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Andhra Pradesh High Court
Judges : B.SUBHASHAN REDDY, M.H.S.ANSARI, P.S.MISHRA
Y.S.Vivekananda Reddy - Appellant
Versus
Government Of A.P. - Respondent
Decided On : 03-04-96
MINES AND MINERALS (REGULATION AND DEVELOPMENT) ACT, 1957 - SECTION 4A - SUB-LEASE - CANCELLATION - POWER OF STATE GOVERNMENT - EXTENT - MAJOR MINERALS - CONSENT - WITHDRAWAL - NATURAL JUSTICE - PRINCIPLES - VIOLATION - FULL BENCH JUDGMENT - RATIO DECIDENDI - BINDING NATURE - DIVISION BENCH - POWER TO EXAMINE - CONTRACTUAL NATURE OF SUB-LEASE - JUDICIAL REVIEW - SCOPE - ESTOPPEL - PRINCIPLE OF - APPLICABILITY - COMPENSATION - MEANING - RESTORATION OF POSSESSION - APPROPRIATE RELIEF.
Fact of the Case:
The Government of Andhra Pradesh, by G.O. Ms. No. 27, Industries and Commerce (Mines. III) Department, dated 7-1-1974, declared that the Barytes Ore bearing areas in the villages of Mangampet and Anantaraju-pet of Cuddapah District other than those already leased out were reserved for exploitation in the public sector with immediate effect and granted in favour of Andhra Pradesh Mining Corporation, a public sector undertaking, the lease in respect of 22.799 hectares of land for extraction of Barytes Ore for a period of 20 years. This was followed by a tripartite agreement dated 25-5-1975 between the State Government, the Corporation and the Pattedars of the lands (writ petitioners), in whom the surface rights were vested and pursuant to the agreement the Corporation" executed sub-lease deeds in favour of the Pattedars for certain extents of lands for specified periods.
Finding of the Court:
The Full Bench took notice of various contentions and referred, particularly, to clauses 15 and 16 of the sublease deeds and held, inter alia, that power under S. 4a of the Act was available to the State Government only in respect of minor minerals and as Baryte was admittedly a major mineral, the State Government had no power to direct termination of the sub-leases.
Issues: 1. Whether the State Government had the power to cancel the sub-leases under Section 4a of the Mines and Minerals (Regulation and Development) Act, 1957 (the Act)? 2. Whether the withdrawal of consent by the State Government and the cancellation of the sub-leases violated the principles of natural justice? 3. Whether the Full Bench judgment in Government of Andhra Pradesh v. Y. S. Vivekananda Reddy, AIR 1995 Andh Pra 1, was binding on the Division Bench? 4. Whether the sub-leases were void ab initio for being granted in violation of Section 5 of the Act read with Section 19 thereof? 5. Whether the petitioners were entitled to compensation for the loss of the period of mining operation/work by them on account of illegal withdrawal of the consent and the cancellation of the sub-leases by the State Government? 6. If it was held that they were entitled to be compensated, whether the compensation would be by treating the period of lease completed by adding to it the period lost by illegal interruptions.
Ratio Decidendi: 1. The power under Section 4a of the Act was available to the State Government only in respect of minor minerals and as Baryte was admittedly a major mineral, the State Government had no power to direct termination of the sub-leases. 2. The withdrawal of consent by the State Government and the cancellation of the sub-leases violated the principles of natural justice, since the same was not preceded by a notice to the affected parties (sub-lessees). 3. The Full Bench judgment in Government of Andhra Pradesh v. Y. S. Vivekananda Reddy, AIR 1995 Andh Pra 1, was binding on the Division Bench. 4. The sub-leases were not void ab initio for being granted in violation of Section 5 of the Act read with Section 19 thereof, as the State Government was estopped from going back from its representation in the form of consent and thus cancel the same. 5. The petitioners were entitled to be compensated for the loss of the period of mining operation/work by them on account of illegal withdrawal of the consent and the cancellation of the sub-leases by the State Government. 6. The appropriate compensation would be by restoration of their possession to the sub-leaseholds, limited to the extent and area as covered by their respective leases or by grant of equivalent area of the same quality and quantity of mineral.
