M/s. Siri Sand Company V. The District Level Sand Committee,

WP/25863/2011

AI Insights

The case involves multiple writ petitions filed by M/s. Siri Sand Company and others, seeking the issuance of Mineral Dealers' Licenses under the A.P. Mineral Dealers Rules, 2000. The petitions were divided into two groups: one challenging the rejection of license applications and the other addressing the inaction on pending applications. The court found that the rejections were based on hypothetical and arbitrary grounds not supported by the rules governing the issuance of such licenses. The court emphasized that the Deputy Director of Mines and Geology must adhere strictly to the procedural requirements set out in the A.P. Mineral Dealers Rules, 2000, and cannot reject applications based on unfounded assumptions or extraneous considerations.

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 696024 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 22-12-2011
• Assessment Year: misc
• Laws Referred To: A.P.Mineral Dealers Rules, 2000, Mines and Minerals (Development and Regulation) Act, 1957, A.P.WALTA, 2002, A.P.Minor Mineral Concession Rules, 1966
• Result in Favour of: Others
• Court: HIGH COURT
• Keywords: Arbitrary rejection; Hypothetical Grounds; Inaction on Application; Mineral Dealers' Licence; Quarry Lease; Rejection of application
• Section: 6; 15; 5(2); 4(2); 7; 2(d); 3(e); 23-c

