MADON - (1.) THIS group of Writ Petitions under Art. 32 of the Constitution and Appeals by certificate granted by the High Court of Gujarat and by Special Leave granted by this Court raises questions relating to the constitutionality of S. 15(1) of the Mines and Minerals (Regulation and Development) Act, 1957 (Act No. 67 of 1957), the power of the State Governments to make rules under the said S. 15 to enable them to charge dead rent and royalty in respect of leases of minor minerals granted by them and to enhance the rates of dead rent and royalty during the subsistence of such leases, the validity of R. 21B of the Gujarat Minor Mineral Rules, 1966, and of certain notifications issued by the Government of Gujarat under the said S. 15 amending the said Rules so as to enhance the rates of royalty and dead rent in respect of leases of minor minerals. These Notifications are : JUDGEMENT_20_SUPP1_1986Html1.htm The question of the validity of a circular, namely, Circular No. M. C. R. 2180 (166) CHH dated Feb. 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.
(2.) 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 quarry leases and mining leases in respect of minor minerals such as black trap, limestone, murrum, bentonite, rubble, marble, sandstone quartzite, etc. In exercise of the powers conferred by S. 15 of the Mines and Minerals (Regulation and Development) Act, 1957, the Government of Gujarat made the Gujarat Minor Mineral Rules, 1966. The said Rules came into force on 1/04/1966. All the leases in the matters before us were given in the form prescribed by the said Rules. Schedule I to the said Rules specified the rates at which royalty was payable and Schedule II specified the rates at which dead rent was payable. By the 1974 Notification the Government of Gujarat made the Gujarat Minor Mineral (Fourth Amendment) Rules, 1974, whereby Schedule I was substituted and Schedule II was amended with effect from 1/12/1974. Under the new Schedule I and the amended Schedule II the rates of royalty and dead rent in respect of certain minor minerals were enhanced. In view of several representations made to it, the Government of Gujarat decided not to implement the 1974 Notification and to refund the amount of royalty, if any, collected at the rates prescribed by the 1974 Notification. By the 1975 Notification the Government of Gujarat made the Gujarat Minor Mineral (Second Amendment) Rules, 1975, whereby Rule 21 of the said Rules and Schedule I were substituted with effect from 1/11/1975. By the said substituted Schedule I the rates of royalty in respect of several items were enhanced. We may pause here to mention that the Appellant in Civil. Appeal No. 706 of 1981, Ambalal Manibhai Patel, filed a Writ petition in the Gujarat High Court, being Special Civil Application No. 66 of 1978, challenging the enhancement in the rate of royalty to Rs. 3 per metric tonne in respect of black trap and hard murrum specified in Item No. 4 of the said substituted Schedule I. The said writ petition was rejected by a learned Single Judge of that High Court. The Letters Patent Appeal against the order of the learned Single Judge, being Letters Patent Appeal No. 61 of 1978, was heard along with several writ petitions raising the same questions. The main contention raised in those matters was that under the proviso to S. 15(3) of the 1957 Act, the rate of royalty in respect of any Minor mineral could not be enhanced by the State Government more than once during 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 budding 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 (e) 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 issuing the 1975 Notification the State Government had not violated the proviso to S. 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 varieties for the purpose of recovering royalty. Appeals have been filed in this Court challenging the correctness of the above judgment. The State of Gujarat has, however, not filed any appeal against this judgment. By the 1976 Notification the Government of Gujarat made the Gujarat Minor Mineral (Second Amendment) Rules, 1976, substituting Schedule II to the said Rules. Schedule II prior to the said substitution was as follows : JUDGEMENT_20_SUPP1_1986Html2.htm By the 1976 Notification Items I and 2 in Schedule II were substituted to read as follows : JUDGEMENT_20_SUPP1_1986Html3.htm
(3.) ON 26/03/1979, the Minister for Mines made a statement in the Legislative Assembly announcing the decision to implement from 1/04/1979, the new policy of dead rent framed by the Government. According to the said statement, the policy was aimed at breaking the hold of big lease-holders of minor minerals who, by finding loopholes in the said Rules, had acquired leases for the same mineral in different districts and had established a monopoly in the market and had made a fortune by exploiting labourers and evading payment of royalty. According to the said statement, such lease-holders quarried just enough minerals and created artificial shortages in order to control the market and maintain high levels of profits, and some lease-holders had acquired control of areas far in excess of the capacity of their crushers and did not allow entry to other industrialists. He further stated that under the said Rules lessees of minor minerals had to pay royalty on the basis of monthly returns but as true monthly returns were not submitted, evasion to the extent of five to ten per cent was taking place in -the payment of royalty. Pursuant to this policy decision the 1979 Notification was issued by the Government of Gujarat. By the 1979 Notification the Government of Gujarat made the Gujarat Minor Minerals (Amendment) Rules, 1979, with effect from 1/04/1979. By this amendment a new R. 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 D was amended, Forms I, J and K were deleted, and Schedules 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 Rs. 1,200 in certain cases, RS. 1, 500 in some other cases, Rs. 2,000 in one case and Rs. 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 writ petition was dismissed by a learned Single Judge of that High Court on 16/02/1978. The Letters Patent Appeal filed against the judgment and order of the learned Single Judge was heard by a Division Bench of that High Court along with twenty-five writ -petitions which challenged the 1979 Notification. The said Letters Patent Appeal and writ petitions were allowed by a Division Bench consisting of Sheth and Nanavati, JJ. The Division Bench held that the conditions in a lease in respect of minor minerals relating to the financial liability of a lessee derived their authority from sub-sec.(3) of S. 15 of the Mines and Minerals (Regulation and Development) Act, 1957, while conditions, other than those relating to a lessee's financial liability, regulating the grant of a lease derived their authority from sub-see. (1) of, S. 15, that the State Government had no power to enhance the rate of dead rent during the subsistence of a lease, and that R. 21-B of the Gujarat Minor Mineral Rules, 1966, and the 1979 Notification were ultra vires S. 15 and sub-clause (g) of clause (1) of Art. 19 of the Constitution. The Division Bench accordingly issued a writ of mandamus against the State Government directing it, to desist from enforcing the said R. 21-B and the 1979 Notification. The Division Bench also made the same declaration in respect of the 1976 Notification and issued the same mandamus in respect thereof. The said judgment of the Division Bench is reported as Smt. Sonbai Pethalji v. State of Gujarat, (1980) 2 (21) 2 Guj LR 530.;