LABOUR CONTRACT CO-OPERATIVE SOCIETY, PALIKUR, KURNOOL DISTT. REP. BY ITS SECRETARYversusDIRECTOR OF MINES AND GEOLOGY, HYDERABAD AND OTHERS.

A      LABOUR CONTRACT CO-OPERATIVE SOCIETY, PALIKUR,
             KURNOOL DISTT. REP. BY ITS SECRElfARY
                              v.
       DIRECTOR OF MINES AND GEOLOGY, HYDERABAD AND
                           OTHERS.
B                             SEPTEMBER 22, 1992

         [S. RANGANATHAN, V. RAMASWAMI AND B.P. JEEVAN
                           REDDY, JJ.]

C         Andhra Pradesh Minor Mineral Concession Rules. 1966:

           Section 12(4) and 13(2)-Minor Minerals-Lease-Grant/renewal of-
    Consideration of applications-<Jiving of preference-Procedure to be fol-
    lowed.

D        The Word "within" appearing in S.12(4) inappropriate-Deletion of the
    Word-Suggested.

           An extent of 40 acres or land containing lime stone slabs was leased
    out to the father or the fourth Respondent. He applied for renewal of the
E   lease 90 days before the expiry of the lease, as contemplated under Rule
    13(2) of the Andhra Pradesh Minor Mineral Concession Rules, 1966.
    HoweYel', he withdrew his application later. His son made an application
    for grant or lease in respect or 18 acres out or the total extent'of 40 acres,
    Later the appellant Society applied for lease in respect of the entire extent
    of 40 acres. Both the applications remained pending till the expiry of 90
F   days from filing and were deemed to have been rejected as per Rules. Both
    the applicants filed revision petitions before the Government which al-
    lowed the applications and remitted the matter to the Deputy Director for
    dtsposal. In the meantime the fifth Respondent Society also applied for
    lease in respect of the entire extent or 40 acres.
G          'The Deputy Director passed orders granting lease in respect of 18
    acres in favour of the fourth Respondent, viz. the son of the previous lease
    and the remaining 22 acres in favour of the fifth Respondent Society, and
    rejected the application of the appellant. An appeal to government having
    failed, the appellant filed a Writ Petition before the High Court. A Single
H   Judge held that the grant of lease in favour of the fourth Respondent was
                                         802
                    CO-OP.SOCIETY. v. DIRECTOR                           803

valid but the rejection of appellant's application was Illegal. The lease In A
favour of fifth Respondent was set aside and the Deputy Director was
directed to reconsider the applications of the appellant and the fifth
RespondenL The appellant preferred an appeal under cl. 15 of the Letters
PatenL The fifth Respondent filed Cross objections. The Division Bench
dismissed the appeal and allowed the Cross-objections. The appellant B
preferred the present appeal by special leave.

      On behalf or the appellant, It was contended that if the application
or the appellant filed within 30 days of expiry or the lease was considered
belated, the application of the fifth respondent which were filed long after
the expiry or the lease were also barred by limitation and could not have       C
been considered. It was also contended that the application of the fourth
respondent could not have been treated as filed within time.

     Dismissing the appeal, this Court enunciated the scheme of the
Rules and,
                                                                                D
      HELD: 1. The authorities were not right in rejecting the appellant's
application as barred by time. This Court does not propose to send back
the matter to the authorities in view or the time that bas elapsed since the
grant in favour of Respondent No.S. The term of the lease is five years only.
A mltjor portion or that term is already over. The Division Bench bas           E
rightly pointed out that among the appellant and the fifth respondent the
latter is entitled to preference for more than one reason viz., the fifth
respondent society is composed of memhers ofVadde Community who are
the traditional stone-<!utters. Though they do not belong to Scheduled
Castes or Scheduled Tribes, they are at the lowest rung among the back-
ward classes, whereas the petitioner society is composed or mere labourers      F
who do not necessarily belong to the traditional stone-<!ulter community.
                                                           [809-H; 810 A-BJ
      2. The existing lessee bad indeed applied for renewal ninety days
before the expiry or his lease. But before It could be granted or rejected it G
was withdrawn on 17.7.87, which means that the field was now clear for
considering the second category applications I.e., those received in terms of
Rule 12(4). The grant of the fourth respondents application is, therefore,
perfectly In order since it was received prior to 30 days before the expiry or
the lease. However, it was only for 18 acres. 22 acres still remained, In
respect of which the third category applications had to be consid•red. The H
    804                   SUPREME COURT REPORTS [1992] SUPP. 1 S.C.R.

