{"id":218035,"date":"2000-08-08T00:00:00","date_gmt":"2000-08-07T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/the-quarry-owners-association-vs-the-state-of-bihar-ors-on-8-august-2000"},"modified":"2018-05-01T01:43:19","modified_gmt":"2018-04-30T20:13:19","slug":"the-quarry-owners-association-vs-the-state-of-bihar-ors-on-8-august-2000","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/the-quarry-owners-association-vs-the-state-of-bihar-ors-on-8-august-2000","title":{"rendered":"The Quarry Owners Association vs The State Of Bihar & Ors on 8 August, 2000"},"content":{"rendered":"
Supreme Court of India<\/div>\n
The Quarry Owners Association vs The State Of Bihar & Ors on 8 August, 2000<\/div>\n
Author: Misra<\/div>\n
Bench: A.P.Misra, N.S.Hegde<\/div>\n
           CASE NO.:\nAppeal (civil) 5089  of  1997\nAppeal (civil)\t5090\t of  1997\nAppeal (civil)\t5091\t of  1997\nAppeal (civil)\t5092\t of  1997\n\n\n\nPETITIONER:\nTHE QUARRY OWNERS ASSOCIATION\n\n\tVs.\n\nRESPONDENT:\nTHE STATE OF BIHAR & ORS.\n\nDATE OF JUDGMENT:\t29\/08\/2000\n\nBENCH:\nA.P.Misra, N.S.Hegde\n\n\n\n\nJUDGMENT:\n<\/pre>\n
L…..I………T…….T…….T…….T…….T…….T..J<\/p>\n
      MISRA, J.\n<\/p>\n
      The  issues  in  these appeals, apparently  impress  a
\ncommon\tpicturisation of usual nature but they are raised in
\nan  interesting\t way while challenging the fixation  of\t the
\nrate  of royalty for the minor minerals under Section 15  of
\nthe  Mines  and Minerals (Regulation and  Development)\tAct,
\n1957  (hereinafter referred to as the Act).  The  question
\nfor  consideration  is, the ambit of delegation of power  by
\nthe  Parliament to the State Government under Section 15  of
\nthe  said  Act.\t  Can  it be said  that\t the  delegation  is
\nunbridled  without  any\t check\tif  it\ttravels\t beyond\t the
\nguideline  as  spelt  by  this Court in\t the  case  of\tD.K.
\nTrivedi\t &  Sons  and Ors.  Vs.\t State of Gujarat  and\tOrs.
\n1986  (Supp.)  SCC  20?\t  In the present  case\tneither\t the
\nvalidity of delegation under Section 15 nor it being without
\nany guideline is under challenge but both appellants and the
\nrespondents  State  stress  two\t different  orbits  for\t the
\nguideline,  the appellants constrict it to be within what is
\nspelt in the D.K.  Trivedi case (supra) while the respondent
\nstresses  it not to be confined to that case.  The  impugned
\nnotifications  dated  17th August, 1991 and 28th  September,
\n1994  issued  by  the State of Bihar enhancing the  rate  of
\nroyalty\t have to be tested as in which of the two orbits  it
\nfalls.\t If  it\t falls\twithin\t the  restricted  orbit,  as
\nsubmitted by the appellants, it may be ultra vires but would
\nbe  valid  if  it falls within the other orbit.\t  Mr.\tF.S.
\nNariman,  learned  senior counsel, submits that extents\t and
\nlimitations of the power of the delegatee have to be read as
\nlaid down by this Court in D.K.\t Trivedi case (supra), where
\nthe  validity of this very delegation of power to the  State
\nGovernment   was  under\t challenge.    Based  on  this\t the
\nsubmission  is,\t Item 54 of the Second Schedule of  the\t Act
\ncontrols  and  guides  the   State  Government\t(hereinafter
\nreferred  to  as the State), for fixing or  enhancing  the
\nrate of royalty which has to be within the reasonable bounds
\nof  12% of the sale price at the pits mouth.  Admittedly in
\nthe present case it is far beyond this, hence the submission
\nis  that the impugned notifications are liable to be  struck
\ndown.\tOn the other hand, submission for the respondents  –
\nthe  State  of Bihar by learned senior counsel\tMr.   Rakesh
\nDwivedi\t is  that  D.K.\t   Trivedis  case  (Supra)  neither
\nrestricts  nor limits the power of enhancement of royalty to
\nItem  54,  Schedule II of the Act nor it exhaustively  dealt
\nwith all other sources of guidelines which was not necessary
\nin that case, which can be gathered from other provisions of
\nthe  Act, the objects and reasons, the scheme of the Act and
\nthe nature of material etc..\n<\/p>\n
      Before   entering\t into  this   legal  tangle,  it  is
\nnecessary  to  turn  to\t some  of  the\tessential  facts  to
\nappreciate more fully the controversies.  The present appeal
\nis  directed  against  the  judgment and  order\t dated\t16th
\nOctober,  1996 of the High Court, passed in a writ  petition
\nby  which  the\tpetition of the appellants,  namely,  Quarry
\nOwners\tAssociation challenging the aforesaid  notifications
\ndated  17th August, 1991 and 28th September, 1994, issued by
\nthe  State  including  challenge  to  the  recovery  of\t the
\nenhanced  royalty under it and for the refund of the  amount
\nalready paid was dismissed.\n<\/p>\n
      The Preamble of the Act lays down:\n<\/p>\n
      An  Act to provide for the development and regulation
\nof mines and minerals under the control of the Union.\n<\/p>\n
      Section  2 declares the expediency of Union to control
\nthe  regulation\t of  mines  and development  of\t minerals
\nSection\t 3(a) defines minerals which includes all minerals
\nexcept mineral oils.  Section 3(e) defines minor minerals.
\nSection\t 4 refers to the prospecting or mining operations to
\nbe  undertaken only under a licence or lease.  Section 4A is
\nfor  termination  of prospecting licences or mining  leases,
\nsub-section  (1)  is  for premature termination\t other\tthan
\nminor  minerals while sub-section (2) is for minor minerals.
\nSection 5 imposes restrictions on the grant of such licences
\nor leases.  Section 6 specifies the maximum area for which a
\nlicence\t and  lease  may be granted, while Section  7  gives
\nperiod\tfor  the  grant\t and  renewal  of  such\t prospective
\nlicences.   Section  8\tdeals with the\tperiods\t for  mining
\nleases.\t  Sub-sections (1) and (2) of Section 9 refer to the
\npayment\t of  royalty  at the rate specified  in\t the  Second
\nSchedule  whether  granted before coming into force of\tthis
\nAct  or subsequently.  Sub-section (3), empowers the Central
\nGovernment  to amend the Second Schedule so as to enhance or
\nreduce\tthe  rate  of royalty payable.\tSection\t 9A  obliges
\nlessee\tto  pay the dead rent.\tSections 10 to 12 deal\twith
\nthe  procedure for obtaining prospective licence, or  mining
\nleases\tin respect of the land in which minerals vest in the
\nGovernment.   Section 13 empowers the Central Government  to
\nmake  rules in respect of minerals.  Section 14 specifically
\nexcludes  Sections  5  to 13 from application  of  quarrying
\nleases,\t mining\t leases\t or other  minerals  concessions  in
\nrespect of minor minerals.  Section 15 empowers the State to
\nmake  rules  in\t respect  of  minor  minerals.\t Section  16
\nentrusts  power to modify mining leases granted before\t25th
\nOctober,  1949.\t  Section  17  gives special  power  to\t the
\nCentral\t Government  to\t undertake   prospecting  or  mining
\noperations  in\tcertain\t lands.\t Section 18  refers  to\t the
\nmineral\t development.  Licences and mining leases under\t the
\nAct  to be void under Section 19 if made in contravention of
\nthe  Act, while Section 20 makes the Act and Rules to  apply
\nto  all renewals.  Section 21 imposes penalties.  Section 22
\nrefers to the cognizance of offences.  Section 23-C empowers
\nthe  State  to\tmake rules for\tpreventing  illegal  mining,
\ntransportation and storage of minerals.\t Section 26 entrusts
\nboth  Central and the State to delegate its power under\t the
\nAct  on\t officer  or  authority of  the\t Central  or  State.
\nSub-section  (1)  of  Section 28 puts an obligation  on\t the
\nCentral\t Government  to\t place its rules  and  notifications
\nbefore the Parliament which is subject to its modifications,
\nif  any.  Similarly, the State is obliged to place its Rules
\nand  notifications  before each houses of State\t Legislature
\nunder  sub-Section (3).\t Section 29 makes existing rules  to
\ncontinue so long they are not in consistent with the Act and
\nRules.\tSection 30 empowers the Central Government to revise
\nany  order  made by the State or any other  authority.\t The
\nFirst Schedule refers to the specified minerals, viz., Hydro
\ncarbons\/energy\tminerals  Atomic minerals and Metallic\tand
\nnon-metallic minerals with reference to Sections 4(3), 5(1),
\n7(2) and 8(2) while the Second Schedule refer to the rate of
\nroyalty\t in  all  States and Union  Territories\t except\t the
\nStates\tof  Assam and West Bengal while the  Third  Schedule
\nrefers\tto  the rate of Dead Rent.  Thus, the aforesaid\t Act
\nexpressly  lays\t down the rates of royalty of  the  minerals
\nthrough\t Schedule II read with Section 9.  It is significant
\nthat  Section 14 excludes Sections 5 to 13 specifically\t for
\nminor  minerals\t which\tincludes  Section  9.\tSection\t 15,
\nentrusts  power on the State to lay down Rules in respect of
\nthe  minor minerals.  Original Section 15 as it stood at the
\ntime of D.K.  Trivedi (Supra), is quoted hereunder:\n<\/p>\n
      Section  15:  Power of State Government to make rules
\nin respect of minor minerals:-\n<\/p>\n
      (1)  The State Government may, by notification in\t the
\nOfficial  Gazette,  make rules for regulating the  grant  of
\nquarry\tleases, mining leases or other minerals\t concessions
\nin  respect  of\t minor minerals and for\t purposes  connected
\ntherewith.\n<\/p>\n
      (2)  Until  rules are made under sub-section (1),\t any
\nrules  made  by a State Government regulating the  grant  of
\nquarry leases, mining leases or other mineral concessions in
\nrespect\t of  minor minerals which are in  force\t immediately
\nbefore the commencement of this Act shall continue in force.\n<\/p>\n
      (3)  The holder of a mining lease or any other mineral
\nconcession granted under any rule made under sub-section (1)
\nshall  pay  royalty in respect of minor minerals removed  or
\nconsumed  by  him  or  by   his\t agent,\t manager,  employee,
\ncontractor or sub-lessee at the rate prescribed for the time
\nbeing in the rules framed by the State Government in respect
\nof minor minerals.\n<\/p>\n
      Provided\tthat the State Government shall not  enhance
\nthe  rate  of royalty in respect of any minor  minerals\t for
\nmore than once during any period of four years.\n<\/p>\n
      This  delegation\tof power to the State withstood\t its
\nchallenge  in  D.K.   Trivedi case  (Supra),  as  aforesaid.
