Partly allowed

Mukesh Goyal v. State of Raj and Ors.

Rajasthan HC11 Jul 2018CW/12798/2017

Case brief

AI extract

What is this about?

The court distinguished prior precedent regarding the 1986 Rules. It held that consent letters do not create vested rights and rejected the challenge to Rule 89's main provision. However, the proviso to Rule 89 was struck down as unconstitutional and unnecessary, rejecting the intent to reference a previously struck-down notification.

What did the court decide?

Proviso to Rule 89 of the Rajasthan Minor Mineral Concession Rules, 2017, is struck down as unconstitutional.

Mukesh Goyal Vs State of Raj and Ors. — Mining and Natural Resources | Rajasthan HC (2018)

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HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR

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CONNECTED WITH

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D.B. CIVIL WRIT PETITION NO. 12799/2017

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Jai Ambey Stone Crusher through Partner Daya Ram, Son of Shri Prabhu Lal, aged about 39 years, by caste Gurjar, resident of village Sutra, tehsil & district Bundi (Rajasthan) (ML No 48/2010)

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----------Petitioner

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Versus

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State of Rajasthan through Principal Secretary, Department of Mines & Geology, Secretariat, Jaipur.

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Director, Mines & Geology, Udaipur, Rajasthan.

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Mining Engineer, Department of Mines & Geology, Bundi-l ----------Respondents

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D.B. CIVIL WRIT PETITION NO. 12797/2017

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Anil Kumar Jain, Son of Shri Sugan Chand Jain, aged about 35 years, resident of village Dabi, tehsil Taleda, district Bundi (Rajasthan) (ML No 35/2010)

----Petitioner

(2 of 16)

[CW-9049/2017]

Versus

State of Rajasthan through Principal Secretary, Department of Mines & Geology, Secretariat, Jaipur.

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Director, Mines & Geology, Udaipur, Rajasthan.

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Mining Engineer, Department of Mines & Geology, Bundi-l ----------Respondents

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D.B. CIVIL WRIT PETITION NO. 12798/2017

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Mukesh Goyal, Son of Shri Chand Mal Goyal, aged about 45 years, resident of 4-A-4, Dadabadi, Sector 4, Block-A, Ward No. 15, tehsil Ladpura, district Kota (Rajasthan) (ML No 61/2010)

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----------Petitioner

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Versus

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State of Rajasthan through Principal Secretary, Department of Mines & Geology, Secretariat, Jaipur.

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Director, Mines & Geology, Udaipur, Rajasthan.

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Mining Engineer, Department of Mines & Geology, Bundi-l ----------Respondents

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D.B. CIVIL WRIT PETITION NO. 12800/2017

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Smt Kanta Devi, Son of Shri Suresh Bairagi, aged about 45 years, resident of Lamba Kho, tehsil & dsitrict Bundi (Rajasthan) (ML No 69/2008)

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------Petitioner

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Versus

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State of Rajasthan through Principal Secretary, Department of Mines & Geology, Secretariat, Jaipur.

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Director, Mines & Geology, Udaipur, Rajasthan.

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Mining Engineer, Department of Mines & Geology, Bundi-l ----------Respondents

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(3 of 16)

[CW-9049/2017]

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For Petitioner(s) : Mr. Ashwani Chobisa & Mr. Pradeep Mathur with Mr. Deepak Prajapati For Respondent(s) : Mr. NM Lodha, Advocate General with Mr. Kunal Jaiman & Mr. Sheetanshu Sharma

¶66

HON'BLE MR. JUSTICE MUNISHWAR NATH BHANDARI HON'BLE MR. JUSTICE DINESH CHANDRA SOMANI

Judgment

11/07/2018

(4 of 16)

[CW-9049/2017]

By this batch of writ petitions, a challenge has been made to Rule 89 of the Rajasthan Minor Mineral Concession Rules, 2017 (for short “the Rules of 2017” ). In the alternative, a prayer is made to apply the Mines and Minerals (Development and Regulation) Amendment Act, 2015 (in short “the Amendment Act of 2015” ) and, accordingly, to grant mining leases to the petitioners by accepting applications remained pending under the Rajasthan Minor Mineral Concession Rules, 1986 (in short “the Rules of 1986” ).

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BRIEF FACTS OF THE CASE :

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It is stated that all the petitioners made applications for grant of mining leases. They completed all the required formalities but mining leases were not executed in their favour. It is despite a consent letter by the State of Rajasthan. To frustrate the rights of the petitioners, initially, a Notification was issued on 3^rd April, 2013 to treat all the pending applications as cancelled and, accordingly, orders were passed to cancel the applications submitted by the petitioners.

