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Andhra Pradesh High Court
Judges : MOHAMMED AHMED ANSARI, V.BHASKARA RAO
Ranjana Granites (P) Ltd., A.Venkat Reddy, Khammam - Appellant
Versus
State OF A.P., rep.by its Principal secretary, Industries and Commerce department, Hyderabad - Respondent
Decided On : 08-04-95
MINERAL CONCESSION RULES - Validity - Note to Rule 12 (5) (e) and Rules 12 (5) (f) (i) and (f) (ii) of the Andhra Pradesh Minor Mineral Concession Rules, 1966 - Ultra vires the Mines and Minerals (Regulation and Development) Act, 1957 and the provisions in Part XIII of the Constitution of India.
Fact of the Case:
The petitioners are quarry lease-holders of black granite and coloured granite in the State of Andhra Pradesh. The order granting the lease stated that the grantee should abide by the Andhra Pradesh Minor Mineral Concession Rules, 1966 (hereinafter referred to as the Rules ). Aggrieved of the conditions envisaged in the impugned rules, namely, establishment of a granite cutting and polishing unit within the State itself, interfering with the free trade in granite even after its extraction, and imposing penal rate (double the rate) of seigniorage in regard to granite exported through harbours, other than in the State of Andhra Pradesh, resorted to these proceedings.
Finding of the Court:
The impugned rules are ultra vires the Mines and Minerals (Regulation and Development) Act, 1957 and the provisions in Part XIII of the Constitution of India.
Issues: 1. Whether the Note to Rule 12 (5) (e) and Rule 12 (5) (f) (i) and Rule 12 (5) (f) (ii) of the Andhra Pradesh Minor Mineral Concession Rules, 1966 are ultra vires the Mines and Mineral (Regulation and Development) Act, 1957 ? 2. Whether the Note under Rule 12 (5){e), Rule 12 (5) (f) (i) and Rule 12 (5) (f) (ii) of the Andhra Pradesh Minor Mineral Concession Rules, 1966 are ultra vires the provisions in part XIII of the Constitution of india?
Ratio Decidendi: 1. The entire field relating to the regulations of mines and development of minerals is taken over by the Parliament by virtue of sec. 2 of the Act and accordingly the State is denuded of the power to legislate under Entry 23 of List II. 2. The State Government has no competence to frame rules travelling beyond what is delegated under Sec. 15 of the Act. 3. The impugned rules provide for collecting double the seigniorge fee when the granite is exported to outside the State, whereas it is single seigniorage fee if it is within the State. There is a mandatory requirement of establishing a cutting and polishing unit within two years or further extended time, lest the lease is liable to be terminated. Further, after establishment of cutting and polishing unit, after polishing the granite a ratio is fixed in exporting the processed granite and raw granite. It is 1:1 and 3:7 in respect of black and colour granite respectively. None of sub-sections of Sec. 15 nor any provision of the Act provides for such contingencies. Therefore, we are not able to agree with the learned Advocate General that the rules impugned fall within the limits of power conferred by Sec. 15 of the Act. 4. The impugned rules impose undue burden and restriction which is a direct impediment affecting the free trade, commerce and intercourse of the granite. Further, as the impugned rules direct payment of double the seigniorage fee in case of export of granite from the harbours outside the State, they are directly in contravention of the provisions of the Import and export Control Act. The impugned rules are trenching into the field occupied by the Parliament and accordingly suffer from lack of legislative competence.
Final Decision: The writ petitions are allowed. There will be no order as to costs.
( 1 ) THIS batch of writ petitions is filed seeking issuance of a Mandamus declaring the Note to Rule 12 (5) (e) and Rules 12 (5) (f) (i) and (f) (ii) of the Andhra Pradesh Minor Mineral Concession Rules, 1966, as ultra vires the Mines and 10 Minerals (Regulation and Development) Act, 1957 and the provisions in Part XIII of the Constitution of India.
( 2 ) THE petitioners are quarry lease-holders of black granite and coloured granite in the State of Andhra Pradesh. The order granting the lease stated that the grantee should abide by the Andhra Pradesh Minor Mineral Concession Rules, 1966 (hereinafter referred to as the Rules ).
( 3 ) THE petitioners aggrieved of the conditions envisaged in the impugned rules, namely, establishment of a granite cutting and polishing unit within the State itself, interfering with the free trade in granite even after its extraction, and imposing penal rate (double the rate) of seigniorage in regard to granite exported through harbours, other than in the State of Andhra Pradesh, resorted to these proceedings.
( 4 ) BEFORE dealing with the merits in detail, it is necessary to refer to some of the relevant provisions of the Central Act and the Rules framed thereunder by the State of Andhra Pradesh.
( 5 ) ENTRY 54 of List-I of the VII Schedule deals with the regulation of mines and development of minerals. It is relevant to extract the said entry, which reads thus:"54. Regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest"
( 6 ) THE Parliament by virtue of the above entry enacted the Mines and minerals (Regulation and Development) Act, 1957 (hereinafter referred to as "the Act" ). The declaration envisaged under Entry 54 is found in Section 2 of the act, which is as follows:"declaration as to expediency of Union Control: It is hereby declared that it is expedient in the public interest that the Union should take under its control the regulation of mines and the development of minerals to the extent hereinafter provided. "
( 7 ) IT may be stated here that the granite, which is the subject matter of these writ petitions, is a minor mineral. Except Section 15 of the Act, the other provisions of the Act are not relevant for the present purpose. Section 15 of the act delegated power to the State Government to make rules for grant of quarry leases, mining leases or other mineral concessions in respect of minerals and for purposes connected therewith. Sub-sections to Section 15 specify various matters in respect of which rules may be made including for collection of rent and royalty, transfer of lease, etc. It is significant to note that none of the sub-sections provide for the sale of quarried mineral.
( 8 ) THE State of Andhra Pradesh by virtue of the power conferred by section 15 (1) of the Act, framed the Rules.
( 9 ) WE may here briefly refer to the Rules relevant for the present purpose. Rule 12 (5) deals with regulation and grant of lease of granite useful for cutting and polishing. Rule 12 (5) (e) deals with seigniorage fee or dead rent in respect of the mineral granite. The note under Ruie 12 (5) (e) prescribes that granite exported in raw form to outside the State attracts double the seigniorage fee, except for stones exported through the ports /harbours within the State. Rule 12 (5) (f) (i) prescribes that notwithstanding anything contained in Rule 31 (a Rule dealing with conditions of permit or lease), the quarry leases granted against the establishment of a granite cutting and polishing unit are liable for termination, if the unit is not established within a period of two years from the date of grant of lease within the State. The proviso to Ruie 12 (5) (f) (i) empowers the State Government to extend the time for such establishment of the unit for a further period of one year in deserving cases and for reasons to be recorded in w
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