Holding

A notice under Rule 72(ii) is not invalidated by the non‑specification of the seven‑day filing period, and the District Magistrate must wait the full seven working days before deciding, making the May‑6 order contrary to the Rules.

Summary

Prem Nath Sharma, who held a mining lease for a granite unit under the Uttar Pradesh Minor Minerals (Concession) Rules, 1963, saw his lease expire on 31 March 1995. The District Magistrate (DM) issued a notice on 31 March 1995 under Rule 72(ii) inviting applications for a fresh lease, specifying 2 May 1995 as the date from which applications could be filed, but the notice did not state the required seven‑working‑day filing period. Sharma applied on 2 May and the DM approved his application on 6 May, yet failed to execute the lease deed, prompting a writ petition for mandamus. The DM later issued a fresh notice on 30 May, claiming the first notice was invalid for not mentioning the seven‑day period; the High Court dismissed Sharma’s petitions, holding the notice defective. The Supreme Court held that the omission of the seven‑day period does not invalidate the notice, that the DM was legally bound to wait the full seven working days before deciding, and that the May‑6 order contravened Rule 72(ii). Consequently, the appeal was dismissed, allowing the respondents to re‑issue a fresh notice.

Issues considered

Whether the failure to mention the seven‑working‑day filing period in a notice issued under Rule 72(ii) of the Uttar Pradesh Minor Minerals (Concession) Rules, 1963 renders the notice invalid.
Whether the District Magistrate could lawfully grant a mining lease before the expiry of the seven‑day application period prescribed by Rule 72(ii).
Whether the appellant was entitled to a preferential right under Rule 9 of the Rules in the grant of the lease.

Legislation cited

Mines and Minerals (Development and Regulation) Act, 1957s. Section 17-A
Uttar Pradesh Minor Minerals (Concession) Rules, 1963s. Rule 72, s. Rule 9

Subjects

mining leaseminor mineralsRule 72Rule 9notice validitymandamuspreferential rightadministrative law

Judgment

A PREM NATH SHARMA
v.
STATE OF U.P. AND ANR.

APRIL 9, 1997

B [J.S. VERMA, CJ. AND B.N. KIRPAL, J.)

Mines & Minerals :

Uttar Pradesh Minor Minerals (Concession) Rules, 1963-Rule
C 72--Notice issued i11viti11g applicatio11s for grant of lease-Rule mentioni11g
time limit of seven working days withi11 which application to be filed-Notice
itself 11ot mentioning such a time limit-Held, notice not invalid-DM decid-
ing to grant lease without, waiting for the expiry of seven days time
limit-Held, contrary to Rule 72.

D TI1e appellant had been granted lease under the provisions of Uttar
Pradesh Minor Minerals (Concession) Rules, 1963 for a period of 10 years
and thereupon the appellant set-up a granite unit. After some extensions,
the lease expired. A public notice was issued by the DM on March 31, 1995
for grant of a fresh lease for the same area. The notice was issued under
E Rule 72(ii) of the 1963 Rules according to which applications for grant of
lease could be received within seven working days from the specified date.
Thus, applications in this case could be filed between May 2 and May 9,
1995.

On May 2 itself, nine applications including that of the appellant
F were filed. The DM, vide his Order of May 6, informed the appellant that
his application had been approved. Thereupon, as required, the appellant
furnished the necessary papers. However, the DM did not execute the deed.
The appellant filed a petition in the Court seeking a Writ of Mandamus
directing the respondents to execute the lease deed in favour of the
G appellant.
During the pendency of the Writ Petition, the DM issued a fresh
Notification on May 30. According to the respondents since the first Notice
of March 31 was not in accordance with the provisions of Rule 72(ii)
inasmuch as the seven days time for acceptance of applications was not
H mentioned in the notice, the DM's order granting the lease was cancelled
774
P.N. SHARMAv. STATE 775

and so fresh notice was issued on May 30. The appellant filed another Writ A
Petition challenging the new notice. The High Court dismissed the peti-
tions holding that the re<Juirement of mention of seven days time limit in
the notice was mandatory and so respondents were right in not acting on
the basis of March 31 notice. Hence this appeal.

