Holding

Section 15(1) of the 1957 Act validly confers on the State the power to make and amend rules charging royalty and dead rent, subject to the four‑year limitation on enhancements for each, making the 1974, 1979 and 1981 notifications valid and the 1975 and 1976 notifications void.

Summary

The petitioners, holders of quarry and mining leases for minor minerals in Gujarat, challenged a series of state notifications and a circular that altered rates of royalty and dead rent and classified building stones. The core issue was whether Section 15(1) of the Mines and Minerals (Regulation and Development) Act, 1957, empowered the State to make rules charging and enhancing royalty and dead rent, and whether the four‑year limitation in the proviso to Section 15(3) applied to both royalty and dead rent. The Supreme Court examined the legislative history, the relationship between Sections 13 and 15, and the scope of the rule‑making power, concluding that the power under Section 15(1) includes the authority to set and amend rates of royalty and dead rent, subject to the four‑year restriction for each. It held that the 1974 notification was valid, the 1975 notification violated the four‑year rule and was void, the 1976 notification was void for a second enhancement of dead rent within the same period, and the 1979 and 1981 notifications were valid and constitutional. Consequently, the Court reversed the Gujarat High Court’s judgment on the 1974 and 1975 notifications, upheld the State’s power to classify building stones, declared the 1981 circular invalid, and ordered appropriate refunds and adjustments.

Issues considered

The constitutionality of Section 15(1) of the Mines and Minerals (Regulation and Development) Act, 1957, and whether it amounts to excessive delegation of legislative power.
Whether the State Government can, under Section 15(1), make rules charging dead rent and royalty and amend those rates during the subsistence of a lease.
Interpretation of the proviso to Section 15(3) – does the four‑year limitation apply to both royalty and dead rent, and can both be enhanced once in each period.
The validity of the Gujarat notifications of 1974, 1975, 1976, 1979 and 1981, and the 1981 circular issued by the State.
The power of the State to classify building stones into varieties and levy different royalty rates.
Whether the State must provide a hearing or opportunity to be heard before amending rates under the rule‑making power.

Legislation cited

Constitution of Indias. Article 19(1)(g), s. Entry 23 of State List, s. Entry 54 of Union List
General Clauses Act, 1897s. 21, s. 8(1)
Mines and Minerals (Regulation and Development) Act, 1957s. 13(2), s. 14, s. 15(1), s. 15(3), s. 19, s. 20, s. 28, s. 29, s. 9, s. 9A

Subjects

Mines and Minerals ActSection 15rule‑making powerdead rentroyaltyminor mineralsconstitutional validityexcessive delegationfour‑year limitationstate governmentGujarat notificationsArticle 19(1)(g)

Judgment

479

A
D.K. TRIVEDI AND SONS AND ORS. ETC. ETC.
v.
STATE OF GUJARAT AND ORS. ETC. ETC.

MARCH 5, 1986
B
[V.D. TULZAPURKAR AND D.P. MADON, JJ,]

J Mines and Minerals (Regulation and Development) Act,
1957 (Act. No.67 of 1957), Section 15(1), Constitutionality of
- Whether the State Government has the power to make rules
under section 15 to enable them to charge dead rent and
royalty during the subsistence of ~uch leases - Validity of c
Notifications/circular issued by the Gujarat Government under
section 15 amending the Gujarat Minor Mineral Rules, 1966 and
dated 29,11.74, 29.10,75, 4.6.76, 26.3,79, 12.2.81 and 18.6.81
- Validity of Rule 21B of the Gujarat Minor Mineral Rules,
1966.
D
The Writ Petitioners and appellants, were persons to
whom the State of Gujarat had granted quarry leases and mining
leases in respect of minor minerals such as black trap, lime·
stones, 1111rrum, bentonite, rubble, marble, sandstone,
quartzite, etc. In exercise of the powers conferred by section
15 of the Mines and Minerals (Regulation and Development) Act, E
1957, the Government of Gujarat made the Gujarat Minor
Mineral Rules, 1966. The said Rules came into force on April
1, 1966. All the leases in .the matters before the Court were
given in the form prescribed by the said Rules, Schedule I to
the said Rules specified the rates at which royalty was
~
payable and Schedule II specified the rates at which dead rent F
was payable. By the 1974 Notification the Government of
Gujarat made the Gujarat Minor Mineral (Fourth Amendment)
Rules, 1974 whereby Schedule I was substituted and Schedule II
was amended with effect from December 1, 1974. Under the new
Schedule I and the amended Schedule II the rates of royalty
and dead rent in ' respect of certain minor minerals were G
enhanced. In view of several representations made to it, the
; {;overnment of Gujarat decided not to implement the 1974 Noti-
fication and to refund the amount.of royalty, if any, collect-
ed at the rates prescribed by the 1974 Notification. By the
1975 Notification the GOvernment of Gujarat made the Gujarat
H
480 SUPREME COURT REPORTS [1986] i s.c.R.

A
Minor Mineral {Second Amendment) Rules, 1975, whereby Rule 21
of the said Rules and Schedule I were substituted with effect '·
from November 1, 1975. By the said substituted Schedule I the
rates of royalty in respect of several items were enhanced.

The Appellant in C.A. 706/81, Ambalal Manibhai Patel,
B being aggrieved by the· said 1975 Notification, filed a Writ
Petition in the Gujarat High Court (Sp.C.Ap.66/78) challenging
the enhancement in the rate of royalty to Rs ,3 per metric ,
tonne in respect of black trap and hard Murrum specified in
Item 4 of the said substituted Schedule I. The Writ Petition
having been dismissed, the appellant filed LPA No.61/78 which
C was heard along with several writ petitions rai!ling the same
questions. The main contention raised in those matters was
that under the proviso to section 15(3) of the 1957 Act, the
rate of royalty .in respect of any m.inor mineral could not be
enhanced by the State Government more than once during any
period of four years and that the rate of roya.lty on black
O trap and hard llllrrum having been increased by the 197 4
Notification, it could not be increased again in 1975, A ~
subsidiary contention raised was that the State G.>vernment had
no power to classify building stones into black !;rap and hard
llllrrum because by doing so what the State Government had done
in effect and substance was to declare black trap and hard
~ murrum as m.inor minerals and that it was only the Central
Government which possessed the power to declare any m.ineral
not covered by the definition of the expre11sion "m.inor
minerals" in clause (e) of section 3 of the 1957 Act to be a
m.inor m.ineral. Both these contentions were rejected by a
Division Bench of the Gujarat High Court by its judgment dated ~
16/17 September 1980 holding that the 197'• Notification had
not become operative and, therefore, in issuing the 1975
Notification the State Government had not violated the proviso
to section 15(3), and that building stones having been already
included in the definition of "m.inor m.inerals", there was no
bar to the State Government classifying them into different
varieties for the purpose of recovering royalty. Civil. Appeal
706/81 is by Special Leave of the Court against the said
judgment. ·~

During the pendency of the said Courl: proceedings, the
Government of Gujarat made the Gujarat Minor Mineral (Second
Amendment) Rules, 1976, substituting Schedule II to the said
D.K. TRIVEDI v. STATE 481

,... A
Rules, changing the rates of dead rent for specified Minor
Minerals and reclassifying the said nomenclature as "for
quarry leases for any minor mineral" and "for quarry Parwana
for any minor mineral."

Pursuant to a policy decision dated March 26, 1979 B
announced on the floors of the Legislature by the Minister for
-' Mines, the Gujarat Government by the 1979 Notification made
the Gujarat Minor Minerals (Amendment) Rules, 1979 with effect
from April 1, 1979. By this amendment a new Rule 21B waa
inserted in the said Rules, Rule 22 was amended, Chapter IV of
the said Rules which dealt with grant of quarrying permits in
respect of lands in which minerals belonged to the Government c
was deleted, Form D was amended, Forms I, J and K were
deleted, and Schedules I and 11 were substituted. By the
substituted Schedule 1, the rate of royalty on all minor
mineral was specified as ten paise per metric tonne. By the
substituted Schedule 11 the rate of dead rent per hectare or
t part thereof in respect of quarry leases was enhanced to D
Rs.1,200 in certain cases, Rs.1,500 in some other cases,
Rs. 2, 000 in one case and Rs. 3, 000 in the remaining cases. So
far as quarry parwanas were concerned, the rate was specified
as one-tenth of the rate for quarry leases per parwana.

Ambalal Manilal Patel again filed a writ petition, E
Sp.C.Ap.138 of 1978, in the Gujarat High Court challenging the
enhancement in the rate of dead rent made by the 1976 Notifi-
cation. The Writ Petition was dismissed leading to the filing
of a Letters Patent Appeal. The said Letters Patent Appeal and
125 other writ petition challenging the 1979 Notification were
allowed by the Division Bench. The Division Bench held that F
the conditions in a lease in respect of minor minerals relat-
ing to the financial liability of a lessee derived their
authority from sub-section (3) of section 15 of the Mines and
Minerals (Regulation and Development) Act, 1957, while condi-
tions, other than those relating to a lessee's financial lia-
bility, regulating the grant of a lease derived their autho- G
Jrity from [Sub-section from] sub-section (1) of section 15,
that the State Government had no power to enhance the rate of
dead rent during the subsistence of a lease, and that Rule
21-B of the Gujarat Minor Mineral Rules, 1966 and 1979 Noti-
fication were ultra vires section 15 and sub-clause (g) of
clause (1) of ArticleT9 of the Constitution. The Division H
482 SUPREME COURT REPORTS [1986] l S,C,R,

A
Bench accordingly issued a writ of mandamus against the State
...
Government directing it to desist from enforcing the said Rule
21-B and the 1979 Notification. The Division Bench also made
the same declaration in respect of the 1976 Notification and
issued the same mandamus in respect therebf, The said judgment
of the Division Bench is reported as s.i:. Sonba1 Pethalji v.
B State of Glljarat & Anr., reported in XXI (2) (1980) 2 Gujarat
L.R. 530. The State of Gujarat accepted the said judgment and~
did not come in appeal to this Court. Cert.ain lessees of
mining and quarry leases, however, appr'oached this Court by
way of Appeals and Writ Petitions challenging the correctness
of the judgment in S11t. Sonbai's case.
c
In view of the said judgment, the Government of Gujarat
issued a circular addressed to all Collec:tors, District
Development Officers and the Director, Geology and Mining,
Ahmedabad, being Circular No. M.C.R.2190 (166) CllH dated
February 12, 1981, stating that in view of the aforesaid
D judgment of the Division Bench the position prior theretd
would prevail and that Chapter IV of the said Rules which was
deleted by the 1976 Notification woul!l stand r1!vived and would
be applied. The Government thereafter made the Gujarat Minor
Minerals (Amendment) Rules, 1981, by issuing the 1981 Notifi-
cation which came into force on June 20, 1981, By the 1981
E Notification Rule 21-B was deleted, Rule 22 was amended,
Chapter IV and certain Forms were inserted, Schedule I to the
said Rules was substituted and Schedule 11 thereto deleted.
Several lessees of mining and quarry leases .filed writ
petitions in the Gujarat High Court challenging the validity
of the 1981 Notification and the said Circular. These writ
F petitions were rejected on the ground that as connected
proceedings were pending in the Supreme Court, it was open to
the petitioners to move this Court if they so desired. Accor-
dingly, the said petitioners as also oth1!rs filed writ
petitions in this Court challenging the validity of thl) 1981
Notification and the said Circular as also in some cases.
G Appeals against the order rejecting the writ petitions.
' ~
Dismissing CA. Nos. 1525-26 of 1982, WP Nos.7103-7128 of 1981
and WP Nos. 4208-17 of 1983, allo<Jing in part only CA.Nos.
706 and 1324/81, WP. Nos. 6419-22/82 and WP Non. 4912-4924 and
5167-5182 of 1983 and allowing CA Nos. 1489 'md 1675/81 WP
H Nos.1656, 2108, 4097 and 7697 of 1981, WP Noe1. 762, 874-942,
D.K. TRIVEDI v. STATE 483

