Syed Shah Mohammed Quadri, J.

( 1 ) THESE ten writ appeals arise out of the common judgment dated 1/02/1994 of

a learned single Judge allowing five writ petitions filed by sub-lessees of Barytes Ore

granted by Andhra Pradesh Mineral Development Corporation Limited in their

favour, Five Writ Appeals are filed by the Government of Andhra Pradesh and five

Writ Appeals are filed by the Andhra Pradesh Mineral Development Corporation

Limited. The Division Bench which dealt with these appeals, having referred to the

aspects debated before it, came to the conclusion that the question of justiciability

of rights and privileges claimed by the parties and the obligations and the duties

cast upon the authorities in such contingencies and many other questions which

may relevantly arise for consideration by the Court are of considerable significance

to the public at large and they require adjudication and resolution by a larger Bench.

Accordingly these appeals are posted before us.

( 2 ) TO appreciate the contentions raised before us, which we shall refer to

presently, it would be necessary to notice the factual background which gave rise to

these appeals. There are large extents of lands bearing gray varieties of barytes in

Anantarajupet village and Management village-erstwhile Inam village of Cuddapah

District. The Government of Andhra Pradesh issued orders in G. O. Ms. No. 27,

Industries and Commerce (Mines. III) Department dated 7/01/1974 declaring that

the Barytes Ore bearing areas in the villages of Mangampet and Anantarajupet of

Cuddapah District except those already leased out were reserved with immediate

effect for exploitation in the public sector. In pursuance of the said orders, the

Government of Andhra Pradesh (hereinafter referred to as the lessor-State)

sanctioned the mining lease of Barytes over an extent of 22. 799 hectares (on

various Survey Nos. , specified in G. O. , mentioned hereunder) for a period of 20

years in favour of M/s. The Andhra Pradesh Mining Corporation Limited, Hyderabad

which subsequently came to be known as the Andhra Pradesh Mineral Development

Corporation (hereinafter, referred to as the lessee-Corporation) in G. O. Ms. No.

151, Industries and Commerce (Mines. III) Department dated 10/02/1975, subject

to the provisions of Mines and Minerals (Regulation and Development) Act, 1957 (for

short the) and the rules made thereunder and also subject to the condition in

Form k prescribed under the Mineral Concession Rules, 1960 (for short the rules ).

( 3 ) IT appears that the surface rights in the said lands vested in the pattedars.

They filed Revision Petitions before the Central Government challenging the validity

of the order granting the lease in favour of the lessee-Corporation and also obtained

stay of the operation of the lease granted in favour of the lessee-Corporation in G.

O. Ms. No. 151. Thus, the Lessee-Corporation was disabled from undertaking the

mining operation. This impasse was resolved by a tripartite agreement entered into

among the lessor-State, lessee-Corporation and the pattedars. By virtue of that

agreement, as modified subsequently, the pattedars were obliged to withdraw the

revision petitions and request the Central Government for dismissal of the revision

petitions and the stay petitions; the lessor-State undertook to give consent for

granting of sub-leases under the Rules in respect of the defined extents in favour of

the pattedars and the lessee-Corporation had agreed to grant sub-leases of the said

defined extents of the land in favour of the pattedars. Accordingly, the revision

petitions were withdrawn, consent under R. 37 for grant of sub-leases was given

and the sub-lease deeds were executed between the lessee-Corporation and the

pattedars-sub-lessees. While so, the Andhra Pradesh Legislative Assembly appointed

a House-Committee to go into the complaints of illegal mining operations of Barytes.

The House-Committee submitted its report on 24/05/1993. Accepting the

recommendation of the House Committee, the Government of Andhra Pradesh have

taken a policy decision reserving the entire Barytes deposits in Mangampet and

Anantarajupet of Cuddapah district for exclusive exploitation by the lessee-

Corporation and ordered cancellation of the sub-leases granted by the lessee-

Corporation in favour of the pattedars-sub-lessees for mining operations of Barytes

which is reflected in G. O. Ms. No. 402, Industries and Commerce (Mines I)

Department dated 1/12/1993. Further to the orders issued in the said G. O. Ms. No.

402, the Government of Andhra Pradesh withdrew, with immediate effect, the

consent granted to the lessee-Corporation to enter into sub-leases of lands bearing

Barytes Ore in Anantarajupet and Mangampet of Cuddapah District with the

pattedars sub-lessees in G. O. Ms. No. 47, Industries and Commerce (Mines. I)

Department dated 7/12/1993. In compliance with the said orders, the lessee-

Corporation cancelled the sub-leases. The legality of the said G. O. Ms. Nos. 402 and

417 and the consequent cancellation of the sub-leases were assailed by the

pattedars-sub-lessees in the above said writ petitions.

( 4 ) THE learned single Judge who dealt with these writ petitions came to the

conclusion that before passing the impugned orders directing cancellation of the

sub-leases and withdrawal of the consent, the Government have not given an

opportunity of being heard to the sub-lessees which is violative of the principles of

natural justice and also of S. 4 A of the quashed the impugned G. Os. , and the

orders passed by the lessee-Corporation cancelling the sub-leases and thus allowed

the writ petitions.

( 5 ) THE learned Advocate General appearing for the lessor-State as well as the

lessee-Corporation, has contended that the subleases are not statutory, but are

ordinary contracts without any statutory flavour, so the termination of the subleases

cannot be questioned in the writ petitions; as the impugned G. Os. , and the

other proceedings are neither statutory orders nor executive orders but they are

made in exercise of the rights conferred under the terms of the contract, the

remedy, if any, for the pattedars-sub-lessees lies under the ordinary civil law, but

not under Art. 226 of the Constitution of India. R. 37 of the Rules has no application

for withdrawal of the consent; even if the withdrawal is treated as action under R.

37, no notice need be given as the provisions of the and the Rules constitute a

complete code and exclude by necessary implication the necessity of issuance of

notice to the subleases before withdrawing consent; it is pointed out that the

c6nsent given by the Government of Andhra Pradesh in favour of the petitioners in

W. P. No. 18499 of 1993 and 18537 of 1993 are void by virtue of S. 19 of the as

prior approval of the Central Government was not obtained as contemplated by the

amended R. 37. With regard to W. P. No. 19953 of 1993, it is urged that the lease

was granted in violation of the proceedings of the Government of India dated

4/09/1990 and also in violation of S. 5 (1) of the and Rr. 59 and 60 of the Rules

framed thereunder; even the consent given to the pattedars who filed W. P. No.

