Decided on February 18,1976

South Karanpura Coal Company Ltd. Appellant
UNION OF INDIA (UOI) Respondents

Referred Judgements :-



A.K. Mookerjee, J. - (1.)This Rule is directed against an order dated November 24,1975, passed by the Joint Secretary to the Government of Bihar cancelling the mining lease of the Petitioners under Rule 37(3) of the Mineral Concession Rules, 1960.
(2.)The Petitioner No. 1 is a limited company registered under the Indian Companies Act. The Petitioner No. 2 is a Director and share -holder of the company. The Petitioner No. 1 was the lessee in respect of 242 bighas colliery and coal lands with relevant surface right thereto situated in mouza Bundu in the district of Hazaribagh. It is alleged that under Sec. 10 of the Bihar Land Reforms Act the Petitioners have become statutory lessee under the State of Bihar. By letter dated June 12, 1976, the Petitioner No. 1 permitted M/s. S.D. Coal and Co. (the added Respondents) to carry out prospecting and exploratory operation in its lease -hold coal bearing land measuring 242 bighas for the purpose of proving the existence of seam and location thereof as well as the feasibility of winning coal from the Said demised land economically. On July 5, 1975, the District Mining Officer, Hazaribagh, issued a show -cause notice to the Petitioners that why the Petitioners' lease should not be determined inasmuch as the Petitioner entered into an agreement for prospecting and car -ring out exploratory -mining operations without obtaining permission under Rule 37 of the Mineral Concession Rules. On July 15,1975, the Petitioner replied to the said show -cause notice wherein it was stated that Rule 37 of Mining Concession Rules, 1960, related to 'transfer of lease'. The arrangement envisaged in its letter dated June 12, 1975, to M/s. S.D. Coal and Co. did not amount in fact or in law to any transfer of lease as defined under Rule 37 of the Mining Concession Rules, 1960. Thereafter, on November 24, 1975, the impugned order was issued determining the Petitioners' lease with respect to 242 bighas of coal land situated in village Bundu in the district of Hazaribagh. The Petitioners being aggrieved by the said order moved this Court under; Article 226 of the Constitution and obtained the present Rule.
(3.)It is urged by the Petitioners that proviso to Sub -Rule (3) of Rule 37 of the Mineral Concession Rules, 1960, has not been complied with before determining the lease under Sub -Rule (3) of Rule 37. Sub -rule (3) of Rule 37 reads as follows:
The State Government may, by order in writing, determine any lease at any time if the lessee has, in the opinion of the State Government, committed a breach of any of the provisions of sub -rule (1) or has transferred any lease or any right, title or interest therein otherwise than in accordance with sub -rule (2): Provided that no such order shall be made without giving the lessee a reasonable opportunity of stating his case.


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