Andhra HC (Pre-Telangana)
Kurra Koteswara Rao, Vijayawada And ... vs The Dy. Director Of Mines And Geology, ... on 21 February, 1992
Equivalent citations: AIR1993AP108, AIR 1993 ANDHRA PRADESH 108, (1992) 2 ANDHWR 148
ORDER S. Parvatha Rao, J.
1. This batch of writ petitions turns upon the interpretation of Rule 12, and the validity of sub-rule (3) of Rule 12 and clause (xiv) of Rule 31 of the Andhra Pradesh Minor Mineral Concession Rules, 1966 (hereinafter referred to as 'the Rules') as amended by G.O.Ms. No. 528, Industries & Commerce (M-IV) Department, dated 7-12-1987 published in the Andhra Pradesh Gazette dated 31-12-1987.
2. Some of the petitioners in these writ petitions were granted mining leases under the Rules for quarrying Road Metal and/or Ballast and they applied for renewal of the same. Some others applied for fresh grant of mining leases for quarrying Road Metal and/ or Ballast. Some of them made the said applications whether for renewal or for fresh leases prior to the amendments effected by the said G.O.Ms. No. 528; others made the said applications subsequent to the said amendments. None of the petitioners are Waddaras or co-operative societies consisting exclusively of Waddaras. Their applications were rejected or not considered by the authorities concerned on the ground that under Rule 12 as amended by the said G.O. Ms. No. 528 they could hot be granted the mining leases. In some writ petitions, the petitioners ques^ tioned notices issued to them for showing cause as to why the mining leases already renewed or grannted to them should not be cancelled on the ground that they were granted contrary to the amended Rule 12; in some, the petitioners questioned the cancel lation of their mining leases pursuant to such notices.
3. The Rules are made by the Government of Andhra Pradesh in exercise of the powers conferred on it by Section 15 of the Mines and Minerals (Regulation and Development) Act, 1957 (hereinafter referred to as 'the Act') enacted by the Parliament. They regulate the grant of mining leases in respect of minor minerals in the State of Andhra Pradesh. Prior to the amendment effected by the said G.O.Ms. No. 528, the relevant portion of Rule 12 was as follows:--
"12. Grant of lease:-- (1) A quarry lease may be granted by auctioning the areas notified under Rule 9-B and in respect of other areas subject to provision of sub-rule (2) and sub-rule (2A) on application and each such application for grant of quarry lease shall be accompanied by a treasury or bank chaltan for rupees one hundred in token of the remittance towards fees.
(2) Whenever more than one application are received for grant of a quarry lease, the Deputy Director shall dispose of the applications in order of preference specified below:--
(i) Applications of Government Department and Government Corporations and Companies;
(ii) Applications of Labour Contract Cooperative Societies;
(iii) Applications of unemployed persons who possess any recognised qualification in Geology, Geophysics, or Mining Engineering or any other allied subjects;
(iv) Other applications;
xxxxx (3) In cases where the quarry lease holders fail to apply for renewal of the lease of the areas within ninety days before the expiry of the lease held by them, as required under sub-rule (2) of Rule 13, fresh application for grant of quarry lease, in respect of those areas, will be entertained thirty days before the expiry of the lease."
Prior to the said amendment clause (xiv) of Rule 31 was as follows:--
"If the lessee to whom a quarry lease is granted has duly observed all the conditions of his lease or permit and given ninety days previous notice in writing to the Deputy Director, requesting grant of the renewal of the lease or permit, the Deputy Director shall, except for the sand quarries grant renewals for not more than two times to the period of quarry lease."
After the amendment effected by the said G.O.Ms. No. 528, Rule 12 and clause (xiv) of Rule 31, to the extent they are relevant, are as follows:--
"12. (1) A quarry lease may be granted subject to the provision of sub-rule (2) or (3) as the case may be on application and each such application for grant of quarry lease shall be accompanied by a treasury or bank challan for Rs. 100/- in token of the remittance towards fee.
(2) Wherever more than one application are received for grant of a quarry lease, the Deputy Director shall dispose of the applications in order to preference specified below:--
(i) Applications of Government Department and Government Corporations and Companies;
(ii) Applications of Labour Contract Cooperative Societies;
(iii) Applications of unemployed persons who possess any recognised qualification in Geology, Geophysics, or Mining Engineering or any other allied subjects;
(iv) Other applications.
(3) The quarry lease applications for Minor Minerals under item No. I of Schedule I under Rule 10 shall be disposed of by the Deputy Director in the order specified below:
(i) Applications of Co-operative Societies consisting exclusively of Professional/Traditional Stone Cutters (Waddaras, etc.) who work either by the manual labour of their own and their family members or by use of machinery.
(ii) Applications of individual Professional/Traditional Stone Cutters (Waddaras, etc.).
(iii) Applications of Government Departments and Government Corporations and Government Companies provided they directly undertaken quarrying departmental-ly without sub-contracting the work to others.
(4) In cases where the quarry leases holders fail to apply for renewal of the lease the areas within ninety days before the expiry of the lease held by them, as required under sub-rule(2) of Rule 13, fresh applications for grant of quarry lease, in respect of those areas, will be entertained 30 days before the expiry of the lease.
Clause (xiv) of Rule 31:-- If the lessee to whom a quarry lease is granted has duly pbserved all the conditions of his lease or permit and given ninety days previous notice in writing to the Deputy Director, requesting grant of the renewal of the lease or permit, the Deputy Director shall except for the sand quarries grant renewals for not more than two times to the period of quarry lease, provided they fall within the category of applicants and areas under sub-rule (2) or sub-rule (3) of Rule 12 as the case may be."
