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CASE NO.: Appeal (civil)  800 of 2005

PETITIONER: Doiwala Sehkari Shram Samvida Samiti Ltd.

RESPONDENT: State of Uttaranchal and Ors

DATE OF JUDGMENT: 12/12/2006

BENCH: Dr. AR. Lakshmanan & Tarun Chatterjee

JUDGMENT: J U D G M E N T WITH

CIVIL APPEAL NOs.678 & 679 OF 2005

Dr. AR. Lakshmanan, J.

Civil Appeal No. 800 of 2005 was filed against the order  passed by the learned single Judge dismissing the writ petition  filed by the appellant challenging the order of the District  Magistrate refusing to grant lease to the appellant as well the  Policy dated 17.10.2002 of the State of Uttaranchal whereby  the State created monopoly in respect of mining of minor  minerals. Civil Appeal No. 678 of 2005 was filed by Maya Ram  against the final judgment and order dated 3.12.2003 passed  by the High Court of Uttaranchal in W.P. No. 258(M/B) of  2003 vide which the writ petition filed by the appellant was  dismissed. Civil Appeal No. 679 of 2005 was filed by one Yograj  Singh against the judgment and order dated 3.12.2003 passed  by the High Court of Uttaranchal in Writ Petition No. 70(M/B)  of 2003 whereby the High Court dismissed the writ petition  filed by the appellant. The respondents in all the appeals are one and the same.   The appellant in Civil Appeal No. 800 of 2005 is Doiwala  Sehkari Shram Samvida Samiti Ltd. which is engaged in  mining business and has vast experience of minor minerals  with expertise, applied for grant of lease for mining of minor  mineral under Rule 9-A of the U.P. Minor Minerals  (Concession) Rules, 1963 for a period of ten years in respect of  25 acres in Lot No. 2 on Tons River in Kalsi Block and 28.42  acres in Lot No.3 Block No.1 village Rampur Mandi, District  Dehradun.  According to the appellant, the Samiti is the  discoverer of the aforesaid two areas and entitled for  preferential treatment under the Rules.  The District  Magistrate after finding the application of the appellant  complete in all respect vide order dated 3.8.1998 directed the  sub-Divisional Magistrate, Division Forest Officer and Deputy  Director, Geology and Mining to submit their report on the  application.  The Divisional Forest Officer, sub-Divisional  Magistrate and the Deputy Director, Mining and Geology  submitted their report dated 22.8.1998, 9.9.1998 and  11.9.1998 respectively recommending the grant of lease in  favour of the appellant for ten years.  The Divisional Forest  Officer, in pursuance of Notification No. 2380 dated 5.6.1997  which requires the decision on the application to be taken by a  Committee headed by District Magistrate and consisting of  Divisional Forest Officer and Deputy Director, Mining and

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Geology, wrote a letter dated 4.12.1998 to constitute the  committee to take a decision on the application as delay was  causing monetary loss to the Forest Department.  Despite  these recommendations, no Committee was constituted by the  District Magistrate as required for decision on the application  of the appellant.  The appellant preferred an appeal under  Rule 77 of the Rules before the Court of Commissioner,  Garhwal for constitution of the Committee.  The appeal was  allowed vide order dated 9.8.2001 by reviving the applications  of the appellant and directed the District Magistrate to decide  the application of the appellant for grant of lease.  While the  appeals of the appellant were pending, the State of U.P. passed  order dated 4.9.1999 granting lease to the U.P. Forest  Corporation for ten years.  The appellant challenged the order  for grant of lease before the High Court of Allahabad by filing a  writ petition.  The High Court vide order dated 25.9.2002  directed the District Magistrate to consider the application of  the appellant.  On 30.4.2001, the erstwhile State of U.P. was  bifurcated and the area under question fell under the newly  formed State of Uttaranchal which exercising power under  Section 87 of the U.P. Reorganisation Act, 2000 extended the  U.P. Minor Minerals (Concession) Rules 1963 with certain  modification/amendment to the newly formed State of  Uttaranchal.  On 17.10.2002, a new policy creating complete  and general ban of mining of minor mineral by private persons  was introduced by the State executive.  The salient features of  the policy decision are as under: "In the State of Uttaranchal, the Mineral Policy,  2001 dated 30.04.2001 was formulated to ensure the  mining of various mineral by modern methods, to  conserve the environment and to explore new mineral  by modern Techniques and also to do away the  monopoly in excavation/ mining of minor minerals.

(2)     That having considered the necessity of extensive  review of mineral the policy 2001 of the State in view of  impeding needs of Environment conservation, Revenue  income easy availability of minor minerals at proper rate  to the consumers and development institutions and to  create opportunity of employment for the local people.   The Government has taken following decision to make  the present mineral policy more effective and  development oriented in respect of the minerals  available in the State :

2.1     To remove the possibility of monopoly in respect of  mining for the areas full of minor minerals and for  ensuring the conservation of environment and for the  mining/excavation work by scientific method.

