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Tuesday, July 16, 2013

Mining lease - cancellation - When the litigation raised by original lessee ends in abatement, and after giving lease to third party, the legal heirs of original lessee can not claim any rights for renewal of lease or any rights conferred by the virtue of orders of high court which passed infavour of deceased with out knowledge, after the lapse of 14 years and the Delhi Highcourt has no jurisdiction over the mines of M.P. and over the orders of M.P. High court =In view of the aforesaid fact, we hold that after the death of the original lessee, Rajendra Nath Bhaskar, all rights come to an end and the first respondent or any other legal heir(s) were neither entitled to continue with the lease nor entitled for renewal of lease. The Original Lessee died on 7th September, 1982 during the pendency of Miscellaneous Petition No. 805/81 and much before the final order dated 16th July, 1986 passed in the said case by the Madhya Pradesh High Court. In the absence of petition for substitution of legal heirs, the said case got abated. The legal heirs including the first respondent cannot derive the advantage of the order dated 16th July, 1986, which was inadvertently passed by the Madhya Pradesh High Court in absence of knowledge of death of the original petitioner/lessee.= Admittedly, the third party rights were created in the meantime in favour of the Mining Corporation pursuant to the order of Madhya Pradesh High Court dated 16th July, 1986. The order passed by the Madhya Pradesh High Court was not challenged in any appeal.= failed to decide the jurisdiction of the High Court to entertain the appeal against the order passed in favour of the Mining Corporation which was passed pursuant to the direction of the Madhya Pradesh High Court. In this back­ground, it was not desirable for the Delhi High Court to entertain the writ petition. Even though the revisional order was passed by the Central Government, the Delhi High Court ought to have asked the first respondent to move before the Madhya Pradesh High Court for appropriate relief. In view of our findings given in the preceding paragraph, the order dated 21st September, 2010 passed by the Single Judge of the High Court of Delhi and the impugned order dated 20th April, 2011 passed by the Division Bench of the Delhi High Court cannot be upheld. They are accordingly set aside. Both the appeals are allowed but there shall be no order as to costs.

published in http://judis.nic.in/supremecourt/imgs1.aspx?filename=40494
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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Civil Appeal No.   4950    of 2013
(arising out of SLP(C)No.13053 of 2011)
M.P. STATE  MINING  CORPORATION LTD. … APPELLANT
Versus
SANJEEV  BHASKAR & ORS.     … RESPONDENTS
With
Civil Appeal No.  4951   of 2013
(arising out of SLP(C)No.29421 of 2011)
J U D G M E N T
SUDHANSU JYOTI MUKHOPADHAYA, J.
Leave granted. These two appeals are preferred by
the   appellants   M.P.   State   Mining   Corporation   Ltd.
(hereinafter referred to as the “Mining Corporation”)
and the State of Madhya Pradesh (hereinafter referred
to as the “State”)   against the common judgment dated
20th April, 2011 passed by the Division Bench of Delhi
High Court in LPA No. 742 of 2010 with LPA No. 284 of
2011.   By   its   impugned   judgment,   the   Division   Bench
dismissed   the   appeals   preferred   by   the     Mining
Corporation   and   the   State   with   costs   quantified   at
Rs.25,000/­ for each appeal and affirmed the judgment
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dated 21st September, 2010 passed by the learned Single
Judge of Delhi High Court.
2. The factual matrix  of the case is as follows:­
The Government of  Madhya Pradesh on 3rd November,
1966 granted a mining lease over an area of 28.00 acres
in   Village   Kari,   District   Tikamgarh,   (M.P.)   to   one
Rajendra   Nath   Bhaskar   for   extraction   of   Pyrophyllite
and   Diaspore   minerals   under   the     Mines   and   Minerals
(Regulation   and   Development)   Act,   1957   (hereinafter
referred   to   as   “the   Act,   1957”)   read     with   Mineral
Concession  Rules, 1960 (hereinafter referred to as the
“Rules, 1960”) for a period of twenty years commencing
from 3rd November, 1966 to 2nd November, 1986.  
After
about 13 years, a notice dated 18th September, 1979 was
issued to said Rajendra Nath Bhaskar by the Collector,
Tikamgarh   to   show   cause   as   to   why   his   mining   lease
should not be revoked on the ground of certain breaches
committed   by   him   which   were   discovered   during   the
inspection made by the Mining Inspector on 28th   May,
1979.  Rajendra Nath Bhaskar submitted his reply on 3rd
October,   1979   and   denied   the   alleged   breaches.
