AIR 2000 SC 2870 : (2000) AIRSCW 3015 : (2000) 3 BLJR 2043 : (2000) 8 JT

539 : (2000) 5 SCALE 538 : (2000) 8 SCC 655 : (2000) 2 SCR 211 Supp : (2000) 5
Supreme 505
SUPREME COURT OF INDIA
DIVISION BENCH
THE QUARRY OWNERS ASSOCIATION — Appellant

Vs.

THE STATE OF BIHAR AND OTHERS — Respondent

( Before : N. Santosh Hedge, J; A. P. Misra, J )
C.A. No. 5089 of 1997 with C.A. No's. 5090, 5091 and 5092 of 1997
Decided on : 08-08-2000

 Christian Marriage Act, 1872 — Section 83

 Constitution of India, 1950 — Article 14, 151, 338(5)
 Essential Commodities Act, 1955 — Section 3
 Gujarat Minor Minerals (Amendment) Rules, 1979 — Rule 22
 Gujarat Minor Minerals Rules, 1966 — Rule 21
 Income Tax Act, 1961 — Section 5(7A)
 Mineral Concession Rules, 1949 — Rule 4
 Mines and Minerals (Development and Regulation) Act, 1957 — Section 10, 11, 12, 13,
14
 Press and Registration of Books Act, 1867 — Section 20
 Registration Act, 1908 — Section 69, 91(1)
 Religious Endowments Act, 1863 — Section 8
 Transfer of Property Act, 1882 — Section 105

Interpretation of Statutes - Words in a statute - Not static but dynamic -

Dynamic meaning gives full thrust and satisfaction to achieve objectivity
intended by legislature. Every word of a language is impregnated with and
is flexible to cannot different meaning, when used in different context. That
is why it is said, words are not static but dynamic and Courts must adopt its
that dynamic meaning which uphold the validity of any provision. This
dynamism is the cause of saving many statutes of it being declared void, it
dissolves the onslaught of any rigid and literal interpretation, it gives full
thrust and satisfaction to achieve the objectivity which the legislature
intended. Whenever there are two possible interpretations, its true
meaning and legislature's intent has to be gathered from the 'Preamble',
Statement of objects and Reasons and other provisions of the same statute.
In order to find true meaning of any word or what the Legislature intended,
one has to go to the principle enunciated in Heydons case which laid down
the following principle as early in the sixteenth century, (1) What was the
law before making of the Act; (2) What was the mischief or defect for which
the law did not provide; (3) What is the remedy that the Act has provided;
and (4) What is the reason of the remedy. The court must adopt that
construction which suppresses the mischief and advances the remedy.
Counsel for Appearing Parties
F.S. Nariman, P.P. Rao, R.K. Dwivedi, S.B. Sanyal, G.L. Sanghi, A.K. Pandey, B.B. Singh, Subhro
Sanyal, Subhash Sharma, Manita Verma, Jamshed Buy and Kumar Rajesh Singh, for the Appellant;

Cases Referred
 M/s. Orissa Cement Ltd. and Others Vs. State of Orissa and others, AIR 1991 SC
1676 : (1991) 2 JT 439 : (1991) 1 SCALE 617 : (1991) 1 SCC 430 Supp : (1991) 2 SCR 105
 P. Kannadasan etc, etc. Vs. State of Tamil Nadu and others [OVERRULED], (1996)
6 AD 237 : AIR 1996 SC 2560 : (1996) 7 JT 16 : (1996) 5 SCALE 596 : (1996) 5 SCC 670 :
(1996) 4 SCR 92 Supp
 K.P. Varghese Vs. Income Tax Officer, Ernakulam and Another, AIR 1981 SC 1922 :
(1981) 24 CTR 358 : (1981) 131 ITR 597 : (1981) 3 SCALE 1315 : (1981) 4 SCC 173 :
(1982) 1 SCR 629
 Sanghvi Jeevraj Ghewar Chand and Others Vs. Secretary, Madras Chillies, Grains
and Kirana Merchants Workers Union and Another, AIR 1969 SC 530 : (1969) 1 LLJ
719 : (1969) 1 SCR 366
 State of Tamil Nadu Vs. Hind Stone and Others, AIR 1981 SC 711 : (1981) 1 SCALE
237 : (1981) 2 SCC 205 : (1981) 2 SCR 742 : (1981) 13 UJ 408
 Baijnath Kadio Vs. State of Bihar and Others, AIR 1970 SC 1436 : (1969) 3 SCC
838 : (1970) 2 SCR 100
 India Cement Ltd. and Others Vs. State Of Tamil Nadu and Others, AIR 1990 SC
85 : (1991) 188 ITR 690 : (1989) 4 JT 190 : (1989) 2 SCALE 953 : (1990) 1 SCC 12 :
(1989) 1 SCR 692 Supp
 Municipal Corporation of Delhi Vs. Birla Cotton, Spinning and Weaving Mills,
Delhi and Another, AIR 1968 SC 1232 : (1968) 3 SCR 251
 Atlas Cycle Industries Ltd. and Others Vs. The State of Haryana, AIR 1979 SC
1149(1) : (1979) CriLJ 927(1) : (1979) 2 SCC 196 : (1979) SCC(Cri) 422 : (1979) 1 SCR
1070
 Commissioner of Income Tax, Patiala and Others Vs. Shahzada Nand and Sons and
Others, AIR 1966 SC 1342 : (1966) 60 ITR 392 : (1966) 3 SCR 379
 The State of Madras Vs. Gannon Dunkerley and Co., (Madras) Ltd., AIR 1958 SC
560 : (1959) 1 SCR 379 : (1958) 9 STC 353
 The Bengal Immunity Company Limited Vs. The State of Bihar and Others, AIR
1955 SC 661 : (1955) 2 SCR 603 : (1955) 6 STC 446
 Harishankar Bagla and Another Vs. The State of Madhya Pradesh, AIR 1954 SC
465 : (1954) CriLJ 1322 : (1955) 1 SCR 380
 Corporation of Calcutta and Another Vs. Liberty Cinema, AIR 1965 SC 1107 : (1965)
2 SCR 477
 Pannalal Binjraj Vs. Union of india (UOI), AIR 1957 SC 397 : (1957) 1 SCR 233
 Bhatnagars and Co. Ltd. Vs. The Union of India (UOI), AIR 1957 SC 478 : (1983)
ECR 1607 : (1957) 1 SCR 701
 State of Bombay Vs. Narothamdas Jethabai and Another, AIR 1951 SC 69 : (1951) 2
SCR 51
 Union of India (UOI) Vs. Sankalchand Himatlal Sheth and Another, AIR 1977 SC
2328 : (1977) LabIC 1857 : (1977) 4 SCC 193 : (1978) 1 SCR 423
 State of M.P. Vs. Mahalaxmi Fabric Mills Limited and others, AIR 1995 SC 2213 :
(1995) 3 JT 93 : (1995) 1 SCALE 758 : (1995) 1 SCC 642 Supp : (1995) 1 SCR 756
 Avinder Singh and Others Vs. State of Punjab and Others, AIR 1979 SC 321 : (1979)
1 SCC 137 : (1979) 1 SCR 845
 D.K. Trivedi and Sons and Others Vs. State of Gujarat and Others, AIR 1986 SC
1323(1) : (1986) 1 SCALE 1133 : (1986) 1 SCC 20 Supp : (1986) SCC 20 Supp : (1986) 1
SCR 479 : (1986) 2 UJ 301
JUDGMENT
A.P. Misra, J.—The issues in these appeals, apparently impress a common
picturisation of usual nature but they are raised in an interesting way while challenging
the fixation of the rate of royalty for the minor minerals u/s 15 of the Mines and
Minerals (Regulation and Development) Act, 1957 (hereinafter referred to as 'the Act').
The question for consideration is, the ambit of delegation of power by the Parliament to
the State Government u/s 15 of the said Act. Can it be said that the delegation is
unbridled without any check if it travels beyond the guidelines as spelt by this Court in
the case of D.K. Trivedi and Sons and Others Vs. State of Gujarat and Others, . In the
present case neither the validity of delegation u/s 15 nor it being without any guideline
is under challenge but both the appellants and the respondents State stress two different
orbits for the guideline, the appellants constrict it to be within what is spelt in the D.K.
Trivedi case (supra) while the respondents stress it not to be confined to that case. The
impugned notifications dated 17th August, 1991 and 28th September, 1994 issued by the
State of Bihar enhancing the rate of royalty have to be tested as in which of the two
orbits it falls. If it falls within the restricted orbit, as submitted by the appellants, it may
be ultra vires but would be valid if it falls within the other orbit. Mr. F.S. Nariman,
learned senior Counsel, submits that extents and limitations of the power of the
delegated have to be read as laid down by this Court in D.K. Trivedi case (supra), where
the validity of this very: delegation of power to the State Government was under
challenge. Based on this, the submission is, Item 54 of the Second Schedule of the Act
controls and guides the State Government (hereinafter referred to as 'the State'), for
fixing or enhancing the rate of royalty which has to be within the reasonable bounds of
12% of the sale price at the pit's mouth. Admittedly in the present case it is far beyond
this, hence the submission is that the impugned notifications are liable to be struck
down. On the other hand, submission for the respondents the State of Bihar by learned
senior counsel Mr. Rakesh Dwivedi is that D.K. Trivedi's case (Supra) neither restricts
nor limits the power of enhancement of royalty to Item 54, Schedule II of the Act nor it
exhaustively dealt with all other sources of guidelines which was not necessary in that
case, which can be gathered from other provisions of the Act, the objects and reasons,
the scheme of the Act and the nature of material etc..
2. Before entering into this legal tangle, it is necessary to turn to some of the essential
facts to appreciate more fully the controversies. The present appeals are directed against
the judgments and orders dated 16th October, 1996 of the High Court, passed in writ
petitions by which the petition of the appellants, namely, Quarry Owners Association
etc. challenging the aforesaid notifications dated 17th August, 1991 and 28th September,
1994, issued by the State including challenge to the recovery of the enhanced royalty
under it and for the refund of the amount already paid were dismissed.
3. The Preamble of the Act lays down:
An Act to provide for the development and regulation of mines and minerals under
the control of the Union.
