RAMLAL AND SONS Vs. STATE OF RAJASTHAN

JUDGEMENT

(1.) This appeal by special leave is against the judgment of the Division Bench of the Rajasthan High Court by which an appeal against the judgment of a single Bench was summarily rejected.

(2.) In answer to a notification of March 29, 1950 issued by the State of Rajasthan inviting tenders for mining rights for mica on certain terms and conditions, the appellant submitted its tender which was accepted on December 30, 1950 and a notification in that behalf was made by the State Government on Feb 6, 1951 granting the mining lease for mica for block No. 6 (except sidries mine) in Bhilwara District on payment of the tendered amount of Rs. 1,55,000/-. The lease was for a period of 20 years with an option of renewal of the lease for another 20 years as per conditions prescribed in the Mineral Concession Rules, 1949 (briefly the Rules). A premium of Rs. 155,000/- was deposited by the appellant and possession was also handed over to it on March 15, 1951. The area originally was 6021 acres but later on a dam, by the name of Meza Dam, was constructed over some parts of the original area and the appellant was left to work on 2924 acres. It is stated that the appellant spent Rs. 5,65,000/- between 1951 and 1955. It is also common case that no lease was executed within six months of the acceptance of the tender as required. On June 19, 1955, the Director of Mines and Geology, Rajasthan, sent a notice to the appellant intimating that the orders sanctioning the lease stood revoked with effect from June 6, 1955. The appellant was asked by this notice to show cause why further action to take immediate possession of the area should not be taken. It may be noted that in this notice exception was taken for the appellant not executing the lease within the requisite period of six months which, it was mentioned, expired on August 27, 1953. The appellant submitted a review application against the order of the State Government cancelling the mine lease on February 23, 1957. It appears, meanwhile the State Government proposed to grant a lease to the appellant and the latter did not press the review application. Thereafter some correspondence took place between the appellant and the State Government regarding execution of the lease, its terms and conditions and the like. The reference was also made by the appellant to the Central Government on March 12, 1963, to direct the State Government to sanction the lease. On May 15, 1965 the Mining Engineer, Rajasthan, sent a notice to the appellant to deposit the dead rent amounting to Rs. 1,27,616.36 for the period 1-4-1960 to 14-9-1965 on pain of legal action. The appellant preferred a revision application to the Government of India against this order. The Government of India by its order of March 19, 1966, set aside the order of May 15, 1965, demanding Rs. 1,27,616-36 as dead rent for block No. 6. This order is significant in more than one way. It is clearly stated in the order that the conditions under the Mineral Concession Rules 1949 under which mining or prospecting operation is allowed to be undertaken do not provide for payment of premium by the lessee except with the prior approval of the Central Government . It was also pointed out in the order that no such approval was secured by the State Government before accepting the premium of Rs. 1,55, 000/- from the appellant. It was, therefore, pointed out that the acceptance of the premium was illegal. It was further held that the State Government was entitled to charge only royalty in the present case and it could charge dead rent or royalty, whichever was higher, only after execution of a formal lease.

(3.) Then came the State Governments impugned order of November , 1967, addressed to the appellant. There was reference in the above order to the fact that appellant-