Sukhan Singh vs State Of U.P. And 3 Others
2014 Latest Caselaw 6402 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

A.F.R.
 
Chief Justice's Court
 

 
Case :- PUBLIC INTEREST LITIGATION (PIL) No. - 31643 of 2014
 

 
Petitioner :- Sukhan Singh
 
Respondent :- State Of U.P. And 3 Others
 
Counsel for Petitioner :- Devbrate Mukherjee
 
Counsel for Respondent :- C.S.C.,Ashish Malhotra
 

 
Hon'ble Dr. Dhananjaya Yeshwant Chandrachud,Chief Justice
 
Hon'ble Dilip Gupta,J.

This proceeding under Article 226 of the Constitution of India has been instituted in the public interest for espousing the interest of persons residing near the bank of the river Yamuna in Tehsil Kalpi, District Jalaun. The fourth respondent, in response to a notice dated 21 April 2008 issued by the District Magistrate under Rule 72 of the U.P. Minor Minerals (Concession) Rules, 19631 applied for the grant of a mining lease in respect of plot nos.4 and 5 of Gata no.240, situated at Village Himanpura, Tehsil Kalpi, District Jalaun for a total area of 80 acres and in respect of mining plot in Gata no.79/1 of Village Sankarpur, Tehsil Jalaun, District Jalaun, admeasuring 10.84 acres. On 24 October 2008, the District Collector submitted a recommendation to the State Government for the grant of its approval for a mining lease in respect of Plot No.4 Gata no.240 in terms of the Government Order dated 16 October 2004 under which prior approval of the State Government was required where the value of the lease was in excess of Rs.5 lacs. A similar recommendation was made by the District Collector on 24 October 2008 in respect of plot no.5 of Gata no.240. No decision was taken by the State Government thereon.

In the meantime, a judgment was delivered by the Supreme Court on 27 February 2012 in Deepak Kumar and Others Vs. State of Haryana and Others2 by which a direction was issued to the State Governments and to the Union Territories for implementing the recommendations made by the Union Ministry of Environment and Forests, in consultation with the States and the Union Territories, making it mandatory to have mining plans before the grant of mining leases. The Supreme Court directed all the States and the Union Territories to give effect to the recommendations made by the Ministry of Environment and Forests (MoEF) in a report of March 2010 as embodied in the Model Rules of 2010 which have been framed by the Ministry of Mines within a period of six months.

On 31 May 2012, a declaration was issued by the State Government, by which the provisions of Chapter IV of the Rules were made applicable so as to declare that in the State of Uttar Pradesh, mining leases would be entered into by following e-tendering process. The validity of the Government Order was challenged before a Division Bench of this Court in Nar Narain Mishra Vs. State of U.P. and Others3. By a judgment delivered on 29 January 2013, the Division Bench upheld the validity of the Government Order and held that both in respect of the grant of fresh mining leases as well as applications for renewal, the declaration made by the Government Order dated 31 May 2012 would apply. The Division Bench held that applicants whose applications for renewal were pending on 31 May 2012 could not claim that their applications should be considered under Chapter II of the Rules and that those areas be kept out of the purview of Government Order dated 31 May 2012. Similarly, the Division Bench also clarified that applications for the grant of fresh leases, which were pending on 31 May 2012, could not be directed to be considered under Chapter II of the Rules and that once a notification had been issued by the State issuing a declaration in terms of the applicability of Chapter-IV of the Rules, the grant of all mining leases thereafter would have to be governed by the process of e-tendering laid down therein.

Insofar as the petition is concerned, it is not in dispute that the first grant in favour of respondent no.4 was made on 29 June 2012 in pursuance of which a mining lease was executed on 31 October 2013. The second grant was on 11 July 2012 while the mining lease was executed on 16 May 2013. In the third case, the permission for renewal was granted on 31 October 2013, whereas the lease was executed on 22 November 2013 in favour of respondent no.4. The fourth respondent applied for a mining plan on 25 May 2014 and has relied upon the amended provisions of the Rules to which we shall shortly turn, in support of the case that there is a deemed approval upon the expiry of a period of three months.

Now, it is in the background of these facts that the scope of the challenge in the present proceedings would have to be considered.

On behalf of the petitioner, the principal submission is that all the three leases which have been executed in favour of the fourth respondent are contrary to law because once a Government Order was issued on 31 May 2012, making a declaration in terms of Chapter IV of the Rules, the grant of a fresh lease as well as the renewal of an existing lease could not have been made under Chapter II of the Rules but only by following the procedure prescribed in Chapter IV of the Rules. In the present case, it has been submitted that in all the three cases, both the date of the grant and the date of the lease is after 31 May 2012 and hence, the leases have been executed ex facie in a manner contrary to law and would, therefore, be invalid.

