V.M. Sahai, J.
1. The questions that arise for consideration in these two petitions (Civil Misc. Writ Petition No. 49158 of 2007 being leading petition) are whether the amendment made in Rule 10 of U.P. Minor Minerals (Concession) Rules, 1963 (in brief the Rules) in 2004 authorising the Collector to grant mining lease for some of the minerals, namely, sand, morrum, bajri, boulders or any of these in mixed state, without any limit of area, is beyond the rule making powers of the State and is ultra vires; whether such grant of power without any guideline is arbitrary and violative of Article 14 of the Constitution; whether lifting of restrictions for grant of mining leases for a maximum area of 30 acres is likely to create monopoly which is against the constitution and public policy; whether preferential right of applicants applying on the same day on financial resources in Rule 9(2)(b) of the Rules is bad being vague; whether the requirement of filing, 'No Objection Certificate' from the Senior Superintendent of Police where the applicants reside introduced in the Rule 6(1)(g)(iv) by Twenty Ninth (Amendment) Rules, 2007 is mandatory or directory, if it is mandatory whether Collector could have entertained the application of respondent and in any case whether the direction of the State Government to ensure its compliance by respondent before grant of lease was valid and in accordance with Rules
2. Facts in brief are that the petitioner who belongs to socially and educationally backward community of Nishad, applied for grant of mining lease on 5.2.2007 in Form MM-1 for excavating sand from plot No. 394 of village Mokalpur, Khand-1 for an area of 30 acres in pursuance of notice dated 4.1.2007 issued by the Collector for settling various vacant mining leases in the district Varanasi. The time fixed for making application was between 5.2.2007 to 13.2.2007. Apart from the petitioner three other persons, namely, the petitioner in civil misc. writ petition No. 55442 of 2007, Kalpnath Singh the respondent No. 4 and one Brijesh Kumar Singh applied on the same day i.e., on 5.2.2007 in Form MM-1. From the comparative chart prepared by District Mining Officer it is clear that respondent was placed at serial No. 1 and petitioner at serial No. 2. In the chart the financial status of petitioner No. 1 was shown as Rs. 25 lakhs. He was doing mining since 1990. The financial status of the petitioner was shown as Rs. 10 lakhs and he was to carry on excavation in partnership of a lessee. He had filed a certificate in Form MM-14 that he traditionally carried on the profession of excavating sand, morrum etc. He claims that even his father and forefather carried the profession.
3. Rule 6(1) of the Rules was amended by Twenty Ninth (Amendment) Rule, 2007 and published in the gazette on 15.2.2007. It added Sub-rule (g) to Rule 6(1), with four sub-clauses. Sub-clauses (iv) provided that the applicant should file No Objection Certificate from the Senior Superintendent of Police. A notice dated 2.4.2007 was issued, in furtherance of the amended rule to all the applicants, by the Collector Varanasi, to file the aforesaid certificate within time mentioned in the notice. The petitioner filed the certificate within time. But the respondent failed to do so. He filed it on 28.9.2007, even after the date when the State Government approved the grant of lease in his favour. The petitioner, also, filed relevant documents including certificate in Form MM-14 claiming preference available to socially and educationally backward classes along with the application. The lease rent for the first year for the area in dispute was fixed at Rs. 7,08,400/- with 10% enhancement in future years. Since the lease was for more than Rs. 2.00 lakhs, therefore, the recommendation was made by the Collector, Varanasi on 13.8.2007 to the State Government for approval and acceptance of mining lease in favour of respondent.
4. The Collector made the recommendation in favour of respondent as preference under Rule 9(2)(e) could be given to the petitioner, who held a certificate in Form MM-14, only, if other things were equal. He was of the view that since financial status and experience of respondent was better, hence the benefit of Sub-rule (e) of Rule 9(2) could not be extended to the petitioner. The recommendation of the Collector was accepted by the State Government in a routine manner. It is the validity of these two orders passed by the Collector and the State Government and vires of the Rules which have been challenged in these petitions.
