1. Application for renewal of certificate of approval under Mineral Concession Rules rejected by State Government; subsequent review application rejected by Union Government without disclosing supporting materials. (Para 2 , 3 )
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1964 Supreme(SC) 75
SUPREME COURT OF INDIA
10th March, 1964
P.B. GAJENDRAGADKAR C.J.I., K.N. WANCHOO, J.C. SHAH, N. RAJAGOPALA AYYANGAR AND S.M. SIKRI, JJ.
Brajlal Manilal and Co. (in both appeals), Appellant
Versus
Union of India and another (in both appeals), Respondents.
Civil Appeals Nos. 115 and 116 of 1963.
Advocates Appeared
Mr. G. S. Pathak, Senior Advocate, (M/s. Rameshwar Nath and S. N. Andley, Advocates of M/s. Rajinder Narain and Co. with him), for Appellant; (in both appeals); Mr. G. S. Patwardhan, Senior Advocate, (Mr. B. R. G. K. Achar, Advocate, with him), for Respondent No. 1 (in both appeals); Mr. I. N. Shroff, Advocate for Respondent No. 2 (in C. A. No. 116 of 1963).
Advocates:
B.R.G.K.Achar, G.S.PATHAK, G.S.PATWARDHAN, I.M.SHROFF, RAJINDAR NARAIN, RAMESHWAR NATH ROY, S.N.ANDLEY
B.R.G.K.Achar, G.S.PATHAK, G.S.PATWARDHAN, I.M.SHROFF, RAJINDAR NARAIN, RAMESHWAR NATH ROY, S.N.ANDLEY
The Central Government, when exercising review jurisdiction under the Mineral Concession Rules, acts as a quasi-judicial authority. Any decision based on undisclosed material without providing the affected party a reasonable opportunity to be heard is void as it violates the principles of natural justice.
Headnote:(A) Mines and Minerals (Regulation and Development) Act, 1948 - Mineral Concession Rules 1949 - Rules 57 and 59 - Renewal of certificate of approval - Review application - Nature of jurisdiction - Quasi-judicial authority - Principles of natural justice - Right to be heard - Decision based on undisclosed material - Order vitiated. (Paras 4, 6)
(B) Administrative Law - Natural Justice - When a government authority functions as a quasi-judicial body, it cannot act on the basis of material as regards which the aggrieved party had no opportunity to make a representation - Reasonable opportunity of being heard is a sine qua non of a fair hearing. (Paras 4, 6)
Facts of the case:
A partnership firm applied for the renewal of a certificate of approval for mining. The State Government rejected the application on the ground that the composition of the firm had changed. The firm subsequently applied to the Central Government for a review of this order. The Central Government rejected the review application after obtaining a report from the State Government, without disclosing the contents of the report to the applicants or providing them an opportunity for a personal hearing.
Findings of Court:
The Central Government, while disposing of a review application under the relevant rules, functions as a quasi-judicial authority. Consequently, it cannot render a decision based on materials not made available to the applicant. The order rejecting the review was contrary to the principles of natural justice as it was rendered without affording the applicants a reasonable opportunity of being heard.
Issues: Whether the jurisdiction exercised by the Central Government under the rules for review is administrative or quasi-judicial, and whether the failure to disclose the State Government's report and provide a hearing violated the principles of natural justice.
Ratio Decidendi: The Central Government acting under the rules for review is functioning as a quasi-judicial authority; therefore, it is required to afford the applicant a reasonable opportunity to be heard and cannot rely on undisclosed material to pass an adverse order.
Result: Appeals allowed.
Legal Category Hierarchy
Table of Contents
2. Whether the Union Government, acting as a quasi-judicial authority, violated natural justice by rejecting a review application without providing a hearing or disclosing the materials relied upon. (Para 4 )
3. The Union Government functions as a quasi-judicial authority during review; rejecting an application based on undisclosed material without a hearing violates the principles of natural justice. (Para 4 , 5 , 6 )
4. A quasi-judicial authority must provide a reasonable opportunity to be heard and disclose materials relied upon to ensure a fair hearing under the principles of natural justice. (Para 4 , 6 )
5. Appeals allowed; orders of the Union Government and High Court set aside; Union Government directed to consider the review application afresh in accordance with law. (Para 8 )
6. Does the Union Government act as a quasi-judicial or administrative authority when reviewing a State Government's decision under Rule 59 of the Mineral Concession Rules?
