The Mines and Minerals (Regulation and Development) Act, 1948 and the Mineral Concession Rules, 1949, apply to sub-leases and are constitutional and valid.

Ramaswami, J.

1. In this case the plaintiff is Mineral Development, Limited, which is a public limited company incorporated under the Indian Companies Act, having its registered office at Calcutta. On 29-12-1947 the Raja of Ramgarh executed a registered lease in favour of the plaintiff in regard to 3026 villages comprised within the Ramgarh Estate on a Salami of Rs. 16,00,000. The term of the lease was for 999 years and there was an express provision in the lease granting power to the lessee to grant sub-leases.

On 8-9-1948 the Dominion Legislature enacted the Mines and Minerals (Regulation and Development) Act, 1948. The Act received the Governor Generals assent on 8-9-1948 but it came into force on 25-12-1949. Rules were framed by the Central Government under Sec. 5 of the Act for regulating the grant of mining leases. Among other matters the rules provided for the persons by whom applications for mining leases may be made, the authority by which mining leases may be granted and the maximum and minimum area and the period for which a mining lease may be granted. There was also provision in the rules for fixing the royalties and the minimum rent payable by the lessee. One of the rules prohibited the taking of premium from the lessee in respect of the mining lease. These rules came into force in the Province of Bihar on 25-10-1949.

By a notification under Section 92 (1) of the Government of India Act, 1935, the Act and the rules were extended to Chotanagpore by a notification dated 16-1-1950. The plaintiff company granted a sub-lease to Bhagat Singh in respect of 40 acres in Mouza Ratansota and Mouza Barharia for a period of 15 years on 1-2-1950. But the Deputy Commissioner of Hazaribagh challenged the legality of the sub-lease and made a criminal complaint against two of the directors of the plaintiff company under Rule 51 of the Mineral Concession Rules. Rule 51 provided that if a private person grants a mining lease in contravention of any of the provisions or accepts any premium he shall be punishable with imprisonment which may extend to six months, or with fine which may extend to Rs. 1,000 or both.

The plaintiff company therefore brought the present suit for a declaration (1) that the definition of the expression mining as provided in the rules did not include the case of sub-leases, and (2) that in any event the rules were unconstitutional since the fundamental right of the plaintiff under Article 19 (1) (f) of the Constitution was violated, The Union of India and the State of Bihar who are impleaded as defendants have contested the suit on the ground that the rules are constitutional and valid, that the Act and the rules apply not only to leases but also to the case of sub-leases. They also said that the restrictions imposed by the rules are reasonable and in the public interest and are within the permissible limits under Article 19 (5) of the Constitution.

2. The two issues arising in this case are therefore (1) whether the Mines and Minerals (Regulation and Development) Act, 1948 and the Mineral Concession Rules, 1949, apply to sub-leases? and (2) whether the Act and the rules are unconstitutional and void?

3. Mr. P.R. Das commenced his argument by saying that the lease granted by the Raja of Ramgarh in favour of the plaintiff company was dated 29-12-1947 and the Act and the rules could not retrospectively affect the rights of the parties acquired under that lease. Counsel based his argument upon Sec. 4 (1) of the Act which states --

"No mining lease shall be granted after the commencement of this Act otherwise than in accordance with the rules made under this Act."

The argument of the counsel was that the Act was not retrospective either by express enactment or by necessary implication & the rights acquired by the plaintiff under the lease granted by the Raja of Ramgarh could not be prejudicially affected. Mr. Das said that as soon as the lease was executed on 29-12-1947 the lessee company acquired a vested