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1967 Supreme(MP) 45
High Court Of Madhya Pradesh
S. P. Bhargava and R. J. Bhave, JJ.
MINERAL MINING CO.PRIVATE LTD. - Appellant
Versus
STATE OF M.P. - Respondents
Misc. Petn. 319 Of 1966
Decided On : 04/28/1967
J.V.JAKATDAR, K.K.DUBEY
Headnote:(1) Constitution of India - Seventh Schedule - List I, Entry 54 - List II, Entry 23 - mines and minerals - vest in the State - Right of Union Government.
(2) Mines and Minerals (Regulation and Development) Act, 1957 - S. 2 - respective powers of the Union and States over mines and minerals.
All mines and minerals vest in the State, Under Entry 23 of the second list of the Seventh Schedule to the Constitution, the power to regulate mines and minerals development belong to the State Legislature. The Executive authority of the State has therefore, the administrative power in that matter to decide upon a policy for the purposes of the development and exploitation of mineral wealth of the State.
This power is however, subject to Entry 54 of list I of the Seventh Schedule to the Constitution. That entry authorises the Parliament to make laws for regulation of mines and minerals development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in public interest.
In exercise of this power the Parliament enacted the Mines and Minerals (Regulation and Development) Act, 1957 Section 2 of this Act clearly indicates that the matters for which and the extent to which no provision have been made in the Act the State Government is entitled to decide on these matters in the best interest of the State. [Para 5]
(3) Mines and Minerals (Regulation and Development) Act, 1957 - S.11 - object of -preferential right of a prospecting licensee over a third person - right of the Stale Government to impose ceiling not taken away.
(4) Mineral Concession Rule, 1960 - Rr. 26 & 34 - power to refuse to grant or renew a mining lease - includes power to reduce the area - reasons for refusing the lease should be given - rights of the prospecting licensee.
Section 11 only deals with the respective claims of the holder of a prospecting licensee and a third party. It no where lays down that the Government is bound to grant a mining lease with respect to whole of the area under the prospecting licence.
The purpose of section 11 is that if the Government has no objection to grant a mining lease over whole of the area, then the bolder of the prospecting licence must be preferred to a third party. This preference is prescribed with a view to preserve the fruits of labour to the party that puts in labour in prospecting the area and not to allow it to be reaped by a third party.
The section does not take away the right of the State Government to fix a ceiling in the matter of various minerals. [Para 5]
Under Rule 26 of the Mineral Concession Rules the State Government is required to state reasons for rejection of an application.
The power of rejection given by Rule 26 includes the power to restrict the grant to a lesser area than the one applied for the requirement of recording the reason is for the benefit of the applicant, so that he may know the reasons of the refusal and may seek relief from the Union Government by way of filing a revision petition as provided in Rule 54.
The purpose of Rule 34 is to enable the person mentioned in section 11 of the Act that is the holder of a prospecting licence to apply for whole of the area for which the prospecting licence was granted or to restrict the application for any part of the area. The language of the rule does not support the contention that the holder of the prospecting licence is as of right, entitled to secure the lease for whole of the area chosen by him. The later part of Rule 34 enables the State Government, for special reasons to be recorded, to reduce the area or exclude any particular area, and accommodate a third party. [Para 6 & 7]
( 1 ) THE petitioner was granted a prospecting licence for soap-stone, dolomitp and quartz in respect of Khasra No. 68. area 64. 12 acres, in village Chita Dhana, district Narsimhapur, under a deed dated 28th February 1963 for a period of two years. The petitioner thereafter applied for a mining lease for whole of the area covered under the prospecting licence by its application dated 22nd April 1964 The state Government by Memo dated 13th October, 1964 directed the petitioner to indicate which block of 20 acres was desired by the petitioner, indicating thereby that the State Government was prepared to grant the lease for that area only. By letters dated 23rd October 1964 and 26th October 1964 the petitioner represented to the State Government that the petitioner was entitled to get a lease for whole of the area and that in view of the enormous expenditure incurred by the petitioner in prospecting the area, there was no justification for reducing the area On the insistence of the State Government that the petitioner should choose 20 acres of land and because of the threat that in case no such choice was made within 15 days the appli- cation for grant of lease was liable to be dismissed, the petitioner under protest gave its choice and the State Government by order dated 20th January 1965 accorded its ianction for grant of lease for 20 acres only. The petitioner thereupon accepted the lease for 20 acres under protest and filed an application for revision before the Central Government under Rule 54 of the mineral Concession Rules, 1960. The Central Government, after inviting the comments of the State Government and after considering the reply of the petitioner on the comments of the State Government as required under Rule 54, rejected the revision application by order dated 27th April, 1966. The petition-er by this petition under Article 226 of the Constitution seeks a writ of certiorari for quashing the order of the State Government dated 20th January 1965 and that of the Central Government dated 27th April, 1966 and also prays for issuance of a writ of mandamus directing the State Government to grant the petitioner a lease for the whole area, applied for.
( 2 ) THE contention of Shri Jakatdar, learned counsel for the petitioner, is that Under section 11 (1) of the Mines and Minerals (Regulation and Development) Act, 1957 (hereinafter called the Act) and Rule 34 of the Mineral Concession Rules, 1960 (hereinafter referred to as the Rules) the State Government had no authority or jurisdiction to reduce the area without assigning special reasons. He urged that a holder of a prospecting licence has a preferential right to secure a lease for whole of the area covered under his licence. The choice of asking for a lesser area is that of the holder of the prospecting licence and that the State Government has no authority to reduce the area on its own accord. The State Government, according to Shri Jakatdar. can for special reasons recorded in writing, reduce the area. In this case, no such valid reason was Riven by the State Government and the act of the State Government in confining the grant to 20 acres was not onlv arbitrary but was also in violation of the Act and the Rules.
( 3 ) FROM the return filed before us as also from the comments sent to the Central government, it appears that the State Government had fixed a ceiling of 20 acres in the case of an individual and 40 acres for a companv for grant of leases for soap-stone mines. A similar ceiling has been fixed for other minerals also. This ceiling was fixed, according to the State Government, after taking into account past experience of the working of the prospecting licences and mining leases. The state Government came to the conclusion that where large areas were granted under prospecting licences and mining leases, such grants often resulted in the area remaining unworked This adversely affected expeditious development of mining resources of the State. In the case
