- (1.) THESE writ petitions relate to mining leases and raise an important question as to the interpretation of Rule 30 and other subsidiary rules of the Minor Minerals Concession Rules, 1955. They have been accordingly heard together and it is convenient to dispose them of by this judgment.
(2.) IN two of the petitions, the petitioner is Hari Shanker proprietor of Messrs Hari Shanker Rajendrapal, a firm of contractors while the other petition Civil Writ No. 88 of 1960, has been presented by Virendra Pal, proprietor of another firm, known as "kishorilal Virendra Pal". We may at the out-set state the relevant facts which have given rise to the petitions on behalf of Hari Shanker. The petitioner carries on the business of operating mines of sand stone in Tehsil Dholpur eversince 1956 when the mining lease for extracting sand stone was sanctioned in his favour by the Government of Rajasthan. From before that period the entire area of the, erstwhile Dholpur State was leased out by the then Dholpur Ruler to Dholpur Stone Company to extract sand stone from the mines situated in that State. Later, when the State of Dholpur merged in the State of Rajasthan, the Rajasthan Government limited the area of operation of the said company and the area so released was leased out to other contractor by means of auction. With this object, the Deputy Director of Mines published in the Rajasthan Gazette of 25. 2. 1956 a notice (Ex. 1) inviting bids at auction and specifying the place and time where the auctions of the various mines in the area were to be held. The petitioner, who offered bids, was the highest bidder for the Dholpur area that comprised the entire Dholpur Tehsil (except Lalkhera) and in due course the Government conveyed its sanction for the mining lease of that area in his favour on 6th April, 1956 (Ex. 2 ). The period of the lease as sanctioned by this order of the Government was from 1. 4. 56 to 31. 7. 59 As a result of the sanction, the mining lease of the mines in Dholpur Tehsil area was granted to the petitioner and possession or the area was handed over to him. Since April 1956 the petitioner has been accordingly extracting sand stone from those mines. An agreement on a stamp paper between the Rajpramukh of Rajasthan on the one hand and the petitioner on the other followed thereafter ; but it is stated that the agreement was lost from the office of the Mining Engineer and a fresh agreement was signed on 1. 7. 59 (Ex. 3) in which the period of the lease was mentioned as stated earlier. The petitioner states that before the lease of the area in question was granted to his firm the mines in the area were lying unexploited and, therefore, the petitioner had to invest a good deal of money in prospecting the mince, in opening up the same, in laying out approach roads and working that fit for making. According to the statement of the petitioner, he claims that he has invested about a lac of rupees which includes a sum of Rs. 50,000/-towards advances to labour. The case of the petitioner is that the mining lease in question was granted to him under the terms of the Mining Rules, as it is evident from the letter of the Government also (Ex. 2 ). Rule 30 of the Rules, the petitioner contends, provides for a statutory period of five years, for a mining lease at the initial stage, but gives an option to the lessee to opt for a shorter period if he so desires. It is, therefore, submitted that the Government was legally bound to grant lease to the petitioner initially for a period of five years ; and the rule also provides for a light of the lessee for renewal of the lease for a period of five years with a further right of renewal for the same period, if the lessee furnishes certain guarantees as provided in the rule. The petitioner accordingly sent a letter of request to the Government on 28th August, 1958 (Ex. 4) to extend the period of the lease for another two years so as to bring it in conformity with the provisions of rule 30 of the rules. He also submitted an application for renewal. In spite of that the Director of Mines under letter dated 22. 9. 58 (Ex. 5) informed the petitioner that as the lease had been auctioned for three years only and there was no condition in the agreement for renewal, no renewal could be granted. Against the order of the Director of Mines the petitioner preferred an appeal (Ex. 6) to the Industries and Mines Ministry, Government of Rajasthan on 21. 11. 58, and he prayed that either the period of the original lease be extended in conformity with rule 30 or a renewal might be granted to him as period by the Rules. The Government by its letter dated 10th January, 1959 (Ex. 7) was pleased to set aside the order of the Director of Mines and enjoined upon the officer that the renewal application of the petitioner be considered under rule 30 of the said Rules. The Government was further pleased to direct the officer to forward the renewal petition with his recommendation to the Government in good time so that appropriate decision might be taken by the Government before the expiry of the period of the petitioner's lease. Later, the Government by an express telegram informed the petitioner that his lease had been extended on existing terms for a period of six months from 1st August, 1959. Ex. 8 is the confirmatory copy of the telegram received by the petitioner which was followed by a letter of the Secretary to the Government, Industries, Mines & Labour Department, dated 12th August, 1959. It is clear from the letter that the Government accepted the petitioner as a suitable party for the grant of extension of the period of the lease. This extension was evidently granted under Rule 30 of the Rules and the petitioner submits that the extension for a period of six months only was arbitrary and against the provisions of the rule. The petitioner again renewed his efforts to get a renewal of the lease as contemplated by the rule and submitted an application dated 28. 