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PETITIONER: DHARAM CHAND JAIN

       Vs.

RESPONDENT: THE STATE OF BIHAR

DATE OF JUDGMENT14/04/1976

BENCH: FAZALALI, SYED MURTAZA BENCH: FAZALALI, SYED MURTAZA BHAGWATI, P.N. GUPTA, A.C.

CITATION:  1976 AIR 1433            1976 SCR   53  1976 SCC  (4) 427

ACT:      Mineral Concession Rules 1960-r. 54-Scope of.

HEADNOTE:      On  September   12,  1958,   the  appellant   made   an application  to  the  State  Government  under  the  Miheral Concession Rules,  1960 for  the grant  of a   mining lease. Having had  no reply  from the  State Government  he filed a revision application  on June  21, 1961  before the  Central Government which directed the State Government to dispose of the application.  Since, there  was no  reply from the State Government,  the   appellant   filed   a   second   revision application before  the Central  Government,  which  by  its order dated  November, 21,  1964, allowed  it. Even  so, the State Government  refused to  implement that  order. A third revision application was filed on January 27,1961 before the Central Government  which, after  obtaining the views of the State Government, rejected it.      Allowing the  appeal against  the order  of the Central Government, ^      HELD :  (1) The  State Government  being a  subordinate authority in  the matter  of grant  of a  mining lease,  was obliged under the law to carry out the orders of the Central Government. It was not open to the State to decline to carry out  the  orders  of  the  Central  Government  particularly because the  Central Government  was a  Tribunal superior to the State  Government. In  view of  Government’s order dated November 21,  1964, it  was not open to the State Government to reject  the application  on any ground whatsoever. If the State Government found itself unable to implement the order, a reference  could have  been made to the Central Government for obtaining  necessary directions. If any ground came into existence subsequent  to the  making of  the  order  of  the Central Government,  the State Government could have brought it to the notice of the Central Government. In any case, the State Government  could not  have refused  to implement  the order of  the  Central  Government  unless  that  Government itself chose to revise it either on a reference or suo moto. [57 C-E]      (2) Under  r. 54  of the Mineral Concessions Rule, 1960

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the Central Government acts as a revisional tribunal against any order  passed by  the State  Government. When  the State Government refused  to carry  out  the  order,  the  Central Government should  have proceeded  to set  aside  the  State Government’s order and directed it to grant the application. The Central  Government has  not disposed  of  the  revision application in accordance with law. [55 B, 56 F]      (3) Assuming  that the  Central Government could revise its earlier  order, that  could be  done only  if some fresh ground came  into existence.  There was  absolutely no legal justification for the Central Government to go back upon its earlier order which stood unvaried and unvacated. [58 A]

JUDGMENT:      CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1414 of 1968.      Appeal by  Special Leave  from the  Judgment and  Order dated the 17th February 1968 of the Govt. Of India, Ministry of Steel, Mines and Minerals. 54      A. K.  Sen, B. D. Khanna, Bishambar Lal and H. K. Puri, for the Appellant.      D. Goburdhan for Respondent.      The Judgment of the Court was delivered by      FAZAL ALI,  J. This  is  an  appeal  by  special  leave against the  order of  the Central Government dated February 17, 1968,  rejecting the  revision application  filed by the appellant before  the Central  Government under r. 54 of the Mineral  Concession  Rules,  1960.  This  appeal  reveals  a wavering and vacillating attitude of the State Government of Bihar taking  inconsistent stands in refusing to implement a quasi-judicial order  passed by  the Central  Government  in favour of  the appellant on one pretext or another spreading over  several  years.  This  has  naturally  resulted  in  a substantial miscarriage  of justice to the appellant who was compelled to  toss like a shuttle-cock from State Government to Central  Government by  filing revisions  after revisions against the  orders of  the State  Government which  shows a somewhat extraordinary  and curious  conduct  of  the  State Government.      The facts of the case lie within a very narrow compass. The appellant  applied on September 12, 1958, for grant of a mining licence  in an  area of 66.77 acres in tehsil Ramgarh and deposited  the prescribed  fees of  Rs. 700/-. The State Government was  unable to  make up  its mind  and passed  no order at  all on the application filed by the appellant. The appellant thereupon  filed a revision application before the Central Government  on the  basis that  his application  was deemed to  have been  rejected by the State Government as it was not  disposed  of  during  the  statutory  period.  This revision was  filed on  June 22,  1961 and  gives a detailed history of the case of the appellant. The Central Government in its  revisional capacity  passed an  order dated March 24 1962 directing  the  State  Government  to  dispose  of  the application of  the appellant  on or  before  September  30, 1962. In  spite of  this  direction,  the  State  Government failed  to   pass  any  order  on  the  application  of  the appellant.  Failing  to  get  any  redress  from  the  State Government  in   spite  of  the  direction  of  the  Central Government, the  appellant was  compelled to prefer a second revision  application   before  the  Central  Government  on October 15,  1963. Thereafter the Central Government invited the comments  of the State Government on the second revision