Item No. 1 of Schedule-I under Rule 10 referred to in sub-rule (3) of Rule 12 is "building stone including stone used for Road Metal, Ballast, concrete and other construction purpose".
4. The petitioners state that prior to the amendments effected by the said G.O.Ms. No. 528 dated 7-12-1987, all the citizens were eligible for grant of a quarry lease in the order of preference specified in-sub-rule (2) of Rule 12 and that after the said amendments, all others except those specified in sub-rule (3) of Rule 12 inserted by the said G.O.Ms. No. 528 are denied the opportunity of getting the quarry leases in respect of the minor minerals specified therein. They contend that there is no reasonable classification for discriminating all others like the petitioners and for totally excluding them and making them ineligible for the grant of quarry leases in respect of the said minor minerals. They submit that the said G.O.Ms. No. 528 is violative of Articles 14, 19(1)(g) and 21 of the Constitution of India and that the said sub-rule (3) inserted by the said G.O. is unconstitutional and arbitrary. The petitioners submit that there are not enough number of Waddaras i.e., professional/traditional stone cutters in some districts like Krishna district and that therefore workers were being brought from other States for quarrying purpose. Even if Waddaras are to be given preference for their social uplift, in order to achieve the said goal the State Government has absolutely no authority to deny totally the petitioners' right to do business. Some of the petitioners further state that they had invested large sums of money in setting up stone crushers after obtaining quarry leases with the expectation that the said leases would be renewed and contend that denial of extension of the said leases on the ground that Rule 12 was amended by the said G.O. is arbitrary and violative of Article 14. They submit that they should have been at least included as the last category in the order of preference in sub-rule (3) of the amended Rule 12 instead of arbitrarily excluding them totally from consideration even when there are no other applicants for the quarries in question. Some of the petitioners who have been in the quarrying business for a number of years contend that they are also professional stone cutters even though they are not Waddaras and as such entitled to be granted renewal of the leases. Some of the petitioners who applied for renewal of quarry leases or for fresh grant of quarry leases prior to the coming into force of the amended Rule 12 raise an additional contention that the said. amendment cannot be given a retrospective effect and that their applications should be considered on the basis of Rule 12 as in force at the time when they submitted the applications.
5. In most of these Writ Petitions, interim directions were granted by this Court directing the respondents to consider the applications of the petitioners for grant or renewal of quarry leases without reference to sub-rule (3) of the amended Rule 12. In Writ Petition No. 10079 of 1988 the petitioner sought directions to permit him to carry on quarrying of stone ballast and road metal in the land in which he was quarrying under a lease which was coming to an end and in respect of which he applied for renewal and interim directions were granted by this Court on 7-7-1988 as prayed for. Counter in this Writ Petition was filed by the Joint Director of Mines and Geology on 19-9-1990. In Writ Petition No. 13865 of 1988 no interim direction was granted when the Writ Petition was admitted on 14-9-1988 as the Government Pleader took time for counter, and on 3-10-1988, as no counter was filed by then, the respondents therein were directed to consider the application of the petitioner for renewal without reference to G.O.Ms. No. 528. No counter was filed in this Writ Petition. In Writ Petition No. 14760 of 1989 the 1st petitioner is the Krishna District Stone Crusher, Owners and Quarry Contractors Association, Vijaya-wada and interim direction was granted on 19-10-1989 directing the Deputy Director of Mines and Geology at Kakinada "to grant the quarry leases in favour of the members of the 1st petitioner-association and the 2nd petitioner without reference to G.O.Ms. No. 528" dated 7-12-1987 pending the said Writ Petition.
6. No counter was filed in any of the Writ Petitions by the Government of Andhra Pradesh explaining why it effected the impugned amendments, In the counter dated 18-4-1990 filed in-Writ Petition No. 14760 of 1989 on 27-4-1991 by the Joint Director of Mines and Geology wherein the 1st petitioner is the Krishna District Stone Crusher, Owners and Quarry Contractors Association, Vijaya-wada, the only reason given for the said amendments is as follows :--
"I submit that the Government of A. P. has amended and inserted the sub-rule (3) of Rule 12 of APMMC Rules, 1966 for considering the grant of quarry leases to the Cooperative Labour Contract Co-operative Societies/Waddaras in order to uplift the weaker sections."
In the counter-affidvit filed by. the Joint Director of Mines and Geology in Writ Petition No. 10079 of 1988 also the reason given for the impugned amendment is as follows :--
"The State Government have taken a policy decision to up lift the professional stone cutter/Waddaras and issued amendment orders. Therefore, the orders issued in G.O.Ms. No. 528, Ind. & Com., dt. 7-12-87 are not in violation of the Constitution of India. Even though the petitioner was granted the original lease in the year 1983, he is not entitled for renewal after 6-7-88 in view of the orders issued in the said G.O."
It is further clarified therein that pursuant to the said G.O. the Director of Mines and Geology issued instructions in Memo No.2064/KI/87 dated 30-5-1988 to all the Deputy Directors of Mines and Geology and Assistant Directors of Mines and Geology not to grant any quarry leases to others except those mentioned in the said G.O.Ms. No. 528. In the counter-affidavit dated 20-3-1991 filed by the Assistant Director of Mines and Geology, Vijayawada in Writ Petition No. 3695 of 1991, the justification for the impugned amendments is in the following' terms:--
"Thus the amended provision of clause 12 contemplates that not only the Waddara community but also others who work by their manual labour or by their own and with their family members, who are professional lists in the field of stone cutting. Therefore the G.O.Ms. No. 528 is not bar to non-Waddaras who are professional stone cutters. It is submitted that the present scheme is evolved to see that this section of the Societies which wholly depending upon stone cutting as their livelihood and therefore the Government thought it fit to safeguard the interests of the said section of the Societies."