5. Shri Devbrat Mukherjee, the learned Counsel for the petitioner has urged that the amendment made in Rule 10 being contrary to the provisions of Section 6(1) of the Central Act, Mines and Minerals [Regulation and Development] Act, 1957 (in brief the Act) is ultra vires and is liable to be struck down. The learned Counsel urged that it creates monopoly with regard to sand, morrum, bajri and boulders etc. which is against public policy. He placed reliance on a Division Bench decision in Ram Dayal v. State of U.P. and Ors. 2007 (5) AWC 4697. He further urged that Rule 9(2)(b) of the Rules gave unguided power to the authority for determination of financial resources and for granting preferential right, therefore, it be declared as invalid. He lastly urged that Sub-rule (g) Clause (iv) of Rule 6(1) of the Rules which was published in the gazette on 15.2.2007 would apply even to pending application and since respondent had not submitted the No Objection Certificate from the Senior Superintendent of Police, Varanasi, the mining lease could not be recommended by the Collector in his favour nor the State Government could grant approval of it. The learned Counsel placed reliance on a Division Bench decision in Satendra Kumar Tripathi and Ors. v. State of U.P. and Anr. 2005 ALJ 1316. On the other hand, Shri S.P. Singh, the learned senior Counsel assisted by Shri 3.S. Parihar appearing for respondent No. 4. Shri Vishnu Pratap, the learned standing Counsel appearing for respondent No. 1 to 3 have supported the order of Collector and the State Government and have urged that the rules are intra vires. Since validity of the Rules was involved, notice was issued to the Advocate General as well.
6. The first question is whether the recommendation of the Collector in favour of respondent on financial resources and its acceptance by the State Government was in accordance with the preference provided in Section 9(2)(b) of the Rules. Rule 9 is extracted below:
9. Preferential right of certain persons. - (1) Where two or more persons have applied for a mining lease in respect of the same land, the applicant whose application was received earlier shall have a preferential right for the grant of lease over the applicant, whose application was receive later:
Provided that where such applications are received on the same day, the State Government may, after taking into consideration the matters specified in Sub-rule (2), grant the mining lease to such applicants as it may deem fit.
(2) The matters referred to in Sub-rule (1) are-
(a) any special knowledge or experience in mining operations possessed by the applicant;
(b) the financial resources of the applicant;
(c) the nature and quality of the technical staff employed or to be employed by the applicant;
(d) the conduct of the applicant in carrying out mining operations on the basis of any previous lease or permit and in complying with the conditions of such lease or permit or the provisions of any law in connection therewith;
(e) In respect of mining lease for sand or morrum or bajri or boulder or any of these in mixed state, exclusively found in the river bed, if other things are equal, preference shall be given to a person or group of persons, whether incorporated or not who belong to socially and educationally Backward Classes (such as Mallah, Kewat, Bind, Nishad, Manjhi, Batham, Dhiwar, Themer, Chai, Sorahia, Turha, Raikwar, Kaiwrt, Khulwat, Tiyar, Gaudia (Codia and Kashyap) and other such castes of citizens, as notified by the State Government from time to time who have obtained a certificate in Form MM-14 from the concerned District Officer, or such other officer authorized in this behalf by the State Government, certifying that such person/persons is/are traditionally engaged in excavation of sand/morrum for their livelihood and who are resident of the District for which the application has been given; and.
7. Rule 9(2) applies only when two or more applications are received on the same day for grant of mining lease. The expression 'financial resources' had not been defined either under the Act or the Rules. It has been incorporated in Sub-rule 9(2)(b) in order to ascertain whether the person to whom mining lease is to be granted was in a position to deposit royalty and dead rent. Further the persons applying are required to obtain solvency certificate from the Collector. The effect of the solvency certificate in favour of a person, whether his financial status is of Rs. 25 lakhs or Rs. 10 lakhs, is that such a person is deemed to satisfy the test of being financially in a position to operate the lease for which he applied. The question is whether better financial status of an applicant can be the sole guiding factor for grant of preference amongst applicants approaching for grant of lease on the same day. Suppose, royalty and dead rent of the area to be leased out is about Rs. 7.00 lakhs and the Collector issued a solvency certificate to 'A' for Rs. 10.00 lakhs and to another applicant 'B' for Rs. 15.00 lakhs. The question would be whether 'B' acquires any preferential right over 'A' or 'B' has to be considered as equal to 'A'. In our opinion since both 'A' and 'B' have received financial solvency certificate from the Collector irrespective of the amount showing their financial status Rs. 10 and Rs. 15 lakhs, and royalty and dead rent was about Rs. 7 lakhs then both were financially solvent and in such a situation none of them would acquire any preferential right on the basis of better financial resources. The reason is obvious. It is not a settlement by auction or tender system in which the highest bidder or tenderer would be entitled to lease as provided in Rule. Any other construction would result in applying the procedure for auction system to grant of mining lease. The preference to an application on better financial resources in absence of any guideline cannot be accepted to be in accordance with the Rule.