2.2     As far as possible the lease for excavation/mining shall  be granted to the Government corporations on river wise  basis so as to ensure better co-ordination and control.   For this purpose lease for mining/excavation in respect  of all areas in district Dehradun shall be granted to  Garhwal Commissionary Development Corporation and  in respect of all areas in River Gola shall be granted to  Uttaranchal Forest Development Corporation.  But  because of excessive availability areas full of minor  mineral in District Haridwar, the lease of  excavation/mining in forest areas shall be granted to  Uttaranchal Forest Development Corpn. and in revenue  areas to Garhwal Commissionary Development  Corporation.

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2.3     The excavation/mining work in respect of the left out  areas under the Mineral Policy 2001, that is, Tanakpur  (Sharda), Ram Nagar, Kotdwar Satpuli and Shrinagar  (Alaknanda) shall also be carried out by the aforesaid  Corporation.  The concerned District Magistrate in  respect of these rivers/areas is required to consult with  the officers of Forest Development Corporation/Garhwal  Commissionary Development  Corporation/Kumayun  Commissionary Development Corporation and submit a  proposal to the Government forthwith.

2.4     The small lots of minor minerals in Hill and plan   regions where excavation/mining was being done and it  is possible to do such excavation/mining but is not  being carrying out because of  absence of permission  from the Government of India under the Forest  Conservation Act, 1980, than district wise proposals  shall be prepared by the concerned Corporations or  Uttaranchal State Cooperative Distribution Organisation  and through the District Magistrate same shall be  communicated to the Government of India for  permission.  In the event of permission from the  Government of India under the Forest Conservation Act,  1980 for excavation/mining in the said areas the  excavation shall be carried out by the Government  Corporations/Uttaranchal State Cooperative  Distribution Organisation.  If  for some reasons  aforesaid institutions are not in a position to carry out  mining activities themselves than same shall be ensured  by aforesaid institutions with the help of local  people/institutions after obtaining the consent of the  Government.

2.5     The land of private measurements except the land  mentioned in aforesaid paras 2.2. and 2.3 or for grant of  licence for mining of minor \026 minerals/lease for  mining/short term mining, it is compulsory to get prior  permission from the Govt.

2.6     In addition to the aforesaid paras 2.2 and 2.3 in any  other condition the prior approval from the Government  shall be necessary for the grant of lease/short time  permit for excavation mining of  minor minerals on the  district level.

2.7     With the object to prevent misuse of minor minerals and  loss of revenue, the District Magistrate shall ensure  time to time checking of the quantity  of minor minerals  into stone crushers and the entering of goods prepared  and effective invigilation on exit of minor minerals from  the stone crushers.

2.8     \005\005\005\005\005\005\005\005\005\005\005\005.

2.9     \005\005\005\005\005\005\005\005\005\005\005\005\005

2.10    \005\005\005\005\005\005\005\005\005\005\005\005..

Sd/- (illegible) S.Krishnan     Chief Secretary"

Pursuant to the order dated 25.9.2002, the District

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Magistrate decided the application and rejected the same in  view of policy dated 17.10.2002.  The rejection Order reads as  follows: From :  District Magistrate.             Dehradun.

To

Sri Sushil Kumar, President, Doiwala Sahakari Shram Samvida Samiti Ltd., Markhand Grand, P.O. Doiwala, District Dehradun.

Sub:   Regarding Applications dated 3.8.98 for  excavation lease of minor minerals, available in Lot  No. 2 & 3 of Chakrata Forest Division.

Sir,         In compliance of order, passed on Writ Petition  No. 1206/MB/2001 dated 25.09.2002, filed by you  in  Hon’ble High Court Nainital, on the  subject  mentioned above, it  is to inform you that an  amendment has been made in mineral policy vide  Uttaranchal  State G.O. No. 3498/O.V./22- kha/2001 dated 17.10.2002.   

       According to paras 2.1 and 2.2, in respect of   all the areas of District Dehradun,  lease of  excavation has to be granted to Garhwal Mandal  Vikas Nigam.  In the light of above order both of  your applications for excavation lease dated 3.8.98  has been dismissed.

                                                               Sincerely,

                                                               Sd./-       (Illegible)                                                         (Radha Ratani)                                            District Magistrate                                                        Dehradun."