7. In some cases, where quarry leases were granted in respect of the minor minerals covered by sub-rule (3) of the amended Rule 12 after the amendment came into force, notices given to the petitioners to show-cause why their leases should not be cancelled on the ground that the petitioners were not Waddaras, were questioned. Writ Petitions Nos. 14589 and 14696 of 1988 are two such. In the counter-affidavit filed in Writ Petition No. 14589 of 1988 by the Deputy Director of Mines and Geology it is stated that the cancellation was proposed in order to preserve the areas because the mineral fell under Item No. 1 of Rule 10 for the benefit of professional stone cutters in addition to the concessions already given under G.O.Ms. No. 19 dated 6-1-1971, G.O.Ms. No. 1052 dated 21-11-1975 and G.O.Ms. No. 29 dated 12-1-1976. In G.O.Ms. No. 19, Ind, and Com. dated 6-1-1971 Waddars were exempted from the levy of seigniorage fees as well as the requirements of obtaining lease or permit for working any quarries of rough stone, building stone, road metal, ballast, grit, Murram and napa slabs. Under G.O.Ms. No. 1052, Ind. & Com., (Mines 1), dated 21-11-1975 the Government directed that genuine co-operative societies consisting only of Waddars should enjoy the benefit conferred in the G.O.Ms. No. 19,dated 6-1-1971 so long as the members work by their manual labour. In the counter-affidavit filed in Writ Petition No, 14696 of 1988 it is stated that "it is the policy of the Government that the minerals under item No. 1 of Schedule-l of Rule 10 of APMMC Rules, 1966 is kept and earmarked for the benefit of the persons mentioned in sub-rule (3) of Rule 12". In Writ Petitions Nos. 14587 and 14589 of 1988 some persons claiming to be Waddaras filed petitions for impleading them as respondents in the said Writ Petitions claiming that they made representations to the authorities concerned for the grant of mining leases for quarrying the minor mineral of road metal etc., in the areas covered by the mining leases granted to the petitioners in the said Writ Petitions and that they should be granted mining leases in preference to the petitioners therein after cancellation of the mining leases granted to the petitioners.
8. From what is stated in the various counter-affidavits filed on behalf of the respondents in these Writ Petitions, it is clear that the respondents understand the amended Rule 12 as restricting the grant of mining leases in respect of the minor minerals specified in Item No, 1 of Schedule-I under Rule 10 to the three categories of applicants mentioned in sub-rule (3) of the amended Rule 12 i.e., (i) Co-operative Societies consisting exclusively of professional/traditional stone cutters (Waddaras etc.); (ii) individual professional/traditional stone cutters (Waddaras etc.); and (iii) Government departments, Government Corporations and Government Companies and that all others are ineligible for the grant of mining leases in respect of the said minor minerals. It is on that basis that applications of the petitioners in these Writ Petitions were not considered or were rejected. The introduction of the impugned sub-rule (3) of Rule 12 is said to be due to the policy decision of the State Government to uplift the professional stone cutters i.e., Waddaras as they constitute a weaker section of the society and wholly depend upon stone cutting as their livelihood and that, therefore, in order to safeguard their interests, the quarrying of the said minor minerals is reserved for them.
9. On behalf of the petitioners, it is argued that on a fair and reasonable interpretation of sub-rules (1), (2) and (3) of Rule 12 as amended, it does not follow that grant of mining leases in respect of the minor minerals in question to persons other than those falling within the three categories specified in sub-rule (3) is totally prohibited even when there are no applications from any of those falling within the said three categories. It is sub-mitted that the said sub-rule (3) provides only for the order of preference to be given to the persons falling within the said three categories. It is also submitted that total prohibition of grant of mining leases to any category of persons is not within the powers of the State Government under Section 15 of the Act on the basis that the State Government is conferred power to make rules only for regulating the grant of quarry leases etc., in respect of minor minerals and that the expression 'regulating' does not take in totally prohibiting the grant of the said mining leases etc. It is also contended that if the object of introducing the new sub-rule (3) is only to help the Waddaras and provide for their economic upliftment it is not necessary to totally prohibit the grant of mining leases to other sections of the society even when there are no applications from any Waddaras and that the total exclusion of others even in such cases would go beyond the avowed object and purpose of the new sub-rule (3) and if the new sub-rule (3) is interpreted as excluding the grant of mining leases in respect of the said minor minerals to all others it will be liable to be struck down as arbitrary and unreasonable and therefore violative of Articles 14 and 19(l)(g) of the Constitution of India. An extreme contention is also advanced by Mr. P. Rajagopala Rao, counsel for some of the petitioners that sub-rules (3) and (2) of the amended Rule 12 conflict with each other and cannot co-exist; it is his contention that sub-rule (2) is not made subject to sub-rule (3) and in the absence of express exclusion both the sub-rules operate in the same field and it is not possible to reconcile the two. However, it is not argued on behalf of the petitioners by any of the learned Counsel appearing for them that Waddaras and other traditional stone cutters are not weaker sections of the society or that giving preference to them over others is discriminatory or otherwise unconstitutional. Another contention advanced is that the impugned 'amendments have no retrospective operation and that applications for renewal or fresh grant of mining leases made in respect of the said minor minerals prior to introduction of the said amendments have to be disposed of applying the unamended Rule 12 as in force at the time when the said applications were made. In that connection it is also submitted that the petitioners who were granted the mining leases earlier were entitled to two renewals and that such a right is a vested right which cannot be taken away by the impugned amendments.
