JUDGMENT
Permod Kohli, J.
1. Petitioners in all these petitions are mining lessees/ licensees of minerals like coal, iron ore and copper ore. They are aggrieved by Notification No. SC-10-A/99-547/M dated 10th February, 1999 issued by the Mines and Geology Department, allegedly issued under Rules 64 of the Mineral Concession Rules 1960 framed under Section 13 of the Mines and Minerals (Development & Regulation) Act, 1957, whereby direction has been issued to all the lessees/licensees of iron ore, copper ore and coal to ensure the payment of the royalty in respect of daily despatches of minerals through the Treasury challans or bank draft on the following day. It is further provided that payment shall be adjusted against the amount payable by the lessees. It further stipulates that earlier directions to the extent in consistent with this notification shall be deemed to be amended. This notification was made effective from the date of its issue.
2. Petitioners have challenged the constitutionality, legality and propriety of this notification on following amongst other grounds:
a. Impugned notification is beyond the power, authority and jurisdiction of the State;
b. It is violative of Rule 64A of the Mineral Concession Rules framed under Mines and Minerals Act, 1957;
c. It is in violation of Regulation 4 framed under Section 57 of the Mines and Minerals (Development & Regulation) Act, 1957;
d. Notification has not been approved by the State Legislature, as required under Section 28(3) of Mines and Minerals (Development & Regulation) Act, 1957; and
e. It is unreasonable, impracticable and discriminatory in nature.
Impugned notification dated 10th February, 1999 is reproduced hereunder:
Notification
10th February, 1999
No. N.C.10-1/99-547/M- In exercise of the powers delegated under Rule 64 of the Mineral Concession Rules, 1960, The Governor of Bihar directs all the lease holders of iron ore, copper ore and coal to ensure the payment of royalty in respect of daily despatches of minerals through treasury challan or bank draft on the day following.
2. Payment made in respect of royalty by the lease holders shall be adjusted as against the present demand.
3. All the directions issued earlier shall be deemed amended to this extent. This order shall be treated taking effect from the date of its notification.
By the order of the Governor,
Sd/- Siyaram Sharan Sharma,
Special Secretary to the Govt.
3. The State Government in its affidavit filed through Additional Director, Mines, Ranchi, has defended the notification tracing the power of the State to issue such a notification to Rule 64 of the Mineral Concession Rules. It is further pleaded that the notification is to be read in the light of provisions of Section 9 of Mines and Minerals (Development &Regulation) Act, 1957. It has also been urged that the State Government was facing difficulty in realizing the royalty and the delay in release of payments affects the execution of governmental schemes adversely.
4. Respondents have placed on record details of amount of royalty payable in respect to the years 1994-95 to 1997-98, relating to three minerals, namely, coal, copper and iron ores and it is stated that more than 95% of the royalty is raised by the State in respect to these minerals.
5. It is relevant to notice some of the important provisions of Mines and Minerals (Development & Regulation) Act, 1957, Mineral Concession Rules and regulations framed under Mines Act (hereinafter to be referred as Act, Rules and Regulations, as the case may be) with a view to appreciate respective contentions of the parties.
Mines and Minerals (Development &
Regulation) Act, 1957
9. Royalties in respect of mining leases:- (1) The holder of a mining lease granted before the commencement of this Act shall, notwithstanding anything contained in instrument of lease or in any law in force at such commencement, pay royalty in respect of any mineral removed or consumed by him or by his agent, manager, employee, contractor or sub-lessee from the leased area after such commencement, at the rate for the time being specified in the second Schedule in respect of the mineral.
(2) The holder of a mining lease granted on or after the commencement of this Act shall pay royalty in respect of any mineral removed or consumed by him or by his agent, manager, employee, contractor or sub-lessee from the leased area at the rate for the time being specified in the Second Schedule in respect of that mineral.
(2-A) The holder of a mining lease, whether granted before or after commencement of the Mines and Minerals (Regulation and Development) Amendment Act, 1972, (56 of 1972) shall not be liable to pay any royalty in respect of any coal consumed by a workman engaged in a colliery provided that such consumption by the workman does not exceed one-third of a tonne per month.
