@JUDGMENTTAG-ORDER
Vineet Kothari, J.@mdashThis batch of writ petitions, as per Schedule ''A'', is being disposed of by common order as the controversy involved is common under the Rajasthan Minor Mineral Concession Rules, 1986 and the present litigation is the fallout of the quashing of the Sand Stone Policy notified by the State Government on 24/4/2007, which Notification came to be quashed by the learned Single Judge of this Court in SBCWP No. 6641/2007 (Deepak Khanna & 12 Ors. vs. State of Rajasthan & Ors.) (details in Schedule ''B'') decided on 21/5/2009 and which judgment became final as neither of the parties preferred any appeal against the said judgment. The facts of the lead case in the present batch is taken from SBCWP No. 12284/11-Ram Prakash Sharma vs. State of Raj. & Ors., who was also petitioner in the earlier batch of writ petitions decided by the coordinate bench of this court on 21/5/2009 at serial no. 6 (SBCWP No. 6582/2007-Ram Prakash Sharma vs. State & Ors.).
Earlier decision of this Court:
2. Before coming to the controversy involved in the present case, it is considered opportune to quote the relevant portion from the judgment dated 21/5/2009 of learned Single Judge of this Court in the case of Deepak Khanna (supra) for better understanding of the controversy in the present batch of writ petitions.
By these writ petitions, the validity of notification Annex. 3 commonly known as Sandstone Policy dated 24.04.2007 has been challenged by the petitioners. The petitioners in SBCW No. 6641/07 applied for grant of mining lease for mineral Masonry Stone and Sandstone near village Rohila Kallan and the petitioners in other writ petitions also applied for mining lease for mineral Masonry Stone and Sandstone in the areas falling within village Bujhawad, Choukha, Gangana and Rohila Kallan, Tehsil and District Jodhpur. During the pendency of the applications filed by the petitioners, the respondent State Govt. issued a notification dated 24.04.2007 (Annex. 3) in respect of four villages namely Bujhawad, Choukha, Gangana and Rohila Kallan in exercise of powers under Rule 65-A of the Rajasthan Minor Mineral Concession Rules, 1986 (for short ''the Rules of 1986'' hereinafter) providing a different procedure for allotment of mining lease from the Rules of 1986. At the relevant time of filing applications by the petitioners for grant of mining lease there were number of mining leases already sanctioned and were operating in the area of the villages mentioned herein above. The petitioners have been waiting for allotment of the mining leases as the procedure for grant of mining lease is first-come first-served as provided under Rule 7 of the Rules of 1986 which provides the preferential rights of certain persons precisely providing the preferential right for the applicants whose applications were received on earlier date for grant of mining lease over an applicant whose application was received later. Without affording an opportunity of hearing or giving notice, the respondents rejected the applications filed by the petitioners vide Annex. 2 on the ground that by notification dated 24.4.2007 the State Govt. has decided to allot the mining lease for mineral Sandstone in villages Bujhawad, Chokha, Gangana and Rohila Kallan only after delineation. Learned counsel for the petitioners submits that there being no provision for delineation in respect of the areas for which mining leases are to be granted under the provisions of the Rules of 1986 as also the policy being discriminatory as the mining lease in the State of Rajasthan are granted under the provisions of Rules of 1986 and only for four villages mentioned above, a different policy, without there being any nexus with the object sought to be achieved, vide Notification dated 24.4.2007 has been issued by the State Govt. Hence these writ petitions.
The conclusions of the learned Single Judge were as under:-
From the perusal of the Notification dated 24.4.2007 it nowhere states that such a deviation from the normal rules as provided under the Rules of 1986 for grant of mining lease is in the interest of mineral development. The very basis which empowers the State Govt. to deviate from the general procedure for grant of mining lease under Rule 65-A is for leasing out mineral deposit in the interest of mineral development. The applicants who have applied for mining lease having preferential right for grant of such lease as envisaged under Rule 7 of the Rules of 1986, by such policy have been deprived of their preferential right for such grant. The State has failed to show any reason as to why the notification dated 24.4.2007 is only in respect of four villages namely Bujhawad, Choukha, Gangana and Rohila Kallan of Tehsil Jodhpur when as noticed above in Tehsil Jodhpur and the area around, there are number of areas where masonry and Sandstone mining leases have been granted and no such policy has been made applicable to them. Even from the reply filed by the State, the State failed to justify the object sought to be achieved by such policy vide notification dated 24.4.2007. In this view of the matter, in my view, the notification dated 24.4.2007 is arbitrary, unreasonable and discriminatory being violative of Article 14 of the Constitution of India and therefore, it cannot sustain and is liable to be set aside.
Consequently, all the writ petitions are allowed. The notification dated 24.4.2007 is hereby quashed. The order rejecting the applications of the petitioners is also quashed and the applications filed by the petitioners are revived. The respondents now shall consider and decide the applications filed by the petitioners for grant of mining lease and pass appropriate order in accordance with law. Stay petitions also stand disposed of.
Background of present writ petitions:
3. From the above judgment of the learned Single Judge, it is clear that the Notification dated 24/4/2007 notifying the Sand Stone Policy came to be quashed in its entirety and consequently all the pending applications on the date of that Notification for these four villages in question, namely; Bujhawad, Choukha, Gangana & Rohila Kallan, Tehsil & District Jodhpur stood revived. However, from the operative portion of the aforesaid judgment dated 21/5/2009, it appears that the separate impugned orders in that batch of writ petitions before the coordinate bench of this Court were also quashed and the applications filed by the petitioners were revived. The said directions of the learned Single Judge later on came to be construed as reviving of the applications only of those persons, who were writ petitioners before this Court at that point of time and not others, though several of the applicants, whose applications were pending prior to 24/4/2007 for grant of mining leases for Masonry Stone or Sand Stone had not approached the Court by way of writ petitions and this is the main reason for fresh spate of litigation in the form of present writ petitions by those applicants, whose applications were treated as rejected throughout and some of those applicants, who applied later than the judgment of learned Single Judge dated 21/5/2009.
4. The gravamen of the controversy now before this court arises mainly because of the subsequently issued decision of the Government of Rajasthan, Mines Department, Annex. 11 dated 16/11/2011, which according to the respondent State was purportedly in compliance with the directions of learned Single Judge given in the judgment dated 21/5/2009 in the case of Deepak Khanna (supra). It is considered appropriate to quote the impugned order dated 16/11/2011 itself, which is impugned in the present writ petitions, hereunder:-
Government of Rajasthan
Mines (Gr. II) Department
No.: F.20 (63) Mines/Gr. II/2005
Jaipur, dated: 16 NOV 2011
Director,
Mines & Geology Department
Udaipur.
Sub.: Allotment of mining leases in respect of villages Bhuzawad, Rohilakallan, Gangana and Chokha as per order dated 21.5.2009 passed by Hon''ble High Court in SBCWP No. 6641/07 Deepak Khanna V/s State, and other similar petitions.
Ref.: Your letter No. dated 21.05.2010
Sir,
As directed, In the subject matter the following course of action is to be taken:
Step A: Directorate should prepare a list of the applications of masonry stone and sand stone which were pending in respect of these 4 villages as on 24.04.2007 and which rejected as a consequence of the notification of 24.04.2007.
Step B: Out of the above applications, a list of such applications may be prepared which were filed by the petitioners in High Court orders in SB Civil Writ Petitions (list enclosed).
Step C: The applications sorted out as per Step-B can be disposed of as per the rules prevalent before issue of notification of 24.04.2007. All other applications may be rejected.
The following guidelines may be adopted to dispose of the applications sorted out as per Step B above.
(i) The applications may be disposed on "First come First Serve Basis" through scrutiny of applications must be conducted before sanction.
(ii) In case any irregularity or deficiency is detected in any of the applications, the same may be rejected.
In case there is a conflict between the application of masonry stone and sand stone then the masonry stone application filed before 04.12.2004 will have a priority.
(iii) Masonry Stone applications will be required to pay royalty of sand stone and will be sanctioned only if they agree to pay royalty of sand stone.
(iv) The masonry stone applications filed after 03.12.2004 may be rejected.
(v) Sand stone applications of 4 hectares filed between 04.12.2004 and 23.04.2007 may be sanctioned on first come first serve basis provided that these applications do not clash with masonry stone applications filed before 04.12.2004.
(vi) All applications filed on or after 24.04.2007 should also be rejected.
(vii) In the interests of clean governance, all applications made in the name of any serving or retired employees of Mines & Geology Department or in the name of following relatives of employees of Mines & Geology Department ought to be rejected.
(a) Spouse
(b) Father
(c) Mother
(d) Brother
(e) Brother''s wife
(f) Sister
(g) Sister''s husband
(h) Son
(i) Daughter-in-law
(j) Daughter
(k) Son-in-law
The above categories of applications may be identified separately and rejected. The reasons for rejections may be conveyed under Rule 9 of the MMCR, 1986.
Yours faithfully,
Sd/-
Dy. Secretary to Govt.