10. The learned Government Pleader appearing for the respondents submits that under Rule 12 as amended by the said G.O. Ms. No. 528 the petitioners are not entitled to the grant of mining leases in respect of the minor minerals specified in Item No. 1 of Schedule-I of Rule 10 as they are not professional/ traditional stone cutters; and by virtue of the proviso introduced to Clause 14 of Rule 31 under the amendments in question, they are also not entitled to renewal of mining leases. He also submits that unde"r Section 15 of the Act, the Government can totally prohibit the grant of mining leases and that the power to regulate comprehends within its scope the power to prohibit. He also submits that as the minor minerals vest in the State nobody has a fundamental right to quarry minor minerals and that grant of mining leases in respect of minor minerals cannot be claimed as of right. He also submits that no retrospective operation was given to the amendments in question and that the consideration of the applications of the petitioners as per the amendments in question after they have come into force does not amount to giving retrospective effect to the said amendments. According to him, after the said amendments came into force, the authorities concerned would have to consider the applications of the petitioners only as per the amended Rules. In support of his contentions, the learned Government Pleader relies on the decision of the Supreme Court in State of Tamil Nadu v. M/s. Hind Stone and submits that the said decision is a complete answer to all the contentions raised on behalf of the petitioners.
11. In State of Tamil Nadu v. M/s. Hind Stone, the Supreme Court was considering the validity of Rule 8-C of the Tamil Nadu Minor Mineral Concession Rules, 1959. The said Rule 8-C was introduced on 2-12-1977 by the Government of Tamil Nadu in exercise of its powers under Section 15 of the Act and reads as follows:--
"8-C. Lease of quarries in respect of black granite to Government Corporation, etc. (1) Notwithstanding anything to the contrary contained in these rules, on and from 7th December 1977 no lease for quarrying black granite shall be granted to private persons.
(2) The State Government themselves may . engage in quarrying black granite or grant leases for quarrying black granite in favour of any corporation wholly owned by the State Government.
Provided that in respect of any land belonging to any private person, the consent of such person shall be obtained for such quarrying or lease."
The Madras High Court struck down the said Rule 8-C on the ground that it exceeded the rule making power given to the State Government under Section 15 which, it Was said, was only to regulate and not to prohibit the grant of mining leases, and directed all the applications of the private persons to be disposed of without reference to Rule 8-C. The Madras High Court held that it was not open to the Government to keep the applications pending for a long time and then to dispose them of on the basis of a rule which had come into force later. Before the Supreme Court it was contended on behalf of the Government of Tamil Nadu that the Madras High Court failed to notice that the minerals belonged to the Government and that the applicants had no vested or indefeasible right to obtain a lease or a renewal to quarry the minerals and that there were good reasons for banning the grant of leases to quarry black granite to private parties and in the light of those reasons the Government could not be compelled to grant leases which would result in the destruction of the mineral resources of the country. The Supreme Court did not agree with the Madras High Court and held that the State Government had not exceeded the rule making power under Section 15 of the Act in banning leases for quarrying black granite in favour of private parties and in stipulating that the State Government themselves may engage in quarrying black granite or grant leases for quarrying black granite in favour of any corporation wholly owned by the State Government. In so holding, the Supreme Court took into consideration the various reasons that prompted the State Government to make the said Rule 8-C which were explained at great length in the common counter affidavit filed on behalf of the State Government and passages from it were extracted in its judgment. It was explained therein that it was found that there were several cases where lessees who obtained the black granite areas on lease by auction were not quarrying in a systematic and planned manner taking into consideration the welfare and safety measures of the workers as well as the conservation of minerals, and that though several attempts were made by the State Government by introducing various amendments to control the abuse it was found that large number of lessees were engaged in mining without proper technical guidance and safety measures for workers, and that the lessees were only interested in obtaining the maximum profit in the shortest period of time without taking into consideration the proper mining and development of the mineral, and that it was found that excepting in a very few cases none of the lessees had set up proper industries or developed systematic mining of the quarries, and that exports continued to be mainly on the raw black granite materials and not cut and polished slabs, and in view of such conditions existing, the Government decided that there should be no further grant of lease to private entrepreneurs for black granite. In view of the elaborate reasons given by the Government of Tamil Nadu, the Supreme Court was satisfied that the said Rule 8-C was made in bona fide exercise of the rule making power and that State monopoly under the circumstances was not bad. Dealing with the contention that Section 15 of the Act authorised making of rules for regulating the grant of mining leases and not for prohibiting them as the said Rule 8-C sought to do, and that therefore, Rule 8-C was ultra vires Section 15, the Supreme Court enquired into the connotation of the word 'regulation' and referred to the various decisions on that aspect and held as follows "In modern statutes concerned as they are with economic and social activities, 'regulation' must, of necessity, receive so wide an interpretation that in certain situations, it must exclude competition to the public sector from the private sector.....
Each case, it was said, must be judged on its own facts and in its own setting of time and circumstances and it might be that in regard to some economic activities and at some stage of social development, prohibition with a view to State monopoly was the only practical and reasonable manner of regulation. The statute with which we are concerned, the Mines and Minerals (Development and Regulation) Act, is aimed, as we have already said more than once, at the conservation and the prudent and discriminating exploitation of minerals. Surely, in the case of a scarce mineral, not to permit exploitation by the State or its agency and to prohibit exploitation by private agencies is the most effective method of conservation and prudent exploitation. If you want to conserve for the future, you must prohibit in the present. We have no doubt that the prohibiting of leases in certain cases is part of the regulation contemplated by Section 15 of the Act."
Rejecting the contention that it was not open to the Government to keep applications for the grant of leases and applications for renewal pending for a long time and then to reject them on the basis of Rule 8-C notwithstanding the fact that the applications had been made long prior to the date on which Rule 8-C came into force, the Supreme Court held as follows :-
"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 that connection, the Supreme Court observed :
"It must be remembered that an application for the renewal of a lease is, in essence an application for the grant of a lease for a fresh period. We are, therefore, of the view that Rule 8C is attracted in considering applications for renewal ofleases also."
