Judgement

HIDAYATULLAH, J.: The appellant Messrs. Nandram Hunatram of Calcutta, a firm consisting of four partners including one Kishan Lal Aggarwal, held a mining lease for coal in respect of Handidhua Colliery for a period of 30 years commencing on April 6, 1959. Under Part VII of the lease, which contained the Convenants of the lessee, the firm had undertaken to commence mining operations within one year from the date of the execution of the lease and then to continue the work of searching and winning minerals without voluntary intermission in a skilful and workmanlike-manner. The firm had appointed one M. L. Goel as the Manager and Kishan Lal Aggarwal as the occupier of the colliery. It appears (and in fact it is not denied) that the partners fell out among themselves and as none of them was willing to spend money on the colliery, work deteriorated and came to a standstill in May 1962. Goel reported to the State Government that the wages of the labourers had not been paid for weeks, that work had stopped at the colliery and that even the essential services were not being maintained owning to non-payment of wages. He wrote to the firm and Government early in the first week of May, bringing to their notice that the colliery was in danger of being flooded if the essential services stopped working. On May 9, 1962 the essential services stopped working as their wages had not been paid for several weeks. The colliery began to get flooded when the pumps stopped and it as apprehended that within the next few hours the pumps would be drowned and the colliery lost. Government, however, stepped in and made a promise to the essential workmen that their wages would be paid and this saved the colliery. On May 14, the Chief Inspector of Mines was informed by Kishan Lal Aggarwal that he was restrained by the other partners of the firm making payment for running expenses of the colliery and that he was not in a position to perform his duties an occupier. He accordingly resigned his office. Goel also resigned and on 16-5-1962 the Sub-divisional Officer, Talchar informed Government that the situation had become very alarming and that some action was absolutely necessary. Government thereupon gave a notice on May 19, 1962 asking the firm to remedy the defect within sixty days of the receipt of the notice failing which Government threatened to take over the colliery from the firm. As the firm did nothing to remove the defects and did not request for extension of time, Government took over the colliery and terminated the lease.

2. The firms thereupon filed an application for revision before the Central Government under Rule 54 of the Mineral Concession Rules 1960. The Central Government asked for the comments of the State Government on the application and invited the firm to make its own comments upon the reply of the State Government. Taking the entire matter into consideration the Central Government by order, February 19, 1963, rejected the application for revision. The present appeal is against the order of the Central Government by special leave of this Court.

3. It was admitted in the application for revision and it is not denied before us that the partners were quarrelling among themselves and the work at the colliery had therefore stopped. It is admitted that the wages of the labourers were not paid for about five weeks before Government sent its notice on May 19, 1962. It is further admitted that the essential services had also stopped working and that but for the timely action of the Government, the colliery would have been flooded in a matter of hours and probably rendered unworkable till dewatered. With this background in mind we have to consider the objections of the firm to the order of the Central Government in the first instance and of the State Government in the final analysis.

4. Clause (3) of Part VII of the lease is one of the covenants by the lessee and under it the lessee under-took to continue work, without voluntary intermiss