A
~946-968, 1616-17, 4455-73, 4479-84, 5589-5605, 5895-5969, 5971
to 6005, 6309, 6463-79 and-10114 to 10122 of 1982 and 3393 to
4003, 8813-8820 and 9539 to 9549 of 1983, the Court,

HELD : 1.1 Sub-section (1) of section 15 of the Mines
and Minerals (Regulation and Development) Act, 1957 is B
con$titutional and valid and the rule-making power conferred
thereunder upon the State Government does not amount to
..i excessive delegation of legislative power to the executive.
(523 G]

1.2 To take into account legislative history and
practice when considering the validity of a statutory c
provision or while interpreting a legislative entry is "well-
established" principle of construction of statutes. [528 B-C]

State of Bollba:y v. Rarothaw!n Jethabai and Anr., (1951]
S,C,R, 51; State of Madras v. Gamman Dunkerley & Co. (Madras)
~Ltd., (1959] S.C.R. 379 referred to. D

1.3 The· 1957 Act is made in exercise of the powers
conferred by Entry 54 in the Union List which speaks both of
regulation of mines and minerals development and Entry 23 in
the State List is subject to Entry 54. The rule-making power
conferred by section 15(1) was for regulating the grant of E
prospecting licences and mining leases and for purposes
connected therewith prior to the Amendment Act of 1972 and
thereafter is for regulating the grant of quarry leases,
mining leases and other mineral concessions in respect of
.,. minor minerals and for purposes connected therewith. The phra-
seology of section 15(1) is the same as that of section 13(1) F
which confers rule-making power upon the Central Government
with this difference that by the Amendment Act of 1972 the
expression "quarry leases, mining leases or other mineral
concessions" has been substituted in section 15(1) for the
words "prospecting licences and mining leases" while the
expression "prospecting licences and mining leases" in section G
13(1) remains unchanged. (524 B-C; 525 B-E)
J•
The word "minerals" wherever used in the 1957 act would
include minor minerals unless minor minerals are expressly
excluded or the context otherwise requires. Although under
section 14, section 13 is one of the sections which does not H
apply to minor minerals, the language of section 13(1) is in
484 SUPREME COURT REPORTS [1986] 1 S.C.R.

A
pari materia with the language of section 15(1). Each of thes~
provisions confers the power to make rules for "regulating",
Thus, the power to regulate by rules given by sections 13(1)
and 15(1) is a power to control, govern and direct by rules
the grant of prospecting licences and mining l<lases in repsect
of minerals other than minor minerals and for purposes
B connected therewith in the case of section 13(1) and the grant
of quarry leases, mining leases and other mineral concessions
in respect of minor minerals and for purposes c:onnected there-.,
with in the case of section 15(1) and to subject such grant to
restrictions and to adapt them to the circumstances of the
case and the surroundings with reference to which such power
c is exercised. The power to regulate conferred by sections
13(1) and 15(1) is not only with respect to the grant of
licences and leases mentioned in those sub-sections but is
also with respect to "purposes connected therewith", that is,
purposes connected with such grant. Entry 54 in the Union List
uses the word "regulation". The makers of the Constitution
D were not only aware of the legislative history ,~f the topic of•
mines and minerals but were also aware how the Dominion Legis-'
lature had interpreted Entry 36 in the Federal Legislative
List in enacting the 1948 Act. When the 1957 Act came to be
enacted, ·Parliament knew that different State Governments had,
in pursuance. of the provisions of Rule 4 of the Mineral
E Concession Rules, 1949, made rules for regulating the grant of
leases in respect of minor minerals and other matters
connected therewith and for this reason it expressly provided
in sub-section (2) of section 15 of the 1957 Act that the
rules in force inmediately before the colllDE!ncement of that Act
would continue in force until superseded by rules made under~
F sub-section (l) of section 15, Regulating the grant of mining
leases in respect of minor minerals and other connected
matters was, therefore, not something which was done for the
first time by the 1957 Act but followed a well-recognised and
accepted legislative practice. In fact, even so far as
minerals other than minor minerals were ~oncerned, what
;:; Parliament did, as pointed out earlier, was i:o transfer to the
1957 Act certain provisions which had until tben been deal\
with under the rule-making power of the Central Government ih
order to restrict the scope of subordinate legislation.
[526 D,E,R; 527 A-H; 528 A-BJ

n 2.1 There are sufficient guidelines provid•~d in the 1957
Act for the exercise of the rule-making power of the State
D.K. TRIVEDI v. STATE 485
A
J Governments under section 15(1) of the 1957 Act. Thelle
guidelines are 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 B
purposes connected therewith"; the illustrative matters set
out in sub-section (2) of section 13; and the restrictions and
.J other matters contained in sections 4 to 12 of the 1957 Act.
[528 C-D; 530 G-R; 531 A-BJ

2. 2 It is well settled that where a statute confers
particular powers without prejudice to the generality of a c
general power already conferred, the particular powers are
ol.\ly illustrative of the general power and do not in any way
restrict the general power. (528 D-E)

King &lperor v. Sibnath Banerjee and Ors., (1944-45) 72
I.A. 241; Om Prakash and Ors. v. Union of India and Ora., D
~ [1970) 3 S.C.C, 942, 944-5; Shiv lirpal Singh v. V.V. Giri
[1971) 2 S.C.R. 197, 224-5 referred to.

2.3 The fact that provision similar to sub-section (2)
of section 13, does not. find a place iri section 15 does not
make any difference. What sub-section (2) of section 13 does E
it to give illustrations· of the matters in respect of which
the Central Government can make rules for "t"egulating the
grant of prospecting licences and mining leases in respect of
minerals and for purposes connected therewith". The opening
4 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 parti-
cularize 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 G
, 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
cOlllM!cted therewith." When section 14 directs that '"The provi-
sions of sections 4 to 13 .(inclusive) shall not apply to H
quarry leases, mining leases or other mineral concessions in
486 SUPREME COURT REPORTS [1986] 1 S.C.R.
A

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.
B Sections 4 to 12 form a group of sections und1!r the heading
"General restrictions on undertaking prospecting and mining
operations". The exclusion of the applicat:lon 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
c by rules made under section 15(1). (529 D-H; 530 A-B]

Sections 13, 14 and 15 have to be read together. In
providing that section 13 will not apply to •1uarry leases,
mining leases or other mineral concessions in respect of minor
minerals what was done was to take away from the Central
D Government the power to make lrules in respect of minor
minerals and to confer that power by section 15(1) upon the •
State Governments. The ambit of the power under aection 13 and
under section 15 is, however, the same, the 0~1ly difference
being that in one case it is the Central Government which
exercises the power in respect of minerals other than minor
E minerals while in the other case it is the Stat:e 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 ~µidelines for
the State Governments to follow in framing the rules under
section 15(1), and in the same way, the State Governments have •
F before them the restrictions and other matters pt:ovided for in )-
sections 4 to 12 while framing their own rules under section
i5(1). (530 C-G] -

3.1 The power to make rules conferred by section 15( l)
includes the power to make rules charging d1!ad rent and
G royalty. (531 B-C)

3. 2 Rent is an integral part of the concept of a lease._ -~
It is the consideration moving from the lessee to the lessor
for demise of the property to him. Section 105 of the Transfer
of Property Act, 1982, contains the definitions of the terms ~
H "lease", "lessor", "lessee", "premium" and "r1!nt". Royalty
connotes the payment made for the materials or minerals won
from the land. (534 C-D]
D, K. TRIVEDI v, STATE 487

A
II.LS. ~ v. Collectoi of Cbittour and Anr., (1964]
6 s.c.R. 666, 673 referred to.

3.3 In a mining lease the consideration usually 111>Ving
from the lessee to the lessor is the rent for the area leased
(often called "surface rent"), dead rent and royalty. Since a B
mining lease confers upon the lessee the right not merely to
_A enjoy the property as under an ordinary lease but also to
extract minerals from the land and to appropriate them for his
own use or benefit, in addition to the usual rent for the area
demised, the lessee is required to pay a certain amount in
respect of the minerals extracted proportionate to the
quantity so. extracted. Such payment is called "royalty". It C
may, however, be that the mine is not worked properly so as
not to yield enough return to the lessor in the shape of
royalty. In order to ensure for the lessor a regular income,
whether the mine is worked or not, a fixed amount is provided
to be paid to him by the leBBee. This is called "dead rent".
~ (534 CHI; 535 A-BJ D

"Dead rent" is calculated on the basis of the area
leased while royalty is calculated on the quantity of minerals
extracted or remved. Thus, while dead rent is a fixed return
to the lessor, royalty is a return which varies with the
quantity of minerals extracted or removed. Since dead rent and E
royalty are both a return.to the lessor in respect of the area
leased, looked at frO. one point of view dead rent can be
described as the minillllllll guaranteed amount of royalty payable
to the lessor but calculated on the basis of the area leased
and not on the quantity of minerals extracted or removed.
Stipulations providing for the lessee's liability to pay F
surface rent, dead rent and royalty to the lessor are the
usual covenants to be found in a mining lease. (535 B-E]

The grant of a mining lease would thus provide for the
consideration for such grant in the shape of surface rent,
dead rent and royalty. The power to make rules for regulating G
;
) . the grant of such leases would, therefore, include the power
to fix the consideration payable by the lessee to the lessor
in the shape of ordinary rent or surface rent, dead rent and
royalty. If this were not so, it would lead to the absurd
result that when the Government grants a mining lease, it is
granted gratis to a person who wants to extract minerals and H
profit from them. Rules for regulating the grant of mining
....
488 SUPREME COURT REPORTS [1986] l S.C.R.
A
leases cannot be confined merely to rules providing for the"
fom in which applications for such leases are to be made, the
factors to be taken into account in granting or refusing such
applications and other cognate matters. Such rules 1111St
necessarily include provisions with respect to the
consideration for the grant. [535 E-H]
B
The Legislature and the rule making authorities have ~
also throughout understood the power to make rules in respect
of mining leases and minerals as including the power to charge
dead rent and royalty. Rule 41 of the Mine1:al Concession
Rules, 1949, made by the Central Government in exercise of the
c powers conferred by section 5 of the 1948 Act prescribed the
conditions which were to be included in every mining lease.
The said Rule 41 provided for payment of royalty on minerals
at the rate specified in the First Schedule to the said Rules
in force on the date of the grant of the lease .~ also to pay
royalty at such revised rates as may be notifiecl from time to
D
time. It also provided for payment of surface rent and further ~
provided for payment of dead rent with a proviso that the
lessee was liable to pay dead rent or royalty, whichever was
higher in amount, but not both. Rules made by the State
Governments in respect of minor minerals also provided for
payment of these charges. Under clause (1) of sec.tion 13(2) of
E the 1957 Act, the rules to be made by the Central Government
can provide "for the fixing and the collection of dead rent,
fines, fees or other charges and the collection of royalties".
Although clause (i) of section 13(2) speaks of fixing and ,_
collection in the case of dead rent and only collection in the ~
case of royalties, the reason is not that the power to fix
F
royalties. was not thought to be a comprehended in the general
rule-making power of the Central Government under section
13(1). The reason was that a separate provision in that behalf
was made by section 9 with respect to mining leases granted
both before the conmencement of the 1957 Act as also after the
commencement of the 1957 Act. Another reason for doing so was
G
to specify the rates for royalties in respect ,Jf different -'
minerals other than minor minerals in the Second Schedule to· ,
the 1957 Act in order to restrict the scope of subordinate
legislation as pointed out in the Statement of Objects and
Reasons to the Legislative Bill No. 83 of 1972. [536 B; E-G;
537 E-H; 538 A]
H
4.1 The sole repository of the power of the State
Government to make rules and amendments thereto, including
D.K. TRIVEDI v. STATE 489

A
_,-ndments enhancing the rates of royalty and dead rent, is
sub-1!ection (1) of section 15, [564 D-E)

