1998 PLP 1320 (SCMR)

MAMOON KAZI, J.

The appellant has called in question the judgment of the Lahore High Court (Rawalpindi Bench) dated 27-4-1995, setting aside the orders passed by the Licensing Authority and the Appellate Authority respectively, while acting under Punjab Mining Concession Rules, 1986.

2. Brief facts of the case are that respondent No.3 held a lease for mining of coal over an area of 239 acres near village Nila Tehsil Chakwal, for a period of 20 years commencing from January, 1981. The said respondent wanted to assign his rights for the remaining period to K.S. Mining Corporation, a partnership firm consisting of two partners, the petitioner and one Lutful Marian. A joint application dated 18-10-1989 signed by both the partners of the said firm and the respondent No.3 was therefore, submitted to the Director of Industries and Mineral Development (Punjab), Lahore, the Licensing Authority. However, subsequently, on 31-10-1989, the respondent No.3 and Lutful Manan intimated the Licensing Authority that due to certain unavoidable circumstances they had agreed not to pursue the said application. The appellant nevertheless wanted to pursue the application, therefore, on 4-11-1989 he wrote to the Authority, indicating that he was not willing to withdraw the application. The Licensing Authority was, therefore, requested to assign the mining lease in the name of the said partnership as, according to the appellant, he still continued to be a partner holding 50 per cent. share in the firm. However, the Licensing Authority .by its order dated 14-7-1990, rejected the assignment 'application holding that the question was disputed, therefore, the request could not be considered for approval. The appellant filed appeal before the Secretary, Industries, the Appellate Authority, and the matter was referred by the Appellate Authority for a de novo hearing. The appellant did not immediately succeed before the Licensing Authority even on remand and three times the matter was remanded by the Appellate Authority for a fresh disposal. Ultimately, the Licensing Authority approved the assignment of lease in favour of K.S. Mining Corporation, vide order dated 8-12-1994 and the appeal filed by the respondent No.3 was also dismissed, vide order dated 3-1-1995. These orders were challenged by the said respondent before the High Court irk a writ petition, which was accepted and the orders passed by the Licensing Authority and the Appellate Authority were declared to be without lawful authority.

3. It was concluded by the learned Judge of the High Court that after revocation of the said proposal by the respondent No.3 in regard to assignment of lease the Licensing Authority was not competent to assign the lease in favour of the said firm. The assignment was also held to be in violation of Rule (7)(e) of the Punjab Mining Concession Rules, 1986 as, according to the learned Judge, the appellant did not possess the required financial qualification as laid down by the said rule. Further, according to the learned Judge, the matter had already been dealt with by the Appellate Authority and, therefore, any order passed by it subsequently amounted to review of the earlier order for which the Appellate Authority had no power. Consequently, the petition was allowed, as pointed out earlier.

4. Leave was granted to consider whether the conclusions arrived at by the learned Judge of the High Court in the impugned judgment were sustainable under the law.

5. Mr. Abdul Hafeez Pirzada, learned counsel for the appellant 'has assailed the judgment of the High Court on three grounds. His first contention was that K.S. Mining Corporation, though a "partnership at will" was never dissolved in accordance with the, provisions of section 43 of the Partnership Act. Therefore, according to the learned counsel, the said partnership firm was still in existence when permission was granted by the Licensing Authority for assignment of the lease. It was contended by the learned counsel that, a valid contract had been concluded between the firm and the respondent No.3 which could not be repudiated unilaterally by the said respondent. Reliance was placed by Mr. Pirzada on the case of Amjad Rashid Khan Malik v. Mrs. Shahida Naeem Malik (1992 SCMR 485). In this case, earlier decided by this Court, it was held with reference to Order XXIII, Rule 1, C.P.C. that the plaintiff in a suit was not free to withdraw from the suit unilaterally if rights of defendants or even third parties created by orders passed by the Court during the proceedings were affected by such withdrawal. It was, therefore, urged by Mr. Pirzada that even if the respondent No.3 or the second partner, Lutful Marian, had backed out from the earlier proposal, any refusal by the Licensing Authority to approve assignment of the lease in favour of the appellant, was liable to be questioned by the appellant on such ground. Reliance was further placed by the learned counsel on the judgment of the Lahore High Court in the case of The Commissioner of Income-tax v. Messrs Crescent Textile Mills Ltd., Lahore (PLD 1973 Lah. 387). In this case when offer of new shares by the respondent-company had been accepted by the existing shareholders and price for acquisition of such shares tad also been duly deposited by them in the coffers of the company, it was held that all formalities of a contract of sale of goods under section 5 of the Sale of Goods Act had been completed from the date the shareholders accepted the company's offer. Consequently computation for the purposes of section 15-B of the Income tax Act could be made accordingly. The second contention of Mr. Pirzada was that the order dated 27-6-1991 was not an appellate order but the same had been passed by the Licensing Authority, therefore, according to the learned counsel, the learned Judge in the High Court completely misread the record while making observations that the said order was an appellate order and having once disposed of the appeal, the Appellate Authority was not vested with power to review his earlier order. Thirdly, Mr. Pirzada also took exception to the observations in the judgment of the High Court in regard to the financial position of the firm. The High Court, according to the learned counsel, could not address itself to this question as it had not been agitated by the respondent No.3 before the department concerned. Consequently, according to the learned counsel, the entire judgment of the learned Judge in the High Court, cannot be sustained.

