SERA JUDDIN COMPANY Vs. UNION OF INDIA

JUDGEMENT

(1.) Messrs Serajuddin and Company petitioner No. 1, a partnership firm carrying on business at Calcutta, and its partner Mohammad Serajuddin petitioner No. 2, have bymeans of this petition under Articles 226 and 227 of the Constitution of India assailed the validity of the order dated 25th August 1962 which the Central Government rejected the application for revision filed by the petitioner-firm under rule 54 of the Mineral Concession Rules, 1960 (here- inafter referred to as the 1960 Rules). The respondents to the petition are the Union of India, Under Secretary to the Government of India, Ministry of Mines and Fuel, and the State of Orissa.

(2.) The brief facts of the case are that the petitioner-firm as the holder of a certificate of approval presented application dated 1st February 1951 before the Collector of Keonjhar, Orissa State, under rule 14 of the Mineral Concession Rules, 1949 (hereinafter referred to as the 1949 Rules) for prospecting licence over an area of seven square miles in Champua Subdivision of Keonjhar district Orissa). Deposits ofRs.90.00andRs.lO.00 were also made by the petitioners in this connection and after some correspondence the petitioner-firm intimated on 22nd December 1957 that the application for prospecting licence should be treated in respect of Manganese and Iron Ore minerals. According to 1949 Rules, if the State Government failed to dispose of an application for grant or renewal of prospecting licence within nine months the application was to be deemed to have been rejected. As the Government of Orissa failed to dispose of the application of the petitioner-firm for prospecting licence, the petitionerfirm filed in April 1958 an application for review to the Central Government under rule 57 of the 1949 Rules on the basis that the petitioner-firm's application for licence should be deemed to have been refused by the State Government. On 23rd January 1962 the petitioner-firm was informed by the Deputy Secretary to the Government of India, Ministry of Steel, Mines and Fuel, that the petitioner-firm's review application had been allowed to the extent that the State Government had been directed to dispose of the petitioner-firms' application dated 1st February 1951 for grant of prospecting licence before 31st March 1962. On 13th Mach 1962, it is stated, copy of the following order was sent to the petitioner-firm :-

(3.) Mr. Chatterjee on behalf of the petitioners has, at the outset, argued that it was for the Government of Orissa to decide whether the application of the petitioners for grant of a prospecting licence should be accepted or not and the Central Government was not justified in issuing a directive to the State Government that no mineral concession be granted to any private paity. .It is pointed out that the State Government had practically decided to grant the licence to the patitioner firm in an area of five square miles. An intimation to that effect was sent by the Secretary to the State Government to Dr. (Mrs.) Sarojini Pradhan in letter dated 5thJanuary 1962 (Annexure B). The State Government, however, declined to grant the licence because of the directive. The effect of the aforesaid, directive, it is contended, was to debar the State Government from independently applying its mind in deciding the application of the petitioner for grant of a prospecting licence. Reliance in this connection is placed upon Commissioner of Police, Bombay v. Gordhandas Bhanj. In this connection I find that section 5 of the Mines and Minerals (Regulation and Development) Act, 1957 (67 of 1957) contains the restrictions on the grant of a prospecting licence. According to sub-section (2) of that section except with the previous approval of the Central Government no prospecting - licence or mining lease shall be granted as respects any mineral specified in the First Schedule. Iron ore and manganese ore are some of the minerals which have been specified in the First Schedule. As the application of the petitioners for grant of prospecting licence was in respect of manganese and iron ores, it is obvious that the Government of Orissa could not grant that application without the approval of the Central Government. The Central Government was well within its rights to accord or with hold its approval, and the order contained in letter dated 13th March 1962 shows- that the Central Government withheld its approval because it was of the view that the area was likely to be suitable for State exploitation. As thequestion of according or withholding approval for grant of prospecting licence for manganese and iron ores was essentially for the CentralGovernment to decide, it cannot be said that the Central Government. unduly fettered or encroached upon the discretion of the State Government by issuing the directive that no mineral concession be granted to' any private party. The said minerals, it may be stated, belong to the