CHHANGANI, J. - (1.) THIS is an application under Arts. 226 and 227 of the Constitution of India by M/s Tiwari Jhumerlal Swarooplal praying for the issue of a writ of certiorari, mandamus and prohibition to quash an order of the Rajasthan Government dated the 6th August, 1963. , cancelling the petitioner's lease, and also for the issue of a writ of mandamus directing the respondent to allow the petitioner to continue to work out the mines for the remaining period of the lease and prohibiting and restraining the respondent from sanctioning the reaction of the lease in the name of others. The case set up by the petitioner in the writ application may be briefly stated as follows : -
(2.) THE petitioner is a registered partnership firm carrying on the sand stone mining business in the Tehsil Bayana and Roopbas in District Bharatpur. THE firm's constitution had changed from time to time but since April, 1958, it has been a firm consisting of four partners. However, in spite of the change in the constitution of the firm the firm has been maintaining the continuity of the business. In the year 1943 the firm was granted the mining lease of the area containing sand stone in Tehsil Bayana and Roopbas of the then Bharatpur State for a period of 10 years, the dead rent ranging from Rs. 72,000/- to Rs. 80,000/- per annum. On the expiry of the period of 10 years the lease was renewed by the Government of Rajasthan - successor State of the then Bharatpur State - for a period of another 8 years on the dead rent of Rs. 1,00,000/- per annum. This period of 8 years for which the lease was renewed expired on 30th April, 1961. THE petitioner firm applied for the renewal of the lease. THE Government of Rajasthan did not grant a renewal of the lease but granted a fresh lease for 30 sq. miles area in three blocks of 10 sq. miles each on a dead rent of Rs. 2,00,000/- per annum for a period of 5 years with effect from 1st May, 1961 to 30th April, 1966, under Government orders dated 30th May, 1961 (Annexure A ). It may be conveniently pointed out here that the order of the Government clearly contemplated the execution of proper agreement of lease and provided "that the order sanctioning lease shall stand revoked without notice if the grantee did not execute a proper agreement within two months from the date of the issue of the order. " After stating the facts referred to above, the petitioner made averments (a) Of its having "invested lacs of rupees in the development and installation of the machinery and the office etc. on these mines; (b) the petitioner's excavated stone worth lacks of rupees lying on the spot; (c) mining work remaining closed during rainy season; (d) the petitioner having made representation to the Government for the reduction of the dead rent and royalty and the rejection of the representation by the Government ; (e) the Government having despatched a 30 days notice to the petitioner requiring him to execute the lease agreement as well as to pay all Government dues upto date with interest failing which the lease would be cancelled ; (f) the Government having despatched a further notice dated 4th July, 1963, requiring the firm to clear Government dues and to execute the lease agreement and to erect permanent boundary pillars on the boundary of the area of 30 miles within a week, and threatening cancellation of the lease in default ; and (g) lack of service of both these notices on the petitioner and the petitioner having "had no occasion to remedy or comply with them" and then proceed to state ""that the Assistant Secretary to the Government of Rajasthan by his order dated 6th August, 1963, informed the petitioner-firm that as the petitioner-firm had failed (i) to execute the lease agreement, (ii) to pay the Government dues on account of dead rent and interest for late payments, and (iii) to erect permanent pillars on the corners of this lease area of 30 Sq. miles in spite of the issue of notices to the petitioner's firm under Rules 17 (21) and 1 7 (22) of the Rajasthan Miner Mineral Concession Rules, 1959 (hereinafter to be referred to as the Rules, the said mining lease was cancelled with immediate effect and the dues were ordered to be recovered under the Land Revenue Act and the area was declared free from the re-grant at an early date " The petitioner further stated that after the cancellation of the lease the Mining Engineer, Kotah, on behalf of the Government, reauctioned the lease for about Rs. 3,92,000/- per annum in 9 pieces in the name of different persons and approached the Government for sanction of the auctions. The petitioner expresses its dissatisfaction with the order cancelling the lease and the action taken for re-auction. The petitioner has enumerated various grounds in paras 5 (a) to 5 (g) in about 9 typed pages. These grounds, it may be incidentally pointed out, have not been placed in a proper logical order and contain numerous repetitions. Considering, however, the arguments addressed at the Bar, it is unnecessary to summarise these grounds and it will be sufficient to indicate the petitioner's case as finally developed during the time of the hearing of the arguments. (1-A) As regards the non-execution and non-registration of the deed of lease, the