P L D 1977 Karachi 497 (PLP)

Z. A. CHANNA. J.

‑This petition is directed against, firstly, the notice dated 231 d April 1974, issued by respondent No. 3, the Deputy Director, Mineral Development, on behalf of the Director, Industries and Mineral Development, Government of Sind, respondent No. 2, requiring the petitioner to show cause why its prosecuting licence in, respect of Khanot area, in Dadu District, be not cancelled, on account of violation by the petitioner of certain provisions of the Pakistan Mining Rules (hereinafter referred to as the Rules), and secondly, the letter, dated 12th July 1974, from respondent No. 3, intimating the petitioner that its prospecting licence in respect of the said area had expired with effect from 29‑6‑1974, and requiring it to forthwith hand over possession of the said area to the Deputy Commissioner, Dadu.

2. The relevant facts, shortly stated, for the purposes of this petition are that the petitioner is a private limited company, having its registered office at Hasson Abdal in Campbellpur District. The petitioner applied for and was granted a prospecting licence for coal over an area of 2479.92 acres in Khanot, in District Dadu. The licence, which was dated 14‑2‑1966, was valid for a period of one year from the date of issue and was subject to the conditions stated therein. One of these conditions was that if the petitioner was desirous of retaining the area for prospecting purposes beyond the period of one year for which the licence was granted, it must give such notice to the Directorate of Industries and Mineral Development (hereinafter referred to as the Directorate) at least one month prior to the expiry of the licence. This condition was based on the requirement of rule 34 of the Rule:. It was, however, specifically stated in the licence that it did not confer any right on the petitioner either to the renewal of the licence or grant of a Mining lease unless the prospecting work or working obligations as required under the licence had been carried out to the satisfaction of the Director. It was also provided in the licence treat the licensee will observe and abide by all other terms and conditions laid down in the Rules, Including the Schedules thereto.

3. The petitioner, after its prospecting scheme was approved by the Directorate, started prospecting operations in the area covered by its licence. It, however, failed to apply for the renewal of its licence within one month of its expiry, but it appears that some time after the expiry of the initial period of the licence the petitioner applied for its extension/renewal, first for period ending on 13‑2‑1967 and thereafter for the period ending on 13‑2‑1968. Subsequently, on 3‑8‑1968, the petitioner applied for conversion of its prospecting licence into a mining lease for a period of thirty years. The petitioner, by its letter dated 13‑10‑1969, repeated its request for grant of a mining lease and in the alternative requested for renewal of its licence. Although, petitioner's applications for renewal of its licence were belated, respondent No. 2, by its letter dated 3‑1‑1970, renewed the licence for the periods from 14‑2‑1967 to 13.2‑1968 and from 14‑2‑1968 to 13‑2‑1969 under rule 34, and further for the period from 14‑2‑1969 up to 13‑2‑1970 under rule

35. It was categorically stated in this letter that the petitioner will have to complete the prospecting work within this period and no further extension or renewal of the licence would be granted. No action, however, was taken on the application of the petitioner for the conversion of his licence into a mining lease despite repeated letters from the petitioner to the Directorate in this behalf. The above letter was followed by three other letters from the Directorate to the petitioner, respectively dated 1‑1‑1971, 19‑7‑1971 and 28‑10‑1971. In the first two of these letters, the Directorate alleged the failure of the petitioner to submit its prospecting reports, as required by the Rules, and advised it to submit the same, otherwise its licence would be liable to cancellation. In the last of these three letters, the Directorate required the petitioner to pay its dues to Government, amounting to Rs. 11,53.35, and also observed that the petitioner was not working the area since April 1970, and required it to intimate the reasons therefore. No further action appears to have been taken by the Directorate till 23‑4‑1974, when the impugned show‑cause notice was issued to the petitioner, which, by its letter dated 8th May 1974, submitted a reply to the show‑cause notice. The petitioner's General Manager also saw respondent No. 3 on the same date in that connection. Respondent No. 3, however by his impugned letter dated 12‑7‑1974, intimated the petitioner that its licence stood expired on 2fr‑6‑1974 and required it forthwith to hand over possession of the prospecting area to the Deputy Commissioner, Dadu. This action, as, intimated in the impugned letter, was taken in pursuance of the Government decision of 29‑6‑1974.

