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M/S. Bundelkhand Minerals And Alkali Pvt. Ltd. v. State Of U.P And Others

Allahabad High Court
May 1, 1992
Smart Summary (Beta)

Structured Summary of the Opinion — G.P. Mathur, J.

Factual and Procedural Background

The petitioner is a company (incorporated in 1986) that applied (Form MM-1) for a mining lease (for 227.6 acres to excavate morram/sand) in two villages (Kahata Hamirpur and Parasan) in Pargana Kalpi, district Jalaun. The State issued notifications in 1985/1986 identifying plots for lease. The District Officer initially rejected the petitioner’s application (order dated 7-1-1988), and the petitioner filed a revision under S.30 of the Mines and Minerals (Regulation and Development) Act, 1957 before the Central Government. The Central Government allowed the revision and remanded the matter to the State Government (order dated 7-12-1989). The State Government rejected the application again (order dated 14-11-1990). The petitioner challenged that order by filing Writ Petition No. 28059 of 1990; the High Court allowed that writ on 17-5-1991 and directed the State to decide the application afresh within two months. The petitioner submitted the certified copy on 30-5-1991. No fresh decision was taken within the time, and the District Officer issued an auction notice dated 27-8-1991 fixing 27-9-1991 for auction of mining leases. The petitioner filed the present writ petition seeking quashing of that auction notice and an order directing the respondents to execute a mining lease in its favour; thereafter the petitioner amended to challenge the State Government's order dated 4-10-1991 rejecting its application. Parties exchanged affidavits and the petition was disposed of finally at the stage of admission.

Legal Issues Presented

  1. Whether the U.P. Government Order dated 16-11-1990 (and the District Officer's auction notice dated 27-8-1991) constitute a valid "declaration" under sub-rule (1) of Rule 23 of the U.P. Minor Minerals (Concession) Rules, 1963, thereby invoking sub-rule (3) and rendering Chapters II, III and VI inapplicable to declared areas.
  2. Whether, in the factual matrix of this case (including prior orders by the Central Government and this Court), the petitioner is entitled to a mining lease under Chapter II despite the State’s declaration and the Seventeenth Amendment to the Rules.
  3. Whether irregularities or late entries in the register (Form MM-5) and the dates recorded therein invalidate the declaration/auction notice or render the auction process unlawful.
  4. Whether principles of res judicata or the earlier directions in Writ Petition No. 28059 of 1990 preclude the State from relying on the amended Rules/G.O. to require auction procedure.

Arguments of the Parties

Petitioner's Arguments

  • The petitioner asserted that, by virtue of earlier orders (Central Government remand dated 7-12-1989 and this Court’s order dated 17-5-1991 in Writ Petition No. 28059 of 1990), the State was under an obligation to grant a lease in its favour and that the State's rejection dated 4-10-1991 was illegal.
  • The petitioner contended that the G.O. dated 16-11-1990 did not amount to a general declaration under Rule 23(1) and that, therefore, Chapters II, III and VI remained applicable to the villages for which it applied.
  • The petitioner challenged the authenticity/timing of entries in Form MM-5 (register under Rule 25), alleging that the names of Parasan and Kahata Hamirpur were inserted after 30-9-1991 and that the date 27-8-1991 was falsely recorded, implying forgery or wrongful conduct by State officers.
  • The petitioner argued that, as the earlier writ had been allowed, the State should be estopped (res judicata) from asserting the effect of the Seventeenth Amendment and the G.O. to deny a lease under Chapter II.

State's Arguments

  • The State relied on a G.O. dated 5-9-1990 (and the Seventeenth Amendment to the Rules effective 26-9-1990) and a subsequent G.O. dated 16-11-1990 which, the State contended, declared that the entire mining area in U.P. would be leased by auction/tender/auction-cum-tender under Chapter IV, thereby excluding Chapters II, III and VI pursuant to Rule 23(3).
  • The State maintained that, because of the declaration and amendment, mining leases can only be granted in accordance with Rules 27, 27-A or 27-B (Chapter IV) and not by application under Chapter II or permit under Chapter VI.
  • The State filed Form MM-5 entries and explained the discrepancy in certification dates by saying that the names of the two villages were incorporated before certification although the clerk had mistakenly noted a later entry date under the District Officer's signature; the State therefore asserted the auction notice and register entries were valid and that the District Officer had competent delegated power under Rule 71 to declare areas.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
The Union of India v. Haim Aghajan, AIR 1968 Bom 366 Interpreting the word "declare" (as discussed in para 6 of that report) in the context of statutory declarations (case concerned Ss.12 and 22 of the Foreign Exchange Regulation Act, 1947). The Court held this authority had no bearing on the present controversy and did not run contrary to the Court’s conclusion that the G.O. dated 16-11-1990 amounted to a declaration under Rule 23(1).
Machhua Matsya Vikas Sahkari Samiti v. State, AIR 1986 All 300 Support for the proposition that a notification under Rule 23 need not list every specific plot or particulars to be valid; a broad recital can embrace many areas. The Court relied on the principle that absence of specific plot numbers in a notification does not invalidate it; this supported the Court's conclusion that a general declaration could apply to broad categories or areas.
Khilodhar v. Addl. District Magistrate, 1987 All LJ 590 Public auction is a wholesome procedure and, when prescribed, should be faithfully followed; auctions are advisable even when not specifically prescribed. The Court invoked the reasoning that auction promotes public interest and transparency, using it to justify deference to the auction-tender regime introduced by amendment and G.O.
State of U.P v. Shiv Charan Sharma, 1981 Supp SCC 85 : AIR 1981 SC 1722 Observation that public auction with open participation and a reserved price guarantees public interest; sales of public property aimed at getting best price ought to be public. The Court relied on this Supreme Court authority to underscore that the auction/tender system serves public interest and public revenue objectives, supporting refusal to interfere with the auction-based leasing regime.
Fertilizer Corporation Kamgar Union (Regd.), Sindri v. Union of India, (1981) 1 SCC 568 Principle (quoted in Shiv Charan Sharma) that sales of public property intended to fetch the best price ought to take place publicly to assure the public that Government acted transparently. Used (through the quotation reproduced in State of U.P v. Shiv Charan Sharma) as background authority to validate the policy rationale favouring auctions; the Court cited it in support of the auction regime's public-interest justification.

