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Judgment
R E P O R T A B L E
06/08/2026
The instant writ petition has been filed by the petitioner under Article 226 of the Constitution of India with the following prayers:
“By an appropriate writ, order or direction and thereby quash and set aside the impugned order dated 07.05.2025 (Annexure-1) and the lease agreement dated 09.05.2025 (Annexure-2) executed in favour of 2 respondent No.5, being illegal, arbitrary and contrary to the provisions of law.
By an appropriate writ, order or direction to the respondent authorities to cancel the mining lease/licence granted in favour of respondent No.5, as the same has been obtained and continued by concealment of material facts and in violation of Rule al of the Rajasthan Minor Mineral Concession Rules, 2017 and the conditions of lease deed;
By an appropriate writ, order or direction directing the respondent authorities to conduct a fair and independent enquiry into the illegal acts and concealment committed by respondent No. 5 and to take appropriate action in accordance with law.
By an appropriate writ, order or direction restraining respondent No.5 from carrying out any mining activities pursuant to the impugned lease during pendency of the present writ petition;
The direct the respondent authorities to consider and decide the representations submitted by the petitioner dated 04.05.2026 in a time-bound manner in accordance with law;
Award costs of the present petition in favour of the petitioner and against the respondents;
Pass any other appropriate order or direction which this Hon’ble Court may deem fit, just and proper in the facts and circumstances of the case in favour of the petitioner.”
The facts, briefly stated, are that respondent No.5 was granted a Bajri mining lease for five years vide order dated 07.05.2025, pursuant to which the lease contract dated 09.05.2025 was executed between respondent Nos.5 and 3, containing restrictions under Clause 7(2) against assignment, subletting or parting with possession of the leased area except as permitted under Rule 27 of the Rajasthan Minor Mineral Concession Rules, 2017. Prior to execution of the lease, respondent No. 5 had entered into a partnership agreement dated 25.04.2025 with the petitioner for 50:50 sharing of profits, under which the petitioner was to manage the mining operations and had deposited approximately Rs.6 crores. The petitioner alleges that the said arrangement was concealed, in violation of Rule 27 and Clause 7(2) of the lease agreement. He thereafter submitted representations dated 04.05.2026 seeking action against respondent No.5, but allegedly received no response. Aggrieved thereby, the petitioner has invoked the jurisdiction of this Court under Article 226 of the Constitution seeking quashing of the lease and consequential reliefs.
Counsel for the petitioner submits that respondents have violated Clause 6(7)(b) and 7(2)of the Contract dated 09.05.2025 entered between the respondent No.3 and 5 and same has been violated. He further submits that the respondents have acted in clear and deliberate violation of Rule 27 of the Rajasthan Minor Mineral Concession Rules, 2017, as also the express terms and conditions of the lease deed dated 09.05.2025, which specifically prohibit the lessee from assigning, subletting or in any manner parting with possession of the leased area without the prior permission of the competent authority. He also submits that this restriction is not a mere contractual formality but a mandatory statutory safeguard intended to ensure that mining rights granted under a lease are exercised only by the person to whom they are granted, and non-compliance therewith strikes at the root of the lease, rendering it liable to cancellation. He also submits that by inducting the petitioner into the operation and management of the mining activity through the partnership agreement dated 25.04.2025, respondent has, in substance and in effect, parted with possession and operational control of the leased premises in favour of the petitioner, without seeking or obtaining any such permission from the competent authority, thereby rendering the arrangement ex-facie illegal and contrary to the statutory mandate.
Per contra, learned Counsel for the respondent submitted that Rule 27 of the Rules, as recited in Clause 7(2) of the lease deed, constitutes a covenant operating exclusively between the lessee (respondent No.5) and the competent authority/State. He further submits that the said provision is regulatory in character, intended solely to enable the State to control and monitor as to who may exploit a public mineral concession, and to safeguard the State's own administrative and revenue interests. He also submits that Rule 27 has not been enacted for the benefit of any private financier or informal associate of the lessee, and consequently, confers no independent right, title or interest, enforceable or otherwise, upon the petitioner. He also submits that the petitioner, not being a party contemplated under the said Rule, cannot found any cause of action thereon, nor can he claim any locus to maintain the present proceedings on the strength of the said provision. He also submits that the present writ petition is wholly misconceived and not maintainable in law, inasmuch as the dispute sought to be agitated by the petitioner is essentially a dispute of a private civil nature between the petitioner and respondent, arising out of an alleged partnership agreement dated 25.04.2025, and does not involve the enforcement of any public law right.