petitioner's case is that it is not responsible for any fault or delay for the non-execution of the lease. Its further case is that the Government itself deferred the execution of the lease deed on account of the pendency of the representation of the petitioner regarding the reduction of the royalty and dead rent which, according to the petitioner, were arbitrarily enhanced by the action of the Government in refusing to renew the lease and granting a lease for the portion of the area. The petitioner in this connection submitted that the notices dated 23rd May, 1963, and 4th July, 1963, requiring it to execute the lease deed were not received by it and, consequently, no steps could be taken by it for executing the lease. (B) Alternatively, the petitioner's case is that even in the absence of a registered deed of lease the petitioner acquired rights as lessee by its commencing the operation of the lease in pursuance of the order of the Government dated 30th May, 1961, and the Government Officers having recognised the status of the petitioner as lessee and having accepted the dead rent and royalty. The rights thus created, according to the petitioner, could not be affected by the absence of the formal execution of the lease deed. (2) As regards the non-payment of the amount of dead rent and royalty, the petitioner's case put in its own words is as follows - "the petitioner's machinery and stock worth more than 10 lacs are lying on the spot and the amount of Rs. 50,000/- of the quarterly instalment could have been immediately paid to the Government if the petitioner firm would have been served with the notice and at any rate the amount of Rs. 35,000/-, the petitioner's deposit could have been adjusted by the Government and the petitioner would have immediately deposited a sum of Rs. 15,000/- (due after adjustment of the petitioner's deposit amount with the Government) or the full amount of Rs. 50,000/- could have been deposited immediately and therefore the petitioner's lease has wrongly been cancelled. " Even at the cost of repetition it may be stated here that the petitioner denied the receipt of the notices dated 23rd May, 1963, and 4th July, 1963, which called upon the petitioner not only to execute the lease but also to pay the arrears of the dead rent. (3) As regards the non-erection of the boundary pillars, the petitioner's case is that the boundary pillars stood erected from the time of the earlier leases. It was further contended that the earlier notice dated 23rd May, 1963, did not even contain a direction for the erection of the boundary pillars and that the second notice dated 4th July, 1963, did not give sufficient time. This point was taken alternative to the point that the petitioner did not receive any of the notices. The petitioner took some general grounds challenging cancellation of the lease. It is contended that the lease having not been executed the Rules could not govern the petitioner's case and that the petitioner's lease must be governed by the provision of sec. 10 (5, Transfer of Property Act, and the petitioner's lease being for manufacturing purposes six month's notice was necessary for the determination of the lease. It is also contended that Rule 17 (21) and (22) of the Rules are directory in nature and non-compliance thereof did not justify the cancellation of the lease. It was also added that the Government also did not act in strict compliance with the provisions of Rule 17 (21) and (22) of the Rules. 4. The writ application has been strongly opposed by the State. The allegation of the petitioner that he was not responsible for the non-execution of the lease deed and that the Government deferred the question of the execution of the lease deed was categorically denied. It was submitted that the petitioner should have executed the lease deed within two months of the receipt of the communication of the Government sanction. The petitioner failed to execute the said deed though extensions for the same were granted from time to time. Dealing with the petitioner's suggestion that the execution of the lease deed was withheld on account of the pendency of its representation for reduction of the dead rent and royalty, it was averred that realising its own default in the matter the petitioner for the first time, on 6. 2. 1962, made a representation to the State Government praying therein that the annual dead rent of Rs. 2,00,000/- and the rate of royalty at 40 n. p. per Cft. be suitably reduced. It was added that it was never the case of the petitioner that its previous lease should have been renewed and that it was entitled to its renewal. The State Government considered the representation of the petitioner and after hearing it finally decided the matter by its order dated 23. 5. 63 and directed the petitioner to execute the lease within 30 days of the receipt of the aforesaid order, failing which it was clearly impressed upon the petitioner that the mining lease granted to it would be cancelled forthwith. It was further stated that the aforesaid order was duly conveyed to the petitioner on 25. 5. 