Case Note & Summary
The dispute arose from a claim for mining lease and prospecting licence in respect of limestone minerals discovered in Bhemdemti Dostpur, Mohindergarh District, Haryana. The petitioner, Dharambir Singh, had applied for these concessions and asserted that he had discovered the minerals. The State Government had notified the area under Rule 59 of the Mineral Concession Rules, 1960, effectively reserving it. The petitioner challenged the reservation before the Central Government in revision and prayed for grant of the lease in his favour. The Mines Tribunal of the Central Government set aside the notification issued by the State Government but declined to grant the mining lease, stating that the grant lay within the State Government's discretion over its property. The petitioner then filed a writ petition before the High Court of Punjab & Haryana, which was dismissed in limine. Aggrieved, the petitioner approached the Supreme Court by special leave petition. The core legal issue was whether the petitioner possessed a preferential right to the mining lease under Section 11(2) of the Mines and Minerals (Regulation & Development) Act, 1957, and whether the State Government was obligated to grant the lease merely because his application was received earlier. The petitioner contended that he had a preferential right as his application was first in time. The respondent Union of India opposed the claim, arguing that the State Government had discretion in the grant of mining leases over its property and that no vested right accrued to the petitioner. The Court analysed Section 11 of the Act. It noted that sub-section (1) grants a preferential right to a prospecting licensee over any other person, subject to conditions in clauses (a) to (c). Sub-section (2) provides that among multiple applicants for a prospecting licence or mining lease, the earlier applicant has a preferential right, but this is expressly subject to sub-section (1). Sub-section (4) further allows the State Government, for special reasons and with the Central Government's previous approval, to prefer a later applicant. The Court held that while granting a prospecting licence or mining lease, the area of discretion is circumscribed by these statutory factors. However, no applicant has a right, much less a vested right, to the grant of a mining lease for mining operations within the State. The State Government has discretion to grant or refuse any prospective licence or lease, subject only to the requirements of the law. Therefore, merely because the petitioner had applied, the State Government was not enjoined to grant the mining lease. The Court also observed that the petitioner had earlier taken the plea that being the sole discoverer of the mines he had a preferential right, but that contention was not pressed before the Supreme Court and had been rightly rejected by the Tribunal and High Court. In conclusion, the Supreme Court found no illegality in the order of the Mines Tribunal refusing to grant the mining lease or in the High Court's dismissal of the writ petition. The special leave petition was dismissed.
Headnote
A) Mines and Minerals - Grant of Mining Lease - Preferential Right under Section 11(2) - Mines and Minerals (Regulation & Development) Act, 1957, Section 11 - The petitioner applied for mining lease and prospecting licence claiming discovery of limestone; he contended that under Section 11(2) he had a preferential right because his application was received earlier. The Court examined Section 11 and held that sub-section (2) grants preferential right among competing applicants only subject to sub-section (1), and no applicant has a vested right to grant of mining lease. The Central Government Mines Tribunal and High Court rightly rejected the claim. Held that the petitioner had no preferential right and the special leave petition was dismissed (Paras 1-5). B) Administrative Law - State Property and Discretion - Discretionary Power to Grant or Refuse Mining Lease - Mines and Minerals (Regulation & Development) Act, 1957, Section 11; Mineral Concession Rules, 1960, Rule 59 - The State Government notified the area under Rule 59; the Mines Tribunal set aside the notification but declined to grant lease, observing that it was within the State Government's discretion over its property. The Court upheld that the State Government has discretion to grant or refuse any prospective licence or mining lease, circumscribed only by the requirements of Section 11, and merely because an applicant applied, the State was not enjoined to grant the lease. No illegality was found in the Tribunal's or High Court's orders. Held that the discretionary power was properly exercised (Paras 1-5).
Issue of Consideration
Whether the petitioner had a preferential right to the grant of mining lease under Section 11(2) of the Mines and Minerals (Regulation & Development) Act, 1957, on the ground that his application was received earlier; and whether the State Government had discretion to refuse the grant of mining lease despite the petitioner's application.
Final Decision
The Supreme Court dismissed the special leave petition, finding no illegality in the Mines Tribunal's refusal to grant mining lease or in the High Court's dismissal of the writ petition. The Court held that no applicant has a right, much less vested right, to the grant of mining lease; the State Government has discretion subject to statutory factors, and merely applying does not compel grant.
Law Points
- No applicant has a vested right to grant of mining lease
- State Government has discretion to grant or refuse mining lease subject to statutory factors
- Section 11(2) preferential right among competing applicants is subject to Section 11(1)
- discretionary power over state property must be exercised according to law