(3) The Central Government may, by notification in the Official Gazette, amend the Second Schedule so as to enhance or reduce the rate at which royalty shall be payable in respect of any mineral with effect from such date as may be specified in the notification:
Provided that the Central Government shall not enhance the rate of royalty in respect of any mineral more than once during any period of 1[three years].
13. Power of Central Government to make rules in respect of minerals:- (1) The Central Government may, by notification in the Official Gazette, make rules for regulating the grant of 1[reconnaissance permits, prospecting licences and mining leases] in respect of minerals and for purposes connected therewith.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:
(a)…
(b)…
(c)…
(d)…
(e)…
(f)…
(g)…
(h) the facilities to be afforded by holders of mining leases to persons deputed by the Government for the purpose of undertaking research or training in matters relating to mining operations;
3[(i) the fixing and collection of fees for 1[reconnaissance permits, prospecting licences or mining leases]; surface rent, security, deposit, fines, other fees or charges and the time within which and the manner in which the dead rent or royalty shall be payable].
14. Sections 5 to 13 not to apply to minor minerals:- The provisions of Sections 1[5 to 13] (inclusive) shall not apply to quarry leases, mining leases or other mineral concessions in respect of minor minerals.
15. Power of State Governments to make rules in respect of minor minerals:- (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.
28. Rules and notifications to be laid before Parliament and certain rules to be approved by Parliament: (1) …
(2) …
1[(3) Every rule and every notification made by the state Government under this Act shall be laid, as soon as may be after it is made, before each House of the State Legislature where it consists of two Houses, or where such Legislature consists of one House, before that House.].
The Mineral Concession Rules 1960
27. Conditions:- (1)Every mining lease shall be subject to the following conditions 1[xx x]
(a) …
(b) …
(c) The lessee shall pay, for every year, except first year of lease, such yearly dead rent 2[at the rates specified in the Third Schedule] 3[of the Act] and if the lease permits the working of more than one mineral in the same area, 4[the State Government shall not charge separate dead rent in respect of each mineral.]
Provided that the lessee shall be liable to pay dead rent or royalty in respect of each mineral whichever be higher in amount but not both.
(2) A mining lease may contain such other conditions as the State Government may deem necessary in regard to the following, namely-
(a) the time-limit, mode and place of payment of rents and royalties;
3[(5j] If the lessee makes any default in the payment of royalty as required under Section 9 or payment of dead rent as required under Section 9A or commits a breach of any of the conditions specified in Sub-rules (1), (2) and (3), except the condition referred to in Clause (f) of Sub-rule (1), the State Government shall give notice to the lessee requiring him to pay the royalty or dead-rent or remedy the breach, as the case may be, within sixty days from the date of the receipt of the notice and if the royalty or dead-rent is not paid or the breach is not remedied within the said period, the State Government may, without prejudice to any other proceedings that may be taken against him, determine the lease and forfeit the whole or part of the security deposit].
64. How the fees and deposit to be made:- Any amount payable under the Act or these Rules except that payable in respect of revision-petition under Sub-rule (1) of Rule 54, shall be paid in such manner as the State Government may specify in this behalf.
2[64A. The State Government may without prejudice to the provisions contained in the Act or any other Rule in these Rules, charge simple interest at the rate of 3[twenty four] per cent per annum or any rent royalty or fee (other than the fee payable under Sub-rule (1) of Rule 54 or other sum due to that Government under the Act ‘r these rules or under the terms and conditions of any prospecting licence or mining lease from the sixtieth day of the expiry of the date fixed by that Government for payment of such royalty, rent, fee or other sum and until payment of such royalty, rent, fee or other sum is made.]
Metalliferous Mines Regulations. 1961
CHAPTER II
Returns, Notices and Records
4. Quarterly returns.- On or before the 20th clay of January, April, July and October in every year, the owner, agent or manager shall submit to the Chief Inspector and the Regional Inspector correct returns in respect of the preceding quarter in Form II of First Schedule.
6. Section 9 of the Act provides for payment of royalty by leaseholder in respect to minerals recovered or consumed from the leased area at the rates specified in Second Schedule after the commencement of this Act.
7. It has been urged on behalf of the petitioners that all three minerals, namely, coal, iron ore and copper ore, are major minerals and only the Central Government is empowered to make rules in respect of such minerals and the Central Government has no power/authority or jurisdiction to frame rules in respect to major minerals.
