Chinnappa Reddy, J. - (1.) Entry 23 of List II of the Seventh Schedule to the Constitution is, "Regulation of mines and mineral development subject to the provisions of List I with respect to regulation and development under the control of the Union". Entry 54 of List I of the Seventh Schedule is "Regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest". Thus while 'regulation of mines and mineral development is ordinarily a subject for State legislation, Parliament may, by law, declare the extent to which control of such regulation and development by the Union is expedient in the public interest, and, to that extent, it becomes a subject for Parliamentary legislation. Parliament has accordingly enacted, the Mines and Minerals (Regulation and Development) Act, 1957. By Section 2 of the Act it is declared that it is expedient in the public interest that the Union should take under its control the regulation of mines and the development of minerals to the extent thereafter provided. It is now common ground between the parties that as a result of the declaration made by Parliament, by Section 2 of the Act. the State legislatures are denuded of the whole of their legislative power with respect to regulation of mines and mineral development and that the entire legislative field has been taken over by Parliament, That this is the true position in law is clear from the pronouncements of this Court in The Hingir-Rampur Coal Co. Ltd. v. The State of Orissa, (1961) 2 SCR 537, State of Orissa v. M. A. Tulloch and Co., (1964) 4 SCR 461 and Baijnath Kedia v. State of Bihar, (1970) 2 SCR 100. Section 3 of the Mines and Minerals (Regulation and Development) Act, 1937, defines various expressions occurring in the Act. Section 3 (e) defines 'minor minerals' and it includes any mineral declared to be a minor mineral by the Central Government by a notification in the Official Gazette. 'Black granite' has been so notified by the Central Government as a minor mineral. Sections 4 to 9A are grouped under the heading 'General Restrictions on undertaking prospecting and mining operations.' These provisions as well as Sections 10 to 13 are made inapplicable to 'minor minerals' by S. 14. S. 4 prohibits all prospecting or mining operations except under a licence or a lease granted under the Act and the rules made thereunder. Section 4A (1) enables the State Government on a request made by the Central Government in the interest of regulation of mines and mineral development to terminate a mining lease pre-maturely and grant a fresh mining lease in favour of a Government Company or Corporation owned or controlled by Government. Perhaps because Section 4A (1) is inapplicable to minor minerals because of the provisions of Section 14, Section 4A (2) has been expressly enacted making somewhat similar provision, as in Section 4A (1), in respect of 'minor minerals' also, Section 4A (2) enables the State Government, after consultation with the Central Government, if it is of opinion that it is expedient in the interest of regulation of mines and mineral development so to do, to prematurely terminate a mining lease in respect of any minor mineral and grant a fresh lease in respect of such mineral in favour of a Government Company or Corporation owned or controlled by Government. Section 5 imposes certain restrictions on the grant of prospecting licences and mining leases. Section 6 prescribes the maximum area for which a prospecting licence or mining lease may be granted. Section 7 prescribes the period for which prospecting licences may be granted or renewed. Section 8 prescribes the period for which mining leases may be granted or renewed. Section 9 provides for the payment of royalty and Section 9A for the payment of dead rent. Secs. 10, 11 and 12 constitute a group of sections under the title 'Procedure for obtaining prospecting licences or mining leases in respect of land in which the minerals vest in the Government'. Section 10 provides for making applications for prospecting licences or mining leases in respect of any land in which the minerals vest in the Government. Section 11 provides for certain preferential rights in favour of certain persons in the matter of grant of mining leases. Section 12 prescribes the Register of prospecting licences and mining leases to be maintained by the State Government. Section 13 empowers the Central Government to make rules for regulating the grant of prospecting licences and mining leases. In particular we may mention that Section 13 (2) (a) empowers the Central Government to make rules providing for the persons by whom, and the manner in which, applications for prospecting licences or mining leases in respect of land in which the minerals vest in the Government may be made and the fees to be paid therefor". Section 13 (2) (f), we may add, empowers the Central Government to make rules providing for the procedure for obtaining a prospecting licence or a mining lease in respect of any land in which the minerals vest in a person other than the Government and the terms on which, and the conditions subject to which, such a licence or lease may be granted or renewed'. Section 14, makes the provisions of Sections 4 to 13 inapplicable to minor minerals. Sec. 15 empowers the State Government to make rules for regulating the grant of quarry leases, mining leases and other mineral concessions in respect of minor minerals and purposes connected therewith. Section 15 (3) provides for the payment of royalty in respect of minor minerals at the rate prescribed by the rules framed by the State Government. Section 16 provides for the modification of mining leases granted before October 25, 1949. Section 17 enables the Central Government, after consultation with the State Government to undertake prospecting or mining operations in any area not already held under any prospecting licence or mining lease, in which event the Central Government shall publish a notification in the official Gazette giving the prescribed particulars. The Central Government may also declare that no prospecting licence or mining lease shall be granted in respect of any land specified in the notification. Section 18 casts a special duty on the Central Government to take all necessary steps for the conservation and development of minerals in India, Sections 19 to 33 are various miscellaneous provisions with which we are not now concerned.