4.2 Sub-section (3) of section 15 does not confer upon
the State Governments the power to make rules charging royalty
or to enhance the rate of royalty so charged from time to B
time. [541 A-BJ

.J 4,3 A proper reading of sunection (3) of section 15
shows that it does not confer any power upon the State
Governments to make rules with respect to royalty. Royalty is
payable by the holder of a quarry lease or raining lease or
other mineral concession granted under rules made under c
sub-1!ection (r) of se<:tion 15. What sub-section (3) does is to
make such holder liable to pay royalty in respect of minor
minerals removed or consumed not only by him but also by his
agent, manager, employee, contractor or sub-lessee. It thus
casts a vicarious liability upon such holder to pay royalty in
.respect of the acts of persons other than himself. The very D
~act that under sub-1!ection (3) the liability of such holder
is to pay royalty "at the rate prescribed for the time being.
in the rules framed by the State Government in respect of
minor minerals" shows that the prescribing of the rate of
royalty in respect of minor minerals is to be done under the
rule-making power of the State Governments which is to be E
found in sub-1!ection (1) of section 15. Yet another purpose
of enacting sub-1!ection (3) is to be found in the proviso to
that sub-1!ection which prohibits the State Government from
J enhancing the rate of royalty in respect of any minor mineral
_for more than once during any period of four years. 539 JH;)
F
Section 9A was inserted in the 1957 Act by the Amendment
Act of 1972 but it waa not inserted with retrospective effect.
It was, therefore, not there when section 15(1) was placed
upon the statute book while enacting the 1957 Act. Section 9A
was enacted with a two-fold purpose. It casts a liability upon
the holder of a mining lease, whether granted before or after G
the commencement of the 1972 Act, tlu!t is, either before or
~fter September 12, 1972, to pay to the State Government dead
rent at the rates specified for the time being in the Third
Schedule to the 1957 Act "notwithstanding anything contained
in the instrument of lease or in any other law for the time
being in force." The purpose of inserting section 9A in the H
490 SUPREME COURT REPORTS [1986] 1 s.c.R.
A
1957 Act, as stated in the Statement of Objects and Reasons to ~
Legislative Bill No.83 of 1972, was to make a "provision of a
statutory basis for calculation of dead rent". Section 9A also
provides that the liability of the lessee would be to pay
either royalty or dead rent whichever is greater, thus
embodying in the Act what was contained in t.he proviso to
B
clause (c) of Rule 27 of the Minor Mineral Concession Rules,
1960. Section 9A was inserted also with a view to prohibit the
Central Government from enhancing the rate of d.ead rent more .._
th~ once during any period of four years. By the Amendment
Act of 1972 section 9 was also a•mded. While under the
original sub-section ( 1) of section 9 the liability of the
c holder of a mining lease was only to pay royaltj' in respect of
any mineral removed by him, after the amendment he is made
liable to pay royalty in respect of any miner.al "removed or
consumed by him or by his agent, manager; employee, contractor
of sub-lessee". By the Amendment Act of 1972 the power to the
Central Government to amend by notification the Second
D
Schedule which specifies the rate of royalty was also
~
curtailed by inserting a proviso to section 9 ( 3) in order to
provide that the Central Government shall not e~thance the rate
of royalty in r::espect of any mineral more than once during any
period of four years. The amendments made by the' Amendment Act
of 1972 have, therefore, no relevance for ascertaining the
E
scope of the rule-malting power of the State Gov·ernments under
section 15(1). [540 A-G]

s.t. Sonbai Petbalji v. State of Gujarat & Anr., XXl (2)
1980 (2) Guj. L.R. 530 reversed.
F ).
M.V. Subba Rao v. State of Audhra Pradesh and Anr.,
A.I.R. 1978 AP 453 overruled.

Laddu Mal and Ors. v. 'Ibe State of B:lhar and Ors.,
A.I.R. 1965 Patna 491; Banku Bihari Saha v. St:ate GoverlWllt
r,;: Madhya Pradesh and Ors., A.I.R. 1969 M.P. 2'.10; Dr. Sbaatl
G
Saroop Sharma and Anr. v. State of Punjab and Ors., A.I.R.
1969 Punj. & Har. 79; H/s. Amar Singh Modi Lal v. State o~
Baryana and Ors., A.I.R. 1972 Punj. & Har. 356; K/a. Brflltd:
Bricks, Bharatpur v. State of Rajastban and Am~., A.I.R. 1972
Raj. 145 distinguished.
H
D.K. TRIVEDI v. STATE 491
A

,.J, Sbeo Varan Singh v. State of U.P., A.I.R. 1980 All. 92;
Bal !kJlwnd Arora etc. v. State of llajastll.'ln and Ora., A. I.R.
1981 Raj. 95 approved.

5.1 The power to make rules under section 15(1) includes B
the power to amend the rules so made, including the power to
amend the rules so as to enhance the rates of royalty and dead
rent. [541 ~]

5.2 Rules under section 15(1), though made by the State
Governments, are rules made under a Central Act end the
provisions of the General Clause& Act, 1897, apply to such c
rules. Under section 21 of the General Clauses Act, where by
any Central Act, a power to make rules is conferred, then thst
power includes a power, exercisable in the like manner and
subject to the like sanction and conditions if any, to add to,
amend, vary or rescind any rules so made. The power to amend
the rules is therefore, comprehended within the power to make D
~ rules and as section 15(1) confers upon the State Governments
the power to make rules providing for payment of dead rent and
royalty, it also confers upon the State Governments the power
to amend those rules so as to alter the rates of royalty and
dead rent so prescribed, either by enhancing or reducing such
rates. The source of the power to enhance the rate of royalty E
is not contained in su~ection (3) of section 15. The purpose
of inserting the said su~ection in section 15 with
retrospective effect was an entirely different Qlle. [541 C-F]

5.3 A State Government is entitled to 11111end the rules
~ under section 15(1) enhancing the rates of royalty and dead F
rent even as regards leases subsisting at the date of such
amendment. [542 A-Bl

5.4 Su~ection (3) of section 15 does not confer any
power to amend the rules made under section 15(1), for the
power to amend the rules is comprehended within the power to G
make the rules conferred by su~ection (1) of section 15. The
. j construction sought to be placed upon the word "grant" in
! "section 15(1) is misplaced. While granting a lease it is open
to the grantor to prescribe conditions which are to be
observed during the period of the grant and also to provide
for the forefeiture of the lease on breach of any of those H
conditions. If the grant of a lease were not to prescribe such
492 SUPREME COURT REPORTS [1986] l s.c.R.
A

conditions, the less..:. 11;1<1ld with impunity connit: breaches of "'
the conditions of the lease. Ordinary leases of immovable
property at times provide for periodic increases of rent and
there is no reason why such increases should not be made in a
mining or quarry lease or other mineral concession granted
B under a regulat;o;;y statute intended for the benefit of the
public and e-;en les~ reason why such a atatute should not
confer power t<'.i ;nake r.11.,.s providing for inc:rease11 in the rate
of dead rent during cha subsistence of the 11~ase. In any ~
event, the power to make ~les under section 15(1) is also for
purposes connected with the grant of mining and quarry leases
c and other mineral concessions and the express:lon "and for
purposes connected therewith" read with the word "grant" would
include the power to enhance the rate of dead rent dudng the
subsistence of the lease. [542 B-F]

5, 5 A quarry lease, mining lease or other \id.neral
D concession in respect of a minor mineral does not stand on the
same footing as an ordinary contract. These leases and •
coucessions are granted by the State GovernmentE1 pursuant to
rules made under the statutory power conferred upon them by a
regulatory Act, Minerals are part of the mater:Lal resources
which constitute a nation's natural wealth and if the nation
E is to advance industrially and if its ecollOlay is to be
benefitted by the proper development and exploitation of these
resources, they cannot be permitted to be frittiired away and
exhausted within a few years by indiscriminate exploitation
without any regard to public and national interest. It was for
achieving the object set out above that both the 1948 Act and
F
the 1957 Act were enacted. The long title of the 1957 Act is ~
"An Act to provide for the regulation of mines and the
development of minerals under the control of the Union." The
1946 Act contained a preamble which stated "Whereas it is
expedient in the public interest to provide for t.he regulation
of mines and minerals and for the development of minerals to
G
the extent hereinafter specified." The makers of the
Constitution recognized the importance to the 118tion of the
regulation of mines and mineral development and, therefore, . ~.
enacted Entry 54 of the Union List and Entry 23 of the State
List. In the exercise of the power conferred by Entry 54,
Parliament has made a declaration in section 2 of the 1957 Act
H
that "it is expedient in the public interest that the Union
should take under its control the regulation of mines and the
D. K. TRIVEDI v. STATE 493
A

,( development of minerals to the extent hereinafter provided."
The presumption is that an authority clothed with a statutory
pnwer will exercise such power reasonably, · and if in the
public interest and for the efficacious regulation of mines
and quarries of minor minerals and the proper development of B
such minerals, a State Government as the delegate of the Union
Government thinks fit to amend the rules so as to enhance the
rate of dead rent, it cannot be said that it is prevented from
-' doing so by the principles of the ordinary law of contracts.
It may be.that in certain cases by enhancing the rate of dead
rent the holders of leases 'in respect of certain types of
minor minerals may be adversely affected but private interest c
cannot be permitted to. override public interest. Conservation
of minerals and their proper exploitation result in securing
the maximum benefit to the conm.mity and it is open to the
State Governments to enhance the rate of dead rent so as to
ensure the proper conservation and development of minor
· minerals even though it may effect a lessee's liability under o
~ a subsisting lease. [ 543 B-H; 544 A-Cl

State of T...U Radu v. IUad Stone Etc., (1981] 2 s.c.R.
742 @751 relied on.

5. 6 Where a statute confers discretionary powers upon E
the executive or an administrative authority, the validity or
constitutionality of such power cannot be judged on the
assumption that the executive or such authority will act in an
arbitrary manner· in the exercise of the discretion conferred
upon it. If the executive or" the administrative authority acts
-1 in an arbitrary manner, its action would be bad in law and F
liable to be struck down by the courts but the possibility of
abuse of power or arbitrary exercise of power cannot
invalidate the statute conferring the power or the power which
lias been conferred by it. (544 C-E]

6.1 A State Government is not required to give an G
opportunity of a hearing or of -making a representation to i:he
J lessee who would be affected by any amendments of the rules
' before making such amendments. [ 544 G-H]

6.2 The enhancement in the rates of royalty. and dead
rent is made in the exercise of the statutory power to amend H
the rules framed under section 15(1). There is no such
494 SUPREME COURT REPORTS [19861 1 s.c.R. -

A
principle of law that before such a statutory power is ;..
exercised, persons who may be affected thereby should be
heard. Whether any opportunity is to be given to per11ons
affected to make representations to the Government would
depend upon the form in which the rule ll&king power is
conferred. It is for the legislative body which confers the
B rule making power to decide in what form such power should be
conferred. In some acts it is provided that the draft of the
rules proposed to be made as also any propc>sed amendment ~ ·
thereto should be published in the Official G•u:ette so that
members of the public may have an opportunity of making such
representations or raising such objections as they think fit.
c Some other Acts provide for rules to be laid before parliament
or the Legislature for its approval and to be effective only
after such approval is given or to continue in force with such
modifications as Parliament or the Legislature may make, and
if the approval is not given to cease to have 1my effect. It
was, therefore, for Parliament to decide whether· rules and ·
D notifications made by the State Governments under section 1
15(1) should be laid before Parliament or the Legislature of
the State or not. It, however, thought i.t fit to do so with
respect to llinerals 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
E minor minerals because it did not consider them to be of equal
importance. An amendment of the rules made under section
15(1), even though it may have the effect of enhancing the
rates of royalty or dead rent does not, therefore, become bad
in law because no opp0rtunity of being heard or malting a
representation is given to persons who would be prejudicially~
F affected thereby. Section 15(1) does not contain any provision
for giving any such opportunity and no such provision can be
imported into that sub-section. (545 B-H] 1
7, A Quarry lease is a mining lease. Under clause (c) of
section 3 "mining lease" inter alia means "a lease granted for
the purpose of undertaking mining operations". Under clause
(d) of section 3, the expression "mining operations" means~
"any operations undertaken for the purpose of winning any '
mineral", ~rrying minerals is, therefore, a 11d.ning operation
in as much as it consists of an operation undertaken for the
purpose of winning particular classes of minerSlls. Clause (vi)
H of Rule 2 of the Gujarat Rules defines "quarry lease" as
D.K. TRIVEDI v. STATE 495

