Sudarshan Mineral Co. Ltd. Vs. Union of
India & ANR [1975] INSC 32 (13 February 1975)
UNTWALIA, N.L.
UNTWALIA, N.L.
MATHEW, KUTTYIL KURIEN GOSWAMI, P.K.
CITATION: 1975 AIR 949 1975 SCR (3) 547 1975
SCC (1) 527
ACT:
Tile Mines & Minerals (Regulation & Development)
Act 1957--Mineral Concession Rules 1960--Whether detailed rule making power
restricts the General Rule making Power--Maximum dead rent specified whether
void on account of uncertainty--Whether renewal of the lease has to be granted
on the same terms and conditions.
HEADNOTE:
The appellant was granted a Mining Lease by
the erstwhile State of Shahapura. for a period 20 years commencing from 12th
August, 1941. The area of the lease was 1500 sq.
miles. The said area later on formed part of
the State. of Rajasthan. The mines & minerals (Regulation & Development
Act, 1957, came into force from 1st June, 1958. Under section 61 of the Act the
area of a mining lease in the case of Mica could not be more than 10 sq. miles
and; its maximum period could not exceed 20 years as provided in section 8.
Section 16 confers powers to modify a mining lease accorded before 1949 to
bring it in conformity with the Act and the Rules. In exercise of this power
the Controller of Mica leases reduced the mining area to 10 sq.
miles and the rent was reduced from Rs. 8 per
acre as fixed by the original lease to Rs. 6/per acre. The period of 20 years
of original lease came to an end in 1961. The appellant applied to the
Government of Rajasthan for renewal of its lease for another 20 years under
rule 28. The renewal was granted but the dead rent was increased from Rs.
6 to Rs. 8 per acre. The appellant challenged
the order of Rajasthan Government by filing a Revision before the Central
Government which was dismissed. Thereafter the a decree of injunction
restraining per acre and for a declaration that they are per acre. The suit was
decreed by the trial First Appellate Court. The dismissal was appellant filed
the present suit for respondents from charging dead rent @ Rs. 8 entitled to
charge only @ Rs. 6 court but was dismissed by the maintained by the High Court
in Second Appeal. On Appeal by Special Leave , the appellant contended :
(1) Under the agreement dated 20-11-1959 the
lease was to be governed by the Act and the Rules except in regard to dead rent
was fixed at Rs. 6/per acre.
(2) Under Rule 28 of the Rules, the State
Government while renewing the lease had power to reduce the area but no power
to increase the dead rent.
(3) Ride 27 does not apply to renewal of a
lease.
(4) Clause (c) of Sub-Rule (1) of Rule 27 is
ultra vires as it transgresses the rule making power under section 13(2) (g) of
the Act.
(5) Rule 27(1)(c) if made applicable to
renewal of a mining lease introduces an element of uncertainty and is therefore
void.
HELD: Rule making power is to be found in
section 13 (1). Section 13(2), merely illustrates the nature of the power, it
does not restrict the general power tinder section 13(1). The rule could have
been framed even under section 13 (2) (g). [549C]
HELD FURTHER: There is no element of
uncertainty in the rule either to the grant of fresh lease or in respect of the
renewal. The maximum limit is contained in Chapter IV. To Provide for payment
of dead rent it has specified rates' subject to variation within. the limitspecified.
These cannot be said to be void on account of uncertainty. [550C] 548
HELD FURTHER: The contention that the renewed
lease had to be granted on the same terms and conditions and that no term and
condition could be varied while granting the renewal of the lease except in
regard to the reduction of the area in accordance with rule 28(5) was negatived
was not correct.
If in the original lease of 1941 there was a
renewal clause one could probably say that the renewal bad to be on the same
terms and conditions but in the absence of such a right of renewal to the
lessee the argument was not sound. The demand of Rs. 8 per acre was within the
limit specified by Schedule IV and was in accordance with law. The appeal was
dismissed with 'Costs. [551B5-D]
CIVIL APPELLATE JURISDICTION : Civil Appeal
No. 2305 of 1969.
Appeal by Special Leave from the Judgment
& Order dated the 8th August, 1969 of the Rajasthan High Court in S. B.
Civil Second Appeal No. 236 of 1966.
P. C. Bhartari, for the Appellant.
Girish Chandra, for Respondent No. 1.
