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PETITIONER: KANGRA VALLEY SLATE CO.  LTD.

       Vs.

RESPONDENT: STATE OF PUNJAB & ORS.

DATE OF JUDGMENT: 19/12/1968

BENCH:

ACT: Mines & Mineral Regulations and Concession Rules, 1960 r. 28 Application  for renewal of lease-Limitation  for-Scope  of- Fixation  of’ time by r. 28, whether mandatory, and  whether ultra vires the rule making power.

HEADNOTE: Rule 28(1) of the Mines Concession Rules, 1960 (as it  stood in 1961) provided that applications for renewal of a  mining lease  shall be made -,It least six months before expiry  of the  lease.  The appellant whose mining lease was to  expire on  March  22, 1962 made an application for renewal  of  the lease.  The application bore the date September 20, 1961 and was  received  by the Director of Industries on  October  9, 1961.   On  the questions (i) whether r. 28  prescribed  any time limit within which an application had to be made;  (ii) even  if  it  did, whether it was  only  directory  and  not mandatory; and (iii) whether r. 28 laying down the period of limitation  for  renewal of application was ultra  vires  s. 13(2)  of the mines & Minerals (Regulations  &  Development) Act,  1957 as the time limit prescribed in the rule did  not fall tinder any of the matters set out in the sub-section. HELD  :  Rule  28  was valid,  and  was  mandatory  and  the application was clearly beyond the time appointed under  the rule. [173 C] (i)  The   statement  that  the  application  was  made   on September  20,  1961 was verified by the  Secretary  of  the appellant company, as true to the best of his knowledge  and belief.   The  Secretary ought to  have  personal  knowledge whether the application was made on the alleged date or not. The  Government did not admit that the application was  sent on  September  20,  1961 and the company  in  the  rejoinder repeated  that  it was sent on that date.  In spite  of  the date  of  sending  the application being put  in  issue,  no attempt was made by the appellant to show from its  despatch book  or any other record or otherwise that it was  actually despatched  on  the  date alleged.   No  argument  even  was advanced in the High Court that as it was made on  September 20, 1961 it was within time.  The mere fact, therefore, that the  application  bore the date Could not mean that  it  was made on that date and was therefore within time.[170 B-C] (ii) Considering  the scheme and the object of the  Act  and the- rules it could not be held that r. 28 was not  intended to  be mandatory and was only directory.  The  rules  laying down  time  limits for  making  applications,  acknowledging their  receipts  and disposal thereof were intended  to  see that  the development of mines and exploitation of  minerals took place both in a regulated manner and without any  undue delay.  if the time limit of six months prescribed in  rules

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22 and 28 was not available to the State Government it would not be possible for it to decide within time and  to, follow the procedure for granting a fresh lease to someone else.The result  would be that mining operations would be delayed  in that particular  land and to that extent the object  of  the Act and the duty imposed by s. 18 on the Central  Government would he delayed or defeated. [172 B-D] 166 (iii)     Rule  28  was  not invalid by reason  of  its  not falling  under any one of the matters set out in s. 1 3  (2) of the Act.  Assuming that the time limit prescribed in  the rule  did not fall under any of the matters set out in  that sub-section,  Sub-sec.  I authorises the Central  Government to  make for regulating the grant of mining leases  and  the Central Government in pursuance of that power can make rules including  the  one  having down the  time  within  which  a ’renewal application should be made.  A grant of renewal  of a  lease is granting a mining lease, and  therefore,  fixing time within which an application for it should be made would be  regulating the grant of a lease.  The function  of  sub- sec.  2 was merely an illustrative one considering that  the rule making power was conferred by sub-sec. 1 and the  rules referred to in the opening ,sentence of sub-sec. 2 were  the rules  which were authorised by and made under  sub-sec.  1. Therefore,   the   provisions  _of  sub-sec.  2   were   not restrictive  of  sub-sec.  1 and that indeed  was  expressly stated by the words "without prejudice to the generality  of the power conferred by sub-sec. [172 E-H] King-Emperor  v. Sibnath Banerjee, 72 I.A. 241 and State  of Kerala v. Shri  M.  Appukutty, [1963] Supp.  1  S.C.R.  563, followed.