12. In view of the judgment of the Supreme Court in M/s. Hind Stone case (supra), it is not possible to accept the contention of the petitioners who made their applications for renewal or for grant of the mining leases prior to the said amendments in question, that their applications should be considered applying the Rules in force on the date when the applications were made. It is also not possible to accept the contention advanced on behalf of the petitioners that 'regulation' under Section 15 of the Act does not take in total prohibition of the grant of mining leases to private parties in respect of any particular minor mineral. Total prohibition of mining can be imposed for conserving a scarce mineral in national interest; private parties can be excluded for prudent exploitation of a mineral by State or its agencies i.e., in the public sector -- the validity of the total prohibition or the total exclusion of private parties has to be judged on the facts and circumstances obtained in each case. But that question does not arise in the present writ petitions, because under the amended Rule 12, there is no total prohibition of the grant of mining leases to private parties in respect of the minor mineral in question i.e., building stone, as in sub-rule (1) of Rule 8-C of the Tamil Nadu Minor Mineral Concession Rules, which provided that "notwithstanding anything to the contrary contained in these rules, on and from 7th December, 1977 no lease for quarrying black granite shall be granted to private persons". "Building stone used for road metal, ballast, concrete and other construction purposes" is not the same thing as black granite and it is not the case of the respondents that the minor mineral 'building stone' has to be conserved or that it has to be quarried in a systematic and planned manner. The Government or the Director of Mines and Geology have not filed counter-affidavits mentioning the reasons for making the amendments in question. Referring to the amendments, the Director of Mines and Geology in his Memo. No. 2064/K1/87 dated 30-5-1988 states:
"From the foregoing amendment, only the Waddars and their societies apart from Government departments are to be granted fresh leases as well as renewal of quarry lease for the minor minerals specified in item 1, under Schedule I under rule 10 APMMC Rules, 1966.
XXXXX XXXXX All the Deputy Directors of Mines and Geology and Assistant Directors of Mines and Geology are, therefore, hereby instructed to adhere to the orders issued in the G.O. cited (G.O. Ms. No. 528) scrupulously and not to grant quarry teases to other than those mentioned in the G.O. in respect of the minor mineral specified ....."
From the counter-affidavits filed by the other respondents in these writ petitions, it is obvious that the only object behind the amendments introduced by the said G.O. Ms. No. 528 is to give preference to Waddaras i.e. professional/traditional stone cutters, because the State Government had taken a policy decision to uplift them. Thus the scope, operation and object of the amendments to Rule 12 impugned in these writ petitions are totally different from those of the said Rule 8-C considered by the Supreme Court in M/ s. Hind Stone's case, (supra). The facts and circumstances in M/s, Hind Stone's case, which prevailed on the Supreme Court in upholding the said rule 8-C, are totally absent in the matters before us and, therefore, we are of the view that the said decision of the Supreme Court is not of any assistance to the learned Government Pleader in repelling the substantial contention raised by the petitioners herein.
13. The substantial contention raised by the learned counsel for the petitioners is that in view of the avowed object of the impugned amendments being uplift of Waddaras, exclusion of all others even when there are no applications from Waddaras or cooperative societies consisting of Waddaras, goes beyond the object of the amendments and is arbitrary and violative of Article 14 of the Constitution of India, it is contended that in the absence of express exclusion, applications from others like the petitioners, will also have to be considered when there are no applications from any one of the three categories mentioned in sub-rule (3). In support of this contention, they rely upon the judgment of a Division Bench of this Court in R. V. Satya-narayana v. State of Andhra Pradesh, (1982) 2 Andh WR 59. In opposition, the learned Government Pleader contends that such an exclusion has to be inferred in view of the silence as regards 'other applications' in sub-rule (3) of Rule 12 as amended by the said G.O. Ms. No. 528. He also relies on a recent judgment of a Division Bench of this Court dated 28-12-1990 in Ahmed Ali Khan v. Govt. of Andhra Pradesh (Writ Appeal No. 1311/ 90 and batch).
14. In Ahmed Ali Khan's case, a Division Bench of this Court held that the action of the authorities concerned in entrusting the distribution of essential commodities in the tribal areas to the Girijan Cooperative Corporation, which is wholly owned by the State Government, was not arbitrary and discriminatory. In so holding, this Court took into consideration the fact that the Government examined carefully the public distribution system in the tribal areas and found that although Girijan Cooperative Corporation had a wide network of its own, several fair price shops in the tribal areas were in the hands of private dealers resulting in improper distribution and, therefore, the Government decided to streamline the functioning of public distribution system in the tribal areas by institutionalising the entire network through Girijan Cooperative Corporation in the interest of the tribals. In so holding, this Court also took into consideration the provisions of the A. P. Scheduled Commodities (Regulation of Distribution by Card System) Order, 1973, which was made in exercise o$-powers under Section 3 of the Essential Commodities Act, 19S5, whereunder it was open to the Government to appoint retail dealers or agents to distribute the essential commodities on their behalf or to take over the scheme of distribution of essential commodities by themselves or to entrust the distribution of essential commodities through a shop set up by the Government or State owned undertaking or a Corporation wholly owned by the Government. This Court also relied on the judgments of the Supreme'Court in Satkari Sasta Anaj Vikreta Sangh v. Slate of M. P., and M. P. Ration Vikreta Sangh Society v. State of M. P., .
