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PETITIONER: MINERAL DEVELOPMENT LTD.

       Vs.

RESPONDENT: THE STATE OF BIHAR AND ANOTHER

DATE OF JUDGMENT: 15/12/1959

BENCH: SUBBARAO, K. BENCH: SUBBARAO, K. SINHA, BHUVNESHWAR P.(CJ) GAJENDRAGADKAR, P.B. GUPTA, K.C. DAS SHAH, J.C.

CITATION:  1960 AIR  468            1960 SCR  (2) 909  CITATOR INFO :  RF         1961 SC 705  (19)  RF         1967 SC 829  (6)  F          1981 SC 873  (24)  RF         1988 SC1099  (6)

ACT: Fundamental  Rights-Restriction  by  State imposed  by  law- Reasonableness-Objective  test-Duty of  Court-Constitutional validity-Bihar Mica Act, 1947, s. 2.5(1)(C)-Constitution  of India, Arts. 19(1)(f), (g) and 19(5) & (6).

HEADNOTE: The  Secretary  of the Government of Bihar  in  the  Revenue Department  issued  a notice to the petitioner  company  who were the lessees of mining lease, charging it with violation of  ss.  10,  12 and 14 Of the Bihar  Mica  Act,  1947,  and calling upon it to show cause why action should not be taken to  cancel its licence which was being issued from  year  to year for mining Mica.  The company asked for particulars  of the alleged violation of the provisions of the Act from  the Government which was furnished.  The company sent a  written representation  to the Government denying  the  allegations. After  two years of the said representation, the  Government issued a notification cancelling the 78 610 petitioner  company’s  licence under the  provisions  of  S. 25(1)(c) Of the Act. The  company  moved  the  Supreme Court  under  Art.  32  Of the  Constitution for the issue of a writ of  certiorari  to quash the      said   order  of  the  Government  of   Bihar cancelling the licence and for the issue of writ of mandamus directing them to forbear     from giving effect to the said order  of  cancellation,  on  ground  inter  alia  that  the Government acted illegally and with mala fides and infringed the  fundamental rights of the petitioner under Art.  19(1), sub-cls.  (f)  and  (g) of the  Constitution  and  that  the provision  of  S.  25(1)(c) of the  Bihar  Mica  Act,  1947, operate  as an unreasonable restriction on the  said  right,

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and   even  if  the  said  section  did  not  infringe   its fundamental   rights,  the  order  of  the   Government   in cancelling  the  lease  without affording  it  a  reasonable opportunity  to show cause within the meaning of the  second proviso to that section, infringed its fundamental rights. Held,  that the provisions of S. 25(1)(c) of the Bihar  Mica Act,  does  not impose an unreasonable  restriction  on  the fundamental  rights  under  Art.  19(1)(f)  &  (g)  of   the Constitution. The restrictions which a State is authorised to impose under cls.  (5)  &  (6) of Art. 19 of  the  Constitution,  in  the interest  of the general public over the fundamental  rights of a citizen under sub-cls. (f) & (g) of clause (1) of  Art. 19  must  be reasonable and must not depend  upon  the  mere uncontrolled discretion of the executive. It is the duty of this Court to decide having regard to  the concept  and principle of reasonableness which is  correctly laid  down  in The State of Madras v. V. G. Row,  whether  a particular  Statute  satisfied  the  objective  test  of   " reasonableness.  " The  statutory conditions of the Bihar Mica Act, subject  to which  the licence is given are, obviously,  reasonable  and necessary  for regulating the mining industry- The power  to cancel  the  licence which is conferred  on  the  Government under S. 25 Of the said Act is only to achieve the object of the Act, i.e., to enforce provisions which have been enacted in the interest of the public, and that power is exercisable on  the basis of objective tests and in accordance with  the principles of natural justice. The general proposition that whenever discretionary power is conferred  on a State Government or the Union Government  by law, the said law must- necessarily operate as a  reasonable restriction on a fundamental right, negatives the concept of fundamental  rights for the simple reason  that  fundamental rights are guaranteed against State action.  Therefore,  the conferment  of such a power on the State Government and  not upon a subordinate officer is only one of the considerations that  may enter into the judicial verdict on  reasonableness of a particular law and the reasonableness of that law falls to  be  decided  only  on  the  cumulative  effect  of   the circumstances under which such power is conferred.                      611 The concept of " reasonable opportunity " is an elastic  one and is not susceptible of easy and precise definition.  What is  reasonable  opportunity under one set  of  circumstances need not be reasonable under different circumstances.  It is the  duty  of the Court to ascertain in  each  case,  having regard  to  the  overall picture before it,  to  come  to  a conclusion  whether  reasonable opportunity is  given  to  a person to " show cause.  " Tribunals  or  authorities  who are  entrusted  with  quasi- judicial  functions  are  as  much  bound  by  the  relevant principles  governing the " doctrine of bias " as any  other judicial tribunal. In  the instant case the Revenue Minister had personal  bias within  the meaning of the decisions and he should not  have taken part in either initiating the enquiry or in cancelling the licence.  Neither the necessary conditions to enable the Government  to take action under S. 25(1)(c) Of the Act  has been  established  nor  the State  Government  has  afforded reasonable opportunity to the petitioner within the  meaning of the second proviso to S. 25(1) Of the Act. State of Madras v. V. G. Row, [1952] S.C.R. 597, followed. Thakur  Raghubir  Singh  v. Court of  Wards,  Ajmer,  [1953] S.C.R. 1049, held inapplicable.