\nLater  this  section was amended on 10th February, 1987,  by
\nintroducing sub-section 1-A through Act No.37 of 1986.\tThis
\nwas in particular and without prejudice to the generality of
\npower  conferred  by  sub-section  1 of\t Section  15.\tThis
\nsub-section 1-A is quoted hereunder:-\n<\/p>\n
      (1-A):   In  particular and without prejudice to\tthe
\ngenerality  of\tthe foregoing power, such rules may  provide
\nfor all or any of the following matters, namely:-\n<\/p>\n
      (a)  the\tperson\tby  whom and the  manner  in  which,
\napplications  for  quarry  leases, mining  leases  or  other
\nmineral\t concessions  may  be made and the fees to  be\tpaid
\ntherefor;\n<\/p>\n
      (b)  the\ttime  within which, and the form  in  which,
\nacknowledgement\t of the receipt of any such applications may
\nbe sent;\n<\/p>\n
      (c)   the\t matters  which\t  may  be  considered  where
\napplications in respect of the same land are received within
\nthe same day;\n<\/p>\n
      (d)  the terms on which, and the conditions subject to
\nwhich  and  the\t authority by which  quarry  leases,  mining
\nleases\tor  other  mineral  concessions may  be\t granted  or
\nrenewed;\n<\/p>\n
      (e)  the procedure for obtaining quarry leases, mining
\nleases or other mineral concessions;\n<\/p>\n
      (f) the facilities to be afforded by holders of quarry
\nleases,\t mining\t leases\t or  other  mineral  concessions  to
\npersons\t deputed  by  the  Government  for  the\t purpose  of
\nundertaking  research  or  training in matters\trelating  to
\nmining operations;\n<\/p>\n
      (g)  the fixing and collection of rent, royalty, fees,
\ndead  rent, fines or other charges and the time within which
\nand the manner in which these shall be payable;\n<\/p>\n
      (h) the manner in which rights of third parties may be
\nprotected  (whether  by\t way of payment of  compensation  or
\notherwise)  in\tcases where any such party is  prejudicially
\naffected by reason of any prospecting or mining operations;\n<\/p>\n
      (i)  the\tmanner in which rehabilitation of flora\t and
\nother  vegetation,  such  as  trees,  shrubs  and  the\tlike
\ndestroyed  by  reason of any quarrying on mining  operations
\nshall be made in the same area or in any other area selected
\nby  the State Government (whether by way of reimbursement of
\nthe  cost  of  rehabilitation or otherwise)  by\t the  person
\nholding the quarrying or mining lease;\n<\/p>\n
      (j)  the manner in which and the conditions subject to
\nwhich,\ta  quarry  lease,  mining  lease  or  other  mineral
\nconcession may be transferred;\n<\/p>\n
      (k)  the\tconstruction, maintenance and use of  roads,
\npower\ttransmission  lines,   tramways,  railways,   aerial
\nropeways,  pipelines and the making of passage for water for
\nmining\tpurposes on any land comprised in a quarry or mining
\nlease or other mineral concession;\n<\/p>\n
      (l)  the form of registers to be maintained under this
\nAct;\n<\/p>\n
      (m)  the\treports\t and statements to be  submitted  by
\nholders\t of  quarry  or\t mining\t  leases  or  other  mineral
\nconcessions  and  the  authority to which such\treports\t and
\nstatements shall be submitted;\n<\/p>\n
      (n)  the\tperiod within which and the manner in  which
\nand  the authority to which applications for revision of any
\norder passed by any authority under these rules may be made,
\nthe  fees  to  be  paid\t therefor, and\tthe  powers  of\t the
\nrevisional authority;  and<\/p>\n
      (o)  any\tother  matter  which is to  be,\t or  may  be
\nprescribed.\n<\/p>\n
      The introduction of this sub-section 1-A including the
\nObjects\t and Reasons, is submitted further enlarges the area
\nof the guidelines to the State.\t Its Objects and Reasons are
\nalso quoted hereunder:-\n<\/p>\n
      Statement\t of  Objects  and Reasons:  The\t Mines\tand
\nMinerals (Regulation and Development) Act, 1957 provides for
\nthe  regulation\t of  mines and the development\tof  minerals
\nunder the control of the Union.\t Since the last amendment of
\nthe  Act in 1972, many problems have come to the force.\t The
\nadverse\t  effects  of  mining\toperation  on  ecology\t and
\nenvironment  have  increasingly\t come to  notice.   In\tmany
\ncases, mining operations have been undertaken without proper
\nprospecting  resulting\tin unscientific mining.\t Further,  a
\nnumber\tof  Committees have stressed the need  for  amending
\ncertain\t provisions  of the Act with the object of  removing
\nbottle-necks  and  promoting speedy development\t of  mineral
\nbased  Industries.  State Governments and representatives of
\ntrade  and  industry have in formal forums like the  Mineral
\nAdvisory  Council as well as in other forums, expressed\t the
\ndesirability  of  taking  a  fresh   look  at  the   various
\nprovisions  of\tthe  Act  with a view to  making  them\tmore
\neffective and development oriented.\n<\/p>\n
      2.   The suggestions made from time to time have\tbeen
\nconsidered  and\t incorporated  in the present  Bill,  which,
\ninter  alia, includes the following salient features, namely
\n:-\n<\/p>\n
      (i)   inclusion  of  11\tmore  minerals\tof  national
\nimportance in the First Schedule to the Act;\n<\/p>\n
      (ii) premature termination of prospecting licences and
\nmining leases on ecological and other grounds:\n<\/p>\n
      (iii)  dispensing\t with the Certificate  of  Approval,
\nIncome-tax  Clearance  Certificate, etc.  for the  grant  of
\nprospecting licences and mining leases;\n<\/p>\n
      (iv)  prospecting of an area and preparation of mining
\nplan as a pre-condition for the grant of a mining lease;\n<\/p>\n
      (v)  rationalisation  of the period of mining  leases,
\nand renewals thereof;\n<\/p>\n
      (vi)  shorter periodicity for purposes of revision  of
\nroyalty and dead rent;\tand<\/p>\n
      (vii)   provision\t for  increasing   the\tquantum\t  of
\npunishment to curb illegal mining activities.\n<\/p>\n
      3.  The Bill seeks to provide for the above objects.\n<\/p>\n
      It is also relevant to record here the rate of royalty
\nfixed  by  the State for the minor minerals through  various
\nnotifications  in  various years.  Initially on\t 1st  April,
\n1975  the rate of royalty fixed was Rs.2.50 per cubic  meter
\nthat  is Rs.7.07 per 100 cubic ft., Rs.1.75 per cubic  meter
\nthat  is  Rs.4.95 for 100 cubic ft for Ballast and  Boulder.
\nNext  on  3rd August, 1977 the rate of stone chips,  Ballast
\nand  Boulder was increased to Rs.3\/- per cubic meter that is
\nRs.8.49\t per  100  cubic  ft  and  from\t 17th  August,\t1991
\n(impugned)  the rate of royalty of stone chips, Ballast\t and
\nBoulder\t was  increased to Rs.12\/- per cubic meter  that  is
\nRs.33.96  per  100  cubic ft.  By  notification\t dated\t28th
\nNovember,  1994\t (impugned) the rate of royalty was  Rs.25\/-
\nper  cubic meter or Rs.70.75 per 100 cubic ft.\tfor Ballast,
\nBoulder\t and stone chips, which according to the  appellants
\nis more than 15 times as originally provided and more than 5
\ntimes  in excess of the maximum rate of 12% of sale price at
\npits  mouth under Entry 54 of Schedule II.  It is also\tnot
\nin  dispute  by the aforesaid Act, under Item 54 of List  I,
\nVII Schedule of the Constitution of India, the regulation of
\nmines  and  mineral  development  both of  major  and  minor
\nminerals  came\tunder  the control of the  Union,  including
\nfixation  of  the  rate of royalty.  The  challenge  to\t the
\naforesaid  two\tnotifications are that the State  trespassed
\nthe  limit  of the guideline as laid and spelt out  in\tD.K.
\nTrivedis  case (Supra).\t Further, if that guideline has not
\nto be, then there is no other check and control or guideline
\nof  the Union over the State Government.  In contrast  there
\nis  check over the other delegatee, viz., Central Government
\nwhere  under  Section  28(1) rules or  notifications  by  it
\nincluding  enhancement\tof royalty is to be laid before\t the
\nParliament.   The High Court repealed the contention of\t the
\nappellants by holding:\n<\/p>\n
      No  doubt\t when  the  decision in the  case  of  D.K.
\nTrivedi\t and  sons (Supra) was given there were no  specific
\nguidelines  in Section 15 of the Act.  However..Amendment
\nAct  1986 (Act No.37 of 1986) which came into force on\t10th
\nFebruary,  1987, guidelines have been provided in Section 15
\nitself.clause  (g)  of sub-section 1-A provided\t that  the
\nrules  may be framed by the State Government for fixing\t and
\ncollecting  rent, royalty, fees etcThe guidelines provided
\nfor  framing  Rules in respect of minerals other than  minor
\nminerals   do  not  remain   relevant  after  insertion\t  of
\nsub-section 1-A in Section 15 of the Act.\n<\/p>\n
      However,\tsubmission for the appellants is sub-section
\n1-A only empowers the State Government but does not lay down
\nany  guideline,\t hence\tit  cannot shield the  State  to  be
\nproviding  with\t any guideline, for which State has only  to
\nfall  under  Item  54  of  Schedule II\tof  the\t Act,  which
\nrecords:-\n<\/p>\n
      Item  54:\t  All  other materials\tnot  herein  before
\nspecified  =  Twelve  per cent of sale price  at  the  pits
\nmouth.\n<\/p>\n
      The  submission is, this is residuary item which cover
\nall  other  minerals not specified in any of  the  preceding
\nitems  in  Schedule  II.   The\t minor\tminerals  not  being
\nspecified  in  any  of the items it would  fall\t under\tthis
\nentry.\n<\/p>\n
      It  is also significant to record that minor  minerals
\nare  used in the local areas for local purposes while  major
\nminerals  are  used for the industrial development  for\t the
\nNational  purpose.  The crux of the matter for consideration
\nis,  whether  is it only Sections 4 to 12 which controls  or
\nguides the State in fixing the royalty for the minor mineral
\nand,  if  it is, whether Entry 54 of Schedule II places\t any
\nceiling\t of  12%  of the sale price at the pits\t mouth\tfor
\nfixing this royalty by the State?  In other words, does D.K.
\nTrivedi\t case (Supra) fore closes the issue of guideline  or
\nis  it open to travel to other fields which guides the State
\nfor fixing the royalty.\n<\/p>\n
      The  appellants  are an association of quarry  owners.
\nThey  were given permit\/lease for the extraction of stone in
\nrespect of their respective places of operation in pursuance
\nto  such permit\/lease.\tThe State Government in exercise  of
\nits  power under Section 15 of the aforesaid Act made  rules
\ncalled\t Bihar\t Minor\tMineral\t  Concession   Rules   1972,
\n(hereinafter  referred\tto  as the Rules)  and\tfixed  the
\nroyalties  from time to time.  Submission for the appellants
\nis  since rate of royalty on building stone including  stone
\nchips , Bolder, Road medal and ballast has been increased to
\nmore  than  100% , the appellants are unable to\t pay,  hence
\nchallenge this enhancement.\n<\/p>\n
      Mr.   F.S.   Nariman, learned senior counsel  for\t the
\nappellants submits, in order to judge the validity regarding
\nexcessive  delegation one has to identify the power which is
\nsought\tto  be delegated.  The power delegated to the  State
\nGovernment  under Section 15 of the Act is the power to\t fix
\nand  collect royalty.  It cannot be disputed that royalty is
\na tax.\tThe question is, are there any guideline to vary the
\nrate  of  royalty apart from D.K.  Trivedis  case  (Supra).
\nThe  submission\t is, this decision settles the guideline  by
\nplacing\t the  restrictions on State power through Section  9
\nread with Item No.54 of the Second Schedule of the Act.\t The
\nintroduction  of  sub-section  1A in Section 15 of  the\t Act
\nmakes  no  difference,\tas it is only an  amplification\t and
\nillustration  of Section 15(1).\t Further, sub-clause (g)  of
\nSection\t 15(1A) only clothes the State with power to  change
\nthe rate of royalty but it cannot be construed as giving any
\nguideline.   It\t is only when legislature fixes any  maximum
\nrate,  beyond  which delegatee cannot enhance the  rate,  it
\ncould  be  said\t it – retained sufficient control  over\t the
\ndelegatee.  The control of the Parliament in relation to the
\nmajor  minerals for such enhancement is enshrined in Section
\n28(1) of the Act, State of M.P.\t V.  Mahalakshmi 1995 (Supp)
\n1  SCC\t642 upheld such a delegation.  The delegatee,  viz.,
\nCentral Government was entrusted with the power to amend the
\nSecond\tSchedule  which\t fixes\troyalty\t but  obligates\t the
\ndelegatee to lay such amendment before the Parliament.\tThis
\nis absent in the case of minor minerals.\n<\/p>\n
      Next  it is submitted, this Court in Baijnath  Kedias
\n1969 (3) SCC 838, held that the State legislature is denuded
\nof  all its legislative power over the minor minerals  after
\nthe passing of the said Act, hence it looses its legislative
\ncontrol\t for  fixing  the royalty.  The State only  acts  as
\ndelegatee  of the Parliament to enhance the rate of royalty.
\nSo  far, Section 28(3), which is for minor minerals,  merely
\nprovides  laying down procedure before the State legislature
\nfor  information  and not with any entrustment of  power  to
\nalter  or modify the rate of royalty, hence Section 28(3) by
\nitself\tcannot save the plea of excessive delegation of\t the
\nlegislative  power.   The language used in Section 28(3)  is
\ndifferent  from what is in Section 28(1), hence both  cannot
\nbe  equated.   There is nothing to show that, in  fact,\t the
\nimpugned   notifications,  were\t laid\tbefore\t the   State
\nlegislature.\tSo  far\t  Delegation  Legislation  Provision
\n(Amendment)  Act of 1983, it refers to the rules made by the
\nState Government under a parliamentary Act for laying before
\nthe  State  legislature\t only with respect to  the  subjects
\nunder  concurrent List 3 of VII Schedule of the Constitution
\nof  India  and\tnot  in respect\t of  subjects  in  exclusive
\ncompetence of the Parliament under List I.\n<\/p>\n
      Learned  senior counsel Mr.  P.P.\t Rao, also appearing
\nfor some of the appellants submits, power to fix the rate of
\ntax  can be delegated provided the statute provides guidance
\nfor fixing such rate.  The guidance may be by fixing maximum
\nrates  of tax or by providing consultation with the  people,
\ni.e.,  subject to the approval by them as held in  Municipal
\nCorporation  of\t Delhi\tV.  Birla Cotton<\/a> 1968 (3)  SCR\t251.
\nReasserting  the  principle  as\t laid down in  the  case  of
\nMahalakshim  Fabrics (Supra), it is submitted Parliament has
\nitself\tlaid down for the major minerals the rate of royalty
\nin the Second Schedule of the Act and authorised the Central
\nGovernment  to\trevise the rates.  In doing so\tthe  Central
\nGovernment  has\t the guidance to keep in view  the  original
\nrates.\t The fixation of royalty should have a direct  nexus
\nwith  the  minerals  throughout\t the country  on  a  uniform
\npattern.   Further, there is requirement that every rule  or
\nnotification  made by the Central Government is to be placed
\nbefore\t each\tHouse  of   Parliament\tsubject\t to   agreed
\nmodification  by  both Houses.\tThus, Section 28(1)  permits
\nParliament  to\tveto  the  enhanced  rate  of  royalty.\t  In
\ncontrast  there\t is no such guideline so far minor  minerals
\nare  concerned, except what is contained in D.K.   Trivedis
\ncase  (Supra).\t Based\ton that it is  submitted  that\tonly
\nprovision  among  Sections  4  to 12 of the  Act,  which  is
\nrelevant  is  Section 9(2) read with Entry 54 of the  Second
\nSchedule  of the Act which fixes the limit of royalty at 12%
\nof the sale price at the pits mouth.  The very rationale of
\nEntry  54  of List I of the Constitution is to regulate\t the
\nmines  and mineral development under the control of Union in
\nthe  public interest.  The preamble as well as Section 2  of
\nthe  Act speak about the expedience of Union control of both
\nmajor  and  minor minerals.  Thus no part of the Act can  be
\nconstrued  so  as  to take away the control  of\t the  Union.
\nSection\t 28(3)\tcannot be read so as to divest the Union  of
\nits  control  and vest the control in the  respective  State
\nlegislature.   In view of difference in the language between
\nSections 28(3) and 28(1), the same purport what is contained
\nin  sub-section (1) cannot be brought into sub-section\t(3).
