# KAYS CONCERN v. UNION OF INDIA & ORS

- **Citation:** [1976] 3 S.C.R. 1042
- **Court:** Supreme Court of India
- **Decided:** 1976-04-06
- **Case number:** Civil Appeal No. 1633 of 1968
- **Bench:** P. N. BuAGWATI, A. C. GuPTA, s. MURTAzA FAZAL Au
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/kays-concern-v-union-of-india-ors-6724
- **Pages:** 4

## Headnote

Mi1.1eraJ Concession Rufes, 1960, Rule 54-Dispo::>al of revision application
-Ohhgat1011 ol Central Govern111e11t to (,Ollsidcr tlie entire material before
ii.
On the expiry of his sub~lease for extracting phosphale form an area of
400 hectares situate in Singbhum district, Bihar, the appellant applied to the
State Government for a grant of fresh lease. For nine months the State
Government failed to dispose of his _application, and under R. 24(3) of theMineral Concession Ilules, 1960, it was deemed to have been refused. Under
_ Rut~ 54 of the ~1fineral Concession Rules, 1960, the appellant applied for
revision and the Centtal Government directed the State Government to consider
his application on merits. The State Government rejected the applk~ation on ..
the ground that it had decided not to grant lease for pho..."<phate to individuals
or private parties, but to work this mineral in the public sector. The app'eJlant again applied for revision during the pendency of which an advertisement
of the State Government appeared in the 'Statesman' indicating the abandonment of its proposal to mine phosphate and apatite in the public sector.
The appellant brought the advertisement to the notice of the Central Govern*
1nent,
but it rejected his revision application.
completely disregarding the
advertisement.
The appellant preferred an appeal to this Court hy "pecial leave.
Al!owinf the appeal and remanding the case to the Central Government,
the Court,
HELD :
The Central Government failed to take into consideration this
advertisement which appeared to indicate a change in the stand of the State
Oovern1ncnl, and made its order in complete disregard of it.
Thts was clear
nonMapplication of n1ind on the part of the Central Government to a very
material circun1stance which was brought to its notice before its disposal of
the revision application.
The order of the Central Government, therefore, sufM
fers from a patent error.
[l 0440-H, 1045A]