¶74

The petitioners challenged the Notification dated 3^rd April, 2013 and orders of cancellation of the applications. The Division Bench held Notification dated 3^rd April, 2013 to be unconstitutional and, accordingly, it was set aside along with orders of cancellation of the pending applications for mining leases. The State Government preferred SLP before the Apex Court to challenge the judgment of the Division Bench dated 31^st July, 2013. The Apex Court passed an interim order in favour of the State Government. During pendency of the SLP, the State Government came out with new Rules of 2017. Rule 89 provides for rejection of all the

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(5 of 16)

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[CW-9049/2017]

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pending applications thus the State Government has come out with similar provision as was brought by way of Notification dated 3^rd April, 2013 even though it was struck down by the Division Bench. In view of the aforesaid, the petitioners were left with no option but to challenge Rule 89 of the Rules of 2017.

¶78

It is also stated that at the time of submission of applications for grant of mining leases, it was for major mineral in few cases. The leases for major mineral are governed by the Mines and Minerals (Development and Regulation), Act, 1957 (for short “the Act of 1957” ). An amendment under Section 10(c) was made by Amending Act of 2015. As per amendment brought on 11^th January, 2015, pending applications were saved for two years i.e. till 11^th January, 2017. The petitioners’ alternative prayer is to deal with their cases as per Amending Act of 2015 and taking into consideration the completion of all the formalities on or before the last date i.e. 11^th January, 2017, they may be granted mining leases.

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GROUNDS OF CHALLENGE :

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Learned counsel for petitioners submit that Rule 89 of the Rules of 2017 is nothing but to bring similar provision, which was earlier brought by way of Notification dated 3^rd April, 2013, which was struck down by the Division Bench holding it to be unconstitutional. It is in the case of Federation of Sand Mining Industries Association & Ors. Vs. State of Raj. & Ors., DB Civil Writ Petition No.4241/2013, decided on 31^st July, 2013. The ratio propounded therein applies to the facts of these cases as well, thus Rule 89 of the Rules of 2017 may be struck down.

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(6 of 16)

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[CW-9049/2017]

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Rule 89 of the Rules of 2017 has been brought ignoring existing rights of the petitioners. Their applications were registered under Rule 10(1) of the Rules of 1986. The petitioners had completed all the formalities thus the Government even issued consent letters. There was no lapse or delay on the part of the petitioners to complete other formalities. It was, however, delayed by the State Government and, now, to nullify rights of the petitioners, Rule 89 of the Rules of 2017 has been brought to treat all the pending applications as rejected. It is even without providing an opportunity of hearing to the petitioners thus on the aforesaid ground also, Rule 89 of the Rules of 2017 deserves to be set aside.

¶84

It is also stated that applications submitted by the petitioners were for major mineral. It was subsequently declared to minor mineral. At the time of submission of the applications, the Act of 1957 was applicable. As per Section 10(c) of the Amendment Act of 2015, the applications of the petitioners should have been dealt with for grant of mining leases on or prior to 11^th January, 2017. The petitioners have been governed by the Rules of 2017 instead of the Amendment Act of 2015. In view of the above, orders for cancellation of the applications are illegal thus may be set aside.

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Further argument of learned counsel for petitioners is in reference to Rule 8 of the Rules of 1986. It provides for rejection/disposal of the applications on the grounds narrated therein. The petitioners were not subjected to process given under Rule 8 of the Rules of 1986. There was no shortcoming in their applications and therefore only, consent letters were issued. The respondents should have saved such applications. Rule 89 saves

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(7 of 16)

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[CW-9049/2017]

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the applications where letter of intent or licence for prospecting of mines has been given.

¶89

Learned counsel for petitioners have made a reference of the proviso to Rule 89 of the Rules of 2017. It provides for deemed rejection of the applications even in reference to Notification dated 3^rd April, 2013. The effect of the provision is nothing but to nullify the judgment of the Division Bench and to make pending appeal before the Apex Court to be infructuous thus proviso suffers from mala fide and ill-motives of the respondents. When the matter in reference to Notification dated 3^rd April, 2013 is pending before the Apex Court, a provision in reference to it could not have been brought thus even proviso to Rule 89 of the Rules of 2017 deserves to be struck down.

