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TMI Blog1964 (9) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... lease. The material facts are. that on 1st November 1961 Shankar Prasad Goenka was granted by this State a quarry lease for the extraction of limestone in certain specified lands admeasuring 24.75 acres, situated in Mauia Amehta, Tahsil Muvwara, District Jabalpur, for a period of five wears commencing from 1st November 1961 and ending on 31st October 1966. On 4th March 1962 the leasee Geonka entered into an agreement with one Dorab Cawasji Bajan for the raising of limestone from the leased out area. Under that agreement Bajan was to engage all labour for the extraction of limestone at marked out places, use his own tools, machinery and materials, was to stack extracted limestone at the place or places selected by Goenka and was to receive payments at the rate of ₹ 20/.- per 100 Cft. of limestone raised. Bajan was made responsible for payment of wages, compensation amount and other emoluments payable under the law to his labour and personnel. This agreement was to last for an initial period of two years. On 18th March 1962 Goenka entered into another agreement with the company in which Dorab Cawasji Bajan was a partner, for the sale of limestone at the rate of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7th April 1964 cancelling the petitioner Goenka's lease on the grounds stated in the show cause notice dated 20th February 1964. The lessee Goenka's application for a transfer of the lease was rejected by an order made on 30th February 1964 which ran as follows: State Government are pleased to reject the transfer application of Shri Shanker Prasad Goenka of Katni in respect of his quarry lease for lime-stone over an area of 24. 75 acres in mauza Amheta to M/s. T.C. Bajan and Co. Katni on the grounds that there are strong speculations in the proposed transaction. Before stating the submission of Shri Dabir, learned counsel appearing for the petitioners, it is necessary to refer to the material terms of the quarry lease granted to Shanker Prasad Goenka which are set out in Clauses 5, 9 and 12 of the lease deed. These clauses run as follows: 5. The lessee/lessees shall at all times during the currency of this demise keep correct and intelligible books of account showing accurately the quantity of the said minerals extracted and the weight and value of the said minerals sold or exported together with the names of the purchasers or consignees and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for producing the account books; and that the accuracy and genuineness of his account books were never doubted or challenged anywhere. It was further contended that under Clause (xvi) of Rule 25(1) of the Madhya Pradesh Minor Mineral Rules, 1961 (hereinafter referred to as the Rules) a lease could not be determined straightway for the lessee's failure to maintain proper and correct accounts of the mineral extracted and sold; that according to the aforesaid clause where the lessee committed a breach of Clause (viii) of Rule 25(1) by failure to maintain proper and correct accounts, the State Government was first required to give a notice in writing to him asking him to remedy the breach within 30 days of the date of the notice and it was only if the breach was not remedied within this period that the State Government could, without prejudice to any other action, determine the lease and forfeit the whole or part of the security deposit; and that no such notice for remedying the breach said to have been committed by the lessee Goenka's failure to maintain accounts was given to him. Learned counsel proceeded to submit that condition 9 of the lease did not absolutely prohibit the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d . condition No. 9 of the lease. We are unable to aecede to this contention. Rule 18 of the Rules, when it says that the lessee may, with the previous sanction of the State Government, assign, sublet or transfer his lease or any right, title or interest therein, to any person , clearly contemplates assignment, transfer or subletting in law. So also condition No. 9, when it speaks of assignment or underletting with the previous sanction of the lessor, prescribes the procedure for obtaining the sanction and directs that when an assignment or transfer is sanctioned, the instrument thereof shall be produced to the Deputy Commissioner and the sum of ₹ 100/- shall be paid to the Collector for registration of the instrument in his office contemplates that the transaction i.s an assignment, transfer or underletting in law. Rule 18 and condition No. 9 cannot be. construed as prohibiting a transaction which is not in law an assignment, transfer or underletting even if the practical effect of the transaction may be to enable a third person to extract the mineral on behalf of the lessee and to purchase it solely to the exclusion of others from the lessee. In the present case, the two c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules or the conditions of the lease leave an easy loophole for evading the prohibition of assignment, transfer or subletting without the previous sanction of the lessor, then the proper course to adopt is to amend the Rules and the conditions so as to prevent the evasion. For stopping the evasion complained of by the learned Government Advocate, a transaction which is legal, competent, regular and in form cannot be rewritten by this Court and made a transaction of assignment, transfer or underletting; nor can the terms assign , transfer or sublet be taken to connote anything other than what they