SAURASHTRA CEMENT AND CHEMICAL INDUSTRIES LIMITED Vs. UNION OF INDIA
LAWS(GJH)-1979-1-26
HIGH COURT OF GUJARAT
Decided on January 19,1979

SAURASHTRA CEMENT AND CHEMICAL INDUSTRIES LIMITED Appellant
VERSUS
UNION OF INDIA Respondents

JUDGEMENT

N.H.BHATT, S.H.SHETH - (1.) The petitioner is a company engaged in the business of manufacturing cement. The Mines and Minerals (Regulation and Development) Act 1957 came into force on 1st June 1958. It provides for the regulation of mines and the development of minerals in the country. Sec. 9 provides for charging royalty when a mining lease is granted. The petitioner is a holder of a mining lease and is required to pay royalty. Entry 8 in THE SECOND SCHEDULE to the Act prescribes the rate of royalty in case of Limestone. Originally it was five per cent of the sale price at the pits head subject to a minimum of thirty seven Paise per tonne. Under sub-sec (3) of sec. 9 the Central Government has the power to enhance or reduce the rate of royalty in respect-of minerals specified tn the second Schedule. On 31st October 1962 the Central Government published a notification udder sec. 9 (3) of the Act whereby a new rate of royalty was substituted for the original one specified in the second Schedule in case of limestone. That notification came into force on 10th November 1962. The new rate was Re. 00.75 p. per tonne but subject to a rebate of Re. 00.38 P. per tonne to be given on limestone beneficiated by froth floatation method. On 29th June 1968 another notification was issued. By that notification a new rate was substituted for one which was made effective under the notification of 1962. The 1968 notification classified limestone into two categories. The first category consisted of superior grade with 45% or more of CaO. Royalty of one rupee and twenty five paise per tonne was prescribed for this grade. The second category of limestone was inferior grade with less than 45% of CaO. Seventy-five paise per tonne was the royalty prescribed for this grade. On 29th January 1970 the third notification was issued which became effective on 7th February 1970 By that notification the categorization of limestone was done away with and royalty at the flat rate of Rs. 1. 25 p. per tonne was levied. It is these notification against which this petition is principally directed.
(2.) Mr. Patel who appears on behalf of the petitioner has raised the following five contentions for our consideration: I. Thirty-Ninth constitutional amendment by virtue of which the Mines and Minerals (Regulation and Development) Act 1957 was inserted in the Ninth Schedule is violative of the rule of law laid down by the Supreme Court in Kesavananda Bharatis case (AIR 1973 S.C. 1461). II. The notification issued in 1970 was ineffective and void because it was published within four years from the earlier notification issued in 1968. III. The notifications of 1962 1968 and 1970 had been issued without authority and therefore void because sub-sec. (3) of sec. 9 of the Act does not empower the Central Government: (a) to revise the rates of royalty before a period of four years from the last revision; (b) to impose more than 20% of the sale price at the pits head as royalty; (c) to change the method of fixing the royalty by prescribing a fixed royalty; (d) to classify and split the mineral for the purpose of charging different rates of royalty; and (e) to give rebate. IV. (a). No express power has been conferred upon the Central Government by the Act either: (i) to change the method of fixing royalty; (ii) to give rebate and; (iii) to split the minerals because these matters pertain to the field of legislative policy. (b) If such power is implied (i) no objective standards or norms have been provided in the Act and the-matter is left to the arbitrary will of the Government; (ii) the power has been unreasonably exercised; and (iii) the rates fixed on the basis of gradation are discriminatory. Sec. 9 of the Act is unconstitutional for want of legislative competence.
(3.) Turning to the first contention which Mr. Patel has raised before us it is difficult to appreciate the contention which he faintly raised for being rejected. By Thirty-Ninth constitutional amendment the Mines and Minerals Regulation and Development Act 1957 has been inserted in the Ninth Schedule It is now at Entry No. 90. Acts specified in the Ninth Schedule are protected against infringement or abridgement of fundamental rights conferred by any of the provisions in Part III of the Constitution. Mr. Patel faintly and without substance tried to argue that Thirty-Ninth Constitutional amendment inasmuch as it pertains to the insertion of the Mines and Minerals (Regulation and Development) Act 1957 violates equality clause incorporated in Art. 14 of the Constitution. He did not make good that contention of his raising an argument in support thereof. Even otherwise it is difficult to think how a constitutional amendment by which protection under Article 31B is given to the said Act violates the concept of basic structure enunciated in Kasavananda Bharatis case AIR 1973 S.C. 1461 by the Supreme Court. In fact he has stated this contention for being rejected and it is not necessary for us to examine it any more; The first contention raised by Mr. Patel is therefore rejected.;


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