Madhya Pradesh High Court
Abdul Rajjak vs State Of M.P. And Ors. on 15 March, 2007
Author: Dipak Misra
Bench: Dipak Misra
ORDER Dipak Misra, J.
1. The seminal and spinal issue that has spiralled and stemmed in this writ petition preferred under Article 226 of the Constitution of India is whether the impugned order dated 19-01-2005, Annexure-P-6 whereby the State Government has passed the order without following the principles of natural justice is warrantable and well founded, for the conception of the term 'declaration' as engrafted under Sub-rule (6) of Rule 30 of M.P. Minor Minerals Rules, 1996 (hereinafter referred to as 'the Rules') would ostracise applicability of the doctrine of natural justice or the same deserves to be lanceted and empierced as on a keener and deeper scrutiny it would be evincible that the said principle has neither been expressly or impliedly chartered into the realm of non-applicability.
2. The facts which are requisite to be stated are that the petitioner was granted a quarry lease for minor mineral 'marble' over his own bhumiswami land admeasuring 2.67 hectares situated in Khasra Nos. 435 and 436 Village, Nimas, Tahsil, Bahoriband, District Katni for a period of 10 years commencing 6-9-2001 by the State Government under the provisions of Mines and Minerals (Development and Regulation) Act, 1957 (for brevity 'the MMDR Act') read within M.P. Minor Mineral Rules, 1996. In pursuance of the said grant an agreement was entered into between the petitioner and the competent authority of the State Government on 6-9-2001 which was duly registered as per Annexure-P-2. Copies of the map and 'khasrapanchshala' of the land have been brought on record as Annexure-P-3. After execution of the agreement the petitioner was granted working permission by the Collector, Katni, as per Annexure-P-4. On being granted Bhu-Pravesh the petitioner started quarrying operation over the said land and carried the mining activities and excavated a sizable amount of mineral for a period of time. The transit passes/royalty challans have been brought on record as Annexure-P-5. A detailed chart has been furnished to highlight the sizable excavation.
3. According to the petitioner while excavation was quite satisfactory, all of a sudden, without affording an opportunity of being heard the State Government declared the quarry lease of the petitioner to have been lapsed on the ground that the petitioner had not been conducting quarrying operation and hence, there had been violation of the quarry lease agreement. The said order has been brought on record as Annexure-P-6. It is put forth while declaring the said lease of the petitioner to have been lapsed because of the violation of Clause (3) of Part 7 of the quarry lease agreement. It is highlighted that the petitioner was not issued any notice before passing of the impugned order and, therefore, he could not clarify the position and by virtue of violation of the principles of natural justice the entire action is vitiated. It is put forth that the petitioner has not violated any aspect of the agreement. He has duly filed the returns and the challans of the excavated minerals with the State Government from time to time. Despite having full knowledge with regard to all the details action has been taken without issue of notice to the petitioner which per se is arbitrary.
4. It is the further case of the petitioner that Clause (3) Part 7 Rule 30(5) of the Rules are not attracted as the petitioner is disputing the stoppage or discontinuance of mining operation at any point of time after grant of 'Bhu-Pravesh' and more specifically within the last six months preceding the issue of the impugned order. It is contended that there is no stipulation in thuarry lease agreement or under the Rules that a particular amount of marble has to be excavated. It is set forth that unilateral declaration by the State Government amounts to premature termination of the lease which runs counter to the provisions contained under Section 4A of the MMDR Act.
