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TMI Blog1986 (3) TMI 328X X X X Extracts X X X X X X X X Extracts X X X X ..... (1). GU-74/121(A)/MCR-2173(49)7268/CHH dated November 29, 1974 (hereinafter referred to as the 1974 Notification ), (2) GU-75/117-MCR-2173(49)/6431/CHH dated October 29, 1975 (hereinafter referred to as the 1975 Notification ), (3) GU-76/39/MCR-2175(68) 4675-CHH dated April 6, 1976 (hereinafter referred to as the 1976 Notification ). (4) GU-79/118/MCR-2178(127)-167-CHH dated March 26, 1979 (hereinafter referred to as the Notification ), and (5). GU-81/75/MCR 2181/(168)-4536-CHH dated June 18, 1981 (hereinafter referred to as the 1981 Notification ). The question of the validity of a circular, namely Circular No. M.C.R. 2180 (166) CHH dated February 12, 1981, issued by the Deputy Secretary, Industries, Mines and Electricity Department, Government of Gujarat, also falls for consideration in these Writ Petitions and Appeals. It is unnecessary in order to decide these Writ Petitions and Appeals to relate the facts of each individual matter. It will suffice if we state broadly how these Writ Petitions and Appeals have come to be filed. The parties before us, other than the State of Gujarat and governmental authorities, are persons to whom the State of Gujarat has granted qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any period of four years and that the rate of royalty on black trap and hard murrum having been increased by the 1974 Notification, it could not be increased again in 1975. A subsidiary contention raised was that the State Government had no power to classify building stones into black trap and hard murrum because by doing so what the State Government had done in effect and substance was to declare black trap and hard murrum as minor minerals and that it was only the Central Government which possessed the power to declare any mineral not covered by the definition of the expression minor minerals in clause (c) of section 3 of the 1957 Act to be a minor mineral. Both these contentions were rejected by a Division Bench of the Gujarat High Court consisting of Thakkar and Mankad, JJ., by its judgment dated September 16- 17, 1980. The Division Bench held that the 1974 Notification had not become operative and, therefore, in lssuing the 1975 Notification the State Government had not violated the proviso to section 15(3), and that building stones having been already included in the definition of minor minerals , there was no bar to the State Government classifying them into different var ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rat. By the 1979 Notification the Government of Gujarat made the Gujarat Minor Minerals (Amendment) Rules, 1979, with effect from April 1, 1979. By this amendment a new Rule 21-B was inserted in the said Rules, Rule 22 was amended, Chapter IV of the said Rules which dealt with grant of quarrying permits in respect of lands in which minerals belonged to the Government was deleted, Form was amended, Forms I, J and K were deleted, and Schedule I and II were substituted. By the substituted Schedule I, the rate of royalty on all minor minerals was specified as ten paise per metric tonne. By the substituted Schedule II the rate of dead rent per hectare or part thereof in respect of quarry leases was enhanced to ₹ 1,200 in certain cases, ₹ 1,500 in some other cases, ₹ 2,000 in one case and ₹ 3,000 in the remaining cases. So far as quarry parwanas were concerned, the rate was specified as one-tenth of the rate for quarry leases per parwana. A writ petition was filed by the said Ambalal Manilal Patel in the Gujarat High Court, being Special Civil Application No. 138 of 1978, challenging the enhancement in the rate of dead rent made by the 1976 Notification. This w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ujarat Minor Mineral (Amendment) Rules, 1981, by issuing the 1981 Notification which came into force on June 20, 1981. By the 1981 Notification Rule 21-B was deleted, Rule 22 was amended, Chapter IV and certain Forms were inserted, Schedule I to the said Rules was substituted and Schedule II thereto deleted. Several lessees of mining and quarry leases filed writ petitions in the Gujarat High Court challenging the validity of the 1981 Notification and the said Circular. These writ petitions were rejected on the ground that as connected proceedings were pending in this Court, it was open to the petitioners to move this Court if they so desired. Accordingly, the said petitioners as also others have filed Writ Petitions in this Court challenging the validity of the 1981 Notification and the said Circular as also in some cases Appeals against the order rejecting the writ petitions. The parties before us - whether Petitioners, Appellants, or Respondents - fall in different groups according to how their interests are affected by one or the other of the impugned Notifications. They have, therefore, advanced different sets of submissions at the hearing of these Writ Petitions and Appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... development to which such regulation and develop ment under Federal control is declared by Federal law to be expedient in the public interest. Entry 23 in List II in the Seventh Schedule to that Act (namely. the provincial Legislative List) provided as follows: 23. Regulation of mines and oilfields and mineral development subject to the provisions of List I with respect to regulation and development under Federal control. The word Federal in the above entries was substituted by the word Dominion by the India (Provisional Constitution) Order, 1947. No legislation was, however, enacted in pursuance of the above power until after Independence, but in 1939 the Government of India made the Mining Concessions (Central) Rules, 1939, or regulating grants of prospecting licences and mining leases in Chief Commissioner's Provinces and British Baluchistan. Rule 6 of the 1939 Rules provided that these Rules were not to apply to minor minerals such as slate, building stone, limestone and clay, the extraction of which was to be regulated by such separate rules as the Chief Commissioner might prescribe. Thus, the provisions relating to minor minerals in the 1939 Rules were sim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 5(1), such rules could provide for the fixing of the maximum and minimum rent payable by a lessee, whether the mine is worked or not. Section 6(1) conferred power upon the Central Government to make rules