18538 of 1993 and 19122 of 1993 for sub-lease of the land, was without dereserving

the area, as such the consent given in all cases is illegal; -the pattedars

get no right under a void contract of sub-leases in view of S. 19 of the. The

transactions between the Corporation-lessee and the pattedars are "transfers in any

other manner" and not "sub-leases" or in the alternative the sub-leases in question

are not in Form c, so they do not fall within the meaning of the lease and

therefore, S. 4a of the has no application. In any event, submits the learned

Advocate General, assuming the Court has rightly come to the conclusion that the

impugned orders are bad for want of notice or for non-compliance of S. 4 A of the

Act, the writ petitions ought not to have been allowed as it resulted in reviving void

orders and perpetuating the illegality.

( 6 ) THE learned Additional Solicitor General appearing for the Union of India and

the 2nd respondent in these appeals, brought to our notice the contents of para 3 of

the counter-affidavit to the effect that the matter relating to sub-leases does not fall

within the purview of the Central Government, but is within the purview of the State

Government. However, he submits that the State Government was not competent to

grant consent under R. 37 of the rules, which is not attracted where the area has

been reserved for exploitation by a Public sector undertaking. He elaborated his

submission with reference to R. 59 which provides, inter alia, that an area which has

been reserved for exploitation by a public sector undertaking is not available for

grant of leases; if a sub-lease is granted in respect of such area by the lessee-

Corporation, it would be contrary to the orders of reservation from which the lessee

derives sustenance. His contention is that when a notification under R. 58 is in force,

R. 37 cannot be invoked. Though the learned counsel conceded that S. 4a of the

applies to sub-leases, yet he contended that as the arrangement to grant sub-leases

pursuant to the tripartite agreement is itself void, S. 4a of the will not be

attracted for such illegal sub-leases. According to the learned counsel, no notice

need be given to the sub-lessees before withdrawal of the consent as the rights

claimed by them whether treated as arising under the contract of sub-lease or under

statutory order under R. 37 of the rules or executive action of tripartite

arrangement, really emanate from a void order of consent being in violation of

declaration of reservation.

( 7 ) SHRI Kapil Sibal, learned Senior Counsel appearing for the respondents-writ

petitioners in W. A. Nos. 131, 134, 170 and 175 of 1994, brought to our notice S. 2

of the and has contended that in view of the concept of occupied field, all

matters relating to regulation of mines and development of minerals have been

brought under the control of the Union Government and that the State Government

has no residuary power in those matters. His contention is, application of R. 37 to

the leases granted to public sector undertakings in respect of the reserved areas

cannot be excluded; once the consent contemplated under R. 37 was given and it

resulted in execution of the sub-leases, the question of withdrawal of the consent

does not arise as the order granting consent has worked out itself and there remain

nothing to be withdrawn; the sub-leases having been granted with the consent of

the State Government, rights have accrued to the subleases and so, the consent

cannot be withdrawn without giving notice to the affected parties. He also argued

that as lease includes sub-lease, S. 4a of the is applicable 19 sub-leases as such

premature determination of the sub-leases has to be strictly in accordance with the

terms of the said section which enjoins notice to the affected party. As admittedly

no notice was given either before ordering the termination of the leases or

withdrawing the consent, the impugned Government orders were rightly quashed by

the learned single Judge. On the question of granting consent illegally and the

leases themselves being void on the ground of violative of the provisions of the

and the Rules, the learned Senior Counsel submits that the impugned orders

themselves are not based on those grounds and that the impugned orders cannot

now be improved or supported on grounds other than those mentioned in the

orders. Referring to the clauses in the sub-lease deeds where under the sub-lessees

have agreed not to claim any damages in the event of termination of subleases due

to withdrawal of consent or taking of policy decision to determine sub-leases, the

learned counsel argued that the clauses themselves being void cannot be given

effect to and that having regard to the cases put forth by the parties before the

learned single Judge no new plea can be allowed to be raised at the stage of appeal.

On the question of the absence of prior consent of the Central Government in W. P.

Nos. 18499 and 19537 of 1993, the learned counsel puts his case on two grounds

viz. , that it was not the case of the lessor-State in the impugned order and there

was no plea that for want of the consent of the Central Government, the sub-leases

would be void.

( 8 ) . V. Suryanarayana Rao the learned counsel appearing for the respondents in

W. A Nos. 132 and 133 of 1993, adopted the arguments of Shri Kapil Sibal. He

however added that it was the duty of the State Government to obtain the approval

of the Central Government and that the State Government cannot take advantage of

its own wrong, yiz. , not obtaining the approval of the- Central Government before

granting sub-leases and in any event, there has been implied approval of the Central

Government in view of the letter dated 4/09/1990 and that had notice been given

before passing the impugned order, the sub-lessees would have satisfied of the

existence of implied consent. As the sub-leases have been cancelled en bloc which is

a clear indication of the non-application of mind, therefore, for that reason also the

cancellation of leases is illegal and has been rightly held to be so by the learned

single Judge.

( 9 ) SHRI Jagadish, the learned counsel appearing for the respondents-pattedars in

Writ Appeals Nos. 169, 171, 172 and 173 of 1994, adopted the arguments of Shri

Kapil Sibal and prayed that the appeals be dismissed.

( 10 ) THE learned single Judge quashed the impugned orders on the ground of

non-compliance of the principles of natural justice and of the requirements of subsec.

(3) of S. 4a of the. The substance of the arguments of the learned Advocate

General is that the impugned order directing termination of sub-leases is not in

exercise of power under S. 4a of the but under power reserved by terms of sublease deed. We shall read with the impugned order, viz. , G. O. Ms. No. 402,

Industries and Commerce (Mines I) Department dated 1/12/1993 which runs thus:--

"govt. OF ANDHRA PRADESH ABSTRACT Report of the House Committee on illegal

mining at Mangampet, Cuddapah District --Acceptance of the recommendations --

Orders -- Issued. ORDER :1. The Committee of the Legislative Assembly which went

into the question of illegal mining of barytes at Mangampet in Cuddapah District

submitted its report on 24-5-1993. 2. Considering that the Government has taken a

policy decision to reserve the entire barytes deposits in Mangampet and Anantarajupeta villages in Cuddapah District for exclusive exploitation by the Andhra

Pradesh Mineral Development Corporation Limited, recommended that expeditious

steps to be taken to complete the acquisition of all mineral bearing lands in

Mangampet and neighbouring villages while taking simultaneous steps to dispose of

litigation pending in the courts. The lands thus acquired may be handed over to the

Andhra Pradesh Mineral Development Corporation Limited, a Public sector

undertaking, to exploit the mines fully. The committee has further recommended

that in view of the acquisition of the entire mineral bearing areas and entrusting

them to the Corporation with powers to exploit the minerals fully, the need for

tripartite agreement disappears and, therefore, the tripartite agreement which

become a source of many irregularities may be cancelled immediately and that all

mineral lands be entrusted to the Corporation for its exclusive exploitation. 3.