5. A counter affidavit has been filed by the answering respondents contending, inter alia, that the present writ petition is not maintainable, as statutory alternative remedy for filing of review before the State Government under the provisions of Rule 57(4) of the 1996 Rules is available. It is the further stand in the return that as per provisions of Sub-rule (6) that Rule 30 if lessee tails to commence mining operation within one year of the date of execution of the lease or discontinues mining operation for cumulative period of six months during any calendar year after commencement of such operation, sanctioning authority may declare the lease to have lapsed. In the case at hand, the quarry lease was executed on 6-9-2001 and the petitioner did not undertake any mining operation for the cumulative period for six months in the year 2003-2004 which is clear from the chart reflected by the petitioner in the petition itself. The petitioner had also failed to submit any return or comply with several other conditions of the quarry lease. The mines of the petitioner were inspected by the mining inspector on 5-11-2004 and it was found that the petitioner had not undertaken the mining operation and also violated several conditions of the mining lease. The report of the mining inspector has been brought on record-R-1. It is further put forth in the return that the petitioner was issued a show cause notice on 1-04-2004 in respect of several violation of conditions of the quarry lease but the petitioner chose not to submit any reply to show cause notice and, therefore, on the basis of the report of the mining inspector a proposal was forwarded by the Collector, Katni, to the State Government to the effect that the petitioner's quarry lease be cancelled or declared lapsed. It is further put forth that in view of the admitted position that the petitioner had not taken any mining operation after commencement of the mining lease the State Government vide order dated 19-01-2005 declared the quarry lease to have been lapsed. The assertions made in the writ petition have been criticised indicating that they are not correct and certain figures have been falsely stated to make out a case on behalf of the petitioner. It is contended that the Sub-rule (5) of Rule 30 of the 1996 Rules does not apply to the facts and circumstances of the case and further the petitioner cannot make a bald statement that no opportunity of hearing was afforded to him inasmuch as the petitioner was asked to issue a notice to show cause.
6. I have heard Mr. Akshay Dharmadhikari, learned Counsel for the petitioner and Mr. Alok Pathak, learned Govt. Advocate for the State.
7. It is submitted by Mr. Dharmadhikari that the plea of alternative remedy does not bar the writ petition, as in the case at hand, the principles of natural justice have been violated. It is urged by him that the petitioner has filed number of documents to show that how the quarry lease has been operated upon and the provisions contained under the 1996 Rules are not attracted. The learned Counsel further canvassed that the impugned order would clearly show that no opportunity of hearing was afforded and a declaration of lapse has bee ade, but an effort has been made to improve the case in the counter affidavit putting forth a stand that the petitioner was issued a notice to show cause indicating violation of the conditions of the quarry lease. It is propounded by Mr. Dharmadhikari that the said show cause notice has not been brought on record. Submission of Mr. Dharmadhikari, learned Counsel for the petitioner is that when an adverse civil consequence has visited the principles of natural justice cannot be made non-applicable on the ground that the result entails ipso facto. The learned Counsel would emphasise on the terms 'declaration' and 'lapse' to increment the submission that the cumulative and conjoint reading of the terms would forsake or part company with the principles of natural justice.
8. Mr. Alok Pathak, learned Govt. Advocate for the State resisting the aforesaid submissions contended that when there is effective alternative remedy, it was incumbent on the part of the petitioner to approach the said forum but not to knock at the doors of this Court under Article 226 of the Constitution of India. The learned Counsel further submitted that the petitioner did not avail the opportunity when show cause notice was issued and he cannot be allowed to plead and raise contentions that no opportunity of hearing was afforded. The learned Counsel further submitted in a case of declaration of 'lapse of lease' the principles of natural justice are not attracted and, therefore, the decision taken by the State Government cannot be found fault with or founder on that score.
9. First I shall take up the question relating to alternative remedy. Rule 57(4) of the 1996 Rules prescribe as under:
57. Appeal, review and revision.
(1)xx xx xx (2) xx xx xx (3) xx xx xx (4) Any person aggrieved by any order passed or deemed to have been passed by the State Government, in exercise of the powers conferred under these rules, may, within sixty days of the date of communication of the order to him, apply to the State Government for review of the order.
10. Submission of Mr. Pathak, learned Counsel for the State is that the impugned order having been passed by the State Government the petitioner could have sought review of the same by approaching the State Government. The proponement of Mr. Dharmadhikari, learned Counsel for the petitioner is that in the case at hand review cannot be regarded as an alternative and efficacious remedy as the State Government has already passed the order and further when there is a categorical assevaration by the petitioner that the principles of natural justice have been given a go by this Court should entertain the writ petition even if there is an alternative remedy.