5. Upon a hue and cry raised by several applicants against this order, 12 days after the said order dated 16/11/2011, the Government of Rajasthan issued another order on 28/11/2011 (Annex. 13), though clause (iii) to this effect was already there in the order dated 16/11/2011, purportedly clarifying that Masonry Stone applicants will be required to pay royalty and dead rent both as applicable to Sand Stone and their applications will be considered only if they agree to pay royalty and dead rent applicable to Sand Stone as per Schedule I of the MMCR, 1986. The said order Annex. 13 dated 28/11/2011 is also quoted below for ready reference:-
Government of Rajasthan
Mines (Gr. II) Department
No.: F. 20 (63) Mines/Gr. II/2005 Jaipur,
dated: 28.11.2011
Director,
Mines & Geology Department,
Udaipur.
Sub: Allotment of mining leases in respect of villages Buzhawad, Rohilakallan, Gangana & Chokha as per order dated 21.05.2009 passed by Hon''ble High Court in S.B.C.WP. No. 6641/2007 Deepak Khanna V/s State, and other similar petitions.
Sir,
With reference to clause (iii) of this department order no. F.20 (63) Mines/Gr. II/2005 dated 16.11.2011, it is clarified that masonry stone applications will be required to pay royalty and deadrent of sand stone and will be sanctioned only if they agree to pay royalty and deadrent of sand stone.
Yours faithfully,
Sd/-
28.11
Dy. Secretary to Government
Contentions of the petitioners
6. Mr. Vikas Balia, learned counsel leading the arguments on behalf of the petitioners, which arguments were adopted by the other learned counsels Mr. Arvind Shrimali, Mr. Kaushal Sharma, Mr. B.M. Bohra, Mr. C.S. Kotwani, Mr. Kuldeep Mathur & Mr. Sunil Joshi, raised the following contentions before this Court.
(i) that essentially the State Government by impugned order Annex. 11 dated 16/11/2011 has illegally sought to give preference to the applicants for Masonry Stone, ignoring the claim of applicants for Sand Stone, the larger and dressed stone block, for which the royalty is also payable at much higher rates, for extraneous reasons and causing loss of public revenue in the process and the impugned order Annex. 11 dated 16/11/2011 as well as Annex. 13 dated 28/11/2011 cannot be said to be in compliance with the directions of this Court in the judgment of Deepak Khanna & ors. (supra).
(ii) that the said orders are not in conformity with Rule 65A of the Minor Mineral Concession Rules, 1986 (''MMCR, 1986'' for short) and without appropriate Notification of legislative character envisaged under Rule 65A of the said Rules, by administrative orders like Annex. 11 dated 16/11/2011 and Annex. 13 dated 28/11/2011, the State Government is not empowered to deviate from the normal procedure for allotment of mining leases of these two minor minerals, namely; Sand Stone and Masonry Stone and on this ground alone the impugned orders Annex. 11 dated 16/11/2011 and Annex. 13 dated 28/11/2011 deserve to be quashed by this Court.
(iii) that the judgment of this Court in the case of Deepak Khanna (supra), which became final, could not have restricted the revival of applications only of the writ petitioners before this Court, while by the impugned Notification dated 24/4/2007, which itself was quashed by this court, all such pending applications filed prior to 24/4/2007 stood rejected and with the quashing of the Notification itself, all such applications should be deemed to have been automatically revived for consideration by the Mining Department, whereas, the impugned orders Annex. 11 dated 16/11/2011 did not do so and vide steps A, B & C enumerated in the said order, only the applications of the writ petitioners were revived and all other applications were rejected by one stroke of pen.
(iv) Learned counsel for the petitioners, Mr. Vikas Balia also argued that various clauses of so called guidelines enumerated in the said impugned order dated 16/11/2011 are per se discriminatory and violative of Article 14 of the Constitution of India because an undue preference is sought to be given to Masonry Stone applications as against the Sand Stone applications, whereas, no such preference could be given in view of the fact that upon survey conducted by the Mining Department in 2004, it was found beyond the pale of doubt that the areas in question for all the four villages, the mineral sand stone is amply available in the said mines and with the developed technology over the period, such bigger blocks of sand stones could be mined by the sand stone applicants, fetching much more public revenue by way of royalty at Rs. 200 per ton as against Rs. 17 per ton for masonry stone, the broken pieces of such sand stones or which is only a byproduct of sandstone obtained in the course of mining of sandstone, which can be converted into masonry stone by breaking them into smaller pieces. He also urged that all the applications or after 24/4/2007 were rejected by the said order dated 16/11/2011 by one stroke of pen without giving any opportunity of hearing to such applicants and for the said breach of principles of natural justice, said order dated 16/11/2011 cannot be sustained.
(v) Learned counsel for the petitioner, Mr. Vikas Balia also submitted that it was well within the knowledge of respondent Mining Department that areas in question for these four villages and other adjacent areas contained blockable sandstone mineral on the basis of survey conducted in 2004 and even prior to that the competent authorities of the Mining Department have themselves rejected the applications for masonry stone mineral on the said basis and in some cases they have even insisted upon inclusion of sandstone in the mining leases earlier granted for masonry stone, in order to realize the higher royalty and, therefore, the Department cannot claim that it is only after 2004 survey that they came to know of existence of sandstone mineral in the said areas.
(vi) Learned counsel for the petitioners also submitted that the impugned orders dated 16/11/2011 and 28/11/2011 have been issued only for four villages, whereas, such mineral is available all over the State of Rajasthan and precisely for this discriminatory Policy Decision taken on 24/4/2007, the said Notification was quashed by this Court in the case of Deepak Khanna (supra). But the impugned order dated 16/11/2011 repeats that mistake and has laid down the so called guidelines for these four villages only and no uniform policy for sandstone and masonry stone has been adopted by the State Government in the entire State and for this reason also the impugned orders cannot be sustained.
(vii) Mr. Vikas Balia also urged that without delineation of the areas with proper demarcation, the minimum area for sandstone mining lease of 4 Hectares cannot be compared with the applicants of masonry stone mining leases and there are several applications with overlapping areas specified in such applications and, therefore, such applications with illegal preference given only to the applicants, who were writ petitioners before this Court, will cause obvious discrimination and the same is violative of Article 14 of the Constitution of India and for this reason also, the impugned orders cannot be sustained.
(viii) Learned counsel for the petitioners also drew the attention of the Court towards the preferential rights of the applicants, who filed their applications at earlier point of time under Rule 7 of the MMCR, 1986 and they submitted that the amendment in Rule 7 (3) of the said Rules w.e.f. 28/1/2011 providing for prior delineation of the area under Rule 11 of MMCR, 1986 and consideration of the applications in accordance with the categories for reservation of leases to certain persons like SC/ST, BPL persons and freedom fighters and those who have installed crushers/mineral based industry, such applications shall be considered by drawing lot by way of lottery. They further submitted that this amendment in law w.e.f. 28/1/2011 cannot be applied to the applications pending and revived by virtue of quashing of the earlier Notification dated 24/4/2007 and such applications will have to be decided on ''first come first served'' basis under Rule 7(1) of the said Rules.
(ix) Learned counsels for the petitioners also submitted that the fixation of minimum area for grant of mining lease for sandstone, which was earlier fixed at 5 Hectares has been further reduced to 4 hectares by the rescission of the earlier Notification of the year 1994 dated 22/4/1994. The size of the mining leases to be granted for sandstone and masonry stone has been varied from time to time and it would be relevant to refer to all the four Notifications brought to the notice of this Court ad seriatim date wise.
(1) Notification dated 22/4/1994:
AREA FOR GRANT OF MINING LEASE FOR LIMESTONE (BURNING/DIMENSIONAL) AND SANDSTONE.
Notification No. F.15(24) Mines-II/94
Dated 22.4.1994
NOTIFICATION
On account of non-availability of larger area under a mining lease for exploitation of mineral/minerals, grant of available land under a mining lease was reviewed. The State Government after through examination, has decided to reduce the size of plots for grant under mining leases for limestone (both burning & dimensional) and sandstone.
Therefore, in exercise of powers conferred under Rule 11 of the Rajasthan Minor Mineral Concession Rules, 1986, the State Government is hereby fixes 5 hectares size of plots for grant of mining lease for limestone (both Burning & Dimensional) and sandstone. However, the provision of this notification will not be applicable in those cases where existing size of the land is less than 5 hectares. This notification shall supersede all previous notifications, circulars or any other directions issued in this regard. (State Govt. Notification No. F.15 (24) Mines-II/94 dated 22.4.1994 and published in Rajasthan Extra Ordinary Gazette on 25.4.1994)
(2) Notification dated 26/2/1996:
GOVERNMENT OF RAJASTHAN
MINES (GR. II) DEPARTMENT
No. F-15(2)Khan/Gr. II/91
Jaipur dt. Feb. 26, 1996
NOTIFICATION
In continuation of this Department Notification dated April 22, 1994 and in exercise of the powers conferred by rule II of the Rajasthan Minor Mineral Concession Rules, 1986 it is hereby notified that where the area available for grant of mining lease of sandstone is less than 5 hectares, mining lease may be granted for area less than 5 hectares but in no case the area shall be less than one hectares.
