Amended rule cannot be applied retrospectively where vested right exists

High Court of Judicature at Hyderabad: In the present case, petitioners filed writ petitions seeking to set aside the rejection orders for transfer of lease passed by Director of Mines and Geology by retrospectively applying the amended Rule 12(5)(h)(viii) of the Andhra Pradesh Minor Concession Rules, 1966.

The issues are: Whether the applications for transfer of lease should be considered, as per un-amended Rule which was in force at the time of submission of application or, as per amended Rule at the time of disposing off the application? Will there be any vested right to prevent the authorities to apply the rule retrospectively?

Director of Mines and Geology, Andhra Pradesh granted quarry lease for colour granites to M/s Maruthi Granites (original lessee) for a period of twenty years (12.07.2007 to 11.07.2027). Managing Director of the original lessee along with petitioner filed joint applications for transfer of quarry leases in favour of the petitioner on 16.07.2015 under Rule 12(5)(h)(viii) of the Andhra Pradesh Minor Concession Rules, 1966.

Unamended Rule 12(5)(h)(viii): “The licensee or lessee shall not assign, sub-let, transfer or otherwise dispose of the under licence or lease without obtaining the previous sanction in writing of the Director.”

Royalty Inspector and surveyor inspected the mining lease and recommended to accord permissions for transfers of quarry leases for unexpired periods i.e. up to 11.07.2027 in favour of the petitioner. All formalities required under the rules and executive instructions have been complied by both the petitioners and respondents. Rule 12(5)(h)(viii) was amended vide G.O.Ms.No. 29, Industries, Commerce (Mines –II) dated 15.02.2017.

Amended Rule 12(5)(h)(viii): “The prospecting licenses and quarry leases granted for the purpose of non-captive consumption are not transferable.”

Director of Mines and Geology, Andhra Pradesh rejected the joint applications for transfers of the leases on 29.05.2017, on the ground that Rule 12(5)(h)(viii) has been amended and that the subject quarry leases are not transferable in view of the said amended provision.

The counsel for respondents contended that the orders of rejection by applying the amended Rule 12(5)(h)(viii) of the Rules is in accordance with law as there is no dispute that the amended Rule is in force and is holding the field as on the date of rejection of the applications. He relied on State of Tamil Nadu v. Hind Stone, (1981) 2 SCC 205 in which it was held that in the absence of vested rights in anyone, an application for lease has to decided according to the rules in force on the date of disposal of application but not on the basis of rules in force at the time of making the application.

The learned Senior Counsel Sri K.G. Krishna Murthy contended that the above case has no relevance to the present facts of the case as the Apex Court was dealing with the grant of lease for a fresh period whereas in the case on hand, the original lessee is having subsisting lease period and hence, there is a vested right. It was also contended that the amended Rule cannot be applied retrospectively which would amount to changing the lease conditions unilaterally to the detriment of the petitioner.

The High Court held that there is a vested right as the original lessee is having subsisting lease period and the amended rule cannot be applied retrospectively as the lease holder entered into lease on the belief that he will be entitled to proceed in accordance with law and might have arranged his affairs by relying upon then existing law and made plans accordingly. Therefore High Court directed to consider the applications for transfer as per the un-amended Rule which was in force at the time of submission of applications without reference to the amended Rule. [Air and Sea trading Company v. State of Andhra Pradesh, Writ Petition Nos. 37319 and 38948 of 2017, decided on 06.12.2017]

 

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