15. In the case of Savkari Sasta Anaj Vikreta Sangh (supra), the Supreme Court was dealing with the provisions of the Madhya Pradesh Foodstuffs (Civil Supply Distribution) Scheme, 1981 whereunder in the allotment of fair price shops, cooperative societies were given first preference and if there was a cooperative society in an area and if such society expressed its unwillingness to run the fair price shop, the fair price shop could be allotted to other persons. The Supreme Court repelled the contention that the Scheme was discriminatory inasmuch as preference was to be shown to the cooperative societies in the matter of allotment of fair price shops and thus a monopoly was sought to be created in favour of cooperative societies. The Supreme Court held that in the context of the said scheme, 'cooperative society' was meant to include consumers' cooperative society only and no other, and proceeded on the basis that preference proposed to be given by the Scheme in the matter of allotment of fair price shops was to consumers' cooperative societies only. It is to be noticed that under the said Scheme, only preference was given to consumers* cooperative societies and there was no total exclusion of all others. In upholding the said preference given to the cooperative societies in the matter of allotment of fair price shops, the Supreme Court took into consideration the circumstances under which the said Scheme was introduced replacing the earlier system under which retailers were appointed for the purpose of distributing foodstuffs which "had deteriorated and become completely unworkable and rotten to a breaking point" and "an absolute and thorough overhaul of the system had become compulsive if the population of Madhya Pradesh were to receive a regular supply of their rations", and that Madhya Pradesh Government came to the conclusion that distribution of foodstuffs through cooperative societies (consumers' cooperative societies) would be the best method of distribution by which the goods could be delivered to the consumers. The Supreme Court also observed :
"No one can doubt the positive and progressive role which cooperative societies are expected to and do play in the economy of our country and, most surely, in the fair and effective distribution of essential articles of food. There certainly was a reasonable classification and a nexus with the object intended to be achieved, which was a fair and assured supply of rations to the consumer. The fundamental right of traders like the petitioners to carry on business in foodstuffs was in no way affected.....No one could claim a right to run a fair price shop as an agent of the Government. All that he could claim was a right to be considered to be appointed as an agent of the Government to run a fair price shop. If the Government took a policy decision to prefer cooperative societies for appointment as their agents to run fair price shops, in the light of the frustrating and unfortunate experience gathered in the last two decades, we do not see how we can possibly hold that there was any discrimi nation."
16. In the case of M. P. Ration Vikreta Sangh Society, (supra) also, the Supreme Court was dealing with the Madhya Pradesh Foodstuffs (Civil Supply Distribution) Scheme, 1981 for running of Government fair price shops by agents to be appointed under it giving preference to cooperative societies, by replacing the earlier scheme of running such fair price shops ' through retail dealers. This time, the said new Scheme was sought to be set aside on the ground that it was arbitrary, irrational and irrelevant, relying on the Air Port Authority case, . While repulsing the said attack and upholding the new Scheme, the Supreme Court observed as follows (paras 7 and 8, at p. 2004 of AIR):
"It is true that according to the rule laid down in the Airport Authority case, , if governmental action disclosed arbitrariness, it would be liable to be invalidated as offending against Article 14. There can be no quarrel with the principles laid down in that case, but the difficulty is about the application of those principles to the facts and circumstances of the present case. We have given a brief outline of the impugned scheme and it cannot be said that it suffers from arbitrariness or is irrational to the object sought to be achieved. The State Government after due deliberation, took a responsible decision to run the fair price shops directly, being satisfied that it was necessary so to do with the object of distributing foodstuffs at fair prices to the consumers, after taking into consideration the fact that the earlier experiment of running these shops through retail dealers was an utter failure..... The action of the State Government in entrusting the distribution of foodstuffs to consumers' cooperative societies, though drastic, was an inevitable step taken in the interests of the general public. The State Government was not bound to give the fair price shops to the retail dealers under a Government scheme. The governmental action in giving preference to consumers' cooperative societies cannot be construed to be arbitrary, irrational or irrelevant.
.....
.....
Consumers' cooperative societies form a distinct class by themselves. Benefits and concessions granted to them ultimately bene-fit persons of small means and promote social justice in accordance with the directive principles. There is an intelligible differentia between the retail dealers who are nothing but traders and consumers' cooperative societies. The position would have been different there was a monopoly created in favour of the latter. The scheme only envisages a rule of preference. The formulation of the scheme does not exclude the retail traders from making an application for appointment as agents....."
17. From the above, it is clear that what the Supreme Court upheld was only the preference given to consumers' cooperative societies in the allotment of fair price shops in view of the conditions obtained in Madhya Pradesh State and the failure of earlier scheme in ensuring equitable distribution of food-stuffs at fair prices. As observed by the Supreme Court, there was no total exclusion of the retail traders under the new scheme upheld by the Supreme Court; on the other hand, it is expressly provided that in the event of a cooperative society in an area expressing its inability in writing to run a fair price shop, or if there was no such cooperative society in existence in such an area, the fair price shop may be allotted to others. It is also to be noticed that the Supreme Court cautiously observed that "the position would have been different if there was a monopoly created in favour of the latter" i.e., consumers' cooper-tive societies.
In Ahmed Ali Khan's case (W. A. No. 1311/90 and batch), as already stated above, this Court relied on the above referred two decisions of the Supreme Court and while rejecting the contention of the petitioners therein that allotting fair price shops hitherto run by them to Girijan Cooperative Corporation in pursuance of circular dated 10-8-1988 was bad, held as follows:
"In the instant case as could be seen from the Circular CCS, Ref. No. PDS. 4/1820. 86 dated 17-6-1986 the Government have examined carefully the public distribution system in the tribal areas and that although Girijan Cooperative Corporation has a wide network of its own, several fair price shops in the tribal areas are in the hands of private dealers resulting in improper distribution- it was decided to streamline the functioning of the public distribution system in tribal areas by institutionalising the entire net work through Girijan Cooperative Corporation,-' Thus, it is evident that in the interests of the tribals that the Government has taken a policy decision to distribute the essential commodities in the tribal areas through Girijan Cooperative Corporation and accordingly issued a circular."