8. Section 13 of the Mines and Minerals (Development & Regulation) Act, 1957 confers the power on the Central Government to make rules in respect to minerals and for purposes connected therewith. Sub-section (2) of Section 13 specifies the areas and matters in respect to which rules can be framed by the Central Government under this Section. Clause (i) of Sub-section (2) provides for framing of rules for purposes of fixing and collection of fees for reconnaissance permits, prospecting licences or mining leases; surface rent, security deposit, fines, other fees or charges and the time within which and the manner in which the dead rent or royalty shall be payable.
9. According to the petitioners, all matters relating to the payment of royalty, the time and the manner of payment fall under this clause and it is only the Central Government, which has exclusive jurisdiction to frame rules.
10. Section 14 excludes the applications of Sections 5 to 13 to minor minerals. Sections 5 to 13 deal with the mining leases for which the Central Government has to take action.
11. It is the Section 15 of the Act, which empowers the State Government to make rules in respect to minor minerals. A conjoint reading of these three sections clearly indicate that it is the Central Government, which has the power and authority to deal with the minerals other than the minor minerals. Section 3, which contains definitions, defines only the minor minerals under Clause (e) thereof, which reads as follows:
Definitions:- In this Act, unless the context otherwise requires-
(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;
12. Since there is no definition of major minerals, all minerals other than minor minerals defined above shall be deemed to be the minerals for which the Central Government has the power to frame rules in terms of Section 13 of the Act. Even in Section 13 of the Act, there is no mention of “major minerals”. It speaks of minerals, which means all minerals other than the minor minerals, as defined under Section 3(e). Even by this expression also, the Central Government has the jurisdiction to frame rules in respect to all minerals other than the minor minerals defined under Section 3(e) for which the State has the power under Section 15 to make rules. Indisputably, these three minerals specified in the impugned notification do not fall within the definition of minor minerals and, thus, the State Government has no authority to frame rules in respect to these minerals.
13. The Mineral Concession Rules, 1960 are notified vide GSR No. 1398 dated 11th November, 1960 in exercise of power conferred by Section 13 of the Mines and Minerals (Development & Regulation) Act, 1957 by the Ministry of Steel, Mines and Fuel (Department of Mines & Fuel), Government of India.
14. Rule 27 prescribes conditions of mining lease. On perusal of this Rule, it appears that every mining lease shall be subject to the conditions specified in this Rule, meaning thereby the conditions stipulated in this rule are the statutory conditions of every mining lease and will form the necessary conditions of every mining lease irrespective of the fact, whether these are incorporated in the lease instrument or not. Clause (c) of Rule 27(1) imposes obligation upon the lessee to pay dead rent at the rates specified in third schedule of the Act for every year. Even Schedule three appended to the Act specifies the rates of dead rent per Hectare perannum.
15. Rule 27(2) provides for imposition of other conditions by the State in addition to the statutory conditions prescribed under Rule 27(1). Clause (a) of Sub-rule (2) empowers the State Government to prescribe the time limit, mode and place of payment of rents and royalties. Sub-rule (5) empowers the State Government to give notice to the lessee requiring him to pay royalty or dead rent payable under the Act or remedy, the breach if the lessee makes default in making payment of royalty, dead rent etc. or commits breach of any of the conditions specified in Rule 27. By such notice 60 days’ time is to be allowed from the date of receipt for payment of dead rents, royalties and remedy the breach.
16. Rule 64 further confers the power on the State Government to decide the manner for payment of amount payable under the Act and Rules, except that payable in respect of revision petition under Sub-rule (1) of Rule 54.
Rule 64-Afurther empowers the State Government to charge simple interest @ 24% per annum on the amount of any rent, royalty or any other amount payable under the Act after 60 days of the expiry of the date fixed by the Government for payment of such royalty, rent, fee or other sum till the amount is paid.
17. It is evident from these Rules that various powers have been conferred upon the State Government under the Rules framed by the Central Government in exercise of power under Section 13.
