1977 (1) TMI 158 - SC - Indian Laws

Summary

Issues Involved:
1. Validity of the appellant's application for a prospecting license despite the initial fee deficiency.
2. The Central Government's directive to the State Government regarding the grant of the prospecting license.
3. The High Court's quashing of the Central Government's order.
4. Preferential rights under Section 11(2) of the Mines and Minerals (Regulation and Development) Act, 1957.
5. The impact of technical errors on the validity of applications under the Act and Rules.

Issue-wise Detailed Analysis:

1. Validity of the Appellant's Application for a Prospecting License Despite the Initial Fee Deficiency:
The appellant applied for a prospecting license on 14th October 1961, but the application was accompanied by a fee of Rs. 24 instead of Rs. 32. The appellant realized the mistake and paid the deficit of Rs. 8 on 28th December 1961. The appellant also made a fresh application on 26th February 1962. The respondent No. 1 applied for a prospecting license on 2nd November 1961, which overlapped with the appellant's application. The High Court held that the appellant's original application was invalid due to the incorrect fee. However, the Central Government found that the State Government's acceptance of the corrected fee implied the application was valid from the original date of filing.

2. The Central Government's Directive to the State Government Regarding the Grant of the Prospecting License:
The Central Government directed the State Government to consider the appellant's application within nine months. The State Government offered the appellant a reduced area of 365 acres, which the appellant contested. The Central Government eventually directed the State Government to grant the overlapping 272.40 acres to the appellant, in addition to the 365 acres already offered, recognizing the appellant's application as valid from the original filing date.

3. The High Court's Quashing of the Central Government's Order:
The High Court quashed the Central Government's order, stating that the appellant's application was invalid due to the initial fee deficiency. The High Court viewed the Central Government's order as containing a patent error. However, the Supreme Court found that the High Court erred in its judgment, emphasizing that the application should be considered valid from the date of filing, as the State Government did not initially reject it and allowed the fee deficiency to be corrected.

4. Preferential Rights Under Section 11(2) of the Mines and Minerals (Regulation and Development) Act, 1957:
Section 11(2) of the Act provides that the applicant whose application was received earlier has a preferential right for the grant of the license. The Central Government held that the appellant's application, despite the initial fee deficiency, should be considered valid from the original filing date, thus giving the appellant a preferential right over the respondent No. 1, whose application was received later.

5. The Impact of Technical Errors on the Validity of Applications Under the Act and Rules:
The Supreme Court emphasized that technical errors, such as a deficiency in the fee accompanying the application, should not render the application void if the deficiency is corrected, and the application is otherwise valid. The Court highlighted that the use of the word "shall" in the rules does not necessarily make the requirement mandatory if the deficiency can be rectified. The Court also noted that the Act and Rules do not explicitly state that an application is void if not accompanied by the correct fee at the time of filing.

Conclusion:
The Supreme Court set aside the judgment and order of the High Court and restored the Central Government's order. The Court held that the appellant's application was valid from the original filing date despite the initial fee deficiency, and the appellant had a preferential right to the prospecting license for the disputed 272.40 acres. The Court emphasized that technical errors should not invalidate an application if the deficiency is corrected and the application is otherwise valid. The appeal was allowed, and the parties were directed to bear their own costs.