JUDGMENT: CIVIL  APPELLATE  JURISDICTION : Civil Appeal  No.  1034  of 1966. Appeal  by special leave from the judgment and  order  dated August  27, 1965 of the Punjab High Court in Letters  Patent Appeal No. 233 of 1963. S. V. Gupte, B. R. L. Iyengar, S. K. Mehta and K. L. Mehta, for the appellant. Niren De, Attorney-General and R. N. Sachthey, for respon- dent Nos. 1 and 2. S.   P. Nayar, for respondent No. 3. S.   P. Sinha and M. I. Khowaja, for the intervener. The Judgment of the Court was delivered by Shelat,  J. The question arising in this appeal, is  whether the’   appellant-company’s  application  bearing  the   date September  20, 1961 for renewal of a mining lease was  time- barred and therefore not a valid application. The  company is a public limited company having  its  regis- tered office in New Delhi and is engaged in quarrying  slate and marketing the same.  The company had secured a perpetual lease  dated  March 22, 1879 of certain  lands  in  villages Majra  and Manhatti in District Gurgaon.  The Controller  of Mining  Leases  under powers reserved under sec. 16  of  the Mines & Minerals (Regulations & Development) Act, 67 of 1957 (hereinafter  called the Act) read with r. 6 of  the  Mining Leases   (Modification  of  Terms)  Amendment  Rules,   1960 modified the said lease reducing its period so as to  expire on March 22, 1962.  In consequence of certain correspondence which  took  place between the company and the  Director  of Industries,   Punjab,  the  company’s  secretary  met   that official on September 12, 1961

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1 67 when  he  was  advised that the  company  should  apply  for renewal of lease in Form J if it -so desired.  Consequently, it  was said that the company made an  application  bearing, the  date  September  20, 1961 which  was  received  by  the Director  of  Industries on October 9,  1961.   The  company thereafter  applied for and obtained on November 10, 1961  a certificate  of  approval  under sec. 5  of  the  Act.   The Director   of   Industries,  however,  rejected   the   said application  on two grounds (1) that it was beyond-the  time prescribed under r. 28 of the Mining Concession Rules, 1960, and (2) that it was not a valid application under Form J  as it  was  not  accompanied by a copy of  the  certificate  of approval.   The company thereupon filed a revision  applica- tion  under  r.  54  of  the  said  rules  to  the   Central Government.   The  Central  Government by  its  order  dated December  14, 1962 rejected it on the ground that it saw  no valid  ground  for  interfering with  the  decision  of  the Government  of  Punjab.  Aggrieved by the said  orders,  the company filed a writ petition in the High    Court of Punjab challenging the validity of the said two orders.  In     the petition the company averred that the said application   for renewal,  though received by the Director of  Industries  on October 9, 1961, was "sent by the petitioner on 20-9-1961 ". The petition also averred that the company had obtained  the certificate of approval as required by sec. 5 of the Act and though  it  did not accompany the said  application  it  was obtained  before  the Director passed his  said  order  and, therefore,  the certificate was within the knowledge of  the State  Government.  ’In the petition the company  challenged the  said  orders  on the grounds that there  was  no  valid ground to hold the said application to be time-barred,  that there was no provision in the Act or the rules requiring the company  to be in possession of the certificate of  approval at  the time of the said application, that the  company  had obtained  that  certificate and that fact was known  to  the Director,  and  lastly,  that  the  order  of  the   Central Government not being a speaking order was invalid. The  learned Single Judge of the High Court, who  heard  the writ  petition,  held that though the said  application  was rejected  on  two grounds, one of them  was  demonstratively untenable  the authority having recognised that the  company had obtained the certificate of approval under sec. 5 (1) of the  Act.  He further held that the Director  of  Industries having  relied upon two grounds for rejection, one of  which was  untenable,  it was difficult to say which  of  the  two grounds was considered sufficient by the’ Central Government to uphold the rejection in view of its order not  containing any reasons whatsoever.  The learned Judge relying upon  the decision in Harinagar Sugar Mills Ltd. (1)  A.I.R. 1961 S.C. 1669. 168 v.   Jhunjhunwala(1)  held  that the order  of  the  Central Government  not  being  a speaking  order  was  invalid.   A Letters Patent appeal against the said order was heard by  a Division  Bench of the High Court.  The Division Bench  held that  as the said application was dismissed on two  grounds, namely,  of  limitation  and  the  failure  to  obtain   the certificate of approval by the time the said application was made,  even  if  the ground as to the  certificate  was  not available,, the other ground of limitation was available and therefore  the Central Government was entitled to hold  that that being sufficient it would not interfere with the  order of  the State Government.  The Division Bench held that  the decision in Dhirajlal v. C.I.T.(1) relied on by the  learned