The two additional submissions which have been pressed in the petition are that the fourth respondent was granted a mining lease without even a mining plan, in violation of the judgment of the Supreme Court in Deepak Kumar's case (supra). Moreover, it has been submitted that a conditional environmental clearance was granted to the fourth respondent by the State Environmental Impact Assessment Authority and since the condition of obtaining an approved mining plan within three months was not fulfilled, environmental clearance would stand revoked.

In response to the petition, it has been urged on behalf of the fourth respondent that (i) the petitioner has an efficacious remedy of a revision under Rule 78 of the Rules and hence a petition under Article 226 of the Constitution should not be entertained; (ii) in the present case the Collector had made a recommendation to the State Government for the grant of a mining lease on 24 October 2008 since, at the material time, the applicable Government Order required prior permission of the State Government where the value of the mining was in excess of Rs.5 lacs. However, on 1 November 2011, a Government Order was issued by which the District Collectors were permitted to dispose of such applications at their level. In the meantime, as a result of the decision of the Supreme Court in Deepak Kumar's case (supra), no final decision had been arrived at. However, since the District Magistrate had already made his recommendation in 2008 to the State Government, only a formal order remained to be issued, particularly after the Government Order dated 1 November 2011 requiring the District Collectors to take a decision at their own level. Hence, it has been urged that the decision making process for the grant of a mining lease had been completed in 2008 when the District Magistrate had applied his mind and a formal order granting permission was a ministerial act which had not been completed earlier in the absence of an environmental clearance as mandated by the decision of the Supreme Court in Deepak Kumar's case. On the issue of renewal, it has been submitted that the application was filed on 22 June 2010 which was approved on 29 June 2012. A Government Order dated 5 September 2012 clarifies the position with reference to the earlier Government Order dated 31 May 2012 to the effect that as and when an area would fall vacant, the process of e-tendering would have to be followed. In sum and substance, the contention of the fourth respondent is that since a formal recommendation had been made by the Collector in 2008, the issuance of permission and the execution of lease were ministerial acts which remained to be completed. Hence, it has been submitted that the procedure which has been followed was lawful and proper.

While dealing with the rival submissions, it would, at the outset, be necessary to advert to the provisions of Section 4 of the Mines and Minerals (Regulation and Development) Act, 19574 under which, inter alia, no person can undertake mining operations in any area, except under and in accordance with the terms and conditions of a mining lease granted under the Act and the Rules made thereunder. Section 15 of the Act confers a rule making power on the State Government for, inter alia, regulating the grant of mining leases in respect of minor minerals and for purposes connected therewith. The State Government has made the Uttar Pradesh Minor Minerals (Concession) Rules, 1963. Rule 3 of the Rules provides that no person shall undertake any mining operations in any area within the State, of any minor mineral to which the Rules are applicable, except under and in accordance with the terms and conditions of a mining lease or mining permit granted under the Rules. Chapter II of the Rules deals with the grant of mining leases. Chapter IV of the Rules deals with auction leases. Rule 23 of the Rules prescribes that the State Government may, by general or special order, declare the area or areas which may be leased out by auction or by tender or by auction-cum-tender. Sub rule (3) of Rule 23 of the Rules specifies that on the declaration of the area or areas under sub-rule (1), the provisions, inter alia, of Chapter II shall not apply to the area or areas in respect of which the declaration has been issued. Thereupon, such area or areas may be leased out according to the procedure prescribed in Chapter IV of the Rules. Rule 23 of Chapter IV of the Rules provides as follows:-

"23. Declaration of area for auction/tender/auction-cum-tender lease:- (1) The State Government may by general or special order, declare the area or areas which may be leased out by auction or by tender or by auction-cum-tender.

(2)Subject to directions issued by the State Government from time to time in this behalf no area or areas shall be leased out by auction or by tender or by auction-cum-tender for more than five years at a time.

Provided that the period in respect of in situ rock type mineral deposit shall be five years and in respect of river bed mineral deposit shall be one year at a time.

(3)On the declaration of the area or areas under sub-rule (1) the provisions of Chapters II, III and VI of these rules shall not apply to the area or areas in respect of which the declaration has been issued. Such area or areas may be leased out according to the procedure described in this Chapter.

(4)The District Officer shall get the area or areas declared under sub-rule (1), evaluated for quality and quantity of mineral for fixing minimum bid or offer by the Director, Geology and Mining, Uttar Pradesh or by an officer authorised by him before the date fixed for auction or tender or auction-cum-tender, as the case may be."