Court's Reasoning and Analysis

The Court's analysis proceeded in several steps, applying the Rules and statutes relied upon by the parties and examining the relevant instruments (G.O., auction notice, Form MM-5) and prior orders:

  1. Statutory Framework: The Court summarized the Rules (U.P. Minor Minerals (Concession) Rules, 1963) and the relevant chapters: Chapter II (grant by application; Rules 4–20), Chapter IV (auction/tender; Rules 23–30), and Chapter VI (mining permits; Rules 51–56). It noted Rule 23(1) permits the State to "declare" areas for auction/tender and Rule 23(3) disapplies Chapters II, III and VI upon such declaration. Rule 25 mandates a register (Form MM-5) of declared areas; Rule 68 permits the State to relax rules in special cases; Rule 71 permits delegation.
  2. Nature of the G.O. dated 16-11-1990: The Court interpreted the G.O. as a general declaration under Rule 23(1) that the entire area of minor minerals in the State would be leased by auction/tender/auction-cum-tender under Chapter IV. The Court reached this conclusion by reference to the G.O.’s language (translated) and by construing the now-amended Rule 23(1) which no longer requires specification or Gazette notification in the previously required form.
  3. Meaning of "declare": To support its interpretation, the Court examined dictionary definitions of "declare" (multiple lexicons reproduced in the opinion) and concluded the G.O. constituted a public announcement or statement sufficient for the statutory notion of "declaration".
  4. Effect of Declaration: Given a valid declaration under Rule 23(1), Rule 23(3) operates to make Chapters II, III and VI inapplicable to declared areas; hence leases must be granted by the procedures in Chapter IV (Rules 27, 27-A, 27-B).
  5. District Officer's Auction Notice: The Court also held that the District Officer's auction notice dated 27-8-1991—which listed the villages and plot details—amounted in itself to a declaration under Rule 23(1). The power to issue such a declaration could be validly delegated to the District Officer under Rule 71 and the 1963 notification (No. 968-M/XVIII-F-M-68-63) delegating Rule 23 powers to District Officers (except for limestone and marble).
  6. Timing/Entry in Form MM-5: The Court addressed the petitioner's contention that Form MM-5 did not show the villages until after 30-9-1991 and that the date 27-8-1991 was falsely recorded. The Court observed: (a) Rule 25 requires a register but does not mandate contemporaneous preparation; Form MM-5 is a record and may be prepared/updated after declaration; (b) the auction notice itself (dated 27-8-1991) contained the villages, and the petitioner admitted those villages appeared in that notice; (c) while the Court expressed displeasure at the sloppy and potentially misleading manner in which Form MM-5 was prepared and signed (noting the District Officer's signature/date mismatch), that procedural irregularity did not negate the legal effect of the earlier G.O. and the auction notice.
  7. Effect of Prior Administrative and Judicial Orders: The Court examined the earlier administrative (Central Government) and judicial (this Court) orders and concluded neither had directed that a lease be granted in favour of the petitioner. The Central Government's order merely remanded for reconsideration and the High Court's order directed reconsideration in light of observations; neither amount to a directive to grant the lease. Consequently, no binding determination entitled the petitioner to a lease as of right.
  8. Res judicata Argument: The Court rejected the contention that the State was precluded by res judicata from relying on the Seventeenth Amendment/G.O. because the earlier judgment did not decide the effect of the Amendment and the G.O.; res judicata applies only to issues actually decided.
  9. Equitable Considerations/Public Interest: The Court emphasized the public interest and revenue considerations favoring auctions: open participation, highest price, and public transparency. Citing authorities, the Court indicated that auction-based disposal is wholesome, promotes public interest and is appropriately applied here.
  10. Overall Conclusion from Reasoning: On the combined basis that the G.O. was a valid general declaration under Rule 23(1), that the District Officer’s auction notice was itself a valid declaration under delegated authority, that Form MM-5 entries being recorded later did not vitiate the declarations, and that prior orders did not command grant of a lease, the Court concluded the State acted within the amended regulatory framework and rejected the petitioner’s claims.

