07 February 2013
Supreme Court
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M/S KALINGA MINING CORPORATION Vs UNION OF INDIA .

Bench: SURINDER SINGH NIJJAR,H.L. GOKHALE
Case number: C.A. No.-001013-001013 / 2013
Diary number: 34302 / 2007
Advocates: S. RAVI SHANKAR Vs


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REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 1013 OF 2013 [Arising out of SLP (C) NO.23141 OF 2007]

M/s. Kalinga Mining Corporation                          ...Appellant  

VERSUS

Union of India & Ors.                               ...Respondents

AND

CIVIL APPEAL NO. 1014 OF 2013 [Arising out of SLP (C) NO.5130 OF 2009]

M/s. Kalinga Mining Corporation                          ...Appellant  

VERSUS

Union of India & Ors.                               ...Respondents

       J U D G M E N T

SURINDER SINGH NIJJAR,J.

1. Leave granted in both the Special Leave Petitions.

2. By this common judgment, we propose to dispose of  

both the aforesaid appeals.  The Appeal arising out of  

Special Leave Petition (C) No. 23141 of 2007 has been  

filed  challenging  the  order  dated  31st August,  2007  

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rejecting the preliminary issue raised by the appellant  

in  OJC No.3662 of  2002.   The Appeal  arising out  of  

Special Leave Petition (C)     No. 5130 of 2009 has  

been  filed  challenging  the  final  order  dated  24th  

November, 2008 in OJC No. 3662 of 2002 upholding  

the order dated 27th September, 2001.

CIVIL APPEAL NO.1013 OF 2013 [Arising out of SLP (C) No. 23141 of 2007]

3. We may notice here briefly the facts as noticed by the  

High Court.

4. On  27th October,  1953,  the  appellant  M/s.  Kalinga  

Mining  Corporation  applied  to  the  Government  of  

Orissa for a prospecting licence. This was granted by  

the  State  Government  on  15th September,  1961  in  

respect  of  an  area  of  480  acres  in  Kalaparbat  Hill  

range  of  Keonjhar  district  subject  to  compliance  of  

lease stipulations. The appellant applied for the grant  

of mining lease also for iron manganese ore over 420  

acres in Kalaparbat Hill range of Keonjhar district. As  

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the  same  was  not  considered  by  the  State  

Government, the appellant filed a revision before the  

Central Government. The same was disposed of by the  

Central Government                 on 23rd July, 1962 by  

intimating  the  State  Government  that  since  the  

prospecting licence was not granted in favour of the  

appellant,  the mining lease application could not be  

considered.  The  direction  was  issued  to  the  State  

Government  to  consider  the  application  of  the  

appellant  for  mining  lease  which  was  dated  4th  

September, 1961 on merit                        by 1st  

January,  1964.  Since  no  decision  was  taken  by  the  

State Government by stipulated date, the application  

of the appellant dated 4th January, 1961 was deemed  

to have been refused. By notification dated 20th July,  

1965, the State Government of Orissa threw open an  

area  of  438.5  acres  in  Kalaparbat  Hill  Range  area,  

Keonjhar  district  for  mining  under  Rule  58(1)  of  

Mineral Concession Rules, 1960 for mining in respect  

of manganese and iron ore.                        On 10 th  

September,  1965,  six  applicants  including  the  

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appellant  and  respondent  No.10  submitted  their  

applications for grant of mining lease in respect of the  

aforesaid  area.  It  appears  that  the  mining  lease  

applications of the appellant as well as the respondent  

No.10 were not disposed of by the State Government  

within  the  statutory  period,  therefore,  both of  them  

separately moved the Central Government in revision.  

By  an  order  dated  7th April,  1967,  the  Central  

Government  allowed  the  revision  petitions  of  the  

appellant  and  respondent  No.10  and  directed  the  

State  Government  to  consider  their  mining  lease  

applications. Still no decision was taken by the State  

Government, as a result of which the appellant moved  

another  revision  petition  before  the  Central  

Government  on  22nd July,  1967.  The  Central  

Government rejected the revision of the appellant by  

its order dated 13th October, 1967.

5. Being  aggrieved,  the  appellant  filed  OJC  No.855  of  

1969 seeking a direction from the High Court for grant  

of  mining  lease  in  its  favour.  Respondent  No.10  

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intervened in the aforesaid writ petition. By an order  

dated 21st June,  1971, the High Court  dismissed the  

writ petition filed by the appellant.

6.  Pursuant  to  the  order  of  the  Central  Government  

dated  7th April,  1967,  the  State  Government  on  3rd  

September, 1971, for the first time, passed an order  

recommending the grant of mining lease in favour of  

respondent  No.10  and  sought  the  approval  of  the  

Central Government as required under Section 5(1) of  

the Mines and Minerals (Development and Regulation)  

Act, 1957. The Central Government by its order dated  

18th January,  1972 refused to  accord its  approval  in  

favour of respondent No.10. It appears that the State  

Government on 25th April,  1972 again requested the  

Central  Government  for  grant  of  approval  to  its  

recommendation made in favour of respondent No.10  

Dr. Sarojini Pradhan. However, by its letter dated 29th  

December, 1972, the Central Government directed the  

State  Government  to  reject  the  mining  lease  

application  of   Dr.  Pradhan.  Thereafter  on  8th June,  

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1973,  the  State  Government  rejected  all  pending  

mining lease applications including the application of  

appellant and Dr. Sarojini Pradhan.

7. Challenging  the  aforesaid  order,  both  the  appellant  

and Dr. Pradhan filed the revision petitions before the  

Central  Government.  The Central  Government by its  

order                  dated 2nd May, 1978 rejected the  

revision filed by Dr. Sarojini Pradhan but allowed the  

revision filed by the appellant with a direction to the  

State Government to pass a fresh order on merits.   

8. It appears that Dr. Pradhan filed a writ petition being  

OJC No.829 of 1978 challenging the order passed by  

the Central Government dated 2nd May, 1978. On 4th  

September,  1987,  the  High  Court  allowed  the  writ  

petition with the following directions :

“We direct the Central Government to reconsider  the question of grant of approval for the grant of  lease of iron ore and manganese in respect of  the  area  after  giving  all  parties  concerned  an  opportunity of hearing. The mode and manner of  hearing  shall  be  regulated  by  the  Central  Government and it shall convey its decision by a  

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speaking  order,  i.e.  by  giving  reasons  for  the  decision.”        

9. We may notice here that in the aforesaid writ petition,  

the  appellant  and  the  other  applicants  had  filed  

applications  for  intervention.  However,  the  cases  of  

interveners  were  not  considered  individually  by  the  

High Court, having regard to the directions which were  

given  by  it.  Few  days  after  the  aforesaid  decision  

dated 4th September, 1987, Dr. Pradhan died on 10th  

September, 1987. Since at that time Dr. Pradhan was  

only an applicant for the mining lease, the appellant  

claims that her application was lapsed.    

10. An  application  was  filed  by  the  legal  heirs  of  

Dr. Pradhan for substitution in the revision filed by her  

and was pending before the Central Government.  In  

OJC No.829 of 1978, a Miscellaneous Case No.1773 of  

1988 was filed wherein the aforesaid fact of death of  

Dr. Pradhan and the fact of application for substitution  

of  her  legal  heirs  were considered.  In  the aforesaid  

application, a direction was given by the High Court on  

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28th April, 1988 to the Central Government to inform  

the parties about the stage of revision and the date on  

which the revision petition was posted for hearing. It  

was  made clear  that  the  legal  heirs  of  Dr.  Pradhan  

may appear  before  the Central  Government  on 16th  

May, 1988 and seek directions; regarding the hearing  

of  revision application.  With  these  observations,  the  

miscellaneous  case  was  disposed  of.  Another  Misc.  