We heard Mr. L.N. Rao, learned senior counsel assisted  by Mr. Amit Kumar and Mr. Amit Anand Tiwari, learned  counsel and Ms. Shobha, learned counsel appearing for the  appellants and Mr. Avtar Singh Rawat, learned Additional  Advocate General for the State of Uttaranchal and Mr.  Jatinder Kumar Bhatia and Mr. Irshad Ahmad, learned  counsel appearing for the respondents. Mr. L.N. Rao, learned senior counsel appearing for the  appellant in C.A.No. 800 of 2005 submitted that the High  Court has failed to appreciate that the State in exercise of its  executive powers cannot put a complete and general ban of  mining of all minor mineral by private persons.  He submitted  that the complete and general ban of  mining of all minor  mineral by private persons would require legislative sanction.   For this proposition, he relied on the judgment of this Court in  State of Tamil Nadu vs. M/s Hind Stone & Ors.  (1981) 2  SCC 205 and in  State of T.N. & Anr. vs. P. Krishnamurthy  & Ors. (2006) 4 SCC 517. Learned senior counsel further submitted that the policy  of the State imposing complete ban and creating monopoly is  without any legislative sanction, against the provisions of  Statute.  Moreover under Section 17A(2) of the Minor Mineral  Development Regulation Act, 1957, the State before reserving

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any area exclusively for itself has to obtain approval from the  Central Government which has not been done in the present  case.  Therefore, the policy does not conform with the  requirements as stipulated by the statute as well as law laid  down by this Court and, therefore, the same is ultra vires. For  this proposition, he relied on the judgments of this Court in  Indian Express Newspapers (Bombay) Private Ltd. & Ors.  vs. Union of India & Ors., (1985) 1 SCC 641 and Union of  India & Anr. vs. International Trading Co. & Anr. (2003) 5  SCC 437.  He further submitted that the State Government is  not competent to create monopoly by a policy decision  exercising its powers as delegated authority under Section 15  of MMDR Act, 1957.  The policy decision would not have come  in the way of grant of lease to the appellants as their right was  fructified much before the policy came into being.  He  submitted that this Court has held consistently that the  ordinary rule of law is that the rights of the parties stand  crystalised on the date of commencement of litigation and  right of relief should be decided by reference to the date on  which the appellant entered the portals of the Court as held in   Beg Raj Singh vs. State of U.P. & Ors. (2003) 1 SCC 726.   Since in the present case, the appellants were consistently  prosecuting their case with diligence, the subsequent policy  could not have prevented the grant of lease to the appellants.   Arguing further, learned senior counsel submitted that  the High Court upheld the policy solely on the ground that the  policy is in public interest.  It was submitted that the policy  which do not conform to the requirement of law laid down by  this Court was bad.  He also submitted that the High Court  failed to appreciate that the State by creating monopoly  through a policy decision had rendered Rule 9A of the Rules  giving preferential rights to certain private persons, otiose and  hence the policy is contrary to the statute. Ms. Shobha, learned counsel appearing for the appellant  in Civil Appeal No. 678 of 2005 after adopting the arguments  of Mr. L.N. Rao submitted that the view taken by the High  Court is contrary to the consistent view taken by this Court  that the executive orders can be issued to fill up the gaps in  the Rules if the Rules are silent on the subject provided the  same is not inconsistent with the Statutory Rules already  framed as was held in the case of Indra Sawhney & Ors. vs.  Union of India & Ors.,  1992 Suppl.(3) SCC 217 and in  Laxman Dhamanekar & Anr. Vs. Management of Vishwa  Bharata Seva Samiti  & Anr.,  2001(8) SCC 378.  She also  submitted that the statutory Rules cannot be overridden by  executive orders or executive practice and merely because the  Government had taken a decision to amend the Rules does not  mean that the Rule stood obliterated and till the rule is  amended, the Rule applies as observed in K. Kuppusamy &  Anr. vs. State of T.N. & Ors., (1998) 8 SCC 469.   The High Court though found force in the submission of  the appellant that the earlier Notification dated 30.4.2001  does not impose a complete ban over grant of lease to private  persons, but despite this failed to appreciate that if that is so  then no such ban can be imposed by way of a Government  Order issued in contradiction to the said Gazette Notification. She also invited our attention to the rejection order dated  21.5.2003 wherein it has been stated that in view of   Government Order No. 3498/Industrial Development-22  Kha/2001 dated 17.10.2002 in connection with the  amendment of Mining Policy-2001 issued by the Government  in continuation of Uttaranchal Minor Mineral Concession  Rules, 2001 that mining work from the rivers/lots situated in  the District be carried out by Garhwal Mandal Development  Corporation Dehradun and in the forest areas the said work

