# Raghunath Dubey & Ors v. State of U.P. & Ors. Opp. Parties

- **Citation:** (2024) 3 ILRA 2021
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2024-02-26
- **Case number:** Writ-C No. 33864 of 2023
- **Bench:** Siddharth Varma, Shekhar B. Saraf
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/raghunath-dubey-ors-v-state-of-u-p-ors-opp-parties-51610
- **Pages:** 5

## Headnote

Mineral (Concession) Rules, 2021 - Rule
23(2)(d) - Right of First Refusal - CoSharers' Consent - Compensation for NonParticipating
Co-Sharer
-
Validity
of
District Magistrate's Order

The petitioners, seven co-sharers along with
respondent no. 5, owned plots (Nos. 454, 460,
461-Ka, 461-Kha, totaling 1.9330 hectares) in
Village
Billi
Markundi,
District
Sonbhadra,
suitable for mining Situ Rock (Dolostone). Under
Rule 23(2)(d) of the 2021 Rules, they consented
to mining on their private land. After e-tender,
the highest bid was Rs. 400 per cubic meter by
respondent no. 4. The petitioners offered Rs.
401 per cubic meter, exercising their right of
first refusal, but respondent no. 5, a co-sharer,
refused to bid higher. The District Magistrate,
on
04.09.2023,
approved
the
lease
for
respondent no. 4, which was challenged. Held:
The
District
Magistrate's
order
was
unsustainable
as
Rule
23(2)(d)
allows
landowners offering a higher bid than the
highest tender to secure the lease, while non-
2022 INDIAN LAW REPORTS ALLAHABAD SERIES
participating co-sharers, like respondent no. 5,
are entitled only to compensation as fixed by
the St. Government. Respondent no. 5's
objections, including alleged family settlement
disputes and petitioners' agreement with a third
party, were irrelevant, as they did not affect the
petitioners' statutory right to the lease. The
availability of appellate or revisional remedies
was immaterial, as no further issues required
adjudication. The impugned order was quashed,
and the petitioners were granted the mining
lease, with respondent no. 5 entitled to
compensation as per Rule 23(2)(d).

## Text

3 All. Raghunath Dubey & Ors. Vs. State of U.P. & Ors.
2021
higher appellate authorities should be
followed unreservedly by the subordinate
authorities and if this healthy rule is not
followed, the result will only be undue
harassment to assessees and chaos in
administration.

30. In the present case, this Court is
fully satisfied that Arbitrator/Collector,
Jhansi has acted in defiance of fundamental
principles of judicial procedure particularly
by not following the directions of the
learned District Judge, as aforesaid, and in
view of the above discussion, the order
impugned dated 28.07.2023 cannot sustain
on merits and is liable to the quashed
despite the fact that it has been recalled by
the Collector on 03.11.2023, inasmuch as,
reasons for setting aside the order on merits
were required to be recorded in the present
judgement so that the fresh exercise to be
carried out by the Arbitrator/Collector
Jhansi even after recalling his order, should
be strictly in accordance with law and
based upon material on record, as noted by
the District Judge in the order of remand
dated 27.04.2022.

31. Accordingly, the writ petition
succeeds and stands allowed.

32. The order impugned dated
28.07.2023,
passed
by
the
District
Magistrate/Arbitrator/Collector, Jhansi in
Case No.2337 of 2023 (Dr. Rajeev Sinha v.
National Highways Authority of India) is
hereby quashed.

33. It is left open to the petitioner to
approach the Arbitrator/ Collector, Jhansi
for
passing
fresh
award
strictly
in
consonance with the directions issued in
the order dated 27.04.2022 passed by the
District Judge, Jhansi in Misc. Case No. 12
of 2017, as reiterated in this judgement.
----------
(2024) 3 ILRA 2021
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 26.02.2024

BEFORE

THE HON'BLE SIDDHARTH VARMA, J.
THE HON'BLE SHEKHAR B. SARAF, J.

Writ-C No. 33864 of 2023

Raghunath Dubey & Ors. ...Petitioners
Versus
State of U.P. & Ors. ...Opp. Parties

Counsel for the Petitioners:
Sri Anil Kumar Shukla, Sri Abhishek Kumar
Pandey, Sri Anil Kumar Shukla, Sri Kumar
Shivam, Sri H.N. Singh(Sr. Advocate)

Counsel for the Opp. Parties:
C.S.C. Sri A.K.S. Parihar, Sri Birendra Singh, Ms.
Swati Singh, Sri Shashi Nandan(Sr. Advocate)