for the conservation and development of minerals. Under clause (i) of section 6(2), in particular, and without prejudice to the generality of The power conferred by section 6(1), such rules could provide for the levy and collection of royalties, fees or taxes in respect of minerals mined quarried, excavated or collected . Section 7 conferred upon the Central Government the power to make rules for the purpose of modifying or altering the terms and conditions of any mining lease granted prior to the commencement of the 1948 Act so as to bring such lease in conformity with the rules made under section 5 and 6. Under section lO, all rules made under the 1948 Act were to be laid, as soon as may be after they were made, before the Central Legislature and after the commencement of the Constitution of India, before the House of the People. In exercise of the power conferred by section 5 of the 1948 Act the Central Government made the Mineral Concession Rules, 1949, for regulati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be fixed by the State Government in the lease; and if the lease permits the working of more than one mineral in the same area, the State Government may charge separate dead rent in respect of each mineral: Provided that the lessee shall be liable to pay the dead-rent or royalty in respect of each mineral, whichever be higher in amount, but not both. (iv) The lessee shall also pay, for the surface area used by him for the purposes of the mine, surface rent at such rate, not exceeding the land revenue and cesses assessable on the land, as may be specified by the State Government in the lease. x x x x Thus, even after the enactment of the 1948 Act and the framing of the Mineral Concession Rules, 1949, minor minerals continued to be governed by rules made by the State Governments. Until the coming into force of the State Reorganisation Act, 1956, on November 1, 1956, the territories of the State of Bombay included the territories now forming part of the State of Gujarat except Saurashtra which was a Part State and Kutch which was a Part State. Under section 8 of the States Reorganisatlon Act, the territories of the then existing States of Saurashtra and Kutch became part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ixed by the Collector and specified in the lease. x x x x. Under the Government of India Act, 1935, petroleum and other liquids and substances declared by Federal law to be dangerously inflammable, so far as regards possession, storage and transport formed a separate legislative topic being Entry 32 in the Federal Legislative List, while oilfields and mineral oils fell under Entry 36 in the said List along with mines and mineral development. Under the Constitution of India, however, the old Entry 36 was divided into two and the regulation and development of oilfields and mineral oil resources became a separate legislative topic along with petroleum and petroleum products, and other liquids and substances declared by Parliament by law to be dangerously inflammable. The relevant legislative Entries in the Constitution of India are Entries 53 and 54 in List I in the Seventh Schedule to the Constitution of India, namely, the Union List. These two Entries read as follows : 53. Regulation and development of oilfields and mineral oil resources; petroleum and petroleum products; other liquids and substances declared by Parliament by law to be dangerously inflammable. 54. Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Gazette of India, Extraordinary, dated July 29, 1957, Part II, sec.2, at page 392). The 1957 Act was amended with retrospective effect by the Mines and Minerals (Regulation and Developments Amendment Act, 1958 (Act No. 15 of 1958). This Amendment Act dealt with mining leases in respect of coal granted before October 29, 1949, and does not concern us. The 1957 Act was again amended by the Mines and Minerals (Regulation and Development) Amendment Act, 1972 (Act No. 56 of 1972), which came into force on September 12, 1972. The Amendment Act of 1972 was enacted mainly to carry out the recommendations made by the Mineral Advisory Board. Amongst the principal changes affected in the 1957 Act by the Amendment Act of 1972 were the imposition of a ceiling on the individual holdings of prospecting licences and mining leases; the imposition of a specific obligation on holders of mining leases in respect of payment of royalty for minerals removed by their agents, sub-lessees or employees; providing a statutory basis for calculation of dead rent; and the application of Minor Mineral Rules to quarry leases (see the Statement of Objects and Reasons to the Legislative Bill No. 83 of 1972, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r that purpose to terminate prematurely a mining lease in respect of a mineral other than a minor mineral, it is for the Central Government, after consultation with the State Government, to form the opinion with respect to such expediency, while it is for the State Government, after consultation with the Central Government, to form the opinion with respect to such expediency in the case of a mining lease in respect of any minor mineral. Section 5 prescribes the restrictions on the grant of prospecting licences and mining leases. Section 6 prescribes the maximum area for which a prospecting licence or mining lease can be granted. Section 7 prescribes the period for which a prospecting licence can be granted or renewed and section 8 prescribes the period for which a mining lease can be granted or renewed. Section 9 is important and requires to be reproduced in extenso. It reads as follows : 9. Royalties in respect of mining leases.