D. M. DHARMADHIKARI, J. ( 1 ) BY the Court. A common order is being passed in this petition and the two connected petitions i. e. W. P. No. 4708 of 1997 Narmada Khany Utkhanan mazdoor Sahkari Samiti Maryadit and another v. State of M. P. and others, and w. P. No. 4677 of 1997 Chandralal v. State of M. P. and others. ( 2 ) THE present petitioner. Narmada Mai Khadan Kaamgar Karigar sahkari Samiti has intervened in W. P. No. 4677 of 1997 and opposes the claim of petitioner Chandralal for grant of quarry lease for mineral, Sand and Bajri. In all the three petitions, the common ground of challenge of the petitioners is to their exclusion from grant of quarry lease for minor mineral 'sand' for the areas popularly known as Malkachhar, Neemkheda and Shitalpur falling within Gram Panchayats Kusmi and Malkachhar in district Jabalpur. The petitioners also challenge the action of the State Government in virtually reserving the three above-mentioned quarries for exploitation exclusively by the respondent M. P. State Mining Corporation. The State Mining Corporation has invited tenders by publication of a notice in the news paper for awarding contracts for collection of sand. All the above actions resulting in complate exclusion of the petitioners from obtaining quarry leases for the aforesaid quarries have been questioned on somewhat common ground urged on their behalf by senior counsel Shri Rajendra Tiwari in Writ Petitions Nos. 5327/96 and 4708/97 and by Shri Prashant Jaiswal, Advocate, in W. P. No. 4677/97. ( 3 ) AT the outset, I may state that the inter se claims for grant of quarry lease by petitioner in W. P. No. 4677/97 and W. P. No. 4708/97 represented separately by Shri Prashant Jaiswal and Shri Rajendra Tiwari Advocates respectively are not being decided leaving the dispute inter se between them for decision by the appropriate authority under the provisions of Minor minerals (Regulation and Development) Act, 1957 read with M. P. Minor minerals Rules. 1996 framed thereunder. ( 4 ) SHRI Rajendra Tiwari. senior Counsel, and Shri Prashant Jaiswal. appearing for the petitioners, in order to make out their points, made strenuous efforts by taking this Court through the constitutional provisions on Panchayats contained in Part IX of the Constitution and the provisions of the Act of 1957 and the Rules formed thereunder. 1996 framed thereunder. ( 4 ) SHRI Rajendra Tiwari. senior Counsel, and Shri Prashant Jaiswal. appearing for the petitioners, in order to make out their points, made strenuous efforts by taking this Court through the constitutional provisions on Panchayats contained in Part IX of the Constitution and the provisions of the Act of 1957 and the Rules formed thereunder. On the basis of the provisions contained in the Constitution, the Act, and the Rules, the common contention advanced by the learned Counsel in their own ways is that without due exercise of power of reservation of the quarries under Rule 13 of the Rules, the State Government could not have turned down the resolution and proposal of the panchayat concerned in whose jurisdiction and area the quarries fall to grant the mineral rights in favour of the petitioner. It is submitted on behalf of the petitioners represent by Shri Rajendra Tiwari, Advocate that the Gram panchayat concerned had declared new quarries and had merely sought consultation of the Director and the Collector as required by sub-rule (2) of rule 8 of the rules. In that process of consultation it was not open to the State government to ignore the resolution and proposal of the panchayat for opening of new quarries. and declare that the quarries are reserved for exclusive exploitation by the Mining Corporation. ( 5 ) TAKING this Court through the constitutional provisions, the contention advanced on behalf of the petitioners is that in order to give effect to the constitutional intendment. revenue obtainable from minor minerals found within the jurisdiction of a Gram Panchayat is to be given to the Gram panchayats concerned so that the Panchayats become financially viable as local self governments. Taking this Court through the scheme of the new Rules of 1996. the submission made is that the intention evinced therefrom is that amongst the competing persons, the preferences be given in accordance with order given in Rule 21 (2) in awarding rights of mineral concession so as to generate self employment and benefit the labours residing in the Panchayat area. It is argued that without any notification of reservation of quarry lease for the mining Corporation, the proposals of Panchayats have been turned down and the right of winning mineral is being denied to the petitioners which are co-operative societies consisting of miners and labourers residing within the