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High Court of Judicature at Madras
THE HONOURABLE MRS. JUSTICE R. BANUMATHI & THE HONOURABLE MR. JUSTICE B. RAJENDRAN
M/s. Gem Granites, Chennai
Versus
The State of Tamil Nadu rep. by Secretary to Government Industries Department & Another
W.A. Nos. 716 of 2000, 2044 and 2045 of 2001, 94 to 115, 159 to 162, 2308 to 2322, 2543 to 2553, 2709 to 2719, 2739 to 2753, 2796 to 2815 of 2004, W.P.Nos.1930 & 1931 of 1999, W.A. M.P. Nos. 141 to 173, 262 to 268, 4272 to 4286, 4684 to 4694, 5005 to 5015, 5075 to 5080, 5083, 5084, 5089, 5169, 5171, 5173, 5175, 5177, 5179, 5181, 5183, 5185, 5187, 5189, 5191, 5193, 5195, 5197, 5199, 5201, 5203, 5205, 5207 of 2004 & 242 of 2007 & W.M.P.No.26313 of 1999
Decided On :Decided on : 16-08-2010
The High Court of Madras, in a comprehensive judgment, addressed several challenges to the validity of Rule 8-A of the Tamil Nadu Minor Mineral Concession Rules, 1959 (TN MMC Rules), as amended by G.O.Ms.No.86, Industries/MMC, dated 22.2.2001. The Court analyzed the scope of the Mines and Minerals (Development & Regulation) Act, 1957 (MMDR Act) and the Granite Conservation and Development Rules, 1999 (GCD Rules) to determine the extent of the State Government's powers in regulating the grant of quarry leases and other mineral concessions.
Fact of the Case:
The primary issue before the Court was whether Rule 8-A of the TN MMC Rules, which introduced a tender-cum-auction system for the grant of quarry leases in respect of granite, was ultra vires the MMDR Act and whether it was repugnant to the GCD Rules. Additionally, the Court considered the validity of specific provisions within Rule 8-A, including the requirement for applicants to have an existing industry or a distinct industrial programme in Tamil Nadu, and the stipulation that the quarried mineral be utilized in the lessee's own industry.
Finding of the Court:
The Court held that Rule 8-A of the TN MMC Rules was not ultra vires the MMDR Act and was not repugnant to the GCD Rules. The Court reasoned that the State Government had the legislative competence to regulate the grant of quarry leases and other mineral concessions under Section 15 of the MMDR Act. The Court further held that the tender-cum-auction system introduced by Rule 8-A was a valid regulatory measure aimed at ensuring transparency and augmenting the State's revenue. The Court also upheld the provisions requiring applicants to have an existing industry or a distinct industrial programme in Tamil Nadu and the stipulation that the quarried mineral be utilized in the lessee's own industry, finding that these provisions were intended to promote industrial development within the State and to conserve the State's granite resources.
Issues: 1. Whether Rule 8-A of the TN MMC Rules, sub-Rule 3(a) and the relevant sub-rules providing for tender-cum-auction system for the grant of lease of areas where the existence of granite has been established otherwise is ultra vires the MMDR Act and whether is in derogation of the GCD Rules, 1999? 2. Whether the summary rejection of application made for an area where there is no invitation for application under Rule 8-A(5)(c) of TN MMC Rules is ultra vires the MMDR Act and whether the same is in derogation of the GCD Rules, 1999? 3. Whether Rule 8-A sub-rule (2)(a)(ii) and the relevant Rules thereon and sub-rule 9(g) and (h) of TN MMC Rules stipulating that the lessee should have an existing industry in Tamil Nadu or having a distinct industrial programme is ultra vires the provisions of the MMDR Act and inconsistent and repugnant to the GCD Rules?
Ratio Decidendi: The Court's decision was based on the following legal principles: 1. The State Government has the legislative competence to regulate the grant of quarry leases and other mineral concessions under Section 15 of the MMDR Act. 2. The tender-cum-auction system introduced by Rule 8-A of the TN MMC Rules was a valid regulatory measure aimed at ensuring transparency and augmenting the State's revenue. 3. The provisions requiring applicants to have an existing industry or a distinct industrial programme in Tamil Nadu and the stipulation that the quarried mineral be utilized in the lessee's own industry were intended to promote industrial development within the State and to conserve the State's granite resources.