Thereafter,   by   an   order   dated   5th   April,   1980,
determination   of   the  lease   was   done   by   the   State
Government in accordance with the then Rule 27(5) of
the   Rules,   1960,     on   the   ground   of   contravention   of
Clause(f) and (g) of sub­rule (1) of   Rule 27 of thePage 3
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Rules, 1960.  A Revision  Application was preferred by
Rajendra Nath Bhaskar  to the Central Government under
Rule 54, read with Section 30 of the Act, 1957 which
was ultimately dismissed by an order dated 6th April,
1981.
3. Being   dissatisfied,   Rajendra   Nath   Bhaskar
challenged   the   order   of   determination   and   the   order
passed     in   revision   application     by   filing   Misc.
Petition No. 805 of 1981 before the Madhya Pradesh High
Court. The Division Bench of Madhya Pradesh High Court
by   its   judgment   dated   16th   July,   1986   held   that   the
impugned orders did not disclose the aspects which were
taken into account and accordingly set aside the orders
with direction to the State Government to decide afresh
the   question   of   determination   of   lease   in   accordance
with law.
4.  In   the   meantime   and   before   the   decision   of   the
Madhya   Pradesh   High   Court,   the   original   lessee,
Rajendra Nath Bhaskar died on 7th September, 1982, but
no application for  substitution was filed.  The period
of   lease   also     expired   on   2nd   November,   1986.
Subsequently, the   legal heirs,   Sanjeev   Bhaskar and
others–respondents herein, filed an application on 2nd
September,   1986   before   the   State   Government   praying
therein for  bringing them on record as the legal heirs
and to permit them to carry out the mining operation
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for   the   remaining   period,   which   came   to   6   years,   6
months and 29 days as the lease could not be operated
for the aforesaid remaining period because of illegal
determination of lease,   which had been quashed vide
order   dated   16th     July,   1986   passed   by   the   Madhya
Pradesh   High   Court.   No   action   was   taken   thereon   for
about   four   years.
 The   Collector,   Tikamgarh   issued   a
demand notice on 8th   June, 1990 determining the dead
rent for the period before expiry of the lease deed in
view of audit inspection note.  Subsequently, two other
demand notices were issued on 14th August, 1990 and 8th
December,   1993     which   according   to   the   State,     were
inadvertently sent. The stand of the State Government
was that as per term of the lease, the period of twenty
years expired on 2nd November, 1986 due to efflux of
time. Subsequently, legal heirs of the original lessee
made no application in the prescribed form and in the
manner  for  grant  of mining  lease  either by  way  of  a
fresh grant or by way of   renewal. As the lessee was
not   a   holder   of   the   lease   the   dead   rent   for   the
subsequent   period   could   not   have   been   demanded   and
therefore,   notices   dated   14th   August,   1990   and   8th
December, 1993 were inadvertently sent.
5. The first respondent, one of the legal heirs, made
representations, inter alia, on 28th August, 1996, 14th
April, 1997 and 23rd September, 1997 to allow him to do
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mining for rest of the period of  6 years, 6 months and
29 days but it has not been made clear as to why no
representation was made by legal heirs for more than 10
years after the order of the Madhya Pradesh High Court
passed on 16th July,  1986.
6.Receiving   no   reply,   the   first   respondent   filed   a
contempt   petition   No.   186   of   1998   before   the   Madhya
Pradesh High Court which was dismissed on the ground
of being time barred. 
However, an observation was made
by   Madhya   Pradesh   High   Court   that   it   could  hope  and
trust that the Government would implement   the order
passed in the year 1986, if they had not implemented
the same so far.
7. For the first time, the State Government responded
on 21st April, 1999   declining   to extend the mining
lease.   It was communicated that in view of the order
passed by the High Court on 16th July, 1986, the mining
lease   was   automatically   restored   for   the   remaining
period   upto     2nd   November,   1986.    In   absence  of  any
direction given by the High Court for renewal of lease
and   the   only   direction   being   given   for   the   State
Government   to   decide   afresh   the   question   of
determination of lease of original lessee, no renewal
could be made.