1. 59 (Ex. 10) to the Government for that purpose, but he received a letter in reply dated 27. 1. 60 (Ex. 11) from the Government that his application for renewal of the mining lease was dismissed. This was, however, followed by an express telegram dated 8th February, 1960 informing the petitioner that his lease was extended for a period of two months only from 1st February, 1960. The petitioner again made efforts to persuade Government to grant him the extension or renewal for the requisite period, but it produced no effect and a notice of of auction was eventually issued under the signature of the mining clerk of the Mines of sand stone in Dholpur Tehsil fixing 16th and 17th of March for purposes of holding the auction. The petitioner challenges the action of the Government in refusing to grant him either extension or renewal of his lease, as being entirely in contravention of the relevant rules and prays for an appropriate writ of certiorari, prohibition or mandamus directing the respondents not to hold the action and to grant him the extension or renewal prayed for. The material facts in writ petition No. 87 of 1960 are also similar except that the mining lease in this case related to the mines of sand stone in Ban area i. e. Tehsil Bari in favour of the petitioner's firm. Sanction for the lease was granted on 12. 6. 56, which in this case was also for a period of three years only i. e. from 11. 6. 56 to 31. 7. 59. In exploiting the mines in question the petitioner alleges that for preliminary operations he had to invest a sum of two lacs of rupees including a sum of one lac as advance to labour. In this case also the petitioner claims for extension of the initial period of the mining lease or for renewal of the period on the strength of Rule 30 of the Rules, but in spite of repeated attempts was unable to obtain the renewal or extension as prayed, except for very short periods of six months and two months respectively; and eventually after dismissal of the petitioner's application for renewal, a notification was issued calling for bids on the 16th and 17th of March, 1960. Accordingly, here also the petitioner challenges the action of the Government in refusing to grant the extension or renewal in question on similar grounds stated in the earlier petition. Affidavits in reply have been filed on behalf of the State Government which have been sworn by Shri S. K. Sharma, Assistant Mining Engineer, Sawai Madhopur, who is the officer-in-charge of the case appointed by the Government of Rajasthan. The sum and substance of the reply in either case is that since the leases in question were granted by public auction under Rule 33 of the Rules, the Government had a right to fix the period of the lease on which condition the petitioner himself executed an agreement with the Government. Accordingly, the choice lay with the Government whether to extend or renew the leases in question, and since the Government did not consider it proper to do so, it had ample right to direct fresh settlement of the mines in question by auction. In effect the position taken by the Government is that Rule 30 has no application to such leases. The claim of the petitioner that he had made considerable investments in exploding the quarries or the mines in question was denied. It is admitted on behalf of the Government that provisionally extensions were granted with a view to maintain status quo, until the decision of the matter by the Government but it is contended that the construction which the petitioner seeks to put on Rule 30 of the relevant Rules is incorrect and the petitioner is, therefore, not entitled as a matter of course to get any extension or renewal. For the present we may refrain from referring to the facts in writ petition 88 of 1960 which will be mentioned at an appropriate stage. In material particular the facts are identical. The minor differences in dates or the situation of the mines do not affect the point under investigation. The point, therefore, which we have to determine is whether the petitioner, as a matter or right, is entitled to an extension or renewal of the period of his lease and whether the respondents have acted in violation of the relevant Rules in refusing him those reliefs? As observed earlier, the decision of the case depends entirely on the construction of Rule 30 and some other subsidiary rules. The Rajasthan Minor Minerals Concession Rules, 1955 were published under Notification dated April 12, 1955 and came into force on the date of the publication in the Rajasthan Gazette. These rules were framed in the exercise of powers conferred by Rule 4 of the Mineral Concession Rules, 1949, framed by the Central Government which provide that the Central Rules will not apply to the extraction of minor minerals, the extraction of which was to be regulated by rules prescribed by the State Government. The Central Rules in their turn have been framed under the Mines and