Amar Jyoti Stone Crusting Co vs The Union Of India And Others

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

Court: Supreme Court of India

Case Number: Civil Appeal No. 112 of 1961

Decision Date: 8 August 1961

Coram: N. Rajagopala Ayyangar, Bhuvneshwar P. Sinha, S.K. Das, A.K. Sarkar, J.R. Mudholkar

In the matter titled Amar Jyoti Stone Crusting Co versus The Union of India and Others, the Supreme Court of India rendered its judgment on the eighth day of August in the year 1961. The opinion was authored by Justice N. Rajagopala Ayyangar, who also constituted the principal bench together with Justices Bhuvneshwar P. Sinha, S. K. Das, A. K. Sarkar, J. R. Mudholkar, and the Chief Justice, Bhuvneshwar P. Sinha. The petitioner in the proceedings was Amar Jyoti Stone Crusting Co., while the respondents comprised the Union of India together with additional parties. The case was cited in the 1967 All India Reporter at page 46 and also reported in the 1962 Supreme Court Reporter, volume three, page 62. The dispute concerned the statutory framework governing quarry permits, the ownership of minerals found in the land, and the presumption of mineral rights under section forty‑two of the Punjab Land Revenue Act of 1887. The factual background indicated that the petitioner had previously obtained a permit from the Collector for quarrying activities up to thirty June 1957 pursuant to the Delhi Minor Mineral Rules of 1938, which were themselves framed under subsection one of clause one‑fifty‑five of the Punjab Land Revenue Act. After the expiration of that permit, the petitioner applied for a renewal, but the application was refused on the basis that the land in question had been incorporated into a “controlled area” reserved for alternative purposes through proceedings under the Delhi (Control of Buildings) Act of 1955. In response, the petitioner instituted a suit seeking a declaration that it possessed an inherent right to quarry stones from the land without the necessity of a fresh permit, asserting that ownership of the minerals vested in the landowner from whom the land had been acquired, and also seeking a mandamus directing the Collector to grant the permit on the ground that the 1955 Act had ceased to operate after the thirtieth day of December 1937. The Court held that the petitioner had failed to establish its title to the mineral rights in the subject land and therefore was not entitled to the declaratory relief claimed. The Court explained that section forty‑two, paragraph two, of the Punjab Land Revenue Act provides a presumption that minerals belong to the landowner only when a record of rights, completed after the eighteenth of November 1871, expressly states that a quarry does not belong to the Government; such a presumption may be invoked only when such a record is produced before the Court and its language supports the inference. In the instant case, neither the petitioner nor any other party produced a record of rights meeting that requirement, and consequently no presumption could be drawn in favour of the petitioner. Moreover, the Court observed that the refusal to grant a new permit was based on sound and pertinent reasons, and that the subsequent repeal of the Delhi (Control of Buildings) Act did not confer any entitlement upon the petitioner to compel the issuance of a permit, particularly because no pending application for a permit existed at the time of the repeal. The judgment arose from Civil Appeal number one hundred twelve of 1961, which was entered on special leave under article one‑hundred‑thirty‑six of the Constitution, challenging the order dated twenty‑six September 1960 of the Punjab High Court, Circuit Bench at Delhi, in appeal number one hundred twenty‑three‑D of 1959. Counsel for the appellant comprised representatives N. S. Bindra, I. C. Jain, and O. P. Rana, while counsel for respondents numbered one to three included C. K. Daphtary, B. Sen, and T. M. Sen, and counsel for respondent number four was Tarachand Brijmohan Lal.