Panchayat area. It is argued that without any notification of reservation of quarry lease for the mining Corporation, the proposals of Panchayats have been turned down and the right of winning mineral is being denied to the petitioners which are co-operative societies consisting of miners and labourers residing within the Panchayat area. It is argued that the action of the Government and the corporation is against the spirit and aim of the constitutional provisions and the provisions contained in the Act read with the Rules of 1996. It is contended that the action of the State is not in public interest as creation of monopoly with regard to quarry leases in favour of the Corporation, contrary to the intendment of the Rules, would deprive the residents of the Panchayat area of legitimate chance of employment and source of livelihood. Reliance is placed on S. Lai and Co. v. Union of India and others, AIR 1972 Pat 460 ; M/s. Serajuddin and Co. v. Union of India and others, AIR 1982 Cal 400 ; M/s, Frick india Ltd. v. Union of India and others, (1990) 1 SCC 400 and State of Tamil nadu v. M/s. Hind Stone, AIR 1981 SC 7111. ( 6 ) SHRI R. S. Jha, Deputy Advocate General, appeared for the authorities of the State and Shri M. L. Jaiswal, Senior Advocate with Shri P. K. Jaiswal, advocate, appears for the Mining Corporation to support the action of the state. It is submitted on behalf of the respondents that although the power of reservation contained Rule 13 of the Rules has not been exercised by the State in favour of the Corporation, yet there is a distinct power under Rule 66 of the Rules with the State Government to relax the provisions of the Rules in special cases in public interest. It is submitted that the State Government, to supplement the statutory rules of 1996. have issued guidelines for grant of quarry lease and exploitation of minor minerals through the Corporation and the Panchayats. A copy of the guidelines has been filed as Annexure-R/2 along with the return of the State. Reference has also been made and reliance placed on a general circular of the State in its Mineral Resources Department dated 13. 9. 1996 (Annexure P/4 ). By the above circular it has been clarified that the existing leases with Mining Corporation shall continue to be held by them. Reference has also been made and reliance placed on a general circular of the State in its Mineral Resources Department dated 13. 9. 1996 (Annexure P/4 ). By the above circular it has been clarified that the existing leases with Mining Corporation shall continue to be held by them. The circular further directs that no mining or quarry shall be granted to any other parties within a radius of 5 kilometers of the areas granted to the Mining corporation. The circular thus provides that the existing quarry leases with the Mining Corporation would continue to be held by the Corporation and would not stand transferred to concerned Panchayatsmay be that they fall within the jurisdiction of the Panchayats. There is also a ban imposed by the circular for grant of leases to any other parties for areas falling within five kilometers from the areas held under the lease by the Corporation. The corporation has been allowed to hold the lease with a condition that in accordance with object of the rules they would provide maximum opportunity of labour and employment to local labourers and those persons living below the poverty line. It is submitted that in public interest, for proper exploitation of minerals and to ensure employment to poor sections of the society living in the Panchayat area, the State Government had taken a decision dated 23. 12. 1996 (Annexure-R/3 to grant right of leases for quarries amongst others in Malkachhar, Neemkheda and Shitalpur for the exclusive operation by the corporation. It is submitted that in accordance with the provisions of the rules, the revenue collected by the Corporation shall be made over to the panchayats. It is also submitted that although the quarry leases are granted to the Corporation, the right of transport of mineral can be given to private parties by notifying tenders and such mode of disposal of minor mineral 'sand' cannot be questioned. ( 7 ) ON behalf of t he Corporation it is submitted that all the supplementary rules, guidelines and circular have been issued so that the mining Corporation which is a limb of the State is assured sufficient business in minerals to be carried on in public interest to generate employment for the poor and the needy. It is also submitted that ban for grant of lease within a radius of 5 k. ms. It is also submitted that ban for grant of lease within a radius of 5 k. ms. from the existing leasehold areas of the Corporation has been found necessary to check unhealthy competition in price of mineral and illicit minings. 