Decided on April 28,1967



- (1.) THE petitioner was granted a prospecting licence for soap-stone, dolomitp and quartz in respect of Khasra No. 68. area 64. 12 acres, in village Chita Dhana, district Narsimhapur, under a deed dated 28th February 1963 for a period of two years. The petitioner thereafter applied for a mining lease for whole of the area covered under the prospecting licence by its application dated 22nd April 1964 The state Government by Memo dated 13th October, 1964 directed the petitioner to indicate which block of 20 acres was desired by the petitioner, indicating thereby that the State Government was prepared to grant the lease for that area only. By letters dated 23rd October 1964 and 26th October 1964 the petitioner represented to the State Government that the petitioner was entitled to get a lease for whole of the area and that in view of the enormous expenditure incurred by the petitioner in prospecting the area, there was no justification for reducing the area On the insistence of the State Government that the petitioner should choose 20 acres of land and because of the threat that in case no such choice was made within 15 days the appli- cation for grant of lease was liable to be dismissed, the petitioner under protest gave its choice and the State Government by order dated 20th January 1965 accorded its ianction for grant of lease for 20 acres only. The petitioner thereupon accepted the lease for 20 acres under protest and filed an application for revision before the Central Government under Rule 54 of the mineral Concession Rules, 1960. The Central Government, after inviting the comments of the State Government and after considering the reply of the petitioner on the comments of the State Government as required under Rule 54, rejected the revision application by order dated 27th April, 1966. The petition-er by this petition under Article 226 of the Constitution seeks a writ of certiorari for quashing the order of the State Government dated 20th January 1965 and that of the Central Government dated 27th April, 1966 and also prays for issuance of a writ of mandamus directing the State Government to grant the petitioner a lease for the whole area, applied for.
(2.) THE contention of Shri Jakatdar, learned counsel for the petitioner, is that Under section 11 (1) of the Mines and Minerals (Regulation and Development) Act, 1957 (hereinafter called the Act) and Rule 34 of the Mineral Concession Rules, 1960 (hereinafter referred to as the Rules) the State Government had no authority or jurisdiction to reduce the area without assigning special reasons. He urged that a holder of a prospecting licence has a preferential right to secure a lease for whole of the area covered under his licence. The choice of asking for a lesser area is that of the holder of the prospecting licence and that the State Government has no authority to reduce the area on its own accord. The State Government, according to Shri Jakatdar. can for special reasons recorded in writing, reduce the area. In this case, no such valid reason was Riven by the State Government and the act of the State Government in confining the grant to 20 acres was not onlv arbitrary but was also in violation of the Act and the Rules.
(3.) FROM the return filed before us as also from the comments sent to the Central government, it appears that the State Government had fixed a ceiling of 20 acres in the case of an individual and 40 acres for a companv for grant of leases for soap-stone mines. A similar ceiling has been fixed for other minerals also. This ceiling was fixed, according to the State Government, after taking into account past experience of the working of the prospecting licences and mining leases. The state Government came to the conclusion that where large areas were granted under prospecting licences and mining leases, such grants often resulted in the area remaining unworked This adversely affected expeditious development of mining resources of the State. In the case of some minerals, large scale operation la required; while in other cases, small scale operations yield better results. Taking into consideration all these facts the State Government fixed a ceiling for different minerals, as indicated above, and that is the reason why the State Government insisted on granting a lease for 20 acres only. Shri Jakatdar says that this reason is quite foreign to the provisions of the Act and is no reason in law. He also referred to Rule 26 of the Rules and urged that it is obligatory on the State government to state reasons while rejecting an application for a lease. The State government failed to observe even this mandatory provision and on this ground alone the order of the State Government was liable to be quashed.;

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