SANKARA MINING SYNDICATE LTD BY ITS MANAGING AGENT RPATTABHIRAMA REDDI Vs. SECRATERY OF STATE FOR INDIA IN COUNCIL REPRESENTED BY THE COLLECTOR OF NELLOR

JUDGEMENT

(1.) This appeal arises out of a suit filed in the Court of the Subordinate Judge of Nellore by the appellant against the Secretary of State for India in Council (the first respondent) and Yettigadda Audemma (the second respondent), for a declaration that an order of the Local Government granting a mining lease to Yettigadda Audemma is illegal and for a decree for specific performance of a contract which he alleged had been entered into between him and the Local Government for a lease of the area in suit. In 1903 the Local Government granted a mining lease of the area known as Survey No. 499 to one R.V. Kuppuswami Aiyar. The lessee subsequently transferred this lease to the appellant company. In 1904 the Local Government granted a mining lease in respect of the area known as Survey No. 500 to Kalappa Chetti, the husband of the second respondent. Kalappa Chetti is now dead and the lease of this area has vested in the second respondent. From the second respondent's area a strip of land three furlongs in length and 133 feet in breadth, lying on the boundary of Survey No. 499, was excluded from, Kalappa Chetti's lease. This area has been referred to as the " margin " and I will so refer to it in this judgment. The object in reserving the margin was to prevent disputes between the two lessees. On the 5 August, 1923, the appellant company applied to the Collector for a lease of the margin. A similar application was filed by the second respondent on the 4 September, 1923. The Collector considered both the petitions and by an order dated the 1st October, 1923, rejected them as he was of the opinion that it was not desirable to grant a lease of the margin to either of them. The second respondent appealed against this order to the Board of Revenue, which confirmed the Collector's order on the 8 November, 1924. The second respondent then preferred an appeal to the Local Government, which by an order dated the 31 July, 1925, granted her petition. The appellant company was dissatisfied with this decision and applied to the Local Government to reconsider it and to grant the area to the appellant company. The Local Government did consider the matter and decided to cancel the lease of the margin to the second respondent on the ground that its previous order was ultra vires and had been passed without full knowledge of the fact that the second respondent, or her predecessors in title, had undermined the margin of the land to a considerable extent and had extracted mica therefrom. The Local Government left it to the Collector to determine whether any portion of the margin should be leased and, if so, to whom.

(2.) On the 15 March, 1926, the second respondent filed another petition asking that a lease of the margin be granted to her, and two days later the appellant company applied. The Sub-Collector thereupon held an inquiry into the matter and found that there had in fact been encroachment by the second respondent after the Collector's order of the 1 October, 1923. He was, however, unable to ascertain the extent of the encroachment that had taken place and therefore recommended that the Collector should allot a moiety of the margin to each of the petitioners, leaving a strip of 10 feet in breadth between the two holdings. The Collector accepted this recommendation, but the parties were dissatisfied with it and further appeals were preferred to the Board of Revenue. By an order dated the 7 February, 1927, the Board of Revenue reversed the Collector's order and directed that neither party should be given any portion of the margin. The appellant company appealed against the Board's order to the Local Government, which by an order dated the 7 May, 1927, directed that the margin should be given to the. appellant company after the reservation of a strip of five links lying on the second respondent's boundary. The Local Government considered that the second respondent had forfeited any claim to consideration.

(3.) In pursuance of this direction of the Local Government, the Collector on the 27 March, 1927, passed a formal order directing that the margin originally excluded from Survey No. 500 should be assigned to the appellant company, after reserving a strip of five links as suggested in the order of the Local Government. The order of the Collector was communicated to the appellant company on the 10 June, 1927, and the appellant company was required to deposit in the Treasury a sum of Rs. 3 as a sketch fee and Rs. 100 by way of security deposit. Before the order of the Collector of the 27 March, 1927, could be complied with the second respondent appealed to the Government of India and asked the Local Government for a stay of all proceedings pending the receipt of the order of the Government of India. The stay was granted on the 20 July, 1927. The orders of the Government of India were communicated to the Board of Revenue in a letter dated the 14 June 1928. In this letter the Government of India expressed the opinion that as the power to grant mining leases had been delegated to the Board of Revenue, the Local Government could not interfere with the Board's orders so long as the Board had acted, whether by granting a lease or refusing to grant a lease, and that the Local Government could not direct the Board to grant a mining lease to a particular person. All that the Local Government could do was to give a direction to the Board of Revenue that a particular area should be assigned on a mining lease. In view of this decision the order passed by the Local Government directing the Board of Revenue to assign to the appellant company the area was ultra vires and was accordingly cancelled. In accordance with this order of the Government of India the Board of Revenue on the 11 October, 1928, granted a lease of the margin to the second respondent, leaving a strip of five links as visible boundary between the two areas. On the 4 December, 1928, a formal lease of this area was granted to the 2nd respondent. The present suit was filed on the 11 October, 1928, for a decree cancelling the lease to the 2nd respondent and granting one to the appellant company. The trial Court found against the appellant company on all of its contentions and dismissed, the suit.