4. We have heard Mr. A. K. Brohi and Mr. S. M. Sadiq, who appeared for the petitioner, the learned Additional Advocate‑General, who represented respondents Nos. 1 to 3, and Mr. A. A. Fazeel, who appeared for respon dent No. 4, to whom a prospecting licence has been granted for the area in respect of which the petitioner previously held such licence.

5. Mr. A. K. Brohi assailed the impugned order, dated 12-7‑1974, on, the following three grounds‑-- (a) that it gives no reason why the petitioner's licence having been validated up to 29‑6‑1974 and its application for conversion of the licence into mining lease being pending, the lease was not granted ; (b) that the order was passed without giving the petitioner an opportunity of being heard ; and (c) that up to 1‑4‑1974, there appears to have been nothing adverse to, the petitioner, and it was only, after respondent No. 4 came on the scene that the trouble started for the petitioner, and hence the section taken against it is mala fide.

6. Both Mr. Brohi and Mr. S. M. Sadiq further contended that it was, within the power of Government to condone the delay in making applications under rule 34 for renewal of the term of prospecting licence and the Government had in the instant case condoned the delay as was clear from the letter of respondent No. 2 dated 3‑1‑1970, and that further as in the meanwhile the petitioner had submitted its application for conversion of its licence into a mining lease, the renewal of the licence was to be automatic under rule 35 until the application for conversion was disposed: of, which application has admittedly not been disposed of as yet.

7. Before considering the above contentions it would be convenient to, refer to certain provisions of the Rules. Rule 7 provides that an application for a prospecting licence or mining lease shall be made fn the form set out in the First Schedule to the Rules. Such application is to be accompanied by the fee specified in rule 9 (3). Rule 18 requires that before granting the licence or lease, the Licensing Authority shall ascertain that the area applied for does not overlap with any other area covered by a licence or lease. Rule 23 provides that notice of the grant, surrender, determination or assignment of a licence or lease shall be published in the official Gazette. Rule 24 is important and refers to the terms and conditions of the licence or lease, which are to be according to the form set out in Part I and Part II respectively of the Second Schedule to the Rules. It further provide& that "subject to satisfactory compliance with the terms and conditions of the licence, the holder of a licence shall have the right to receive a mining lease . . . . : " The next relevant rule is rule 33, which provides that a prospecting licence shall in the first instance be for one year. The provisions relating to renewal of licence are contained in rules 34 and 35, which read as follows;‑ "

34. Renewal.‑Subject to the licensee having carried out his working obligations under rule 36, the licensing authority shall on application made by the licensee on one month's notice in writing, grant one renewal of a prospecting licence for a further term of 12 months in respect of the whole of the licensed area or any part or parts thereof which comply with rule

31. The licensing authority may in its discretion grant a further renewal for a period of 12 months to enable the licensee to complete the prospecting work to the satisfaction of the licensing authority.

35. Right of the licensee for renewal of his prospecting licence on applying for a mining lease.--‑The licensee having before the expiry of a prospecting licence applied for a mining lease shall have the right to renewal of the prospecting licence until the mining lease applied for has been granted or refused."

8. Rule 36 relates to the working obligations and provides that the licensee shall in respect of the area covered by his licence prepare within three months of the grant of the licence a prospecting scheme which has to be approved by the Licensing Authority before the licensee commences operations in the area. It further provides that the licensee shall forfeit the right to the renewal of his licencc or the grant of a raining lease if, in the opinion of the Licensing Authority, the Licensee has failed to fulfil the working obligations as required by the prospecting scheme. The next relevant rule is rule 42, which provides that in the event of any damage caused to the mineral property due to unscientific working lack of supervision, etc. the licensee shall be liable to pay compensation for such damage. The right of a licensee to a mining lease is governed by rule 45 which provides that on or before the determination of his licence, the licencee shall have a right, in the case of minerals other than precious stones, to a mining lease, the initial period whereof, as provided in rule 52, is not to exceed thirty years. Rule 77 provides for arbitration and the provisions of that rule relevant for the purposes of this petition read as follows :‑-- "

