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Gopal Prasad Gupt v. State Of U.P.And Others - WRIT - C No. 3501 of 2004 [2006] RD-AH 3516 (15 February 2006)


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                 Civil Misc. Writ Petition No. 3501 of  2004

Gopal Prasad Gupta  . . . Vs.  . . . .State of U.P. and others.

   AN D

         Civil Misc. Writ Petition no. 72493 of 2005

         Krishna Kumar  . . . . . Vs.  . . . .  . State of U.P.  and others.


Hon'ble Yatindra Singh,J.

Hon'ble R.K.Rastogi,J.

(Delivered by  Hon'ble R.K.Rastogi, J)

In both these writ petitions  a common  question of   law regarding  applicability of  Rule 9-A   of The  U.P. Minor Minerals (Concession) Rules ,1963 ( the Rules) is involved , hence  we  have heard both of them together and now  we  are deciding  them by  a common  judgment.

The facts relevant for disposal of   both these writ petitions are  that The U.P. Minor Minerals (Concession) Rules,1963  were amended by the  20th Amendment Rules on 7.8.1994 and Rule 9-A was added  which  provides  for  preference to certain class of  persons in the matter of  grant  of mining  leases. This amendment was challenged in  a writ petition and was declared ultra-vires by  Full bench decision of this Court in the case of 'Ram Chandra  Vs. State of U.P. and another' reported in (2001) 1 SAC page 475. A Special Leave  Petition was filed  against this order before the Hon'ble Apex Court. Later on this  appeal was disposed of  on 9.9.2002 on the under taking given by the State Government  that no preference will be given to any one  in granting the mining leases. It is relevant to point out  that some leases  had  already  been granted  in pursuance of the 20th Amendment dated 7.8.1994. These leases  were permitted to complete  their terms. In these leases  there was  also a provision for renewal of the lease. Some persons to whom the leases had been granted  applied for renewal of the  leases . Civil Misc. Writ Petition no. 3501 of 2004 has been filed  more or less for  restraining the grant of renewal of the leases.

A notice was issued on 19.1.2001 advertising  Lot no. 2 Khand No. 871 village Piper Deeh Tehsil Dudhi District Sonbhadra for grant of  mining lease. The mining lease was granted to Kirshna Kumar,  the petitioner in W.P. no. 72493 of 2005 on 27.2.2001. This lease itself was for three years . Krishna Kumar applied for renewal of the lease on 15.9.2003. This lease was renewed for a further period of three years on 10.7.2005. The lease deed  was also executed  on 18.7.2005. This was cancelled on 14.10.2005 without  giving any opportunity of hearing to Krishna Kumar. Hence, he has filed Writ Petition no. 72493 of 2005.

After the lease of Krishna Kumar  had been  renewed on 10.7.2005 one Kuldeep  Prasad  Yadav  had filed Civil Misc. Writ Petition no. 54636 of 2005 challenging  this  renewal. In this writ petition interim order  was granted on 10.8.2005 staying operation of  the renewal in favour of Krishna Kumar. In this writ petition counter and rejoinder affidavits were exchanged. However, after cancellation of the renewal by the District Magistrate on 14.10.2005 this writ petition was dismissed as infructuous on 20.10.2005.

We have heard Sri W.H. Khan, counsel for Gopal Prasad Gupta, petitioner in Writ Petition no. 3501 of 2004 and  Sri Dev Brat Mukerjee, counsel for the person seeking impleadment in this writ petition. We have also heard  Sri Dev Brat Mukerjee, counsel for Krishna Kumar, petitioner in Writ Petition no. 72493 of 2005, Sri W.H. Khan, counsel for caveator respondent and the Standing Counsel for the State of U.P. and State Officials in both the writ petition.

The counsel for Krishna Kumar, petitioner in Writ Petition no.72493 of 2005 submitted that the order of cancellation of the lease deed was passed without giving any opportunity of hearing   to the petitioner. Sri W.H. Khan and the Standing Counsel  submitted that though no opportunity has been given to the petitioner yet this lease  granted under  the provisions of Rule 9-A was rightly cancelled .

The following  points arise  for determination  in  writ petition No. 72493 of 2005:

(i)Whether  the petitioner was  granted  the   mining lease without  allowing any preferential right to him as provided in Rule 9-A of the Rules ?

(ii)Whether  the order  cancelling his lease without giving any opportunity  of show cause  to  him is  illegal and ultravires ?

(iii)To what relief  , if any,  is  the petitioner entitled  in Writ Petition No. 72493 of 2005 ?

In writ petition No. 3501 of 2005 the only  point that  arises for determination  is whether  the  relief  sought by  the petitioner can be granted.

First of all  we take up  the first point  of writ petition no. 72493 of 2005.

The  petitioner's case is that  though there was  a provision for  preferential  right  of  certain  class of  persons in respect of  grant of mining lease as provided in Rule 9-A of the Rules,   yet he did not  get  allotment of  the lease on the basis of  this Rule because  none from the general category  had applied  for grant of  lease, and so  his application for grant of lease  was allowed. So the  order  for  grant of lease in his favour can not be deemed  to have been   passed under Rule 9-A. As such  the lease granted in his favour was not liable to be  cancelled.