A
> meaning "a kind of mining lease in respect of a minor mineral
granted under these rules." Quarry lease• are, therefore,
·included in the term "mining leases". [546 C-F)

8, l By reason of the prohibition contained in the
proviso to section 15(3}, a State cannot enhance' the rate of B
royalty in respect of any minor mineral more than once during
any period of four years. A State Government is also not enti-
_,_ tled to enhance the rate of dead rent more than once during
any period of four years. Such a construction would be in
consonance with practice, both past and present. The proviso
to section 9(3) prohibits the Central Government from enhanc-
ing the rate of royalty in respect of any mineral other than a C
minor mineral more than once during any period of four years.
The proviso to section 9A(2) also prohibits the Central
GQvernment from enhancing the dead rent in respect of any area
1110re than once during any period of four years. [548 A-CJ

~ 8. 2 During any period of four years, however, the State D
Government can enhance both dead rent and royalty, but only
once. [ 548 F)

Although in one sense dead rent may partake of the
nature of royalty, there is a substantial difference between
both. The bases for calculating royalty and dead rent are E
different and they are dealt with in different provisions of
1957 Act (Dlllll!ly, sections 9 and 9A) so far as minerals other
than minor minerals are concerned and in the rules made by the
State Governments under section 15(1) so far as minor minerals
1 are concerned. (548 E-F)
F
8,3 The period of four years for this purpose 1111St be
and can only be reckoned from the date of coming in to force
of the rules and it is open to a State Government to enhance
the rate of royalty or dead rent at any time once during the
period of four years fr0111 the cOllling into force of the rules
and after each period of four years expires at any time during G
.) each succeeding period of four years. The Gujarat Rules came
·into force on April l, 1966. Therefore, in the case of the
Gujarat Rules the first pEidod of four years would be 1. 4.1966
to 31.3.1970, the second period would be 1.4.1970 to
31,3.1974, the third period would be 1.4.1974 to 31,3.1978,
tbe fourth period would be 1.4.1978 to 31.3.1982, the fifth H
496 SUPREME COURT REPORTS [19~6] 1 S.C.R.

A
period would be 1.4.1982 to 31.3.1986 and sc' on thereafter. l>
Thus, during any of these periods of four years both dead rent
and royalty can be enhanced by the Government of Gujarat but·
only once during each sqch period. [549 A-D]

9. Building stones being minor mineuls, the State
B Government hss the power to classify them into different
varieties and to charge a different rate of royalty in respect
of each such variety. As building stones hsve been defined as •.
being minor minerals, the rule-making power with respect
thereto vests in the State Goverments under section 15(1),
The 1957 Act does not enjoin State Governments to charge a
c uniform rate of royalty in respect of all varieties of
building stones nor does it prohibit them from classifying
building stones into different varieties and charging royalty
thereon at separate rates. [557 A-C)

10.l Notification No. GU-74/12l(A)/MCR-·2173(49)7268/CHH
D dated November 29, 1974, whereby the Government of Gujarat j
made the Gujarat Minor Mineral (Fourth Amendment) Rules, 1974,
was validly issued and bec8111e operative with effect from
December 1, 1974. The enhancement in the rates of royalty by
the 1974 Notification was in the third peri<>d of four years
reckoned from the date of coming into force of the Gujarat
E Rules, namely, fro11 April 1, 1966. This third period was froa
April 1, 1974 to March 31, 1978. The rates of royalty having
been enhanced once by the 1974 Notification, they could not be
enhanced again during this period and could 1)nly be enhanced
during the subsequent period which comenced from April 1,
1978. [556 D-E] 1-
F
10.2 Notification No. GU-75/117-MCR-2173(49)/6431/CHH
dated October 29, 1975, whereby the Government: of Gujarat made
tbe Gujarat Minor Mineral (Second Amendment) Rules, 1975, to
the extent thst it enhanced the rates of royalty in respect of
certain minor minerals was void as offending the prohibition
G contained in the proviso to section 15(3), [5% F-G)
' \.
10,3 The Explanation to Rule 21 provid·ed thst "For the
purpose of this rule Schedule '1 means Schedule I as
substituted by the Gujarat Minor Minerals (Third Amendment)
Rules, 1966". Thus, the reference to Schedule I in Rule 21 was
R to Schedule I as substituted by the Not:ification dated
D.K. TRIVEDI v. STATE 497
A
J.. November 25, 1966. That Schedule was, however, again
subBtituted by the 1974 Notification. The effect of anch
substitution waa to repeal the 1966 Schedule I and to
austitute it by a new Schedule I. Under section 8(1) of the
General Clauaes Act, 1897, where the said Act or any Central
Act or Regulation llllde after the com.ncement of the said Act, B
repeals ad re-enacts, with or withOut modification, any
provieion of a former enactment, then references in any other
~· enactaent or in any instrument to the provision so repealed
are, unless a different intention appears, to be construed as
references to the provision so re-enacted. Though section 8(1)
of the General Clauses Act does not in express terms ref er to
rnles llllde under an Act, the sam principle of construction c
would, apply in the caae of rules llllde under an Act. Thus,
after the coming into force of the 1974 Notification, the
hplaation to Rule 21 mat be read aa "For the purpose of
this rule Schedule I •ans Schedule I as substituted by the
Gajarat Minor Mineral {Fourth Amendment) Rules, 1974" and
references to Schedule I in Rule 21 m1St be construed ss D
references to Schedule I aa so substituted and not as
references to Schedule I aa substituted by the Gujarat Minor
Minerals {Third Amendment) Rules, 1966. [554 H; 555 A-£)

Rule 21 wu not substituted for the purpose of
conferring upon the State GoverDlll8Dt the power to enhance the E
rates of royalty specified in Schedule I. It was substituted
for a wholly different purpose, Ulllely, to bring the Hid
Rule in conformity with sub-section (3) which was inserted
with retrospective effect in section 15 by tile Amendment Act
1 of 1972. Its object wu to ll8ke the holder of a llining lease
or lll1'f other llineral concession liable for payment of royalty F
not oRly in respect of llinor llinerals removed or constlllled by
hill but also by his manager, employee, contractor or
s11b-lessee. Rule 21 did not have any relevance or bearing on
the scope or exercise of that power. In fact, sub-clause {a)
of c18tl.Be {i) of Rule 22 and clause (3) of Part V of the
Schedule to Fora D {U111ely, the Fora of Quarryiug Lease) G
.; appended to the Gujarat Bales expressly provided a condition
· that the leHee is to pay to the Govermll!llt royalty at the
rates for the time being specified in and in force under
Schedule I to the Gujarat Rules. Further, clause 12 of Part U
of the Schedule to Form 'D' stipulates that the quarrying
R
498 SUPREME COURT REPORTS [19861 1 s.c.R.
A

lease is to be 'subject to the Gujarat Miuor Mineral Rules,
1966 as amended from time to time." (555 F-H; 556 A-DJ
• No. GU-76/39/MCR-2175(68)4675-CHH
10.4 Notification
dated April 6, 1976, whereby the Government of. Gujarat made
B the Gujarat Minor Mineral (Second Amendment) Rules, 1976, was
void as it enhanced the rates of dead rent for the second time
during the same period of four years in as much as this -nd- •-
ment falls within the thtrd period of four years conaencing
"from 1.4.74 to 31.3.78 during which by the 1974 1111enclment the
rates of dead rent had already been enhanced with effect from
c 1,12. 74. (557 D-F]

10,5 Notification No. GU-79/118/MCR-2178(127)-167 dateu
March 26, 1979, whereby the Government of Gujarat made the
Gujarat Minor Minerals (Amendment) Rules, 1979, was valid and
was not ultra vires either section 15 or Article 19(l)(g) of
D the Constitution. The enhancement in the rates of dead rent ,
made by t:he 1979 Notification does not 11110unt to ''ny unreason-
able restrictions on the right of the holders o:E the quarry
leaaea to carry on their trade or business. The rates of dead
rent specified cannot be loolted at in isolation, but in con-
junction with the drastic reduction made in the rates of
royalty and so read there is nothing unreasonable in them.
(557 F~; 558 A]

Siii:. Sonbei Patbalji •· State of Gujarat 1md Aar., XX
(2) 1980 (2) Guj. L.R. 530 reversed.
F
The enhancement in the rates of dead rent made by the
1979 Notification was during the fourth period of four years
which comnenced on April 1, 1978 and ended ou Mat·ch 31, 1982,
The 1979 Notification, therefore did not violate the bar (
against enhancing the rates of dead rent more than once during
G any period of four years also. _559 B-C

10.6 The rates of royalty and dead rent 1pedfied by the· ~
Notification dated Novellber 29, 1974, - l y , the Gujarat
Minor Mineral (Fourth Amendment) Rules, 1974, cont:inued to be
operative and in force until the cOlling into force of the
H Notification dated March 26, 1979, ou April 1, 191'9, (560 A-Bl
D.K. TRIVEDI v. STATE 499
A
J. 10. 7 The directions contained in the Circular No. MCR
2180(166) CHH dated February 12, 1981 issued by the Government
of Gujarat were invalid and inoperative because the 1979
Notif cation as also Rule 22B were valid and operative and the
State Government could not by a circular letter charge and
collect royalty at rates different from the rate spe~ified in B
the 1979 Notification. [561 G-H; 562 A-Bl

J 10.8 Notification No.GU-81/75/MCR 2181/(168)-4536-<:HH
dated June 18, 1981, whereby the Government of Gujarat made
the Gujarat Minor Mineral (Amendment) Rule, 1981, is valid and
constitutional and does not offend Article 19(1) (g) of the
Constitution. [562 E-F] C

10.9 It is true that by the 1981 Notification the rates
of royalty have been enhanced manifold. During the particular
period of fpur years, namely, the fourth period commencing on
April 1, 1978, and ending on March 31, 1982, the rates of
' royalty had not been enhanced but drastically reduced by the D
1979 Notification while the rates of dead rent had been consi-
derably enhanced by the 1979'Notification. The enhancement in
the rates of royalty made by the 1981 Notification was, there-
fore, the first enhancement made during the fourth period of
four years. If the rates of royalty so enhanced are looked at
alone, it would appear that they are unreasonable, but taking E
into account the fact that dead rent is not payable sf ter the
COiiing into force of the 1981 Notification, the position is
completely altered and it cannot be said that enhancement in
the rates of royalty is unreasonable. Though by the 1981 Noti-
,. fication the rates of royalty in respect of certain minor
minerals have been enhanced, by no stretch of imagination can F
such enhancement be said to be excessive or unreasonable when
compared with the rates of royalty specified in the 1974
Notification. [562 F-G; 563 A-D]

ORIGINAL JURISDICTION : Writ Petitions Nos: 1656, 2108,
4097, 7103, 7104-7128, 7697 of 1981, 762, 874-942, 946-968, G
.,J 1616-17. 4455-4473, 4479-4484, 5589-5605, 5895-5969,
· 5971-6005, 6309, 6419-6422, 6463-6479, 10104-10122 of 1982,
3993-4003, 4208-4217, 4912-4924, 5167-5182, 8813-8820,
9539-9549 of 1983,
H
500 SUPREME COURT REPORTS [19861 i s.c.R.
A WITH

Civil Appeals Nos: 706, 1489, 1675, 1934 of 1981J
1525-1526 of 1982.