4. Section 2 declares the expediency of Union to control the regulation of mines and
development of minerals Section 3(a) defines 'minerals' which includes all minerals
except mineral oils. Section 3(e) defines 'minor minerals'. Section 4 refers to the
prospecting or mining operations to be undertaken only under a licence or lease. Section
4A is for termination of prospecting licences or mining leases, Sub-section (1) is for
premature termination other than minor minerals while Sub-section (2) is for minor
minerals. Section 5 imposes restrictions on the grant of such licences or leases. Section 6
specifies the maximum area for which a licence and lease may be granted, while Section
7 gives period for the grant and renewal of such prospective licences. Section 8 deals
with the periods for mining leases. Sub-sections (1) and (2) of Section 9 refer to the
payment of royalty at the rate specified in the Second Schedule whether granted before
coming into force of this Act or subsequently. Sub-section (3) empowers the Central
Government to amend the Second Schedule so as to enhance or reduce the rate of
royalty payable. Section 9A obliges lessee to pay the dead rent. Sections 10 to 12 deal
with the procedure for obtaining prospective licence, or mining leases in respect of the
land in which minerals vest in the Government. Section 13 empowers the Central
Government to make rules in respect of minerals, Section 14 specifically excludes
Sections 5 to 13 from application of quarrying leases, mining leases or other minerals
concessions in respect of minor minerals. Section 15 empowers the State to make rules
in respect of minor minerals. Section 16 entrusts power to modify mining leases granted
before 25th October, 1949. Section 17 gives special power to the Central Government to
undertake prospecting or mining operations in certain lands. Section 18 refers to the
mineral development. Licences and mining leases under the Act to be void u/s 19 if
made in contravention of the Act, while Section 20 makes the Act and Rules to apply to
all renewals. Section 21 imposes penalties. Section 22 refers to the cognizance of
offences. Section 23-C empowers the State to make rules for preventing illegal mining,
transportation and storage of minerals. Section 26 entrusts both Central and the State to
delegate its power under the Act on officer or authority of the Central or State. Sub-
section (1) of Section 28 puts an obligation on the Central Government to place its rules
and notifications before the Parliament which is subject to its modifications, if any.
Similarly, the State is obliged to place its Rules and notifications before each houses of
State Legislature under Sub-section (3). Section 29 makes existing rules to continue so
long they are not inconsistent with the Act and the Rules. Section 30 empowers the
Central Government to revise any order made by the State or any other authority. The
First Schedule refers to the specified minerals, viz., Hydro carbons/energy minerals
Atomic minerals and metallic and non metallic minerals with reference to Sections 4(3),
5(1), 7(2) and 8(2) while the Second Schedule refers to the rate of royalty in all States
and Union Territories except the States of Assam and West Bengal while the Third
Schedule refers to the rate of Dead Rent. Thus, the aforesaid Act expressly lays down the
rates of royalty of the minerals through Schedule II read with Section 9. It is significant
that Section 14 excludes Sections 5 to 13 specifically for minor minerals which includes
Section 9. Section 15 entrusts power on the State to lay down Rules in respect of the
minor minerals. Original Section 15 as it stood at the time of D.K. Trivedi (Supra), is
quoted hereunder:
Section 15: Power of State Government to make rules in respect of minor minerals:
(1) The State Government may, by notification in the Official Gazette, make rules for
regulating the grant of quarry leases, mining leases or other minerals concessions in
respect of minor minerals and for purposes connected therewith.
(2) Until rules are made under Sub-section (1), any rules made by a State Government
regulating the grant of quarry leases, mining leases or other mineral concessions in
respect of minor minerals which are in force immediately before the commencement of
this Act shall continue in force.
(3) The holder of a mining lease or any other mineral concession granted under any
rule made under Sub-section (1) shall pay royalty in respect of minor minerals removed
or consumed by him or by his agent, manager, employee, contractor or sub-lessee at the
rate prescribed for the time being in the rules framed by the State Government in
respect of minor minerals.
Provided that the State Government shall not enhance the rate of royalty in respect of
any minor minerals for more than once during any period of four years.
5. This delegation of power to the State with stood its challenge in D.K. Trivedi case
(Supra), as aforesaid. Later this Section was amended on 10th February, 1987, by
introducing Sub-section 1-A through Act No. 37 of 1986. This was in particular and
without prejudice to the generality of power conferred by Sub-section 1 of Section 15.
This Sub-section (1-A) is quoted hereunder:
(1 -A): In particular and without prejudice to the generality of the foregoing power,
such rules may provide for all or any of the following matters, namely.-
(a) the person by whom and the manner in which, applications for quarry leases,
mining leases or other mineral concessions may be made and the fees to be paid
therefor;
(b) the time within which, and the form in which, acknowledgement of the receipt of
any such applications may be sent;
(c) the matters which may be considered where applications in respect of the same
land are received within the same day;
(d) the terms on which, and the conditions subject to which and the authority by
which quarry leases, mining leases or other mineral concessions may be granted or
renewed;
(e) the procedure for obtaining quarry leases, mining leases or other mineral
concessions;
 (f) the facilities to be afforded by holders of quarry leases, mining leases or other
mineral concessions to persons deputed by the Government for the purpose of
undertaking research or training in matters relating to mining operations;
(g) the fixing and collection of rent, royalty, fees, dead rent, fines or other charges and
the time within which and the manner in which these shall be payable;
(h) the manner in which rights of third parties may be protected (whether by way of
payment of compensation or otherwise) in cases where any such party is prejudicially
affected by reason of any prospecting or mining operations;
(i) the manner in which rehabilitation of flora and other vegetation, such as trees,
shrubs and the like destroyed by reason of any quarrying on mining operations shall be
made in the same area or in any other area selected by the State Government (whether
by way of reimbursement of the cost of rehabilitation or otherwise) by the person
holding the quarrying or mining lease;
(j) the manner in which and the conditions subject to which, a quarry lease, mining
lease or other mineral concession may be transferred;
(k) the construction, maintenance and use of roads, power transmission lines,
tramways, railways, aerial ropeways, pipelines and the making of passage for water for
mining purposes on any land comprised in a quarry or mining lease or other mineral
concession;
(I) the form of registers to be maintained under this Act;
(m) the reports and statements to be submitted by holders of quarry or mining leases
or other mineral concessions and the authority to which such reports and statements
shall be submitted;
(n) the period within which and the manner in which and the authority to which
applications for revision of any order passed by any authority under these rules may be
made, the fees to be paid therefor, and the powers of the revisional authority; and
(o) any other matter which is to be, or may be prescribed.
6. The introduction of this Sub-section (1-A) including the Objects and Reasons, it is
submitted, further enlarges the area of the guidelines to the State. Its Objects and
Reasons are also quoted hereunder:
Act 37 of 1986 - The Mines and Minerals (Regulation and Development) Act, 1957
provides for the regulation of mines and the development of minerals under the control
of the Union. Since the last amendment of the Act in 1972, many problems have come to
the fore. The adverse effect of mining operation on ecology and environment have
increasingly come to notice. In many cases, mining operations have been undertaken
without proper prospecting resulting in unscientific mining. Further, a number of
Committees have stressed the need for amending certain provisions of the Act with the
object of removing bottle-necks and promoting speedy development of mineral based
industries. State Governments and representatives of trade and industry have in formal
forums like the Mineral Advisory Council as well as in other forums, expressed the
desirability of taking a fresh look at the various provisions of the Act with a view to
making them more effective and development-oriented.
2. The suggestions made from time to time have been considered and incorporated in
the present Bill, which, inter alia, includes the following salient features, namely :
(i) inclusion of 11 more minerals of national importance in the First Schedule to the
Act;
(ii) premature termination of prospecting licences and mining leases on ecological and
other grounds:
(iii) dispensing with the Certificate of Approval, income tax Clearance Certificate, etc.
for the grant of prospecting licences and mining leases;
(iv) prospecting of an area and preparation of mining plan as a pre condition for the
grant of a mining lease;
(v) rationalisation of the period of mining leases, and renewals thereof;
(vi) shorter periodicity for purposes of revision of royalty and dead rent; and
(vii) provision for increasing the quantum of punishment to curb illegal mining
activities.
3. The Bill seeks to provide for the above objects.
It is also relevant to record here the rate of royalty fixed by the State for the minor
minerals through various notifications in various years. Initially on 1st April, 1975 the
rate of royalty fixed was Rs. 2.50 per cubic meter that is Rs. 7.07 per 100 cubic ft., Rs.
1.75 per cubic meter that is Rs. 4.95 for 100 cubic ft. for Ballast and Boulder. Next on
3rd August, 1977 the rate of stone chips, Ballast and Boulder was increased to Rs. 3/-per
cubic meter that is Rs. 8.49 per 100 cubic ft and from 17th August, 1991 (impugned) the
rate of royalty of stone chips, Ballast and Boulder was increased to Rs. 12/- per cubic
meter that is Rs. 33.96 per 100 cubic ft. By notification dated 28th November, 1994
(impugned) the rate of royalty was Rs. 25/-per cubic meter or Rs. 70.75 per 100 cubic ft.
for Ballast, Boulder and stone chips, which according to the appellants is more than 15
times as originally provided and more than 5 times in excess of the maximum rate of
12% of sale price at pit's mouth under Entry 54 of Schedule II. It is also not in dispute by
the aforesaid Act, under Item 54 of List I, Seventh Schedule of the Constitution of India,
the regulation of mines and minerals development both of major and minor minerals
came under the control of the Union, including fixation of the rate of royalty. The
challenge to the aforesaid two notifications is that the State trespassed the limit of the
guidelines as laid and spelt out in D.K. Trivedi's case (Supra). Further, if that guidelines
have not to be, then there is no other check and control or guideline of the Union over
the State Government. In contrast there is check over the other delegated, viz., Central
Government as u/s 28(1), rules or notifications by it including enhancement of royalty is
to be laid before the Parliament. The High Court repelled the contention of the
appellants by holding:
No doubt when the decision in the case of D.K. Trivedi and sons (Supra) was given
there were no specific guidelines in Section 15 of the Act. However.... Amendment Act,
1986 (Act No. 37 of 1986) which came into force on 10th February, 1987, guidelines have
been provided in Section 15 itself... Clause (g) of Sub-section 1 -A provided that the rules
may be framed by the State Government for fixing and collecting rent, royalty, fees etc....
The guidelines provided for framing Rules in respect of minerals other than minor
minerals do not remain relevant after insertion of Sub-section (1-A) in Section 15 of the
Act.
7. However, submission for the appellants is, Sub-section (1-A) only empowers the
State Government but does not lay down any guideline, hence it cannot shield the State
to be providing with any guideline, for which State has only to fall under Item 54 of
Schedule II of the Act, which records:
Item 54: All other materials not herein before specified = Twelve per cent of sale price
at the pit's mouth.
The submission is, this is residuary item which cover all other minerals not specified
in any of the preceding items in Schedule II. The minor minerals not being specified in
any of the items it would fall under this entry.
8. It is also significant to record that minor minerals are used in the local areas for
local purposes while major minerals are used for the industrial development for the
National purpose. The crux of the matter for consideration is, whether, is it only
Sections 4 to 12 which controls or guides the State in fixing the royalty for the minor
minerals and, if it is, whether Entry 54 of Schedule II places any ceiling of 12% of the
sale price at the pit's mouth for fixing this royalty by the State? In other words, does
D.K. Trivedi case (Supra) fore closes the issue of guideline or is it open to travel to other
fields which guides the State for fixing the royalty.