Heard.
Upon examining the rival submission, it would be apposite to notice the relevant contractual and statutory provisions. Clause 6(7)(b) and clause 7(2) of the contract are reproduced hereunder:
“(6)Further covenants of the lessee:
The lessee/lessees further covenant/covenants with the Government as follows:-xxxxxxxxxxxxxx (7)
(a)Abstaining from entering occupied land- The lessee/lessees shall abstain from entering on the surface of any occupied Government land or of any private land comprised within the leased area without previously obtaining the consent of the occupant in writing.
(b)The lessee/lessees shall abstain from opening any new quarry or depot in the leased area without the previous sanction of the Mining Engineer, Assistant Mining Engineer concerned.
xxxxxxxxxxxxxxx
“7- Calculation of royalty, assignment of tax and recovery of dues: It is hereby further agreed between the parties hereto as follows:-
(1)The royalty payable hereunder shall be calculated on the quantity dispatched from or consumed within the leased area as per the rates specified in Schedule-lIl of the Rajasthan Minor Mineral Concession Rules, 2017;
(2)The lessee/lessees shall not assign, sublet or part with the possession of the leased area or any part thereof except in the manner permitted by rule 27 of the said rules.
(3)Without prejudice to any other mode of recovery under any provision of this lease or any law, all amounts falling due hereunder against the lessee/lessees may be recovered as arrears of land revenue under the law in force for such recovery.
(4)The lessee/lessees shall duly and regularly pay to the competent authority all taxes, cess and local dues in respect of the leased area, said minerals or the working of the mines.”
Relevant part of Rule 27(1) of the Rajasthan Minor Mineral Concession Rules, 2017 (‘Rules of 2017’) is reproduced hereunder:
“27.Transfer of mineral concession.-(1) The lessee or licencee shall not, without the previous consent in writing of the competent authority,-
(i)assign, sublet, mortgage or in any other manner transfer the lease or licencee or any right, title or interest therein; and
(ii)enter into or make any bona-fide arrangement, contract or understanding whereby the lessee or licencee will or may be directly or indirectly financed to a substantial extent by or under which the mining operations or undertakings will or may be substantially controlled by, any person or body of persons other than the lessee or licencee:
Provided that where the mortgagee is a state institution or a bank or a state corporation, the lessee or licencee shall inform the Mining Engineer or Assistant Mining Engineer concerned about any mortgage, within a period of one month from the date of mortgage or assignment.”
A plain reading of the Rule 27 of the Rules of 2017, makes the statutory scheme clear. The restriction is imposed upon the ‘Lessee or Licencee’ without the previous written consent of the competent authority, the lessee/licencee cannot transfer the lease or any right, title or interest therein, nor can the lessee/licencee enter into an agreement, whereby, the mining operations are substantially financed or controlled by another person.
The purpose of such a provision is to regulate the manner in which a mineral concession granted by the State is held and operative. It ensures that the person to whom the mineral concession has been granted does not, without approval of the competent authority, effectively transfer the benefit, control or exploitation of the concession to another person. The provision, therefore, operates primarily in the regulatory and public law relationship between the State/Competent Authority and the lessee or licencee.
However, the existence of such a statutory restriction does not by itself confer any independent right upon every person, who claims to have entered into a private arrangement with the lessee. The petitioner admittedly is neither the lessee nor the licencee under the impugned mining lease. His claim arises from the alleged partnership agreement dated 25.04.2025 entered into with the respondent No.5.