Dismissing the appeal, this Court B

HELD : 1. As per Rule 72(ii) of Uttar Pradesh Minor Minerals
(Concession) Rules, 1963, the applications for grant of lease arc to be
received within seven working days from the date specified in the notice.
The mention in the notice of the date within which application has to be
filed may be desirable but non-mention of the same will not invalidate the
c
said notice. The High Court was not right in holding the notice to be bad
because of non-specification of seven days time limit. [779-B-D]

2. As per Rule 72(ii), applications could be filed between May 2 and
May 9. The DM was under a legal obligation to wait till May 9 before taking D
any decision for grant of the lease. [779-F]

3. As per Rule 9, an application received earlier in point of time will
normally get preference over an application received later. However, a later
applicant but more deserving one may be given preference if the applica-
tion is filed within the period specified in Rule 72(ii). In this case, it was E
possible that a more deserving applicant than the appellant might have
filed an application by May 9. The opportunity granted to prospective
applicants was denied by the OM who by his order of May 6 decided to
grant the lease in favour of the appellant. [781-F-G; 782-1<']
F
4. The notice of March 31 did not suffer from any legal infirmity but
the Order of May 6 issued by the DM was contrary to Rule 72(ii). The
respondents are at liberty to issue a fresh notice inviting applications for
grant of lease. [782-G-H] v
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 14748-49 G
of 1996.

From the Judgment and Order dated 24.4.96 of the Allahabad High
Court in C. Misc. W.P. No. 15290 and 16886 of 1995.

Sudhir Chandra, P. Niroop and Ms. Nandini Gore for the Appellant. H
776 SUPREME COURT REPORTS (1997] 3 S.C.R.

A R.C. Verma, Ashok K. Srivastava and R.B. Misra for the Respon-
dents.

Anil Kumar Gupla-II for the implcading party.

The J udgmcnl of the Court was deliwred by
B
KIRPAL, J. The appellant had, under the provisions of Uttar Pradesh
Minor Mineral~ (Concession) Rules, 1963 (for short 'the Rules') on 17th
September, 1977, be..:n granted a lease of a plot of land admeasuring 10
acres in Mahoba Tehsil, Hamirpur District. This lease was for a period of
ten years and on the basis thereof the appellant set-up a granite unit.
c
The aforesaid lease was extended from time lo lime. The tenure of
the lease having expired a public notice dated 31st March, 1995 was issued ....
by the District magistrate, H amirpur for grant of a fresh lease for the area
which was being exploited by lhe appellant. This notice was published on
D 2nd April, 1995 and was issued under Rule 72 of the Rules. Ruic 72, as it
stood at the relevant lime, was as under :

"Availability of area for re-grant to be notified - (i) If any area,
which was held under a mining lease under Chapter II or on
reserved under Section 17-A of the Act, becomes available for
E re-grant on mining lease lhe District Officer shall notify the
availability of lhc area through a notice inviting applications for
grant of mining lease specifying a date, which shall not be earlier
than thirty days from the date of the notice and giving description
of such area and a copy of such notice shall be displayed on the
Notice Board of his office and shall also he sent to the Tehsildar
F of such area and the Director.

(ii) The application for grant of mining lease under sub-rule (1)
shall be received within seven working days from the date specified
in the notice refert~d to in the said sub-rule. If, however, the
number of applications received from any area is less than three,
G
the District Officer may further extend the period for seven more
working days and if even thereafter, the number of applications
remains less than three, the District Officer shall notify the
availability of the area afresh in accordance with the said sub-rule.

H (iii) An application for grant of mining lease for such area which
P.N.SHARMAv. STATE[KIRPAL,J.] 777

is already held under a lease or notified under sub-rule (1) of Rule A
23 or reserved under Section 17-A of the Act and whose availability
has not been notified under sub-rule (1), shall be premature and
shall not be considered and the application fee thereon, if paid
shall be refunded."