9. The appellants are an association of quarry owners. They were given permit/lease
for the extraction of stone in respect of their respective places of operation in pursuance
to such permit/lease. The State Government in exercise of its power u/s 15 of the
aforesaid Act made rules called the Bihar Minor Mineral Concession Rules 1972,
(hereinafter referred to as the 'Rules') and fixed the royalties from time to time.
Submission for the appellants is, since rate of royalty on building stone including stone
chips , Boulder, Road medal (Metal?) and Ballast has been increased to more than 100%
, the appellants are unable to pay, hence challenge this enhancement.
10. Mr. F.S. Nariman, learned senior counsel for the appellants submits, in order to
judge the validity regarding excessive delegation one has to identify the power which is
sought to be delegated. The power delegated to the State Government u/s 15 of the Act is
the power to fix and collect royalty. It cannot be disputed that royalty is a tax. The
question is, are there any guideline to vary the rate of royalty apart from D.K. Trivedi's
case (Supra). The submission is, this decision settles the guideline by placing the
restrictions on State power through Section 9 read with Item No. 54 of the Second
Schedule of the Act. The introduction of Sub-section (1A) in Section 15 of the Act makes
no difference, as it is only an amplification and illustration of Section 15(1). Further,
Sub-clause (g) of Section 15(1A) only clothes the State with power to change the rate of
royalty but it cannot be construed as giving any guideline. It is only when Legislature
fixes any maximum rate, beyond which delegated cannot enhance the rate, it could be
said it retained sufficient control over the delegated. The control of the Parliament in
relation to the major minerals for such enhancement is enshrined in Section 28(1) of the
Act, State of M.P. Vs. Mahalaxmi Fabric Mills Limited and others, , upheld such a
delegation. The delegated, viz., Central Government was entrusted with the power to
amend the Second Schedule which fixes royalty but obligates the delegated to lay such
amendment before the Parliament. This is absent in the case of minor minerals.
11. Next it is submitted, this Court in Baijnath Kadio Vs. State of Bihar and Others, ,
held that the State Legislature is denuded of all its legislative power over the minor
minerals after the passing of the said Act, hence it loses its legislative control for fixing
the royalty. The State only acts as delegated of the Parliament to enhance the rate of
royalty. So Section 28(3), which is for the minor minerals, merely provides laying down
procedure before the State Legislature for information and not with any entrustment of
power to alter or modify the rate of royalty, hence Section 28(3) by itself cannot save the
plea of excessive delegation of the legislative power. The language used in Section 28(3)
is different from what is in Section 28(1), hence both cannot be equated. There is
nothing to show that, in fact, the impugned notifications, were laid before the State
Legislature. So far the Delegated Legislation Provisions (Amendment) Act, 1983, which
requires rules made by the State Government under a parliamentary Act for its laying
before the State Legislature it only relates to the subjects under the concurrent List III of
Seventh Schedule of the Constitution of India and not in respect of subjects in exclusive
competence of the Parliament under List I.
12. Learned senior counsel Mr. P.P. Rao, also appearing for some of the appellants
submits, power to fix the rate of tax can be delegated provided the statute provides
guidance for fixing such rate. The guidance may be by fixing maximum rates of tax or by
providing consultation with the people, i.e., subject to the approval by them as held in
Municipal Corporation of Delhi Vs. Birla Cotton, Spinning and Weaving Mills, Delhi
and Another, . Reasserting the principle as laid down in the case of Mahalaxmi Fabrics
(Supra), it is submitted Parliament has itself laid down for the major minerals the rate
of royalty in the Second Schedule of the Act and authorised the Central Government to
revise the rates. In doing so the Central Government has before it the guidance, to keep
in view the original rates. The fixation of royalty should have a direct nexus with the
minerals throughout the country on a uniform pattern. Further, there is requirement
that every rule or notification made by the Central Government is to be placed before
each House of Parliament is subject to the modification by both Houses. Thus, Section
28(1) permits Parliament to veto the enhanced rate of royalty. In contrast there is no
such guideline so far minor minerals are concerned, except what is contained in D.K.
Trivedi's case (Supra). Based on that it is submitted that only provision among Sections
4 to 12 of the Act, which is relevant is Section 9(2) read with Entry 54 of the Second
Schedule of the Act which fixes the limit of royalty at 12% of the sale price at the pit's
mouth. The very rationale of Entry 54 of List I of the Constitution is to regulate the
mines and minerals development under the control of Union in the public interest. The
Preamble as well as Section 2 of the Act speak about the expedience of Union control of
both major and minor minerals. Thus no part of the Act can be construed so as to take
away the control of the Union. Section 28(3) cannot be read so as to divest the Union of
its control and vest the control in the respective State Legislature. In view of difference
in the language between Sections 28(3) and 28(1), the same purport what is contained
in Sub-section (1) cannot be brought into Sub-section (3). Further the taxing statute
must be interpreted as it reads with no additions or subtractions of words and where
two opinions are possible the one which benefits an assessee must be adopted.
13. Learned senior counsel Mr. S.B. Sanyal, in addition to the adoption of the
submissions by the aforesaid two learned Counsels further submits that Section 28(3)
which is brought in through amendment cannot be construed to confer authority on the
State Legislature to modify any notifications or rules framed by the State Government.
But laying of such rule or notification before the State Legislature is only for the purpose
of information. In a delegated legislation the control and authority of the Principal to
modify or cancel any act of the delegated must remain. Parliamentary control over
delegated legislation should be living continuity as a constitutional necessity which is
not to be found in the present case.
14. Repelling the submissions, Mr. Rakesh Dwivedi, learned senior counsel, appearing
for the State of Bihar submits, in D.K. Trivedi's case (Supra) Section 15, as it then stood,
was questioned as suffering from the vice of excessive delegation of its legislative power.
This Court held that Sub-section (2) of Section 13 was merely particularization or
illustration of the generality of power already contained in Sub-section (1) and since
Section 15(1) was similar to Section 13(1), it could necessarily contain illustrations of
Section 13(2) and the provisions of Section 13(2) being in the same sub-chapter as
Section 15, would furnish sufficient guidelines. Reliance was also placed on the following
observations made in that case:
The exclusion of the application of these sections to minor minerals means that these
restrictions will not apply to minor minerals but it is left to the state governments to
prescribe such restrictions as they think fit by rules made u/s 15(1).
15. The submission is, Sections 4 to 12, as they stood then, cannot be construed as
restricting the power of delegated over the minor minerals in view of Section 14. In fact,
they were referred by this Court as it being available to the State Government for taking
note while framing the rules. They were available not as restrictive or limiting its power
but for its adoption wherever necessary. In fact, while judging the validity of the
notifications impugned in that case, this Court was not called upon nor did it examine
whether the State power to enhance royalty was restricted to Schedule II and Section 9
of the Act. Further, the guideline is also to be found in the Preamble, the Statement of
Objects and Reasons and other provisions of the Act. Sections 4A, 17 and 18 also provide
the guideline. Further after the amendment, the power of the Central Government u/s
9(3) of the Act for the modification of the rate of royalty for the major minerals is made
very wide. The only difference being that u/s 28(1) Parliament has opportunity to
modify the rate fixed by the Central Government. This was because the Central
Government was modifying the rates fixed by the Parliament itself. Secondly, major
minerals are minerals of national importance hence require uniform treatment at the
national level. In contrast, the minor minerals are mostly used locally and are of local
importance and hence their treatment is left to the State Government at the provincial
level. This is in recognition of State's original power to determine such royalty under
Entry 54 of List II of the Seventh Schedule. This is also in tune with the principle of
federalism which requires local matters to be left for it being dealt with by the State
Government.
 16. Further submission is, in order to find the guidelines the nature of the subject
matter is also to be considered. The product, namely, minor minerals is neither
produced nor it belong to the appellants. So it is not a case of imposition of tax
simplicitor on the appellants but such tax in fact includes the price of the minerals
which is the property of the State. In other words, it includes the price of the property
which State parts with. Thus, royalty is a unique kind of tax which is different from
other taxes. Both royalty/dead rent are integral part of the lease as talked about in
Section 4 of the Act and Section 105 of the Transfer of Property Act, 1882. Hence the
lessee cannot insist that in spite of the minerals being parted by the State the mining
should be made available cheaply so that they can derive profits, and even super profits.
Further, there should have been fixation of maximum limit for royalty u/s 15 is not an
absolute rule. In fact, the rate fixed has not been demonstrated to be confiscatory or
arbitrary, for which the courts are there and if that be, it could be quashed. Further the
history of regulation of minerals shows that royalty has always been fixed by the State
Government. Under Rule 4 of the Mineral Concession Rules, 1949 framed by the Central
Government under the 1948 Act, the State Governments were given power to make rules
with regard to the minor minerals. In fact, what was then delegated to the State
Government by the Central Government has now been delegated by the Parliament
itself. Thus the status of State Government has changed from sub-delegated to
delegated. Next it is submitted, it is true that phraseology of Section 28(3) is differently
couched than what is in Section 28(1). This was done also in view of the observations
made by this Court in D.K. Trivedi's case (Supra). It is also submitted that placement of
such notification and rules u/s 28(3) before the State legislature cannot be said to be
only a show piece but is meaningful. He also submits since 1st April, 1975 the State of
Bihar has increased royalty only four times and even now it has not raised royalty since
28.9.1994, despite the lapse of six years. Thus raising of royalty only four times during
25 years despite power to revise every three years shows that the Government has been
more than reasonable in fixing the royalty.
17. In order to scrutinise the submissions of the learned Counsels for the parties, it
would be appropriate first to focus as to what this Court said in D.K. Trivedi's case
(Supra). The constitutionality of Section 15(1) of the said Act was raised with reference
to the delegation of power to the State Government delegating essential legislative
function, including charging and enhancing the rate of dead rent and royalty that it
being unbridled, including challenge to the charging of the same during the subsistence
of the existing leases, including the validity of Rule 21(b) of the Gujarat Minor Minerals
Rules, 1966 and few notifications issued by the State Government u/s 15 in respect of
the minor minerals. The relevant notifications were, one dated 29.11.1974 by which the
State Government made Gujarat Minor Minerals (Fourth Amendment) Rules, 1974
whereby Schedule I were substituted and Schedule II was amended w.e.f. 1.12.197*4. By
this the rate of royalty and dead rent in respect of some of the minor minerals were
specified. Through the notification dated 29th October, 1975 the State Government
brought in Gujarat Minor Minerals (Second Amendment) Rules, 1975, whereby Rule 21
of the said rules and Schedule I was substituted w.e.f. 1.11.1975, through which the rate
of royalty in respect of several items were enhanced. The next notification was dated 6th
April, 1976, by which the State Government made the Gujarat Minor Minerals (Second
Amendment) Rules, 1976 through which it substituted Schedule II in the said rules, by
which the dead rent was enhanced. The next notification was dated 26th March, 1979,
through which the State Government made the Gujarat Minor Minerals (Amendment)
Rules, 1979. Through this new Rule 21-B was inserted and Rule 22 was amended and
Schedules I and II were substituted. By the substituted Schedule I the rate of royalty on
all minor minerals was specified as 10 p. per metric tonne and by the substituted
Schedule II the rate of dead rent per hectare or part thereof in respect of quarry leases
was enhanced to Rs. 12007 in certain cases, Rs. 1500/- in some other cases, Rs. 2,000/-
in one case and Rs. 3,000/- in the remaining cases. The contention raised before this
Court was, that Section 15(1) of the Act is unconstitutional as it suffers from the vice of
excessive delegation of the essential legislative power to the executive as it is
unchannelised as there are no guidelines, which gives free hand to the State
Government to act arbitrary. This submission for the lessee was rejected when this
Court held:
We find that this contention is based upon a fallacy inasmuch as it is founded upon
reading the provisions of Section 15(1) in isolation and without reference to other
provisions of the 1957 Act and its legislative history.
