Kamal Kant Jain vs State And Ors
2023 Latest Caselaw 1932 Raj

[2023/RJJD/005009]

HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Spl. Appl. Writ No. 882/2007

Kamal Kant Jain s/o Shri Moti Lal Jain, resident of 2/146, Khandu Colony, Banswara through Power of Attorney Holder Subhas Chandra s/o shri Moti Lal Jain, aged 54 years, r/o 59-60, Ambika House, Babubali colony, Banswara.

----Appellant Versus

1. State of Rajasthan through the Deputy Secretary to the Government of Rajasthan, Mines Department, Jaipur.

2. The Additional Director (Mines), Udaipur Zone, Udaipur.

3. The Assistant Mining Engineer, Mines & Geology Department, Banswara.

                                                                   ----Respondents


For Appellant(s)              :    Mr. D.D.Thanvi.
                                   Mr. Amit Vyas.
For Respondent(s)             :    Mr. Sandeep Shah, AAG with
                                   Ms. Akshiti Singhvi.


             HON'BLE MR. JUSTICE ARUN BHANSALI
     HON'BLE MR. JUSTICE YOGENDRA KUMAR PUROHIT
                                    Judgment

23/02/2023
(PER HON'BLE MR. ARUN BHANSALI, J.)

This special appeal is directed against the order dated

10/8/2007 passed in S.B.Civil Writ Petition No. 7367/2006,

whereby, the writ petition filed by the appellant-petitioner has

been dismissed.

The writ petition was filed by the appellant-petitioner inter

alia questioning the validity of the order dated 7/1/2003 passed

by the Additional Director (Mines), Udaipur Zone, Udaipur,

whereby, the mining lease of the appellant-petitioner was

cancelled & the renewal application was rejected and order dated

[2023/RJJD/005009] (2 of 12) [SAW-882/2007]

20/9/2006 passed by the Deputy Secretary to the Government of

Rajasthan, Department of Mines, rejecting the revision petition

filed by the appellant under Rule 47 of the Rajasthan Minor

Mineral concession Rules, 1986 ('the Rules, 1986').

It is inter alia indicated in the petition that the mining lease

for mineral marble was allotted to the appellant-petitioner on

9/2/1982 and the agreement in this regard was executed on

10/5/1982, which was registered on 3/8/1982. After working the

mine during the lease period, the appellant-petitioner submitted

an application for renewal of the mining lease on 5/12/1991. On

account of retrospective revision of dead rent, the respondents

demanded a sum of Rs. 1,55,830/- from the appellant-petitioner

as dead rent, validity whereof was challenged by the appellant-

petitioner by filing SBCWP No. 2672/2000, which came to be

allowed by order dated 17/7/2001, holding that the revision of

dead rent could not have been made with retrospective effect.

Based on the said judgment, the revised demand was raised by

the respondents, validity of which was also challenged by the

appellant-petitioner by filing SBCWP No.4773/2001, which was

pending at the time of filing of present special appeal. Notice was

sent by the respondents for payment of dead rent on 7/3/2002 to

the tune of Rs.3,90,377/-, which remained pending.

The Addl. Director (Mines) vide his impugned order dated

7/1/2003 noticing the fact of non-payment of demand amounting

to Rs.3,90,377/-, in terms of the proposal of the Assistant Mining

Engineer, Banswara, cancelled the mining lease and rejected the

application for renewal while forfeiting the application fee.

[2023/RJJD/005009] (3 of 12) [SAW-882/2007]

Feeling aggrieved the appellant-petitioner filed a civil suit in

the court of Addl. Civil Judge (Sr. Div.), Banswara, wherein, by

way of interim order, the appellant-petitioner was permitted to

excavate the mineral. Simultaneously, the appellant-petitioner

preferred revision petition before the Deputy Secretary, who by its

order dated 20/9/2006 came to the conclusion that in the pending

Writ Petition No. 4773/2001 as there is no interim order and the

amount of demand has not been deposited, cancellation of mining

lease and rejection of renewal was justified.

