Case Note & Summary
The dispute arose from the refusal to grant a mining lease for manganese ore in the East Pench Range, Nagpur District. The appellant, a public limited company engaged in mining manganese ore, had held a leasehold interest transferred from an earlier lessee since 1952. The original lease expired on September 9, 1955, after which the appellant sought renewal. Renewal was refused by the State of Bombay in 1958. In 1959, the State of Bombay invited fresh applications for the mining lease, and the appellant applied. On July 8, 1959, the Government of Bombay made an order granting the entire area to the appellant. However, after the reorganisation of states in 1960, the area fell within Maharashtra. The Government of Maharashtra reserved the mines for exploitation in the public sector by notification dated August 25, 1960, and on January 16, 1961, the Collector informed the appellant that its application was rejected. The appellant filed a revision before the Central Government under Rule 55 of the Mineral Concession Rules, 1960. The Central Government first directed the State Government to reconsider the application, but the State Government again rejected it on December 19, 1961. The appellant filed a second revision before the Central Government, which was rejected on October 17, 1964. Subsequently, the Maharashtra Government, with Central Government consent, issued a fresh notification on March 26, 1965 inviting applications, and the appellant submitted an application in response. The legal issues before the Supreme Court were: whether the Central Government's order was bad for lack of reasons; whether personal hearing was required; whether Section 17 of the Mines and Minerals (Regulation and Development) Act, 1957 had been violated; and whether the appeal was a fit case for exercise of discretionary jurisdiction under Article 136 of the Constitution. The appellant contended that the order was a judicial order without reasons, that natural justice required personal hearing, that the Central Government ignored the final order of the State Government granting the lease, and that public sector reservation required compliance with Section 17. The respondents argued that the appellant had already availed the fresh opportunity to apply and that no legal error existed in the Central Government's order. The Court held that Section 17 had no bearing on public or private sector reservation. The State Government's order of July 8, 1959 was only a recommendation to the Central Government, not a final grant, because under Section 8(2) of the Act, no mining lease for manganese ore could be granted without previous approval of the Central Government. On the question of personal hearing, the Court stated that Rule 55 required a reasonable opportunity but not necessarily a personal hearing; written representation could suffice. The majority, per Mudholkar and Bachawat JJ, held that the Central Government was not bound to give fuller reasons because it agreed with the State Government's reasons. Subba Rao J dissented on this point, opining that the Central Government acted as a tribunal under Rule 55 and should have given reasons, citing Harinagar Sugar Mills Ltd. v. Shyam Sunder Jhunjhunwala, (1962) 2 SCR 339, and emphasising that speaking orders prevent abuse of power. However, all judges agreed that the appeal was not fit for interference under Article 136 because the appellant had already taken the opportunity to apply afresh under the new notification. Accordingly, the Supreme Court dismissed the appeal.
Headnote
A) Mines and Minerals (Regulation and Development) Act, 1957 - Section 17 Applicability - Public Sector Reservation - Section 17 has no bearing on public or private sectors and does not control reservation of mines for State exploitation - The appellant contended that mines could not be placed in the public sector without complying with Section 17, but the Court held Section 17 unrelated to the issue - Held that Section 17 does not govern public sector reservation (Paras 474 E-F, 475 C-D). B) Mines and Minerals (Regulation and Development) Act, 1957 - Grant of Mining Lease by State Government - Nature of State Government Order - State Government's order granting lease was only a recommendation to Central Government, not a final grant - The appellant argued that Central Government ignored final order of Government of Bombay granting lease; Court held the order was merely recommendatory because Central Government's previous approval was required under Section 8(2) - Held that State Government's grant was not final (Paras 474 D, 475 D). C) Mineral Concession Rules, 1960 - Rule 55 Revision - Natural Justice - Personal Hearing - Central Government acting under Rule 55 is not bound to give personal hearing; reasonable opportunity may be satisfied by written representation - Appellant requested personal hearing but it was refused; Court held opportunity need not be personal, written representation sufficient, depending on facts - Held that no violation of natural justice (Paras 473 F, 473 G-H, 475 C-D). D) Mineral Concession Rules, 1960 - Rule 55 Revision - Speaking Order Requirement - Central Government not required to give fuller reasons if it agrees with State Government's reasons - Majority (Mudholkar and Bachawat JJ) held that since State Government had communicated reasons for refusal and Central Government agreed, no separate detailed reasons necessary - Subba Rao J dissented, holding that both orders lacked reasons and Central Government as tribunal should give reasons; but since appeal dismissed under Article 136, no effect - Held that no obligation to give independent reasons in this case (Paras 476 B, 473 E, 471 D-472 G). E) Constitution of India, 1950 - Article 136 Discretionary Jurisdiction - Interference in Revision Orders - Supreme Court declined to exercise discretionary jurisdiction because appellant had already submitted fresh application in response to new notification - The Court held that since appellant took opportunity to apply afresh, it was not a fit case for interference under Article 136 - Held that appeal dismissed (Paras 475 B-C).
Issue of Consideration
Whether the Central Government's order under Rule 55 of the Mineral Concession Rules, 1960 was vitiated for lack of reasons; whether personal hearing was required before the Central Government; whether Section 17 of the Mines and Minerals (Regulation and Development) Act, 1957 applied to public sector reservation; whether the appeal was a fit case for exercise of discretionary jurisdiction under Article 136 of the Constitution.
Final Decision
The Supreme Court dismissed the appeal. The Court held that the appellant having taken the opportunity to apply for the lease under the fresh notification, it was not a fit case for interference under Article 136. Section 17 had no bearing on the question at issue. The order of the Government of Bombay was only a recommendation to the Central Government. The appellant was not entitled to a personal hearing before the Central Government. The majority (Mudholkar and Bachawat JJ) held that the Central Government was not bound to give in its order fuller reasons for rejecting the application because it agreed with the reasons given by the Government of Maharashtra. Subba Rao J expressed a contrary view that the Central Government's order was vitiated for lack of reasons, but the appeal was nevertheless dismissed by the Court on the discretionary ground.
Law Points
- Section 17 of Mines and Minerals (Regulation and Development) Act
- 1957 has no bearing on public or private sector reservation
- State Government's order granting mining lease is only a recommendation to Central Government
- personal hearing not mandatory under Rule 55 of Mineral Concession Rules
- 1960
- Central Government not bound to give independent reasons if it agrees with State Government's reasons
- Supreme Court's jurisdiction under Article 136 is discretionary and not exercised when fresh application is pending
