Natural justice limits withdrawal of mining consent once sub-leases are executed and operations have begun.

Consent for sub-leasing of barytes mining areas, once acted upon and crystallised into executed sub-leases and commenced operations, could not be withdrawn or cancelled without notice to the affected sub-lessees. The Court treated a reasonable opportunity of hearing as mandatory before any adverse action affecting possession and mining rights, and held that Section 21 of the General Clauses Act could not be used where the statutory scheme and context were inconsistent with such withdrawal. It also held that the impugned action could not be justified under Section 4A, Rule 37, or the State's executive power, since executive power cannot displace Central mineral regulation and the order was not founded on a breach attracting Rule 37.

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Issues: (i) Whether the Government could lawfully cancel the sub-leases and withdraw the consent granted for sub-leasing of barytes mining areas without notice to the affected sub-lessees; (ii) Whether the impugned action could be sustained under Section 4A of the Mines and Minerals (Regulation and Development) Act, 1957, Rule 37 of the Mineral Concession Rules, 1960, or the State's executive power.

Issue (i): Whether the Government could lawfully cancel the sub-leases and withdraw the consent granted for sub-leasing of barytes mining areas without notice to the affected sub-lessees.

Analysis: The cancellation order did not trace its source to any contractual term authorising termination by the State Government, and the consequential orders passed by the Corporation could not independently sustain the action. The Court also held that, even apart from the source of power, the sub-lessees were in possession and carrying on mining operations pursuant to consent already acted upon, so an adverse order affecting their rights could not be made without affording them a reasonable opportunity of being heard. The State could not rely on Section 21 of the General Clauses Act, 1897 to withdraw consent after the consent had culminated in executed sub-leases and commenced operations, because that provision cannot be invoked where the statutory scheme and the context are inconsistent with such withdrawal.

Conclusion: The withdrawal of consent and cancellation of sub-leases without notice were invalid.

Issue (ii): Whether the impugned action could be sustained under Section 4A of the Mines and Minerals (Regulation and Development) Act, 1957, Rule 37 of the Mineral Concession Rules, 1960, or the State's executive power.

Analysis: Section 4A was held applicable only within its own statutory limits, and in any event the State could not invoke it for major minerals in the manner adopted here. Rule 37(3) was construed as dealing with determination of a lease for breach of the rule, with a mandatory opportunity of hearing, and the impugned action was not founded on such breach. The Court further held that the State's executive power under Article 162 could not override the field occupied by the Central legislation on regulation and development of minerals. The order withdrawing consent was also held unsustainable because, once the consent had been acted upon and the sub-leases executed, it had worked itself out and could not be rescinded in the manner attempted.

Conclusion: The impugned orders could not be sustained under Section 4A, Rule 37, or Article 162.

Final Conclusion: The judgment under appeal was substantially affirmed, and the appeals failed, while leaving open the appellants' liberty to proceed afresh in accordance with law after issuing notice and granting hearing.

Ratio Decidendi: A consent for sub-leasing, once acted upon and crystallised into executed sub-leases and commenced operations, cannot be withdrawn or nullified by the State in a manner inconsistent with the governing statute, the rules, and the requirement of a reasonable opportunity of being heard.

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