11. This Court in the case of Life Insurance Corporation of India v. Ramji Kewat and Ors. (W.P. No. 6905/2000 and other connected writ petitions) after referring to the decisions rendered in the cases of Jila Parishad Moradabad v. Kundan Sugar Mills ; Champalal Binani v. The Commissioner of Income-tax, West Bengal and Ors. ; State of U.P. and Ors. v. Indian Hume Pipe Co. Ltd. ; Shiv Shankar Dal Mills v. State of Haryana and Ors. , Kuntesh Gupta v. Management of Hindu Kanya Mahavidyalaya ; Sarat Chandra v. State of Orissa and Ors. ; Dhaneshwar Nayak v. State of Orissa 1986 (11) OLR 113; and Kamala Kanta v. O.S. Board of Homeopathic Medicine, Bhubaneswar expressed the opinion as under:
From the aforesaid enunciation of law, it becomes crystal clear that there is no bar for entertaining a writ petition under Articles 226 and 227 of the Constitution of India where an alternative remedy has not been taken resort to. It is a self imposed restraint and restriction by the Court itself. While exercising such power under the Constitution the Court is required to keep in view certain factors. As has been noticed when an order is passed without jurisdiction or when principles of natural justice are violated, or when the vires of an Act is challenged or where enforcement of any of the fundamental right is sought or where a pure question of law arises or where a strong case has been made out the Court may exercise the discretion. It is to be further noted here the Apex Court has also observed that the grounds are not exhaustive. No straitjacket formula can be laid down. It will depend upon the facts of each case.
12. As in the present case, a stand has been taken there has been violation of the principles of natural justice and a counter argument is canvassed the doctrine of audi alteram partem is not applicable, I am not inclined to throw the writ petition overboard on the ground that the petitioner had not approached the State Government seeking review of the impugned order.
13. The next aspect that requires to be considered is whether the principles of natural justice would be attracted to a case of this nature. Mr. Pathak has urged with vehemence that Sub-rule (6) of Rule 30 only requires a declaration to be made by the sanctioning authority by passing an order and there is no question of affording of opportunity of hearing to the leassee.
14. In this context, it is apposite to refer to Section 14 of the MMDR Act which provides as under:
14. The provisions of s. [5 to 13 by Central Act 37 of 1986] (inclusive) shall not apply to quarry leases, mining leases or other mineral concessions in respect of minor minerals.
15. Section 15 of the aforesaid enactment confers power on the State Government to make rules in respect of minor minerals and accordingly the State Government has framed the rules. Submissions of the learned Counsel for the State is that the lapse is automatic and, therefore, the question of following of principles of natural justice does not arise. At this juncture it is condign to refer to Sub-rules (6), (7), (9) and (10) of Rule 30 of the 1996 Rules. They read as under:
30. Conditions of quarry lease.
(1)xx xx xx (2) xx xx xx (3) xx xx xx (4) xx xx xx (4) xx xx xx (5) xx xx xx (6) Subject to the other conditions of these rules, where mining operations have not commenced within a period of one year from the date of execution of the lease or discontinued for a cumulative period of six months during any calendar year after commencement of such operation, the Sanctioning Authority may, by an order, declare the quarry lease as lapsed and communicate the declaration to the lessee.
(7) Where the lessee is unable to commence mining operation for a period exceeding one year or unable to continue mining after commencement for the reasons beyond his control, he may submit an application to Sanctioning Authority explaining the reasons at least ninety days before the expiry of such period.
(8) xx xx (9) The Sanctioning Authority of the lease may, on receipt of an application made under Sub-rule (7) and on being satisfied about the adequacy and genuineness of the reason for the non-commencement of mining operations or discontinuance thereof, pass an order before the date on which the lease would have otherwise, lapsed; extending or refusing to extend the period of the lease:
Provided that where the Sanctioning Authority on receipt of application under Sub-rule (7) does not pass any order before the expiry of the date on which the lease would have otherwise lapsed, the lease shall be deemed to have been extended until the order is passed by the concerned authority or for a period of one year whichever is earlier.
16. The question that emerges for consideration is whether the rules cannot be interpreted to exclude applicability of the principles of natural justice. In this context, I think it seemly to refer to a passage from the decision rendered in the case of D.K. Trivedi and sons and Ors. v. State of Gujarat and Anr. AIR 1986 SC 1323 wherein their Lordships in paragraph 76 have expressed the opinion as under:
(1) Sub-section (1) of Section 15 of the Mines and Minerals (Regulation and Development) Act, 1957, is constitutional and valid and the rule-making power conferred thereunder upon the State Governments does not amount to excessive delegation of legislation power to the executive.