8. The order of granting lease is invalid for yet another reason. The recommendation of the Collector was accepted by the State Government without applying its mind. The relevant part of the recommendation dated 13.08.2007 is extracted below:
6- ----lHkh vkosndks ds }kjk [kuu dk;ksZ esa rduhdh lsok iznku djus gsrq [kuu vfHk;Urk dk VsfDudy dalyVsUlh izek.k i= izLrqr fd;k x;k gS A Jh dYiukFk flag ,oa Jh jk/ks';ke fu'kkn orZeku esa iV~Vk/kkjd gS ,oa bUgs [kuu dk;ksZ dk vuqHko Hkh izkIr gS A Jh mn;ukFk }kjk fu;e 9 2 M+ ds vUrxZr izk:Ik ,e0,e0&14 ij o`fRr izek.k i= izLrqr izLrqr fd;k gS A fdUrq blds ckn Hkh buds i{k esa vf/kekurk dh fLFkfr ugha cu jgh gS D;ksfd fu;e 9 2M+ ds izkfo/kkuksa ds vuqlkj vU; ckrs leku gksus ij gh izk:i ,e0,e0&14 ij izek.k i= izLrqr djus okys vkosnd dks vf/keku fn;k tk ldrk gS A Jh dYiukFk flag ds foRrh; lalk/ku ,oa vuqHko] Jh mn;ukFk dh rqyuk esa vPNs gS A bl izdkj iz'uxr {ks= gsrq Jh dYiukFk flag] foRrh; lalk/ku vU; lHkh vkosnd ls vPNs gksus ,oa [kuu dk;ksZ dk vuqHko izkIr gksus ds dkj.k vf/kd ik= vkosnd izrhr gksrs gS A
9. The petitioner admittedly is a member of economically and socially backward community of Nishad. He filed a certificate in Form-MM-14. He has been denied the benefit of Sub-rule 9(2)(e) as the respondent being financially better, having more experience than the petitioner, other things were not equal as provided in the rule to give preference to the petitioner. What is the meaning of expression 'other things being equal'. How it has to be understood? The amended rule was introduced in 2004 by twenty seventh amendment. The rule is benevolent piece of legislation. It is intended to help the weaker Section of society traditionally engaged in taking out mineral from the bed of river. It has to be construed liberally so as to advance its objective. If a person of weaker Section of a society is ousted in favour of another person having better financial status then it would be nullifying the object sought to be achieved by the rule. A construction which defeats the purpose of a social legislation has to be avoided. The Collector in making recommendation, therefore, on financial superiority of respondent committed an error of law. The construction of the expression 'other things being equal' also appears to be fallacious. Rule 9(2)(a) to (d) lays down four criteria to determine preference amongst persons applying on same date, namely special knowledge, financial resources, technical staff and conduct of the applicant. From the comparative chart it is clear that the respondent was carrying mining operations since 1990 and the partner of the petitioner was a sitting licensee. Therefore, both had the experience of mining operation. The lease rent was to be Rs. 7.00 lakh and odd. The respondent and the petitioner had financial status of Rs. 25 lakhs and Rs. 10 lakhs respectively. Therefore, both had the financial resources for carrying out mining operation. They had been granted solvency certificate. Both had technical staff and there was no complaint against either of them. Therefore, all four criteria were satisfied by both. The word equal has to be understood in the context it has been used. If it is understood as has been held by the authorities then it would mean that both should have had the same financial resources or experience. It would be contrary to equal as understood in law. It cannot mean same experience or same amount of money. It can only mean the two being of the same class or category. That is both should have been solvent and both should have had experience. The word equal appears to have been understood as identical. In other words the petitioner, according to the authorities, would have been equal to the respondent if his financial resource was of Rs. 25 lakhs and he would have been lessee since 1990. That in our opinion, is not only faulty but against the spirit and content of the amendment. If the word equal is construed in the sense of numerical equal in financial resource or length of experience, then probably there would hardly be any case in which a person of socially and educationally backward class would get the benefit. The error committed by the Collector and the State Government was in erroneous understanding of the expression. There was no reason to deny the preference to petitioner under Rule 9(2)(e).