6. So far as the second and the third contentions of Mr. Abdul Hafeez Pirzada are concerned, the same, no doubt, appear to be forceful. The observations made by the learned Judge of the High Court that, the order dated 27-6-1991 was an appellate order cannot be supported by the record. The record indicates that the case was heard by the Licensing Authority on 27-6-1991 but the appellant did not appear before the Licensing Authority resulting in the rejection of his application. An appeal was filed by the appellant on 17-7-1991 before the Secretary, Industries and Mineral Development, the appellate authority, and vide order dated 22-10-1991, he remanded the case to the Licensing Authority for de novo proceedings after affording an opportunity of hearing to the appellant. Thereafter, the case was heard by the Licensing Authority and on 12-1-1992 it accepted the appellant's plea and approved the assignment of lease in favour of K.S. Mining Corporation. The assignment letter was thereafter issued in favour of the said Corporation alongwith a notification dated 18-1-1992. The respondent No.3 then filed appeal dated 18-1-1992 before the Appellate Authority against the said order of the Licensing Authority arid the record shows that thereafter once again the case was remanded to the Licensing Authority for a fresh hearing with further directions that till such time "possession should not be disturbed". On I8-2-1994 the appellant's plea was accepted and lease was ordered to be assigned to K.S. Mining Corporation. The respondent No.3 feeling aggrieved by the said order filed appeal to the Appellate Authority, which was dismissed on 3-1-1995. It was this order which was challenged by the said respondent before the High Court, resulting in passing of the impugned judgment. Consequently, although the case was referred to the Licensing Authority for a de novo hearing a number of times by the Appellate Authority, but there is nothing to indicate that any of the orders passed by the Appellate Authority had been reviewed by it. The circumstances of the case indicate that, each time the order passed by the Licensing Authority was found to be erroneous and therefore, the case was remanded for a fresh disposal. Therefore the contention raised by the learned counsel is not without force.

7. The other contention of Mr. Pirzada also appears to be right as the question in regard to the financial position of the said partnership firm could not be addressed by the High Court for the first time the exercise of Constitutional jurisdiction. Admittedly, the question had not been dealt with earlier by the Department and it was for the first time that such question had been raised before the High Court. Without any foundation being laid in this regard, the question could not be dealt with by the High Court for the first time in the exercise of its Constitutional jurisdiction. Therefore, the observations made by the High Court in this regard are clearly not sustainable.

8. It now .remains to be considered, whether notwithstanding withdrawal of request by the respondent No.3, mining lease could nevertheless be assigned in favour of the appellant. The contention of Mr. Pirzada is that in view of x valid contract concluded between the respondent No.3 and the said firm, the approval accorded to the said lease by the respondents Nos. l and 2 was not open to question. In this regard, the view taken by the learned Judge in the High Court is that no approval could be granted by the Licensing Authority under Rule 19 of the Punjab Mining Concession Rules, 1986 after withdrawal of the respondent No.3 in whose favour the lease had been originally granted. The said rules have been framed by the Government of Punjab by virtue of power conferred on it under section 2 of Mines and Oil Fields and Mineral Development (Government Control) Act, 1948. Rule 19 in the said Rules provides as under:-- "

19. ASS1Q A licensee or a lessee shall not transfer any right or interest under the licence or the lease, nor part with the possession of the area or any part thereof, without the previous consent in writing of the Licensing Authority." As is evident from the language employed in the said rule, an embargo has been placed on a licensee or a lessee to transfer any right or interest under the licence or the lease or to part with the possession of the area or any part thereof held by him under such licence or lease, without the previous consent in writing of the Licensing Authority. In the present case, as has been pointed out earlier, a joint request was made by the partners of the firm and the respondent No.3 for assignment of the lease in favour of the former but admittedly, one of the partners, Lutful Marian, backed out and so did the respondent No.3; as they made a joint request to the Licensing Authority to cancel the earlier request. However, notwithstanding the withdrawal, the Licensing Authority allowed the assignment in favour of the appellant. It may be pointed out that the Authorityhad been vested with very limited powers under rule 19 and it had no power to act as an arbiter and determine respective rights between the appellant and the respondent No.3 vis-a-vis the said transaction or to enforce any contract between the two parties. Mr. Prizada has very strongly argued that the respondent No.3 was not free to withdraw after entering into the said contract with the said firm and as the Authority was already seized of the matter, it could perform its function under rule 19, notwithstanding the repudiation of the said transaction by the respondent No.3. Support has been sought by him from (1971) 3 WLR 355, (1986) 2 WLR 581 and (1995) 3 WLR

558. The said cases indicate that when transaction between the parties was complete in all other respects, withdrawal by one of the parties to the transaction could be of no consequence. However, these were cases between landlord and tenant which were being dealt with by a Rent Tribunal. In the present case, one of the principal parties to the said transaction was the respondent No.3 who had withdrawn the joint request earlier made to the Licensing Authority. Therefore, as has been observed by the learned Judge in Chambers, there was nothing before the Licensing Authority upon which an order, as contemplated under rule 19, could be passed by him. If there was a valid contract between the appellant's firm and the respondent No.3 in this connection, the appellant was free to seek any appropriate remedy available to him under the law. But both the Licensing Authority and the Appellate Authority were in error while approving the assignment of lease in favour of the appellant.

9. In the result, the appeal is dismissed. A.A./M-148/S Appeal dismissed.