Patna High Court
S. Lal And Co. Ltd. vs The Union Of India (Uoi) And Ors. on 27 July, 1973
Equivalent citations: AIR1975PAT44, AIR 1975 PATNA 44
Author: N.L. Untwalia
Bench: N.L. Untwalia
JUDGMENT Untwalia, C.J.
1. The petitioner in this case is a limited company incorporated under the Companies Act, having its registered office in Calcutta. It carries on business of mining and has various mining leases to exploit various minerals in the State of Bihar and other States. It holds a valid certificate of approval granted by the State of Bihar under Rules 4 and 4-A of the Mineral Concession Rules, 1960 (hereinafter called the Rules) made under Section 13 of the Mines and Minerals (Regulation and Development) Act, 1957 (hereinafter called the Act). The petitioner's case is that in or about January 1968 the Government of Bihar issued a notification under Rules 58 and 59 of the Rules stating therein that the lands in villages Byanbil and Kanyaluka situated in the district of Singhbhum were available for grant of mining lease for phosphate with effect from 15th February, 1968. A copy of this notification is Annexure-1 to this writ application. The petitioner applied for grant of mining lease over the said villages on 15-2-1968. Copies of the applications are Annexures-2 and 2-A. The applications were not disposed of within the period of one year, as prescribed under Rule 24 of the Rules. Therefore, deeming them to have been rejected, the petitioner-Company filed applications in revision before the Central Government under Rule 54 of the Rules. Copies of the revision applications filed on 1-3-1969 are Annexures 2-B and 2-C. C. W.J.C. 1121 of 1969 was filed in this Court by the petitioner on 16-9-1969 for a direction to the Union of India (respondent No. 1) to dispose of the revision applications. The writ application was admitted on 18-9-1969. During its pendency the petitioner-Company received a communication from the Government of India dated 7-12-1970 (Annexure-3), whereby the Central Government, in exercise of their relevant powers under Rule 55, directed the State Government to grant mining lease for apatite over an area of 106.38 acres in village Kanyaluka.
2. In paragraph 9 of the petition the statement was that the Company had been informed that the Central Government had recommended the grant of lease to the petitioner in respect of village Byanbil also. The area in that village for mining apatite was 187.38 acres. In spite of the revisional order of the Central Government contained in Annexure-3, the Government of Bihar has not granted mining lease to the petitioner even in respect of the land in village Kanyaluka. The petitioner, therefore, approached the Government of Bihar in the Department of Mining and Geology for immediate implementation of the order passed by the Central Government and the copy of this application dated 9-5-1972 is Annexure-4. C.W.J.C. 1121 of 1969 proceeded to disposal in regard to other two villages with which we are not concerned in this writ application. But the grievance of the petitioner in this writ application is that the State Government should be directed to grant mining lease to the petitioner in respect of villages Kanyaluka and Byanbil. Realising the difficulty, however, in respect of the sufficiency of materials for village Byanbil, this application was confined to the prayer for village Kanyaluka only, and whatever has been stated in this writ application in relation to the grant of mining lease for village Byanbil has been withdrawn.
3. An application under Section 151 of the Code of Civil Procedure had been filed by one Dr. Satyanarain Sinha for being added as a party respondent. An order in that connection was passed on 9-1-1973 by a Bench of this Court of which I was a member. But when the hearing of this case was commenced on 23-7-1973 learned Counsel for Dr. Satyanarain Sinha did not press that application for adding him as a party, Accordingly, that petition was dismissed.
4. The present writ application was filed on 28-7-1972 and admitted on 12-9-1972. Notice of this application seems to have been served on the respondents long before 7-3-1973, when this case was included as a ready case in the Monthly List. A counter-affidavit on behalf of the State of Bihar was filed on 16-3-1973. Although, according to the rules of the High Court, the cause for late filing of the counter-affidavit ought to have been explained and without there being any explanation for the delay it could be rejected, we thought improper not to reject this counter-affidavit on a technical ground and considered it for whatever it is worth.
5. The stand taken in the counter-
affidavit is that a notification issued under Rules 58 and 59 of the Rules can be withdrawn by the State Government and, consequently, it is stated in paragraph 3: "That under notification No. B/M-6-1013/70-6599M published in Bihar Gazette dated 3-10-1972, the area ? have been reserved for exploration in the public sector and in this view of the matter the State Government in the aforesaid circumstances is unable to grant any lease to the petitioner."
