Ramnik Lal Kothari v. Government Of India,...

Untwalia, J.:— The petitioner has obtained a rule from this Court under Articles 226 and 227 of the Constitution of India against the Government of India, Ministry of Steel. Mines and Metals (Opposite party No. 1), the State of Bihar (Opposite Party No. 2) and others to show cause why the order of the Government of India contained in their letter dated the 27th June, 1967, a copy of which is Annexure “F” to the writ application, should not be quashed and opposite party No. 1 should not be directed to consider the application of the petitioner for a mining lease in accordance with law. Cause has been shown on behalf of the opposite party No. 1, by learned Government Pleader No. 1, and on behalf of opposite party No. 4, by Sri S.K Mazumdar.

2. The petitioner's case is that he has a lease of coal mining and works over an extensive area in village Turiyo, in the district of Hazaribagh. He raises coal of all grades in his colliery. He intended to extend the area of his operation and, therefore, applied on the 29th November, 1961, for mining lease for the adjacent area in village Turiyo. This application was rejected because of the pendency of some litigation wherein interim injunction had been made. When the interim injunction was vacated, the petitioner renewed his application on the 18th March, 1965, a copy of which application is Annexure C. No order was passed by the Government of Bihar on the said application within the time prescribed by the Mineral Concession Rules, 1960, hereinafter called the “Rules”, framed under the Mines and Minerals (Regulation and Development) Act, 1957 (Act 67 of 1957), hereinafter referred to as the “Act”. The petitioner, therefore, submitted an application in revision to the Government of India in accordance with Section 30 of the Act and Rule 54 of the Rules, a copy of the said application is Annexure “D”. Several other persons also had applied for granting lease for the area for which the petitioner had made the application. The Government of Bihar was asked to submit its comments on the revision application filed by the petitioner. It submitted its comments. Other interested parties were also given notice and they submitted their comments. The petitioner submitted counter comments, copies of which are Annexures “E”, “E-1” and “E-2”. The Government of India by its impugned order dated 27th June, 1967, rejected the application filed by the petitioner on the ground that the area was reported to contain low grade coal, for which there was no demand, and any production of the grade of coal which could be found in the area for which mining lease had been asked for would be against the planned production of coal and against national interests. The petitioner feels aggrieved by this order. His only grievance is that the point on which his application in revision has been rejected was not taken in any of the comments filed by the Government of Bihar or the private parties and did not arise on the records of the revision before the Government of India. Rejection of the revision application on a new ground, without giving an opportunity to the petitioner to have his say, or of making his representation in that regard, was an order of rejection in violation of the principles of natural justice. The order should therefore, be quashed, and opposite party No. 1 should be directed to dispose of the matter afresh after giving opportunity to the petitioner to make his representation in regard to the ground on which the application in revision has been rejected.

3. The stand taken on behalf of the contesting opposite parties is that the petitioner was aware of the fact and had made his representation in his counter comments in relation to that, which facts form the basis of the rejection of his application in revision. In the alternative, it has been submitted on their behalf that the Central Government had power to reject the revision application on materials apart from those which were available before it in the comments and the counter comments and had power to withhold approval of the granting of a mining lease under Section 5 of the Act.

4. Section 30 of the Act says:

“The Central Government may, of its own motion or on application made within the prescribed time by an aggrieved party, revise any order made by a State Government or other authority in exercise of the powers conferred on it by or under this Act.”

5. An application for grant of a mining lease has to be disposed of within nine months from the date of its receipt under sub-rule (1) of Rule 24 of the Rules, Sub-rule (3) of which says:

“If any application is not disposed of within the period specified in sub-rule (1). It shall be deemed to have been refused.”

6. A person aggrieved by any order made by the State Government can file an application in revision of the order under Rule 54 of the Rules. After providing for sending notice and copies of the application to the impleaded parties under sub-rule (2) of Rule 54, the procedure prescribed for passing order on revision application is to be found in Rule 55. Sub-rule (1) of Rule 55 requires that copies of the application shall be sent to the State Government and to all the impleaded parties calling upon them to make such comments as they may like to make. The applicant is to be provided with copies of such comments under sub-rule (2) of R. 55, calling upon him to make such further comments as he may like to make. Sub-rule (3) then says:

“The revision application, the communications containing comments and countercomments referred to in sub-rules (1) and (2) shall constitute the records of the case.”