Judgement Text

"HONOURABLE SRI JUSTICE VILAS V.AFZUL PURKAR WRIT PETITION Nos.25863, 25886, 26257, 26260, 26282, 26312, 26496, 26762, 25885 and 27201 of 2011 Dt:- 22.12.2011 Between:- M/s.Siri Sand Company, rep. by its Managing Partner and others … Petitioners and The District Level Sand Committee, rep. by its Chairman and others … Respondents This Court made the following:- HONOURABLE SRI JUSTICE VILAS V.AFZUL PURKAR WRIT PETITION Nos.25863, 25886, 26257, 26260, 26282, 26312, 26496, 26762, 25885 and 27201 of 2011 COMMON ORDER: - Heard the learned counsel for the petitioner and the learned Government Pleader appearing for the respondents. 2. The petitioners in all the writ petitions are seeking Mineral Dealers’ Licence under the A.P.Mineral Dealers Rules, 2000 (for short, “the Rules”). In this batch of cases two categories of cases are grouped. In the first group of cases viz., W.P.Nos.25886, 26257, 26260, 26282, 26312, 26762, 25885 and 27201 of 2011, the applications of the petitioners for grant of Dealers’ licence was rejected by the Deputy Director of Mines & Geology-3rd respondent and the same is questioned in these writ petitions. In the second group of cases viz., W.P.Nos.25863 and 26496 of 2011, the inaction of the 3rd respondent, in keeping the applications of the petitioners pending for a long time without consideration is questioned. The order of rejection, which is passed in W.P.No.25886 of 2011, would be sufficient to be noticed to appreciate the manner in which similar rejection orders were passed in the group of writ petitions as indicated above. Hence, for the sake of convenience, the facts in W.P.No.25886 of 2011 are narrated hereunder. 3. Petitioner is a lessee, who was granted lease for quarrying the ordinary sand in Siddhantam Sand Reach in West Godavari District, which is valid upto 31.03.2013. While this writ petition does not deal with nor there are any disputed allegations with respect to working of the said quarry lease by the petitioner, the scope of the present writ petition is confined only to the petitioner’s application for granting dealers’ licence under the Rules. The said application of the petitioner, dated 06.05.2011, was rejected by the Deputy Director of Mines and Geology, Kakinada-3rd respondent under the impugned proceedings, dated 02.09.2011, on three principal grounds, which are as follows:- “ 1. There is a possibility for non payment of 2nd year lease amount by the applicant under the guise of Mineral Dealer Licence, if it is now granted. 2. The applicant has made huge stock probably with the help of machinery like poclains etc., which is a violation under A.P.Mineral Dealer Rules, 2000 as well as A.P.WALTA, 2002. 3. Floods season prevails for a month or two during this financial year. There is every scope for replenishment of sand after the flood is receded. Hence, there is no necessity to make stock of sand. From the above, I am of the view that grant of Mineral Dealer License for Sand will lead not only to violation of APWALTA, 2002 but also cause hardship to regulate sand auctions.” 4 . Counter affidavit filed by the respondents justifies the impugned order on the ground that the report submitted by the Assistant Director of Mines and Geology-4th respondent with respect to the application of the petitioner for dealers’ licence shows that the stock point of petitioner was inspected by Royalty Inspector reporting a stock of 44274.00 cubic metres; that the application of the petitioner for dealers’ licence was considered in the light of the said report in accordance with the instructions given by the Director of Mines and Geology in the memo, dated 18.11.2009; that the sand mining will have adverse impact on the ground water levels, course of the perennial river and in turn on environment, if it is done indiscriminately without following conditions of APWALTA. 5. In order to appreciate the rival contentions, it would be appropriate to notice that sand is a minor mineral under Section 3(e) of the Mines and Minerals (Development and Regulation) Act, 1957 (for short, “the Act”); that the power of the State to make rules relating to minor minerals is covered by Section 15 of the Act; that the State Government is empowered to make rules for preventing illegal mining, transportation and storage of minerals under Section 23(c) of the Act. By virtue of the powers conferred on the State Government under Section 15 and 23(c) of the Act referred to above, A.P.Mineral Dealers’ Rules, 2000 are incorporated and framed, whereunder a dealer as contemplated under the Rules is defined under Section 2(d) of the Rules, as follows: “2(d):- ‘Dealer’ means any person who carries on the business of buying, selling, supplying, transporting, distributing or delivering for sale of minerals and mineral products and includes. (a) Person who buy and process mineral or mineral products for sale or for utilization for their own purposes. (b) Any person who holds a mining lease or a quarry lease granted under the Mineral Concession Rules, 1960 oir the A.P.Minor Mineral Concession Rules, 1966 issued by the Government, framed under the Mines and Minerals (Development and Regulation) Act, 1957. Rule 3 of the Rules, is as follows:- “3. Prohibition: - (1) All dealers shall register themselves as dealers with the Mines and Geology Department of the Government of Andhra Pradesh as per the procedure indicated in the following Rules. (2) No person other than a dealer or a mining lease holder shall buy or sell or offer for sale or engage in any transaction of buying and selling any mineral at any place or transport mineral for purposes of sale or consumption without being registered as a dealer. 6. It is therefore, pertinent that any person who seeks to deal with minerals in any of the capacity to buy, sell, stock, transport etc., is required to obtain a dealers’ licence. Rule 4 of the Rules deals with grant of Registration and its renewal. Sub-rule (2) of Rule 4 provides the requirements, which have to be met by each of the applicant, which is as follows:- “4. (2) Every application made under sub-rule 1 shall be accompanied by- (a) A fee of Rs.1,000/- (rupees one thousand only) payable through treasury challan under the following head of account: “0853-Non-Ferrous Mining and Mettalurgical Industries 102-Mineral Concession Fees and Royalties. 