Holding and Implications

Holding: The Court dismissed the writ petition; the interim order was vacated. Petition dismissed.

Direct Consequences and Implications

  • The auction notice dated 27-8-1991 and the State Government's order dated 4-10-1991 rejecting the petitioner’s application were held to be lawful in the statutory context: the State validly declared areas for auction/tender under Rule 23(1) and, accordingly, leases in declared areas must be granted under Chapter IV procedures (Rules 27, 27-A, 27-B).
  • The petitioner was not entitled, as of right, to a mining lease under Chapter II despite earlier administrative/judicial remands; neither the Central Government nor the High Court had directed grant of a lease in the petitioner’s favour.
  • The Court expressed strong displeasure at the manner in which Form MM-5 was prepared and signed (noting irregular entries and misleading dates) but held that these procedural deficiencies did not invalidate the declaration or auction notice in the circumstances of this case.
  • The Court did not purport to lay down any novel legal principle; it applied the amended Rules and existing precedent to the facts. The decision enforces the application of the auction/tender regime introduced by the Seventeenth Amendment and the State's G.O.; it confirms that public auction/tender procedures, when validly declared, displace grant-by-application mechanisms under the Rules.

Disposition: Petition dismissed; interim order vacated.

Show all summary ...

G.P Mathur, J.:— The present writ petition has been filed for quashing of the auction notice dated 27-8-1991 (Annexure 3 to the writ petition) issued by the District Officer, Jalaun, and for a writ of mandamus directing the respondents to execute a mining lease in favour of the petitioner. Subsequently an amendment application was moved, which was allowed, whereby a prayer was made for quashing of the order dated 4-10-1991 passed by the, State Government. The parties have exchanged counter and rejoinder affidavits and the writ petition is being disposed of finally at the stage of admission in accordance with the Rules of Court.

2. The case of the petitioners, in brief, is that it is a company which was registered in the year 1986 in accordance with the provisions of the Companies Act; that the Company desires to set up a project to manufacture cement concrete blocks for building construction and the basic raw materials for the same is sand (Mooram), cement and water, that the petitioner-Company intends to establish its manufacturing unit near village Kahata Hamirpur, Par. Kalpi, district Jalaun; that the State Government issued a notification dated 3-12-1985 under R. 25 of U.P Minor Minerals (Concession) Rules, 1963 (hereinafter referred to as the Rules) which was published in U.P Gazette on 11-10-1986 whereby plot No. 1164 in village Kahata Hamirpur was shown for the purpose of being leased out in accordance with the provisions of Chapter II of the Rules and that subsequently a similar notification dated 30/31-5-1986 was issued with regard to plot No. 1163 which was published in U.P Gazette on 28-6-1986. The petitioner moved an application in prescribed Form MM-1 on 19-3-1986 for grant of mining lease for 227.6 acres for excavating Morram; that some other persons also applied for grant of mining lease in their favour; that the application of the petitioner was rejected by the District Officer by order dated 7-1-1988 on the ground that the State Government had issued orders for granting lease on the basis of auction; that the petitioner filed a revision against the aforesaid order under S. 30 of the Mines and Minerals (Regulation and Development) Act, 1957 (hereinafter referred to as the Act) before the Central Government; that the Central Government allowed the revision by order dated 7-12-1989 and remanded the case to the State Government for a fresh decision on merits; that the State Government rejected the petitioner's application by order dated 14-11-1990; that the petitioner challenged the aforesaid order by filing Writ Petition No. 28059 of 1990 which was allowed on 17-5-1991 and the State Government was directed to decide the petitioner's application afresh within two months from the date of presentation of the certified copy of the order; that the petitioner filed the certified copy of the judgment of the writ petition before the State Government on 30-5-1991 but no order was passed by the State Government within the time granted by the High Court and that the District Officer, Jalaun, issued an auction notice dated 27-8-1991 fixing 27-9-1991 as the date for holding the auction for granting mining lease forexcavating sand (Morram). The petitioner has thus challenged the auction notice issued by the District Officer, Jalaun, and has prayed that the respondents be directed to execute mining lease in its favour in accordance with Chapter II of the Rules. The State has filed several counter-affidavits. The main plea taken therein is that initially a Government Order was issued by the State Government on September 5, 1990, by which it was provided that entire mining area in the State of U.P will be leased out on the basis of auction. Subsequently U.P Minor Minerals (Concession) Rules were amended on September 26, 1990, by means of Seventeenth Amendment and the State Government issued a G.O on November 16, 1990, declaring that entire mining area in the State will be leased out by auction or by tender or by auction-cum-tender in accordance with Chapter IV of the Rules. In view of the declaration was made by the State Government on November 16, 1990, no mining lease or permit could be granted in accordance with Chapters II, III and VI of the Rules. The auction notice issued by the District Officer also amounted to a declaration under R. 23(1) of the Rules which made the provisions of Chapters II, III and VI of the Rules inapplicable. The application moved by the petitioner was rejected by the State Government on 4-10-1991 and the copy of the said order has been filed along with the counter-affidavit.