Final Decision: The writ petitions were allowed. The respondents were directed to put the petitioners in possession of their respective mines covered by their respective subleases by 18-3-1996 and permit the petitioners to continue their mining operations and transportation of the Barytes under specific permit on conditions as laid down by the Supreme Court and as quoted above and deposit of 5% of the sale price as determined by the Corporation before issuing permits for transportation. The interrupted period, as stated above, shall be deemed to commence on the date the petitioners assume work and continue until the completion of the period.
( 1 ) THESE writ petitions are off-shoots of the judgment of a Full Bench of this Court in Government of Andhra Pradesh v. Y. S. Vivekananda Reddy, AIR 1995 Andh Pra 1.
( 2 ) UNDISPUTED facts are as follows: The Government of Andhra Pradesh by G. O. Ms. No. 27, Industries and Commerce (Mines. III) Department, dated 7-1-1974 declared that the Barytes Ore bearing areas in the villages of Mangampet and Anantaraju-pet of Cuddapah District other than those already leased out were reserved for exploitation in the public sector with immediate effect and granted in favour of Andhra Pradesh Mining Corporation, a public sector undertaking, the lease in respect of 22. 799 hectares of land for extraction of Barytes Ore for a period of 20 years. This was followed by a tripartite agreement dated 25-5-1975 between the State Government, the Corporation and the Pattedars of the lands (writ petitioners), in whom the surface rights were vested and pursuant to the agreement the Corporation" executed sub-lease deeds in favour of the Pattedars for certain extents of lands for specified periods. The Andhra Pradesh State Assembly, however, appointed a House Committee to enquire into certain complaints of illegal extraction of Barytes Ore and after considering the recommendations of the House Committee, allegedly the Government took a policy decision and issued G. O. Ms. No. 402, dated 1-12-1993 reserving the entire Barytes Ore bearing areas in Mangampet and Anantarajupet of Cuddapah District for exclusive exploitation by the Corporation. Consequently, the Government cancelled all the existing sub leases and also issued G. O. Ms. No. 417, dated 7-12-1993 to withdraw with immediate effect the consent given to the Corporation to enter into sub-leases and asked the Corporation to take all necessary steps in this regard. Challenging the said action of the State Government, the sublessees (Pattedars) filed several writ petitions, which were allowed by the learned single Judge holding that the State Government had no power under S. 4a of the Mines and Minerals (Regulation and Development) Act, 1957 (for short the Act ) to direct cancellation of the sub-leases and that the impugned action was violative of the principles of natural justice, since the same was not preceded by a notice to the affected parties (sub-lessees ). Both the State Government and the Corporation preferred appeals against the order of the learned single Judge. The Division Bench hearing the appeals, however, having regard to the complexity of the legal questions involved, referred the matter for decision by a Full Bench. The Full Bench took notice of various contentions and referred, particularly, to clauses 15 and 16 of the sublease deeds and held, inter alia, that power under S. 4a of the Act was available to the State Government only in respect of minor minerals and as Baryte was admittedly a major mineral, the State Government had no power to direct termination of the sub-leases. The judgment also referred to R. 37 of the Mineral Concession Rules, 1960 (for short the Rules ), which conferred power on the State Government to determine any lease for breach of the conditions specified therein and opined that the State Government could not rescind the consent granted earlier. It affirmed the aforementioned views of the learned single Judge in all respects. Adverting to the question whether the original consent given by the State Government under R. 37 of the Rules was itself illegal in view of the subsistence of the notification issued under R. 58 of the Rules reserving the entire area for exploitation by a public sector undertaking (the Corporation), the Full Bench declined to express any opinion, for cancellation of the sub-leases was not based on that alleged infirmity. The Full Bench, however, observed as follows (AIR 1995 Andh Pra 1, para 52): "we leave it open to the appellants if they propose to terminate the sub-leases or with draw the consent, to issue notice
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