In this case, the appeal was filed under Article 136 of the Constitution after special leave was granted, challenging the decision of the Punjab High Court in the second appeal numbered 123‑D of 1959. The appellant was a firm that held a lease dated 21 December 1955 for several parcels of land identified as kasra numbers 1621, 1646, 1652, 1653 and 1703, situated in Naraina Village, an area administered by the Chief Commissioner of Delhi. Under the terms of that lease the firm was engaged in operating stone quarries on the leased fields, which formed the subject matter of the lease. The authority to quarry in that area was governed by the Delhi Minor Mineral Rules of 1938, which were promulgated exercising the powers conferred by section 155(1) of the Punjab Land Revenue Act of 1887. Those rules required any person wishing to quarry to submit an application to the Collector, who alone had the discretion to grant a permit, each permit being valid for a period of one year. The rules further mandated that the holder of a permit pay royalty at the rates specified in the rules for the minerals extracted. However, the rules expressly exempted from the permit requirement and from the royalty obligation any quarrying of minerals that were proved to be located on land belonging to the land‑owner, where that land‑owner possessed the mineral right under section 42 of the Punjab Land Revenue Act, 1887. The appellant firm had duly applied for, obtained, and complied with the conditions of permits under those rules, and had paid the prescribed royalty from the commencement of its lease until 30 June 1957. After that date the firm applied for a further permit but was denied. Consequently, the appellant issued a notice to the government authorities under section 80 of the Civil Procedure Code and instituted a suit on 8 October 1957, the suit from which the present appeal arose. In that suit the appellant sought two principal reliefs: first, a declaration that it possessed an inherent right to quarry stones from the disputed land even in the absence of a permit, and second, alternatively, a perpetual injunction compelling the Union of India, the Collector and the Delhi Development Authorities to issue the requisite permit on the condition that the appellant continue to pay the royalty as it had previously done. The first prayer rested on the contention that the land‑owner, from whom the appellant derived its leasehold title, had transferred ownership of the mineral rights to the appellant, thereby giving the firm a right to quarry without needing a permit under the Delhi Minor Mineral Rules. The alternative prayer was based on the argument that, even if the mineral rights in the disputed land vested in the Government, the appellant nevertheless held a lawful entitlement to continue quarrying operations and that the Collector was obligated to grant the permit that had been applied for. The appellant further maintained that the Collector had refused the permit in bad faith and for reasons unrelated to the statutory purpose of the permit‑granting power.

The Court recorded that the Collector had denied the permit in a dishonest manner and had done so for reasons that were unrelated to the purpose for which the statutory rules authorized him to grant permits. The Trial Court had dismissed the suit, finding the appellant lacking on every material issue, and that decision had been affirmed by successive courts up to the High Court, whose judgment was now under appeal. Counsel for the appellant put forward two main arguments. The first argument asserted that the High Court judge had misinterpreted and misapplied section 42 of the Punjab Land Revenue Act, and that a correct construction of that provision would make the appellant’s lessor the owner of the mineral rights in the disputed lands. To appreciate this contention the Court set out the full text of section 42, which reads: “(1) When in any record‑of‑rights completed before the eighteenth day of November, 1871, it is not expressly provided that any forest, quarry, unclaimed, unoccupied, deserted or waste land, spontaneous produce or other accessory interest in land belongs to the land‑owners, it shall be presumed to belong to the Government. (2) When in any record‑of‑rights completed after that date it is not expressly provided that any forest or quarry or any such land or interest belongs to the Government it shall be presumed to belong to the land‑owners. (3) The presumption created by subsection (1) may be rebutted by showing—(a) from the record or report made by the assessing officer at the time of assessment, or (b) if the record or report is silent, then from a comparison between the assessment of villages in which such features existed and the assessment of villages of similar character in which they did not exist, that the forest, quarry, land or interest was taken into account in the assessment of the land‑revenue. (4) Until the presumption is so rebutted, the forest, quarry, land or interest shall be held to belong to the Government.” The Court acknowledged that counsel was correct in pointing out that the High Court judge had wrongly treated sub‑clause (4) as if it applied equally to the presumption created by sub‑section (2) in favour of the land‑owner. However, the Court held that this error did not automatically entitle the appellant to rely on the presumption of sub‑section (2) in the present facts. It was agreed by the parties that records of rights for the village of Naran had been prepared on two occasions after 1871, although neither side had produced the relevant entries before the Court. Counsel for the appellant submitted that once it was established that a post‑1871 record of rights existed for the village, the presumption in sub‑section (2) favouring the land‑owner’s entitlement to the minerals should arise, and that, as the defendants in the

