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PETITIONER: D.   N. ROY AND S. K. BANNERJEE AND ORS.

       Vs.

RESPONDENT: STATE OF BIHAR AND ORS.

DATE OF JUDGMENT: 30/09/1970

BENCH: HEGDE, K.S. BENCH: HEGDE, K.S. SHAH, J.C. GROVER, A.N.

CITATION:  1971 AIR 1045            1971 SCR  (2) 522  1970 SCC  (3) 119  CITATOR INFO :  D          1980 SC1461  (5)  D          1984 SC1048  (19)

ACT: Mineral  Concession  Rules,  1960, rr.  54,  55-Disposal  of applicasion-exercise of Suo-motu powers-Whether can be  done without affording opportunity.

HEADNOTE: The   respondent-State  granted  a  mining  lease   to   the appellant.   The  5th  respondent,  whose  application   was rejected moved the Central Government under rule 54 of  the, Mineral  Concession  Rules, 1960, praying  (i)  for  setting aside  the  grant in favour of the appellant, and  (ii)  for grant  of the area on lease to him.  The Central  Government asked  for  the  comments of the  appellant  and  the  State Government  and after receipt of these comments,  they  were passed  to  the parties for further comments.   The  Central Government by an order passed on Sept. 30, 1964 rejected the application  of 5th respondent as time-barred.   Thereafter, the   Central  Government  on  Nov.  5,  1964,   under   the revisionary powers conferred by r, 55, of the Rules and "all the  powers  enabling in this behalf," set aside  the  order granting  the lease to the appellant, and  further  directed regrant  after issuing fresh notification.   The  appellant, moved the High Court under Art. 226 of the Constitution  for quashing  the  order  of  November,  1964,  The  High  Court dismissed the petition. HELD  :  The  appeal as well as the Writ  Petition  must  be allowed and the order of the Central Government Nov. 5, 1964 must be set aside. The High Court erred in its approach that the two prayers in the application of the 5th respondent were independent,  and that  the Central Government by its order of Sept. 30,  1964 had  disposed of only the prayer of 5th respondent to  grant the  area  on lease to him, but it had not disposed  of  his other prayer to cancel the grant in favour of the appellant. The two reliefs asked for by the 5th respondent were  inter- connected  reliefs.  In the context in which they were  mad, they  could  not  be  considered  as  independent   prayers.

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Further  by its order dated September 30, 1964, the  Central Government dismissed the entire application of the 5th  res- pondent on the ground that the same was time-barred.  If his application  in respect of one part of his prayer was  time- barred, it was equally, time-barred in respect of the  other part. [527 B-D] The order of Nov. 5, 1964 of the Central Government does not show  that  it  was made in the exercise  of  its  suo  motu powers.   It is purported to have been made on the basis  of the application made by the 5th respondent. [527 E] If  the Central Government wanted to exercise its  suo  motu power  it  should have intimated that fact as  well  as  the grounds  on which it proposed to exercise that power to  the appellant and given him an opportunity to show cause against the exercise of suo motu power as well as 5 2 3 against  the  grounds  on which it wanted  to  exercise  its power.   The  Central  Government had  not  given  him  that opportunity.   Failure of the Central Government to  do  so, vitiates the impugned order. [527 H]

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1908 of 1968. Appeal from the judgment and decree dated August 9, 1966  of the  Patna  High Court in Misc.  Judicial Case No.  1665  of 1964. M.   C. Chagla, Kailash Mehta and, A. K. Nag, for the appel- lants. Jagadish  Swarup,  Solicitor-General and R. C.  Prasad,  for respondents Nos. 1, 3 and 4. V.   A.  Seyid Muhammad and S. P. Nayar, for respondent  No. 2. The Judgment of the Court was delivered by Hegde,  J. On June 24, 1959, the Deputy Commissioner  Santal Parganas  caused a notice dated June 20, 1959  published  in the Bihar Gazette in accordance with the provisions of  Rule 67   of   the  Mineral  Concession  Rules,  1949,   of   the availability  for  regrant of mining rights  in  respect  of fireclay  over  the  whole of  village  Palasthali  No.  39, situate in Thana Nala, Block Kasta, Sub-Division Jamtara  in the  District  of  Santal Parganas.  He  announced  in  that notice that the said area will be available for regrant with effect  from  August 1, 1959 and  invited  applications  for grant of mining lease in respect of that area in  accordance with the provisions of Mineral Concession Rules, 1949.   The appellant, a partnership firm applied for that lease on June 24, 1959 itself.  Thereafter other persons including the 5th respondent Nankhu Singh also applied for obtaining the lease in  question.   The State Government of  Bihar  granted  the lease  to the appellant on March 31, 1962.  In pursuance  of that grant a written agreement was entered into between  the State  Government  and the appellant and the same  was  duly registered.  The State Government rejected the  applications of  the other applicants.  Even during the pendency  of  the applications before the State Government, the 5th respondent moved  the Central Government under rule 54 of  the  Mineral Concession  Rules, 1960 which had replaced the  1949  Rules. Therein  he prayed that the grant of the lease in favour  of the appellant, if it had been made, should be cancelled  and that  he  should be granted the mineral lease  in  question. The Central Government served a copy of that petition on the appellant and called for its comments.  At the same time  it called  for  the comments of the State Government  as  well.