8.   The first respondent on 7th July, 1999,   filed a
Revision   Application   before   the   Central   Government
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under Section 30 of the Act, 1957 read with Rule 55 of
the   Rules,   1960.   During   the   pendency   of   the   said
revision   application,   the   State   Government   granted   a
lease   for   five   hectares   out   of   the   mining   area   in
question   to   the   M.P.   State   Mining   Corporation.     The
Central Government vide order dated 12th August, 1999,
granted an interim stay directed the State Government
not to grant the mining lease to the third party.   The
Mining Corporation filed a Writ Petition No. 3914/1999
before   the   Madhya  Pradesh  High   Court   on   24th   August,
1999   seeking   a   writ   of   mandamus   directing   the
respondents to execute a lease deed for a period of 20
years commencing from the date of execution in terms of
the   grant   made   on   30th     July,   1999.     But   the   first
respondent was not made a party therein.
9. In the said case on 15th September, 1999 , interim
mandamus was issued on the State to execute the mining
lease in   favour   of   the   Mining   Corporation   which   was
executed   on   25th     September,   1999.   According   to
appellants,   the   writ   petition   filed   by   the   Mining
Corporation became infructuous.
10. The   first   respondent   filed   another   Revision
Application on 15th December, 1999, inter alia, praying
for quashing of the grant made on 30th July, 1999 in
favour of the  Mining Corporation.  The first revision
application was dismissed on 7th November, 2001 by thePage 7
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Mines   Tribunal,   which   was   challenged   by   the   first
respondent in Writ Petition (Civil) No. 8033/2002  but
this time before the High Court of Delhi.   The Second
Revision   application   was   dismissed   on   31st   December,
2002,   inter   alia,   on   the   ground   that   the   lease   was
executed in favour of the   Mining Corporation by the
State Government in compliance of  the order dated 15th
September,   1999   of   interim   mandamus   by   the   Madhya
Pradesh   High   Court.     The   said   order   was   assailed   by
first respondent by filing a Writ Petition(Civil) No.
5809/04     before   the   High   Court   of   Delhi.   Both   the
aforesaid   Writ   Petitions   were   heard   by   the   learned
Single   Judge   of     High   Court   of   Delhi   who   by   common
impugned   judgment   dated   21st   September,   2010   allowed
both   the   writ   petitions   filed   by   first   respondent
holding  that   the  grant  could  not   have  been    made   in
favour   of   the   Mining   Corporation   and   that   the   first
respondent   was   entitled   to   the   benefit   of   remaining
expired period of the original lease to begin from the
date the decision was taken by the State Government,
but  subject to the first respondent complying with all
the requirements of the Act and   Rules and any other
applicable   law   and   paying   the   dead   rent   and   other
charges as required by law.  The common order passed in
those   two   writ   petitions   was   upheld   by   the   Division
Bench of Delhi High Court by its common Judgment dated
20th April, 2011.Page 8
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11. Learned   counsel   for   the   State   and   the   Mining
Corporation   assailed   the   impugned   judgment   on   the
following grounds:
(a)  Original   Lessee     Rajendra   Nath
Bhaskar   having   died   on   7th   September,
1982,   the   lease   comes to an end. As
per   Rules,   1960   as   was   prevailing   in
June,   1982,   if     lessee   dies   during   the
continuation   of   the   lease,   a   fresh
application   has   to   be   presented   by   his
heirs   or   legal   representatives   if   they
are   continuing   the     business   of   the
deceased   and   have   the   required
qualification   to   obtain   a   grant   on
account of special reason for grant.   In
absence of any such application filed by
legal heirs for grant of lease in their
favour, they are not entitled for renewal
of   lease     or   to   continue   for   the
remaining period.
(b) The   High   Court   of   Delhi     had   no
jurisdiction   to   interfere   with   the
impugned order of grant passed in favour
of the Mining Corporation, being granted
by   the   State   Government   pursuant   to   thePage 9
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direction   of   the   Madhya   Pradesh   High
Court dated 15th September, 1999.
12. Per Contra, according to first respondent pursuant
to the original order passed by the Madhya Pradesh High
Court dated 16th July, 1986 it was the duty on the part
of the State Government to re­examine and decide the
matter afresh regarding the question of  determination
of the lease.  Admittedly, the State Government did not
proceed to decide the matter afresh.   Therefore, the
first   respondent   was   entitled   for   mining     for   the
remaining period of six years, six months and twenty
nine   days.     Learned   counsel   for   the   respondents
contended  that first respondent, Sanjeev  Bhaskar, son
of     Rajendra   Nath   Bhaskar,   original   lessee   moved   an
application on 2nd September, 1986 for mutating   his
name saying that in view of family settlement his name
be mutated.  He also requested for grant of benefit for
the   period   during   which   mining   was   unlawfully
interrupted.     In   this   background,     the   High   Court
rightly interfered with the order as well as the order
issuing grant in favour of the Mining Corporation which
was   passed   during   the   pendency   of   the   Revision
Application.