Government have decided to accept the recommendations made by the House

Committee and accordingly order cancellation of all existing subleases to mine

barytes entered into between the Andhra Pradesh Mineral Development Corporation

Limited and the sub-lessees. A. P. Mineral Development Corporation Limited is

directed to take action accordingly in accordance with law and report compliance to

Government. 4. All such mineral lands shall stand reverted to or shall be acquired by

A. P. mineral Development Corporation Limited for its exclusive exploitation. A. P.

Mineral Development Corporation Limited alone should mine the barytes in keeping

with the policy of the Government of India. (By Order and in the Name of the

Governor of Andhra Pradesh) M. V. Natarajan, Principal Secretary to Government.

"the impugned order itself does not refer to any clause in the sub-lease deed

pursuant to which the termination of sub-lease has been effected. In the counter affidavit of respondents 1 and 2, para 7 deals with this aspect. We shall extract it

here for proper appreciation. "

( 11 ) I submit that by an (order) under G. O. Ms. No. 402, dated 1-12-1993, the

Government have taken a policy decision to put an end to all the existing sub-leases

in order to enable the Corporation to carry on mining operations. It may be stated

herein that the Government earlier issued G. O. Ms. No. 27, dated 7-1-1974 with the

concurrence of Government of India reserving the entire area for the purpose of

Public Sector undertaking. e. the Corporation. After a thorough study of the report

of the House Committee of the Legislature and the existing facts and circumstances,

the Government took the present policy decision in public interest and for public

good. After an objective assessment it was decided by the Government that the only

proper way to exploit the deposit must be by a single agency. e. , through the

Corporation, so that it can do away with illicit quarrying at various places and by

different persons. Decision of the Government was to enforce accountability on a

single agency and to see that the unique deposit of barytes would be quarried in a

more scientific and systematic manner rather than allowing it to be quarried in

fragmented small areas. The conservation of the material and proper development

of the land through scientific mining was given utmost importance. The Government

also kept in view the internal requirement of agencies like O. N. G. C. and Oil India.

It had to see that there is no indiscriminate export resulting in shortage of the

mineral at a later point of time. The Government also felt that the tripartite

agreement has outlived its purpose. The deposit was being exploited

indiscriminately. I submit that the decision of the Government was totally justified

and is well within its competence. The main objective was to maximise the

production in a scientific way and to go for systematic mining. Issuance of any

notice in this regard-would defeat, the very purpose, assuming without admitting

that the situation demands issue of notice! It may be reiterated that the sub-leases

are purely contractual, without any statutory flavour and giving of notice is not only

not contemplated but is also not at all necessary. "it is seen that even the counter affidavit does not refer to any specific power in the contract of sub-lease. However,

the learned Advocate General has invited our attention to CIs. 15 and 16 of the

deed of sub-lease executed by the lessee-Corporation in favour of Mr. Y. S. Raja

Reddy, the petitioner in W. P. No. 18538 of 1993. It may be appropriate to read the

said clauses here:"15. The lessee reserves the right to terminate this sub-lease in

the event of any violation of the terms and conditions/ default/breach of contract

and the sub-lessee shall be responsible for all damages that accrue. 16. The sublessee shall not claim any damage from the lessee in the event of the State

Government withdrawing the permission under R. 37 (i) to sub-lease during the

tenure of this lease or on account of any other Governmental action having a direct

bearing on this contract. "

( 12 ) A perusal of the said clauses makes it evidence that clause 15 reserves the

right of the lessee-Corporation to terminate the sublease but it prescribes the event

on the happening of which this power can be exercised and it is any violation of the

terms and conditions/default/breach of contract. In the instant case, it is nobodys

case that the lessee-Corporal ion has ordered premature termination of the subleases

for any violation of the terms and conditions/ default or breach of contract.

Therefore, the impugned order cannot be said to be under clause 15 of the sub

lease deed.

( 13 ) CLAUSE 16 does not deal with the question of the termination of lease. It

deals with the consequences of termination of the sub-lease, for it provides that the

sub-lessee shall not claim any damage from the lessee-Corporation in the event of

the State Government withdrawing permission under R. 37 (1) of the Rules to subleases during the tenure of the lease or on account of any other governmental

action having direct bearing on the contract. On happening of any of the events

mentioned in clause 16, the sub-lessee is precluded from claiming damages from the

lessee-Corporation and, in our view, this also does not support the claim that the

termination of the sub-leases was in exercise of the powers conferred under the

terms of the contract of sub-lease.

( 14 ) WE have already pointed out above that no 4 power is reserved for the "state

Government to terminate the sub-lease under the deed of sub-leases either as

lessor or in its capacity as State. In view of this finding, we cannot give effect to the

contention of the learned Advocate General that the impugned order directing

termination of the sub-leases is by virtue of and in exercise of the authority

conferred on the lessor-State by the terms of the sub-lease deed. The orders of

termination of sub-leases passed by the Corporation-lessee are only consequential

orders passed consequent upon the impugned G. Q. Ms. , and we make it clear that

we have not pronounced upon the power of the Corporation to terminate the subleases

by invoking power under the deed of sub-leases.

( 15 ) NOW we consider it appropriate to decide the question whether on the facts

and in the circumstances of the case, the judgment under appeal can be sustained,

because if it can be upheld, then it would be unnecessary to go into the other

aspects relating to the merits of the case. Therefore, we shall consider whether the

impugned order directing premature determination of the sub-leases without

complying with sub-sec. (3) of S. 4a of the and the order withdrawing the

consent without issuing notice to the pattedars-respondents are valid in law.

