The State Government cannot refuse to grant prospecting licences without following the procedures outlined in Rule 12 of the Mineral Concession Rules, 1960.

JUDGEMENT [Per: Hon'ble Cyriac Joseph, C.J. (Oral)]

1. In the year 1995, the petitioners applied to the Government of Uttar Pradesh for grant of prospecting licences under the Mineral Concession Rules, 1960 (hereinafter referred to as 'the Rules'). Before any decision was taken on their applications, the State of Uttaranchal was created w.e.f. 09-11-2000. After the creation of the State of Uttaranchal also, no decision on their applications was communicated to the petitioners. When the petitioners contacted the second respondent - District Magistrate, Bageshwar - they were informed that, as per Annexure 1 order dated 29-12-2004, the Government of Uttaranchal had rejected the applications. A copy of the said Government Order dated 29-12-2004 was supplied to the petitioners by the District Magistrate. As per Annexure 1 order dated 29-12-2004, the District Magistrate, Bageshwar was informed that the Government had decided to refuse the applications for grant of prospecting licences in respect of an area of 8.38 Sq. Kms. in Village Kunoli Sunera, District Bageshwar and the District Magistrate was directed that the said area be notified Invltin9 applications in accordance with the Rules. However, no reason was stated in Annexure 1 order for rejecting the applications. On the basis of Annexure 1 Government Order, the second respondent issued Annexure 2 notification dated 22-01-2005 inviting fresh applications for grant of prospecting licence in respect of the above-mentioned area. In the said notification, though it was stated that the earlier applications had been rejected by the Government,' the reason for such rejection was not indicated. In such circumstances, the petitioners filed this writ petition praying for quashing Annexures 1 and 2 and for directing respondent No. 1 to grant the prospecting licences to the petitioners in respect of an area of 8.38 Sq. Kms in Village Kunoli Sunera, District Bageshwar. They also prayed for restraining the respondents from granting prospecting licence to persons who applied pursuant to Annexure 2 notification.

2. The writ petition was admitted on 26-07-2005. Though the petitioners had filed Civil Misc. Application No. 4750 of 2005 seeking stay of operation of Annexures 1 and 2 and an order restraining the respondents from granting prospecting licence to persons other than the petitioners in respect of an area of 8.38 Sq. Kms. in Village Kunoli Sunera, the interim relief was not granted. However; it was directed that the grant of licence to persons other than those who had applied pursuant to the first notification shall tie subject to further orders in the case. .

3. According to the petitioners, Annexure 1 order is liable to be quashed on the ground that the applications of the petitioners were rejected against the provisions contained in the Rules. It is also contended that once Annexure 1 is quashed, the consequential notification (Annexure 2) and all further proceedings pursuant to the said notification are liable to be quashed. It is specifically contended that an application for grant of prospecting licence can be rejected under Rule 12 of the Rules only after giving an opportunity of being heard to the applicants and after recording in writing the reasons for the rejection. It is further pointed out that the refusal of the application should be communicated to the applicants. According to the petitioners, no reason has been assigned by the Government for rejecting the applications of the petitioners and the refusal was not even communicated to the petitioners. The petitioners came to know of Annexure 1 order only when they made enquiries with the second respondent. It is pointed out that Annexure 1 order is not marked to any of the petitioners.

4. A counter affidavit has been filed on behalf of the first respondent by the Secretary, Industrial Development, Government of Uttaranchal. It is admitted that the petitioners had applied for grant of prospecting licence in respect of an area

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