In so holding, this Court took into consideration the fact that Girijan Cooperative Corporation was wholly owned by the State Government and that under the first proviso to sub-clause (1) of clause (3) of the A. P. Scheduled Commodities (Regulation of Distribution by Card System) Order, 1973, any authorisation of the retail dealer shall cease to be valid when the Government undertakes the. running of the authorised fair price shops either by themselves, or through a Government undertaking or a Corporation wholly owned by the State Government in the Government scheme, and that the validity of the said proviso was earlier upheld by this Court in Writ Petition No. 8983 of 1984 and batch byjudgment dated 17-12-1984. It has to be kept in view that this Court was dealing with the entrustment of distribution of essential commodities through fair price shops set up by the Government in the tribal areas and that no one has a right to run a fair price shop. It is under those circumstances and on the facts of that case that this Court held that it could not be said that the policy decision of the Government to entrust distribution of essential commodities in the tribal areas through Girijan Cooperative Corporation was arbitrary and discriminatory and offended Articles 14 and 300-A of the Constitution of India. We are, therefore, of the view that Ahmed Ali Khan's case is of no assistance to the respondents.
18. In Ahmed Ali Khan's case, the decision of another Division Bench of this Court in R. V. Satyanarayana v. State of A. P., (1982 (2) Andh WR 59) (supra), wherein it was held that reservation of all the posts of Sarpanchas in scheduled areas to members of Scheduled Tribes was held to be ultra vires, was distinguished as a case of reservation of an elective post of Sarpanch and, therefore, had no application to the facts of that case. In R. V. Satyanarayana's case, this Court held as follows:
"Abdul Latif v. State, , is a case dealing with Articles 15(1) and 15(4) of the Constitution. It was held that the order of the State Government in the matter of giving preference to Scheduled Castes and Scheduled Tribes in the settlement of excise shops, was ultra vires as the effect of the order was not merely to give preference to candidates belonging to Scheduled Castes and Scheduled Tribes but to exclude candidates from all other communities in cases where there was a single candidate belonging to Scheduled Caste or Scheduled Tribe. It was held that Article 15(4) is not an independent or substantive enactment but it is an exception or a qualification to the main guarantee under Article 15(1) of the Constitution. Tt is, therefore, not permissible to interpret Article 15(4) of the Constitution in such a way as to destroy or nullify the meaning of guarantee under Article 15(1) of the Constitution. It is because the interest of the society as a whole is served by promoting the advancement of the weaker elements of that society that Article 15(4) of the Constitution authorises special provision to be made. But if a provision which is in the nature of an exception completely excludes the rest of the society that clearly is outside the scope of Article 15(4) of the Constitution. We are in agreement with the decision and applying the same principle, we are of the view that that part of section 12 of the Act which directs that the Commissioner shall reserve the post of Sarpanch in all the villages in the scheduled areas to the Scheduled Tribes is ulira vires. In this connection reference may also be made to the observation of the Supreme Court in paragraph 37 of its judgment in A. B. S. K. Sangh (Rly) v. Union of India, , that "the same observation which applies to Article 16 will hold good for the sub-Articles of Article 15."
We cannot ignore the principle approved and applied by the Division Bench of this Court in Ahmed Ali Khan's case that a provision intended for providing opportunities to weaker eiements of society for their advancement in a particular field cannot arbitrarily exclude the rest of the society from that field. This principle gains support from the decisions of the Supreme Court in the cases of Sarkari Sasta Anaj Vikreta Sangh, and M.P. Ration Vikreta Sangh Society, referred to earlier, wherein it is observed that even in the case of running of a fair price shop as an agent of the Government, "the right to be considered to be appointed as an agent of the Government to run a fair price shop" cannot be denied to others while providing for a rule of preference for some. The Supreme Court held in those cases that the preference given to co-operative societies was not arbitrary on the facts and circumstances in those cases, and observed that the scheme in question in those cases only envisaged a rule of preference and did not exclude the retail traders from making an application for appointment as agents and that there were intelligible differentia between the retail dealers and consumers co-operative societies.
19. In the present Writ Petitions, giving preference to the applications made by the co-operative societies consisting exclusively of Waddaras and to applications of individual Waddaras in their economic interest is not questioned. The petitioners do not dispute the fact that Waddaras constitute weaker section of the society. Therefore, in view of Article 46 of the Constitution of India, it is not possible for them to question the preference given to Waddaras for their economic advancement. A Constitution Bench of the Supreme Court observed recently in Marri Chandra v. Dean, S. G. S. Medical College, as follows:--
"It is necessary to take into account de facto inequalities which exist in the society and to take affirmative action by way of giving preference and reservation to the socially and economically disadvantaged persons or inflicting handicaps on those more advantageously placed, in order to bring about real equality. Such affirmative action though apparently discriminatory is calculated to produce equality on a broader basis by eliminating de facto inequalities and placing the weaker sections of the community on a footing of equality with the stronger and more powerful sections so that each member of the community, whatever is his birth, occupation or social position may enjoy equal opportunity of using to the full his natural endowments of physique, of character and of intelligence.".
The petitioners do not also question the extent of preference given. Whether the view of the Patna High Court in Abdul Latif's case, to the effect that giving preference to some on every occasion without exception results in excluding others totally is correct or not need not be enquired into in the present matters -- that question depends on the facts of each case and may require, and depends on, a pragmatic appraisal of the relevant facts of the situation.