13. Further,   according   to   learned   Counsel   for   the
first respondent, part of the cause of action havingPage 10
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taken   place   at   Delhi,   the   orders   in   the   Revision
Applications had been passed by the Central Government,
the Writ Petitions were maintainable before the Delhi
High Court.
14. It is not disputed that much before the decision
of the Madhya Pradesh High Court, the original lessee,
Rajendra Nath Bhaskar died on 7th September, 1982. The
Miscellaneous Petition No. 805/1981 pending before the
Madhya   Pradesh   High   Court   abated   in     absence   of   any
petition for substitution filed by the legal heirs.
15. Further, in the year 1982 when the original lessee
died, there was no provision for orders to continue the
application   for   a   mining   lease.   Legal   heirs/
representatives of the original lessee, if they wanted
to   continue   the   business   or   mining   activity   of   the
deceased and also if they had required qualification,
could at best file an application for grant of fresh
mining   lease.     Admittedly,     after   the   death   of   the
lessee (7th September, 1982), legal heirs including the
first   respondent   never   applied   for   fresh   grant   of
lease.   It has also not been made clear that whether
any one of them have required qualification for grant
of mining lease.
16. In view of the aforesaid fact, we hold that after
the   death   of   the   original   lessee,   Rajendra   Nath
Bhaskar,   all   rights   come   to   an   end   and   the   first
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respondent   or   any   other   legal   heir(s)   were   neither
entitled to continue with the lease nor entitled for
renewal of lease.
17. Similar   issue   fell   for   consideration   before   this
Court in G. Buchivenkata Rao v. Union of India & Ors.,
(1972) 1 SCC 734. In the said  case, this  Court held
as follows:
“14.  It has to  be remembered that, in
order to enable a legal representative
to   continue   a   legal   proceeding,   the
right to sue or to pursue a remedy must
survive   the   death   of   his   predecessor.
In   the   instant   case,   we   have   set   out
provision showing that the rights which
an applicant may have had for the grant
of  a  mining lease, on the strength  of
an   alleged   superior   claim,   cannot   be
separated   from   his   personal
qualifications.   No   provision   has   been
pointed   out   to   us   in   the   rules   for
impleading   an   heir   who   could   continue
the application for a mining lease. The
scheme   under   the   rules   seems   to   be
that,   if   an   applicant   dies,   a   fresh
application has to be presented by his
heirs or legal representatives if they
themselves   desire   to   apply   for   the
grant   of   a   lease.   It   may   be   that   the
heirs   and   legal   representatives,   if
they   are   continuing   the   business   or
industry   of   the   deceased   and   have   the
required   qualifications,   obtain
priority   over   an   earlier   applicant   on
account   of   special   reasons   for   this
preference.   But,   in   each   case,   they
have to apply afresh and set out their
own   qualifications.   It   has   not   been
shown   to   us   that   any   legal
representatives   have   applied   afresh.
The legal representatives only claim to
be   entitled   to   succeed   the   deceasedPage 12
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Buchivenkata   Rao   under   a   will.   The
assumption   underlying   the   application
is that whatever right the deceased may
have had to obtain a lease survived and
vested in the heirs after his death, we
are unable to accept the correctness of
this assumption.
15.  In   support   of   the   contention   on
behalf   of   the   heirs   of   Buchivenkata
Rao,   our   attention   was   drawn   to   the
case   of  Dhani   Devi  v.  Sant   Bihari7
which   related   to   a   right   to   obtain
transfer   of   a   permit   for   a   Motor
Vehicle   under   Section   61,   sub­section
(2) of the  Motor  Vehicles Act.  It was
held   there   that,   in   the   case   of   the
death of an applicant for the grant of
a   permit   in   respect   of   his   motor
vehicle,   the   Regional   Transport
Authority   had   the   power   to   substitute
the person succeeding to the possession
of the vehicle in place of the deceased
applicant. It was routed out there that
the right to the permit was related to
the   possession   of   the   vehicle.