This Court further held:
There is no substance in the contention that no guidelines are provided in the 1957 Act
for the exercise of the rule making power of the State Government u/s 15(1)...
A provision similar to Sub-section (2) of Section 13, however, does not find place in
Section 15. In our opinion, this makes no difference. What Sub-section (2) of Section 13
does is to give illustrations of the matters in respect of which the Central Government
can make rules for "regulating the grant of prospecting licences and mining leases in
respect of minerals and for purposes connected therewith". The opening clause of Sub-
section (2) of Section 13, namely, "In particular, and without prejudice to the generality
of the foregoing power", makes it clear that the topics set out in that Sub-section are
already included in the general power conferred by Sub-section (1) but are being listed
to particularize them and to focus attention on them. The particular matters in respect
of which the Central Government can make rules under Sub-section (2) of Section 13
are, therefore, also matters with respect to which under Sub-section (1) of Section 15 the
State Government can make rules for "regulating the grant of quarry leases, mining
leases or other mineral concessions in respect of minor minerals and for purposes
connected therewith". When Section 14 directs that "The provisions of Sections 4 to 13
(inclusive) shall not apply to quarry leases, mining leases or other mineral concessions
in respect of minor minerals", what is intended is that the matters contained in those
sections, so far as they concern minor minerals, will not be controlled by the Central
Government but by the concerned State Government by exercising its rule-making
power as a delegate of the Central Government. Sections 4 to 12 form a group of
Sections under the heading "General restrictions on undertaking prospecting and
mining operations". The exclusion of the application of these Sections to minor minerals
means that these restrictions will not apply to minor minerals but that it is left to the
State Governments to prescribe such restrictions as they think fit by rules made u/s
15(1). The reason for treating minor minerals differently from minerals other than
minor minerals is obvious. As seen from the definition of minor minerals given in
Clause (e) of Section 3, they are minerals which are mostly used in local areas and for
local purposes while minerals other than minor minerals are those which are necessary
for industrial development on a national scale and for the economy of the country. That
is why matters relating to minor minerals have been left by Parliament to the State
Governments while reserving matters relating to minerals other than minor minerals to
the Central Government.
18. This Court finally upheld the validity of Sub-section (1) of Section 15 by holding
that power conferred upon the State Governments does not amount to excessive
delegation of any essential legislative power. It further held, there are sufficient
guidelines for the exercise of rule-making power which are to be found in the object for
which such power is conferred, namely, for regulating the grant of quarry leases, mining
leases or mineral concessions in respect of minor minerals and for the purposes
connected therewith. It also held that power to make rules u/s 15(1) includes to amend
the rules so as to enhance the rates of royalty and dead rent. Further there is a check on
the State Government not to enhance the rate of royalty/dead rent more than once
during any period of four years in view of proviso to Section 15(3). It upheld notification
dated 29th November, 1974, but held notification dated 29th October, 1975 as void as it
offends the prohibition contained in the proviso to Section 15(3). It also similarly holds
notification dated 6th April, 1976 as void as the same enhances the rates of dead rent for
the second time during the same period of four years. It however holds notification
dated 26th March, 1979 to be valid.
19. Strong hammering has been done by the learned Counsels for the appellants with
reference to the observation made by this Court in D.K. Trivedi's case (supra), where
this Court records that the guidelines for the exercise of rule-making power u/s 15(1) are
to be found in the restrictions and other matters contained in Sections 4 to 12 of the Act.
Based on this, submission is that this restriction could only be, what is contained in Item
54 Schedule II read with Section 9 of the Act. The submission is, Item 54 refers to "all
other mines and minerals not hereinbefore specified" which would include minor
minerals as Section 3(a) defines "Minerals" very widely to mean all minerals except
mineral oils. Hence the restriction which is stated, is really the restriction not to
enhance the royalty beyond the rate specified in Item 54 which could only be upto 12%
of sale price at the pit's mouth.
20. In our considered opinion such a restrictive interpretation is not to be found in the
D.K. Trivedi's case (Supra). In that case, through the aforesaid 1979 notification, rate of
dead rent was enhanced by substituting the then existing Schedule II. The then existing
rate of dead rent in Schedule II was:
Schedule II
Rates of Dead Rent
{SeeRule22(1)(b)}
1. For specified minor minerals
For every 100 sq. metres or part thereof, up to 5 hectares ..Re. 0.35
For each additional hectare or part thereof,exceeding5hectares ,.Rs. 50.00
For other minor minerals
 For every 100 sq. metres or part thereof upto 5 hectares ..Re. 0,20
For each additional hectare or part thereof exceeding 5 hectares ..Rs. 35.00
21. This was substituted and the rate of dead rent per hectare was enhanced to Rs.
1200/-, 1500/-, 2,000/- and 3,000/- in various cases. Though the enhancement
through this notification of 1979 was enormous yet no submission was made, nor this
Court adverted or recorded that this enhancement has to be restricted to 12% of the sale
price at pit's mouth in terms of Item 54 of Schedule II. In fact, in spite of this large
enhancement, notification of 1979 was upheld. The question, whether any such increase
is arbitrary, excessive or violative of Article 14 is to be tested on a different pedestal. Any
excessive exercise or arbitrary exercise of power by a delegated could be controlled by
the courts and if there are any, the courts would not hesitate to strike it down. Mere
possibility of an abuse of power or arbitrary act, cannot invalidate any statute. To reach
this, one has to make foundation with specific plea with reference to the facts and
figures based on the circumstances of each case. In the present case, however, we are
testing the submissions of the appellants, whether the said decision restricts the exercise
of power by the State Government in enhancing the rate of royalty or dead rent to the
rate as specified in Item 54 of Schedule II of the Act. This submission is based on the
misconstruction of the statute and relying only on a part of the observation what is
recorded in para 34 of that decision. This Court further records in the same para 34 that
the guidelines with reference to Section 15(1) are to be found in the object for which
such power is conferred, the illustrative matters set out in Sub-section (2) of Section 13
and in the restriction and other matters contained in Section 4 to 12. Para 34 of the said
decision records:
The guidelines for the exercise of the rule-making power u/s 15(1) are, thus, to be
found in the object for which such power is conferred (namely, "for regulating the grant
of quarry leases, mining leases or other mineral concessions in respect of minor
minerals and for purposes connected therewith"), the meaning of the word "regulating",
the scope of the phrase "for purposes connected therewith", the illustrative matters set
out in Sub-section (2) of Section 13, and in the restrictions and other matters contained
in Sections 4 to 12.
22. It is relevant to refer here the preceding paragraph 33 with reference to Sections 4
to 12 where this Court records:
Sections 4 to 12 forms a group of Sections under the heading "General restrictions on
undertaking prospecting and mining operations". The exclusion of the application of
these Sections to minor minerals means that these restrictions will not apply to minor
minerals but that is left to the State Governments to prescribe such restrictions as they
think fit by rules made u/s 15(1).
23. Thus this Court not only did not tie down the State Government to such
restrictions, on the contrary left it open for it to prescribe such restrictions as it thinks
fit.
24. In other words, Sections 4 to 12, not being applicable to the minor minerals, the
figurative restrictions which are contained there could not be made applicable, but of
course they are available as a guideline to the State Government to take note of in other
respects, while framing its rules. So, they are available not as restrictive or limiting
guidelines but are available otherwise for its consideration and adoption, wherever it is
necessary. If submission for the appellants is accepted, it would militate against the
express mandate of Parliament as contained in Section 14 which excludes Sections 4 to
12 from its application to minor minerals.
25. The fallacy of this submission that the rate of royalty and dead rent, for the minor
minerals, is to be what is contained in Item 54 of Schedule II, is based on misconstruing
both the said judgment of this Court and the provisions of the Act. The submission is, as
Section 3(a) defines "minerals" which would include minor minerals, hence Item 54 as it
records: "all other minerals not hereinbefore specified" would include minor minerals. It
is an interpretation in abstract without taking into consideration of Section 14. Section
14 specifically excludes Sections 5 to 13 (earlier it was Sections 4 to 13) from its
application to minor minerals. Thus, Second Schedule which refers to the rate of royalty
in view of Section 9 could only refer to the minerals other than minor minerals. The
language as recorded in Item 54, as aforesaid would only mean other residual major
minerals not specified hereinbefore meaning that what is not specified in Item Nos. 1 to
53. This could never mean to include minor minerals. Thus the residuary mineral under
Item 54 could only be the left over major minerals. Neither the residuary nor the left
over major mineral could be equated with the minor minerals nor there is any material
on record to draw such inference. When this Court records : "guidelines for the exercise
of rule-making power u/s 15(1) is to be found in the restrictions and in the other matters
contained in Sections 4 to 12", the use of word "restriction" is in view of the same words
being used in the heading of this group of Sections 4 to 12. The heading states, "General
'restriction' on undertaking, prospecting and minor operations". In other words, the
restriction referred to in para 34 co-relates to this heading of general restrictions to be
taken note while framing the rules.
26. We may visualise this from another angle. This reference of general restrictions as
contained in Sections 4 to 12 for it being taken note would only mean to consider its
broad principle and pattern while framing its own rules. It cannot be doubted that
Sections 4 to 12 also gives guidance to the State Government while acting as delegated
u/s 15 while fixing rate of royalty. This guidance is to be found in Section 9 itself which
refers to the royalties. Sub-section (1) of Section 9 provides, holder of a mining lease
granted before the commencement of this Act to pay royalty in respect of any mineral
removed or consumed from the leased area at the rate for the time being specified in the
Second Schedule in respect of that mineral notwithstanding anything to the contrary
contained in the instrument of lease and similarly Sub-section (2) provides, after the
commencement of this Act the holder of a mining lease shall pay royalty at the rate
specified for the time being in the Second Schedule in respect of any particular mineral.
