Bhagwandas Gangasahai vs Union Of India and Ors

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Writ Petition (civil) 676 of 1954

Decision Date: 11 October 1955

Coram: V. Bose, B. Jagannadhadas, S.J. Imam, S.R. Das, N.C. Aiyar

In the matter of Bhagwandas Gangasahai versus the Union of India and others, a writ petition under Article 32 of the Constitution was filed and heard together with a second petition because the factual question to be decided was identical in both petitions. The petitioners alleged that their fundamental rights had been violated by the government’s decision to lease a tract of land located in Abu Road Taluka to a private entity identified as Respondent No. 3, Messrs Jeewan and Sons, for a period of twenty years, thereby allowing that entity to carry out limestone excavation. The petitioners asserted that the lease had been granted without the issuance of any public notice, without inviting applications or tenders, and without conducting an auction, and that no notice had been given to the public, to other limestone merchants, or to railway contractors. The petitioners further stated that they had been engaged in limestone excavation in Abu Road Taluka for many years prior to the execution of the lease to Respondent No. 3, and that they possessed leases for limestone kilns which they had been operating for the past ten years. They reported that they had been informed by the government that they would neither receive permission to continue limestone excavation nor have their kiln leases renewed; instead, they would be allotted alternative land, identified by certain survey numbers, in the village of Akra.

The petitioners contended that the grant of the lease to Respondent No. 3 created a monopoly in the limestone business. They also claimed that, while their kiln leases remained in force, they had been served with a decisive notice ordering the closure of their kilns within twenty-four hours. According to the petitioners, this governmental action infringed their fundamental rights to hold property and to carry on their trade. The court examined these submissions and observed that, based on the facts presented, it was difficult to discern how the issuance of the lease to Respondent No. 3 could have infringed any of the petitioners’ fundamental rights. The land parcel ultimately leased to Respondent No. 3 did not contain any portion that had previously been covered by the petitioners’ leases. The court noted that, as owners of the land and its mineral resources, the government was prima facie entitled to lease the land to Respondent No. 3, and the petitioners had failed to demonstrate any legal authority that would have given them a superior right to that land. Consequently, the court concluded that the government’s action in granting the lease could not, under the circumstances, be characterized as conferring a monopoly on Respondent No. 3, contrary to the petitioners’ allegations. The judgment further indicated that, despite these findings, certain aspects of the lease would be examined in the subsequent portion of the decision.

The Court observed that the lease granted to Respondent No 3 was illegal because it contravened the Mines and Minerals (Regulation and Development) Act, 1948, referred to as the Act, and the Rules made under it, specifically the Mineral Concession Rules of 1949. The Court pointed out that section 4 of the Act expressly prohibited the issuance of any mining lease unless it complied with the Rules framed under the Act, and that any lease granted in violation of that provision was void and of no effect. The Mineral Concession Rules, 1949 defined “minor mineral” to include building stone, boulder shingle, grave, lime-stone and kankar used for lime burning, murrum, brick-earth, ordinary clay, ordinary sand, and road metal. Rule 4 of those Rules provided that they would not apply to minor minerals, and that the extraction of such minerals should be regulated by rules that the Provincial Government might prescribe. The Court noted that at the time the disputed lease was issued, the Government of Bombay had not yet framed any such Provincial Rules. The Rules that the Bombay Government eventually framed came into force only in 1955, and the Court was not concerned with those later rules.

Mr Anthony, counsel for the petitioners, argued that limestone fell within the category of a “minor mineral,” and therefore, even though the lease was said to have been granted under Rule 26, it could not have been validly granted because the Mineral Concession Rules, 1949 did not apply to such a lease. The Court agreed that because no Provincial Rules had been framed by the Bombay Government under the authority of the Act, the lease had been issued in direct contravention of the explicit requirement of section 4 of the Act, rendering the lease void and of no effect. Consequently, the Court held that the Government’s action in granting the lease was illegal and that, if the lease infringed the petitioners’ fundamental rights, the petitioners were entitled to seek a writ of mandamus.

However, the Court expressed difficulty in identifying any specific fundamental right of the petitioners that had been violated. It explained that even assuming the Government’s action was illegal, a petition for a writ under Article 32 of the Constitution could not be entertained unless a breach of a fundamental right could be demonstrated. The Court examined the terms of the lease and found that the lease did not fall within the definition of “minor mineral” as set out in the Mineral Concession Rules, 1949. The lease was described merely as a mining lease concerning lime-stone, without any reference to lime-stone being used for lime burning. Because lime-stone could be employed for purposes other than lime burning, and because the record contained no material to support the petitioners’ contention that the lime-stone was solely for lime burning, the Court concluded that the lease did not relate to a minor mineral. Accordingly, the Mineral Concession Rules, 1949 were applicable to the lease, and the Government’s act of granting the lease could not be characterized as illegal.

In this case the Court observed that the act of the Government in granting the lease could not be described as illegal. The petitioners had alleged that they were ordered to shut down their lime-kilns while their lease was pending, without any justification, and claimed that this amounted to a violation of their fundamental rights, thereby entitling them to a writ under Article 32 of the Constitution. According to the petitioners, the terms of their lease had been extended up to 31 July 1955, and at the time of the hearing no lease existed in their favour. The Court therefore held that any cause of action the petitioners might have for damages or otherwise, based on the alleged improper conduct of the Government, rendered the petitions under Article 32 ineffective with respect to this aspect of the dispute.

The Court also noted that the respondents denied that the petitioners ever possessed a lease, asserting instead that the petitioners were merely licensees. No document resembling a lease was produced on behalf of the petitioners. The Court referred to Exhibit ‘R’ Annex 2, filed in Petition No. 676 of 1954, which, far from demonstrating a lease in the petitioners’ favour, identified them as licensees. Although paragraph 4 of that document employed the word “lease,” the opening paragraph clearly indicated that Bhagwandas Gangasahai and Lime Merchants were seeking permission to make non-agricultural use of Survey No. 230 of Morthalla in Abu Road Taluka, and that the Mamlatdar was informing them that such permission had been granted. In these circumstances the Court found it difficult to reach a definitive conclusion that the petitioners held a lease of the lime-kiln rather than a licence.

The Court further observed that, even assuming a lease had existed, it would have terminated on 31 July 1955, and the petitioners had failed to demonstrate any entitlement to renewal. Counsel for the petitioners, Mr Anthony, argued that renewal had been the usual practice in the past and cited paragraph 4 of Exhibit ‘R’, which stated that the merchant must apply before expiry for renewal. The Court clarified that paragraph 4 merely provided that the merchant would either surrender possession of the land at the expiry of the lease or submit an application for renewal before that date; it did not create any right to renewal nor any guarantee that renewal would be granted.

Consequently, the Court dismissed the petitions and ordered that costs be awarded in two separate sets: one set of costs to Respondent No. 3, Messrs Jeewan and Sons, and another set of costs to Respondents 1, 2 and 4.