- (1) The holder of a mining lease granted before the commencement of this Act shall, notwithstanding anything contained in the instrument of lease or in any law in force at such commencement, pay royalty in respect of any mineral removed or consumed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lease or in any other law for the time being in force, pay to the State Government, every year, dead rent at such rate as may be specified, for the time being, in the Third Schedule, for all the areas included in the instrument of lease : Provided that where the holder of such mining lease becomes liable, under section 9, to pay royalty for any mineral removed or consumed by him or by his agent, manager, employee, contractor or sub-lessee from the leased area, he shall be liable to pay either such royalty or the dead rent in respect of that area, whichever is greater. (2) The Central Government may, by notification in the Official Gazette, amend the Third Schedule so as to enhance or reduce the rate at which the dead rent shall be payable in respect of any area covered by a mining lease and such enhancement or reduction shall take effect from such date as may be specified in the notification : Provided that the Central Government shall not enhance the rate of the dead rent in respect of any such area more than once during any period of four Years. Sections 10 to 12 prescribe the procedure for obtaining prospecting licences and mining leases in respect of land in which the min ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made under sub-section (1) shall pay royalty in respect of minor minerals removed or consumed by him or by his agent, manager, employee, contractor or sublessee at the rate prescribed for the time being in the rules framed by the State Government in respect of minor minerals : Provided that the State Government shall not enhance the rate of royalty in respect of any minor mineral for more than once during any period of four years. In section 14 and in sub-sections (1) and (2) of section 15 the words quarry leases, mining leases or other mineral concessions were substituted by the Amendment Act of 1972 for the words prospecting licences and mining leases . Sub- section (3) was inserted in section 15 with retrospective effect by the same Amendment Act. Section 19 provides as follows : 19. Prospecting licences and mining leases to be void if in contravention of Act. - Any prospecting licence or mining lease granted, renewed or acquired in contravention of the provisions of this Act or any rules or orders made thereunder shall be void and of no effect. Explanation. - Where a person has acquired more than one prospecting licence or mining lease in any State and the aggrega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the State Government in the lease; x x x x (5) If the lessee makes any default in payment of royalty as required by section 9 or commits a breach of any of the conditions other than those referred to in sub-rule (4), the State Government shall give notice to the lessee requiring him to pay the royalty or remedy the breach, as the case may be, within sixty days from the date of the notice and if the royalty is not paid or the breach is not remedied within such period, the State Government may, without prejudice to any proceeding that may be taken against him, determine the lease and forfeit the whole or part of the security deposit. In exercise of the power conferred by section 15(1) of the 1957 Act various State Governments have made rules in respect of minor minerals. Although these rules vary from State to State, there are certain broad features present in all of them. The majority of States provide for two types of mineral concessions, namely a lease on tenure basis and a permit to extract a specified quantity of a minor mineral. In all the States the rules provide for the grant of a lease for a particular term of years varying from one year to twenty years. These le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ujarat Rules when we come to discuss the question of the validity of Rule 21-B of the Gujarat Rules and the impugned Notifications and the impugned Circular dated February 12, 1981. The first contention which was raised before us was that section 15(1) of the 1957 Act 18 unconstitutional as suffering from the vice of excessive delegation of legislative power to the executive. It was submitted that the rule-making power conferred upon the State Governments by section 15(1) was an uncanalized power as no guidelines were prescribed for its exercise and thus it enabled the State Governments to act arbitrarily and as they liked with respect to leases of minor minerals. We find that this contention is based upon a fallacy inasmuch as it is founded upon reading the provisions of section 15(1) in isolation and without reference to the other provisions of the 1957 Act and its legislative history. The 1957 Act is made in exercise of the powers conferred by Entry 54 in the Union List. The said Entry 54 and Entry 23 in the State List fell to be interpreted by a Constitution Bench of this Court in Baijnath Kedia v. State of Bihar Ors. [1970] 2 S.C.R. 100. In that case this Court held th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conferred by section 15 (1) was for regulating the grant of prospecting licences and mining leases and for purposes connected therewith prior to the Amendment Act of 1972 and thereafter is for regulating the grant of quarry leases, mining leases and other mineral concessions in respect of minor minerals and for purposes connected therewith. The phraseology of section 15(1) is the same as that of section 13(1) which confers rule-making power upon the Central Government with this difference that by the Amendment Act of 1972 the expression quarry leases, mining leases or other mineral concessions has been substituted in section 15(1) for the words prospecting licences and mining leases while the expression prospecting licences and mining leases in section 13(1) remains unchanged. The term minerals is defined by clause (a) of section 3 as including all minerals except mineral oils . This definition would thus include minerals which are minor minerals as also minerals other than minor minerals. The term minor minerals is, however, separately defined by clause (e) because the power to make rules in respect thereof is vested by section 15(1) in the State Governments while t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the language of section 15(1). Each of these provisions confers the power to make rules for regulating . The Shorter Oxford English Dictionary, Third Edition, defines the word regulate as meaning to control, govern, or direct by rule or regulations; to subject to guidance or restrictions; to adapt to circumstances or surroundings . Thus, the power to regulate by rules given by sections 13(1) and 15(1) is a power to control, govern and direct by rules and grant of prospecting licences and mining leases in respect of minerals other than minor minerals and for purposes connected therewith in the case of section 13(1) and the grant of quarry leases, mining leases and other mineral concessions in respect of minor minerals and for purposes connected there with in the case of section 15(1) and to subject such grant to restrictions and to adapt them to