Each of the aforesaid consideration itself may be taken note by the State Government
while framing its own rules for the minor minerals. In other words, it may apply also the
rate of royalty for the minor minerals at the same rate as the then existing rate, when
this Act came into force. Schedule II with reference to Section 9, fixes rate of royalty for
various minerals not being minor minerals, is also a good source of guideline. There we
find various methods applied for fixing or charging the royalty on the various minerals.
It demonstrates charging of royalties per tonne, per unit per cent, per tonne of ore on
pro rata basis, per cent of sale price at the pit's mouth etc.. In the case of gold, it is per
one gram of gold per tonne of ore and on pro rata basis on the basis of per 100 kg. With
reference to Uranium it is for dry ore with U3 08 content of 0.05 per cent with pro rata
increase/decrease @ Re.1.00 per metric tonne of ore for 0.01 per cent.
27. This pattern of charging also reveals a good guiding force while fixing any royalty
by the State Government for the various minor minerals.
28. This apart, the guidelines even in the D.K. Trivedi's case (Supra) does not confine
itself to Sections 4 to 12 but further records, it to be found in the object for which such
power is conferred, namely, for regulating the grant of quarry leases, mining leases or
other mineral concessions in respect of minor minerals and for the purposes connected
therewith the meaning of the word 'regulating' the scope qf the phrase 'for purpose
connected therewith' and the illustrative matters as set out in Sub-section (2) of Section
13. We find that Section 13 gives power to the Central Government to make rules in
respect of minerals other than minor minerals, while Section 15 gives power to the State
Government to make rules in respect of minor minerals. The extent of exercise of power
in both these Sections are similar. The only difference is, Central Government exercises
power in respect of all other minerals other than minor minerals, while the State
Government exercises power for the minor minerals only. Section 13(2), particularizes
the power given to the Central Government to make rules in respect of matters
enumerated therein. Though they are already covered u/s 13(1) but is more focused in
Sub-section (2). There was no such similar Sub-section in Section 15 when D.K. Trivedi's
case (Supra) was decided, though later it was brought in through amendment by
incorporating Sub-section (1A) through Act No. 37 of 1986 w.e.f. 10th February, 1987.
This Court very clearly held in that case:
The ambit of the power u/s 13 and u/s 15 is, however, the same, the only difference
being that in one case it is the Central Government which exercises the power in respect
of minerals other than minor minerals while in the other case it is the State
Governments which do so in respect of minor minerals. Sub-section (2) of Section 13
which is illustrative of the general power conferred by Section 13(1) contains sufficient
guidelines for the State Governments to follow in framing the rules u/s 15(1).
So, this Court held that Sub-section (2) of Section 13, which is illustrative of the
general power conferred by Section 13(1) itself contains sufficient guidelines for the
State Government to frame its own rules u/s 15(1).
29. It seems the Parliament in order to bring on parity, made similar provision for the
minor minerals through insertion of Section 15(1-A) to equate it with Section 13(2). This
Sub-section (1-A) similarly as Section 13(2) is also illustrative of the general power
conferred on Section 15(1). Thus as Sub-section (2) of Section 13 was held to be the
guiding force to the State Government, is now applicable to this Sub-section (1-A)
through the infusion of various sub-clauses in Sub-section (1-A). The submission that it
is only a power, is equally applicable to Sub-section (2) of Section 13. Even this sub-
dividing the exercise of power through these various sub-clauses, both in Section 13(2)
and Sub-section (1-A) of Section 15 implicitly gives guideline to the delegated. In fact,
the Parliament itself through various amendments has been strengthening the
guidelines to the State Government. Not only sub-Section (1-A) of Section 15 but even
Section 4-A and Section 17-A were inserted through the same amending Act No. 37 of
1986. Similarly, Sub-section (3) was inserted in Section 28 by Act No. 25 of 1994 and
Section 23-C was inserted by Act No. 38 of 1999. Even Section 14 was amended by the
aforesaid Act No. 37 of 1986. Earlier Sections 4 to 13 were excluded for the minor
minerals but through this amendment, the exclusion shrunk to Sections 5 to 13. In other
words, both Sections 4 and 4-A were made applicable even to the minor minerals.
Further Section 4(1-A) which was inserted through Act No. 38 of 1999 covers transport
or storage of any mineral in accordance with the Act and Rules. In case the restrictive
interpretation, as submitted for the appellants, to limit the State's power within Entry
54 of Schedule II is accepted, it will lead to various incongruities. Section 6 fixes the
maximum area of lease to be twenty-five square kilometres under Sub-section (a) and
ten square kilometres under Sub-section (b). Section 7 fixes 3 years for prospecting
licence and Section 8 fixes maximum period of 30 years for mining lease. If the State
Government has to take literally what is contained there then even for the minor
minerals State Government has to issue leases for such large area for such a long period.
This would be impracticable, in view of difference in the nature of major and minor
minerals. Thus the fixation of period, area of leases and the rate of royalty for the major
minerals is not equitable with that of the minor minerals.
30. Half - hearted submission was also made by Mr. Sanyal, one of the learned senior
Counsels, that proviso to Section 9(3) limits the power of the Central Government to fix
the rate of royalty not exceeding 20% while there is no such limitation on the power of
the State Government. It is sufficient to record here that this limitation has been lifted
by amending Sub-section (3) of Section 9. Now there is no such limitation on the power
of the Central Government.
31. Now, we may proceed to examine another perceivable guideline to the State
Government. It is significant, both Entry 54 List I of the Seventh Schedule of the
Constitution and Entry 23 List II refer to the "Regulation of Mines and Minerals
Development". This Entry has been reiterated both in the Preamble and the Statement
of Objects and Reasons of this Act. This 'regulation of mines and minerals development'
clearly indicates the guidelines which the Parliament is projecting. Every word of a
language is impregnated with and is flexible to connote different meaning, when used in
different context. That is why it is said, words are not static but dynamic and courts
must adopt its dynamic meaning which uphold the validity of any provision. This
dynamism is the cause of saving many statutes of it being declared void, it dissolves the
onslaught of any rigid and literal interpretation, it gives full thrust and satisfaction to
achieve the objectivity which the legislature intended. Whenever there are two possible
interpretations, its true meaning and Legislature's intent has to be gathered, from the
'Preamble', Statement of Objects and Reasons and other provisions of the same statute.
In order to find true meaning of any word or what the Legislature intended, one has to
go to the principle enunciated in the Heydon's case 76 E.R. 637 : (1584) 3 Co. Rep. 7a
9.7, which laid down the following principle as early in the sixteenth century. (1) What
was the law before making of the Act; (2) What was the mischief or defect for which the
law did not provide; (3) What is the remedy that the Act has provided; and (4) What is
the reason of the remedy. The Court must adopt that construction which suppresses the
mischief and advances the remedy. This Court has followed this principle in The Bengal
Immunity Company Limited Vs. The State of Bihar and Others, ; Commissioner of
Income Tax, Patiala and Others Vs. Shahzada Nand and Sons and Others, ; Sanghvi
Jeevraj Ghewar Chand and Others Vs. Secretary, Madras Chillies, Grains and Kirana
Merchants Workers Union and Another, ; Union of India (UOI) Vs. Sankalchand
Himatlal Sheth and Another, and K.P. Varghese Vs. Income Tax Officer, Ernakulam
and Another, .
32. Returning to the present case we find the words "Regulation of Mines and Mineral
Development" are incorporated both in the Preamble and Statement of Objects and
Reasons of this Act. Before that we find Preamble of our Constitution in unequivocal
words expresses to secure for our citizens social, economical and political justice. It is in
this background and in the context of the provisions of the Act, we have to give meaning
of the word 'regulation'. The word "regulation" may have different meaning in different
context but considering it in relation to the economic and social activities including the
development and excavation of mines, ecological and environmental factors including
States' contribution in developing, manning and controlling such activities, including
parting with its wealth, viz., the minerals, the fixation of the rate of royalties would also
be included within its meaning. This Court in State of Tamil Nadu Vs. Hind Stone and
Others, held:
Word 'regulation' has not got that rigidity of meaning as never to take in 'prohibition'.
In modem statutes concerned as they are with economic and social activities,
'regulation' must of necessity, receive so wide an interpretation that in certain
situations, it must exclude competition to the public sector from the private sector. More
so in a welfare State. Must depend on the context in which the expression is used in the
statute and the object sought to be achieved by the contemplated legislation. Each case
must be judged on its own facts and in its own setting of time and circumstances and it
may be that in regard to some economic activities and at some stage of social
development, prohibition with a view to State monopoly is the only practical and
reasonable manner of regulation. The Mines and Minerals (Development and
Regulation) Act aims at the conservation and the prudent and discriminating
exploitation of minerals and prohibiting of leases in certain cases is part of the
regulation contemplated by Section 15 of the Act.
So in regulating mineral development, the royalty/dead rent is the inherent part of it.
State has thus before it number of factors, as aforesaid, which would guide it to fix,
enhance or modify the rate of royalty/dead rent payable by a lessee. The conservation
and regulation of mines and mineral development include wide activity of the State
including parting with its wealth, are all relevant factors to be taken into consideration
as a guiding force for fixing such royalty/dead rent. For interpretation of a Statute with
reference to 'Preamble' we may usefully refer the case of Bhatnagars and Co. Ltd. Vs.
The Union of India (UOI), where Constitution Bench held:
...In other words, in considering the question as to whether guidance was afforded to
the delegate in bringing into operation the material provisions of the Act by laying down
principles in that behalf, the Court considered the statement of the principles contained
in the Preamble to the Act as well as in the material provisions of Section 3 itself. This
decision shows that if we can find a reasonably clear statement of policy underlying the
provisions of the Act either in the provisions of the Act or in the Preamble, then any part
of the Act cannot be attacked on the ground of delegated legislation by suggesting that
questions of policy have been left to the delegate....
 With reference to the 'Regulation of Mines and Mineral Development', with reference
to the minor minerals, the policy of the Act is communicating loudly from its roof top,
that let it be done by the delegated's State who is fully aware of the local conditions as
such minerals are also used for the local purposes and on whom this largesse falls. What
delegated should do and what it should not do is also enshrined in the Act. Section 18 is
also not excluded from its application to the minor mineral development. Under it, duty
is cast on the Central Government to take all necessary steps for the conservation and
Systematic development of minerals in India. Its Sub-section (2) focuses the periphery
within which it has to do and what not to do. This itself is a guidance which 'State' may
take note of while framing its own rules. Similarly Section 23-C gives detail guidance
what State should provide to check illegal mining, storage and transportation.