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Single  Judge  was  not  relevant  as  by  reason  of   some irrelevant evidence having been considered by the  authority in  that  case  it became  impossible  to  appreciate  which evidence,  relevant or irrelevant. was found  sufficient  by it.   Since in this case there were two grounds  which  were distinct  in themselves and were the basis of rejection,  if the ground of non-possession of certificate was not tenable, the other ground of limitation was sufficient for  upholding the  order of rejection.  The learned Single  Judge,  there- fore,  was not correct in allowing the writ petition on  the ground that it was not possible to ascertain on which of the two  grounds  the revision application  was  rejected.   The Division Bench then held that "no challenge appears to  have been  raised  in  the  writ  petition  on  factual  position regarding  limitation",  and therefore,  the  rejection  was sustainable on the ground of limitation.  As to the order of the  Central  Government  not being a  speaking  order,  the Division  Bench  distinguished Harinagar’s  case(2)  on  the around  that the impugned order was an appellate  order  and not  a  revision  order.  Relying on Syed  Yakoob  v.  Radha krishnan(3) the Division Bench held that the order need  not be  a speaking order where it is a revisional order and  one of  affirmance.   The appellant company challenges  in  this appeal  by  special, leave the order of the  Division  Bench which allowed the appeal and dismissed its writ petition. Mr. Gupte for the company raised three contentions (1)  that the  order  of the Central Government not being  a  speaking order was invalid, (2) that r. 28 of the said rules does not prescribe  any  time limit within which an  application  for renewal  has  to  be made and even if it  does  it  is  only directory  and not mandatory, and (3) that the rules do  not require that a certificate of approval should accompany  the application for renewal. On the first contention Mr. Gupte relied on Harinagar Sugar- Mills Ltd. v.  Jhunjhunwala (2) Shivji Nathubhai v. The (1) A.I.R. 1955 S.C. 271.                    (2) A.T.R. 1961 S.C. 1669. (3)  A.I.R. 1964 S.C. 477. 16 9 Union of India,(1) and Prag Das Umar Vaishva v. The Union of India(2).  Assuming that the order of the Central Government was  not a valid order by reason of reasons not having  been recorded  therein,  the  question  that  we  should  address ourselves  is whether under Art. 136 of the Constitution  we should  interfere with the said order even if we  find  that application for renewal was time-barred.               R.    28,  as it stood at the  material  time,               was as follows               "(1)  Applications  -for renewal of  a  mining               lease shall be made to the State Government in               Form  J at least six months before the  expiry               of the lease.      (6) If an a  application  for the first  renewal  of  a               mining lease made within the time referred  to               in sub-rule (1) is  not  disposed  of  by  the               State Government before the date of expiry  of               the  lease, the period of that lease shall  be               deemed  to  have been extended  by  a  further               period  of six months or ending with the  date               of   receipt  of  the  orders  of  the   State               Government thereon, whichever is shorter." Form J in the form for an application for renewal, item  (v) whereof  requires the applicant to give the number and  date of the certificate of approval and also that he should annex a copy of it to the application . The first question is what