3. The present writ petition was filed on 23-9-1991 which was initially heard on 24-9-1991. After the State had filed a short counter-affidavit annexing therewith a copy of the order dated 4-10-1991 rejecting the petitioner's application, an amendment application was moved whereby a prayer has been made for quashing of the aforesaid order dated 4-10-1991. This amendment application was allowed.

4. We have heard Shri G.N Verma and Shri U.K Saxena on behalf of the petitioner and Shri Shitla Prasad, Additional Chief Standing Counsel, on behalf of the State and have also examined the record.

5. In order to appreciate the contention advanced by learned counsel for the parties it will be useful to briefly refer to the relevant provisions of the Act and Rules. In exercise of power conferred by S. 15 of Mines and Minerals (Regulation and Development) Act, 1957, the State Government made U.P Minor Minerals (Concession) Rules, 1963. Sub-rule (7) of Rule 2 defines ‘minor minerals’ as ‘building stones, gravel, ordinary clay, ordinary sand other than sand used for prescribed purposes and any other mineral, which the Central Government has declared from time to time or may declare, by notification in the Official Gazette, to be minor mineral, under CI. (c) of S. 3 of the Mines and Minerals (Regulation and Development) Act, 1957. Rule 3 provides that no person shall undertake any mining operations in any area within the State of any minor mineral to which these rules are applicable except under and in accordance with the terms and conditions of a mining lease or mining permit granted under these rules. Sub-rule (2) of this rule provides that no mining lease or mining permit shall be granted otherwise than in accordance with the provision of these rules. Chapter II (Rules 4 to 20) relates to grant of mining lease. Rule 5 provides that an application for grant of mining lease shall be addressed to the State Government and be in Form MM-1. Chatper III (Rules 21 and 22) relates to paying of royalty and dead rent. The royalty has to be paid in respect of the mineral removed from the leased area at the rates specified in the First Schedule. Chapter IV (Rules 23 to 30) relates to auction and lease. Chapter V (Rules 31 to 50) lays down the conditions of a mining lease and Chapter VI, (Rules 51 to 56) provides for mining permit, Rule 52 provides that an application for grant of a mining permit shall be submitted in Form MM-8. Thus a mining lease on the basis of an application can be granted under Chapter II, a mining permit on the basis of an application can be granted under Chapter VI and a mining lease on the basis of auction or tender can be granted under Chapter IV. The relevant provisions of Rules 23, 25, 68 and 71 as they stand after the Seventeenth Amendment read as follows:—

“23. Declaration of area for auction/tender/auction-cum-tender lease— (1) The State Government may by general or special order declare the area or areas which may be leased out by auction or by tender or by auction-cum-tender.

(2)…………………………………

(3) On the declaration of the area or areas under sub-rule (1) the provisions of Chapters II, III and VI of these rules shall not apply to the area or areas in respect of which the declaration has been issued. Such area or areas may be leased out according to the procedure described in this Chapter.

(4)…………………………………

25. Register of area or areas declared for auction or tender or auction-cum-tender lease. The District Officer shall cause to be maintained a register of areas declared under sub-rule (1) of Rule 23 in Form MM-5.

…………………………………

68. Relaxation of rules in special cases.— The State Government may, if it is.of opinion that in the interest of mineral development it is necessary so to do, by order in writing and for reason to be recorded authorise in any case the grant of any mining lease or the working of any mine for, the purpose of winning any mineral on terms and conditions different from those laid down in these rules.

…………………………………

71. Delegation.— The State Government may, by notification direct that any power exercisable by it under, these rules, may in relation to such matters and subject to such conditions, as may be specified in the notification, be exercisable also by such officer or authority subordinate to the State Government as may be specified in the notification.”

6. Procedure for grant of lease by auction is given in Rule 27, by tender is given in R. 27-A and by auction-cum-tender is given in R. 27-B.

7. Shri G.N Verma, appearing for the petitioners, vehemently contended that the petitioner had moved the application for grant of mining lease in village Kahta Hamir-pur and Parasan in Pargana Kalpi, district Jalaun, on 9-3-1987 and in view of the orders passed by the Central Government on 7-12-1989 and by the High Court on 17-5-1991 in Writ Petition No. 28059 of 1990, the State was under an obligation to grant a lease in its favour and the order dated 4-10-1991 passed by the State Government rejecting the petitioner's application is wholly illegal. Shri Shitala Prasad, learned Additional Chief Standing Counsel, has on the other hand, submitted that in view of the amendment in Rules and the declaration made by the State Government the petitioner's prayer for grant of lease in accordance with Chapter II of the Rules cannot be granted and the only method by which mining lease can be granted is in accordance with Chapter IV of the Rules. It is not disputed that initially the State Government issued a G.O on September 5, 1990, which recited that the Governor in supersession of all earlier Government orders regarding grant of lease of minor minerals in the State and exercising power under Rule 68 of the Rules directs that the lease of mining area in the State be given in accordance with Chapter IV of the Rules by auction and tender and in the manner laid down in the order. Thereafter details as to how auction is to be conducted or tender should be accepted were given. Subsequently U.P Minor Minerals (Concession) Rules, 1963, were amended by the Seventeenth Amendment which came into force on September 26, 1990. Thereafter a G.O was issued on November 16, 1990. The G.O is in Hindi and relevant portion thereof, as translated in English, reads as follows:

“Subject:— Grant of lease of areas of minor minerals in the State by enforcing the procedure of auction/tender.