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should be got done through Uttaranchal Forest Development  Corporation alone.  The Additional District Magistrate,  therefore, rejected the application made by the appellant for  grant of mining lease for ten years and informed the appellant  to take back his application fee and preliminary expenses of  Rs.3000/-.  She also submitted that the State before reserving  any area exclusively has to obtain approval from the Central  Government which has not been done in the present case.   Mr. Avtar Singh Rawat, learned Additional Advocate  General, in reply to the arguments, submitted that the State  Government amended the Rules and the policy decision of the  Government is in bona fide exercise of executive power of the  State Government and not in its misuse to advance its own  self interest.  It was submitted that the State Government has  a power to change the policy by executive action when it is not  trammeled by any statute or rule.  He further submitted that  the Government has constituted a Committee of Cabinet  Council for making recommendations for amending the Mining  Policy 2001 and after accepting the recommendations by the  Uttaranchal Council of Ministers the amendment has been  made in the Mining Policy 2001 by the Government Order No.  3498 dated 17.10.2002.  It was further contended that the  State Government has not misused any of its rights for  establishing the monopoly of the Government  Companies/Corporations in the mining sector.  The factual  position is that under para 2.5 of the amendment dated  17.10.2002 the provision has been made to grant mining  permits/mining lease to the private parties on their private  lands also.  The learned Additional Advocate General further  submitted that the recommendations by the Council of  Ministers constituted for amendment in Mining Policy 2001  have been approved and admitted and that the State  Government while exercising the powers conferred under  section 87 of the U.P. Reorganisation Act, 2000 and the U.P.  sub-Mineral (Remission) Regulations, 1963 has been adapted  by the Council of Ministers by making the same  conformable/adaptable in the light of Uttaranchal State, in  sequence of which itself, Government’s Order No. 1187 dated  30.4.2001 has been issued by which Uttaranchal sub-Mineral  (Remission) Regulation has been made.   It was further  submitted that by exercising the powers conferred under  Section 87 of the U.P. Reorganisation Act, 2000, the U.P.  Sub- Mineral (Remission) Regulation 1963 has been formulated.   Section 87 of the U.P. Reorganisation Act, 2000 reads as  under: "87.  For the purpose of facilitating the application in  relation to the State of Uttar Pradesh or Uttaranchal of any  law made before the appointed day, the appropriate  Government may, before the expiration of two years from  that day, by order, make such adaptations and modifications  of the law, whether by way of repeal or amendment, as may  be necessary or expedient, and thereupon every such law  shall have effect subject to the adaptations and  modifications so made until altered, repealed or amended by  a competent Legislature or other competent authority.

       Explanation \026 In this section, the expression  "appropriate Government" means as respects any law  relating to a matter enumerated in the Union List, the  Central Government, and as respects any other law in its  application to a State, the State Government."

Relying upon Section 87, learned Additional Advocate  General submitted that under the above Section, U.P. Sub- Mineral (Remission) Regulation, 1963 has been formulated by

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the Council of Ministers while making the same adaptable in  the light of the Uttaranchal State.  It was further submitted  that the State Government while exercising the powers  conferred under Section 87 of the Reorganisation Act has  adopted the U.P. Upkhanij (Parihar) Niyamavali, 1963 in the  perspective of the State of Uttaranchal, in pursuance whereof  the Government Order No. 1187 dated 30.4.2001 has been  issued by which the Uttaranchal Upkhanij (Parihar)  Niyamavali has been formulated.   As already stated, the policy  decisions were taken by the Council of Ministers and after  approval of Council of Ministers, the mining policy 2001 has  been amended by Government Order No. 1031 dated  30.4.2001 and the Government Order No. 3498 dated  17.10.2002 has been issued and any general and full  restriction has not been imposed on the mining of the  Upkhanijs.   We have carefully considered the rival submissions made  by the parties with reference to the records, the Government  Orders and annexures filed in these appeals. The Parliament has enacted the Mines and Minerals  (Regulation & Development) Act, 1957.  Section 4 of the Act  prohibits all prospecting or mining operation except under a  licence or a lease granted under the Act and Rules made  thereunder.  Section 15 empowers the State Government to  make Rules for regulating the grant of quarry leases, mining  leases and other mineral concessions in respect of minor  mineral and purposes connected therewith.  Pursuant to the  powers vested in it under Section 15 of Mines and Minerals  (Regulation & Development) Act, 1957 the State of U.P. has  made U.P. Minor Mineral (Concession) Rules, 1963 which has  been adopted by the State of Uttaranchal with certain  modifications on 30.4.2001 exercising power under Section 87  of U.P. Reorganisation Act, 2000.  The State of Uttaranchal  further amended its policy decision on 17.10.2002 whereby it  was decided that as far as possible the lease for  excavation/mining shall be granted to the Government  Corporations on river wise basis so as to ensure better  coordination and control.  This decision was taken keeping in  view the excavation of the minor mineral with the modern  techniques, to do away with the monopoly in the  excavation/mining and for the purpose of the conservation  and development of minor mineral available at the reasonable  rate as also to increase the employment opportunity apart  from the aspect of revenue.  However, the provision was  included if for some reasons the Government Institutions are  not in a position to carry out mining activities themselves then  the same shall be ensured by the Institutions with the help of  local people/institutions after obtaining the consent of the  Government.  Thus it was submitted that no policy decision  has been taken by the State Government against the Rules  and the Act.  It was also submitted that the High Court is fully  justified in upholding the policy and that the policy is not  contrary to Rules and the provisions of the Act. It is pertinent  to notice that an argument advanced by the learned counsel  that the High Court fell in error in holding that the State  Government is competent to frame a policy creating a  monopoly in favour of Government Companies/Corporations  exercising delegated legislative power conferred by the  Parliament under Section 15 of the Mines and Minerals  (Regulations) Act, 1957.  This argument, in our view, is  without any basis.  The State Government, in the instant case,  has not amended the mining policy for creating any monopoly  of the Government company or Government Corporation.    The Government has not made any exclusive provision  for State/Companies/Corporations etc. in the mineral policy