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JUDGMENT: ORIGINAL  JURISDICTION:  Petition No. 159  of  1956. Petition   under  Art. 32 of the Constitution of  India  for enforcement of Fundamental Rights. N.   C. Chatterjee and D. N. Mukherjee, for the petitioners. Mahabir  Prasad,  Advocate-General for the State  of  Bihar, Bajrang Sahai and R. C. Prasad, for the respondents. 1959.  December 15.  The Judgment of the Court was delivered by SUBBA RAO J.-This petition under Art. 32 of the Constitution is  filed  by the Mineral Development  Limited  against  the State  of  Bihar  and another for the issue  of  a  writ  of certiorari  to  quash the order of the Government  of  Bihar dated September 7, 1955, cancelling the petitioner’s licence and  for the issue of a writ of mandamus directing  them  to forbear   from   giving  effect  to  the   said   order   of cancellation. One Raja Bahadur Kamakshya Narain Singh (hereinafter  called the  proprietor) was the proprietor of Ramgarh and  Serampur estates in the district of 612 Hazaribagh in the State of Bihar.  On December 29,1947,  the said    proprietor    executed    a    mining    lease    in favour of the Mineral Development Limited (herein-     after called the Company) for all minerals in respect   of   3,026 villages for a period of 999 years.  On or about January  3, 1951,  the  Deputy  Commissioner,  Hazaribagh,  granted  the Company a licence bearing No. H.L.      261-H  in form ’  B’ under  s. 6 of the Bihar Mica Act, 1947 (hereinafter  called the Act) for mining mica.  The licence was renewed from year to  year  by  the relevant authority and  the  last  of  the renewals expired on December 31, 1954.  The Secretary to the Government  of  Bihar  in the Revenue  Department  issued  a notice dated March 7, 1953, to the Company charging it  with violations of ss. 10, 12 and 14 of the Act and calling  upon it  to show cause within 15 days of the receipt of the  said notice why action should not be taken to cancel the  licence issued in favour of the Company.  By letter dated March  20, 1953, the Company requested the Secretary to the Government, Revenue  Department,  Bihar,  to furnish  the  Company  with particulars  of the alleged violations of the provisions  of the  Act.   After  a  reminder was  sent,  the  Company  was furnished  by  the Government with the  particulars  by  its letter  dated  May 1, 1953.  On or about May 17,  1953,  the Company  sent  a written representation  to  the  Government denying  the allegations made against it and explaining  how the Company complied with the provisions of the Act.   After this  letter, no further correspondence passed  between  the Government and the Company.  But on September 7, 1955, i.e., two  years  after the said  representation,  the  Government issued  a notification cancelling the Company’s licence  No. 261-H of 1951.  The result of this notification was that the Company was prevented from carrying on the mining operations in large tracts of land it had taken on lease from the  said proprietor.’ The Company in its petition has stated that it had  invested a large sum of about Rs. 16 lakhs to obtain the mining lease and  spent a considerable sum in prospecting and  developing the  mines, that by the arbitrary act of the  Government  it could not work the                             613 mines, that a large number of labourers had been thrown  out

