Applicant Cannot Have Exclusive Right In Seeking A Grant Of License Of Mineral Unless Facilitated By Statute- SC Observes

A Supreme Court Bench of Justice AS Bopanna and Justice MM Sundresh has observed that, when a decision is taken by a competent authority in the public interest by evolving a better process such as auction, a right, if any, to an applicant seeking lease over a Government land evaporates on its own. It was also held that an applicant cannot have an exclusive right in seeking a grant of license of a mineral unless facilitated accordingly by a statute.

Senior Advocate Manish Singhvi appeared for the appellants, while AOR Shobha Gupta and Counsel Ankita Gupta appeared for the respondents.

In his case, the appellants approached the Apex Court seeking to overturn a decision of the Division Bench of the High Court, through which the Bench declared Rule 4(10) and Rule 7(3) of the Rajasthan Minor Mineral Concession Rules, 1986 as unconstitutional.

Applications were invited in 2003 for leasing out minor minerals, and numerous individuals submitted their applications. However, in 2007, a notification was issued rejecting applications for leasing sandstone in four villages, citing Rule 65A of the Rules.

This led to writ petitions in the High Court of Rajasthan. The High Court quashed the 2007 notification, stating that the restriction on leasing sandstone for only four villages lacked justification for mineral development. The court directed authorities to revive the applications and consider them in accordance with the law. In 2011, amendments were made to the Rules, and government orders provided relief to those who approached the High Court. Some other applicants challenged these orders, seeking similar benefits. In 2013, the High Court held that the earlier decision applied to all parties, subject to considering pending applications as per the amended rules. However, in the same year, a new notification declared all previous applications as rejected, except for certain categories eligible for preference, and allowed 50% of the leases to be granted through auction.

The High Court declared these amendments as illegal due to the lack of hearings for the applicants, failure to revive applications based on legitimate expectations, and vested rights. 

The Apex Court observed that it is far too settled that there is no right vested over an application made which is pending seeking lease of a Government land or over the minerals beneath the soil in any type of land over which the Government has a vested right and regulatory control. It was further observed that, "The power of the Government to amend, being an independent one, pending applications do not come in the way. For a right to be vested there has to be a statutory recognition. Such a right has to accrue and any decision will have to create the resultant injury. When a decision is taken by a competent authority in public interest by evolving a better process such as auction, a right, if any, to an applicant seeking lease over a Government land evaporates on its own. An applicant cannot have an exclusive right in seeking a grant of license of a mineral unless facilitated accordingly by a statute".

Further, the Court took the stance that legitimate expectation is a weak and sober right as ordained by a statute. In that context, the Court observed that when the Government decides to introduce fair play by way of auction facilitating all eligible persons to contest on equal terms, certainly one cannot contend that he is entitled for a lease merely on the basis of a pending application. Accordingly, it was further said that "The right being not legal, apart from being non-existent, it can certainly not be enforceable."

The Court also did not find any legal malice in the amendments and held that "The Appellants have duly complied with the orders passed. Even otherwise, law is quite settled that basis of a judgment can be removed and a decision of the court cannot be treated like a statute, particularly when power is available to act and it is accordingly exercised in public interest."

Finally, the Court observed that the decisions of the High Court rendered earlier did not stand in the way of the impugned amendments, as they were with respect to sandstone alone, while in the impugned judgment, the High Court applied it to all the minor minerals. It was further said that, "there is neither a right nor it gets vested through an application made over a Government land. Law does not facilitate hearing the parties in bringing an amendment by an authority competent to do so. The High Court, in our considered view, has totally misconstrued the issues ignoring the fact that there is a delegation of power to the first appellant which was rightly exercised as conferred under Section 15 of the 1957 Act."

In light of the same, the impugned judgments were set aside.

Cause Title: The State of Rajasthan & Ors. vs Sharwan Kumar Kumawat Etc. Etc.

Click here to read/download the Judgment