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2003 DIGILAW 628 (KER)

Secretary, Kerala Granites and Stone Association v. State of Kerala

2003-10-01

J.B.KOSHY, K.THANKAPPAN

body2003
Judgment :- J.B. Koshy, J. Petitioners in these Original Petitions challenge Ext. P-2 Government Order amending R.4 and introducing R.8A and increasing the royalty payable for granite. Petitioners are engaged in quarrying and mining operations. The Mines and Minerals (Regulation and Development) Act, 1957 was enacted by the Central Government for the development of mines and minerals. S.3(a) and (e) of the Act deals with definitions, the relevant portion of which reads as follows: "(a) 'minerals' includes all minerals except mineral oils; (e) 'minor minerals' means 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." 2. In exercise of the powers conferred under S.3(e) of the Act, the Central Government declared the following as minor minerals: "(a) Boulder, Shingle, Chalaceony, Pebbles used for ball mill purposes only, lime shell, kankar and limestone used for lime burning, murrum, brickearth, fuller's earth bentonite, road metal, reh-matti, slate and shale when used for building material (Central Government Notification No. M. 11-152/ (18) 54-A-11 dated 1 st June 1958). (b) Stones used for making household materials (Central Government Notification No.M.II-159(II)/59 dated 13th June 1960). (c) Quartzite and standstone when used for purposes of building or for making road metal or household utensils (Central Government Notification No.M.II-1(1)/63 dated 10th February 1965). (d) Saltpetre is a minor mineral (Government of India's Notification dated 2 8th January 1967)." S.15 of the Act empowers the State Governments to make rules in respect of minor minerals by notification in the official gazette. It also provides that the State Government shall not enhance the rate of royalty or dead rent in respect of any minor mineral for more than once during any period of three years. So, with regard to the minor minerals, royalty can be revised only in an interval of three years. 3. It is the contention of the petitioners that in view of S.3(e), minor minerals can be building stones, gravel etc., and other minerals specified by the Central Government by notification. Granite is not specified by a notification and therefore granite cannotbe considered as minor mineral and State Government has no jurisdiction to impose royalty on the same. It is further contended that the amount of royalty is enhanced periodically in an exorbitant and unreasonable manner. 4. Granite is not specified by a notification and therefore granite cannotbe considered as minor mineral and State Government has no jurisdiction to impose royalty on the same. It is further contended that the amount of royalty is enhanced periodically in an exorbitant and unreasonable manner. 4. Now we will first consider whether the granite is a minor mineral. It is true that granite is not separately notified, but the contention of the Government is that it is a part of the building stones. The "building stones" is a minor mineral as per S.3(e) of the Act. Of course, petitioners are quarrying granite. The petitioners have not averred in their petition that they are not making granite which is used for building. Since word 'stones' is used for all types of building stones, it will be considered under S.3(2) and separate notification is not needed. Further, all the petitioners were given quarrying licences by the State Government as per the Rules for minor minerals and they have not obtained licences for major minerals as provided under the Central Rules. They have no licence to quarry major mineral. All the petitioners were getting licences under the Kerala Mineral Concession Rules, 1960 and quarrying permits were also under the State rules only. Granite is defined in the dictionary as follows: "A coarse-grained igneous rock containing megasopic quartz, averaging 25 per cent much feldspar (orthoclase, mincrocline, dodic plagioclase) and mica or other coloured minerals. In the wide sence, granites includes alkaligranites, adamellites and granodiorites, while the granite clan includes the medium-fine grained equivalents of these rock types." Similar definition is given in the Granite Conservation and Development Rules, 1999 where granite is defined under S.3(h). R.52 of the Granite Conservation and Development Rules, framed by the Central Government, provides as follows: "52. Applicability of the provisions of Minor Mineral Concession Rules framed by the State Government.- The provisions of the Minor Mineral Concession Rules or any other rules framed by the State Government under S.15 of the Act shall be applicable to granite quarry leases to the extent they are not repugnant to or inconsistent with these rules." That also shows that the granite is a minor mineral. Under R.8A of the Kerala Minor Mineral Concession Rules, 1967 the granites and other crystalline rocks are classified into two (i) ordinary low value items and (ii) all granites etc., used for making value-added products. Under R.8A of the Kerala Minor Mineral Concession Rules, 1967 the granites and other crystalline rocks are classified into two (i) ordinary low value items and (ii) all granites etc., used for making value-added products. R.8 A reads as follows: "8A. Classification of granite and other crystalline rocks.-The different varieties of granite and other crystalline rocks are classified as (i) Dimension stones which included all types of granites, dolerite, charnockite, leptynite and other crystalline rocks of Acid, Intermediate, basic and ultrabasic groups of igneous and metamorphic origin which are suitable for cutting to pre-determined sizes, polishing, carving and aminable for making value-added products in decorative monumental and ornamental fields of industry as a high-value item and (ii) all those group of rocks specified above in sub-item (1) which are not suitable for using as dimension stones as specified therein, but can be used as ordinary building stones, road metal, rubble and ballasts after breaking into irregular pieces by blasting or otherwise as low value item with different rates of royalty, dead rent. Note.- Indulgence of quarrying or raising a high value item of dimension stone with the permit/ lease taken for ordinary low value items of granite and other crystalline rocks attract provisions of Rule 58, besides the permit/ lease is liable for cancellation without any notice." Therefore we are of the opinion that the contention that dimension stones and other granite materials quarried by the petitioners are not minor minerals because it is used for making value added materials or for export cannot be accepted. We hold that granite is a minor mineral as defined under S.3(e) of the Act. 5. With regard to the rate of royalty as we have already pointed out in this judgment that State Government can revise it only an interval of three years. The rates were actually being revised after interval of more than three years. The State Government is entitled to make rules under R.15 and that power includes power to amend the rules also. The State has got power to increase the rates. Section itself contemplates of revision or royalty in an interval of three years. Merely because royalty charged by neighbouring States for similar items is less cannot be a ground to quash the rates fixed by the Government, if they have got power to impose royalty and change the rates. The State has got power to increase the rates. Section itself contemplates of revision or royalty in an interval of three years. Merely because royalty charged by neighbouring States for similar items is less cannot be a ground to quash the rates fixed by the Government, if they have got power to impose royalty and change the rates. According to learned Government Pleader, State having a high density population, environmental problems etc., has to be looked after by the Government and cost is going up and the charges are fixed depending upon the expenses they are incurring and in any event arithmetical correlation need not be established and court need not take the role of a cost accountant as held by the Supreme Court in Sreenivasa General Traders & Ors. v. State of Andhra Pradesh & Ors., (1983) 4 SCC 353. It is not necessary to establish that those who pay the fee must receive direct benefit of the services rendered for which the fee is being paid, as held by the Supreme Court in The City Corporation of Calicut v. Thachambalath Sadasivan & Ors., AIR 1985 SC 756. It is submitted by the petitioners that after filing the petitions also there was increase in the rates and the increase is now 400 times from the original fixation. R.29 of the Kerala Minor Mineral Concession Rules, 1967 permits the Government to impose levy or royalty. Therefore, Rules are valid and there is no legal ground to quash the amended Rules. 6. In the above circumstances, we see no merit and the Original Petitions are dismissed. However, if the rates are very high and the petitioners are finding it difficult to compete with similarly placed persons in neighbouring States, it is for the petitioners to make representation before the Government.