According to Rule 72(ii), the applications for the grant of a mining B
lease were to be received within seven days from the specified date. It is
common ground that the specified date as per the aforesaid notice was 2nd
May, 1995 and applications for the grant of mining lease could be filed
between 2nd May, 1995 and 9th May, 1995.

It appears that on the very first date, i.e., 2nd May, 1995, nine
c
applications including that of the appellant, for the grant of the mining
lease were filed. The District Magistrate vide his order dated 6th May,
1995, informed the appellant that his application for grant of the mining
lease had been approved. The appellant was required, in token of accep-
tance of the terms of the lease, to submit an agreement along with a D
treasury challan of Rs. 30,000 to enable the execution of the lease deed.
According to the appellant the needful was done and the stamp papers
worth Rs. 30,065 were furnished to the office of the Mines Officer on 12th
May, 1995 so as to enable the District Magistrate to execute the lease deed
in favour of the appellant.
E
The District Magistrate did not, however, execute the lease deed.
Thereupon, the appellant filed writ petition No. 15290/95 seeking a writ of
mandamus requiring the court to direct the respondents therein to execute
the lease deed in the appellant's favour pursuant to the sanction communi-
cated to the appellant vide order dated 6th May, 1995. F
During the pendency of the aforesaid writ petition the District
Magistrate, Mahoba, issued a fresh notification dated 30th May, 1995.
According to the respondents the State Government had arrived at the
conclusion that the first notice dated 31st March, 1995 was not in accord-
ance with the provisions of Rule 72 inasmuchas the seven days time for G
acceptance of the application for grant of the mining lease as contemplated
by Rule 72 was not mentioned in the notice and, therefore, the order dated
6th May, 1995 sanctioning the lease was cancelled and a fresh notice dated
30th May, 1995 was issued. This led to the appellant filing a second writ
petition No. 16886 of 1995 challenging the fresh notice dated 30th May, H
778 SUPREME COURT REPORTS [1997] 3,S.C.R.
I
I
A 1995. It appears that one other applicant, namely, Achintya Kumar Tripathi
also filed a writ petition No. 15338 of 1995, seeking a writ of mandamus
restraining the re~pondents from executing a lease in favour of the appel-
lant herein and he also prayed for a direction to the respondent to grant
the mining lease in his favour.

B The Division Bench of the High Court by a common judgment dated
24th April, 1996 dismissed the three writ petitions. It came to the con-
clusion that the requirement of communicating in the notice that applica-
tion for grant of mining lease under Rule 72(i) shall be received v.~thin
seven working day~ from the dated specified in the notice was mandatory.
c In view of the fact that this was not specified, therefore, the notice dated
31st March, 1995 had not been issued in accordance with the provisions of
Rule 72 and, const.:quently, respondents were right in not acting on the
basis of the said notice and executing the lease deed in favour of the
appellant. The High Court did not think it necessary to consider the claim
D of Achintya Kumar Tripathi in his writ petition. Dire<tion was issued that
as the fresh notic.e dated 30th May, 1995 had expired the respondents
should issue a fresh notice in accordance with the provisions of Rule 72
and invite fresh applications.

Challenging the correctness of the aforesaid decision of the Al-
E lahabad High Court it was submitted by the learned counsel for the
appellant that Rule 72 did not require that the notice should itself specify
the dates when applications for lease could be submitted. He further
contended that the appellant had been exploiting the mines since 1977 till
the expiry of the last lease on 31st March, 1995. The appellant was a
F mechanical engineer and had pursued higher studies in UK and he had
invested a huge amount of money in setting up the requisite machinery and
in building up the infrastructure for carrying out the mining operations.
He, therefore, had a preferential right to get the lease under sub-rule (1)
of Rule 9 ot the Rules.