(2) There are sufficient guidelines provided in the 1957 Act for the exercise to the rule making power of the State Governments under Section 15(1) of the 1957 Act. These guildelines are to be found in the object for which such power is conferred, namely, "for regulating the grant of quarry leases, mining leases or other mineral concessions in respect of minor minerals and for purposes connected therewith; the meaning of the word 'regulating'; the scope of the phrase "for purposes connected therewith"; the illustrative matters set out in Sub-section (2) of Section 13; and the restrictions and other matters contained in Sections 4 to 12 of the 1957 Act.
(3) The power to make rules conferred by Section 15(1) includes the power to make rules charging dead rent and royalty.
(4) The power to make rules under Section 15(1) includes the power amend the rules so made, including the power to amend the rules so as to enhance the rates of royalty and dead rent.
(5) A State Government is entitled to amend the rules under Section 15(1) enhancing the rates of royalty and dead rent even as regards leases subsisting at the date of such amendment.
(6) Sub-section (3) of Section 15 does not confer upon the State Governments the power to make rules charging royalty or to enhance the rate of royalty so charged from time to time.
(7) The sole repository of the power of the State Government to make rules and amendments thereto, including, amendments enhancing the rates of royalty and dead rent, is Sub-section (1) of Section 15.
(8) A State Government is not required to give an opportunity of a hearing or of making a representation to the lessee who would be affected by any amendments of the rules before making such amendments.
(9) A quarry lease is a mining lease.
(10) By reason of the prohibition contained in the proviso to Section 15(3) a State Government cannot enhance the rate of royalty in respect of any minor mineral more than once during any period of four years.
(11) A State Government is also not entitled to enhance the rate of dead rent more than once during any period of four years.
(12) During any period of four years the State Government can enhance both dead rent and royalty, but only once.
(13) The period of four years for the purpose of enhancing the rate of dead rent and royalty is to be reckoned from the date of coming into force of the rules made by the particular State Government.
(14) Building stones being minor minerals, the State Government has the power to classify them into different varieties and to charge a different rate of royalty in respect of each such variety.
17. I have referred to the said decision solely for the purpose of appreciating how rules have been framed and what is the role of the State Government.
18. In Assam v. Sillimanite Ltd. and Anr. v. Union of India and Ors. , the Apex Court in para 12 has held as under:
12. In our opinion, the decision in Ram Kishan 's case fully covers the present case and should be followed by us. In fact, we think that the subsequent amendment in 1986 lends support to the plea of the petitioners. Though it is true that the scope of Section 4A(1) has been widened, the insertion of Sub-section (3) clearly reflects a statutory intention that an opportunity of hearing must be given before the order of termination is passed, presumably as such an order widely affects the rights of the lessees. We are not able to agree with Shri Datar that under Section 4A, as it stood before 1986, no useful purpose would have been served by the giving of such an opportunity. Several situations of such an opportunity of hearing, the lessee may be able to either dissuade the Government from terminating the leases prematurely or in persuading the Government to do is subject to certain safeguards for its benefit. For example, the lessee may be able to show that the public sector corporation to whom it is proposed to entrust the working of the mines is not yet adequately equipped to exploit the mines and that, at least for some more time the status quo should continue; or again, if there is only a short period before the leases are to expire in the normal course, the lessee may be able to persuade the Government that no great advantage would be derived by premature termination of the lease. These are only illustrative. Several such other situations can be thought of. It is very difficult, therefore, to accept the contention that because an order under Section 4A is to be passed in order to give effect to a policy of the Government, it is not necessary or useful to provide the lessees, whose leases are about to be terminated, an opportunity of hearing. We, therefore, hold, respectfully following the decision in Ram Kishan's case (supra), that the order passed under Section 4A, dated 7-12-1972 is null and void as it violated the principles of natural justice and was passed without giving an opportunity to the lessees of being heard.