Case being Misc. Case No.1977 of 1988 was field in  

the  aforesaid  OJC  NO.829 of  1978.  In  the  aforesaid  

Case No.1977 of 1988, on 11th May, 1988, the High  

Court passed the following order :

“Heard.

On  28.4.1988,  on  a  complaint  made  by  the  petitioner that no action had been taken by the  Central Government to implement our judgment  in  OJC  No.829/87,  we  directed  that  the  legal  representatives of the deceased petitioner would  appear  before  the Central  Government  on 16th  May, 1988 to take steps regarding hearing.  An  application has now been filed stating that the  legal  representatives  could  not  appear  before  the  Central  Government  on  that  day  due  to  difficulties stated in the petition. The counsel for  the  parties  now  agree  that  the  legal   representatives of the deceased petitioner would   appear before the Central Government on the 6th  of  June,  1988 on which  day a date of  hearing   shall be fixed.   

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The Misc. case is disposed of accordingly.”   

11. It may be noted here that in both the Misc. cases the  

appellant was a party and was heard.

12. In the meantime, another matter being OJC No.1431 of  

1980  was  filed.  In  the  aforesaid  matter,  a  Division  

Bench of the High Court rejected the contentions of  

the State that on the death of Dr. Pradhan, her writ  

petition will abate.   

13. Thereafter on 11th May, 1990, the Central Government  

conveyed  to  the  State  Government  its  approval  of  

grant  of  mining  lease  in  favour  of  the  legal  

representatives of            Dr. Pradhan. The appellant,  

however, claims that no such order, with reasons, was  

made available to the parties.  In view of the aforesaid  

approval, the State Government by its order dated 24th  

May,  1990  asked  the  legal  representatives  of  Dr.  

Pradhan to furnish certain information and documents  

regarding  the  grant  of  mining  lease.  By  a  letter  

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dated  26th June,  1990,  the  legal  representatives  of  

Dr. Pradhan furnished the information and documents  

to the State Government. At this stage, the appellant  

filed OJC No.4316 of 1990 challenging the order dated  

11th May,  1990  passed  by  the  Central  Government,  

even though the said order was not made available to  

the parties.                            On 18th December, 1990  

the  High Court  passed an interim order  staying the  

operation of  the order of Central  Government dated  

11th May, 1990.  

14. Whilst this controversy between the parties about the  

abatement  of  the  application  of  Dr.  Pradhan  for  

mining,  as  also  the  writ  petition  filed  by  her,  was  

pending, a significant change took place in that on 20th  

February,  1991 Rule  25A was  inserted  in  the  Minor  

Concession Rules, 1961 w.e.f.        1st April, 1991. The  

aforesaid rule permitted the legal representatives to  

continue pressing an application for grant of  mining  

lease even if the applicant dies.   

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15. It  appears  that  OJC  No.1269  of  1982  filed  by  

Dr. Pradhan challenging the order passed by the State  

Government rejecting the application filed by her for  

mining  lease  for  “lime  stone  and  Dolmite”  over  an  

area in respect of certain other areas which are not  

subject matter of the present proceedings came to be  

decided on 23rd February, 1993. In this judgment, the  

High Court held that Rule 25A is clarificatory in nature  

and  allowed  the  substitution  of  legal  heirs  of  Dr.  

Pradhan to pursue the mining application.

16. On 13th December, 1996, the High Court disposed of  

OJC No.4316 of 1990 directing the State Government  

to  reconsider  the  matter  and  pass  a  fresh  and  

speaking  order  after  hearing  the  appellant,  legal  

representatives of              Dr. Pradhan and one M/s.  

Balasore  Minerals.  On  8th April,  1999,  the  Central  

Government  approved  the  recommendations  of  the  

State Government for grant of lease in favour of legal  

representatives  of  Dr.  Sarojini  Pradhan.  Thereafter,  

terms  and  conditions  were  offered  by  the  State  

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Government  to  the  legal  representatives  of  Dr.  

Pradhan            on 8th July, 1999, which were accepted  

by them on 20th July, 1999.

17. At this stage, the appellant filed OJC No.11537 of 1999  

challenging  the  order  dated  8th April,  1999.  By  

judgment dated 2nd July, 2001, the High Court allowed  

the aforesaid writ petition, quashed the order of the  

Central  Government  and  remanded  the  matter  for  

fresh  consideration.  Relying  on  the  order  passed  in  

OJC No.1269 of 1982, it was held that on the death of  

the original applicant Dr. Pradhan, her application for  

mining lease does not abate. The Court also held that  

this  being  a  pure  question  of  law,  the  issue  has  

become final and shall not be reopened in the hearing  

before the Central Government.    

18. The  appellant  challenged  the  order  dated  2nd July,  

2001 passed in OJC No.11537 of 1999 by filing SLP (C)  

No.13556 of 2001 on the issue of allowing the legal  

representatives of the deceased to be substituted in  

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place of the latter. This was dismissed in limine on 24th  

August, 2001. Thereafter               on 26th September,  

2001,  the  Central  Government  approved  the  

recommendations of the State Government for grant  

of mining lease in favour of legal representatives of  

Dr. Pradhan.

19. The appellant filed a fresh OJC No.3662 of 2002 (writ  

petition)  challenging  the  grant  of  lease  dated  27th  

September,  2001,  on the basis  that  it  constituted a  

new cause of action. At this stage, according to the  

appellant,  another  significant  change  took  place  in  

that on 9th September, 2003, this Court set aside the  

order  passed  by  the  High  Court  in  OJC  No.1269  of  

1982 on 23rd February, 1993, which had been filed by  

the  legal  representatives  of  Dr.  Pradhan  for  certain  

other  areas.  It  was  held  by  this  Court  in  Saligram  

Khirwal Vs. Union of India & Ors.  1   that legal heirs  

cannot pursue an application for mining lease.  Thus,  

the  interpretation  placed  on  Rule  25A  by  the  High  

Court to the effect that it was clarificatory in nature,  1  (2003) 7 SCC 689

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was reversed by this Court.  It was held that Rule 25A  

was only prospective.  Upon such interpretation, this  

Court further observed that the legal heirs shall be at  

liberty to make a fresh application in their own right.

20. On 2nd June, 2006, the High Court passed further order  

in  OJC  No.  3662  of  2002  directing  that  any  action  

taken in connection with the grant of lease shall  be  

subject  to  the  result  of  the  writ  petition.  On  21st  

February,  2007,  the writ  petition was  allowed to  be  

amended in view of the judgment in Saligram’s case  

(supra). The appellant raised a preliminary objection  

relating to the maintainability of the application for the  

grant of mining lease by the legal heirs of Dr. Pradhan,  

contending that on the death of the original applicant,  

her application for grant of mining lease abates and  

the legal  heirs cannot maintain the said application.  

By order dated 31st August, 2007, the High Court held  

that  the  controversy  stood  concluded  between  the  

parties  by  the  rejection  of  the  earlier  SLP  (C)  No.  

13556 of 2001 on 24th August, 2001.  It was held that  

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the  order  dated  24th August,  2001  having  attained  

finality, the question of allowing the legal heirs to be  

substituted  for  the  deceased  applicant  had  also  

attained  finality  between  the  parties  and  would  

operate as  res judicata.   The subsequent decision in  

Saligram’s  case  (supra) is  of  no  consequence.  

Therefore,  the  preliminary  objection  raised  by  the  

appellant about the maintainability of the mining lease  

application  by  the  legal  heirs  of  Dr.  Pradhan  was  

rejected.   It  is  this  interim  order  which  has  been  

challenged in the present appeal.  