\nFurther\t the taxing statute must be interpreted as it  reads
\nwith  no  additions or subtractions of words and  where\t two
\nopinions  are  possible the one which benefits\tan  assessee
\nmust be adopted.\n<\/p>\n
      Learned  senior counsel Mr.  S.B.\t Sanyal, in addition
\nto  the\t adoption  of the submissions by the  aforesaid\t two
\nlearned counsels further submits that Section 28(3) which is
\nbrought\t in through amendment cannot be construed to  confer
\nauthority   on\t the  State   legislature  to\tmodify\t any
\nnotifications  or rules framed by the State Government.\t But
\nlaying\tof  such  rule\tor  notification  before  the  State
\nlegislature  is\t only for the purpose of information.  In  a
\ndelegated  legislation\tthe  control and  authority  of\t the
\nPrincipal  to modify or cancel any act of the delegatee must
\nremain.\t  Parliamentary\t control over delegated\t legislation
\nshould\tbe  living continuity as a constitutional  necessity
\nwhich is not to be found in the present case.\n<\/p>\n
      Repelling\t  the  submissions,   Mr.   Rakesh  Dwivedi,
\nlearned\t senior\t counsel, appearing for the State  of  Bihar
\nsubmits,  in D.K.  Trivedis case (Supra) Section 15, as\t it
\nthen  stood,  was questioned as suffering from the  vice  of
\nexcessive  delegation of its legislative power.\t This  Court
\nheld  that  sub-section\t (2)  of   Section  13\twas   merely
\nparticularisation or illustration of the generality of power
\nalready contained in sub-section (1) and since Section 15(1)
\nwas  similar to Section 13(1), it could necessarily  contain
\nillustrations of Section 13(2) and the provisions of Section
\n13(2)  being  in the same sub-chapter as Section  15,  would
\nfurnish\t sufficient guidelines.\t Reliance was also placed on
\nthe following observationsa made in that case:-\n<\/p>\n
      The exclusion of the application of these sections to
\nminor  minerals means that these restrictions will not apply
\nto minor minerals but it is left to the state governments to
\nprescribe  such restrictions as they think fit by rules made
\nunder Section 15(1).\n<\/p>\n
      The  submission  is, Sections 4 to 12, as\t they  stood
\nthen,  cannot  be  construed  as restricting  the  power  of
\ndelegatee over the minor minerals in view of Section 14.  In
\nfact, they were referred by this Court as it being available
\nto  the\t State Government for taking note while framing\t the
\nrules.\t They  are available not as restrictive or  limiting
\nits power but for its adoption wherever necessary.  In fact,
\nwhile  judging the validity of the notifications impugned in
\nthat case, this Court was not called upon nor did it examine
\nwhether\t the State power to enhance royalty is restricted to
\nSchedule  2 of Section 9 of the Act.  Further, the guideline
\nis  also  to  be  found in the preamble,  the  Statement  of
\nObjects\t and  Reasons  and  other  provisions  of  the\tAct.
\nSections  4A, 17 and 18 also provide the guideline.  Further
\nafter  the  amendment, the power of the\t Central  Government
\nunder  Section\t9(3) of the Act for the modification of\t the
\nrate  of  royalty for the major minerals is made very  wide.
\nThe   only  difference\tbeing\tthat  under  Section   28(1)
\nParliament  has opportunity to modify the rate fixed by\t the
\nCentral Government.  This was because the Central Government
\nwas  modifying\tthe  rates fixed by the\t Parliament  itself.
\nSecondly, major minerals are minerals of national importance
\nhence  require uniform treatment at the national level.\t  In
\ncontrast, the minor minerals are mostly used locally and are
\nof local importance and hence their treatment is left to the
\nState  Government  at  the  provincial level.\tThis  is  in
\nrecognition  of\t States\t original power\t to  determine\tsuch
\nroyalty\t under Entry 54 of List II of the Seventh  Schedule.
\nThis  is also in tune with the principle of federalism which
\nrequires local matters to be left for it being dealt with by
\nthe State Government.\n<\/p>\n
      Further submission is, in order to find the guidelines
\nthe  nature of the subject matter is also to be\t considered.
\nThe  product, namely, minor minerals is neither produced nor
\nit  belong  to\tthe  appellants.  So it is  not\t a  case  of
\nimposition  of\ttax simplicitor on the appellants but  such
\ntax  in fact includes the price of the minerals which is the
\nproperty  of  the  State.  In other words, it  includes\t the
\nprice of the property which State parts with.  Thus, royalty
\nis a unique kind of tax which is different from other taxes.
\nBoth  royalty\/dead  rent are integral part of the  lease  as
\ntalked\tabout in Section 4 of the Act and Section 105 of the
\nTransfer  of  Property Act, 1882.  Hence the  lessee  cannot
\ninsist\tthat  in spite of the minerals being parted  by\t the
\nState  the  mining should be made available cheaply so\tthat
\nthey  can derive profits, and even super profits.   Further,
\nfixation  of  maximum limit for royalty under Section 15  is
\nnot  an absolute rule.\tIn fact, the rate fixed has not been
\ndemonstrated  to be confiscatory or arbitrary, for which the
\ncourts\tare  there  and\t if that be, it\t could\tbe  quashed.
\nFurther\t the  history of regulation of minerals\t shows\tthat
\nroyalty\t has  always  been fixed by  the  State\t Government.
\nUnder Rule 4 of the Mineral Concession Rules, 1949 framed by
\nthe  Central  Government  under\t the  1948  Act,  the  State
\nGovernment  was given power to make rules with regard to the
\nminor  minerals.   In fact, what was then delegated  to\t the
\nState  by  the Central Government has now been delegated  by
\nthe  Parliament itself.\t Thus the status of State Government
\nhas  changed  from sub-delegatee to delegatee.\tNext  it  is
\nsubmitted,  it is true that phraseology of Section 28(3)  is
\ndifferently  couched than what is in Section 28(1).  This is
\nbecause\t the Parliament is directing the rules to be  placed
\nbefore\tthe State legislature.\tThis was done in view of the
\nobservations  by this Court in D.K.  Trivedis case (Supra).
\nIt is also submitted that placement of such notification and
\nrules  under  Section  28(3) before  the  State\t legislature
\ncannot\tbe  said to be only a show piece but is\t meaningful.
\nHe also submits since 1st April, 1975 the State of Bihar has
\nincreased  royalty  only four times and even now it has\t not
\nraised\troyalty\t since 28.9.1994, despite the lapse  of\t six
\nyears.\t Thus  raising of royalty only four times during  25
\nyears  despite power to revise every three years shows\tthat
\nthe  Government has been more than reasonable in fixing\t the
\nroyalty.\n<\/p>\n
      In  order to scrutinise the submissions of the learned
\ncounsels  for the parties, it would be appropriate first  to
\nfocus  as  to what this Court said in D.K.   Trivedis  case
\n(Supra).  The constitutionality of Section 15(1) of the said
\nAct  was raised with reference to the delegation of power to
\nthe   State  Government\t  delegating  essential\t legislative
\nfunction,  including charging and enhancing the rate of dead
\nrent   and  royalty  that  it  being  unbridled,   including
\nchallenge to the charging of the same during the subsistence
\nof the existing leases, including the validity of Rule 21(b)
\nof   the  Gujarat  Minor  Minerals   Rules,  1966  and\t few
\nnotifications  issued by the State Government under  Section
\n15  in\trespect\t of  the   minor  minerals.   The   relevant
\nnotifications  were, one dated 29.11.1974 by which the State
\nGovernment  made  Gujarat Minor Minerals (Fourth  Amendment)
\nRules, 1974 whereby Rule (1) was substituted and Schedule II
\nwas  amended w.e.f.  1.12.1974.\t By this the rate of royalty
\nand  dead rent in respect of some of the minor minerals were
\nspecified.   Through  the notification dated  29th  October,
\n1975  the State Government brought in Gujarat Minor Minerals
\n(Second\t Amendment) Rules, 1975, whereby Rule 21 of the said
\nrules  and  Schedule  I was substituted\t w.e.f.\t  1.11.1975,
\nthrough\t which\tthe  rate of royalty in respect\t of  several
\nitems  were  enhanced.\tThe next notification was dated\t 6th
\nApril,\t1976, by which the State Government made the Gujarat
\nMinor  Minerals (Second Amendment) Rules, 1976 through which
\nit  substituted Schedule II in the said rules, by which\t the
\ndead  rent  was enhanced.  The next notification  was  dated
\n26th  March,  1979, through which the State Government\tmade
\nthe Gujarat Minor Minerals (Amendment) Rules, 1979.  Through
\nthis  new Rule 21-B was inserted and Rule 22 was amended and
\nSchedules  I  and  II\twere  substituted.   By\t substituted
\nSchedule  I  the rate of royalty on all minor minerals\twere
\nspecified  as  10  p.  per metric tonne and  by\t substituted
\nSchedule  II  the  rate\t of dead rent per  hectare  or\tpart
\nthereof\t in  respect  of  quarry   leases  was\tenhanced  to
\nRs.1200\/-,  in\tcertain cases Rs.1500\/- in some other  cases
\nRs.2,000\/-  in\tone  case and Rs.3,000\/-  in  the  remaining
\ncases.\t The  contention raised before this Court was,\tthat
\nSection\t 15(1) of the Act is unconstitutional as it  suffers
\nfrom  the  vice\t of excessive delegation  of  the  essential
\nlegislative power to the executive as it is unchannelised as
\nthere  are no guidelines, which gives free hand to the State
\nGovernment to act arbitrary.  This submission for the lessee
\nwas rejected when this Court held:-\n<\/p>\n
      We  find that this contention is based upon a fallacy
\ninasmuch  as  it is founded upon reading the  provisions  of
\nSection\t 15(1)\tin isolation and without reference to  other
\nprovisions of the 1957 Act and its legislative history.\n<\/p>\n
      This  Court further held:\t 32.  There is no substance
\nin  the\t contention that no guidelines are provided  in\t the
\n1957  Act  for the exercise of the rule-making power of\t the
\nState Government under Section 15(1).\n<\/p>\n
      33.A  provision similar to sub-section (2) of  Section
\n13,  however,  does  not find place in Section 15.   In\t our
\nopinion, this makes no difference.  What sub- section (2) of
\nSection\t 13 does is to give illustrations of the matters  in
\nrespect\t of which the Central Government can make rules\t for
\nregulating  the\t grant of prospecting licences\tand  mining
\nleases\tin  respect of minerals and for\t purposes  connected
\ntherewith.   The  opening  clause  of  sub-section  (2)\t of
\nSection 13, namely, In particular, and without prejudice to
\nthe  generality of the foregoing power, makes it clear that
\nthe topics set out in that sub- section are already included
\nin  the\t general power conferred by sub-section (1) but\t are
\nbeing listed to particularize them and to focus attention on
\nthem.\tThe  particular\t matters  in respect  of  which\t the
\nCentral\t Government can make rules under sub-section (2)  of
\nSection\t 13  are,  therefore, also matters with\t respect  to
\nwhich  under  sub-section  (1)\tof   Section  15  the  State
\nGovernment  can\t make  rules for regulating  the  grant\t of
\nquarry leases, mining leases or other mineral concessions in
\nrespect\t of  minor  minerals   and  for\t purposes  connected
\ntherewith.  When Section 14 directs that The provisions of
\nSections  4  to\t 13 (inclusive) shall not  apply  to  quarry
\nleases,\t mining\t leases\t or  other  mineral  concessions  in
\nrespect\t of  minor minerals, what is intended is  that\tthe
\nmatters\t contained in those sections, so far as they concern
\nminor  minerals,  will\tnot  be controlled  by\tthe  Central
\nGovernment   but  by  the   concerned  State  Government  by
\nexercising  its\t rule-\tmaking power as a  delegate  of\t the
\nCentral\t Government.   Sections\t 4  to 12 form\ta  group  of
\nsections   under  the  heading\t General  restrictions\t on
\nundertaking   prospecting  and\t mining\t operations.\tThe
\nexclusion  of  the  application of these sections  to  minor
\nminerals  means\t that these restrictions will not  apply  to
\nminor  minerals but that it is left to the State Governments
\nto  prescribe  such restrictions as they think fit by  rules
\nmade  under  Section 15(1).  The reason for  treating  minor
\nminerals differently from minerals other than minor minerals
\nis  obvious.  As seen from the definition of minor  minerals
\ngiven  in  clause (e) of Section 3, they are minerals  which
\nare  mostly used in local areas and for local purposes while
\nminerals  other\t than  minor minerals are  those  which\t are
\nnecessary for industrial development on a national scale and
\nfor  the  economy  of  the country.   That  is\twhy  matters
\nrelating  to minor minerals have been left by Parliament  to
\nthe  State  Government while reserving matters\trelating  to
\nminerals   other   than\t minor\t minerals  to  the   Central
\nGovernment.\n<\/p>\n
      This  Court finally upheld the validity of sub-section
\n(1)  of Section 15 by holding that power conferred upon\t the
\nState Governments does not amount to excessive delegation of
\nany essential legislative power.  It further held, there are
\nsufficient  guidelines for the exercise of rule-making power
\nwhich  are to be found in the object for which such power is
\nconferred,  namely,  for  regulating  the  grant  of  quarry
\nleases,\t mining leases or mineral concessions in respect  of
\nminor minerals and for the purposes connected therewith.  It
\nalso  held  that  power to make rules  under  Section  15(1)
\nincludes  to  amend the rules so as to enhance the rates  of
\nroyalty\t and  dead  rent.  Further there is a check  on\t the
\nState  Government  not to enhance the rate  of\troyalty\/dead
\nrent  more than once during any period of four years in view
\nof  proviso to Section 15(3).  It upheld notification  dated
\n29th  November,\t 1974,\tbut  held  notification\t dated\t29th
\nOctober,  1975\tas  void  as   it  offends  the\t prohibition
\ncontained  in  the  proviso  to\t  Section  15(3).   It\talso
\nsimilarly  holds notification dated 6th April, 1976 as\tvoid
\nas  the same enhances the rates of dead rent for the  second
