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1987 Supreme(AP) 73
Andhra Pradesh High Court
Judges : A.SEETHARAM REDDY, A.RAMANUJULU NAIDU, V.BHASKARA RAO
Barium Chemicals Ltd - Appellant
Versus
Government of India - Respondent
W.P.No. 3027/77
Decided On : 02-06-87
Advocates Appeared :
Mr. K. Srinivasa Murthy,Mr. K. Jagannadha Rao,Mr. T. Anantha Babu
Headnote:MINES AND MINERALS (REGULATION AND DEVELOPMENT) ACT, 1957, Sec. 10 and 11 Rule 22 of Mineral Concessional Rules, 1960 Scope of Rule 11 - Prospective licensee though has preferential right for lease other applicants have to be considered on merits State Government has discretion in granting lease on basis of merits.
HELD:
Per Amareswari J.,: Section 11 (2) contemplates a preference being only after considering all the applications with reference to the matters mentioned in Sub-section (3) and when the claims are equal or approximately equal. Reading Secs. 11 (1) and (2), a prospecting licensee has an over-riding preferential treatment over others subject to the tests mentioned therein All other applications have to be considered on merits with reference to the matters mentioned in Sub.sec. (3) and a preference can be given to a prior applicant only when their claims are equal or approximately equal or there is nothing to choose between the two.
The State Government has discretion to choose one among them section 11 (2) stands on a different footing from Sec. 11(1). Just because a person files an application a day or two, he cannot enjoy the right so as to exclude others from consideration. It is not an indefeasible right. The object of the Act is to develop mineral Wealth and this purpose would be defeated if the applications are not considered on merits with reference to the Act and the Rules including Sec. 11 (3) which mentions very relevant factors.
It is only after consideration of all the applications, when the merits are equal or approximately equal a preference can be given to a prior applicant. It is a limited preference that is contemplated under Sec. 11 (2). Whenever there are more applicants than one, the claims of all the applicants must be evaluated and lease should be granted to the deserving.
Per Seetharam Reddy & Bhaskara Rao JJ. (Concurring): The matters referred to in sub-Section (3) will be applicable to cases contemplated under proviso to sub-Sec. (2) viz., where two or more applications are received on the same day, the matters enumerated in sub.Sec. (3) will have to be taken into consideration for deciding the claims inter se between such applicants and that to the applications referred to sub-Sec. [2]. Neither the language nor the intendment of it supports the attraction of mutters specified under sub-Sec. (2) of Section 11. Notwithstanding the fact that the applicant whose application received later than the first applicant, being superior, judging with reference to the material furnished in From-I, he cannot be preferred. It is only when the first applicant fails to qualify himself as a fit person, then the next one in point of time will have the priority for the grant of lease, provided be proves to be a fit person. If, on the other hand, where more applications are received on the same day, than the discretionary right has been conferred upon the authority to compare and select with reference to the matters enumerated in sub-Sec. (2) and choose one of them is the authority deemed fit. Sub-Sec. (4) which has the overriding effect over sub-Sec.(2) carves out an exception by which the preferential right in favour of the applicant who applies earlier can be given a go-bye and a lease could be granted in favour of a person, who applies later than the first applicant provided the authority gives special reasons which have be recorded and then obtains previous approval of the Central Government provided of course, he is a fit person.
( 1 ) AN extent of 110 acres in Survey Nos. 57 and 58 of Pocharam Village, Yellanud Taluk, Khammam District was notified by the Government of Andhra Pradesh on 31-7-1972 as available for granting a mining lease for Barytes.
( 2 ) ON the same day, i. e. 31-7-1972, the 4th respondent M/s. Expo Chemicals, Kothagudem applied for the lease. The petitioner M/s. Berium Chemicals Ltd. , Ramavaram, Khammam District also applied for a mining lease over the same area on 2-8-1972 i. e. , two days later.
( 3 ) THE State Government by its order in G. O. Ms. No. 232, dated 6-4-1973 granted the lease to M/s. Expo Chemicals, the 4th respondent on the sole ground that their application was received earlier than that of the petitioner and as such they have a preferential right under S. 11 (2), Mines and Minerals (Regulation and Development) Act, 1957, hereinafter called the Act.
( 4 ) THE petitioner carried the matter in revision under S. 30 read with R. 54, Minerals Concession Rules, 1960. The Central Government by its order dated 18-11-1975 affirmed the order of the State Government on the same reasons and dismissed the revision petition.
( 5 ) THE validity of these two orders is challenged in this writ petition which came up for hearing before Justice Chinnappa Reddy, as he then was. The main contention urged by the petitioner was that neither the State Government nor the Central Government considered the applications on merits. They were blindly led away by the fact that the 4th respondents application was received earlier and as per S. 11 (2) lease has to be granted to the earliest applicant. It was urged that all applications have to be considered on merits and preference be given to the first application only when the claims are equal. In support of this contention, reliance was placed on a decision of the Division Bench of this Court in Writ Appeals Nos. 600 and 601 of 1960 dated 1-4-1971. The learned Single Judge expressed the view that the ratio of the Division Bench decision is opposed to the plain meaning and content of S. 11. According to the learned Judge, S. 11 envisages preference in favour of a prospecting licensee for the same land first and next to the person whose application is received earliest, and in a case where several applications are received on the same day, lease has to be granted after considering the matters mentioned in S. 11 (3) and that the view of the Division bench that the claims of all the applicants must be evaluated and preference be given only when other things are equal requires reconsideration and referred the matter to a Full Bench. That is how the matter is now before us.
( 6 ) THE main submission of Mr. K. Srinivasa Murthy the learned Counsel for the petitioner is that when more than one application is filed for a mining lease all the applications should be considered with reference to the matters mentioned in S. 11 (3) and preference can be given to an earlier applicant under S. 11 (2) only when their claims are equal. Section 11 (2) does not create any special right in favour of a prior applicant, eliminating the others from consideration. All applicants must be treated equally and their applications must be considered and claims evaluated, preference being given only when they are otherwise equal.
( 7 ) THIS is countered by Mr. K. Jagannadha Rao and Mr. N. V. Suryanarayana Murthy, the learned counsel for the Central Government and the State Government respectively that S. 11 (3) has no application to cases falling under the main limb of S. 11 (2) and it applies only to a situation where several applications are received on the same day. In other words, S. 11 (3) must be confined in its operation to the proviso and not to the main limb of sub-s. (2 ). It is urged that if the application of a prior applicant is a valid one in that it is accompanied by the requisite fee and the required certificates, he should be given the lease and the question of inter se merits does not arise.
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