21. We may further notice here that OJC No. 3662 of 2002  

was  ultimately  dismissed  by  the  High  Court  on  

24th November, 2008.  The dismissal of the aforesaid  

writ petition was challenged by the appellant by filing  

SLP (C)              No. 5130 of 2009.

22. From the aforesaid narration of the facts, it becomes  

apparent that only two issues arise in this appeal for  

consideration viz. :

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(a) Is  Rule  25A,  as  introduced  in  the  Mineral  

Concession Rules, 1960, w.e.f. 1st April, 1991, by  

way of  amendment  dated 20th February,  1991,  

clarificatory in nature, and hence retrospective,  

or is it only prospective in nature?

(b) Whether the dismissal of the SLP on 24th August,  

2001,  filed  by  the  appellant  against  the  

judgment of the High Court dated 2nd July, 2001  

in OJC           No. 11537 of 1999 would attract the  

principles of  res judicata, so as to disentitle the  

appellant  from  urging  the  invalidity  of  the  

application  of  the  legal  heirs  in  place  of  the  

deceased  Dr.  Pradhan,  in  the  pending  

proceedings  in  OJC  No.  3662  of  2002,  the  

judgment  which  is  the  subject  matter  of  the  

present appeal?

23. We have heard the learned counsel for the parties at  

length.

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24. Mr. K.K. Venugopal, learned senior counsel appearing  

for the appellant, submitted that the dismissal of the  

earlier SLP on the preliminary issue will not act as a  

bar against the SLP challenging the order passed at  

the  final  stage.   He  submitted  that  in  SLP  (C)  No.  

13556  of  2001,  this  Court  did  not  entertain  the  

challenge  against  the  order  of  the  High  Court  

permitting  the  legal  heirs  of  Dr.  Pradhan  to  be  

substituted for  her  and to  pursue the litigation with  

regard  to  the  mining  lease.   In  support  of  this  

submission,  the  learned  counsel  relied  on  The  

Chamber of Colours and Chemicals (P) Ltd. Vs.  

Trilok Chand Jain  2  , Taleb Ali & Anr. Vs. Abdul Aziz  

& Ors.  3  , and  Shah Babulal Khimji Vs.  Jayaben D.  

Kania & Anr.  4    He further submitted that the principle  

of res judicata would not be applicable when the law is  

subsequently  declared  contrary  to  the  law  earlier  

declared, on the basis of which the decision was given  

which is  sought to  be reopened.   In  support  of  this  

proposition,  he  relies  upon  the  law laid  in  cases  of  

2 (1973) 9 DLT 510 Para 6 3 AIR 1929 Cal 689 Para 38 4 (1981) 4 SCC 8 Paras 55 and 78

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Mathura Prasad Bajoo Jaiswal & Ors. Vs. Dossibai  

N.B.  Jeejeebhoy  5  ,  Nand  Kishore Vs.  State  of  

Punjab  6  ,  Sushil  Kumar  Mehta Vs.  Gobind  Ram  

Bohra  (Dead)  Through  His  LRs  7  ,  and  

Kunhayammed & Ors. Vs. State of Kerala & Anr.  8    

25. In  Kunhayammed  (supra),  it  was  held  that  the  

dismissal in limine is not a decision on merits, it is only  

an  expression  of  opinion  that  the  Court  would  not  

exercise jurisdiction under  Article  136 (Paras 14,  16  

and 17).  Additionally in the written submissions, the  

learned counsel has also relied upon the judgment in  

the case of  Saligram (supra).  On the basis of this  

judgment, it was submitted that upon the death of an  

applicant for mining lease, the application abates and  

the legal heirs would have no legal right to step into  

the shoes of the deceased applicant, and that such an  

application would be non est in the eyes of law.  If so,  

any recommendation for grant of mining lease to the  

5 (1970) 1 SCC 613 6 (1995) 6 SCC 614 para 17 7 (1990) 1 SCC 193 para 26 8 (2000) 6 SCC 359

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legal heirs, or approval of such recommendation of the  

Central  Government,  would  be  mere  nullities  in  the  

eyes of law.  He relied on paragraphs 11 and 12 of the  

judgment.  Learned  senior  counsel  further  submitted  

that  the  judgment  in  Saligram’s  case  (supra)  

involved an interpretation of the statutory Rule 25A.  

Such an interpretation is in the realm of public law.  It  

would, therefore, be a judgment in rem.  Principle of  

res judicata would have no application in such a case.  

In support of this proposition, learned senior counsel  

relied on the judgment of this Court in U.P. Pollution  

Control Board & Ors. Vs.  Kanoria Industrial Ltd.  

& Anr.  9     He submitted that the law declared in the  

aforesaid  judgment  would  necessarily  apply  to  any  

pending  case  where  the  issue  is  a  live  one.   The  

contrary interpretation placed on Rule 25A by the High  

Court  in  the  earlier  proceedings  would  be  of  no  

consequence.  An application which is non est and the  

order made thereon in favour of the legal heirs is a  

mere nullity, in the eyes of law, and cannot be treated  

as a valid application in the pending writ petition OJC  9 (2001) 2 SCC 549 Para 18

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No. 3662 of 2002.              Mr. Venugopal further  

submitted that the legal position was made clear by  

this  Court  even  before  insertion  of  Rule  25A in  the  

case of  C. Buchi Venkatarao Vs.  Union of India &  

Ors.  10  .

26. Mr.  Dushyant  Dave,  learned  senior  counsel  for  the  

respondent  No.  10  submits  that  in  the  facts  and  

circumstances  of  this  case,  it  is  not  open  to  the  

appellant  to  question  the  status  of  the  LRs  of  

respondent No. 10 on the basis of the “order” in the  

case of Saligram Khirwal (supra).

27. Learned  senior  counsel  submits  that  the  case  of  

Saligram Khirwal  (supra) is  merely  an  order  and  

not a judgment.  There is no declaration of law in the  

case of Saligram Khirwal (supra).  In fact, this Court  

has  not  interpreted  Rule  25A  of  the  Rules  in  the  

aforesaid order.   The order makes it  clear that Rule  

25A,  on  its  plain  reading  does  not  have  any  

applicability to the situation emerging from the facts  10 (1972) 1 SCC 734 Para 14

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in that case. He further submitted that even assuming  

for the sake of argument that  Saligram’s  order lays  

down any principle of law, the same can not aid the  

appellant  in  reopening  the  status  of  the  LRs  of  the  

respondent  No.  10  in  the  present  case.  He  seeks  

support  for  the  aforesaid  proposition  from  the  

explanation to Order 47 Rule 1 of  the Code of  Civil  

Procedure,  1908.  He relies on the judgment of  this  

Court  in  the  case  of  Shanti  Devi Vs.  State  of  

Haryana & Ors.  11   and  Union of India & Ors. Vs.  

Mohd.  Nayyar Khalil  & Ors.  12   The  learned  senior  

counsel  reiterates  that  the  claim  made  by  the  

appellant would be barred by res judicata. In support  

of  his  submission,  he relies  on the judgment  in  the  

case of  State of West Bengal Vs.  Hemant Kumar  

Bhattacharjee & Ors.  13   and  Mohanlal Goenka Vs.  