The Court held that it could not accept the proposition that, because the appellant had failed to produce the record of rights, the appellant had thereby proved its title to the minerals. Section 42(2) creates a presumption against the Government only where a record of rights completed after 18 November 1871 does not expressly state that any quarry belongs to the Government, and that presumption arises solely when the record is actually placed before the Court and the presumption is drawn from the contents of the document that is produced. The subsection therefore provides no authority for drawing a presumption about the contents of a record of rights that has not been produced and is not before the Court. Accordingly, counsel for the appellant could not invite the Court to infer a presumption against the defendants on the basis of the non‑production of the document, because the record of rights is a public document that the appellant also could have obtained a certified copy of and filed if it supported its case. The appellant had produced only the Jamabandi account for the year 1948‑49 and relied on the absence of any mention in that account of the Government being proprietor of the mineral rights. However, the Court observed that the Jamabandi relates to land revenue and does not reflect the customary practice in the village concerning mineral ownership, which would be recorded only in a wajib‑ul‑arz. Moreover, a Jamabandi is not the type of document on which the presumption under section 42(2) could be invoked. Consequently, the relevant record of rights was not before the Court, and therefore neither of the presumptions in sections 42(1) or 42(2) could be applied in favour of either the Government or the landowner. The Court noted that two factual matters were before it that could determine the title to the minerals. First, the appellant had been extracting minerals on the basis of permits obtained from the Collector; such permits could be issued only if the appellant’s lessor was not the owner of the minerals. Counsel for the appellant attempted to explain this conduct by suggesting that the appellant might have applied for a permit under a mistake as to its rights. The Court held that this argument did not assist the appellant, because making the application would amount to an admission that placed the burden on the appellant to prove, to the Court’s satisfaction, that the application was made under a mistake—a burden the appellant had not discharged. Additionally, a plaintiff who alleges ownership of minerals must establish his title before succeeding in the suit, and the appellant had produced no evidence to prove such a title. Counsel further submitted that a presumption in favour of the plaintiff’s ownership arose under section 110 of the Indian Evidence Act by reason of the appellant’s admitted possession of the property. The Court rejected this submission, observing that the possession of the minerals was under a permit granted by the Collector, a circumstance that clearly negated the plaintiff’s ownership of the minerals in view of the Minor Mineral Rules. Accordingly, the Court concluded that the appellant’s claim of established proprietary rights to the quarry could not succeed.

The Court observed that the presumption under section 110 of the Indian Evidence Act, which arises from the appellant’s admitted possession of the property, could not be invoked in this case because the possession concerned only the minerals that the appellant held under a permit issued by the Collector. That circumstance, the Court held, negated any claim by the plaintiff to ownership of the minerals in view of the provisions contained in the Minor Mineral Rules. Accordingly, the lower courts were correct in concluding that the appellant’s assertion of proprietary rights to the quarry could not succeed. The respondents later moved this Court for permission to admit further evidence, specifically the entries from the wajib‑ul‑arz of the record‑of‑rights for the suit village dated 1880 and 1908‑09, which state that the Government owned the stone quarries in that village. Counsel for the appellant objected strongly to admitting those documents at this stage and argued that, were the application allowed, the appellant should be given an opportunity to produce evidence challenging the accuracy of those entries. The Court noted that its own finding on the appellant’s rights was already clear even without the additional records, and therefore it saw no necessity to admit them. It affirmed that the appellant had failed to establish title to the mineral rights in the suit lands, and consequently the appellate courts were justified in dismissing the appellant’s claim for a declaration of ownership. Counsel for the appellant raised another argument, contending that even if the Government were the rightful owners of the minerals and a permit under the Minor Mineral Rules 1938 was required, the Collector was legally bound to grant a permit unless there were proper grounds for refusal, and that the refusal in this case was improper and mala fide. The Court explained that the Collector had denied the permit because of a resolution passed by the Delhi Development Provisional Authority established under Act 53 of 1955. That authority had classified the land in question as a “controlled area,” meaning it was reserved for other purposes, and consequently deemed it appropriate to prohibit quarrying there. The plaintiff alleged that the Collector had acted improperly by following the Board’s recommendation to prohibit quarrying on the suit land. However, counsel for the appellant did not dispute the position that, if the land fell within a “controlled area” under Act 53 of 1955, and if there was a legitimate need to ban quarrying for the health of residents living near the quarries, and the Collector had been informed of this by the Development Authority, then the Collector’s order refusing permission could not be successfully challenged. The Court therefore concluded that the Collector’s refusal was within the scope of his legal authority and could not be set aside.