A   application received within thiry days of the expiry of the lease and the
    applications received after the expiry of the lease stand on the same footing.
    The application of the Petitioner was not entitled to any preferential con·
    sideration on account of the fact that it was filed before the expiry of the
    lease, because it was filed within thiry days of the expiry of the lease. It did
B   not fall in the second category but only in the third category. (809 E·G)

          3. The appellant Society admittedly hotds a Iea~e in respect of 65
    acres whereas the fifth respondent has none apart from the one in con· .
    troversy. Even if this fact is taken into consideration, still the fifth respon·
    dent is entitled to preference, because its area is far smaller than that of
C   the appellants. (810-E]

           4. The presence of the word 'within' in Rule 12(4) has given room
    for some avoidable controversy. The said word appears to have crept into
    the sub-rule incautiously. It is not used either in sub-rule(2) of Rule 13 or
    for that matter in the latter portion of Rule 12(4). It must be noticed that
D   the first half of Rule 12(4) expressly referes to Rule 13(2) and says that if
    no application is made thereunder others can apply. The said words
    cannot and can never mean anything different than what Is provided by
    Rule 13(2). It is for this reason that the word 'within' therein is inap·
    propriate and ought to be ignored. The Rule-making authority would be
E   well advised to delete the same. (808 B-DJ

            CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4027 of
    1992.

         From the Judgment and Order dated 20.4.92 of the Andhra Pradesh
F   High Court in W.P. No. 1062 of 1991.

         K. Madhava Reddy, D Prakash Reddy and G. Narasimhulu for the
    Appellant.

        S. Padmanabhan, T.V.S.N. Chari, Ms. Anjani Aiyagar, Sridhar and
G   Ram Kumar for the Respondents.

            The Judgment of the Court was delivered by

            B.P. JEEVAN REDDY, J. Leave granted.

H           This Appeal is directed against the Judgment of a Division Bench of
        CO-OP. SOCIETY. v. DIRECTOR (JEEVAN REDDY, J.]                805

the Andhra Pradesh High Court dismissing Writ Appeal 1062 of 1991 A
preferred by the Appellant. The main issue in this appeal is the interpreta-
tion to be placed upon sub-rule (4) of Rule 12 of A.P. Minor Mineral
Concession Rules, 1966.

      Survey No. 650/1 Palukar Village in Kurnool District is of an extent
of 40 acres. It contains a minor mineral, lime stone slab. One Venkatesan B
was granted a lease for the said extent earlier. The term of his lease was
expiring on 20.8.87. He applied for renewal of the lease 90 days before the
expiry of his lease as contemplated by sub-rule 2 of rule 13 of the said rules.
On 17.7.87 however he withdrew his application. On 18.7.87 his son, the
fourth respondent, applied for grant of lease in respect of 18 acres in the C
said survey number. No orders were passed thereon by the appropriate
authorities. On 10.8.87 the appellant, a Labour Cooperative Society, ap-
plied for lease in respect of the entire extent of 40 acres. Both these
applications remained pending till the expiry of 90 days from the respective
dates they were filed, with the result that they were deemed to have been D
rejected. Both of them filed revisions before the Government which were
allowed and their applications remitted for disposal in accordance with law
to the Deputy Director of Mines and Geology, Cuddapah.

      On 17.2.88, fifth respondent which too is a Labour Cooperative
Society applied for lease in respect of the entire extent of 40 acres.       E

       On 3.10.1988, the Deputy Director passed orders granting lease in
respect of 18 acres in favour of fourth respondent (son of the previous
lessee) and the remaining 22 acres in favour of the fifty respondent. The
application filed by the appellant was rejected as barred by time. Against F
the said order the appellant filed a Writ P~tition in the High Court which
was rejected in view of the alternative remedy of appeal to Government,
provided by Rules. Appellant accordingly preferred an appeal to the
Government which was dismissed on 28.3.1989. He then filed -the writ
petition No. 4748/89 from which the present appeal arises. The writ petition G
was heard and disposed of by a learned Single Judge, who held that the
grant of lease in favour of the fourth respondent is proper and valid but
that the rejection of the application filed by the appellant is illegal. The
grant in favour of the fifth respondent was set aside and the Deputy
Director directed to reconsider the applications of the appellant and the
fifth respondent in accordance with the rules. Against the judgment of the H
    806                   SUPREME COURT REPORTS (1992] SUPP. 1 S.C.R.

A learned Single Judge the appellant preferred Writ Appeal No. 1062 of 1991
    while the fifth respondent preferred cross objection>. Both of them were
    heard by a Division Bench which disposed of the Writ Appeal in the
    following terms :

          (1) The order of the learned Single Judge confirming the grant in
B   favour of the fourth respondent is unexceptionable.