8, The main question that falls for consideration before this Court is whether the action taken by the State Government to make available the three above-mentioned quarries for exclusive operation by the Corporation against the resolution of the Panchayats. is in accordance with law or not. For deciding the above question, it would be necessary to briefly survey the provisions contained in the Constitution and the Rules of 1996 framed thereunder to give effect to the constitutional provisions. Article 243-G of the Constitution empowers the legislature of a State, by law, to "endow the Panchayats with such powers and authority as may be necessary to enable them to function as institutions of self-government and such law may contain provisions for the devolution of powers and responsibilities upon Panchayats at the appropriate level. " Under Article 243-H, the legislature of State is empowered by law to "authorise a Panchayat to levy, collect and appropriate such taxes, duties, tolls and fees in accordance with such procedure and subject to such limits" as also "assign to a Panchayat such taxes duties, tolls and fees levied and collected by the State". ( 8 ) THE above Articles and other Articles contained in Chapter IX aim at financially strengthening the lowest democratic units i. e. the Panchayats to enable them to function as viable local self governments for the upliftment of the rural population. ( 9 ) THE subject of mineral concession is a Central subject regulated by central legislation. Mines and Minerals (Regulation and Development) Act, 1957. Under Section 15 of the Act. the State Government has been conferred with the power to make rules for regulating grant of quarry leases mining leases and other mineral concessions in respect of minor minerals. In exercise of powers under Section 15, earlier the State Government had framed M. P. Minor Mineral Rules, 1961 which are superseded and substituted by rules of the same name of 1996. Obviously, the new rules have been framed to give effect to the provisions for creation of Panchayat Raj as envisaged by Part-IX of the Constitution. In exercise of powers under Section 15, earlier the State Government had framed M. P. Minor Mineral Rules, 1961 which are superseded and substituted by rules of the same name of 1996. Obviously, the new rules have been framed to give effect to the provisions for creation of Panchayat Raj as envisaged by Part-IX of the Constitution. Under the Rules of 1996, the relevant rule for consideration in this case is Rule 4 which provides that no person shall undertake any mining operation in any area except in terms of a quarry permission or a quarry lease granted in accordance with rules. It, however, protects the existing quarry leases granted earlier to the commencement of the Rules. Sub-rule (2) of Rules 4 states that "no quarry permit or quarry lease shall be granted other than in accordance with provisions of these rules. " sub-rule 2 Rule 5 contains a prohibition that no quarry lease or quarry permit shall be granted in respect of an area which is a forest land, at certain distance from a bridge. National or State Highways or in respect of an area notified by the government as reserved for the use of the Government, Local Authorities or for any other public or for special purposes except with the previous approval of the State Government. Such prohibition, however, is not applicable to quarry lease for mineral 'sand or bajri in respect of land within a distance of 50 metres from river banks, nala (small water course), canal or any natural water course, dams or any water impounding structures. Sub-rule 2 (a) and (d) to Rule 5 needs reproduction :"5. Restrictions on the grant of quarry permit or quarry lease. (1 ). . . . . . . . . . (2) No quarry lease, or quarrypermit shall be granted in respect of an area : (a| notified by the Government as reserved for the use of the government Local Authorities or tor any other public or for special purposes except with the previous approval of the State Government. (d) except for the mineral sand or bajri in respect of land within a distance of 50 matre from river banks, nala (small water course) canal or natural water course, dams or any water impounding structures. (d) except for the mineral sand or bajri in respect of land within a distance of 50 matre from river banks, nala (small water course) canal or natural water course, dams or any water impounding structures. "rule 7 provides that quarries of certain annual value mentioned therein concerning minerals specified in Schedule II of the Rules shall, for regulating the grant and renewal or quarry permit and all purposes connected therewith, shall stand transferred to