G Notice for the grant of mining lease is issued under sub-rule (i) of
Rule 72. This sub-rule requires the notice to invite applications for re-grant
of mining lease specifying a date which was not to be earlier than thirty
days from the date of the notice. The notice is required to give the
description of the area where the re-grant of the mining lease is available.
H Sub-rule (i) does not require the period within which the application for
P.N. SHARMAv. STATE [KIRPAL, J.] 779

grant of lease can be filed or the last date by which the application will be A
received to be specifically stated in the notice which is issued. The reason
for this is that the period within which the application for grant of lease
can be filed is specified by Rule 72(ii) itself. As per this sub-rule the
applications are to be received within seven working days from the date
specified in the notice. The date which was specified in the notice dated
31st March, 1995 was that of 2nd May, 1995. If the number of applications
B
are lass than three then this sub-rule requires the District Officer to further
extend the period for seven more working days. If again the number of
applications remains less than three then the availability of the area has to
be notified afresh. In our opinion, while mentioning of the dates within
which the applications may be filed may be desirable hut non-mentioning c
of the same will not in any way invalidate the said notice. Reading the rule
as a whole it is only the specified date which has to be stated in the notice,
which cannot be earlier than thirty days of the notice, and the date on being
so notified sub-rule (ii) of Ruic 9 clearly stipulates the period within which
the applications can be filed, that period being of seven days. The High D
Court, in our opinion, was, therefore, not right in holding the notice dated
31st March, 1995 to be bad because of the non-specification of the seven
days period within which the applications could be filed.

There is, however, one other reason why no relief could have been
granted to the appellant. As we have already noted by notice dated 31st E
March, 1995 the specified date was 2nd May, 1995. On that day itself nine
applications were filed. According to sub- rule (ii) of Rule 72 applications
could be filed during a period of seven days, i.e., by 9th May, 1995. The
District Magistrate did not, however, wait and by order dated 6th May,
1995 he communicated to the appellant that grant of lease in his favour F
had been sanctioned. ThL~ the District Magistrate could not do. He was
under an obligation to entertain applications for the grant of lease for a
period of seven days after the specified date, i.e., till 9th May, 1995. It is
only after the period of seven days is over that the District Magistrate could
consider the applications received before deciding as to whom the lease G
should be granted.

It was submitted by the learned counsel for the appellant that the
appellant had a preference to get the lease and in fact on the very first date
itself, i.e., 2nd May, 1995 nine applications were received. It was further H
780 SUPREME COURT REPORTS [1997) 3 S.C.R.

A submitted that even though by order dated 6th May, 1995 the appellant's
application was approved in actual fact no further applications were
received till 9th May 1995 or even thereafter. It was, therefore, submitted
that by not waiting till after 9th May, 1995 and by according sanction on
6th May, 1995 the District Magistrate had committed no illegality.

B In order to appreciate the aforesaid submission it is necessary to
examine Rule 9 under which the preferential right is claimed by the
appellant relevant portion of which is as under :

"Preferential right of certain person - (i) Except as provided in
sub-rules (2) and (3) where two or more persons have applied for
c a mining kase in respect of the same land, the applicant whose
application wa<; received earlier shall have " prµfcrential right for
the grant of lease over an applicant whose application was received
later.

D Provided that where such applications are received on the same
day, the Stale Government may, after taking into consideration the
matters 5pecificd bdow grant the mining lease to such one of the
applicants as it may deem fit :

(a) Past experience;
E
(b) financial resources;

(c) nature and quality of the technical staff employed or to be
employed by the applicant;

F ( d) the conduct of the applicant in carrying out mining operations
on the basis of any previous kase or permit and in complying
with, conditions of such lease or permit or the provisions of
any law in connection therewith; and

( e) such other matters as may be considered necessary by the
G
State Government.

(2) The State Government may, for any special reasons to be
recorded, grant a mining lease to an applicant whose application
was received later in preference to an applicant whose application
H was received earlier.
P.N. SHARMA v. STATE [KIRPAL, J.] 781

(3) In respect of mining lease for excavation ......... " A

Sub-rule (1) of Rule 9 states that where two or more persons apply
for a mining lease in respect of the same land, then the application received
earlier shall have a preferential right for the grant of lease over an applicant
whose application was received later. But this is subject to the provisions
B
of sub-rule (2) and sub-rule (3) of Rule 9, to which we will presently refer.