          {2) The learned Judge was not right in setting aside the grant in
    favour of the fifth respondent. The grant in favour of the fifth respondent
    is equally valid and proper. Accordingly the Writ Appeal was dismissed
C   and the cross objections filed by the fifth respondent were allowed.

           Shri K. Madhava Reddy, learned counsel for the appellant submitted
    that the Division Bench erred in holding that the application filed by the
    appellant on 10.8.87 was barred by limitation and also in holding that the
    application of the fourth respondent was well in time. He submitted that
D   if the appellant's application submitted within 30 days of the expiry of the
    lease (in favour of Venkatesan, the previous lessee) is barred by time so is
    the application of the fifth respondent which was filed long after the expiry
    of the said lease. The learned counsel also assailed the correctness of the
    holding that the application of the fourth respondent was within. time and
    that it was rightly allowed.
E
          For a proper appreciation of the issues in controversy it is necessary
    to notice the relevant Rules. A.P. Minor Mineral Concession Rules, 1966
    were been framed by the Governor of Andhra Pradesh in exercise of the
    rule making power conferred upon him by section 15(1) of the Mines and
F   Minerals {Regulation and Development) Act, 1957 Rules 12 and 13
    prescribe the manner in which the leases of minor minerals are to be
    granted and renewed. In so far as they are relevant, they read as follows :

                "Rule 12: {Sub-rule {1) omited as unnecessary).

            {2) Whenever more than one application are received for
G
            grant of a qual'ry lease, the (Deputy Director) shall dis-
            pose of the applications in order of preference specified
            below:-

            (i) Applications of Government Department and Govern-
H           ment Corporations and Companies;
CO-OP. SOCIETY. v. DIRECTOR (JEEVAN REDDY, J .)                  807

(ii) Applications of Labour Contract Co-operative                      A
Societies;

(iii) Applications of unemployed persons who possess any
recongnised qualification in Geology, Geophysics, or Min-
ing Engineering or any other allied subjects;
                                                                       B
(iv) Other applications;

(3) (Omitted as unnecessary.)

(4) In case where the quarry lease holders fail to apply
for renewal of the lease of the areas within ninety days               c
before the expiry of the lease held by them, as required
under sub-rule (2) of Rule 13, fresh application for grant
of quarry lease, in respect of those areas, will be enter-
tained thirty days before the expiry of the lease :

Rule 13 : Disposal of application :- (1) The application               D
for the grant of a quarry lease shall be disposed of within
ninety days from the date of its receipt and if it is not
disposed of within that period, the application shall be
deemed to have been refused. (The lease deed shall be
executed within ninety days from the date of grant of lease            E
or within such further period as the Director ·may allow
in this behalf and if no such lease deed is executed within
the said period due to any default on the part of the
applicant, the (Deputy Director) may revoke the order
granting the lease).
                                                                       F
(2) The application for the renewal of a quarry lease shall
be made at least ninety days before the expiry of the
period of lease to the (Deputy Director) and it shall be
disposed of before the expiry of the lease period. If the
application is not so disposed of within that period, it shall
                                                                       G
be deemed to have been not renewed.

    Provided that where an application for grant of quarry
lease is rejected or deemed to have been refused under
these rules, the fee paid by the applicant under sub-rule
(1) of Rule 12 shall be refunded to the applicant;                     H
    808                   SUPREME COURT REPORTS [1992] SUPP.1 S.C.R.

A                Provided further that where an application for grant
             of quarry lease is rejected on account of any lapse on the
             part .of the applicant in supplying any material informa-
             tion, the fee paid by the applicant under sub-rule (1) of
             Rule 12 shall be forfeited to the Government.)"

B          We have heard the counsel for the parties on the interpretation to.
    be placed upon the above Rules. The presence of the word "within" in Rule
    12(4) has given room for some avoidable controversy. The said word
    appears to have crept into the sub-rule incautiously. The said word
    ('within') is not used either in sub-r\tle (2) of Rule 13 or for that matter in
C   the latter portion of Rule U(4). It must be noticed that the first half of
    Rule U(4) ("In case where ..................... under sub-rule (2) of Rule 13')
    expressly refers to Rule 13(2) and says thai if no application is made
    thereunder others can apply. The said words cannot and can never mean
    anything different than whal is provided by Rule 13(2). It is for this reason
    that we say the word 'within' therein is inappropriate and ought to be
D   ignt>red. The Rule-making authority would be well advised to delete the
    same. On a proper and harmonious reading of Rules 13(2), 12(4) and other
    allied provisions, the following scheme emerges:

           (1) An existing lessee has to apply for renewal, if he so chooses, at
E   least ninety days before the expiry of the period of his lease. Such applica-
    tion has to be disposed of before the expiry of his lease. If it is not so
    disposed of, the application must be deemed to have been rejected (Rule
    13(2)).

