2002 Supreme(AP) 1074

Andhra Pradesh High Court
Judges : A.R.LAKSHAMANAN, GHULAM MOHAMMED
A.P.Small Scale Granite Industries association, Hyderabad - Appellant
Versus
Government Of A.P., Industries and Commerce (Mines) Dept. - Respondent
Decided On : 09-09-02

Headnote:

Civil Matter - Civil Suit – Mines and Minerals (Regulation and development) Act, 1957 - Section 17-A (3), Section 24-A, sub- section (2) of Section 24, subsection (1) of Section 15 – Writ petitions - Constitution of India - Article 265 , Article 226 - A. P. Minor Mineral Concession Rules, 1966 - Seeking such a relief for fact of agreement - Central Rules, 1960 - Rule 14 (2) (i), 12 (5) (b), Rule 12 (5) (a) (i) - Government of Andhra Pradesh having identified an extent of Ac. 268. 70 cts. of land belonging to Animal Husbandry department situated in village, where a Cattle Breeding Farm was located, as having rich deposits of black galaxy granite, proposed to Government of India that two Mandals viz. in said district should be reserved for APMDC - It appears that same was subject matter of litigation before this court in a batch of writ petitions - Writ petitions were disposed of by a learned single Judge with a direction to keep quarry lease applications pending with director of Mines and Geology until such time Government of India took a decision on issue - Subsequently, proposal was, however, withdrawn by government - Government issued G. O. Ms Animal Husbandry (AH. III) Department directing handing over of aforesaid extent of land to APMDC, out of which, an extent of 100 acres of land was directed to be handed over to Corporation immediately for exploration purpose - It was mentioned in order that terms of transfer will be decided separately by revenue Department - According to petitioners, such ownership rights have not been conferred on APDMC so far - Contention of petitioners that prior approval of Government of India is required under sub-section (2) of Sec. 17-A of Act where State Government intends to reserve any area for undertaking prospecting mining operations through a government company or corporation owned or controlled by it and since such approval has not been obtained government could not have undertaken prospecting or mining operations through APMDC has no merit - Said provision has no application to facts of present case - Here APMDC has purchased land from Animal husbandry and Fisheries Department and is absolute owner of land – Further, government has not undertaken any mining operation through the Corporation - apmdc being owner of land has surface rights over galaxy granite bearing area in question - Since Government has not reserved said land for APMDC, question of application of Section 17-A (2) does not arise - Further, this Court has upheld ownership of APMDC over land in question - Contention of petitioners that they were compelled to sign at dictates of authorities is without any basis - Learned counsel appearing for petitioners relied upon decision of apex Court in Verigamto Naveen v. Govt. of a. P - Wherein matter relates to termination of a sub-lease - It was held that interference in contractual matters is permissible where breach of contract involves breach of statutory obligation and order complained of has been made in exercise of statutory power by a statutory authority - It was held freedom of government to enter into business with any body it likes is subject to condition of reasonableness and fair play as well as public interest - After entering into a contract, in canceling contract, which is subject to terms of statutory provisions, as in present case, it cannot be said that matter falls purely in a contractual field – Held, Court opinion, it is a contractual obligation between Corporation and joint venture company - Corporation issued tender notifications on in certain newspapers inviting bids from interested for mining franchise from interested parties for prospecting and quarrying of galaxy granite and formed seven joint venture companies for seven blocks - As rightly pointed by learned advocate-General, if joint venture company is not willing to pay MFF, they should have not participated in tenders itself - APMDC was granted prospecting license by Government of Andhra Pradesh, vide G. O. Ms. No. 11, Industries and commerce (MIl) Department prior to delegation of powers to director of Mines and Geology in an extent of Ac. 70. 70 cts - And after delegation of powers, prospecting license were granted by Director of Mines and geology vide proceedings and proceedings and lease deeds were also executed - As rightly pointed out by learned Advocate-General whatever terms and conditions that are agreed upon are between APMDC and Joint venture companies for getting transfer of prospecting license. Neither government nor Director of Mines and geology are concerned in this regard - No provision in Act nor in provisions of Rules, 1966 stipulated any such condition nor it prohibits APMDC to collect Mining franchise Fee from joint venture companies - It is purely a private transaction between APMDC and joint venture companies – Court view, transaction of sub -lease between APMDC and private party is purely a private contract since there is no statutory power or flavor involved in implementing conditions of sub-lease - Court have come to conclusion that tender notification issued by APMDC and contracts entered into by some of petitioners pursuant thereto are not contrary to provisions of Act and Rules made there under, application of principle of severance for invalidation of that part of contract entered into for payment of MFF as being contrary to Statute and validating remaining part of contract as urged by learned counsel for petitioners does not arise - It is not necessary to refer to decisions relied on by learned counsel for petitioners on said issue - Very essence of contract entered into by petitioners is for payment of MFF for transfer of surface rights for undertaking mining operations – Appeal Dismissed.