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of  employment  and that in the result it was being  put  to heavy  loss.   It  has filed the present  petition  for  the reliefs  mentioned  already for the reasons,  among  others, that the Government acted illegally and with mala fldes  and infringed  the  fundamental rights of the  petitioner  under Art.  19(1), sub cls. (f) and (g) of the Constitution.   The first  respondent to the petition is the State of Bihar  and the  second  respondent is the Additional Secretary  to  the Government of Bihar in the Revenue Department.  They filed a counter denying the allegations made against the  Government and  particularly  stated that they had acted  within  their rights  and cancelled the licence in strict compliance  with the provisions of the Act. The  arguments  of Mr. Chatterjee, learned Counsel  for  the petitioner,  may be broadly formulated under  the  following four heads: (i) The Bihar Mica Act, 1947, as amended by  the Bihar Mica (Amendment) Act, 1949, is ultra vires for want of constitutional  competence; (ii) the provisions of -the  Act are  repugnant  to the provisions of the Central Act  53  of 1948,  and, therefore, to the extent of such repugnancy  the former  Act should yield to the latter Act, with the  result that  the licensing provisions under the Act ceased to  have any  legal effect; (iii) the petitioner has the  fundamental rights  under Art. 19(1)(f) and (g) of the  Constitution  to acquire,  hold and dispose of his property and to  carry  on any  occupation, trade or business in respect  thereof,  and that the provisions of s. 25(1)(c) of the Act operate as  an unreasonable  restriction  on  the  said  rights,  and   are therefore  void; and (iv) even if the said section  did  not infringe his fundamental rights, the order of the Government in  cancelling  the lease without affording  him  reasonable opportunity  to show cause within the meaning of the  second proviso to that section infringed his fundamental right. The  first  two  contentions need not detain  us;  for,  the petition  may  be disposed of on the basis of the  last  two contentions. 614 The first question, therefore, is whether the provisions  of s.  25 of the Act infringe the fundamental rights         of the  petitioner under sub-cls. (f) and (g) of Art. 19(1)  of the  Constitution.  The said provisions of the  Constitution read: Article 19: (1) All citizens shall have the right- (f)  to acquire, hold and dispose of property; and (g)  to  practise  any  profession,  or  to  carry  on   any occupation, trade or business." Under sub-cls. (f) and (g) of Art. 19(1), every citizen  has the  right to acquire, hold and dispose of property, and  to practise  any  profession, or to carry  on  any  occupation, trade  or  business.   But  cls. (5)  and  (6)  of  Art.  19 authorize  the State to make a law imposing restrictions  in the interest of the general public, but the restrictions  so imposed  must be reasonable.  The concept of  reasonableness has  been  clearly explained by Patanjali Sastri,  C.J.,  in State of Madras v. V. G. Row(1) as under:. "  It is important in this context to bear in mind that  the test  of  reasonableness,  wherever  prescribed,  should  be applied to each individual statute impugned, and no abstract standard,  or general pattern of reasonableness can be  laid down  as applicable to all cases.  The nature of  the  right alleged  to have been infringed, the underlying  purpose  of the restrictions imposed, the extent and urgency of the evil sought  to  be remedied thereby, the  disproportion  of  the imposition,  the prevailing conditions at the  time,  should all enter into the judicial verdict."

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These  observations, if we may say so with  great  ’respect, lay  down the correct principle.  It follows that it is  the duty of this Court to decide, having regard to the aforesaid considerations and such others, whether a particular statute satisfies  the objective test of " reasonableness  ".  While not disputing the general principle, the learned Counsel for the  petitioner  strongly relied upon the decision  of  this Court in Thakur Raghubir Singh v. Court of Wards, Ajmer  (2) in support of his contentions.  The facts in that case (1) [1952] S.C.R. 597. 607. (2) [1953] S.C.R. 1049, 1055. 615 were:s. 112 of the Ajmer Tenancy and Land Records Act  (XLII of 1950) provided that " if a landlord habitually  infringes the   rights  of  a  tenant  under  this  Act,   he   shall, notwithstanding   anything  in  section  7  of   the   Ajmer Government  Wards Regulation, 1888 (1 of 1888) be deemed  to be  a  ’landlord  who  is disqualified  to  manage  his  own property’  within  the  meaning of section  6  of  the  said Regulation  and  his property shall be liable  to  be  taken under  the  superintendence  of the  Court  of  Wards."  The determination of the question whether a landlord bad  habit- ually  infringed the rights of his tenants was left  to  the Court of Wards.  The petitioner whose estate was taken  over by  the Court of Wards questioned the validity of the  power conferred  on the Court of Wards.  This Court held that  the said  section was void as being an unreasonable  restriction on  the  rights  in property as  the  restriction  made  the enjoyment  of that right depend upon the mere discretion  of the executive.  Mahajan, J., as he then was, observed : " When a law deprives a person of possession of his property for  an indefinite period of time merely on  the  subjective determination of an executive officer, such a law can, on no construction of the word "reasonable" be described as coming within that expression, because it completely negatives  the fundamental right by making its enjoyment depend on the mere pleasure  and  discretion  of  the  executive,  the  citizen affected  having no right to have recourse for  establishing the contrary in a civil court." In that case the combined operation of s. 112 of Act XLII of 1950 and the provision’s of Regulation 1of 1888 was that the Court  of Wards could in its own discretion and on  its  own subjective  determination  assume  superintendence  of   the property  of a landlord who habitually infringed the  rights of his tenants.  The Act also did not provide any  machinery for determining the question whether a certain landlord  was a person who habitually infringed the rights of his tenants. Even   the  condition  precedent  for  the   assumption   of superintendence by the Court 616 of   Wards,  viz.,  the  previous  sanction  of  the   Chief Commissioner,   was  also  a  matter  entirely  resting   on his  discretion.   It will be seen that under that  Act  the entire question was left to the unbridled discretion of  the executive  without providing for any machinery to  ascertain the  grounds for its action.  That decision cannot apply  to the facts of the present case as they   differ  in  material respects  from  those  considered  by  this  court  in  that decision.  The short question, therefore, is whether s. 25 of the  Act places   unreasonable   restrictions   on   the   petioner’s fundamental  rights  under  Art. 19(1)(f)  and  (g)  of  the Constitution.  It is conceded that the State can make a  law imposing  restrictions,  in the interest of the  public,  on citizens  in respect of their enjoyment of  mineral  rights;