77. Arbitration.‑--Any question or dispute regarding the licence or lease, and any matter or thing connected therewith shall be referred to the Central Government (now appropriate Government) in the appropriate Ministry whose decision shall be final provided that any dispute concerning‑

(1) the right of the licensee to a prospecting licence or mining lease, or (2) the cancellation of licence or lease for any violation of the under taking given in accordance with sub‑rule (6) of rule 9, or any breach of the provisions thereof, or shall be determined by two arbitrators‑one to be nominated by the Central Government and the other by the licensee or lessee; and in the case of disagreement between the arbitrators, by a Judge of the Supreme Court of Pakistan to be appointed by the arbitrators in writing and the decision of such arbitrators or such Judge as umpire, as the case may be, shall be final.

9. Reference may also be made to paragraph 38 of the form of deed required to be executed by the licensee, which confers powers upon the Government to revoke or terminate the licence, after giving due notice to the licensee, if the licensee has at any time refused or neglected to perform or acted in contravention of any terms and conditions of his licence. However, powers under this paragraph can only be exercised, except in the case of non‑payment of fees, rent or royalties, after giving the licensee or the lessee, as the case may be, an opportunity of remedying the breach, if it is capable of remedy.

10. The first ground of attack by Mr. Brohi on the impugned order of 12‑7‑1974 is based on the assumption that the petitioner's licence stood validated by the Directorate up to 29‑6‑1974, first by the letter dated 3‑1‑1970, and thereafter, by the impugned letter itself. Mr. A. A. Fazeel, while conceding that the said letters purported to renew or extend the petitioner's licence up to 29‑6‑1974, submitted that such extensions were in violation of the provisions of rules 34 and 35 of the Rules and therefore the extensions were invalid and conferred no right on the petitioner. He further submitted that the Rules did not confer any power on the Directorate to condone the delay in submitting applications for extension or renewal of licence under rule

34. The learned Additional Advocate‑General on the first day of his arguments had conceded that the extensions/renewal of the petitioner's licence had been validly made, but on the following day he went back on this concession and supported the submission of Mr. A. A. Fazeel that the Directorate bad no power to renew a licence if the application therefore was not made within the period prescribed in rule

34. We have already referred to and reproduced this rule, which provides that the application for renewal must be made at least a month prior to the expiry of the period of validity of the licence. It is an admitted position that the petitioner had not submitted applications for renewal of his licence within the period prescribed in rule

34. It, therefore falls to be considered whether the Directorate or the Government have the power to condone the delay in making applications for renewal of licence. Now the right to grant renewal of licence is regulated by the Rules. According to Crawford on "Statutory Construction", at page 526 :‑

"A statute which creates a new right, privilege or immunity, and regulates the manner of its exercise, will be construed as mandatory. In other words, the right can be exercised only in the manner and within the time prescribed. Similarly, when a statute gives a new right and prescribes a particular remedy for its recovery, such remedy must be strictly pursued; though it is otherwise where a statute gives a right without prescribing a remedy. In the latter case, the common law, affords the remedy and any suitable form of action may be adopted."

11. Reference may also be made to the following passage from ‑Maxwell on "Interpretation of Statutes", Eleventh Edn., page 364; "Where powers, rights or immunities are granted with directions that certain regulations, formalities or conditions shall be complied with, it seems neither unjust nor inconvenient to exact a rigorous observance of them as essential to the acquisition of the right or authority conferred and it is therefore probable that such was the intention of the Legislature:

12. The principles enunciated in the foregoing passages were applied by A. D. N. of this Court in the case of Saleem Sons Limited v. Second Labour Court (P L D 1973 Kar. 1). In that case, an employee, whose services had been terminated failed to bring his grievance to the notice of his employer within the period prescribed in clause (a) of Standing Order 18 of the West Pakistan Industrial and Commercial (Standing Orders) Ordinance. 1968. or to file a complaint before the Labour Court within the period specified in clause (b) of Standing Order