6. A copy of the notification spoken of in paragraph 3 of the counter-affidavit published in the Bihar Gazette (Extraordinary) Dated 3-10-1972 was produced before us at the time of the hearing by the learned Advocate-General, This notification states that in supersession of all previous notifications issued in connection with the unreserved area of apatite mines in the district of Singhbhum it was notified for information of the general public that all such mineral areas, except those in respect of which leases had already been granted, had been reserved for mining operations in public sector. The question for consideration in this case is whether the State Government can resist this writ application on the basis of the notification dated 28-9-1972 published in the Bihar Gazette dated 3-10-1972.
7. Under Section 2 of the Act the Parliament has declared that it is expedient in the public interest that the Union should take under its control the regulation of mines and the development of minerals to the extent provided in the Act. It is well settled by now that on the making of such a declaration the power to legislate in respect of such mines and minerals is exclusively in the Central Parliament, and the State Legislature's power to make any legislation in that regard is extinct. It has been held that the whole of the field is occupied in regard to the subject-matter of mines and development of minerals by this Act, and the State Legislature is now power-less to pass any legislation--vide Raijnath v. State of Bihar, AIR 1970 SC 1436 and State of Orissa v. H.A. Tulloch, AIR 1964 SC 1284 noticed in paragraph 7 of the judgment of Bhagwati, C.J. in Amritlal Nathubhai Saha v. Union Govt. of India, AIR 1973 Guj 117.
8. On the application in revision filed by the petitioner under Rule 54 after following the procedure of calling for comments of the necessary parties, including the Government of Bihar, a final revisional order communicated by Annexure-3 was passed. In its comment the State Government had taken the stand that they wanted to keep the area in question reserved for a private party who might apply for it in future, In the order of the Central Government it is stated that such reservations are not contemplated in the Act or the Rules. If the State Government wanted to reserve, it should be for a public purpose. Finally, in exercise of their revisional powers under Rule 55 of the Rules and all other powers enabling in this behalf, the Central Government directed the State Government to grant mining lease for apatite over an area of 106.38 acres in village Kanyaluka, district Singbhum, in favour of the petitioner-Company. It is plain that the State Government is bound to obey this order unless it can justifiably resist it in law.
9. The argument put forward by the learned Advocate-General on the basis of the decision of the Gujarat High Court referred to above is that even though the executive power of the State to reserve the area for exploitation in public sector could not be exercised under Article 162 of the Constitution, as the power of the Bihar Legislature to make laws in regard to mines and minerals had been taken away, it had the executive power under Article 298 to reserve the area, as held by the Gujarat High Court. As against this submission, Mr. B. C. Ghose, learned Counsel for the petitioner, relied upon a Bench decision of the Orissa High Court in State of Orissa v. Union of India, AIR 1972 Orissa 68. The Orissa High Court has expressed the following view in paragraph 15 at page 73 of the judgment:
"Even though the State has a proprietary title in the mines, by the passing of the Act the subject of the Legislation becomes an exclusive subject for legislation by Parliament as has already been stated in paragraph 6 of this judgment. Under the Act the State has no residuary power of working out mires and minerals without observing the conditions prescribed in the Act and the rules. In other words, even if the State desires to reserve a particular area for being exploited in the public sector it must make the necessary application under the Act and the rules and in exercise of its revisional power it is open to the Central Government to set aside : he decision of the State Government and direct grant of the same to other applicants to the exclusion of the State Government."
There is no reference, as perhaps the point was not argued, to Article 298 in the judgment of the Orissa High Court. I find myself in respectful agreement with the view expressed by the Gujarat High Court in Amritlal's case, AIR 1973 Guj 117. The executive power of the Union granted under Article 298 is apart from their executive power mentioned in Article 73. Similarly, the executive power granted to the State by Article 298 is de hors and over and above its power under Article 162. But then the quality of the executive power granted either to the Union or to the State is subject to proviso (a) in the case of former and proviso (b) in the case of latter. The State Government, therefore, has power to reserve certain area for exploitation by itself or by a statutory corporation or for a company in public sector. But then, as observed by Bhagwati, C.J., at the end of paragraph 15 at page 129-
"This of course does not mean that the Central Government is powerless to override the reservation made by the State Government. The Central Government can always make Rules under Sub-sections (1) and (2) of Section 18 and such rules having binding force on the State Government by virtue of Section 18, Sub-section (3), they can set at naught any reservation made by the State Government."
