Case Note & Summary
The dispute concerned the refusal of the State Government of Madhya Pradesh to renew a certificate of approval held by a partnership firm engaged in mining. Under the Mines and Minerals (Regulation and Development) Act, 1948 and the Mineral Concession Rules, 1949, a prospecting licence or mining lease could not be obtained without a certificate of approval from the State Government. The appellants had held such certificate since 1952 and it was renewed annually until 31 December 1955. On 22 November 1955 they applied for renewal for the year 1956. The District Officer recommended the application, but the State Government rejected it on 21 September 1956 on the ground that the partners composing the firm had changed. The order was communicated on 6 October 1956. The appellants then applied to the Union Government on 15 November 1956 under Rule 57 of the Mineral Concession Rules for review of the State Government's order. While the review application was pending, the Central Government corresponded with the State Government and obtained the latter's remarks and report on the merits without informing the appellants. The appellants, upon learning of this, requested copies of the correspondence and an opportunity for personal hearing, but their request was refused. On 9 July 1958 the Union Government rejected the review application stating that there was no valid ground to interfere with the decision of the State Government. The appellants then sought a writ of certiorari from the Punjab High Court under Article 226 of the Constitution, but the High Court dismissed the petition in limine. The appellants obtained special leave from the Supreme Court under Article 136. The central legal issue was whether the Central Government, while disposing of a review application under Rule 59 of the Mineral Concession Rules, acted as a quasi-judicial authority and whether its order was vitiated for violation of natural justice because it considered materials received from the State Government behind the appellants' back without affording them a reasonable opportunity of hearing. The appellants contended that the Union Government's function under Rule 59 was quasi-judicial and that the order was void for violation of natural justice. The respondents defended the orders and opposed the appeal. The Supreme Court, following its earlier decision in Shivji Nathubhai v. Union of India, held that the Central Government while disposing of an application for review under Rule 59 functioned as a quasi-judicial authority. It further held that although Shivji Nathubhai dealt with an order passed adverse to a respondent without hearing, the same principle applied where a review petition was rejected based on materials not made available to the applicant. In the present case, the Central Government had gathered information and the State Government's remarks behind the appellants' back and refused their request for copies and hearing. The Court concluded that the order dated 9 July 1958 was vitiated as contrary to natural justice because the decision was rendered without affording the appellants a reasonable opportunity of being heard, which was a sine qua non of a fair hearing. The appeals were allowed and the impugned order of the Central Government rejecting the review was set aside.
Headnote
A) Mines and Minerals - Review by Central Government - Quasi-Judicial Function - Mineral Concession Rules, 1949, Rule 59 - The Central Government while disposing of an application for review under Rule 59 acts as a quasi-judicial authority, not purely administrative. The Court relied on Shivji Nathubhai v. Union of India, [1960] S.C.R. 775, which held that the Central Government exercised quasi-judicial power under Rule 59. This characterisation required the observance of principles of natural justice in the decision-making process (Paras 1-5). B) Natural Justice - Right to Fair Hearing - Disclosure of Adverse Material - Mineral Concession Rules, 1949, Rule 59 - In disposing of the review application, the Union Government gathered information and the State Government's remarks behind the appellants' back and refused their request for copies and personal hearing. The Supreme Court held that the same principle of natural justice applies even where a petition for review is rejected based on materials not made available to the applicant. The order rejecting the review was vitiated because the appellants were denied a reasonable opportunity of being heard, a sine qua non of a fair hearing (Paras 1-5).
Issue of Consideration
Whether the Union Government, while disposing of a review application under Rule 59 of the Mineral Concession Rules, 1949, acted as a quasi-judicial authority and whether its order rejecting the review, based on materials not disclosed and without affording a reasonable opportunity of hearing, violated principles of natural justice.
Final Decision
The Supreme Court allowed Civil Appeals Nos. 115 and 116 of 1963, set aside the order of the Central Government dated 09-07-1958 rejecting the review application and the Punjab High Court's dismissal, holding that the decision was rendered without affording the appellants a reasonable opportunity of being heard and was contrary to natural justice.
Law Points
- Central Government acts quasi-judicially when disposing of review application under Rule 59 of Mineral Concession Rules
- 1949
- principles of natural justice require disclosure of materials relied upon and reasonable opportunity of hearing
- order based on undisclosed State Government report without hearing is vitiated
- reliance on Shivji Nathubhai v. Union of India.