( 16 ) AT the outset, we would point out that the impugned order directing

termination of sub-leases does not purport to be issued under Section 4a of the.

But the fact is not determinative of source of power if such an order can be passed

under that section in law. As the learned single Judge has tested the validity of the

impugned order on the touchstone of S. 4a of the and that finding is assailed

before us, we shall examine this aspect in the first instance. It will be useful to refer

to S. 4a of the in so far as it is relevant for our purposes:--"4a. Termination of

prospecting licences or mining leases :-- (1) Where the Central Government, after

consultation with the State Government, is of opinion that it is expedient in the

interest of regulation of mines and mineral development, preservation of natural

environment, control of floods, prevention of pollution, or to avoid danger to public

health or communications or to ensure safety of buildings, monuments or other

structures or for conservation of mineral resources or for maintaining safety in the

mines or for such other purposes, as the Central Government may deem fit, it may

request the e State Government to make a premature termination of a prospecting

licence or mining lease in respect of any mineral other than a minor mineral in any

area or part thereof, and, on receipt of such request, the State Government shall

make an order making a premature termination of such prospecting licence or

mining lease with respect to the area or any part thereof. (2) Where the State

Government, after consultation with the Central Government, is of opinion that it is

expedient in the interest of regulation of mines and mineral development,

preservation of natural environment, control of floods, prevention of pollution or to

avoid danger to public health or other structures or for such other purposes, as the

State Government may deem fit, it may, by an ordered, in respect of any minor

mineral make premature termination of a prospecting licence or mining lease with

respect to the area or any part thereof covered by such licence or lease: Provided

that the State Government may, after, the premature termination of a prospecting

licence or mining lease under sub- sec. (1) or sub-sec. (2), as the case may be,

grant a prospecting licence or mining lease in favour of such Government Company

or Corporation owned or controlled by Government as it may think fit. (3) No order

making a premature termination of a prospecting licence or mining lease shall be

made except after giving the holder of the licence or lease a reasonable opportunity

of being heard. (4) xx xx xx"

( 17 ) A plain reading of the provisions extracted above makes it clear that:

subsection (1) deals with the premature termination of a prospecting licence and

mining lease in respect of any mineral other than a minor mineral; (2) it is the

Central Government which has to form an opinion, after consultation with the State

Government, as to whether it is expedient to direct premature termination of lease;

(3) the ground for such an action are: (a) in the interest of regulation of mines and

mineral development; (b) preservation of natural environment; (c) control of floods;

(d) prevention of pollution; or (e) to avoid danger to public health; or (f)

communications, or (g) to ensure safety of buildings, monuments or other

structures, or (h) for conservation of mineral resources, or (i) for maintaining safety

in the mines, or (j) for such other purposes as the Central Government may deem

fit; (4) On formation of such an opinion, the Central Government has to request the

State Government to make a premature determination; (5) It is only then the State

Government has to pass an order making premature termination of such prospecting

licence or mining lease with respect to any area, pursuant to such a request, under

sub-sec. (2) of Section 4-A of thewhich deals with premature determination of

prospecting licence or mining lease in respect of any minor mineral, it is for the

State Government to form an opinion on the basis of the criteria mentioned therein,

after consultation with the Central Government, and make an order of premature

determination of the lease of any minor mineral. After such determination, the State

Government has power to grant prospecting licence or mining lease in favour of a

Government Company or Corporation as it may deem fit. Sub-section (3) of the said

section, enjoins that no order making premature determination of the prospecting

licence or mining lease shall be made except after giving the holder of the licence or

lease a reasonable opportunity of being heard. For the purposes of the controversy

before us, it is not necessary to deal with sub-section (4) of Section 4a of the

which prescribes when a mining lease will lapse and matters related thereto.

( 18 ) THE expression mining lease is defined in Clause (c) of Section 3 of the

in the following terms :-" "mining lease" means a lease granted for the purpose of

undertaking mining operations, and includes a sub-lease granted for such purpose.

"section 3 which deals with definitions of the expressions used in the, provides

that the expressions defined therein would have the meaning assigned to them

unless the context otherwise requires. Thus, unless the context otherwise requires,

a sub-lease granted for the purpose of mining operations would fall within the

meaning of the expression mining lease. During the course of the debate, we

found consensus among the learned counsel for the parties that for the purposes of

Section 4a of the, sub-lease falls within the meaning of the expression lease*

but they raised competing contentions on the question as to whether the

requirements of Section 4a of the should be complied with for premature

termination of sub-leases in question. The learned Additional Solicitor General and

the learned Advocate General argued that as the sub-leases were illegal and void,

there was no obligation on the State Government to comply with the requirements

of Section 4 A of the for premature termination of the sub-leases granted in

favour of the pattedars, whereas Sri Kapil Sibal contended that the sub-leases were

entered into in pursuance of the tripartite agreement under which the pattedars

gave their consent for mining operations by the Corporation-Lessee on their patta

lands and as a consideration thereof, the lessor-State and the lessee-Corporation

agreed to grant sub-leases of parcels of land and accordingly sub-leases were duly

granted with the consent of the State Government, therefore, the sub-leases are

valid and the premature termination of the sub-leases without complying with the

requirements of Section 4a of the is wholly illegal.

( 19 ) THESE contentions lead us to the inquiry into the question -- Was the grant of

sub-leases valid in law

( 20 ) HERE it will be useful to refer to paragraph 3 of the impugned order of the

Government dated 1-12-1993, extracted above, which shows that the Government

(Lessor State) has taken a policy decision to accept the recommendations of the

House-Committee and ordered cancellation of all existing sub-leases entered into by

the Lessee-Corporation and the sub-lessees, but not for the reasons that the subleases were invalid or illegal.

( 21 ) IT has already been noticed that the power under Section 4a of the

regarding premature termination of leases is available to the Central Government in

case of any, mineral other than minor mineral and in the event of the Central

Government forming the opinion that it is expedient in the interest of the regulation

of mines and mineral development, among other reasons specified therein, so to do,

it can request the State Government to make premature determination of the

leases. This power is available to the State Government only in respect of minor

mineral. Barytes is admittedly a major mineral. Therefore, the Government (Lessor-

State) cannot exercise the power under Section 4a and request the Lessee-

Corporation to terminate the sub-leases in question prematurely as Barytes is

included in the first schedule and ceased to be a minor mineral from 1986. It is

perhaps for this reasons, no plea is taken by respondents 1 and 2 (the Lessor-State

and the Lessee--Corporation) in their counter affidavit tracing source of power for

premature termination of the sub-leases of Barytes to Section 4a of the nor was

the impugned order sought to be supported before us under that provision. In view

of this fact and in the view we have taken we shall revert to the said question

presently.