After  careful consideration of the record  and the  relevant provisions, we do not find any  force in the above contention. When  the category,  in which  the petitioner applied for grant of mining lease was reserved  for a particular class of  persons, there was no  opportunity  for  a person of  the  general category to apply for  grant of  mining lease in that category because  their applications were liable to be  rejected  under Rule 9-A. Hence  no body from  the general category  applied for grant of  mining lease in that category which was  reserved for a certain class of  persons  and so  the petitioner's application ,who was   a candidate  of  the preferential  category,  was allowed.  Subsequently  when the  above Rule being unconstitutional  and ultravires,    has been  struck  down by a  Full Bench  of this court  in  the case of Ram Chandra (supra),  the petitioner can not  take  this plea that  since there was no  candidate of the general category  his lease shall not be affected. The ratio of  the above judgment as well as  of  the subsequent orders  passed by the Government  in respect of  the leases,  which were  granted  in accordance with the above Rule 9-A, shall  apply  to the case of the petitioner also. In this way  there is no  force in the contention of the petitioner that the lease in his favour  was not granted  under Rule 9-A, and so  the  Full Bench judgment of this court striking  down  the above  Rule has got no effect upon  the lease  granted in his favour.

Now, we take up  point no. 2.

The case of the petitioner  is  that  since  no opportunity was given  to him prior to  cancelling  the lease in his favour,  the order passed by the Government  is in violation of  the principle of  natural justice,  and so it was  illegal. The  learned Standing Counsel for State  conceded  that no opportunity of hearing  was given to the petitioner   prior to passing of the  impugned order,  but their contention is that  there was no necessity  to do so. In this connection  it would be useful  to  go through  the   following    date chart mentioning  the dates of  relevant incidents  which are as under:

27.2.01  A mining lease  was granted in favour of the petitioner for a    period of  three years.

17.3.01   A lease  deed  was  executed  between  the  petitioner and           State.

27.3.01  The  Full Bench of this court held in  writ petition No. 256 of   1997 (Ram Chandra Vs.State of U.P.)   that  Rule 9-A of the    Rules  was  unconstitutional and ultravires.

10.9.01  The State Government filed an appeal  against the judgment  of the Full Bench  of this court  before  the Hon'ble Apex                Court and in that S.L.P.  an interim order  was  passed  by        the Hon'ble Apex Court  directing that " Status quo  as on       today  be maintained".

11.1.02       A Division Bench of this court  interpreted the aforesaid              interim order regarding status quo  ( passed by  the Hon'ble  Apex Court ) in Civil Misc. Writ Petition No.44196/01, Katwaru Vs. Spl. Secretary, Industrial Development  Anubhag, U.P. Govt. and others,   decided  on   11.1.02  reported  in 2002(1), AWC 657   holding   that  the leases  already granted  before  the Full Bench  judgment of this Court  were not to be   affected  but fresh mining  lease on preferential  basis   under Rule 9-A could not  be granted  nor renewal of any such   lease  was  to be  granted     after   decision  of the Full Bench .

15.9.03       The petitioner applied for renewal of the lease.

10.7.05      The lease was renewed for a further period of three years.

18.7.05      The lease deed was executed .

7.10.05      A letter  was  issued  by Sri S.B.  Misra  Under Secretary       of the  Industrial  development,  Section -5, directing the           District Magistrate ,Sonebhadrato cancel the renewal of the      lease in  favour of the petitioner.

14.10.05    The order was passed  by the District Magistrate            Sonebhadra cancelling the  renewal of the lease in favour               of   the petitioner.

It is, thus, apparent  from  the above date chart  that the  lease in favour of the petitioner was  granted  on 27.2.2001 when Rule 9-A  of the Rules  was  in the  Statute    book, and  was   in    force,  and as such the lease was  validly  granted in favour of the petitioner on that date. Even after decision of the Full Bench  in the case of Ram Chandra (surpa) on 27.3.01, the lease in  the petitioner's favour  which was granted  prior to  the above   date   validly continued  for a period of three years  i.e. up to  17.3.04. However,  in view of the   Ruling  of this court  in  Katwaru  Vs.  Special Secretary Industrial Development Anubhag, U.P. and others : 2002 (1) AWC 657,  this lease  could not be  renewed after 17.3 .04 and   the order for its renewal was illegal.

The petitioner's contention is that  no opportunity of hearing was  given to him prior to  passing of the impugned  cancellation order  dated 14.10.05  and so this order  being in violation of  the principles of natural justice  is illegal  and  it should be set aside, and  a fresh  opportunity of hearing  should be granted   to him. The State Government has  conceded that  no opportunity of hearing was given  to  the petitioner, but its  case is that  the above order was validly passed in  pursuance of the   Full Bench  decision of this Court  and  so  there was no necessity  to give any   opportunity of hearing  to the petitioner.