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is  the  meaning  of  the word  ’made’  in  r.  28(1).   The company’s contention was that there is a distinction between the word ’made’ and the word ’received’, and that if it  can satisfy  that the application was made in time it  would  be enough  compliance  of  r. 2 8 (1), no matter  when  it  was received   by  the  State  Government.   The  Director’   of Industries,  therefore, was not correct in holding  that  as the  application was received by him on October 9,  1961  it was not a valid one. Assuming that the word ’made’ in r. 28(1) means sent to  the State   Government  the  question  still  is   whether   the application  was  made within time ? In para 8 of  the  writ petition  filed by the company it was no doubt  stated  that though  the  State Government received  the  application  on October 9, 1961 it was sent by the company on September  20, 1961.  In the grounds challenging the validity of the orders of the two governments no ground, however, was taken that as the application was made on September 20, 1961 it was within time  even  if it was received on October 9,  1961.   It  is significant that though the writ peti- (1)  [1960] 2 C.R. 775. (2) C.A. No. 657 of 1967, Dated August 17,1967. 7SLIP.  CI/69-12 170 tion  was verified by the company’s secretary who  ought  to have personal knowledge whether the application was sent  on September 20, 1961 or not, he did not swear to this fact  as being  within his personal knowledge.  The verification,  on the  contrary,  was couched in ambiguous  language,  namely, "true  to the best of deponent’s knowledge and belief".   In the affidavit in reply by the Government the allegation that the  application  was  sent on September 20,  1961  was  not admitted.   In its rejoinder the company repeated  that  the application  was sent on September 20, 1961.  Therefore,  in spite  of the date of sending the application being  put  in issue,  no attempt was made by the company to show from  its despatch  book or any other record or otherwise that it  was actually  despatched on the date alleged.  No argument  even was  advanced before the High Court that as it was  made  on September  20, 1961 it was within time, and  therefore,  the Director  of Industries was wrong in dismissing it as  time- barred.   No  attempt was even made to show whether  it  was sent  by personal delivery or despatched by post.  Since  it was  sent  from New Delhi to Chandigarh, presumably  it  was sent  by post, but no evidence was produced to show when  it was   despatched.   The  mere  fact,  therefore,  that   the application  bore  the date September 20, 1961  cannot  mean that  it  was made on that day and  was,  therefore,  within time.  We hold, therefore, that the application was not made within the prescribed time and was time-barred. The contention of Mr. Gupte, however, was that r. 28 is  not mandatory but is only directory, and therefore, even if  the application  was  time-barred, the  Director  of  Industries ought  to have considered it on merits.  The rule  uses  the word  "shall’  but it is well settled that the use  of  that word is not conclusive of the provision in which it is  used as  being mandatory.  We shall, therefore, have  to  examine the  object  or  purpose  of the  rule  and  consider  other provisions in the Act and the Rules to ascertain whether  it was intended to be mandatory. The  Act was passed inter alia for the regulation  of  mines and  development of minerals under the control of the  Union of  India.   It was passed under Entry 54 of List 1  in  the VIIIth Schedule to the Constitution which carves out for the Union of India the power to make laws relating to mines  and

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minerals  from  out of the power of the  State  Legislatures under Entry 23 of List II.  Section 2 of the Act, therefore, contains the requisite declaration that it was expedient  in the  public  interest that the Union should take  under  its control  the  regulation  of mines and  the  development  of minerals to the extent provided in the Act.  Section 18  of, the  Act expressly enacts that it shall be the duty  of  the Central Govern to take all steps as may be necessary for the conservation                             171 and  development of minerals and for that purpose make  such rules as it thinks fit.  Since the development of mines  and minerals  was to be regulated and controlled by the  Central Government, S. 4 lays down a ban against any one undertaking any prospecting or mining operations except under a  licence or  a lease.  The anxiety of Parliament while  enacting  the Act  was to see that conservation and development  of  mines and  minerals should be in a proper and regular manner.   It is,  therefore,  that  S. 5  provides  that  no  prospecting licence  or  mining  lease  should be  granted  by  a  State Government  unless  the  applicant holds  a  certificate  of approval  from that Government.  With the mandate which  the Central  Government received from the Act, the Central  Gov- ernment  made elaborate rules to ensure that development  of mines and exploitation of minerals proceeded along regulated lines  and there was no procrastination in the  development. This is the trend expressed in clear language throughout the rules.  R. 15, for instance, provides that a deed granting a prospecting licence shall be executed within 90 days of  the communication of the order of the State Government  granting such  a  licence.  If no such deed is’ executed  within  the aforesaid  time due to the fault of the applicant the  State Government  is authorised to revoke it.  R. 22 provides  for an application for a mining lease and its renewal.  For  the latter,  it  provides  that it shall be made  at  least  six months  (now extended to 12 months under the  amended  rule) before the expiry of the lease.  R. 23 provides for the ack- nowledgment  by the authority in the prescribed form of  the receipt of the application for grant or renewal of a  lease. R.  24 provides time limit for disposal of  the  application made  under  r.  22.  Cl. 3 of r. 24  provides  that  if  an application is not disposed of within the prescribed time it shall  be deemed to have been refused.  This  provision  was obviously  made  to ensure disposal within the time  and  to prevent  an applicant having to wait indefinitely  till  his application  was disposed of by the State Government and  to enable him to make a revision application. under r. 54. It is clear that the object of these rules laying down  time limits for making applications, acknowledging their receipts and  disposal  thereof was to see that  the  development  of mines  and  exploitation of minerals took place  both  in  a regulated  manner and without any undue delay.  R.  28  with which  we are immediately concerned not only lays  down  the time  within which a renewal application is to be  made  but also  provides  that  if it is not disposed  of  before  the expiry of the lease the period of the lease shall be  deemed to have been extended for a further period of six months  or ending  with  the date of the receipt of the orders  of  the State Government thereon whichever is shorter.. 172 The   object  of  providing  time  limit  for  the   renewal application  was that sufficient time before the  expiry  of lease  was  available  to the  State  Government  to  decide whether  the renewal should be granted or not, for,  if  the renewal  was  not  granted the land  in  question  would  be