By Order
Sd/-
(Kiran Soni Gupta)
Dy. Secretary to Govt.
(3) Notification dated 5/9/2008:
(4) Notification dated 5/9/2008 :
Thus, as per the latest Notification Sr. No. 1081 dated 5/9/2008, the size of the mining lease for lime stone (burning and dimensional) and, therefore, including sandstone, has been fixed at 4 Hectares.
(ix) Learned counsel for the petitioners also submitted that the impugned orders have not been made in consonance with the report of the Committee constituted in pursuance of the judgment of this Court in Deepak Khanna case (supra) and the minutes of such committee meeting dated 18/8/2010 are on record at Annex. 8. The said Committee of Addl. Director (Mines), Jodhpur, Superintending Mining Engineer, Jodhpur, Superintendent Geologist, Jodhpur and Mining Engineer, Jodhpur had in fact recommended the giving of mining leases for sandstone instead of masonry stone but the impugned orders have simply ignored such recommendation of the Committee of four senior officers of the Mining Department. The relevant extract of the minutes of the meeting dated 18/8/2010 are quoted below for ready reference:
7. Learned counsels for the petitioners, therefore, submitted that the present writ petitions deserve to be allowed and the impugned orders Annex. 11 dated 16/11/2011 and Annex. 13 dated 28/11/2011 deserve to be quashed and all such pending applications deserve to be decided by the competent authority in accordance with law expeditiously.
8. Learned counsels for the petitioners relied upon the Supreme Court decisions in the case of
Contentions of the respondent State
9. On the other hand, Mr. G.R. Punia, Sr. Advocate & Addl. Advocate General & Mr. Anand Purohit, Sr. Advocate & Addl. Advocate General defending the impugned orders submitted orally & in their written submissions as under:-
(i) That in the areas Bhujawad, Gangana, Rohilla Kalan and Chokha Tehsil Luni district Jodhpur, 41 mining leases for Masonry stone were in force from 1989 to 2004.
(ii) That the field report of the Geologist dated 4.12.2004, it was signified that apart from mineral Masonry stone there is possibility of the mineral Sand Stone. The conclusion of this report is "based upon the field observation and study of available quarry sections it is concluded that there is possibility of extraction of blockable sandstone alongwith khandas in these areas.
(iii) That since till year 2004, the practice of granting the mining lease for masonry stone was in vogue, therefore, the 544 applications were filed by the applicants for grant of mining lease for mineral masonry stone, thereafter since the report dated 4.12.2004 showed that there was possibility of mineral dimensional sand stone also in these areas, therefore, 84 applications were received for mineral stand stone for the area from 1 to 4 hectares.
(iv) That the State Government issued a notification dated 24.4.2007 by which all the earlier applications which were received prior to this notification, were treated as rejected and the applications were invited afresh. Therefore, 544 applications for masonry stone and 84 applications for sandstone which were received, were rejected/cancelled pursuant to the notification dated 24.4.2007.
(v) That against the cancellation/rejection orders, various writ petitions were filed in the Hon''ble High court. Those writ petitions were decided vide judgment dated 21.5.2009 etc.
(vi) Vide aforesaid judgment, the notification dated 24.4.2007 was quashed Consequent upon the aforesaid judgment the applications of the writ petitioners were taken up and in this sequence, 231 applications for masonry stone and 55 applications for sand stone were revived.
(vii) That in order to reach a logical decision, a committee was constituted headed by the Additional Director, Mines, Jodhpur, which submitted its report to the State Government. Thereafter, State Government issued notification dated 16.11.2011 and 28.11.2011.
(viii) That in the aforesaid circumstances, again the present writ petitions were filed laying challenge to the notifications/orders dated 16.11.2011 and 28.11.2011, thereupon as per the legal advise, no action was taken pursuant to the notifications dated 16.11.2011 and 28.11.2011.
(ix) That it is relevant to submit here that vide notification dated 28.11.2011 the State Government has pressed into service the delineation method, under which half of the mining lease shall be granted to the applicants of different categories through lottery and remaining will be decided while inviting tenders.
(x) That total 33 writ petitions were filed against the rejection of the applications pursuant to the notification dated 24.4.2007 and from among total writ petitions, applications of 234 applicants were revived as per the order issued by the Hon''ble High court from time to time.
(xi) That however, being aggrieved with the notification dated 16.11.2011, as many as 19 writ petitions have been filed and in these writ petitions mainly following three fold challenge has been made.
(a) That the applications of those applicants who preferred writ petitions, were to be decided and the applications of other applicants were ordered to be rejected/cancelled. Against this, 7 writ petitions were filed by total 96 applicants of masonry stone viz. writ petition NO. 09/2012, 1417/2012, 1478/2012, 13025/2012, 1259/2012, 12883/2011 and 3010/2012 respectively.
(b) That a provision was made to give preference to the applications of mineral masonry stone received upto 4.12.2004. Against this, 10 writ petitions have been filed by 11 applicants viz. Writ petition No. 59/2012, 78/2012, 1037/2012, 58/2012, 3556/2012, 12284/2011, 11925/2011, 55/2012 and 77/2012 respectively.
(c) That a provision was made to give preference to the applicants of 4.00 hectare sand stone received in between 4.12.2004 to 23.4.2007. Against this 2 writ petitions have been filed by 4 applicants of the masonry stone viz. S.B. Civil writ petition No. 1048/2012 and 1054/2012.
(xiii) That apart from aforesaid writ petitions, one writ petition bearing No. 3840/2011 Anu kumar Tripathi Vs. State and others (applicant of mineral sand stone) has been filed in which main prayer is to not to apply Rule 65A of the Rules of 1986.
(a) That counsels for the petitioners argued that in the existing mining lease in force of the masonry stone, the sandstone is being included as per the report dated 4.12.2004 so the availability of the sand stone has been established, therefore, it is not proper to grant mining leases for masonry stone in preference over sandstone.
In this regard it is submitted that in the report dated 4.12.2004, the availability of the sandstone has not been proved in all the areas, therefore, the mineral sand stone has been included as per the availability in the interest of revenue of the State.
(b) That counsels for the petitioner have argued that as per Rule 18 (16) of the Rules of 1986 it is unfair that the department while issuing new mining leases for mineral masonry stone will include the sand stone afterwards but it would be proper, if in these areas only mining lease of sand stone are granted in place of masonry stone, because the mineral stand stone is the higher mineral than that of the masonry stone.In this regard it is submitted that in the report dated 4.12.2004 the availability of the mineral sand stone has been shown in some areas, therefore, in these areas while granting mining lease for masonry stone and sand stone on the priority basis, as per Rule 18 (16) of the Rules of 1986, the mineral can be included as per availability and while doing so it will augment the State Revenue.
While issuing the notification/orders dated 16.11.2011/28.11.2011 and as per Rule 18(16) of the Rules of 1986, the royalty for the higher mineral and dead rent shall be recovered by the department. (c) That counsels for the petitioners have contended that looking from the point of view of the mineral conservation, it will be proper that the mining lease for higher mineral i.e. for sand stone is only issued, because the masonry stone is the bye-product of the sand stone.
In this regard it is submitted that as per the notifications dated 16.11.2011 and 28.11.2011 and Rule 18(16) of the Rules of 1986, if the lease area under the mining lease for masonry stone, the existence of sand stone is established, then the sand stone will be included in the mining lease and in this there will be two-fold benefits inasmuch as the State Government shall not be put to revenue loss and there shall be conservation of mineral as well. Further since as per the report dated 4.12.2004, the sand stone is available, therefore, while drawing equilibrium as per principles of natural justice, the provision of preference in favour of the applicants of masonry stone prior to 4.12.2004 and applicants of sand stone after 4.12.2004, has been kept.
(xiv) That in these areas from last 25-30 years, 41 mining lease for masonry stone are already in existence. In this way, the applications for grant of mining lease for masonry stone were made. In the report dated 4.12.2004 it was revealed that there is possibility of existence of sand stone, therefore, in the notification dated 16.11.2011 it was provided that the applicants of masonry stone who made applications upto 4.12.2004 may be given preference and the applicants of sand stone who made applications after 4.12.2004 may be given preference.
(xv) That in the notification dated 16.11.2011 it was provided that consideration will be bestowed in favour of only those who preferred earlier writ petitions before the Hon''ble High court for the reason that in the judgment dated 21.5.2009 direction was made to revive the applications of the petitioners.
(xvi) That in the notification dated 28.11.2011 which was issued in continuation to the notification dated 16.11.2011, it was provided that the applicant of the masonry stone shall pay the royalty of sand stone and dead rent and this will put the State Government to revenue gain.
