Holding

Rule 59 applies to the case and the mining lease granted to respondent No. 4 was illegal as it violated Rule 58.

Summary

The appellant, a resident of Bazargaon village in Nagpur district, challenged the grant of a mining lease to respondent No. 4 over land that had been reserved for Nistar (grazing) purposes. The earlier application for a mining lease had been rejected because of this reservation, but the lease was later granted without publishing the required public notice under Rule 58 of the Mineral Concession Rules, 1960. The High Court dismissed the challenge, holding that Rule 59 applied only to land previously reserved for mining purposes. The Supreme Court examined the meaning of the phrase “reserved for any purpose” in Rule 59, noting that an amendment in 1963 removed the words “other than prospecting or mining for minerals,” thereby extending the rule to all reservations. The Court held that Rule 59 indeed covered the present case, the lease was granted illegally in violation of Rule 58, and set aside the High Court’s order, quashing the lease. The State was directed to follow the proper notification procedure before any further grant.

Issues considered

Whether Rule 59 of the Mineral Concession Rules, 1960 applies to land reserved for purposes other than mining, such as Nistar purposes.
Whether the failure to publish a public notice under Rule 58 renders the grant of a mining lease illegal.

Legislation cited

Mineral Concession Rules, 1960s. Rule 21(2), s. Rule 58, s. Rule 59

Subjects

Mineral Concession RulesRule 58Rule 59public notificationmining leasereservation of landpublic interestprocedural complianceCivil AppealMaharashtra

Judgment

A JANAK LAL ·;,,
v.
STATE OF MAHARASHTRA & ORS.

AUGUST 10, 1989

B (LALIT MOHAN SHARMA AND J.S. VERMA, JJ.]
"'J~
).-< ,-
Mineral C-oncession Rules, 1960: Rules 58 & 59--Reserved land
granted for mining without public notification-Validity of.
...
Words and Phrases: 'reserved for any purpose'-Meaning of-
I,
..

Mineral Concession Rules, 1960, Rule 59. ~-
c '
Rule 58 of the Mineral Concession Rules, 1960, which deals with I
availability of areas for regrant of a mining lease, requires a notifica- 1
lion to be published in the offical gazette at least 30 days in advance.
Rule 59 directs the procedure laid down in Rule 58 to be followed in the
D case of any land in respect of which the State Government had refused
to grant a prospeding licence or a mining lease on the ground that it
was required to be reserved for any purpose. The expression "reserved
for any purpose" was earlier followed by the words "other than
prospecting or mining for minerals", which was omitted by an amend-
ment in 1963. 't-
E ~
An application for grant of mining lease in respect of the disputed
area had been rejected earlier on the ground that it was reserved for
some other purpose. Subsequently, however, a mining lease in regard I
to the said area was granted in favour of respondent No. 4. The appel-

-f-'
Iant challenged the allotment on the ground that the procedµre for
J:_-
F settlement as laid down in Rule 59 read with Rule 58 was not followed ..
before the grant. The High Court dismissed that application on the
ground that Rule 59 was confined to cases where earlier reservation was
made for mining purposes.

Allowing the appeal,
G
HELD: I. The grant of mining lease in favour of respondent No.
4 was illegally made in violation of Rule 58 of the Mineral Concession
Rules, 1960. [833E-F]
.
"""
2.1 Rule 59 covered the instant case. Earlier the only category 'f'
H which was excluded from the application of this 'tule was prospecting

830

JI''
JANAK LAL v. STATE OF MAHARASHTRA (SHARMA, J.] 831

or mining leases. The effect of the 1963 amendment is that by omitting
the words "other than prospecting or mining for minerals", prospect· A
ing and mining leases have also been placed in the same position as _the
other cases. The other cases to which the Rule applied earlier have not
thus been excluded. [833E-B)

2.2 It is clearly in the public interest to notify the proposal to B
grant a mining lease. The State and its authorities will, in that case,
itave the choice of selecting the most suitable person by following the
just and equitable criteria hiid down by the Rules. [833D)

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3255
of 1989.
c
From the Judgment and Order dated 29.7.1985 of the Bombay
High Court in W.P. No. 2137of1979.

V.A. Bobde, S.D. Mudaliar and A.G. Ratnaparkhi for the
Appellant. D

S.K. Dholakia, A.S. Bhasme and A.M. Khanwilkar for 'the
Respondents.