Minerals (Regulation and Development) Act No. LIII of 1948. Sec. 5 of the Act authorises the Central Government by notification published in the Gazette to make rules for regulating the grant of mining leases or prohibiting such grant; sec. 7 authorises the Central Government to make rules for the purpose of modifying or altering the terms and conditions of any mining lease while sec. 8 enables the Central Government to delegate the power exercisable under the Act to any officer or authority. The State Rules, therefore, are statutory rules and have to be obeyed by the authorities incharge of settlement of these mines and minerals: (See Lajja Ram and others Vs. State of Rajasthan and another (1 ). "minor Minerals" mentioned in the Rajasthan Rules carry the same meaning and import as "minor Minerals" defined in the Central Rules. The State Rules contemplate grant of mining of leases either on application made to the Director, Mines & Geology, Rajasthan for settlement of mines or by public auction or by inviting tenders to be submitted for acceptance by the authority competence to grant leases. Most of the general rules pertaining to "grant of mining leases" for such minerals are embodied in chapter IV of the Rajasthan Rules; Chapter V refers to "grant of mining leases and royalty collection contract by auction or by inviting tenders or by other methods. " A great deal of argument at the Bar has centered on the question whether Chapters IV and V of the Rules are mutually exclusive. The contention of the petitioner is that the rules contained in these two chapters have to be read together. According to the learned counsel for the petitioner the rules regulating the grant of mining leases in general are embodied in chapter IV which also govern mining leases granted under chapter V, namely, by inviting tenders or by public auction; and, therefore, even though in the present instance the leases were granted by public auction the application of R. 30 of the Rules was not excluded. The contention on behalf of the State is that the two chapters are wholly exclusive of each other and in a case of mining lease granted under chapter V by inviting tenders or by public auction, R. 30, which fell under chapter IV of the Rules, had no application at all and in the case of such leases the Government was entitled to exercise its own discretion. The position of the State in this respect is quite unenviable, when we find that in its own letters the Government purports to have acted under R. 30 of the Rajasthan Rules and extended the period on two occasions, though for smaller periods. The position is the same in the other cases also. Since the contention has been advanced we have to examine the validity thereof. It should be noticed that in chapter V there is no other provision dealing with the period of leases granted as a result of tender or public auction. It may be also stated that the State Government was unquestionably satisfied that the petitioners were suitable parties for the grant of extension under the relevant rules. The controversy before us has, therefore, taken a purely legal character. If it is held that R. 30 has no application to the case or that for certain reasons on the interpretation of the rule itself the petitioners are not entitled to its benefit, then the applications are bound to fail. If on the contrary it is held that R. 30 applies even to such leases as were granted to the petitioners and there is nothing else in the provisions of the rule to deprive them of its benefit, then in our opinion, the petitioners would be entitled to succeed. The respondents cannot act in violation of the statutory rules and deprive the petitioners of the right of extension or renewal of their leases which is vouchsafed to them by virtue of that rule. It is true that R. 30 occurs in chapter IV of the Rules and not in chapter V which deals with the grant of mining leases by public auction or by tender. We feel, after a careful examination of the various provisions in the two chapters concerned that rules contained in those chapters are complimentary and supplementary of each other and not mutually exclusive. It is obvious that there are various rules in chapter IV which must of necessity apply to mining leases under chapter V made under R. 33 of the Rules by auction or tender. For instance, R. 19 prohibits mining lease in respect of any such minor minerals as the Government may notify in this behalf. This would prohibit mining leases not only on application of parties but also by auction or tender. Similarly, the provisions in relation to registrar of mining lease, area of mining lease, length and breadth of area leased, boundaries below the surface, security etc. must govern not only mining leases granted under chapter IV but also under chapter V. It is, therefore, futile to contend that simply because the mining leases in these cases were granted by public auction under R. 33 of the Rules contained in chapter V, Rule 30, which occurs in chapter IV, will have no application to such leases. In our opinion, even leases granted by auction or tender must conform to most of the general rules mentioned in chapter IV. It was argued that under R. 41 of the Rules when a bid is confirmed or a tender is accepted, "the bidder or tenderer" has to execute a lease containing the terms and conditions mentioned in R. 31 with such modification as may be necessary by reason of the provisions of R. 33 and 34. An