18. A conjoint reading of Section 13 of the Act and these Rules clearly establish that even though the power to frame rules lies with the Central Government under Section 13, but there is no prohibition for the Central Government to confer the powers or impose duties upon the State Government in respect to any matters specified under Section 13. The Central Government having empowered the State Government to decide about the manner of payment of sums payable under the Act, the contention of learned Counsel for the petitioners that the State Government has no authority or jurisdiction to decide about the time and mode of payment seems to be an argument in futility. This contention further deserves rejection in view of Rule 64-A, which empowers the State Government to charge interest on expiry of 60 days of the date fixed by the State Government for payment of such royalty. This rule also authorizes State Government to fix the date for payment of sums under the Act. Rule 64-A has been relied upon by the petitioners and no challenge is made to it in these proceedings.
19. Another allied argument is raised by Mr. Ananda Sen, learned Counsel appearing for the petitioners. His submission is that the expression such manner occurring in Rule 64 does not include the power to fix the time limit for payment of the amount under the Act. The word “manner” has been defined in Chambers dictionary as way in which anything is done; method; fashion; personal style of acting or bearing; custom; style of right or thought.’ This definition clearly includes within its swipe the power to fix time also as it relates to the way, a thing is required to be done. I am unable to persuade myself to accept the argument of Mr. Ananda Sen in this regard. Therefore, the argument of petitioners’ counsel that the impugned notification is beyond the power/authority or jurisdiction of the State deserves to be rejected.
20. It has been contended that the impugned notification is violative of Rule 64-A of the Mineral Concession Rules, 1960 framed under Act. This Rule, has been quoted hereinabove and inter alia empowers the State Government to charge interest on the amount payable as rent, royalty or fee or any other amount payable under the Act or the Rules under the terms and conditions of the licence or lease from the 60th day of the expiry of the date fixed by the Government for payment of such amount. This Rule confers (i) power to charge interest as prescribed; and (ii) fix period for payment of the royalty, rent, fee etc.
21. As discussed above, Rule 64 empowers the State Government to specify the manner for payment and Rule 64-A further authorizes the State Government to fix the time for payment. The State Government thus derives authority to fix the time for payment of royalty and other amounts payable under the Act and Rules from both these Rules read with Rule 27(2).
22. Learned Counsel appearing for the petitioners tried to impress upon the Court that in view of the clear stipulation in Rule 64-A for payment of interest from the 60th day of the date fixed for payment, State Government has no jurisdiction to issue impugned notification asking the petitioners-lessees/licensees to pay the amount on the date i.e. following the date of despatches of the minerals. I do not feel, there is any conflict between the impugned notification and Rule 64-A. Rule 64-A only empowers the State Government to charge interest from the 60th day of the date fixed by the Government for payment. Therefore, question arises how the 60th day will be calculated. 60th day can only be determined, if a date for payment is fixed by the Government. The impugned notification seeks to fix the date for payment of royalty wherein the State Government has issued direction to the leaseholders to pay the royalty on the next date of dispatching the minerals. By issuing this notification, the State Government has only fixed the date for payment and liability to pay interest would be from 60th day from the date of dispatch of each consignment of minerals. This notification is only to supplement Rule 64-A and not to supplant this Rule. Hence there is no force in the argument of the petitioners’ counsel that the notification violates Rule 64-A. This takes me to switch over the next contention of the petitioners, which deals with the violation of Regulation 4 of the regulations framed under Section 57 of The Mines Act, 1952. Section 57 of The Mines Act, 1952 empowers the Central Government to make regulations for purposes specified in that section. There is no specific provision contained in this Section, which deals with the payment of royalty except Clause (zz). This clause is general in nature and speaks of any other matter, which has to be or may be prescribed. Regulation 4 relied upon by the petitioners, as noticed above, deals with filling of quarterly returns on or before 20th day of January, April, July and October in every year with the Chief Inspector and Regional Inspector in respect to the preceding quarter in Form II of first schedule. Form-II in Schedule-I only speaks of information in respect to the mine, mineral work, postal address of mine station and place, district and State etc. of the mine, name and address of the owner, Managing Agent and Managing Director etc.
23. Table A(2) deals with the mineral work and despatch in the quarter. From the perusal of this form, I do not find that either Regulation 4 or Form-11 in Schedule-1 to Metalliferous Mines Regulations, 1961 framed under Section 57 of the Mines Act, 1952 has any relevance with the issue involved.