18. It was held that the provisions of clauses (a) and (b) of the said Standing Order are mandatory and as the employee had not strictly complied with the provisions of the said Order, the Labour Court had no jurisdiction to entertain his complaint. We are in respectful agreement with the above view and applying the principle under lying that decision to the instant case take the view that as the applications by the petitioner for renewal of his licence ware not made within the period prescribed in rule 34, respondent No. 2 had no jurisdiction to renew or extend the licence on the expiry of the initial period of one year, nor could it condone the delay in making the applications for renewal since there is no power under the rules reserved to the Directorate or even the Government to do so.

14. Mr. S. M. Sadiq also urged before us that in effect the renewal of prospecting licence is governed by agreement and the Directorate or the Government, being a party to the agreement, it was within their power to condone the delay on tire part of the petitioner in making applications for renewal. We find ourselves unable to agree with his contention as, in our opinion, it is based on an incorrect premise. We have already shown that the renewal of licences is governed by rule

34. The mere fact that the provisions of this rule have been incorporated in the form of agreement to be executed by the licensee does not mean that the provisions as to renewal of licences are governed by agreement and can be modified by a party, or even of both parties to the agreement.

15. The purported condonation by the Directorate or the Government also cannot be considered to be valid on the principle of waiver for waiver can only be of the advantage of a law made solely for the benefit of the individual in his private capacity and there can be no waiver of requirements which have been imposed for the public good (See Maxwell, "Interpretation of Statutes". Eleventh Edition, page 328). In the case of Edward Ramia Ltd. v. African Woods Ltd. ((1960) 1 W L R 86), the question arose whether the requirements of section 12 of the Gold Coast Concession Ordinance, which lays down the procedure to be followed by a person desiring to obtain a concession in the Ashanti area, could be waived. The said section Inter alia provides that application for concession must be made to the Chief concerned and notice of the application given to the Chief Regional Officer, section 13 of the said Ordinance provides that no concession shall be certified as valid unless it has been obtained in accordance with the provisions of section

12. It was held by their Lordships of the Privy Council that these requirements have been imposed for the public good and a waiver of any of them is impossible.

16. If we ate right in taking the view that the extensions or renewals of the petitioner's licence, being in violation of rule 34, are invalid and that the Directorate or the Industries Department was not competent to condone the delay in the making of applications for renewal under that rule, then the petitioner's licence stood expired on the expiry of the initial period of one year for which it was granted, namely on 13‑2‑1967. No application for conversion of the licence into a mining lease having been made by the petitioner before that date, rule 35, which gives a right to the licensee to the renewal of his licence until his application for mining lease has been granted or refused, will not apply. In the view that we have taken of the matter, it was not necessary for the Directorate or Government to issue a show‑cause notice to the petitioner, give it an opportunity of being heard or even pans a formal order for the termination of its licence.

17. Even apart from the view that we have taken that the petitioner's licence stood expired on 13‑2‑1967, we find ourselves unable to agree with the first contention of Mr. Brohi. We have already referred to the fact that the petitioner was served with a notice dated 23‑4‑1974, to show cause why its licence should not be cancelled. The show‑cause notice contained three specific allegations against the petitioner, namely that it had abandoned the mines, that the mineral property was being damaged due to unscientific working and lack of supervision and that the dues of Government have not been paid and those which have been paid were paid six months after they fell due. In its reply, dated 8‑5‑1974, to the show‑cause notice, the petitioner has admitted that it did temporarily close down its mine, but denied that the mines were being unscientifically worked or that the dues had not been paid. The Department, however, did not accept this explanation as satisfactory, and found that the petitioner had admittedly abandoned the mines, that the working of the mines by the petitioner was unscientific and lacked supervision with the result that the coat had crumbled into dust or turned into ashes due to combustion on account of remaining open to the atmosphere and that an amount of Rs. 4,990, as the dead rent, for the period that the petitioner failed to mine or raise any coal, was outstanding against the petitioner. The record of the Directorate, which was produced before us by the learned A. G., shows that it was on the basis of these findings of the Directorate, and after obtaining approval of the Government, that the impugned letter of 12‑7‑1974 was issued. Since a proper show‑cause notice was issued to the petitioner and its reply thereto was duly considered by the Directorate, as well as personal hearing given to the General Manager of the petitioner, we are of the opinion that the Directorate has complied with the requirements of the Rules and it was not necessary in the circumstances of the case to state in the impugned order itself the reasons for passing the same. The reasons for the order were in fact the same that were communicated to the petitioner through the show‑cause notice.

