http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 4  

PETITIONER: KAYS CONCERN

       Vs.

RESPONDENT: UNION OF INDIA & ORS.

DATE OF JUDGMENT06/04/1976

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

CITATION:  1976 AIR 1525            1976 SCR  (3)1042  1976 SCC  (4) 706

ACT:      Mineral  Concession   Rules,  1960,  Rule  Disposal  of revision application  Obligation of  Central  Government  to consider the entire material before it.

HEADNOTE:      On the expiry of his sub-lease for extracting phosphate form an  area of  400 hectares situate in Singbhum district, Bihar, the  appellant applied  to the State Government for a grant of  fresh lease.  For nine months the State Government failed to  dispose of his application, and under s. 24(3) of the   Mineral Concession  Rules, 1960, it was deemed to have been refused. Under Rule 54 of the Mineral Concession Rules, 1960, the  appellant applied  for revision  and the  Central Government directed  the State  Government to  consider  his application on  merits. The  State Government  rejected  the application on  the ground  that it had decided not to grant lease for  phosphate to  individuals or private parties, but to work  this mineral  in the  public sector.  The appellant again applied  for revision  during the pendency of which an advertisement  of  the  State  Government  appeared  in  the ’Statesman’ indicating  the abandonment  of its  proposal to mine  phosphate  and  apatite  in  the  public  sector.  The appellant brought  the advertisement  to the  notice of  the Central   Government,   but   it   rejected   his   revision application, completely disregarding the advertisement.      The appellant  preferred an  appeal to  this  Court  by special leave.      Allowing the  appeal and  remanding  the  case  to  the Central Government, the Court, ^      HELD:  The  Central  Government  failed  to  take  into consideration this  advertisement which appeared to indicate a change  in the stand of the State Government, and made its order in  complete disregard  of it.  This  was  clear  non- application of mind on the part of the Central Government to a very material circumstance which was brought to its notice before its  disposal of  the under revision application. The order of  the Central  Government, therefore. suffers from a patent error. [1044G-H, 1045A]

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 4  

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil Appeal No. 1633 of 1968.      Appeal by  special leave  from the  judgment and  order dated the  2nd December,  1967 of  the Government  of India, Ministry of Steel, Mines and Metals (Department of Mines and Metals) at New Delhi in No. M.V. 1 (141)/67.      S. K. Mehta and K. R. Nagaraia, for the appellant.      S. P. Nayar and Girish Chandra, for respondent No. 1.      U. P. Singh and Shambhu Nath Jha, for respondent No. 2.      The judgment of the Court was delivered by      BHAGWATI, J.  This appeal  can be disposed of on a very narrow point and we will, therefore, set out only so much of the facts  giving rise  t(s the appeal as bear on this point and omit what is unnecessary.      Since 23rd  December, 1959  the appellants  had a  sub- lease from  the  Receiver  in  Suit  No.  203  of  1905  for extracting phosphate from 1043 an area of 400 hectares situate in Singhbhum District in the State of  Bihar. This  sub-lease, according  to the State of Bihar, came  to an  end from  1st September,  1964  and  the appellants, therefore,  made an  application to the State of Bihar on  22nd/24th March,  1965 for a grant of fresh mining lease for  extraction of apatite and phosphate from the same area under  Rule 22  of the  Mineral Concession  Rules, 1960 made by  the Central  Government under  s. 13  of the  Mines Minerals (Regulation   Development)  Act,  1957.  The  State Government failed  to dispose  of the  application within  a period of nine months from the date of its receipt and hence under Rule  24(3) of  the Mineral Concession Rules, 1960 the application was  deemed to  have been  refused by  the State Government. The  appellants preferred a revision application to the Central Government on 16th February, 1966 against the deemed refusal  of their  application under  Rule 54  of the Mineral  Concession  Rules,  1960.  The  Central  Government disposed of  the revision application by an order dated 31st December, 1966  directing the  State Government  to consider the application  of the  appellants  and  to  decide  it  on merits. The  State Government  thereafter by  an order dated 9th  February,   1967  rejected   the  application   of  the appellants on  the ground  that  the  State  Government  had already taken  a decision  not to  grant lease for phosphate ore to any individual or private party as it had decided "to work this  mineral in  the public  sector".  The  appellants again filed a revision application to the Central Government against the  order of  the State  Government rejecting their application. The  Central Government invited comments of the State Government  on the  revision application  and  on  the comments submitted  by the  State Government, the appellants were given  an opportunity  to submit  their  cross-comments which they  did on  8th August,  1967. Whilst  the  revision application   was    pending,   the   appellants   read   an advertisement  in   the  issue   of  Statesman   dated  13th September, 1967 to the following effect:                     "Government of Bihar            Department of Mines & Geology, Patna.       Mining and beatification of low grade apatite of                          Singhbhum.           A reserve of a little over 1 million tonnes of low      grade Apatite  Mineral with  average 16%  P.O. has been      proved in  a belt  consisting of  several mouzas in the      Singhbhum District  of Bihar.  The representative  bulk

