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Judgment
Jawad Rahim, J.—The petitioner has called In question in this petition the validity of the Notification dated 18.11.2003 vide Annexure-F
whereby the first respondent has delegated to the second respondent to perform the imposition of duties under Rule 26(1) of Mineral Concession
Rules, 1960 and also the letter of recommendation of the State Government No. CI 14 MMM 2004 dated 09.02.2004 seeking approval of the
third respondent for grant of mining lease to the fourth respondent vide Annexure-H. It also seeks issue of mandamus to the respondents No. 1
and 2 to consider the applications filed by the petitioner.
I have heard the persuasive arguments of the learned Counsel Sri. Phanindra and the learned Additional Government Pleader in supplementation
to the material on record.
Learned Counsel Sri. Phanindra has referred to the following factual matrix which is borne out from the record in support of the relief sought in
the writ petition and has particularly made mention to the proviso of Section 11(2) and Section 26 of the Mines and Minerals (Development and
Regulation) Act, 1957 (hereinafter referred to as the MMRD Act), as also to the imposition of duties upon the State Government by provision of
Rule 26(1) of Mineral Concession Rules, 1960 (hereinafter referred to as the MC Rules).
I shall therefore, refer to the relevant grounds with reference to the facts in the same sequence. It is as follows:
The petitioner Company applied for grant of mining lease over an area of 5,900 Acres in Ramadurga Range, Sushilnagar, Kalahaili & other
Villages of Sandur Taluk, Bellary District, for mining of iron ore on 11-10-1994, dividing the entire are into five blocks. Separate applications were
filed as detailed below:
(i) Application No. : 170 AML 94
Date of Appln. : 11-10-1994
Extent of Area : 1,200 Acres
Location : Ramadurga Range,
Sushilnagar, Kalahalli &
Other villages, Sandur
Taluk, Bellary District.
(ii) Application No. 171 AML 94
Date of Appln. : 11-10-1994
Extent of Area : 1,000 Acres
Location : Ramadurga Range,
Sushilnagar, Kalahalli &
Other villages, Sandur
Taluk, Bellary District.
(iii) Application No. : 72 AML 94
Date of Appln. 11-10-1994
Extent of Area : 1.200 Acres
Location : Ramadurga Range,
Sushilnagar, Kalahalli &
Other villages, Sandur
Taluk, Bellary District.
(iv) Application No. : 173 AML 94
Date of Appln. : 11-10-1994
Extent of Area : 1,200 Acres
Location : Ramadurga Range,
Sushilnagar, Kalahalli &
Other villages, Sandur
Taluk, Bellary District.
(v) Application No. : 174 AML 94
Date of Appln. : 11-10-1994
Extent of Area : 1,200 Acres
Location : Ramadurga Range,
Sushilnagar, Kalahalli &
Other villages, Sandur
Taluk, Bellary District.
The applications referred to above were the earliest application seeking grant of mining lease. The petitioner claims priority over all other
applications, if any, received by the Government.
The applications were pending consideration by the Government and as nothing was heard, though the petitioner was relentlessly pursuing it with
the Officials of the Department of Mines and Geology as also the State Government to expedite consideration of the applications. The petitioner
believed that its applications were in conformity with the rules and had furnished all material particulars as required under MMRD Act and MC
Rules framed thereunder. There was no impediment for the State to consider those applications. Noticing inaction of the Government petitioner
submitted several representations including representation dated 21-03-2002, 25-02-2002 and 17-05-2002.
After long lapse of time the petitioner received show cause notices from the respondent No. 2 on 28-05-2002, wherein intention of the
Government to reject the applications was indicated on the ground that the area applied for by the petitioner was sloppy and filled with greens and
the environment is likely to be affected if mining is permitted and thus was not suitable for mining operations. Identical show cause notices were
received in respect of four applications except applications pertaining to area applied for vide application bearing No. 172 AML 94 dated 11-10-
2004.
In response to the aforesaid show cause notices the petitioner filed a detailed statement on 01-07-2002 and was represented through its counsel
and sought further opportunity to substantiate that the reasons assigned in the show cause notices were not factually correct and that the area
applied for was suitable for mining operations. Thereafter nothing was done by the State or the respondent No. 2.