the circumstances of the case and the surroundings with reference to such power is exercised. It is pertinent to bear in mind that the power to regulate conferred by sections 13(1) and 15(1) is not only with respect to the grant of licences and leases mentioned in those sub-sections but is also with respect to purposes connected there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch had until then been dealt with under the rule-making power of the Central Government in order to restrict the scope of subordinate legislation. To take into account legislative history and practice when considering the validity of a statutory provision or while interpreting a legislative entry is a well-established principle of construction of statutes : see, for instance, State of Bombay v. Narothamdas Jethabhai and Anr. [1951] S.C.R. 51 and State of Madras v. Gannon Dunkerley Co. (Madras) Ltd. [1959] S.C.R. 379. There is no substance in the contention that no guidelines are provided in the 1957 Act for the exercise of the rule-making power of the State Governments under section 15(1). As mentioned earlier, section 15(1) is in pari materia with section 13(1). Section 13, however, contains sub-section (2) which sets out the particular matters with respect to which the Central Government may make rules In particular, and without prejudice to the generality of the foregoing power , that is, the rule-making power conferred by sub-section (1). It is well settled that where a statute confers particular powers without prejudice to the generality of a general power already confer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... power conferred by sub-section (1) but are being listed to particularize them and to focus attention on them. m e particular matters in respect of which the Central Government can make rules under sub-section (2) of section 13 are, therefore, also matters with respect to which under sub-section(l) of section 15 the State Governments can make rules for regulating the grant of quarry leases, mining leases or other mineral concessions in respect of minor minerals and for purposes connected therewith . When section 14 directs that The provisions of sections 4 to 13 (inclusive) shall not apply to quarry leases, mining leases or other mineral concessions in respect of minor minerals , what is intended is that the matters contained in those sections, so far as they concern minor minerals, will not be controlled by the Central Government but by the concerned State Government by exercising its rule-making power as a delegate of the Central Government. Sections 4 to 12 form a group of sections under the heading General restrictions on undertaking prospecting and mining operations . The exclusion of the application of these sections to minor minerals means that these restrictions will not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , illustrative matters set out in sub-section (2) of section 13, and in the restrictions and other matters contained in sections 4 to 12. The next question to be considered is whether the rule making power of the State Governments under section 15(1) includes a power to charge dead rent and royalty. Before embarking upon a consideration of this question, it will be useful to know the meaning of the expression dead rent and royalty and their connotation. Wharton's Law Lexicon , Fourteenth Edition, at page 359, defines dead rent as: Dead Rent A rent payable on a mining lease in addition to a royalty, so called because it is payable whether the mine is being worked or not. The definition of dead rent given in. Black's Law Dictionary , Fifth Edition, at page 359, is as follows: Dead Rent. in English law, a rent payable on a mining Lease in addition to a royalty, so called because it is payable although the mine may not be worked. Jowitt's Dictionary of English Law , Second Edition, at page 555, defines dead rent as Dead Rent, a term sometimes used in mining leases in contradistinction to a royalty, to denote a fixed rent to be paid whether t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ragraph 224 as follows: 224. Rents and royalties. An agreement for a lease usually contains stipulations as to the dead rents and other rents and royalties to be reserved by, and the covenants and provisions to be inserted in, the lease..... The topics of dead rent and royalties are dealt with in Halsbury's Laws of England in the same volume under the sub-heading Consideration , the main heading being Property demised; Consideration . Paragraph 235 deals with dead rent and paragraph 236 with royalties . m e relevant passages are as follows : 235. Dead rent. It is usual in mining leases to reserve both a fixed annual rent (otherwise known as a 'dead rent', 'minimum rent' or 'certain rent') and royalties varying with the amount of minerals worked. The object of the fixed rent is to ensure that the lessee will work the mine; but it is sometimes ineffective for that purpose. Another function of the fixed rent is to ensure a definite minimum income to the lessor in respect of the demise. If a fixed rent is reserved, it is payable until the expiration of the term even though the mine is not worked, or is exhausted during the currency of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount is provided to be paid to him by the lessee. This is called dead rent . Dead rent is calculated on the basis of the area leased while royalty is calculated on the quantity of minerals extracted or removed. Thus, while dead rent is a fixed return to the lessor, royalty is a return which varies with the quantity of minerals extracted or removed. Since dead rent and royalty are both a return to the lessor in respect of the area leased, looked at from one point of view dead rent can be described at the minimum guaranteed amount of royalty payable to the lessor but calculated on the basis of the area leased and not on the quantity of minerals extracted or removed. In fact, clause (ix) of Rule 3 of the Rajasthan Minor Mineral Concession Rules, 1977, defines dead rent as meaning the minimum guaranteed amount of royalty per year payable as per rules or agreement under a mining lease . Stipulations providing for the lessee's liability to pay surface rent, dead rent and royalty to the lessor are the usual covenants to be found in a mining lease. The grant of a mining lease would thus provide for the consideration for such grant in the shape of surface rent, dead rent and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the