Ambica Quarry Works & ANR Vs.
State of Gujarat & Ors  INSC 264 (11 December 1986)
MUKHARJI, SABYASACHI (J) MUKHARJI, SABYASACHI
(J) SINGH, K.N. (J)
CITATION: 1987 AIR 1073 1987 SCR (1) 562 1987
SCC (1) 213 JT 1986 1036 1986 SCALE (2)1037
R 1988 SC2187 (35,36)
Gujarat Minor Mineral Rules, 1966: Rule
18--Renewal of lease-Lease granted prior to coming into operation of Forest
(Conservation) Act, 1980--Renewal whether mandatory.
Forest (Conservation) Act, 1980: Pre-existing
mining leases-Renewal of--Whether could be claimed as a matter of right.
Interpretation of statutes--Interpretation
must subserve and help implement intention of Act. Expression 'may' when not
construed as 'shall'.
Constitution of India:' Article
141--Precedent--Ratio of a decision to be understood in the background of facts
of the case.
Sub-clause (b)(i) of rule I8 of Gujarat Minor
Mineral Rules, 1966, which were framed under Act 67 of 1957, provides that the
lease for all minerals specified in subclause (i) of clause (a) may be renewed
by the competent officer for one or more periods not exceeding ten years at one
Section 2 of the Forest (Conservation) Act,
1980, brought into force on 25th October, 1980 provides that notwithstanding
anything contained in any other law for the time being in force in a State, no
State Government or other authority shall make, except with the prior approval
of the Central Government, any order directing (i) dereservation of reserved
forest, and (ii) the use of forest land for nonforest purposes.
The appellants had been granted leases for
quarrying minor minerals prior to the coming into operation of the 1980 Act.
Their applications for renewal of leases under r. 18 of the Rules were rejected
by the competent authority on the ground that the lands fell under the reserved
forests which were governed by the 1980 Act. Their revision applications
failed, and the High Court also rejected the writ petitions filed by them.
563 In the appeals by special leave, it was
contended for the appellants that the conditions precedent for the operation of
the Act were not existing, that there was no question of extending for
non-forest purposes forest lands, since their's were existing quarry leases in
areas which were at the relevant time dereserved forests, that they had not
committed any breach of the terms of grant nor there were any other factors
disentitling them to such renewal, that the words 'may be renewed' in r.
18(b)(i) should be read as 'shall be renewed', and so read they make it incumbent
on the Government to renew the lease if the lessee so desired, and as they had
invested large sums of money in mining operations a duty was cast on the
authorities to exercise the power granting permission in a manner that they
could receive full benefit of their investments.
For the respondents it was contended that
after the coming into operation of 1980 Act there was no question of renewal of
the leases because it had prevented renewal of lease without the approval of
the Central Government.
Dismissing the appeals, the Court,
HELD: 1. Whether the power is one coupled
with a duty must depend upon the facts and circumstances of each case and must
be so decided by the Courts in each case. [569D] I.2 The Gujarat Minor Minerals
Rules, 1966 dealt with a situation prior to the coming into operation of the Forest
(Conservation) Act, 1980. While under r. 18 of the Rules there was power to
grant renewal, which might have cast a duty on account of the investments made
by the appellants in the areas covered by the quarrying leases, they could not
claim renewals as a matter of right after the Act was brought into force. Their
applications were rejected on good grounds. The orders of the appropriate
authorities deal with the situation. [569G, F, 570B] Julius v. Lord Bishop of
Oxford,  5 Appeal Cases 214 and Craies on Statute Law, 7th Edn. 229,
2.1 All interpretations must subserve and
help implement the intention of the Act. The primary purpose of the Act of 1980
is to prevent further deforestation and ecological imbalances. Therefore, the
concept that power coupled with duty enjoined upon the respondents to renew the
lease, stands eroded by the mandate of the legislation manifest in the Act. The
primary duty was to the community and that 564 took precedence over the
obligation to the individuals.
2.2 The appellants are asking for renewal of
the quarry leases. It will lead to further deforestation or at least it will
not help reclaiming hack the areas where deforestations have taken place. The
Central Government has not granted approval. If the State Government was of the
opinion that this was not a case where it should seek approval of the Central
Government, the State Government could not apparently seek such approval.
3. The ratio of any decision must he
understood in the background of the facts of that case. A case is only an
authority for what it actually decides, and not what logically follows from it.
[572C] Quinn v. Leathem,  Appeal Cases 495, referred to.
State of Rajasthan v. Hari Shankar Rajendra
Pal,  3 SCR 402, State of Bihar v. Banshi Ram Modi and Others,  3
SCC 643, distinguished.