18. We are also unable to agree with the next contention of Mr. Brohi that the impugned order was passed without giving an opportunity to the petitioner of being heard. The petitioner's letter, dated 8‑8‑74, copy whereof has been filed with the petition itself, states that the General Manager of the petitioner bad called upon respondent No. 3 on the same date in connection with the show‑cause notice received by the petitioner and concludes by thanking respondent No. 3 for giving the petitioner's case a patient and understanding bearing. We may further point out that though the petitioner did not ask for any further hearing or interview, respondent No. 3, by his telegrams of 18th June 1974, asked the petitioner to see the: Additional Director, Industries, on 28th June and thus a further opportunity of hearing was given to the petitioner, but it did not await of it and Instead on the same day a Director of the petitioner wrote to the Additional Director to the effect that he was unable to attend the meeting as his flight was cancelled by the P. I. A. and no alternate booking was available. It was for the Director or other representative of the petitioner to make suitable arrangements for seeking the Additional Director on the day arranged for the meeting, keeping in mind the possibility of a delayed flight or cancellation of booking.

19. We also are unable to find any force in the last contention of Mr. Brohi that the trouble for the petitioner started only when respon dent No. 4 came on the scene and hence the action taken against it is mala fide. The contention in effect is that the entire proceedings against the petitioner were motivated solely by the desire to see that the petitioner was pushed out in order to make way for respondent No. 4, and but for the keenness of this respondent to obtain a prospecting licence for the area in respect of which the petitioner held a licence, the litter's licence would not have been terminated or touched. We have already referred to the Direc torate's letters of 1‑1‑1971, 19‑7‑1971 and 26‑10‑1970, wherein the petitioner was charged with failing, in violation of the rules, to submit monthly production figures, to pay up the outstanding of Government and to work the mines, which bad been abandoned since April 1970. In fact, the petitioner was in clear terms warned in the Directorate's letter of 19‑7‑1971 that because of its misconduct and failure to abide by the rules, the Department would be justified in cancelling its licence. It will thus be seen that the cancellation of the petitioner's licence was contemplated or at least threatened long before March 1974. when respondent No. 4 came on the scene. The mere fact, therefore. that the Government or the Directorate stayed its hand till after respondent No. 4 had applied for a licence for the area granted to petitioner, cannot make mala fide the action of the Government and the Directorate in refusing to extend or renew the petitioner's licence, which action appears to have been taken on adequate material and after due consideration.

20. Mr. A. A. Fazeel, the learned counsel for respondent No. 4, also opposed the petition on another ground. He submitted that under rule 77 any dispute concerning the right of a licensee to a prospecting licence or mining lease or the cancellation of licence or lease is referable to arbitration, and since the petitioner had admittedly failed to avail of this alternate and efficacious remedy, it was disentitled to relief in the exercise of our constitutional jurisdiction. We are inclined to agree with this contention. The arbitration provided under this rule is to be by two arbitrators, one to be appointed by the licensee/lessee and the other by Government, and in case of disagreement between the two arbitrators, the matter is to be determined by a Judge of the Supreme Court appointed by the arbitrators. Thus the remedy provided is effective and efficacious and should have been availed of.

21. The upshot of the above discussion is that we find no merit in this petition, which rye accordingly dismiss with costs. S A. H Petition dismissed.