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TMI Blog1994 (2) TMI 302X X X X Extracts X X X X X X X X Extracts X X X X ..... said declaration. 2. To sustain the challenge to the said Rule 39, the writ petitioner Shri Naidu, urged two main grounds, namely, (a) The State Government had no power to frame a rule deviating from the Mineral Concession Rules already made in exercise of the powers conferred under Section 15(1) of the Mines and Minerals (Regulation and Development) Act, 1957 (hereinafter referred to as MMRD Act) and (b) Rule 39 had conferred arbitrary, uncanalised and unguided power on the executive thereby offending Article 14 of the Constitution of India. The expression public purpose and interest of mineral development as referred to in the said Rule 39 is vague and does not constitute sufficient guidelines. The said writ petition was contested by the State of Madras and also by other respondents who were impleaded in the writ proceedings, namely, the Tamil Nadu Granites Quarry Owners and Exporters Association, Shanthi Granites and the Premium Granites. 3. The Division Bench of the Madras High Court by the impugned judgment did not accept the first contention of the writ petitioner but upheld the second contention and declared that Rule 39 of the Mineral Concession Rules was unconstitu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nged in a writ proceeding before the Madras High Court. The validity of Rule 8(C) was ultimately upheld by this Court on February 5, 1981 in the case of Hind Stone . Some of the lessees whose leases had expired by efflux of time, made applications for renewal of their leases but no renewal was granted. In 1984 Writ Petition No. 12267 of 1984 was filed by one of such applicants for renewal before this Court for a mandamus to direct State Government to grant renewal of lease for a further period of ten years and similar writ petitions were also moved before this Court for the aforesaid relief by some of the lessees whose leases had also expired. In such writ petitions this Court has passed ad interim order of status quo on May 3, 1984 as regards possession. Applications were also filed before this Court for vacating status quo order but such applications were dismissed by this Court on September 28, 1984 and the writ petitioners who were lessees but whose leases had expired, continued to remain in possession of land in terms of the interim order of this Court without, however any right to quarry operations. On December 9, 1988, by GO No. 1273 Rule 8(C) was amended thereby providing f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustries was traceable to Rule 8(A) as amended by GO No. 214 dated June 10, 1992 and such grant of lease could be sustained without reference to Rule 39 since struck down by the Madras High Court but the High Court allowed the said writ petitions and set aside GO Nos. 125 and 197 by which the leases were granted in favour of some persons. It has been held by the High Court that the grant of leases cannot be sustained under Rule 8(A) of the Mineral Concession Rules and such grant of leases can be referable only to Rule 39 and since Rule 39 has been struck down, the grant made under the said Rule 39 is also liable to be set aside. Such grantees, therefore, have also moved special leave petitions before this Court inter alia challenging the decision of the Madras High Court striking down Rule 39. 9. To appreciate the rival contentions raised by the parties either in support or against the validity of Rule 39 of the Mineral Concession Rules, the provisions of Rule 39 are set out as hereunder: In exercise of the powers conferred by subsections (1) and (I-A) of Section 15 of the Mines and Minerals (Regulation and Development) Act, 1957 (Central Act 67 of 1957) the Governor of Tamil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral development . Scientific exploitation of the minerals without waste is undoubtedly an exercise for mineral development envisaged by the Act and the rules. (3) Since reasons are to be recorded in writing while exercising the power under Rule 39, it can always be ascertained from the order that may be passed under the said provisions of Rule 39 as to whether the grant is one for furthering mineral development or not. (4) The word public interest is a word of definite concept which has been referred to in the Constitution and in many other Acts. The import of the expression public interest has been considered and noted in the decisions of this Court. Hence, the said expression does no longer suffer from any vagueness or indefiniteness. (5) Power under Rule 39, being controlled by such consideration in the interest of mineral development and in public interest , cannot be exercised arbitrarily and capriciously but such exercise has to be made with definite objective purpose. There is, therefore, no occasion to strike down Rule 39 on the score of being potentially arbitrary and capricious and open to unguided and uncanalised exercise of power. If in any particular c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owever giving any right to quarry. In 1988, Rule 8(C) was amended whereby provision was made for grant of leases for quarrying black granite to private persons having industries or having industrial programmes. Such amendment of Rule 8(C) virtually restored the position as was prevailing in 1972. The persons who had set up industries or had industrial programmes for quarrying black granite scientifically as desired by the Government, made applications for grant of renewal of leases. Such applications were scrutinised by the department concerned and recommendations for grant of renewal of leases were made by the department. At that stage, in 1989 the Mineral Concession Rules were further amended inter alia providing that quarry leases were to be granted to industries only under tender system. Tenders were floated and some of the aspirants