule (2) of Rule 9 of the Rules. The State Government, therefore, was  fully within its powers to decide to grant the lease in favour of appellant and not to  give preference to respondent No.1 under clause (e) of sub-rule (2) of Rule 9 of the  Rules and the High Court while exercising the power of judicial review could not  have reversed this decision of the State Government.

10.  The High Court  has  also  held  that  the  appellant  had  not  submitted  the  ‘No  Objection  Certificate’  mentioned  in  Rule  6(1)(g)  of  the  Rules  and  therefore  his  application was not complete in all respects on the date when the recommendation  was made by the Collector to the State Government for grant of mining lease and the  State Government granted its approval to the mining lease in favour of the appellant  making it  subject  to  filing of ‘No Objection Certificate’  before execution of the  mining lease. In the opinion of the High Court, Rule 6 of the Rules not only provides  for filing of ‘No Objection Certificate’ but also lays down that when ‘No Objection  Certificate’ is not furnished by a person, his application for mining lease shall not be  considered and therefore the appellant could not have been granted the lease by the  State Government.

11. While the Counsel for the respondent No.1 supported this conclusion of the High  Court,  Counsel  for  the  appellant  submitted  that  Rule  6(1)(g)  of  the  Rules  was  introduced in the Rules by the notification dated 15.02.2007, whereas the public  notice inviting applications had been issued by the District Magistrate, Varanasi on  04.01.2007 and the application had been filed by the appellant on 05.02.2007 before  Rule 6(1)(g) of the Rules was notified and came into force and for this reason the  State Government did not reject the application of the appellant for non-furnishing  of ‘No Objection Certificate’ and instead granted the permission for grant of mining  lease in favour of the appellant subject to furnishing ‘No Objection Certificate’ as  per Rule 6(1)(g) of the Rules.

12. We are of the considered opinion that the High Court was not right in taking a  view that the State Government could not have granted the mining lease in favour of  the appellant when the appellant had not furnished the ‘No Objection Certificate’

along with the application or after the notice was issued by the District Magistrate to  him to furnish the same. Sub-rule (2) of Rule 6 of the Rules provides that if the  application  for  mining  lease  is  not  complete,  such  application  shall  not  be  considered. When the appellant filed his application on 05.02.2007, there was no  provision in Rule 6 requiring a person to furnish along with his application the ‘No  Objection Certificate’. It was only thereafter that on 15.02.2007 the notification was  issued by the Government introducing Rule 6(1)(g) in the Rules which requires that  in case the area applied for has an annual lease amount or dead rent, as the case may  be, of rupees two lacs or more, then the applicant shall also furnish ‘No Objection  Certificate’  from the  authorities  mentioned  therein.  Since  the  appellant  was  not  required to furnish the ‘No Objection Certificate’ when he submitted his application  on 05.02.2007, his application could not be held to be not complete and nothing  prohibited  the  District  Magistrate  or  the  State  Government  to  consider  the  application of the appellant for the mining lease. The respondent No.1 in his reply,  however, has relied on Rule 26 in Chapter-IV of the Rules which provides that no  person shall be allowed to bid at the auction or take part in the tender proceeding for  a  lease  if  he  has  not  furnished  ‘No  Objection  Certificate’  from the  authorities  mentioned therein. This provision, as we have noticed, applies to an auction or a  tender proceeding for a lease under Chapter-IV of the Rules and does not apply to a  lease granted under Chapter-II of the Rules. There was, therefore, nothing in the  Rules which prohibited the State Government to grant permission to the District  Magistrate to execute the lease in favour of the appellant subject to his furnishing  ‘No Objection Certificate’ in accordance with the amended Rules.

13. In the result,  we allow this appeal and set aside the impugned judgment and  order dated 21.05.2008 of the Allahabad High Court in Civil Miscellaneous Writ  Petition No.49158 of 2007. No costs.