In terms of Rule 23, the State Government issued a declaration by a Government Order dated 31 May 2012. By and as a result of the decision of the Government, the provisions of Chapter IV of the Rules were made applicable to all areas in the State falling vacant and to incorporate the procedure of e-tendering with a view to provide transparency in the allotment of mining leases.

A Division Bench of this Court in Nar Narain Mishra (supra) upheld the validity of the notification issued by the State. Among the issues which were framed for decision by the Division Bench, the first three issues are as follows:-

"(1) Whether the Government Order dated 31/5/2012, is only a policy decision of the State Government or can be treated to be a declaration within the meaning of Rule 23 sub-rule (1) of the Rules, 1963.

(2) Whether the application filed by the applicants for renewal of mining leases under Chapter II of the Rules, 1963 pending on 31.5.2012 are required to be considered and decided in accordance with Chapter II of the Rules, 1963, even if the Government Order dated 31/5/2012, is treated to be a declaration under Rule 23 sub-rule 1of the Rules, 1963.

(3) Whether the area with regard to which an application for renewal of mining lease or an application for grant of lease under Chapter II of the Rules, 1963 is pending can be treated to be vacant area within the meaning of Government Order dated 31/5/2012."

These issues were answered by the Division Bench by holding as follows:-

"The State stand is that there is no inviolable right of renewal in a lease and the right of consideration of the renewal and the claim of renewal of the lease have to be dealt with in accordance with the Rules as existing at the relevant time. It is submitted that declaration under Chapter IV having been issued all areas stand notified for settlement under Chapter IV, the renewal of lease cannot be granted since renewal can be granted only in accordance with the procedure prescribed under Chapter II which provision is no more applicable. When the State issued the Government Order on 31.5.2012 applying the same to all vacant areas, it intended to apply the Government Order on the areas which were not occupied. No exception has been provided in the Government order to exclude out those areas in respect of which renewal applications are pending. An application for renewal of lease is in essence an application for grant of lease and same principle has to be applied with regard to applications which are pending for grant of lease and on similar analogy, if the submissions of the petitioners are to be accepted those areas on which applications for grant of lease have been submitted should also be kept out of purview of the Government Order dated 31.5.2012. No such intention or object is decipherable from the Government order. By subsequent Government Order dated 5.9.2012, the State Government has provided that those areas where renewal has been sanctioned or granted on or before 5.9.2012, shall not be settled under Chapter IV. The cases where renewal has been granted are on different footing."

The Division Bench followed the judgment of the Supreme Court in State of Tamil Nadu Vs. M/s Hind Stone and others5 and held as follows:-

"In view of the above pronouncement of the Apex Court, it is clear that the applicants whose application for renewal is pending cannot claim that their application for renewal be considered under Chapter II and those areas be kept out of purview of the Government order dated 31.5.2012. The areas having been declared under Rule 23(1), the provisions of Chapter II under which renewal of lease can be granted becomes inapplicable. The new state of affairs which have been brought into existence by declaration under Rule 23(1) has to be given its full effect and no rider or exception can be read specially when the Government Order dated 31.5.2012 does not contemplate any such exception. Thus, the submission of the applicants that their renewal applications which were pending at the time of issuance of declaration on 31.5.2012 shall be considered according to Chapter II cannot be accepted and the areas in respect of which the applications for renewal were pending on 31.5.2012, cannot be said to be not vacant."

Consequently, the view of the Division Bench was that no mandamus could be granted, directing the consideration of those applications for renewal of leases which were pending on 31 May 2012 under Chapter II of the Rules, once a declaration has been issued under Rule 23 of the Rules, making the provisions of Chapter IV of the Rules applicable. Similarly, on and after 31 May 2012, it was held, applications for the grant of fresh leases, even though they were pending, would not be governed by Chapter-II of the Rules as claimed by the petitioner.

The view which has been taken by the Division Bench in Nar Narain Mishra (supra) is plainly in accord with both the Act and the Rules. Under Section 4(1) of the Act, there is a prohibition on any person undertaking mining operations in any area, except under and in accordance with the mining lease. Under Rule 3(1) of the Rules, there is a similar prohibition on undertaking any mining operations in any area within the State, of a minor mineral "except under and in accordance with the terms and conditions of a mining lease".

In the decision of the Supreme Court in the State of Tamil Nadu (supra), the position in law was set out in the following observations:-

"While it is true that such applications should be dealt with within a reasonable time, it cannot on that account be said that the right to have an application disposed of in a reasonable time clothes an applicant for a lease with a right to have the application disposed of on the basis of the rules in force at the time of the making of the application. No one has a vested right to the grant or renewal of a lease and none can claim a vested right to have an application for the grant or renewal of a lease dealt with in a particular way, by applying particular provisions. In the absence of any vested rights in anyone, an application for a lease has necessarily to be dealt with according to the rules in force on the date of the disposal of the application despite the fact that there is a long delay since the making of the application."