19. In the case of State of Haryana v. Ram Kishan and Ors. , their Lordships in paragraphs 7 and 8 have opined as under:
7. The language of Section 4A clearly indicates that the Section by itself does not prematurely terminate any mining lease. A decision in this regard has to be taken by the Central Government after considering the circumstances of each case separately. For exercise of power it is necessary that the essential condition mentioned therein is fulfilled, namely that the proposed action would be in the interest of regulation of mines and mineral development. The question of the State Government granting a fresh mining lease in favour of a Government Company or a Corporation arises only after a decision to terminate the existing mining lease is arrived at and given effect to. The section does not direct termination of all mining leases, merely for the reason that a Government Company or Corporation has equipped itself for the purpose. The section was enacted with a view to improve the efficiency in this regard and with this view directs consultation between the Central Government and the State Government to be held. The two Governments have to consider whether premature termination of a particular mining lease shall advance the object or not and must, therefore, taken into account all considerations relevant to the issue with reference to the lease in question. It is not correct to say that an existing mining lease can be terminated merely for the reason that a Government Company or Corporation is ready to undertake the work.
8. Considering in this light, the section must be interpreted to imply that the person who may be affected by such a decision should be afforded an opportunity to prove that the proposed step would not advance the interest of mines and mineral development. Not to do so will be violative of the principles of natural justice. Since there is no suggestion in the section to deny the right of the affected persons to be heard, the provisions have to be interpreted as implying to preserve such a right. Reference may be made to the observations of this Court in Baldev Singh v. State of Himachal Pradesh , that where exercise of a power results in civil consequences to citizens, unless the statute specifically rules out the application of natural justice, such rules would apply. The cases, Union of India v. Cynamide India Ltd. , D.C. Saxena v. State of Haryana and State of Tamil Nadu v. Hind Stone etc. : , relied upon by Mr. Mohanty do not help the appellant. The learned Counsel placed reliance on the observations in Paragraphs 5 to 7 of the judgment in Union of India v. Cynamide Ltd., which were made in connection with legislative activity which is not subject to the rule of audi alteram partem. The principles of natural justice have no application to legislative activities, but that is not the position here. It has already been pointed out earlier that the existing mining leases were not brought to their end directly by Section 4A itself. They had to be terminated by the exercise of the Executive Authority of the State Government. Somewhat similar was the situation with regard to Section 4A of Haryana Board of School Education" Act, 1969, which was under consideration in D.C. Saxena v. State of Haryana . A matter of policy was adopted and include y the legislature in the impugned section. Besides, the validity of the section was not under challenge there, as was expressly stated in Paragraph 6 of the judgment. So far as the case, State of Tamil Nadu v. Hind Stone is concerned, the learned Counsel for the appellant cited it only with a view to emphasise, the importance of the mineral wealth of the nation which nobody denies. We, therefore, hold that a final decision to prematurely terminate a lease can be taken only after notice to the lessee.
20. In Baldev Singh and Ors. v. State of Himachal Pradesh and Ors. in Paragraph 5, Their Lordships expressed the view as follows:
5...It is a fact that the Orissa Act provides in clear terms a right of hearing whereas Section 256 of the Himachal Act makes no such provision but the settled position in law is that where exercise of a power results in civil consequences to citizens, unless the statute specifically rules out the application of natural justice, the rules of natural justice would apply. We accept the submission on behalf of the appellants that before the notified area was constituted in terms of Section 256 of the Act, the people of the locality should have been afforded an opportunity of being heard and the administrative decision by the State Government should have been taken after considering the views of the residents. Denial of such opportunity is not in consonance with the scheme of the Rule of Law governing our society. We must clarify that the hearing contemplated is not required to be oral and can be by inviting objections and disposing them of in a fair way.
Submission of Mr. Pathak, learned Counsel for the State is that use of the term 'lapse' rules out the application of natural justice since the consequence is automatic. Per contra, Mr. Dharmadhikari would contend that the term 'lapse' does not have its independent existence but has insegragable nexus with the term 'declaration'.
21. In Black's Law Dictionary Sixth Edition at Page 88 the term 'lapse' is described as under:
Lapse-- The termination or failure of a right or privilege through neglect to exercise it within some limit of time, or through failure of some contingency.
22. In Oxford Large Print Dictionary Third Edition at Page 456 meaning of 'lapse' has been given as under:
Lapse-- the termination of a privilege or a legal right through disuse.
23. In Black's Law Dictionary Sixth Edition at Page 409 the term 'declare' has been endowed the following meaning:
Declare-- To make known, manifest, or clear. To signify, to show in any manner either words or acts. To publish; to utter, to announce clearly some opinion or resolution.