respective Panchayats. It may be mentioned that minerals and bajri are included as Item No. 1 in Schedule II and in respect of them the quarry leases and permits can be granted by respective Gram panchayats. Rule 8 is relevant and needs reproduction, which is on the subject of grant of quarry leases or permits by Panchayats concerned and the procedure for opening new quarries. Rule 8 as it stood prior to amendment by Notification dated 1997, reads as under :"8. Procedure for demarcation of new quarries and grant of quarry permits when the area falls under different Gram Panchayats/janpad panchayats. (1) If the area of any quarry, in respect of which powers to grant quarry permits, as specified in Rule 7 above, covers more than one Gram Panchayat or Janpad Panchayat. quarry permit for such quarry shall be granted by that Gram Panchayat which is authorised by Zila Panchayat. (2) Concerning Panchayat may demarcate and declare new quarry in respect of mineral specified in Schedule II in consultation with the director and the Collector of the district concerned. "the above Rule, under Notification No. 19-53-87-XII-2 dated 19th June. 1997, has now been substituted by the amended rule which reads as under :"8. Procedure for demarcation of new quarries. Panchayat may demarcata and declare new quarry in respect of Mineral specified in schedule II in consultation with the Collector of the District. " rule 21 contains the bodies and persons who are to be preferred in order of preference for grant to quarry leases or permits. Under sub-rule (1) of Rule, for minerals specified in Item No. 1 of Schedule I, exclusive right is created in favour of Mining Corporation. Minerals specified at Sl. " rule 21 contains the bodies and persons who are to be preferred in order of preference for grant to quarry leases or permits. Under sub-rule (1) of Rule, for minerals specified in Item No. 1 of Schedule I, exclusive right is created in favour of Mining Corporation. Minerals specified at Sl. No. 2 to 7 of Schedule I and all minerals specified in Schedule II have to be granted in order of preference provided under Clauses (i) to (iv) of sub-rule (2) of Rule 21 to co-operative societies, association of scheduled castes and tribes, backward classes, co- operative societies of educated unemployed youths or individuals, consisting of members below poverty line, and similar others to cater to the needs of the poorest sections of the society living within the Panchayat area. The last relevant rule is Rule 66 which is the general provisions giving power of relaxation to the state Government from complying with the provisions of the Rules in special cases. " ( 10 ) ON examination of the provisions of the Constitution and the scheme of the rules, the question needs decision is whether the State Government in making available the three quarry leases, for which the petitioners are aspirants, for exclusive exploitation by the Mining Corporation, has acted in accordance with the rules or de hors them. ( 11 ) IT is not disputed that there is no notification of reservation in the official gazette issued in accordance with Rule 13 of the Rules. It is also not disputed that "sand' and 'bajri' is mineral notified at SI. No. 1 in Schedule II for which the Panchayat is empowered to grant quarry lease or permit in order of preference to societies or individuals from poor sections of the society as laid down in sub-rule (2) of Rule 21. On behalf of the State for refusing to make available the above-mentioned quarries for grant to the Gram Panchayats, the justification shown is that there is a circular and guideline issued by the State that within a radius of 5 kms. of the existing area held by the Corporation under any lease, no lease could be granted to private parties to check unhealthy competition in price of mineral and to control illicit mining. The circular on which reliance has been placed is dated 13. 9. 1996 (Annexure-P/4 ). of the existing area held by the Corporation under any lease, no lease could be granted to private parties to check unhealthy competition in price of mineral and to control illicit mining. The circular on which reliance has been placed is dated 13. 9. 