Judgment

MUKHERJEA, J. :- This appeal with leave is directed against a judgment and order of the High Court of Patna in connection with a writ petition of respondents Nos. 1 to 3 (who will hereinafter be referred to as the "petitioners") by which the High Court quashed and cancelled two leases granted by the State of Bihar in favour of M/s. Bharat Marble Company, a partnership firm and the present appellant M/s. Hindustan Steel Limited. The facts and circumstances out of which the petition arose are as follows.

2. By a registered document dated 11 July 1919 one Kumar Amardeyal Singh, who was the proprietor of Ladi Estate at the relevant time granted a lease in favour of one Pran Kristo Chatterjee. The lease which gave a perpetual Mokarari Settlement was in respect of various minerals including iron ore and related to a large tract of land in District Palamau covering an area of 2227 acres in village Adar and 1303 acres in village Gore. Both the two villages Adar and Gore appertained to Kumar Amardeyal Singh s estate, bearing Touzi No. 130, Survey No. 143 and Touzi No. 161, Survey No. 91 respectively of the Collectorate of Palamau. In 1937 the heirs of the original lessee under the document of 11 July 1919 assigned and transferred their interest under the lease to one Vyomkesh Mukherjee. In 1949, Vyomkesh Mukherjee died leaving behind the petitioners as his heirs and successors. On 21 September 1951 the petitioners granted a sub-lease under the aforesaid lease of 11 July 1919 to one Madan Gopal Rungta. The latter, however, was obstructed in his working of the mines under the Sub-lease by the Deputy Commissioner of Palamau in December, 1952. On 16 April 1953 Madan Gopal Rungta entered into an agreement by which he agreed to pay royalty to Government of Bihar for working the mining rights covered by the sub-lease. In January, 1955 the whole of Ladi Estate vested in the State of Bihar under the Bihar Land Reforms Act, 1950. In 1959 the Controller of Mining Leases initiated a case for the modification of the terms of the lease dated 11 July 1919. On 28 September 1959 after hearing the petitioners and also after hearing Madan Gopal Rungta who held a power of attorney on behalf of the said petitioners, the said Controller in purported exercise of his powers under Rule 6 of the Mining Lease (Modification of Terms) Rules, 1956 modified the lease under the aforesaid registered document of 11 July 1919 and made it terminable with effect from 20 September 1961. It is stated on behalf of the appellant that this order of termination was made at the instance of Madan Gopal Rungta who pleaded that the lease should be made terminable after the expiry of the sub-lease granted in his favour. On 11 December 1961 the Government of Bihar invited applications for grant of mining leases in respect of Gore in the Official Gazette. On 10 September 1962 Madan Gopal Rungta and his son Tribeni Prasad Rungta both applied for grant of a mining lease of the area. Certain other parties had also applied for mining lease in the area prior to this stage. On 13 November 1962 a notice was issued to Tribeni Prasad Rungta under S. 7 of the Bihar and Orissa Public Demands Recovery Act demanding a sum of Rupees 66,317.93 by way of dead rent and royalties which are alleged to have accrued during the period when Madan Gopal Rungta was working the mines under the aforementioned sub-lease. On 1 April 1963 the appellant M/s. Hindustan Steel Limited applied for the grant of mining lease for an area of 67.26 acres within the area. Some time in 1963 Tribeni Prasad Rungta made an application under Art. 226 of the Constitution of India challenging the certificate proceedings mentioned before and the High Court allowed the application and quashed the proceedings on 23 November 1964. On 22 July 1965 the Government of Bihar acting with the approval of the Central Government granted a mining lease to the appellant in respect of 67.26 acres. On 17 October 1966 a lease was granted in f