\ntime during the same period of four years.  It however holds
\nnotification dated 26th March, 1979 to be valid.\n<\/p>\n
      Strong hammering has been done by the learned counsels
\nfor  the appellantss with reference to the observation\tmade
\nby  this  Court\t in D.K.Trivedis case (supra),\twhere  this
\nCourt  records\tthat  the  guidelines for  the\texercise  of
\nrule-making power under Section 15(1) are to be found in the
\nrestrictions and other matters contained in Sections 4 to 12
\nof  the\t Act.\tBased  on  this,  submission  is  that\tthis
\nrestriction  could  only  be, what is contained in  Item  54
\nSchedule  II read with Section 9 of the Act.  The submission
\nis,  Item  54  refers to all other mines and  minerals\tnot
\nhereinbefore  specified which would include minor  minerals
\nas  Section 3(a) defines Minerals very widely to mean  all
\nminerals  except minerals oil.\tHence the restriction  which
\nis  stated,  is\t really the restriction not to\tenhance\t the
\nroyalty\t beyond\t the rate specified in Item 54\twhich  could
\nonly be upto 12% of sale price at the pits mouth.\n<\/p>\n
      In   our\tconsidered  opinion   such   a\t restrictive
\ninterpretation\tis  not to be found in the  D.K.   Trivedis
\ncase  (Supra).\t In  that case, through the  aforesaid\t1979
\nnotification, rate of dead rent was enhanced by substituting
\nthe  then  existing Schedule II.  The then existing rate  of
\ndead rent in Schedule II was:\n<\/p>\n
      1.  For specified minor minerals<\/p>\n
      For  every  100 sq.  metres or part thereof, up  to  5
\nhectares ..  Re.  0.35<\/p>\n
      For each additional hectare or part thereof, exceeding
\n5 hectares ..Rs.50.00<\/p>\n
      2.  For other minor minerals<\/p>\n
      For  every  100  sq.  metres or part  thereof  upto  5
\nhectares ..Re.\t0.20<\/p>\n
      For  each additional hectare or part thereof exceeding
\n5 hectares ..Rs.35.00<\/p>\n
      This  was\t substituted and the rate of dead  rent\t per
\nhectare\t was  enhanced\tto Rs.1200\/-,  1500\/-,\t2,000\/-\t and
\n3,000\/-\t in  various cases.  Though the enhancement  through
\nthis notification of 1979 was enormous yet no submission was
\nmade,  nor  this  Court\t adverted   or\trecorded  that\tthis
\nenhancement has to be restricted to 12% of the sale price at
\npits mouth in terms of Item 54 of Schedule II.\tIn fact, in
\nspite  of  this\t large enhancement,  1979  notification\t was
\nupheld.\t   The\tquestion,  whether   any  such\tincrease  is
\narbitrary,  excessive  or violative of Article 14 is  to  be
\ntested\ton a different pedestal.  Any excessive exercise  or
\narbitrary  exercise  of\t power\tby   a\tdelegatee  could  be
\ncontrolled  by\tthe courts and if there are any, the  courts
\nwould  not hesitate to strike it down.\tMere possibility  of
\nan  abuse  of power or arbitrary act, cannot invalidate\t any
\nstatute.   To  reach this, one has to make  foundation\twith
\nspecific  plea with reference to the facts and figures based
\non  the\t circumstances of each case.  In the  present  case,
\nhowever,  we are testing the submissions of the\t appellants,
\nwhether the said decision restricts the exercise of power by
\nthe  State  Government in enhancing the rate of\t royalty  or
\ndead rent to the rate as specified in Item 54 of Schedule II
\nof the Act.  This submission is based on the misconstruction
\nof the statute and relying only on a part of the observation
\nwhat  is  recorded in para 34 of that decision.\t This  Court
\nfurther records in the same para 34 that the guidelines with
\nreference to Section 15(1) are to be found in the object for
\nwhich  such power is conferred, the illustrative matters set
\nout  in sub-section (2) of Section 13 and in the restriction
\nand  other matters contained in Section 4 to 12.  Para 34 of
\nthe said decision records:-\n<\/p>\n
      34.    The  guidelines  for   the\t exercise  of\tthe
\nrule-making power under Section 15(1) are, thus, to be found
\nin  the\t object for which such power is\t conferred  (namely,
\nfor regulating the grant of quarry leases, mining leases or
\nother  mineral concessions in respect of minor minerals\t and
\nfor  purposes connected therewith), the meaning of the word
\nregulating,   the  scope  of   the  phrase  for\t purposes
\nconnected  therewith,  the illustrative matters set out\t in
\nsub-section  (2) of Section 13, and in the restrictions\t and
\nother matters contained in Sections 4 to 12.\n<\/p>\n
      It  is relevant to refer here the preceding  paragraph
\n33  with  reference  to\t Sections 4 to 12  were\t this  Court
\nrecords:\n<\/p>\n
      Sections\t4 to 12 forms a group of sections under the
\nheading General restrictions on undertaking prospecting and
\nmining\toperations.   The exclusion of the  application\t of
\nthese\tsections   to  minor   minerals\t means\tthat   these
\nrestrictions  will  not apply to minor minerals but that  is
\nleft  to the State Government to prescribe such\t restriction
\nas they think fit by rules made under Section 15(1).\n<\/p>\n
      Thus  this  Court not only did not tie down the  State
\nGovernment  to\tsuch restrictions, on the contrary  left  it
\nopen for it to prescribe such restrictions as it thinks fit.\n<\/p>\n
      In  other words Sections 4 to 12, not being applicable
\nto  the minor minerals, the figurative restrictions what  is
\ncontained  there could not be made applicable, but of course
\nthey  are available as a guide line to the State  Government
\nto  take note of in other respects, while framing its rules.
\nSo,  they  are\tavailable  not as  restrictive\tor  limiting
\nguidelines but are available otherwise for its consideration
\nand  adoption, wherever it is necessary.  If submission\t for
\nthe  appellants\t is accepted, it would militate against\t the
\nexpress\t mandate  of Parliament as contained in\t Section  14
\nwhich  excludes\t Sections  4 to 12 from its  application  to
\nminor minerals.\n<\/p>\n
      The  fallacy  of\tthis  submission that  the  rate  of
\nroyalty and dead rent, for the minor minerals, is to be what
\nis  contained  in  Item\t 54  of Schedule  II,  is  based  on
\nmisconstruing  both the said judgment of this Court and\t the
\nprovisions  of the Act.\t The submission is, as Section\t3(a)
\ndefines\t minerals which would include minor mineral, hence
\nItem 54 as it records:\tall other minerals not hereinbefore
\nspecified   would  include  minor   minerals.\tIt  is\t an
\ninterpretation in abstract without taking into consideration
\nSection\t 14.  Section 14 specifically excludes Sections 5 to
\n13 (earlier it was Sections 4 to 13) from its application to
\nminor  minerals.   Thus Second Schedule which refers to\t the
\nrate of royalty in view of Section 9 could only refer to the
\nminerals  other\t than  minor   minerals.   The\tlanguage  as
\nrecorded  in  Item  54, as aforesaid would only\t mean  other
\nresidual  major minerals not specified hereinbefore  meaning
\nthat  what  is\tnot specified in Item Nos.  1 to  53.\tThis
\ncould  never  mean  to\tinclude minor  minerals.   Thus\t the
\nresiduary  mineral under Item 54 could only be the left over
\nmajor  minerals.   Neither the residuary nor the  left\tover
\nmajor  mineral\tcould be equated with the minor mineral\t nor
\nthere  is  any\tmaterial on record to draw  such  inference.
\nWhen  this Court records :  guidelines for the exercise\t of
\nrule-making  power under Section 15(1) is to be found in the
\nrestrictions  and in the other matters contained in Sections
\n4  to 12.  The use of word restriction is in view of  the
\nsame  words  being  used  in the heading of  this  group  of
\nSections   4   to   12.\t   The\theading\t  states,   General
\nrestriction   on   undertaking,\t  prospecting  and   minor
\noperations.  In other words, the restriction referred to in
\npara  34 co- relates to this heading of general restrictions
\nto be taken note while framing the rules.\n<\/p>\n
      We  may  visualise  this\tfrom  another  angle.\tThis
\nreference of general restrictions as contained in Sections 4
\nto  12 for it being taken note would only means to  consider
\nits broad principle and pattern while framing its own rules.
\nIt  cannot  be\tdoubted\t that Sections 4 to  12\t also  gives
\nguidance  to  the State Government while acting as  delegate
\nunder  Section\t15  while  fixing  rate\t of  royalty.\tThis
\nguidance  is to be found in Section 9 itself which refers to
\nthe  royalties.\t  Sub-section  (1) of  Section\t9  provides,
\nholder\tof a mining lease granted before the commencement of
\nthis Act to pay royalty in respect of any mineral removed or
\nconsumed from the leased area at the rate for the time being
\nspecified  in the Second Schedule in respect of that mineral
\nnotwithstanding\t anything  to the contrary contained in\t the
\ninstrument  of lease and similarly sub-section (2) provides,
\nafter  the  commencement of this Act the holder of a  mining
\nlease  shall pay royalty at the rate specified for the\ttime
\nbeing  in  the Second Schedule in respect of any  particular
\nmineral.  Each of the aforesaid considerations itself may be
\ntaken  note  by the State Government while framing  its\t own
\nrules  for the minor minerals.\tIn other words, it may apply
\nrate  of royalty for the minor minerals at the same rate  as
\nthe  then  existing  rate, on the date this  Act  came\tinto
\nforce.\t Schedule II with reference to Section 9 fixes\trate
\nof  royalty for various minerals not being minor minerals is
\nalso  a\t good  source of guideline.  There we  find  various
\nmethods\t applied  for fixing or charging the royalty on\t the
\nvarious\t minerals.  It demonstrate charging of royalties per
\ntone,  per unit per cent, per tone of ore on prorata  basis,
\nper cent of sale price at the pits mouth etc..\tIn the case
\nof  gold, it is per one gram of gold per tonne of ore and on
\npro  rata basis on the basis of per 100 kg.  With  reference
\nto  Uranium it is for dry ore with U3 O8 content of 0.05 per
\ncent  with  pro rata increase\/decrease @ Re.1.00 per  metric
\ntonne of ore for 0.01 per cent.\n<\/p>\n
      This  pattern of charging also reveals a good  guiding
\nforce  while fixing any royalty by the State Government\t for
\nthe various minor minerals.\n<\/p>\n
      This apart, the guidelines even in the D.K.  Trivedis
\ncase (Supra) does not confine itself to Sections 4 to 12 but
\nfurther records, it to be found in the object for which such
\npower  is  conferred, (namely, for regulating the  grant  of
\nquarry leases, mining leases or other mineral concessions in
\nrespect\t of  minor minerals and for the\t purposes  connected
\ntherewith) the meaning of the word regulating the scope of
\nthe   phrase   for  purpose    connected   therewith   the
\nillustrative  matters  as  set\tout in\tsub-section  (2)  of
\nSection\t 13.   We  find that Section 13 gives power  to\t the
\nCentral\t Government  to\t make rules in respect\tof  minerals
\nother  than minor minerals, while Section 15 gives power  to
\nthe  State  Government\tto make rules in  respect  of  minor
\nminerals.   The\t extent of exercise of power in\t both  these
\nsections  are  similar.\t  The only  difference\tis,  Central
\nGovernment  exercises power in respect of all other minerals
\nother  than  minor  minerals,  while  the  State  Government
\nexercises power for the minor minerals only.  Section 13(2),
\nin particular, gives power to the Central Government to make
\nrules in respect of matters enumerated therein.\t Though they
\nare already covered under Section 13 (1) but is more focused
\nin  sub section (2).  There was no such similar\t sub-section
\nin Section 15 when D.K.\t Trivedis case (Supra) was decided,
\nthough\tlater  it  was\tbrought\t  in  through  amendment  by
\nincorporating  sub-section  1A\tthrough Act  No.37  of\t1986
\nw.e.f.\t 10th February, 1987.  This Court very clearly\theld
\nin that case:-\n<\/p>\n
      The  ambit  of the power under Section 13\t and  under
\nSection\t 15 is, however, the same, the only difference being
\nthat  in  one  case  it\t is  the  Central  Government  which
\nexercises  the power in respect of minerals other than minor
\nminerals  while in the other case it is the State Government
\nwhich  do so in respect of minor minerals.  Sub- section (2)
\nof  Section  13 which is illustrative of the  general  power
\nconferred  by  Section 13(1) contains sufficient  guidelines
\nfor  the  State Governments to follow in framing  the  rules
\nunder Section 15(1).\n<\/p>\n
      So,  this\t Court held that sub-section (2) of  Section
\n13,  which is illustrative of the general power conferred by
\nSection\t 13(1) itself contains sufficient guidelines for the
\nState  Government  to frame its own rules under Section\t 15(
\n15(1).\n<\/p>\n
      It  seems the Parliament in order to bring on  parity,
\nmade  similar  provision  for  the  minor  minerals  through
\ninsertion  of  Section 15(1-A) to equate it with Section  13
\n(2).   This sub-section (1-A) similarly as Section 13 (2) is
\nalso  illustrative of the general power conferred on Section
\n15  (1).  Thus as sub-section (2) of Section 13 was held  to
\nbe  the\t guiding  force\t to  the  State\t Government  is\t now
\napplicable to this sub-section (1-A) through the infusion of
\nvarious\t sub-clauses  in sub-Section (1-A).  The  submission
\nthat  it is only power is equally applicable to\t sub-section
\n(2)  of Section 13.  Even sub-dividing the exercise of power
\nthrough\t various  sub-clauses,\tboth in Section 13  (2)\t and
\nsub-Section  (1-A) of Section 15 implicitly gives  guideline
\nto  the\t delegatee.  In fact, the Parliament itself  through
\nvarious\t amendments has been strengthening the guidelines to
\nthe State Government.  Not only sub-Section (1-A) of Section
\n15 but even Section 4A and Section 17A were inserted through
\nthe  same  amending  Act  No.37 of  1986.   Similarly,\tsub-
\nsection\t (3) was inserted in Section 28 by Act No.25 of 1994
\nand  Section 23- C was inserted by Act No.38 of 1999.\tEven
\nSection\t 14 was amended by the aforesaid Act No.37 of  1986.
