# Province of Bombay v. Kushalda.s S. Advani

- **Citation:** [1960] 2 S.C.R. 775
- **Court:** Supreme Court of India
- **Decided:** 1959-02-25
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/province-of-bombay-v-kushalda-s-s-advani-1779
- **Pages:** 9

## Headnote

S.C.R.
SUPREME COURT REPORTS
SHIVJI NATHUBHAI
v ..
THE UNION OF INDIA & . OTHERS
B. P. SINHA, c. J., P. B. GAJENDRAGADKAR,
775
K. N. WANCHOO, K. c. DAS GUPTA AND J. c. SHAH, JJ.
Mining Lease-Grant by the State Governm~nt-:Cancell_at_ion. jn
review by the Central Government-Such cancellation if a quasi-Judicial
act-Mineral Concession Rules, r949.
rr. J2S4·
·
Rule 54 of the Mineral Concession Rules, r949, provided as
follows:
"Review. Upon receipt of such application, the Central
Government may, if it thinks fit, call for the relevant records and
other information from the Provincial Government, and after
considering any explanation that may be offered by the Provincial Government, cancel the order of the Provincial Government
or revise it in such manner as the Central Government may deem
just and proper."
.
The appellant was granted mining leases in respect of five
areas and possession was delivered to him. On an application for
review made by one of the respondents under r. 52 of the Rules,
the Central Government, without giving the appellant an
opportunity of being heard, cancelled the leases with regard to
two of the areas and directed the State Government to grant
leases in respect thereof to the said respondent. The appellant
applied to the High Court under Art. 226 of the Constitution for
quashing the said order. The Single Judge who heard the
application as well as the Division Bench on appeal held that the
order of cancellation was an administrative order and the appellant was not entitled to a hearing. It was contended on behalf of
the appellant in this Court that rr. 52-55 of the Rules showed that
the proceeding before the Central Government was a quasijudicial proceeding and, consequently, the rules of natural justice
must apply.
Held, that the contention must prevail and the order of
cancellation be quashed.
In exercising its power of review under r. 54 of the Mineral
Concessions Rules, r949, the Central Government acted judicially
and not administratively.
·
Assuming that the act of the State Government in granting a
mining lease was an administrative act, it was not correct to say
that no right of any kind passed to the lessee thereunder untill
the review was decided by the Central Government where a
review had been applied for.
Rule 52, therefore, by giving the
aggrieved party the right to a review created a lis between him
and the lessee and, consequently, in the absence of anything to
the contrary either in r. 54 or the statute itself, there could be no
99
January r9.
776
SUPREME COURT REPORTS [1960(2)]
doubt that the Central Government was acting quasi-judicially
under r. 54.
Shivji lVathubai
.
.
Province of Bombay v. Kushalda.s S. Advani.
[r950] S.C.R.
The Uni:: of India 621• applied.
and Others
R. v. Electricity Commissioner. (r924) I. K. B. r7r, referred to.

## Text

S.C.R.
SUPREME COURT REPORTS
SHIVJI NATHUBHAI
v ..
THE UNION OF INDIA & . OTHERS
B. P. SINHA, c. J., P. B. GAJENDRAGADKAR,
775
K. N. WANCHOO, K. c. DAS GUPTA AND J. c. SHAH, JJ.
Mining Lease-Grant by the State Governm~nt-:Cancell_at_ion. jn
review by the Central Government-Such cancellation if a quasi-Judicial
act-Mineral Concession Rules, r949.
rr. J2S4·
·
Rule 54 of the Mineral Concession Rules, r949, provided as
follows:
"Review. Upon receipt of such application, the Central
Government may, if it thinks fit, call for the relevant records and
other information from the Provincial Government, and after
considering any explanation that may be offered by the Provincial Government, cancel the order of the Provincial Government
or revise it in such manner as the Central Government may deem
just and proper."
.