Para. 1 of the order reads that in continuation of G.O No. 5235/18-12-9010/90 dated 5th September, 1990, and the decision of the Government for grant of lease of all minor minerals available in the State through the system of auction/tender, necessary amendment has been made in Chapter IV of the Rules by U.P Minor Mineral (Concession) (Seventeenth Amendment) Rules, 1990, and notification in that regard has been issued on 26th September, 1990. Para. 2 of the Order reads that the entire mining area available in the State should now be leased out through the system of auction/tender/auction-cum-tender as the circumstances of the case require, in accordance with the provisions of U.P Minor Minerals (Concession) (Seventeenth Amendment) Rules, 1990, and the G.O dated 5th September, 1990 should be deemed to be amended to the extent of the amended Rules. Para. 3 of the Order gives the details of the amended provisions of R. 23(1) and lays down that while giving lease on the basis of auction or tender or auction-cum-tender provisions of Rule 27, 27-A or 27-B should be followed. Para. 5 provides that new areas and such areas which are lying vacant should be declared under Rule 23(1).

8. We have carefully examined the G.O dated November 16, 1990, and in our opinion it amounts to a general declaration to the effect that the entire area of minor minerals in the State shall be leased out on the basis of auction/tender, auction-cum-tender as contemplated by sub-rule (1) of Rule 23. Since the State Government has issued a declaration under sub-rule (1) of R. 23 with regard to the entire mining area available in the State, provisions of Chapters II, III and VI shall not apply to any mining area in the State in view of sub-rule (3) of R. 23. The effect of the declaration made by the State Government is that lease of mining area can be granted only in accordance with the procedure prescribed by Rule 27, 27-A or 27-B of the Rules. The petitioner had moved the application on 9-3-1987 in Form MM-1 for grant of mining lease in accordance with Chapter II. In view of this development such an application could not have been allowed by the State Government as the provisions of Chapter II do not apply to the area for which the application was moved. In this view of the matter we are of opinion that the petitioner's application was rightly rejected and there is no illegality in the order dated 4-10-1991 passed by the State Government.

9. Learned counsel for the petitioner has vehemently contended that the G.O dated 16th November, 1990, does not amount to a general declaration as required by R. 23(1) of the Rules and, therefore, the provisions of sub-rule (3) will not apply and consequently Chapters II, III and VI of the Rules shall continue to be in operation. In our opinion the contention of the learned counsel for the petitioner is wholly unfounded. What sub-rule (1) of Rule 23 requires is that the State Government may by general/special order declare the area or areas which may be leased out by auction or by tender or by auction-cum-tender. The Rules have not laid down any particular form in which the requisite declaration is to be made nor the manner of making declaration has been laid down. Prior to amendment, sub-rule (1) of Rule 23 provided that the State Government may notify in the Gazette specific areas;which may be leased out by auction. Therefore, prior to amendment the specific areas had to be mentioned and the order of the State Government had to be notified in the Gazette. However, the word “specific” has been omitted in the amended rule and the requirement of notification in the Gazette has also been omitted. What the rules provide now is that the State Government may declare the area which may beleased out by auction or by; tender or by auction-cum-tender. This order may be general or a special order. The meaning of the word “declaration” as given in different dictionaries is as follows:—

Chambers Twentieth Centuary Dictionary:

Declare— to make known; to announce; to make a full statement of; to make a statement, to announce one's decision.

Declaration— act of declaring; that which is declared; a formal announcement.

Websters Third New International Dictionary:

Declare— to make clear; to make known publicly, formally or explicitly, especially by language; announce, proclaim or publish specially by formal statement or official pronouncement; communication to others; to make evident: serve as a means of revealing: to make a formal acknowledgment of.

The New Lexicon Webster's Dictionary:

Declare— to make known expicitly or formally: announce; to give particulars of.

Wharton's Law Lexicon:

Declaration— a proclamation or affirmation, open expression or publication.

Collins Dictionary:

Declare— a formal statement or announcement: explicit and methodic statement: formal announcement.

Law Lexicon by P. Ramanatha:

Declare— a formal announcement: a deliberate statement.

10. The word “declare” as used in sub-rule (1) of R. 23 would, therefore, mean “to make known or to announce or to make a statement.” By the G.O dated November 16, 1990, the State Government has made a statement and has made it known publicly that entire areas of minor minerals in the State of U.P shall be leased out on the basis of auction/tender/auction-cum-tender. It has been fur-’ ther announced that the lease will be given in accordance with the procedure prescribed by Rule 27, 27-A or 27-B which is in Chapter IV of the Rules, It cannot, therefore be said that the G.O dated November 16, 1990, does not amount to a general declaration as contemplated by sub-rule (1) of Rule 23.