1963. The State produced on record a certified copy of the postal acknowledgement evidencing the receipt of the notice. It was also added that the second notice was also properly communicated to the petitioner. As regards the petitioner's claim that it acquired the lessee's right even in the absence of a registered lease deed, the State's reply is that the petitioner acquired no legal enforceable right which could have come into existence only under a proper formal agreement executed in accordance with Art. 299 of the Constitution and R. 18 read with Schedule IV of the Rules. Reliance was also placed upon the order of sanction specifically providing that "this order sanctioning lease shall stand revoked without notice if the grantee did not execute a proper agreement within two months from the date of isw of this order. " It was pointed out that the recognition of the status of the petitioner as a lessee by the officers of the Government cannot confer any legal rights upon the lessee. With regard to the non-payment of the arrears of dead rent, the State's reply is that the Government dues which fell in arrears against the petitioner at the time when the first notice dated 23rd May, 1963, was given amounted to Rs. 1,04,976. 18 np. The sum of Rs. 35,000/- deposited by the petitioner in lieu of security deposit could not have been adjusted against the dues which had already fallen due against him. Further the deposit of Rs. 35,000/- was wholly inadequate to meet the demand. The State also submitted that after the notice dated 23rd May, 1963, the petitioner deposited part payment in the Treasury. The State claimed a sum of Rs. 65,934. 58 np. and interest upto the date of dispossession. The other grounds relied upon by the State for dismissing the writ application may also be referred to. The State's case is that after cancelling the lease in favour of the petitioner the State took over possession of the lease-area on 21. 8. 1963. After taking over the possession the State divided the said area in nine blocks and after making full compliance of R. 53 of the Rules, auctioned the said nine blocks to nine different persons on 4th and 5th of November, 1963, for a sum of Rs. 3,91,851/- and odd. The highest bids given by the various persons were accepted by the State except in case of one person whose bid being low was rejected. The bidders also made deposits of 1/4th of their bids amounting to Rs. 97,965/ -. It is submitted that the State issued a notification published in the Government Gazette dated 19th September, 1963, advertising the auction of the area to be leased and fixed 4th and 5th November, 1963, for auction. The petitioner in spite of constructive knowledge remained silent and took no steps. The petitioner approached only after the bids of other persons had been accepted. Evidently, according to the State, the rights of the 3rd parties have been created and the petitioner is not entitled to any relief in the exercise of extraordinary jurisdiction in view of its laches and omissions. It was added that the petitioner has not and could not claim relief of possession in the writ" application as the relief for possession can be appropriately claimed in a regular civil suit. The writ petition according to the State, deserves to be disallowed on this ground also. We have heard Mr. Tiwari for the petitioner and the learned Government Advocate for the State and have given our careful consideration to the arguments addressed on either side. Taking up the questions of fact first, we may at the outset mention that there are two questions of fact on which controversy has been joined - (1) Whether the State deferred the execution of the lease and the petitioner is not liable for omission to execute the lease deed? (2) Whether the petitioner did not receive notices dated 23rd May, 1963, and 4th July, 1963? The State has categorically denied the statements of fact made by the petitioner. Now, in connection with exercise of extraordinary jurisdiction, it has been an accepted practice not to permit elaborate enquiry into disputed questions of fact and to determine them ; more so, in cases where a party can resort to the remedy by way of a suit. Broadly examining on the materials as they stand, we have also no hesitation in deciding the questions of fact in favour of the State for the purpose of this writ application. The initial order sanctioning the lease made it clear that the grantee was required to execute the lease within two months of the order of sanction. There is no material on record to justify an inference that the State desired the postponement of the execution of the lease deed on account of the pendency of any representation by the petitioner. The two notices issued by the State clearly indicate the State's anxiety to get a formal deed of lease executed. In this connection the petitioner's stand that it did not receive any of the two notices cannot be accepted. So far as the first notice is concerned, the State has brought on record the postal acknowledgement receipt evidencing the receipt of the notice by the petitioner. The second notice was also sent under a registered post and it is not understandable why this notice also could not have reached the petitioner. It may also be significantly pointed out that the non-receipt of the notices does not in any way relieve the petitioner of its responsibility to execute