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but the complaint is that the law which enables the State in its  uncontrolled  discretion to prevent the  owner  or  the lessee  of such a field from enjoying his land or  leasehold interest or to carry on his mining operations permanently or for  an indefinite period is unreasonable.  So stated  there is plausibility in the argument.  But let us look at the law more  closely  to ascertain whether it suffers from  such  a vice. The  Act  was passed in the year 1947 and was  amended  from time  to  time.   The declared object of the  Act  is  "  to regulate  the possession and transport of, and  trading  in, mica  in  the  Province of Bihar  ".  It  was  necessitated, presumably,  because  of  the  scarcity  of  mica  and   its importance in the industrial field, and for that reason  for regulating home consumption and foreign export.  The learned Counsel for the petitioner did not controvert the  position, and   indeed  conceded  that  reasonable  restrictions   can legitimately  be  imposed on the mining  operations  of  the petitioner.   Section 4 of the Act imposes a prohibition  on the  possession  of, and trading in, mica  without  licence, proprietor’s  certificate, or digger’s permit.   Sections  5 and  6  prescribe  a  machinery  for  granting  proprietor’s certificate, miner’s or dealer’s licence.  Sections 10 to 12 define the duties of licensees and registered proprietors in the  matter  of  keeping accounts  and  producing  them  for inspection.  Section 14 prohibits                             617 the  removal  of mica from one place to  another  without  a pass.   Sections  17, 19 and 21A impose  penalties  for  the infringement of the provisions of the Act an the rules  made thereunder.   Section  22  to  24  deal  with  miscellaneous matters,  such  as the power Of a police officer  to  arrest without warrant persons guilty of an offence under this Act, to search, seize and detain mica removed without a pass etc. Then  comes  s.  25. As the main  argument  of  the  learned Counsel turns upon the provisions of s. 25, it is  necessary to read the entire section, which is as follows : Section  25.   "  (1) The State Government  may  cancel  the licence  or  proprietor’s  certificate of  any  licensee  or registered proprietor who- (a)  allows  his licence or proprietors certificate, as  the case  may  be, to be used on behalf of any other  person  as authority  to-  buy or have in his possession or  sell  mica extracted from a mica mine or from a mica dump, or (b)  being  a  person  to whom a miner’s  licence  has  been granted  extracts mica from a mine the particulars of  which are  not  endorsed  on  his licence, or (c) is guilty of repeated failure to comply with any of  the other provisions of this Act or rules made thereunder, or (d)  is  convicted of an offence under Chapter XVII  of  the Indian Penal Code committed in respect of mica: Provided that a licence or a proprietor’s certificate  shall not  be cancelled solely by reason of conviction from  which the  licensee or the registered proprietor has no  right  of appeal or revision; Provided   further   that  a  licence  or   a   proprietor’s certificate  shall not be cancelled unless the  licensee  or the proprietor has been furnished with the grounds for  such cancellation and has been afforded reasonable opportunity to show cause why his licence shall not be cancelled. (2)  A fresh licence or proprietor’s certificate shall  not, without  the previous sanction of the State  Government,  be granted to any licensee or registered 79 618