Consequently, the petitioner cannot derive a right to maintain the present proceedings merely by relying upon a statutory obligation imposed upon respondent No.5. The fact that Rule 27 of the Rules of 2017 may have been violated, if established, does not necessarily mean that every private party associated with the lessee acquires a corresponding right to seek cancellation of the mining lease. More importantly, the very foundation of the petitioner’s allegation is the partnership/financing agreement dated 25.04.2025. The petitioner himself claims to have entered into that agreement with the respondent No.5, to have acquired a 50:50 interest in the profits and to have participated in the management of the mining operations after investing approximately Rs.6 Crores, as alleged.
Thus, the petitioner cannot simultaneously rely upon the alleged arrangement as the source of his interest and for the purpose of maintaining the present writ petition, seek to treat the same arrangement as an independent ground conferring upon him a right to challenge the status granted in favour of respondent No.5.
There is another important aspect of the matter. The petitioner seeks cancellation of the mining lease granted in favour of respondent No.5 by invoking Rule 27 of the Rules of 2017. The power to grant, regulate or cancel a mineral concession vests in the competent statutory authority in accordance with the governing statutory framework. The petitioner does not acquire the status of the lessee or licencee merely because he claims to have financed or participated in the business of the lessee, therefore, even assuming for the sake of argument that the private respondent No.5 entered into an agreement, which required prior permission under Rule 27 and that such permission was not taken, the petitioner would still have to establish an enforceable legal right or legal interest enabling him to maintain the present petition seeking cancellation of the lease.
On the contrary, the petitioner’s own case reveals that his grievance substantially concerns his investment, his alleged share in the profit, his alleged right to participate in the management and the alleged arrangement entered into with respondent No.5. These are matters arising from the private contractual relationship between the parties. The position becomes particularly significant in view of the settled principles governing exercise of jurisdiction under Article 226 of the Constitution of India.
The Supreme Court in Joshi Technologies International Inc. v. Union of India, (2015) 7 SCC 728, has held that while the jurisdiction of the High Court under Article 226 is wide, such extraordinary jurisdiction cannot ordinarily be invoked in matters arising purely out of private contractual disputes. The Court observed that the writ remedy is available only where the contracting party seeks enforcement of a public law right, as distinguished from a private law remedy arising under the contract. The Supreme Court further held that even where the respondent is the State, a writ of mandamus would not lie unless the dispute involves a corresponding public duty. The relevant paragraphs are reproduced below:
“55.Law in this aspect has developed through catena of judgments of this Court and from the reading of these judgments it would follow that in pure contractual matters the extraordinary remedy of writ under Article 226 or Article 32 of the Constitution cannot be invoked. However, in a limited sphere such remedies are available only when the non-Government contracting party is able to demonstrate that it is a public law remedy which such party seeks to invoke, in contradistinction to the private law remedy simpliciter under the contract. Some of the case law to bring home this cardinal principle is taken note of hereinafter.
56.Significantly, in Andi Mukta Sadguru Shree Muktajee Vandas Swami Suvarna Jayanti Mahotsav Smarak Trust v. V.R. Rudani as well, this Court made it clear that if the rights are purely of private character, no mandamus can be issued. Thus, even if the respondent is "State", the other condition which has to be satisfied for issuance of a writ of mandamus is the public duty. In a matter of private character or purely contractual field, no such public duty element is involved and, thus, mandamus will not lie.”
Further, the Supreme Court in Union of India vs. M/s Puna Hinda, AIR 2021 SC 4187, has observed that a writ court, in exercise of its extraordinary jurisdiction under Article 226 of the Constitution, cannot be called upon to adjudicate disputed questions of fact arising out of purely contractual matters falling within the domain of private law and devoid of any statutory flavour. The relevant paragraph is reproduced below:
“24.Therefore, the dispute could not be raised by way of a writ petition on the disputed questions of fact. Though, the jurisdiction of the High Court is wide but in respect of pure contractual matters in the field of private law, having no statutory flavour, are better adjudicated upon by the forum agreed to by the parties. The dispute as to whether the amount is payable or not and/or how much amount is payable are disputed questions of facts. There is no admission on the part of the appellants to infer that the amount stands crystallized. Therefore, in the absence of any acceptance of Joint Survey Report by the competent authority, no right would accrue to the writ petitioner only because measurements cannot be undertaken after passage of time. Maybe, the resurvey cannot take place but the measurement books of the work executed from time to time would form a reasonable basis for assessing the amount due and payable to the writ petitioner, but such process could be undertaken only by the agreed forum i.e., arbitration and not by the Writ Court as it does not have the expertise in respect of measurements or construction of roads.”