the lease on to obtain an adjournment for the purpose. In our opinion, the petitioner has failed to prove that he was not responsible for the non-execution of the lease and that he did not receive the notices of the State. This now brings us to the question of law. The learned counsel for the petitioners referred to the provisions of the Transfer of Property Act and cited some cases to show that the rights of a lessee can come into existence even in the absence of a formal deed of lease or the absence of registration. We consider it unnecessary to refer to those cases as the cases were decided on their own facts and the circumstances and cannot be interpreted to lay down any principle in the abstract, as to when the rights of a lessee can come into operation without a formal deed. The decision of the present case must depend upon the nature of the agreement between the parties and the interpretation of Art. 299 of the Constitution and the relevant provisions of the Rules. The order of sanction, we may point out, is very specific and makes it clear that a formal deed of lease was considered necessary by the parties for bringing about the relation of lessee and lessor between the parties. The Rules also clearly bring out the need of a formal deed before the creation of a right of lessor and lessee. R. 18 of the Rules provides that "where a lease has been granted under R. 11 of the formal lease in form given in Schedule IV shall be executed within one month from the date of receipt of the sanction by the applicant and if no such formal lease is executed within the aforesaid period, the order granting the lease shall be deemed to have been revoked. " R. 19 further makes it clear that "the currency of lease shall be from the date of execution of the lease agreement unless otherwise stated. " R. 1 7 prescribes a number of conditions and directs that they shall be included in every mining lease and if they are not so included, shall be deemed to have been included therein. A proper consideration of the scheme of the Rules warrants the inference that formal deed of lease is necessary for the grant of a lease. Apart from the agreement between the parties and the rules a formal deed of lease is obligatory in view of the provisions of Art. 299 of the Constitution which provides that all contracts made in the exercise of the executive power of the State shall be expressed to be made by the Governor and that all such contracts shall be executed on behalf of the Governor by such persons and in such manner as he may direct or authorise. That these provisions are of mandatory nature and must be complied with for a valid contract, stands concluded by a judgment of their Lordships of the Supreme Court in Bhikraj Jaipuria vs. Union of India (1 ). Although in that case sec. 175 of the Government of India Act, 1935, prescribing the mode in which the contracts on behalf of the Government were to be executed, came up for interpretation but the observations made therein apply equally to the interpretation of Arc. 299 of the Constitution. After referring to the principles governing the determination of a question whether a particular provision should be considered mandatory or directory, their Lordships observed as follows - "it is clear that the Parliament intended in enacting the provision contained in sec. 175 (3) which is similar to Art. 299 of the Constitution that the state should not be saddled with liability for unauthorised contracts and with that object provided that the contracts must show on their face that they are made on behalf of the State i. e. by the Head of the State and executed on his behalf and in the manner prescribed by the person authorised. The provision, it appears, is enacted in the public interest, and invests public servants with authority to bind the State by contractual obligations incurred for the purposes of the State. It is in the interest of the public that the question whether a binding contract has been made between the State and a private individual should not be left open to dispute and litigation; and that is why the legislature appears to have made a provision that the contract must be in writing and must on its face show that it is executed for and on behalf of the head of the State and in the manner prescribed. The whole aim and object of the legislature in conferring powers upon the head of the State would be defeated if in the case of a contract which is in form ambiguous, disputes are permitted to be raised whether the contract was intended to be made for and on behalf of the State or on behalf of the person making the contract. This consideration by itself would be sufficient to imply a prohibition against a contract being effectively made otherwise than in the manner prescribed. It is true that in some cases, hardship may result to a person not conversant with the law who enters into a contract in a form other than the one prescribed by law. It also happens that the Government contracts are sometimes made in disregard of the forms prescribed; but that would not in our judgment be a ground for holding that departure from a provision which is mandatory and at the same time salutary may be permitted. " At a later stage their Lordships further