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under the amended Mineral Policy dated 17.10.2002.  In this  context, our attention was drawn to Para 2.5 of the amended  Mineral Regulation dated 17.10.2002 reproduced in paragraph  supra.  In paragraph 2.5 provisions have been made for sanction  mining/collection leases/short term mining licenses on private  "NAAP" land under which short term mining leases/temporary  mining licenses have been sanctioned in the different Districts    in Uttaranchal State.  In our view, no monopoly of mining of  minerals in favour of the Government  Corporations/Departments has been created, nor have the  fundamental rights as enshrined under the Constitution been  violated.  As already noticed, by Government Order No. 3498  dated 17.10.2002 in paragraph 2.5 there is a provision for  grant of license permitting private parties for mining of the  minerals and nowhere the general and full restriction has been  imposed.  In the instant case, the State Government has  exercised its right as conferred under Section 87 of the U.P.  Reorganisation Act, 2000 for the first time and U.P. Sub- Minerals Remission Regulation (Exemption), 1963 were  adapted and in sequence of which the Government’s order No.  1187 dated 30.4.2001 has been issued.  The newly created  Uttaranchal State in view of making Mineral Policy more  effective and developing for ensuring the mining/collection  work of sub minerals available in the State in a scientific  manner while keeping the environment preserved and for  ruling out the possibility of monopoly in mining area covered  with the sub-minerals as far as practicable, provisions are  made to sanction river wise mining/collection leases to the  Government Corporations so that better coordination and  control might be ensured.  The Mineral Policy, 2001 of  Uttaranchal State has been declared by the Government Order  dated 30.4.2001under which in the Forest Areas, keeping in  view the Forest Conservation, provisions have been made for  getting the work of mining and collection of the sub-minerals,  done through Uttaranchal Forest Development Corporation.   The area in question applied for by the appellant is concerned  with forest area.   We may also usefully reproduce the Notification dated  30.4.2001 issued by the Government in pursuance of the  provisions of Clause (3) of Article 348 of the Constitution of  India.  The Notification reads as under: "In pursuance of the provision of clause (3) of Article 348 of  the Constitution of India the Governor is pleased to order the  publication of the following English translation of the  notification No. 1187/Ind. Dev./2001-22Kha/2001  Secretariat, Dehradun dated April 30, 2001 for general  information. Notification

       Whereas under the provision of the Section 86 of the  Uttar Pradesh Reorganisation Act, 2000 the Uttar Pradesh  Minor Mineral (Concession) Rules, 1963 is applicable to the  State of Uttaranchal.  Now, therefore, in the exercise of the  power conferred under Section 87 of the Uttar Pradesh,  Reorganisation Act, 2000 (Act No. 29 of 2000), the Governor  of Uttaranchal is pleased to direct that the Uttar Pradesh  Minor Mineral (Concession) Rules, 1963 shall have  applicability to the State of Uttaranchal subject to the  provisions of the following order :-

The Uttaranchal Minor Mineral (Concession) Rules, 2001  (Adaptation  and Modification) Order, 2001.

1.      Short title and commencement

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(i)     This order may be called the Uttaranchal Minor  Mineral (Concession) Rules, 2001 (Adaptation and  Modification) Order, 2001. (ii)    It shall come into force at once.

2.      Uttaranchal to be read in place of Uttar Pradesh :

       In the Uttar Pradesh Minor Mineral (Concession)  Rules, 1963 wherever the expression "Uttar Pradesh" occurs,  it shall be read as  "Uttaranchal".

In the sub-Rule (5) of Rule 1 of the above amended  Uttaranchal Minor Mineral (Concession) Rules, 2001 the  following shall be added: "In the sub-rule (5) of the Rule 1 of the above amended  Uttaranchal Minor Mineral (Concession) Rules, 2001, the  following shall be added :-

       "This rule shall not affect the right of the Government  to get the mining activities done by the Government  Departments, Government Corporations or Judicial  Corporations".

       In the sub rule (2) of the rule 3 of the above amended  The Uttaranchal Minor Mineral (Concession) Rules, 2001  before the word "any" the following shall be added :-

       "Excluding where the mining activities are done by the  Government Departments, Government Corporations or  Judicial Corporations".