Moreover, there was a rule enabling the
Transport Authorities to substitute the
heir   or   legal   representatives   of   the
deceased.   No   such   rule   applicable   to
the case  of the heirs of  the deceased
Buchivenkata   Rao   has   been   pointed   out
to us. Therefore, we are unable to hold
that   the   heirs,   who   have   been   heard,
had   any   right   to   continue   the   appeal
before us. This feature of the case is
decisive   not   only   on   the   right   to   be
heard on  the fresh ground but also  on
the   right   to   advance   any   argument   in
support of the appeal of the deceased.”
18. After a period of more than 9 years from the death
of original lessee,  Rule 25A was inserted in the RulesPage 13
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1960 by GSR 129(E), dated 20th February, 1991, which
reads as follows:
“25A. Status of the grant on the death
of   applicant   for   mining   lease.­(1)
where an applicant for grant or renewal
of   mining   lease   dies   before   the   order
granting   him   a   mining   lease   or   its
renewal is passed, the application for
the grant or renewal of a mining lease
shall   be   deemed   to   have   been   made   by
his legal representative.
(1.2)In   the   case   of   an   applicant
in   respect   of   whom   an   order
granting   or   renewing   a   mining
lease   is   passed,   but   who   dies
before   the   deed   referred   to   in
sub­rule   (1)   of   rule   31   is
executed,   the   order   shall   be
deemed to have been passed in the
name   of   the   legal   representative
of the deceased.”
19.The aforesaid substituted provision of Section 25A
is not applicable in the present case as it was not a
case of death of the applicant during the pendency of
grant or renewal of mining lease. Further Section 25A
having   inserted   nine   years   after   the   death   of   the
assessee,   the   first   respondent   and   the   other   legal
heirs  cannot derive advantage of the same.
20. The   Original   Lessee   died   on   7th   September,   1982
during   the   pendency   of   Miscellaneous     Petition   No.
805/81 and much before the final order dated 16th July,
1986    passed  in  the  said   case  by   the  Madhya  Pradesh
High Court. In the absence of petition for substitution
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of legal heirs,  the said case got abated.
The legal
heirs including the first respondent cannot derive the
advantage of the order dated 16th July, 1986, which was
inadvertently passed by the Madhya Pradesh High Court
in   absence   of   knowledge   of   death   of   the   original
petitioner/lessee.
21. From the impugned judgment, it is clear that after
1986, the first respondent made representations on 28th
August, 1996, 14th April, 1997 and 23rd November, 1997.
In 1998, a Contempt Application No. 186/98   was filed
by the first respondent which was dismissed for being
barred by time. The first respondent had not explained
the   delay of more than 14 years after the death of
the original lessee and   delay of 10 years after the
order   dated   16th   July,   1986   passed   by   the     Madhya
Pradesh  High   Court   as  to  why   they  did  not  choose   to
move before any Court of Law.
In absence  of  any such
valid   explanation,   we   are   of   the   view   that   the   High
Court ought  to have  dismissed the case on the ground
of delay and latches.
22. Admittedly,   the third party rights were created
in   the   meantime   in   favour   of   the   Mining   Corporation
pursuant   to   the   order   of   Madhya   Pradesh   High   Court
dated 16th  July, 1986. The order passed by the Madhya
Pradesh High Court was not challenged in any appeal.
The   Delhi   High   Court   also   failed   to   notice   thePage 15
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aforesaid fact and
failed to decide the jurisdiction of
the   High   Court   to   entertain   the   appeal   against   the
order passed in favour of the Mining Corporation which
was   passed   pursuant   to   the   direction   of   the   Madhya
Pradesh High Court.   
In this back­ground,   it was not
desirable   for   the   Delhi   High   Court   to   entertain   the
writ   petition.   
Even   though   the   revisional   order   was
passed by the Central Government, the Delhi High Court
ought to have asked the first respondent to move before
the Madhya Pradesh High Court for appropriate relief.
23. In   view   of   our   findings   given   in   the   preceding
paragraph, the order dated  21st September, 2010 passed
by   the Single Judge of the   High Court of Delhi and
the impugned order dated 20th April, 2011 passed   by
the Division Bench of the Delhi High Court cannot be
upheld.     They   are   accordingly   set   aside.     Both   the
appeals are allowed  but there shall be no order as to
costs.
……………………………………………………………………………J.
(T.S.THAKUR)
…………………………………………………………………………J.
(SUDHANSU JYOTI MUKHOPADHAYA)
NEW DELHI,
JULY 2,2013.

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