Counsel submitted that the Delhi Development Provisional Authority Act of 1955 had ceased to operate on 30 December 1957 because it had been replaced by the Delhi Development Act of 1957, and that under the new enactment the land in question had not been notified as a controlled area. Accordingly, counsel argued that the trial court, when delivering its judgment, should have taken judicial notice of the termination of the 1955 Act and the lapse of its notification, and that, on that basis, the appellant possessed a clear legal right to the mandamus relief he sought—an order directing the Collector to grant the quarrying permission. The court noted that it was unnecessary to explore the extent to which a court might consider subsequent facts and grant relief based on those facts. The factual background, as presented, was that the appellant had applied to the Collector for permission to quarry stones, the Collector had refused the request, and the refusal was challenged as illegal. The plaint therefore sought a mandatory injunction compelling the Collector to grant the permission. The court observed that it would be a different matter if the appellant could demonstrate that the Collector’s refusal in April‑May 1957 was improper, but that was not the case. The counsel’s argument rested on the proposition that, long after the suit was filed, the statutory basis for the refusal had disappeared, thereby giving the appellant a right to obtain the permit.

The court held that this argument was founded on a fallacy. Since the Collector had properly refused the appellant’s application before the suit was instituted, there was no pending application before the authority at the time the suit was heard. It was also undisputed that, during the pendency of the trial‑court proceedings, the appellant did not file a fresh application based on the changed legal circumstances. Consequently, there was no application on which the court could impose a mandatory injunction directing the Collector to grant permission. The cessation of the 1955 Act therefore did not confer any advantage on the appellant in the present suit. In view of this conclusion, the court found it unnecessary to examine the broader issue of whether, when the government is the owner of property, its discretion in managing that property may be subject to judicial direction, except where a statute expressly authorises such individual rights. The appeal was consequently dismissed with costs.

The Court pointed out that the appellant was not in a position to assert any specific right under the legal framework that governed the matters before it. Because the appellant could not establish a claim to any particular right, the Court found that the grounds presented in the appeal did not satisfy the requirements for a successful reversal of the lower court's decision. Accordingly, the Court concluded that the appeal must fail and that there was no basis for granting any relief to the appellant in this proceeding. The order therefore provided that the appeal be dismissed and that the appellant bear the costs incurred by the respondents in defending the suit. The dismissal of the appeal was pronounced as final, leaving the decision of the lower tribunal intact and confirming that no further judicial intervention would be available to the appellant. Thus, the Court affirmed the dismissal, imposed costs, and closed the matter without granting the appellant any entitlement or relief. The cost order required the appellant to reimburse the respondents for all expenses that were properly incurred in the conduct of the trial and subsequent appellate proceedings. No further relief or modification of the earlier judgment was granted, and the parties were directed to comply with the final determination as articulated by the Court.