for getting leases participated in such tenders and those who had participated and were successful were given the letters of commitment assuring grant of lease to them if they would set up industries. In 1992, the Rules were amended again by GOMs No. 214 drastically. As per the amended rules, grant of quarry leases to quarry black granite were to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e object of the MMRD Act is for regulation of mineral development and the Rules framed under the MMRD Act both by the Central and State Governments clearly furnish the scope and support of the word mineral development . It has been strongly contended that scientific exploitation of minerals without waste is undoubtedly a part of mineral development as envisaged by the MMRD Act and the rules framed thereunder. It has been urged by the learned counsel that the word public interest having been referred to in the Constitution and in many enactments is a word of definite concept. 19. The validity of Service Rules including Fundamental Rule 56(j) empowering the Government to terminate the service by way of premature retirement had been challenged before this Court as ultra vires Articles 14 and 16 of the Constitution but this Court in a series of decisions has held that if the power to retire prematurely in public service is exercised in public interest the provision empowering such premature retirement does not become invalid on the score of offending Articles 14 and 16 of the Constitution. The Constitution Bench of this Court in T.G. Shivacharana Singh v. State of Mysore AIR 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d at page 866 of the Report. It has been held that while considering the power given to the Government to remove a member under Section 14(e) of the Punjab Municipalities Act, the expression public interest would necessarily depend upon the time, place and circumstances with reference to which the consideration was made. It may be noted here that Section 14(e) was struck down not on the score that the expression public interest is vague and it introduces unguided, and unbridled power but the same was struck down in view of the fact that Section 14(e) providing for removal without a hearing circumvents Section 16(1) which contemplates a hearing to be given to the members to be affected. 22. The learned counsel have also referred to the decision of this Court made in the case of Harakchand Ratanchand Bahthia v. Union of India1969) 2 SCC 166: (1970) 1 SCR 479. In considering the expression so far as it appears to be necessary or expedient for carrying out the provisions of the Act (Gold Control Act), the Constitution Bench in the said decision held that the said phrase was not subjective in the context of the scheme and object of the legislation. The opinion of the administ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nchment on policy considerations, it is open to the Court to examine whether policy is in consonance with the object and purport of the Act. 24. The learned counsel have also contended that Entry 54 List I of Seventh Schedule to the Constitution of India enables the Central Government to regulate mines and mineral development in public interest by making a declaration of such intention and Parliament has in fact made such declaration by Section 2 of the MMRD Act. By the said MMRD Act, Parliament has left the power of regulating quarry leases in respect of minor minerals to the State Governments under Section 15 of the MMRD Act. The State Government has the authority to deal with the minor minerals under which the Mineral Concession Rules have been framed by the Government of Tamil Nadu. It is by the said rules that the State Government has been regulating grant of leases from time to time. In 1992 the Government thought it fit to prohibit grant of quarry leases to private persons except in patta lands and providing for grant of quarry leases to revenue lands only to government companies in terms of Rule 8(C). On a reconsideration and as a part of policy decision, the Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st of mineral development and in public interest, grant of lease can be made notwithstanding other provisions in the Mineral Concession Rules. In the aforesaid facts, it cannot be contended that Rule 39 was introduced without any justification whatsoever or the same suffers from any excessive delegation or vice of uncanalised and unbridled power or the same was introduced to give favours to a chosen few. 26. The High Court in striking down Rule 39 has held that Rule 39 provides for an arbitrary power and the guidelines of public interest and in the interest of mineral development do not provide any objective standard. For such finding, the High Court has relied on the decision of this Court made in Dwarka Prasad Laxmi Narain v. State of U. P. 1954SCR803:AIR 1954SC224 ; R. M. Seshadri v. District Magistrate, Tanjore AIR 1954 SC 747: (1955) 1 SCR 686; Harakchand Ratanchand Banthia v. Union of India7 and Jalan Trading Co. (P) Ltd. v. Mill Mazdoor Union8. It has been contended by the learned counsel that all the said decisions do not support the proposition that Rule 39 is ultra vires Article 14 of the Constitution. The decisions relied on by the High Court primarily relate to laws ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of prohibited categories, the law carves out an exception or relaxation, the rule to be applicable should be appreciated on a different perception. There the question of unbridled power being allowed to be exercised does not arise. The question is of taking out certain exceptions from the prohibited area and keeping certain categories outside the prohibited area for being allowed to exercise freedom of trade or business from the restrictions imposed. 