1996 (Annexure-P/4 ). The bah contained in the circular for grant of quarry leases or permits by panchayats for an area within a radius of 5 kms. from existing lease of the corporation is not to be found mentioned in any of the provisions of the Rules of 1996. The State Government is competent to issue such circulars and guidelines which are supplementary to the rules and intended to fill its gap so as to advance the object of the Act and the rules. The State Government, however, cannot be conferred with power to issue guidelines or circulars which are not in conformity with the rules. The provision of the circular directing the authorities to desist from granting leases by the Panchayats to any parties within a radius of five kilometers from the existing leased works an of the corporation is. therefore, against the provisions contained in the rules. Any other interpretation of the rules would take away a large chunk of land with minerals from being allowed to be exploited by the Panchayat in the interest of its own revenue. As has been noticed, under Rule 5 (2) (d ). mineral concession for mining mineral 'sand and Bajri' within a distance of 50 metres from river banks, nala canal or natural water course, dam's etc. can be granted without any restriction. Under sub-rule (2) of Rule 21, minerals specified in Schedule ii can be granted in order of preference to individuals and associations from very poor sections of the society. The guidelines issued banning grant of quarry leases or permits for minerals 'sand and Bajri' within a radius of 5 kms. from the area leased out to the Corporation, therefore, cannot be sustained as such ban is clearly in violation of the rules. ( 12 ) AT this stage, it may be pointed out that in fact there was a proposal made by the Panchayat for opening new quarries near the river-bed for grant of mining right for collection of sand. from the area leased out to the Corporation, therefore, cannot be sustained as such ban is clearly in violation of the rules. ( 12 ) AT this stage, it may be pointed out that in fact there was a proposal made by the Panchayat for opening new quarries near the river-bed for grant of mining right for collection of sand. In accordance with Rule 8 (2), the concerned Panchayat had taken a formal resolution and had sent the resolution for opinion or consultation of the Director and the Collector. The requirement of sub-rule (2) of Rule 8 of 'consultation' with the Director and collector of the district, before opening a new quarry, is obviously with a view to ensure proper exploitation of natural resourses and minerals in public interest and for protection of environment. The proposal moved by the Gram panchayat could be approved or disapproved for a valid reason in public interest. In the instant case, such proposal to open new quarries has not been expressly turned down for any relevant reason in public interest. The resolution has been turned down and the proposal to grant leases to the petitioners and others has been rejected solely on the ground that the State government had conveyed its decision to reserve the quarries under the proposed leases for exclusive operation by the Mining Corporation. ( 13 ) ON examining the scheme of the rules and ascertaining the object that is evinced by the rules and the constitutional provisions, this Court is of the opinion that grant of quarry leases and quarry permits for the areas falling within a Panchayat is a matter exclusively for the Panchayat to decide. The State Government has overriding power to reserve an area for the Mining Corporation in respect of minerals apart from minerals mentioned in Schedule I for which exclusive right of working is with the corporation. Apart from the provisions of reservation contained in Rule 13 and Rule 21 (1) in respect of minerals specified in Schedule I, the State government cannot take away other mineral areas from the jurisdiction of the Panchayat by taking recourse to Rule 66. which is sought to be invoked and relied on behalf of the State. Rule 66 is a general power of relaxation and reads as under : "66. Relaxation of rules in special cases. which is sought to be invoked and relied on behalf of the State. Rule 66 is a general power of relaxation and reads as under : "66. Relaxation of rules in special cases. In any case or class of cases in which the State Government is of the opinion that the public interest so requires it may grant a quarry lease/quarry permit on the terms and conditions other than those prescribed in these rules. " ( 14 ) THE language of the above rule plainly conveys that in public interest, the State Government may grant a quarry lease or permit on terms and conditions other than those prescribed in the rules. The relaxation is in respect of 'terms and conditions'. The provision cannot be read to mean that all other provisions of the rules can be disregarded by the State Government to confer monopoly right on the Corporation. In any event, the power of relaxation under Rule 66 has to be exercised in public interest. The term "public interest" has a wide connotation and meaning. On behalf of the State it has been urged that the Corporation has been granted exclusive right in respect of minerals falling in that area. In judging the action of the State on the touch-stone of 'public