Whereafter, the appellant-petitioner moved an application in

the pending suit seeking withdrawal of the suit with liberty to

question the validity of the order dated 7/1/2003 and revisional

order dated 20/9/2006, which withdrawal was permitted by the

trial court on 14/11/2006.

Whereafter, the writ petition was filed before this Court.

When the writ petition came up before the Court for admission,

the learned Single Judge while noticing the contention on behalf of

the appellant-petitioner that as the petitioner has already

deposited the entire dead rent and, therefore, the revisional

authority should have restored the mining lease in favour of the

petitioner, came to the conclusion that a sum of Rs. 4,34,478/-

was due against the appellant-petitioner and only a sum of Rs.

93,000/- has been deposited, which cannot be treated as deposit

of entire due amount and by observing that the issue in question

before the revisional authority is also pending consideration before

the civil court, upheld the rejection of revision petition on account

of pendency of suit and consequently rejected the writ petition in

limine.

[2023/RJJD/005009] (4 of 12) [SAW-882/2007]

Learned counsel for the appellant made submissions that

rejection of the writ petition by the learned Single Judge

essentially on the ground that issue in question was pending

consideration before the civil court and that the appellant-

petitioner had not deposited the entire amount due, are both

against the record/non-existant.

Submissions were made that specific averments in the

petition were made regarding withdrawal of the suit with

permission to file writ petition and the same having been

permitted by the trial court, supported by the certified copies of

the application and order passed by the court, therefore, the

indication made that the suit was still pending was not as per

record.

Further submissions were made that the appellant-petitioner

had questioned the validity of the demand raised by the

respondents after the retrospective revision of dead rent was

quashed by this Court, which petition ultimately came to be

allowed by order dated 2/2/2017, whereby, the demand raised has

been quashed by the Court and respondents were directed to

redetermine the dead rent applicable to the mining lease.

Pursuant thereof, the Mining Engineer has reported to the Director

that the original demand against the appellant-petitioner was

Rs.5,20,430/-, which in terms of the judgment of the Court is

reduced to NIL and that the amount of interest of Rs.97,791/-,

which on account of Amnesty scheme is also reduced to NIL and,

therefore, the indication made by the Court regarding appellant-

petitioner having not deposited the requisite amount as per law

also now stands negated.

[2023/RJJD/005009] (5 of 12) [SAW-882/2007]

Submissions were also made that the Addl. Director while

passing order dated 7/1/2003 and the revisional authority while

dismissing the revision petition on 20/9/2006 failed to take into

consideration the provisions of Rule 18 (21) of the Rules, 1986,

which provides for alternate consequence in case of any breach on

the part of the lessee, wherein, the competent authority may

either determine the lease and take possession of the premises or

in the alternative impose payment of penalty not exceeding twice

the amount of dead rent of the lease. However, the authority has

chosen to impose drastic penalty of determination of lease without

considering the alternative penalty of payment of twice the

amount of annual dead rent and on account of the said non-

compliance also, the determination of the lease by the authority

and rejection of the revision petition were bad.

Submissions were made that while issuing notice in the

present appeal, the Court had ordered maintaining status quo

and, therefore, the mine in question continues to remain un-

allotted and, therefore, the orders impugned dated 7/1/2003 and

20/9/2006 as well as the order passed by the learned Single

Judge deserve to be set aside and respondents be directed to

renew the lease deed of the appellant-petitioner.

Learned AAG appearing for the respondents vehemently

opposed the submissions. It was submitted that the purported

payment made by the appellant after filing of the revision

petition/cancellation of lease deed does not give right to the

appellant to get the mining lease restored.

Submissions have been made that the lease was due for

renewal on 3/8/1992 and on account of revision of dead rent, on

[2023/RJJD/005009] (6 of 12) [SAW-882/2007]

account of amendment in the Rules, 1986, the demand was

raised, which was questioned by the appellant by filing petition

before this Court and as the interim order passed in the petition

was not communicated, the demand in terms of the amended

provision was raised, which was not deposited by the appellant,

which resulted in determination of lease by order dated 7/1/2003.

