The District Collector, Pudukkottai vs Selvi Industries

K.A. Swami C.J

The point that arises for consideration in this appeal is, whether on deletion of R.8A of the Tamil Nadu Minor Mineral Concession Rules,. 1959

(hereinafter referred to as the Rules) and the introduction of R.8 by the Notification dated 19th August, 1988, the lease granted under R.8-A, as it

stood prior to 19th August, 1988, can be renewed under R.9 of the Rules. Facts necessary for the purpose of deciding this question are no more

in dispute. They are as follows:- The respondent was granted a lease for a period of ten years in the year 1973 to quarry the minor minerals viz,

granite for crushing into jelly, in an area of 11.91 acres comprised in S. No. 183/1, Melur village, Pudukkottai District, on priority basis, under

R.8-A of the Rules then in existence. The said lease was renewed for a period of five years in the year 1982. It was again renewed in 1987 for a

further period of five years. The period of second renewal was also over in 1992. In all, the respondent had the mining lease for a period of 20

years. R.8-A of the Rules, as it stood, when the lease was granted to the respondent, and was renewed on two occasions as stated above, was as

follows:-

8A. Leases to the Industries:-

Notwithstanding anything to the contrary contained in R.8, the Collector may sanction leases in favour of the applicants who require the mineral for

their existing industry or industries or, who are having a distinct industrial programme to utilise the mineral in their own industry. The lease amount

to be collected from any such applicant shall be an amount equal to the average of the lease amount for the proceeding three years of the average

seigniorage fee specified in rule 8 for the proceeding ten years, whichever is higher, in addition to the ordinary assessment:

Provided that in the case of lease for quarrying any forest declared to be reserved under S.16 of the Tamil Nadu Forest Act, 1882 (Tamil Nadu

Act V of 1882) or in any land at the disposal of the Government in respect of which rules under S.26 of the said Act have been made, the District

Forest Officer concerned shall exercise the powers of the Collector under these Rules.

R.9 of the Rules, as it stood then, was as follows:-

9.Renewal of lease:- (1 )The Collector may, on application, renew for a further period not exceeding the period for which the lease was originally

granted in each case if he is satisfied that

(1) such renewal is in the interests of mineral development; and

(ii) the lease amount is reasonable in the circumstances of the case;

(2) Every application for renewal shall be made to the Collector, sixty days prior to the date of expiry of the lease;

Provided further that in the case of lease for quarrying in any Forest declared to be reserved under S.16 of the Tamil Nadu Forest Act, 1882

(Tamil Nadu Act V of 1882), or in any land at the disposal of the Government in respect of which Rules under S.26 of the said Act have been

made, the District Forest Officer concerned shall exercise the powers of the Collector under the Rules, and where the period of lease exceeds ten

years, it shall not be renewed except with the sanction of the Chief Conservator of Forests: Provided that a lease, the period of which exceeds ten

years shall not be renewed except with the sanction of the Director of Industries and Commerce.

Thus, from the aforesaid repealed R.8A, it is clear that notwithstanding anything to the contrary contained in R.8, it was permissible for the

Collector to sanction leases in favour of the applicants who required the mineral for their existing industry or industries or who were having a

distinct industrial programme to utilise the mineral in their own industry. The collector was also empowered to fix the lease amount equal to the

average of the lease amount for the preceding three years of the average seigniorage fee specified in rule 8 of Rules for the preceding ten years,

whichever was higher, in addition to the ordinary assessment. R.8, as it then existed, provided for lease of quarries to private persons. It provided

a procedure quite different from the one contained in present R.8 which came to be substituted by the Notification dated 19th August, 1988 by the

Government order Ms. No. 964 Industries (K1). The old Rule 9 as reproduced above also empowered the Collector to renew a lease for a

further period not exceeding the period for which the lease was originally granted. However, the present R.9 does not give the same liberty or

authority to the Collector to renew the lease. The power of the Collector to renew the lease is circumscribed by the limitations confined therein.