(xvii) That the section 15 of the Act of 1957 cloths the State Government with authority to dispose-of the applications received for grant of mining lease for minor minerals. The State Government is authorized to make Rules and procedure in this regard.
(xviii) That in exercise of powers conferred by section 15 of the Act of 1957, the Rules of 1986 have been framed by the State Government. There is a provision in section 11(2) of the Act of 1957 and Rule 7 of the Rules of 1986 that the applicant whose application is received first, shall be given preference over the later applicant.
(xix) That while exercising the power conferred by Rule 65A of the Rules of 1986, the State Government has issued notification dated 28.1.2011 notifying the policy for disposal of the applications, which provides that the 50% of the mining lease will be granted to the different reserved categories through lottery and rest 50 % will be granted while inviting tenders.
(xx) That in the aforesaid areas, from time to time, applications for masonry stone and sand stone have been received. Vide notification dated 16.11.2011, provision has been made to deal with the applications on the priority basis having regard to their date of receipt and there is cut-off date i.e. 4.12.2004.
Since disputes arose, therefore, in exercise of powers conferred by Rule 65A of the Rules of 1986, the government issued notification dated 24.4.2007 thereby Sand Stone policy was brought into effect and it was decided that the applications which were earlier received may be cancelled and afresh applications may be invited. However, the said notification dated 24.4.2007 was quashed by the Hon''ble High court vide judgment dated 21.5.2009.
That the department has been granting mining lease on the basis of principle " first come first get". Presently, 141 applications of sand stone and 375 applications of masonry stone are in force out of which 85 applications of sand stone and 231 applications of masonry stone, have been revived as per orders of the Hon''ble High court from time to time.
(xxi) That the aforesaid area is consisting of in 500 hectares of mineral bearing area, out of which 41 hectare has been leased out, 42 hectares is forest area and about 65 hectares is the restricted area around a temple, rest about 350 hectare area is available for sanction of mining leases.
10. Thus, both the learned Addl. Advocate General submitted that the impugned orders Annex. 11 dated 16/11/2011 and Annex. 13 dated 28/11/2011, in fact, have been issued in compliance with the judgment of this Court in the case of Deepak Khanna (supra) and the guidelines given in the said orders are in conformity with the relevant rules and, therefore, the present writ petitions deserve to be dismissed by this Court.
Findings & Reasons of the Court:
11. I have heard the learned counsels for the parties at length and perused the record of the case, written submissions filed by both the sides learned counsels, relevant statutes and case laws on the issue and given my thoughtful consideration to the entire matter.
12. In the first instance, this Court is of the opinion that the impugned orders Annex. 11 dated 16/11/2011 followed by Annex. 13 dated 28/11/2011 cannot be sustained and deserve to be quashed. The reasons are as follows.
(i) When this Court had quashed the Notification dated 24/4/2007 containing the Sandstone Policy in the case of Deepak Khanna (supra) on 21/5/2009 finding that such Sandstone Policy notified only for four villages in question and there is no uniform policy for the entire State of Rajasthan, once the said Notification dated 24/4/2007 itself was quashed, the revival of the pending applications only of the writ petitioners before the Court at that point of time cannot be justified. It is true that this court while quashing the Notification dated 24/4/2007 had further directed that order(s) rejecting the applications of the petitioners is also quashed and the applications of the petitioners are revived and also saying that respondents shall now consider and decide the applications filed by the petitioners for mining leases and pass appropriate orders in accordance with law, this Court never prohibited or negatived the revival of the other applications pending at that time. Since the orders impugned in those writ petitions were specific orders rejecting the pending applications of the writ petitioners in view of Notification dated 24/4/2007, this direction of the learned Single Judge was a natural consequence of quashing of the Notification dated 24/4/2007 itself. Since the Notification dated 24/4/2007 itself rejected all the pending applications at that point of time, the only consequence of the quashing of the Notification would be that all pending applications would stand revived, whether such applicants had approached the court or not.
(ii) Several of such applicants, admittedly, were the writ petitioners but some of them may not have filed writ petitions, but they cannot be put in a more disadvantageous position in comparison with the writ petitioners before this court at that point of time, when the Notification impugned in those writ petitions itself was quashed by this Court. In the considered opinion of this Court, the additional direction of the learned Single Judge of this Court quashing the orders rejecting the applications of writ petitioners is in addition and not in derogation of the quashing of Notification dated 24/4/2007 itself. Even though the learned Single Judge did not specifically revive the other pending applications of those persons, who were not the writ petitioners before the said bench but the same consequence has to follow, once the Notification dated 24/4/2007 itself was quashed. Thus, all such pending applications at the time of quashing of the Notification dated 24/4/2007 will have to be treated as revived.
(iii) Not only the applications pending as on 24/4/2007 but even those applicants, who applied for mining leases in the said areas even after 24/4/2007 or even after the judgment of this Court in the case of Deepak Khanna (supra) deserve to be considered in accordance with the law and directions, which are now being given in the present order.
(iv) The entire confusion and mix up, which is reflected in the impugned orders Annex. 11 dated 16/11/2011 and Annex. 13 dated 28/11/2011 is on account of misconstruing the directions of this court in the case of Deepak Khanna (supra) by the respondents. Surprisingly, even though the Committee constituted in pursuance of the aforesaid judgment, in its recommendations dated 18/8/2010 had recommended the consideration of the applications after delineation of the areas in accordance with the Rules, such recommendations of the said Committee have not even been referred in the impugned orders, much less followed. This omission has no where been explained by the respondent State Government while justifying the impugned order dated 16/11/2011 and 28/11/2011.
(v) The impugned orders cannot be sustained even on the short ground of attack urged by the petitioners that the same do not conform with the requirement of Rule 65A of the MMCR, 1986, which is quoted below:-
65A Grant of mineral concession by adopting procedure different from the given in the Rules:-
Notwithstanding any thing contained in these rules, Government may, by notification in Rajasthan Gazette or at least one daily news paper having wide circulation in the State as well as on news paper having wide circulation in the locality nearest to the area in question adopt any method or procedure different from that provided in the rules for leasing out mineral deposit in the interest of mineral development.
It is also found relevant to quote here the Rule 7, Rule 11, Rule 12, Rule 13 and Rule 18 (1) to 18(3) & 18(6) of the MMCR, 1986 for ready reference:
7 Preferential rights of certain persons:-
(1) Where two or more persons have applied for a mining lease in respect of the same land, applicant whose application was received on earlier date shall have a preferential right for the grant of the lease over an applicant whose application was received later.
Provided that the competent authority may prefer an application received later from a Government company or Corporation owned by the Government over any other application received earlier for the same area.
(2) Where such applications are received on the same day the mining lease shall be granted in the following order of priority.
(i) A Government Company or Corporation owned by the Government;
(ii) A person who have installed or willing to install mineral based units in the State with weightage for all or any of the following criteria:-
� State PSU
� Central PSU
� Quantum of Investment
� Pioneering nature of the industry in the district;
(iii) Unemployed Mining Engineer or Geologist;
(iv) Disabled person;
(v) Sportsman, athlete or player of national repute;
(v-a) Persons identified as Below Poverty Line (BPL)
(vi) Societies of unemployed youth; and
(vii) Other applicant.
Provided that where applications are received from the same category of persons, the competent authority after taking into consideration the matters specified below may grant mining lease to such one of the applicants as it may deem fit:-
(a) Any special knowledge of or experience in mining operations possessed by the applicant;
(b) The financial resources of the applicant;
(c) The nature and quality of technical staff employed or to be employed by the applicant;
(d) Such other matters as may be specified.
(2A) (i) Notwithstanding anything contained in sub rule (1) and (2) all applications received within a period of 30 days from the publication of the notification issued under rule 59, for grant of mining lease, for any mineral for an area notified as "free" shall be considered by the competent authority on the same footing irrespective of date of submission of the applications.
(ii) The competent authority after taking into consideration the matters specified in the Proviso to sub rule (2), may grant mining lease to such one of the applicants as it may deem fit.
(3) Notwithstanding anything contained in sub-rule (1) and (2) above, the area for mining lease in the Government land shall be allotted after delineation. New System shall be effective from the date of issue of notification dated 28.01.2011 and the applications pending on 27.01.2011 shall be disposed off as per prevailing rules in force prior to notification dated 28.01.2011. Prior to delineation all requisite NOC''s, except consent from Pollution Control Board and environment clearance, for allotment of plots so delineated shall be procured by the department. Out of these delineated plots 50% shall be allotted by auction/tender and the remaining 50% shall be allotted to the following categories of persons, as per percentage indicated against each category:-
In the reserved area applications will be invited after 30 days of notification and the applications received within a period of 30 days after 30 days of notification shall be treated as received on the same day. The applications shall be disposed of by way of lottery.