11. Learned counsel for the petitioner has contended that under sub-rule (I) of R. 23 the State Government is required to declare the specific area which have to be leased out by auction or by tender or by auction-cum-tender and since in the G.O aforesaid specific areas have not been mentioned therefore it will not amount to a general declaration as required by Rules. The submission is that the details, namely, the plot Nos., name of village and district, should have been given in the order. Para, 2 of the Order shows that a direction has been given with regard to the entire mining area available in the State. Since the State Government has made a declaration with regard to the entire mining area of the State under sub-rule (1) of Rule 23, and no mining area has been left out, it was not at all necessary to give the details like plot numbers, village ordistrict. The position may have been different if the order had been issued with regard to some specific areas. The submission made by learned counsel, in our opinion, has no substance.

12. Learned counsel for the petitioner has placed reliance upon a Division Bench decision in The Union Of India v. Haim Aghajan*, AIR 1968 Bom 366 in support of his submission that the G.O dated November 16, 1990, does not amount to declaration under sub-rule (I) of Rule 23 of the Rules and has referred to the following statement in para. 6 of the report:—

“The word ‘declare in S. 12(1) can have but one meaning and that is a ‘a true declara tion’ It is impossible to construe the word ‘declaration’ by itself and give its ordinary meaning which may mean ‘any statement that a person may make.’”

13. The aforesaid observation was made by the Bench in reference to Ss. 12 and 22 of Foreign Exchange Regulation Act, 1947. S. 22 provided that no person when making any declaration to any authority make any statement which he knows or has reasonable cause to believe to be false or not true. The authority cited has no bearing on the controversy in hand nor the proposition laid down there anyway runs contrary to the view taken by us that the G.O amounts to a declaration under sub-rule (1) of Rule 23. Learned Standing Counsel has placed reliance upon Machhua Matsya Vikas Sahkari Samiti v. State, AIR 1986 All 300 in support of his submission that even if specific description of the plots was not mentioned in the notification it will not become invalid and the provisions of sub-rule (3) of Rule 23 will apply to the area. In this case in the notification issued under Rule 23 of the Rules large number of plots were mentioned and at the, bottom of this notification a recital was made to the following effect (as translated into English):

“In this district all the areas on the bank of river Ganga or any other river where and is available.”

14. It was held that the recital at the bottom of the notification was sufficient to embrace all the mining areas on the bank of river Ganga and other rivers and the provisions of sub-rule (3) of Rule 23 will apply to all such areas even though no specific plots Nos. or details had been given.

15. By notification No. 968-M/XVIII-F-M-68-63 dated December 12, 1963, issued in exercise of power conferred by Rule 71 the State Government has directed that power under Rule 23 of the Rules may also be exercised by a District Officer in relation to all minor minerals to which these rules apply other than lime-stone and marble. Therefore, the District Officer can also exercise power under Rule 23(1) of the Rules with regard to sand (Morram). The District Officer, Jalaun, issued an auction notice on 27-8-1991 directing that auction will be held on 27-9-1991 for giving leases of the areas for excavating sand on the basis of auction and tender. In the auction notice the names of the villages in dispute, namely Parasan and Kahata Hamir-pur, are mentioned at serial Nos. 18 and 19. The details of the various plots including their numbers and areas are also mentioned in the notice. This auction notice, in our opinion, also amounts to a declaration under sub-rule (1) of Rule 23 of the Rules. The auction notice clearly mentioned that leases for all minining areas for excavating sand from various plots in villages Parasan and Kahata Hamirpur shall be given on the basis of auction and tender on 27-9-1991. By this auction notice the District Officer had made a public announcement in most unequivocal terms that leases of mining area shall be given on the basis of auction and tender. This auction notice, therefore, completely fulfills the requirements of sub-rule (1) of Rule 23 and has been issued by a competent authority to whom power has been delegated in accordance with Rules. So the result of the auction notice issued by the District Officer on 27-8-1991 is that the lease of mining area has to be granted in accordance with Chapter IV and the provisions of Chapters 11 and III shall not apply.

16. It was next submitted that the petitioner's application for grant of lease was initially rejected by the District Officer on 7-3-1988 but the revision against the said order was allowed on 7-12-1989 by the Central Government and the matter was remanded to the State Government for fresh decision. The State Government again rejected the application by order dated 14-11-1990 but the said order was quashed by the High Court in Writ Petition No. 28059 of 1990 by order dated 17-5-1991. It is submitted that in view of the decision of the Central Government dated 7-12-1989 and of the High Court dated 17-5-1991 the petitioner was entitled to a lease in its favour-and the State Government has erred in rejecting its application on 4-10-1991. In our opinion neither the Central Government nor this Court had ever given any direction to the effect that lease be granted in favour of the petitioner. By order dated 7-12-1989 the Central Government had merely remanded the matter to the 1993 All. L.J 66 IX (1) State Government for reconsideration of the application moved by the petitioner. In Writ Petition No. 28059 of 1990 this Court had only considered the question that it was possible for the State Government to grant a lease for an area exceeding 30 acres as provided by Rule 10 of the Rules by taking recourse to Rule 68 which gives the power to the State Government to give relaxation in Rules in special cases. The operative portion of the judgment and order dated May 17, 1991, in the writ petition shows that the State Government was directed to decide the petitioner's application for grant of mining lease afresh in the light of the observations made in the judgment and in the order of the Central Government. Thus it is clear that no order had been passed for granting lease in favour of the petitioner but the matter had been sent back for reconsideration.