Rr.8 and 9 of the present Rules are as follows:-

Lease of quarries to private persons, Labour Cooperative Societies formed by Repatriates from Sri Lanka and other Labour Co-operative

Societies:-

(1) (a) The Collector shall publish a notice in the District Gazette inviting applications for the lease of quarries. Such application shall contain

particulars about the lease amount:

Provided that Labour Co-operative societies formed by Repatriates from Sri Lanka and other Labour Co-operative Societies who apply in

response to such notice need not quote any lease amount in their application.

Explanation: The expression ""Repatriate from Sri Lanka"" shall mean a person who has been certified by the High Commissioner of India in Sri

Lanka to be a person affected by the scheme of the Government of Sri Lanka for repatriation of Indian Nationals and who, therefore, has left or

has been displaced from his place of residence in Sri Lank and who has been subsequently residing in India.

(b) If only one application for the lease of quarries is received in response to such notice, the Collector snail reject the application and publish

another such notice inviting applications for lease of quarries. If only one application is received even after the publication of second notice, the

Collector, may, if he is satisfied that the grant of lease to the applicant will be in the interest of mineral development, grant the leave to the applicant

for a period of three years and in such case the lease shall not be renewed;

(c) In cases where applications are received:-

(i) from a Labour Co-operative Society formed by Repatriates from Sri Lanka, other Labour Co-operative Societies, individual Repatriate from

Sri Lanka ana private Indian citizens, preference shall be given to the Labour Cooperative Society formed by Repatriates from Sri Lanka;

(ii) from more than one Labour Cooperative Societies formed by Repatriates from Sri Lanka or from more than one of other Labour Co-operative

Societies, as the case may be, the lease may be granted to such of the society in the respective category which is considered to be the most

deserving in the circumstances after taking into consideration the comparative economic backwardness, the nearness of the area of operation and

the labour force of the society,

(iii) from a labour Co-operative Society formed by the person other than Repatriates from Sri Lanka and a Repatriate from Sri Lanka, preference

shall be given to the former;

(iv) from a repatriate from Sri Lanka and an Indian Citizen, preference shall be given to the former;

Provided that no Repatriate from Sri Lanka or Labour Co-operative Society formed by Repatriates from Sri Lanka or any other Labour Co-

operative Society shall be granted more than two quarry leases at a given point of time. No lease shall be granted for an area exceeding ten

hectares in extent. The period of lease in all such cases shall be only three years;

(d) In the case of lease granted under clauses (b) and (c) the lessee shall submit, to the Deputy Director or Assistant Director of Geology and

Mining, as the case may be, a monthly return showing the number of workers employed in quarrying quantity of mineral quarried and transported

and the seigniorage fee paid. The monthly return shall be furnished so as to reach the Deputy Director (Geology and Mining), or Assistant Director

(Geology and Mining), as the case may be before the 5th day of the succeeding month. The lessee shall also furnish a copy of annual audited

accounts relating to the said quarry lease to the Deputy Director or Assistant Director of Geology and Mining, as the case may be.

(c) In the case of lease granted under clauses (b) and (c) the lessee shall pay, besides ordinary assessment, seigniorage fee for all minor minerals

removed or consumed at the rates prescribed form time to time in Appendix II to these rules.

(2)(a) In all other cases where more than one application for lease of quarries is received from private persons the privilege of quarrying shall be

put to public auction. The auction shall be conducted by the Tahsildar having jurisdiction over the area after giving the publicity to the auction in the

following, namely;

(i) by notice published in the District Gazette;

(ii) by notice in the language of the district put up at the

office of the Collector, Revenue Divisional Officer, Block

Development Officer, Tahsildar and Deputy Tahsildar having

jurisdiction over the area;

(iii) When the anticipated bid amount is expected to exceed ten thousand rupees by advertisement in one issue of a leading Tamil daily newspaper

circulating in the district and in the State.

(b) every notice and advertisement published under clause (a) shall inter alia specify:-

(i) the date and time of auction;

(ii) the place of auction;

(iii) the amount of earnest money to be deposited for participating in the auction;

(iv) the upset price, if any, when reauction is ordered under clause (g) below;

(c) There shall at least be seven clear days between the date of publication of the notice or the date of advertisement, whichever is later, and the

date of auction.