Provided that mining leases for mineral bajri shall only be granted by way of tender or auction;
(4) Notwithstanding anything contained in sub rule (1) (2) and (3), the priority for grant of mining lease in the same slope area may be given to the existing lessee of such slope area, if such existing lessee applies for the said area and deposits non refundable one time premium amount equivalent to yearly dead rent of the applied area, the concerned Mining Engineer/Assistant Mining Engineer shall issue a notice about such application, to the existing lessee of such slope area and if the existing lessee applies within 15 days from the date of receipt of such notice and deposits the premium amount, he shall be given priority.
11. Area of Mining Lease:-
(1) The mining lease shall be granted for such area as the Government may deem fit. The Director may fix the area for the grant of a mining lease for a particular mineral and for a particular area, but it shall not be less than 1 Hectare. This limit shall however, not apply for renewal of existing mining leases and also to the gap areas which are less than the minimum prescribed size.
Provided that where the gap area available free for grant is less than one hectare and surrounded by three or more mining leases or by forest boundary or any other reserved land, such gap area shall be granted by auctions to any one of the surrounding lessees and the same shall be added in his lease.
Provided further that where the gap area is one hectare or above, a separate mining lease shall be granted by way of open auction.
Provided further also that in the case where application for grant of a mining lease has been received for an area exceeding the prescribed size and the applicant having been informed by the concerned Mining Engineer/Assistant Mining Engineer to reduce the area fails to reduce the same within given time, the application may be rejected by the Mining Engineer/Assistant Mining Engineer.
Provided also that 30 meter wide strip of Government land shall be kept reserved around the existing mining lease for allotment to adjoining lessees to enhance size of lease for scientific and safe mining. The area of strip shall be allotted on an application submitted by the lessee to the Mining Engineer/Assistant Mining Engineer concerned, after considering its merit and obtaining prior approval of the Director (Mines), area of strip may be added to his existing mining lease. The existing lessee in whose lease, the strip is added shall pay, premium equivalent to four times of dead rent of the area to be added, in addition to dead rent as per rules".
(2) No person shall acquire in respect of any mineral or prescribed group of associated minerals as prescribed in Schedule-III one or more mining leases covering total area of more than 10 Sq. Kms.
Provided that the maximum number of mining leases to be granted for a particular mineral or for a mineral of associated group under this rule to a person within direct jurisdiction of any Mining or Assistant Mining Engineer shall be restricted to two and the total number of leases in the entire State would not exceed three.
Provided further that if the Government is of the opinion that in the interest of mineral development it is necessary to do so, it may for reasons to be recorded permit grant of mining leases exceeding two or three in number as the case may be and/or covering an area in excess of 10 sq. Kms.
(i) Notwithstanding anything contained in sub-rules (1) and (2) above, mining leases for specific projects approved by the Rajasthan State Industrial Investment Corporation, shall be granted on the recommendations of a committee appointment under the Chairmanship of the Mines Secretary.
(ii) For the purpose of determining the total area referred to in sub-rule (2) the area held under mining lease by a person as a member of a cooperative society, company or other corporation or a Hindu Undivided Family or a partner of a firm shall be deducted from the area referred to in sub-rule (2) above so that the total area held by such person under mining lease, whether as such member or partner or individually may not in any case exceed the total area specified in subrule (2).
12. Length and breadth of area under a mining lease:-
As far as possible area applied under mining lease shall be rectangular in shape and length shall not exceed four times of its width.
13. Boundaries below the surface:-
Boundaries of the area covered by a mining lease shall run vertically downwards below the surface towards the centre of the earth.
18. Conditions:-
The following conditions shall be included in every mining lease and if they are not so included shall be deemed to have been included therein:-
(1) (a) The holder of a mining lease granted before the commencement of these rules, shall notwithstanding anything contained in the instrument of lease or any law or rules in force at such commencement, pay royalty in respect of any mineral removed by him from and/or consumed within the leased area after such commencement at the rates for the time being specified in Schedule I in respect of that mineral;
(b) The holder of a mining lease granted on or after the commencement of these rules shall pay royalty in respect of any mineral removed by him from and/or consumed within the leased area at the rate for the time being specified in the Schedule I in respect of that mineral;
(c) The State Government may, by notification in the Official Gazette, amend the Schedule I so as to enhance the rate at which royalty shall be payable in respect of any mineral in accordance with the provisions of these rules with effect from such date as may be specified;
Provided that no enhancement in the rate of royalty shall be made before a period of 3 years from such previous enhancement;
(2) (a) The lessee shall pay for surface area used by him for the purpose of mining, surface rent to Revenue Department as per the rates prevalent in the area;
(b) The Government shall be entitled to charge certain amount per year or part thereof for the ecological restoration of mines and quarries from the lessee and this shall be the part of agreement. The amount may be fixed and revised by Government from time to time and may vary from place to place;
(3) The lessee shall also pay for every year such yearly dead rent as may be fixed by the Government in quarterly installments in advance and if the lease permits the working of more than one mineral, the State Government shall not charge separate dead rent in respect of each mineral;
Provided that the yearly dead rent at the time of initial grant shall be according to the rates specified in Schedule-II. The rates specified in Schedule-II shall, however, not be applicable at the time of revision of dead rent;
Provided further that the rate of annual dead rent shall stand revised after every five years from the date of initial grant or renewal of the mining lease in accordance with the following formula:-
Revised dead rent = Existing dead rent + 40% of Existing dead rent;
Provided further also that revised dead rent shall not exceed five times of the dead rent calculated as per schedule-II in force at time of revision of dead rent;
Provided further also that the existing dead rent shall not be reduced if it is more than the dead rent calculated as aforesaid;
Provided further also that the lessee shall be liable to pay either dead rent or royalty in respect of each mineral whichever is higher but not both;
18(16) If any minor mineral not specified in the lease is discovered in the leased area, the lessee shall not win and dispose of such mineral unless such mineral is included in the lease or a separate lease is obtained for such mineral. In such case the dead rent shall be charged for the mineral whose dead rent is higher as specified in Schedule-II;
It may be noted that Rule 65A permits the State to adopt the procedure different from the one given in the rules and, therefore, necessarily it is a power to relax the existing rules and deviating from the same, the State Government can allot the mining leases in a different method. The said Rule 65A starts with a non obstante clause which mandatorily require the issuance of a Notification and publication of the same in the Gazette or at least one daily news paper having wide circulation in the State as well as one news paper having wide circulation in the locality nearest to the area in question but no such procedure has been adopted in the present case before issuing the impugned orders by the State Government. Upon specific query from the Court, even the learned Addl. Advocate Generals appearing for the State could not show any such Gazette Notification or publication of news paper before or at the time of issuing the impugned orders dated 16/11/2011 and 28/11/2011. In view of such admitted non compliance of the statutory provisions of Rule 65A alone, the impugned order are rendered defective and unsustainable and the same, therefore, deserve to be quashed.
(vi) It is also relevant to mention here that Schedule I of the MMCR, 1986 prescribes the rate of Royalty under Rule 18(1)(b) insofar as it pertains to sandstone at serial no. 1 and masonry stone at serial no. 7. The same are quoted below for ready reference:-
From the above, the wide gap of Royalty payable for sandstone and masonry stone is easily noticeable. While royalty on sandstone is naturally much higher because the sandstone is large blockable stone and, therefore, salable in market at much higher rate, whereas, much lower royalty is payable for masonry stone. It is undisputed that masonry stone is a byproduct of sandstone. Since, before actual mining it cannot be exactly ascertained as to how much sandstone will be available though with the advanced technology of geological survey, it can broadly be ascertained whether a particular area or mine of sandstone and masonry stone will have the sandstone or not and now as per the survey report of 2004 available within the Mining Department, it is clear that large areas containing sandstone have been found in the State of Rajasthan. Therefore, with such wide gap of royalty for two minor minerals in question, the possibility of large scale evasion of royalty cannot be overruled. However, undue preference to the mining leases for masonry stone, as would appear in the impugned orders of the Mining Department of State of Rajasthan, Annex. 11 dated 16/11/2011 & Annex. 13 dated 28/11/2011, but as a saving grace saying that the applicants applying for mining leases for masonry stone will be required to pay royalty and dead rent of sandstone clearly shows that the State Government can add the condition of payment of royalty and dead rent payable for sandstone, if actually the sandstone is found to be mined by the concerned lessee. It would have been much better if a uniform rate of royalty could be prescribed for these two minor minerals, sandstone & masonry stone, particularly when one is bye-product of the other & exact quantum of such mined mineral is an assessment upon every removal of such mined minerals, which may not be accurate to the extent of precision every time.
13. Though this Court finds considerable force in the submissions of learned counsels for the petitioners on the other grounds of attack on these two impugned orders like illegal preference to applications for masonry stone, disposal of applications on ''first come first serve'' basis but it is not necessary to deal with such other contentions in details separately since for want of compliance of Rule 65A and finding that the impugned orders do not comply with the directions of this Court in Deepak Khanna''s case (supra) in letter & spirit, and other reasons discussed hereafter, the said orders dated 16/11/2011 and 28/11/2011 deserve to be quashed.
