Laxman Prasad v. State of U. P — 1983 DIGILAW 740 (ALL)

JUDGMENT Satish Chandra, C.J. - The Mirzapur Stone Mahal Act, 1886, was enacted to declare and amend the law relating to the Stone Mahal in the district of Mirzapur in the Kurth-Western Provinces (now known as Uttar Pradesh). It was a skeleton Act. It, subject to the rules made under it, entitled any person to open a quarry, or quarry stone, in any land in any part of the district of Mirzapur. The rules framed under this Act made an elaborate provision for the grant of licences to work stone quarries and other connected matters in the district of Mirzapur. The licence was for a financial year. It was heritable and transferable by sale or mortgage only. It was renewable subject to the provisions of Rules 13, 16 and 17 on an application being duly made and on payment of the prescribed fee. At present the fee is Rs. 10/- per year. 2. The petitioners allege that they have been working stone quarries in the district of Mirzapur for generations. They used to apply for renewal of their licences in the beginning of each year. The licence was renewed as a matter of course. When the petitioners applied for renewal of their licences for the year 1980-81, the the Superintendent, Stone Mahal. Mirzapur, declined to renew the licences. On enquiry. the petitioners were informed that the Uttar Pradesh Minor Minerals (Concession) Rules, 1963, have been enforced in the district of Mirzapur with effect from 26th Apr. 1979. Those who desired to continue quarrying stone may apply for a lease under those rules. The provision is the U.P. Minor Minerals (Concession) Rules 1963, were much more stringent than the Rules framed under the Stone Mahal Act. In the Minor Minerals Rules, the lincence fee was Rs. 50/- per year. The lincence was neither transferable nor heritable. In certain instances it could be cancelled. The petitioners felt aggrieved and have come to this Court. Their submission is that they are still governed by the provisions of the Stone Mahal Act and the Rules and are entitled to renewal of their licences under them. The respondents are in error in forcing the petitioners to apply for a licence under the Minor Minerals (Concession) Rules. 3. To understand the submission of the petitioners, it is necessary to have a look at the legislation on the subject of mines and minerals. 4. The respondents are in error in forcing the petitioners to apply for a licence under the Minor Minerals (Concession) Rules. 3. To understand the submission of the petitioners, it is necessary to have a look at the legislation on the subject of mines and minerals. 4. In 1957 Parliament enacted the Mines and Minerals (Regulation and Development) Act 67 of 1957. S. 2 of the this Act made a declaration in view of Entry 54 of List I of the Seventh Schedule to the Constitution of India. It stated: "S.2 It is hereby 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 hereinafter provided:- "Minor minerals" were defined to mean building stones, gravel, ordinary clay, ordinary sand other than sand used for prescribed purposes, and any other mineral which the Central Government may, by notification in the Official Gazette, declare to be a minor mineral. It is to be noted that by a notification of Mar. 6, 1965, Sand stone was declared to be a minor mineral. S. 14 of this Act provided that the provisions of Sections 4 to 13 (inclusive) shall not apply to prospecting lincences and mining leases in respect of minor minerals. S. 15 is relevant and material because it gives power to the State Government to make rules in respect of minor minerals. It reads : "S. 15(1) - The State Government may, by notification in the Official Gazette, make rules for regulating the-grant of prospecting licences and mining leases in respect of minor minerals and for purposes connected therewith. (2) ..................." S. 16 of the Act provided : "16(1) - All mining leases granted before the 25th day of Oct. 1949, shall, as soon as may be after the commencement of this Act, be brought into conformity with the provisions of this Act and the rules made under Sections 13 and 18. Provided that if the Central Government.............. (2) ................ S. 19 of the Act is important. It lays down a prohibition. It provided : "19. 1949, shall, as soon as may be after the commencement of this Act, be brought into conformity with the provisions of this Act and the rules made under Sections 13 and 18. Provided that if the Central Government.............. (2) ................ S. 19 of the Act is important. It lays down a prohibition. It provided : "19. Prospecting licences and mining leases to be void if in contravention of Act.- Any prospecting lincence or mining lease granted, renewed or acquired in contravention of the provisions of this Act or any rules or orders made thereunder shall be void and of no effect." S. 20 of the Act stated. "20. The provisions of this Act and the declaration in view of Entry 54 of List I of rules made thereunder shall apply in relation to the renewal after the commencement of this Act of any prospecting licence or mining lease granted before such commencement as they apply in relation to the renewal of a prospecting licence or mining lease granted after such commencement." In other words S. 20 applied to the renewal of existing leases. 