Bhagwandas Gangasahai vs Union Of India (Uoi) And Ors.

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

Court: Supreme Court of India

Case Number: Not extracted

Decision Date: 11 October 1955

Coram: Imam, J.

In this case, the Supreme Court of India heard two petitions filed under Article 32 of the Constitution on the same day, 11 October 1955, because both raised an identical question for decision. The petitions were presented by the same parties and were listed together before the Bench, which recorded that the judgment was authored by Justice Imam. The petitioners alleged that their fundamental rights were violated when the Government leased a tract of land in Abu Road Taluka to Respondent No. 3, identified as Messrs Jeewan and Sons, for a period of twenty years, authorising the latter to excavate limestone. According to the petitioners, the lease was granted without any public invitation for applications, without a tender process, without an auction, and without any notice being given either to the public, to other limestone merchants, or to railway contractors who might have been interested. The petitioners further explained that they had been engaged in limestone excavation in Abu Road Taluka for many years prior to the contested lease and that they possessed valid leases for lime-kilns that they had been operating for the past ten years. Subsequently, the petitioners received a communication from the Government indicating that they would not be granted further permission to excavate limestone, that the existing leases for their lime-kilns would not be renewed, and that instead they would be allotted suitable parcels of land drawn from specific survey numbers located in Akra village.

Representing the petitioners, counsel argued that the grant of the lease to Respondent No. 3 created a monopoly over the limestone business in the area and that, during the period when the petitioners’ lime-kiln leases were still in force, they were served with a peremptory notice demanding the closure of their kilns within twenty-four hours, an act the petitioners claimed violated their fundamental rights to hold property and to carry on a trade or business. The Court examined these submissions and found it difficult to conceive how any fundamental right of the petitioners had been infringed by the Government’s decision to grant the lease to Respondent No. 3. The Court noted that the parcel of land ultimately leased to Respondent No. 3 did not include any portion that had previously been part of the petitioners’ leasehold, and that, as the owner of the land and its minerals, the Government was prima facie entitled to lease the area to any qualified party. The petitioners were unable to demonstrate any legal authority that entitled them to have that specific area leased to them instead of Respondent No. 3, and consequently the Court concluded that the lease could not be characterised as conferring a monopoly, contrary to the petitioners’ contentions. Nevertheless, the Court observed that the lease might be illegal because it appeared to be contrary to the Mines and Minerals (Regulation and Development) Act 1948 and the Mineral Concession Rules of 1949. Section 4 of the Act expressly prohibits the grant of a mining lease except in accordance with the Rules made thereunder, declaring any lease granted in contravention of the Act to be void and of no effect. The Rules define “minor mineral” to include limestone, and Rule 4 of the Rules states that they shall not apply to minor minerals, leaving their extraction to be regulated by rules that a provincial government may prescribe. At the time the lease in question was granted, the Government of Bombay had not yet framed any such provincial rules; those rules were only introduced in 1955, and the Court indicated that they were not relevant to the present dispute. Counsel for the petitioners, Mr Anthony, contended that because limestone is classified as a “minor mineral,” the lease could not have been validly granted under Rule 26 of the 1949 Rules, which they argued were not applicable in the absence of the provincial regulations.

The Act provides that a mining lease may be granted only in accordance with the Rules made thereunder; any lease granted contrary to the provisions of the Act is void and of no effect. The Mineral Concession Rules of 1949 define the term “minor mineral” to include building stone, boulder shingle, gravel, lime-stone and kankar used for lime burning, murrum, brick-earth, ordinary clay, ordinary sand, and road metal. Rule 4 of those Rules provides that they shall not apply to minor minerals, whose extraction is to be regulated by rules that may be prescribed by the Provincial Government. At the time the lease in question was granted, 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 they are not relevant to the present case. Counsel for the petitioners argued that lime-stone is a “minor mineral” and, although the lease was said to have been granted under Rule 26, the Mineral Concession Rules of 1949 did not apply to that lease. Because no Provincial Rules had been framed under the Act, the petitioners maintained that the lease contravened the explicit provisions of Section 4 of the Act and was therefore void and of no effect. On that basis they contended that the Government’s action in granting the lease was illegal and, having infringed the petitioners’ fundamental rights, warranted the issuance of a writ of mandamus by the Court.

The Court observed that it could not identify any specific fundamental right of the petitioners that had been infringed. It noted that, even assuming the Government’s action in granting the lease was illegal, a petition for a writ under Article 32 of the Constitution is maintainable only when a violation of a fundamental right is established. A careful examination of the lease terms showed that the lease did not fall within the definition of “minor mineral” contained in the 1949 Rules. The lease expressly described itself as a mining lease concerning lime-stone alone, without mentioning that the lime-stone was to be used for lime burning. Because lime-stone can be employed for purposes other than lime burning, and because the record contained no material to support the petitioners’ suggestion that the lime-stone was exclusively for lime burning, the lease could not be said to refer to a minor mineral. Consequently, the Mineral Concession Rules of 1949 applied to the lease, and the Government’s grant of the lease could not be characterised as illegal. The petitioners further argued that they had been ordered to shut down their lime-kilns during the subsistence of the lease without any justification, alleging that this order violated their fundamental rights and that they were therefore entitled to a writ under Article 32.

According to the petitioners, the term 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 observed that any cause of action the petitioners might have for damages or any other relief arising from the alleged improper act of the Government could not be pursued through the present petitions under Article 32 of the Constitution, because that aspect of the case had become ineffective. The respondents, however, did not concede that a lease had ever been granted to the petitioners; they maintained that the petitioners were merely licencees. No document resembling a lease or indicating a lease was produced on behalf of the petitioners. The party relied upon an exhibit identified as Ex. ‘R’ Annex. 2, which was part of Petition No. 676 of 1954. The Court noted that this document, rather than establishing a lease in favour of the petitioners, actually suggested that the petitioners were treated as licencees. Although paragraph 4 of the document contains the word “lease,” the opening paragraph makes clear that Bhagwandas Gangasahai and the Lime Merchants were seeking permission to make non-agricultural use of survey No. 230 of Morthalla of 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 possessed a lease of the lime-kiln and were not, in fact, licencees.

The Court further held that even if a lease had existed, it terminated on 31 July 1955, and the petitioners had not demonstrated any entitlement to renewal. Counsel for the petitioners, Mr. Anthony, argued that the customary practice had been to renew leases and cited paragraph 4 of Ex. ‘R’ as indicating that the merchant must apply for renewal before the expiry. The Court observed that paragraph 4 merely states that the merchant must either relinquish possession of the land at the expiry of the lease or submit an application for renewal before the lease ends. It does not confer any right to renewal upon the petitioners, nor does it contain any guarantee that the lease would be renewed. Consequently, the Court dismissed the petitions and ordered two sets of costs: one set to be paid to Respondent No. 3, Messrs Jeewan and Sons, and the other set to be paid to Respondents 1, 2 and 4.