Mining Lease - Uttar Pradesh Minor
Mineral (Concession) Rules, 2021 - Rule
23(2)(d) - Right of First Refusal - CoSharers' Consent - Compensation for NonParticipating
Co-Sharer
-
Validity
of
District Magistrate's Order

The petitioners, seven co-sharers along with
respondent no. 5, owned plots (Nos. 454, 460,
461-Ka, 461-Kha, totaling 1.9330 hectares) in
Village
Billi
Markundi,
District
Sonbhadra,
suitable for mining Situ Rock (Dolostone). Under
Rule 23(2)(d) of the 2021 Rules, they consented
to mining on their private land. After e-tender,
the highest bid was Rs. 400 per cubic meter by
respondent no. 4. The petitioners offered Rs.
401 per cubic meter, exercising their right of
first refusal, but respondent no. 5, a co-sharer,
refused to bid higher. The District Magistrate,
on
04.09.2023,
approved
the
lease
for
respondent no. 4, which was challenged. Held:
The
District
Magistrate's
order
was
unsustainable
as
Rule
23(2)(d)
allows
landowners offering a higher bid than the
highest tender to secure the lease, while non-
2022 INDIAN LAW REPORTS ALLAHABAD SERIES
participating co-sharers, like respondent no. 5,
are entitled only to compensation as fixed by
the St. Government. Respondent no. 5's
objections, including alleged family settlement
disputes and petitioners' agreement with a third
party, were irrelevant, as they did not affect the
petitioners' statutory right to the lease. The
availability of appellate or revisional remedies
was immaterial, as no further issues required
adjudication. The impugned order was quashed,
and the petitioners were granted the mining
lease, with respondent no. 5 entitled to
compensation as per Rule 23(2)(d).

(Delivered by Hon'ble Siddharth Varma, J.
& Hon'ble Shekhar B. Saraf, J.)

1. The petitioners, who are seven in
number, and the respondent no.5 are cosharers of plot no.454 area 0.5190 hectare;
plot no.460 area 0.0760 hectare; plot
no.461-Ka area 0.9360 hectare and plot
no.461-kha area 0.4020 hectare. Out of the
total area of these four plots which
exceeded 1.1 hectare, an area of 1.100
hectare was found, after inspection, fit for
mining of Situ Rock (Dolostone) and it was
decided by the District Magistrate to invite
bids by way of e-tender for mining of the
minerals found in the four plots which were
situated in village Billi Markundi, Pargana
Agori, Tehsil Obra, District Sonbhadra.

2. Before the e-tender took place to
get the highest bid for the mineral
available,
the
petitioners
and
the
respondent no.5 had given their consent to
the District Mining Officer, Sonbhadra that
they were ready and willing to get the
minerals excavated from their private land
as per Rule 23(2)(d) of the Uttar Pradesh
Minor Mineral (Concession) Rules, 2021
(hereinafter referred to as the "Rules").
Rule 23(2)(d) of the Rules is being
reproduced here as under :-

"23. Declaration of area for etender/e-auction/e-tender-cum-e-auction
lease :

(1) ...............

(2) Subject to direction issued by
the State Government from time to time in
this behalf--

(a) .............

(b) .............

(c) .............

(d) Naturally available in-siturock type mineral found in private land of
minimum area one hectare shall be leased
out for a maximum period of ten years
through e-tender/e-auction/e-tender cum eauction:

Provided that in respective mine
area the District Officer after confirming
the availability of mineral, suitability of
area, certificate of land ownership, land
owner's affidavit for consent, shall process
e-tender/e-auction/e-tender cum e-auction
after determination of quantity and period
not
exceeding
ten
years.
The
land
owner/owners after completion of e-auction
process of the are will take cognizance of
the highest bid and within seven working
days get an opportunity to present an offer
higher than the highest bid before the
District
Officer
having
territorial
jurisdiction over the concerned area. If this
right of first refusal is not exercised by the
land owner/owners, the lease will be
approved in favour of the highest bidder
and the land owner/owners will have the
right to receive a compensation equal to the
amount
as
decided
by
the
State
Government from time to time, which will
be in addition to the amount payable to the
State
Government.
Payment
to
land
owner/owners will be mandatory along
with the payment to the State Government."