The appellant was granted mining leases in respect of five
areas and possession was delivered to him. On an application for
review made by one of the respondents under r. 52 of the Rules,
the Central Government, without giving the appellant an
opportunity of being heard, cancelled the leases with regard to
two of the areas and directed the State Government to grant
leases in respect thereof to the said respondent. The appellant
applied to the High Court under Art. 226 of the Constitution for
quashing the said order. The Single Judge who heard the
application as well as the Division Bench on appeal held that the
order of cancellation was an administrative order and the appellant was not entitled to a hearing. It was contended on behalf of
the appellant in this Court that rr. 52-55 of the Rules showed that
the proceeding before the Central Government was a quasijudicial proceeding and, consequently, the rules of natural justice
must apply.
Held, that the contention must prevail and the order of
cancellation be quashed.
In exercising its power of review under r. 54 of the Mineral
Concessions Rules, r949, the Central Government acted judicially
and not administratively.
·
Assuming that the act of the State Government in granting a
mining lease was an administrative act, it was not correct to say
that no right of any kind passed to the lessee thereunder untill
the review was decided by the Central Government where a
review had been applied for.
Rule 52, therefore, by giving the
aggrieved party the right to a review created a lis between him
and the lessee and, consequently, in the absence of anything to
the contrary either in r. 54 or the statute itself, there could be no
99
January r9.
776
SUPREME COURT REPORTS [1960(2)]
doubt that the Central Government was acting quasi-judicially
under r. 54.
Shivji lVathubai
.
.
Province of Bombay v. Kushalda.s S. Advani.
[r950] S.C.R.
The Uni:: of India 621• applied.
and Others
R. v. Electricity Commissioner. (r924) I. K. B. r7r, referred to.
CIVIL APPELLATE JURISDICTION:
Civil Appeal
No. 428 ofl959.
Appeal from the judgment and order dated
February 25, 1959, of the Punjab High Court (Circuit
Bench) at Delhi in Letters Patent Appeal No. 47-D of
1955, arising out of the judgment and order dated
November 28, 1955 of the said High Court in \Vrit
Petition No_ 306-D of 1954.
N. C. Chatterjee, J. B. Dada.chanji, S. N. Andley.
Rameshwar Nath and P. L. Vohra, for the appellant.
C.
K. Daphtary. Solicitor-General
of India,
R. Gapapathy Iyer, R. H. Dhebar and T. M. Sen, for
respondents Nos. 1 & 2.
G. S. Pathak, S.S. Shukla and Mrs. E. Udayaratnam, for respondent No. 3.
1960. January 19. The Judgment of the Court
was delivered by
Wanchoo J.
WANCHOO J.-This appeal upon a
certificate
granted by the Punjab High Court raises the question
whether an order of- the Central Government under
r. 54 of the Mineral Concession Rules, 1949, (hereinafter called the Rules) framed under s. 6 of the Mines
and Minerals (Regulation and Development) Act,
No. 53of1941, (hereinafter called the Act) is quasijudicial or administrative. The brief facts necessary
for this purpose are these.
The appellant was granted
a mining lease by the then Ruler of Gangpur State on
December 30, 194 7, shortly before the merger of that
State with the State of Orissa on January 1, 1948.
This lease was annulled on June 29, 1949. Thereafter
the appellant was granted certificates of approval in
respect of prospecting licences and mining leases_
Eventually, the appellant applied on December 19,
1949, for mining leases for manganese in respect of
five areas in the district of Sundergarh (Orissa). He
was asked on July 4, 1950, to submit a separate
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S.C.R.
SUPREME COURT REPORTS
777
application for each area which he did on July 27,
z~'6o
Ul50. . Some defects were pointed out in these appliShivji N at!tubai.
cations and therefore the appellant submitted fresh
v.
applications on September 6, 1950, after removing the The Union of India
defects. In the mea.ntime, the third respondent also
and Others
made applications for mining leases for manganese for
the same area on July 10, 1950. These applications
Wanchoo J.