Benoy Kishna Mukherjee & Ors.  14  .  On the basis of  

the aforesaid judgments, it is submitted that even if  

the judgment       dated 2nd July, 2001 rendered by the  

11 (1999) 5 SCC 703 12 (2000) 9 SCC 252 13 1963 Supp (2) SCR 542 14 1953 SCR 377

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High Court in OJC        No. 11537 of 1999 and the  

dismissal  of  the  SLP  (C)  No.  13556  of  2001  are  

considered  to  be  erroneous  in  view  of  the  earlier  

judgment  of  this  Court  in  C.  Buchivenkata  Rao  

(supra) and/or  orders  in  Saligram  (supra),  the  

matter regarding LRs of respondent No. 10 and their  

status to maintain and proceed with the mining lease  

application can not be reopened since it has become  

final  inter  parte.   According  to  the  learned  senior  

counsel, res judicata is not a mere technical rule, it is  

based on principle of justice and public interest, viz. a  

litigant should not be vexed twice over the same issue  

and  there  should  be  finality.   The  rule  is  based  on  

equity,  justice  and  good  conscience.   Subsequent  

change  in  law  cannot  unsettle  a  matter  which  has  

attained finality.  He points out that principles of  res  

judicata and  constructive  res  judicata have  been  

applied even to Public Interest Litigation, which cannot  

be said to be in the realm of private law.  He submits  

that the judgment relied by the appellant in the case  

of Mathura Prasad (supra) is distinguishable as it is  

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dealing with a situation where there was inherent lack  

of jurisdiction and is therefore, not applicable in the  

present case.

28. Mr. Mohan Jain, has also submitted that the claim of  

the appellant is clearly barred by the principle of  res  

judicata.  He has relied upon the case of Satyadhyan  

Ghosal & Ors. Vs. Deorajin Debi (Smt.) & Anr.  15   

29. We  have  considered  the  submissions  made  by  the  

learned counsel for the parties.

30. At the outset, it needs to be noticed that the parties  

herein  have  been  competing  for  the  same  mining  

lease  for  the  past  half-a-century.   A  perusal  of  the  

facts  narrated  herein  above  would  also  show  that  

there have been several rounds of litigation between  

the parties.  Although, we have noticed all the facts in-

extenso for the purpose of deciding the issue of  res  

judicata,  it  is  necessary  to  recapitulate  the  

foundational facts with regard to the aforesaid issue of  15 AIR 1960 SC 941

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res judicata.                    On 3rd September, 1971, the  

State Government passed an order recommending the  

grant of mining lease in favour of respondent No. 10.  

Since  the  Central  Government  did  not  approve  the  

recommendation made by the State Government, on  

8th June,  1973,  it  rejected  all  pending  mining  lease  

applications including the application of the appellant  

and  Dr.  Sarojini  Pradhan.   On  2nd May,  1978,  in  a  

revision petition filed by the appellant challenging the  

order  of  cancellation  of  its  application  for  grant  of  

lease,  the Central  Government issued a direction to  

the State Government to pass a fresh order on merits.  

This order was challenged by           Dr. Pradhan in OJC  

No. 829 of 1978.  The writ petition was allowed by the  

High Court  on 4th September,  1987 by directing the  

Central Government to reconsider the question for the  

grant  of  lease  after  giving  all  parties  concerned  an  

opportunity of hearing.  During the pendency of the  

revision petitions, Dr. Pradhan died on 10th September,  

1987.  Since OJC No. 829 of 1978 was still pending in  

the High Court, the legal heirs of Dr. Sarojini Pradhan  

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by way of a Misc. Case    No. 1773 of 1988 brought the  

fact of her death on the record of the proceedings and  

sought a direction of the High Court to be substituted  

as her legal heirs.  It is a matter of record that on the  

application filed by the legal heirs for substitution in  

place of  respondent  No.  10,  the  appellant  was  duly  

heard.  The application made by the LRs of respondent  

No.  10  was  allowed  on  28th April,  1988  with  the  

following observations:-

“Misc. Case No. 1773 of 1988 Heard counsel for the parties.  

2. By  judgment  dated  4/9/1987,  while  quashing  Annexure  5  the  order  passed by  the  Central  Government,  and  the  consequential  order  passed  by  the  State  Government  as  per  Annexure  8  and  the  revisional  order  as  per  Annexure  11,  we  directed  the  Central  Government to re-consider the question of grant  of approval for the grant of lease for iron ore and  manganese  giving  the  parties  concerned  an  opportunity of hearing.  A grievance is now made  that  despite  lapse  of  more  than  six  months,  nothing is heard from the Central Government.  In  the  meanwhile,  the  sole  petitioner  has  died  and  it  is  stated  than  an  application  for  substitution  of  his  legal  representatives  has  already  been  filed  and  the  revision  is  pending  before the Central Government.

3. In  these circumstances,  we would require  the central government to inform the parties the  further  stage  of  the  revision  and  the  date  to  

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which the revision would be posted for hearing.  The legal representatives of the petitioner may  appear  before  the Central  Government  on 16th  May, 1988 to take directions regarding hearing  of the revision.

4. The Misc. Case is disposed of accordingly.  A  copy  of  this  order  be  communicated  to  the  Central Government.  A copy of this order be also  handed  over  to  the  standing  counsel  for  the  Central Government.  Certified copy of this order  be  granted  in  course  of  today,  if  an  urgent  application is made therefore.”

31. It appears that the LRs of respondent No. 10 failed to  

appear before the Central  Government  on 16th May,  

1988.   Therefore,  they  filed  another  Misc.  Case No.  

1977 of 1988 seeking another opportunity to appear  

before the Central Government.  Therefore, the High  

Court by its order dated 11th May, 1988 directed the  

LRs  of  Dr.  Sarojini  Pradhan  to  appear  before  the  

Central Government on 6th June, 1988.  As is evident  

from  the  order,  which  we  have  reproduced  in  the  

earlier  part  of  this  judgment  that  the  direction  was  

issued  on  the  agreement  of  the  counsel  for  the  

parties.  In the meantime in another matter being OJC  

No.  1431  of  1980,  the  Division  Bench  rejected  the  

contention  of  the  State  that  on  the  death  of  Dr.  

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Sarojini Pradhan, her writ petition will  abate and the  

substitution  of  the  LRs  of  Dr.  Sarojini  Pradhan  was  

allowed.  In accordance with the directions issued by  

the High Court in the orders dated 28th April, 1988 and  

11th May,  1988,  the  LRs  of  respondent  No.  10  duly  

appeared  before  the  Central  Government.   Upon  

hearing  the  concerned  parties,  the  Central  

Government took a decision under Section 5(1) of the  

Mines and Minerals (Development and Regulation) Act,  

1957 to approve the grant of mining lease in favour of  

LRs of                            Dr. Sarojini Pradhan.  Appellant  

ought to have challenged the status of the LRs before  

the High Court at the time of the hearing of Misc. Case  

No. 1773 of 1988 and Misc. Case            No. 1977 of  

1988.  Appellant, it would appear, had accepted the  

locus standi of the LRs of Dr. Sarojini Pradhan.  This is  

evident from the fact that in the subsequent hearing  

before  the  Central  Government,  which  were  held  

consequent  upon  the  directions  issued  by  the  High  

Court in the aforesaid two Misc. cases, the appellant  

raised no objection with regard to the locus standi of  

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the  legal  heirs  of  respondent  No.  10.   Clearly,  

therefore,  a  final  decision  had  been  reached  with  

regard to the acceptability of the locus standi of the  

LRs of respondent No. 10 to step into the shoes of the  

deceased     Dr.  Sarojini  Pradhan.   The  appellant  

decided to raise the issues of the abatement of the  

application of Dr. Sarojini Pradhan only after a decision  

was taken by the Central  Government  on 11th May,  

1990,  which  approved  the  recommendation  of  the  

State Government for grant of mining lease in favour  

of  the legal  heirs  of  Dr.  Sarojini  Pradhan.   It  is  also  

noteworthy  that  OJC  No.  4316  was  decided  

on 13th December, 1996 with a direction to the Central  

Government  to  reconsider  the  matter  and  pass  a  

speaking  order.  In  the  aforesaid  writ  petition,  Dr.  