MADON, J. This group of Writ Petitions under Article 32
of the Constitution and Appeals by certificate granted by the
B High Court of Gujarat and by Special Leave granted this tourt
raises questions relating to the constitutionality of section
15(1) of the Mines and Minerals (Regulation and Development) •
Act, 1957 (Act No. 67 of 1957), the power of the State
Governments to make rules under the said section 15 to enable
them to charge dead rent and royalty in respect of leases of
c minor minerals granted by them and to enhance the rates of
dead rent and royalty during the subsistence of such leases,
the validity of Rule 21-B of the Gujarat Minor Mineral Rules,
1966, and of certain notifications issued by the Government of
Gujarat under the said section 15 amending the said Rules so
as to enhance the rates of royalty and dead rent in respect of
D leases of minor minerals. These Notifications ar" :

(1). GU-74/12l(A)/MCR-21B(49)7268/CHH dated November
29, 1974 (hereinafter referred to as "the 1974 Notification"),

(2) GU-75/117-MCR-2173(49)/6431/CHH dated October 29,
E 1975 (hereinafter referred to as "the 1975 Notifi.cation"),

(3) GU-76/39/MCR-2175(68) 4675-CHH dated April 6, 1976
(hereinafter referred to as "the 1976 Notification").

(4) GU-79/118/MCR-2178(127)-167-CHH dated March 26, 1979 }
F (hereinafter referred to as "the Notification"), and

(5). GU-81/75/MCR 2181/(168)-4536-CHH dated June 18,
1981 (hereinafter referred to as "the 1981 Notifi.cation").

The question of the validity of a circular, namely Circular
G No. M.C.R. 2i80 (166) CHH dated February 12, 1981, issued by
the Deputy Secretary, Industries, Mines and El1~ctricity De- \.
partment, Government of Gujarat, also falls for consideration
in these Writ P"titions and Appeals.

It is unnecessary in order to decide these Writ
H Petitions and Appeals to re!ate the facts of each individual
D.K. TRIVEDI v. STATE [MADON, J] 501

A
J,, matter. It will suffice if we state broadly how these Writ
Petitions and Appeals have come to be filed. The parties
before us, other than the State of Gujarat and governmental
authorities, are persons to whom the State of Gujarat has
granted quarry leases and mining leases in respect of minor
minerals such as black trap, limestone, unrrum, bentonite, B
rubble, marble, sandstone, quartzite, etc. In exercise of the
powers conferred ·by section 15 of the Mines and Minerals
' (Regulation and Development) Act, 1957, the Government of
Gujarat made the Gujarat Minor Mineral Rules, 1966. The said
Rules came into force on April 1, 1966. All the leases in the
matters before ·us were l!iven in the form prescribed by the
said Rules. Schedule I to the said Rules specified the rates c
at which royalty was payable and Schedule II specified the
rates at which dead rent was.payable. By the 1974 Notification
the Government of Gujarat made the Gujarat Minor Mineral
(Fourth Amendment) Rules, 1974, whereby Schedule. I was substi-
tuted and Schedule 11 was amended with effect from December l,
1974. Under the new Schedule I and the amended Schedule II the D
rates of royalty and dead rent in respect of certain minor
minerals were enhanced. In view of several representations
made to it, the Government of Guj~rat decided not to implement
the 1974 Notification and to refund the amount of royalty, if
any, collected at the rates prescribed by the 1974
Notification. By the 1975 Notification the Government of E
Gujarat made the Gujarat Minor Mineral (Second Amendment)
Rules, 1975, whereby Rule 21 of the said Rules and Schedule I
were substituted with effect from November 1, 1975. By the
said substituted Schedule I the rates of royalty in respect of
~ several items were enhanced.
F
We may pause here to mention that the Appellant in Civil
Appeal No. 706 of 1981, Ambalal Manibhai Patel, filed a writ
petition in the Gujarat High Court, being Special Civil Appli-
cation No. 66 of 1978, chalienging the enhancement in the rate
of royalty to Rs. 3 per metric tonne in respect of black trap
and hard murrum specified in Item No. 4 of the said substitu- G
,,f ted Schedule I. The said writ petition was rejected by a
· learned Single Judge of that High Court. The Letters Patent
Appeal against the order of the learned Single Judge, being
Letters Patent Appeal No. 61 of 1978, was heard along with
several writ petitions raising the same questions. The main
contention raised in those matt~rs was that under the proviso H
502 SUPREME COURT REPORTS [1986 J l s.c.R.

A
to section 15(3) of the 1957 Act, the rate of royalty in \.
respect of any minor mineral could not be enhanced by the
State Government more than once during any period of four
years and that the rate of royalty on black trap and hard
mrrwn having been increased by the 197'4 Notification, it
could not be increased again in 1975. A subsidiary contention
B raised was that the State Government had no powl!r to classify
building stones into black trap and hard mrrum because by
doing so what the State Government had done in effect and '
substance was to declare black trap and hard 111!.rrum as minor
minerals and that it was only the Central Government which
possessed the power to declare any mineral not covered by the
C definition of the expression "minor minerals" in clause (c) of
section 3 of the 1957 Act to be a minor mineral. Both these
'contentions were rejected by a Division Bench of the Gujarat
High Court consisting of Thakkar arid Mankad, JJ., by its judg-
ment dated September 16-17, 1980. The Division Bench held that
the 1974 Notification had not become operative and, therefore,
D in issuing the 1975 Notification the State Government had not ,
violated the proviso to section 15(3), and that building
stones having been already included in the definition of
"minor minerals"', there was no bar to the State Government
classifying them into different varieties for the purpose of
recovering royalty. Appeals have been filed iri this Court
E challenging the correctness of the above judgment. The State
of Gujarat has, however, not filed any appeal against this
judgment.

By the 1976 Notification the Government of Gujarat made
the Gujarat Minor Mineral (Second Amendment) Rules, 1976, ~
F substituting Schedule II to the said Rules. Schedule II prior
to the said substitution was as follows

" SCHEDULE II

Rates of Dead Rent
G [See Rule 22 (i)(b)]

1. PCK" specified Minor llinerals.

For every 100 sq. meters or part
thereof, upto 5 hectares Rs. 0.35P.
H
For each additional hectare or P•lrt
thereof, exceeding 5 hectares :as. 50. 00
D.K. TRIVEDI v.'STATE [MADON, J] SQ3

A
2. For other minor minerals

For every lQQ sq. meters or _part
thereof upto 5 hectares Rs. Q.2QP.

For each additional hectare or B
part ther.eof exceeding
S hectares. Rs. 35.QQ

By the 1976 Notification Items 1 and 2 in Schedule 11 were
substituted to read as follows :

"(l) for quarry leases for any minor minersl for c
every hectare or part thereof: Rs.SQQ (Five
hundred)

(2) for quarry parwana for any minor mineral for
every pat'Hana: Rs. lQQ (One hundred)."
·n
On March 26, 1979, the Minister for Mines ·made a
statement in the Legislative Assembly announcing the decision
to implement from Ap~il 1, 1979, the new policy of dead rent
framed by the Government. According to the said statement, the
policy was aimed at breaking the.hold of big lease-holders of
minor minerals who, by finding loopholes in the said Rules, E
had acquired leases for the same mineral in different
districts and had established a ioonopoly in the market and had
made a fortune by exploiting labourers snd eve.ding pa.yment of
roya.lty. According to the ea.id statement, such lease-holders
1'quarded just enough minerals and created artificial shortages·
in order to control the market and maintain high levels of F
profits, and some lease-holders had acquired control of are.as
far in excess of the capacity of their crushers and did not
allow entry to other industrialists. He further stated that
under the said Rules lessees of minor minerals had to pay
royalty on the basis of ioonthly returns but as true ioonthly
returns were not submitted, evasion to the extent of five to G
ten per cent was taking place in the payment of royalty.
~Pursuant to this policy decision the 1979 Notification was
issued by the Government of Gujarat. By the 1979 Notification
the Government of Gujarat made the Gujarat Minor Minerals
(Amendment) Rules, 1979, with effect from April 1, 1979, By
this amendment a new Rule 21-B was inserted in the said Rules, H
Rule 22 was amended, Chapter IV of the said Rules which dealt
504 SUPREME CotlRT REPORTS [1986] 1 S.C.R.

A
with grant of quarrying permits in respect of lands in which\
mi,nerals belonged to the Government was delet•ed, Form D was
amended, Forms, I, J and K were deleted, and Schedule I and II
were substituted. By the substituted Schedule I, the rate of
royalty on all minor minerals was specified as. ten paise per
metric tonne. By the substituted Schedule II the rate of dead
B rent per hectare or part thereof in respect of quarry leases
was, enhanced to Rs .1, 200 in certain cases, Rs. 1, 500 in some
other cases, Rs. 2,000 in one case and Rs. 3,000 in the'·
remaining cases. So far as quarry parwanas were concerned, the
rate was specified as one-tenth of the rate for quarry leases
per parwana.
c
A writ petition was filed by the said Ambalal Manilal
Patel in the Gujarat High Court, being Special Civil
Application No.. 138 of 1978, challenging the enhancement in
the rate of dead rent made by the 1976 Notification. This writ
petition was dismissed by a learned Single Judge of that High
D Court on February 16, 1978. The Letters Paten1: Appeal filed l
against the judgment and order of the learned Single Judge was
heard by a Division Bench of that High Court along with
twenty-five writ petitions . which challenged the 1979
Notification. The said Letters Patent Appeal and writ
petitions were allowed by a Division Bench consl.sting of Sheth
E and Nanavati, .JJ. The Division Bench held that the conditions
in a lease in respect of minor minerals relating to the
financial liability of a lessee derived their authority from
sub-section (3) of section 15 of the Mines and Minerals
(Regulation and Development) Act, 1957, while conditions,
'other than those relating to a lessee's financial liability, t
F regulating the grant of a lease derived th!!ir authority,
from sub-section (1) of section 15, that the State Government
had no power to enhance the rate of dead rent during the
subsistence of a lease, and that Rule 21-B of the Gujarat
Minor Mineral Rules, 1966, and the 1979 Notification were
ultra vires section 15 and sub-clause (g) of clause (1) of
G Article 19 of the Constitution. The Division Bench accordingly
issued a writ of mandamus against the State Government ~
directing it to desist from enforcing the said Rule 21-B and '
the 1979 Notif:lcation. The Division Bench also made the same
declaration in respect of the 1976 Notification and issued the
same mandaD11s in respect thereof. The said judgment of the
H Division Bench is. reported as Smt. Sonbai Pethalji v. State of
Gujarat & Anr. XXI (2) 1980 (2) Guj. L.R. 530.
D.K. TRIVEDI v. STATE [MAOON, J] sos

A The Government of Gujarat accepted the said judgment and A
did not come in appeal to this Court. Certain lessees of
mining and quarry leases, however, have approached this Court
by way of Appeals and Writ Petitions challenging the
correctness of the judgment in Smt. Sonabai's Case. In view of
the said judgment, the Government of Gujarat issued a circular
addressed to all Collectors, District Development Officers and B
the Director, Geology and Mining, Ahmedabad, being Circular
*No. M.C.R. 2180 (166) C1lll dated February 12, 1981, stating
that in view of the aforesaid judgment of the Division Bench
the position prior thereto would prevail and that Chapter IV
of the said Rules which was deleted by the 1976 Notification
would stand revived and would be applied. The Government
thereafter made the Gujarat Minor Mineral (Amendment) Rules, C
1981, by issuing the 1981 Notification which came into force
on June 20, 1981, By the 1981 Notification Rule 21-B was
deleted, Rule 22 was amended, Chapter IV and certain Forms
were inserted, Schedule I to the said Rules was substituted
iand Schedule II thereto deleted. Several lessees of mining and
quarry leases filed writ petitions in the Gujarat High Court D
challenging the validity of the 1981 Notification and the said
Circular. These writ petitions were rejected on the ground
that as connected proceedings were pending in this Court, it
was open to the petitioners to move this Court if they so
desired. ACcordingly, the said petitioners as also others have
filed Writ Petitions in this Court challenging the validity of E
the 1981 Notification and the said Circular as also in some
cases Appeals against the order rejecting the writ petitions.