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 4  

    samples of the minerals have laboratory Jamshedpur, and      it has  been found  that the  mineral can  be  suitably      upgraded by  benefication, to yield Apatite concentrate      with 36%  to 40% P.O., suitable for use as raw material      for the manufacture of Phosphetic fertiliser. Report of      economic  feasibility   studies  available.  The  State      Government may consider giving tax holidays for a filed      period  and  also  may  guarantee  the  safety  of  the      investment   invested   parties   capable   of   making      investment  to   the  tuner   of  40  to  50  lakhs  in      undertaking  to   above  project   may  obtain  further      particulars from the 1044      Mines Commissioner,  Department of  Mines and  Geology,      Government of Bihar. Patna.                                             Sd/- K. ABRAHAM,                            Commissioner of Mines & Geology." The appellant  immediately addressed  a communication  dated 26th September,  1967 to  the Central Government enclosing a copy of the advertisement and pointing out that it was clear from  the   advertisement  that  the  State  Government  had abandoned the  idea of  working apatite and phosphate in the public  sector   and  that  the  ground  for  rejecting  the application of  the appellants  for mining  lease no  longer existed. The  Central Government,  however by an order dated 2nd December, 1967 rejected the revision application stating that:           "....  the   Central  Government   have  come   to      conclusion that  as the State‘Government are anxious to      do phosphate mining for their own fertilizer factory in      public sector, there is no valid ground for interfering      with the  decision of  the State  Government  rejecting      your application  for grant of mining lease for apatite      and phosphate in Singhbhum district." The  appellants   thereupon  preferred  the  present  appeal against the  order of  the Central  Government with  special leave obtained from this Court.      It is apparent from the order of the Central Government dated  2nd   December,  1967  that  the  Central  Government rejected the  revision application  of the appellants on the ground that the State Government was anxious to do phosphate mining for  its own fertilizer factory in the public sector. This was  undoubtedly the original ground put forward by the State  Government  for  rejecting  the  application  of  the appellants for  mining lease. But it does appear prime facie from the  advertisement in  the issue of the Statesman dated 13th  September,   1967  that  the  proposal  of  the  State Government  to  mine  apatite  and  phosphate  for  its  own fertilizer factory  in the  public sector  was abandoned and the State  Government was prepared to give mining lease to a party which  was prepared  to undertake a project of setting up a  plant for  beatification of this mineral so as to make it suitable  for use  as raw material for the manufacture of phosphatic   fertilizer.   The   appellants   brought   this advertisement to  the notice  of the  Central Government  by their representation dated 26th September, 1967 and this was done before  the revision application was disposed of by the Central Government.  Even so,  the Central Government failed to take into consideration this advertisement which appeared to indicate  a change  in the  stand of the State Government and made  its order  dated 2nd  December, 1967  in  complete disregard of  it. The  order of the Central Government dated 2nd December, 1967 clearly shows that the Central Government failed to apply its mind to this advertisement though it was brought to  its notice  in time  and proceeded to dispose of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 4  

the revision  application as  if no  such advertisement  had been issued  by the State Government. The Central Government did not even care to invite the comments of the State 1045 Government in  regard to  the advertisement  and ignored  it altogether A  in making  its order  rejecting  the  revision application. This  was clear  non-application of mind on the part  of   the  Central   Government  to   a  very  material circumstance which  was brought  to  its  notice  before  it disposed of  the revision  application.  The  order  of  the Central Government,  therefore, suffers  from a patent error and it  must be quashed and set aside and the matter must go back to the Central Government for fresh determination.      We accordingly  set aside the order dated 2nd December, 1967 passed by the Central Government and remand the case to the Central  Government with  a direction  to dispose of the revision application,  after taking  into account the entire material before it, including the advertisement given by the State Government  in  the  issue  of  Statesman  dated  13th September, 1967  and giving  an  opportunity  to  the  State Government  to   offer  its   comments  in  regard  to  this advertisement and a further opportunity to the appellants to make their  submissions on  the comments, if any, offered by the State  Government. The State of Bihar will pay the costs of the appeal to the appellants. M.R. Appeal allowed. 1046