  It is thus seen that under the above amended Rule, the  rights of the Government to get the mining activities done by  the Government Departments, Government Corporations etc.  was not affected.  The rights of the Government, as already  noticed, mining trade in respect of the minor minerals and  lease is regulated by Section 15 of the Mines and Minerals  (Regulation and Development) Act, 1957 under which the  State Government has been empowered to make Rules to give  effect to the provisions of the Act.  There is no restriction  under the Act that the minor minerals lease would be confined  to State or its agencies and as such the policy decision of the  State of Uttranchal which creates an embargo on the right of  the appellant is ultra vires the provisions of 1957 Act and the  Rules.  The right to trade is guaranteed under Article 19(6) of  the Constitution of India and that can only be regulated by  means of a valid law and not by the notification, which has  been done by the State of Uttranchal in the present case.  It is  also seen from the Notification dated 30.4.2001 that it did not  deprive the appellants’ right of consideration of his application  as no monopoly or right was created excluding any private  person.   It was argued by the learned senior counsel that the  appellant has preferential right of consideration under Rule  9(a) of 1963 Rules and the District Magistrate while rejecting  the application has not considered this aspect.  To appreciate  the argument of Mr. L.N. Rao, it will be proper to mention  certain provisions of 1957 Act and the Rules of 1963. Section 15 of the Mines and Minerals (Regulation &  Development) Act, 1957 gives power to State Government to  make rules in respect of   minor minerals.         The State of U.P. framed the U.P. Minor Minerals  (Concession) rules 1963 under Section 15 of the Mines and  Minerals (Regulation & Development) Act, 1957.

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       Rule 3 Sub-clause 1 of the rules provides that no person  shall undertake any mining operation in any area within the  State except under and in accordance with the terms and  conditions of a mining lease or mining permit granted under  these Rules.  Rules 3 sub-clause II speaks that no mining  lease or mining permit shall be granted otherwise than in  accordance with the provisions of the Rules.  Rule 9(A) gives  preferential right to certain persons in respect of mining lease  for sand etc.  Rule 27 provides procedure for grant of lease by  auction.  Under Rule 72 if any area, which was held under a  mining lease, under Chapter-II or as reserved under Section  17(A) of the Act becomes available for re-grant on mining  lease, the District Officer shall notify the availability of the  area through a notice inviting for applications for grant of  mining lease specifying a date.  Rule 77 provides appeal before  Divisional commissioner against the order of District Officers  Committee passed under the Rules.  Thereafter under Rule 78  revisions shall lie before the State Government.         Under Section 86 of U.P. Re-organization Act, 2000, the  U.P. Mining Minerals (Concession) Rules, 1963 are applicable  in the State of Uttaranchal.  The State of Uttaranchal  exercising power under Section 87 of U.P. Re-organisation Act.  2000 issued notification on 30.02.2001 amending the rules by  adding rule 1 Sub-Rule 5 as under :- "This rule shall not affect the right of the Government to get  the mining activities carried out by the Government  Departments, Government Corporations or Judicial  Corporations".

Further before Rule 3 Sub rule 2, the following was added :-         "Excluding where the mining activities are done by the  Government Departments, Government Corporation or  Judicial Corporation". We have already reproduced the relevant clauses of the  amended Policy and noticed that the effect of Amendment of  2000 is that it does not completely exclude the private persons  from getting lease.  The effect of the Amendment is that the  Rule shall not have any application on the right of State  Government to get the mining work done through Government  Departments, Government or statutory Corporations.  It was  further argued by learned senior counsel appearing for the  appellant that several other persons have been granted mining  lease, however, the appellant has been refused on the ground  of change of policy by the State Government.  Therefore, the  action of the State Government is violated to Art. 14 of the  Constitution of India.   This Court in Union of India & Anr. vs. International  Trading Company & Anr. (supra) has held that two wrongs  do not make one right.  The appellant cannot claim that since  something wrong has been done in another case, directions  should be given for doing another wrong.  It would not be  setting a wrong right but could be perpetuating another wrong  and in such matters, there is no discrimination involved.  The  concept of equal treatment on the logic of Art. 14 cannot be  pressed into service in such cases.  But the concept of equal  treatment pre-supposes existence of similar legal foothold.  It  does not countenance repetition of a wrong action to bring  wrongs at par.  The affected parties have to establish strength  of their case on some other basis and not by claiming negative  quality.  In view of the law laid down by this Court in the  above matter, the submission of the appellant has no force.  In  case, some of the persons have been granted permits wrongly,  the appellant cannot claim the benefit of the wrong done by  the Government.   After the Amendment, the amended Rules reads as

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under: "Rule 1, Sub-rule 5:-   These rules will have no  application on the right of State Government to get the  excavation of minor mineral done through Government  Department, Government Corporations or Statutory  corporations.