I may respectfully add that the argument advanced on behalf of the petitioner with reference to Section 4 of the Act was also rejected by the Gujarat High Court in Amritlal's case AIR 1973 Guj 117 on the ground that the State Government could not grant lease to itself and, therefore, Section 4 did not come in the way of exercise of such power. As was pointed out by Mr. Ghose, this reason of rejection of such argument may not hold good in case of a company incorporated under the Companies Act, even though the company may be owned and controlled by a Government. Therefore, there would be a necessity of the grant of mining leases by the State Government to such a company. But even so, I have no doubt in my mind that the State Government will have the power under Article 298 of the Constitution to reserve an area for exploitation in public sector whether the undertaking in public sector is a statutory corporation or a corporation incorporated under the Companies Act.
10. I shall resume the discussion of the point argued by the learned Advocate-General after stating his another argument that the State Government had the power to withdraw its notification issued either under Rule 58 or under Rule 59 of the Rules. Granting it to be go, as, there does not seem to be any flaw in this argument, the question for consideration is whether the State Government could without the notification issued under Rule 58 or Rule 59 could reserve the area for exploitation in public sector, after the order of the Central Government contained in Annexure "3".
11. Proviso (b) to Article 298 says that the executive power of the State granted under the main provision of the said Article shall be subject to legislation by Parliament if the purpose of the executive power is one with respect to which the State Legislature cannot make laws. It is plain, therefore, that the executive power of the Bihar State exercised in this case by reserving an area for exploitation in public sector was subject to legislation by Parliament. Legislation by Parliament was the Act; the rules framed by the Central Government were statutory rules. The order passed by the Central Government on the revisional application of the petitioner-Company was in exercise of the power granted to the Central Government under the statutory rules. It, therefore, must follow legitimately and as a matter of construction that the executive power of the State to reserve is subject to the revisional order passed by the Central Government. The State Government had taken the stand before the Central Government when it was invited to give its comments in answer to the petitioner's application in revision that it had reserved the area for exploitation by the private party, but the Central Government, in spite of that, made the revisional order. Thereafter it was not open to the State Government to pay that it would not obey the order of the Central Government directing it to grant lease to the petitioner and reserve the area for exploitation in public sector. In my opinion, the exercise of such power is hit by proviso (b) to Article 298.
12. Similarly, the exercise of the power of the State Government to withdraw the notification issued under Rule 58 and or Rule 59 is also invalid because it had no power to withdraw after a final order of the kind incorporated in Annex-ure-3 had been passed by the Central Government under Rule 55 of the Rules. The learned Advocate-General faintly argued at one stage that no provision has been made either in the Act or in the Rules for execution and enforcement of a revisional order passed by the Central Government under Rule 55 of the Rules and, therefore, the State Government was free at large either to withdraw the notification issued under Rule 58 or Rule 59 or to reserve the area for exploitation in public sector. This argument has been stated merely to be rejected. In the very context of the scheme of the Act and the Rules it is difficult to imagine that the State Government will have the liberty of disobeying or ignoring the order of the Central Government passed under Rule 55. It is bound to obey it unless the order can be held to be a nullity or is set aside by an appropriate Court on any other ground. Even if there is no machinery provided for execution of such an order, undoubtedly the writ jurisdiction of this Court for issuing a rule of mandamus to obey that order is available. On the particular facts of this case, it may also be added that the order of the Central Government was passed in December. 1970. After waiting for sufficient time and, on finding the State Government not amenable to its request to grant lease to the petitioner in accordance with the order of the Central Government contained in Annexure-3, this writ application was filed on 28-7-1972. The notification under which the State Government now wants to take shelter was made on 28-9-1972 after this writ application was admitted on 12-9-1972 which, as is the practice of the Court, must have been admitted after hearing the State Counsel on notice to the Advocate-General. In the circumstances, therefore, the notification dated 28th September 1972 in so far as it relates to the area of 106.38 acres in village Kanyaluka in the district of Singhbhum for extraction of apatite must be held to be hit on the ground of mala fides also, not because there can be any finding of malice, in fact, no such case has been made out, but because the action of issuing the notification in so far as it relates to the claim of the petitioner can be struck down as being vitiated by malice in law. In any view of the matter, I do not see any justification to refuse the prayer of the petitioner for issuance of a writ of mandamus to compel respondents 2 and 3 for the grant of lease in village Kanyaluka.
13. In the result, this writ application is allowed and respondents 2 and 3 are directed, by issuance of a writ of mandamus, to obey the order of the Central Government contained in Annexure-3 and grant lease to the petitioner-Company in respect of apatite mine in village Kanyaluka, district Singhbhum, in respect of an area of 106.38 acres. I shall make no order as to costs.
S.K. Jha, J.
14. I agree.