During this period the petitioner learnt that the respondent No. 2 had received several other applications on various dates later to the
applications submitted by the petitioner. It also learnt that the respondent No. 2 had recommended to the State to accept the application of Rama
Rao Poai and M/s Jindal Vijayanagar Steel Limited for grant of mining lease by relaxing Rule 59(1) of M.C. Rules, 1960. The respondent No. 2
had, through its communication, requested the Government to take up the matter with the respondent No. 3 - Central Government for approval.
The said communication of the respondent No. 2 dated 24-10-2001 has been relied by the petitioner to substantiate this point. Since the petitioner
felt such exercise was improper and tends to deprive the petitioner its legitimate right to secure mining lease preferentially over the application of
Rama Rao Poai and M/s Jindal Vijayanagar Steel Limited, it filed writ petition in WP No. 39138-142/2002 assailing the action of the respondent
No. 2 whereby recommendations was made in favour of the parties referred to above. This Court issued Rule Nisi and by an interim order dated
25-10-2002 respondents 1 and 2 were directed not to take decision even though they were permitted to consider the request of the contesting
respondent together. The interim order was periodically extended and was in force. It is at Annexure-A.
When the matter stood thus, State Government issued notification on 17-02-2003 and Gazetted it thereby de-reserving an extent of 11,620.56
KMS of land which was reserved in the state as forest, for deforestation vide notification at Annexure-B. Pursuant thereto the State Government
issued notification on 15-03-2003 bearing No. MCI 16 MM 2003 calling for application for mining lease to an extent of 426.50 Hcts, which was
part of the surrendered are of M/s Smiore Company Ltd in M.L. No. 1179, which is at Sl. No. 6 of the said notification and fails within the
Ramadurga Range. The said notification is at Annexure-C. The petitioner realizing that the area sought for by the petitioner for mining lease is
almost entire part of the area shown in St. No. 6 in the notification dated 15-03-2003 vide Annexure-B and any action pursuant to the said
notification by the Government would defeat its rights, the petitioner once again challenged the said notification vide Annexure-B in W.P. No.
31610/2003. The matter was heard and it appears the learned Single Judge has reserved it for orders.
However, as a precautionary measure and to ensure that its bona fide attempt to seek grant of mining lease reaches logical end, the petitioner
without prejudice to its right to challenge Annexure-C, thought fit to apply afresh and in this regard two separate applications were filed by it
dividing the area shown at Sl. No. 16 in notification into two blocks viz., 1) 705 Hec. and 2) 830 Hec. through application dated 16-04-2003.
It is pertinently brought out by the petitioner that the notification Annexure-C has been issued by the State in respect of the area of the land for
which the petitioner had applied for mining lease as early as in the year 1994 and that matter was subject matter of consideration in WP No.
39138-142/2004.
It is further brought out by the petitioner that by two notices the respondent No. 2 called upon the petitioner to appear before him on 18-08-
2003 to consider the applications filed by the petitioner in the year 1994 vide Application bearing No. DMG/MLS/2003-04/171 AML 94/8985
and Application bearing No. DMG/MLS/2003-04/172 AML 94/8983. The petitioner appeared personally before the respondent No. 2 on the
scheduled date ie., 18-08-2003 and filed detailed statement of objections vide Annexure-E. It is therefore, clear that the notice issued by the
respondent No. 2 is in respect of applications filed by the petitioner in the year 1994 and not in respect of the applications of the petitioner filed on
16-04-2003 (in pursuance to the notification at Annexure-C). The respondent No. 2 undoubtedly, has received the detailed statement from the
petitioner and was required to consider the same.
The petitioner has further brought on record that the State Government issued notification dated 18-11-2003 vide Annexure-F whereby it
delegated powers duties under Rule 26(1) of the M.C. Rules, 1960 Imposed upon the State Government to be exercisable by the respondent No.
2 in respect of applications received by the State for grant of mining lease in response to the State Government notification dated 15-03-2003
(Annexure-C) and not applications received earlier to it.
