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Sahi Ram v. Avtar Singh And Others
Factual and Procedural Background
The respondent was granted a mining lease for major minerals on 8 July 1981. A separate surface lease for minor minerals over the same land had earlier been issued to one Shri R. L. Sharma. Inspections by the Director of Mines revealed alleged breaches of the lease terms, resulting in a show-cause notice under Rule 27(5) of the Mineral Concession Rules, 1960 on 10 March 1983. After the respondent’s reply, the Department prosecuted him, leading to a conviction on 13 September 1983; on appeal, the respondent secured the benefit of the Probation of Offenders Act, 1958.
Further notices followed. A stop-work order was issued on 23 February 1984, and the State of Haryana terminated the lease on 27 April 1984 and assumed possession on 29 April 1984. The respondent’s revision under Section 30 of the Mines and Minerals (Regulation and Development) Act, 1957 was dismissed by the Central Government on 24 November 1984.
The respondent challenged the termination before the Delhi High Court in Civil Writ Petition No. 2566 of 1985. On 24 November 1992, a learned Single Judge found violations of natural justice but, instead of remitting the matter, directly restored the lease for its unexpired term. The Division Bench (LPA No. 73 of 1992) affirmed that decision.
Meanwhile, the appellant, Sahi Ram, obtained a lease for the same major mineral area on 31 October 1985, which has since been renewed. He appealed to the Supreme Court, asserting that the respondent committed serious breaches and that the High Court erred in restoring the lease.
Legal Issues Presented
- Whether the High Court was justified in restoring the respondent’s mining lease outright after finding a denial of natural justice, instead of remitting the matter for fresh consideration by the competent authority.
- Whether the breaches and irregularities cited in the termination order were in fact attributable to the respondent or to Shri R. L. Sharma, the surface lessee.
- What procedural steps are necessary to ensure compliance with the principles of natural justice in reconsidering the termination of the lease.
Arguments of the Parties
The opinion does not contain a detailed account of the parties' legal arguments.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The Supreme Court observed that once the High Court concluded that relevant inspection reports and factual materials had not been supplied to the respondent, the appropriate course was to remit the matter for reconsideration, not to restore the lease summarily. To balance efficiency with fairness, the Court determined that the remand should be to the Central Government (the revisional authority) rather than back to the State of Haryana.
The Court emphasized the following procedural safeguards:
- The Central Government must issue a fresh show-cause notice within six weeks, explicitly setting out every factual element relied upon in the State’s cancellation order (27 April 1984) and in the Central Government’s own earlier order (24 November 1984).
- The notice must be accompanied by copies of all documents relied upon.
- The respondent must be given an opportunity to reply; the appellant Sahi Ram must receive a copy of that reply and may file objections.
- After considering any rejoinder from the respondent, the Central Government shall grant a personal hearing to both parties and render a reasoned decision, determining inter alia whether the alleged breaches were committed by the respondent or by Shri R. L. Sharma.
- The Central Government’s fresh order must be passed and submitted to the Supreme Court within four months, with copies to all stakeholders.
The Court retained seisin of the matter, directing that it be listed on 27 September 1999, and ordered that the existing status quo remain in force in the meantime.
Holding and Implications
ORDER: Matter remanded to the Central Government for de novo consideration with directions to issue a fresh show-cause notice, hear both parties, and pass a reasoned order within four months; status quo to continue until further orders.
Implications: The Supreme Court did not adjudicate the substantive rights of the parties but ensured that any decision on the lease termination would be made after affording full procedural fairness. The outcome of the respondent’s lease and the appellant’s subsequent lease now depends on the Central Government’s forthcoming decision, which will later be subject to the Supreme Court’s review. No new legal precedent on substantive mining law was set; the ruling reinforces procedural due-process requirements for administrative decisions.
M. Jagannadha Rao, J.— Leave granted.
2. This appeal is directed against the judgment of the Delhi High Court in LPA No. 73 of 1992 confirming the judgment of the learned Single Judge dated 24-11-1992 in Civil Writ Petition No. 2566 of 1985 allowing the writ petition.
3. The respondent filed the writ petition questioning the revisional order of the Central Government dated 24-11-1984 passed under Section 30 of the Mines and Mineral (Regulation and Development) Act, 1957 (hereinafter called “the Act”), dismissing the revision petition and confirming the order of the State of Haryana dated 27-4-1984 terminating the mining lease granted to the appellant on 8-7-1981.