' The parties before us - whether Petitioners, Appellants,
or Respondents. - fall in different groups according to how
their interests are affected by one or the other of the F
impugned Notifications, They have, therefore, advanced
different sets of submissions at the hearing of these Writ
Petitions and Appeals. The reason for this is obvious. For
extracting or excavating certain classes of minor minerals a
larger surface area is required than for extracting or
If excavating other classes of minor minerals, Thus for clay and G
' earth a larger surface area is required than for bentonite
because in the case of bentonite mining is required to be
deeper. The result is that lessees of larger surface areas are
affected more when the rate of dead rent is enhanced while the
lessees of smaller surface areas are affected more when the
· rate of royalty is enhanced. H
506 SUPREME COURT REPORTS [1986] 1 s.c.R.
A
In order to understand the controvere1y between th~·
parties and the·rival submissions advanced at the Bar, it is
necessary to trace briefly the legislative history of the
enactments providing for the regulation of mines and the
control and development of minerals in India and· then to refer
to the relevant statutory provisions in· that behalf extracting
B such of them as are necessary. There was no :statute dealing
with these matters prior to the enactment of the Mines and
Minerals (Regulation and Development) Act, 1948 (Act No. LUI•
of 1948) but they were governed by executive rules. Rules for
the grant of mineral concessions in British India were for the
first time made by the Department of Revenue and Agriculture
c (Geology and Minerals) by a resolution dated December 13,
1894. These rules were revised in 1899. Neither the 1894 Rules
nor the 1899 Rules made any mention of minor minerals. In 1913
revised rules were made by Resolution No. 7552·-7581-121 dated
September 15, 1913. These rules were intended to provide guid-
ance to officials of the Government in grantJlng prospecting
D licences and mining leases. Unlike the previous rules , these j
rules for the first time, made a reference to minor minerals,
the extraction of which was to be regulated by such separate
rules as the Local Governments might prescribe' in accordance
with local circumstances and requirements. No exhaustive defi-
nition of minor minerals was given, but they Included slate,
E building stone, limestone and clay.

Under the Government of India Act, 1935, the legislative
field of regulation of mines and development of minerals was
divided between the Central Legislature and the Provincial
Legislatures. Entry 36 in List I of the Seventh Schedule to~
F that Act (namely, the Federal Legislative List) provided as
follows :

"36. Regulation of mines and oilfields and mineral
development to which such regulation and develop-
ment under Federal control is declared by Federal
G law to be expedient in the public interest.''

Entry 23 in List II in the Seventh Schedule to that Act"
(namely, the provincial Legislative List) provid.ed as follows:

"23. Regulation of mines and oilfields and mineral
H ·development subject to the provisions of List I
D.K. TRIVEDI v. STATE [MAOON, J) 507
A

with respect to regulation and development under
Federal control."

The word "Federal" in the above entries was substituted by
the word "Dominion" by the India (Provisional Constitution) B
Order, 1947.

No legislation was, howe1er, enacted in pursuance of the
• above power until after Independence, but in 1939 the
Government of India made the Mining Concessions (Central)
Rules, 1939, or regulating grants of prospecting licences and
mining leases in Chief Commissioner's Provinces and British c
Baluchistan. Rule 6 of the 1939 Rules provided that these
Rules were not to apply to minor minerals such as slate,
building stone, limestone and clay, the extraction of which
was to be regulated by such separate rule.s as the Chief
Commissioner might prescribe. Thus, the provisions relating to
minor minerals in the 1939 Rules were similar to those in the D
. \ 1913 Rules and the list of minor minerals was also identical
' under these two sets of rules. Some of the Provincial
Governments, such as the Governments of Assam, Bihar, Bombay
and the United Provinces, also framed their own rules for
grant of mineral concessions.
E
The need for Central regulation of mines and oilfields
and mineral development began to be increasingly felt and
became highlighted during the Second World War with the result
that certain key minerals had to be controlled under the
Defence of India Act, 1939. It was recognized that a planned
,) and uniform policy of mineral development was essential to F
economic and industrial progress. After Independence the
Government of India set out in its Industrial Policy Resolu-
tion of April 6, 1948, the policy which it proposed to pursue
in the industrial field. The Industrial Policy Resolution
included minerals· amongst the industries whose location had to
be governed by economic factors of all-India import or which G
required considerable investment or a high degree of technical
1li skill and consequently had to be the subject of Central re-
7 gulation and control. Accordingly, in pursuance of the power
conferred by Entry 36 in the Federal Legislative List the
, Legislature of the Dominion of India enacted on September 8,
1948, the Mines and Minerals (Regulation and Development) Act, H
1948 (hereinafter referred to as "the 1948 Act"). The object
508 SUPREME COURT REPORTS [1986] 1 S.C.R.
A

of the 1948 Act was to regulat,e mines and oilfields and.f '
mineral development on the lines contemplated in the Industri- ·
al Policy Resolution of April 6, 1948 (see the Statement of
Objects and Reasons to the Legislative Bill which when enacted
became the Mines and Minerals (Regulation and Development)
B Act, 1948, published in the Gazette of India, 1948, Part V,
page 601,c The 1948 Act was brought into force on October 25,
1949, by Notification No. M.II. 155(24)-1 dated October 8,
1949, published in the Gazette of India, Extraordinary, 1949,.•
at page 2075. ·

C Clause (c). of section 3 of the 1948 Act defined "miner-
als" as including "natural gas and petroleum". Section 5(1)
conferred power upon the Central Government to make rules to
regulate the grant of mining leases or for prohibiting the
grant of such leases in respect of any mineral or in any area.
Under clause (d) of section 5(2), in part.icula:~, and without
D prejudice to the generality of the power. conferred by section
5(1), such rules could provide for "the fixing of the maxi1111m f
and minimum rent payable by a lessee, whet he,- the mine is ·
worked or not." Section 6(1) conferred power upon the Central
Government to make rules for the conservation and development
of minerals. Under clause (i) of section 6(2), in particular,
E and without prejudice to the generality of the power conferred
by section 6(1), such rules could provide. for "the levy and
collection of royalties, fees or taxes in respe·~t of minerals
mined quarried, excavated or collected". Section 7 conferred
upon the Central Government the power to make rules for the
purpose of modifying or altering the terms and conditions of
F any mining lease granted prior to the colillllencement of the 1948 ~
Act so as to bring such lease in conformity with the rules
made under section 5 and 6. Under section 10, all rules made
under the 1948 Act were to be laid, as soon as may be after
they were made, before the Central Legislature and after the
counnencement of the Constitution of India, before the House of
G the People.

In exercise of the power conferred by section 5 of the
1948 Act the Central Government made the Mineral Concession~
Rules, 1949, for regulating the grant of prospecting licences
and mining leases for minerals other than petroleum and
H natural gas. The said Rules came into force on October 25,
1949, namely, the date on which the 1948 Act was brought into
D.K. TRIVEDI v. STATE [MADON • .Jl 509
A
~ force. Rule 4 of the said Rules expressly provided that the
said Rules "shall not apply to minor minerals, the extraction
of which s)1all be regulated by such rules as the Provincial
Government may prescribe." After the coamence~nt · of the
0

Constitution, by Notification No. M.11-155(92) dated October
29, 1951\ the word "Provincial" was substituted by the word B
"State". clause (ii) of Rule 3 defined the expression '~minor
mineral". The said definition in its finally amended form was
., as follCMS

"(ii) 'minor mineral' means building stone, bould-
er, shingle, gravel, Chalcedony pebbles used for
ball mill purposes only, limeshell kankar and lime- C
stone used for . lime burning, mrrum, brick-earth,
Fuller's earth, Bentonite, ordinary clay, ordinary
sand used for non-industrial .purposes, road metal,
reh-matti, slate and shale when used for building
material." '
D
) Although the said Rules did not apply to min9r minerals, in
view of certain arguments · advanced at the Bar it would be
useful to look at the material provisions of Rule 41 of the
said Rules as finally amended. Rule 41 prescribed the
conditions which every mining lease was to include. 'nle
provisions of the said Rule 41 material for our purpose were E
as follCMs:

"41. Conditions -
(1) Every mining lease shall include the following
conditions;- F

(i) The lessee shall pay royalty on ainerals
despatched from the leased areas at the rate
epecif ied in the First Schedule to these rules as
in force on the date of the grant of the lease;
G
Provided that . _the lessee shall pay royalty at such
revised rates as may be notified from time to time;

Provided further that the rate of royalty shall not
be revised more than once in two years, nor it
shall be in excess of twenty percent of the sale H
value of the mineral at the pit's mouth.
510 SUPREME COURT REPORTS [1986] 1 $.C.R.

A ( i-:-A) · Where the lessee is a Gcnrernmerit or . a .
~asi--O>vernment organisation, the rate. of ToyaltY.j..
s~ll be fixed by the Central Government · bf
negotiation between the lessor and the lessee~- ·
. ·,
x x x · X

B (iii) The lessee shall also PaY, for . ev~ry _year,
except the first year of the leaSE!, .suth year.l y
4
dead rent within the limits specified -in the :'l'hird
Schedule to these · Rules, as may ~ fixed by -~he ·
State Government in the lease; and if the leas~.
permits the wo~k.iog of more than one Ddne~~l. ·.·in::·ih~
c. same area, .the State Government may duir·ge··:.separate
dead rerit in respect of ·each mineral:

Provided that the lessee -shall be liable to pay the
dead-rent or royaity in respect of each mineral,
whichever be higher in aioount, but not both. ·
D
(iv) The lessee shall also pay, for the surface
area used by him for the purposes of the mine,
surface rent at such rate, not exceeding the land
revenue and ceases assessable on the land-, as may
be specified by the State Government in the lease.
E
x x x x

Thus, even after the enactment of the 1948 Act and the framing
of the Mineral Concession Rules, 1949, minor minerals continu-
ed to be governed by rules made by the State Gove!rnments. 1-.
F
Until the coming into force of the State Reorganisation
Act, 1956, on November 1, 1956, the territories of the State
of Bombay included the territories now forming part of .the
State of Gujarat except Saurashtra which was a Part B State
and Kutch which was a Part C State • . Under section 8 of the
G States Reorganisation Act, the territories of the then
existing States of Saurashtra and Kutch became part of the i
territories of the State of Bombay.

It will be useful to refer to the rules in force in thi
State of Bombay as at the date of the reorganization oJ
li states.
D.K. TRIVEDI v. STATE [MADON, J] 511

A
~ By order No. IND/Q/58/2500 dated November 18, 1949, the
Government of Saurashtra made regulations governing the
operation of various kinds of quarries in Saurashtra. Schedule
I to the said Order contained rules in that behalf. Rule (7)
provided as follows:

"(7) A surface rent and dead rent or minimum

. Royalty at the rate specified in schedules V and
VI shall be recovered on all quarry materials
permitted or licensed to be quarried and removed
under Rule (2)."

The Saurashtra Rules applied . to white clay, stones and other C
minerals specified in Schedule V to the said Order.