The respondent No. 2, acting under such delegated powers vide Annexure-F, issued two notices on 27-11-2003 under Rule 26(1) of the MC
Rules requiring the petitioner to appear before him and on 22-12-2003 for presentation of its case in support of its application filed in the year
1994 vide Application bearing No. DMG/MLS/2003-04/171 AML 94/8985 and Application bearing No. DMG/MLS/2003-04/172 AML
94/8983. Since, respondent No. 2, in exercise of the delegated powers conferred upon him vide Annexure-F, had issued notices the petitioner
resisted it questioning his jurisdiction and filed detailed memo and also filed copy of the company''s presentation book let dated 17-12-2003 as
also other relevant documents. Those documents were also filed along with this writ petition as Annexures-G, G1 and G2. The petitioner would
contend that such notices were in respect of applications submitted in the year 1994 and not with regard to the applications submitted on 16-04-
2003. Thus, petitioner has seriously questioned the authority or jurisdiction of the respondent No. 2 to deal with the application submitted in the
year 1994 regarding which no power under Rule 26 (1) of M.C. Rules was delegated vide Annexure-F.
The learned Counsel Sri Phanindra would then contend that no action was taken by the respondent No. 2 on the objections statement filed by
the petitioner but at the same time the petitioner learnt to its dismay that the respondent No. 2 had recommended the case of respondent No. 4 for
grant of mining lease to the State Government to seek approval u/s 5(1) of the MMRD Act from the Central Government. The State Government
acting on the evaluation report (recommendations) of the respondent No. 2 addressed a letter on 09-02-2004 to the respondent No. 3 - Central
Government seeking its prior approval u/s 5(1) MMRD Act to grant lease in favour of respondent No. 4 vide Annexure-H. The learned Counsel
posed serious challenge to the act of the respondent No. 2 in recommending the case of respondent No. 4 to seek approval of the Central
Government for grant of lease u/s 5(1) of MMRD Act, exercising the power delegated upon him vide Annexure-F. The action of the respondent
No. 2 and the State Government is assailed by him describing it as violative of the interim order granted by this Court in Writ Petitions No. 39138-
142/2002 and being in violation of proviso to Section 11(2) of MMRD Act and Rule 26 of M.C. Rules 1960. Such action of the State
Government and the respondent No. 2 proposing to grant lease in favour of respondent No. 4 over an area of 426.50 hectares of land, is termed
as arbitrary and unjust.
Sri Phanindra, referring to provisions of proviso to Section 11(2) of the MMRD Act contends that all pending applications and applications
filed pursuant to notification Issued by the State Government calling for applications had to be considered by the State Government simultaneously.
Rule 26(1) of M.C. Rules envisages personal hearing of the applicants before rejection. The State Government Is the competent authority to
consider, hear and pass orders. Mandate of all these provisions has been violated by the State Government in recommending the case of the
respondent No. 4.
The learned Counsel for petitioner has also challenged the notification dated 18-11-2003 (Annexure-F) whereby the State Government has
delegated its power / duties under Rule 26(1) of M.C. Rules, 1960 to respondent No. 2 partially but retained the power of making a decision. He
pointed out that notification dated 18-11-2003, Annexure-F delegates to the respondent No. 2 the function of the State Government exercisable
under Rule 26(1) of M.C. Rules only in respect of applications received pursuant to notification dated 15-03-2003(Annexure-C) and had not
delegated such power to the respondent No. 2 in respect of applications submitted to the State Government before notification dated 15-03-2003
(Annexure-C). Also he drew my attention to the fact that the notification notifying availability of the area of land and calling for applications was in
respect of the area which over lapped the area for which the petitioner had already submitted applications In the year 1994.
Be that as it may, he very pertinently pointed out that while delegating its power exercisable under Rule 26(1) of the Rules (vide Annexure-F
dated 18-11-2003), the State Government had delegated its power to respondent No. 2 only In respect of applications received in response to
notification dated 15-03-2003 (Annexure-C) and not in respect of applications received earlier (in this case the applications submitted by the
petitioner in the year 1994).
Therefore, the power exercisable by the State under Rule 26(1) of M.C. Rules in respect of applications prior to notification Annexure-C
dated 15-03-2003 vested only with the State Government and not with the respondent No. 2. Therefore, the respondent No. 2 could not have by
a notice dated 27-11-2003 exercised any power of the State Government under Rule 26(1) of the M.C. Rules to consider the applications of the
petitioner submitted in the year 1994. (vide Application bearing No. DMG/MLS/2003-04/171 AML 94/8985 and Application bearing No.