14. Once it is held that the impugned orders cannot hold the field and also that all pending applications for mining leases for sandstone and masonry stone would stand revived and also that the applications filed after the judgment of this Court in Deepak Khanna''s case (supra), this Court has to necessarily deal with the issues raised as to how such applications have to be dealt with by the competent authorities.
15. It is true that Rule 7 of MMCR, 1986 gives preference to the applications received at earlier point of time over the applications received later on, namely on ''first come first serve'' basis, it is equally true that in view of amendment in law with non obstante clause in Rule 7(3) w.e.f. 28/1/2011, such applications shall have to be disposed of 50% each by way of auction & lottery keeping in view the reservations for the reserved classes of persons specified in Rule 7 (3). It is well settled that no vested right accrues to the applicant merely by filing the application for mining lease on the basis of date of application or area applied for and such applications pending on the date of the amended Rules i.e. 28/1/2011 will be governed by the amended position of law and not the earlier rules. Therefore, this Court sees no impediment in the disposal of all the applications in accordance with the amended Rule 7(3) by way of draw of lot in a lottery & by way of auction, as prescribed under Rule 7(3) brought on the statute book w.e.f. 28/1/2011 and which is in force now.
16. That before such exercise can be undertaken, the area in question is required to be delineated and properly demarcated, which is envisaged under the said Rules, viz. the MMCR, 1986. In their written submissions in para 10 (ix), the State Government has clearly so stated and the position of Rules now in force is clearly this.
Such delineation exercise alone can clarify the situation as to what area is up for being granted for mining leases and how the applications of the various applicants will be dealt with. This Court has also sought clarification from learned Addl. Advocate Generals as to how much time the State would require to delineate the area in question for grant of mining leases and upon instructions from the Director (Mines), Additional Director (Mines) and other relevant officials of the Mining Department present in the Court, they stated that such exercise can be undertaken and completed within a period of six months. It is of course necessary, and unless such delineation and demarcation of area is specified, the applications for the particular size of areas specified in the applications, which may overlap the area specified in other applications also cannot be considered properly and it would result in utter chaos and confusion, which should be avoided. The mining leases already granted in the said area prior to 24/4/2007, the date when the Notification for Sandstone Policy was notified and which was quashed by this Court in the Deepak Khanna''s case (supra) cannot obviously be disturbed now for this reason and such existing leases will of course be governed by the existing rules of MMCR, 1986 & conditions stipulated in the said mining leases for cancellation of the same, only if the contingency as stated in such Rules arise like not fulfilling the requirements of mining leases etc. but the other areas or virgin areas, which is stated to be 350 hectares vide para 10 (xxi) of the written submissions of the State, can certainly be delineated and demarcated by the Mining Department of the State Government and then the applications for masonry stone and sandstone can be considered according to the amended Rule 7(3) of the MMCR, 1986. Unless the Mining Department notifies what is their stock and what is up for sale or lease, neither of the parties, the lessor (State) or lessee (Miner) or seller or purchaser can be said to have any consensus ad idem while entering into a contract of lease.
17. The rule for giving preference to applicants on the basis of ''first come first served'' was deprecated and not adopted even in the judgment relied upon by the learned counsel for the petitioners in the case of Indian Metals & Ferro Alloys Ltd. (supra). In that case, the Hon''ble Supreme Court dealing with the applications for grant of rights for the mining of chrome ore or chromite in the State of Orissa, a major mineral, in para 2, 3, 16 and 17 of the judgment held as under:
(2) Proliferation of applications: Another problem created by the passage of time is the entry of new parties in the fray. We shall later point out that, though S. 11 tries to enunciate a simple general principle of "first come; first served" in practice, priority of an application in point of time does not conclude the issue. In this case itself. For instance: during the period ORIND''s application of 1971 has been under consideration before various authorities and in the writ petition filed in Orissa High Court, several other competitors have come into the picture. The statutory provision is not clear as to which of the applications in respect of any particular area, are to be considered together. If ORIND''s application of 1971 for example: were to be considered only on the basis of the persons who had made applications at that time or a short time before or after, one result would follow; if, on the other hand: if all the applications pending for disposal at the time ORIND''s application is to be granted or rejected are to be considered. The result would be totally different. Since the interests of the nation require that no lease for mining rights should be granted without all applications therefore at any point of time being considered and the best among them chosen or the areas distributed among such of them as are most efficient and capable; the latter is the only reasonable and practical procedure. That is why this Court, in its order dated 30.4.87: laid down-we think rightly-that all applications pending for consideration as on 30.4.87 should be considered by Rao.
(3) Procedure for consideration of applications: A further confusion created in this case is due to the fact that leases of different areas in different villages and districts have been applied for. No attempt has been made to locate, with reference to any compact block of land; who exactly are the competitors and whether there are areas in respect of which there is no competition at all. It will be seen later how this has caused difficulty in the present case. But what we wish to point out here is that the statute must lay down clearer guidelines and procedure. Having regard to the new avenues for vast industrial development in the country, the more workable procedure would be for the S.G. to call for applications in respect of specified blocks by a particular date and deal with them together: other later entrants not being permitted in the field. Otherwise only confusion will result, as here. There was a time when the S.G. looked to private enterprises for mineral development in its territory. Even now, it has been stated that 87% of the State territory containing chromite is under lease to one industrial house. Of late, however, competition has crept in. The S.G. has its own public sector corporations and various entrepreneurs are interested in having mining leases for their purposes. It is, therefore, vital that there should be a better and detailed analysis, district-wise and area-wise and that a schedule for consideration of applications in respect of definite areas should be drawn up with a strict time frame so that the State is no longer constrained to deal with sporadic applications or make a routine grant of leases in order of priority of applications. These are aspects which call for careful consideration and appropriate statutory amendments.
16. IS s. 11(2) Conclusive?
Now, to turn to the contentions urged before us: Dr. Singhvi, who appeared for ORIND, vehemently contended that the rejection of the application of ORIND for a mining lease was contrary to the statutory mandate in S. 11(2); that, subject only to the provision contained in S. 11(1) which had no application here, the earliest applicant was entitled to have a preferential right for the grant of a lease; and that a consideration of the comparative merits of other applicants can arise only in a case where applications have been received on the same day. It is no doubt true that S. 11(2) of the Act read in isolation gives such an impression which, in reality, is a misleading one. We think that the sooner such an impression is corrected by a statutory amendment the better it would be for all concerned. On a reading of S. 11 as a whole one will realise that the provisions of sub-section(4) completely override those of sub-section (2). This sub-section preserves to the S.G. a right to grant a lease to an applicant out of turn subject to two conditions: (a) recording of special reasons and (b) previous approval of the C.G. It is manifest, therefore, that the S.G. is not bound to dispose of applications only on a "first come, first served" basis. It will be easily appreciated that this should indeed be so for the interests of national mineral development clearly require in the case of major minerals, that the mining lease should be given to that applicant who can exploit it most efficiently. A grant of ML in order of time-will not achieve this result.
17. In the context of his submission pleading for priority on the basis of the time sequence-Dr. Singhvi referred to certain observations in the decisions reported as
18. The criteria for grant of State largess particularly natural resources on the basis of ''first come first served'' basis also was criticized by the Apex Court in the famous 2G case as well. The Hon''ble Supreme Court in para 94, 95 and 96 of the said judgment rendered in the case of
94. There is a fundamental flaw in the first-come-first-served policy inasmuch as it involves an element of pure chance or accident. In matters involving award of contracts or grant of licence or permission to use public property, the invocation of first-come-first-served policy has inherently dangerous implications. Any person who has access to the power corridor at the highest or the lowest level may be able to obtain information from the Government files or the files of the agency/instrumentality of the State that a particular public property or asset is likely to be disposed of or a contract is likely to be awarded or a licence or permission is likely to be given, he would immediately make an application and would become entitled to stand first in the queue at the cost of all others who may have a better claim.
95. This Court has repeatedly held that wherever a contract is to be awarded or a licence is to be given, the public authority must adopt a transparent and fair method for making selections so that all eligible persons get a fair opportunity of competition. To put it differently, the State and its agencies/instrumentalities must always adopt a rational method for disposal of public property and no attempt should be made to scuttle the claim of worthy 86 applicants. When it comes to alienation of scarce natural resources like spectrum etc., it is the burden of the State to ensure that a non-discriminatory method is adopted for distribution and alienation, which would necessarily result in protection of national/public interest.
96. In our view, a duly publicised auction conducted fairly and impartially is perhaps the best method for discharging this burden and the methods like first-come-first-served when used for alienation of natural resources/public property are likely to be misused by unscrupulous people who are only interested in garnering maximum financial benefit and have no respect for the constitutional ethos and values. In other words, while transferring or alienating the natural resources, the State is duty bound to adopt the method of auction by giving wide publicity so that all eligible persons can participate in the process.