3. After the land owners had given
their consent for excavation of the minerals
3 All. Raghunath Dubey & Ors. Vs. State of U.P. & Ors.
2023
from the four plots which were in their
ownership, they had waited for the tenders
to be made public and when it was found
that the highest bidder i.e. the respondent
no.4 had given a tender for Rs.400 per
cubic meters then the petitioners and the
respondent no.5 were put to notice on
19.8.2023 by the District Magistrate,
Sonbhadra as per the proviso to Rule
23(2)(d) as to whether they were ready to
take the mining rights at a rate higher than
Rs.400 per cubic meters. In response to the
notice dated 19.8.2023, the petitioners
submitted their consent for taking the lease
and for doing the mining work on the plots
in question at the rate of Rs.401 per cubic
meters. This meant that the petitioners had
offered that the lease be finally executed in
their favour at a rate which was Re.1/-
higher than the rate which was offered by
the highest bidder. However, the respondent
no.5, who was also a co-sharer along with
the seven petitioners, backed out and he did
not give any rate for the minerals which
were to be mined from the plots in
question. Resultantly thereof, the District
Magistrate on 4.9.2023 approved the lease
in favour of respondent no.4-M/s. Mahadev
Mining and passed the impugned order on
4.9.2023, which is under challenge in this
writ petition.

4. Assailing the order passed by the
District Magistrate on 4.9.2023, learned
Senior
Counsel
appearing
for
the
petitioners Sri H.N. Singh assisted by Sri
Anil Kumar Shukla and Sri Abhishek
Kumar, Advocates essentially raised the
following grounds :-

(i) If the land owners, who had
given their consent for their land to be
auctioned, did not accept the mining right
at a price over and above the highest bid
then they would be given the compensation
as would be decided and given by the State
Government. In the instant case, learned
counsel for the petitioners submitted that if
the petitioners were given the mining rights
then the respondent no.5 who was also a
co-sharer and had not offered to mine at a
rate higher than the highest bidder then he
would definitely be given the compensation
as per his share. This is the compensation
he would have received had the highest
bidder been given the lease.

(ii) Learned counsel for the
petitioners has submitted that when initially
the petitioners and the respondent no.5
were ready to give the land, which was in
their possession, for mining purposes then
definitely the respondent no.5, in the event
he decided not to take the mining lease,
would
only
get
the
compensation
commensurate to his share.

(iii) Learned counsel for the
petitioners has submitted that if the
respondent no.5 was submitting, as it had
been stated in the short counter affidavit,
that the petitioners had in fact entered into
an agreement with one Balwant Singh, son
of Paras Singh, who according to the
respondent no.5 would actually mine the
minerals, then it mattered a little, as firstly
the alleged agreement was an unregistered
agreement and also if the petitioners would
sub-lease,
they
would
suffer
the
consequences of sub-letting the lease rights
and, therefore, the grounds raised in the
counter affidavit were of no consequence.

(iv) What is more, the petitioners
had submitted that the approval dated
4.9.2023 would enable the respondent no.4
to get the letter of intent which meant that
the respondent no.4 would get the lease in
his favour and the respondent no.5 would
get the compensation as would be fixed by
the State Government. Learned counsel,
therefore, submitted that if the petitioners
got the lease to mine from the land in
2024 INDIAN LAW REPORTS ALLAHABAD SERIES
question then also the respondent no.5
would only get the compensation fixed by
the Government.

(v) Under such circumstances, it
was submitted by the petitioners that if the
land was to be mined by the petitioners
then the respondent no.5 was only to get a
compensation. It mattered little as to who
would mine, the highest bidder or the
owners who had given a bid higher than the
highest bid.

5. Sri Shashi Nandan, learned Senior
Counsel assisted by Sri A.K.S. Parihar,
learned counsel appearing for respondent
no.5, however, has submitted that the
petitioners if were aggrieved by the
impugned order, which had been passed by
the District Magistrate, then they had a
right of Appeal under Rule 79 of the Rules
and thereafter they had a right to file a
Revision. He has submitted that even
though Ram Ji Dubey had 1/3rd share in
the property, the family settlement dated
30.4.1992 which was being depended upon
by the petitioners had given the respondent
no.5 a lesser share. Learned Senior Counsel
for the respondent no.5 further submitted
that the petitioners had in fact sold their
mining rights to Balwant Singh without the
consent of respondent no.5.

6. Learned Additional Chief Standing
Counsel Ms. Priyanka Midha supported the
impugned order and submitted that the
petitioners could not get any right once one
co-sharer had refused to get the mining
rights.

7. Having heard Sri H.N. Singh,
learned Senior Advocate assisted by Sri
Anil Kumar Shukla and Sri Abhishek
Kumar, learned counsel for the petitioners;
Ms. Priyanka Midha, learned Additional
Chief Standing Counsel appearing for
respondent nos.1, 2 and 3 and Sri Shashi
Nandan, learned Senior Advocate assisted
by Sri A.K.S. Parihar, learned counsel for
respondent no.5, we are of the view that the
order dated 4.9.2023 cannot be sustained in
the eyes of law.