       Amended Rule 3, Sub-rules 2 :-  Except where the  mining is being done by Government Departments,  Government Corporations or Statutory Corporations no  mining lease or mining permit shall be granted otherwise  than in accordance with the provisions of these rules."

We are of the opinion that the Rules amended and the  policy decision of the Government are in bona fide exercise of  executive power of the State Government and not in its misuse  to advance its own self interest.  This Court in State of Tamil  Nadu vs. M/s Hind Stone & Ors., (supra) has held that in  case, the Rule has been made in bona fide exercise of the rule  making power of the State Government and not in its misuse  to advance its own self-interest cannot be considered a misuse  of the rule making power merely because it advances the  interest of a State, which really means the people of the State. In State of Tamil Nadu vs. M/s Hind Stone & Ors., this  Court while allowing the appeals and upholding the validity of  the Rule held as under: "(1) Reading Section 15 in the context of Sections 4-A, 17  and 18 of the Act it is clear that Rule 8-C was made in bona  fide exercise of the rule-making power of the State  Government and not in its misuse to advance its own self  interest.  However, this does not mean that making a rule  which is perfectly in order is to be considered a misuse of the  rule-making power, if it advances the interest of a State,  which really means the people of the State.

(2) Monopoly in favour of State Government can be created  even by subordinate legislation.  It is not possible to accept  the contention that monopoly, even in favour of a State  Government, can only be created by plenary power and that  Parliament not having chosen to exercise its plenary power,  it was not open to the subordinate legislating body to create  a monopoly by making a rule.

(3) G.O. Ms. No.1312 dated December 2, 1977, which  introduced Rule 8-C, cannot be said to have involved a major  change of policy.  Whenever there is a switch over from  ’private sector’ to ’public sector’ it does not necessarily follow  that a change of policy requiring express legislative sanction  is involved.  It depends on the subject and the statute.  If a  decision is taken to ban private mining of a single minor  mineral for the purpose of conserving it, such a ban, if it is  otherwise within the bounds of the authority given to the  Government by the statute, cannot be said to involve any  change of policy."

    It is also well settled law that the Government has a  right to denial.  This Court in 1982 All Law Journal 582 has  held that it cannot be disputed that the Government has a  right to denial of its policy from time to time according to the  demands of the time and in the public interest. The judgment in the case of Union of India & Anr. vs.  International Trading Co. & Anr., (supra) was relied on by  the learned senior counsel appearing for the appellant for the  applicability of the doctrine "Legitimate expectation".   According to Mr. L.N. Rao, by grant of lease to the appellant

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their right was fructified much before the policy came into  being and, therefore, their rights of mining cannot be taken  away before the expiry of the period in view of the policy  decision.   This Court held in the above case that change in policy  decision must not be arbitrary, unreasonable, irrational,  perverse and in public interest and change in policy, if  founded on Wednesbury reasonableness, can defeat a  substantive legitimate expectation and the reasonableness of  restriction must be determined from the standpoint of general  public interest.  This Court further held on facts of that case  that doctrine of legitimate expectation or promissory estoppel  is not attracted on non-renewal of permits to private parties. The judgment in the case of Beg Raj singh vs. State of  U.P. & Ors., (supra) was cited by Mr. L.N. Rao.  The mining  lease was granted for one year in accordance with the policy  decision and when the renewal was sought for another two  years, the lease was granted only for one year when it should  have been for a minimum period of three years.  Meanwhile,  the State Government decided to hold an auction of the mining  rights setting aside the order of Collector.  This Court held that  Government having incurred obligation to grant lease for three  years in accordance with its own policy decision, it cannot  decline to enforce the same merely because a little more  revenue could be earned by resort to auction.  This Court  further held that the relief cannot be denied solely because of  loss of time in prosecuting proceedings in judicial or quasi- judicial forum.  If a litigant was found entitled to right to relief,  he should ordinarily be resorted to the position in which he  would have been done to him.  This Court further observed  that where the petitioner was wrongfully disallowed to operate  the mining lease for the full lease period but the lease  remained inoperative and no third-party right created, held,  petitioner must be allowed to operate the mine for the full  period of lease subject to adjustment for the period for which  he has already operated. This Court further observed that a litigant though  entitled to relief in law, may yet be denied relief in equity  having regard to subsequent or intervening events between  commencement of litigation and date of decision and that the  rights of parties get crystalised on the date of commencement  of litigation and, therefore, right to relief should be decided  accordingly. In the instant case, the lease was granted to the  appellant in Civil appeal No. 800 of 2005 for a period of ten  years on 14.7.1998 and the appellant’s appeal before the  Commissioner for constitution of Committee which was  allowed by order dated 9.8.2001 by reviving the application of  the appellant and directed the District Magistrate to decide the  application of the appellant for grant of lease.   While the  appeals of the appellant were pending, the State of U.P.   passed an order on 4.9.1999 granting lease to the U.P. Forest  Corporation for 10 years.  The appellant challenged the order  for grant of lease before the High Court.  The High Court  dismissed the writ petition. As pointed out by Mr. L.N. Rao, in our opinion, he is right  in his submission.  The policy decision would not have come  in the way of grant of lease and fructified much before the  policy came into being.   As pointed out by this Court in the judgment of this  Court in Beg Raj Singh vs. State of U.P. & Ors. (supra), the  appellant would be entitled to have the lease till the expiry of  ten years from the date of the grant of lease in their favour.   The rights of the appellants get crystalised on the date of  commencement of the litigation and, therefore, the appellant is