19. The said judgment of two Hon''ble Judges was subject matter of Presidential Reference under Article 143 of the Constitution of India and later on five Judges Constitution Bench of Hon''ble Supreme Court answered the said Reference in
81. Our reading of these paragraphs suggests that the Court was not considering the case of auction in general, but specifically evaluating the validity of those methods adopted in the distribution of spectrum from September 2007 to March 2008. It is also pertinent to note that reference to auction is made in the subsequent paragraph (96) with the rider ''perhaps''. It has been observed that "a duly publicized auction conducted fairly and impartially is perhaps the best method for discharging this burden." We are conscious that a judgment is not to be read as a statute, but at the same time, we cannot be oblivious to the fact that when it is argued with vehemence that the judgment lays down auction as a constitutional principle, the word "perhaps" gains significance. This suggests that the recommendation of auction for alienation of natural resources was never intended to be taken as an absolute or blanket statement applicable across all natural resources, but simply a conclusion made at first blush over the attractiveness of a method like auction in disposal of natural resources. The choice of the word ''perhaps'' suggests that the learned Judges considered situations requiring a method other than auction as conceivable and desirable.
82. Further, the final conclusions summarized in paragraph 102 of the judgment (SCC) make no mention about auction being the only permissible and intra vires method for disposal of natural resources; the findings are limited to the case of spectrum. In case the Court had actually enunciated, as a proposition of law, that auction is the only permissible method or mode for alienation/allotment of natural resources, the same would have found a mention in the summary at the end of the judgment.
83. Moreover, if the judgment is to be read as holding auction as the only permissible means of disposal of all natural resources, it would lead to the quashing of a large number of laws that prescribe methods other than auction, e.g., the MMDR Act. While dealing with the merits of the Reference, at a later stage, we will discuss whether or not auction can be a constitutional mandate under Article 14 of the Constitution, but for the present, it would suffice to say that no court would ever implicitly, indirectly, or by inference, hold a range of laws as ultra vires the Constitution, without allowing every law to be tested on its merits. One of the most profound tenets of constitutionalism is the presumption of constitutionality assigned to each legislation enacted. We find that the 2G Case does not even consider a plethora of laws and judgments that prescribe methods, other than auction, for dispensation of natural resources; something that it would have done, in case, it intended to make an assertion as wide as applying auction to all natural resources. Therefore, we are convinced that the observations in Paras 94 to 96 could not apply beyond the specific case of spectrum, which according to the law declared in the 2G Case, is to be alienated only by auction and no other method.
20. Further the Hon''ble Constitution Bench citing the Supreme Court of California in National Audubon society v. Superior Court-(1983) 33 Cal 3d 419 narrated the principle of Public Trust and the power of the State to use public property for public purposes in the following manner:-
76. The Supreme Court of California, in National Audubon Society v. Superior Court of Alpine Country also known as Mono Lake case summed up the substance of the doctrine. The Court said:
Thus the public trust is more than an affirmation of State power to use public property for public purposes. It is an affirmation of the duty of the State to protect the people''s common heritage of streams, lakes, marshlands and tidelands, surrendering the right only in those rare cases when the abandonment of the right is consistent with the purposes of the trust.
This is an articulation of the doctrine from the angle of the affirmative duties of the State with regard to public trust. Formulated from a negatory angle, the doctrine does not exactly prohibit the alienation of the property held as a public trust. However, when the State holds a resource that is freely available for the use of the public, it provides for a high degree of judicial scrutiny on any action of the Government, no matter how consistent with the existing legislations, that attempts to restrict such free use. To properly scrutinise such actions of the Government, the courts must make a distinction between the Government''s general obligation to act for the public benefit, and the special, more demanding obligation which it may have as a trustee of certain public resources...
21. The opinion of the Constitution Bench in Reference under Article 143 of the Constitution was summarized in para 146 to 151 in the following terms:
146. To summarize in the context of the present Reference, it needs to be emphasized that this Court cannot conduct a comparative study of the various methods of distribution of natural resources and suggest the most efficacious mode, if there is one universal efficacious method in the first place. It respects the mandate and wisdom of the executive for such matters. The methodology pertaining to disposal of natural resources is clearly an economic policy. It entails intricate economic choices and the Court lacks the necessary expertise to make them. As has been repeatedly said, it cannot, and shall not, be the endeavour of this Court to evaluate the efficacy of auction vis-�-vis other methods of disposal of natural resources. The Court cannot mandate one method to be followed in all facts and circumstances. Therefore, auction, an economic choice of disposal of natural resources, is not a constitutional mandate. We may, however, hasten to add that the Court can test the legality and constitutionality of these methods. When questioned, the Courts are entitled to analyse the legal validity of different means of distribution and give a constitutional answer as to which methods are ultra vires and intra vires the provisions of the Constitution. Nevertheless, it cannot and will not compare which policy is fairer than the other, but, if a policy or law is patently unfair to the extent that it falls foul of the fairness requirement of Article 14 of the Constitution, the Court would not hesitate in striking it down.
147. Finally, market price, in economics, is an index of the value that a market prescribes to a good. However, this valuation is a function of several dynamic variables; it is a science and not a law. Auction is just one of the several price discovery mechanisms. Since multiple variables are involved in such valuations, auction or any other form of competitive bidding, cannot constitute even an economic mandate, much less a constitutional mandate.
148. In our opinion, auction despite being a more preferable method of alienation/allotment of natural resources, cannot be held to be a constitutional requirement or limitation for alienation of all natural resources and therefore, every method other than auction cannot be struck down as ultra-vires the constitutional mandate.
149. Regard being had to the aforesaid precepts, we have opined that auction as a mode cannot be conferred the status of a constitutional principle. Alienation of natural resources is a policy decision, and the means adopted for the same are thus, executive prerogatives. However, when such a policy decision is not backed by a social or welfare purpose, and precious and scarce natural resources are alienated for commercial pursuits of profit maximizing private entrepreneurs, adoption of means other than those that are competitive and maximize revenue may be arbitrary and face the wrath of Article 14 of the Constitution. Hence, rather than prescribing or proscribing a method, we believe, a judicial scrutiny of methods of disposal of natural resources should depend on the facts and circumstances of each case, in consonance with the principles which we have culled out above. Failing which, the Court, in exercise of power of judicial review, shall term the executive action as arbitrary, unfair, unreasonable and capricious due to its antimony with Article 14 of the Constitution.
150. In conclusion, our answer to the first set of five questions is that auctions are not the only permissible method for disposal of all natural resources across all sectors and in all circumstances.
151. As regards the remaining questions, we feel that answer to these questions would have a direct bearing on the mode of alienation of Spectrum and therefore, in light of the statement by the learned Attorney General that the Government is not questioning the correctness of judgment in the 2G Case, we respectfully decline to answer these questions. The Presidential Reference is answered accordingly.
The concurrent but additional opinion given by the Hon''ble Justice J.S. Khehar in para 200 summed up like this:-
200. I would therefore conclude by stating that no part of the natural resource can be dissipated as a matter of largess, charity, donation or endowment, for private exploitation. Each bit of natural resource expended must bring back a reciprocal consideration. The consideration may be in the nature of earning revenue or may be to "best subserve the common good". It may well be the amalgam of the two. There cannot be a dissipation of material resources free of cost or at a consideration lower than their actual worth. One set of citizens cannot prosper at the cost of another set of citizens, for that would not be fair or reasonable.
22. The cited judgment in the case of Indian Metals & Ferro Alloys Ltd. (supra) has further been referred and relied upon by the Hon''ble Supreme Court in a recent case in
It is not open to the State Government to justify grant based on criteria that are dehors the MMDR Act and the MC Rules. The exercise has to be done strictly in accordance with the statutory provisions and if there is any deviation, the same cannot be sustained. It is the normal rule of construction that when a statute vests certain power in an authority to be exercised in a particular manner then the said authority has to exercise it only in the manner provided in the statute itself. In these circumstances, no extraneous considerations such as past commitments made by the State Government to J and K who have already set up steel plants could be entertained by the State Government while granting mining leases and must abide by the Act and the Rules.
Section 11(4) permits only the applications made pursuant to the notification of the area for grant of mining lease to be taken into account and not applications made prior to the notification. The notification referred to in the first proviso to Section 11(2) is intended only to invite applications in respect of "virgin areas". It is also clear that the main provision in Section 11(2) gives preference to a prior applicant for grant of reconnaissance permit, prospecting licence or mining lease over later applicants where the State Government has not issued any notification. The main provision in Section 11(2) applies to "virgin areas". To the extent an area is previously held or reserved would require a notification for it to become available. The first proviso to Section 11(2) carves out an exception to the preferential right based on priority of applications in point of time referred to in the main provision. It makes it clear that where the State Government subsequently issues a notification inviting applications for grant, the prior and subsequent applications to the notification would be considered as if they were filed on the same day and no priority in order of time would be given.