8. The petitioners along with the
respondent no.5 had with open eyes
consented to the mining of their land which
was their Bhumidhari. The petitioners and
the respondent no.5 would be entitled for
the compensation if the respondent no.4
mined the minerals from the land in
question. Also such of the owners who did
not give a higher bid would get the
compensation while the owners who gave a
higher bid would get into the mining work.
We are also of the view that the ground
which had been taken by the respondent
no.5 that there was no family settlement
dated 30.4.1992 is not tenable. The earlier
"no objection" was given on the basis of the
settlement which had settled the share and
now it did not lie the mouth of respondent
no.5 to say he was being given a lesser
share. If the respondent no.4 mines, the
respondent no.5 would get only such
compensation as he was entitled for.
Therefore, it was wrong on the part of the
respondent no.5, to say that the petitioners
were lessening his share in the property
and, therefore, they may not be given the
right to mine. We are also of the view that
the partnership which the respondent no.5
alleges had been entered into by the
petitioners and one Balwant Singh was not
to come in the way of the mining lease to
the petitioners. If the petitioners had
entered into in a partnership with any
outsider and if sub-letting was not allowed
then they would suffer the consequences.
However, since this ground was not taken
by the District Magistrate, it is not required
to be dealt with in this order. Still further,
3 All. M/s Neeraj Potato Preservation & Food Prod. Pvt. Ltd. Vs. U.P. Micro Small & Medium
 Entp. Kanpur & Ors.
2025
the ground taken by the respondents that
the petitioners had an alternative remedy of
filing an Appeal and thereafter a Revision
has no legs to stand. The petitioners and the
respondent no.5 had offered their lands to
the District Magistrate for mining purposes
as per Rule 23(2)(d) of the Rules. The bids
were invited and when the petitioners had
offered their bid which was higher than the
highest bid then nothing further had to be
decided. The respondent no.5 would get the
compensation as per the proviso to Rule
23(2)(d) of the Rules just as he would have
got had the highest bidder in the tender got
the lease. Since nothing further had to be
decided and only the question that who
should be granted the mining lease had to
be looked into when the respondent no.5
had refused to take the mining rights
despite the fact that he had earlier given his
consent, we are of the view that nothing
further could have been decided by the
Appellate Court and thus the case was not
required to be relegated to the Appellate or
Revisional forum.

9. Under such circumstances, the
order dated 4.9.2023 passed by the District
Magistrate, Sonbhadra is quashed and is
set-aside. The petitioners may now be
given the mining lease for mining on the
land in question comprising plot no.454
area 0.5190 hectare; plot no.460 area
0.0760 hectare; plot no.461-Ka area 0.9360
hectare and plot no.461-kha area 0.4020
hectare situated in village Billi Markundi,
Pargana Agori, Tehsil
Obra,
District
Sonbhadra forthwith. The respondent no.5
would be given the compensation as is
envisaged in the proviso to Rule 23(2)(d) of
the Rules.

10. With these observations, the writ
petition stands allowed.
----------
(2024) 3 ILRA 2025
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 21.02.2024

BEFORE

THE HON'BLE MAHESH CHANDRA
TRIPATHI, J.
THE HON'BLE PRASHANT KUMAR, J.

Writ-C No. 35190 of 2023

M/s Neeraj Potato Preservation & Food
Prod. Pvt. Ltd. ...Petitioner
Versus
U.P. Micro Small & Medium Entp. Kanpur &
Ors. ...Respondents

Counsel for the Petitioner:
Sri Mushir Khan, Sri Amit Saxena (Sr. Advocate)

Counsel for the Respondents:
C.S.C., Sri Manish Goyal (Addl. A.G.), Sri Fuzail
Ahmad Ansari(S.C.)

Civil Law - Micro, Small and Medium
Enterprises
Development
Act,
2006
(MSMED Act) - Sections 8, 18, 24 - U.P.
Regulation of Cold Storage Act, 1976 -
Sections 2(c), 5 & 22 - Jurisdiction of Micro
and Small Enterprises Facilitation Council -
Financial Services - Registration Requirement -
Maintainability of Writ Petition

The
petitioner,
a
cold
storage
company
registered
under
the
MSMED
Act
for
warehousing and storage services, sought
recovery of a loan of Rs. 4,09,022/- with 18%
interest from farmers (respondents nos. 2 and
3) through the U.P. Micro, Small and Medium
Enterprises Facilitation Council, Kanpur. The
Council dismissed the claim on 29.07.2022
(signed
14.08.2023),
holding
it
lacked
jurisdiction as the petitioner was not registered
for financial services under the MSMED Act, and
the loan was not covered under cold storage
services as per the U.P. Regulation of Cold
Storage Act, 1976. The petitioner challenged