endeavour is made by the learned Government Advocate to contend that while R. 31 has been specifically mentioned in R. 41 as to the conditions of the lease, there is no reference to R. 30 and, therefore, R. 30 cannot be said to apply. If that is so, R. 41 does not, for the matter of that, refer to some of the other rules also, as contained in chapter IV; yet it can not be doubted that those rules will govern the grant of a mining lease under R. 33 of the Rules. This alone, therefore, can not lead to the inference that R. 30 was not intended to apply to such leases. It was also urged that R. 39 of the Rules contemplates the grant of leases for a period of even an year or less, which shows that the Government may fix its own period in case of a lease granted by public auction or by inviting tenders; and, consequently, if it is held that R. 30 applies there would be conflict between the two rules. There is a twofold answer to this contention. R. 39 opens with these words: - "in case of leases or royalty collection contracts granted for more than one year the balance of the contract money or dead rent shall be payable in the manner indicated below. " The contention of the petitioner is that R. 39 applies only to leases of the nature contemplated by R. 34 which is as follows : - "notwithstanding anything in these rules, any minor mineral deposit may be leased out by a contract (to be called a royalty collection contract), whereunder the contractor undertakes to pay an amount annually. " The leases referred to in Rule 30 are, therefore, apparently synonymous with royalty collection contracts. "mining lease" as defined in Rule 3 (iv) of the Rules is something quite different from a "mere lease" as mentioned in Rule 39. But even apart from this, assuming that Rule 39 applies to a mining lease, we do not think that there would be any real conflict between this rule and Rule 30 in such a case. Rule 30 also contemplates that a mining lease may be granted for a period of one year or less. It says that a mining lease may be granted for a period of 5 years, "unless the applicant himself desires a shorter period. " This shorter period may be for a year or even less in some cases. These arguments, therefore, in our opinion, do not sustain the contention that Rule 30 of the Rules in chapter IV will have no application to leases granted under chapter V. The learned Government Advocate himself eventually conceded that he could not place his argument that high. He, therefore, tried to concentrate on the language of Rule 30 itself in order to support his contention that the petitioner was not entitled to the benefit of that rule. At this stage it is useful to reproduce Rule 30 which runs as follows : - "a mining lease may be granted for a period of 5 years unless the applicant himself desires a shorter period; Provided that the period may be extended by the Government for another period not exceeding 5 years with option to the lessee for renewal for another equivalent period, in case the lessee guarantees investments in machinery, equipments and the like, at least to the tune of 20 times the value of annual dead-rent within 3 years from the grant of such extension. The value of the machinery, equipment and the like shall be determined by the Government. Where the lease is so renewed, the dead rent and the surface rent shall be fixed by the Government within the limits given in the Second Schedule to these rules, and shall in no case exceed twice the original dead rent and surface rent respectively and the royalty shall be charged at the rates in force at the time of renewal. " The learned Government Advocate at the out set contends, the very use of the word "applicant" in the first part of the rule shows that it relates to leases granted on application only and excludes all other variety of leases by auction or tender. It is pointed out that Rule 41 uses the words "bidder or tenderer shall execute a lease". The contention assumes that the words "bidder or tenderer" are in juxtaposition of the word "applicant" as used in Rule 30. We are unable to think so. The word "applicant" in the rule appears to have been used in a more comprehensive sense so as to include not only persons who applied for settlement of leases under Rule 20 of the Rules but also persons who applied for settlement by offering tenders or bids at public auction. The word "applicant. " is more or less an omnibus expression meant to cover all those who take such leases. It was then submitted that the word "may" which occurs in the rule indicates that the grant of lease for any particular period is discretionary and it is open to the Government to grant the lease for a shorter period. It is also argued that when the petitioners themselves agreed to get leases for a shorter periods, they lost the benefit of the proviso and after the period of the lease has run out they are not entitled to any extension or renewal. These arguments require serious consideration. It is true that ordinarily the use of the word "may" leaves a good deal of discretion with the subject to do or not do a certain thing which the statute or rule contemplates. When the law says that a certain act may be done it does not generally involve an element of compulsion on the parry giving that direction or impose an obligatory duty on him to abide by the terms of the statute or rule. But there are cases where in the context the word "may" has been often held to