DMG/MLS/2003-04/172 AML 94/8983).
Further, he pointed out that such action was also in violation of the interim order issued by this Court in W.P. No. 39138-142/2004 and WP
No. 31610/2003. The said interim order passed by this Court as, rightly submitted by the learned Counsel for petitioner, shows that respondents 1
and 2 were duty bound to implement the interim order and also final order passed by this Court, directing respondents No. 1 and 2 to consider the
applications of the petitioner in respect of the area which forms major part of the area notified by the State Government and subsequently
recommended in favour of the respondent No. 4 for grant of mining lease.
At this juncture, it is material to note that the mining lease applied for by the petitioner was in respect of the are indicated in the sketch at
Annexure-J. The area notified by the State Government vide Annexure-C virtually overlaps to an extent of 97 hectares and 255 hectares. That
area of land has been recommended for mining lease in favour of respondent No. 4. The other area of 352 hectares is also overlapped with the
area of 426.50 hectares recommended by the State Government for mining tease in respect of respondent No. 4. This area is in respect of which
the petitioner had filed two mining lease applications on 16-04-2003 vide Application bearing No. DMG/MLS/2003-04/171 AML 94/8985 and
Application bearing No. DMG/MLS/2003-04/172 AML 94/8983.
It is also noticed that this Court had passed an interim order in writ petition No. 40488/2002 in writ action by M/s Zeenath Transport
restraining respondents 1 and 2 from considering and granting any application for mining lease in respect of the area applied of by that petitioner
which is also a part of the area notified by the State Government vide Annexure-C and recommended in respect of respondent No. 4. That Interim
order Is noticed at Annexure-K.
I have considered the arguments of learned Counsel Sri Phanindra and the contention of the learned Government Pleader Sri
Hanumantharayappa appearing on behalf of State Government.
The learned Government Pleader Sri Hanumantharayappa when confronted with these facts and the interim order of this Court as also the
provisions of Section 11(2) and 26(2) of the MMRD Act and Rule 26(1) of Mineral Concession Rules, responded vehemently to negate all the
contentions of the petitioner''s counsel. In this regard he assertively canvassed that while considering the applications for grant of mining lease, the
State Government has meticulously compiled with all the procedural requirements in dealing with the applications of the petitioner and other
applicants including the application of the respondent No. 4.
With regard to the applications submitted by the petitioner in the year 1994, he would contend that, the respondent No. 2 has considered all
those applications as is evident from the notices issued by him to the petitioner on 25-03-2002 and granted personal hearing to the petitioner. The
petitioner could not substantiate its suitability for grant of mining lease. Once again the respondent No. 2 issued show cause notice to the petitioner
on 18-08-2003 and heard the petitioner with respect to its application submitted in the year 1994. The petitioner had availed opportunity which is
undisputable in view of the fact that the petitioner itself had produced its reply, which is at Annexure-E.
During this period the State Government, in exercise of powers conferred upon it, rightly issued notification for de-reserving certain area vide
notification dated 15-03-2003 Annexure-B. This was under the provisions of Rule 59 of MC Rules, 1960 and indicated its intention to call for
applications in respect of areas of 11,670.56 sq.kms. after de-reserving it. That was followed by Annexure-C notification dated 15-03-2003
calling for application. The petitioner had availed that opportunity and filed fresh applications. The areas in respect of which petitioners have
applied no doubt comprised in Sl. No. 6 of the notification but the applications submitted by the petitioner were considered along with other
applications received by the State Government including application of the respondent No. 4.