For the Respondent No. 4-in person (not present).
E
The Judgment of the Court was delivered by

SHARMA, J. Notice for final disposal of the case was served on
the respondents. Heard the learned counsel for the parties. Special
-t\ leave is granted.
F
2. This case is dependent on the correct meaning and scope of
Rule 59 of the Mineral Concession Rules, 1960 (hereinafter referred to
as the Rules). A certain area in village Bazargaon, District Nagpur was
reserved for Nistar purposes (that is, for grazing of cattle etc.). The
respondent No. 4 applied for grant of a mining lease in regard to the
said area which was allowed. The appellant, who is a local resident, G
challenged the allotment on the ground that the procedure for settle-
ment as laid down in Rule 59 read with Rule 58 was not followed
before the grant.

3. Rule 58 deals with availability of areas for re-grant of a
mining lease and requires an entry to that effect to be made in a H
832 SUPREME COURT REPORTS (1989] 3 S.C.R.

register referred to in Rule 21(2) of the Rules, and a notification tO"be
A
published in the official gazette at least 30 days in advance. The
purpose obviously is to enable the members of general public to apply
for the proposed lease. Rule 59 directs the procedure in Rule 58 to be
followed in the c;ises mentioned thereunder in the following terms:

B "59. Availability of certain areas for grant to be notified-
In the case of any land which is otherwise available for the
grant of a prospecting licence or a mining lease but in
respect of which the State Government has refused to grant
a prospecting licence or a mining lease on the ground that
the land should be reserved for any purpose, the State
I
Government shall, as soon as such land becomes again
c available for the grant of a prospecting licence or mining ~

lease, grant the licence or lease after following the proce-
dure laid down in rule 58."

The appellant contends that as the prescribed procedure had not been
o followed, the grant in favour of the respondent No. 4 is illegal and fit
to be set aside.

4. Admittedly the disputed area was reserved for Nistar pur-
poses and when an application for grant of mining lease was earlier
made by a third party it was rejected on the ground that it was so
E reserved. Further, there is no dispute that before the impugned grant
was made in favour of the respondent No. 4 the procedure prescribed
by Rule 58 was not followed, and no opportunity was given to any
other person before entertaining the request of the respondent No. 4.
The question in this background is whether Rule 59 is attracted to the
case.
F
5. The appellant's application under Article 226 of the Constitu-
tion was dismissed by the Bombay High Court on the ground that Rule
59 was confined to cases where earlier reservation was made for min-
ing purposes. The stand of the respondents that the expression
"reserved for any purpose" in rule 59 does not cover a case where the
G area was reserved for Nistar purposes or for any purpose other than ,'F
that of mining was accepted. ,;.

6. Earlier the expression "reserved for any purpose" was
followed by the words "other than prospecting or mining for mine-
rals", which were omitted by an amendment in 1963. Mr. Dholakia,
H learned counsel for the respondents, appearing in support of the
'I-
I
"';

JANAK LAL v. STATE OF MAHARASHTRA [SHARMA, J.J 833

) impugned judgment, has contended that as a result of this amendment A
the expression must now be confined to cases of prospecting or mining
for minerals and all other cases where the earlier reservation was for
agricultural, industrial or any other purpose must be excluded from
the scope of the rule. We are not pursuaded to accept the suggested
interpretation. Earlier the only category which was excluded from the
B
'1application of Rule 59 was prospecting or mining leases and the effect
of the amendment is that by omitting this exception, prospecting and
mining leases are also placed in the same position as the other cases.
We do not see any reason as to why by including in the rule prospect-
ing and mining leases, the other cases to which it applied earlier would
~ get excluded, The result of the amendment is to extend the rule and
' not to curtail its area of operation. The words "any purpose" is of wide c
} con~otation and there is no reason to restrict its meaning.
I
7, We do not see any ground for limiting the scope of the rule so
as to deprive the members of general public to approach the State with
competitive terms. It is clearly in the public interest to notify the
proposal to grant a mining lease, so that the best deserving person may D
have a chance to be considered. The State and its authorities will, in
that case, have the choice of selecting the most suitable person by
following the just and equitable criteria laid down by the Rules. If, on
~ the other hand, the rule is cons!rued as suggested by the respondents,
a resourceful applicant can succeed in striking an un-deserved bargain
to the prejudice of the public interest. E

8. We are, therefore, of the view that Rule 59 covered the pre-
sent case and the grant in favour of the respondent No, 4 was illegally
made in violation of Rule 58. Accordingly, the appeal is allowed, the
. judgment of the High Court is set aside and the decision to grant the
mining lease in question to the respondent No. 4 is quashed. The State F
Government may now issue a notification and take other steps in
, accordance with law before proceeding further. There, will be no order
as to costs.

P.S.S. Appeal allowed.
G

}