(2.) Pursuant to the power vested in it under Sec. 15 of the Mines and Minerals (Regulation and Development) Act, 1957, the Government of Tamil Nadu has made the Tamil Nadu Minor Mineral Concession Rules, 1959. Section II of the rules consisting of Rules 3 to 16 is entitled "Government lands in which the minerals belong to the Government". Rule 8 prescribes the procedure for the lease of quarries' to private persons. The ordinary procedure is to publish a notice in the District Gazette inviting applications, thereafter to hold an auction and finally to grant a lease to the highest bidder, Rule 8A which was introduced by way of an amendment in 1972, provides for a special procedure for the sanctioning of leases in favour of applicants who require the minerals for their existing industries or who have an industrial programme for the utilisation of the mineral in their own industry. Rule 8-B was introduced in 1975 making special provision for the grant of leases for quarrying black granite. The rule is as follows: "8-B. Lease of quarries in respect of black granite to private persons- (1) Notwithstanding anything to the contrary contained in rules 8 and 8-A, the authority competent to grant leases in respect of quarrying black granite shall be the State Government. (2) An application for the grant of a quarrying lease in respect of any land shall be made to the Collector of the District concerned in the prescribed form in triplicate and shall be accompanied by a fee of Rs. 100/-. The Collector shall after scrutiny, forward the application along with his remarks to the Director of Industries and Commerce who shall technically scrutinise the industrial programme given by the applicant and forward the application with his remarks to the Government. (G. O. Ms. No. 993 Industries dt. 25-8-1975)". Rule 8-C was introduced by G. O. Ms. No. 1312 Industries dated December 2, 1977. By this rule leases for quarrying black granite in favour of private persons are banned. Leases can only be granted in favour of a Corporation wholly owned by the State Government. It is the vires of this rule which was under challenge before the High Court and is also under challenge now. It will be useful to extract the same. It is as follows: "8-C. Lease of quarries in respect of black granite to Government Corporation, etc. (1) Notwithstanding anything to the contrary contained in these rules, on and from 7th December 1977 no lease for quarrying black granite shall be granted to private persons. (2) The State Government themselves may engage in quarrying black granite or grant leases for quarrying black granite in favour of any corporation wholly owned by the State Government. Provided that in respect of any land belonging to any private person, the consent of such person shall be obtained for such quarrying or lease".
(3.) Rule 9 provides for renewal of leases and it is in the following terms: "9. Renewal of lease:- (1) The Collector may on application renew for a further period not exceeding the period for which the lease was originally granted in each case if he is satisfied that:- (i) such renewal is in the interests of mineral development, and (ii) the lease amount is reasonable in the circumstances of the case. (2) Every application for renewal shall be made to Collector, sixty days prior to the date of expiry of the lease: Provided that a lease, the period of which exceeds ten years shall not be renewed except with the sanction of the Director of Industries and Commerce". A proviso was added to Rule 9 (2) in 1975 and it said: "Provided also that the renewal for quarrying black granite shall be made by the Government".;