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1983 DIGILAW 732 (ALL)

Seth Ram Autar v. State of U. P

1983-09-28

A.N.VERMA, SATISH CHANDRA

body1983
JUDGMENT Satish Chandra, C.J. - In our opinion, the decision of a Division Bench of this Court in D.K. Jain v. Collector, 1979 All LJ 1190 fully covers the present case. The judgment of that case runs as follows :- "The petitioners obtained lease deeds from the State of U.P. under the provisions of the U.P. Minor Minerals (Concession) Rules. 1963, for three years in some and five years in some other cases. By these lease deeds the petitioners were authorised to extract certain minor minerals from specified areas of lands: The lease deeds fixed the dead rent payable by the lessees per year. It also provided that the lessees would be liable to pay the dead rent or the prescribed royalty whichever is higher for every year. By a notification published in the U.P. Gazette dated 15th Sept. 1976 these 1963 Rules were amended in certain respects. The Second Schedule which prescribed the scale of fee to be fixed for the leases was amended. The existing and the amended Schedule reads as follows :- Existing Second Schedule (Rule 22) Second Schedule as hereby substituted (Rule 22) Area Dead rent per acre per annum Area Dead rent per acre per annum Minimum Rs. Maximum Rs. Minimum Rs. Maximum Rs. 1. Up to 10 acres 50 100 1. Up to 10 acres 500 1,000 2. More than 10 acres but not more than 30 acres 35 70 2. More than 10 acres but not more than 30 acres 350 700 3. More than 30 acres 20 40 3. More than 30 acres 200 400 It is apparent that for different areas of land the minimum as well as the maximum was considerably increased. 2. The respondents took the position that with effect from 15th Sept. 1976 the lessees were liable to pay dead rent at the enhanced rates. They appear to have fixed, the maximum prescribed by the amended Schedule and made demands. On failure of the lessees to deposit the demanded amounts, they initiated recovery proceedings for the amounts as arrears of land revenue. Aggrieved, the petitioners have come to this Court. The petitioners grievance is that there has been really no fixation of dead rent in their cases after the coming into force of the amendment on 15th Sept. 1976. On failure of the lessees to deposit the demanded amounts, they initiated recovery proceedings for the amounts as arrears of land revenue. Aggrieved, the petitioners have come to this Court. The petitioners grievance is that there has been really no fixation of dead rent in their cases after the coming into force of the amendment on 15th Sept. 1976. In the next place the provisions of the rules in enhancing the liability of the lessees to pay the enhanced amounts have not been followed. Rule 22 of the Rules provides :- "22. Dead rent.- The holder of a mining lease shall during the terms of the lease pay, for every year, other than the first year of the lease such amount as dead rent as may within the limits specified in the Second Schedule to these rules, be specified in the lease by the State Government, and if the lease permits the working of more than one mineral in the same area, the said dead rent will be paid separately for each such mineral;". Provided that the lessee shall be liable to pay the dead rent or royalty in respect of each mineral whichever be higher in amount but not both." As seen above the Schedule does not fix the dead rent in case of individual lessees. It leaves to the State Government to fix the actual dead rent within the minimum and the maximum prescribed in the Schedule. Rule 22 does not specifically authorise revision of the dead rent which may have been initially fixed in the lease deeds. Prima facie the State Government cannot unilaterally enhance the dead rent merely because the Schedule has enhanced the limits. But we were referred to Form MM-3 appended to the Rules which prescribes the form of leases to be executed between the parties. Since this form is part of the statutory rules, we may assume it to have statutory force. 3. Clauses (1) and (2) of Part II of Form MM-3 run as follows :- "Rents and Royalties reserved by this lease to pay dead rent or royalty whichever is greater. Since this form is part of the statutory rules, we may assume it to have statutory force. 3. Clauses (1) and (2) of Part II of Form MM-3 run as follows :- "Rents and Royalties reserved by this lease to pay dead rent or royalty whichever is greater. - (1) The lessee shall pay, for every year, except the first year of the lease yearly dead rent as specified in Clause (2) of this part in respect of each mineral; Provided that the lessee shall be liable to pay the dead rent or royalty in respect of each mineral, whichever is higher in amount, but not both. Rate and mode of payment of dead rent- (2) Subject to the provision of Clause (1) of this part, during the subsistence of the lease, the lessee/lessees shall pay to the State Government annual dead rent at the following rate/rates, or at such revised rate/rates which may be communicated in writing to the lessee/lessees by the State Government, per mineral per acre of the lands demised and described in part I of this Schedule ........... 