23. The said judgment in the case of Indian Metal & Ferro Alloy''s case (supra) was also referred and relied upon by the two Judges Bench in the case of
11. The question of priority is to be adjudged only at the time of consideration of the applications. Undisputedly, respondent No. 4 had taken over the unit on the date the applications were considered. Therefore, the stand of the appellants that at the time the applications were made by respondent No. 4 it had not set up an industry is really without substance. As was observed by this Court in Indian Metals & Ferro Alloys Ltd. v. Union of India and Ors. since the applicant had already set up an industry for processing minor minerals on the date of consideration of the application its claim for priority was to be judged on the basis of the factual position on the date of consideration of the applications.
12. It was submitted by learned counsel for the appellants that no reasons were indicated by the authorities as to why the respondent No. 4 was to have priority over the appellants. Reference in this context is made to Sub-rule (5-a) of Rule 6.
13. It is to be noted that in a case covered by Sub-rule (5-a) the State Government has to objectively assess as to whether in the interest of mineral development preference is given to a person though he made the application later. In such a case the Government''s opinion that in the interest of mineral development it is necessary to do so obviously has an objective angle involved and, therefore, there is necessity to record reasons. So far as Sub-rule (6-a) is concerned, there is no requirement indicated to record reasons. The fact that priority is given to a person who has already set up an industry is itself the reason for giving priority. Therefore, the enumeration of the order of priority is itself the reason inbuilt in the process of consideration of the applications. That itself is the foundation and forms the rational for the priority given. It is not the case of the appellant that the order of priority is irrational. That being so, stand of learned counsel for the appellants that reasons were not recorded and, therefore, the action is vitiated is really of no consequence.
24. In
16. We are of the view that the process of allotment of housing plots on ''first-com-first-served'' basis by a statutory authority has inherent dangerous implications and unless properly guarded, may lead to favoritism, partiality, arbitrariness, etc. so far as this case is concerned, the advertisement informing the public that the housing plots would be allotted on "first-come-first-served" basis appeared in three newspapers on 7-1-2000 and on the very same day 58 applicants had deposited the entire purchase price of Rs. 2,40,000 in Oriental Bank of Commerce, BDA, Bhubaneswar and few others on subsequent days.
22. In our considered opinion, there appears to be a fundamental flaw in adopting the principle of ''first come first served'' inasmuch as it cannot be said to be free of arbitrariness and does not reflect transparency. It may be proved beneficial to those, who may be aware of such a procedure to be followed by B.D.A. in allotment of plots and may cause loss to those who may genuinely be interested in having a plot. We cannot put a seal of approval for such a method as the same is surrounded by many extraneous considerations. We have to keep in mind the larger public interest and institutional integrity cannot be allowed to be compromised.
23. We are not taking the extreme stand that, in all situations the method of "First Come First Served" be not followed, but sufficient safeguards have to be taken. For instance, the Haryana Urban Development Authority (HUDA), in the matter of allotment of industrial plots stated that the allotment of plots would be on ongoing "First Come First Served" basis with the following rider:
As per provisions made in the Industrial Policy, the industrial plots are to be allotted on "first come first served basis on the analogy that all applications received within a block of one month shall be treated at par. However, submission of application will not entitle an applicant for allotment of industrial plot. The allotment shall be made after due assessment of the project report and the financial viability and usefulness of the project and other merits of the applicant as decided by the Committee constituted for the purpose.
24. The policy of allotment of plots on "First Come First Served" basis was, therefore, on the analogy that applications received within a block of one month shall be treated at par. This may make the process transparent and give little chance for favouritism.
25. We are of the view that BDA can adopt several methods for allotment of plots like, by way of lots, "First Come First Served", auction etc., but the process should be transparent. We, are, however, of the view that so far as the instant case is concerned, the decision taken by the authority to cancel the process of allotment by way of "First Come First Served" basis cannot be said to be illegal, arbitrary or vitiated by extraneous reasons warranting interference under Article 226 of the Constitution of India
25. Thus, this Court is fortified in its view that all the pending applications after delineation of the areas have to be considered denovo and not only the applications of writ petitioners before this Court at the time of judgment of this Court dated 21/5/2009 in the case of Deepak Khanna(supra) but all other applications as well deserve to be considered as per the amended Rule 7(3) of the MMCR, 1986. This Court finds no justification for giving any preference to the applicants on the basis of ''first come first served'' basis, which can result into undue advantage to any person by mere fortuitous circumstance of making application at earlier point of time and for equal and fair distribution of State largess in the form of natural resources, a fair, equal & reasonable consideration of all the applicants must be held under the amended provision of the Rules, as no vested right can be said to have accrued to those applicants merely on the basis of fortuitous circumstance of their date of filing the application at earlier point of time or the area for which they applied. The law applicable on the date of consideration of the applications is relevant and not the law applicable on the date of filing of the applications for mining leases.
26. At this juncture, it may also be observed that the possibilities of revenue leakages and chances of corruption both at the level of miners as well as concerned officials of the Mining Department can arise, if such wide gap of royalty rates is maintained without any specific details of two types of minerals being available at a particular place or time of removal of such mined minerals. The monitoring of mining and carrying out of the minerals through check posts of Mining Department, for which contracts are now given to private parties, known as ''Contracts for Collection of excess Royalty'' for various check posts, such leakages of revenue and mal-practices by the miners becomes a breeding ground for corruption, which deserves to be checked, without any doubt, in the public interest as well as national interest. It would have been much better, if these two minerals were kept in one common category in Schedule I of MMCR, 1986 with a uniform rate of royalty and dead rent, since it is undoubted that benefit of technology is now available to all and it is in the interest of State Government to fetch maximum possible revenue from such mining of valuable minerals. However, since it is a Policy decision, this Court would not interfere in that matter, unless the discrimination and arbitrariness is found to be palpable, which cannot stand the judicial scrutiny upon a judicial review by the Court. But, it is considered relevant to express this view because keeping the two homogeneous products like sandstone and masonry stone, where one is bye-product of another, in the present case with a wide gap of royalty and dead rent, is not desirable.
Therefore, from the above discussion, the following two principles emerge for consideration by the concerned authorities of the Mining Department of the State Government, which deserve to be noted and followed in the forthcoming consideration of applications in the present case and these principles obviously would not apply only to four villages for which the impugned orders have been issued but to the entire State of Rajasthan. These principles are:
(i) that as far as possible, the area for mining should be well defined, demarcated & delineated so that only specific areas are made available for grant of mining leases for sandstone and masonry stone.
(ii) that all the applications deserve to be considered as per the amended position of Rule 7(3) of the MMCR, 1986, namely; on the basis of auction or lottery so as to give a fair, reasonable and equal chance to all applicants, who apply before the given cut off date.
27. As already indicated above, since the criteria of ''first come first served'' has been consistently deprecated even by the Hon''ble Supreme Court, therefore, in the present case also, all the applicants, whose applications stand revived as aforesaid and who apply now before the date when the exact delineated areas are put up or notified for grant of mining leases, should be given equal and fair chance of consideration of their applications.
28. It has also been noted above that mere filing of the application for any specified area does not create any vested right in any applicant and only the right of consideration of the application in a fair, just and reasonable manner exists in law in force on the date of consideration of all the applications. It is also clear that the State Government can always delineate areas in its own discretion and it is not necessary that minimum size of 1 hectare or 4 hectares is maintained. It is for the State Government to take its own decision in the matter. The State Government can reserve some areas for sandstone applicants and some area for masonry stone applicants with the conditions included for the applicants for masonry stone to charge them royalty for sandstone, if sandstone is also found in such mines given for masonry stone, if the State Government decides to retain & have separate rates of royalty and dead rent for two types of minor minerals in question. Therefore, while quashing the impugned orders Annex. 11 dated 16/11/2011 and Annex. 13 dated 28/11/2011, all these writ petitions are disposed of with the following directions:-
(i) That the respondent State shall undertake the exercise of delineating, demarcating and specifying all the mining areas available for the Sandstone and Masonry Stone within a period of six months as undertaken by the learned Addl. Advocate Generals, on behalf of the State.
(ii) Thereafter, the State Government will re-notify such delineated areas for grant of mining leases for sandstone and masonry stone, as the case may be, with the stipulation & condition that payment of Royalty and dead rent applicable for the sandstone in case sandstone is also found available in the mining lease granted for masonry stone.
(iii) That all the applications hitherto filed for such mining leases shall be treated as revived and with further applications, which may now be filed upon such re-notification of delineated areas available for grant of mining leases for sandstone and masonry stone. The earlier applicants will be at liberty to withdraw their earlier applications & file fresh applications also in pursuance of such renotification.
(iv) That as per the submission of State Government vide para 10 (viii) above that State has not taken any action in pursuance of the impugned orders so far, it is directed that no mining leases for sandstone & masonry stone will be granted in pursuance of the impugned orders Annex. 11 dated 16/11/2011 and Annex. 13 dated 28/11/2011 till all such applications are decided as per the directions given in this judgment.
(v) That all the applications will be decided within one year from today in accordance with the amended Rule 7(3) of the MMCR, 1986 on the basis of lottery or by way of auction, as may be considered appropriate by the State Government but not on the basis of ''first come first served'' principle.
(vi) The parties will bear their own costs.