It is further submitted that the interim order which was granted by

the trial court came to be reversed by the appellate court and the

respondents took possession of the mining lease in the year 2006.

itself and ever since the status of the lease is the same i.e. the

same is in possession of the respondents.

With regard to the order passed by the Court in CWP No.

4773/2001 filed by the appellant-petitioner questioning the

demand raised, it was accepted that no amount was due against

the appellant. It was re-emphasized that as the amount was not

deposited at the relevant time, the determination of mining lease

was justified.

With regard to the plea raised based on the provisions of

Rule 18 (21) of the Rules, 1986, it was submitted that the same

was not applicable to the case of the appellant pertaining to

renewal of the mining lease and that the provisions of Rule 18

(21) of the Rules, 1986 are applicable only during the currency of

the mining lease.

It was submitted that the order passed by the learned Single

Judge does not call for any interference.

We have considered the submissions made by learned

counsel for the parties and have perused the material available on

record.

[2023/RJJD/005009] (7 of 12) [SAW-882/2007]

The Addl. Director vide his order dated 7/1/2003 inter alia

while noticing that the amount of demand has not been paid by

the appellant despite notice, cancelled the mining lease and

rejected the application for renewal inter alia as under:

"vr% lgk;d [kfu vfHk;Urk] ckalokM+k ds izLrkokuqlkj] iV~Vk/kkjh }kjk psruk i= fnukad 7&3&2002 dh ikyuk ugha djus ds dkj.k] mDr [kuu iV~Vk izfrHkwfr jkf'k tCr dj [kf.Mr djrs gq;s] uohuhdj.k vkosnu i= fnukad 05-12-91 dks vkosnu 'kqYd tCr djrs gq;s vLohd`r fd;k tkrk gSA"

The revisional authority by its order dated 20/9/2006

reiterated the determination made by the Addl. Director, while

rejecting the revision petition and observed as under:

"cgl lquh xbZ] izLrqr rF;kRed izfrosnu] fjdkMZ ,oa vf/kuLFk U;k;ky; }kjk ikfjr vkns'k fnukad 7-1-2003 dks voyksdu dj euu fd;k x;kA rF;kRed izfrosnu tks lgk;d [kfu vfHk;Urk ckalokM+k }kjk izsf"kr fd;k x;k gS mlds voyksdu ls Li"V gS fd izkFkhZ }kjk ,d ;kfpdk la[;k [email protected] ekuuh; mPp U;k;ky; ds le{k nk;j dh xbZ gS tks orZeku esa fopkjk/khu gS ,oa ftldk dksbZ LFkxu ugha gksus ds dkj.k dkuwuh psruk i= fnukad 7-3-02 ikfjr fd;k x;k ftldh ikyuk ugha djus ds dkj.k iz'uxr [kuu iV~Vk [kf.Mr dj uohuhdj.k vkosnu i= vLohd`r fd;k x;k tks fu;ekuqlkj fd;k x;k gSA mDr ;kfpdk esa izkFkhZ dks LFkxu fnukad 3-1-2002 dks izkIr gks x;k tks izkFkhZ } kjk dk;kZy; esa fnukad 10-9-2003 dks is'k fd;k x;kA mDr fLFkfr esa izkFkhZ }kjk izLrqr fjohtu tks bl U;k;ky; esa izLrqr dh xbZ gS oks fu"izHkkoh izrhr gksrh gSA ,slh fLFkfr esa bl U;k;ky; ls iz'uxr izdj.k esa dksbZ fu.kZ; fn;k tkuk mfpr izrhr ugha gksrh gSA vr% izLrqr fjohtu [kkfjt dh tkrh gSA"

So far as the order passed by the learned Single Judge to the

extent observations have been made that the issue in question

before the revisional authority is also pending consideration before

the civil court is concerned, it appears that the appellant failed to

point out the factual aspect before the learned Single Judge

inasmuch as copies of the application seeking withdrawal of the

suit and order passed by the trial court permitting withdrawal

[2023/RJJD/005009] (8 of 12) [SAW-882/2007]

were available on record as Annex.21 and 22, respectively and,

therefore, rejection of the writ petition on the said count appears

to be not justified.