33. We have said Sections 4A, 17, 18 and 23-C also provide for the guidelines. Sub-
section (2) of Section 4A empowers the State Government to prematurely terminate any
prospecting licence or mining lease if it is expedient in the interest of regulation of
mines and mineral development, preservation of natural environment, control of floods,
prevention of pollution or for avoiding danger to public health or communications or to
ensure safety of buildings, monuments, structures or for other purposes. Under Sub-
section (2) of Section 17, the Central Government undertakes reconnaissance,
prospecting or mining operations in any area not already covered by any licence or
lease, after consultation with the State Government but Sub-section (3) obligates it to
pay the permit fee, prospecting fee, royalty, surface rent or dead rent, at the same rate at
which it would have been payable by any other person under this Act. This also is a
check on the State Government, while fixing the rate of the royalty. Similarly, Section 18
which refers to the mineral development as aforesaid casts an obligation on the Central
Government to take all such steps for the conservation and systematic development of
minerals in India and for the protection of environment by preventing or controlling any
pollution for which it may make rules and Sub-section (2), in particular, specifies large
list on which such rules may be framed, which has been framed (the Mineral
Conservation and Development Rules), 1988, which would be binding on the
Government including the State Government. In conserving or regulating the
development of any mineral resources, the price factor is inherent. Any development
requires, planning, execution, management and with reference to the excavation of
mines, controlling the extent and manner of mining, to check its wastage, protecting
environment and controlling pollution etc. which are provided in this Act. This all
require expenditure to be incurred by the State coupled with considerations for parting
with the wealth of the State, as minerals belong to the State except on private land. They
are all guiding factors in fixing, modifying or enhancing the rate of royalty. Thus
development of mineral resources inherently refers to the price factor to be recovered by
the owner.
34. One of the submissions for the appellants is, since royalty is a tax, delegation for
its enhancement cannot be left unbridled on the delegated and if two interpretations are
possible, the one which favours an assessee should be accepted. It is true that this Court
has held royalties on the minerals to be a tax in India Cement Ltd. and Others Vs. State
Of Tamil Nadu and Others, ; M/s. Orissa Cement Ltd. and Others Vs. State of Orissa
and others, ; State of M.P. Vs. Mahalaxmi Fabric Mills Limited and others, and P.
Kannadasan etc, etc. Vs. State of Tamil Nadu and others [OVERRULED], .
 35. In considering this submission we have to keep in mind, tax on this royalty, is
distinct from other forms of taxes. This is not like a tax on income, wealth, sale or
production of goods (excise) etc. This royalty includes the price for the consideration of
parting with the right and privilege of the owner, namely, the State Government who
own the mineral. In other words, the royalty/dead rent, which a lessee or licensee pays,
includes the price, the minerals which is the property of the State. Both royalty and dead
rent are integral parts of a lease. Thus, it does not constitute usual tax as commonly
understood but includes return for the consideration for parting with its property. In
view of this special nature of the subject under consideration, namely, the minerals, it
would be too harsh to insist for a strict interpretation with reference to minerals while
considering the guidelines to a delegated who is also the owner of its mineral. In the
present case, we are not considering any liability of tax on the assessee but whether
delegation to the State by the Parliament with reference to minor minerals is unbridled.
36. One of the guidelines in the case of Mahalaxmi Fabric Mills Ltd. and Ors. (Supra)
was that the Parliament had itself laid down with reference to major minerals, the rates
of royalty in the Second Schedule of the Act and authorised the Central Government to
revise the rates from time to time. So far minor minerals, also, we find Sub-section (2) of
Section 15 approves the rules made by the State Government, regulating the grant of
quarry leases, mining leases or other mineral concessions in respect of mines and
minerals prior to the enforcement of this Act and similarly Sub-section (3) approves the
rate of royalty/dead rent prescribed for its payment in respect of minor minerals for the
time being in force, i.e., what existed prior to the coming in force of this Act. Thus, even
approval of the then existing rates of royalty or dead rent is by the Parliament itself
which similarly is also a guiding factor to the State Government for any subsequent
modification of the rates. The proviso to Sub-section (3) brings an additional check on
the enhancement of rate of royalty/dead rent that it cannot be enhanced more than once
during any period of three years. Prior to the Act No. 37 of 1996 this period was of four
years.
37. We have to keep in mind, in the present case, delegation of power is on the State
Government which is the highest executive in the State, which is responsible to the State
Legislature. In a Parliamentary democracy every act of the State Government is
accountable to its people through State Legislature which itself is an additional factor
which keeps the State Government under check not to act arbitrarily or unreasonably.
When a policy is clearly laid down in a statute with reference to the minor minerals with
main object under the Act being for its conservation and development, coupled with
various other provisions to the Act guiding it, checking it and controlling it then how
such delegation could be said to be unbridled. With reference to Municipal Corporation
of Delhi Vs. Birla Cotton, Spinning and Weaving Mills, Delhi and Another, , the
question of delegation of power to the Municipal Corporation and the State Gov-
ernment was considered in which Avinder Singh and Others Vs. State of Punjab and
Others, was referred and relied as under:
In the Municipal Corporation of Delhi case, the proposition that where the power
conferred on the corporation was not unguided, although widely worded, it could not be
said to amount to excessive delegation, was upheld. Delegation coupled with a policy
direction is good. Counsel emphasised that the court had made a significant distinction
between the local body with limited functions like a municipality and Government:
The needs of the State are unlimited and the purposes for which the State exists are
also unlimited. The result of making delegation of a tax like sales tax to the State
Government means a power to fix the tax without any limit even if the needs and
purposes of the State are to be taken into account. On the other hand, in the case of
municipality, however, large may be the amount required by it for its purposes it cannot
be unlimited, of the amount that a municipality can spend, is limited by the purposes for
which it is created. A municipality cannot spend anything for any purposes other than
those specified in the Act which creates it. Therefore in the case of a municipal body,
however large may be its needs, there is a limit to those needs in view of the provisions
of the Act creating it. In such circumstances there is a clear distinction between
delegating a power to fix rates of tax, like the sales tax, to the State Government and
delegating a power to fix certain local taxes for local needs to a municipal body.
It is too late in the day to contend that the jurisprudence of delegation of legislative
power does not sanction parting with the power to fix the rate of taxation, given
indication of the legislative policy with sufficient clarity. In the case of a body like a
municipality with functions which are unlimited and the requisite resources also
limited, the guideline contained in the expression "for the purposes of the Act" is
sufficient, although in the case of the State or Central Government a mere indication
that taxation may be raised for the purposes of the State may be giving a carte blanche
containing no indicium of policy or purposeful limitation.
{Emphasis supplied}
38. With reference to the question what is the "policy of the legislature" this very
decision holds:
We are clearly of the view that there is fixation of the policy of the legislation in the
matter of taxation, as a close study of Section 90 reveals; and exceeding that policy will
invalidate the action of the delegate. What is that policy? The levy of the taxes shall be
only for the purposes of the Act. Diversion for other purposes is illegal. Exactions
beyond the requirements for the fulfilment of the purposes of the Act are also invalid.
Like in Section 90(1), Section 90(2) also contains the words of limitation 'for the
purposes of this Act' and that limiting factor governs Sub-sections (3), (4) and (5).... The
expression "purposes of this Act" is pregnant with meaning. It sets a ceiling on the total
quantum that may be collected. It canalises the objects for which the fiscal levies may be
spent. It brings into focus the functions, obligatory or optional, of the municipal bodies
and the raising of resources necessary for discharging those functions nothing more,
nothing else.
39. This case clearly lays down that fixation of the policy under an Act, in the matter of
taxation is itself a guidance to a delegated, which is also to be found in the present case,
when its Preamble, State of Objects and Reasons and various other provisions clearly
lays down policy when it refers the same to be for the development and regulation of
mines and minerals. The fixation of rate thus has to co-relate with the purpose of the Act
and not beyond it.
 40. With reference to another submission that only purposeful guidance with control
over the State Government would be to fix maximum limit of rate of royalty, which is
not there in the present case. Similar question was also submitted and this Court in the
case of Corporation of Calcutta and Another Vs. Liberty Cinema, held:
No doubt when the power to fix rates of taxes is left to another body, the legislature
must provide guidance for such fixation. The question then is, was such guidance
provided in the Act? We first wish to observe that the validity of the guidance cannot be
tested by a rigid uniform rule; that must depend on the object of the Act giving power to
fix the rate. It is said that the delegation of power to fix the rates of taxes authorised for
meeting the needs of the delegate to be valid, must provide the maximum rate that can
be fixed, or lay down rules indicating that maximum. We are unable to see how the
specification of the maximum rate supplies any guidance as to how the amount of the
tax which no doubt has to be below the maximum, is to be fixed. Provision for such
maximum only sets out a limit of the rate to be imposed and a limit is only a limit and
not a guidance.
It seems to us that there are various decisions of this Court which support the
proposition that for a statutory provision for raising revenue for the purposes of the
delegate, as the Section now under consideration is, the needs of the taxing body for
carrying out its functions under the statute for which alone the taxing power was
conferred on it, may afford sufficient guidance to make the power to fix the rate of tax
valid.
41. Before we take up the history of the delegation of the power of the State
Government as delegated, it is necessary to refer to two decisions of this Court in
Bhatnagars and Co. Ltd. Vs. The Union of India (UOI), . These cases also considered
the history of the earlier provisions of the Act in testing the challenge of vires of a
provision. It held:
...Thus, if the Preamble and the relevant Section of the earlier Act are read in the light
of the preamble of the present Act, it would be difficult to distinguish this Act from the
Essential Supplies Act with which this Court was concerned in Harishankar Bagla and
Another Vs. The State of Madhya Pradesh, . Incidentally we may also observe that in
Pannalal Binjraj Vs. Union of india (UOI), , (B), where the vires of Section 5(7-A) of the
Income tax Act were put in issue before this Court, the challenge was repelled and
during the course of the judgment delivered on December 21, 1956, the previous history
of the earlier Income tax Acts was taken into account to decide what policy could be said
to underlie the provisions of the impugned Section.
42. This Court in Municipal Corporation of Delhi (Supra) also referred to the history
of enactment while examining and testing vires of the Act. It records:
According to our history also there is a wide area of delegation in the matter of
imposition of taxes to local bodies subject to controls and safeguards of various kinds
which partake of the nature of guidance in the matter of fixing rates for local taxation. It
is in this historical background that we have to examine the provisions of the Act
impugned before us.
