2020 Supreme(Kar) 164

IN THE HIGH COURT OF KARNATAKA AT BENGALURU
ABHAY S. OKA, HEMANT CHANDANGOUDAR, JJ.
Mr. Khaleed Pasha Son of Mr Kamal Pasha – Appellant
Versus
State Of Karnataka - Respondents
Writ Petition No. 58505 of 2016 c/w W.P.Nos. 52907, 53084, 53085, 53086, 53088, 53089, 57046, 57047, 57048, 58502, 58503, 58504, 58506, 60381, 61476, 61735, 61823, 61824, 61829, 62099, 62154, 62527, 63508, 63564 of 2016, 11402, 11584, 11585, 11586, 11587, 1272, 14675, 1541, 15748, 1620, 1621, 1622, 16492, 1948, 2213, 2236, 2237, 2262, 27080, 28335, 30357, 30358, 30415, 30416, 31698, 33978, 33979, 35367, 35438, 35439, 36770, 36771, 36772, 36773, 37098, 37099, 37100, 37439, 39103, 39104, 40493, 42237, 45111, 45219, 45220, 45221, 45222, 45223, 46011, 46013, 47463, 47524, 47526, 51382, 51383, 51737, 56355, 57996, 5847, 5868, 5869, 5870, 5871, 5872, 6629, 8339, 9192, 9448, 9450, 9451, 9452, 985 of 2017, 14187, 14401, 15139, 18088, 23445, 24297, 28235, 31338, 31363, 32630, 32631, 32999, 33000, 36227, 38930, 38969, 38970, 38971, 39341, 3997, 41395, 43347, 47763, 47766, 48192, 48193, 48206, 48211 of 2018, 10332, 14946, 18332, 20690, 22185, 22186, 22937, 26864, 29941, 31981, 31982, 31983, 31984, 33076, 33274, 38872, 39226, 48565, 50073, 50429, 50847, 51694, 53070, 5646, 7612 of 2019, 1020, 1182, 548, 3424, 3903 AND 4195 of 2020 (GM-MM-S)
Decided on : 01-06-2020

Headnote:

