1977 (3) TMI 178 - SC - Indian Laws

Supreme Court Upholds Mining Lease Cancellation Due to Non-Compliance

Shrikrishnadas Tikara Versus State Government of Madhya Pradesh and Ors.

The Supreme Court upheld the State Government's decision to cancel a mining lease due to non-compliance with royalty payments and conditions, rejecting ... - Issues:1. Interpretation of Rule 27(5) under the Mines and Minerals (Regulation and Development) Act, 1957.2. Validity of cancellation of mining lease by the State Government.3. Application of principles of waiver and estoppel against the State.4. Compliance with natural justice principles in the cancellation process.5. Allegation of non-application of mind by the Central Government in the revision process.Analysis:1. The case involved the interpretation of Rule 27(5) of the Mines and Minerals Act, which allowed the State Government to cancel a mining lease if the lessee failed to remedy breaches within 60 days of notice. The appellant, a mining lease holder, received a notice for non-compliance with royalty payments and other conditions, leading to the State Government canceling the lease and forfeiting the security deposit.2. The validity of the lease cancellation by the State Government was challenged by the appellant through a revision application to the Central Government. The appellant argued that despite breaches, the State Government had discretionary power not to cancel the lease, which was not exercised in this case. The Central Government, as the revisory authority, dismissed the revision application under Rule 55.3. The appellant raised the issues of waiver and estoppel against the State, contending that the second notice from the Collector constituted a waiver of the first notice and that natural justice principles were violated. The Supreme Court rejected the plea of waiver, stating that there was no intentional abandonment by the State, and established that estoppel does not apply against the government in its sovereign capacity.4. The Court analyzed the compliance with natural justice principles and concluded that the lessee had been given a fair opportunity to explain the breaches. The Court highlighted that natural justice principles are flexible and depend on the circumstances of each case, finding no unfair delay or lack of opportunity for the appellant to present their case.5. The appellant also alleged that the Central Government did not apply its mind properly in considering the revision, as it mixed up breaches from the two notices. However, the Court found no merit in this argument, stating that the reference to the second notice was due to additional submissions by the appellant and did not prejudice the appellant's case. The Court affirmed the orders of the State Government, Central Government, and High Court, allowing the appellant to seek reconsideration from the State Government if desired.