Ramesh Kumar vs State of Rajasthan and Another

R.S. Chauhan, J.—In Charles Dickens'' novel Oliver Twist, Oliver made the fatal mistake of asking the In-charge of the orphanage for a second helping of soup. Oliver Twist was castigated for his audacity. Similarly, in the present case the petitioner has audaciously requested for the renewal of his mining licence. He has suffered the same fate. Vide order dated 10-8-2007, the petitioner''s application for renewal of mining lease has not only been rejected, but security amount has also been forfeited. Like poor Oliver Twist, the petitioner is also hoping that he will see better days ahead.

This petition involves very short controversy, namely, whether the respondents are justified in rejecting an application for renewal of mining lease without following the procedure established in Rule 26 of the Mineral Concessions Rules,1960 (`the Rules'' for short) or not? Since the controversy is very short, only the bare facts are narrated herein below.

As far back as on 2-8-1985, the State Government had granted mining lease to the petitioner for mining mineral silica sand, china clay, mineral activities near village Bilang Tehsil Kaman, District Bharatpur. The lease was to come into effect from 22-8-1985. The mining area was spread out in 245.71 hectare of land. The lease was for a period of 20 years. Thus, the lease period was to come to an end on 21-8-2005. During this period, in order to develop the mine, the petitioner invested crores of rupees. He not only constructed roads, developed infrastructure facilities, but also introduced machinery and vehicles. He planted trees and erected buildings for administrative officers. Till 2005, the petitioner spent about Rs. 4,53,77,038. According to the petitioner, for his development and maintenance of the mines, he had been lauded by Indian Bureau of Mines and the Director General of Mines.

A year before the lease period was to end, on 14-7-2004, the petitioner applied for renewal of the lease-deed. However, instead of objectively considering the petitioner''s application, the respondents No. 3, 5 and 6 started threatening the petitioner. Therefore, the petitioner filed a writ petition before this Court, registered as S.B. Civil Writ Petition No. 6908/2005. Vide order dated 31-8-2005, this Court granted an interim stay in the petitioner''s favour and directed the respondents to permit the petitioner to operate the mines and to excavate silica sand upto capacity of 80 MT per day.

Vide notice dated 14-10-2005, the respondents directed the petitioner to comply with certain conditions for the purpose of grant of renewal of lease-deed. According to the petitioner, the said notice has been issued under Rule 26(3) of the Rules. However, according to the petitioner the requirement of law is that prior to issuance of notice under Rule 26(3), a notice under Rule 26(1) has to be issued. But according to the petitioner, no notice under Rule 26(1) has ever been issued to him. However, the respondents claim that they did send a notice under Rule 26(1) of the Rules to petitioner on 14-10- 2005. We shall revert back to this aspect, since the entire controversy revolves around non compliance of Rule 26(1) of the Rules.

It is further the case of the petitioner that vide letter dated 11-5- 2007, the respondents threatened the petitioner that in case certain irregularities, allegedly committed by him, are not removed, then they would be compelled to reject the application for renewal and to forfeit the security amount. Since the petitioner was aggrieved by the said notice/ letter dated 11-5-2007, he filed another writ petition before this Court, registered as S.B. Civil Writ Petition No. 5772/2007.

Since the respondents were agitated by the fact that every time the petitioner would rush to the refuge of this Court, vide order dated 10-8-2007, they rejected the petitioner''s application for renewal of licence and forfeited the security amount. Hence, this petition before this Court.

Mr. Rajeev Surana, the learned Counsel for the petitioner, has vehemently contended that the right of livelihood is part of right to "life" contained under Article 21 of the Constitution of India. Right to livelihood, right to carry out any trade or business is equally part of "personal liberty" enjoyed by a person. Therefore, the right to livelihood is covered both, under Article 19 and 21 of the Constitution of India. In case the State wants to deprive a person of his right to livelihood, it can do so only after following the procedure established by law. Mines and Minerals (Regulation and Development) Act, 1957 and the Rules made thereunder deal with the grant of licence and with the renewal of licence. The Act and the Rules contain the procedure established by law. Therefore, while renewing the licence, the competent authority is duty bound to adhere to the procedure prescribed under the Act and the Rules. For, it is a settled principle that once a procedure has been established, the competent authority is bound to follow it. Secondly, according to Rule 26 of the Rules, the State Government may refuse to renew a mining lease, only after giving an opportunity of hearing and recording its reasons. Thus, before any action can be taken under Rule 26(3), notice under Rule 26(1) is sine qua non pre-condition. However, in the present case, no notice under Rule 26(1) was ever sent to the petitioner. Since, the said procedure has not been followed, the order dated 10-8-2007 is absolutely arbitrary, unjust and unfair.

On the other hand, Mr. S. N. Kumawat, the learned Additional Advocate General for the State, has contended that in fact on 14-10- 2005 notice under Rule 26(1) was duly sent to the petitioner. Therefore, the respondents were justified in dismissing the application for renewal of licence and in forfeiting the security amount. Thus, he has supported the impugned order.

Heard learned Counsel for the parties and perused the material available on record.

During the course of arguments, this Court specifically asked Mr. Kumawat to produce the copy of notice dated 14-10-2005, allegedly sent under Rule 26(1), as the said notice was conspicuously missing from the reply filed by the State. Despite taking numerous adjournments, the State could not produce the said notice. Finally, during the course of arguments, Mr. Kumawat frankly conceded, and in our opinion rightly so, that no notice under Rule 26 (1) was sent.

Rule 26 of the Rules reads thus:

Refusal of application for grant and renewal of mining lease.--

(1) The State Government may, after giving an opportunity of being heard and for reasons to be recorded in writing and communicated to the applicant, refuse to grant or renew a mining lease over the whole or part of the area applied for.

(2) An application for the grant or renewal of a mining lease made under Rule 22 or Rule 24-A, as the case may be, shall not be refused by the State Government only on the ground that Form I or Form J, as the case may be, is not complete in all material particulars, or is not accompanied by the documents referred to in Sub-clauses (d), (e), (f), (g) and (h) of Clause (i) of Sub-rule (3) of Rule 22.

(3) Where it appears that the application is not complete in all material particulars or is not accompanied by the required documents, the State Government shall by notice, require the applicant to supply the omission or, as the case may be, furnish the documents without delay and in any case not later than sixty days from the date of receipt of the said notice by the applicant.

It is, indeed, a settled principle of law that once the law prescribes a procedure, then the competent authority is legally bound to adhere to the said procedure. In the present case under Rule 26(1) of the Rules, the respondents were legally bound to send a notice to the petitioner, however, they failed to do so. Therefore, the procedure has been flouted by the respondents. Since, the pre-condition of Rule 26(1) has not been fulfilled, the power under Rule 26(3) of the Rules could not be invoked for dismissing the application. Therefore, clearly the order dated 10-8-2007 is not only arbitrary, unfair and unjust, but it is also patently illegal.

In the result, the impugned order dated 10-8-2007 is quashed and set aside. The respondents are directed to reconsider the case of petitioner for renewal of his licence after meticulously following the procedure established by law. The application should be decided within a period of two months from the date of receipt of the certified copy of this judgment.

With these observations, the writ petition is, hereby, allowed.

There shall be no order as to costs.