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TMI Blog1972 (1) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... them for quarrying limestone. The contention of the petitioners is that the limestone quarried by each one of them is of inferior grade with less than 45% calcium oxide. Section 9 of the Act lays down that the holder of a mining lease shall pay royalty on the mineral in accordance with the rates for the time being specified in the Second Schedule in respect of that mineral. Sub-section (3) of this section empowers the Central Government to amend the Second Schedule by issuing a notification so as to enhance or reduce the rate at which royalty shall be payable in respect of any mineral with effect from such date as may be specified in the notification, but a rider has been put by the statute on this power of the Central Government by adding a proviso thereto which lays down that the Central Government shall not (a) fix the rate of royalty in respect of any mineral so as to exceed twenty per cent of the sale price of the mineral at the pit's head, or (b) enhance the rate of royalty in respect of any mineral more than once during any period of four years. 3. When the said Act came into force from 1st of June, 1958, the rate of royalty specified for limestone in the Second Sched ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otification issued by the Central Government on 29th of January, 1970, be declared illegal and the notices issued by the Government in pursuance of the said notification demanding royalty from the petitioners at the enhanced rate be quashed; and the respondents be directed not to realise royalty from the petitioners at the rate of ₹ 1.25 per tonne. 8. The Union of India has not filed any reply to these writ petitions. 9. The State Government along with its officers have, however, joined issue with the petitioners and in their reply it has been averred that the petitioners have been paying royalty at the rate of Re. 0.75 per tonne since 10th of November, 1962, as the limestone was not beneficiated by froth floatation method and hence they were not entitled to any rebate of 38 paise per tonne according to the rates prescribed in the Second Schedule. Therefore, it cannot be said that the effect of the impugned notification is to enhance the rate of royalty on inferior grade limestone within a period of four years. According to the reply of the respondents, the petitioners have been made to pay the enhanced rate of royalty after eight years as they have been regularly payin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y in respect of any mineral removed by him from the leased area after such commencement, at the rate for the time being specified in the Second Schedule in respect of that mineral. (2) The holder of a mining lease grant ed on or after the commencement of this Act shall pay royalty in respect of any mineral removed by him from the leased area at the rate for the time being specified in the Second Schedule in respect of that mineral. (3) The Central Government may, by notification in the Official Gazette, amend the Second Schedule so as to enhance or reduce the rate at which royalty shall be payable in respect of any mineral with effect from such date as may be specified in the notification: Provided that the Central Government shall not- (a) fix the rate of royalty in respect of any mineral so as to exceed twenty per cent of the sale price of the mineral at the pit's head, or (b) enhance the rate of royalty in respect of any mineral more than once during any period of four years. 12. Sub-section (3) of this section empowers the Central Government to amend the Second Schedule so as to enhance or reduce the rate of royalty in respect of any mineral by issuin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for the first time in the year 1968 did not increase the rate of royalty on the limestone extracted by the petitioner companies though the effect of that amendment was that limestone of superior category having content of 45% or more than 45% CaO had to pay royalty at the enhanced rate of ₹ 1.25 per tonne. Under these circumstances, the contention of the learned counsel for the respondents is that the rate of royalty by abolishing the categories of inferior grade of limestone is increased after the lapse of a period of eight years and, therefore, it cannot be said that the impugned notification in any manner violates the provisions of Clause (b) of the proviso to Sub-section (3) of Section 9 of the Act. 15. From the above facts it is clear that the Central Government for the first time divided limestone into two categories in 1968 and different rates of royalty were prescribed for these two categories. Prior to this the system of charging royalty on limestone was different. Though there were no distinct categories yet rebate was allowed on that limestone which was beneficiated by froth floatation method. The question of getting any advantage of this rebate system, howeve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot be argued that the rate of royalty was not increased on limestone because of the 1968 notification. In such circumstances, this argument is not available to Mr. Raj Narain that the Central Government did not enhance the royalty at all on limestone by issuing a notification on 29th June, 1968. 18. The proviso to Sub-section (3) of Section 9 of the Act puts a rider on the power of the Central Government to enhance the rate of royalty in respect of any mineral in two ways, (1) that the Central Government cannot fix the rate of royalty in respect of a mineral so as to exceed twenty per cent of the sale price at the pit's head, and (2) that it cannot enhance the rate of royalty in respect of any mineral more than once during any period of four years. The words used by the Legislature while putting this rider on the power of the Central Government are in respect of any mineral . As observed above, the effect of the notification issued by the Central Government on 29th of June, 1968, is to enhance the rate of royalty in respect of superior grade of limestone which undoubtedly falls within the term mineral as used n the Act. The power vested in the Central Government by virt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Delhi judgment on facts and I agree with the distinction pointed out by Mr. Raj Narain but with all that distinguishing feature, the learned Judges have arrived at the conclusion that the impugned notification is violative of the proviso to Section 9(3) of the Act. 20. Mr. Raj Narain's next contention is that the Central Government can within the four corners of the proviso enhance the rate of royalty at least once within a period of four years from 1968 in respect of any mineral and if the Central Government has issued the impugned notification after two years of its previous notification of 1968, it cannot be said to be violative of Clause (b) of the proviso to Section 9(3) of the Act. This very argument was raised before the Delhi High Court also but that contention was repelled by the learned Judges by observing as follows: We regret, we cannot accept this argument because on a plain construction of the proviso to Section 9(3) the enhancement in the rate of royalty can only be made once during any period of four years and since the rate of royalty has been enhanced by the notification dated 29th June, 1968 the Government could not further enhance the rate before t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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