24. The notification impugned in this petition, in my view, is not a piece of subordinate legislation for the reasons hereinafter noticed. Even if it is considered to be subordinate legislation, grounds on which a subordinate legislation can be questioned have been laid down by Hon’ble Supreme Court in various judgments. A similar question came to be examined by the Hon’ble Supreme Court. While examining the validity of Rule 38-A of Tamil Nadu Minor Mineral Concession Rules, 1959 in the case of State of Tamil Tonu and Anr. v. P. Krishnamurthy and Ors. , Hon’ble Supreme Court held as under:
15. There is a presumption in favour of constitutionality or validity of a subordinate legislation and the burden is upon him who attacks it to show that it is invalid. It is also well recognized that a subordinate legislation can be challenged under any of the following grounds:
(a) Lack of legislative competence to make the subordinate legislation.
(b) Violation of fundamental rights guaranteed under the Constitution of India.
(c) Violation of any provision of the Constitution of India.
(d) Failure to conform to the statute under which it is made or exceeding the limits of authority conferred by the enabling Act.
(e) Repugnancy to the laws of the land, that is, any enactment.
(f) Manifest arbitrariness/unreasonableness (to an extent where the court might well say that the legislature never intended to give authority to make such rules).
16. The court considering the validity of a subordinate legislation, will have to consider the nature, object and scheme of the enabling Act, and also the area over which power has been delegated under the Act and then decide whether the subordinate legislation conforms to the parent statute. Where a rule is directly inconsistent with a mandatory provision of the statute, then, of course, the task of the court is simple and easy. But where the contention is that the inconsistency or non-conformity of the rule is not with reference to any specific provision of the enabling Act, but with the object and scheme of the parent Act, the court should proceed with caution before declaring invalidity.
The impugned notification does not fall in any of the categories as noticed by Hon’ble Supreme Court in Paras-15 of the aforesaid judgment and thus, it cannot be said to be invalid or ultra vires in any manner.
25. The next argument of the petitioner relates to Sub-section (3) of Section 28 of the Act quoted hereinabove. Section 28(3) require every rule and every notification made by the State Government under this Act to be laid as soon as may be after it is made before each house of the State Legislature, where it consists of two houses, or where such legislature consists of one house, before that house. Under this Section every notification made under the Act is required to be laid before the Assembly and the Council, if exists, and in case no Council exists before Assembly. This Section imposes an obligation for placing the Rule and every notification made by the State Government under the Act before the legislature of the State.
26. The question, which needs consideration is, is it a notification issued and made under the Act. It is admitted case of the parties that this notification has been issued under Rule 64 of the Mineral Concession Rules, 1960. It is not a notification issued under any provision of the Act. Even if it is assumed that the expression “under the Act” includes rules also, position will not change in view of discussion hereinafter. Though the impugned direction is termed as a notification, but Rule 64 does not require issuance of a notification, even Rule 64-A also does not provide for issuance of any notification fixing the date for payment. Rule 64 only empowers the State Government to specify the manner for payment of amount payable under the Act. It can be by an executive order or any other form. No specific form has been prescribed. As per the scheme of rules 27(2), 64 and 64-A, these are enabling provisions and enable the State Government to decide the mode and method of payment of royalty and other amounts payable under the Act. This by no stretch of imagination means that the action of the State Government acquires legislative character.
27. There are some provisions under Mines and Minerals (Development & Regulation) act, 1957, which require issuance of a notification by the State Government. Such as Sections 15(1) and 17-A(2), which require the State Government to issue a notification in official gazette. Thus, the notification contemplated by Section 28(3) is a statutory notification envisaged under any of the provisions of the Act and the rules. It does not take into its compass any other order or instruction that may be required to be issued by the State Government in exercise of its executive power even if the powers or actions are envisaged by a statutory provision. The expression notification used in the impugned order appears to be misnomer.
28. I am of the considered view that impugned notification is not the one, which is contemplated by Section 28(3) and was required to be laid before the Legislature of the State. This is an order or an action for which the State Government has been authorized under Rule 64. It is not a statutory or legislative action, but falls within the realm of the executive power of the State Government conferred upon it by virtue of Rule 64. Even the impugned notification is in the nature of direction with no penal consequences. It is merely directory and not mandatory. The impugned notification cannot be said to be illegal or nonest for its non-laying before State Legislature, as required under Section 28 of the Mines and Minerals (Development & Regulation) Act, 1957.