powers conferred by section 5 of the 1948 Act prescribed the conditions which were to be included in every mining lessee. The said Rule 41 provided for payment of royalty on minerals at the rate specified in the First Schedule to the said Rules in force on the date of the grant of the lease as also to pay royalty at such revised rates as may be notified from time to time. It also provided for payment of surface rent and further provided for payment of dead rent with a proviso that the lessee was liable to pay dead rent or royalty, whichever was higher in amount, but not both. Rules made by the State Governments in respect of minor minerals also provided for payment of these charges. As seen earlier, Rule (7) of the Saurashtra Rules provided for payment of surface rent and dead rent. Similarly, Rule 18 of the Bombay Minor Mineral Extraction Rules, 1955, provided for the lessee of a quarry lease to pay royalty at the rates specified in Schedule I to the said Rules, such rates being liable to be revised once in every five years, as also surface rent and yearly dead rent and also provided that the lessee shall be liable to pay the dead rent or royalty in respect of each minor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning lease is to contain a provision requiring the lessee to pay surface rent and dead rent and a further provision that the lessee shall be liable to pay dead rent or royalty in respect of each mineral, whichever be higher in amount, but not both. It is pertinent to note that these provisions were included in the said Rules when they were first made and thus existed in the said Rules much prior to the insertion of section 9A in the 1957 Act by the Amendment Act of 1972, casting a liability upon the lessee to pay dead rent. The Gujarat High Court in Smt. Sonbal's Case held that the intention of Parliament in enacting section 15(1) was not to clothe the State Governments with power to impose any financial liability upon the lessee but only to give them the power to prescribe conditions for regulating the grant of leases other than conditions relating to financial liability and that the power to prescribe conditions relating to financial liability of a lessee were to be found only in sub-section (3) of section 15. In order to ascertain this intention attributed by it to Parliament, the Gujarat High Court relied upon the provisions of section 9A and sub- section (33 of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder rules made under sub- section (1) of section 15. What sub-section (3) does is to make such holder liable to pay royalty in respect of minor minerals removed or consumed not only by him but also by his agent, manager, employee, contractor or sub-lessee. It thus casts a vicarious liability upon such holder to pay royalty in respect of the acts of persons other than himself. The very fact that under sub-section (3) the liability of such holder is to pay royalty at the rate prescribed for the time being in the rules framed by the State Government in respect of minor minerals shows that the prescribing of the rate of royalty in respect of minor minerals is to be done under the rule-making power of the State Governments which is to be found in sub-section (1) of section 15. Yet another purpose of enacting sub-section (3) is to be found in the proviso to that sub-section which prohibits the State Government from enhancing the rate of royalty in respect of any minor mineral for more than once during any period of four years. If the reliance placed by the Gujarat and the Andhra Pradesh High Courts on sub-section (3) of section 15 in order to ascertain the intention of Parliament was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at High Court in Smt. Sonbai's Case and by the Andhra Pradesh High Court in M.V. Subba Rao's Case was wrong and requires to be overruled. The next contention was that though under section 15(1) the State Governments may have the power to make rules providing for payment of royalty and dead rent, sub-section (3) showed that such power did not extend to amending the rules so as to enhance the rate of dead rent. The submission in this behalf was that the power to enhance the rate of royalty by amending the rules was expressly provided for in sub-section (3) by the use of the words at the rate prescribed for the time being in the rules framed by the State Government in respect of minor minerals but there was no such provision in section 15 with respect to dead rent. We are unable to accept this submission. Rules under section 15(1), though made by the State Governments, are rules made under a Central Act and the provisions of the General Clauses Act, 1897, apply to such rules. Under section 21 of the General Clauses Act, where by any Central Act, a power to make rules is conferred, then that power includes a power, exercisable in the like manner and subject to the like san ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o reason why such increases should not be made in a mining or quarry lease or other mineral concession granted under a regulatory statute intended for the benefit of the public and even less reason why such a statute should not confer power to make rules providing for increases in the rate of dead rent during the subsistence of the lease. In any event, the power to make rules under section 15(1) is also for purposes connected with the grant of mining and quarry leases and other mineral concessions and the expression and for purposes connected therewith read with the word grant would include the power to enhance the rate of dead rent during the subsistence of the lease. In support of the above contention it was also submitted that in the absence of a provision like the one contained in section 15(3) the power to enhance the rate of dead rent cannot be so exercised as to affect subsisting leases and that unless this construction were placed upon sub-section (1), the power conferred by that sub-section would be bad in law as being an arbitrary power. It was submitted that a mining lease is the result of a contract entered into between two parties and dead rent is part of the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for the efficacious regulation of mines and quarries of minor minerals and the proper development of such minerals, a State Government as the delegate of the Union Government thinks fit to amend the rules so as to enhance the rate of dead rent, it cannot be said that it is prevented from doing so by the principles of