(d) The auction shall be subject to confirmation by the Collector.

(e)(i) The Collector shall ordinarily confirm the auction in favour1 of the highest bidder:

Provided that where the Collector is satisfied:

(a) that the highest bid amount is not reasonable in the circumstances of case; or

(b) that the bid amount is lower than the upset price specified in sub-clause (iv) of clause (b); or

(c) that it will not be in the interest of mineral development to grant the lease to the highest bidder;

He shall pass orders refusing to confirm the auction, recording the reasons therefor in writing.

(ii) An order confirming the bid shall be deemed to be the acceptance of the bid and such an order of confirmation of the sale shall be passed after

the expiry of ten days from the date of auction.

(iii) Notwithstanding anything in sub-clause (i) when the minerals are to be worked out by or on behalf of any person who is not a citizen of India,

the lease shall not be confirmed except with the previous sanction of the State Government.

(f) Where the privilege of quarrying is put to auction, no seigniorage fee shall be collected in addition to the bid amount and area assessment.

(g) If any person offers within ten days from the date of auction to bid in reauction at a price which shall not be less than two times the highest bid

amount, the Collector shall direct the person concerned to deposit the amount offered by him within ten days from the date of receipt of the order

of the Collector. On the deposit of such amount, the Collector shall reject all the bids, and order a reauction with the upset price of the amount

offered for the privilege of quarrying;

(3) In the case of lease of quarrying in any forest declared to be a reserved forest under S. 16 of the Tamil Nadu Forest Act, 1882 (Tamil Nadu

Act V of 1882), or in any land at the disposal of the Government in respect of which Rules under S. 26 of the said Act have been made, the

procedure referred to above shall be followed by the District Forest Officer concerned.

(4) The lessee shall deposit as security

(i) Ten percent of the lease amount or bid amount when leased out by public auction in case such lease amount or bid amount can be calculated

and specified subject to a minimum of rupees two thousand; and

(ii) Two thousand rupees in other cases.

(5) The lease deed shall be in the form set out in Appendix I to these rules.

9.Renewal of lease: (1) Subject to the provisions of clause (b) of sub-rule (1) of R.8, the Collector may on application renew a lease for a furs her

period not exceeding the period for which the lease was originally granted, if he is satisfied that;

(1) such renewal is in the interest of mineral development; and

(ii) the lease amount is reasonable in the case of leases originally obtained through public auction.

(2) Every application for renewal shall be made to the

Collector three months prior to the date of expiry of the lease:

Provided that in the case of lease for quarrying in any forest declared to be reserved under S. 16 of the Tamil Nadu Forest Act, 1882 (Tamil Nadu

Act V of 1882) or in any land at the disposal of the Government in respect of which Rules under S.26of the said Act have been made, the District

Forest Officer concerned shall exercise the power of the Collector under these rules

Thus, a reading of the old Rules 8, 8-A and 9 as they stood prior to 19th August, 1988 and the present Rr.8 and 9, it becomes clear that the

priority that was available for obtaining quarrying lease of the minor mineral required for use in any existing industry of the appellant or by those

who having distinct industrial programme to utilise the mineral in their own industry, is no more available, as such a priority has not been continued

under the new Rules. Further, the present R.9, which relates to renewal of lease, is subject to R.8(l) (b), whereas the earlier old R.8-A which

provided for priority in the matter of granting lease had an overriding effect on R.8 as it stood. Apart from the fact that the priority then existing has

been taken away, the very renewal Rule is made subject to R.8(l)(b), which, in turn, has to be read with R.8 (l)(a), which provides that the