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proprietor  whose  licence or proprietor’s  certificate  has been cancelled under this section." This  section embodies the severest punishment that  can  be imposed  under  the Act on a licensee or a  proprietor.   It enables  the  State Government to cancel the  licence.   The power  is  entrusted to the highest executive in  the  State which ordinarily can be relied upon to discharge its  duties honestly,  impartially  and in the interest  of  the  public without any extraneous considerations.  The section provides clearly ascertainable standards for the State Government  to apply to the facts of each case.  Clauses (a), (b), (c)  and (d)  of s. 25(1) describe with sufficient particularity  the nature of the defaults to be committed and the abuses to  be guilty  of  by the licensee in order to  attract  the  penal provisions.  Clause (c) with which we are directly concerned embodies the last step that can be resorted to by the  State Government  to eliminate the recalcitrant operator from  the field  of mining industry if only he is guilty  of  repeated failures to comply with any of the provisions of the Act  or the rules made thereunder other than those mentioned in  the other  clauses of the section.  The discretion of the  State Government  under  cl. (c) of s. 25(1) is hedged in  by  two important restrictions: viz., (i) the failure to comply with the  provisions  of the Act or the  rules  made  thereunder, should  be a repeated failure and not a mere  sporadic  one, i.e., the defaulter must be a recalcitrant one; (ii)  before cancelling  the licence the State Government  should  afford reasonable opportunity to the licensee to show cause why his licence   should   not  be  cancelled.   That   apart,   the cancellation  of the licence has not the effect  of  barring the  licensee  or the proprietor from applying for  a  fresh licence.  The only condition imposed is that a fresh licence shall not be granted to him without the previous sanction of the  State Government.  In the foregoing circumstances,  can it  be  said  that  the  section  imposes  an   unreasonable restriction  on  the petitioner’s fundamental rights  ?  The statutory  conditions subject to which the licence is  given are, obviously, reasonable                             619 and  necessary  for  regulating the  mining  industry.   The provisions of the Act, as we have already pointed out,  were only designed to compel a licensee to keep accounts, produce them  before the authorities when required, to  prevent  him from  removing mica from the  fields without  passes  and to impose penalties for contravening the rules.  The only  vice is said to lie in the power to cancel a licence conferred on the  State  Government under s. 25 of the  Act.   The  power given to the State Government is only to achieve the  object of the Act i.e., to enforce the said provisions, which  have been enacted in the interest of the public; and that  power, as  we  have  indicated,  is exercisable  on  the  basis  of objective  tests  and in accordance with the  principles  of natural  justice.   We,  cannot,  therefore,  hold  that  s. 25(1)(c)  of the Act imposes an unreasonable restriction  on the petitioner’s fundamental rights under Art. 19(1)(f)  and (g) of the Constitution. Before leaving this part of the case, we must make it  clear that  we  do not intend to lay down as  a  proposition  that whenever  discretionary  power  is  conferred  on  a   State Government or the Union Government by law, the said law must necessarily  operate  as  a  reasonable  restriction  on   a fundamental right.  Such a general proposition negatives the concept  of  fundamental rights for the simple  reason  that fundamental  rights,  are guaranteed against  State  action. Therefore,  the  conferment  of such a power  on  the  State

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Government and not upon a subordinate officer is only one of the considerations that may enter into the judicial  verdict on   the  reasonableness  of  a  particular  law   and   the reasonableness  of that law falls to be decided only on  the cumulative  effect  of the circumstances  under  which  such power is conferred. The  next question is, did the State Government comply  with the  provision of s. 25(1)(c), read with the second  proviso thereto,  of  the  Act ? Under the said  proviso  the  State Government  can cancel a licence after affording  reasonable opportunity  to the licensee to show cause why  his  licence should  not  be cancelled.  This proviso  confers  a  quasi- judicial power on the 620 State Government.  The concept of " reasonable opportunity " is an elastic one and is not susceptible     of   easy   and precise definition.  The decisions on cases  under Art.  311 of the Constitution afford illustrations of the applications of the said doctrine to varying    situations.    What    is reasonable  opportunity under one set of circumstances  need not be reasonable under different circumstances.  It is  the duty  of the Court to ascertain in each case, having  regard to  the overall picture before it, to come to  a  conclusion whether  reasonable  opportunity is given to a person  "  to show  cause" within the meaning of the second proviso to  s. 25(1)  of  the  Act.   Tribunals  or  authorities  who   are entrusted with quasi-judicial functions are as much bound by the  relevant principles governing the " doctrine of bias  " as  any  other judicial tribunal.  This Court  in  a  recent decision in Gullapalli Nageswara Rao v. The State of  Andhra Pradesh (1) observed: "The principles governing  the "doctrine of bias"  vis-a-vis judicial tribunals are well-settled and they are: (i) no man shall be a judge in his own cause; (ii) justice  should  not only be done but manifestly and undoubtedly seem to be done. The  two  maxims  yield the result that if  a  member  of  a judicial  body is " subject to a bias (whether financial  or other) in favour of, or against, any party to a dispute,  or is in such a position that a bias must be assumed to  exist, he  ought  not  take  part in the decision  or  sit  on  the tribunal"; and that ,any direct pecuniary interest,  however small,  in the subject-matter of inquiry will  disqualify  a judge, and any interest, though not pecuniary, will have the same  effect, if it is sufficiently substantial to create  a reasonable  suspicion  of bias".  The  said  principles  are equally  applicable  to  authorities, though  they  are  not courts  of  justice or judicial tribunals, who have  to  act judicially   in  deciding  the  rights  of   others,   i.e., authorities  who  are empowered to  discharge  quasijudicial functions." In view of the foregoing principles the first question to be considered is whether in the present case the (1)  [1959] S.C.R. Supp. (1) 319.                             621 authority   functioning  for  the  State  Government-it   is admitted  that the then Revenue Minister of the  State  made the impugned order-had personal bias against the petitioner. Secondly, we will have to scrutinize the record to ascertain whether  reasonable opportunity was given to the  petitioner to show cause or whether it was denied that right.  Thirdly, we will have to ascertain whether the State Government found that the petitioner was guilty of repeated failure to comply with  any  of the other provisions of the Act or  the  rules made  thereunder and cancelled the licence on the  basis  of that finding.  It may be mentioned that the learned Advocate