¶90

It is lastly submitted that Rule 89 of the Rules of 2017 applies retrospectively as it nullifies all the pending applications. The Rules could not have been brought to nullify the pending applications i.e. to have retrospective effect. It is moreso when pending applications have been processed to a great length and even consent letters were issued in favour of petitioners thus rights created in favour of petitioners and could not have been nullified by bringing Rule 89 of the Rules of 2017 to be applied retrospectively. In view of the above also, Rule 89 of the Rules of 2017 deserves to be struck down with a direction to grant mining leases in favour of petitioners.

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ARGUMENT OF THE SIDE OPPOSITE :

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Learned Advocate General Mr. NM Lodha vehemently contested the writ petitions. It is submitted that a case is not made out to strike down Rule 89 of the Rules of 2017. A challenge

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(8 of 16)

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[CW-9049/2017]

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to Rule 89 of the Rules of 2017 has been made in ignorance of the fact that the State Government has come out with a new legislation for minor minerals under their domain. Rules of 2017 provides for grant of mining lease by a mode different than existing under the Rules of 1986. Under the Rules of 1986, the mining lease was to be given in order of preference to the date of submission of application. The application submitted earlier was having preferential right for grant of mining lease, rather, it was required to be granted unless defects are found and not cured. The aforesaid mechanism has given rise to many controversies and even litigation. It has, otherwise, affected revenue of the Government thus to do away with the aforesaid procedure, the Rules of 2017 were brought, which provides for auction of mining leases. It is to fetch reasonable amount for the mining lease and furthermore to have transparency in grant of lease. The object sought to be achieved is not only to avoid litigation in grant of mining leases but to see that revenue of the Government is not affected.

¶96

In view of new set of Rules of 2017, all the pending applications have been treated as rejected other than saved under the Rules. There is no illegality in framing of the Rules of 2017.

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A challenge to Rule 89 of the Rules of 2017 has been made in reference to earlier judgment of the Division Bench in the case of Federation of Sand Mining Industries Association (supra). The judgment (supra) is not operating having been stayed by the Supreme Court. He further states that judgment aforesaid has no effect on the new Rules where mode of allotment of mines itself has been changed. The pending applications cannot be processed under the Rules of 1986, as it no more exists. It can be processed

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(9 of 16) [CW-9049/2017]

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only under the Rules now applicable, therefore, the judgment of the Division Bench in the case of Federation of Sand Mining Industries Association (supra) has no application to the facts of this case as it was rendered under the old Rules of 1986.

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He further submits that challenge to the Rules has been made showing existing rights in favour of the petitioners. The existing rights can be claimed only when it is crystalised and become final in nature. In the instant cases, the applications submitted by the petitioners were not crystalised so as to claim existing rights. The mining leases have not been issued in their favour so as to claim existing right for challenge to Rule 89 of the Rules of 2017.

¶101

Further argument of learned counsel for petitioners is in reference to the provisions of the Act of 1957 and subsequent amendment i.e. Amendment Act of 2015. It applies to the major minerals and not to minor minerals. The leases sought by the petitioners are now for minor minerals. It may be that at the time of submission of the applications, it was major mineral but having been declared as minor mineral, a claim cannot be made by treating it to be for major mineral.

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It is further stated that even otherwise the crucial date for grant of lease for major mineral was 11^th January, 2017. It has already expired. The petitioners were not having required approval for grant of mining leases as otherwise mandated under Section 10(c) of the Amending Act of 2015 thus a right claimed pursuant to the Amending Act of 2015 is also not made out.

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It is further stated that claim of right under Rule 8 of the Rules of 1986 is without considering that aforesaid Rules no more exist. It is, no doubt, true that pending applications could have

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(10 of 16)

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[CW-9049/2017]

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been rejected by applying Rule 8 of the Rules of 1986. It is, however, for the reason that Rule 8 of the Rules of 1986 was not applied, a right is not created.

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It was for the petitioners to pursue and complete all the formalities to fetch the stage of getting letter of intent or execution of lease. If the applications were not pursued for years together, right cannot be claimed by blaming the State Government for prolonging it. In few cases, the applications are pending for last 10 to 12 years. The aforesaid is considerable time and if petitioners could not pursue applications to fetch the stage of getting lease, the blame cannot be passed on the respondents in reference to Rule 8 of the Rules of 1986 if their applications were not rejected. In view of the above also, a case is not made out for grant of indulgence to the petitioners.

