| Citation | 2023 SCC online SC 898 |
| Date of Judgment | 1st August 2023 |
| Court | Supreme Court of India |
| Case Type | Civil Appeal No.1162-1171/2016 |
| Appellant | State of Rajasthan |
| Respondent | Sharwan Kumar Kumawat |
| Bench | A.S. Bopanna and M.M. Sundresh |
| Referred | Rule 4,7,65A, of Rajasthan Minor Mineral Concession Rules, 1986 |
FACTS OF THE CASE
In the matter of leasing out minor minerals, the Appellants invited applications through a Notification dated 23.05.2003, receiving numerous applications from interested parties. Later, a Notification dated 24.04.2007 was issued, rejecting applications for four villages concerning sandstone and masonry stone, citing Rule 65A of the Rules. Some applicants filed writ petitions before the High Court of Rajasthan, which were allowed, and the court directed the Appellants to reconsider their applications in accordance with the law, quashing the Notification dated 24.04.2007.
Following the High Court’s orders in 2009, amendments were made to the Rules through a Notification dated 28.01.2011. Subsequently, a Government Order on 16.11.2011 facilitated relief to those who approached the High Court, and another Government Order on 28.11.2011 required royalty payment by masonry stone applicants before granting any lease. Certain other applicants contested these orders, claiming similar benefits should be extended to them
On 13.03.2013, the High Court ruled that the earlier decision should be considered as a decision in rem, with all pending applications to be assessed according to the amendment made through Notification dated 28.01.2011 to Rule 4 and 7. The State was instructed to delineate, demarcate, and specify mining areas for sandstone and masonry stone within six months, followed by re-notification of such areas for grant of mining leases. The applicants were allowed to revive their applications or submit new ones based on the re-notification.
It was further directed that no mining leases for sandstone and masonry stone should be granted based on the impugned orders of 16/11/2011 and 28/11/2011 until all applications were decided as per the court’s directions. The State was given one year to decide all applications, using either a lottery or auction system, as deemed appropriate, but not on a ‘first come first served’ basis.
In the second round of litigation, the High Court did not grant the relief of ‘first-come first-serve’ basis for the grant of mining leases but instead upheld the amended rule. Responding to the orders passed by the High Court, a Notification was issued on 03.04.2013, introducing the impugned amendments. All applications were declared rejected, except for 50% of the leases, which were to be granted through auction. Some categories were entitled to preference.
The Division Bench of the High Court declared the amendments illegal on three grounds: the applicants were not heard, their applications should be revived based on legitimate expectation, and their rights vested in them.
ISSUE
In all these appeals the Appellants seek to overturn the decision of the Division Bench of the Rajasthan High Court, Jaipur Bench declaring sub-rule (10) of Rule 4 and sub-rule (3) of Rule 7 of the Rajasthan Minor Mineral Concession Rules, 1986 as unconstitutional.
ARGUMENTS
In the case, Dr. Singhvi, the senior advocate representing the appellants, argued that the High Court’s recent order failed to recognize the distinction between previous judgments, which specifically pertained to sandstone and minor minerals in four districts, and the newly amended Rules meant to govern all minor minerals. He asserted that the High Court’s finding that invalidated the Rules altogether was factually incorrect, as the earlier decisions were duly followed. Dr. Singhvi emphasized that mining is not a fundamental right, and thus, the respondents do not have an inherent preferential right or vested interest in mining activities.
Furthermore, Dr. Singhvi contended that the High Court made an error by considering the principles of Legitimate Expectation and Natural Justice in a case involving the introduction of new Rules through substitution. He argued that the impugned orders should be set aside as they obstruct the implementation of the newly amended Rules, which aim to regulate all minor minerals in the State.
On the other hand, representing the respondents, Ms. Shobha Gupta and Ms. Ankita Gupta, the advocates-on-record, argued that the High Court’s decision to uphold the impugned amendments was justified as it prevented an attempt to undermine the earlier court ruling. They stated that there was no valid reason for keeping the applications pending for an extended period when granting leases earlier would have been possible, considering the relatively small size of the mining areas requested by the respondents. According to them, the introduction of the impugned rules appeared to have malicious intent as it hindered the fair consideration of the respondents’ applications
JUDGMENT
The Supreme Court on Tuesday set aside the order of the Rajasthan High Court that declared Rule 4 (10) and Rule 7(3) of the Rajasthan Minor Mineral Concession Rules, 1986 as unconstitutional.
A division bench of Justice A.S. Bopanna and Justice M. M. Sundresh while setting aside the High Court order observed:
“The High Court, in our considered view, has totally misconstrued the issues ignoring the fact that there is a delegation of power to the first appellant [State] which was rightly exercised as conferred under Section 15 of the 1957 Act [Mines and Minerals (Development and Regulation) Act, 1957].”
The Court carefully examined the issue and clarified some crucial aspects regarding the interpretation of these rules. The Court emphasized that the Rules were lawfully introduced under the authority granted by Section 15 of the 1957 Act. It underlined the fact that filing an application for a government land does not create any inherent right or vested interest in obtaining a mining lease. The principle was established in earlier cases, particularly in Monnet Ispat & Energy Ltd. V. Union of India, (2012) 11 SCC 1, where it was held that applicants do not have a fundamental right in mining.
Before the 2011 amendment, Rule 7 of the Rules granted preferential rights to certain applicants based on the timing of their applications, with some exceptions for Government Companies or Corporations. The Court clarified that this provision did not prohibit the State from making general amendments to the Rules. Subsequently, after the 2011 amendment, Rule 4(10) was introduced, stating that mining leases on government lands (excluding marble and granite) could not be granted until the area was delineated, and applications would be invited thereafter. Pending applications on the date of the Notification would be dealt with under the prevailing Rules. Rule 7 was further amended, introducing an auction process and clarifying that applications received before 27-01-2011 would be processed under the previous rules.
The Court upheld the validity of the impugned Rules and explained that they served two purposes: continuing the auction process and rejecting all pending applications to create a level playing field. It reaffirmed that when the Government introduces fair play through an auction process, applicants cannot claim entitlement solely based on pending applications. This principle was highlighted in the State of T.N. v. Hind Stone, (1981) 2 SCC 205, where it was established that such rights are non-existent, unenforceable, and not legal.
CONCLUSION
The Supreme Court’s decision clarifies that applicants do not possess inherent rights or vested interests in obtaining mining leases on government land. The State has the authority to introduce fair processes, such as auctions, to ensure equitable treatment for all eligible parties. The ruling reaffirms the legality of the impugned Rules and establishes that the law does not mandate the inclusion of parties’ opinions when making amendments by a competent authority, as long as the amendments are made within the scope of Section 15 of the 1957 Act.
REFERENCES
This Article is written by B S BADRINATH of university law college ,Intern At Legal Vidhiya