7. According to sub-rule (4) of Rule 55 of the Rules “after considering the records referred to in Sub-rule (3), the Central Government may confirm, modify or set aside the order or pass such order in relation thereto as the Central Government may deem just and proper”. There is no scope for controversy as regards the view expressed by a Bench of this Court in D.N Roy and S.K Banerjee v. State of Bihar, 1967 BLJR 212 that the power of revision of the Central Government under Section 30 of the Act is a quasi judicial power, irrespective of the fact whether the order of the State Government is sought to be revised suo motu by the Central Government or on an application made by an aggrieved party. In either view of the matter, the person who may be adversely affected by the order of revision has got to be given a reasonable opportunity to represent his case. In so far as the procedure which is to be followed on an application made by an aggrieved party, it is manifest on the language of rules 54 and 55 specially sub-rules (3) and (4) of the latter, that the order of the Central Government is to be based upon the records of the case which consist of the application, the comments and the counter-comments of the party and the State Government, and upon no other material.

8. If any further material is to be used against the person going to be adversely affected by the order, there cannot be any doubt that such a material cannot be used without giving an opportunity to the person concerned of having his say in the matter of that material.

9. Feeling this difficulty, both the learned counsel for the opposite parties endeavoured to support the impugned order of the Central Government with reference to section 5(2) of the Act, the relevant portion of which reads as follows:

“Except with the previous approval of the Central Government no prospecting licence or mining lease shall be granted—

(a) as respects any mineral specified in the First Schedule, or

(b) to any person who is not an Indian national.”

10. Form ‘K’ appended to the Rules is a model form of mining lease. In one of the preambles of the Indenture of lease, as is apparent from the said form, the fact that the Central Government has approved the grant of the lease, has got to be stated. Reading the provision which has been extracted above from Section 5 of the Act with the form, it would be clear that in every case of a mining lease, the previous approval of the Central Government has got to be obtained. There are no rules providing any elaborate procedure for obtaining such an approval except rule 63, which reads:

“Where in any case the previous approval of the Central Government is required under the Act or these rules, the application for such approval shall be made to the Central Government through the State Government.”

11. The application for approval of the Central Government has to be filed through the State Government under rule 63 of the Rules for exercise of the power of the Central Government under section 5(2) of the Act. The order of the Central Government in exercise of the said power may be executive in character, as contended on its behalf by the learned Government Pleader. Yet I am of the opinion that if the exercise of power under section 5(2) of the Act and the order made thereunder adversely affects or prejudices a person, the trend of the decisions of the Courts in India as also in England is that such a person must be given an opportunity to have his representation or say in regard to the matter which is going to affect him adversely. To put it briefly, the power may be executive, but it has to be exercised in accordance with the principles of natural justice which are generally applicable for the exercise of power in a judicial manner. Reference in this connection may be made to a recent decision of the Supreme Court in The Union of India v. Anglo Afghan Agencies, AIR 1968 SC 718. I do not mean to suggest that invariably in all cases, the power under section 5(2) of the Act has got to be exercised by the Central Government keeping in view the principles for the exercise of a judicial power. But by and large it may affect or prejudice the rights or interest of a person; in all fairness, the person concerned must be given a reasonable opportunity to make his representation.

12. It is more so in the instant case where on the wordings of the order, as communicated in Annexure “F”, the power was not exercised by the Central Government purporting to be expressly under section 5(2) of the Act. The contents of Ext. F are as follows:

“I am directed to refer to your revision application dated the 5th May, 1966 on the subject mentioned above and to say that after careful consideration of the facts stated in the matter of your revision application, the Central Government in exercise of the powers conferred under rule 55 of the Mineral Concession Rules, 1960 and all the other powers enabling in this behalf, hereby reject your revision application on the ground that the area is reported to contain low grade coal for which there is no demand and any further production of this grade of coal will be against planned production of coal and against national interests.”