## Text

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1042
KAYS CONCERN
v.
UNION OF INDIA & ORS.
April 6, 1976
[P. N. BuAGWATI, A. C. GuPTA AND s. MURTAzA FAZAL Au, JJ.]
Mi1.1eraJ Concession Rufes, 1960, Rule 54-Dispo::>al of revision application
-Ohhgat1011 ol Central Govern111e11t to (,Ollsidcr tlie entire material before
ii.
On the expiry of his sub~lease for extracting phosphale form an area of
400 hectares situate in Singbhum district, Bihar, the appellant applied to the
State Government for a grant of fresh lease. For nine months the State
Government failed to dispose of his _application, and under R. 24(3) of theMineral Concession Ilules, 1960, it was deemed to have been refused. Under
_ Rut~ 54 of the ~1fineral Concession Rules, 1960, the appellant applied for
revision and the Centtal Government directed the State Government to consider
his application on merits. The State Government rejected the applk~ation on ..
the ground that it had decided not to grant lease for pho..."<phate to individuals
or private parties, but to work this mineral in the public sector. The app'eJlant again applied for revision during the pendency of which an advertisement
of the State Government appeared in the 'Statesman' indicating the abandonment of its proposal to mine phosphate and apatite in the public sector.
The appellant brought the advertisement to the notice of the Central Govern*
1nent,
but it rejected his revision application.
completely disregarding the
advertisement.
The appellant preferred an appeal to this Court hy "pecial leave.
Al!owinf the appeal and remanding the case to the Central Government,
the Court,
HELD :
The Central Government failed to take into consideration this
advertisement which appeared to indicate a change in the stand of the State
Oovern1ncnl, and made its order in complete disregard of it.
Thts was clear
nonMapplication of n1ind on the part of the Central Government to a very
material circun1stance which was brought to its notice before its disposal of
the revision application.
The order of the Central Government, therefore, sufM
fers from a patent error.
[l 0440-H, 1045A]
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1633 of 1968.
Appeal by special leave from the judgment and order dated the
2nd December, 1967 of the Government of India, Ministry of Steel,
Mines and Metals (Department of Mines and Metals) at New Delhi
in No. M.V. 1 (141) /67.
S. K. Mehta and K. R. Nagaraja, for the appellant.
S. P. Nayar and Girish Chandra, f.~r respondent No. l.
U. P. Singh and Shambhu Nath !ha, for respondent No. 2.
The Judgment of the Court was delivered by
BHAGWATI, !-
This appeal can be disposed of on a very nap:,ow
point and we will, therefore, se! ont. only so m~ch of ~he facts givmg
rise to the appeal as bear on this, pomt and omit what 1s unnecessary.
Since 23rd December, 1959 the appellants had a sub-lease from
the Receiver in Suit No. 203 of 1905 for extracting phosphate from
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KAYS CONCERN v. UNION (Bhagwati, ].)
I 0 43
an area of 400 hectares situate in Singhbhum District in the State of
Bihar.
This sub-lease, according to the State of Bihar, came to an
end from 1st September, 1964 and the appellants, therefore, made an
application to the State of Bihar on 22nd/24th March, 1965 for a
grant of fresh mining lease for extraction of apatite and pl10sphate from
the same area under Rule 22 of the Mineral Concession Rules, 1960
made by the Central Government under s. 13 of the Mines & Minerals
(Regulation & Development) Act, 1957. The State
Government
failed to dispose of the application within a period of nine months
from the date of its receipt and hence under Rule 24(3) of the Mineral Concession Rules, 1960 the application was deemed to have been
refused by the State Government. The appellants preferred a revision application to the Central Government on 16th February, 1966
against the deemed refusal of their application under Rule 54 of the
Mineral Concession Rules, 1960. The Central Government disposed
of the revision application by an order dated 31st December. 1966
directing the State Government to consider the application of the
appellants and to decide it on merits.
The State Government thereafter by an order dated 9th February, 1967 rejected the application
of the appellants on the ground that the State Government had already
taken a decision not to grant lease for phosphate ore to any individual
or private party as it had decided "to work this mineral in the public
sector".
The appellants again filed a revision application to the Central Government against the order of the State Government rejecting
their application.
The .Central Government invited comments of the
State Government on the revision application and on the comments
submitted by the State Government, the appellants were given
an
opportunity to submit their cross-comments which they did on 8th
August, 1967. Whilst the revision application
was pending, the
appellants read an advertisement in the issue of Statesman dated 13th
Septe1uber, 1967 to the following effect :
"Government of Bihar
Department of Mines & Geology, Patna.
Mining and beneficiation of low grade apatite of
Singhbhum.
A reserve of a littl.e over 1 million tonnes of low grade
Apatite Mineral with average 16% P.O. has been proved
in a belt consisting of several mouzas in the Singhbhum
District of Bihar.
The representative bulk samples of the
minerals
have laboratory
Jamshedpur,
and it has been
found that the mineral can be suitably upgraded by benefication, to yield Apatite concentrate with 36% to 40% P.O.,
suitable for use as raw material for the manufacture of Phosphetic fertiliser. Report of economic feasibility studies
available.
The State Government may consider giving tax
holidays for a fixed period and also may guarantee the
safety of the investtnent invested parties capable of making
investment to the tune of 40 to 50 lakhs in undertaking
to above project may obtain further particulars from the
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1044
SUPREME COURT REPORTS
[1976] 3 S.C.R.
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Mines Commissioner, Department of Mines and Geology,
Government of Bihar. Patna.
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Sd/-
K. ABRAHAM,
Commissioner of Mines & Geology."
The appellant immediately addressed a communication dated 26th
September, 1967 to the Central Government enclosing a copy of the
advertisement and pointing out that it was clear from the advertisement that the State Government had abandoned the idea of working
apatite and phosphate in the public sector and that the ground for
rejecting the application of the appellants for mining lease no longer
existed.
The Central Govermnent, however, by an order dated 2nd
December, 1967 rejected the revision application stating that :
". . . . the Central Government have come to conclusion
that as the State ·Govermnent are anxious to do phosphate
mining for their own fertilizer factory in public sector, there
is no valid ground for interfering with the decision of the
State Government rejecting your application for grant of
mining lease for apatite and phosphate in Singhbhum district. H
The appellants thereupon preferred the present appeal
against the
order of the Central Govermnent with special leave obtained from
this Court.
It is apparent from the order of the Central Government dated
2nd December, 1967 that the Central Government rejected the revision application of the appellants on the ground that the State Government was anxious to do phosphate mining for its own fertiliur
factory in the public sector.
This was undoubtedly
the
original
ground put forward by the State Govermnent for rejecting the application of ·the appellants for mining lease.
But it does appear prima
facie from the advertisement in the issue of the Statesman dated 13th
September, 1967 that the proposal of the State Govermnent to mine
apatite and phosphate for its own fertilizer factory in the public sector
was abandoned and the State Government was prepared to give mining lease to a party which was prepared to undertake a project of
setting up a plant for beneficiation of this mineral so as to make it
suitable for use as raw material for the manufacture of phosphatic
fertilizer.
The appellants brought this advertisement to the notice of
the Central Government by their representation dated 26th September, 1967 and this was done before the revision application was
disposed of by the Central Government.
Even so, the Central Government failed to take into consideration this advertisement which
appeared to indicate a change in the stand of the State Government
and made its order dated 2nd December, 1967 in complete disregard
of it.
The order of the Central Government dated 2nd December,
1967 clearly shows that the Central Government failed to apply its
mind to this advertisement though it was brought to its notice in time
and proceeded to dispose of the revision application as if no such advertisement had been issued by the State Government.
The Central
Government did not even care to invite the comments of the State
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KAYS CONCERN v. UNION (Bhagwati, J.)
1045
Government in regard to the advertisement and ignored it altogether
in making its order rejecting the revision application. This was clear
non-application of mind on the part of the Central Government to a
very material circumstance which was brought to its notice before it
disposed of the revision application.
The order of the Central Government, therefore, suffers from a patent error and it must be quashed and set aside and the matter must go back to the Central Government for fresh determination.
We accordingly set aside the order dated 2nd December, 1967
passed by the Central Government and remand the case to the Central Government with a direction to dispose of the revision application, after taking into account the entire material before it, including
the advertisement given by the State Government in the issue of
Statesman dated 13th September, 1967 and giving an opportunity to
the State Government to offer its co=ents in regard to this advertisement and a further opportunity to the appellants to make their
submi~sions on the comments, if any, offered by the State Government. The State of Bihar will pay the costs of the appeal to the
appellants.
M.R.
Appeal allowed.
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