Important Point
Amended Rule 8(8)(a) of the Tamil Nadu Minor Minerals Concession Rules, 1959, which came into force on 19.2.1996 applies to appeals pending as on that date and as such three years period of mining lease in such cases would start from the date of execution of lease deed irrespective of expiry of period of lease during pendency of appeal.

Headnote:Tamil Nadu Minor Mineral Concession Rules, 1959-Rule 8(6)(b) (ii)/8(8)(a)-Sand quarrying lease-Tender invited for lease of 3 years 1.1.95 to 31.3.98 - Appellants’ offer highest-Offer rejected on ground offer less than upset price-Appeal thereagainst - Pending appeal Rule 8(8)(a) amended, inter alia providing that period of three years of lease would commence from date of execution of lease deed-Appeal came to be allowed granting lease for one year only as two years period had already expired-Appellant’s plea amended rule 8(8)(a) would be applicable and he would be entitled to 3 years lease from date of execution of lease deed-Rejected by High Court-Whether correct-No-Law laid down in State of Tamil Nadu v. Hind Stone, 1981(2) SCR 742 that if rules are amended during pendency of application for a mining lease amended rule is to be applied while disposing of application, applies equally to appeal-Amended rule applied to appeal in question-Period of three years would run from date of execution of lease deed.
       Held : After the amendment, the three years period for quarrying of sand is to be counted from the date of execution of the lease. Apart from the lease amount, seigniorage fee or deed rent or other charges have to be paid. The above amendment by GOMs No. 235 dated 19.12.1996 came into force after the order of rejection was passed by the Collector on 22.3.1995. Obviously, the Collector could not have applied the amendment. But the appeal was preferred to the Director on 20.4.1995 and it was during the pendency of the appeal that the amendment dated 19.12.1996 came into being. (Paras 10 & 11)
       As to the effect of the amendments to the Rules, the judgment of the Supreme Court in State of Tamil Nadu v. Hind Stone, 1981(3) SCR 742, is relevant. In that case, when certain renewal applications were pending under these very Rules, before the Government, Rule 8(c) was introduced by GOMs No. 1312 (Industries) on 2.12.1977. By that rule, “leases” for quarrying black granite in favour of private parties were banned. Question arose whether the amendment applied only to fresh leases or whether the pending renewal applications were to be disposed of under the Rules as they stood when the original lease was granted. Question also arose whether, the concerned authority could apply a Rule which came into force during the pendency of an application or whether the Rules in force on the date of the application alone applied. It was argued for the applicant that there was undue delay in the disposal of the renewal applications and hence the new amendments could not be applied. The Court held that if rules are amended during the pendency of an application for a mining lease, the amendment Rule is to be applied while disposing of the application. The argument if there was long delay in disposal of applications, subsequent amendments should not be applied, was rejected. (Para 12)
       What applies to applications applies equally to appeals because, an appeal is nothing by the continuation of the proceedings which started with an application. In our view it makes no difference whether the delay has occurred on account of keeping the applications pending or on account of an appeal being filed. In either case, Hind Stone becomes applicable. (Para 13)
       The learned single Judge and the Division Bench, in our view, erred in not applying the judgment of this Court in Hind Stone to the appeal that was pending before the appellate authority. We are of the view that the amended Rule 8(8)(a) which came into force on 19.12.1996 applied to the appeal which came to be disposed of on 1.4.1997. If that be so, the period of 3 years for a sand quarry lease must necessarily run from the date of execution of the lease deed. (Para 14)

Judgment

M. Jagannadha Rao, J.-Leave granted.

2. The appellant’s writ petition No. 1046 of 1997 was dismissed by a learned Single Judge of the Madras High Court by Judgment dated 20.10.1997 and further appeal filed by the appellant before the Division Bench in Writ Appeal No. 1686 of 1998 was also dismissed. Aggrieved by the said judgments this appeal has been preferred.

3. The following are the relevant facts.

The District Collector, Tuticorin (First respondent) published a notification in the District Gazette in January 1995 calling for tender applications for grant of lease of sand quarry in 1.17 1/2 hectares for a period of two years from 1.1.95 to 31.3.1997. The said advertisement was amended and modified as a lease for three years i.e. upto 31.3.98, rather than for two years. On 23.2.1995 the petitioner submitted his tender and offered a sum of Rs. 1.60 lakhs per annum. The offer of the petitioners was the highest. The first respondent did not accept the offer but rejected the same by orders dated 22.3.1995 in exercise of his powers under Rule 8(6)(b)(ii) of the Tamil Nadu Minor Mineral Concession Rules, 1959 (hereinafter called “the Rules”). The Collector felt that the appellant’s offer, even though it was highest, was less than the upset price as estimated by the department. The appellant preferred an appeal to the Director of Geology and Mines (second respondent). The Director allowed the appeal of the appellant by his order dated 1.4.1997 on the ground that by the closing date of the tenders namely, 6.3.1995 the upset price was not fixed by the Assistant Geologist, that such upset price was fixed only on 10.3.1995 long after the closing date namely, 6.3.1995. The Director also held that compared to another tender where the offer of Rs. 1.75 lakhs of this very appellant was accepted for an extent of 3.24 hectares, the present offer of the appellant for 1.60 lakhs was not unreasonable particularly when the extent of the quarry area in this case was only 1.17 1/2 hectares. However, the Director applied the provisions contained in the amendment to Rule 8-A introduced by G.O.Ms. 235 on 19.12.1996 by which additional Seigniorage fee was payable in addition to lease amount. By the date when the Director allowed the appeal on 1.4.1997, part of the lease period from 1.4.1995 upto 1.4.1997 had already expired. Therefore, the Director granted the lease only for the remaining period from 1.4.1997 upto 31.3.1998.

4. Aggrieved by the said order to the extent that full three year lease was not granted by the Director from the date of execution of lease as provided in the amended Rules dated 19.12.96, the appellant filed the writ petition in the High Court. He contended that when the Director applied the amended rules dated 19.12.1996 which were issued in GOMs No. 235, so far as seigniorage was concerned, the Director should have also given the benefit of the amendment to Rule 8(8)(a) which stated that the lease should run for a period of three years from the date of the execution of the lease deed. The writ petition was contested by the respondents before the learned Single Judge.

5. The learned Single Judge while dismissing the writ petition observed that the auction notice specified a particular period namely, 1.1.95 to 31.3.98 and, therefore, the appellant could not claim that the three year period was to run as per the amended Rule 8(8)(a), that the amendment was prospective in nature and was not applicable to leases which had already been processed and rejected by the Collector earlier,-in this case on 22.3.1995. Merely because the appellate order was passed subsequent to the amendment of the rules in GOMs No. 235 dated 19.12.1996, the appellant could not seek the benefit of the amendment. Before the learned single Judge, the appellant relied upon the judgment of this Court in State of Tamil Nadu v. Hind Stone1 for the proposition that if rules were amended during the pendency of an application for the grant of a mining lease,

Click Here to Read the rest of this document