interest', the other provisions of the Rules cannot be overlooked. The provisions of the Rules discussed above show that they do not contain any prohibition for grant of quarry leases and permits for areas within radius of five kilometres of the leased area of the Corporation. To read such a ban into the provisions is to add to the rules, which are statutory, by adding something to it by executive instructions. It is settled in law that executive instructions can supplement the statutory rules, but cannot supplant them. The concept of public interest is to be found through out the provisions of the rules which are framed after Part-IX on 'panchayat' which was introduced in the Constitution to encourage the lowest democratic institutions and to put them of financially sound footing. Where the rules intend that the Corporation should have exclusive right of exploitation, express provisions have been made by reserving the areas for it under Rule 13 and exclusive right to it for minerals specified in Schedule-I. Apart from the above-mentioned rights granted to the Corporation, no further monopoly rights can be created. Where the rules intend that the Corporation should have exclusive right of exploitation, express provisions have been made by reserving the areas for it under Rule 13 and exclusive right to it for minerals specified in Schedule-I. Apart from the above-mentioned rights granted to the Corporation, no further monopoly rights can be created. The State, thus, in putting a ban on grant of quarry lease within the radius of 5 kms, from the leased areas of the Corporation, and in granting such area for exploitation to the Corporation, has indirectly reserved such areas without resort to Rule 13 of the Rules. An act which cannot directly be done cannot be permitted to be done indirectly, in the manner as has been done here. The State Government has also not come out, except for the specific stand taken by them as discussed above, that the public interest was in any manner protected by grant of exclusive right of mining to the Corporation. The petitioners have formed co-operative societies of miners and labourers residing within the Panchayat area who would be getting opportunities of employment. The Corporation on the other hand, after obtaining exclusive rights of operating the quarries has issued tender notice for grant of right of collection to private parties. Such action may not be illegal or against public interest, but the right of Panchayats to deal with quarries falling within their jurisdiction and to exploit them for the bestinterest of the Panchayat has been taken away. This would indirectly result in discouraging Panchayat Raj movement which aims at giving maximum participation to the rural population in a village and to take them self-reliant. 15. For the reasons aforesaid, the action of the Government and the corporation cannot be sustained and has to be quashed. Consequently, the circular dated 13. 9. 1996 (Annexure-P/4) imposing a ban on grant of quarry leases and quarry permits within a radius of 5 kms. from existing leased areas of the Corporation and the grant (Annexure-R/3) dated 23. 12. 1996 made in favour of the Corporation by the State in relation to the quarry leases in malkachhar and Neemkheda and Shitalpur with the consequent action of the corporation in issuing tender notices for award of transport contracts to private parties all are hereby quashed. from existing leased areas of the Corporation and the grant (Annexure-R/3) dated 23. 12. 1996 made in favour of the Corporation by the State in relation to the quarry leases in malkachhar and Neemkheda and Shitalpur with the consequent action of the corporation in issuing tender notices for award of transport contracts to private parties all are hereby quashed. The respondents are hereby restrained from interfering with the right of the Gram Panchayats Kusmi and Malkachhar to deal with the grant of quarry leases and permits for minor mineral 'sand and Bajri. The respondents are directed to reconsider the proposals of the grain Panchayats concerned in accordance with Rule 8 of the Rules (as amended by notification published in M. P. Rajpatra (Extra-ordinary) dated 19. 6. 1997) and convey their decision to the Panchayats within a reasonable period of two months from the date of this order. The competing claims of petitioners Narmada Khanij Utkhanan Mazdoor Sahkari Samiti Maryadit and chandralal (i. e. parties in W. P. Nos. 4708/97 and 4677/97) shall be decided by the Gram Panchayats concerned Le. Gram Panchayat Malkachhar and kusmi, and the aggrieved party, if any. may resort, if necessary, to remedy provided to them of appeal and revision under the Rules. In the circumstances, the parties shall bear their own costs. .