The Union Government functions as a quasi-judicial authority when disposing of an application for review under Rule 59 of the Mineral Concession Rules. (Para 4 )
7. Is it a violation of natural justice for a quasi-judicial authority to reject an application based on materials not disclosed to the applicant?
Yes. A quasi-judicial authority cannot act on the basis of material as regards which the applicant had no opportunity to make a representation, as a reasonable opportunity to be heard is a sine qua non of a fair hearing. (Para 4 , 6 )
8. What is the legal effect of a decision rendered by a quasi-judicial authority without affording the aggrieved party a reasonable opportunity to be heard?
Such a decision is vitiated as being contrary to the principles of natural justice and is therefore void. (Para 4 , 6 )
Judgment
AYYANGAR, J. : Civil Appeal No. 115 is by special leave granted by this Court under Art. 136 of the Constitution and is against an order of the Union of India (Ministry of Steel, Mines and Fuel) dated July 9, 1958 rejecting an application filed by the appellants under Rule 57 of the Mineral Concession Rules 1949 to review an order passed by the Government of Madhya Pradesh rejecting their application for the renewal of the Certificate of Approval granted to them. The appellants filed a petition to the High Court Punjab under Art. 226 of the Constitution praying for a writ of certiorari to quash the above order of the Union of India. This petition was dismissed by the High Court in limine and Civil Appeal No. 116 of 1963 is by special leave of this Court against this order of the High Court, Punjab. It would thus be seen that both the appeals are directed to challenge the validity of the same order and we shall therefore deal with them together.
2. The appellants, who constitute a partnership, are engaged, inter alia in the business of mining and they held a prospecting licence in the State of Madhya Pradesh. They hold concessions in regard to prospecting and working minerals in several areas of the State to the details of which it is not necessary to refer. Under the scheme of the Mines and Minerals (Regulation and Development) Act, 1948 (Act No. XLIII of 1948) and the Mineral Concession Rules 1949 framed thereunder, in order that a prospecting licence may be granted to a person he has to hold a certificate of approval from the State Government concerned and similarly the rules provide that no mining lease shall be granted to any person unless he held a similar certificate of approval. To enable them to do the prospecting in lands in which they had obtained mineral concessions, the appellants applied for and obtained from the Government of Madhya Pradesh a certificate of approval under the Mineral Concession Rules from 1952 onwards. The duration of the certificate is one calendar year and the same has to be renewed every year, if it is to be in force. The original certificate granted to the appellants for the year 1952 was being renewed from year to year and as a result they held valid a certificate of approval up to the period ending on December 31, 1955. Being desirous of having the same renewed for the following calendar year 1956 they made an application to the Government of Madhya Pradesh on November 22, 1955. The information required by the form of application prescribed by the rules was furnished and the necessary documents were filed and this application was recommended by the District Officer, Bhandara. The State Government, however, by an order dated September 21, 1956 rejected the application, the reason given being that the partners composing the firm had changed. This order was communicated to the appellants on October 6, 1956 and thereupon the appellants made an application on November 15, 1956 to the Union Government for a review of the order of the State Government under Rule 57 of the Mineral Concession Rules. Rule 57 (2) which was invoked by the appellant provides :
"Where a State Government has failed to dispose of an application for grant or renewal of a certificate of approval or prospecting licence or a mining lease within the period prescribed therefore in these Rules, such failure shall, for the purpose of these rules, be deemed to be a refusal to grant or renew such certificate, licence or lease, as the case may be, and any person aggrieved by such failure may, within two months of the expiry of the period aforesaid, apply to the Central Government for reviewing the case."
3. The procedure for review is laid down by Rule 59 which reads :
"Review. Upon receipt of such application, the Central Government may, if it thinks fit, call for the relevant records and other information from the State Government, and after considering any explanation that may be offered by the State Government cancel or revis
