Surendra Prasad Saha vs State of Bihar

S.B. Sinha, J.—This application is directed against an order dated 8-4-1985 as contained in Annexure 1 to the writ application whereby and whereunder the District Mining Officer, Giridih informed the petitioner that his applicaton for renewal of the mining lease for mineral sand cannot be renewed in view of the insertion of Rule 11A of the Bihar Minor Mineral Concession Rules, 1972 by the State of Bihar in terms of a notification dated 6-11-1984 as contained in Annexure 2 to the writ application which, incidentally was replaced by another notification dated 14-1-1985 as contained in Annexure 2 to the writ application.

The facts of the case lie in a very narrow compass.

The petitioner was granted a mining lease for the minor mineral sand by reason of registered deed of lease dated 19-5-1980 in respect of an area comprising 11.38 acres of land in village Makatpur and Barmashia for a period for five years commencing from 19-2-80.

In terms of the aforementioned deed of lease allegedly the petitioner was entitled to renewal thereof for a further period of five years.

Allegedly in terms of the aforementioned deed of mining lease the petitioner filed an application on 16-11-84 for renewal of the lease before 90 days from the date of expiry thereof on 19-2-1985 and also deposited the relevant fee.

By reason of the impugned order dated 8-4-1985 as contained in Annexure 1 to the writ application, the petitioner was intimated that in view of the aforementioned notification as contained in Annexure 2 to the writ application, his mining lease cannot be renewed.

It appears that the aforementioned notification dated 6-11-1984 was replaced by notification dated 14-1-1985 which is as contained in Annexure 3 to the writ application.

The parliament enacted Mines and Minerals (Regulation and Development) Act, 1957 (Act 67/1957) (hereinafter referred to as the ''said Act'') to provide for regulation of mines and the development of minerals under the control of the Union.

In terms of Section 14 of the said Act, Sections 4 to 13 thereof do not apply to minor minerals.

Section 20 of the said Act provides that the said Act and rules made thereunder shall apply in relation to the renewal after the commencement of the Act of any prospecting licence or mining lease granted before such commencement as they apply in relation to the renewal of a prospecting licence or mining lease granted after such commencement.

The State of Bihar in purported exercise of its power conferred upon it u/s 15 of the said Act framed rules known as the Bihar Minor Mineral Concession Rules 1972.

By reason of an amending Act being Mines and Minerals (Regulation and Development) Amendment Act 1972, Section 15 of the said Act was amended,

Section 15 of the said Act reads as follows:--

1A. In particular and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely :--

(a) the person by whom and the manner in which, applications for quarry leases and mining leases or other mineral concessions may be made and the fees to be paid thereof;

(b) the time within which, and the form in which, acknowledgment of the receipt of any such applications may be sent;

(c) the matters which may be considered where applications in respect of the same land are received within the same day.

(d) the terms on which, and the conditions subject to which and the authority by which quarry leases, mining leases or other mineral concessions may be granted or renewed.

(e) the procedure for obtaining quarry leases, mining lease or other mineral concessions;

(f) the facilities to be afforded by holders of quarry leases, mining leases or other mineral concessions to persons deputed by the Government for the purpose of undertaking research or training in matters relating to mining operations;

(g) the fixing and collection of rent, royalty, fees, dead rent, fines or other charges and the time within which and the manner in which these shall be payable.

(h) the manner in which rights of third parties may be protected (whether by way of payment of compensation or otherwise) in case where any such party is prejudicially affected by reason of any prospecting or mining operations.

(i) the manner in which rehabilitation of flora and other vegetation such as trees, shrubs and the like destroyed by reason of any quarrying or mining operations shall be made in the same are or in any other area selected by the State Government (whether by way of reimbursement of the cost of rehabilitation or otherwise) by the person holding the quarrying or mining lease.

(j) the manner in which and the conditions subject to which, a quarry lease mining lease or other mineral concesion may be transferred .

(k) the construction, maintenance and use of roads, power transmission lines, tramways, aerial ropeways, pipelines and the making of passage for water for mining purpose on any land comprised in a quarry or mining lease for other mineral concession;

(l) the form of registers to be maintained under this Act.

(m) the reports and statement to be submitted by holders of quarry or mining leases or other mineral concessions and the authority to which such reports and statements shall be submitted.

(n) the period within which and the manner in which and the authority to which applications for revision of any order passed by any authority under these rules may be made the fees to be paid therefor, and the powers of the revision authority and

(o) any other matter which is to be or may be prescribed.

(2) Until rules are made under Sub-section 1, any rules made by a State Government regulating the grant of quarry leases........

Prior to coming into force of the amendment as carried out by virtue of the notifications as contained in Annexures 2 and 3 to the writ application, there existed a provision in the Bihar Minor Mineral Concession Rules 1972 with regard to the renewal of the mining lease inter alia in respect of the sand. However, the State of Bihar inserted Rule 11A in the aforementioned rules of 1972 by S.O. No. 1133 dated (9-8-78. It was substituted by S.O. No. 33 dated 14-1-I9S5 as contained in Annexure 3 to the writ application whereby and whereunder Rule 11A was amended reads as follows:--

"Notwithstanding anything contained in these rules the settlement of sand as minor mineral will be done by public auction by the Collector to the highest bidder on annual basis.