\nEarlier\t Sections  4  to  13 were  excluded  for  the  minor
\nminerals but through this amendment, the exclusion shrunk to
\nSections  5  to 13.  In other words, both Sections 4 and  4A
\nwere  made  applicable even to the minor minerals.   Further
\nSection\t 4(1-A) which was inserted through Act No.38 of 1999
\ncovers\ttransport  or storage of any mineral  in  accordance
\nwith   the  Act\t and  Rules.\tIn  case   the\t restrictive
\ninterpretation, as submitted for the appellant, to limit the
\nStates power within Entry 54 of Schedule II is accepted, it
\nwill  lead  to various incongruities.  Section 6  fixes\t the
\nmaximum\t area  of lease to be twenty-five square  kilometers
\nunder  sub-Section  (a)\t and  ten  square  kilometers  under
\nsub-section  (b).   Section 7 fixes 3 years for\t prospecting
\nlicence\t and Section 8 fixes maximum period of 30 years\t for
\nmining lease.  If the State Government has to take literally
\nwhat  is  contained there then even for the  minor  Minerals
\nState Government has to issue leases of such area for such a
\nlarge  period.\t This  would be impracticable,\tin  view  of
\ndifference  in the nature of major and minor minerals.\tThus
\nthe  fixation  of  period, area of leases and  the  rate  of
\nroyalty for the major minerals is not equitable with that of
\nthe minor minerals.\n<\/p>\n
      Half  hearted submission was also made by Mr.  Sanyal,
\none  of the learned senior counsel, that proviso to  Section
\n9(3)  limits the power of the Central Government to fix\t the
\nrate  of  royalty not exceeding 20% while there is  no\tsuch
\nlimitation  on\tthe power of the State Governments.   It  is
\nsufficient  to\trecord\there that this limitation  has\tbeen
\nlifted\tby amending sub-section (3) of Section 9.  Now there
\nis   no\t such  limitation  on\tthe  power  of\tthe  Central
\nGovernment.\n<\/p>\n
      Now,  we\tmay proceed to examine\tanother\t perceivable
\nguideline  to the State Government.  It is significant, both
\nEntry  54 List I of the Seventh Schedule of the Constitution
\nand  Entry 23 List II refer to the Regulation of mines\tand
\nminerals  development.\tThis Entry has been reiterated both
\nin  the Preamble and the Statement of Objects and Reasons of
\nthis   Act.    This  regulation\t of  mines   and   minerals
\ndevelopment  clearly  indicates\t the guidelines\t which\tthe
\nParliament  is\tprojecting.   Every word in  a\tlanguage  is
\nimpregnated  with  and\tis  flexible  to  connote  different
\nmeaning,  when\tused  in context.  That is why it  is  said,
\nwords  are  not static but dynamic and courts must adopt  it
\nthat  dynamic  meaning\twhich  uphold the  validity  of\t any
\nprovision.   This  dynamism  is\t the cause  of\tsaving\tmany
\nstatutes  of  it  being\t declared  void,  it  dissolves\t the
\nonslaught  of any rigid and literal interpretation, it gives
\nfull  thrust  and  satisfaction to achieve  the\t objectivity
\nwhich  the  legislature\t intended.  Whenever there  are\t two
\npossible  interpretations  its true meaning and\t legislature
\nintended  has to be gathered, from the Preamble, Statement
\nof  Objects  and  Reasons and other provisions of  the\tsame
\nstatute.   In order to find true meaning of any or what\t the
\nlegislature  intended  one  has\t to   go  to  the  principle
\nenunciated  in\tthe  Heydons  case,  which  laid  down\tthe
\nfollowing  principle as early in the sixteenth century.\t  76
\nE.R.   637  = (1584) 3 Co.  Rep.  7a 9.7;  (1) What was\t the
\nlaw  before making of the Act;\t(2) What was the mischief or
\ndefect\tfor which the law did not provide;  (3) What is\t the
\nremedy\tthat  the  Act has provided;  and (4)  What  is\t the
\nreason\t of  the  remedy.   The\t  Court\t must\tadopt\tthat
\nconstruction  which suppresses the mischief and advances the
\nremedy.\t  This\tCourt has followed this principle in  Bengal
\nImmunity  Co.  Ltd.  Vs.  State of Bihar & Ors., AIR 1955 SC
\n661 (674);  The Commissioner of Income tax, Patiala Vs.\t M\/s
\nShahzada  Nand\t&  Sons, AIR 1966 SC 1342  (1347);   Sanghvi
\nJeevraj\t  Ghewar  Chand\t &   Ors.   Vs.\t  Secretary,  Madras
\nChillies,  Grains  and\tKirana\t Mercants  Workers  Union  &
\nAnr.,AIR   1969\t  SC  530  (533);    Union  of\t India\t Vs.
\nSankalachand  Himatlal Sheth & Anr., AIR 1977 SC 2328 (2358)
\nand  K.P.   Varghese  Vs.  Income Tax Officer,\tErnakulam  &
\nAnr., AIR 1981 SC 1922 (1929).\n<\/p>\n
      Returning\t to  the  present  case we  find  the  words
\nregulation   of\t  mines\t and   mineral\t development   are
\nincorporated both in the Preamble and Objects and Reasons of
\nthis  Act.  Before that we find Preamble of our Constitution
\nin unequivocal words expresses for securing for our citizen,
\nsocial,\t economical  and political justice.  It is  in\tthis
\nbackground  and in the context of the provisions of the\t Act
\nwe  have to give meaning of the word regulation.  The word
\nregulation may have different meaning in different context
\nbut  considering  it in relation to the economic and  social
\nactivities  including  the  development\t and  excavation  of
\nmines,\t ecological  and   environmental  factors  including
\nStates\tcontribution in developing, manning and controlling
\nsuch activities including parting with its wealth, viz., the
\nminerals,  the fixation of the rate of royalties would\talso
\nbe  included  within  its meaning.  This Court in  State  of
\nTamil  Nadu  Vs.  M\/s Hind Stone and Ors.  1981 (2) SCC\t 205
\nheld:-\n<\/p>\n
      Word  regulation\thas  not  got  that  rigidity  of
\nmeaning\t as  never  to\ttake in\t prohibition.\tIn  modern
\nstatutes  concerned  as\t they are with economic\t and  social
\nactivities,  regulation must of necessity, receive so wide
\nan  interpretation  that  in  certain  situations,  it\tmust
\nexclude\t competition  to the public sector from the  private
\nsector.\t  More\tso in a welfare State.\tMust depends on\t the
\ncontext\t in which the expression is used in the statute\t and
\nthe  object  sought  to\t be  achieved  by  the\tcontemplated
\nlegislation.   Each case must be judged on its own facts and
\nin  its own setting of time and circumstances and it may  be
\nthat in regard to some economic activities and at some state
\nof  social  development,  prohibition with a view  to  State
\nmonopoly  is  the  only practical and reasonable  manner  of
\nregulation.   The  Mines  and\tMinerals  (Development\t and
\nRegulation) Act aims at the conservation and the prudent and
\ndiscriminating\texploitation of minerals and prohibiting  of
\nleases\t in  certain  cases  is\t  part\tof  the\t  regulation
\ncontemplated by Section 15 of the Act.\n<\/p>\n
      So in regulating mineral development, the royalty\/dead
\nrent  is the inherent part of it.  State has thus before  it
\nnumber\tof  factors which would guide it to fix, enhance  or
\nmodify\tthe  royalty\/dead  rent payable by  a  lessee.\t The
\nconservation and regulation of mines and mineral development
\nincludes  wide activity of the State including parting\twith
\nits  wealth,  are  all\trelevant factors to  be\t taken\tinto
\nconsideration\tas   a\tguiding\t  force\t for   fixing\tsuch
\nroyalty\/dead  rent.   For interpretation of a  Statute\twith
\nreference  to  Preamble we may usefully refer the case\tof
\nBhatnagar  & Co.  Ltd.\tVs.  Union of India & Ors., AIR 1957
\nSC  478 where Constitution Bench held:\tIn other words, in
\nconsidering the question as to whether guidance was afforded
\nto  the\t delegate  in bringing into operation  the  material
\nprovisions  of\tthe  Act by laying down principles  in\tthat
\nbehalf,\t the  Court  consid\/bn\tered the  statement  of\t the
\nprinciples  contained in the preamble to the Act as well  as
\nin  the material provisions of s.  3 itself.  This  decision
\nshows  that  if we can find a reasonably clear statement  of
\npolicy\tunderlying  the provisions of the Act either in\t the
\nprovisions  of the Act or in the preamble, then any part  of
\nthe  Act  cannot  be  attacked on the  ground  of  delegated
\nlegislation by suggesting that questions of policy have been
\nleft to the delegate…..\n<\/p>\n
      With   reference\tto  the\t  regulation   of   mineral
\ndevelopment, with reference to the minor minerals the policy
\nof  the Act is communicating loudly from its roof top,\tthat
\nlet it be done by the delegatees State who is fully aware of
\nthe  local  conditions as such mineral is also used for\t the
\nlocal  purposes\t and  on  whom\t this  larges  falls.\tWhat
\ndelegatee  should do what it should not do is also enshrined
\nin  the\t Act.\tSection\t 18 is also not\t excluded  from\t its
\napplication to the minor mineral development.  Under it duty
\nis cast duty on the Central Government to take all necessary
\nsteps  for  the\t conservation and  systemic  development  of
\nminerals   in  India.\tIts   sub-section  (2)\tfocuses\t the
\nperiphery  within  which  it has to do and what not  to\t do.
\nThis  itself  is a guidance which State may take  note\tof
\nwhile  framing its own rules.  Similarly Section 23-C  gives
\ndetail\tguidance what State should provide to check illegal,
\nmining, storage and transportation.\n<\/p>\n
      We  have\tsaid  Sections\t4-A, 17, 18 and\t 23  C\talso
\nprovides for the guidelines.  Sub-section (2) of Section 4-A
\nempowers  the  State Government to premature  terminate\t any
\nprospecting  licence  or mining lease if it is expedient  in
\nthe interest of regulation of mines and mineral development,
\npreservation  of  natural  environment, control\t of  floods,
\nprevention  of\tpopulation  or for avoiding  danger  to\t the
\npublic\thealth\tor  communication  or to  ensure  safety  of
\nbuildings,  monuments,\tstructures  or for  other  purposes.
\nUnder  sub-section (2) of Section 17, the Central Government
\nundertakes  reconnaissance, prospecting or mining operations
\nin  any\t area not already covered by any licence  or  lease,
\nafter consultation with the State Government but sub-section
\n(3)  obligates\tit to pay the permit fee,  prospecting\tfee,
\nroyalty,  surface  rent\t or dead rent, at the same  rate  at
\nwhich  it would have been payable by any other person  under
\nthis  Act.   This also is a check on the  State\t Government,
\nwhile fixing the rate of the royalty.  Similarly, Section 18
\nwhich  refers to the mineral development as aforesaid  casts
\nan  obligation\ton the Central Government to take  all\tsuch
\nsteps  for  the conservation and systematic  development  of
\nminerals  in India and for the protection of environment  by
\npreventing  or\tcontrolling any pollution for which  it\t may
\nmake  rules  and sub-section (2), in  particular,  specifies
\nlarge list on which such rules may be framed, which has been
\nframed\t(the  Mineral  Conservation and\t Development  Rules,
\n1988),\twhich  would be binding on the Government  including
\nthe  State  Government.\t  In conserving\t or  regulating\t the
\ndevelopment  of\t any mineral resources, the price factor  is
\ninherent.   Any\t development requires, planning,  execution,
\nmanagement  and\t with reference to the excavation of  mines,
\ncontrolling  the  extent and manner of mining, to check\t its
\nwastage,  protecting  environment and controlling  pollution
\netc.   which  are  provided in this Act.  This\tall  require
\nexpenditure  to\t be  incurred  by  the\tState  coupled\twith
\nconsiderations\tfor parting with the wealth of the State, as
\nminerals  belongs to the State except on private land.\tThey
\nare  all  guiding factors in fixing, modifying or  enhancing
\nthe  rate of royalty.  Thus development of mineral resources
\ninherently refers to the price factor to be recovered by the
\nowner.\n<\/p>\n
      One  of  the  submission for the appellant  is,  since
\nroyalty\t is a tax, delegation for its enhancement cannot  be
\nleft  unbridled on the delegatee and if two  interpretations
\nare  possible,\tthe one which favours an assesee  should  be
\naccepted.   It is true that this Court has held royalties on
\nthe minerals to be a tax in India Cement Ltd.  and Ors.\t Vs.
\nState  of Tamil Nadu and Ors.  1990(1) SCC 12, Orissa Cement
\nLtd.   Vs.  State of Orissa and Ors.  1991 Supp.(1) SCC 430,
\nState  of  M.P.\t Vs.  Mahalaxmi Fabric Mills Ltd.  and\tOrs.
\n1995  Supp.   (1) SCC 642 and P.  Kannadasan  etc.   etc.Vs.
\nState of Tamil Nadu & Ors.  etc.  etc.\t1996(7) SC 16.\n<\/p>\n
      In  considering  this  submission we have to  keep  in
\nmind,  tax  on this royalty is distinct from other forms  of
\ntaxes.\t This  is not like a tax on income, wealth, sale  or
\nproduction of goods (excise) etc.  This royalty includes the
\nprice  for  the consideration of parting with the right\t and
\nprivilege of the owner, namely, the State Government who own
\nthe mineral.  In other words, the royalty\/dead rent, which a
\nlessee\tor  licensee pays, includes the price  the  minerals
\nwhich  is the property of the State.  Both royalty and\tdead
\nrent  are  integral  part  of a lease.\tThus,  it  does\t not
\nconstitutes  usual  tax as commonly understood but  includes
\nreturn\tfor the consideration for parting with its property.