By Notification No. MNL-1154-M dated December 28, 1954,
the Government of Bombay in exercise of the power conferred by
Rule .4 of .the Mineral Concession Rules, 1949, made the Bombay
)Minor .Miner al Extraction Rules, 1955, which came into force on
0
D
June 1, 1955. Clause :(iv) of Rule 2 defined "Quarrying lease".
The said definition was as follows :

"(iv) 'quarrying lease' means a lease to mine,
quarry, bore, dig and search for, win, work and
carry away any minor mineral specified therein". E

Rule 18 prescribed the conditions which every quarrying lease
was to include. The relevant provisions of the said Rule 18
were as follows

"18. Conditions. - F

( 1) Every quarrying lease shall include the
following conditions :·-

(i) The le.ssee shall pay royalty on minor minerals
despatched . ftom the leased area at the rates G
specified in Schedule I to these Rules :
)
Provided that such rates shall be liable to be
revised once in every 5 years.
512 SUPREME COURT REPORTS [19861 1 s.c.R.
A

(ii) The lessee shall also pay for every year of<.
the lease such yearly dead rent within the limits
specified in Schedule II to these Rules as may be
fixed by the Collector in the lease; and if the
lease permits the working of more than one mineral
B in the same area, the Collector may fix separate
dead rent in respect of each mineral :

Provided that the lessee shall be liable to pay the ~
dead rent or royalty in respect of each minor
mineral, whichever be higher in amount, but not
c both.

(Hi) The lessee shall also pay, for the surface
area used by him for the purposes c1f the quarry,
surface rent at such rate, not exce1~ing the land
revenue and ceases assessable on thE• land, as may
D be fixed by the Collector and specified in the
lease.

x x x x."
Under the Government of India Act, 1935, "petroleum and
E other liquids and substances declared by Fede1~al law to be
dangerously inflammable, so far as regards possession, storage
and transport" formed a separate legislative topic being Entry
32 in the Federal Legislative List, while oilfields and
mineral oils fell under Entry 36 in the said L:Lst along with
mines and mineral development. Under the Constitution of
F India, hOlll'ever ,. the old Entry 36 was divided into two and the )-
regulation and development of oilfields and mineral oil
resources became a separate legislative top!.c along with
petroleum and petroleum products, and other liquids and subs-
tances declared by Parliament by law to be dangerously inflam-
mable. The relevant legislative Entries in the Ccmstitution of
G India are Entries 53 and 54 in List I in the Se,1enth Schedule
to the Constitution of India, namely, the Union List. These
two Entries read as follows

"53, Regulation and development of oilfields and
mineral oil resources; petroleum and petroleum
H products; other liquids and substancEos declared by
Parliament by law to be dangerously inflammable.
D,K, TRIVEDI v. STATE [MADON, j) 513
A
54. Regulation of mines and mineral development to
the extent to which such regulation and develo_pment
under the control of the Union is declared by
Parliament by law to be ex_pedient in the public
interest."
B
Entry 23 in List II in the Seventh Schedule to the Constitu-
tion, namely, the State List, corresponds to Entry 23 in the
"' Provincial Legislative List in the Government of India Act,
1935, and is as follows :

"23. Regulation of mines and mineral development
subject to the provisions of List I with respect to
c
regulation and development under the control of the
Union."

In 1957 Parliament decided that the regulation and
develo_pment of mines and minerals should feature by themselves
D
I in a separate Act. Accordingly Parliament enacted on December
28, 1957, the Mines and Minerals (Regulation and Development)
Act, 1957 (Act No. 67 of 1957), hereinafter referred to as
"the 1957 Act". Section 32 of the 1957 Act amended the 1948
Act in the manner set out in Schedule III to the 1957 Act so
as to remove from the 1948 · Act all references to mines and
E
minerals and to confine it to oilfields and mineral oil ·
resources. The short title of the 1948 Act was also amended to
read "The Oilfields (Regulation and Development) Act, 1948",
and its long title was amended to read "An Act to provide for
the regulation of oilfields and for the development of mineral
-I oil resources". The 1957 Act was btought into force on June 1, F
1958, by Notification No. G.S.R. 432 dated May 29, 1958,
published in the Gazette of India, Extraordinary, 1958, Part
II, sec. 3(i), at page 225.

A number of provisions which till then had been dealt
with under the rule-making powers of the Central Government
G
were transferred to the 195 7 Act in order to restrict the
> scope of subsidiary legislation. Thus, instead of leaving it
' to the rules made by the Central Government to define the term
"minor mineral", the definition of that term was embodied in
the 1957 Act. Amongst the other provisions which fell within
the scope of the rule-making powers of the Central Government
H
and were made part of the 1957 Act were the provisions for the
514 SUPREME COURT REPORTS (1986] l S.C.R.

A
maximum period for which a prospecting licence or a miningl.
lease was to be gr.anted and the power to prescribe the rates
of royalty for various minerals (see the Statement Of Objects
and Reasons to the Legislative Bill No. 49 of 1957, which when
enacted became the 1957 Act, published in the Gazette of
India, Extraordinary, dated July 29, 1957, Part II, sec.2, at
B page 392). The 1957 Act was amended with retrospective effect
by the Mines and Minerals (Regulation and Development) Amend-
ment Act, 1958 (Act No. 15 of 1958). This Amendment Act dealt •
with mining leases in respect of coal granted before October
29, 1949, and does not concern us. The 1957 Act was again
amended by the Mines and "Minerals (Regulation and Development)
C Amendment Act, 1972 (Act No. 56 of 1972), which came into
force on September. 12, 1972. The Amendment Ac.t of 1972 was
enacted mainly to carry out the reconnnendations made by the
Mineral Advisory Board. Amongst the principal changes affected
in the 1957 Act by the Amendment Act of 1972 were the imposi-
tion of a ceiling on the individual holdings of prospecting
D licences and mining leases; the imposition of a specific obli- i
gation on holders of mining leases in respect of payment of
royalty for minerals removed by their agents, sub-lessees or
employees; providing a statutory basis for calculation of dead
rent; and the application of Minor Mineral Rules to quarry
leases (see the Statement of Objects and Reasons to the Legis-
E lative Bill No. 83 of 1972, which when enacted became the
Amendment Act of 1972, published in the Gazette of India,
Extraordinary, dated August 21, · 1972, Part II, s'ec. 2, at page
828).

We will not turn to the relevant provisions of the 1957 1-
F Act. Section 2 of the 1957 Act contains a declaration that it
is expedient in the public interest that the Union should take
under its control the regulation of mines and the development
of minerals to the extent provided in the 1957 Act. Certain
definitions given in section 3 are important and may be repro-
duced. These definitions are those contal.ned i'n clauses (a)
G and (c) to (e) of the said section 3. These clauses pro-1ide
as follows {_

"3. Definitions. -

In this Act, unless the context other1orise requires,
H
D.K. TRIVEDI v. STATE [MADON, J] 515
A
(a) 'minerals' includes all minerals except mineral
oils;

x x x x
B
(c) 'mining lease' means a lease granted for the
purpose of undertaking mining operations, and in-
cludes a sub-lease granted for such purpose;

(d) ;mining operations' means. any operations
· undertaken for the purpose of winning any mineral;

(c) 'minor minerals\ means building stones, gravel,
c
ordinary clay, ordinary sand other ·than sand used
for prescribed purposes, and any other mineral
which the Central Government may, by notification
in the Official Gazette, declare to be a minor
mineral".
D
It is pertinent to note that the term "minor minerals" came to
be defined in a statute for the first time by clause (e) of
section 3 of the 1957 Act. In addition to the minor minerals
mentioned in the said clause (e),- boulder; shingle; chalcedony
pebbles used for ball mill purposes only; limeshell, kankar
E
and limestone used in kilns for manufacture of lime used as
building material; llllrrum; brick-earth; Fuller's earth;
bentonite; road metal; reh-matti; slate and shale when used
for building material; marble; stone used for making household
i utensils; quartzite and sandstone when used for purposes of
~ building or for making road m~til and household utensils; and
F
"'
slatpetre, have been declared t·o be minor _minerals by varioue
notifications issued by the Central Government. Under section
4A which was inserted by the Amendment Act of 1972, where in
the interest of regulation of mines 8"'ld mineral development it
.is · thought expedient to grant a mining 1ease in favour of a
Government company or corporation owned or controlled by the
G
. Government and for that purpose to terminate prematurely a
) mining lease in respect of a mineral other than a minor
mineral, it is for the Central Governlllent, after consultation
with the State Government, to form the opinion with respect to
such expediency, while it is for the State Government, after
consultation with the Central Government, to form the opinion
H
with respect to such expediency in the case of a mining lease
516 SUPREME COURT REPORTS [19861 1 s.c.R.
A
in respect of any minor mineral. Section 5 prescribes the{,
restrictions on the grant of prospecting licences and mining
leases. Section 6 prescribes the maximum area for which a
prospecting licence or mining lease. can be granted. Section 7
prescribes the period for· which a prospecting licence can be
granted or renewed and section 8 prescribes the period for
B
which a mining lease can be granted or renewed. Section 9 !s
important and requires to be reproduced in extenso. It reads
as follows - .,

"9. "Royalties in respect of mining le.ases.-
c ( 1) The holder of a mining lease gran.ted before the
co11111encement of this Act shall, n1otwithstanding
anything contained in the instrument of lease or in
any law in force at such comnencement, pay royalty
in respect of any mineral removed or consumed by
him or by his agent, manager, employee, contractor
D
or sub-lessee from the leased area after such i
co11111encement, at the rate for the time being
specified in the Second Schedule in respect of that
mineral.

( 2) The holder of a mining lease :~ranted on or
after the commencement of this A.~t shall pay
royalty in respect of any mineral removed or
consumed by him or by his agent, manager, employee,
contractor or sub-lassee from the leased ares at
the rate for the time being specified in the Second
Schedule in respec~f that mineral. \-

(2A) The· holder of a mining lease, whether granted
before or after the co11111encement of the Mines and
Minerals (Regulation and Development) Amendment
Act, 1972, shall not be liable to pay any royalty
in respect of any coal consumed by a workman engag-
G
ed in a colliery provided that such consumption by
the workman does not exceed one-third of a tonne 4
per month.

(3) The Central Government may, by nc1tificatir:!I in
the Official Gazette, amend the Second Schedule so
H
as to enhance or reduce the rate at which royalty
D.K. TRIVEDI v. STATE [MADON, J] 517
A
shall be payable in respect of any mineral with
effect from such date as may specified in the
notification :

Provided that the Central Government shall not
B
enhance the rate of royalty in respect of any
mineral more than once during any period of four
years."

The words "mineral removed or consumed by him or his agent,
manager, employee, contractor or sub-lessee" were substituted
in sub-sections (1) and (2) by the Amendment Act of 1972 for (
the words "mineral removed by him". Sub-section (2A) was
inserted in section 9 by the same Amendment Act. The proviso
to sub-section (3) was substituted by the Amendment Act of
1972 for the original proviso which read as follows :

"Provided that the Central Government shall not-
I
(a) fix the rate of royalty in respect of any
mineral so as to exceed twenty per cent of the sale
price of the mineral at the pit's head, or

(b) enhance the rate of royalty in respect .of any
mineral more than once during any period of four
years."

Section 9-A was inserted in the 1957 Act by the Amendment Act
of 1972. It reads as follows :
-I
9A. Dead rent to be paid by the. leasee. -

(1) The holder of a mining lease, whether granted
before or after the colllllencement of the Mines and
Minerals (Regulation and Development) Amendment
Act, 1972, shall, notwithstanding anything contain-
G
ed in the instrument of lease or in any other law
for the time being . in force, pay to the State
Government, every year, dead rent at such r.ate as
may be specified, for the time being, in the Third
Schedule, for all the areas included in the instru-
ment of lease :
H
518 SUPREME COURT REPORTS [1986] l s.c.R.
A
Provided that wh_ere the holder of such mining lease '-
becomes liable, under section 9, to pay royalty for
any mineral removed or consumed by him or by his
agent, manager, employee, contractor or sub-lessee
from the leased area, he shall be liable to pay
either such royalty or the dead rent in respect of
B
that area, whichever is greater.

(2) The Central Government may, by notification in
the Official Gazette, amend the Third Schedule so
as to enhance or reduce the rate at which the dead
rent shall be payable in ree1pect of any area
c covered by a mining lease and such E!nhancement or
reduction shall take effect from such date as may
be specified in the notification :

Provided that the Central Government shall not
enhance the rate of the dead rent in respect of any ,
D such area more than once during any period of four '
years."