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General,  who  appeared before us on behalf  of  the  State, submitted  that  the State Government  exercised  its  power under s. 25(1)(c) of the Act. The notice to show cause was issued by the State  Government to the petitioner on March 7, 1953.  The licence granted  in favour  of  the  petitioner  was  cancelled  by  the   State Government  by  its notification dated  September  1,  1955. Admittedly, during this period Sri Krishna Ballav Sahay  was the Revenue Minister of the Government of Bihar, and he  was in  charge of the department dealing with mines.  There  was political  rivalry  between the said Minister and  Sri  Raja Bahadur  Kamakshya Narain Singh, the ex-landlord of  Ramgarh and  Serampur  estates in the district  of  Hazaribagh,  who leased the lands in question to the petitioner.  The case of the  State  is that the said lease was benami only  for  the said proprietor; and the case of the petitioner is that  the wife of the proprietor, Rani Lalita Rajya Luxmi Devi, is the registered  share  holder  of  the  Company.   The  question whether  the lease is only benami for the proprietor or  not is  now in dispute in title suit No. 53 of 1954  pending  on the file of the court of the Subordinate Judge,  Hazaribagh. We  shall,  therefore, assume for the purpose of  this  case that there is a dispute on the question of title, the  State Government  asserting that the lease is only benami for  the proprietor and the petitioner claiming to be the real lessee and  the  wife  of the proprietor only  a  registered  share holder of the 622 Company.    Whichever  version  is  true,  the   proprietor, directly or because of his wife, is very much interested  in the Company,at any rate, the Government’s case is that he is the  owner.   It is alleged in the petition  that  the  said proprietor  opposed  the  Revenue Minister  in  the  general election  held in 1952 to the Bihar Legislative Assembly  in the constituency of Giridih and Barkagaon and defeated  him. It is also stated that before the said election, the Revenue Minister filed a criminal case against the proprietor in the District  Court of Hazaribagh charging him under s.  500  of the  Indian Penal Code.  The High Court in a judgment  dated April  15, 1952, delivered in the petition to  transfer  the said  case  to some other Court recorded the  admitted  fact that  there was political rivalry between the  Minister  and the proprietor.  Ultimately, this Court transferred the said criminal  case  from  the State of Bihar to the  file  of  a Magistrate’s  Court  in Delhi on the ground that  there  was political rivalry between the two persons.  These facts  are not denied in the counter-affidavit filed by the State.   In the  said counter-affidavit the following cryptic  statement occurs: " That the allegations in para. 14(b) of the petition  about the  alleged political rivalry between Sri Kamakshya  Narain Singh  and  Sri  Krishna Ballav Sahay,  the  then  Minister, Revenue, has no bearing on the facts of this case so far  as the  orders  of  the Government are concerned  and  to  that extent the allegations are denied." It  may,  therefore,  be  taken  that  the  allegations  of’ personal bias of the Revenue Minister against the proprietor is not denied.  It is also not disputed that the proceedings against the petitioner were started during the tenure of the said   Revenue  Minister  and  that  the  actual  order   of cancellation  was  made by him.  We have  no  hesitation  in holding that the Revenue Minister had personal bias  against the  proprietor  and that he was also acting on  the  belief that the lease was only benami for the said proprietor.  We, therefore, hold that the said Revenue Minister had  personal