( 22 ) WE may note here that the only other provision in the Rules which authorises

termination of a mining lease is sub-rule (3) of Rule 37 of the Rules. The said subrule

is in the following terms:--"37. Transfer of lease :-- (1) xxx xxx xxx xxx (1a) to

(2) xxx xxx xxx xxx (3) The State Government may by order in writing determine

any lease at any time if the lessee has, in the opinion of the State Government

committed a breach of the provision of sub-rule (1) or has transferred any lease or

any right, title or interest therein otherwise than in accordance with sub-rule (2):

Provided that no such order shall be made without giving the lessee a reasonable

opportunity of stating his case. "

( 23 ) THUS sub-rule (3) empowers the State Government to determine any lease in

writing at any time if in its opinion the lessee has committed: (i) a breach of subrule

(1), or sub-rule (1a), or sub-rule (IB); or (ii) has transferred any lease or any

right, title or interest therein otherwise than in accordance with sub-rule (2 ). The

proviso appended to this sub-rule enjoins that the lessee shall be given a reasonable

opportunity of stating his case before determining the lease. The learned Advocate

General has contended that context of Rule 37 otherwise requires so in the rule,

sub-lease cannot be included within the meaning of the mining lease. Reading the

rule, as a whole, we find considerable force in the submission of the learned

Advocate General and we do accede to it.

( 24 ) THE power under sub-rule (3) of Rule 37, in our view is available to determine

only a mining lease for it is meant to be exercised when there is breach of sub-rules

(1), (la) or (1b) or violation of sub-rules (2) of Rule 37 and in the instant case, the

source of power to issue the impugned G. O. Ms. No. 402 is not, and in our view,

rightly sought to be derived from this sub-rule obviously because the proviso to subrule

(3) enjoins that no order of termination of lease shall be made without giving

the lessee a reasonable opportunity of stating his case and admittedly no notice was

given to the sub-lessees.

( 25 ) WE shall now proceed to consider whether the impugned order could have

been validly passed by the State in exercise of its Executive power.

( 26 ) SHRI Kapil Sibal contends that in view of the declaration in Section 2 of the

Act, the regulation of mines and development of the minerals has come under the

control of the Union and the State has no residuary power to deal with this in view

of the well-recognised concept of occupied field except to the extent the power is

reserved to the State Government under the or the Rules.

( 27 ) THE extent of the Executive Power of the State under Article 162 of the

Constitution extends to the matters with respect to which the Legislature of the

State has power to make laws. This power is subject to the provisions of the

Constitution and in any matter in the List III (concurrent list), the executive power

of the State is subject to and limited by the executive power expressly conferred by

the Constitution or by any law made by the Parliament upon the Union or authorities

thereof. In other words, in regard to the matters in the concurrent list, the executive

power of the State cannot over-ride the executive power conferred upon the Union

or the authorities thereof which has been expressly conferred either by the

Constitution or by any Act of the Parliament upon them.

( 28 ) ENTRY 54 is List-I (Union List) of VII Schedule reads as follows :--"54.

Regulation of mines and mineral, development to the extent to which such

regulation and development under the control of Union is declared by Parliament by

law to be expedient in the public interest. "the effect of this entry is that Parliament

can make law providing regulation of mines and mineral development and to the

extent to which such regulation and development is declared by Parliament by law

to be expedient in public interest, it will be under the exclusive control of the Union.

Insofar as List II (State List) is concerned the relevant entry. e. , Entry 23 therein,

makes it clear that the legislative power of the State in relation to regulation of

mines and mineral development is subject to the provisions of List I with respect to

the regulation and development under the control of the Union.

( 29 ) FROM the above discussion it follows that in view of declaration under Section

2 of the, the State is denuded of legislative powers to enact any law in respect

of regulation of mines and mineral development, hence the State can claim to

executive power touching any aspect of regulation of mines and mineral

development.

( 30 ) IT will be useful to refer to the judgment of the Supreme Court in State of

Orissa v. M. A. Tulloch and Company, AIR 1964 SC 1284 [LQ/SC/1963/191] on this aspect. In the said

case, the scope of provisions of the vis-a-vis the provisions of the Orissa Mining

Areas Development Fund Act (Act 27 of 1952) came up for consideration of the

Supreme Court. By the impugned Orissa Act, the State Government was empowered

to levy fees on a percentage of value of mined ore for the development of mining

areas. The competence of the State Legislature to pass the Orissa Act, was

questioned on the ground that the Central Act covered the entire field of mineral

development and that being the extent to which Parliament had declared by law

that it was expedient that the Union should assume control the field of mineral

development was taken over, that would include the provision of amenities to

workmen employed in the mines which was necessary in order to stimulate or

maintain the working of mines, as such the Orissa Act was repugnant and no fee

could be levied by the State Legislature. Upholding that contention the Supreme

Court observed that the covered the entire field of mineral development and that

being the extent to which the Parliament had declared by law that it was expedient

that the Union should assume control and that the terms of Section 18 (1) of that

Act laid a duty upon the Central Government to take all steps as might be necessary

for the conservation and development of minerals in India and that purpose the

Central Government has, by notification, to make such rules as it deemed fit so that

it would include the provision of amenities to workmen employed in the mines, the

Orissa Act levying fees was beyond the legislative competence of the State. It was

held as follows at Page 1291 :--"repugnancy arises when two enactments both

within the competence of the two Legislatures collide and when the Constitution

expressly or by necessary implication provides that the enactment of one Legislature

has superiority over the other then to the extent of the repugnancy the one

supersedes the other. But two enactments may be repugnant to each other even

though obedience to each of them is possible without. disobeying the other. The

test of two legislations containing contradictory provisions is not, however, the only

criterion of repugnancy, for if a competent legislature with a superior efficacy

expressly or impliedly evinces by its legislation an intention to cover the whole field,

the enactments of the other legislature whether passed before or after would be

overborne on the ground of repugnance. Where such is the position, the

inconsistency is demonstrated not by a detailed comparison of provisions of the two

statutes but by the mere existence of the two pieces of legislation. Having regard to

the terms of S. 18 (1) of the Central Act 67 of 1957 it appears clear that the

intention of Parliament was to cover the entire field and thus to leave no scope for

the argument that until rules were framed, that was no inconsistency and no

supersession of the Stale Act 27 of 1952.--"