S. M. Jain, for Respondent No. 2.
The, Judgment of the Court was delivered by
UNTWALIA, J. This is a plaintiffs appeal by special leave of this Court from
the Judgment and decree of the Rajasthan High Court whereby the, plaintiffs
Second appeal from the decision of the First Appellate Court was dismissed and
the dismissal of its suit was maintained.
The facts of the case lie in a narrow compass
and may usefully be stated at the outset. The plaintiff was granted a mining
lease for mining mica by the erstwhile State of Shahpura for a period of 20
years commencing from the 12th August, 1941. The area of the lease purported to
1500 sq.
miles. In due course the mining area in
question came to form part of the State of Rajasthan. The Mines and 'Minerals
(Regulation and Development) Act, 1957-hereinafter called the Act-came into
force from 1st June,, 1958. Undersection 6(1) of the Act as it stood at the
relevant time the area of a mining lease in the case of mica could not be more
than 10 sq. miles and its maximum period could not exceed 20 years as provided
in section 8. Section 16 confers power on the appropriate authority to modify a
mining lease granted before 24th October, 1949 to bring it in conformity with
the Act and the Rules made there under. In exercise of this power and in
accordance with the Mining leases (Modifications of Terms) Rules, 1956 the
Controller of Mica Leases, Nagpur, reduced the mining area ,of the appellant
lease to 10 sq. Miles by his order dated November 20, 1959.
As per Rule 10(1) (a) of the said Rules a
compensation of Rs. 10/only was fixed by agreement between the parties for
reduction of the area, and by the, same order the dead rent at the rate of Rs.
8/-per acre per annum fixed by the original lease was reduced to Rs. 6/per acre
c. The period of 20 years of the original lease came to an end on August 11,
1961. The appellant applied to the Government of Rajasthan for renewal of its
lease for another 20 years. This was done in accordance with Rule 28 of the
Mineral Concession Rules., 1960hereinafter called the Rules. The Government of
Rajasthan granted the renewal by order dated December 13, 1961 for a period of
20 years 549 with effect from August 12, 1961. The dead rent fixed for their
renewed lease was Rs. 20/per hectare which comes to Rs. 8/per acre. The
appellant challenged the order of the Government of Rajasthan by filing a
revision before the Central Government in accordance with Rule 54 of the Rules.
But the revision was dismissed. Thereupon it
filed a suit against the Union of India, respondent no. 1 and the State of
Rajasthan, respondent no. 2 for a decree of in unction to restrain the
defendant from charging dead rent at the rate of Rs. 8/per acre per annum and
for a declaration that they are entitled to charge only at the rate of Rs. 6/per
acre. The suit was decreed by the Trial Court but was dismissed by the First
Appellate Court. The dismissal was maintained,by the High Court in second
appeal.
Mr. Y. S. Chitlay, learned counsel for the
appellant, pressed the following five points in support of this appeal :
(1) Under the agreement dated 20-11-1959 the
lease was to be governed by the Act and the Rules except in regard to dead rent
which was fixed at Rs. 6/per acre.
(2) Under Rule 28 of the Rules, the State
Government while renewing the lease had power to reduce the area but no power
to increase the dead rent.
(3) Rule 27 does not apply to renewal of a
lease.
(4) Clause (c) of Sub-Rule (1) of Rule 27 is
ultra vires as it transgresses the rule making power under section 13:(2) (g)
of the Act.
(5) Rule 27(1) (c) if made applicable to
renewal of a mining lease introduces an element of uncertainty and is therefore
void.
Learned counsel for the respondents combated
the appellants argument in all respects. In our opinion none of the contentions
put forward on behalf of the appellant is fit to be accepted and the appeal
must fall.
As is well settled the power to make rules
for regulating the grant of prospecting licences and mining leases in respect
of minerals and for purposes connected therewith is to be found in sub-section
(1) of :section 13. Sub-section (2) merely illustrates the nature of the power.
It does not restrict the general power under sub-section (1). Even under clause
(g) of sub-section (2) in ptrticular the Rules may provide the terms on which
and the conditions subject to which any mining lease may be granted or renewed.