were not accompanied by the deposit required under
r. 29 of the Rules. Consequently, the third respondent
was asked on July .24, 1950, to deposit a sum of
Rs. 500, which it did on August 3, 1950. It was then
found that the third respondent's applications were
defective. It was therefore asked on September 5,
1950, to send a separate application in the prescribed
form for each block and thereupon it submitted fresh
applications on September 6, 1950. Eventually, on
December 22, 1952, the State of Orissa granted the
mining leases of the five areas to the appellant taking,
into account r. 32 of the Rules, which prescribed
priority. It was held that the appellant's applications
were prior and therefore the leases were granted to
him. Thereafter on April 21, 1953, posse£sion of the
areas leased was delivered to the appellant. It seems,
however, that the third respondent had applied. for·
review to the Central Government under r. 52 of the
Rules. This review application was allowed by the ·
Central Government on January 28, 1954, and the
Government of Orissa was directed to grant a mining
lease to the third respondent with respect to two out
of the five areas .
The appellant's complaint is that he came to
know in February, 1954, that the third respondent
had applied to the Central Government. under r. 52
for review. He thereupon addressed a letter to the
Central Government praying that he might be given a
hearing before any order was passed on the review .
application. He was, however, informed on July 5,
1955, by the Goyernment of Orissa of the order passed
by the Central Government on January 28, 1954, by
which the lease granted to him by the State of Orissa
with respect to two areas was cancelled. Consequently, .
he made an application under Art. 226 of the
778
SUPREME COURT REPORTS [1960 (2)]
1960
Constitution to the Punjab High Court praying for
quashing the order of January 28, 1954, on the
Shivji Nathubhai
d th t •t
· · d" · 1
d
d th
groun
a
1
was a quasi-JU 1ma or er an
e
The unio:· of India rules of natural justice had not been followed inasmuch
and Others
as he had not been given a hearing before the review
application was allowed by the Central Government,
Wanchoo f.
thus affecting his rights to the lease granted by the
State of Orissa. The writ petition was heard by a
learned Single Judge of the High Court and it was
held that the order was not a quasi-judicial order but
merely an administrative one and that there being no
lis, the appellant was not entitled to a hearing. In the
result, the writ petition failed. The appellant went
up in Letters Patent Appeal to a Division Bench of
the High Court, which upheld the order of the learned
Single Judge. The appellant then applied for a
certificate to permit him to appeal to this Court which
was granted; and that is how the matter has come up
before us.
Shri N. C. Chatterji appearing on behalf of the
appellant contends that the Central Government was
acting in a quasi-judicial capacity when it passed the
order under r. 54 of the Rules and therefore it was
incumbent upon it to hear the appellant before
deciding the review application, and inasmuch as it did
not do so it contravened the principles of natural
justice which apply in such a case and the order is
liable to be quashed. In support of this, learned
counsel relies on Nagendra Nath Bora and another v.
The Commissioner of Hills Division and Appeals, Assam
and others ('), and submits that rr. 52 to 55 of the
Rules which are relevant for the purpose clearly show
that the proceeding before the Central Government is a
quasi-judicial proceeding in view of the following circumstances appearing from these rules: (1) Rule 52 gives
a statutory right to any person aggrieved by an order
of the State Government to apply for review in case of
refusal of a mining lease ; (2) It also prescribes a
period of limitation, namely, two months; (3) Rule 53
prescribes a fee for an application under r. 52. These
circumstances taken with the circumstance that a lis is
(I) [1958] S.C.R. 1240.
•
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•
..
,
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•
S.C.R.
SUPREME COURT REPORTS
779
created as soon as a person aggrieved by an order is
z960
given the right to go up in review against another 51 . .. N
h b .
person in whose favour the order has been passed by
nv;i
at u ai
the State Government show that the proceeding before The Uni:~ of India
the Central Government at any rate at the stage of
and Others
review is quasi-judicial to which rules of natural
justice apply.
Wanchoo ],
Mr. G. S. Pathak appearing for the third respondent on the other hand contends that the view taken
by the High Court is correct and that the order of
January 28, 1954, is a mere administrative order and
therefore it was not necessary for the Central Govern-
~ ment to hear either party before passing that order.
He points out that the minerals, for 1Ilining which the
lease is granted under the Rules, are the property of
the State. No person applying for a mining lease of
such minerals has any right to the grant of the lease.