carry the significance of "must", thereby enjoining upon the party concerned to perform a certain act as obligatory or mandatory. Much depends upon the language of the context in which the word occurs and the plain grammatical meaning attached to the word "may", often has to yield to the meaning which a reasonable interpretation of the context imposes upon it. Thus where the context inexorably leads to the conclusion that the intention of the legislature was that a certain thing must be done, the mere use of the word "may" should not deter us from giving that interpretation. Here if we were to adopt the interpretation that the learned Government Advocate suggests and hold that the grant of the lease for a period of five years, was only discretionary with the Government, the other portions of the rule become superfluous and otiose. In that case there was no meaning in the addition of the exception in the first part of the rule "unless the applicant himself requires it for a shorter period". Similarly, the proviso also loses all its significance, because there is no meaning in providing for renewals when the period of the lease is left entirely to the discretion of the authority concerned. It is as good as suggesting that the rules in chapter IV including Rule 30 have no application to leases of the kind, with which the petitioners are concerned, which fall in chapter V. Any such argument is open to the further exception that the authorities concerned can then very conveniently ignore all he provisions of chapter IV, by resorting only to mining leases under Rule 33 of chapter V and make the rules embodied in the earlier chapter almost a dead letter. Rule 30, therefore has to be interpreted as a whole, so as to give effect to all its provisions. In our opinion, the words "unless the applicant himself desires a shorter period" and the language of the the proviso which follows, are clear pointers to the interpretation of the rule, which means that although the grant of the lease may be discretionary yet when the mining lease is being granted it must be for a period of five years unless the applicant himself wants it for a shorter period. The choice for a shorter period lies with the applicant; but it appears to be obligatory on the authority concerned to lease it out initially, if he does lease out the mines at all, for a period of at-least five years. Similarly, in the proviso the period may be extended for another period not exceeding five years, with option to the lessee for renewal for another equivalent period in case the lessee guarantees certain investment within three years of such extension. The word "may" has been used in the proviso also merely because it lies with the lessee 10 claim or not to claim an extension or renewal whether for a second or a third period. If the lessee wants a renewal for an equal period of five years, then he has to give the guarantee required. There would be no meaning in providing for a guarantee for investment at least to the tune of 20 times the value of the annual dead-rent within 3 years from the grant of such extension if discretion lay with the Government to grant renewal for a much shorter period. A scrutiny of the language of the rule and the proviso thereto clearly suggests that the rule mikes it obligatory on the part of the Government to grant the lease initially for a period of five years (unless the lessee himself desires for a shorter period); and then if the lessee desired an extension, to grant him an extension for another five years but not more than five years; and if the lessee exercises his option for a further period of five years to grant him the renewal, subject to the condition of his furnishing the investments required. The word "not exceeding 5 years" do not, in our opinion, suggest that the extension could be given for shorter periods. The intention merely was to provide the maximum limit for each period of the lease, so as not to exceed that limit unless extended or renewed. It is true that the Rule has not been very happily worded. The position appears to have been clarified by the amended set of rules which were published in 1959. The corresponding rule there is Rule 16 which is as follows: - " (a) The period for which a mining lease may be granted shall be five years at the first instance unless the Government allows a longer period not exceeding ten years. (b) Upon an application made in this behalf, before, six months of the expiry of the lease and upon payment of a fee of Rs. 10/-, a mining lease may be renewed by the Government for a period equivalent to the period of the original lease. The lease may further be renewed by the Government for another period of original lease provided the Government, is satisfied that the mines have been improved by the lessee and that substantial investments in machinery, equipment have been incurred by him. Where the lease is so renewed the dead rent shall not exceed twice the original dead rent in the case of first renewal. Royalty shall be chargeable at the rates in force at the time of renewal. " This Rule, of-course, clearly explains the intention of the law; but the old Rule also, we think, if correctly interpreted leads to the inference that the intention was to make the period of the lease obligatory. The learned Government Advocate has contended that there could be no intention to grant leases for such long periods in respect of minor minerals. We do not think so. In