13. The phrase “all the other powers enabling in this behalf” occurring in the above passage does not necessarily refer to the exercise of the power under section 5(2) of the Act. On the face of the order, the revision application filed by the petitioner was being rejected on a ground which admittedly is not to be found in any of the papers forming a part of the record of the revision before the Central Government. Even if it be assumed, as was argued on behalf of the Central Government, that the phrase aforesaid was comprehensive enough to refer to the exercise of the power under section 5(2) of the Act, I am of the opinion that on the facts of this case, the said power could not be exercised without giving an opportunity to the petitioner to have his say or to make his representation in regard to the facts stated in the order and which forms the sole ground for rejection of the revision application.

14. This brings me to the consideration of the first submission made on behalf of the opposite party No. 1. In the counter-affidavit filed on behalf of the Central Government, it has been said that in the report of the Coal Controller, a copy of which is Annexure “A” to the counter-affidavit, the Coal Controller had said:

“In any case the area contains Grade IIIA coal and there is no need of other parties to acquire some extra area for augmentation of production in this variety of coal. Technically speaking, from the information and plans available in our record it seems that the area can best be worked out if acquired by Kalyani Selected Kargali Colliery and not by any other mine. The need for this however does not exist at present.”

15. The petitioner undoubtedly, as submitted on behalf of opposite party No. 1, was aware of this report as he himself relied on a portion of it, but this report was not an enclosure to any of the comments or counter-comments and did not form part of the record of the revision case before the Central Government. The last sentence in the passage extracted from this report does not state and bring out the facts which formed the basis of the impugned order. The petitioner in one of his counter-comments (Annexure E/1), which is dated 5-8-1966, referred to the extraction of coal from the area in respect of which mining lease was asked for, which was of Grade III-A and III-B, stating further that certain Thermal Power Stations consumed that grade of coal and hence national interest would be served by extracting that grade or coal from the said area. The report of the Coal Controller is dated 2nd of August 1966. The counter comment of the petitioner dated 5th of August 1966 could not possibly refer to that report. On the materials placed before us, therefore, I am not satisfied that the petitioner was aware of the facts stated in the impugned order (Annexure “F”) and had an opportunity of making his representation in that regard.

16. The area in respect of which the mining lease was applied for contained low grade of coal. But the fact as to whether there was any further production of that grade of coal would be against the planned production of coal or against national interests or not, ought not to have formed the basis of the impugned order, whether it be an order under Section 30 of the Act pure and simple, or a composite order under section 30 read with Section 5(2) of the Act, without giving an opportunity to the petitioner to make his representation in regard to those facts. It may well be that if such an opportunity was given to the petitioner, he could have satisfied the Central Government that there was demand for low grade of coal and further production would not be against planned production of coal or against national interests.

17. It may be stated here that the State Government in its comments had recommended for grant of mining lease in respect of the area in question to opposite party No. 4 and had not taken the stand that no mining lease ought to be granted to any person. In the comment and the counter-comments, various facts were stated by the parties to justify their respective claims for the grant of the mining lease.

18. The Central Government does not seem to have gone into those facts and decided the matter, as it decided that no lease at all should be granted. Some endeavour was made on behalf of the opposite party no. 4 before us, with reference to the various facts, to show that the petitioner had no case for grant of a mining lease to him, while the case of opposite party No. 4 was much superior in that regard. We did not think it advisable or necessary to examine those facts for ourselves as it is for the Central Government to look into them when it decides to accord approval to the grant of a lease when the cases goes back to it.

19. For the reasons stated above I allow the application, quash the order of the Central Government as contained in its letter dated the 27th June, 1967 (Annexure “F”) by grant of writ of certiorari and direct the said Government by a writ of mandamus to dispose of the revision application filed by the petitioner afresh, after giving him an opportunity to make his representation in regard to the facts referred to above in this judgment. I shall make no order as to costs.

20. B.N Jha, J.:— I agree.

21. Petition allowed.