30. Elaborating on the contention that the power of relaxation as contained in Rule 39 is similar in various statutes it has been urged that the power granted under Section 31 of the MMRD Act confers identical power on the Central Government as Rule 39 confers the power on the State Government. Section 31 of the MMRD Act may be set out as hereunder: 31. Relaxation of rules in special cases.- The Central Government may, if it is of opinion that in the interests of mineral development it is necessary so to do, by order in writing and for reasons to be recorded, authorise in any case the grant, renewal or transfer of any prospecting licence or mining lease, or the working of any mine for the purpose of searching for or winning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther prospectively or retrospectively) make an exemption of reduction in rate, in respect of any tax payable under the Act. 34. It is contended that Section 14 is quite similar to Rule 39 of the Mineral Concession Rules. In this connection, reference has also been made to Rule 66 of the Karnataka Minor Mineral Concession Rules, 1969, containing provisions for relaxation of rules in special cases. The said rule is set out as hereunder : 66. Relaxation of rules in special cases.- In cases where the Government is of the opinion that public interest so requires, it may authorise the grant of a quarrying lease or a quarrying permit on such terms and conditions other than those prescribed in the rules, as the Government may by order specify: Provided that notwithstanding anything contained in these rules such safeguards, territorial, financial or otherwise may be provided to the leases with a view to safeguarding the interests of any industry or trade in order to avoid unhealthy competition among the lessees and to prevent any fall in the trade and to see that minor mineral is exploited in a scientific and systematic manner. Basing the arguments on the aforesaid contentions t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the vagaries of the individual whims and fancies. It is trite to say that individuals are not and do not become wise because they occupy high seats of power, and good. sense, circumspection and fairness does not go with the posts, however high they may be. There is only a complacent presumption that those who occupy high posts have a high sense of responsibility. The presumption is neither legal nor rational. History does not support it and reality does not warrant it. In particular, in a society, pledged to uphold the rule of law, it would be both unwise and impolitic to leave any aspect of its life to be governed by discretion when it can conveniently and easily be covered by the rule of law. It has also been contended that it is also not factually correct that all the ten grantees (13 leases) are having their own industries or factories and they are not exporting any raw granite or raw block granite to foreign countries but they are processing and polishing after cutting them and sizing them and it was only the said polished goods that are being exported by them. It has been contended that only M/s Enterprising Enterprises and Gem Granite have their own factories at Madr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t a quarry lease contrary to the State policy. Mr Sibal, the learned counsel in this connection has referred to the decision in Gardner v. Jay(1885) 29 Ch D 50, 58: 52 LT 395. Lord Justice Bowen in dealing with the judicial discretion has held that : If a court is invested by Act of Parliament with a discretion, that discretion, like other judicial discretion, must be exercised according to common sense. The learned counsel has also contended that it is a settled principle of interpretation of statute that a court should not interpret a statute in such a fashion as to render other provisions redundant. There should always be an attempt to read different sections of a statute harmoniously so that one provision does not invalidate the other. It has been contended that the statutory rule should be considered as a part of an integrated scheme and no one provision should be so interpreted as to render the scheme as envisaged in other provisions inoperative. It has been submitted that Rule 8(C) represents the part of a scheme in respect of which the State Government does not allow exploitation of granite except by itself or through its Corporations. It must therefore be held that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his Court held that such clauses are constitutionally impermissible. 42. It has been very strongly contended that in case this Court finds Rule 39 to be vague and ambiguous then this Court may, in the light of scheme of the entire rules, the policy of the State Government as expressed in the said rules, permit Rule 39 to be read down in such a manner so as to give effect to the policy of the Government and also to the scheme of the MMRD Act. It has been submitted that this Court has repeatedly followed doctrine of reading down in State of Karnataka v. Ranganatha Reddyl8, R.L. Arora v. State of U. P. (1964) 6 SCR 784: AIR 1964 SC 1230, following Kedar Nath Singh v. State of Bihar, 1962 Supp 2 SCR 769: AIR 1962 SC 955 , Jagdish Pandey v. Chancellor, University of Bihar1968) 1 SCR 23 1: AIR 1968 SC 353, Sunil Batra v. Delhi Administration(1 978) 4 SCC 494: 1979 SCC (Cri) 155. 43. It has been further submitted that as Rule 39 cannot be given a wide interpretation thereby giving extraordinary power to relax other provisions of the rules and consequently rendering the scheme of the entire rules ineffective. The only interpretation by reading down Rule 39 which can be given is that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harmapuri District only on the ground that there was a huge loss of foreign exchange. The learned counsel have contended that such an exercise in completely overlooking the other provisions will be wholly capricious and therefore impermissible under Article 14 of the Constitution and consideration of loss of foreign exchange is alien to the relevant considerations permissible under the Mineral Concession Rules. 