          (2) Within ninety days of ~he expiry of the lease and thirty days before
F   the expiry of the lease, it is open to others too to apply for grant of lease
    in respect of the area, or a part of the area, held by the lessee (Rule 12(4)).
    These applications may be termed as Second Category applications. If any
    such application or applications are received under Rule 12(4) they should
    be considered and disposed of in accordance with law.
G          (3) Applications for lease received within thirty days of the expiry of
    the lease and those received after the expiry of the lease constitute the third
    category. These applications too have to be considered and disposed of in
    accordance with law.

H         (4) The above three categories are in the descending order. Each
        CO-OP.SOCIETY. v. DIRECTOR [JEEVANREDDY,J.]                        809

category enjoys a preference over the other. In other words, the application A
for renewal filed by the existing lessee under Rule 13(2) shall be taken up
first and disposed of. If renewal is granted, exhausting the area of lease,
no occasion arises for considering the applications falling in the second and
third category. In case, however, where no application for renewal is filed
or where it is filed but rejected, the second category applications shall have B
to be taken up and considered. If any of them are allowed and leas!!
granted, exhausing the area of lease, there is no occasion for considering
the third category applications. In case, no application falling in the second
category is received or if received, is rejected, does the occasion arise for
taking up and considering the third category applications.
                                                                                  c
      5. We may clarify in the interest of unbroken exploitation of mineral
wealth, that the authority can well receive the applications falling within all
the three categories, if and when filed. For example, be ought not to refuse
to receive the second category applications merely because the renewal
application is filed and so on. But the applications received shall be placed     D
in their proper category and considered in the order indicated above.

       Now let us consider the facts of this case in the light of the above
understanding of the relevant Rules. The existing lessee had indeed applied
for renewal ninety days before the expiry of his lease. But before it could
be granted (or rejected, as the case may be) it was withdrawn on 17.7.87,         E
which means that the field was now clear for considering the second
category applications i.e., those received in terms of Rule 12( 4). The
application of the fourth respondent was the only application received in
terms of Rule 12(4). The grant of the said application is, therefore, per-
fectly in order. However, it was only for 18 acres. 22 acres still remained,      F
in respect of which the third category applications had to be considered.
As clarified hereinabove, the application received within thirty days of the
expiry of the lease (like the one filed by the appellant) and the applications
received after the expiry of the lease (like the one filed by Respondent
No.5) stand on the same footing. The application of the Petitioner was not
entitled to any preferential consideration on account of I.he fact that it was    G
filed before the expiry of the lease, becuase it was filed within thirty days
of the expiry of the lease. It did not fall in the second r,ategory but only in
the third category.

      It must, accordingly, be said. that the authorities were not right in       H
    810                   SUPREME COURT REPORTS 11992] SUPP. 1 S.C.R.

A   rejecting the appellant's application as barred by time. We do not, however,
    propose to send back the matter to the authorities in view of the time that
    has elapsed since the grant in favour of Respondent No. 5. The term of
    the lease is five years only. A major portion of that term is already over.
    We, therefore, propose to give a quietus to the controversy. If ;o, question
    arises who among the two Labour Cooperative Societies should be
B   preferred. The Division Bench has pointed out, rightly in our opinion, that
    among the two of them, the fifth respondent is entitled to preference for
    more than one reason viz., (1) the fifth respondent society is composed of
    members of Vadde Community who are the traditional stone-cutters.
    Though they do not belong to Schedule Castes or Scheduled Tribes, they
C   are at the lowest rung among the backward classes, whereas the petitioner
    society is composed of mere labourers who do ·not necessarily belong to
    the traditional stone-cutter community.

           (2) The appellant/society admittedly holds a lease in respect of 65
    acres whereas the fifth respondent has none-apart from the one in con-
D   troversy. Mr. Madhava Reddy has brought to our notice that even the fifth
    respondent has a lease in respect of 15 acres. Even if we take that fact into
    consideration, still the fifth respondent is entitled to preference, because
    its area is far smaller than that of the appellants.

           For the above reasons, the appeal fails and is accordingly di<missed.
E
           No. costs.

    G.N.                                                      Appeal dismissed.