In view of this decision, the position in law is well settled. No person has a vested right to the grant or renewal of a mining lease or to have an application considered or disposed of in a particular manner. An application for the grant of a lease has to be dealt with in accordance with the prevailing rules on the date of disposal of the application. Mere pendency of an application on 31 May 2012, either for the grant of a fresh lease or for the renewal of an existing lease, did not confer a vested right either to the grant of or, for that matter, the renewal of the lease. Once the State Government issued a declaration under Rule 23 of the Rules by its notification dated 31 May 2012, the procedure for the grant of mining leases, both fresh as well as renewals, has to necessarily abide by Chapter IV of the Rules. There is no merit in the submission that once a recommendation had been made by the Collector in 2008, a vested right will enure to the benefit of the fourth respondent and that all the steps that remained to be taken were of a ministerial nature.

The State Government, by its order dated 1 November 2011, empowered the Collectors to take a decision at their own level. Here again, it is not in dispute that no decision as such was taken by the Collector until 31 May 2012, when the provisions of Chapter IV of the Rules came to be applied. The subsequent Government Order dated 5 September 2012 clarifies that only one method for the execution of mining leases has been found to be in public interest and in the interest of revenue and as and when the terms of existing leases would come to an end, it was only the process of e-tendering which was required to be followed. The fourth respondent, both in regard to its application for the grant of a fresh mining lease as well as in respect of the renewal of an existing lease, had acquired no vested right either for the grant or renewal of a mining lease. Once the Government Order dated 31May 2012 took effect, the petitioner had no case to assert that the pending application of the petitioner would be governed by Chapter II and not by Chapter IV of the Rules.

Finally, and for the sake of completeness, we would also refer to a Government Order dated 26 February 2013 which refers to the decision of this Court in Nar Narain Mishra (supra) and clarifies that all applications for the grant of mining leases or for renewals which were pending as on 31 May 2012 should be treated as rejected since the provisions of Chapter IV of the Rules came into force. The attention of the Court has been drawn to another Government Order dated 26 February 2013 which states that those applications in respect of which approval has been granted by the competent authority prior to 5 September 2012 would for the purposes of renewal be treated as valid. In our view, the subsequent clarification of the State Government on 26 February 2013 does not and cannot detract from the plain legal position as it emerges once a notification has been issued under Rule 23 of the Rules making the provisions of Chapter IV of the Rules applicable. Once a declaration has been issued in terms of Rule 23(1) of the Rules, the provisions of Chapter IV of the Rules must necessarily apply both to fresh applications for the grant of a mining lease as well as to applications for renewal, including all applications which were pending on the date of issuance of the Government Order.

The basic position in law is that the mere filing of an application either for the grant of a lease or for the renewal of a lease does not confer a vested right for the grant or renewal of a lease and, an application has to be disposed of on the basis of the rules as they stand on the date of the disposal of the application.

This being the clear position in law which has been enunciated in the judgment of the Supreme Court in State of Tamil Nadu (supra), it would be impermissible to accept the contention of the fourth respondent that its applications were liable to be disposed of, not on the basis of the provisions of Chapter IV but under Chapter II of the Rules. Besides, the acceptance of any such submission would be contrary to the law laid down by a Division Bench of this Court in Nar Narain Mishra (supra) which follows the decision of the Supreme Court.

We do not find any merit in the submission that the petitioner should be relegated to the remedy of a revision under Rule 78 of the Rules in respect of the issues raised in the petition. The issues which have been raised in these proceedings are settled in law. We find that there is no reason or justification to relegate the petitioner to the remedy of a revision.

For these reasons, we have come to the conclusion that both the grant of the leases to the fourth respondent as well as the renewal was contrary to law and was invalid. We, accordingly, allow the petition and set aside the orders dated 31 October 2013, 29 June 2012, 11 July 2012 and 16 May 2013 respectively, issued by the second respondent as well as the grants and renewals of the mining leases to the fourth respondent. Since the fourth respondent has, in pursuance of the unlawful grant or, as the case may be, renewal of mining leases in its favour continued to excavate mining minerals, we leave it open to the Collector, after due notice to show cause to the fourth respondent, to adopt consequential steps in accordance with law.

The petition is, accordingly, allowed. There shall be no order as to costs.

Order Date :- 12.9.2014

VMA

(Dr. D.Y. Chandrachud, C.J.)

(Dilip Gupta, J.)