2001 Supreme(SC) 305

2001(2) Supreme 27
SUPREME COURT OF INDIA
(From Allahabad High Court)
G.B. Pattanaik & B.N. Agrawal, JJ.
M/s. A-One Granites -Appellant
versus
State of U.P. and Ors. -Respondents
Civil Appeal No. 6495 of 1998
Decided on 16-2-2001
Counsel for the Parties :
For the Appearing Parties : Govind Das, G.L. Sanghi, Parag P. Tripathi, Shanti Bhushan, Gopal Subramanium, Sr. Advocates, Yatish Mohan, Arjun Pant, Vishwajit Singh, Arvind Varma, Ms. Sangeeta Mandal, Ms. Varsha Chaudhary, Kapil K. Choudhary, Gaurab Banerjee, R.B. Misra, Advocates.

Headnote:(i) Uttar Pradesh Minor Minerals (Concession) Rules, 1963-Rule 72-Procedure for re-grant of mining lease under Chapter II-Notice notifying availability of area for re-grant of lease-Grant of lease before expiry of 7 days from issuing notice-Court quashing lease as invalid-Subsequent grant of lease without following procedure prescribed under Rule 72-Not valid-Object of Rule 72 is transparency in matter of granting mining lease and restrict any underhand dealing-Merely because area in question had been held by previous lessee for some period under auction/tender basis under Chapter IV it could not be said that Rule 72 would not apply when such area was withdraw for grant of lease under normal procedure under Chapter II.

       Under the Rules, mining operation in respect of any minor mineral can be undertaken only in accordance with the terms and conditions of a mining lease or mining permit granted under the Rules. Such a lease could be granted under Chapter II, which prescribes the procedure and rule 9 provides for a preferential right when two or more persons apply for a mining lease in respect of the same land. The mining lease could also be granted under Chapter IV by way of auction/tender/auction-cum-tender when State Government by special or general order declare that the area in question could be leased out by auction or by tender or by auction-cum-tender, as provided in rule 23. The procedure for grant of lease by auction is provided under rule 27. Rule 24 empowers the State Government to withdrawn any area which had been declared under sub-rule (1) of rule 23 and once the area is withdrawn under rule 24, then the procedure prescribed in Chapter II for grant of mining lease becomes applicable. Thus the procedure provided under Chapter II of the Rules being the normal procedure, Chapter IV is an exception to the same. By 20th amendment whereby rule 72 was incorporated in the Rules certain restrictions were put to the effect that if any area which was held under a mining lease or reserved under Section 17A of the Act became available for re-grant the District Officer was required to notify its availability through a notice inviting applications for grant specifying a date which shall not be earlier than 30 days from the date of the notice and the said notice was required to be displayed on the notice board of the District Office and was also required to be sent to Tehsildar of such area and the Director. According to the aforesaid rule, if an area was held under mining lease either under Chapter II or under Chapter IV, the procedure prescribed in rule 72 was applicable. By 21st amendment, rule 72 was substituted which prescribes the procedure of notifying the availability of the area through a notice, inviting for applications for grant of mining lease, specifying the date when the said area which was held under a mining lease under Chapter II or reserved under Section 17-A of the Act becomes available for re-grant on mining lease. Further amendment was made that the applications for grant of mining lease were required to be received within 7 working days from the date specified in the notice referred to in sub-rule (1) of rule 72. (Paras 15 & 16)

       The language used in rule 72(1) on a literal meaning being given, would undoubtedly support the contention of Mr. Das and Mr. Sanghi, appearing for the appellant that this procedure would not apply when the area in question had been held under a lease not under Chapter II but under Chapter IV. But such an interpretation should be avoided inasmuch as the very purpose for which rule 72 has been engrafted in the Rules will totally get frustrated. The object of having such provision is transparency in the matter of granting mining lease and restrict any under-hand dealing with the minerals by the permit granting authority. The object of notifying the availability through a notice by the District Officer is to bring it to the notice of the public at large, so that an interested applicant can make an application and such application could be considered on its own merit, when more than one applications are received in respect of the same area. The lease under Chapter II of the Rules could be granted for a period not exceeding ten years, as provided in sub-rule (1) of Rule 12 and under sub-rule (2) of Rule 12, if the State Government is of the opinion that it would be necessary in the interest of mineral development, it may grant the lease for any period exceeding ten years but not exceeding fifteen years. The Rules also contemplate renewal of such lease. Rule 19(2) empowers the State Government to determine any lease on the grounds indicated thereunder, after giving the lessee a reasonable opportunity of stating his case. The area which was being operated upon on the basis of a lease obtained under Chapter II when becomes available for re-grant if the prescribed procedure under rule 72 is not followed, then it may lead to favouritism and bias, ultimately resulting in corruption of the permit granting authority. It is to prevent such abuse, the Legislature have brought into the Rules, the procedure prescribed under rule 72, the duty of notifying the availability of the area by the District Officer. In case of auction lease, it is not necessary, since the procedure prescribed for grant of auction lease in rule 27 itself indicates that the District Officer or the Committee authorised is duty bound to at least give a notice 30 days before the date of auction in the manner indicated under the Rules by providing the date, time and place of auction and if for any reason, the auction is not completed on the notified date, then a fresh auction could be held after giving a shorter notice of at least seven days. Thus the procedure followed for grant of lease by auction as provided under rule 27 or tender as provided under rule 27(A) or auction-cum-tender, as provided under rule 27(B) is itself sufficient notice to the public to enable them to participate in the auction/tender/auction-cum-tender and question of any clandestine dealing in such case would not arise. But in a case when the area was held under auction/tender/auction-cum-tender under Chapter IV and the State Government withdraws the area from the said procedure, whereafter provisions of Chapter II, the normal procedure for granting lease becomes applicable as in the case in hand, then if Rule 72 is interpreted in the manner, as contended by the learned counsel for the appellant, then it would frustrate the purpose of transparency and open-ness engrafted in rule 72 and such an interpretation will be against the legislative intent. It is a cardinal principle of construction that the courts must adopt a construction which would suppress the mischief and advance the remedy. In other words, the court must adopt a purposive interpretation of the provisions under consideration. So construed, it is difficult for us to accept the contention of Mr. Das appearing for the appellant that rule 72 has no application to the case in hand merely because the area in question had been held by the previous lessee for some period under auction/tender basis under Chapter IV, particularly when on 30th of March, 1995 the District Magistrate withdrew the area held under auction/tender system to the normal procedure of grant of mining lease under Chapter II w.e.f. 1.4.1995. Thus, we are of the opinion that rule 72 shall have application in the case in hand and the High Court has not committed any error in quashing the order passed by the State Government sanctioning mining lease in favour of the appellant without following the procedure prescribed under rule 72 of the Rules. (Paras 17 & 18)

       (ii) Precedents-Rule of sub-silentio. (Para 11)