Final Decision: The Court set aside the order of the learned single Judge, which had struck down Rule 8-A of the TN MMC Rules, and allowed the Writ Appeals filed by the Government. Consequently, the Court dismissed the Writ Petitions challenging the validity of Rule 8-A and also dismissed the Writ Appeal filed by the Appellant in W.A.No.716 of 2000, which challenged the collection of seigniorage fee for the granite blocks quarried from the leasehold areas.
R.BANUMATHI,J.
Writ Appeals except W.A.No.716 of 1999:
1. These Writ Appeals arise out of common order in W.P.Nos.24199 of 2001 etc., batch, whereby the learned single Judge struck down Rule 8-A of the Tamil Nadu Minor Mineral Concession Rules, 1959 as amended by G.O.Ms.No.86, Industries/MMC, dated 22.2.2001 is contrary to the Granite Conservation and Development Rules, 1999, as the State Government has not carried out the scheme of Granite Conservation and Development Rules and ultra vires Section 18 of Mines & Minerals (Development & Regulation) Act, 1957. Since all the Writ Appeals arise out of common order and the Writ Petitions also involve determination of same points, the Writ Petitions and all the Writ Appeals were heard together and disposed off by this common judgment.
2. For conservation and systematic development of and scientific mining to conserve the granite resources and to prescribe a uniform frame-work with regard to systematic and scientific exploitation of granite throughout the Country, Government of India introduced the Granite Conservation and Development Rules, 1999 (in short, "GCD Rules") and it came into effect from 1.6.1999. Introduction of prospecting licence and submission of approved mining plan, grant of lease for 20 years with provision of renewal, etc., are some of the features of the GCD Rules. The Government of Tamil Nadu in G.O.4(D) No.3/Industries/ MMB2/dated 29.10.1999 have constituted a committee to examine in detail the GCD Rules with the existing provisions of Tamil Nadu Minor Mineral Concession Rules, 1959 (in short, "TN MMC Rules) and to suggest necessary amendments to TN MMC Rules. The Committe was also requested to consider the new draft Tamilnadu Granite Conservation Rules, 1999 proposed by the Commissioner of Geology and Mining.
3. The Committee carefully considered the provisions contained in GCD Rules and also the then existing provisions of TN MMC Rules. Based on the recommendations of the Committee, the Government of Tamilnadu amended the provisions of TN MMC Rules vide G.O.Ms.No.86/Industries/MMC/ dated 22.2.2001 after duly considering the provisions of GCD Rules stipulating the procedure for obtaining mining lease for quarrying granite and retaining the tender-cum-auction system for grant of lease in respect of granite quarrying lease. By the amendment, "prospecting licence" is not envisaged for grant of licence in respect of Government lands. Rule 19-A of TN MMC Rules stipulates grant of prospecting licence and for quarrying granite in respect of patta lands. According to the Government, TN MMC Rules are in consonance with GCD Rules and as per the powers delegated to the State Government under Section 15 of the Mines & Minerals (Development & Regulation) Act, 1957 (in short, "MMDR Act").
4. The Respondents/ Quarry operators have challenged the amendments made to Rule 8-A of TN MMC Rules by G.O.Ms.No. 86/Industries/MMC/ dated 22.2.2001 so far as it relates to granting of quarry lease in respect of Government lands as null and void and consequently sought for a direction to the Government to grant prospecting licence in respect of lands indicated in the Writ Petitions. In the Writ Petitions, the Respondents/Writ Petitioners averred that GCD Rules direct the grant of prospecting licence on application and after prospecting, on application, quarry lease has to be granted and the Appellant – State Government cannot frame rules contrary to the GCD Rules. It was further averred that by virtue of GCD Rules, 1999, the Writ Petitioners have got statutory right to apply for prospecting and mining leases in respect of any granite bearing lands, whereas the Government by the impugned G.O. has taken away the rights to obtain prospecting licence. The plea of Respondents was that when the Central Government has provided a uniform Government policy throughout the country by bringing GCD Rules with effect from 1.6.1999 and in the TN MMC Rules there is no provision for prospecting
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