The consultation prescribed by the Notification issued under rule 26(2) of the Mines and Minerals (Regulation and Development) Act, 1957, which requires the Collector or District Revenue Officer to consult with the Assistant Director of Mines and Geology before canceling or determining a lease, is mandatory.

Headnote:
MINES AND MINERALS (REGULATION AND DEVELOPMENT) ACT, 1957 - SECTION 26(2) - MINERAL CONCESSION RULES, 1960 - RULE 27(4), (5) - DELEGATION OF POWER TO COLLECTOR OR DISTRICT REVENUE OFFICER TO CANCEL OR DETERMINE LEASE - PRIOR CONSULTATION WITH ASSISTANT DIRECTOR OF MINES AND GEOLOGY MANDATORY - FAILURE TO CONSULT RENDERS ORDER INVALID.
Fact of the Case:

The petitioner, a mining company, was granted a mining lease for manganese ore. The lease deed contained a covenant requiring the petitioner to give 15 days' notice before transporting ore from the mine. The petitioner failed to give such notice and was served with a show-cause notice by the District Collector. The petitioner submitted an explanation, but the District Revenue Officer determined the lease and forfeited the security deposit. The petitioner challenged the order in a writ petition.
Finding of the Court:

The court held that the District Revenue Officer's order was invalid because he had failed to consult with the Assistant Director of Mines and Geology before determining the lease. The court found that the Mineral Concession Rules, 1960, which were framed under the Mines and Minerals (Regulation and Development) Act, 1957, required the Collector or District Revenue Officer to consult with the Assistant Director of Mines and Geology before canceling or determining a lease. The court also found that the State Government had issued a notification in 1974, which amended the earlier notifications and substituted the words "prior consultation with the concerned Assistant Director of Mines and Geology shall be made" for the words "prior approval of the Government shall be taken".
Issues: Whether the District Revenue Officer's order was invalid because he had failed to consult with the Assistant Director of Mines and Geology before determining the lease.
Ratio Decidendi: The court held that the consultation prescribed by the Notification was mandatory. It reasoned that the power to cancel or determine the lease was conferred by sub-rules (4) and (5) of rule 27 of the Mineral Concession Rules, 1960 on the Government. But this power has been delegated by the Government to the collector by Notification in G. O. Ms. No. 1994 dated 6th December, 1963 and it is specifically directed that the power conferred on the Collector was subject to the condition that prior approval of the government shall be taken. This was modified subsequently by the memo dated 5th November, 1974 and the power exeroisable by the Collector or the District Revenue officer as the case may be, is subject to the condition that prior consultation with the concerned Assistant Director of Mines and geology shall be made.
Final Decision: The court allowed the writ petition and quashed the orders of the District Revenue Officer and the Central Government.

( 1 ) THE petitioner M/s. Khaitan Mineral development Corporation, Cheepurpalli, srikakulam District, was granted a mining lease for Manganese Ore over an extent of ac. 7-78 cents in S. No, 141 (P) and 151 (P; of Devada Village, Cheepurupalli taluk, Srikakulam District, for a period of 20 years, by an order of the Government of andhra Pradesh in G. O. Ms. No 1043, industries, dated 25th July, 1964. The mining lease deed was executed on 7th November, 1964, and it is valid upto 6th November, 1984. Manganese ore is a mineral, listed as item II in Schedule-I of the Mines and minerals (Regulation and Development) Act, 1957. While the petitioner was carrying on mining operations, it was served with a notice in February, 1970, by the District collector, stating that the petitioner had transported manganese ore from the mine without giving 15 days notice and thus contravened the covenants 1 and 13 of Part VII of the Mining Lease Deed, and called upon it to show cause why the lease should not be terminated. The petitioner submitted its explanation that the royalty had been paid, that certain refunds were due to it for the previous years and that it was entitled to adjustment of the same. The petitioner however admitted having committed breach of covenant No. 13 but raised a contention that it was a formal one and that notice need not be given in writing when the officers were aware of the production of the material.

( 2 ) THE District Revenue officer, Srikakulam, by his order Rc. No. 28286 of 74-D3 dated 15th March, 1975 rejected the explanation of the petitioner, determined the mining lease with immediate effect and forfeited the whole security amount of Rs. 1000 for violation of covenant No. 13 of Part VII of the mining lease deed.

( 3 ) AGAINST the said order of the District revenue Officer, the petitioner preferred a revision to the Central Government, under rule 54 of the Mineral Concession Rules 1960 (hereinafter called the Rules ). The central Government after calling for the comments of the State Government, dismissed the revision petition by final order no. 246 of 1977 dated 7th September 1977 which was communicated to the petitioner by letter dated 24th October, 1977. It is these two orders of the Central Government and the District Revenue Officer that are being challenged in this writ petition.

( 4 ) THE main contention urged by Sri I. Venkatanarayana, learned Counsel for the petitioner is that the determination of the lease by the District Revenue Officer without prior consultation with the Assistant Director of mines and Geology, is illegal and without jurisdiction.

( 5 ) ON the other hand it is contended by Sri k. Subrahmanya Reddy, learned standing counsel for the Central Government that consultation with the Assistant Director, is not mandatory, but it is only declaratory, and the absence of consultation would not invalidate the impugned orders. He also submits that the Assistant Director had subsequently submitted a report recommending the determination of the lease and therefore the defect if any in the impugned orders has been cured and the impugned orders cannot be invalidated on account of absence of prior consultation.

( 6 ) IN order to appreciate these contentions, it is necessary to notice a few facts which have a bearing on them. In the supplemental counter affidavit filed on behalf of the respondents 2 to 5, it is stated that the District revenue Officer, requested the Assistant director of Mines and Geology, Visakhapatnam, through his letter No. 28286/ 74-D3 dated 20th December, 1974 to send his views on the determination of the lease for violation of the conditions of the lease deed committed by the petitioner. As the assistant Director did not send any reply, he was reminded by the District Revenue officer, by his letter dated 7th January, 1975, 27th January, 1975 and 13th February, 1975, to send his views. As no reply was received inspite of the aforesaid reminders, the District Revenue Officer, passed an

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1978 Supreme(AP) 302

Cases Referred (3)