the ordinary law of contracts. It may be that in certain cases by enhancing the rate of dead rent the holders of leases in respect of certain types of minor minerals may be adversely affected but private interest cannot be permitted to override public interest. Conservation of minerals and their proper exploitation result in securing the maximum benefit to the community and it is open to the State Governments to enhance the rate of dead rent so as to ensure the proper conservation and development of minor minerals even though it may affect a lessee's liability under a subsisting lease. Where a statute confers discretionary powers upon the executive or an administrative authority, the validity or constitutionality of such power cannot be judged on the assumption that the executive or such authority will act in an arbitrary manner in the exercise of the discreti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d depend upon the form in which the rule-making power is conferred. It is for the legislative body which confers the rule-making power to decide in what form such power should be conferred. In some Acts it is provided that the draft of the rules proposed to be made as also any proposed amendment thereto should be published in the Official Gazette so that members of the public may have an opportunity of making such representations or raising such objections as they think fit. Some other Acts provide for rules to be laid before Parliament or the Legislature for its approval and to be effective only after such approval is given or to continue in force with such modifications as Parliament or the Legislature may make, and if the approval is not given to cease to have any effect. It was, therefore, for Parliament to decide whether rules and notifications made by the State Governments under section 15(1) should be laid before Parliament or the Legislature of the State or not. It, however, thought it fit to do so with respect to minerals other than minor minerals since these minerals are of vital importance to the country's industry and economy, but did not think it fit to do so in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e proviso to section 15(3) was that the lessees of mining and quarry leases and other mineral concessions should have a sense of security that their financial liability will not be enhanced in rapid succession so as to cast an unbearable burden upon them and make it unprofitable for them to work the quarry or the mine. It was further submitted that though under the proviso to section 15(3), the rate of royalty in respect of a minor mineral cannot be enhanced more than once during any period of four years, there was no such restriction with respect to enhancing the rate of dead rent and the State Governments cannot nullify the prohibition contained in the proviso to section 15(3) by repeatedly and frequently enhancing the rate of dead rent and that the absence of such a restrictive provision with respect to dead rent shows that it was not the intention of Parliament to confer power upon the State Government to enhance the rate of dead rent so as to affect subsisting leases. Although at the first blush there seems to be a considerable force in this submission, on a closer scrutiny the true position would appear to be otherwise. As pointed out earlier, since dead rent is the minimu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re cannot be anything objectionable in the power of the State Governments to enhance dead rent. We accordingly hold that the State Governments cannot enhance the rate of dead rent more than once during a period of four years. As an extension of the above submission, it was urged that royalty and dead rent were one and the same and, therefore, either royalty or dead rent alone could be enhanced once during any period of four years but not both. According to this argument, if during any period of four years royalty is enhanced, dead rent cannot be enhanced during that period but can only be enhanced in the next period of four years. Although in one sense dead rent may partake of the nature of royalty, there is a substantial difference between both. The bases for calculating royalty and dead rent are different and they are dealt with in different provisions of the 1957 Act (namely, sections 9 and 9A) so far as minerals other than minor minerals are concerned and in the rules made by the State Governments under section 15(1) so far as minor minerals are concerned. It is, therefore, not possible to accept the above argument. According to us, during any one period of four years, dead ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich the minerals vest in Government. Schedule I to the Gujarat Rules specifies the rates of royalty on different minor minerals and Schedule II the rates of dead rent. By Notification dated August 25, 1969, a new chapter, namely, Chapter III-A, was inserted in the Gujarat Rules providing for grant of parwana in respect of lands in which minerals belong to Government. Clause (vi- A) which was inserted in Rule 2 by the same Notification defines Quarrying parwana as meaning a quarrying parwana granted under these rules to extract and remove any minor mineral from land not exceeding a specified area. Rule 21 deals with rates of royalty. As originally made it provided as follows : 21. Rates of royalty. - Royalty shall be leviable on minor minerals quarried from the leased area specified in column 1 of Schedule I at the rates respectively specified against them in column 2 of the said Schedule. By Notification dated September 22, 1966, the said rule was renumbered as sub-rule (1) and a new sub-rule was inserted in Rule 21 as sub-rule (2). Sub-rule (2) provided as follows : (2) The Government may, by notification in the Official Gazette, amend Schedule I so as to enh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to him surface rent at the rate prescribed by Government . By Notification dated July 6, 1974, the word Director (that is, the Director of Geology Mining, Gujarat State) was substituted by the words competent officer . Under Rule 11(5), a deed of lease is to be executed in Form D or in a form as near thereto as the circumstances of each case may require. Form D appended to the Gujarat Rules inter alia provides for payment by a lessee to the State Government of the several rents and royalties mentioned in Part V of the Schedule to the said Form. Part V of the said Schedule provides as follows : PART V Rents and Royalties Reserved by this lease 1. To pay dead rent or royalty whichever is greater.