Sarojini Pradhan was a respondent.  The appellant sets  

out  in  meticulous  detail  the  history  of  litigation  

between the parties.  It is specifically noticed in the  

judgment that although a number of contentions have  

been raised  to  challenge the  order  dated  11th May,  

1990,  ultimately  the  dispute  was  confined  to  the  

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question as to whether or not it was necessary for the  

Central  Government  to  hear  all  the  applicants  

alongwith Dr.  Sarojini  Pradhan.  The main ground for  

challenging  the  order  of  the  Central  Government  

accepting  the  recommendation  of  the  State  

Government  was  that  the  Central  Government  had  

failed to pass a speaking order.  The locus standi of  

the LRs of respondent No. 10 was not under challenge  

in the proceedings before the High Court in OJC No.  

4316  of  1990.   The  writ  petition  was  allowed,  a  

direction was again issued to the Central Government  

to  reconsider the matter  and pass a fresh speaking  

order giving reasons for the decision after hearing all  

the  concerned  parties.   This  was  the  second  time  

when the locus standi of the LRs of respondent No. 10  

was  accepted  judicially.  It  is  noteworthy  that  the  

appellant accepted the aforesaid judgment. It was not  

assailed either by way of a review petition before the  

High  Court  or  by  way  of  a  Special  Leave  Petition  

before this Court.  In such circumstances, it would be  

difficult  to accept the submissions of  Mr.  Venugopal  

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that the High Court has erroneously accepted the plea  

raised by the LRs of the respondent that the claim of  

the appellant is barred by  res judicata.   Considering  

the principle of  res judicata, this Court in the case of  

Mohanlal  Goenka Vs.  Benoy  Kishna  Mukherjee  

(supra) held as under:

“22. There is ample authority for the proposition  that even an erroneous decision on a question of  law operates as res judicata between the parties  to it.  The correctness or otherwise of a judicial  decision  has  no  bearing  upon  the  question  whether or not it operates a res judicata.”  

32. This court also held that “a wrong decision by a court  

having  jurisdiction  is  as  much  binding  between  the  

parties as a right one and may be superseded only by  

appeals  to  higher  tribunals  or  other  procedure  like  

review which the law provides.” [See State of West  

Bengal Vs.  Hemant  Kumar  Bhattacharjee  

(supra)]

33. In view of the aforesaid clear enunciation of the law by  

this Court, it would appear that even if the judgment  

dated 2nd July, 2001 rendered by the High Court in OJC  

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No. 11537 of 1999 and the dismissal  in limine of SLP  

(C)  No.  13556  of  2001  arising  from  the  aforesaid  

judgment is considered to be erroneous in view of the  

judgment in  Saligram’s case (supra),  the matter  

regarding the locus  standi  of  the LRs of  respondent  

No.  10  to  proceed  with  a  mining  lease  application  

cannot  be  permitted  to  be  reopened  at  this  stage  

since it has become final inter partes.   

34. Even though, strictly speaking,  res judicata may not  

be applicable to  the proceedings before  the Central  

Government, the High Court in exercise of its power  

under Article 226 was certainly  entitled to take into  

consideration  the  previous  history  of  the  litigation  

inter  partes to  decline  the  relief  to  the  appellant.  

Merely  because  the  High  Court  has  used  the  

expression that the claim of the appellant is barred by  

res judicata would not necessarily result in nullifying  

the conclusion which in fact is based on considerations  

of  equity  and  justice.  Given  the  history  of  litigation  

between the parties, which commenced in 1950s, the  

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High Court was justified in finally giving a quietus to  

the same. The subsequent interpretation of Rule 25A  

by  this  Court,  that  it  would  have  only  prospective  

operation, in the case of Saligram (supra), would not  

have  the  effect  of  reopening  the  matter  which  was  

concluded between the parties.  In our opinion, if the  

parties  are  allowed  to  re-agitate  issues  which  have  

been decided by a Court of competent jurisdiction on a  

subsequent change in the law then all earlier litigation  

relevant  thereto  would  always  remain  in  a  state  of  

flux.   In  such  circumstances,  every  time  either  a  

statute or a provision thereof is declared ultra vires, it  

would  have  the  result  of  reopening  of  the  decided  

matters  within  the period  of  limitation  following  the  

date of such decision. In this case not only the High  

Court had rejected the objection of the appellant to  

the  substitution  of  the  legal  heirs  of  Dr.  Sarojini  

Pradhan  in  her  place  but  the  SLP  from  the  said  

judgment  has  also  been  dismissed.   Even  though,  

strictly speaking, the dismissal of the SLP would not  

result in the merger of the judgment of the High Court  

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in the order of this Court, the same cannot be said to  

be wholly irrelevant.  The High Court, in our opinion,  

committed  no  error  in  taking  the  same  into  

consideration  in  the  peculiar  facts  of  this  case.  

Ultimately, the decision of the High Court was clearly  

based  on the  facts  and  circumstances  of  this  case.  

The High Court clearly came to the conclusion that the  

appellant had accepted the locus standi of the LRs of  

Dr. Sarojini Pradhan to pursue the application for the  

mining lease before the Central Government, as well  

as in the High Court.  

35. In view of the conclusions recorded by us above, it is  

not  necessary  to  express  an  opinion  on  the  

interpretation of Rule 25A of the Mineral Concession  

Rules, 1960.  In any event, the judgment in the case of  

Saligram (supra) has concluded that the Rule would  

have only prospective operation.   The legal  position  

having been so stated, it  is  not necessary for us to  

dilate upon the same.

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CIVIL APPEAL NO.1014 OF 2013 [Arising out of SLP (C) No. 5130 of 2009]

36. This now brings us to the second appeal arising out of  

Special Leave Petition, i.e., 5130 of 2009, wherein the  

appellant has challenged the final judgment rendered  

by the High Court in  the amended OJC No.  3662 of  

2002 which was decided on 24th November, 2008.

37. The  appellant  now  claims  that  order  

dated  27th September,  2001  is  void  as  it  has  been  

passed  in  breach  of  rules  of  natural  justice.   Mr.  

Krishnan  Venugopal,  Senior  Advocate,  appearing  for  

the appellant has submitted that in pursuance of the  

order dated 2nd July, 2001 passed by the High Court in  

OJC No. 11537 of 1999, parties were heard by Mr. S.P.  

Gupta,  Joint  Secretary  for  two  days,  i.e.,  

28th August,  2001  and  13th September,  2001.  

However, the order dated 27th September,  2001 has  

been passed by                 Dr. R.K. Khatri, Deputy  

Secretary,  who did  not  hear  the parties  at  all.   Mr.  

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Krishnan submits that, by virtue of the orders passed  

by the High Court, the proceedings before the Central  

Government were quasi-judicial in nature.  Therefore,  

it  was  necessary  that  the  same officer  who  gave  a  

hearing to the parties ought to have passed the order  

in relation to the competing claims with regard to the  

grant of mining lease.  Learned counsel highlights that  

originally the appellant had obtained the prospecting  

licence for the area in dispute between 17th October,  

1962  and  16th October,  1963.   However,  while  the  

appellant’s application for mining lease was pending,  

the State Government made the area available for re-

grant under Rule 58 [now Rule 59(1)] of the Rules, as  

they  stood  in  1965.   Six  persons  including  the  

appellant and Late Dr. Sarojini Pradhan applied for the  

grant  of  mining  lease  on  the  same  date,  i.e.  10th  

September,  1965,  thus  triggering  the  application  of  

the proviso to Section 11(2) read with the merit based  

criteria in Section 11(3) of the MMDR Act.  As four of  

the  contenders  dropped  out  over  the  next  four  

decades, only appellant and respondent No. 10, i.e.,  

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the legal heirs of the Late Dr. Pradhan were the only  

contesting parties for the mining lease at the relevant  

time.  Repeatedly, the orders passed in favour of Dr.  