Thus learned Government Pleader supports the notification dated 18-11-2003 Annexure-F whereby the State Government has delegated its
functions under Rule 26(1) of Mineral Concession Rules, 1960 upon the respondent No. 2. He seeks to justify such exercise of powers referring
to Sub-section (2) of Section 26 of the Mines and Minerals (Development and Regulation) Act, 1957. According to him all powers conferred and
duties to be performed by the State Government under Mines and Minerals (Development and Regulation) Act, 1957 could be delegated by the
State Government upon any other authorities or Officers subordinate to it. Exercising that power conferred upon it under Sub-section (2) of
Section 26 of the Mines and Minerals (Development and Regulation) Act, 1957, the State Government rightly delegated the functions to be
performed by it under Rule 26(1) of Mineral Concession Rules, 1960 upon respondent No. 2 which cannot be brought to challenge. Respondent
No. 2 discharged such powers delegated to him under Rule 26(1) of MC Rules, 1960 and has heard the petitioner and other applicants and
considered the suitability of the applications. On such consideration he recommended the case of respondent No. 4, which recommendation was
accepted by the State Government to grant mining lease to respondent No. 4 after seeking approval of the Central Government u/s 5(1) of the
MMRD Act. Therefore, he submits that the recommendations made by the State Government dated 09-02-2004 impugned in this writ petition
(Annexure-H) is valid and is not open to challenge.
In view of serious challenged posed by the petitioner to the notification No. CI 65 MMM 2003 dated 18-11-2003 issued by respondent No.
1 vide Annexure-F and the recommendations made by the State Government to the Central Government (respondent No. 3) vide letter No. CI 14
MMM 2004 dated 09-02-2004 vide Annexure-H, seeking approval of the Central Government u/s 5(1) of the MMRD Act to grant mining lease
to the respondent No. 4, it would be appropriate to first consider the sustainability and legality of the said notification at Annexure-F. It reads thus:
Government Of Karnataka
No.CI 65 MMM 2003
Karnataka Government Secretariat
Sachivalaya - 2
Bangalore, date: 13.11.2003
Notification
In exercise of the powers conferred by Sub-section (2) of Section 26 of the Mines and Minerals (Development and Regulation) Act, 1957, the
State Government hereby direct that the powers exercisable by it in relation to the matters detailed below shall also be exercisable by the Director
of Mines and Geology, Government of Karnataka.
To give an opportunity of being heard as provided under Rule 26(1) of Mineral Concession Rules, 1960 sending the recommendations to
Government to refuse or to grant of mining lease, limited only in respect of applicants who have applied for grant of mining lease in response to the
Government notification No. CI 33 MMM 94 dated 15-03-2003 and notification No. CI 16 MMM 2003 dated 15-03-2003.
By Order And In The Name Of
Governor Of Karnataka
SD/-
(A.B. Siddhanti)
Under Secretary To Govt (Mines)
Commerce & Industries Dept.
The above notification Annexure-F shows that it is issued by the State Government purporting to be in exercise of powers conferred by Sub-
section (2) of Section 26 of the Mines and Minerals (Development and Regulation) Act, 1957 to delegate powers exercisable by it under Rule
26(1) of Mineral Concession Rules, 1960, upon the respondent No. 2.
Therefore, it is necessary to examine whether Sub-section (2) of Section 26 of the Mines and Minerals (Development and Regulation) Act,
1957 confers such power to the State Government. Section 26 of the Mines and Minerals (Development and Regulation) Act, 1957 reads thus:
Delegation Of Powers.-
(1) The Central Government may, by notification in the official Gazette, direct that any power exercisable by it under this Act may, in relation to
such matters and subject to such conditions, If any, as may be specified in the notification be exercisable also by-
(a) such officer or authority subordinate to the Central Government; or
(b) such State Government or such officer or authority subordinate to a State Government, as may be specified in the notification.
(2) The State Government may, by notification in the Official Gazette, direct that any power exercisable by it under this Act may, in relation to such
matters and subject to such conditions, If any, as may be specified in the notification, be exercisable also by such officer or authority subordinate to
the State Government as may be specified In the notification.
(3) Any rules made by the Central Government under this Act may confer powers and impose duties or authorises the conferring of powers and
imposition of duties upon any State Government or any officer or authority subordinate thereto.
(emphasis supplied)
The scheme of the Mines and Minerals (Development and Regulation) Act, 1957, is clear. It has conferred certain specific powers upon the
Central Government and also the State Government. Section 26 of the said Act (which is extracted above) deals with delegation of powers. Under
Sub-section (1) of Section 26, the Central Government may, by a Notification in official gazette direct that any of the powers exercisable by it
under the Act may, in relation to such matters and subject to such conditions to be specified in the Notification be exercisable also by:
(a) Such officer or authority subordinate to Central Government or
(b) Such State Government or such officer subordinate to the State Government.