20. In the light of the above discussion and on the facts of the present matter, we are of the view that exclusion of all others like the petitioners herein from the grant of quarry leases in respect of the minor minerals specified in sub-rule (3) of the amended Rule 12 will be arbitrary and unreasonable and unrelated to the avowed object which is the upliftment of the professional/traditional stone cutters i.e., Waddaras etc.
21. The rejection of the applications of some of the petitioners for the grant of renewal of the mining leases in respect of the specified minor minerals is sought to be justified on the basis of the Memo dated 30-5-1988 issued by (he Director of Mines and Geology, wherein it is pointed out that in view of the amendment to Rule 12 "only the Waddaras and their societies apart from the Government departments are to be granted fresh leases as well as the renewal of quarry lease" for the specified minor minerals. The said Memo proceeds on the basis of the understanding of the Director of Mines and Geology of the said amendments. However, it is to be noticed that sub-rule (1) of the amended Rule 12 provides that "a quarry lease may be granted subject to the provision of sub-rule (2) or (3) as the case may be .....". Under this sub-rule (1), nobody is excluded from making an application for quarrying any minor mineral. Exclusion is sought to be inferred in the case of specified minor minerals because sub-rule (3) of the amended Rule 12 does not make any mention about "other applications", whereas sub-rule (2) of the said Rule 12 provides for the disposal of 'other applications' giving them the last preference. Though the said sub-rule (3) refers to 'the quarry lease applications' for the specified minor minerals and requires them to be disposed of in the order specified, it does not provide for the manner in which 'other applications' not falling within Clauses (i), (ii)'and (iii) have to be dealt with. It is not possible to infer from this that others are precluded from making applications in respect of the specified minor minerals. As already stated above, total exclusion from consideration of applications of all others as regards the specified minor minerals will be arbitrary and unreasonable. Arbitrariness is anathema to Article 14 (Air Port Authorities Case, ). The amended Rule 12 has therefore to be interpreted in a manner that would sustain it and not in a manner that would make it unconstitulional. In this connection, it has to be kept in view that the Rule in question is made by the Slate Government in exercise of its powers under Section 15 of the Act which provides for making rules for regulating the grant of quarry leases, mining leases or other mineral concessions in respect of the minor minerals and for purposes connected therewith and one of the matters in respect of which Rules can be made is "the person by whom and the manner in which, applications for quarry leases, mining leases or other mineral concessions may be made and the fees to be paid therefor". As observed by the Supreme Court in Keshav Chandra Joshi v. Union of India, , Rules which are legislative in character must be interpreted harmoniously as a connected whole giving life and force to each word, phrase and rule and no part thereof should be rendered nugatory, and resort to iron out the creases could be had when the construction of the relevant rule, phrase or word would lead to unintended absurd results. Interpreting the amended Rule 12 in the light of the above principles, we are of the view that in the absence of any express exclusion of all others like the petitioners from making applications in respect of the specified minor minerals, the quarry lease applications for the specified minor minerals from all others who do not fall under Clauses (i), (ii) and (iii) of sub-rule (3) of Rule 12 will also have to be considered subject to the preference specified in the said sub-rule (3). We therefore hold that Memo dated 30-5-1988 of the Director of Mines and Geology does not correctly interpret the said Rule 12 and set aside the said Memo No. 2064/K1/87 dated 30-5-1988.
22. The fact that there were no other applications in respect of the areas for which the petitioners applied is not disputed by the respondents except in a couple of Writ Petitions wherein persons claiming to be Wad-daras sought to implead themselves on the ground that they made certain representations for the grant of quarry leases -- but even in those couple of Writ Petitions, the counter-affidavits filed on behalf of the authorities concerned have not mentioned whether any applications or representations were received from others. In the circumstances, we direct the respondents to consider and dispose of the applications of the petitioners in Writ Petition Nos. 10079, 9968, 10619, 11072, 12870, 13865, 14762, 15224 and 15232 of 1988; 1417, 1459, 2511, 4781, 5103, 5222, 6102, 6532, 6873, 11500, 12627, 12636, 13340, 14760, 17608 and 17987 of 1989; 4008, 4015, 7890 and 15710 of 1990 and 3695 of 1991 giving them the last preference i.e., after the applications, if any, falling under Clause (iii) of sub-rule (3) of the amended Rule 12, and these Writ Petitions are accordingly allowed.
23. In Writ Petitions Nos. 14682, 14683, 14696, 18702 of 1988 and 5848 of 1989 the petitioners question the notices issued to them pursuant to Memo No. 2064/K1/87 of the Director of Mines and Geology dated 30-5-1988 to show cause as to why the grant or renewal, as the case may be, of the mining leases in their favour should not be cancelled on the grounds that the same were granted contrary to sub-rule (3) of the amended Rule 12 of the Rules. In as much as we have set aside the said Memo on the ground that it was based on an erroneous understanding of the amended Rule 12, the notices impugned in these Writ Petitions will have to be quashed except in Writ Petitions Nos. 14587 and 14589 of 1988 wherein certain persons claiming to be Waddaras impleaded themselves as respondents 4 and 5 claiming that they made representation for the grant of quarry leases in respect of the specified minerals and that ignoring their claims the quarry leases were granted to the petitioners in the said two Writ Petitions. Writ Petitions Nos. 14682, 14683, 14696, 18702 of 1988 and 5848 of 1989 are therefore allowed.
24. So far as W.P. Nos. 14587 and 14589 of 1988 are concerned, the authorities concerned i.e., respondent No. 2 shall enquire into the matter after giving adequate opportunity to the petitioners and respondents 4 and 5 and pass appropriate orders thereon in the light of this judgment. These two writ petitions Nos. 14587 and 14589 of 1988 are accordingly disposed of. No costs. Advocates fee Rs. 150/- in each.
25. Order accordingly.