Mines and Minerals Act, 1957 - Section 15 - Karnataka Land Revenue Act, 1964 - Section 95 - Punjab Cinemas Act, 1952 - Section 5 - Karnataka Minor Mineral Concession Rules, 1994 - Karnataka Minor Mineral Concession Rules, 2016 - Constitution of India, 1950 - Article 19 - Grant of quarrying lease or composite license - Possession of patta lands - Whether holders of patta lands in territory of Ex-Mysore area who are owners of sub-soil minerals in such patta lands can be forced to obtain a permission or a license from State Government for carrying out quarrying operations - Whether amendments are constitutionally valid - Whether any mining lease or license is required to be obtained if owner of land and minerals therein wants to win minerals did not specifically arise for consideration before Apex Court - Whether holders of patta lands in Ex-Mysore State areas forming part of Karnataka State have any ownership rights in granite found in sub-soil of their lands - Whether they are required to follow any of procedure laid down by Karnataka Minor Minerals Concession Rules, 1969 - Real grievance of petitioners in this group of writ petitions is about amendment brought to sub-rule (1) of Rule 32 which requires holders of patta lands to obtain a license for quarrying minor minerals though persons holding patta lands are owners of minerals in sub-soil – Court may note here that this issue relates only to patta lands in Ex-Mysore area of State of Karnataka - There are other consequential challenges to various other amendments made to Chapter-V - Chapter-VI which deals with payment of royalty dead rent security deposit etc also underwent major amendments - There is a challenge to 4th proviso incorporated in Rule 36 by Amendment Rules - There is also a challenge to sub-Rule (5) of Rule 36 of amended Rules which requires grantee of a quarrying lease or license to make payment of one tenth of royalty amount of highest permitted annual production quantity of minerals mentioned in environmental clearance in advance in form of a Bank Guarantee a Fixed Deposit a Demand Draft or any other mode of payment as may be specified by Government from time to time before execution of lease or license – Held, Rates of royalty are specified in Schedule-II to said Rules of 1994 and there is no provision made for charging royalty on basis of highest permitted annual production quantity mentioned in environmental clearance - Third proviso to Rule 36 confers power on State Government to provide for payment of royalty on any mineral to be charged on ad valorem basis on sale value or average selling price of mineral or notified royalty per cubic meter or per metric ton whichever is higher - Section 9 of said Act of 1957 provides for levy of royalty – However by virtue of Section 14 Section 9 is not applicable to minor minerals which are dealt with by said Rules of 1994 - Under Sub-Rule (1) of Rule 36 royalty is payable in respect of mineral removed or consumed by holder of a lessee or licensee – Therefore sub-Rule (1) of Rule 36 can be broadly termed as a charging provision for imposing payment of royalty - Title of Rule 36 is Payment of royalty and dead rent in advance - Moreover neither in provisions of said Act of 1957 nor under said Rules of 1994 there is any prohibition on making a demand of payment of royalty in advance - Sub-Rule (5) of Rule 36 provides for payment of royalty in advance in form of a performance guarantee - Thus it is also a mode or manner of payment of royalty - Even if advance royalty amount is recovered it is always subject to refund or adjustment - Sub-rule (5) is some sort of a guarantee to ensure payment of royalty - Guarantee given under provision can be invoked only when royalty is due and payable by Licensee but it is not paid by him within stipulated time - Guarantee cannot be invoked if license holder is not at all liable to pay royalty – Therefore in court view provision of sub-rule (5) of rule-36 is not ultra virus of said Act of 1957 - There is nothing to show that it violates any Constitutional provision - It is not shown to be manifestly arbitrary - There is one more argument that was canvassed across Bar - Draft Amendment Rules were published to which objections were raised by owners of mines and their association as well - Contention is that while finally notifying said Amendment Rules an altogether new set of Rules have been added which is impermissible as no opportunity was available to them to raise objections to said set of Rules - Rule making power is vested in State Government by virtue of Section 15 of said Act of 1957 - Only requirement contemplated under sub-section (1) of Section 15 is of making rules by a notification in Official Gazette - There is no requirement under said Act of 1957 of prior publication of draft rules and granting opportunity to submit objections to draft rules - It is well settled that power to amend rules has to be also exercised in manner in which power to frame rules is exercised unless statute under which rules are framed prescribes a different procedure for amending rules – Therefore there was no requirement in law to publish draft rules by a notification and to invite objections and suggestions – Therefore said argument canvassed by petitioners deserve to be rejected - Another challenge was to sub-rule (5) of Rule 42 which provides that validity of Computerized Mineral Dispatch Permit shall be one hour for each ten kilometer of distance or fraction thereof from date of issue and two hours of additional time together for loading and unloading of minor minerals – However on perusal of pleadings there is no challenge in this group of petitions to validity of Rule 42 which requires that no person shall transport or cause to be transported any minor mineral except under or in accordance with a CMDPs. All that sub-rule (2) of Rule 42 provides is that validity of CMPDPs is for a limited duration as specified in sub-rule (5) of Rule 42 – However proviso of sub-rule (5) of Rule 42 confers powers on Competent Authority to renew permit and even in case of minerals in transit renewal can be made subject to payment of processing fee and Special Security Permit Paper fee - A permit granted to transport to minor mineral can be acted upon or utilized within a reasonable time and it is not permitted to be utilized beyond specified time - Such time restriction has been imposed only with a view to avoid misuse of such permits - Therefore court find that there is no illegality associated with time limit imposed by sub-rule (5) of Rule 42 of said Rules of 1994 especially when proviso to sub-rule (5) of Rule 42 provides for granting extension or renewal of such permit by Competent Authority - Writ petitions are disposed of