5. The provisions of Act 67 of 1957 came up for consideration before the Supreme Court in Baijnath Kedia v. State of Bihar, AIR 1970, SC 1436. In that case it was held that the declaration made in S. 2 of the Act brought the entire legislative field with respect to mines and minerals within the purview of Central Parliament. Nothing was left for legislation by the State Legislature. S. 16 of the Act expressly confined itself to leases granted before 25th Oct. 1949. It was not applicable to leases granted thereafter. In that case the leases were granted in 1955 for a period of thirty years. It was further held that the vested rights in such leases could not be taken away by the rules framed by the Bihar Government. They required Central legislation. S. 16 of the Act of 1957 being inapplicable, there was no other provision in that Act which could cover the case. S. 15 of the Act permitted the State Government to make rules, but if the old leases were to be modified, a legislative enactment by Parliament on the lines of S. 16 of Act 67 of 1957 was necessary. The place of such a law could not be taken by legislation by the State Legislature. 6. S. 15 of the Act permitted the State Government to make rules, but if the old leases were to be modified, a legislative enactment by Parliament on the lines of S. 16 of Act 67 of 1957 was necessary. The place of such a law could not be taken by legislation by the State Legislature. 6. It appears that in view of this decision, Parliament enacted the Mines Minerals (Regulation and Development) Amendment Act 56 of 1972. It amended various provisions of Act 67 of 1957. Sections 14 and 15(1) and (2) of the Act were amended. The phrase "prospecting licences and mining leases" (occurring in Sections 14 & 15 was deleted and it was substituted by the phrase "Quarry leases. mining leases or other mineral concessions". It was further stated that after sub-sec. (2) of S. 15, the following sub-section shall be inserted and shall be deemed always to have been inserted, namely :- "(3) The holder of a mining lease or any other mineral concession granted under any rule made under sub.-sec (1) shall pay royalty in respect of minor minerals removed or consumed by him or by his agent, manager, employee, contractor or sub-lessee at the rate prescribed for the time being in the rules framed by the State Government in respect of minor minerals; Provided that the State Government shall not enhance the rate of royalty in respect of any minor mineral for more than once during any period of four years". 7. Sub-sec. (1) of S. 16 was repealed and re-enacted as follows : "16(1)(a), All mining leases granted before the commencement of the Mines and Minerals (Regulation and Development) Amendment Act, 1972, if in force at such commencement, shall be brought into conformity with the provisions of this Act, and the rules made thereunder, within six months from such commencement, or such further time as the Central Government may, by general of special order, specify in this behalf. (b) .................. 8. Sections 19 and 20 were not, touched. They remained as they were originally enacted. 9. After their amendments Sections 14, 15 and 16 read as follows : "S. 14. (b) .................. 8. Sections 19 and 20 were not, touched. They remained as they were originally enacted. 9. After their amendments Sections 14, 15 and 16 read as follows : "S. 14. The provisions of Sections 4 to 13 (inclusive) shall not apply to quarry leases, mining leases or other mineral concessions in respect of minor minerals." "S. 15(1), The State Government may, by notification in the Official Gazette, make rules for regulating the grant of quarry leases, mining leases or other mineral concessions in respect of minor minerals and for purposes connected therewith. (2) Until rules are made under sub-sec. (1), any rules made by a State Government regulating the grant of quarry leases, mining leases or other mineral concessions in respect of minor minerals which are in force immediately before the commencement of this Act shall continue in force. (3) The holder of a mining lease or any other mineral concession granted under any rule made under sub-sec. (1) shall pay royalty in respect of minor minerals removed or consumed by him or by his agent, manager, employee, contractor of sub-lessee at the rate prescribed for the time being in the rules framed by the State Government in respect of minor minerals : Provided that the State Government shall not enhance the rate of royalty in respect of any minor mineral for more than once during any period of four years". "S. 16(1)(a). All mining leases granted before the commencement of the Mines and Minerals (Regulation and Development) Amendment Act, 1972 if in force at such commencement, shall be brought into conformity with the provisions of this Act, and the rules made thereunder, within six months from such commencement, or such further time as the Central Government may by general or special order, specify in this behalf. (b) ..............................." 