So far as the fact regarding non-deposit of demand raised by

the respondents is concerned, it is apparent that the said demand

was under challenge in CWP No. 4773/2001 and as there was

apparently no interim order, the appellant was required to deposit

the said amount subject to final outcome of the petition and,

therefore, the observations made that the rejection on account of

non-payment of amount of demand/amount of demand having

been deposited after passing of the order by the revisional

authority were justified. The said scenario has changed during the

pendency of the present appeal, wherein, status quo was ordered

by this Court, wherein, demand raised, which formed the basis for

determination of lease deed has been quashed by this Court and

the same was remanded back and on remand the authority had

found that taking into consideration the judgment of this Court as

well as the Amnesty scheme nothing is due against the appellant,

which facts have been placed on record by the appellant by filing

additional affidavit and the same has been responded by State

admitting the factual aspect of the matter, though insisting that

cancellation of the lease deed in the first instance was justified.

Coming to the issue raised by the appellant with regard to

non-compliance of the requirements of Rule 18 (21) of the Rules,

1986, which provide for alternate consequences of breach of

conditions of lease i.e. either the lease can be determined or

penalty can be imposed, the provisions inter alia reads as under:

[2023/RJJD/005009] (9 of 12) [SAW-882/2007]

"21 (a) In case of any breach on the part of the lessee of any covenant or condition contained in the lease, the competent authority may determine the lease and take possession of the said premises and forfeit the security money or in the alternative may impose payment of a penalty not exceeding twice the amount of annual dead rent of the lease. Such action shall not be taken unless the lessee has failed to remedy the breach after serving of 15 days notice;

(b) The Government may also at any time after serving the aforesaid notice enter upon the said premises and distain all or any of the minerals or movable property therein and may carry away, distain or order the sale of the property so distained or so much of it as will suffice for the satisfaction of the rent or royalty due and all cost and expenses occasioned by the non-payment thereof."

A learned Single Judge of this Court in M/s Neel Kanth

Chemical Works vs. State of Rajasthan : S.B.Civil Writ Petition No.

1241/1980 decided on 10/10/1980 on the said aspect inter alia

came to the following conclusion:

"After this, second question would arise whether extreme penalty of determination of lease is necessary in the interest of justice or alternative penalty by imposing the amount not exceeding twice the amount of the annual dead rent of the lease, would meet the ends of justice. There should be application of mind on this aspect of the case also, and the impugned order or order of determination should show that the authority has applied its mind and come to the conclusion that because the lessee has failed to remedy the defects pointed out to the lessee within 15 days time allowed to him, and because the defects or contraventions of the clause are of such a nature that the alternative penalty requiring him to pay double the amount of dead rent, is not enough and the circumstances and the contraventions are so grave that it wants the extreme penalty of determination of the lease and taking possession of the said premises, therefore, the lease is being determined."

The said determination was followed by another Single Judge

in M/s Sojat Lime Company vs. State of Rajasthan & Ors. : S.B.

Civil Writ Petition No. 14717/2016 decided on 6/11/2017, while

observing as under:

"Thus, it appears that the respondents were in a hurry to cancel the lease deed. An opportunity should have been granted to the petitioner to pay the amount along

[2023/RJJD/005009] (10 of 12) [SAW-882/2007]

with the penalty in terms of the Rule 18 (21) (a) of the Rules of Rajasthan Minor Mineral Concession Rules, 1986."