17. Shri G.N Verma has then contended that in the earlier Writ Petition No. 28059 of 1990 the State had taken the plea that in view of the Seventeenth Amendment in the Rules the mining area has to be leased out on the basis of auction but this plea was not accepted and the writ petition was allowed and, therefore, the State is debarred from raising such a plea on the principle of res judicata. A copy of the counter-affidavit filed by the State in the aforesaid writ petition has been filed along with the rejoinder-affidavit of the petitioner. In para. 16 of the said counter-affidavit it was no doubt stated that before the Seventeenth Amendment in the Rules leases covering an area of not more than 30 acres were granted but under the existing policy of the State Government leases shall be granted only by way offender and auction system as per latest amendment in the Rules made on 26-9-1990. However, in the judgment of this Court there is neither any discussion nor any finding on this question. The Court did not at all consider the effect of the Seventeenth Amendment in the Rules nor it appears that the G.O dated November 16, 1990, was brought to the notice of the Court. It is well settled that it is only a finding on an issue in a judgment which operates as res judicata. Since there is no finding on the effect of Seventeenth Amendment of the Rules and the declaration made by the State Government in the judgment, this cannot operate as res judicata against the State.

18. There is another reason due to which we do not consider it proper to interfere in writ jurisdiction. The State Government has amended the Rules by the Seventeenth Amendment introducing a system by which leases would be granted on the basis of auction or tender or auction-cum-tender. Every citizen of India including the petitioner is entitled to participate in the auction. Naturally the highest bidder will be granted a lease. This will increase the public revenue as the State will get the highest price for its minerals. In Khilodhar v. Addl. District Magistrate, 1987 All LJ 590, while considering the provisions of Rule 115-S of the U.P.Z.A & L.R Rules regarding grant of fishery rights in tanks belonging to Gaon Sabha a Division bench of our Court speaking through Hon. K.J Shetty, C.J observed as follows in para 4 of the report:—

“The disposal of any right by public auction is a wholesome procedure. It is advisable to follow that procedure even if it has not been specifically prescribed. But when prescribed, it must be faithfully followed. It must not be disregarded.”

19. The matter regarding grant of mining lease with regard to a minor mineral was considered by Hon'ble Supreme Court in State of U.P v. Shiv Charan Sharma, 1981 Supp SCC 85 : AIR 1981 SC 1722 : (1981 All LJ 1025), where it was observed as follows in paras 3 and 4 of the report:—

“In proceeding in this manner, we are not embarking upon any hitherto unknown or adventurous course. We are merely translating into action the sentiment expressed in the majority opinion of the Constitution Bench in Fertilizer Corporation Kamgar Union (Regd.), Sindri v. Union of India, (1981) 1 SCC 568 : (AIR 1981 SC 344 at p. 350). The pertinent observation may be extracted:

“We want to make it clear that we do not doubt the bona fides of the authorities, but as far as possible, sales of public property, when the intention is to get the best price, ought to take place publicly. The vendors are not necessarily bound to accept the highest or any other offer, but the public at least gets the satisfaction that the Government has put all its cards on the table.”

Public auction with open participation and a reserved price guarantees public interest being fully subserved. That is what High Court by the judgment under appeal directed.”

20. What the petitioner wants is that it should be granted a mining lease for 227.6 acres of land in accordance with Chapter II of the Rules, though there is a prohibition under Rule 10 for granting lease of an area of more than 30 acres, and it wants to pay royalty at the rate fixed in the First Schedule. Judicial notice can be taken of the fact that the price which sand or morram fetches in open market is many-times higher than the price fixed in the First Schedule. The petitioner does not want an auction to be held nor it wants to participate in such an auction. It wants an exclusive area for itself for which it will have to pay a very small amount as royalty and dead rent. The procedure of auction adopted under the amended rules is beneficial to both, public at large and also the State. The system gives the best price to the State and also ensures an open participation to every person desirous of entering into such a business. As observed by the Supreme Court such a system guarantees public interest being fully subserved. Though, as discussed earlier, the petitioner has no case on merits yet it is an additional reason due to which we do not consider it a fit case for interference in exercise of our equitable jurisdiction under Art. 226 of the Constitution of India.