observed - "in any event, inadvertence of an officer of the State executing a contract in manner violative of the express statutory provision, the other contracting party acquiescing in such violation out of ignorance or negligence will not justify the court in not giving effect to the intention of the legislature, the provision having been made in the interest of the public. " On the principle laid down in the above judgment the petitioner did not acquire any legal and enforceable right as a lessee, and the ad hoc and unauthorised recognition of his right as a lessee by the officers of the Government be relied upon by him. To us, the position is perfectly clear that the petitioner has no legal and enforceable right to sustain the present writ application. The writ application deserves to be dismissed on this ground. However, as some more points were argued before us we also consider it proper to deal with them. It was contended in the first instance that the later portion of Rule 18 of the Rules providing that "if no such formal lease is executed within the aforesaid period, the order granting the lease shall be deemed to have been revoked" is not attracted to the present case. It was pointed out that under the proviso to Rule 18 the State Government or an officer authorised by the State Government to grant lease in its behalf may permit the execution of the formal deed within a reasonable time after the expiry of the prescribed period of one month on being satisfied that the lessee was not responsible for the delay in the execution of the formal deed and that the proviso does not further provide that in case of an omission to execute the lease within the extended period the order granting the lease can be revoked. On these premises, it was argued that the State Government having in the initial order prescribed two months time for the execution of the lease and having subsequently extended the period for the execution of the lease, it cannot avail of Rule 18 for treating the order granting lease as revoked. We are wholly unable to agree with the above interpretation of Rule 18 and its proviso. On a proper interpretation of the rule and the proviso the correct legal position is that by an extension of time granted another time limit for the execution of the lease is substituted for the original time limit and the penal consequences operating in case of an omission stand postponed upto the new time limit. The legislature in making the Rules evidently could not have intended to lay down that after once the time limit is extended it cannot resort to penal consequences to secure the execution of the lease. The point sought to be made by Mr. Tiwari, in our opinion, has no force. Now, taking up the question of non-payment of the arrears of dead rent, it may be stated at the beginning that the agreement itself did not specify the mode of payment of the dead rent but sub-rule (3) of Rule 17, which should govern the present case, provides that the lessee shall pay dead rent in quarterly instalments in advance. Consequently, the petitioner was liable to make quarterly payments of Rs. 50,000/- each on 1st of May, 1st of August, 1st of November and 1st of February, for the four quarters, namely, May to July, August to October, November to January and February to April. At the time when the State issued the first notice on 23rd of May, 1963 the petitioner undoubtedly was in arrears at least in respect of the instalments payable on 1st February and 1st of May, for the quarters February to April and May to July, The petitioner's contention that it had ample properties and was in a position to make the payment and could have made payment, if properly demanded, and that its deposit could have been adjusted towards the demand, are in our opinion, wholly irrelevant and besides the point, and they cannot undo the default which the petitioner made in the payment of the dead rent. Rule 17 sub-rule (21) which deals with the determination of the lease in case of default of payment of dead rent reads as follows - "the Government shall have the right to determine the lease after serving a notice on the lessee to pay the dues within 30 days from the date of receipt of notice if the dead rent or surface rent reserved or made payable by the lessee is not paid within 15 days next after the date fixed in the lease for payment of the same. Government may also at any time after serving the aforesaid notice enter upon the said premises and distrain all or any of the minerals or movable property therein and may carry away, detain or order the sale of the property so distrained, or so much of it as will suffice for the satisfaction of the rent or royalty due and all costs and expenses occasioned by the non-payment thereof. " It is clear that after the expiry of 15 days next after the date fixed in the lease for payment of the dead rent, the Government can serve a 30 days notice upon the lessee and thereafter the Government have the right to determine the lease. We have no doubt that the Government's notice dated 23rd of May, 1963, was issued after the expiry of 15 days after the date of payment fixed for that purpose and that it gave the petitioner 30 days notice and the Government determined lease