According to him, the right will only arise after the
lease has been granted by the State Government and
the review application, if any, has been decided by the
Central Government. He submits that even under
r. 32, which deals with priority the State Government is
not bound to grant the lease to the person who applies
first and it can for any special reason and with the
prior approval of the Central Government grant it to
a person who applies later. His contention further is
that as at the earlier stage when the grant is made by
the State Government the order granting the lease is
a mere administrative order-as it must be in these
circumstances (he asserts)-, the order passed on review
by the Central Government must also partake of the
same nature.
In order to decide between these rival contentions
it is useful to refer to rules 52 to 55 which fall for
consideration ii:'i this case. These are the rules as
they existed up to 1953. Since then we are told there
have been amendments and even the Act has been
replaced by the Mines and Minerals (Regulation and
Development) Act, 1957.
We are, however, not
concerned with the Rules as modified after January
1954 or with the Act of 1957. Rule 52 inter alia
provides that any person aggrieved by an order of the
780
SUPREME COURT REPORTS [l!J60 (2)]
ry6o
State Government refusing to grant a mining lease may
h . within two months of the date of such order apply to
Sllivji Nathub ai h C
1 G
f
·
·
h
I' 1
v.
t e entra
overnment or revrewmg t e same. :.u e
The Union of India 53 prescribes a fee.
Rule 54 may be quoted in extenso,
and Others
namelyWanchoo ].
" Upon receipt of such application, the Central
Government may, if it thinks fit, call for the relevant
records and other information from the State
Government and after considering any explanation
that may be offered by the State Government, cancel
the order of the State Government or revise it in
such manner as the Central Government may deem
just and proper. "
Rule 55 then says that the order of the Central
Government under r. 54, and subject only to such
order, any order of the State Government under these
rules shall be final.
This Court had occasion to consider the nature of
the two kinds of acts, namely, judicial which includes
quasi-judicial and administrative, a number of times.
In Province of Bombay v. Kushaldas S. Advani (1), it
adopted the celebrated definition of a quasi-judicial
body given by Atkin L. J. in R. v. Electricity Commissioners('), which is as follows:-
"Whenever any body of persons having legal
authority to determine questions affecting rights of
subjects, and having the duty to act judicially act
in excess of their legal authority they are. subject to
the controlling jurisdiction of the King's Bench
Division exercised in these writs. "
This definition insists on three requisites each of which
must be fulfilled in order that the act of the body may
be a quasi-judicial '.act, namely, that the body of
persons (1) must have legal authority, (2) to determine
questions affecting the rights of subjects, and (3) must
have the duty to act judicially. After analysing the
various cases, Das J. (as he then was) laid down the
following
principles as deducible
therefrom in
Kushaldas S. Advani's case (1) .at p. 725 :-
" (i) That, if a statute empowers an authority, not
being a Court in the ordinary sense, to decide
(1) [1950] S.C.R. 621.
(z) [19z4] l K.B. 171.
·•
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S.C.R.
SUPREME COURT REPORTS
781
disputes arising out of a claim made by any party
· r960
under the statute which claim is opposed by another SI ... N. 1 bh .
party and to determine the respective rights of the · '"'J' "v:
1 •u
ai
contesting parties who are opposed to each other, The Union of Indi"
there is a lis and prima facie and in the absence of
and Others
anything in the statute to the contrary it is the
duty of the authority to act judicially and the
Wancho"O 1·
decision of the authority is a quasi-judicial act; and
(ii) that if a statutory authority has power to do
any act which will prejudicially affect the subject,
then, although there are not two parties apart from
the authority and the contest is between the authority proposing to do the act and the subject opposing
it, the final determination of the authority will yet
be a quasi-judicial act provided the authority is
required by the statute to act judicially. "
It is on these principles which are now well-settled
that we have to see whether the Central Government
when acting unde~ r. 54 is acting in a quasi-judicial
capacity or otherwise. It is not necessary for present
purposes to decide whether State Government when
it grants a lease is acting merely administratively.
We shall assume that the order of the State Government granting a lease under the Rules is an administrative order. We have, however, to see what the
position is after the State Government has granted a
lease to one of the applicants before it and has refused
the lease to others.