 43. We may further examine this question from another angle. In order to adjudicate,
whether any delegation of power is unbridled or excessive, the historical background of
similar provisions which preceded the impugned provision which should be kept in
mind, as it is also a relevant consideration. In fact, D.K. Trivedi's case (supra) itself has
taken the note of its historical background. It is significant that Entry 54 List I of the
Seventh Schedule of the Constitution of India, reproduces Entry 36 in the Federal
Legislative List in the Government of India Act, 1935, except by omitting the words "and
oil fields". Under this Entry 36 the Mines and Minerals (Regulation and Development)
Act, 1948 was enacted as we have now the present 1957 Act under Entry 54 List I. This
Act conferred very wide rule making power upon the Central Government, for regulating
and granting of mining leases. The Constitution maker also knew that Central
Government in exercise of this rule making power, made the Minerals Concession Rules,
1949 and by Rule 4 the extraction of minor minerals was left to be regulated by the rules
made by the Provincial Governments. When the present 1957 Act came into force, the
Parliament was aware that different State Governments in pursuance of this Rule 4 were
regulating the grant of leases in respect of minor minerals including fixation of rate of
royalties. This Parliament approved in the present Act through Sub-sections (2) and (3)
of Section 15, then existing Rules which were in force immediately before the
commencement of this Act which included the rate of royalty/dead rent for it to be
continued in force, unless superseded by the Rules made under Sub-section (1). Thus,
the Parliament was fully aware that even in the past it was the State Governments which
were entrusted and were dealing with minor minerals as a delegated. The only
difference being, earlier the State Governments were acting as sub-delegated of the
Central Government but now they act as delegated of the Parliament. This was the
pattern adopted and approved since inception. This seems to be also because minor
minerals being more useful for the local uses and the State Government being the
highest executive in the State knowing fully well of its uses, management including
fixation of its prices. Thus, in this historical background there is nothing wrong to
delegate to the State Government power to fix rate of royalty/dead rent for the minor
minerals.
44. In D.K. Trivedi's case (supra) this Court records:
...To take into account legislative history and practice when considering the validity of
a statutory provision or while interpreting a legislative entry is a well established
principle of construction of statutes : see, for instance, State of Bombay Vs.
Narothamdas Jethabai and Another, and The State of Madras Vs. Gannon Dunkerley
and Co., (Madras) Ltd., .
45. This takes us to the next submission, whether the introduction of Sub-section (3)
of Section 28 by the Parliament in any way strengthen the guideline and put a check on
the exercise of power by the State Government. Sub-section (1) of Section 28 refers to
the placement of every rule and every notification made by the Central Government
before each House of Parliament for a period of 30 days when the same becomes
effective, subject to its modification, if any. Sub-section (3) of Section 28 directs
placement of every rule or notification made by the State Government before each
House of State Legislature. The submission is, there is no provision in Sub-section (3) as
in Sub-section (1), of such rule being subject to scrutiny for its approval or modification
by the State Legislature. The submission is, Sub-section (3) in no way places any check
on the State Government, as State Legislature is not entrusted with power to approve or
modify. In other words, introduction of Sub-section (3) is merely for the sake of
information and nothing more. Further it is submitted, when language of two different
Sub-sections in the same Section are different it has to be differently interpreted, which
cannot be construed to connote same meaning and same effect. It is also submitted,
even if Sub-section (3) was brought on the Statute Book, it was not sufficient for the
State, as it has to show that in fact both the impugned notifications were so laid before
both the Houses of the Legislature. The submission is, actually they were not so laid.
Further reliance is placed in the case of Atlas Cycle Industries Ltd. and Others Vs. The
State of Haryana, (para 30) where this Court held that a mere laying procedure is
directory not mandatory. On the other hand, submission on behalf of the State is that
this laying procedure before the Legislature cannot be a mere show, but it is for a
purpose, the effect of which it has to be given. In our considered opinion, the
incorporation of this by the Parliament cannot be said to be in futility. In fact, this was
brought in, in view of the observation made by this Court in the case of D.K. Trivedi's
(supra).
46. It is true that the language of both Sub-sections (1) and Sub-sections (3) of Section
28 are different. They are reproduced below:
28. Rules and notifications to be laid before Parliament and certain rules to be
approved by Parliament. - (1) Every rule and every notification made by the Central
Government under this Act shall be laid, as soon as may be after it is made before each
House of Parliament while it is in session for a total period of thirty days which may be
comprised in one session or in two or more successive sessions and if, before the expiry
of the session immediately following the session or the successive sessions aforesaid,
both Houses agree in making any modification in the rule or notification or both Houses
agree that the rule or notification should not be made, the rule or notification shall
thereafter have effect only in such modified form or be of no effect, as the case may be;
so, however, that any such modification or annulment shall be without prejudice to the
validity of anything previously done under the rule or notification.
XXX XXX

(3) Every rule and every notification made by the State Government under this Act
shall be laid, as soon as may be after it is made, before each House of the State
Legislature where it consists of two Houses, or where such Legislature consists of one
House, before that House.
There is no difficulty for us to uphold their submissions that in view of difference in
the language of Sub-section (3), the same meaning to it as that of sub-Section (1) cannot
be given. This difference has been carved out for a purpose to give different projection to
the said two provisions. In the case of major mineral which plays important role in the
National growth and wealth and where the delegated is the Central Government,
Parliament retained its full control but for the minor mineral, Parliament felt for the
minor minerals as the subject is of local use and State Government being well versed to
deal with it in the historical background, mere placement of rules, notifications framed
by it before the State Legislature would be a sufficient check on the exercise of its
powers. Thus, this difference of language gives two different thrust as intended by the
Parliament. Any act of the Parliament, far less when it introduces any new provision
through amendment, it could be said for it to be in futility. The purpose has to be found.
What could be the purpose for such an amendment? One of the reasons is that this was
brought in, in view of the observation made by this Court in D.K. Trivedi's (supra). This
Court records:
...It was, therefore, for Parliament to decide whether rules and notifications made by
the State Governments u/s 15(1) should be laid before Parliament or the legislature of
the State or not. It, however, thought it fit to do so with respect to minerals other than
minor minerals since these minerals are of vital importance to the country's industry
and economy, but did not think it fit to do so in the case of minor minerals because it
did not consider them to be of equal importance....
The Parliament through its wisdom, apart from above brought this amendment also to
keep a check on the exercise of power by the State Government as delegated. The
question is whether mere laying of rules and notification before the Legislature, as in the
present case, can be construed as a check on the State Government power. Laying before
House of Parliament are made in the three different ways. Laying of any rule may be
subject to any negative resolution within specified period or may be subject to it
confirmation. This is spoken as negative and positive resolution respectively. Third may
be mere laying before the House. In the present case, we are not concerned with either
affirmative or negative procedure but consequence of mere laying before the Legislature.
47. Administrative Law by HWR Wade & Forsyth, 7th Edition, page 898 records with
reference to mere laying:
Laying before Parliament
An Act of Parliament will normally require that rules or regulations made under the
Act shall be laid before both Houses of Parliament. Parliament can then keep its eye
upon them and provide opportunities for criticism. Rules or regulations laid before
Parliament may be attacked on any ground. The object of the system is to keep them
under general political control, so that criticism in Parliament is frequently on grounds
of policy. The legislation concerning 'laying' has already been explained.
Laying before Parliament is done in a number of different ways. The regulations may
merely have to be laid; or they may be subject to negative resolution within forty days;
or they may expire unless confirmed by affirmative resolution.
48. Constitutional and Administrative Law, Stanley De Smith and Rodney Brazier, 7th
Edn., records:
...If the instrument has merely to be laid, or laid in draft, before Parliament, it will be
delivered to the Votes and Proceedings Office of the House of Commons. No opportunity
is provided by parliamentary procedure for the instrument to be discussed, but its
existence will at least be brought to the notice of members and the Minister is more
likely to be questioned about it than if it is not laid before Parliament at all.
49. In a democratic set up, every State Government is responsible to its State
Legislature. When any statute requires mere laying of any notification or Rule before the
Legislature its execution, viz., State Government comes under the scrutiny of the
concerned Legislature. Every function and every exercise of power, by the State
Government is under one or other Ministry who in turn is accountable to the legislature
concerned. Where any document, rule or notification requires placement before any
House or when placed, the said House inherently gets the jurisdiction over the same.
Each member of the House, subject to its procedure gets right to discuss the same, they
may put questions to the concerned Ministry. Irrespective of the fact that such rules or
notifications may not be under purview of its modification, such members may seek
explanation from such Ministry of their inaction, arbitrariness, transgressing limits of
their statutory orbit on any such other matter. Short of modification power, it has a right
even to condemn the Ministry. No doubt in the case where House is entrusted with
power to annul, modify or approve any rule, it plays positive role and has full control
over it, but even where the matter is merely placed before any House, its positive control
over the executive, makes even mere laying to play a very vital and forceful role which
keeps a check over the concerned State Government. Even if submission-for the
appellants is accepted that mere placement before a House is only for the information,
even then such information, inherently in it makes Legislature to play an important role
as aforesaid for keeping a check on the activity of the State Government. Such placement
cannot be construed to be non est. No act of Parliament should be construed to be of
having no purpose. As we have said mere discussion and questioning the concerned
ministry or authority in the House in respect of such laying would keep such authority
on guard to act with circumspection which is a check on such authority, specially when
such authority is even otherwise answerable to such Legislature. Further examining the
scheme of the Act, with its historical background, we find there is clear demarcation in
dealing between the major minerals and the minor minerals. For minor minerals all its
activity before this Act has been delegated to the State Government as it having all
conceivable knowledge over it, as it being of local use and not being of much national
importance. For this difference also stricter control is made for the major minerals
through Section 28(1) than for the minor minerals. Thus, this mere check on the State
Government, as aforesaid, may have been found to be sufficient by the Parliament, with
reference to the minor minerals. Thus, the language of both Sub-section (1) and Sub-
section (3) though different, this is only for two different purposes. Thus when
Parliament introduced Sub-section (3) through amendment, it was to further strengthen
the control over the State Government power. Any other submission, the one made by
the appellants, makes such an Act of the Parliament meaningless, which cannot be
attributed to the Parliament.
50. This takes us to the next submission. It is submitted that the State Government, in
spite of the mandate under Sub-section (3) of Section 28, to place the rules and the
notifications framed by it before each House of Legislature, the impugned notifications
have not been placed. Appellants' case is, they were not placed, while for the respondent
State submission is, they were placed. Subsequent to the conclusion of the hearing,
learned Counsel for the State sought leave of this Court, which was granted, to place
affidavit with annexures to substantiate to its submission. An additional affidavit by Mr.
Anand Vardhan, District Mining Officer dated 1st May, 2000 was filed on behalf of the
respondent State of Bihar. A reply affidavit dated 4th June, 2000 was filed by one Mr.
Subhash Kumar, Secretary of the appellant's association.