21. Shri G.N Verma has strenuously contended that no declaration was made as contemplated by sub-rule (1) of Rule 23 with regard to villages Prasan and Kahata Hamir-pur for which the petitioner had moved application for grant of lease and as such provisions of Chapter IV of the Rules shall not apply to the aforesaid villages and they will continue to be governed by Chapters II, III and VI and there was no impediment in granting lease in its favour. Learned Counsel for the petitioner has contended that in pursuance of the direction issued by this Court the petitioner had moved an application before the District Officer, Jalaun, for being given certified copy of Form MM-5 but the same was deliberately not supplied as the names of the aforesaid two villages were not mentioned therein. He has further submitted that in the short counter-affidavit (sworn on 5-10-1991) filed on behalf of the State, copy of Form MM-5 was filed as Annexure-5. This Form MM-5 had been certified to be correct by the A.D.M (F & R), Jalaun, on 30-9-1991 but curiously enough it contained entry only up to serial No. 39 and the names of villages Parasan and Kahata Hamirpur were not mentioned. The State filed another counter-affidavit (sworn on 12-10-1991) where also copy of Form MM-5 was filed in which towards the end the names of villages Parasan and Kahata Hamirpur were mentioned. This Form MM-5 was certified to be correct by A.D.M (F & R) on 5-10-1991 but the date of declaration with regard to these two villages is mentioned as 27-8-1991. The contention of the learned Counsel is that if really the declaration with regard to these villages had been made on 27-8-1991, the copy of Form MM-5 which was filed along with the short-counter-affidavit (sworn on 5-10-1991) and certified by the A.D.M on 30-9-1991, should have also contained the names of these two villages. Since the names of these two villages were not mentioned in the aforesaid Form MM-5 it obviously means that no declaration with regard to these villages had been made till 30-9-1991 but had been done subsequently. Learned Counsel has vehemently urged that the officers of the State have committed forgery in the records and have mentioned the names of these two villages sometimes after 30-9-1991 and the date of declaration 27-8-1991 mentioned in the affidavit filed on behalf of the State is false. The State in the supplementary affidavit (sworn on 13-11-1991) has tried to explain this discrepancy. It is stated in this affidavit that the entry in Form MM-5 filed along with the short-counter-affidavit (sworn on 5-10-1991) and certified by the A.D.M on 30-9-1991, was only up to serial No. 39. Form MM-5 which has been filed along with the main counter-affidavit sworn on 12-10-1991 and certified by the A.D.M on 5-10-1991 mentions a list of 41 villages in which Parasan is mentioned at serial No. 40 and Kahata Hamirpur at sl. No. 41. It is admitted that this entry of villages Parasan and Kahata Hamirpur in Form MM-5 was done subsequently and at the time when its copy as certified by the A.D.M on 5-10-1991 was issued the names of these villages had already been incorporated. However by mistake of the clerk concerned the date 27-8-1991 was written in column No. 9 and the District Officer put his signature over the date showing thereby that he had signed the said entry on 27-8-1991. It is thus submitted that though the date 27-8-1991 mentioned in column No. 3, which represents the date of declaration, is correct but the date mentioned under the signature of the District Officer in column No. 9 was wrong as the entry had been made after 30-9-1991 and had not been made on 27-8-1991. Thus it is admitted in the supplementary affidavit that in Form MM-5 the names of these villages had been mentioned sometime after 30-9-1991 though the entries in the records show as if the same was done on 27-8-1991. We cannot but express our displeasure to the manner in which form MM-5 has been prepared and the District Officer has put his signature thereon. If the District Officer had put his signature in column No. 9 sometime after 30-9-1991, which also aprears to be correct from the material on record, there was absolutely no reason or justification for putting the date 27-8-1991 below his signature. This shows the callous manner in which the district authorities have discharged the duty and also their utter disregard for the sanctity to official documents.

22. A question still arises as to whether in view of the fact that the names of villages Parasan and Kahata Hamirpur were mentioned in Form MM-5 sometime after 30-9-1991 the auction notice issued by the District Officer is illegal. Rule 25 of the Rules provides that the District Officer shall cause to be maintained a register of areas declared under sub-rule (1) of Rule 23 in Form MM-5. At serial No. 3 in form MM-5 there is a column in which date of declaration has to be mentioned. Rule 25 does not say that Form MM-5 has to be prepared simultaneously along with a declaration under sub-rule (1) of Rule 23. In fact column No. 3 of form MM-5 itself contemplates that the said form would be prepared sometime after declaration has been made. In our opinion Form MM-5 is merely a record where areas declared for auction/tender/auction-cum-tender shall be noted down. It is described as “Register of Areas Declared for Auction/Tender/Auction-cum-Tender Lease” in the Rules. Therefore, the mere fact that on a particular day name of a particular village is not mentioned in Form MM-5 cannot lead to the inference that declaration under Rule 23(1) of the Rules has not been made with regard to the said village till the said date. In para 35 o the writ petition it is admitted that in the auction notice issued by the District Officer on 27-8-1991 the villages are shown at item Nos. 18 and 19. This fact is again admitted by the petitioner in para 5 of its rejoinder-affidavit (sworn on 26-10-1991) and also in para 16 of its supplementary affidavit. Thus it is admitted to the petitioner itself that in the auction notice issued on 27-8-1991 names of these villages were mentioned. We have already held above that auction notice issued by the District Officer amounts to a declaration under sub-rule (I) of Rule 23 of the Rules. We have also held that the G.O issued by the State Government on November 16, 1990, amounts to a declaration with regard to the? area of minor minerals in the State of.? Thus it cannot be held that no declaration has been made with regard to these two villages as required by sub-rule (1) of Rule 23 and the contention raised by the learned Counsel for the petitioner has no substance.

23. In view of the discussion made above there is no merit in this writ petition. It is accordingly dismissed. The interim order is vacated.

Petition dismissed.