The proviso to sub-rule (1) deals with a situation where two or more
persons apply for a mining lease in respect of the same land on the same
day. !n such a case the State Government had to take into consideration
the matters specified in the said proviso before deciding as to whom the c
lease is to be granted. In the present case nine applications were received
on 2nd May, 1995, including that of the appellant. In those circumstances
the State Government was required to act in accordance with the
provisions of proviso to sub-rule (1) of Rule 9 and presumably, it took into
consideration the factors mentioned therein while deciding on 6th May,
D
1995 to grant the mining lease to the appellant.

While an application received earlier in point of time has a
preference over a later application, as provided by sub-rule (1) of Rule 9,
nevertheless the State Government has been given the power under sub-
rule (2) of Rule 9 to grant a mining lease to an applicant whose application E
was received later in preference to an application whose application was
received earlier. This can be done for special reason which have to be
recorded. In other words, an application received earlier in point of time
will normally get a preference over an application received later but the
earlier applicant does not get an undefeasible right to get the lease because F
the State Government, under sub-rule (2) of Rule 9, has the power to
accept an application which is received later in point of time. Similarly an
applicant under sub-rule (3) will be given preference to an applicant under
Rule 9(1) even though his application may be later in point of time. We,
however, make it clear that a later application which could be considered
under sub-rule (2) or sub-rule (3) can only be that whose application which G
has been filed within the period specified by Rule 72(ii). For example an
application received after 9th May, 1995, pursuant to the earlier notice
dated 31st March, 1995 could not have been considered by the State
Government either under sub-rule (2) or (3). An application received after
the prescribed period of time will not be regarded as a valid application, H
782 SUPREME COURT REPORTS [1997] 3 S.C.R.

A but all applications received within the seven days period. i.e., 2nd May
1995 to 9th May, 1995 in this case, had to be considered.

Even though nine applications were received on 2nd May, 1995 the
Sate Government was not precluded from considering or even granting
lease in favour of an applicant whose application was received later
B provided the conditions under sub-rule (2) or sub-rule (3) in his case was
held to be satisfied. This being so no decision accepting an application
could have been taken by the District Magistrate by considering the
preference under Rule 9(1) before the period of seven days had elapsed.
Had order dated (ith May, 1995 not been passed, it is possible that a more
C deserving applicant than the appellant herein may have filed an application
by 9th May, 1995 on the consideration of which the State Government, for
reasons tu be recorded, could have been pursuaded to l!rant a mining lease.
A provision like sub-rule (2) of Rule 9 had necessarily to be incorporated
so that the application of the most deserving applicant was not rejected
D merely because the applications of the other applicants were received
earlier. for example if in the instant case for reasons beyond its control,
the appellant had not been able to file the application for the grant of the
mining lease on the very first date itself, i.e., 2nd May, 1995, when eight
other applications were received but had filed its application say on 3rd
May, 1995 then his application being later in point of time, would not have
E been considered but for the provisions contained in sub-rule (2) of Rule 9.
This mb-rule, in such an eventuality would have enabled the applicant to
satisfy the State Government that for special reasons preference should be
given to his application and the mining kase granted notwithstanding that
eight other persons had applied earlier. The opportunity granted by Rule
72(ii) to prospective applicants to apply for a mining l~ase was denied when
F
within four days of the receipt of the application the District Magistrate
on 6th May, 1995 took a decision whereby he decided to grant the lease
in favour of the appellant. This could not be done.

From the aforesaid discussion it will follow that it is not the notice
G dated 31st March, 1995 which suffered from any legal infirmity but it is the
acceptance of the application before 9th May, 1995 which was bad in law.
The said order dated 6th May, 1995 being contrary to Rule 72(ii) was
rightly not acted upon and, therefore, the only course which was open to
the respondents was lo issue a fresh notice, which it did on 30th May, 1995.
H The conclusion of the High Court that the writ petitions filed by the
P.N.SHARMAv. STATE[KIRPAL,J.] 783

appellant could not be allowed was correct, though for a different reason. A
For the aforesaid reasons these appeals are dismissed. The respon-
dents will be at liberty to issue a fresh notice for the grant of lease in
accordance with law and keeping in view the observations contained
herein. There will be no order as to costs.
B
J.N.S. Appeals dismissed.