10. The next question is whether the application for grant of mining lease made by Kalpnath Singh, the respondent was complete in all respects on the date when recommendation was made by the Collector to the State Government for grant of mining lease, if not, its effect in law. The old and new Rule 6 are extracted below:
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Old Rule 6 New Rule 6
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6. Application fee and deposit for grant 6. Application fee and deposit for grant
of mining lease- (1) Every application of mining lease- (1) Every application
for grant of mining lease shall be for grant of mining lease shall be
accompanied by- accompanied by-
(a) a fee one thousand rupees; (a) a fee of one thousand rupees;
(b) a deposit of two thousand rupees for (b) a deposit of two thousand rupees for
meeting the preliminary expenses, other meeting the preliminary expenses, other
than those specified in Rule 17, and than those specified in Rule 17, and
(c) four copies of the cadestral survey (c) four copies of the cadestral survey
map on which the area applied for is map on which the area applied for is
clearly marked, and in case such area is clearly marked, and in case such area is
not covered by cadestral survey, four not covered by cadestral survey, four
copies of topographical survey map on a copies of topographical survey map on a
scale at least 4' = 1 mile, on which the scale of at least 4'x 1 mile, on which the
area applied for is accurately marked; area applied for is accurately marked;
(d) a certificate issued by District (d) a certificate issued by District
Officer or by such officer as may be Officer or by such officer as may be
authorized by the District Officer in this, authorized by the District Officer in this
behalf, showing that no mining dues are behalf, showing that no mining dues are
outstanding against the applicant: outstanding against the applicant:
Provided that further that such Provided further that such certificate
certificate shall not be required where the shall not be required where the applicant
applicant has furnished an affidavit to the has furnished an affidavit to the
satisfaction of the State Government, satisfaction of the State Government,
stating that he does not hold or had not stating that he does not hold or had not
held any mining lease or any other held any mining lease or any other
mineral concession in the territory of the mineral concession in the territory of the
State; State;
(e) a certificate of caste and residence of (e) a certificate of caste and residence of
the applicant, where the application is for the applicant, where the application is for
mining lease of sand or morrum or bajri mining lease of sand, or morrum or bajri
or boulder or any of these in mixed state; or boulder or any of these in mixed state;
(f) a character certificate given by the (f) a character certificate given by the
District Officer of the District, where the District Officer of the District, where the
applicant permanently resides; applicant permanently resides;
(g) in case the area applied for is having
(2) If the applicant on is not complete in annual lease amount or dead rent, as the
any respect or is not accompanied by the case may be, of rupees two lacs or more,
fee deposit or the documents mentioned then the applicant shall also furnish no
in Sub-rule (1) the District Officer or the objection certificate of the following
Officer authorized by the State authorities:
Government in this behalf, shall, by (i) Authorised Officer of the Income
fifteen days notice require the applicant by Tax Department,
to complete the application in all respects
or, to deposit the fee or furnish the (ii) Authorised Officer of the Trade
documents within such time as may be Tax Department,
specified in the notice and if the applicant
fails to do so within the specified time, (iii) District Magistrate of the district
such application shall not be considered. where m aflp/icant permanentiy
resides,
(iv) Senior Superintendent of
Police/Superintendent of Police of the
district, where the applicant
permanentiy resides.
