2016 (1) TMI 1409 - SC - Indian Laws

Effect of amendment - Rule 8(8) of the Tamil Nadu Minor Mineral Concession Rules, 1959 which was amended by G.O. Ms. No. 391 dated 17.11.2000 - whether the amendment would have retrospective effect or will become operational prospectively i.e. only from 17.11.2000? HELD THAT - Rule 8(8) of the 1959 Rules which prescribes period for grant of lease is not procedural but substantive in nature. By amendment, change in the said Rule was effected with the classification of areas into virgin area and other areas that is non-virgin areas . It is only in respect of virgin areas that the period of lease stands enhanced to ten years whereas in respect of other areas the period of lease continues to be five years. This was clearly a substantive amendment which had nothing to do with any procedure. There was no concept of virgin area in the unamended rule which has been introduced for the first time by way of aforesaid amendment. An error is committed by the High Court in holding that fixation of period of lease is also procedural. When a decision to grant lease is substantive in nature, the period for which the lease is to be granted would also be substantive. Thus, the conclusion arrived at by the High Court is contrary to law. It is to be borne in mind that a particular provision in a procedural statute may be substantive in nature and such a provision cannot be given retrospective effect. Appeal allowed - decided in favor of appellant.

Summary

Issues involved:
1. Interpretation of amended Rule 8(8) of the Tamil Nadu Minor Mineral Concession Rules, 1959 regarding retrospective or prospective effect.
2. Application of the amended rule to leases granted before the amendment.
3. Determination of whether the amended rule is procedural or substantive in nature.

Detailed Analysis:
1. The Supreme Court considered the issue of whether the amended Rule 8(8) of the Tamil Nadu Minor Mineral Concession Rules, 1959, which extended the period of lease for quarrying stone in virgin areas to ten years, should have retrospective or prospective effect. The Respondents argued that since they were granted leases for virgin areas before the amendment, they should benefit from the extended lease period. The High Court had ruled in favor of the Respondents, considering the amendment procedural and applying it to ongoing leases. The Supreme Court analyzed the nature of the amendment and concluded that it was substantive, as it introduced a new classification of areas and conferred new rights. Therefore, the Court held that the amendment should not apply retrospectively. The Court emphasized that even in procedural statutes, some provisions may be substantive, and in this case, the period of lease was substantive in nature.

2. The Court examined the application of the amended rule to leases granted before the effective date of the amendment. It reviewed a specific case where a lease was granted for five years before the amendment, and the leaseholder claimed entitlement to the extended ten-year period for virgin areas post-amendment. The Court found that the unamended rule did not differentiate between virgin and non-virgin areas, and the lease was granted based on the prevailing rule at that time. The amendment introduced the concept of virgin areas and extended the lease period for such areas, which was a substantive change. Therefore, the Court ruled that the amended rule should not be applied retrospectively to leases granted before the effective date of the amendment.

3. The Court delved into the distinction between procedural and substantive aspects of statutes. It cited legal principles and precedents to establish that procedural statutes are generally presumed to have retrospective effect unless textually inadmissible. However, the Court clarified that a provision in a procedural statute may be substantive in nature and should not be given retrospective effect. Applying these principles to the case at hand, the Court determined that the amendment to Rule 8(8) was substantive due to the introduction of new rights and classifications. Therefore, the Court overturned the High Court's decision, emphasizing that the fixation of the lease period was substantive, not procedural. The Court allowed the appeals, ruling in favor of the Appellants, and decided that there would be no order as to costs in the circumstances of the case.