Division Bench Upholds Quashing of Govt Orders, Orders Status Quo with Opportunity to be Heard

Government of Andhra Pradesh and another Versus Y.S. Vivekananda Reddy and others

Government of Andhra Pradesh and another Versus Y.S. Vivekananda Reddy and others - AIR 1995 AP 1 Issues Involved:
1. Justiciability of rights and privileges claimed by sub-lessees.
2. Validity of the Government Orders (G.O.Ms. No. 402 and G.O.Ms. No. 417).
3. Compliance with principles of natural justice.
4. Applicability of Section 4A of the Mines and Minerals (Regulation & Development) Act, 1957.
5. Legality of the withdrawal of consent under Rule 37 of the Mineral Concession Rules, 1960.

Issue-wise Detailed Analysis:

1. Justiciability of Rights and Privileges Claimed by Sub-lessees:
The sub-lessees filed writ petitions challenging the cancellation of sub-leases by the Andhra Pradesh Mineral Development Corporation Limited (Lessee-Corporation) following the Government Orders (G.O.Ms. No. 402 and G.O.Ms. No. 417). The learned single Judge allowed the writ petitions, holding that the sub-lessees were not given an opportunity to be heard before the cancellation, which violated the principles of natural justice. The Division Bench referred the matter to a larger Bench due to its public significance.

2. Validity of the Government Orders (G.O.Ms. No. 402 and G.O.Ms. No. 417):
The Government of Andhra Pradesh issued G.O.Ms. No. 402, canceling all sub-leases and reserving the entire Barytes deposits for exclusive exploitation by the Lessee-Corporation, based on the recommendations of a House-Committee. Subsequently, G.O.Ms. No. 417 withdrew the consent given to the Lessee-Corporation to enter into sub-leases. The learned single Judge quashed these orders, finding that they were issued without giving notice to the sub-lessees, thus violating natural justice principles.

3. Compliance with Principles of Natural Justice:
The learned single Judge quashed the impugned orders on the ground that the sub-lessees were not given an opportunity to be heard before the cancellation of their sub-leases, which violated the principles of natural justice and Section 4A(3) of the Act. The Division Bench upheld this finding, emphasizing that even if the orders were issued under executive power, compliance with natural justice was mandatory.

4. Applicability of Section 4A of the Mines and Minerals (Regulation & Development) Act, 1957:
Section 4A(1) of the Act allows for the premature termination of mining leases by the Central Government in consultation with the State Government for specified reasons. Section 4A(3) mandates that no order making a premature termination of a mining lease shall be made without giving the holder of the lease a reasonable opportunity of being heard. The Division Bench found that the impugned orders did not purport to be issued under Section 4A, and even if they were, the requirements of Section 4A(3) were not met.

5. Legality of the Withdrawal of Consent under Rule 37 of the Mineral Concession Rules, 1960:
Rule 37 requires the previous consent in writing of the State Government for the transfer of a mining lease. The Division Bench held that once the consent resulted in the execution of sub-leases, it worked out itself and could not be withdrawn. The State Government's attempt to withdraw the consent under Section 21 of the General Clauses Act was found to be invalid as the consent had already culminated into a contract, and mining operations had commenced.

Conclusion:
The Division Bench upheld the learned single Judge's decision to quash the impugned orders (G.O.Ms. No. 402 and G.O.Ms. No. 417) and the consequent cancellation of sub-leases, citing violations of natural justice and non-compliance with statutory requirements. The State Government was directed to maintain the status quo for three months, allowing it to issue fresh notices if it intended to terminate the sub-leases or withdraw consent, thus giving the sub-lessees an opportunity to be heard.