After a careful consideration of the  facts and circumstances of the case,  we are  in agreement with the aforesaid  submission of the learned Standing Counsel. It is to be  seen that  in the present case  Rule 9A of the Rules   was declared to be  ultravires by this Court, and that order  applies  to all those  persons  in whose    favour  the  mining leases were granted on the basis of  provisions of  Rule 9A. There was no necessity  to  give  opportunity of  hearing to each and  every  lease holder prior to  passing of  the  cancellation order  in compliance of the  decision of this Court.  It is also  to be  seen that  in this case  the  petitioner  enjoyed  benefits of  the  mining lease  originally granted  in  his favour  for a period  of  about 3 years  even after  decision of the   Full Bench  of this Court,  and he also  applied  for renewal of the lease,  though he must have  been aware of this fact  that in view of  the decision of  the Full  Bench   of this court  as well as  of  the order of  Hon'ble  Apex Court, no renewal  could be granted  in his favour . The  Renewal was  granted  in his favour  by the Government   in violation  of the direction of this Court as well as    of the  Hon'ble Apex Court   in the case referred to  above.   However,  when this mistake was  pointed out,  the Government , taking into consideration the  decision of this court  as well as the order of   Hon'ble Apex Court, decided   to cancel    renewal of  the lease. It did not  commit any illegality  by  doing so,  nor  it was necessary to give any opportunity  of hearing to  the petitioner when  orders for  cancellation  of  lease were   passed   in  compliance of the direction of  the  Court. As such,   we do not find any force in the second contention  also  of the  petitioner,  and hold that  the order of  cancellation    of  renewal of lease    passed by the Government is valid.

Now, we  take up  to the  third point.

It is to be seen that  in view of the  findings  on  points no. 1 and 2,   no  relief  for permitting the petitioner  to continue  the mining  operations can be granted. However,  it is to be seen that  the petitioner  must have  deposited  the  royalty , the lease amount,  the security money  and  the  stamp duty on execution of  the renewed   lease deed.  Since these amounts were  incurred  by the petitioner in pursuance of renewal of the  lease granted by the  Government,  we are  of the view  that the petitioner is entitled to rateable  refund of the  royalty,  and  the lease  money  after making   deduction for the period during which the petitioner had performed  the mining  work  in accordance with the  renewed  lease. He shall  also be entitled  to  full  refund of the security money and the   stamp duty  paid by him  for  execution of  renewed  lease agreement . In the  case  of  Kamla Kant  Pandey Vs.  State of U.P. and others  in Writ Petition No. 43774 of 2005    decided on 16.12.2005 [ 2006(1) A.D.J. 142] we have  allowed  interest  on this amount  at the rate  which was  applicable  to F.D.Rs.  in the  nationalised Banks  for the periods during which   the  amount remained with the  Government, and the Government  while passing  orders for  return of rateable  royalty and  lease money and   full stamp duty  and  caution money, shall  allow interest  on these amounts for the periods the amounts remained  with it   at the rate  applicable  to F.D.Rs.   of  those periods in the nationalised Bank.

Now, we  come to Writ Petition No. 3501   of 2004. In this  writ petition  the relief  sought  by  the petitioner  was that   directions may be issued to the Government  not to renew the  mining leases which were granted in  accordance with  Rule 9-A of the Rules , and to grant  such leases  by way of auction  after advertising the same in the widely  circulated  news  papers.  We are of the view that  so far as  the  first part of the  relief  sought by the  petitioner is concerned , the same can be  granted  and a direction  can be  issued  to the Government   not to renew the leases which had been granted  in  accordance with  Rule 9A of the Rules  that has  now been declared  ultravires. So far as  second part   of the relief  regarding grant of mining  leases is concerned,  the Government  can grant such leases  in accordance with the provisions of law. With these observations, this writ petition is liable to be  disposed of.

Writ petition No.72493 of 2005 is partly allowed. It is  dismissed  so far it relates  to grant of relief  for quashing  the order  dated 14.10.2005 passed by the  District Magistrate, Sonebhadra  cancelling the renewal of  lease in favour of the petitioner  and  for quashing the  notice dated  18.10.2005  inviting  applications for   grant of  fresh lease. However,  the writ petition is  allowed  to the extent of  rateable refund of  royalty  and lease money  for the period during which the petitioner could not  perform the mining  operations due to  the order  passed by  the District  Magistrate , Sonebhadra on 14.10.2005, and for   full refund  of amount of  the stamp duty  utilised in  execution of the lease deed and the amount  of   security money. The petitioner shall also be entitled to   interest  on the above amount for the  periods the  amount  remained with  the government  at the rate  applicable  to F. D. Rs. of those periods in the  nationalised Banks.

Writ Petition No. 3501 of 2004 is  also partly allowed and the Government  is restrained from  renewing   mining leases of those persons whose  cases  are  covered  by  Rule 9A  of the Rules  now declared ultravires. The Government shall  take  necessary   steps for granting  mining   leases   of  these areas in accordance with law.




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