CIVIL APPELLATE JURISDICTION: Civil Appeal
Nos. 4250-425 1 of 1986.
From the Judgment and Order dated 9th August,
1985 of the Gujarat High Court in Spl. Civil Appln. No. 2471 of 1985 and 62 18
Govind Dass, S.H. Sheth, Mrs. H. Wahi and
M.V. Goswami for the Appellants.
P.S. Potio, T.U. Mehta, and M.N. Shroff for
The Judgment of the Court was delivered by
SABYASACHI MUKHARJI, J: We grant leave in these two special leave applications
and dispose of these appeals arising out of the decisions of the High Court of
Gujarat by the judgment herein.
The two appeals centre round the question of
how to strike balance between the need of exploitation of the mineral resources
lying hidden in the forests and the preservation of the ecological balance and
to arrest the growing environmental deterioration and involve common questions
of law. In the appeal arising out of special leave petition No. 12041 of 1985
the appellant firm had been granted a 565 quarry lease for the minor mineral
black trap at S. No. 73 of Village Morai of Taluka--Pardi, in the District of
Valsad in the State of Gujarat..The lease was granted on or about 8th November,
1971 for a period of ten years. The area comprised of 13 acres of land for
quarrying purpose. Three persons were granted-2-1/2 acres of land each and the
remaining-5-1/2 acres of land were placed at the disposal of Industries, Mines
and Power Department for the purpose of granting quarry lease from the same.
The case of the appellant was that the said lands were dereserved from the
forest area from 1971.
On or about 3rd August, 1981 when the
appellant's term of lease was about to expire, the appellant applied for
renewal of lease asper rule 18 of Gujarat Minor Mineral Rules, 1966
(hereinafter called the said Rules). The application of the appellant for
renewal of lease was rejected by the Assistant Collector, Valsad, on the ground
that the land fell under the "Reserved Forest" area and hence the
Forest (Conservation) Act, 1980 (hereinafter called '1980 Act') applied to the
forests. The forest department of State of Gujarat refused to give 'no
objection' certificate. The contention of the appellant was that by the order
dated 29th November, 1971, the forest department had dereserved the said land
from the reserved area and had allotted the land for the quarrying purpose to
the appellant. The contention of the appellant was as the land was under the
control of the Industries, Mines & Power department, the 1980 Act did not
apply to the same. An appeal was preferred by the appellant which was dismissed
by the Director, Industries, Mines and Power department Government of Gujarat
on or about 4th March, 1985.
It is asserted by the appellant that on or
about 29th January, 1983, the Government had issued two circulars instructing
the Director of Geology and Mining and other authorities not to issue the
leases in the fresh area issued by the State Government. The appellant
thereafter filed a writ petition in the High Court of Gujarat. The High Court
of Gujarat dismissed the petition. The appellant has come up in appeal before
this Court from the said decision. The appeal arising out of S.L.P. No. 12041
of 1985, hereinafter mentioned as first appeal.
The case of the appellants in the second
appeal is that on diverse dates quarry leases. had been granted to the said
appellants. There were ten of them. Eight of the appellants got their first
renewal of their quarry leases in 1976-77.
Appellant No. 9 applied for first renewal in
Appellant No. 6 applied for first renewal on
20th July, 1982. In 1982, some of the appellants except appellants 6 to 9
applied 566 for second renewal to the Collector. In December, 1982, second
renewals were refused by the Collector. Revision filed by the appellants
against the order of the Collector was rejected by the Director, Geology and
Mining in 1983 and in December, 1983, writ petition often described as special
civil application was filed before the High Court, challenging the refusal to
renew. The High Court rejected the said writ petition. The second appeal herein
arises out of the said decision in August, 1985 of the High Court of Gujarat.