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After 5 24 receiving  the  comments of the State Government,  the  same were  passed  on  to the appellant as well  as  to  the  5th respondent  and  their  further comments  were  called  for. After  examining the representation made by the parties  and the  comments offered by the State Government,  the  Central Government dismissed the petition made by the 5th respondent on September 30, 1964.  The Order of the Central  Government reads thus "GOVERNMENT OF INDIA MINISTRY OF STEEL & MINES, (Department of Mines and Metals),                       No. MV-1(569)/61 New Delhi, the 30th September, 1964 From Shri A. Nabar, Under Secretary to the Government of India. To Shri Nankhu Singh, P.O. Churulia, Distt.  Burdwan (West Bengal) Subject   :  Application  under  rule  54  of  the   Mineral Concession Rules, 1960 in respect of Mining lease for  fire- clay  over 248 acres in Mouza Palasthali, P.S. Nala,  Distt. Santal, Parganas. Sir, I am directed to refer to your application dated  17-10-1961 on   the  above  subject  and  to-say  that  after   careful consideration  the  Central Government  hereby  reject  your revision application as being time-barred. Yours faithfully, Sd./-A. Nabar, Under Secretary to the Government of India." Thereafter the Central Government passed a further order  on November 5, 1964 and that order reads thus : Registered A/D D. N. ROY V. BIHAR (.Hegde, J.)                5 2 5 "GOVERNMENT OF INDIA MINISTRY OF STEEL AND MINES (Department of Mines and Metals) No. MV-1(569)/61 New Delhi, the 5th November, 1964. From Shri H. S. Sahni, Under Secretary to the Government of India. TO The  Secretary  to the Government of  Bihar,  Department  of Mines and Geology, Patna. Subject : Revision application under rule 54 of the  Mineral Concession  Rules, 1960 from Shri Nankoo Singh  relating  to Mining lease for Fire-clay over 248 acres in Santal  Pargana District. Sir, In  continuation  of this Ministry’s letter of  even  number dated  30-9-1964 on the above subject, I am directed to  say that  since  no entry in the standard register was  made  as required  under  former rule 67 of  the  Mineral  Concession Rules,  1949,  the  area  could not have  been  held  to  be available  and the four applications (referred to in para  2 of  the  State Government’s letter No. 3181/ M,  dated  9-6- 1962)  would be deemed to be premature and should have  been rejected on that ground alone. Even  assuming that the  notification was valid,  the  first two  applications were premature under rule 68 and  on  that ground  should  have  been rejected.  Apart  from  this  the