29. Although, I have held that the impugned notification is not one made under the Act and is also not a legislative measure, even if the contention of the petitioner is accepted that it is a notification made under Act, whether its placement before the legislature was necessary. Section 28(3) only requires that every rule and notification made by the State Government shall be laid as soon as may be made before each House of the State Legislature and no more. What is the impact, if this provision is not complied with. In (1979) 2 SCC 796 (Atlas Cycle Industries Ltd. v. State of Haryana) Hon’ble Supreme Court noticed that there are three different laying clauses, which assure different forms depending upon a degree of control, which legislature may like to exercise, namely,- (i) laying without further procedure; (ii) laying subject to negative resolution and (iii) laying subject to affirmative resolution.
While considering the question of non-laying the notification in category (i), Hon’ble Supreme Court further observed in Para-32 of the aforesaid judgment as under:
32. From the foregoing discussion, it inevitably follows that the legislature never intended that non-compliance with the requirement of laying as envisaged by Sub-section (6) of Section 3 of the Act should render the order void. Consequently non-laying of the aforesaid notification fixing the maximum selling prices of various categories of iron and steel including the commodity in question before both Houses of Parliament cannot result in nullification of the notification.
30. The last argument of the petitioner is that the impugned notification is unreasonable, mechanical and discriminatory in nature. By virtue of the impugned notification, lease holder of iron ore, copper ore and coal has been asked to ensure the payment of royalty in respect to daily despatches of minerals by the next date. Though, petitioners have not explained how it is impracticable or unreasonable even if it is assumed that for any practical reason, the leaseholder experiences any inconvenience or hassles, this cannot be a ground for quashing the impugned notification. It is settled law that Court should not declare any action be it legislative or executive ultra vires merely at the asking. All attempts should be made to save a law or an action bona fidely initiated by the State unless it is arbitrary, irrational and unreasonable to the extent it is impracticable to implement under normal circumstance by a prudent person. The notification requires payment of royalty on the despatches made. From the scheme of the Act, the Rules and even statutory conditions specified under Rule 27 of the Mineral Concession Rules framed under the Act, it is apparent that whenever the despatches are to be made, the quantity of identified mineral is ascertained. Royalties are fixed under the schedule and thus, there is no difficulty in determining the amount of royalty payable on despatches in a day.
31. It has been urged on behalf of the petitioners that mining is spread over large areas of the lease and it is impracticable to collect data from all the areas of the despatches in a day. There may be some substance in this submission, but this itself does not nullify the impugned notification. Petitioners are at liberty to approach the respondents for seeking necessary modification of the notification as for the time for ascertaining the despatches and the period for payment is concerned. In any case, it does not hamper the mining operations in the leased area.
32. In so far the question of discrimination is concerned, the sum and substance of the argument of the petitioner is that the impugned notification specifies only three minerals viz. iron ore, copper ore and coal and thus the notification tends to treat the leaseholders of these three minerals differently and with hostility as against the leaseholders of other minerals.
33. In the counter affidavit filed, it is stated that 95% of the royalty amount is in respect to these three minerals, which constitute the majority of leasees/licensees in the State. It is not disputed that these are the major minerals available in the State and constitute a class and can be segregated from other minerals, because of large quantity and large area of the State. Such a classification has nexus with the object sought to be achieved i.e. rationalization of collection of royalty and rent, which is major source of State’s income, as is evident from the counter affidavit. There does not seem to be any discrimination. In any case no foundation has been laid in the writ application to establish discrimination. The burden lies upon the petitioners to not only to allege but also prove discrimination by placing necessary materials on record. Petition sans such material/record.
34. In view of the law laid down by the Apex Court in the aforesaid judgments and clear mandate of law, non-compliance of Section 28(3) will not render the notification void, which only requires laying of a rule or a notification before the State Assembly/Council and nothing more. The provision is directory in nature and its non-compliance will not be a ground for its quashment.
35. In view of the detailed discussions made above, these petitions deserve to be dismissed. I order accordingly.