Collector shall publish a notice in the District Gazette inviting applications for the lease of quarries. R.8(l)(b) provides that if only one application for

the lease of quarry is received in response to the notice published in the District Gazette inviting the applications, the Collector shall have to reject

that application and publish another such notice inviting applications for lease of quarries. Even on the second notice, if only one application is

received and the Collector is satisfied that the grant of lease to the applicant will be in the interest of mineral development, the Collector may grant

lease to the applicant for a period of three years and in such case, the lease is not renewable. On the contrary, if more than one applications arc

received from a Labour Co-operative Society formed by Repatriates from Sri Lanka and other Labour Cooperative Societies, individual

Repatriates from Sri Lanka and Private Indian Citizens, preference shall be given to the Labour Co-operative Society formed by Repatriates from

Sri Lanka. Sub-

Clauses (ii), (iii) and (iv) of Clause (c) of R.8(l) provides for consideration of applications under different circumstances which are not consistent

with the priority then existing under the old R.8-A. In all other cases not falling under clauses (b) and (c) of Sub-R.(l) of R.8 and where more than

one applications for lease of quarries are received from private persons, the privilege of quarrying shall have to be put to public auction. The

auction has to be conducted by the Tahsildar having jurisdiction over the area, after giving due publication to the auction in the manner provided in

the said Rule. The renewal under R.9 of the present Rules, apart from the fact that it is subject to the provisions of Clause (b) of Sub-R.(l) of R.8 it

also does not follow as a matter of course because the renewal is also required to be in the interest of mineral development and the lease amount

also has to be reasonable in the case of leases originally obtained through public auction. In the case of a lease for quarrying in any forest declared

to be a reserved forest under S. 16 of the Tamil Nadu Forest Act, 1882 or in any land at the disposal of the Government in respect of which Rules

under S.26 of the said Act 1882 have been made, the District Forest Officer concerned is to exercise the power of the Collector under these

Rules. Therefore, it is clear that if a lessee who had obtained lease for quarrying miner mineral under the old Rules as per the priority than existing

under the old R.8-A thereof, applies for renewal, after the coming into force of the new Rules, such application for renewal cannot be entertained

in the manner as it would have been entertained when the old Rules 8-A and 9 were in force. The renewal has to be sought in the manner provided

under the new Rules.

The respondent herein made an application for renewal of the lease after the new Rules came into force. The application was rejected. It filed

writ petition No.8026 of 1992 which was disposed of on 29.7.1992 with the following direction:-

The Collector is directed to take the renewal application on file and dispose of the same on merits in the light of the observations indicated above.

The Collector shall dispose of the renewal application within a period of one month from the date of receipt of copy of this order

In the course of the order, the learned single Judge has also pointed out that the present R.9 provides for renewal. Pursuant to the aforesaid

direction, the Collector considered the application and rejected the same by the order dated 20th

August, 1992 stating that as R.8-A then existed at the time when the lease was granted to the respondent providing priority to applicants requiring

the minor, mineral for their existing industry/industries or for those who were having a distinct industrial programme to utilise the mineral in their own

industry, has not been in force, therefore, the renewal of such a lease cannot be granted. This order was challenged by the respondent in W.P. No.

13823 of 1992. The learned single Judge by the order dated 2.8.1993, allowed the writ petition and directed the Collector of Pudukkottai to

consider the renewal application of the petitioner in the light of the directions contained in his order dated 29.7.1992 passed in W.P.No.8026 of

1992 and the directions given in the impugned order within four weeks from the date of receipt of a copy of the order.

4-A. It is clear from the order under appeal that the effect of the change in law has not been taken into consideration. Old Rr.8,8-A and 9 are not

in force as they are substituted by the Rules 8 and 9. The priority on the basis of which lease was to be granted under R.8-A is no more available

under the present Rules. The application for renewal of lease shall have to be considered as per the Rules existing on the date the application is

considered. The application for renewal of lease is in effect, and substance, is an application for grant of lease for a fresh period. There is no vested

right in the applicant seeking renewal or grant of a lease to have his application considered in a particular manner and with reference to a particular