fact, the period contemplated by the amended rule, if at all, is even greater; and although we may not accept the figure of alleged investments made by the petitioners in the development of the mines, yet it is common knowledge that in opening up the mines, in laying out approach roads and in organising labour a good deal of initial investment has to be made by the lessee and it takes some time to realise the profits of the investment. It is, therefore, not unreasonable to expect that in framing the rule provision has been made for such contingencies. It is true that minor minerals as defined also include sand and clay but at the same time there are various other minerals exploitation of which would require a fairly considerable investment of capital and labour. We, therefore, see no force in this contention of the learned Government Advocate. In the result, we must hold that Rule 30 applies to the mining leases of these lease is concerned, it appears that even in 1959 petitioners. So far as the initial period of the the petitioners agreed to execute a lease for a shorter period. Therefore, it implies that originally the applicant himself desired a lease for a shorter period; but that would not deprive him of the benefit of the proviso to the rule and the petitioner was justified in applying to the Government for extending the period of his lease for another five years with the option for renewal for an equivalent period, subject to the condition mentioned in the proviso. In fact, the Government itself in some of its letters in reply to the petitioner's claim acknowledged that the petitioner was a suitable party for the grant of extension or renewal and even agreed to extend the leases for shorter periods. It is, therefore, contended by the learned counsel for the petitioner that it is of no use sending back these cases to the Government for purposes of renewal but to make an order directing extension for the required period under the law as the terms of the rule have been held to be obligatory. Reliance has been placed in this connection upon a decision of the Supreme Court in Y. Mahaboob Sheriff and Sons V. Mysore State Transport Authority, Bangalore (2) where in a case of renewal of permit under the Motor Vehicles Act it was held: - "it is therefore open to us to issue a direction in the nature of mandarins requiring the Authority to follow the law as laid down by this Court in respect to the order of renewal granted by it in accordance with Sec. 58 (1) (a ). It is true that where it is a case of discretion of an authority, this Court will only quash the order and ask the authority to reconsider the matter if the discretion has not been properly exercised. But in this case, the discretion, is not absolute; it is circumscribed by the provision of Sec. 58 (1) (a), which lays down a duty on the Authority which grants a renewal to specify a period which is not less than three years and not more than five years. The duty being laid on the Authority which has in this case decided to grant a renewal to specify a period not less than three and not more than five years as the duration of the renewal, it is in our opinion open to this Court to direct the Authority to carry out the duty laid on it by Sec. 58 (1) (a) read with Sec. 56 (2), when it has granted the renewal. " We have no doubt that these principles with equal force apply to the instant cases. We, accordingly allow the petitions and quash that part of the order of the Government which extended the leases only for limited periods and direct that the Government should comply with the requirements of the law as laid down in Rules in the light of the interpretation which we have given above. We may now briefly refer to the facts in the writ petition presented by Shri Virendra Pal, which, as we have said earlier, is also governed by the decision which we have just given. In this case, the petitioner obtained a lease for the Based area and the lease in his favour was sanctioned by the Government under letter dated 12. 6. 56. It this case also the period of the lease originally was for 3 years from 11. 6. 56 to 31. 7. 59. The petitioner claims in this case that he made investments to the tune of one lac and seventy thousand rupees which included a sum of Rs. 60,000/- as advance to labour in exploiting the mines in the area. The Government by its letter dated nth August, 1959 accepted this petitioner also as a suitable party for the grant of the extension for the area already leased out to him but extended the term only for a period of six months. Under letter dated 8. 2. 60 on the remonstrance of the petitioner the period of lease was extended for another two months from 1st February, 1960 but his prayer for further extension was rejected. In his case also we do not see any reason why Government should not grant the extension prayed for on the terms of Rule 30 and we issue a mandamus accordingly, quashing that part of the order of the Government which extends the lease only for limited periods.
(3.) THE net result is that we direct that the leases should be renewed for a period of five years with option of further renewal if so desired for another period of five years, subject to the conditions mentioned in Rule 30. THEse applications are accordingly allowed and the rules made absolute. THE petitioner will be entitled to their costs; hearing fee Rs. 100/- (Rupees one hundred) to be divided between the petitioners equally. .;