4. The respondent was granted mining lease on 8-7-1981 in respect of major minerals. This was underneath while on the surface, minor mineral lease was granted to one Mr R.L Sharma. A joint inspection of the leased area by the Director of Mines is said to have revealed various irregularities. A show-cause notice was issued to the respondent on 10-3-1983 under Rule 27(5) of the Mineral Concession Rules, 1960 (hereinafter called “the rules”) and the respondent was directed to remedy the breaches in 60 days. The respondent replied on 9-5-1983. The Department filed a complaint which ended in a conviction on 13-9-1983. In appeal, the respondent is said to have merely sought benefit under the Probation of Offenders Act, 1958. The same was granted and the appeal dismissed. According to the appellant, this meant that the respondent admitted contravention or breaches alleged against him.
5. By letter dated 20-10-1983, further breaches were pointed out and the respondent asked to submit a scheme with plans to rectify the defects. On 18-1-1984, the respondent was asked to form benches and employ workers to rectify the defects pointed out in the prohibitory order dated 20-10-1983. There was an inspection on 21-2-1984. A stop-work order was passed on 23-2-1984. Then the impugned order of termination of lease was passed on 27-4-1984 by the State of Haryana under Rule 27(5). Possession is said to have been taken over by the State on 29-4-1984. Revision to the Central Government was dismissed on 24-11-1984.
6. The learned Single Judge, while allowing the respondents' writ petition on 24-11-1992 held that the State of Haryana violated principles of natural justice. But after holding so, the learned Judge instead of directing that the matter should go back to the State of Haryana, which terminated the lease, straightway restored the lease for the remaining period, without directing any further enquiry to be made after adequate notice to the respondent in conformity with the principles of natural justice. This judgment was confirmed in an LPA.
7. Now this civil appeal is preferred by Sahi Ram who was granted lease of the major minerals on 31-10-1985 in the interregnum and his lease was being renewed. He has filed this appeal contending that the respondent was guilty of severe breaches, that the order of the State Government and the Central Government was right and that the orders of the learned Single Judge and the Division Bench are wrong.
8. Elaborate arguments were addressed before us by the learned Senior Counsel for the appellant, Shri P.P Rao and Shri M.S Ganesh and for the respondent, by learned Senior Counsel, Dr L.M Singhvi and for the State of Haryana by Mr Prem Malhotra. It may be stated that the State of Haryana had filed a special leave petition against the order of the High Court but withdrew the same.
9. In the view we had taken during the course of the arguments, we told learned counsel for the respondent that the learned Single Judge — once he came to the conclusion that certain documents relating to inspection reports were not supplied or that the facts relied upon by the State Government and the Central Government in their orders were not put to the respondent seeking his explanation — should have remitted the matter back instead of straightway setting aside the termination of lease and restoring it back. We, therefore, suggested that the matter should go back, instead of the State Government, to the Central Government, so that time could be saved. We directed counsel to give us the points which could be referred back to the Central Government. Both sides have filed a long list of points to be referred to the Central Government.
10. We have considered these draft points suggested by both sides. We are of the view that one of the important issues is as to whether the breaches discovered or irregularities committed were by the respondent or Shri R.L Sharma. Initially notice was given for the rectification of defects in 60 days. Subsequent inspections showed, according to the Department, that the respondent had not rectified the defects or breaches of the lease terms or the rules applicable. Therefore, after the show-cause notice, several inspections took place. It is not clear from the record before us whether the respondent or his agent was present at these inspections. It is also necessary to give to the respondent adequate notice of the various facts taken into account in the orders of the State Government cancelling the lease and in the order of the Central Government revision.
11. We are of the view that it is necessary that a fresh show-cause notice be issued by the revisional authority, the Central Government to the respondent giving the facts which are set out in the order of cancellation of lease dated 27-4-1984 and as set out in the order of the Central Government dated 24-11-1984 and which have been relied upon against the respondent. The said show-cause notice will therefore be issued to the respondent within six weeks from today by the Central Government.
12. In view of the fact that the appellant is in possession under a lease granted on 31-10-1985 and renewed thereafter till date, it will be necessary for the Central Government to hear the appellant Sahi Ram also after allowing him to file his objections to the reply of the respondent.
13. The Central Government will, therefore, give a show-cause notice to the respondent as above-stated (with a copy to the appellant) setting out all the factual material relied upon against the respondent by the State of Haryana in his cancellation order dated 27-4-1984 and the material relied upon by the Central Government in its order dated 24-11-1984. The show-cause notice will be accompanied by copies of all such documents as were relied upon against the respondent by the State of Haryana and by the Central Government. After receiving the explanation of the respondent and the objections of the appellant to the said explanation of the respondent and the rejoinder of the respondent, if any thereto, the Central Government will give a hearing to the respondent and to the appellant, and will pass a reasoned order and submit the same to this Court within four months from today, after communicating the same to the appellant and the respondent and the State of Haryana. The Central Government shall also decide whether the breaches and irregularities were committed by the respondent or by Shri R.L Sharma. The aggrieved parties can file objections thereto thereafter in this Court.
14. List this matter on 27-9-1999. In the meantime the status quo as of today will continue.
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