(2) If the applicant on is not complete in
any respect or is not accompanied by the
fee, deposit or the documents mentioned
in Sub-rule (1), the District Officer or the
Officer authorized by the State Government
in this behalf, by fifteen days
notice require the applicant to complete
the applicant in all respects or, to deposit
the fee or furnish the documents within
such time as maybe specified in the
notice and if the applicant fails to do so
within the specified time, such application
shall not be considered.
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11. It is not disputed that while the applications were pending the amendment was made in Rule 6(1). It further cannot be disputed that amendments in rule normally applies to pending applications. As per Rule 6(1)(g) where the mining area applied for is having annual lease amount or dead rent of more than Rs. 2 lakhs then the applicant shall also furnish the No Objection Certificate from the authorities mentioned in Sub-clauses (iv) of the Rule 6(1)(g). Rule 6(2) further provides that if the application is not complete then the district officer or the officer authorized is required to give 15 days notice to the applicant to complete the application in all respects and if the applicant fails to do so within the specified time such applicants shall not be considered.
12. The Additional District Magistrate (Administration), Varanasi on behalf of the Collector, Varanasi issued a notice dated 2.4.2007 to all the applicants that in view of amendment made in Rule 6(1) of the Rules all the certificates as required by Rule 6(1)(g) has to be filed and it was specified in the notice that the certificate should be filed by 12.5.2007. The petitioner submitted a No Objection Certificate issued by Senior Superintendent of Police, Varanasi in pursuance of notice dated 2.4.2007 but the respondent failed to do so. Even though the No Objection Certificate from the Senior Superintendent of Police had not been submitted by the respondent and his application was incomplete and was not liable to be considered as provided by Rule 6(2), the Collector sent his recommendation on 13.8.2007 to the State Government for grant of mining lease in favour of the respondent. The State Government granted its approval in favour of the respondent on 21.9.2007 making it subject to filing of No Objection Certificate before grant of mining lease. The respondent filed the certificate dated 28.9.2007 issued from the Senior Superintendent of Police, Varanasi. The rule has been extracted above. It is clear that the rule not only provides that filing of the certificate is necessary but it also lays down the consequences if it is not filed within time granted by the Collector. It cannot be disputed, rather it is well settled that where the law provides a thing to be done in a particular manner and provides the consequences as well for failure to do so, then such a provision has to be held mandatory and the authorities cannot ignore it, Since the respondent had not complied with Clause (iv) of Rule 6(1)(g) of the Rules which was mandatory, the respondent's application could not have been considered and the Collector committed an error of law in entertaining his application and recommending it to the State Government for grant of lease. The State Government too failed in its statutory obligation and instead of rejecting the application of the respondent directed that the authorities may ensure that the certificate be obtained before grant of lease. This was beyond the power of the State Government. It could not ignore the provisions of law and attempt to cure the defect in non-maintainability of the application by issuing such direction which was contrary to the Rules.
13. The petitioner in writ petition No. 55442 of 2007 has filed solvency certificate issued to his father for Rs. 5 lakhs by the Collector and lease rent fixed for the first year for the area in dispute was Rs. 7.00 lakh and odd, therefore, he did not had financial status or financial resources to take the lease, therefore, his petition deserves to be dismissed.
14. Since the petitioner in writ petition No. 49158 of 2007 is entitled to relief on the two points discussed earlier it is not necessary to decide the validity of Rule 10. The question is left open.
15. In the result the writ petition No. 49158 of 2007 succeeds and is allowed. The order of the State Government dated 21.9.2007, Annexure- 3 and the recommendation of the Collector dated 13.8.2007, Annexure-2 respectively to the writ petition as well as all other consequential orders I pursuance of the aforesaid orders are quashed.
16. The Collector Varanasi, and the other respondents are directed to settle the mining lease for excavating sand from plot No. 394 of village Mokalpur, Khand-1, Varanasi for an area of 30 acres in favour of Udai Nath the petitioner in writ petition No. 49158 of 2007 forthwith, as he was entitled to it under Sub-rule (e) of Rule 9(2) of the Rules.
The writ petition No. 55442 of 2007 is dismissed.
The petitioner in writ petition No. 49158 of 2007 shall be entitled to his costs.