Both these appeals involve the question,
whether after coming into operation of 1980 Act, the appellants were entitled
to renewal either first or second of their quarry leases? In this connection it
is necessary to refer to the 1980 Act. This was an Act passed by the Parliament
to provide for the conservation of forest and for matters connected therewith
or ancillary thereto. The Statement of Objects of the said Act is relevant. It
is stated that deforestation caused ecological imbalances and led to
environmental deterioration. It recognised that deforestation had been taking
place on a large scale in the country and it had thereby caused widespread
concern. With a view to checking further deforestation, an Ordinance had been
promulgated on 25th October, 1980. The Ordinance made the prior approval of the
Central Government necessary for dereservation of reserved forests and for the
use of forest land for non-forest purposes. The Ordinance had also provided for
the constitution of an advisory committee to advise the Central Government with
regard to grant of such approval. The 1980 Act replaced the said Ordinance. The
Act extends to the whole of India except the State of Jammu & Kashmir, and
came into force on 25th October,: 1980. Section 2 of the said Act is only
relevant for our present purpose. It provides as follows:
"2. Restriction on the dereservation of
forests or use of forest land for non-forest purpose --Notwithstanding anything
contained in any other law for the time being in force in a State, no State
Government or other authority shall make, except with the prior approval of the
Central Government, any order directing-(i) that any reserved forest (within the
meaning of the expression "reserved forest" in any law for the time
being in force in that state) or any portion thereof, shall cease to be
(ii) that any forest land or any portion
thereof may be used for any non-forest purpose.
567 Explanation.--For the purposes of this
section "non-forest purposes" means breaking up or clearing of any
forest land or portion thereto for any purpose other than re-afforestation.
" The said section makes it obligatory for the State Government to obtain
the permission of the Central Government for (1) dereservation of reserved
forest and (2) for use of forest land' for non-forest purposes. It is apparent,
therefore, that the two dual situations were intended to be prevented by the
legislation in question., namely dereservation of reserved forest, and use of
forest land for nonforest purposes.
In the instant appeals leases for quarrying
purposes had been granted prior to the coming into operation of the Act in
question. Shri Gobind Dass, learned counsel for the appellant in the first
appeal and Shri Sheth learned counsel for the appellants in the second appeal
contended that there was no question of extending for non-forest purposes
forest lands. There were existing quarry leases in one case first renewal was
sought and in some other cases second or third renewals were being sought.
Therefore these were at the relevant time dereserved forests. Neither of the
two contingencies sought to be prevented was there. The conditions precedent
for the operation of the Act were not there in the facts of these appeals, it
Our attention was drawn to rule 18 of Gujarat
Minor Mineral Rules, 1966 which were framed under the Act 67 of 1957 by the
Government of Gujarat. The rules provided for the period of the lease, renewals
and availability of areas already granted and sub-clause (b)(i) of the said
rule 18 of the said Rules provides as follows:
"(b)(i) The lease for all minerals
specified in-sub-clause (i) of clause (a) may be renewed by the competent
officer for one or more periods and the period of renewal at one time shall not
exceed ten years and the total period for which the lease may be renewed shall
not exceed twenty years in the aggregate." Shri Sheth drew our attention
to rule 3 of Part VIII (page 62) of the Manual which deals with the procedure
of granting renewals under the rules.
On the other hand Shri Mehta, counsel for the
respondents in the 568 first appeal and Shri Poti, counsel for the respondents
in the second appeal contended before us that after coming into operation of
1980 Act there was no question of renewal of the leases because this Act had
prevented renewal of the lease without the approval of the Central Government.
Shri Gobind Dass, however, placed strong
reliance on State of Rajasthan v. Hari Shankar Rajendra Pal,  3 SCR 402.
That was a decision dealing with Rajasthan Mines Minerals Concession Rules,
1958. This Court in that case was concerned with Rule 30 under Chapter IV under
the said Rajasthan Rules. This Court observed that the word "may' in the
proviso in rule 30 in regard to the extension of the period by Government
should be construed as 'shall' so as to make it incumbent on Government to
extend the period of the lease if the lessee desired extension. The Rajasthan Rules
provided, inter alia, as follows:
"Period of lease--A mining lease may be
granted for a period of 5 years unless the applicant himself desires a shorter
Provided that the period may be extended by
the Government for another period not exceeding 5 years with option to the
lessee for renewal for another equivalent period, in case the lessee guarantees
investments in machinery, equipments and the like, at least to the tune of 20
times the value of annual dead-rent within 3 years from the grant of such
extension. The value of the machinery, equipment and the like shall be
determined by the Government. Where the lease is so renewed, the dead rent and
the surface rent shall be fixed by the Government within the limits given in
the Second Schedule to these rules, and shall" in no case exceed twice the
original dead-rent and surface rent respectively, and the royalty shall be
charged at the rates in force at the time of renewal." It was submitted by
Shri Gobind Dass that the said rule was in pari materia with sub-rule (b) of
rule 18 of Gujarat Minor Mineral Rules 1966. Often when a public authority is
vested with power, the expression 'may' has been construed as 'shall' because
power if the conditions for the exercise are fulfilled is coupled with duty. As
observed in Craies On Statute Law, 7th Edition, page 229, the expression
"may" and "shall" have often been subject of constant and
con569 flicting interpretation. "May" is a permissive or enabling
expression but there are cases in which for various reasons as soon as the
person who is within the statute is entrusted with the power, it becomes his
duty to exercise it. As early as 1880 the Privy Council in Julius v. Lord
Bishop of Oxford, 1880, 5 Appeal Cases, 214. explained the position.