10. In view of the provisions of S. 15 of the Act of 1957, the State Government framed the U.P. Minor Minerals (Concession) Rules, 1963. These rules came into force by a notification issued by the State Government on Aug. 26, 1963. They applied to the whole of Uttar Pradesh. A few weeks later the State Government issued another notification on Sept. 21, 1963, excluding the district of Mirzapur from the purview of Minor Minerals (Concession) Rules. These rules came into force by a notification issued by the State Government on Aug. 26, 1963. They applied to the whole of Uttar Pradesh. A few weeks later the State Government issued another notification on Sept. 21, 1963, excluding the district of Mirzapur from the purview of Minor Minerals (Concession) Rules. The stone quarries in the district of Mirzapur hence continued to be governed by the Stone Mahal Act, 1886 and the rules framed thereunder. Then on 26th Apr. 1979, the State Government again issued a notification amending rule 1(4) of the Minor Minerals (Concession) Rules and applied those rules to the district of Mirzapur also. On these rules coming into force in Apr, 1979 the Collector, Mirzapur as well as the Superintendent, Stone Mahal, Mirzapur, declined to renew the licences granted under the Stone Mahal Act, 1886 and the rules framed thereunder. They indicated that the persons who wanted to continue stone quarry may apply for the relevant lease or permit under the U.P. Minor Minerals Concession Rules 1963. R. 3(1) of these rules provided : "3(1), No person shall undertake any mining operations in any area within the State of any minor mineral to which these rules are applicable except under and in accordance with the terms and conditions of a mining lease or mining permit granted under these rules." 11. The Stone Mahal Act, 1886, was a Central Act so is the Mines and Minerals (Regulation and Development) Act, 1957. The question is which of these two will apply. 12. Entry 54 of List I of the VII Schedule of the Constitution reads : "54. Regulation of mines and minerals 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." 13. S. 2 of Act 67 of 1957 makes the requisite declaration as mentioned above. Regulation of mines and minerals 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." 13. S. 2 of Act 67 of 1957 makes the requisite declaration as mentioned above. In Baijnath's case ( AIR 1970 SC 1436 ) (supra) the Supreme Court held in paragraph 22 as follows : "We have already held that the whole of the legislative field was covered by the Parliamentary declaration read with the provisions of Act 67 of 1957, particularly S. 15.....The whole of the topic of minor minerals became a Union subject....Therefore, if the old leases were to be modified a legislative enactment by Parliament on the lines of S. 16 of Act 67 of 1957 was necessary." At that time S. 16 confined itself to mining leases granted before Oct. 25, 1949. The 1972 Amending Act repealed and re-enacted S. 16(1). As re-enacted, it applied to all mining leases granted before the commencement of the Amending Act 1972 if in force at such commencement. It went on to provide that all such leases shall be brought into conformity with the provisions of this Act. and the rules made thereunder. The phrase "shall be brought into conformity with the provisions of this Act, and the rules made thereunder" includes S. 15 of the Act and the rules framed thereunder. It is clear that the quarry leases granted before 12th Sept. 1972 if in force on that date had to be brought into conformity with the Minor Minerals (Concession) Rules 1963 which were framed under S. 15(1) of the Act of 1957. S. 15(1) of the Act, as amended, also was clearly applicable to quarry leases. It, hence, covered the quarry leases in the district of Mirzapur. Sub-sec. (2) of S. 15 makes the position quite clear. Under it the old rules made by the State Government to regulate the grant of quarry leases, etc. continue to apply until rules are made under sub-sec. (1). Hence it is evident that the rules framed by the State Government under the Stone Mahal Act, 1886, continued to remain in operation but only until the rules here made under sub-sec. (1). Under sub-sec. (1) of S. 15, the U.P. Minor Minerals (Concession) Rules 1963 were framed. They were extended to the district of Mirzapur in Apr. 1979. (1). Hence it is evident that the rules framed by the State Government under the Stone Mahal Act, 1886, continued to remain in operation but only until the rules here made under sub-sec. (1). Under sub-sec. (1) of S. 15, the U.P. Minor Minerals (Concession) Rules 1963 were framed. They were extended to the district of Mirzapur in Apr. 1979. With effect from that date the pre-existing rules framed under the Stone Mahal Act 1886 ceased to operate and the rules framed under S. 15(1) became operative. In ether words, the U.P. Minor Minerals (Concession) Rules 1961, became applicable to quarry leases in the district of Mirzapur. S. 19 of the Act of 1957 which makes mining leases granted, renewed or acquired in contravention of the provisions of this Act to be void and of no effect, applies and renders the licences granted under the Stone Mahal Act and the rules, void and of no effect, S. 20 also applies. Under it the Act and the rules apply to the renewal of preexisting leases. There hence appears to be no escape from the position that with effect from the date when the Minor Minerals (Concession) Rules were extended to Mirzapur, they governed the stone mining operations in the district of Mirzapur to the exclusion of the rules framed under the Stone Mahal Act, 1886. 