- The lessee/lessees shall not be liable to pay in respect of any yearly period, both the dead rent reserved by Clause 2 of this Part and also the sum of the royalties reserved by Clause 3 of this Part, but shall pay only whichever of the said sums is greater. 2. Rate and mode of payment of dead rent. - Subject to the provision of Clause 1 of this Part, as from the day of .........19............... during the subsistence of this lease the lessee/lessees shall pay to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 1974 Notification, Schedule I to the Gujarat Rules prescribing the rates of royalty was substituted and Schedule II which prescribing the rates of dead rent was amended. By the substituted Schedule I the rates of royalty on several minor minerals were enhanced while in respect of a few they remained the same. By the amendment of Schedule II the rates of dead rent were enhanced. By the 1975 Notification, the Government of Gujarat made the Gujarat Minor Mineral (Second Amendment) Rules, 1975, which came into force on November 1, 1975. By the 1975 Notification the rates of royalty specified in Schedule I were again altered so as to enhance the rates in respect of some minor minerals. The 1975 Notification also substituted Rule 21. The substituted Rule 21 is as follows : 21. Rate of Royalty. - The holder of a mining lease or any other mineral concession granted under these rules shall pay royalty in respect of minor minerals, specified in column 1 of Schedule I, removed or consumed by him or by his agent, manager, employee, contractor or sub-lessee from the leased area at the rates respectively specified against them in column 2 of the said schedule. As mentioned earlie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the 1974 Notification, the Explanation to Rule 21 must be read as For the purpose of this rule Schedule I means Schedule I as substituted by the Gujarat Minor Mineral (Fourth Amendment) Rules, 1974 and references to Schedule I in Rule 21 must be construed as references to Schedule I as so substituted and not as references to Schedule I as substituted by the Gujarat Minor Minerals (Third Amendment) Rules, 1966. The emphasis placed by the Gujarat High Court upon the substitution of Rule 21 by the 1975 Notification in order to arrive at the conclusion that the 1974 Notification was invalid and inoperative and the 1975 Notification was valid was entirely misconceived. Rule 21 was not substituted for the purpose of conferring upon the State Government the power to enhance the rates of royalty specified in Schedule I. It was substituted for a wholly different purpose, namely, to bring the said Rule in conformity with sub- section (3) which was inserted with retrospective effect in section 15 by the Amendment Act of 1972. Its object was to make the holder of a mining lease or any other mineral concession liable for payment of royalty not only in respect of minor minerals removed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to section 15(3). The judgment under appeal of the Gujarat High Court to the extent that it holds to the contrary is, therefore, erroneous and requires to be reversed and set aside. Yet another contention which was raised before us was that under the definition of minor minerals given in clause (e) of section 3 of the 1957 Act, building stones are minor minerals and, therefore, under section 15(1) the State Government can levy royalty only on building stones as such and cannot classify them into different varieties for the purpose of recovering royalty upon them at varying rates. This argument was also advanced before the Gujarat High Court and was rejected by it. We fail to understand the point which is sought to be made. As building stones have been defined as being minor minerals, the rule-making power with respect thereto vests in the State Governments under section 15(1). The 1957 Act does not enjoin State Governments to charge a uniform rate of royalty in respect of all varieties of building stones nor does it prohibit them from classifying building stones into different varieties and charging royalty thereon at separate rates. This part of the judgment under appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charging dead rent as also can amend the rules to enhance the rates of dead rent so as to effect even subsisting leases and have pointed out that the judgment of the Gujarat High Court in Smt. Sonbai's case is not correct. The reasons given by the Gujarat High Court for coming to the conclusion that the 1979 Notification violated Article 19(1)(g) were very much the same as prompted it to hold that the State Government could not enhance the rates of dead rent during the subsistence of a lease. Those reasons are erroneous. We do not find that the enhancement in the rates of dead rent made by the 1979 Notification amount to any unreasonable restrictions on the right of the holders of quarry leases to carry on their trade or business. The rates of dead rent specified in the 1979 Notification cannot be looked at in isolation but must be read in conjunction with the drastic reduction made in the rates of royalty and so read there is nothing unreasonable in them. We, therefore, hold that the 1979 Notification was valid in law and constitutional. The Gujarat High Court in Smt. Sonbai's case also held that the 1976 Notification was ultra vires section 15 and Article 19(1)(g) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I as substituted by the 1975 Notification having been substituted by a new Schedule I by the 1979 Notification, such substitutions amounted to a repeal of Schedule I as notified by the 1975 Notification and a re-enactment of Schedule I by the 1979 Notification. As we have held that the 1979 Notification is valid and constitutional, these questions have become academic and do not require to be decided, but the second challenge to the validity of the said Circular falls to be decided by us with respect to other Notifications. As seen above, the 1974 Notification substituted Schedule I and amended Schedule II. The 1975 Notification which again substituted Schedule I has been held by us to be invalid to the extent that it enhanced the rates of royalty in respect of some of the minor minerals. The 1976 Notification which enhanced the rates of dead rent specified in Schedule II has also been held by us to be invalid. The question is whether by reason of these Notifications being