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bias within the meaning of the decisions and he should                             623 not  have taken part in either initiating the enquiry or  in cancelling the licence. On  the  basis  that s. 25 of the  Act  is  constitutionally valid,  the  question  is whether  the  provisions  of  that section  have  been complied with in the present  case.   If they  were  not  complied  with,  the  order  of  the  State Government  made in derogation of the said provisions  would certainly infringe the fundamental rights of the petitioner. The main objection to the validity of the impugned order  is that  the  State Government did not  afford  the  petitioner reasonable opportunity to show cause why his licence  should not  be  -cancelled.   The  subject-matter  of  the   mining leasehold  interest  is in respect of 3,026 villages  for  a period  of 999 years.  It is alleged in the petition that  a large  amount  of  about  Rs. 16 lakhs  were  spent  by  the petitioner  to  obtain the mining lease and  in  addition  a considerable sum was spent in prospecting and developing the mines.   On March 7, 1953, the Government of  Bihar  through its Secretary in - the Revenue Department issued a notice to the petitioner asking it to show cause within 15 days of the receipt of the said notice why action to cancel the  miner’s licence No. 261-H under s. 25(1)(c) of the Act should not be taken  by the Government.  It is stated in the  notice  that the petitioner committed "  violations of ss. 10, 12 and  14 in respect of their mica godowns at Marhand and Sultana, ss. 10 and 12, in respect of the godowns at Simaria and s. 10 in respect  of  Kowabar godowns and have thus  been  guilty  of repeated  failures  to comply with those provisions  of  the Bihar Mica Act, 1947." On receipt of this notice, the  peti- tioner  by  its  letter  dated March  20,  1953,  asked  the Government to furnish it with particulars of the allegations contained in the said notice and on March 27, 1953,  renewed its  request for the said particulars.  On May 1, 1953,  the Government  sent  a  Memorandum No.  A/M1-8022/53R.  to  the petitioner Company giving the particulars of the  violations of the provisions of the Act.  The subject of the memorandum is  described  as  " Repeated failure  to  comply  with  the provisions  of  the Bihar Mica Act, 1947."  The  particulars show that between December 3, 1952, and December 11, 1952, 624 the  Inspector of Mica Accounts inspected different  godowns of the petitioner and found contravention of the  provisions of ss. 10, 12 and 14 of the Act. What is important to notice is  that the inspection, though spread over a few days,  was really   one  inspection  of  different  godowns   and   the particulars disclosed were comparatively trivial defaults in carrying  out  the provisions of the Act.  It  may  also  be noticed that one of the particulars related to an inspection alleged to have been made on March 6, 1952; and, in  respect of  that  inspection,  the  petitioner  was  prosecuted  and convicted;  but  the licence was renewed for  the  next  two years  in spite of the said conviction.  The result of  that inspection  is,  therefore,  not  germane  to  the   enquiry initiated  by the notice dated March 7, 1953.  After  giving the  particulars  the memorandum concludes., " it  is  clear that  the  Company has been guilty of  repeated  failure  to comply with the provisions of the Bihar Mica Act, 1947 " and on these allegations the Company was directed to show  cause why the licence should not be cancelled under s. 25(1)(b) of the  Act.  Section 25(1)(b) says that the  State  Government may cancel the licence of any licensee who, " being a person to  whom a miners’s licence has been granted  extracts  mica from a mine the particulars of which are not endorsed on his