( 31 ) IN Baijnath v. State of Bihar, AIR 1970 SC 1436 [LQ/SC/1969/305] , Bihar State Legislature

amended the Bihar Land Reforms Act, under Entry 23 of List II of the Schedule VII

of the Constitution. By virtue of the amendment, the ex-landlords ceased to have

any interest and the State of Bihar became the Lessor under the State Act. The

State demanded rent and royalty from the Lessees who got the land under the

leases prior to coming into force of the. The amendment was challenged as

unconstitutional. Following the judgment in State of Orissa v. M. A. Tulloch and

Company (1st supra), the Supreme Court held that the Union had taken all the

powers to itself and authorised the State Government to make rules for the

regulation of leases and that by the declaration and the entrustment of Section 14,

the whole of the field relating to the minor minerals came within the jurisdiction of

Parliament and no scope was left for the enactment of the second proviso to Section

10 (2) in the Bihar Land Reforms Act and therefore the said enactment was without

jurisdiction.

( 32 ) WE may also note here the well settled principle that under Article 162, the

executive power is co-extensive with the power of the legislature to legislate and

that executive power cannot be exercised in derogation of the law made by the

competent legislature. It was so held in Chitralekha v. State of Mysore, AIR 1964 SC

1823. We have already held that the State legislature is denuded of the legislative

power on the topic of regulation of mines and mineral development. In view of this,

the irresistible conclusion is that premature termination of the sub-leases by the

State Government by the impugned G. O. Ms. No. 402 cannot be upheld even under

the executive power of the State Government under Article 162 of the Constitution.

( 33 ) NEXT the validity of the other impugned order issued by the Government in G.

O. Ms. No. 417, Industries and Commerce (Mines-I) Department, dated 7/12/1993

remains to be considered. After referring to the policy decision and the orders issued

in G. O. Ms. No. 402 dated 1/12/1993 to cancel all the sub-leases entered into

between the Lessee-Corporation and the sub-lessees, and to entrust the area to the

Lessee-Cor poration for its exclusive exploitation, the Government by orders issued

in G. O. Ms. No. 417 purported to withdraw, with immediate effect, the consent

given to the Corporation to enter into sub-leases of the land bearing Barytes mines

in Mangampet and Anantarajupet villages of Cuddapah District.

( 34 ) RULE 37 enjoins that the transfer of a mining lease in any form specified

therein shall be with the previous consent in writing of the State Government. Rule

37 (1) insofar as it is relevant for the point in issue, as i* stood at the relevant time,

read thus:--"37. Transfer of lease: (I) The lessee shall not, without the previous

consent in writing of the State Government; (a) xxx xxx xxx xxx (b) xxx xxx xxx xxx

(1-A) xxx xxx xxx xxx (2) xxx xxx xxx xxx (3) xxx xxx xxx xxx From a perusal of the

above extracted provision it is evident that it does not impojse absolute prohibition

on the lessee to transfer the lease but it imposes an obligation on the lessee to

obtain previous consent in writing of the State Government if it intends to assign,

sub-let, mortgage or transfer in any other manner, mining lease or any right, title or

interest therein or if he intends to enter into pr make any arrangement contract or

understanding whereby he will or may be directly or indirectly financed to a

substantial extent by, or under which his operations or undertakings will or may be

substantially controlled by any person or body of persons other than the lessee. We

do not consider it necessary to refer to the other requirements of the rule having

regard to the nature of the controversy before us. Incidentally, it may be pointed

out that Rule 37a of the Rules provides that after grant of the consent by the State

Government, a transfer lease deed in Form o or a form as near thereto as possible,

shall be executed within three months of the date of the consent unless the period

is extended by the State Government and that in the instant cases, the sub-leases

are not in Form o.

( 35 ) MR. Sibal argues that the very purpose of granting consent is to enable the

Lessee to sub-lease the mining lease or any right, title or interest therein and after

the lessee transferring the mining lease by way of sub-lease, the consent given by

the State Government will work out itself and nothing will survive for being

withdrawn by the State Government. He relied on a judgment of this Court in C. M.

Ramanath Reddy v. State of Andhra Pradesh, 1991 (11) ALT 32 which was decided

by one of us (Syed Shah Mohammed Quadri,.)

( 36 ) IN that case, the consent given by the State Government to the Andhra

Pradesh Mineral Development Corporation Limited to grant sub-leases in favour of

the Writ Petitioner therein was ordered to be kept in abeyance after the execution of

the lease deed and after he has started mining operations pursuant to the subleases

granted in his favour. On behalf of the Government it was urged that the

rights of the petitioners, if any, which were alleged to be interfered with, were

contractual rights and therefore, Article 226 of the Constitution was not available

and that the authority which gave its consent had power to suspend the order

granting the consent. Insofar as the first contention is concerned, it was pointed out

that the State Government was not a party to the sub-lease and there was no privity

of contract between the State and the sub-lessee and that Rule 37 does not create

any statutory relationship of lessor and the lessee between the State and the sublessee, therefore, the impugned action of the State could not be said to be one of

the rights and obligations arising out of or under a contract; it was laid down therein

that where the State acted under a contractual right or power or committed breach

of a contractual obligation which gave rise to a cause to a citizen to enforce a

commercial contractual right against another person or the State, generally, the

High Court would not adjudicate such causes exercising its jurisdiction under Article

226 of the Constitution and would leave the parties to work out their rights in a

competent Civil Court. This is not an absolute rule of law creating bar on the

exercise of jurisdiction of the High Court under Article 226 of the Constitution but a

factor which the High Court takes into consideration in the exercise of its

extraordinary and discretionary writ jurisdiction. On the facts ef that case, it, was

held that no right or obligation of the Writ Petitioner arising out of the contract of

sub-leases was sought to be enforced against the State and that what was

questioned therein was the executive action of the State which interfered with the

rights of the petitioner. It was also laid down therein that having regard to the facts

and circumstances of that case the power of the State Government to terminate the

lease under sub-rule (3) of rule 37, did not embrace the power to suspend the

consent granted to the lessee to enter into sub-lease with a pattedar.