\nIn  view  of  this  special  nature  of\t the  subject  under
\nconsideration,\tnamely, the minerals, it would be too  harsh
\nto  insist  strict  interpretation  with  reference  to\t the
\nguidelines  to\ta  delegatee who is also the  owner  of\t its
\nmineral.   In  the present case, we are not considering\t any
\nliability  of tax on the assessee but whether delegation  to
\nthe State by the Parliament with reference to minor minerals
\nis unbridled.\n<\/p>\n
      One  of the guidelines in the case of Mahalaxmi Fabric
\nMills  Ltd.   and Ors.\t(Supra) was that the Parliament\t had
\nitself laid down with reference to major minerals, the rates
\nof  royalty in the Second Schedule of the Act and authorised
\nthe  Central  Government  to revise the rates from  time  to
\ntime.\tSo far minor minerals, also we find sub-section\t (2)
\nof  Section  15\t approves  the\t rules\tmade  by  the  State
\nGovernment,  regulating\t the grant of quarry leases,  mining
\nleases\tor other mineral concessions in respect of mine\t and
\nmineral\t prior to the enforcement of this Act and  similarly
\nsub-section  (3)  approves  the rate  of  royalty\/dead\trent
\nprescribed  for its payment in respect of minor minerals for
\nthe  time  being in force, i.e., what existed prior  to\t the
\ncoming\tin  force of this Act.\tThus, even approval  of\t the
\nthen  existing\trates  of  royalty  or\tdead  rent  by\t the
\nParliament  itself  is\tsimilarly a guiding factor  for\t any
\nsubsequent  modification  of  its   rate.   The\t proviso  to
\nsub-section   (3)   brings  an\t additional  check  on\t the
\nenhancement  of rate of royalty\/dead rent that it cannot  be
\nenhanced  more\tthan once during any period of three  years.
\nPrior to the Act No.37 of 1996 this period was of 4 years.\n<\/p>\n
      We  have\tto  keep  in  mind,  in\t the  present  case,
\ndelegation  of power is on the State Government which is the
\nhighest\t executive in the State, which is responsible to the
\nState  Legislature.  In a Parliamentary democracy every\t act
\nof the State Government is accountable to its people through
\nState Legislature which itself is an additional factor which
\nkeeps the State Government under check to act arbitrarily or
\nunreasonably.\tWhen  a\t policy is clearly laid\t down  in  a
\nstatute with reference to the minor mineral with main object
\nof  the\t Act for its conservation and  development,  coupled
\nwith  various  other  provisions  to  the  Act\tguiding\t it,
\nchecking  it  and  controlling it then how  such  delegation
\ncould be unbridled.  With reference to Municipal Corporation
\nof  Delhi  Vs.\t Birla Cotton, Spinning and  Weaving  Mills,
\nDelhi, 1968 (3) SCR 251, the question of delegation of power
\nto  the\t Municipal Corporation and the State Government\t was
\nconsidered  in\twhich Avinder Singh and Ors.  Vs.  State  of
\nPunjab\tand Ors.  1979 (1) SCC 137 was considered and relied
\nas under:\n<\/p>\n
      In  the  Municipal  Corporation of  Delhi\t case,\tthe
\nproposition   that   where  the\t  power\t conferred  on\t the
\ncorporation  was  not unguided, although widely\t worded,  it
\ncould  not  be said to amount to excessive  delegation,\t was
\nupheld.\t Delegation coupled with a policy direction is good.
\nCounsel\t emphasised  that the court had made  a\t significant
\ndistinction  between  the local body with limited  functions
\nlike a municipality and Government:\n<\/p>\n
      The  needs of the State are unlimited and the purposes
\nfor  which the State exists are also unlimited.\t The  result
\nof  making  delegation of a tax like sales tax to the  State
\nGovernment  means  a power to fix the tax without any  limit
\neven  if the needs and purposes of the State are to be taken
\ninto   account.\t  On  the  other   hand,  in  the  case\t  of
\nmunicipality, however large may be the amount required by it
\nfor  its purposes it cannot be unlimited, of the amount that
\na  municipality\t can  spend is limited by the  purposes\t for
\nwhich  it is created.  A municipality cannot spend  anything
\nfor any purposes other than those specified in the Act which
\ncreates\t it.   Therefore  in the case of a  municipal  body,
\nhowever\t large\tmay be its needs, there is a limit to  those
\nneeds  in view of the provisions of the Act creating it.  In
\nsuch  circumstances  there  is a clear\tdistinction  between
\ndelegating  a power to fix rates of tax, like the sales tax,
\nto  the\t State\tGovernment  and delegating a  power  to\t fix
\ncertain local taxes for local needs to a municipal body.\n<\/p>\n
      It  is  too  late\t in  the day  to  contend  that\t the
\njurisprudence  of  delegation of legislative power does\t not
\nsanction parting with the power to fix the rate of taxation,
\ngiven  indication of the legislative policy with  sufficient
\nclarity.   In  the case of a body like a  municipality\twith
\nfunctions  which  are unlimited and the requisite  resources
\nalso limited, the guideline contained in the expression for
\nthe purposes of the Act is sufficient, although in the case
\nof  the\t State or Central Government a mere indication\tthat
\ntaxation  may be raised for the purposes of the State may be
\ngiving\ta carte blanche containing no indicium of policy  or
\npurposeful limitation. {Empahsis supplied}<\/p>\n
      With  reference to the question what is the policy of
\nthe legislature this very decision holds:\n<\/p>\n
      We  are clearly of the view that there is fixation of
\nthe  policy of the legislation in the matter of taxation, as
\na  close  study of Section 90 reveals;\tand  exceeding\tthat
\npolicy\twill invalidate the action of the delegate.  What is
\nthat  policy?\tThe levy of the taxes shall be only for\t the
\npurposes  of  the  Act.\t  Diversion for\t other\tpurposes  is
\nillegal.    Exactions  beyond  the   requirements  for\t the
\nfulfilment  of\tthe  purposes of the Act are  also  invalid.
\nLike in Section 90(1), Section 90(2) also contains the words
\nof  limitation\tfor  the  purposes of this  Act\t and  that
\nlimiting  factor governs sub- sections (3), (4) and (5)The
\nexpression  purposes of this Act is pregnant with meaning.
\nIt  sets  a  ceiling  on  the  total  quantum  that  may  be
\ncollected.   It\t canalises the objects for which the  fiscal
\nlevies\tmay  be spent.\tIt brings into focus the  functions,
\nobligatory  or\toptional,  of the municipal bodies  and\t the
\nraising\t of  resources\tnecessary   for\t discharging   those
\nfunctions  nothing more, nothing else.\n<\/p>\n
      Thus  this case clearly lays down that fixation of the
\npolicy\tof  the\t Act in the matter of taxation itself  is  a
\nguidance  to  a\t delegatee, which is also be  found  in\t the
\npresent\t case,\twhen its preamble, objects and\treasons\t and
\nvarious\t other provisions refers to for the development\t and
\nregulation  of mines and minerals.  The fixation of rate has
\nco-relate for this purpose of the Act and not beyond it.\n<\/p>\n
      With  reference  to  another   submission\t that\tonly
\npurposeful  guidance with control over the State  Government
\nwould  be to fix maximum limit of rate of royalty, which  is
\nnot  there  in the present case.  Similar question was\talso
\nsubmitted  and\tthis  Court in the case\t of  Corporation  of
\nCalcutta Vs.  Liberty Cinema 1965 (2) SCR 477 held:\n<\/p>\n
      No doubt when the power to fix rates of taxes is left
\nto  another body, the legislature must provide guidance\t for
\nsuch  fixation.\t  The  question then is, was  such  guidance
\nprovided  in  the  Act?\t We first wish to observe  that\t the
\nvalidity of the guidance cannot be tested by a rigid uniform
\nrule;\tthat  must  depend on the object of the\t Act  giving
\npower  to  fix the rate.  It is said that the delegation  of
\npower  to fix the rates of taxes authorised for meeting\t the
\nneeds  of the delegate to be valid, must provide the maximum
\nrate  that  can be fixed, or lay down rules indicating\tthat
\nmaximum.   We are unable to see how the specification of the
\nmaximum\t rate supplies any guidance as to how the amount  of
\nthe tax which no doubt has to be below the maximum, is to be
\nfixed.\t Provision for such maximum only sets out a limit of
\nthe rate to be imposed and a limit is only a limit and not a
\nguidance.\n<\/p>\n
      It  seems\t to us that there are various  decisions  of
\nthis  Court  which  support  the   proposition\tthat  for  a
\nstatutory  provision for raising revenue for the purposes of
\nthe delegate, as the section now under consideration is, the
\nneeds  of  the\ttaxing body for carrying out  its  functions
\nunder  the  statute  for which alone the  taxing  power\t was
\nconferred  on it, may afford sufficient guidance to make the
\npower to fix the rate of tax valid.\n<\/p>\n
      Before  we  take up the history of delegation  of\t the
\npower  of the State Government as delegatee, it is necessary
\nto  refer  to  two  decisions  of  this\t Court\tin   messrs.
\nBhatnagar  & Co.  and Anr.  Vs.\t The Union of India and Ors.
\nAIR  1957  SC 478.  This case also considers the history  of
\nthe  earlier provisions of the Act where challenge of  vires
\nwas made.  It held:\n<\/p>\n
      Thus,  if\t the preamble and the relevant section\tof
\nthe earlier Act are read in the light of the preamble of the
\npresent\t Act, it would be difficult to distinguish this\t Act
\nfrom  the  Essential Supplies Act with which this Court\t was
\nconcerned  in  Harishankar  Baglas case, AIR 1954  SC  465.
\nIncidentally we may also observe that in Pannalal Binjraj v.
\nUnion  of India, Petns.\t Nos.<\/a>  97 and 97A etc.\tof 1956( (8)
\nAIR  1957 SC 397, (B), where the vires of s.  5 (7-A) of the
\nIncome\ttax  Act  were put in issue before this\t Court,\t the
\nchallenge was repelled and during the course of the judgment
\ndelivered  on December 21, 1956, the previous history of the
\nearlier\t Income\t tax Acts was taken into account  to  decide
\nwhat  policy could be said to underlie the provisions of the
\nimpugned section.\n<\/p>\n
      This  Court in Municipal Corporation of Delhi  (Supra)
\nalso  referred\tto the history of enactment while  examining
\nand  testing  vires of the Act.\t It records:  According\t to
\nour  history also there is a wide area of delegation in\t the
\nmatter\tof  imposition of taxes to local bodies\t subject  to
\ncontrols  and  safeguards of various kinds which partake  of
\nthe  nature  of guidance in the matter of fixing  rates\t for
\nlocal taxation.\t It is in this historical background that we
\nhave  to  examine the provisions of the Act impugned  before
\nus.\n<\/p>\n
      We  may  further\texamine this question  from  another
\nangle.\t In  order to adjudicate, whether any delegation  of
\npower  is unbridled or excessive, the historical  background
\nof  similar provisions which preceded the impugned provision
\nshould\talso  be  kept\tin mind as it  is  also\t a  relevant
\nconsideration.\tIn fact, D.K.  Trivedis case (supra) itself
\nhas  taken  the\t note of its historical background.   It  is
\nsignificant  that Entry 54 List I of the Seventh Schedule of
\nthe  Constitution  of  India,  reproduces Entry\t 36  in\t the
\nFederal\t Legislative  List in the Government of\t India\tAct,
\n1935,  except by omitting the words and oil fields.  Under
\nthis  Entry  36\t the  Mines  and  Minerals  (Regulation\t and
\nDevelopment)  Act,  1948  was  enacted as we  have  now\t the
\npresent\t 1957 Act under Entry 54 List I.  This Act conferred
\nvery wide rule making power upon the Central Government, for
\nregulating   and   granting   of    mining   leases.\t The
\nconstitutional\tmaker  also knew that Central Government  in
\nexercise  of  this  rule  making power,\t made  the  Minerals
\nConcession Rules, 1949 and by Rule 4 the extraction of minor
\nminerals  was left to be regulated by the rules made by\t the
\nProvincial Governments.\t When the present 1957 Act came into
\nforce,\tthe  Parliament\t was   aware  that  different  State
\nGovernments  in pursuance of this Rule 4 were regulating the
\ngrant  of  leases  in respect of  minor\t minerals  including
\nfixation  of rate of royalties.\t This Parliament approved in
\nthe  present Act through sub-sections (2) and (3) of Section
\n15,  then  existing  Rules which were in  force\t immediately
\nbefore\tthe commencement of this Act which included the rate
\nof  royalty\/dead rent for it to be continue in force, unless
\nsuperseded  by the Rules made under sub- section (1).  Thus,
\nthe  Parliament was fully aware that even in the past it was
\nthe  State Governments which were entrusted and were dealing
\nwith  minor  minerals as a delegatee.  The  only  difference
\nbeing,\t earlier  the  State   Governments  were  acting  as
\nsub-delegatee  of the Central Government but now they act as
\ndelegatee  of the Parliament.  This was the pattern  adopted
\nand approved since inception.  This seems to be also because
\nminor  minerals being more useful for the local uses and the
\nState  Government  being the highest executive in the  State
\nknowing\t fully\twell  of   its\tuses,  management  including
\nfixation  of its prices thus, in this historical  background
\nthere  is nothing wrong to delegate the State Government  to
\nfix rate of royalty\/dead rent.\n<\/p>\n
      In D.K.  Trivedis case (supra) this Court records:\n<\/p>\n
      To  take\tinto  account\tlegislative  history   and
\npractice  when\tconsidering  the  validity  of\ta  statutory
\nprovision  or  while interpreting a legislative entry  is  a
\nwell  established  principle of construction of\t statutes  :
\nsee,  for instance, State of Bombay v.\tNarothamdas Jethabai<\/a>
\n(1951 SCR 51) and State of Madras v.  Gannon Dunkerley & Co.
\n(Madras) Ltd.<\/a>  (1959 SCR 379).\n<\/p>\n
      This  takes  us  to the next submission,\twhether\t the
\nintroduction  of  sub-\tsection\t (3) of Section\t 28  by\t the
\nParliament  in\tany way strengthen the guideline and  put  a
\ncheck  on  the\texercise of power by the  State\t Government.
\nSub-section  (1)  of Section 28 refers to the  placement  of
\nevery  rule  and  every\t notification made  by\tthe  Central
\nGovernment  before each House of Parliament for a period  of
\n30  days  when\tthe same becoming effective subject  to\t its
\nmodification, if any.  Sub-section (3) of Section 28 directs
\nplacement  of  every rule or notification made by the  State
\nGovernment  before  each  House of State  Legislature.\t The
\nsubmission  is, there is no provision in sub-section (3)  as
\nin  sub-section (1), of such rule being subject to  scrutiny
\nfor  its approval or modification by the State\tLegislature.