Similarly, Sub-section (2) of Section 26 has conferred upon the State Government delegation of powers. Under Sub-Section 2 of Section 26,
the State Government may by a notification in Official Gazette, direct that any power exercisable by it under the Act may, in relation to such
matters and subject to such conditions as may be specified in the Notification be exercisable also by such officer or authority subordinate to the
State Government.
Thus, Sub-section (1) and Sub-section (2) of Section 26, enables the Central Government or the State Government as the case may be, to
direct that any or ail such powers exercisable by it (the Central Government or the State Government) under ''the Act'' (Mines and Minerals
(Development and Regulation) Act, 1957) be exercisable by the officers or authority subordinate to it. This power of delegation is referable only to
the power exercisable under the Mines and Minerals (Development and Regulation) Act, 1957 and no reference is made to the powers
exercisable and duties imposed on it under the provisions of the of Mineral Concession Rules. 1960. Reference to the said Rules is conspicuous by
its absence.
(emphasis supplied)
We are concerned with the powers of delegation of the State Government only. Therefore, the moot question that arises for consideration is:
Whether the power of delegation conferred upon the State Government under Sub-section (2) of Section 26 of the MMRD Act, 1957, (in respect
of powers exercisable by it under of the MMRD Act, 1957) enable it to direct that the powers exercisable and duties imposed upon it under Sub-
rule (i) of Rule 26 of Mineral Concession Rules, 1960, be exercisable or performed by any officer or authority sub-ordinate to it as has been done
vide Annexure-F?
The answer is in the negative for the following reasons:
Firstly, reference is necessarily to be made to Sub-Section 3 of Section 26 of the MMRD Act, 1957 (extracted above). It postulates that any rules
made by the Central Government under the Act may confer powers and impose duties or authorize the conferring of powers and imposition of
duties upon any State Government or any officer or authority sub-ordinate thereto. It clearly adumbrates that under this provisions it is only the
Central Government which can authorise conferring of powers and imposition of duties upon any State Government or any officer or authority sub-
ordinate thereto.
There is nothing in this provision to indicate that the powers conferred and the duties imposed upon the State Government by the Rules framed
by the Central Government, can be delegated by the State Government to any of the officers or authority sub-ordinate to it. In the absence of any
such authorisation by the Central Government under the rules made by it, the State Government enjoys no such delegation of power. In other
words, it is only the Central Government by rules made by it can authorises delegation of such power to the State Government upon officers or
authorities sub-ordinate thereto. In the absence of any such rule the State Government cannot arrogate to itself such power of delegation.
In the absence of Sub-section (3) to Section 26 of MMRD Act, 1957, a liberal view was possible that the power of delegation conferred
upon the State Government by Sub-section (2) of Section 26 in relation to powers exercisable by it under the provisions of MMRD Act, 1957,
may also include the powers exercisable and the duties imposed upon it by the provisions of Mineral Concession Rules, 1960. But, that view is not
possible in view of the specific provision of Sub-section (3) of Section 26 of MMRD Act, 1957, referred to above.
This issue can be further examined with reference to Mineral Concession Rules, 1960. Section 13 of the Mines and Minerals (Development
and Regulation) Act, 1957 confers upon the Central Government power to make the rules for regulating grant of reconnaissance permits,
prospecting licences and mining leases in respect of minerals and for purposes connected thereto.
In exercise of such power conferred by Section 13 of the MMRD Act, 1957, the Central Government has framed the Mineral Concession
Rules. 1960 In order to regulate exercise of powers conferred on the State Government In the matter relating to grant of licences and mining leases
in respect of minerals and for the purposes connected thereto. We are concerned in this case with Rule 26 of Mineral Concession Rules, 1960.