invalid, the rates of royalty and dead rent specified in the 1974 Notification revived. A number of authorities were cited before us in support of the contention that when an Act or a statutory provision is stru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were a part and parcel of a single indivisible process and not bits of a disjointed operation. The position before us is the same. It was not the intention of the Government of Gujarat that even if the new schedule of royalty substituted by the 1975 Notification was void and inoperative, Schedule I as substituted by the 1974 Notification would none the less stand repealed. It was equally not the intention of the Government of Gujarat that even if the rates of dead rent substituted in Schedule II by the 1976 Notification were void and inoperative, the rates of dead rent as substituted by the 1974 Notification would none the less stand repealed. If the contention in this behalf were correct, it would lead to the startling result that on and from the date of the coming into force of the 1975 Notification no royalty was payable in respect of minor minerals and that on and from the date of the coming into force of the 1976 Notification no dead rent was payable in respect of any leased area. The rates in Schedule I and Schedule II were intended to be substituted by new rates. The intention was not to repeal them in any event. If the substitutions effected by the 1975 and 1976 Notifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are unreasonable, but when we take into account the fact that dead rent is not payable after the coming into force of the 1981 Notification, the position is completely altered and it cannot be said that enhancement in the rates of royalty is unreasonable. The fallacy in the above contention lies in comparing the rates of royalty specified in the 1981 Notification with the uniform rate of ten paise per metric tonne specified in the 1979 Notification. If we compare the rates of royalty specified in the 1981 Notification with those specified in the 1974 Notification and we bear in mind that under the 1974 Notification dead rent was also payable under the 1974 Notification, we find that in some cases the rates of royalty are reduced, for example, the rate of royalty in respect of dressed and carved marble and slabs of marble was ₹ 55 per metric tonne in the 1974 Notification while under the 1981 Notification blocks and slabs of marble above 15 cms. in size is only ₹ 35 per metric tonne. Though by the 1981 Notification the rates of royalty in respect of certain minor minerals have been enhanced by no stretch of imagination can such enhancement be said to be excessive or unre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any minor mineral more than once during any period of four years. (11) A State Government is also not entitled to enhance the rate of dead rent more than once during any period of four years. (12) During any period of four years the State Government can enhance both dead rent and royalty, but only once. (13) The period of four years for the purpose of enhancing the rates of dead rent and royalty is to be reckoned from the date of coming into force of the rules made by the particular State Government. (14) Building stones being minor minerals, the State Government has the power to classify them into different varieties and to charge a different rate of royalty in respect of each such variety. (15) Notification No. GU-74/121(A)/MCR-2173(49)7268/CHH dated November 29, 1974, whereby the Government of Gujarat made the Gujarat Minor Mineral (Fourth Amendment) Rules, 1974, was validly issued and became operative with effect from December 1, 1974. (16) Notification No. GU-75/117-MCR-2173(49)/6431/CHH dated October 29, 1975, whereby the Government of Gujarat made the Gujarat Minor Mineral (Second Amendment) Rules, 1975, to the extent that it enhanced the rates of royal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 61 of 1978 - Ambalal Manibhai Patel v. The State of Gujarat Anr. and connected writ petitions. These appeals are accordingly partly allowed and the judgment appealed against is reversed to the extent that it holds that the enhancement in the rates of royalty made by the Notification dated November 29, 1974, was invalid and inoperative and the enhancement in the rates of royalty made by the Notification dated October 29, 1975, was valid and operative. The said judgment is confirmed in so far as it holds that the State Government has the power to classify building stones into different varieties and levy a different rate of royalty in respect of each such variety. It is also confirmed in so far as it holds that the State Government has the power to enhance the rates of royalty. The orders dismissing the writ petitions under Article 226 of the Constitution of India filed by the Appellants in these Appeals in the Gujarat High Court are set aside and the said writ petitions are allowed in part and it is declared that the enhancement in the rates of royalty made by the Notification dated November 29, 1974, was valid and became operative with effect from December 1, 1974, and that the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from acting upon the directions contained in the Circular No. M.C.R. 2180(166)CHH dated February 12, 1981, and direct the State of Gujarat to collect royalty and dead rent in accordance with the Notification dated March 26, 1979, for the period commencing on April 1, 1979, and ending on June 19, 1981. Writ Petition Nos. 7103 and 7104 to 7128 of 1981 and 4208 to 4217 of 1983 challenge the constitutionality of section 15 of the Mines and Minerals (Regulation and Development) Act, 1957, and the validity of Notification No. GU-81/75/MCR 2181/(168)-4536-CHH dated June 18, 1981, whereby the Government of Gujarat made the Gujarat Minor Mineral (Amendment) Rules, 1981. All these writ petitions are accordingly dismissed. Writ Petitions Nos. 6419 to 6422 of 1982 and 4912 to 4924 and 5167 to 5182 of 1983 challenge the validity of the directions contained in the Circular dated February 12, 1981 as also the Notification dated June 18, 1981. These Writ Petitions are allowed so far as the Circular dated February 12, 1981 is concerned, and accordingly we restrain the State of Gujarat and its officers from acting upon the directions contained in the said Circular and direct the State of Gujar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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