 51. It may be pointed here, out of the two impugned notifications only one notification
dated 28.9.1994 was required to be placed before the House of the State Legislature
since Sub-section (3) of Section 28 was only brought in the year 1994. As per the State
affidavit, on the date the arguments concluded in this case, a fax message was received
by the Standing Counsel that the notification dated 28.9.1994 had been placed before
two houses in the May-June 1994 and 1995 session through Administrative Report of
the Department of Mines and Geology. The affidavit further states, every year
Department of Mines and Geology prepares Administrative Report, which includes the
revenue earned from mining and there is a section in the office which reports the
prevailing rates of royalty and the notifications under which it is fixed. This report is
sent every year to both the houses of the State Legislature through their respective
Sections. In 1994-95 Administrative Report, the impugned notification dated 28.9.1994
is mentioned in para 4.40 of Chapter IV at page 6 and notification as a whole is included
as Annexure 6 at page 29. Similarly, the Administrative Report for 1995-96 mentions
the fixation of royalty as fixed by notification dated 28.9.1994, is mentioned in para 4.4
of Chapter (IV?) at page 7. Similarly, Administrative Report for 1996-97 also mentions
fixation of royalty on mines minerals through notification dated 28.9.1994. Each year
these reports were supplied to the Secretary, Bihar Vidhan Sabha with sufficient number
of copies to enable its circulation to the members of the two Houses. About 400 copies
were sent to Vidhan Sabha and 100 copies to Vidhan Parishad. Based on the aforesaid
averment in the concluding para of the affidavit it is averred:
...it is clear that the notification dated 28.9.1994 fixing royalty had been laid before
the two houses of the State legislature as required by Section 28(3) of the Mines and
Minerals (Regulation and Development) Act, 1957.
52. In the reply affidavit for the appellants one Mr. Subhash Kumar, a letter dated
4.6.2000 which is in response to a query is annexed, which is of under Secretary, State
Minister Homes, annexing letter No. 4/99-4-7 dated 27th May, 2000 of the Dy.
Secretary, Bihar Legislative Assembly, which records:
...as per direction (I) have to inform that Bihar Legislative Assembly has no knowledge
of Bihar Minor Mineral Concession Rules, 1972 and amendment made therein of any
regulation made in this connection:.
53. The perusal of the two affidavit makes it clear that truly as required by Sub-section
(3) of Section 28 the impugned notification dated 28.9.1994 was not placed. It seems
various departments of the Government sends its administrative report every year with
respect to its functioning and revenue earned. It is in this context Department of Mines
and Geology prepared and sent its administrative report for 1994-95, 1995-96 and 1996-
97 and the notification dated 28.9.1994 is referred in these reports. Further 400 copies
for the Vidhan Sabha and 100 copies for Vidhan Parishand were sent for circulation.
Thereafter there are no other documents showing it was actually placed before the
House. Even if these reports were sent and placed before the House they were
administrative reports though they did contain the said notification dated 28.9.1994. In
fact, the letter dated 27th May, 2000 from Shri Jagdish Prasad Yadav, Dy. Secretary
Bihar Legislative Assembly, reveals that the House has no knowledge of the Bihar
Mineral Concessions Rule 1972 and amendment made thereunder or any regulation
made in this connection.
 54. So, it is not possible to hold, based on affidavits of the parties that the impugned
notification dated 28.9.1994 was actually placed in terms of Section 28(3). It being part
of some administrative report cannot constitute to be a fact to hold its placement in
terms of said Sub-section (3). Though the affidavit on behalf of State reveals that under
rules of procedure and conduct of business of the Bihar Vidhan Sabha, there is a
delegated legislation committee, which examines, all the rules which are required to be
laid before the House, which also inspects and examines the working of such personnels
involved under it.
55. M/s. Atlas Cycle Industries Ltd. and Ors. (Supra). In this case also one of the
contentions was that the notifications were not placed before the Parliament as required
by Sub-section (6) of Section 3 of the Essential Commodities Act 1955 - The Sub-section
(6) of Section 3 of this Act requires that every order made under this Section by the
Central Government or by any officer or authority of the Central Government shall be
laid before both houses of Parliament, as soon as may be, after it is made. This is similar
to the provision which we are considering under Sub-section (3) of Section 28. The
Court held such provision to be discovery and hence for this default of not placing the
Iron and Steel Control Order 1956 and notification under Clause 15(3) before the
Parliament the order shall not become invalid.
56. However, since we have upheld that impugned notifications issued by the State to
be within the ambit of delegation and that delegation is not excessive as there are
enough guidelines and control over the State Government notwithstanding its check on
the State under Sub-section (3) of Section 28, it would not have any effect on its validity.
But we make it clear when a statute as under Sub-section (3) of Section 28 requires its
placement, it is the obligation of the State Government to place such with this specific
note before each House of Parliament. Even if it has not been done, the State shall now
do place it before each House of the State legislature at the earliest the notification dated
28.9.1994 and will also do so in future while framing rules or issuing any notifications
under the rules framed under Sub-section (1) of Section 15 of the Act.
57. Another submission for the appellants is that the delegator or the Parliament must
retain its control over the delegated and such delegated cannot be entrusted to another
Legislature, namely, State Legislature as in the present case. To repel this submission
learned Counsel for the State, referred to the Delegated Legislation Provisions
(Amendment) Act, 1983. This Act amended various Parliament Acts to implement the
recommendations of the Committees on Subordinate Legislation regarding laying of
certain rules framed by the delegated before the State Legislatures. The Schedule of this
Act, refers to the large number of such amendments made by the Parliament. Few of
them are being referred hereunder, namely, The Religious Endowments Act, 1863,
amendment Section 8 which requires "Every rule framed under this Section shall be
laid, as soon as it is framed, before the State Legislature." By amending Section 20 of the
Press and Registration of Books Act, 1867 it directs, "Every rule made by the State
Government under this Section shall be laid, as soon as may be after it is made, before
the State Legislature." Similarly Section 83 of the Indian Christian Marriage Act, 1872,
requires that "Every rule made by the State Government under this Section shall be laid,
as soon as may be after it is made, before the State Legislature." The Registration Act,
1908 amended Section 91(1) through which the following was brought in "Every rule
prescribed under this Section or made u/s 69 shall be laid, as soon as it is made, before
the State Legislature."
58. We are not further enumerating such a large number of cases recorded in the
Schedule itself. Each one of them were the act of Parliament in which with reference to a
delegated, provisions are made for placing its rules framed by it, before the State
Legislature. Thus, placement of any notification or rules framed by the State
Government under Sub-section (3) of Section 28 cannot be said to be something out of
any novel procedure but is a well recognised principle. The submission was how can a
delegated under one Legislature, viz., the Parliament be placed under the control of
another Legislature. This submission has no merit. In a Federal structure of any
Constitution, their fields are well defined, sometimes same subject may be under control
of both Legislatures as in the concurrent list of our Constitution. Thus in a given case, as
in the above, large number of such cases which were a delegated of the Parliament were
put under the control of the State Legislature. This submission is sought to be
challenged by learned senior Counsel Mr. Nariman that the cases in the Schedule under
the 1983 Act are all cases falling under the Concurrent List of the Seventh Schedule of
our Constitution. This was because both the Parliament and the State Legislature had
the plenary power to make laws over the same subject. This in our considered opinion
would make no difference. It is significant to record, though the subject we are dealing
with, viz., 'Regulation of mines and mineral development' does not fall in the
Concurrent List, but still both falls in the field of the Parliament under Entry 54 List I
and the State Legislature under Entry 23 List II, their possible conflict is resolved by the
following words in Entry 23 List II, "subject to the provisions of List I with respect to
regulation and development under the control of the Union". This control may be full, or
partial. In the present case when this 1957 Act was passed, Union came in full control
over this subject and no field was left for the State to make the law. But this covering of
the entire field was by the 1957 Act itself not by any other constitutional limitation. Then
the Act which takes the entire field can also withdraw from it both partially or fully. In
the present case since the Parliament has exercised its discretion under Item 54 List I,
the State Legislature is denuded of its power under Entry 23 List II. It may be said so
long that Act remains in force it eclipses the power of the State Legislature. In the
present case as held in Baijnath Kadio case (supra) after passing of the aforesaid 1957
Act the power of State Legislature has been completely denuded by the Parliament. If
that be so, it is always open for the Parliament to withdraw partially the eclipse if so
desires, may leave the Legislature for such part to exercise its power which it originally
has by virtue of Item 23 of List II. It is in this light when we examine the amendment by
introducing Sub-section (3) of Section 28, with provision to lay the rule or notification
made by the State Government before the State Legislature it cannot be said it can only
be when it is in the concurrent list. Thus such placement cannot be said to be
incompetent or keeping if it beyond the control of the Parliament. As we have said this
placement before the State Legislature is for a limited purpose for which the Parliament
is competent. Thus introduction of Sub-section (3) in Section 28, in this light cannot be
said to be of no consequence. It was done for a purpose, as aforesaid, and that purpose is
sufficient to hold the State Government under check while exercising its power as a
delegated.
 59. We also find there are few provisions in our Constitution which require mere
laying before the Parliament. Article 151 requires laying of the report of the Comptroller
and Auditor-General of India before each House of Parliament and with reference to the
State, to be laid before the Legislature of the State. Article 338(5) requires placing of the
report of the Commission before each House of Parliament and with reference to the
State Government, under Sub-article (7) is to be laid before the Legislature of the State.
Though they are mere provisions of mere laying before the Parliament, but it is always
open to any Member of the House to discuss and comment on the said report.
60. Next coming to the quantum of imposition, on the facts of this case, the
imposition of royalty/dead rent could be said to be arbitrary or excessive by the State
Government. We do not find any material placed by the appellants in the writ petition to
come to such a conclusion. Though by proviso to Sub-section (3) of Section 15 it is open
for the State Government to revise the royalty every three years but the history shows it
has not done so. Since 1975 the State Government has increased royalty only four times
and there is no increase since 28th September 1994 despite lapse of six years, in other
words, raising royalty only four times during 25 years. Even in the case of D.K. Trivedi
(supra) as we have recorded above a large percentage of increase in royalty has been
made yet it was not struck down on that account.
61. Before concluding we would like to record our appreciation in the manner in which
learned Counsels for the parties made their valuable submissions which made our task
easy. Though at times their ingenuity made us think and rethink but the precision
through which the submissions were made helped us to conclude to the best of our
conscience.
62. In view of the aforesaid discussion and findings we conclude:
(a) The impugned two notifications dated 17th August, 1991 and 28th September,
1994 are valid.
(b) The State Government while acting as delegated u/s 15(1) of the Act is not confined
to fix the royalty/dead rent within the peripheral ambit of Entry 54 Schedule II of the
Act. Neither D.K. Trivedi (Supra) has said so, nor can it be construed to be so.
(c) The State Government has acted within the ambit of the power delegated to it and
such delegation is with sufficient guidelines and check in view of the Preamble, Object
and Reasons and various provisions of the Act.
(d) Requirement of mere placement of the rules or the notifications before the State
Legislature is also one of the form of check on the State Government to exercise its
powers as a delegated.
(e) In this case the impugned notification dated 28.9.1994 has not been placed as
required by Sub-section (3) of Section 28 of the Act, The State Government is directed to
do so now at the earliest.
(f) However, non-placement of the said notification would not invalidate the same, as
this requirement is only directory.
 (g) The enhancement of royalty on the facts and circumstances of this case cannot be
said to be arbitrary or otherwise illegal.
63. In view of the aforesaid findings, we do not find any merit in these appeals and
accordingly they are dismissed. We uphold the judgment of the High Court but on a
different reasoning as recorded by us earlier. The appeals stand dismissed with costs.