Decided on December 15,1952

STATE OF BIHAR Respondents


Sarjoo Prosad, J. - (1.) This application under Article 226 of the Constitution has been presented by the two petitioners, S. K. Sahana & Sons Ltd. and Sahana Industries Ltd. which are sister concerns, carrying on business in mica, the share -holders in each of them being common. They have moved for a writ of certiorari against an order cancelling their license on the authority of which they worked mica mines.
(2.) The facts alleged in the petition are these. The first petitioner is a lessee in respect of 50 mica squares which it holds under leases originally granted by the Government of India. The said leases were renewed in the year 1930 by the Government of Bihar for a period of 30 years in favour of the petitioner and the leases are still subsisting. Out of the 50 mica squares under lease, 12 are fully mechanised in the sense that they are being worked with modern mechanical implements. The said petitioner employs a very large number of miners, labourers and home-splitters, their number running into thousands and pays about Rs. 5,000/- per day in wages to his employees. The mica business of the petitioner was started as early as the year 1880 by its predecessor, and the business has been continued ever since. Mica is a dollar earning commodity, and in the year 1950-51 the petitioner no. 1 claims to have exported mica to the United States of America worth about 25 lakhs of rupees and has also secured forward contracts for the supply of mica for three years from July 1952 onwards valued at about a crore of rupees. The case of the petitioners is that the forward contracts are of great advantage to the Union of India, and failure to comply with the same is likely to create complications in the international relationship between the Union of India and the United States of America.
(3.) The above facts have not been controverted on behalf of the State of Bihar, which is the opposite party in this case. It is also not disputed that one Gupta Mica concern had also certain mica leases held under the Government of Bihar. This Concern, being unable to work the said mines, entered into a contract with the petitioner No. 2 sometime in January 1950 appointing the said petitioner its agent with the right of working the mines as raising contractor on certain terms and conditions embodied in an agreement dated 15-1-1950, Accordingly possession of the mines was delivered to petitioner No. 2, and the said petitioner had been working the mines as such and had paid the concern in the course of working a sum of Rs. 35,000/-. This petitioner claims that by about November or December 1950 the mines of Gupta Mica Concern of which the petitioner was the lessee had been fully developed and had proved to be a profitable concern, and the said petitioner had been working the mines under miner's license granted to its lessor. The Gupta Mica Concern, however, wanted to take possession of the mines even before the expiry of the agreement, but the petitioner No. 2 refused to make over the mines to the said concern. The latter then sent a report to the inspector of mines alleging that they had stopped working the mines in question. This dispute arose sometime in December 1950, although under the terms of the agreement the petitioner No. 2 was entitled to work the mines as a raising contractor for a period of five years from January 1950 and had made investments and developed the mines on the faith of that agreement. The petitioner No. 2, Sahana Industries Ltd., then appointed petitioner No. 1, S. K. Sahana and Sons Ltd. its managing agent, the latter having a miner's license which was necessary under the Bihar Mica Act (10 of 1948) for the purpose of carrying on business as a miner. It is also asserted that the Chief Inspector of Mica Mines recognised the petitioner No. 2 as virtual owner of the said mines, and the two petitioners continued to work the same.;

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