Earl Cairns, Lord Chancellor speaking for the
judicial committee observed dealing with the expression "it shall be
lawful" that these words confer a faculty or power and they do not of
themselves do more' than confer a faculty or power. But the Lord Chancellor
explained there may be something in the nature of the thing empowered to be
done, sometimes in the object for which it is to be done, something in the
conditions under which it is to be done, something in the title of the person
or persons' for whose benefit the power is to be exercised, which may couple
the power with a duty, and make it the duty of the person in whom the power is
reposed, to exercise that power when called upon to do so. Whether the power is
one coupled with a duty must depend upon the facts and circumstances of each
case and must be so decided by the courts in each case. Lord Blackburn observed
in the said decision that enabling words were always compulsory where the words
were to effectuate a legal right.
Here the case of the appellants is that they
have invested large sums of money in mining operations. Therefore, it was the
duty of the authorities that the power of granting permission should have been
so exercised that the appellants had the full benefits of their investments. It
was emphasized that none of the appellants had committed any breach of the
terms of grant nor were there any other factors disentitling them to such
renewal. While there was power to grant renewal, and in these cases there were
clauses permitting renewals, it might have cast a duty to grant such renewal in
the facts and circumstances of the cases specially in view of the investments
made by the appellants in the areas covered by the quarrying leases, but
renewals cannot be claimed as a matter of right for the following reasons.
The rules dealt with a situation prior to the
coming into operation of 1980 Act. ' 1980 Act' was an Act in recognition of the
awareness that deforestation and ecological imbalances as a result of
deforestation have become social menaces and further deforestation and
ecological imbalances should be prevented. That was the primary purpose writ
large in the Act of 1980. Therefore the concept that power coupled with the
duty enjoined upon the respondents to renew the lease stands eroded by the
mandate of the legislation as manifest in 1980 Act in the facts and
circumstances of these cases. The primary 570 duty was to the community and
that duty took precedence, in our opinion, in these cases. The obligation to
the society must predominate over the obligation to the individuals.
For the same reasons we are unable to accept
the view that the ratio of the decision of this Court in the case of State of
Rajasthan v. Hari Shankar Rajendra Pal (supra) could be invoked in the facts and
circumstances of these cases to demand renewal. Furthermore it appears to us
from the affidavits in opposition filed on behalf of the respondents that there
were good Founds for not granting the renewal of the lease. The orders of the
appropriate authorities in both these cases deal with the situation.
Both Shri Gobind Dass as well as Shri Sheth,
however, relied very heavily on the decision of this Court in State of Bihar v.
Banshi Ram Modi and Others,  3 SCC 643. As the said decision dealt with
section 2 of the 1980 Act, it is necessary to refer to the facts of that case.
There a mining lease for winning mica was granted by the State Government in
respect of an area of 80 acres of land which formed part of reserved forest
before coming into force of 1980 Act. However, the forest land had been dug up
and mining operations were being carried on only in an area of 5 acres out of
the total lease area of 80 acres. While carrying on mining operations, the
respondent came across two associate minerals felspar and quartz in the area.
The respondent in that case, therefore, made an application to the State
Government for execution of a Deed of Incorporation to include the said
minerals also in the lease. Though the 1980 Act had come into force, the State
Government executed the Deed of Incorporation incorporating these items without
obtaining prior sanction of the Central Government under section 2 of 1980 Act.
Since the respondent in that case made a statement before the Court that he
would carry on the mining operations only on 5 acres of land which had already
been utilised for non-forest purposes even before the Act came into force, the
question for determination was whether prior approval of the Central Government
under section 2 of 1980 Act in the facts of that case was necessary for the
State Government for granting permission to win associate minerals also within
the same area of 5 acres of land? This Court answered the question in negative
and affirmed the judgment of the High Court. This Court observed at pages 647
and 648 of the report as follows:
"The relevant parts of Section 2 of the
Act which have to be construed for purposes of this case are clause (ii) of and
571 the Explanation to that section. Clause (ii) of Section 2 of the Act provides
that notwithstanding anything contained in any other law for the time being in
force in a State, no State Government or other authority shall make, except
with the prior approval of the Central Government, any order directing that any
forest land or any portion thereof may be used for any non-forest purpose.