Sub-rule(1) of Rule 26 imposes upon the State Government, a specific duty in the matter relating to refusal of application for grant and refusal
of mining lease. It requires that the State Government may after giving an opportunity of being heard and for the reasons to be recorded in writing
and communicated to the applicant, refuse to grant or renew a mining lease either the whole or part of the area applied for. Under this provision the
Central Government has imposed such duty only upon the State Government and has not authorised the State Government to delegate the duties
so imposed, to be performed by any officer or authority sub-ordinate to it. Consequently, the State Government could not have delegated the
powers exercisable and duties to be performed by it under Sub-rule(1) of Rule 26 of Mineral Concession Rules, 1960, upon the respondent No. 2
as has been done vide notification dated 18-11-2003, Annexure-F.
Secondly, as noticed from Annexure-F the State Government has assumed to its power of delegation by misinterpreting Sub-section (2) of
Section 26 of the MMRD Act, 1957 and while doing so divided the nature of duty imposed by Sub-rule (1) of Rule 26 of Mineral Concession
Rules, 1960. It has conferred upon respondent No. 2 the power to hear the applicants but has retained to itself the power of decision making,
virtually it has split the duty imposed upon it under that provision between itself and respondent No. 2.
Taking note of the effect of similar statute, which required personal hearing has to be given to the applicant before any adverse order is passed,
the Apex Court in the case of Gullapalli Nageswara Rao and Others Vs. Andhra Pradesh State Road Transport Corporation and Another, ,
observed thus:
Relevant observation in Para-31:
The second objection is that while the Act and the Rules framed thereunder impose a duty on the State Government to give a personal hearing, the
procedure prescribed by the Rules impose a duty on the Secretary to hear and the Chief Minister to decide. This divided responsibility is
destructive of the concept of judicial hearing. Such a procedure defeats the object of personal hearing. Personal hearing enables the authority
concerned to watch the demeanor of the witnesses and clear-up his doubts during the course of the arguments, and the party appearing to
persuade the authority by reasoned arguments to accept his point of view. If one person hears and another decides, then personal hearing becomes
an empty formality. We, therefore, hold that the said procedure followed in this case also offends another basic principle of judicial procedure.
From the dictum of the Apex Court a clear mandate emerges that there can be no division or splitting of the statutory function conferred upon
the State Government. Therefore, tested from this angle also the notification dated 18-11-2003, Annexure-F is unsustainable as being destructive
of very requirement of Rule 26(1) of Mineral Concession Rules, 1960.
At this juncture, the learned Counsel for petitioner, referred to the letter of the State Government dated 12-04-2005 No. DO No. CI 14
MMM 2004 addressed to the Central Government. The contents of which shows that the State Government is also conscious of the legal position
that it had no power of delegation to delegate the performance of duty casts upon it under Sub-rule (1) of Rule 26, to respondent No. 2. In the
letter under reference the State Government has communicated to the Central Government as follows: (Relevant Portion)
In all the above cases, the power of hearing under Rule 26(1) of Mineral Concession Rules, 1960, was delegated to the then Director of Mines
and Geology. Accordingly, the Director heard the applicants and sent his evaluation report to the State Government. Based on the evaluation
report of the Director of Mines and Geology, the Government took decision to recommend the applications in the above 10 cases.
The opinion of the Law Department was obtained on the procedure adopted by the State Government In recommending the proposals. The Law
Department has opined that the delegation of powers to the Director of Mines and Geology for hearing the cases was not correct since it is not
appropriate for one person / authority to hear and another person / authority to recommend the case. Therefore, the Law Department has stated
that the recommendations sent to Government of India were contrary to Section 26(2) of the Mines and Minerals (Development and Regulation)
Act, 1957 and suggested that the State Government could proceed afresh u/s 26(2) of the Mines and Minerals (Development and Regulation) Act,
1957, in view of the infirmity pointed out.
Therefore, I request that Government of India, Ministry of Mines may kindly return all the above 10 recommendations to State Government to
examine the proposals afresh.
From the extracted portion, it is clear that the State Government has realised that the power of hearing under Rule 26(1) of Mineral
Concession Rules, 1960, delegated to the respondent No. 2 was impermissible and accordingly it has sought withdrawal of the recommendations
made by it to the Central Government. But it is brought on record that the Central Government has ignored the said communication of the State
Government and is pursuing the recommendations made by the State Government in favour of the respondent No. 4.