Mr. Pathak contends that even in such a situation
there is no right in favour of the person to whom the
lease has been granted by the State Government till
the Central Government has passed an order on a
review application if any. Rule 55, however, makes
clear that the order of the State Government is final
subject to any order by the Central Government under
r. 54. Now when a lease is granted by the State Government, it is quite possible that there may be no application for review by those whose applications have been
refused. In such a case the order of the State Government would be final. It would not therefore be in our
opinion right to say that no right of any kind is
created in favour of a person to whom the lease is
782
SUPREME COURT REPORTS [1960 (2)]
'960
granted by the State Government. The matter would
be different if the order of the State Government were
Shiv}i Nathubai
v.
not to be effective until confirmation by the Central
The Union of India Government; for in that case no right would arise
and Othm
until the confirmation was received from the Central
Government. But r. 54 does not provide for confirmaWanchoo ].
C
l G
I
tion by the entra
overnment.
t gives power to
the Central Government to act only when there is an
application for review before it under r. 54. That is
why we have not accepted Mr. Pathak's argument
that in substance the State Government's order
becomes effective only after it is confirmed; r. 54 does
not support this. We have not found any provision
in the Rules or in the Act which gives any power to
the Central Government to review B'!W motu the order
of the State Government granting a lease. That some
kind of right is created on the passing of an order
granting a lease is clear from the facts of this case
also. The order granting the lease was made in
D'ecember 1952. In April 1953 the appellant was put
in possession of the areas granted to him and actually
worked them thereafter. At any rate, when the
statutory rule grants a right to any party aggrieved to
make a review application to the Central Government
it certainly follows that the person in whose favour
the order is made has also a right to represent his
case before the authority to whom the review application is made. It is in the circumstances apparent that
as soon as r. 52 gives a right to an aggrieved party to
apply for review a lis is created between him and the
party in whose favour the grant has been made.
Unless therefore there is anything in the statute to the
contrary it will be the duty of the authority to act
judicially and its decision would be a quasi-judicial act.
The next question is whether there is anything in
the Rules which negatives the duty to act judicially
by the reviewing authority. Mr. Pathak urges that
r. 54 gives full power to the Central Government to act
as it may deem 'just and proper ' and that it is not
bound even to call for the relevant records and other
information from the State Government before
deciding an application for review. That is undoubtedly
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S.C.R.
SUPREME COURT REPORTS
783
so.
But that in our opinion does not show that the
Ig6o
statutory Rules negative the duty to act judicially. Sh' .. N h b .
Wh
R 1
.
. h
h C
G
1v1i
at u as ·
at the
u es-require is t at t e entral overnment
v.
should act justly and properly; and that is wh3!t an The Union of India
authority which is required t.o act judicially must do.
and Others
The fact that the Central Government is not bound
even to call for records again does not negative the
Wanchoo J.
duty cast upon it to act judicially, for even courts have
the power to dismiss appeals without calling for
records. Thus r. 54 lays down nothing to the contrary.
We are therefore of opinion that there is prima f acie a
lis in this case as between the person to whom the
lease has been granted and the person who is aggrieved
by the refusal and therefore prima facie it is the duty
of the authority which has to review the matter to act
judicially and there is nothing in r. 54 to the contrary.
It must therefore be held that on the Rules and the
Act, as they stood at the relevant time, the Central
Government was acting in a quasi-judicial capacity
while deciding an application under r. 54. As such it
was incumbent upon it before coming to a decision to
give a reasonable opportunity to the appellant, who
was the other party in the review application whose
rights were being affected, to represent his case. Inasmuch as this was not done, the appellant is entitled to
ask us to issue a writ in the nature of certiorari
quashing the order of January 28, 1954, passed by the
Central Government. ·
We therefore allow the appeal and setting aside
the order of the High Court quash the order of the
Central Government passed on January 28, 1954. It·
will, however, be open to the Central Government to
proceed to decide the review application afresh after
giving a reasonable opportunity to the appellant to
represent his case. The appellant will get his costs
throughout from the third respondent, who is the
principal contesting party.
Appeal allCiWed.
IOO