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entitled to the relief of continuing the lease till the expiry of the  lease for ten years.  The appellant, in our opinion, must be  allowed to operate the mine for the full period of lease subject  to adjustment for the period for which he has already operated  and subject to the payment of lease amount and other dues  etc. We, therefore, allow C.A.No. 800 of 2005 only to the  above extent and not otherwise.  The appellant shall not be  entitled to continue the lease or renewal thereof after the  expiry of the period of ten years. In State of T.N. & Anr. vs. P. Krishnamurthy & Ors.  (supra), there is a presumption in favour of  constitutionality  or validity of a subordinate legislation and the burden is upon  the party who attacks it to show that it is invalid.  It is also  well recognized that a subordinate legislation can be  challenged under any of the following grounds:     (a)     Lack of legislative competence to make the  subordinate legislation. (b)     Violation of fundamental rights guaranteed  under the Constitution. (c)     Violation of any provision of the Constitution. (d)     Failure to conform to the statute under which  it is made or exceeding the limits of authority  conferred by the enabling Act. (e)     Repugnancy to the laws of the land, that is,  any enactment. (f)     Manifest arbitrariness/unreasonableness (to  an extent where the Court might well say that  the legislature never intended to give authority  to make such rules).

The Court considering the validity of a subordinate  legislation will have to consider the nature, object and scheme  of the enabling Act, and also the area over which power has  been delegated under the Act and then decide whether the  subordinate legislation conforms to the parent statute.  Where  a rule is directly inconsistent with a mandatory provision of  the statute, then, of course, the task of the Court is simple  and easy.  But where the contention is that the inconsistency  or non-conformity of the rule is not with reference to any  specific provision of the enabling Act, but with the object and  scheme of the parent Act, the Court should proceed with  caution before declaring invalidity. In Govind Prasad vs. R.G. Parsad & Ors. (1994) 1 SCC  437, this Court held that administrative order containing  policy decision of the government to change the conditions of  promotion could not be given effect to unless suitable  provisions were incorporated in the statutory rules.   As already noticed, the Uttaranchal Minor Mineral  (Concession) Rules, 2001 (Adaptation & Modification) Order,  2001 was issued in pursuance of the provisions of clause (3) of  Article 348 of the Constitution of India the Governor ordered  publication of the Notification dated 30.4.2001 for general  information.  Sub-Rule (5) of rule 1 of the above amended  Rules of 2001 has already reproduced in paragraph supra.   Therefore, the changed conditions can be given effect to since  suitable provisions were incorporated in the statutory rules. This Court in the case of Union of India and Another  Vs. International Trading Company and Another (supra) in  para 15 while dealing with the executive power of State  Government in respect of change of policy has held as under :- "While the discretion to change the policy in exercise of the  executive power, when not trammeled by any statute or rule  is wide enough what is imperative and implicit in terms of  Article 14 is that a change in policy must be made fairly and

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should not give the impression that it was so done arbitrarily  or by any ulterior criteria.  The wide sweep of Article 14 and  the requirement of every State action qualifying for its  validity on this touchstone irrespective of the field of activity  of the State is an accepted tenet.  The basic requirement of  Article 14 is fairness in action by the State, and non  arbitrariness in essence and substance is the heart beat of  fair play.  Actions are amenable, in the panorama of judicial  review only to the extent that the State must act validly for a  discernible reasons, not whimsically for any ulterior  purpose.  The meaning and true import and concept of  arbitrariness is more easily visualized than precisely defined.   A question whether the impugned action is arbitrary or not  is to be ultimately answered on the facts and circumstances  of a given case.  A basic and obvious test to apply in such  cases is to see whether there is any discernible principle  emerging from the impugned action and if so, does really  satisfy the test of reasonableness."

Thus it is clear that the State Government has a power to  change the policy under executive power only when it does not  preamble by any statute or rules. For the aforesaid reasons, we partly allow C.A. No.  800/2005 as indicated in paragraph supra and dismiss C.A.  Nos. 678 and 679 of 2005.  No costs.