\nThe  submission\t is,  sub-section (3) in no way\t places\t any
\ncheck  on the State Government, as State Legislature is\t not
\nentrusted  with power to approve or modify.  In other words,
\nintroduction  of  sub-section (3) is merely for the sake  of
\ninformation and nothing more.  Further it is submitted, when
\nlanguage  of two different sub-sections in the same  Section
\nare  different\tit has to be differently interpreted,  which
\ncannot be construed to connote same meaning and same effect.
\nIt is also submitted, even if sub-section (3) was brought on
\nthe Statute Book, it was not sufficient for the State, as it
\nhas  to\t show that in fact both the  impugned  notifications
\nwere so laid before both the Houses of the Legislature.\t The
\nsubmission  is,\t actually  they were not so  laid.   Further
\nreliance  is  placed in the case of Atlas  Cycle  Industries
\nLtd.   Vs.   State  of Haryana, 1979 (2) SCC 196  (para\t 30)
\nwhere  this  Court  held  that a mere  laying  procedure  is
\ndirectory  not mandatory.  On the other hand, submission  on
\nbehalf of the State is that this laying procedure before the
\nLegislature  cannot be a mere show, but it is for a purpose,
\nthe  effect of which it has to be given.  In our  considered
\nopinion,  the incorporation of this by the Parliament cannot
\nbe said to be in futility.  In fact, this was brought in, in
\nview  of  the observation made by this Court in the case  of
\nD.K.  Trivedis (supra).\n<\/p>\n
      It  is true that the language of both sub-sections (1)
\nand  sub-sections (3) of Section 28 are different.  They are
\nreproduced below:\n<\/p>\n
      28.   Rules  and\tnotifications  to  be  laid  before
\nParliament  and certain rules to be approved by\t Parliament.\n<\/p>\n
–  (1) Every rule and every notification made by the Central
\nGovernment  under this Act shall be laid, as soon as may  be
\nafter it is made before each House of Parliament while it is
\nin  session  for a total period of thirty days which may  be
\ncomprised  in  one  session  or in two\tor  more  successive
\nsessions   and\tif,  before  the   expiry  of  the   session
\nimmediately following the session or the successive sessions
\naforesaid,  both Houses agree in making any modification  in
\nthe  rule or notification or both Houses agree that the rule
\nor notification should not be made, the rule or notification
\nshall  thereafter have effect only in such modified form  or
\nbe  of no effect, as the case may be;  so, however, that any
\nsuch modification or annulment shall be without prejudice to
\nthe  validity of anything previously done under the rule  or
\nnotification.\n<\/p>\n
      xxx xxx<\/p>\n
      (3)  Every  rule\tand every notification made  by\t the
\nState  Government  under this Act shall be laid, as soon  as
\nmay  be\t after\tit is made, before each House of  the  State
\nLegislature  where it consists of two Houses, or where\tsuch
\nLegislature consists of one House, before that House.\n<\/p>\n
      There  is\t no  difficulty\t for   us  to  uphold  their
\nsubmission  that  in view of difference in the\tlanguage  of
\nsub-section  (3),  the\tsame  meaning  to  it  as  that\t  of
\nsub-Section  (1) cannot be given.  This difference has\tbeen
\ncarved out for a purpose to give different projection to the
\nsaid  two  provisions.\tIn the case of major  mineral  which
\nplays  important role in the National growth and wealth\t and
\nwhere  the  delegatee is the Central Government,  Parliament
\nretained  its  full  control  but  for\tthe  minor  mineral,
\nParliament  felt  as the subject is for local use and  State
\nGovernment  well  versed to deal with it in  the  historical
\nbackground, mere placement of rules, notifications framed by
\nit  before the State Legislature would be a sufficient check
\non  the\t exercise of its powers.  Thus, this  difference  of
\nlanguage  gives\t two  different thrust as  intended  by\t the
\nParliament.   Any  act of the Parliament, far less  when  it
\nintroduces  any new provision through amendment, it could be
\nsaid for it to be in futility.\tThe purpose has to be found.
\nWhat could be the purpose for such an amendment?  One of the
\nreasons\t is  that  this\t was  brought in,  in  view  of\t the
\nobservation  made by this Court in D.K.\t Trivedis  (supra).
\nThis Court records:\n<\/p>\n
      It  was, therefore, for Parliament to decide whether
\nrules  and notifications made by the State Governments under
\nSection\t 15(1)\tshould\tbe  laid before\t Parliament  or\t the
\nlegislature  of\t the State or not.  It, however, thought  it
\nfit  to\t do  so with respect to minerals  other\t than  minor
\nminerals since these minerals are of vital importance to the
\ncountry’  industry and economy, but did not think if fit to
\ndo  so\tin  the case of minor minerals because\tit  did\t not
\nconsider them to be of equal importance..\n<\/p>\n
      The  Parliament  through its wisdom, apart from  above
\nbrought\t this amendment also to keep a check on the exercise
\npower  by the State Governments as delegatee.  The question
\nis  whether  mere laying rules and notification\t before\t the
\nlegislature,  as in the present case, can be construed as  a
\ncheck on the State Government power.  Laying before House of
\nParliament  are made in the three different ways.  Laying of
\nany  rule  may be subject to any negative resolution  within
\nspecified period or may be subject to it confirmation.\tThis
\nis  spoken as negative and positive resolution respectively.
\nThird  may be mere laying before the House.  In the  present
\ncase,  we  are\tnot  concerned with  either  affirmative  or
\nnegative procedure but consequence of mere laying before the
\nlegislature.\n<\/p>\n
      Administrative Law by HWR Wade & Forsyth, 7th Edition,
\npage  898  records with reference to mere  laying:   Laying
\nbefore Parliament An Act of Parliament will normally require
\nthat  rules or regulations made under the Act shall be\tlaid
\nbefore\tboth Houses of Parliament.  Parliament can then keep
\nits  eye upon them and provide opportunities for  criticism.
\nRules  or regulations laid before Parliament may be attacked
\non  any\t ground.  The object of the system is to  keep\tthem
\nunder  general\tpolitical  control,  so\t that  criticism  in
\nParliament   is\t frequently  on\t  grounds  of  policy.\t The
\nlegislation concerning laying has already been explained.\n<\/p>\n
      Laying  before  Parliament  is  done in  a  number  of
\ndifferent ways.\t The regulations may merely have to be laid;
\nor  they may be subject to negative resolution within  forty
\ndays;\tor  they may expire unless confirmed by\t affirmative
\nresolution.\n<\/p>\n
      Constitutional  and  Administrative  Law,\t Stanely  De
\nSmith and Rodney Brazier, 7th Edn., records:\n<\/p>\n
      If  the instrument has merely to be laid, or laid in
\ndraft,\tbefore Parliament, it will be delivered to the Votes
\nand  Proceedings  Office  of  the   House  of  Commons.\t  No
\nopportunity  is provided by parliamentary procedure for\t the
\ninstrument  to be discussed, but its existence will at least
\nbe brought to the notice of members and the Minister is more
\nlikely\tto  be\tquestioned about it than if it is  not\tlaid
\nbefore Parliament at all.\n<\/p>\n
      In  a  democratic\t set up, every State  Government  is
\nresponsible  to\t its  State Legislature.  When\tany  statute
\nrequire\t mere laying of any notification or Rule before\t the
\nLegislature  its  execution,  viz., State  Government  comes
\nunder  the  scrutiny  of the concerned\tLegislature.   Every
\nfunction  and  every  exercise\tof   power,  by\t the   State
\nGovernment  is\tunder one or other Ministry who in  turn  is
\naccountable  to\t the  legislature   concerned.\t Where\t any
\ndocument, rule or notification requires placement before any
\nHouse  or  when placed, the said House inherently  gets\t the
\njurisdiction  over  the\t same.\tEach member  of\t the  House,
\nsubject\t to  its procedure gets right to discuss  the  same,
\nthey   may   put  questions  to\t the   concerned   Ministry.
\nIrrespective  of  the fact that such rules or  notifications
\nmay  not be under purview of its modification, such  members
\nmay  seek explanation from such Ministry of their  inaction,
\narbitrariness, transgressing limits of their statutory orbit
\non  any such matter.  Short of modification power, it has  a
\nright  even  to condemn the Ministry.  No doubt in the\tcase
\nwhere  House  is entrusted with power to annually modify  or
\napprove\t any  rule,  it plays positive role  and  have\tfull
\ncontrol\t over it, but even where the matter is merely placed
\nbefore\tany House, its positive control over the  executive,
\nmakes  even  mere laying to play a very vital  and  forceful
\nrole   which  keeps  a\tcheck\tover  the  concerned   State
\nGovernment.   Even  if\tsubmission   for  the  appellant  is
\naccepted  to  be  that\tmere   placement  is  only  for\t the
\ninformation,  even  then such information, inherently in  it
\nmakes legislature to play an important role as aforesaid for
\nkeeping\t a  check on the activity of the  State\t Government.
\nSuch placement cannot be construed to be non est.  No act of
\nParliament  should be construed to be of having no  purpose.
\nAs  we\thave  said  mere   discussion  and  questioning\t the
\nconcerned  ministry or authority in the House in respect  of
\nsuch  laying would keep such authority on guard to act\twith
\ncircumspection which is a check on such authority, specially
\nwhen  such  authority is even otherwise answerable  to\tsuch
\nLegislature.   Further examining the scheme of the Act, with
\nits   historical   background,\twe   find  there  is   clear
\ndemarcation  in\t dealing between the Major minerals and\t the
\nMinor  minerals.   For minor minerals all its activity\tfrom
\nbefore\tthis Act has been delegated to the State  Government
\nas  it having all conceivable knowledge over it, as it being
\nof local use and not being of much national importance.\t For
\nthis  difference also stricter control is made for the Major
\nminerals  through Section 28(1) than for the minor minerals.
\nThus, this mere check on the State Government, as aforesaid,
\nmay have been found to be sufficient by the Parliament, with
\nreference to the minor minerals.  Thus, the language of both
\nsub-section  (1) and sub-section (3) though different,\tthis
\nis  only  for two different purposes.  Thus when  Parliament
\nintroduced  sub-section\t (3)  through amendment, it  was  to
\nfurther\t strengthen  the control over the  State  Government
\npower.\t  Any  other  submission,  the\t one  made  by\t the
\nappellants,  makes  such  an Act of the\t Parliament  meaning
\nless, which cannot be attributed to the Parliament.\n<\/p>\n
      This takes us to the next submission.  It is submitted
\nthat  the  State Government, in spite of the  mandate  under
\nsub-section  (3)  of Section 28, to place the rules and\t the
\nnotifications  framed by it before each House of Legislature
\nthe   impugned\t notifications\thave\tnot   been   placed.
\nAppellants case is that stating they were not placed, while
\nfor  the  respondent  State submission is  it  were  placed.
\nSubsequent to the conclusion of the hearing, learned counsel
\nfor the State sought leave of this court, which was granted,
\nto  place  affidavit  with  annexures  to  substantiate\t its
\nsubmission.   An additional affidavit by Mr.  Anand Vardhan,
\nDistrict  Mining  Officer dated 1st May, 2000 was  filed  on
\nbehalf\tof the respondent State of Bihar.  A reply affidavit
\ndated  4th  June, 2000 was filed by one Mr.  Subhash  Kumar,
\nSecretary of the appellants association.\n<\/p>\n
      It  may  be  pointed  here, out of  the  two  impugned
\nnotifications  only  one  notification dated  28.9.1994\t was
\nrequired  to  be  placed  before  the  House  of  the  State
\nLegislature  since  sub-section (3) of Section 28  was\tonly
\nbrought\t in  the year 1994.  As per the State affidavit,  on
\nthe date the arguments concluded in this case, a fax message
\nwas  received by the Standing Counsel that the\tnotification
\ndated  28.9.1994  had been placed before two houses  in\t the
\nMay-June 1994 and 1995 session through Administrative Report
\nof  the\t Department  of Mines and  Geology.   The  affidavit
\nfurther\t states, every year Department of Mines and  Geology
\nprepares  Administrative Report, which includes the  revenue
\nearned\tfrom  mining  and there is a section in\t the  office
\nwhich  reports\tthe  prevailing\t rates of  royalty  and\t the
\nnotifications  under which it is fixed.\t This report is sent
\nevery  year  to\t both the houses of  the  State\t Legislature
\nthrough\t   their   respective\t  Sections.    In    1994-95
\nAdministrative\tReport,\t the   impugned\t notification  dated
\n28.9.1994  is mentioned in para 4.40 of Chapter IV at page 6
\nand  notification  as a whole is included as Annexure  6  at
\npage  29.  Similarly, the Administrative Report for  1995-96
\nmentions  the  fixation of royalty as fixed by\tnotification
\ndated 28.9.1994, is mentioned para 4.4 of Chapter at page 7.
\nSimilarly,  Administrative Report for 1996-97 also  mentions
\nfixation  of royalty on mines minerals through\tnotification
\ndated  28.9.1994.  Each year these reports were supplied  to
\nthe  Secretary, Bihar Vidhan Sabha with sufficient number of
\ncopies\tenable\tits  circulation to the members of  the\t two
\nHouses.\t  About 400 copies were sent to Vidhan Sabha and 100
\ncopies\tto Vidhan Parishad.  Based on the aforesaid averment
\nin the concluding para of the affidavit it is averred:\n<\/p>\n
      it  is clear that the notification dated\t28.9.1994
\nfixing\troyalty\t had been laid before the two houses of\t the
\nState  legislature as required by Section 28(3) of the Mines
\nand Minerals (Regulation and Development) Act, 1957.\n<\/p>\n
      In  the  reply affidavit for the appellants  one\tMr..