For the reasons discussed above, I am satisfied that the notification dated 18-11-2003, vide Annexure-F issued by the State Government, is
without jurisdiction and unsustainable and liable to be quashed. Consequently, it impacts all further proceedings pursuant thereto.
The other issues arising for consideration is with regard to contravention of proviso to Section 11(2) of MMRD Act, 1957.
It is not in dispute that the petitioner had submitted five applications on 11-10-1994. No action was taken by the State Government on the
said applications. For the first time on 18-08-2003 respondent No. 2 issued notice calling upon the petitioner to appear before it for enquiry under
Rule 26(1) of Mineral Concession Rules, 1960. The reply given by the petitioner vide Annexure-E has not been considered. The respondent No.
2 had issued such notice in exercise of powers conferred upon him vide notification dated 18-11-2003, Annexure-F.
Proviso to Section 11(2) adumbrates that pending applications must be considered along with the applications filed pursuant to notification
notifying the availability of the area and calling for applications. In the instant case, it is not in dispute, the petitioner had filed five applications on
11-10-1994 much earlier to the notification issued by the Government on 15-03-2003 vide Annexure-C. Those applications were necessarily to
be considered under Rule 26(1) of Mineral Concession Rules, 1960, simultaneously with the applications filed pursuant to notification, Annexure-
C and petitioner was required to be given personal hearing. That has not been done.
As rightly pointed out by the learned Counsel Sri Phanindra, even if the State Government had power to delegate, it had delegated upon the
respondent No. 2 the power under Rule 26(1) of Mineral Concession Rules, 1960 only with respect to the applications submitted by the
applicants pursuant to the notification 15-03-2003 vide Annexure-C. Therefore, respondent No. 2 did not have any power conferred upon him by
the State Government to deal with the applications submitted prior to the said notification. On this ground also issuance of notice by the respondent
No. 2 to perform duties under Rule 26(1), was without jurisdiction.
Even if is to be held that notification dated 18-11-2003, Annexure-F was valid, the State Government has delegated to the respondent No. 2
its power only in respect of applications received pursuant to notification dated 15-03-2003, Annexure-C and not in relation to applications
submitted earlier. Therefore, the applications submitted by the petitioner were required to have been considered by the State Government only and
not by the respondent No. 2. Non consideration of such applications is evident from the subsequent proceedings of the Government. Without
considering the applications of the petitioner and other applicants, the State Government has processed the application of the respondent No. 4.
Thus, it is indicative of violation of proviso to Section 11(2) of MMRD Act, 1957 and irregularity in the proceedings before respondents 1 and 2.
For the reason discussed in the preceding paras of this judgement, the recommendation of the State Government by letter No.CI 14 MMM
2004 dated 09.02.2004 vide Annexure-H addressed to the Central Government (respondent No. 3) seeking prior approval u/s 5(1) of the
MMRD Act, 1957 to grant mining lease in favour of the fourth respondent is held unsustainable. The same is therefore,, liable to be quashed.
In the result, the grounds urged by the petitioner in support of the relief sought in the writ petition are accepted and all grounds urged to the
contrary are rejected. The petitioner shall succeed in this legal pursuit. The writ petition is allowed.
The impugned Notification bearing No.CI 65 MMM 2003 dated 18.11.2003 issued by the first respondent vide Annexure-F is quashed.
Consequently, the reference made by the first respondent - State Government by letter bearing No.CI 14 MMM 2004 dated 09.02.2004 vide
Annexure-H seeking prior approval of the Central Government (respondent No. 3) u/s 5(1) of the MMRD Act for grant of mining lease to the
fourth respondent is also quashed.
By issue of writ of mandamus, the respondents No. 1 and 2 are directed to consider the mining lease applications filed by the petitioner in the
year 1994 and the applications filed pursuant to the Notification (Annexure-C) over an area of 705 Hecs. and 830 Hecs. along with other
applications in accordance with law. Since the matter in issue has reached no finality from the year 1994, it is but necessary to direct expeditious
hearing of the applications without loss of time.
Rule nisi issued is made absolute.
Learned Government Pleader is permitted to file his memo of appearance within a period of eight weeks.