45. It has been contended that in case the Government wants to grant leases in Dharmapuri District to persons who were not in possession of letters of commitment as on June 10, 1992, the only course open to the State Government is to change its policy of reservation as well as its policy in relation to letters of commitment and allow all individuals who are interested in a quarrying licence consistent with the concept of equal opportunity. 46. It has been further contended that the State Government is under a constitutional duty to act fairly and justly and give equal opportunity to every individual who seeks largess from the Government. The grant of licence to a few people and that also on grounds of loss of foreign exchange is totally obnoxious to the theory of just ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contention of the appellants that the guidelines need not be expressly found in the impugned provisions but such guidelines can be gathered from the setting of the Act and the rules framed thereunder. Such contention gets support from the decisions of this Court in P.J. Irani5, S. Kandaswamy Chettiar 6, Jalan Trading Co. 9, Workmen of Meenakshi Mills Ltd.10 49. The power of relaxation under Rule 39 of Mineral Concession Rules is to be exercised for mineral development and in public interest after recording reasons for such exercise of power. In our view, it has been rightly contended by the learned counsel in support of the validity of Rule 39, that the exercise of power under the said Rule 39 cannot be made arbitrarily, capriciously and on subjective satisfaction of the authority concerned but the same is to be exercised within the parameters of mineral development and in public interest which as aforesaid, are not vague and indefinite concepts. Such exercise of power must satisfy the reasonableness of State action before a court of law if any challenge of improper action in exercise of the said power under Rule 39 in a given case is made. It has been held by the Consti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onious construction and the principle of reading down a statutory provision, we propose to examine the contentions made in that regard. It has been contended that all the provisions in the Mineral Concession Rules must be understood as an integrated scheme and no particular provision should be permitted to govern the field in isolation particularly when it runs counter to the scheme envisaged by the other provisions of the Mineral Concession Rules. It has been contended that since under the other provisions of the Mineral Concession Rules, exploitation of black granite in Dharmapuri District is restricted to a particular class of operators as a policy decision of the State Government, so long such policy decision remains in force no relaxation of the same is permissible in the purported exercise of power under Rule 39. Accordingly, Rule 39 may be held valid only if the same is interpreted as a provision having a limited application and being wholly confined in varying the terms and conditions of leases in appropriate cases. 53. Although, at the first glance, such argument appears to be reasonable but on closer scrutiny the same does not appear to be sustainable. The Mineral Conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplication of Rule 8(C) should be understood and held as subject to other provisions in the Mineral Concession Rules. 55. In various statutes, the provision of relaxation or exemption finds place and it has been indicated that such provisions of relaxation and exemption have been noticed and upheld by this Court in some of the statutes. In the MMRD Act itself, there is such provision for relaxation, being Section 3 1. Such provision of relaxation in Karnataka Minor Mineral Concession Rules, 1969 is contained in Rule 66. It has been rightly contended that where in respect of prohibited categories, the law carves out restriction or relaxation, the purpose is to take out certain exceptions from the prohibited area and keeping certain categories outside the purview of restrictions imposed under other provisions in the statute. In such circumstances, it will not be appropriate to hold that the exception militates with other provisions and hence should not be permitted. In our view, in interpreting the validity of a provision containing relaxation or exemption of another provision of a statute, the purpose of such relaxation and the scope and the effect of the same in the context of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd consequential change in rules and who can effectively quarry such granite with advanced technological set-up, in view of change of the policy and consequential incorporation of different provisions for grant of quarry lease, has suffered unmerited hardship by becoming ineligible for grant of a quarry lease. If in mitigating such unmerited hardship and in the greater interest for mineral development in the State and for better revenue earning from such developmental operation, the question of granting lease to such persons requires to be favourably considered in an objective manner with the aid of a general provision for relaxation or exemption in an appropriate case, without changing the general policy as a whole as contained in other provisions, it cannot be held that such provision is per se obnoxious or violates the principle of just and fair State action affording equal opportunity to all. It should be borne in mind that Article 14 has an inbuilt flexibility and it permits classification amongst persons if such classification has an objective basis consistent with the object and purpose for which the reasonable classification is intended. 58. In Ramana Dayaram Shetty v. I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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