Sub-Rule (1) of Rule 27 requires every ruining lease to be subjected to the
conditions enumerated in clause (a) to (n) and such conditions have got to be
incorporated in every mining lease. The conditions enumerated in clause (a) to
(o) of Sub-Rule (2) are optional anda mining lease may contain such other
conditions as the. State Government may deem necessary in regard to them. Rule
27(1) (c) reads as follows :
"The lease shall pay, for every year,
cxcept the first year of the lease, such yearly dead rent within the limits
specified 550 in Schedule IV as may be fixed from time to time by the State
Government and if the lease permits the working of more than one mineral in the
same area, the State Government may charge separate dead rent. in respect of
each mineral Provided that the lessee shall be liable to pay the dead rent or
royalty in respect of each mineral whichever be higher in amount but not
both." There is no element of uncertainty in the Rule either in regard to
the grant of fresh lease or in respect of the renewal. The yearly dead rent to
be fixed from time to time by the State Government cannot exceed the limit
specified in Chapter IV. The maximum limit is therefore certain. To provide for
payment of dead rent at a specified rate subject to variation within the limit
specified in Schedule IV, is a term which cannot be said to be void on
account-of uncertainty, nor is it beyond the Rule making power conferred on the
Central Government under section 13 of the Act. The 4th and 5th points urged on
behalf of the appellant therefore fail.
Rule 27(1) makes it incumbent to subject
every mining lease to the conditions enumerated in that sub-rule. The renewal
of lease cannot be outside Rule 27(1). A lease granted under the Rules and the
renewal made there under will not occasion any difficulty at all in the
application of the conditions enumerated in sub-rule (1) to both. But the scope
for argument in this case arose because the original lease was granted in 1941
by the erstwhile State. The modifications were made in the year 1959 in
accordance with the Act of 1957 and the Mining Leases (Modification of Terms)
Rules, 1956. The Rules of 1960 were then not in existence. The question which
deserves careful consideration, therefore, is-whether there is any substance in
either of the first or second points urged on behalf of the appellant.
The Controller of Mica leases prepared a note
and passed a final order an the 20th November, 59 recording the modifications
of the terms of the mining lease dated 12-81941 specifically stating therein
that the said lease was for 20 years "without a renewal clause".
After providing that "dead rent shall be payable at the rate of Rs. 6/per
acre per annum", it was mentioned "The following clause shall be
deemed to be inserted in the lease deed and shall form part thereof :
"Except for the modifications made by
this order the lease shall be subject to the Rules made or deemed to have been
made under sections 13 and 18 of the Mines and Minerals (Regulation and
Development) Act, 1957 (No. 67 of 1.957)".
It was submitted on behalf of the appellant
that when renewal of the lease was granted under Rule 28 of the Rules then the
State Government was bound to act upon and incorporate the new clause inserted
in the original lease by order dated 20-11-1959. In other words, it was
contended that the renewed lease had to be granted on the same terms and
conditions. No term and condition could be varied while 551 granting the
renewal of the lease except in regard to the reduction of the area in
accordance with sub-Rule (5) of Rule 28. That being so, the agreement stressed
was that in view of the new clause operation of Rule 27 (1) (c) was excluded in
regard to the dead rent, it was not payable at any rate different from Rs. 6/per
acre. In our judgment the argument though attractive is not fruitful. If in the
original lease there would have been a renewal clause giving a right to the
lessee to have the renewal of the lease for another period of 20 years at its
option one could probably say that the renewal had to be on the same terms and
conditions. In that event the new clause inserted in the original lease by
order dated 20-11-1959 could possibly be said to override the mandatory
requirement of Rule 27(1) (c). But in absence of such a right of renewal to the
lessee the said clause was operative and effective only during the period of
the original lease i.e. up to 11th August, 196 1. The lease renewed thereafter
was a renewal of the original lease in one sense and a fresh lease in another.
While granting a fresh lease the Governmental authority has no power to relax
the mandatory requirement of sub-Rule (1) of Rule 27 of the Rules. By agreement
it cannot take the conditions of the lease out of the said provision. It is,
therefore, clear on the facts and in the circumstances of this case that while
granting the renewal of the lease, the authority was neither bound nor
empowered to incorporate a condition in the lease against clause (c) of Rule
27(1). The demand of dead rent at Rs. 20/per hectare i.e. Rs. 8/per acre was
within the limits specified in Schedule IV of the Rules and there was no
infirmity in it.
For the reasons stated above we find no merit
in this appeal. It is accordingly dismissed with costs.
P.H.P. Appeal dismissed.
Back