( 37 ) IT is now contended by the learned Advocate-General that Section 21 of the

General Clauses Act confers power on the State Government to withdraw the

consent already granted. Section 21 reads as follows :--"21. Power to issue, to

include power to add to, amend, vary or rescind, notifications, orders, rules or byelaws:--

Where, by any Central Act or Regulation, a power to issue notifications,

orders, rules or bye-laws is conferred, then that power includes a power, exercisable

in the like manner and subject to the like sanction and conditions (if any) to add to,

amend, vary or rescind any notifications, orders, rules or bye-laws so issued. "it may

be noticed that Section 21 of the General Clauses Act prescribes a rule of

construction. It says that a power to issue notifications, orders, rules or bye-laws

conferred by any Central Act or Regulation includes a power to add to, amend, vary

or rescind any notifications, orders, rules or bye-laws so issued and this power is to

be exercised in the like manner and subject to the like sanction and conditions, if

any.

( 38 ) IN our view the power to withdraw the consent earlier given by the State

Government under Rule 37 of the Rules to the lessee to enter into, sub-teases, can

be exercised so long as it is capable of being rescinded or withdrawn as this exercise

should be subject to the like conditions. When on the strength of the consent to

enter into sub-leases for mining, the lessee has executed sub-lease deed and thus

the consent culminated into contract and the sub-lessee has already commenced the

mining operations, the consent has worked out itself and cannot be withdrawn at

that stage as the conditions existing at the time of giving consent have changed. A

close reading of the Rule 37 of the Rules, shows that having regard to the scheme

of the Rule, the concept of withdrawal of the consent given to the Lessee for

entering into sub-leases is inconsistent with the power conferred thereunder so by

invoking Section 21 of the General Clauses Act, the State Government cannot

purport to withdraw the consent.

( 39 ) IN State of Bihar v. D. N. Ganguly, AIR 1958 SC 1018 [LQ/SC/1958/95] the question before the

Apex Court was whether a reference made under Section 10 (1) of the Industrial

Disputes Act can be cancelled or superseded pending adjudication proceedings

pursuant to the order of reference. The Supreme Court observed that the rule of

construction embodied in Section 21 of the General Clauses Act can apply to the

provisions of a Statute only where the subject-matter, context and effect of such

provisions are in no way inconsistent with such application and it was held that the

said section did not apply to Section 10 (1) of the Industrial Disputes Act to enable

the Government to cancel or supersede the order of reference.

( 40 ) THE recent judgment of the Supreme Court in State of Madhya Pradesh v.

jay Singh, AIR 1993 SC 825 [LQ/SC/1992/775] : 1992 AIR SCW 3318 relied upon by the learned

Advocate General is of no assistance to the appellants. There, the question was

whether, in exercise of the powers under S. 21 of the General Clauses Act, the

government can reconstitute the Commission of Inquiry appointed under the

Commissions of Inquiry Act, 1952. It was held that the power to rescind any

notification, conferred under Section 21 of the General Clauses Act was inapplicable

in the scheme of the Commissions of Inquiry Act and: that it could not be invoked to

enlarge the Governments power to reconstitute the Commission constituted under

Section 3 of the. Act in a manner other than that expressly provided in that Act itself

and that as there was no express Power given by that Act to the appropriate

Government to reconstitute the Commission of Inquiry by replacing or substituting

its sole member, no such power could be exercised by the appropriate Government.

( 41 ) FOLLOWING the ratio of the judgment in State of Madhya Pradesh v. Ajay

Singh (6th supra), we hold that the State cannot invoke the power under Section 21

of the General Clauses Act to withdraw the consent validly given by it to the Lessee-

Corporation to enter into sub-leases with the pattedars after the sub-lease deeds

have been executed and the mining operations are already commenced.

( 42 ) THERE is one important distinguishing feature which comes in the way of

applying the ratio in Ramanath Reddys case (4th supra) to the facts of this case and

that is here the grant of consent is said to be illegal and there was no such plea in

that case. The contention of the appellants is that a mining area which has been

reserved under Rule 58 for exploitation by a public sector undertaking is not

available even for grant of a sub-lease of such an area in view of provisions of Rule

59 as such no valid consent could have been given under Rule 37. As the impugned

order of the Government in G. O. Ms. 41,7 is not passed on the ground that the

consent granted by it was invalid in law, we do not wish to express any opinion on

this aspect. We shall deal with this further when we deal with contentions based on

Rules 58 and 59 of the Rules.

( 43 ) EVEN assuming that the State Government is competent to order premature

termination of lease as well as withdraw the consent given under Rule 37 of the

Rules, the impugned orders cannot be sustained as they were passed without giving

an opportunity of being heard to the affected parties and in violation of the

principles of natural justice as admittedly the sub-lessees have been carrying on the

mining operations after they entered into sub-leases which were pursuant to

consent, granted under Rule 37 of the Rules.

( 44 ) FOR all the above reasons, the order of the learned single Judge holding that

G. O. Ms. No. 402 and G. O. Ms. No. 417 dated 1-12-1993 and 7-12-1993

respectively and consequential termination of sub-leases by the Lessee-Corporation,

as illegal and void, has to be upheld.

( 45 ) NOW that remains to be considered is what relief can be granted to the

appellants in these cases.

( 46 ) THE contention of the learned Advocate General is that as the sub-leases are

void ab initio and of no effect, the petitioners should not, be granted any relief in

the writ petitions as it would amount to perpetuating illegality. We have already

referred to Mr. Kapil Sibals contention on this aspect and that is, the plea that the

sub-leases are void was neither the case of the appellants in the impugned orders

nor before the learned single Judge, so they cannot defend or support the orders on

the grounds other than those mentioned in the orders itself as it would amount to

improving the impugned orders which is impermissible. The principle that the

impugned order cannot be supported on grounds other than those mentioned in the

impugned order is too well settled to admit of any debate on it. The Constitution

Bench of the Supreme Court in Mohinder Singh v. Chief Election Commissioner, AIR

1978 SC 851, [LQ/SC/1977/331] laid down that when a statutory functionary made an order based on

certain grounds, its validity must be judged by the reasons so mentioned and could

not be supplemented by fresh reasons in the shape of affidavit or otherwise and

that otherwise, an order made in the beginning might, by the time, it came to the

Court on account of a challenge, get validated by additional grounds later brought

out; it was pointed out, "orders are not like old wine becoming better as they grow

older".