Explanation :-- Existing leases shall not be renewed nor fresh lease permits for sand shall be granted."

According to the learned counsel appearing on behalf of the petitioner, the said Rule 11A of Bihar Minor Mineral Concession Rules, 1972 had no application whatsoever in view of the fact that the petitioner was granted mining lease, as noticed hereinbefore, on 19-4-1980, and as such on the expiry of five years from the said date he was entitled to renewal of the said mining lease as matter of right despite the insertion of Rule 11A in terms of S.O. No. 33 dated 14-1-1985. The learned counsel further submitted that renewal of a lease being matter of right the same cannot be taken away with retrospective effect.

As noticed hereinbefore Rule 11A was amended from time to time, the first being in the year 1978 or provision for settlement of the mineral sand by holding public auction along with other mineral was made by virtue of notification dated 6-11-1984, as contained in Annexure 2 to the writ application. However, in supersession of the said notification dated 6-11-1984 the State of Bihar issued another notification on 14-1-1985 as contained in Annexure 3 to the writ application as a result thereof Rule 11A was further amended.

True it is that the instant mining lease executed in favour of the petitioner contains a clause of renewal of mining lease, but such renewal can be allowed provided the same is permissible in terms of the provisions of the rule framed under the said Act. As noticed hereinbefore Section 20 of the said Act provides for a right of renewal in terms of provisions of the said Act and the rules thereunder.

It is absolutely clear that in a case where a conflict arises between the provision of an instrument and the statutory rule, the latter shall prevail.

In this case Rule 11A of the Bihar Minor Mineral Concession Rules, 1972 shall have effect notwithstanding anything contained in the instrument which by necessary logical corollary would means that the said rule shall prevail inasmuch as the deed of mining lease was also executed in terms of the provision of the said Act and the rules framed thereunder.

Further it is well known that renewal is fresh grant. Such a right of renewal, therefore, can be taken away or hedged with conditions by reason of statutory rules.

In terms of Section 15 Sub-section 1A (Clause e) of the said Act the State Government is empowered to make a rule with regard to the procedure for obtaining quarry lease mining lease or other mineral concession.

As noticed hereinbefore in terms of Section 20 of the aforementioned Act the same procedure as provided for in the said Act and rules framed thereunder are to be followed in case of renewal of a mining lease which are to be followed at the time of grant of such lease.

It is, therefore, absolutely clear that in view of the amended rule, the State of Bihar had no other option to grant mining lease in respect of Mineral and except by holding auction. However, there is no doubt that even a successful bidder in an auction must be eligible to be granted a mining lease in terms of the said Act and the Bihar Minor Mineral Concession Rules, 1972. The Supreme Court in the State of Tamil Nadu Vs. Hind Stone and Others, while considering the validity of Rule 8(c) and"9 of Tamil Nadu Minor Mineral Concession Rules 1959, whereby and whereunder the monopoly was sought to be created in respect of black granite held that the land rules are intra vires the constitution and further held that they apply also to a case of the renewal. In that case the Supreme Court held thus as follows (at p. 720 of AIR) :--

"The next question for consideration is whether Rule 8-C is attraced when applications for renewal of leases are dealt with. The argument was that Rule 9 itself laid down the the criteria for grant of renewal of leases and therefore Rule 8-C should be confined, in its application to grant of lease in the first instance. We are unable to see the force of the submission. Rule 9 makes it clear that a renewal is not to be obtained automatically for the mere asking. The applicant for the renewal has, particularly to satisfy the Government that the renewal is in the interests of mineral development and that the lease amount is reasonable in the circumstances of the case. These conditions have to be fulfilled in addition to whatever criteria is applicable at the time of the grant of lease in the first instance, suitably-adapted of course to grant of renewal. Not to apply the criteria applicable in the first instance may lead to absurd results. If as a result of experience gained after watching the performance of privage entrepreneurs in the mining of minor minerals it is decided to stop grant of leases in the private sector in the interest of conservation of the particular mineral resource attainment of the object sought will be frustrated if renewal is to be granted to private entrepreneurs without regard to the changed outlook. In fact some of applicants for renewal of leases may themselves be the persons who are responsible for the changed outlook. To renew leases in favour of such persons would make the making of Rule ''C'' a mere exercise in futility. It must be remembered that an application for the renewal of a lease is in essence an application for the grant of a lease for a fresh period. We are, therefore, of the view that Rule 8C is attracted in considering applications for renewal of leases also".

In this view of the matter, in my opinion the impuged order dated 8-4-1985 as contained in Annexure 1 to the writ application cannot be said to be illegal.

In the result application is dismissed, but in the facts and circumstances of the case there will be no order as to costs.