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available  for re-grant and the State Government would  have to  declare  that the land was so  available  for  re-grant, invite  applications for the grant of the lease  and  follow the procedure laid down in the Act and the Rules  therefore. It  is obvious that if the time of six months prescribed  in rules 22 and 28 was not available to the State Government it would  not be possible for it to decide within time  and  to follow  the procedure for granting a fresh lease to  someone else.   The result would be that mining operations would  be delayed  in  that particular land and to,  that  extent  the object  of  the  Act and the duty imposed by s.  18  on  the Central   Government   would   be   delayed   or   defeated. Considering  the  scheme and the object of the Act  and  the rules it is not possible to agree with Mr. Gupte that r.  28 was not intended to be mandatory and is only directory.  Mr. Gupte next contended that r. 28 laying down the  period 1  limitation for renewal application was ultra  vires  sec. 13(2)  of the Act, as the time limit prescribed in the  rule does  not  fall  under any of the matters set  out  in  that subsection.   Assuming that it is so, sub-sec. 1  authorises the  Central  Government to make rules  for  regulating  the grant  of  mining  leases  and  the  Central  Government  in pursuance  of that power can make rules including  the,  one laying  down  the time within which  a  renewal  application should be made.  A grant of renewal of a lease is granting a mining  lease,  and therefore, fixing time within  which  an application  for it should be made would be  regulating  the grant  of a lease.  A similar contention was  considered  in King Emperor v. Sibnath Banerjee(1) in connection with r. 25 of the Defence of India Rules made under S. 2 of the Defence of  India  Act,  1939, as amended in  1940,  and  the  Privy Council held that though the rule did not fall under any  of the matters enumerated in sub-sec. 2 of sec. 2, the rule was competent  as it would be one which could be made under  the generality  of  Powers contained in sub-sec.  1 of  sec.  2. Their  Lordships  held that the function of sub-sec.  2  was merely an illustrative one considering that the rule  making power was conferred by sub-sec.  1 and the rules referred to in  the opening sentence of sub-sec. 2 were the rules  which were  authorised by and made under sub-sec.   1.  Therefore, the  provisions of sub-sec. 2 were not restrictive  of  sub- sec.  1  and that indeed was expressly stated by  the  words "without prejudice to the generality of the powers confer C(1)-7-2 I.A. 241 at 8. 1 7 3 red  by sub-sec.  1".  The general language of  sub-sec.  1, therefore,  amply justified the terms of r. 26  and  avoided the  contention that it was not justified under sub-sec.  2. These  observations were followed with approval in State  of Kerala v. Shri M. Appukutty(1) where the vires of ’r. 17  of the  Madras General Sales Tax Rules made under s. 19 of  the Madras General Sales Tax Act, 9 of 1939 were challenged  and the  challenge was rejected.  The argument, therefore,  that r. 28 was invalid by reason of its not falling under any one of the matters set out in s. 13(2) is without substance. In the view that we take that r. 28 is a valid rule and that it is mandatory, the application was clearly beyond the time appointed  under  the  rule, the company  having  failed  to establish that it was made, as it alleged, on September  20, 1961.   In that view it would not be necessary for us to  go into  the  questions  whether  the  order  of  the   Central Government not being a speaking order was bad or whether the application  by the company was not a valid one inasmuch  as the  company was not possessed a certificate of approval  at the date when the application was made and its copy was, not

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annexed  -thereto as required by Form J. Assuming  that  the application  was  a valid one and that  the  requirement  of annexing  the  copy of the certificate of approval  was  not mandatory and assuming further that the order of the Central Government was not a valid one, the only thing that we could be  asked  to  do would be to send back the  matter  to  the Central Government directing it to pass a proper order.  But in the view that we have taken of r. 28 and consequently  of the  application for renewal being time-barred, the  Central Government   can  only  reject  once  again   the   revision application adding in its order that the Director was  right in rejecting the application as it was time-barred.  Such an order of remand would serve no useful purpose so far as  the appellant  company is concerned.  That being so, it  is  not worth  our while to interfere under Art. 136 with the  order of the Central Government and ask that Government to pass  a fresh order. In  the  result the appeal must fail and is  dismissed  with costs. Y.P.                              Appeal dismissed. (1) [1963] Supp.1 C.R.563,569,570. 174