Judgment

DESAI, J.:- This appeal by certificate under Article 133 (1) (b) and (c) of the Constitution arises from a writ petition filed by the appellant in the High Court in which her motion for a writ of certiorari to quash an order No. K/MM/65 dated November 4, 1965, issued by the Mining Officer, Jabalpur, respondent 6 for and on behalf of Collector, Jabalpur, respondent 1, and a prayer for a writ of mandamus seeking to restrain the State of Madhya Pradesh and its officers and servants from recovering the amount involved in the writ petition, were negatived.

2. A brief resume of facts would help in focussing attention on the dispute involved in this appeal. Appellant applied for and obtained a quarry lease for excavating limestone in an area covering 25.32 acres in Jabalpur District, under the relevant Minor Mineral Rules then in force. The lease was executed by the appellant and the State of Madhya Pradesh on June 26, 1961. Madhya Pradesh Minor Mineral Rules, 1961 (1961 Rules for short), came into force with effect from August 11, 1961. By virtue of Rule 24 of 1961 Rules the royalty in respect of quarry leases was regulated as set out in the schedule annexed to the Rules. In respect of limestone for which appellant had obtained a lease, the provision in the First Schedule with regard to rate of royalty was, 10% of the sale value at the pits mouth subject to a minimum of 50 naye paise per ton for limestone, 75 naye paise per ton for unslaked lime and Re. 1 per ton for unslaked lime. As per clause 3 of the indenture of lease royalty at the aforementioned rate was payable half yearly, i. e. on. 15th March and 15th September in each year. Clause 5 made it obligatory for the lessee to keep correct and intelligible books of accounts showing accurately the quantity of mineral extracted, the weight and value of minerals sold and exported together with name of purchasers or consignees and there was a further obligation to submit certain statements to the Deputy Commissioner at Jabalpur on dates prescribed therein. Appellant was served with a memo bearing No. 2/MA/62 dated September 20/21, 1962, assessing the royalty in respect of limestone quarried by the appellant and demanding a sum of Rs. 35,313.58 p. as arrears of royalty. On receipt of this memo appellant made a representation as contemplated by Cl. 15 of the indenture of lease. As this clause spells out an arbitration agreement between the parties it may be reproduced in extenso :

"15 Whenever any doubt, difference or dispute shall hereafter arise touching the construction of these presents or anything herein contained or any matter or things connected with the said lands or the working or non-working thereof or the amount or payment of any rent or royalty reserved or made payable hereunder the matter in difference shall be decided by the lessor whose decision shall be final."

A hearing was given by Secretary to Government, Department of Natural Resources, Bhopal, respondent 4, where appellant appeared with her advocate Shri P. V. Lele. Respondent 4 by his minutes dated July 5, 1965, held that the appellant had no objection to the assessment of royalty for the period from January 1, 1958 to June 30, 1961, and the only objection raised was against the assessment for the period July 1, 1961 to December 31, 1961. After setting out the objections raised by learned Advocate of the appellant, respondent 4 directed the Mining Officer to recheck the sales for this period and report by the next day. After report of the Mining. Officer was received, the appellant was again heard by respondent 4 and he passed the impugned order assessing the royalty payable by the appellant. Pursuant to this order respondent 6 for and on behalf of Collector of Jabalpur issued a demand notice dated November 4, 1965. Appellant thereupon filed the writ petition questioning the legality and validity of the impugned demand notice.

3. A return was filed on behalf of the respondent, contending, inter alia, that sinc