Rule existing on the date the application was filed. No such right accrues in the absence of a vested right. A similar situation under the Rules came

up for consideration before the Supreme Court in State of Tamil Nadu Vs. Hind Stone and Others, That was a case in which renewal applications

were filed when the old R.8-B was not in force. The validity of R.8-C which came to be introduced enabling the State Government to reserve the

mineral for exploitation by the Corporation came to be challenged. The Supreme Court upheld the validity of R.8-C. In that case, a contention was

also advanced that renewal applications were not governed by R.8-C or the new Rules because they were filed before the new Rules came into

force. While considering this contention, the Supreme Court observed thus:-

The next question for consideration is whether R.8-C is attracted when applications for renewal of leases are dealt with. The argument was that

R.9 itself laid down the criteria for grant of renewal of leases and, therefore, R.8C should be. confined, in its application, to grant of leases in the

first instance. We are unable to see the force of the submission. R.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 private 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

the 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 R.8-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 R.8-C is attracted in considering

applications for renewal of leases also.

Thus, it was held that an application for renewal of the lease is, in essence, an application for the grant of a lease for a fresh period, therefore !he

new R.8-C attracted in considering applications for renewal of lease also. It was also pointed out that there was no right vested in the applicants to

have the application disposed of on the basis of the Rules that were in force at the time of making the application for renewal. The relevant portion

of the judgment in this regard is as follows:-

Another submission of the learned counsel in connection with the consideration of applications for renewal was that applications made sixty days or

more before the date of G.O. Ms. No. 1312 (2-12-1977) should be dealt with as if R.8-C had not come into force. It was also contended that

even application for grant of leases made long before the date of G.O. Ms. No. l3l2 should be dealt with as if R.8-C had not come into force. The

submission was that it was not open to the Government to keep applications for the grant of leases and applications for renewal pending for a long

time and then to reject them on the basis of R.8C notwithstanding the fact that the applications had been made long prior to the date on which

R.8C came into force. While it is true that such applications should be dealt with within a reasonable time, it cannot on that account be said that the

right to have an application disposed of in a reasonable time clothes an applicant for a lease with a right to have the application disposed of on the

basis of the rules in force at the time of the making of the application. No one has a vested right to the grant or renewal of a tease and none can

claim a vested right to have an application for the grant or renewal of a lease dealt with in a particular way, by applying particular provisions. In the

absence of any vested rights in-any one, an application for a lease has necessarily to be dealt with according to the Rules in force on the date of the

disposal of the application despite the fact that there is a long delay since the making of the application. We are, therefore, unable to accept the

submission of the learned counsel that applications for the grant or renewal of leases made long prior to the date of G.O. Ms. No.1312 should be

dealt with as if R.8-C did not exist.

Therefore, it is clear that the law that in force on the date when the application is considered for renewal of the lease is required to be applied.

We have already pointed out that on the date when the renewal application was filed and it was considered old Rules 8, 8-A and 9 came to be

substituted by new Rules 8 and 9, providing a different criteria and different procedure for granting and renewing the lease. That being so, it was

not at all possible for the Collector to accept the contention of the respondent herein to renew the lease as though it was granted under old R.8A of

the Rules applying the very same criteria. Consequently, it follows that the directions issued by the learned single Judge do not accord with the

Rules that are applicable for the grant of renewal of the lease. Hence, the point raised for consideration is answered as follows: The Rules that are

applicable to the application filed by the respondent for grant of renewal are those which have come into force pursuant to the Notification dated

19th August, 1988. Therefore, renewal of such a lease granted under the old Rule of priority cannot Be considered under the new Rules which do

not contain any such priority. Further, R.9 relating to renewal of a lease is subject to the provisions contained in R.8(l)(b) of the Rules. That being

so, the respondent has to apply for grant of a lease as and when it is notified in the District gazette as per Rule 8(l)(a) of the Rules by the Collector.

For the reasons stated above, the writ appeal is allowed, the order dated 2.8.1993 passed in W.P. No. 13823 of 1992 is set aside and the writ

petition is dismissed, reserving liberty to the petitioner-respondent to apply for grant of lease as and when the Collector notifies m the District

Gazette as per Rule 8(l)(a) of the Rules. In the facts and circumstance of the case, there will be no order as to costs.