Sarojini  Pradhan  for  the  grant  of  mining  lease  has  

been set  aside by the High Court  on the ground of  

being in violation of the rules of natural justice.  On  

31st August,  2007,  the  Division  Bench  rejected  the  

preliminary issue raised by the appellant to the effect  

that the application made by Dr. Pradhan for a mining  

lease abates on her death, in 1987. Although the High  

Court  held  that  legal  heirs  of  Dr.  Pradhan  can  be  

substituted  in  her  place,  the  writ  petition  was  kept  

pending for final disposal on the issue of as to whether  

the orders  granting the lease in  favour  of  her  legal  

heirs had been passed in violation of rules of natural  

justice.

38. The High Court in the impugned judgment took note of  

the submissions made by Dr. Devi Pal, learned senior  

counsel appearing for the appellant. The main thrust  

of the argument of Dr. Pal was that the matter had  

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been heard by                Mr. S.P. Gupta, Joint Secretary  

on 28th August, 2001 and                        13 th  

September,  2001,  but  has  been  decided  by  

Dr. R.K. Khatri, Deputy Secretary of the Government of  

India,  Ministry  of  Coal  Mines  vide  order  dated  27th  

September,  2001,  and  the  said  order  had  been  

communicated by                     Mr. O.P. Kathuria,  

Under  Secretary  to  the  Government  of  India.   The  

submissions  made  in  the  High  Court  have  been  

reiterated before us by Mr. Krishnan Venugopal.  He  

submits that the approval granted in favour of legal  

heirs of                     Dr. Sarojini Pradhan causes  

adverse civil consequences to the appellant.  Such an  

order could only have been passed by the officer, who  

had heard the parties.  The order, however, has been  

passed by a different officer,  Dr.  R.K.  Khatri,  on the  

basis of the notes recorded by Mr. S.P. Gupta in the  

relevant file.  In support of the submission, the learned  

counsel  has relied  on the judgment of  this  Court  in  

Gullapalli  Nageswara  Rao  &  Ors. Vs.  Andhra  

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Pradesh  State  Road  Transport  Corporation  &  

Anr.  16   

39. Learned counsel then submitted that even if, for the  

sake of argument, it is accepted that approval under  

the proviso to Section 5(1) of the MMDR Act is to be  

treated as administrative in character, the impugned  

order               dated 27 th September, 2001 still  

deserves  to  be  set  aside  because  it  is  neither  

expressed nor can it  be deemed to be expressed in  

the  name of  the  President  of  India,  as  required  by  

Article 77 of the Constitution of India and the Conduct  

of Business Rules.  In support of this submission, the  

learned counsel relies upon the judgment of this Court  

in  Bachhittar Singh Vs.  State of Punjab & Anr.  17    

On the basis of the aforesaid judgment, Mr. Krishnan  

Venugopal  submits  that  the  impugned  order,  not  

having been passed by the concerned Minister of the  

Central Government, can not be deemed to be in the  

name of the President.   He further emphasised that  

16 AIR 1959 SC 308 17 AIR 1963 SC 395

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there is no material on the record to show that, under  

the Rule of Business, the power to pass the order on  

behalf  of  the  Central  Government  under  proviso  to  

Section 5(1) of  the MMDR Act was delegated to the  

Deputy Secretary.  He further pointed out that even if  

the order is administrative in character, it would still  

be  non est  and void, having been passed in violation  

of  rules  of  natural  justice  and  causes  serious  civil  

consequences to the appellant. For this proposition, he  

relies on the judgment of this Court in  Automotive  

Tyre Manufacturers  Association Vs.  Designated  

Authority  &  Ors.  18    Mr.  Krishan  further  submitted  

that  the  Central  Government’s  order  is  vitiated  

because it is based mainly on the report of the Indian  

Bureau of Mines comparing the Iron Ore production of  

the appellant with that of the legal heirs of Late Dr.  

Sarojini Pradhan for 1999-2000 and 2000-2001, which  

is  a  period  after  the  State  Government’s  

recommendation  dated  5th February,  1999.   The  

relevant period prior to 5th February,  1999 has been  

wholly ignored by the Central Government in passing  18 (2011} 2 SCC 258

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the  order  dated  27th September,  2001.   He  further  

submitted that  the comparative merit  of  the parties  

had  to  be  judged  on  the  criteria  specified  under  

Section 11(3) of the MMDR Act.  The criteria under the  

aforesaid section include :- (a)  special knowledge or  

experience  in  prospecting  operations  or  mining  

operations;  (b)   the  financial  resources  of  the  

applicants,      (c) nature and quality of technical staff  

employed or to be employed by the applicant, (d) the  

investment which the applicant proposes to make in  

the  mines.   Even  though  the  written  statements  

submitted  by  the  parties  about  their  financial  and  

technical  capabilities  were  sent  to  the  State  

Government  for  verification,  a  separate  report  was  

sought  from the  Indian  Bureau  of  Mines  which  was  

confined only to two years: 1999-2000 and 2000-2001.  

The impugned order dated 27th September, 2001 has  

been  passed  primarily  based  on  the  report  of  the  

Indian Bureau of  Mines  for  the aforesaid  two years.  

The  order  is  clearly  vitiated  as  it  is  based  on  

extraneous  considerations.   In  support  of  this,  the  

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learned  senior  counsel  relies  on  Commissioner  of  

Income Tax,  Bombay  & Ors. Vs.  Mahindra  and  

Mahindra Limited & Ors.  19    The order passed by the  

Central  Government  is  contrary  to  the  directions  

issued by the High Court                  on 2nd July, 2001  

by  which  the  matter  had  been  remanded  to  the  

Central  Government  with  a  direction  to  place  the  

recommendation dated 5th February, 1999 of the State  

Government before the parties, to hear them, and to  

pass a speaking order with reasons. The High Court  

did not authorise the Central Government to conduct  

its own investigations and elicit fresh materials outside  

the scope of the State Government recommendation.  

In  support  of  this  submission,  the  learned  counsel  

relies  on  a  judgment  of  this  Court  in  Sandur  

Manganese and Iron Ores Limited Vs.  State of  

Karnataka & Ors.  20     The  learned  counsel  further  

pointed out that the State Government can not grant a  

mining  lease  without  the  previous  approval  of  the  

Central Government under the proviso to Section 5(1)  

19 (1983) 4 SCC 392 20 (2010) 13 SCC 1

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of  the  Act.   Therefore,  the  power  of  the  Central  

Government is confined to the grant of the previous  

approval on the basis of the material submitted by the  

State  Government  for  seeking  such  a  previous  

approval.  In support of this submission, the learned  

counsel relied on the judgments of this Court in Lord  

Krishna  Textile  Mills Vs.  Workmen  21  ,  Ashok  

Kumar Das & Ors. Vs.  University of Burdwan &  

Ors.  22  ,  State  of  Tamil  Nadu Vs.  Hind  Stone  &  

Ors.  23   and  Kabini  Minerals  (P)  Ltd.  &  Anr.   Vs.  

State of Orissa & Ors.  24   

40. Learned counsel further submitted that the impugned  

order dated 27th September, 2001 is vitiated as it has  

been  obtained  by  fraud.   He  submitted  that  both  

parties have provided a statement of the respective  

technical  and  financial  capabilities  to  the  Central  

Government.  In their submissions before the Central  

21 AIR 1961 SC 860 22 (2010) 3 SCC 616 23 (1981) 2 SCC 205 24 (2006) 1 SCC 54

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Government, the legal heirs of                       Late Dr.   

Sarojini Pradhan had categorically stated that one Mr.  

Nilamani  Ojha,  a  mining  engineer,  was  the  number  

two  person  in  their  technical  team.   This  fact  was  

denied by               Mr. Ojha in a latter dated 5th  

November,  2001 written to the Central  Government.  