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application  of  M/s.   D. N. Roy and S.  K.  Bannerjee  was deemed  to  be rejected on the expiry of 9 months  from  the date  of receipt of application i.e., 24-3-1960.  The  party did  not come up in revision.  The  application,  therefore, ceased  to  exist  and the order  of  the  State  Government granting  the lease to this party on 31-3-1962  was  without jurisdiction.   The  grant and consequent execution  of  the Mining lease are therefore, void. In view of the position explained above the Central  Govern- ment  in  exercise of their revisionary power  conferred  by Rule  55  of Mineral Concession Rules, 1960  and  all  other powers enabling in this behalf hereby set aside the order of the   State  Government  contained  in  their   letter   No. A/MM/4031/62-1789M, dated 5 2 6 31-3-1962 (mentioned in State Government’s letter No.  A/MM- 4031./62-3181/M,  dated 9-6-1962) granting Mining  lease  to M/s.   D. N. Roy and S. K. Banerjee and further direct  them to  through open the area again under Rule 58(1) of  Mineral Concession  Rule 1960 for regrant.  The notification  should clearly  indicate  the  date from which the  area  could  be available for regrant and the date by. which the petitioners should submit their applications for mineral concession. 4.   M/s.  D. N. Roy and S. K. Banerjee are being informed. Yours,-faithfully, Sd./- H. S. Sahni Under Secretary to the Government of India. Copy forwarded to M/s.  D. N. Roy and S. K. Banerjee village and  P.  O.  Churulia, Distt.  Burdwan  (West  Bengal)  with reference to their letter dated 12-6-1963. Sd./- H. S. Sahni Under Secretary to the Government of  India." Aggrieved  by this order the appellant moved the Patna  High Court under Art. 226 of the Constitution to quash the  order of the Central Government dated November 5, 1964 (which will hereinafter  be referred to as the ’impugned  order’).   The High Court dismissed its petition.  As against the order  of the  High Court the appellant has brought this appeal  after obtaining Certificate of fitness from the High Court. It  was  urged  before the High Court  that  the  Government having passed the final order on September 30, 1964, it  had no power  to  review its own order and  make  any  further order.  Admittedly there is no provision under the Mines and Minerals (Regulation and Development) Act, 1957 or under the Mineral  Concession  Rules,  1960  empowering  the   Central Government to review its order.  The High Court did not hold that the Central Government had any power to review its  own order  either  under the Mines and Mineral  (Regulation  and Development)  Act,  1957  or under  the  Mineral  Concession Rules.   It  upheld the Central Government’s  order  on  two grounds  namely that the order dated September 30,  1964  is not  a  complete  order  as  it  did  not  dispose  of   the application  made  by  the  5th  respondent  completely  and secondly the Central Government had suo moto power to review the  order of the State Government under s. 30 of the  Mines and Minerals (Regulation and Development) Act, 1957.   These conclusions of the High Court were assailed before us. 527 In  his application under rule 54 of the Mineral  Concession Rules,  1960,  the 5th respondent prayed for  (i)  setting aside  the  grant made in favour of the appellant  and  (ii) grant the area in question, on lease to him.  The High Court thought that these are two independent prayers.  In its view the Central Government by its order dated September 30, 1964 had  disposed  of only the prayer of the 5th  respondent  to

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grant  the area on lease to him but it had not  disposed  of his first prayer namely to cancel the grant in favour of the appellant.   In our opinion this is an  incorrect  approach. The two reliefs asked for by the 5th respondent were  inter- connected reliefs.  In the context in which they were  made, they cannot be considered as independent prayers.  No  grant in  his  favour could have been made without  first  setting aside the grant made in favour of the appellant.   Therefore the  first  relief  asked for by the  5th  respondent  is  a necessary  condition  precedent for a grant in  his  favour. Further  by its order dated September 30, 1964, the  Central Government  dismissed  the  entire application  of  the  5th respondent on the ground that the same was time-barred.   If his  application  in respect of one part of  Ms  prayer  was time-barred,  it was equally time-barred in respect  of  the other part. The  impugned order of the Central Government does not  show that it was made in the exercise of its suo moto power.-  It is  purpoted  to  have  been  made  on  the  basis  of   the application made by the 5th respondent under rule 54 of  the Mineral  Concession  Rules, 1960.  In paragraph  3  of  that order  it says "in view of the position explained above  the Central  Government in exercise of their  revisionary  power conferred  by Rule 55 of Mineral Concession Rules, 1960  and all  other powers enabling in this behalf hereby  set  aside the order of the State Government contained in their  letter No. A/MM/4031/62-1789M, dated March 31, 1962". It  is true that the order in question also refers  to  "all other powers enabling in this behalf".  But in its return to the writ petition the Central Government did not plead  that the  impugned order was passed in exercise of its  suo  moto powers.   We  agree that if the exercise of a power  can  be traced  to an existing power even though that power was  not purported   to   have   been   exercised,   under    certain circumstances,  the exercise of the power can be  upheld  on the strength of an undisclosed but undoubted power.  But  in this  case  the difficulty is that at no stage  the  Central Government intimated to the appellant that it was exercising its suo moto power.  At all stages it purported to act under rules  54 and 55 of the Mineral Concession Rules, 1960.   If the Central Government wanted to exercise its suo moto power it should have intimated that fact as well as the grounds on which it proposed to 5 28 exercise  that  power  to the appellant  and  given  him  an opportunity ’to show cause against the exercise of suo  moto power  as well as against the grounds on which it wanted  to exercise  its power.  Quite clearly the  Central  Government had not given him that opportunity.  The High Court  thought that as the Central Government had not only intimated to the appellant  the grounds mentioned in the application made  by the  5th  respondent  but also the  comments  of  the  State Government,  the appellant had adequate opportunity  to  put forward  his  case.   This conclusion  in  our  judgment  is untenable.  At no stage, the appellant was informed that the Central  Government proposed to exercise its suo moto  power and  asked him to show cause against the exercise of such  a power.   Failure of the Central Government to do so, in  our opinion, vitiates the impugned order. For the reasons mentioned above we allow this appeal as well as  the  writ  petition and set aside  the  impugned  order. Central ’Government shall pay the costs of the appellant  in this Court as well as in the High Court. Y.P.

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Appeal and petition allowed. 529