Explanation to Section 2 of the Act defines "non-forest purpose" as
breaking up or clearing of any forest land or portion thereof for any purpose
other than reforestation. Reading them together, these two parts of the section
mean that after the commencement of the Act no fresh breaking up of the forest
land or no fresh clearing of the 'forest on any such land can be permitted by
any State Government or any authority without the prior approval of the Central
Government. But if such permission has been accorded before the coming into
force of the Act and the forest land is broken up or cleared then obviously the
section cannot apply. In the instant case it is not disputed that in an area of
five acres out of eighty acres covered by the mining lease the forest land had
been dug up and mining operations were being carried on even prior to the
coming into force of the Act. If the State Government permits the lessee by the
amendment of the lease deed to win and remove felspar and quartz also in
addition to mica it cannot be said that the State Government has violated
Section 2 of the Act because thereby no permission for fresh breaking up of
forest land is being given. The result of taking the contrary view will be that
while the digging for purposes of winning mica can go on, the lessee would be
deprived of collecting felspar or quartz which he may come across while he is
carrying on mining operations for winning mica. That would lead to an unreasonable
result which Would not in any Way subserve the object of the Act. We are,
therefore, of the view that while before granting permission to start. mining
operations on a virgin area Section 2 of the Act has to be complied with it is
not necessary to seek the prior approval of the Central Government for purposes
of carrying out mining operations in a forest area which is broken UP or
cleared before the commencement of the Act. The learned counsel for respondent
1 has also given an undertaking that respondent 1 would confine his mining
operations only to the extent of five acres of land on which mining operations
572 have already been carried out and will not feel or remove any standing
trees thereon without the prior permission in writing from the Central
Government. Taking into consideration all the relevant matters, we are of the
view that respondent 1 is entitled to carry on mining operations in the said
five acres of land for purposes of removing felspar and quartz subject to the
above conditions." The aforesaid observations have been set in detail in
order to understand the true ratio of the said decision in the background of
the facts of that case. It is true that this Court held that if the permission
had been granted before the coming into operation of the 1980 Act and the
forest land has been broken up or cleared, clause (ii) of section 2 of 1980 Act
would not apply in such a case. But that decision was rendered in the
background of the facts of that case. The ratio of any decision must be understood
in the background of the facts of that case. It has been said long time ago
that a case is only an authority for what it actually decides, and not what
logically follows from it.
(See Lord Halsbury in Quinn v. Leathem)
 Appeal Cases 495. But in view of the mandate of Article 141 that the
ratio of the decision of this Court is a law of the land, Shri Gobind Dass
submitted that the ratio of a decision must be found out from finding out if
the converse was not correct. But this Court, however, was cautious in
expressing the reasons for the said decision in State of Bihar v.
Banshi Ram Modi & Others (supra). This
Court observed in that decision that the result of taking the contrary view
would be "that while digging for purposes of winning mica can go on, the
lessee would be deprived of collecting felspar or quartz which he may come
across while he is carrying on mining operations for winning mica. That would
lead to an unreasonable result which will not in any way sub-serve the object
of the Act." There was an existing lease where mining operation was being
carried on and what was due by incorporation of a new term was that while
mining operations were being carried on some other minerals were available, he
was given right to collect those. The new lease only permitted utilisation or
collection of the said other minerals.
In the instant appeals the situation is
entirely different. The appellants are asking for a renewal of the quarry
leases. It will lead to further deforestation or at least it will not help
reclaiming back the areas where deforestations have taken place. In that view
of the matter, in the facts and circumstances of the case, in our opinion, the
ratio of the said decision cannot be made applicable to support the appellants'
demands in these cases because the facts are entirely diffe573 rent here. The
primary purpose of the Act which must subserve the interpretation in order to
implement the Act is to prevent further deforestation. The Central Government
has not granted approval. If the State Government is of the opinion that it is
not a case where the State Government should seek approval of the Central
Government, the State Government cannot apparently seek such approval in a
matter in respect of, in our opinion, which it has come to the conclusion that
no renewal should be granted.
In that view of the matter and the scheme of
the Act, in our opinion, the respondents were fight and the appellants were
wrong. All interpretations must sub-serve and help implementation of the intention
of the Act. This interpretation, in our opinion, will sub-serve the predominant
purpose of the Act.
In that view of the matter, we are unable to
sustain the submissions urged in support of these appeals. The appeals
therefore fail and are accordingly dismissed. In view of the facts and
circumstances of these appeals, however, we direct the parties to pay and bear
their own costs.
P.S.S. Appeals dismissed.