He further submitted that even technical information  

submitted by the legal heirs of                Late Dr.  

Pradhan is factually incorrect.  Therefore, the decision  

of  the  Central  Government  is  vitiated  by  fraud.  

Learned  counsel  relies  on  Regional  Manager,  

Central Bank of India Vs.  Madhulika Guruprasad  

Dahir  &  Ors.  25   and  State  of  Orissa  &  Ors.  Vs.  

Harapriya Bisoi26.

41. Mr. Ashok K. Gupta, learned senior counsel appearing  

for  the legal  heirs  of  respondent  No.  10,  had made  

detailed  submissions  controverting  the  submissions  

made on behalf of the appellant.  

25 (2008) 13 SCC 170 26 (2009) 12 SCC 378.

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42. It  is  submitted  that  the  submissions  made  by  the  

appellant that the Central Government’s order is not in  

consonance with Article 77, is wholly unfounded and  

devoid of merits. This ground was not even pleaded in  

the writ petition before the High Court. In fact, no such  

submission  was  made  at  the  hearing  of  the  writ  

petition by the High Court.  No grievance is made in  

the SLP that such a submission was made before the  

High  Court  and  that  it  was  not  considered.  The  

submissions  raised  by  the  appellant  at  this  stage  

being a mixed question of law in fact ought not to be  

permitted  to  be  raised  in  the  present  proceedings.  

This apart, he submits that the judgment in the case  

of  Bachhittar Singh (supra) was  rendered on the  

basis of its own facts. Furthermore, in that case, the  

order signed by the Minister was not communicated to  

the parties and therefore, it was held that there was  

no effective order. In the present case, the order was  

passed  on  the  basis  of  the  approval  granted  and  

conveyed in the manner  prescribed under law. With  

regard to the order being vitiated as it was passed on  

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consideration of the material subsequent to the date  

of recommendation of the State Government viz. 5th  

February, 1999, he submits that the appellant cannot  

even be permitted to raise such an objection, having  

willingly  submitted  materials/information  subsequent  

to  the  date  of  the  recommendation  by  the  State  

Government.  Mr.  Gupta further  submits that Section  

5(2)  of  the MMDR Act  does not prohibit  the Central  

Government to take into account material subsequent  

to  the  recommendations  made  by  the  State  

Government. In the present case, it was necessary as  

the hearing was being conducted 2½ years after the  

recommendations  have  been  submitted.  Learned  

counsel further submits that no fraud was played by  

the legal heirs of respondent No.10, as is sought to be  

canvassed by the appellant. No such ground of fraud  

was either pleaded in the writ petition before the High  

Court  nor  was  any  submission  made  to  that  effect  

before the High Court. The letter               dated 5 th  

November,  2001  of  Mr.  Nilamani  Ojha  has  been  

obtained  by  the  appellant  only  for  the  purpose  of  

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prejudicing  the  case  of  the  appellant  in  this  Court.  

With regard to the main ground relating to breach of  

rules of natural justice and which is premised on the  

basis that no hearing was granted by the officer that  

passed the impugned order, it  is  submitted that the  

submission is contrary to the material on the record.  

The matter was heard by Mr. S. P. Gupta, and it was  

his  note  running  into  47  paragraphs,  which  was  

approved by the Secretary and the Minister, as per the  

rules of the business. The hearing was to be given by  

the  Central  Government  and  not  by  a  particular  

individual.  Therefore,  it  was  clearly  a  case  of  

institutional  hearing  and  it  was  not  necessary  that  

Mr.  Gupta  should  have  passed  the  order.  In  this  

context, he relies on a judgment of the House of Lords  

in  Local  Government  Board Vs. Arlidge  27  .  

According to the learned counsel, this principle is also  

recognized  by  this  Court  in  Automotive  Tyre  

Manufacturers  Association  (supra) and Ossein  

and Gelatine Manufacturers’ Association of India  

27  (1915) AC 120

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Vs. Modi Alkalies and Chemicals Limited & Anr.  28    

and Pradyat  Kumar  Bose Vs.  The  Hon’ble  The  

Chief Justice of Calcutta High Court29.

43. We  have  considered  the  submissions  made  by  the  

learned counsel for the parties.

44. It  is  by  now well  settled  that  judicial  review of  the  

administrative  action/quasi  judicial  orders  passed by  

the Government is limited only to correcting the errors  

of law or fundamental procedural requirements which  

may lead to manifest injustice. When the conclusions  

of  the  authority  are  based  on  evidence,  the  same  

cannot be re-appreciated by the court in exercise of its  

powers of judicial review. The court does not exercise  

the  powers  of  an  appellate  court  in  exercise  of  its  

powers  of  judicial  review.  It  is  only  in  cases  where  

either  findings  recorded  by  the  administrative/quasi  

judicial authority are based on no evidence or are so  

perverse  that  no  reasonable  person  would  have  

reached such a conclusion on the basis of the material  

28 1989 (4) SCC 264 29 1955 (2) SCR 1331

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available that the court would be justified to interfere  

in the decision. The scope of judicial review is limited  

to the decision making process and not to the decision  

itself, even if the same appears to be erroneous. This  

Court  in  the  case  of  Tata  Cellular Vs.  Union  of  

India  30   upon detailed consideration of the parameters  

within  which  judicial  review could be exercised,  has  

culled out the following principles :

“70.  It  cannot be denied that  the principles  of   judicial  review  would  apply  to  the  exercise  of   contractual  powers  by  Government  bodies  in   order  to  prevent  arbitrariness  or  favouritism.   However, it must be clearly stated that there are   inherent limitations in exercise of that power of   judicial review.  Government is the guardian of   the  finances  of  the  State.   It  is  expected  to   protect the financial interest of the State.  The  right to refuse the lowest or any other tender is   always available to  the Government.   But,  the   principles  laid  down  in  Article  14  of  the   Constitution  have  to  be  kept  in  view  while   accepting or refusing a tender.  There can be no  question  of  infringement  of  Article  14  if  the  Government tries to get the best person or the   best quotation.  The right to choose cannot be   considered to be an arbitrary power.  Of course,   if the said power is exercised for any collateral   purpose the exercise of that power will be struck   down.  

…….      ……     ……     …..     …..     …..     …  

…. …….      ……     ……     …..     …..     …..      

30 (1994) 6 SCC 651

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77.  The duty of the court is to confine itself to   the question of legality.  Its concern should be:

1.  Whether  a  decision-making  authority  exceeded its powers ?

2.  Committed an error of law,

3.  committed a breach of the rules of natural   justice,

4.  reached  a  decision  which  no  reasonable   tribunal would have reached or,

5. abused its powers.

Therefore,  it  is  not  for  the  court  to  determine  whether a particular policy or particular decision  taken in the fulfillment of that policy is fair.  It is   only concerned with the manner in which those  decisions have been taken.  The extent of the   duty  to  act  fairly  will  vary  from case  to  case.   Shortly  put,  the  grounds  upon  which  an  administrative  action  is  subject  to  control  by  judicial review can be classified as under :

(i) Illegality :  This means the decision-maker   must  understand  correctly  the  law  that   regulates  his  decision-making  power  and  must give effect to it.

(ii) Irrationality,  namely,  Wednesbury  unreasonableness.

(iii) Procedural impropriety. The above are only the broad grounds but   it  does  not  rule  out  addition  of  further   grounds  in  course  of  time……  ……………………………..

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……..           ………         ………         ………..   ……….        ….”

45. The aforesaid judgment has been followed again and  

again.  It  was clearly  observed in  the said  judgment  

that where the Court comes to the conclusion that the  

administrative decision is arbitrary, it must interfere.  