in the month of August after waiting for a sufficiently long time. The action of the Government is fully justified on the language of Rule 21 of the Rules and we do not find that there has been any non-compliance by the Government of the provisions of sub-rule (21) of Rule 17 of the Rules. Mr. Tiwari emphasised the later portion of the sub-rule (21) of Rule 17 which enables the Government to enter upon the premises and distrain all or any property therein and to carry away, detain or order the sale of the property so distrained, and contended that the Government having entered into the premises could not determine the lease. We do not find any substance in this contention. The later portion of the rule empowers the Government to take steps for the recovery of the dead rent but cannot be interpreted to prejudicially affect the right of the Government to determine the lease in the manner provided by the earlier part of the rules. Mr. Tiwari also made a point that the notice dated 23rd of May, 1963 even though held to have been served on the petitioner, did not remain an effective notice as it was Waived by the subsequent notice dated 4th of July, 1963. He referred to certain provisions of the Transfer of Property Act in this behalf. The provisions of the Transfer of Property Act are not directly relevant in considering the petitioner's lease which is to be governed by the provisions of the Rules. Unlike the provisions of the Transfer of Property Act sub-rule (21) of R. 17 does not prescribe in detail the mode and the manner of the determination of the lease. On the other hand, sub-rule (21) of R. 17 gives the right to the Government to determine the lease on satisfying certain conditions and the Government after acquiring the right can enforce it in such manner as it thinks fit. If the Government issued a second notice it would be a serious question of mixed law and fact whether it would necessarily amount to a waiver of the first notice and adversely affect the right of the Government to determine the lease under sub-rule (21 ). In any case, it seems to us that even assuming that the second notice amounted to a waiver of the first, it is an undeniable fact that the petitioner failed to execute the requisite agreement within a reasonable time thereof, nay, altogether until the date of the present with applica-tion, and his failure to do so would have the effect of revocation or termination of his lease under the rules and the petitioner has no satisfactory answer to make against this position. As for the third ground relied upon by the State, namely, the non-erection of the boundary pillars, the petitioner's case is that the boundary pillars had already been erected, that the first notice dated 23rd of May, 1963 did not contain any direction for the erection of the boundary pillars and that the second notice of 4th. July, 1963, was not in accordance with the requirements of sub-rule (22) of R. 17 of the Rules. The learned Government Advocate conceded that the case of the Government with regard to this ground is not free from infirmities. He, therefore, made no submission in this behalf but contended that the cancellation or determination of the lease on being justified on the first two grounds, we need not consider this ground. We accordingly do not examine the merits of this ground. We, however, observe that the cancellation of the lease on the earlier two grounds was correct in law and that the non-availability of this ground to the State does not in any manner affect the order of cancellation of lease, Lastly, we may also point out that the petitioner has been guilty of laches and delay in invoking our jurisdiction. The State re-entered into the possession of the mining area on 21st of August, 1963, and this position cannot be seriously challenged. The State then published a notification in the gazette dated 19. 9. 1963 advertising the auction of the mining area and fixed 4th and 5th November, 1963, as the dates of the auction. The petitioner must have acquired knowledge of the action of the Govt. in the ordinary course of business. At any rate, the petitioner must be deemed to have constructive knowledge of the Government notification. In coming to the conclusion as to the knowledge of the petitioner, we have also relied upon the fact that the petitioner has not given details as to how and when he came to know of the action taken by the State for auctioning the mining area. The mining area was divided into 9 blocks and the auction was completed on 5th of November, 1963. Bids of as many as 8 persons had been accepted by the State. Third parties have intervened in the matter though what their precise rights are, it is not for us to determine in this proceeding. Indeed, some of them have put in applications in this Court for being impleaded as parties. We have not felt it necessary to allow them to be impleaded in view of the conclusion to which we have come. The petitioner itself is to blame for all these complications on account of its laches and delay. This ground also dissuades us from exercising our extraordinary jurisdiction. For the reasons mentioned above, we do not find any force in this writ application and it is consequently hereby dismissed with costs. . ;