¶108

Learned Advocate General has further submitted that challenge to proviso of Rule 89 of the Rules of 2017 is without considering the main provision. As per Rule 89 of the Rules of 2017, all the pending applications are to be treated as rejected other than falling under Rule 4 and 5 of the Rules of 2017. When no application has been saved by Rule 89 of the Rules, 2017, then earlier Notification dated 3^rd April, 2013 remains of no effect. In fact, even if proviso is deleted, the consequence would remain the same i.e. rejection of the applications other than falling under Rule 4 and 5 of the Rules of 2017. The proviso to Rule 89 of the Rules of 2017 was brought to make the things clear. It is not to affect pending litigation before the Apex Court or to nullify earlier judgment of the Division Bench in the case of Federation of Sand Mining Industries Association (supra).

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(11 of 16)

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[CW-9049/2017]

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The argument in regard to retrospective effect of Rule 89 of the Rules of 2017 has also been raised. A challenge to it has been made ignoring legislative competence to make a provision with retrospective effect. It is, otherwise, a case where Rules of 2017 were brought to change the criteria for grant of mining leases and, due to aforesaid, to reject all the pending applications. Per se Rule 89 of the Rules of 2017 cannot be said to be of retrospective. Even if it is treated to be retrospective, there exists no illegality therein as it is within the legislative competence. Hence, the argument in reference to retrospective effect of Rule 89 is also of no consequence and deserves to be rejected summarily.

¶112

In view of the aforesaid, all the writ petitions deserve to be dismissed as no ground is made out to strike down Rule 89 of the Rules of 2017 or to consider applications of the petitioners under the Act of 1957 and, more specifically, under the Amendment Act of 2015.

¶113

We have considered rival submissions made by learned counsel for the parties and scanned the matter carefully.

¶114

The first ground raised for challenge to Rule 89 of the Rules of 2017 is in reference to earlier Notification dated 3rd April, 2013. It is stated that a similar provision was earlier brought by the Notification under the Rules of 1986. It has been struck down by the Division Bench and applying the ratio propounded therein, Rule 89 of the Rules of 2017 may be struck down. The argument aforesaid has been opposed by learned Advocate General Shri NM Lodha and, accordingly, we are considering rival submissions of the parties.

¶115

Before bringing Rules of 2017, the Rules of 1986 were operational for allotment of mining lease. The previous Rules were

¶116

(12 of 16)

¶117

[CW-9049/2017]

¶118

not having same provision for allotment of mining lease, as exist now. Under the Rules of 1986, there was no provision for auction of the mining lease, rather, allotment of mining lease was altogether on different criteria. Under the Rules of 2017, the method of allotment of mining lease has been changed and it is by way of auction. It would not only give proper value and revenue to the Government out of the mining lease but avoid voice of arbitrariness in allotment of mining lease. In those circumstances, Rule 89 of the Rules of 2017 was brought to treat all the pending applications as rejected other than falling under Rule 4 and 5 of the Rules of 2017. The consideration of the validity of Rule 89 of the Rules of 2017 cannot be made on same parameters as were taken for challenge to the Notification dated 3^rd April, 2013 under the Rules of 1986. In view of the above, we cannot apply the ratio propounded by the Division Bench of this court in the case of Federation of Sand Mining Industries Association (supra). It has, otherwise, been stayed by the Apex Court in pending appeal of the State of Rajasthan thus judgment aforesaid has not attained finality.

¶119

The examination of the issue was, otherwise, in reference to the Rules of 1986 and not under the Rules of 2017. For the aforesaid reason also, we are unable to apply the judgment in the case of Federation of Sand Mining Industries Association (supra).

¶120

The second ground for challenge is in reference to the existing right. It is stated that applications submitted by the petitioners for grant of mining leases were registered under Rule 10(1) of the Rules of 1986. The petitioners had completed all the formalities followed by consent letter by the Government. The question for our consideration is as to whether the registration of

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(13 of 16)

¶122

[CW-9049/2017]

¶123

applications and grant of consent letters results in existing and vested rights. The existing or vested rights can be drawn only when mining leases have already been granted or right is saved by the provisions of law and not otherwise.

¶124

In the instant cases, mining leases were not granted in favour of the petitioners. If mining leases would have been granted and a provision to cancel is brought, a challenge could have been made on the ground of vested and existing right. Mere issuance of consent letter by the Government does not create a existing or vested right in favour of the petitioners. Rule 89 save those applications where letters of intent have been issued or permission for prospecting of mines has been granted. The applications have not been saved at any stage prior to it. Mere registration of the applications and consent letters do not create rights in favour of the petitioners.

