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1980 Supreme(Raj) 107

High Court Of Rajasthan
Judgename : Guman Mal Lodha
BAL MUKAND ARORA - Appellant
Versus
STATE OF RAJASTHAN - Respondent
Civil Writ Petn 1244 Of 1980
Decided On : 08/30/1980

Advocates Appeared:
.N.SHARMA, M.I.KHAN, N.L.Jain, P.C.JIAN, PREMASHOPA, S.B.MATHUR, Vimal Chaudhary

The State Government has the power to levy and collect dead rent under Section 15 of the Mines and Minerals (Regulation and Development) Act, 1957 and the relevant provisions.

Headnote:

MINES AND MINERALS (REGULATION AND DEVELOPMENT) ACT, 1957 - SECTIONS 9, 13, 15 - RAJASTHAN MINOR MINERAL CONCESSION RULES, 1977 - RULE 3(IX) - DEAD RENT - VALIDITY - POWER OF STATE GOVERNMENT TO LEVY AND COLLECT - INCREASE IN YEARLY DEAD RENT - LEGALITY.

Fact of the Case:

The petitioners challenged the validity of charging dead rent by the State of Rajasthan under the Rajasthan Minor Mineral Concession Rules 1977 and the Mines and Minerals (Regulation and Development) Act, 1957.

Finding of the Court:

The court upheld the validity of charging dead rent by the State of Rajasthan, holding that the State Government has the power to levy and collect dead rent under Section 15 of the Act and the relevant provisions.

Issues: 1. Whether the State Government has the power to levy and collect dead rent under the Mines and Minerals (Regulation and Development) Act, 1957 and the Rajasthan Minor Mineral Concession Rules, 1977? 2. Whether the increase in yearly dead rent while sanctioning renewal of leases is legal and valid?

Ratio Decidendi: 1. Section 15(1) of the Act empowers the State Government to make rules for regulating the grant of mining leases in respect of minor minerals and for purposes connected therewith, which includes the power to prescribe the rate of royalty and dead rent. 2. The definition of dead rent in Rule 3(ix) of the Rules is not ultra vires. 3. The increase in yearly dead rent while sanctioning renewal of leases, if it exceeds the maximum limit prescribed in the Second Schedule and enhances the minimum limits prescribed under the Second Schedule, is illegal and invalid.

Final Decision: The writ petitions were partly accepted. The court held that the Government of Rajasthan is authorized by law to levy and collect dead rent, but the increase in yearly dead rent while sanctioning renewal of leases, by the maximum and limits prescribed in the Second Schedule, is illegal and invalid.

Judgment


GUMAN MAL LODHA, J.

( 1 ) A common question of law is involved in these writ petitions, regarding the validity of charging of dead-rent by the State of Rajasthan and its functionaries under the provisions of the Rajasthan Minor Mineral Concession Rules 1077 (hereinafter called to be as the concession Rules), and Mines and Minerals (Regulation and Development) Act, 1957 (hereinafter called to be as the Act of 1957 ). A bunch of 12 writ petitions, in which validity of the charging of dead rent was challenged, came up for consideration before this Court in Atmaram bilochi v. State of Rajasthan Civil Writ Petn. No. 955 of 1980 (Per Honble Mr. Justice K. S. Sidhu), on 8th August, 1980, it was held that the Government of rajasthan was authorised by law to collect and levy, dead-rent. It was then held that the dead-rent is a kind of minimum rent or royalty with this difference that the rent, called royalty, is a varying charge based on the value of the product, and the rent, called dead rent is a minimum annual payment, which is usually not enforced if the amount payable as annual royalty is more than the amount of dead-rent fixed for the year. Royalty, in a sense, is therefore the genus of which dead-rent is a species.

( 2 ) RELIANCE was placed upon the judgments of this Court in Bherulal v. State of rajasthan, AIR 1956 Raj 161 and Commr. of Income-tax v. Ramlal and Sons, air 1964 Raj 152 (FB ). This court held that royalty is inter alia, a charge by the owner of the minerals from those to whom he gives the concession to remove the minerals, and the charge is on production, the rate being fixed according to weight or the value of the produce. According to Rules. royalty and dead rent have been defined in the following terms: (See Rule 3)"royalty" means the charge payable to the Government in respect of the ore or mineral excavated, removed or utilized from any land as prescribed in Schedule I.

"dead rent means the minimum guaranteed amount of royalty per year payable as per rules or agreement under a mining lease. "

According to the view of this Court, dead rent is the minimum guaranteed amount of royalty, per year payable, as per rules or agreement under a mining lease.

( 3 ) SECTION 15 (1) of the Act was held to be the source of authority for the State government to make rules for regulating the grant of mining leases in respect of minor minerals and for purposes connected therewith. Placing reliance upon the judgment of the Supreme Court in Baijnath v. State of Bihar, AIR 1970 SC 1436, this Court held that the State Government is fully competent, as a delegate of Parliament, to make rules regulating the grant of mining leases in respect of minor minerals and for purposes connected therewith.

( 4 ) JUDGMENT in Brimco Bricks Bharatpur v. State of Rajasthan. AIR 1972 Raj 145 was relied upon to introduce the meaning of "for purposes connected therewith" under Section 15 (1) of the Act and it was held that the State government can lawfully frame rules under Section 15 (1) prescribing the rate of royalty for the grant of mining lease in respect of minor minerals.

( 5 ) THE decision of Madhya Pradesh High Court in Banku Bihari Saha v. State govt. of Madhya Pradesh, AIR 1969 Madh Pra 210 was relied upon by this court. In view of the plain language of Section 15 (1) of the Act, as per the finding of this Court, this Court held that the Parliament has delegated to State government the power to make rules for regulating the grant of, inter alia, mining lease in respect of minor minerals and for purposes connected therewith and that such delegated power included the power to frame rules prescribing the rate of royalty and, for that matter dead rent for the grant of mining leases in respect of minor minerals.

( 6 ) IT was then held that Sub-section (1) of Section 15 of the Act was the sole repository of the power to make rules in respect of minor minerals. Sub-section (3) had to be inserted by Parliament by an amendment in 1972 t














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