\nSubhash\t Kumar, a letter dated 4.6.2000 which is in response
\nto  a  quary is annexed, which is of under Secretary,  State
\nMinister  Homes,  annexing letter No.  4\/99-4-7\t dated\t27th
\nMay, 2000 of the Dy.  Secretary, Bihar Legislative Assembly,
\nwhich records:\n<\/p>\n
      .as  per\tdirection (1) have to inform  that  Bihar
\nLegislative Assembly has no knowledge of Bihar Minor Mineral
\nConcession  Rules,  1972 and amendment made therein  of\t any
\nregulation made in this connection:.\n<\/p>\n
      The  perusal of the two affidavit makes it clear\tthat
\ntruly  as  required  by sub section (3) of  Section  28\t the
\nimpugned  notification\tdated 28.9.1994 was not placed.\t  It
\nseems  various\tdepartments  of\t the  Government  sends\t its
\nadministrative\treport\tevery  year   with  respect  to\t its
\nfunctioning  and  revenue  earned.  It is  in  this  context
\ndepartment  of\tMines  and  Geology prepared  and  sent\t its
\nadministrative\treport for 1994-95, 1995-96 and 1996-97\t and
\nthe  notification  dated  28.9.1994  is\t referred  in  these
\nreports.   Further  400 copies for the Vidhan Sabha and\t 100
\ncopies\tfor  Vidhan  parishand were  sent  for\tcirculation.
\nThereafter  there  are\tno  other document  showing  it\t was
\nactually  placed  before the House.  Even if  these  reports
\nwere  sent  and\t placed\t before\t  the  House  it  were\tsaid
\nadministrative\t report\t  which\t did\tcontain\t  the\tsaid
\nnotification  dated  28.9.1994.\t In fact, the  letter  dated
\n27th  May,  2000  from\tShri   Jagdish\tPrasad\tYadav,\t Dy.
\nSecretary Bihar Legislative Assembly, reveals that the House
\nhas  no knowledge of the Bihar Mineral Concessions Rule 1972
\nand amendment made thereunder or any regulation made in this
\nconnection.\n<\/p>\n
      So, it is not possible to hold, based on affidavits of
\nthe  parties that the impugned notification dated  28.9.1994
\nwas  actually  placed in terms of Section 28(3).   It  being
\npart of some administrative report cannot constitute to be a
\nfact to hold its placement in terms of said sub-section (3).
\nThough\tthe affidavit on behalf of State reveals that  under
\nrules  of  procedure  and conduct of business of  the  Bihar
\nVidhan\tSabha,\tthere is a delegated legislation  committee,
\nwhich  examines, all the rules which are required to be laid
\nbefore\tthe  House,  which also inspects  and  examines\t the
\nworking of such personals involved under it.\n<\/p>\n
      M\/s  Atlas  Cycle Industries Ltd.\t and Ors.  1979\t (2)
\nSCC  196.  In this case also one of the contentions was that
\nthe  notifications were not placed before the Parliament  as
\nrequired  by  sub-section (6) of Section 3 of the  Essential
\nCommodity  Act\t1955  The sub-section (6) of Section  3\t of
\nthis  Act requires that every order made under this  section
\nby  the Central Government or by any officer or authority of
\nthe  Central Government shall be laid before both houses  of
\nParliament,  as\t soon as may be, after it is made.  This  is
\nsimilar\t to  the  provision which we are  considering  under
\nsub-sectionn  (3)  of  Section\t28.   The  Court  held\tsuch
\nprovision  to be directory and hence for this default of not
\nplacing\t  the  Iron  and  steel\t  control  order  1956\t and
\nnotification  under  clause 15(3) before the Parliament\t the
\norder shall not become be invalid.\n<\/p>\n
      However,\t since\t we  have   upheld   that   impugned
\nnotifications  issued by the State to be within the ambit of
\ndelegation and that delegation is not excessive as there are
\nenough\tguidelines  and\t control over the  State  Government
\nnotwithstanding its check on the State under sub-section (3)
\nof Section 28, it would not have any effect on its validity.
\nBut we make it clear when a statute as under sub-section (3)
\nof Section 28 requires its placement it is the obligation of
\nthe  State Government to place such with this specific note,
\nwhile  placing before each Houses of Parliament.  Even if it
\nhas  not  been done, the State shall now do place it  before
\neach  houses  of the State legislature at the  earliest\t the
\nnotification  dated 28.9.1994 and will also do so in  future
\nwhile  framing rules or issuing any notifications under\t the
\nrules framed under sub-section (1) of Section 15 of the Act.\n<\/p>\n
      Another  submission  for\tthe appellants is  that\t the
\ndelegator or the Parliament must retain its control over the
\ndelegatee  and such delegatee cannot be entrusted to another
\nLegislature,  namely,  State Legislature as in\tthe  present
\ncase.\tTo  repel  this submission learned counsel  for\t the
\nState,\treferred to the The Delegated Legislation Provisions
\n(Amendment)  Act, 1983.\t This Act amended various Parliament
\nActs  to implement the recommendations of the Committees  on
\nSubordinate  Legislation  regarding laying of certain  rules
\nframed\tby the delegatee before the State legislatures.\t The
\nSchedule  of  this Act, refers to the large number  of\tsuch
\namendments  made  by the Parliament.  Few of them are  being
\nreferred  hereunder,  namely, The Religious Endowments\tAct,
\n1863,  amendment Section 8 which requires Every rule framed
\nunder  this section shall be laid, as soon as it is  framed,
\nbefore the State Legislature. By amending Section 20 of the
\nPress and Registration of Books Act, 1867 it directs, Every
\nrule  made by the State Government under this Section  shall
\nbe  laid,  as  soon as may be after it is made,\t before\t the
\nState  Legislature.  Similarly\tSection 83  of\tthe  Indian
\nChristian Marriage Act, 1872, requires that Every rule made
\nby the State Government under this Section shall be laid, as
\nsoon  as  may  be  after  it   is  made,  before  the  State
\nLegislature.  The Registration Act, 1908 amended Section 91
\n(1)  through which the following was brought in Every  rule
\nprescribed under this Section or made under Section 69 shall
\nbe  laid,  as  soon  as\t it   is  made,\t before\t the   State
\nLegislature.\n<\/p>\n
      We are not further enumerating such is large number of
\ncases  recorded\t in the Schedule itself.  Each one  of\tthem
\nwere  the  act\tof Parliament in which with reference  to  a
\ndelegatee,  provisions are made for placing its rules framed
\nby it, before the State Legislature.  Thus, placement of any
\nnotification  or rules framed by the State Government  under
\nsub-section (3) of Section 28 cannot be said to be something
\nout  of\t any  novel  procedure\tbut  is\t a  well  recognised
\nprinciple.  The submission was how can a delegatee under one
\nlegislature,  viz.,  the  Parliament  be  placed  under\t the
\ncontrol\t of  another  legislature.  This submission  has  no
\nmerit.\t In  a Federal structure of any constitution,  their
\nfields\tare well defined, sometime same subject may be under
\ncontrol\t of  both legislatures as in the concurrent list  of
\nour  Constitution.   Thus in a given case, as in the  above,
\nlarge  numbers\tof  such cases were a delegatee\t is  of\t the
\nParliament  were  put  under  the   control  of\t the   State
\nlegislature.   This submission is sought to be challenged by
\nsubmitting  by learned senior counsel Mr.  Nariman that\t the
\ncases  in  the\tSchedule under the 1983 Act  are  all  cases
\nfalling under the Concurrent List of the Seventh Schedule of
\nour  Constitution.  This was because both the Parliament and
\nthe  State  Legislature had the plenary power to  make\tlaws
\nover the same subject.\tThis in our considered opinion would
\nmake no difference.  It is significant to record, though the
\nsubject\t we are dealing with, viz., Regulation of mines and
\nmineral\t development does not fall in the Concurrent  List,
\nbut  still  both falls in the field of the Parliament  under
\nEntry  54  List I and the State legislature under  Entry  23
\nList  II,  their  possible  conflict   is  resolved  by\t the
\nfollowing  words  in  Entry  23 List  II,  subject  to\tthe
\nprovisions  of\tList  I\t with\trespect\t to  regulation\t and
\ndevelopment  under the control of the Union.  This  control
\nmay be full, or partial.  In the present case when this 1957
\nAct was passed, Union came in full control over this subject
\nand  no\t field was left for the State to make the law.\t But
\nthis covering of the entire field was by the 1957 Act itself
\nnot  by\t any other constitutional limitation.  Then the\t Act
\nwhich  takes the entire field can also withdraw from it both
\npartial\t or fully.  In the present case since the Parliament
\nhas exercised its discretion under Item 54 List I, the State
\nLegislature  is denuded of its power under Entry 23 List II.
\nIt may be said so long that Act remains in force it eclipses
\nthe  power of the State Legislature.  In the present case as
\nheld  in Baij Nath Kedias case (supra) after passing of the
\naforesaid  1957 Act the power of State Legislature has\tbeen
\ncompletely  denuded by the Parliament.\tIf that be so, it is
\nalways\topen  for the Parliament to withdraw  partially\t the
\neclipse\t if  so desires, may leave the Legislature for\tsuch
\npart  to  exercise  its power which it\toriginally  have  by
\nvirtue\tof Item 23 of List II.\tIt is in this light when  we
\nexamine\t the  amendment\t by introducing sub-section  (3)  of
\nSection\t 28, with provision to lay the rule or\tnotification
\nmade by the State Government before the State Legislature it
\ncannot\tbe said it can only be when it is in the  concurrent
\nlist.\tThus such placement cannot be said to be incompetent
\nor  keeping if beyond the control of the Parliament.  As  we
\nhave said this placement before the State legislature is for
\na  limited  purpose for which the Parliament  is  competent.
\nThus  introduction of sub-section (3) in Section 28, in this
\nlight  cannot be said to be of no consequence.\tIt was\tdone
\nfor  a purpose and that purpose, as aforesaid, is sufficient
\nto  hold  the State Government under check while  exercising
\nits power as a delegatee.\n<\/p>\n
      We  also\tfind  there  are   few\tprovisions  in\t our
\nConstitution   which   require\tmere   laying\tbefore\t the
\nParliament.   Article  151 requires laying of the report  of
\nthe  Comptroller  and Auditor-General of India\tbefore\teach
\nHouse  of Parliament and with reference to the State, to  be
\nlaid  before the Legislature of the State.  Article 338\t (5)
\nrequires placing of the report of the Commission before each
\nHouse  of  Parliament  and  with   reference  to  the  State
\nGovernment,  under sub-Article (7) it to be laid before\t the
\nLegislature  of the State.  Though they are mere  provisions
\nof  mere laying before the Parliament, but it is always open
\nto  any\t Member of the House to discuss and comment  on\t the
\nsaid report.\n<\/p>\n
      Next coming to the quantum of imposition, on the facts
\nof  this case, the imposition of royalty\/dead rent could  be
\nsaid  to be arbitrary or excessive by the State\t Government.
\nWe  do not find any material placed by the appellants in the
\nwrit  petition\tto  come to such a  conclusion.\t  Though  by
\nproviso\t to sub-section (3) of Section 15 it is open for the
\nState Government to revise the royalty every three years but
\nthe  history shows it has not done so.\tSince 1975 the State
\nGovernment  has increased royalty only four times and  there
\nis  no\tincrease since 28th September 1994 despite lapse  of
\nsix  years, in other words, raising royalty only four  times
\nduring\t25 years.  Even in the case of D.K.  Trivedis  case
\n(supra)\t as  we\t have recorded above a large  percentage  of
\nincrease in royalty has been made yet it was not struck down
\non  that account.  Before concluding we would like to record
\nour appreciation in the manner in which learned counsels for
\nthe  parties made their valuable submissions which made\t our
\ntask easy.  Though at times their ingenuity made us to think
\nand  rethink but the precision through which the submissions
\nwere  made  helped  us\tto  conclude  to  the  best  of\t our
\nconscience.\n<\/p>\n
      In  view\tof the aforesaid discussion and findings  we
\nconclude:\n<\/p>\n
      (a)  The impugned two notification dated 17th  August,
\n1991  and  28th\t September, 1994 are valid.  (b)  The  State
\nGovernment  while acting as delegatee under Section 15(1) of
\nthe  Act is not confined to fix the royalty\/dead rent within
\nthe  peripheral\t ambit of Entry 54 Schedule II of  the\tAct.
\nNeither\t D.K.\tTrivedi (Supra) has said so, nor can  it  be
\nconstrued  to  be  so.\t(c) The State Government  has  acted
\nwithin\tthe  ambit  of the power delegated to  it  and\tsuch
\ndelegation  is with sufficient guidelines and check in\tview
\nof  the Preamble, object and reasons and various  provisions
\nof  the Act.  (d) Requirement of mere placement of the Rules
\nor  the\t Notifications before the State Legislature is\talso
\none of the form of check on the State Government to exercise
\nits  powers  as a delegatee.  (e) In this case the  impugned
\nnotification dated 28.9.1994 has not been placed as required
\nby  sub-section\t (3)  of Section 28 of the Act.\t  The  State
\nGovernment  is\tdirected to do so now at the earliest.\t (f)
\nHowever,  non-placement\t of the said notification would\t not
\ninvalidate  the same, as said requirement is only directory.\n<\/p>\n
(g)   The   enhancement\t of  royalty   on  the\t facts\t and
\ncircumstances of this case cannot be said to be arbitrary or
\notherwise illegal.\n<\/p>\n
      In  view of the aforesaid findings, we do not find any
\nmerit  in these appeals and accordingly they are  dismissed.
\nWe  upheld the judgment of the High Court but on a different
\nreasoning  as  recorded\t by us earlier.\t The  appeals  stand
\ndismissed with costs.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India The Quarry Owners Association vs The State Of Bihar & Ors on 8 August, 2000 Author: Misra Bench: A.P.Misra, N.S.Hegde CASE NO.: Appeal (civil) 5089 of 1997 Appeal (civil) 5090 of 1997 Appeal (civil) 5091 of 1997 Appeal (civil) 5092 of 1997 PETITIONER: THE QUARRY OWNERS ASSOCIATION Vs. RESPONDENT: THE STATE […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-218035","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nThe Quarry Owners Association vs The State Of Bihar & Ors on 8 August, 2000 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/the-quarry-owners-association-vs-the-state-of-bihar-ors-on-8-august-2000\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Quarry Owners Association vs The State Of Bihar & Ors on 8 August, 2000 - 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