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licence."  It  is admitted by the learned  Advocate  General that the Government did not take action under cl. (b) of  s. 25(1) and that the mention of that clause in the  memorandum was  only a mistake for cl. (c) of s. 25(1) of the Act.   On May  17, 1953, the petitioner submitted to the Government  a detailed  explanation  in  regard to  the  charges  levelled against it.  It premised its explanation with the  statement that all the relevant books of accounts and stock books  had been  seized by the Inspector of Mica Accounts and  had  not been  returned  in  spite  of  repeated  requests  and  that therefore it reserved its right to make further  submissions when  the books were returned. It also pointed out  that  at the  time  of  inspection it was not asked  to  explain  the alleged irregularity in accordance with the usual  procedure in  regard  to such matters.  In then  proceeded  to  answer every one of                             625 the  allegations made against it.  The explanation given  by the  Company appears to be plausible and the  contraventions alleged,  even  if true, appear to be too  trivial  for  the drastic  action taken by the State.  In 1954 the  Government filed  a suit against the said proprietor for a  declaration that  the  various companies brought into existence  by  him were bogus ones and the various transactions entered into by him were all benami for him.  After the explanation given by the  petitioner, there was a lull for more than  two  years. The State Government neither returned the account books  nor invited  the  petitioner  to  make  further  submissions  by allowing  it  to  look  into  the  accounts  seized  by  the authorities  concerned.  Suddenly, on September 7,  1955,  a notification  was issued to the effect that the Governor  of Bihar  was pleased to cancel the petitioner’s  licence.   It was also directed to stop operating the mica mines forthwith and  to produce the books of account relating to  the  above mines in respect of their godowns on September 12, 1955. From the foregoing narration of facts it is obvious that the licence affecting rights of great magnitude was cancelled to say the least, for trivial reasons.  The enquiry was held by the  department  headed by the Minister  who  was  obviously biased   against  the  petitioner.   Some   technical   non- compliances  of  the rules alleged to have  been  discovered during  the inspection of certain godowns were given  as  an excuse  to withdraw the licence no opportunity was given  to the  petitioner to inspect its accounts and to  explain  the alleged-defaults with reference to the accounts.  After  the petitioner  gave  its reply, a sense of false  security  was created  in the petitioner and after a period of  two  years the  Government  issued  the  notification  cancelling   the licence.   Meanwhile,  as a second string to  the  bow,  the state filed a suit against the proprietor for a  declaration that the lease was benami and for other reliefs.  The hidden hand  of the Revenue Minister can be seen in  this  enquiry. The  proceedings were started because of  political  rivalry between  the  proprietor and the Revenue  Minister.   Though heavy  stakes were involved, the enquiry was conducted in  a manner which 80 626 did  not  give  any real opportunity to  the  petitioner  to explain  its  conduct and to disprove the  allegations  made against it; and the order of cancellation of the licence was made admittedly by the same Revenue Minister, who was behind the enquiry.  In the circumstances, we  must  hold  that  no reasonable  opportunity was given to the  petitioner  within the meaning of the second proviso to s. 25(1) of the Act.

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That  apart,  the  State  Government did  not  find  on  the material that the petitioner was guilty of repeated  failure to  comply  with  any of the provisions  of  the  Act.   The particulars furnished by the Government did not disclose any such  repeated  failure.   Under s.  25(1)(c)  of  the  Act, repeated failure to comply with any of the provisions of the Act  is  a  necessary condition for the  cancellation  of  a licence.   Unless  there  is  repeated  failure  within  the meaning of that clause the State Government has no power  to cancel  the  licence  under the said  clause.   That  apart, neither in the notice initiating the proceedings nor in  the notification cancelling the licence issued by the Government it  was stated that the petitioner was guilty of "  repeated failure " within the meaning of the said clause.  But in the particulars furnished, the State Government alleged that the petitioner  had  been guilty of repeated failure  to  comply with the provisions of the Act, but the particulars did  not support  that  statement,  for, apart from  the  default  of March,  1952,  the  alleged  contravention  of  rules   were discovered by the Inspector of Mica Accounts only during the inspection of some of the godowns between December 3,  1953, and  December 11, 1953.  The result of that  one  continuous inspection  cannot  be  the  basis  for  holding  that   the petitioner  was  guilty of " repeated failure "  within  the meaning  of  s. 25(1)(c) of the Act.  There  is  nothing  on record to show that the petitioner was found to be guilty of contravention  of  any of the provisions of the Act  on  any other  occasion  after  March, 1952.  Apart  from  the  only prosecution,  which we have already noticed, the  petitioner was  not  prosecuted  for any  other  contravention  of  the provisions of ss. 10, 12 or 14 of the Act.  That prosecution cannot be pressed into 627 service,  as  the State Government renewed the  licence  for 1953-54.   In  this state of record we must  hold  that  the respondents  failed to prove that the petitioner was  guilty of  repeated  failure to comply with the provisions  of  the Act.   On  the basis of the said  finding,  the  respondents would have no power to take action under S. 25(1)(c) of  the Act. The  foregoing  discussion  establishes  that  neither   the necessary condition to enable the Government to take  action under  s. 25(1)(c) of the Act has been established  nor  the State Government had afforded reasonable opportunity to  the petitioner  within the meaning of the second proviso  to  s. 25(1). In  the  result we accept the petition and issue a  writ  of certiorari against the respondents quashing the order of the Government  of  Bihar dated September  1,  1955,  cancelling miner’s  licence No. 261-H of 1951 granted in favour of  the petitioner.   The  respondents  will pay the  costs  to  the petitioner. Petition allowed.