24. In this context, I may refer with profit to the decision rendered in the case of Rash Lal Yadav v. State of Bihar , wherein the Apex Court observed as under:
What emerges from the above discussion is that unless the law expressly or by necessary implication excludes the application of the rule of natural justice, Courts will read the said requirement in enactments that are silent and insist on its application even in cases of administrative action having civil consequences. However, in this case, the High Court has, having regard to the legislative history, concluded that the deliberate omission of the proviso that existed in Sub-section (7) of Section 10 of the Ordinance (1980) while re-enacting the said sub-section in the Act, unmistakably reveals the legislature's intendment to exclude the rule of giving an opportunity to be heard before the exercise of power of removal. The legislative history leaves nothing to doubt that the legislature did not expect the State Government to seek the incumbent's explanation before exercising the power of removal under the said provision.
25. In State of U.P. v. Sheo Shankar Lal Srivastava , the Apex Court in Paragraph Nos. 13 and 14 has held as under:
13. It is true that the principle of natural justice is based on two pillars:-- (i) nobody shall be condemned without hearing; and (ii) nobody shall be a judge in his own cause.
14. It is, however, well known that the principles of natural justice can be excluded by a statute. They can also be waived.
26. In this context, I may refer with profit to the decision rendered in Ajit Kumar Nag v. General Manager (PJ), Indian Oil Corporation Ltd., Haldia and Ors. , wherein it has been held as under:
The principles of natural justice are not rigid or immutable and hence they cannot be imprisoned in a straitjacket. They must yield to and change with exigencies of situations. They must be confined within their limits and can not be allowed to run wild. While interpreting legal provisions, a Court of law can not be unmindful of the hard realities of life. The approach of the Court in dealing with such cases should be pragmatic rather than pedantic, realistic rather than doctrinaire, functional rather than formal and practical rather than "precedential". In certain circumstances, application of the principles of natural justice can be modified and even excluded. Both in England and in India, it is well established that where a right to a prior notice and an opportunity to be heard before an order is passed would obstruct in the taking of prompt action, such a right can be excluded. It can also be excluded where the nature of the action of to be taken, its object and purpose and the scheme of the relevant statutory provisions warrant its exclusion. The maxim audi alteram partem can not be invoked import of such maxim would have the effect of paralysing the administrative process or where the need for promptitude or the urgency so demands. The principles of natural justice have no application when the authority is of the opinion that it would be inexpedient to hold an enquiry and it would be against the interest of security of the Corporation to continue in employment the offender workman when serious acts were likely to affect the foundation of the institution.
(Quoted from the placitum)
27. The present case is to be seen whether the provisions do exclude the concept of natural justice by expression or implied terms. As is luminescent the term 'declaration' has a different connotation.
28. Mr. Dharmadhikari, learned Counsel for the petitioner has commended me to the decision rendered in the case of Smt C. Syamala v. Govt. of A.P. (1989) 2 ALT 52 (NRC), wherein it has been held that when it is the contention of the petitioner that she continued the mining activity without any break it cannot be said that the notice is unnecessary before declaring that the lease had lapsed. Therefore, an order passed in violation of principles of natural justice is a nullity.
29. The rule in question requires the Competent Authority to declare that the lease has lapsed. There has to be formation of an opinion. There has to be a kind of announcement. Had the word, 'lapse' been singularly used without having any nexus with declaration possibly the conception of natural justice would have been ostracised. But, a fertile one, there has to be declaration of lapse. The said words cannot be read in isolation. They have to be read in conjunction. Thus, there can be no shadow of doubt that doctrine of natural justice gets attracted to the case at hand.
30. I will be failing in duty, if I do not note the submission of Mr. Pathak that a show-cause notice was issued to the petitioner. The notice has not been brought on record. Nothing has been done to substantiate the said stand. The impugned order does not so reflect. In view of the obtaining factual matrix, the irresistible conclusion is that no opportunity of hearing was afforded to the petitioner before the impugned order came to be passed.
31. In view of the aforesaid analysis undoubtedly, the order came to be passed without affording an opportunity of being heard to the petitioner. Hence the impugned order contained in Annexure P-6 has to be lanceted and accordingly, it is so directed. Needless to emphasise, it would be open to the Competent Authority to proceed against the petitioner, if so advised, after affording an opportunity of being heard to him.
32. Resultantly, the writ petition is allowed to the extent indicated herein above. There shall be no order as to costs.