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application. The  State Government, however, appears to have taken the  stand that  as  the  area  in  question  was  the subject-matter of  a litigation  the  State  Government  was legally  advised   to  defer   grant  of  a  mining  licence particularly in  view of certain injunction orders passed by the Alipore  Civil Court  and the Calcutta High Court. These comments  were   forwarded  to   the   appellant   for   his explanation. The  appellant informed  the Central Government that the  injunction orders  relating to  Ramgarh litigation had since  been vacated  and the  State  Government  may  be directed  to   dispose  of  the  application  filed  by  the appellant for  grant of the mining lease. It appears that by a subsequent  correspondence the  State Government  informed the Central Govern- 55 ment that  final orders  on the application of the appellant could only be made if he decided to select one compact block for the mining lease. On receiving this comment, the Central Government  allowed   the  revision  application  again  and directed the  State Government  to grant the mining lease to the appellant  in respect  of a compact block to be selected by him. This order was passed on November 21, 1964. We might mention here  that under  r. 54  of the  Mineral  Concession Rules, 1960,  the Central  Government acts  as a  revisional tribunal against  any order  passed by  the State Government and has  obviously, therefore,  the same powers as the State Government. This  matter is  no longer  res integra  and  is settled by  an authority of this Court in State of Assam and others v.  Om Prakash  Mehta &  others(1) where  this  Court observed as follows:           "Under Rule 55 the Central Government can call for      the  records   from  the  State  Government  and  after      considering any  comments made  on the  petition by the      State  Government  or  other  authority,  may  confirm,      modify or  set aside the order or pass such other order      in relation  thereto as the Central Government may deem      just and proper. It also provides for an opportunity to      the applicant  to make  his representation  against the      comments, if any, received from the State Government or      other authority. Thus the fact that the application for      renewal is  deemed to  have been refused as a result of      Rule 24(2)  does not  prohibit the  Central  Government      from passing  any order  it may  deem just  and  proper      including an order granting renewal." In  these   circumstances,  therefore,   when  the   Central Government allowed the revision application and directed the State Government  to grant the licence to the appellant, the order must  be deemed  to be  an order passed by the Central Government granting the prayer of the appellant for issue of the mining lease. As, however, the application had been made to the  State Government  by the  appellant, the form of the order  of  the  Central  Government  was  to  give  a  clear direction to the State Government to grant the formal lease. The order of the Central Government dated November 21, 1964, therefore, left  no discretion  to the  State Government  to refuse to  grant the mining lease to the appellant. It seems to us  that the  State Government  does not  appear to  have appreciated the  real content  of the  order of  the Central Government and  was labouring  under a misconception that in spite of  a clear  direction given by the superior Tribunal, namely, the  Central Government,  it was  still open  to the State Government to reject the application.      It appears  that the  State Government, after receiving the order of the Central Government, refused to implement it on the  ground that  the State  Government had  formulated a

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policy that  the area  in dispute  should be  conserved  for building cement  factories and licences should be given only to those  applicants who  are prepared  to set  up a  cement factory. The State Government rejected the application of 56 the appellant on December 17, 1966, as the appellant had not indicated anywhere  in the  application that he was prepared to set up a cement plant. In fact the appellant on coming to know of  the stand  taken by  the  Government  did  file  an application before  the Central  Government on  January  27, 1967 that  he  could  put  up  a  cement  plant  if  it  was economical to  do so.  The appellant  consequently  filed  a third revision  application before  the  Central  Government against the order of the State Government dated December 17, 1966 rejecting the application of the appellant for grant of mining lease. This application was filed on January 27, 1967 and in  his comments  the appellant  pointed out that by the time the  Central Government  was seized  of the  matter the policy of  the State  Government of Bihar, due to the change in the Ministry, had changed and that it may be asked to re- examine  the  matter.  The  Central  Government  accordingly invited further  comments of  the State  Government  in  the matter and  this time  the State  Government again  took the stand that  as the  area in  dispute which  was comprised in Tauzi No.  28 was  the subject  matter of  title suit in the Court of Hazaribagh, the State Government was not willing to grant the  licence to  the appellant and involve itself into an endless  litigation. This  comment appears  to have found favour  with  the  Central  Government  which  rejected  the revision application  of the appellant by the impugned order dated February  17, 1968 against which the present appeal by special leave has been preferred before us.      The facts  mentioned above  are proved from the various annexures filed  by the  appellant along  with  the  special leave and  printed in  the Paper Book and consist of various orders passed  by the  Central and  State  Governments,  the correspondence between  the State Government and the Central Government, the note-sheets and summary of facts made by the concerned  Ministry   etc.  The   learned  counsel  for  the respondent has  not at  all disputed  the correctness of the contents of these documents.      It seems  to us  that the  Central Government  has  not disposed of the revision application in accordance with law. To begin with, the Central Government had expressly directed the State  Government to  dispose of  the application of the appellant by  its order  dated March  24, 1962, on the first revision application  filed by  the appellant.  Due  to  the continued inaction  of  the  State  Government,  the  second revision application was filed before the Central Government which was  also allowed  on November  21, 1964 and the State Government was  given clear directions to grant the lease to the appellant.  In view of this order it was not open to the State Government  to reject the application of the appellant on any  ground whatsoever.  If the  State  Government  found itself  unable   to  implement  the  order  of  the  Central Government a  reference could  have been made to the Central Government for  obtaining necessary  directions.  Ultimately the order  of the  Central Government  culminated  into  the grant of  a licence  in favour of the appellant after he had selected a  compact block.  Thereafter the  State Government instead of  implementing this order took the stand that they had devised a policy to grant leases only to those 57 persons  who  were  prepared  to  set  up  a  cement  plant. Subsequently this  policy was  also given  a go  by and  the