However, the Court can not function as an appellate  

authority  substituting  the  judgment  for  that  of  the  

administrator.  Applying  the  aforesaid  principles,  the  

High Court  has examined the entire  record and has  

concluded  that  the  decision  making  process  is  not  

flawed in any manner, as canvassed by the appellant.  

The  High  Court  noticed  that  the  record  was  duly  

produced by                       Mr. J.K. Mishra, learned  

Assistant  Solicitor  General.  It  was  also  noticed  that  

throughout  the  proceedings,  no  reference  has  been  

made  to  any  particular  officer  or  post  or  any  

designation. The order dated 11th July, 2001 passed by  

the High Court merely directed that they shall appear  

before  the  Central  Government  on  18th July,  2001.  

Order                dated 14th August, 2001 clearly  

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indicates that the matter was being heard in view of  

the  directions  given  by  the  High  Court  in  OJC  No.  

11537 of  1999 and  secondly,  notice  was  issued  for  

hearing  on  28th August,  2001.   The  record  further  

indicated  that  the  matter  was  heard  by  Mr.  S.  P.  

Gupta, Joint Secretary for two days i.e. on 28th August,  

2001 and 13th September, 2001. Both the parties had  

been  given  opportunity  to  place  on  the  record  any  

documents and written submissions in support of their  

claim. It was also apparent that particulars submitted  

were made available to all the parties.                   On  

13th September, 2001, Mr. S. P. Gupta, Joint Secretary  

made a note as under :

“Thus,  all  the  documents  available  with  the  Central Government are also available with both  the parties.”  

46. The  High  Court  also  took  note  of  the  fact  that  

independently of all the material supplied by the State  

Government along with the recommendation and the  

material  made  available  by  the  parties,  the  Central  

Government had also asked Indian Bureau of Mines to  

furnish certain reports in support of both the parties.  

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These  reports  were,  in  turn,  made  available  to  the  

rival parties. The High Court further noticed that after  

complying with all the formalities required, the issues  

were  finally  adjudicated.  Upon  conclusions  of  the  

arguments  by  the  parties,  Mr.  S.  P.  Gupta,  Joint  

Secretary  who  had  heard  the  parties  prepared  the  

note running                into 19 pages (from pages 30 –  

49) containing 47 paragraphs of original record. The  

note has been duly signed by            Mr. S.P. Gupta,  

Joint  Secretary  on  17th September,  2001.  The  High  

Court  further  noticed  that  in  fact  this  is  the  report  

which  had  been  duly  approved  by  the  Secretary  

on  18th September,  2001  and  by  the  Central  

Government Minister on 25th September, 2001. While  

making  the  endorsement  of  the  approval,  the  

Secretary has written as under :-

“I  endorse  fully  the  above  note  of  the  Joint  Secretary.  This is a very old case in which the  parties have repeatedly recourse to the courts.  As such (sic) even now near litigation may follow.  Therefore  the  decision  of  the  Central   Government  has  to  be in  terms of  a  speaking  order which is backed by facts and law.”   

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47. The  High  Court  further  notices  that  the  impugned  

order  dated  27th September,  2001  is,  in  fact,  a  

verbatim copy of the report/note prepared by Mr. S.P.  

Gupta, Joint Secretary. Upon examination of the entire  

matter, the High Court has concluded that the order  

has  been  signed  by  Mr.  R.P.  Khatri  merely  to  

communicate the approval of the Central Government  

to the parties.  

48. We are of the considered opinion that the conclusions  

reached  by  the  High  Court  cannot  be  said  to  be  

contrary to the established principles and parameters  

for  exercise  of  the  power  of  judicial  review  by  the  

courts. At this stage, we may also make a reference to  

a  submission  made  by  Mr.  Krishnan  that  the  High  

Court did not give due consideration to the grievance  

of the appellant raised in the writ petition with respect  

to the merits because it assumed that the appellant  

had attempted to bye-pass the alternative remedy of  

revision available to it under Section 30 of MMDR Act  

read with           Rules 54 and 55 of the Rules. We are  

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of  the  considered  opinion  that  the  aforesaid  

submission of the learned counsel is wholly misplaced.  

The  High Court  merely  noticed that  the  matter  had  

been referred back to the Central  Government on a  

limited issue. Therefore, it was not open to the Central  

Government to re-open the entire controversy. It has  

been observed by the High Court that such a power  

would only be available to the Central Government in  

exercise  of  its  Revisional  Powers  under  Section  30  

read with Rules 54 and 55 of the Rules. We also do not  

find much substance in the submission made by Mr.  

Krishnan  that  the  order                  dated 27th  

September, 2001 is vitiated as it has been passed by  

an officer who did not give a hearing to the parties.  

This is clearly a case of an institutional hearing. The  

direction  has  been  issued  by  the  High  Court  for  a  

hearing to be given by the Central Government. There  

was  no  direction  that  any  particular  officer  or  an  

authority  was  to  give  a  hearing.  In  such  

circumstances, the orders are generally passed in the  

relevant files and may often be communicated by an  

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officer  other than the officer  who gave the hearing.  

The legality of institutional hearing has been accepted  

in  England  since  the  case  of  Local  Government  

Board Vs.  Arlidge (supra). The aforesaid judgment  

was  quoted with  approval  by this  Court  in  Pradyat  

Kumar  Bose  (supra).  This  Court  approved  the  

following passage from the speech of Lord Chancellor  

in the aforesaid case:  

“My Lords, I concur in this view of the position of  an administrative body to which the decision of a  question  in  dispute  between  parties  has  been  entrusted.  The  result  of  its  enquiry  must,  as  I  have said, be taken, in the absence of directions  in the statute to the contrary, to be intended to  be reached by its ordinary procedure. In the case  of the Local Government Board it is not doubtful  what this procedure is. The Minister at the head  of the Board is directly responsible to Parliament  like other Ministers. He is responsible not only for  what he himself does but for all that is done in  his department. The volume of work entrusted to  him is  very  great  and he  cannot  do  the  great  bulk of it  himself.  He is expected to obtain his  materials vicariously through his officials, and he  has  discharged  his  duty  if  he  sees  that  they  obtain these materials for him properly. To try to  extend his duty beyond this and to insist that he  and  other  members  of  the  Board  should  do  everything  personally  would  be  to  impair  his  efficiency.  Unlike  a  Judge in  a  Court  he  is  not  only  at  liberty  but  is  compelled  to  rely  on the  assistance of his staff.”  

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In view of the aforesaid settled position of law, it  is  

difficult to accept the submissions of Mr. Krishnan that the  

order dated 27th September, 2001 suffers from any legal or  

procedural infirmity. In our opinion, the conclusions reached  

by  the  High  Court  are  in  accordance  with  the  settled  

principles of law. Although a large number of cases have  

been cited by the learned counsel for the parties on either  

side,  but  it  is  not  necessary  to  consider  all  of  them  

individually as the principles with regard to observance of  

natural  justice  are  well  entrenched  in  our  jurisprudence.  

Undoubtedly,  any  decision,  even if  it  is  administrative  in  

nature, which causes adverse civil  consequences must be  

passed upon hearing the concerned parties. In our opinion,  

the  Central  Government  has  fully  complied  with  the  

aforesaid  principle  in  passing  the  order  dated  27th  

September, 2001.  

49. In  view  of  the  above,  we  find  no  merit  either  in  

Civil  Appeal  No.  1013  of  2013  arising  out  of  

SLP (C)No. 23141 of 2007 or Civil Appeal No. 1014 of  

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2013 arising out of SLP (C) No. 5130 of 2009.  Both the  

appeals are, therefore, dismissed with no order as to  

costs.    

   .……..…………….….….J.   [Surinder Singh  Nijjar]

……….…………………….J.     [H.L.Gokhale]

New Delhi; February 07, 2013.

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