High Court Of Madhya Pradesh
G. P. Singh, C.J. and J. S. Verma, J.
MANOHARLAL UTTAMCHAND AWAL
Versus
STATE OF MADHYA PRADESH
Decided On : Nov 28,1978
Rule 24 of the M.P. Minor Mineral Rules applies only when the lease is held for limestone as a minor mineral. Where in the lease-deed it was not mentioned that the limestone was to be used for burning lime, the lease is not for minor mineral.
The use made by a lessee of the mineral extracted by him may be relevant to find out the character of the lease; but once it is established that the lease is of limestone as major mineral, the character of the lease does not change simply because the lessee is using the limestone extracted by him like a minor mineral. The liability to pay royalty does not depend upon the use made by the lessee of the limestone but on the character of the lease unless the rules or conditions of the lease otherwise provide which is not the position in the instant case.
(Para 4)
It is the character of lease which will determine the applicability of section 9 (1) of the 1957 Act or rule 24 (1) of the 1961 rules. The applicability of these provisions does not depend upon the use made by the lessee of the mineral extracted by him. 1972 JLJ 222 (SC) & 1976 JLJ 547 (SC) relied on.
(Para 5)
( 1. ) THE petitioners lather Uttamchand was granted mining leases in five villages of Tahsil Maihar, District Satna, between 1951 and 1956. These leases were granted under the Mineral Concession Rules, 1949 which were mads under the Mines and Minerals (Regulation and development) Act, 1948. The leases were for extracting limestone without mentioning any purpose. Demands of royalty were made from the petitioner in respect of different periods. It appears from the orders assessing royalty that the petitioner used a part of the limestone from his mines for lime burning in kilns. Royalty on the quantity of limestone burnt by the petitioner in kilns was assessed at the rates applicable to minor mineral. The petitioner was also made liable to enhanced royalty under the Mines and Minerals (Regulation and Development) Act, 1957. The petitioner filed revisions against the various assessment orders to the Central Government which were dismissed by orders passed on 6th January 1970. Recovery proceedings were then started against the petitioner. The petitioner filed this petition under Article 226 of the Constitution challenging the demands of enhanced royalty. ( 2. ) THE rate at which the royalty was payable under the leases is mentioned in clause (3) of Part 5 of the lease-deeds. Under this clause, the lessee was liable to pay royalty at the rate of 5 per cent of the sale value at the pits mouth subject to a minimum of - /6 /- annas per ton. It was further provided that the rate was subject to such alteration as may be prescribed by the Central Government under the proviso to Rule 41 (1) (i) of the mineral Concession Rules, 1949. Rule 41 of these Rules laid down the conditions to be included in the mining leases. Rule 41 (1) (i) provided that the lessee shall pay royalty on minerals despatched from the leased area at the rate specified in the First Schedule to the Rules. There was a proviso to Rule 41 (1) (i) stating that the rates shall be liable to be revised with effect from the beginning of the year 1955 and thereafter once in every ten years.
( 3. ) IN the Mines and Minerals (Regulation and Development) Act, 1948 (hereinafter referred to as the 1948 Act) there was no definition of minor minerals. The Mineral Concession Rules, 1949 (hereinafter referred to as the 1949 Rules), which were made by the Central Government under sections of the 1948 Act, defined "minor mineral" in Rule 3 (ii ). "limestone used for lime burning" was included as a minor mineral in this definition. Rule 4 contained an exemption in respect of minor minerals. The rule provided that the 1949 Rules were not to apply to minor minerals and that the extraction of minor minerals would be regulated by such rules as the State Government might prescribe. The 1948 Act, in so far as it dealt with mines and minerals, was replaced by the Mines and Minerals (Regulation and Development) Act, 1957 (Act No. 67 of 1957), hereinafter referred to as the 1957 Act. Section 3 (e) of this Act defines "minor minerals" to mean building stones, gravel ordinary clay, ordinary sand other than sand used for prescribed purposes, and any other mineral which the Central government may, by notification in the Official Gazette, declare to be a minor mineral. By a notification issued on 1st June 1958, limestone used for lime burning was declared to be a minor mineral. By another notification issued on 20th September 1961, which amended the earlier notification, "limestone used in kilns for manufacture of lime used as building material" was declared to be a minor mineral. Section 9 (1) of the 1957 Act provides that the holder of a mining lease granted before the commencement of the act shall, notwithstanding anything contained in the instrument of lease or in any law in force at such commencement, pay royalty in respect of any mineral removed by him from the leased area after such commencement, at the rate for the time being specified in the Second Schedule in respect of that mineral. L
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