1959 (12) TMI 47 - SC - Indian Laws

Supreme Court Quashes Mining License Cancellation Due to Procedural Violations

MINERAL DEVELOPMENT LTD. Versus STATE OF BIHAR

The Supreme Court allowed the petition, quashing the State Government's order cancelling the petitioner's mining license under the Bihar Mica Act, 1947. ... - Issues Involved1. Constitutional validity of the Bihar Mica Act, 1947, as amended by the Bihar Mica (Amendment) Act, 1949.2. Repugnancy of the Bihar Mica Act, 1947, with the Central Act 53 of 1948.3. Infringement of fundamental rights under Article 19(1)(f) and (g) of the Constitution.4. Compliance with the provisions of Section 25(1)(c) of the Bihar Mica Act, 1947, and the second proviso thereto.5. Personal bias of the Revenue Minister against the petitioner.Issue-wise Detailed Analysis1. Constitutional Validity of the Bihar Mica Act, 1947The petitioners argued that the Bihar Mica Act, 1947, as amended, was ultra vires for want of constitutional competence. However, the Supreme Court did not delve into this issue as the petition was disposed of on the basis of other contentions.2. Repugnancy with Central Act 53 of 1948The petitioners also contended that the provisions of the Bihar Mica Act were repugnant to the Central Act 53 of 1948, and therefore, the former should yield to the latter. This issue was similarly not addressed in detail by the Court, as the petition was resolved on other grounds.3. Infringement of Fundamental Rights under Article 19(1)(f) and (g)The petitioners claimed that the cancellation of their mining licence infringed their fundamental rights to acquire, hold, and dispose of property, and to carry on any occupation, trade, or business as guaranteed under Article 19(1)(f) and (g) of the Constitution. The Court examined whether Section 25 of the Bihar Mica Act imposed unreasonable restrictions on these rights. The Court held that the Act's provisions were designed to regulate the mining industry in the public interest and did not impose unreasonable restrictions. The power to cancel a licence was vested in the State Government, which was expected to act impartially and in the public interest.4. Compliance with Provisions of Section 25(1)(c) and Second ProvisoThe Court scrutinized whether the State Government complied with Section 25(1)(c) of the Act, which allows for the cancellation of a licence if the licensee is guilty of repeated failure to comply with the Act's provisions. The Court found that the State Government did not afford the petitioner a reasonable opportunity to show cause as required by the second proviso to Section 25(1). The Court noted that the State Government's action was based on trivial defaults and that the petitioner was not given access to its seized account books to prepare a proper defense. The prolonged delay of over two years between the show-cause notice and the cancellation order further indicated a lack of reasonable opportunity.5. Personal Bias of the Revenue MinisterThe Court examined allegations of personal bias against the Revenue Minister, who had political rivalry with the proprietor of the estates leased to the petitioner. It was established that the Minister had personal bias and should not have participated in the proceedings. The Court held that the biased actions of the Minister vitiated the enquiry and the subsequent cancellation order.ConclusionThe Supreme Court concluded that the State Government did not comply with the procedural requirements of Section 25(1)(c) of the Bihar Mica Act and that the petitioner was not afforded a reasonable opportunity to show cause. Additionally, the Court found that the Revenue Minister's personal bias against the petitioner further invalidated the cancellation order. Consequently, the Court issued a writ of certiorari quashing the State Government's order dated September 1, 1955, cancelling the petitioner's mining licence. The respondents were directed to pay the costs to the petitioner.Petition allowed.