( 47 ) THE illegalities with which the sub leases are said to be suffering from and

which would be perpetuated are: (1) the lands which are the subject-matter of the

sub-leases form part of the lands reserved for exclusive exploitation by public sector

undertakings, so sub-letting of those lands or any extent out of them would be in

violation of Rule 59 (1) of the Rules; (2) the approval of the Central Government as

contemplated under the amended Rule 37 has not been obtained by the State

Government before giving its consent to the Lessee-Corporation to enter into subleases with the pattedars; and (3) the orders granting consent to enter into sub

lease of such lands are illegal and this illegality will be perpetuated unless consents

are withdrawn.

( 48 ) BY Central Act No. 37 of 1986, S. 5 of the was amended and the amended

provision disabled the State Government from granting prospecting licence or mining

lease in respect of any mineral specified in First Schedule except with the previous

approval of the Central Government. After amendment S. 5 reads thus:--"5.

Restrictions on the grant of prospecting or mining leases:-- (1) No prospecting

licence or mining lease shall be granted by a State Government to any person unless

he - (a) is an Indian National; and (b) satisfies such conditions as may be

prescribed; Provided that in respect of any mineral specified in the First Schedule,

no prospecting licence or mining lease shall be granted except with the previous

approval of the Central Government. Explanation;-- xx xx xx (2) xx xx xx xx "by the

same amended Central Act, the First Schedule was substituted including barytes at

Sl. No. 3 in the list of specified minerals. However, after about five years, on

20/02/1991, Rule 37 was amended in G. S. R. No. 129 (E), to bring it in line with

amended S. 5 of the. Sub-rule (l) of Rule37 after amendment in so far as it is

relevant for our purposes reads thus:"37. Transfer of lease: (1) The lessee shall not,

without the previous consent in writing of the State Government and in the case of

mining lease in respect of any mineral specified in the First Schedule to the,

without the previous approval of the Central Government,-- (a) and (b) xx xx xx "the

result of the above amendments is that in respect of Barytes bearing area, no-lease

can be granted by the State Government to any person except with the previous

approval of the Central Government and no transfer of a mining lease of Barytes can

be consented to by the State Government without the previous approval of the

Central Government.

( 49 ) THE challenge by the appellants on the validity of the sub-leases is that the

area out of which the sub-leases were granted, was reserved by the State

Government for exploitation by public sector undertakings under Rule 58 of the

Rules in January, 1974. So, it ceased to be available for grant of leases and also

sub-leases under Rule 59, as such the consent given under Rule 37 being violative

of Rules 58 and 59, is rendered void and of no effect by S. 19 of the. This

contention is met by the sub-lessees urging that reservation of an area under Rule

58 does not render grant of a lease of a portion of, the reserved area in favour of a

person other than public sector undertakings, illegal and void. So neither giving of

consent under Rule 37 by the State Government nor sub-leasing of the area by the

Lessee-Corporation will be illegal or void and in support thereof reliance is placed

upon a decision of the Supreme Court in Indian Metal and Ferro Alloys Ltd. v. Union

of India, AIR 1991 SC818.

( 50 ) IN Indian Metal and Ferro Alloys Ltd. v. Union of India (8th supra), the area in

question was reserved for exploitation by the public sector undertaking by the State

of Orissa. The mineral involved was chrome ore which is one of the minerals

included in the First Schedule. Many applications were filed for mining rights. Some

of them were private companies and some were public sector corporations. It

appears that during the pendency of the writ petition pursuant to the orders of the

Court, private parties were granted mining lease in respect of part of the reserved

area. The validity of that grant came under attack. The Supreme Court observed

that the fact that the area in question was duly reserved for exploitation by public

sector undertaking, did not mean that the private parties could not be granted any

lease at all in respect of those areas because it was open to the Central Government

to relax the reservation for recorded reasons and also because the State

Government can always denotify the reservation and make the area available for

grant to the private parties. The Supreme Court held that it was not open to the

public sector corporations to object to the grant to any private parties on the ground

that the reservation has been notified in favour of the public sector undertaking and

that it was open to the State Government to grant lease to the private parties even

in respect of the areas covered by the notification of the State Government and that

cannot be challenged by any public sector undertaking. It may be pointed out that in

the instant case, there has been neither any relaxation by the Central Government

nor was any notification issued de-reserving the area in question.

( 51 ) BE that as it may, the contentions now urged to sustain the impugned orders

of cancellation of the sub-leases and withdrawal of the consents given by the State-

Lessor for entering into sub-leases, are : firstly, the ground that no consent under

Rule 37 could have been granted by the State Government and no sub-lease could

have been entered into between the Lessee-Corporation and the pattedars in

respect of any part of the area reserved under R. 58 having regard to the provisions

of Rule 59 (1) of the Rules; the second infirmity pointed out in the grant of the subleases- is that the approval of the Central Government as contemplated under Rule

37 of the Rules has not been obtained; and the third aspect is that the infirmities or

irregularities will be perpetuated unless the leases are cancelled and the consents

are withdrawn.

( 52 ) WE do not wish to express any opinion on any of the infirmities or illegalities

indicated above. The fact remains that the impugned orders of cancellation of the

subleases or withdrawal of the consent are not based on any of the said grounds.

Therefore, we are not inclined to go into the question whether the consents given

by the State-lessor under Rule 37 of the Rules to the lessee-Corporation to enter

into sub-leases with the pattedars and subsequent sub-leases entered into between

the lessee-Corporation and the pattedars, are vitiated for any of the above

infirmities or illegalities. However, we leave it open to the appellants if they propose

to terminate the sub-leases or withdraw the consent, to issue notices to the sublessees to show cause as to why such an action should not be taken, grant them

reasonable time for submitting their explanation, consider the same and pass

appropriate orders in accordance with law. For this purpose, we consider it just to

direct the parties to maintain status quo obtaining as on this day for a period of

three months from today. If no fresh orders are passed within the said period of

three months pursuant to the show cause notice, it would be open to the sublessees

to proceed with the mining operations in accordance with the sub-leases

granted to them. The orders under appeals are accordingly modified and subject to

the above modification and observations, the appeals are dismissed, but in the

circumstances of the case, we direct the parties to bear their own costs.

( 53 ) ORDER accordingly.