4. In Writ Petition No. 818 of 1977, Balraj Suri v. State of U.P. decided on 2-12-1977 : 1978 All LJ 440 : AIR 1978 All 321 a Division Bench of this Court held that Form MM-3 is part of the rules and hence Clauses (1) and (2) of Part II thereof are statutory in character. It was further held that Rule 22 and Rule 14 read with Form MM-3 including Clauses (1) and (2) of Part II thereof must be read as harmonising with each other. Thus construed the position that emerged is that at the stage of execution of the lease, the licencing authority may specify therein as dead rent an amount in between the two limits mentioned in the Second Schedule. It is the amount thus specified that shall be payable by the lessee till such time as it is not varied by the State Government in exercise of powers reserved to it under Clause (2) of Part II of Form MM-3. As a result of clause (2) quote above, the State Government clearly has right to revise the rate of dead rent. In the case the argument was that the State Government has no power to revise the rent. The argument was repelled on t finding quoted above. 5. As a result of clause (2) quote above, the State Government clearly has right to revise the rate of dead rent. In the case the argument was that the State Government has no power to revise the rent. The argument was repelled on t finding quoted above. 5. In the present cases the position is different. Here the petitioners principally challenged the recovery proceedings on the ground that method prescribed by Clause (2) aforesaid has not at all been followed inasmuch as there is no material to suggest that either the State Government or any officer to whom the authority may have been delegated has in fact applied his mind and reached a decision as to the actual rate to be fixed in the case of each lessee including the petitioners. We enquired but the learned Standing Counsel was unable to tell us that the District Magistrate to whom according to him the powers had been delegated, actually took a decision to fix the maximum which has been prescribed by the amended Schedule. If somebody had applied his mind it was not necessary that the maximum may have been inevitably fixed in every case. The minimum is Rs. 500/- while the maximum is Rs. 1,000/- up to ten acres. No one knows what the officer would have decided if he had applied his mind to the individual cases. 6. But this is not the only difficulty. Clause (2) aforesaid raises a liability upon the lessees to pay to the State Government annual dead rent at the rate specified in the leases or at such revised rates which may be communicated in writing to the lessees by the State Government. The difficulties are first that there is nothing to indicate whether the State Government has delegated this power to communicate in writing the revised rates. In the next place there is nothing to indicate that the revised rates were communicated in writing to the lessees by any one. We specifically enquired from the learned Standing Counsel but he was unable to state that any such communication in writing was effected. Reading Rule 22 along with Clauses (1) and (2) it is apparent that the liability of the lessees to pay at the revised rates accrues from the day of communication of revised rates in writing to them. This is an essential part of the clause creating liability. Reading Rule 22 along with Clauses (1) and (2) it is apparent that the liability of the lessees to pay at the revised rates accrues from the day of communication of revised rates in writing to them. This is an essential part of the clause creating liability. In its absence it cannot be said that the lessees were at all liable to pay the enhanced rate. Learned Standing Counsel relied upon the aforesaid decision of the Division Bench but in that case no difficulty about the non- communication of the revised rate in writing was raised or decided. That case is hence not helpful on this point. 7. The respondents are trying to recover the dead rent at the enhanced rate due from 15th Sept. 1976 till the expiry of the year of the leases in 1977, without any valid basis." 8. In the present case the leases were for different periods. In Writ Petition No. 10205 of 1979, Seth Ram Autar v. State of Uttar Pradesh the lease was executed on August 17, 1966. It related to an area of 35 acres for quarrying marble and limestone. The dead rent fixed in the lease was Rs. 40/- per acre for each mineral. The liability was hence to pay Rs. 1,400/- per year per mineral as the total dead rent. 9. The dead rent in the case was hence neither the minimum nor the maximum prescribed. It was in between the two. The notification of Sept. 15. 