14. In so far as the U.P. Minor Minerals (Concession) Rules, 1963, framed under S. 15(1) of Act 67 of 1957 continue to operate, the Stone Mahal Act 1886 will also remain dormant. The reason being that after the coming into force of the Constitution, Entry 54 of list I of VII Schedule gave control of the topic of mines and minerals to Parliament only in so far as the requisite declaration was made by Parliament. The requisite declaration was made by Parliament by enacting S. 2 of the Act of 1957. Thus the Act of 1957 was the enactment which completely covered the topic of mines and minerals including minor minerals. Since the Act of 1957 after its amendment in 1972 specifically provided for quarry leases, the Stone Mahal Act 1886 which was earlier in point of time and which did not contain any such declaration, became obsolete. 15. On behalf of the petitioners it was submitted that S. 16(1) authorises only the Central Government to bring the mining leases in conformity with the Act. 15. On behalf of the petitioners it was submitted that S. 16(1) authorises only the Central Government to bring the mining leases in conformity with the Act. We are unable to agree. S. 16(1)(a) makes all mining leases granted before the commencement of 1972 Act able to be brought into conformity with the provisions of this Act, and the rules made thereunder, within six months of the commencement of 1972 Act. The Central Government has only been authorised to extend the time by general or special order. The Central Government is not required to pass an order in respect of individual leases. That is liable to be taken care of by the relevant rules, for instance, the U.P. Minor Minerals (Concession) Rules framed under S. 15(1) of the Act. 16. It was also submitted that the petitioners had acquired perpetual lessee rights under the rules framed under the Stone Mahal Act. They could only be acquired by the State by legislation. The rules were not sufficient to deprive the petitioners of such rights. 17. The submission is misconceived. The petitioners did not acquire any perpetual rights under the Stone Mahal Rules. They had rights under a licence which was liable to be renewed each year on an application being made and the requisite fee being paid. It was open to it particular person not to apply for renewal or not to deposit the fee. It was also open to a licensee to abandon the quarry. For breach of rules, the licences could be cancelled. The licence was transferable and heritable but since it was renewable each year, the rights of the transferee or the heirs would normally come to an end on the expiry of the financial year, unless the licence was renewed. The petitioners rights were annual, They were liable to be renewed, but they were also liable and to be cancelled. Hence they cannot be equated with either perpetual lessee right or with rights like that. of an owner. 18. This apart, S. 16(1) (a) of the Act,a amended, is an enactment by Parliament. It provides for the mining leases to be brought into conformity with the provisions of the Act and the rules. It is not merely the rules that affect the petitioners' rights, there is a statutory enactment vide S. 16(1)(a) of the Act. 19. 18. This apart, S. 16(1) (a) of the Act,a amended, is an enactment by Parliament. It provides for the mining leases to be brought into conformity with the provisions of the Act and the rules. It is not merely the rules that affect the petitioners' rights, there is a statutory enactment vide S. 16(1)(a) of the Act. 19. It was also urged that the minor Minerals (Concession) Rule till not apply of their own force to pre-existing leases. S. 15(1) of the Act of 1957 negatives this argument. It authorises the State Government to make rules for regulating the grant of quarry leases, mining leases or other mineral concessions in respect of minor minerals and for purposes connected therewith. Regulating the grant is wide enough to include renewal or cancellation, etc. of pre-existing leases. 20. After the learned counsel for the petitioners had concluded his arguments. the counsel for the State raised an objection that a joint petition was not maintainable. Since we had heard arguments on the merits and since it fails thereon, we deem it unnecessary to go into this question. 21. Before parting with this case we are constrained to observe that we have had no assistance from the counsel appearing on behalf of the State of U.P. This group of cases was heard by us on July 26, 1983. Mr. B.L. Yadav, the Chief Standing Counsel for the State appeared for it. He principally submitted that the Stone Mahal Act was a Provincial Act and stood repealed by Act 67 of 1957. He placed reliance upon T. Barai v. Henry Ah Hoe, AIR 1983 SC 150 . The, argument had to be stated to be rejected, because the Stone Mahal Act was a Central Act which had been carried into force by the Adaptation Orders of 1937 as well as of 1950. 22. We, however, felt dissatisfied with the state of arguments submitted on behalf of the Government. We considered the whole matter ourselves and then came to the conclusion that several aspects required further consideration, specially the impact of the 1972 amendment to Sections 15 and 16 of the Act of 1957. We, therefore, had to post the case again for rehearing. It is our regret that the effect of the Amending Act of 1972 was not even mentioned by the counsel appearing for the State. We, therefore, had to post the case again for rehearing. It is our regret that the effect of the Amending Act of 1972 was not even mentioned by the counsel appearing for the State. If this had been clarified at the earlier hearing, the time taken by the Court in rehearing the case would have been avoided. 23. The various points raised in support of the writ petitions having failed, the same are dismissed, but we make no order as to costs.