mean in law. In our judgment, the lessee Goenka did not in any way transfer or assign the lease or underlet it by executing the two agreements with Dorab Cawasji Bajan and the Company and did not commit any breach of Rule 18 or condition No. 9. As neither the Rules nor the conditions of the lease prohibit the lessee from employing a contractor for extracting limestone and from selling the extracted material exclusively to one person or body, it cannot be said that the lessee used the leased out land or any part thereof in any manner other than authorized by the lease and infr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State Government without prejudice to any other action, may determine the lease and forfeit the whole or part of the security deposits. It is plain from the language of Clause (xvi) that a lease cannot he determined on the ground of the failure of the lessee to keep correct accounts as provided by Clause (viii) unless and until a notice is first given to the lessee to remedy the breach of Clause (viii) within 30 days from the date of the notice and if the lessee fails to remedy the breach within that period. In the present case, admittedly, no such notice was given to the lessee Goenka. Learned Government Advocate did not say before us that any such notice was given to the lessee, and in the return also there is no statement to that effect Learned Government Advocate, however, suggested that Clauses (viii) and (xvi) bad no applicability where there was a total failure to maintain accounts and that those clauses applied only when some accounts had been kept but they were not correct. We are unable to accede to this contention which leads to the anomaly of no action of any kind against the lessee being permissible if he totally fails to maintain accounts but the lessee being subject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntrary to the terms of the lease a writ of certiorari could not he issued for quashing this administrative decision of the State Government; and that the lessee's proper remedy was to file a suit for damages or for specific performance of the contract of lease. The argument would have had some validity if the cancellation of the lease had been founded solely on the ground that the lessee Goenka by concluding the two agreements with Dorab Cawasji Bajan and the Company had transferred or assigned the lease without obtaining the previous sanction of the lessor. But, as is evident from the impugned order dated 7th April 1964 under challenge, the lease was cancelled on two grounds, namely, failure to maintain proper accounts of the mineral extracted and transfer of the quarry lease to the Company without prior sanction of the lessor, that is, the State Government. It is true that Rule 18, which deals with assignment or transfer of a lease with the previous sanction of the State Government, does not itself say anything about the cancellation of the lease if an assignment or transfer is effected without the requisite sanction of the State Government. In fact, there is no specific prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the lessee's failure to keep proper accounts is an executive act, still inasmuch as the act can be done only after certain conditions mentioned in Clause (xvi) of Rule 25 are satisfied, the validity of the act can be assailed in proceedings under Article 226 if the conditions are not fulfilled, (See Municipal Committee. Seoni v. State of M. P. MANU/MP/0019/1962MANU/MP/0019/1962). Now, the impugned order dated 7th April 1964 cancelling the petitioner Goenka's lease rests on two grounds, namely, his failure to maintain proper accounts and the alleged transfer of the quarry lease to the Company without prior sanction of the State Government. It is not a speaking order and it is impossible to say from it how far one or the other of the two grounds influenced the Government and effectively operated to bring about the decision in regard to the cancellation of the lease. It follows, therefore, that if the cancellation of the lease on the ground of failure to maintain proper accounts was illegal as being contrary to Clause (xvi) of Rule 25, the entire order dated 7th April 1964 itself is vitiated, as it is impossible for the Court to say that it was the alleged transfer of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed to transfer the lease to the Company was rejected mentioned strong speculations in the proposed transaction as a ground for refusing sanction. We must confess our inability to understand what precisely the Govt. meant when it rejected the lessor's prayer for sanction on the ground that there are strong speculations in the proposed transaction. In the return filed on behalf of the opponent in Misc. Petition No. 308 of 1964 the refusal of sanction is sought to be justified on the ground that the lessee had entered into two agreements with Dorab Cawasji Bajan and the Company and had virtually transferred the lease in violation of Rule 18 and condition No. 9 of the lease. It has also been averred therein that the matter of granting sanction for assignment or transfer is discretionary and administrative in character and the lessee cannot as of right claim that he should be allowed to transfer or assign the lease. If the return is any guide to the meaning of the expression used in the order dated 20th February 1964, namely, there are strong speculations in the transaction , it is clear that the Government refused sanction for the transfer of the lease solely because it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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