¶125

The words “vested or existing right” have been defined by the Apex Court in the case of S.B. International Ltd. and Ors. Vs. Asstt. Director General of Foreign Trade and Ors., reported in (1996) 2 SCC 439 . It was held that vested and existing right can be claimed only when a right has already been conferred and not a right which is claimed. In view of the judgment of the Apex Court in the case (supra), we cannot accept even second ground raised by the petitioners.

¶126

The third ground to challenge the validity of Rule 89 of the Rules of 2017 is in reference to amendment in Section 10(c) of the Amending Act of 2015. The Act of 1957 covers major minerals and not the minor minerals. It is, no doubt, true that mining leases applied by the petitioners were earlier for major minerals

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(14 of 16)

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[CW-9049/2017]

¶129

but it was then declared to be minor minerals under the domain of the State Government.

¶130

Once the mineral in question was declared to be minor mineral, it cannot be governed by the Act of 1957 and by Section 10(c) of the Amending Act of 2015 thereunder. Even if Section 10(c) of the Amending Act of 2015 is applied, the petitioners are not entitled to any benefit in absence of completion of all required formalities given therein and expiry of the date. Thus even third ground raised by learned counsel for petitioners cannot be accepted.

¶131

The next question raised by learned counsel for petitioners is in reference to Rule 8 of the Rules of 1986. The rule aforesaid provides ground of rejection/disposal of the applications. The Rules of 1986 are not existing now, rather, it is now to be governed by the Rules of 2017. In view of the above, Rule 8 of the Rules of 1986 does not provide any assistance to the petitioners.

¶132

The last question raised by learned counsel for petitioners is in reference to the proviso to Rule 89 of the Rules of 2017 and its retrospective effect. We do not find that Rule 89 of the Rules of 2017 has retrospective effect because it rejects all the pending applications. Hence, Rule 89 of the Rules of 2017 can be inferred to be prospective in nature. The pending applications on the date when Rules of 2017 were brought can be dealt with by the provisions, as existed. In view of the aforesaid, Rule 89 of the Rules of 2017 can be said to have its retrospective application and even if it is so, we find no illegality therein. The State has competence for it.

¶133

Another question is in reference to the proviso added to Rule 89 of the Rules of 2017. It is submitted that when main provision

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(15 of 16)

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[CW-9049/2017]

¶136

itself rejects all the pending applications, therefore, there was no necessity to make reference of the Notification dated 3rd April, 2013 issued under the Rules of 1986. It has been brought to nullify the judgment of this court. We are in agreement to the argument aforesaid while not accepting the argument raised by learned Advocate General. If the main provision of Rule 89 is looked into, it rejects all the pending applications other than falling under Rule 4 and 5 of the Rules of 2017. For ready reference, Rule 89 of the Rules of 2017 is quoted hereunder:

¶137

“89. Status of pending applications.- Notwithstanding anything contained in these rules, all the pending applications except saved under rule 4 and rule 5, on the date of notification of these rules shall be deemed to have been rejected:

¶138

Provided that on and after the commencement of these rules, all applications including those rejected under the Rajasthan Minor Mineral Concession Rules, 1986 or rejected under notification dated 3^rd April 2013 or subsequently restored shall be deemed to have been rejected and such applicant shall have no locus standi under these rules.”

¶139

When the main provision itself rejects all the pending applications, there was no necessity to add proviso to emphasise rejection of all the pending applications even pursuant to the Notification dated 3rd April, 2013 and subsequent restoration due to judgment of the Division Bench. It is moreso when by operation of Rule 89, all the pending applications, which may be pending

¶140

(16 of 16)

¶141

[CW-9049/2017]

¶142

even prior to 2013 or subsequent thereto but before bringing the Rules of 2017, get rejected. The addition of proviso to Rule 89 of the Rules of 2017 is unnecessary and liable to be struck down. It would not affect the main provision of Rule 89 of the Rules of 2017.

¶143

In view of the discussions made above, we partly allow the writ petitions. The proviso to Rule 89 of the Rules of 2017 is held to be unconstitutional and is, accordingly, struck down, however, a challenge to the main provision of Rule 89 of the Rules of 2017 is not accepted.

¶144

A copy of this order be placed in each connected file.

¶145

(DINESH CHANDRA SOMANI),J (M.N. BHANDARI),J

¶146

FRBOHRA

Mukesh Goyal v. State of Raj and Ors.

Case brief

What is this about?

What did the court decide?

Mukesh Goyal v. State of Raj and Ors.

Case brief

What is this about?

What did the court decide?

What the court decided

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