81- Other receipts.” (b) Income Tax Clearance Certificate. (c) Sales Tax Clearance Certificate. (d) An affidavit to the effect that he had not been convicted in any case relating to smuggling of ores and minerals. (e) A copy of the certificate issued by the Industries Department or any other Department of Government for establishment of the factory or beneficiation plant or any industry, if any.” 7. It is not disputed that the petitioner has complied with the said requirements for filing application as required under sub-rule (2) of Rule 4 of the Rules. Once the petitioner files an application as required, it is required to be processed and considered by the Deputy Director under Rule 5 Sub-rule (2), which is as follows: “5. (2) The Deputy Director of Mines and Geology shall grant a dealers registration in Form-D for a period of five (5) years within thirty (30) days from the date of receipt of the application. In case of refusal or rejection of the application, the reasons shall be recorded in writing and communicate to the applicant within thirty (30) days from the date of receipt of the application.” 8. It is evident that the Deputy Director processes and grants a dealers’ licence, which is valid for a period of five years and which can be renewed thereafter if a licencee makes an application for renewal as per rules. Rule 6 of the Rules deals with Transit pass, which is required for any person to transport or carry away any mineral from one place to another. Rule 7 of the Rules imposes conditions, which form part of the dealership granted. Further the Rules provides penalties, seizure and confiscation, custody of the seized property etc., including right of appeal and revision. In short, therefore, the Rules referred to above completely cover the aspect of application, scrutiny and registration of any person as a dealer. The grant of dealers’ licence, therefore, is required to be considered in terms of the compliances within the Rules as mentioned above. 9. In the present case, however, the petitioner’s application for dealers’ licence was rejected on mere possibilities and probabilities, which were purely hypothetical in nature. The Deputy Director has not considered nor applied his mind to assess the petitioner’s application from the standpoint of compliance with the dealers’ rules. But on the contrary he has proceeded on a hypothesis that if the dealers’ licence is granted, the petitioner may commit default with reference to the 2nd year lease amount in the quarry lease. Admittedly, the quarry lease which incidentally the petitioner holds is covered by A.P.Minor Mineral Concession Rules 1966, which separately provides adequate machinery under those Rules to safeguard various situations including defaults, if any, committed by the quarry lease holders. Thus, the application of the petitioner for dealers’ licence cannot be rejected for possibility of defaults committed in a quarry lease. The rejection on the said ground is, therefore, clearly arbitrary and unintelligible and has no nexus with the dealers’ rules as above, which are required to be followed for considering grant or rejection of the application for dealership. 10. Similarly, ground Nos.2 and 3 are equally hypothetical and arbitrary. Inasmuch as ground No3 is highly presumptive that the petitioner might have used machinery in violation of the Minor Mineral Concession Rules, while quarrying the sand or for that matter he might have violated APWALTA. Even in the counter affidavit no basis for such presumption is found, leave alone any material to support the said ground in the impugned order. Ground No.3 mentioned in the impugned order is mostly advisory, as it is not for the Deputy Director to advise the petitioner whether there is any necessity to stock the sand or not. It is a matter of choice for the petitioner and not for the Deputy Director to reject the application on the ground of necessity. All the three grounds, therefore, are clearly arbitrary and rejection of the petitioner’s application on the said grounds cannot be upheld. T h e licencing authority i.e., the Deputy Director in these rules must keep in mind that application for dealership may be made either by a quarry lease holder or for that matter, even a trader who intends to trade in the minerals. It is for that reason one does not find any necessity of giving details of quarry lease held by the applicant when he applies for dealership. Thus, any person could seek a licence under the dealers’ rules referred to above. As such consideration of each application in accordance with the dealers’ rules is contemplated and not extraneous matters. The impugned orders are wholly unsupported by any reason and as such the impugned orders are liable to be set aside and are accordingly set aside. Therefore, the rejection orders passed in similar manner in the first group of cases viz., W.P.Nos.25886, 26257, 26260, 26282, 26312, 26762, 25885 and 27201 of 2011, are set aside. 11. The second group of cases viz., W.P.Nos.25863 and 26496 of 2011, are cases where no action is forthcoming by the Deputy Director on the applications of the petitioners. The action of the Deputy Director in not disposing of the said applications is clearly an enforceable inaction and all the said applications which are pending for a long time are required to be considered and disposed of in accordance with the Dealers’ Rules referred to above. As such, these second group of writ petitions viz., W.P.Nos.25863 and 26496 of 2011, complaining of inaction also deserve to succeed. 12. For the reasons as above, the first group of writ petitions W.P.Nos.25886, 26257, 26260, 26282, 26312, 26762, 25885 and 27201 of 2011, where rejection orders are passed, are allowed by setting aside the orders of rejection and the second group of writ petitions viz., W.P.Nos.25863 and 26496 of 2011, questioning the inaction of the Deputy Director in not considering the applications of the petitioners, shall also stand allowed and there shall be a direction in all the writ petitions as follows:- 1) The Deputy Director of Mines and Geology in each of these writ petitions shall consider afresh the respective applications for grant of dealers’ licence filed by each of the petitioners in accordance with the Dealers’ Rules referred to above and pass appropriate orders therein within six weeks from the date of receipt of a copy of this order. 2) Pending these writ petitions, each of the petitioners were granted an interim relief whereunder Deputy Director of Mines and Geology was directed to consider grant of temporary licence to each petitioner for a period of three months/two months. The said period having recently expired, these writ petitions were heard on priority basis. Since the petitioners in these cases were carrying on business on the basis of temporary licence, the Deputy Director shall grant a further temporary licence to each of the writ petitioners for a period of two months from today to enable them to continue to carry on business subject to final orders to be passed by the Deputy Director on their applications for licence as directed hereunder. There shall be no order as to costs. _____________________________ VILAS V. AFZULPURKAR, J 22.12.2011 Note: C.C. by 26.12.2011. {B/o} lmv HONOURABLE SRI JUSTICE VILAS V.AFZUL PURKAR WRIT PETITION Nos.25863, 25886, 26257, 26260, 26282, 26312, 26496, 26762, 25885 and 27201 of 2011 23.12.2011 lmv "