1976 amended the minimum as well as the maximum rates that were originally prescribed. There is nothing to show that the State Government or its delegate had, in fact, enhanced the dead rent payable by any of these petitioners at, any particular figure which may be either the minimum or the maximum or in between the two of the enhanced rates prescribed by the notification of Sept. 15, 1976. The position is that there is nothing to indicate as to what was the actual revised rate fixed for any of the present petitioners. There is no material to suggest that any communication was addressed to any of the lessees to indicate the increase in the rate of dead rent. 10. Learned Standing Counsel argued that the notification of Sept 15, 1976 was published in the State Gazette. That was sufficient communication to the lessee. There is no material to suggest that any communication was addressed to any of the lessees to indicate the increase in the rate of dead rent. 10. Learned Standing Counsel argued that the notification of Sept 15, 1976 was published in the State Gazette. That was sufficient communication to the lessee. Assuming that the publication in the gazette was sufficient communication to the lessee the publication in the gazette was only of the notification. The notification did not prescribe or fix any particular amount for the lessees. It changed the minimum and maximum rates prescribed- in the original Schedule. It left a wide margin of discretion in the State Government to fix the annual dead rent payable by each of the lessees. In the present case there is nothing to indicate that the State Government fixed any particular amount for the lessees. 11. In paragraph 4 of the counter- affidavit filed in Writ Petition No. 10205 of 1979 it has been stated that the total amount paid as royalty by the petitioner for the period commencing from Jan. 1977 to Dec. 1978 comes to Rs. 33,887.50, whereas the dead rent came to Rs. 1,06,000/- and as such, the petitioner was required to pay the balance after adjusting the entire balance paid as royalty towards the payment of dead rent and was treated as part payment of dead rent for the period Jan. 1977 to Dec. 1978. The notice of demand served on the petitioner was for Rs. 71,045/-. It mentioned that it was in relation to three figures Rs. 42,950/-, Rs. 28,000/- and Rs. 1,095/-. From this also, it is not possible to decipher as to what was the rent at which the demand was created. In any event, the balance as mentioned in the figures given in paragraph 4 comes to Rs. 70,112-50 which is not the same as the amount mentioned in the demand notice. 12. However it is amply clear that the State Government did not communicate to the petitioner the dead rent fixed for him after the publication of the notification on September 15, 1976. As held by the Division Bench in D. K. Jain's case (1979 All LI 1190) the liability of the lessees to pay dead rent at the revised rates accrues from the day of communication of the revised rates in writing to them. As held by the Division Bench in D. K. Jain's case (1979 All LI 1190) the liability of the lessees to pay dead rent at the revised rates accrues from the day of communication of the revised rates in writing to them. In the absence of such communication it cannot be said that the lessees were at all liable to pay at the enhanced rates. 13. In the present case the lease was for a period of 15 years from August, 1966. That period has by now expired. The service of the vague notice of demand dated October 3, 1979. was hence valueless. It did not even purport to create any liability. It was a notice making a demand for payment of Rs. 71,045/- on the footing that the petitioner was liable to pay that amount. That could only be if the liability had been validly created prior to the service of the notice. But that was not so. 14. Learned counsel for the petitioner sought to place reliance on S. 9-A introduced in the Mines and Minerals (Regulation and Development) Act, 1957 by the Amending Act of 1972. This was in support of the submission that the State Government has no jurisdiction to enhance the rates of dead rent. The submission has no merit. S. 9-A will not be applicable to minor minerals. Section 14 provides that Sections 3 to 13 (inclusive) shall not apply to minor minerals. Section 9-A was by the Amending Act of 1972 inserted after S. 9. It will be included within the phrase `Sections 3 to 13 (inclusive)' occurring in S. 14. S. 9-A hence cannot be employed in the case of minor minerals. 15. The decision of the Andhra Pradesh High Court in M.V. Subba Rao v. State of Andhra Pradesh, AIR 1978 Andh. Pra. 453 is distinguishable. It did not notice S. 14 of the Mines and Minerals (Regulation and Development) Act, 1957. 16. In the result, the petitions succeed and are allowed. The impugned demand notices served on the petitioners are quashed. In the circumstances, we make no order as to costs.