Against the order in the case of M/s Sojat Lime Company

(supra), a Division Bench in State of Rajasthan & Ors. vs. M/s

Sojat Lime Company : D.B.Special Appeal Writ No. 200/2019

decided on 8/7/2019 inter alia observed as under:

"This Court notices that as urged on behalf of the State, Rule 18(21)(a) undoubtedly confers discretion upon the State to adopt either the course of cancellation of the lease straightway after issuing notice or to recover twice the amount of rent. In the present case, the learned Single Judge was largely influenced by the fact that the State did not, having regard to the overall circumstances, explore the possibility of exercising the lesser drastic measure of recovering the lease amounts along with penalty amounts as imposed and instead proceeded straightway cancelling the lease deed.

This Court is of the opinion that no fault can be found with the impugned order, particularly since the learned Single Judge has preserved the discretion of the State to determine the penalty/damages in terms of the second part of Rule 18(21)(a) of the Rules of 1986. The measure is also in accordance with doctrine of proportionality."

From the above determination made by Single Judge as

upheld/approved by the Division Bench, it is apparent that while

taking action under the provisions of Rule 18 (21) in case of any

breach on the part of lessee of any conditions contained in the

lease, before exercising the option of extreme penalty of

determination of lease, the authority has to explore the imposition

of alternative penalty also and has to come to a conclusion that

the breach was of such a nature that the determination of lease

was the only penalty which could be imposed.

In the present case, as noticed hereinbefore, imposition of

alternative penalty has not been explored by the respondents and

straightway determination of lease has taken place, which action,

in the circumstances of the case, cannot be approved.

[2023/RJJD/005009] (11 of 12) [SAW-882/2007]

The submission made by the respondents that provisions of

Rule 18 (21) of the Rules, 1986 are not applicable in case of

renewal of the lease, apparently has no substance in view of Rule

17 of the Rules, 1986, which provides for renewal of mining lease

and inter alia provides as under:

"17. Renewal of Mining Lease:-

(1) .............

(2) .............

(3) Notwithstanding anything contained in the instrument of the mining lease, if the application for renewal has not been disposed of before the expiry of lease it shall be deemed to have been extended by a further period till the competent authority passes order thereon. The dead rent after expiry of the lease period shall be as per the revised dead rent referred to in sub rule 93) of the rule 18."

A perusal of the above provision reveals that if the

application for renewal has not been disposed of before the expiry

of the lease, it shall be deemed to have been extended by a

further period till the competent authority passes order thereon

and, therefore, as on 7/1/2003 when the Addl. Director passed

the order, the mining lease was in currency on account of the

deeming provision and, therefore, the submission made in this

regard cannot be countenanced.

Further, a bare look at the order passed on 7/1/2003 itself

reveals that the authority has cancelled the mining lease and

rejected the renewal application, which necessarily means that the

mining lease was in currency on the said date and as such, the

submission made in this regard has no substance.

In view of the above discussion, besides the fact that the

aspect of withdrawal of the suit on the same issue apparently was

not brought to the notice of the learned Single Judge and on

account of subsequent developments, whereby the demand raised

[2023/RJJD/005009] (12 of 12) [SAW-882/2007]

against the appellant has been quashed and on re-determination it

has been bound that nothing was due against the appellant and

the fact that provisions of Rule 18(21) of the Rules, 1986 were not

followed by the respondents while passing the order dated

7/1/2003/rejecting the revision petition on 20/9/2006, the orders

impugned cannot be sustained.

Consequently, the special appeal is allowed. The order dated

10/8/2007 passed by the learned Single Judge is set aside. The

order dated 7/1/2003 passed by the Addl. Director (Mines),

Udaipur Zone, Udaipur (Annex.13 to the writ petition) and order

dated 20/9/2006 passed by the Deputy Secretary, Mining

Department, Rajasthan (Annex.20 to the writ petition) are

quashed and set aside. The matter is remanded back to the Addl.

Director (Mines) to pass fresh order on the renewal application of

the appellant taking into consideration the subsequent events as

well as the provisions of Rule 18 (21) of the Rules, 1986 as

interpreted hereinbefore.

Needful may be done by the said authority within a period of

three months from the date copy of this order is placed by the

appellant with the said authority.

No order as to costs.

(YOGENDRA KUMAR PUROHIT),J (ARUN BHANSALI),J

baweja/-

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