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State Government  rejected the  application of the appellant on the  ground that  the land  was the  subject-matter of  a litigation. This  led to  the last  revision  filed  by  the appellant  before   the  Central   Government.  The  Central Government, after  calling for  the comments  of  the  State Government, appears  to have  upheld the  order of the State Government rejecting  the  application.  In  doing  so,  the Central Government  overlooked the  fact that it had already directed by its order dated November 21, 1964 that the State Government should grant the mining lease to the appellant in respect of  a compact  block selected  by the appellant. The State Government,  being  a  subordinate  authority  in  the matter of grant of mining lease, was obligated under the law to carry  out  the  orders  of  the  Central  Government  as indicated above.  But the State Government declined to do so on the ground that it had laid down a policy that the mining leases in  respect of the area should be given only to those who were prepared to set up a cement factory. It was clearly not open to the State Government to decline to carry out the orders  of   the  Central   Government   on   this   ground, particularly because  the Central  Government was a tribunal superior to  the State  Government. If  a ground  came  into existence subsequent  to the  making of  the  order  of  the Central Government  which warranted a reconsideration of the order of  the Central  Government as  indicated  above,  the State Government  could have  brought  this  ground  to  the notice of  the Central  Government. However,  one  thing  is manifestly clear  that the  State Government  could not have refused to  implement the  order of  the Central  Government unless the  Central Government  itself chose  to  revise  it either on  a reference  by the State Government or suo motu. In fact  to take  the view  that the  State Government could decline to  carry out the order of the Central Government on some ground  which it  thinks proper  would be subversive of judicial discipline. Therefore, when the appellant preferred a revision application to the Central Government against the refusal of  the State  Government to  carry out the order of the Central  Government by  rejecting his  application,  the Central Government  should have  proceeded to  set aside the order  of  the  State  Government  and  directed  the  State Government  to  grant  the  application  of  the  appellant. Instead of  doing this, the Central Government again appears to have  entered into  the merits  of the question as if its earlier order  was not in existence at all and sustained the rejection of  the application of the appellant on the ground that the  area in  question was  the subject-matter  of  the title suit  in the  Court of  Hazaribagh,  even  though  the appellant had pointed out to the Central Government that the injunction issued  by the  Court regarding  the premises  in dispute had  been vacated.  Even assuming  for the  sake  of argument  that  the  Central  Government  could  revise  its earlier  order,   and  putting   the  case  of  the  Central Government at  its highest,  this could be done only if some fresh   ground   came   into   existence   which   warranted reconsideration of  the earlier  order. The  fact that there was a  litigation pending in the Hazaribagh Court in respect of the  area in  question was  neither a new or a fresh fact which came into existence for the first time after the order was made  by the  Central  Government  directing  the  State Government to 58 grant the  licence to  the  appellant.  The  litigation  was pending since  1954 and  the Central Government was aware of this fact  even when  it passed its order dated November 21, 1964.  In   these  circumstances,   therefore,   there   was

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absolutely no  legal justification  at all  for the  Central Government to  go back  upon its  earlier order. The earlier order of the Central Government stood unvaried and unvacated and the  State Government  was bound  to implement  it  and, therefore, the  Central Government was in error in upholding the action  of the  State Government  rejecting the revision application  filed   by  the  appellant  and  thus  silently condoned the lapse committed by the State Government.      For the  reasons given above, we are satisfied that the order impugned  passed by  the Central  Government cannot be allowed to stand and must be set aside. We accordingly allow the appeal,  set aside  the order  of the Central Government dated February  17, 1968  rejecting the revision application of  the   appellant  and  direct  the  State  Government  to implement the order of the Central Government dated November 21, 1964 for granting the mining lease to the appellant. The appellant will be entitled to his costs throughout.                                         [1976] SUPPLEMENTARY 59