Moreover, this Court has also taken into consideration the case of Kerala State Electricity Board & Anr. v. Kurien E. Kalathil & Ors.,(2000) 6 SCC 293, wherein it was held by the Hon’ble Apex Court that the, that disputes relating to interpretation and implementation of the terms of a contract cannot be the subject-matter of a writ petition, and a contract does not become statutory merely because one of the parties is a statutory or public body. It was further held that such disputes, being in the realm of private law, are matters for adjudication by a civil court or in arbitration, and not in proceedings under Article 226 of the Constitution. The relevant paragraphs are reproduced below:
“10.We find that there is a merit in the first contention of Mr Raval. Learned counsel has rightly questioned the maintainability of the writ petition. The interpretation and implementation of a clause in a contract cannot be the subject-matter of a writ petition. Whether the contract envisages actual payment or not is a question of construction of contract. If a term of a contract is violated, ordinarily the remedy is not the writ petition under Article 226. We are also unable to agree with the observations of the High Court that the contractor was seeking enforcement of a statutory contract. A contract would not become statutory simply because it is for construction of a public utility and it has been awarded by a statutory body. We are also unable to agree with the observation of the High Court that since the obligations imposed by the contract on the contracting parties come within the purview of the Contract Act, that would not make the contract statutory. Clearly, the High Court fell into an error in coming to the conclusion that the contract in question was statutory in nature.
11.A statute may expressly or impliedly confer power on a statutory body to enter into contracts in order to enable it to discharge its functions. Dispute arising out of the terms of such contracts or alleged breaches have to be settled by the ordinary principles of law of contract. The fact that one of the parties to the agreement is a statutory or public body will not by itself affect the principles to be applied. The disputes about the meaning of a covenant in a contract or its enforceability have to be determined according to the usual principles of the Contract Act. Every act of a statutory body need not necessarily involve an exercise of statutory power. Statutory bodies, like private parties, have power to contract or deal with property. Such activities may not raise any issue of public law. In the present case, it has not been shown how the contract is statutory. The contract between the parties is in the realm of private law. It is not a statutory contract. The disputes relating to interpretation of the terms and conditions of such a contract could not have been agitated in a petition under Article 226 of the Constitution of India. That is a matter for adjudication by a civil court or in arbitration if provided for in the contract. Whether any amount is due and if so, how much and refusal of the appellant to pay it is justified or not, are not the matters which could have been agitated and decided in a writ petition. The contractor should have relegated to other remedies.”
In substance, therefore, the petitioner seeks to convert a dispute arising from a private commercial arrangement into an enforceable legal right by way of filing the present writ petition. The mere impleadment of the State or the invocation of a statutory provision regulating the conduct of a mineral concessionary, cannot by itself transform a private contractual dispute into a enforceable legal right under Article 226 of the Constitution of India. The limited question before this Court is whether on the basis of the pleadings and material placed on record, the petitioner has established a legally enforceable right warranting exercise of the extraordinary jurisdiction under Article 226 of the Constitution of India for cancellation of the mining lease granted in favour of respondent No.5.
For the reasons recorded hereinabove, the answer must be in the negative. The petitioner not being the lessee or licencee and having founded his grievance substantially upon a private partnership/financing arrangement with respondent No.5, has failed to establish the requisite legally enforceable right under Article 226 of the Constitution of India. The dispute in substance concerns the right and obligation arising between private parties and involves disputed questions of fact which cannot appropriately be adjudicated in the instant writ petition.
Consequently, the writ petition is held to be not maintainable and is accordingly dismissed.
Footnotes
- 1.31/Pradeep Kumar Limba