Sections 10 to 12 prescribe the procedure for obtaining
prospecting licences and mining leases in respec:t of land in
which the min~rals vest in the Government. Under section 10,
E
such applications are to be made to the concerned State
Government and the State Government is to grant or refuse to
grant such licence or lease having regard to the provisions of
the 1957 Act and any rules made thereunder. Under the Mineral
Concession Rules, 1949, the procedure was very similar with
differences which are not material for our purpose. Sections \-
F 13 to 16 form a group of sections under the heading "Rules
for regulating the grant of prospecting licenceos and mining
leases". Section 13 confers rule-making power upon the Central
Government. The relevant provisions of that section are as
follows :
G "13. Power of Central Government to 1118ke rules in
respect of llinerals. - ~

(1) The Central Government may, by notification in
the Official Gazette, make rules for regulation the
grant of prospecting licences and mining leases.in
H
respect of minerals and for purposes connected
therewith.
D.K. TRIVEDI v. STATE [MAOON, J] 519

A
(2) 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 ·-

x .x x x B

(i) the fixing and collection of dead rent, fines,
fees or other charges.and the collection of royal-
ties in respect of -

(i) prospecting licences,
(ii) mining leases , C
(iii)minerals mined, quarried, excavated or collec-
ted;

x x x

(r) any other matter which is to be, or may be, D
prescribed under. this Act."

Sections 14 and 15 provide as follows :

"14. Sections 4 to 13 not to apply to minor
alnerals. - E

The provisions of sections 4 to 13 (inclusive)
shall not apply to quarry leases, mining leases or
other mineral concessions in respect of miJ>or
-i minerals.
F
15. POifer of State Government to make rules in
respect of llinDr alnerals. -

(1) The State Government may, by notification in
the Official Gazette, make rules for regulating the
grant of quarry leases, mining leases or other G
mineral 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
g;-ant of quarry leases, mining leases or other H
5.20 SUPREME COURT REPORTS (19861 1 s.c.R.

A
mineral concessions in respect of minor minerals 4-
which are in force iuoediately before the coaoence-
ment of this Act shall continue in force.

(3) The holder of a mining lease or any other.
mineral concession granted under any rule made
B under sub-section (l) shall pay royalty in respect
. of minor minerals removed or consllllll!<i 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 :
c
Provided that the State Government shall not
enhance the rate of royalty in respect of any minor
mineral for more than once during any period of ~
four years."
D In section 14 and in sub-sections (l) and (2) of section 15 ,
the words "quarry leases, mfuing leases or other mineral
concessions" were substituted by the Amendment Act of 1972 for
the words "prospecting licences and mining le~1ses". Sub-sec-
tion (3) was inserted in section 15 with retro,;pective effect
by the same Amendment Act. Section 19 provides as follows :
E

"19. Prospecting licences and llin:l:11g leases to be
void if in contravention of Act. -

Any prospecting licence or mining lease granted, \-
F renewed or acquired in contravention of the
provisi!)ns of this Act or any rules or orders made
thereunder shall be.void and of no effect.

Ellplanat:l:on. - Where a person has acquired more
than one prospecting licence O•r mining lease in any
G State and the aggregate area covered by such
licences .or lea8es, as the case .may be, exceeds the ~
max:hmim area permissible under sect:lon 6, only that
prospecting li~ence.or mining lease the acquisition
of ;.w!iich has •resulted in such .maxiOP.1111 area being
exceeded•.:shalL be deemed to be .void."
H
D.K. TRIVEDI v. STATE [MADON, J] 52-1
A
~ Under section 20 the provisions of the 1957 Act and the rules
made thereunder apply to the renewal of any prospecting
licence or mining lease whether granted before or after the
commencement of the 1957 Act. Under section 28(1), rules and
notifications made by the Central Government are to be laid B
before Parliament and to be subject to any modification which
may be made by Parliament, and if not approved, are thereafter
to be of no effect. Under section 29 all rules made or pur-
~ porting to have been made under the 1948 Act in so far as they
related to matters for which provision was made in the 1957
Act and were not inconsistent therewith are to be deemed to
have been made under the 1957 Act and to continue in force c
until superseded by any rules made under the 1957 Act.

In exercise of the power conferred by section 13 of the
1957 Act, the Central Government, by Notification No. G.S.R.
1398 dated November 11, 1960, published in the Gazette of
India dated November 26, 1960, Part II, sec. 3(i), at page D
1 1832, made. the Mineral Concession Rules, 1960. Rule 27 of the
said Rules sets out the conditions to which every mining lease
is to be subject. The relevant provisions of Rule 27 are as
follows :

"27. Conditions. - (l) Every mining lease shall be E
subject to the following conditions · and.· ·such
conditions shall be incorporated .in every mining
leaile -

x x x x
-J F
(c) the lessee shall pay, for every:. year,• ·except
the first year of the leaile such' yearly dead :rent
within the limits specified in .Schedule IV as' may
be fixed from time to ·time by.the State ·Government
and if the lease permits the wor~ing of iiiote than
one mineral in the sale area, the State.Go~e1'nnliint G
shall not charge separate dead rent in respect of
each mineral :

Provided that the lessee shall be liable to pay the
• dead rent of royalty in respect of each mineral
whichever be higher in amount but not both; H
522 SUPREME COURT REPORTS (1986 J 1 s.c.R.

A
(d) the lessee shall also, pay for the. surface area +
used by him for the purpose of mining operations ,
surface rent and water rate at such rate not
exceeding the land revenue, water and cesses
assessable on the land, as may be specified by . the
State Government in the lease;
B
x x x x

(5) If the lessee makes any default in payment of
royalty as required by section 9 or commits a
breach of any of the conditions other than those
c referred to in sub-rule ( 4), the State Government
shall give ootice to the lessee requiring" him to
pay. the royalty or remedy the breach, as the case
may be, within sixty days from the date of the
notice and if the royalty is not p~icLor the breach
is · not remedied within such petfod, the -State
D Government may, without prejudice to any proceeding :
that may be taken against him, deterIDine the lease
and forfeit the whole or part of the security
deposit."

In exercise of the power conferred by section 15( 1) of
E the 195 7 Act · various State Governments have made rules in
respect of minor minerals. Although these rules vary from
State to State, there are certain broad featutres present in
all of them. The majority of States provide for two types of
mineral concessions, namely a lease on tenure basis and a
permit to extract a specified quantity of a mi.n<u: mineral. In \-
F all the _States the rules provide for the grant of a lease for
a particular term of ·years varying from one year to twenty
years. These _leases are variously described in different State
rules as "mining lease", "quarrying lease" and "quarry lease"
and are similar in nature to· the mining leasE•S granted under
the Mineral Concession Rules, 1960. In most of-the State rules
G there is a provision for the grant of a permlt to excavate a
specified quantity of a minor mineral from ~· specified area +.
within a prescribed time. These permits are refer.red to iii
different State rules as "permit", "quarrying permit", "mining
permit" and. "short-term permit". In some of the State rules •
there is also a provision for the grant of a prospecting
H licence. All State rules which provide for payment of royalty
D.K. TRIVEDI v. STATE [MADON, J] 523

A
and dead rent contain a provision that either dead rent or
4 royalty, whichever is higher in amount, but not bo<:h, would be
p·ayable. In addition, most State rules also contain a provi-
sion for the payment of surface rent. In certain State rules,
for instance, those of the Andhra Pradesh and Tamil Nadu,
royalty is called "seigniorage fee" (See the "Digest of Minor B
Mineral Lawe of India" issued in 1974 by the Controller,
Indian Bureau of Mines, Nagpur, PP• 5-8).

*). With effect on or from May 1, 1960, by the Bombay
Reorganisation Act, 1960, certain territories comprised in the
State of Bombay were formed into R separate State, namely, the
State of Gujarat, and the territories which remained with the C
State of Bombay were renamed as the "State of Maharashtra".
The State of Gujarat, however, did not, in the exercise of the
power conferred by section 15(1) of the 1957 Act, make any
rules for minor minerals until 1966 and until such rules were
made, the· rules in force innnediately before the commencement
, of the 1957 Act continued to apply in the State of Gujarat by D
\virtue of the provisions of section 15(2). By Notification No.
GU 125-MCR 2164/508'9/Clffi dated March 18, 1966, the Government
of Gujarat made the Gujarat Minor Mineral Rules, 1966, for
regulating the grant of mining leases in respect of minor
minerals and for purposes connected therewith. These Rules
will be hereinafter referred to as "the Gujarat Rules". The E
Gujarat Rules came into force on April 1, 1966. Rule 41 of the
Gujarat Rules repealed the Bombay Minor Mineral Extraction
Rules, 1955, and all other rules in force in any part of the
State of Gujarat innnediately before the coming into force of
~he Gujarat Rules. We will point out the relevant provisions
_"'of the Gujarat Rules when we come to discuss the question of F
·the validity of Rule 21-B of the Gujarat Rules and the
impugned Notiffaations and the impugned Circular dated
February 12, 1981.

The first contention which was raised before us was that
section 15(1) of the 1957 Act is unconstitutional as suffering G
from the vice of excessive delegation of legislative power to
~he executive. It was submitted that the rule-making power
conferred upon the State Governments by section 15(1) was an
uncanalized power as no guidelines were prescribed for its
exercise and thus it enabled 'the State Governments to act
arbitrarily and as they liked with respect to leases of minor H
524 SUPREME COURT REPORTS [19B6J l s.c.R.
A
minerals, We find that this contention is based upon a fallacy ~
inasruch as it is founded upon reading the provisions of
section 15(1) in isolation and without reference to the other
provisions of the 1957 Act and its legislative history.

The 1957 Act is made in exercise of the powers conferred
B by Entry 54 in the Union List. The said Entry ;,4 and Entry 23
in the State List· fell to be interpreted by a Constitution
Bench of this Court in Baijnath Kedia v. State uf Bihar & Ors. • ..
[1970] 2 S.C,R. 100. In that case this Court held that Entry
54 in the Union List speaks both of regulation of mines and
mineral development and Entry 23 in the State List is subj-ect
c to Entry 54, Under Entry 54 it is open to Parliament to
declare that it is expedient in the public interest that the
control in these matters should vest in the Central Govern-
ment. To what extent such a delcaration c,an go is for Parlia-
ment to determine and this must be commensurate with public
interest but once such declaration is made and the extent of
D such regulation and development laid down the subject of the j, ,\ ,.
legislation to the extent so laid down becO!llE!S an exclusive \·
subject for legislation by Parliament. Any legislation by the
State after such declaration which touches upon the field
disclosed in the declaration would necessarily be unconstitu-
tional because that field is extracted from the legislative
E competence of the State Legislatute. In that case the Court
further pointed out that the expression "under the control of
the Union" occurring in Entry 54 in the Union List and Entry
23 in the State List did not mean "control of the Union
Government" because the Union consists of three limbs, namely,
Parliament, the Union Government and the Unio11 Judiciary, and ~ 1
F the control of the Union·which is to be.exercised under the
said two Entries is the one to be exercised by Parliament,
namely, the legislative organ of the Union, which is,
therefore, the control by the Union. The Court further held
that the Union had taken all the power in respec~ of minor
minerals to itself and had authorized the State Governments to
G make rules for the regulation of leases E1nd thus by the
declaration made in section 2 and the enactment of section 15
the whole of the field relating to minor minerals came withinl
the jurisdiction of Parliament and there was no scope left to
the State Legislatures to make any enactlllE.'!lt · with respect
thereto. The court also held that by giving the power
H
D.K. TRIVEDI v. STATE [MADON, J] 525
A

J;. to the State Governments to make rules, the control of the
Union was not negatived but, on the contrary, it established
that the Union was exercising the control. One of the conten-
tions •aised in that case was that section 15. was unconstitu-
tional as the delegation of legislative-power made by it to B
the rule-making authority was excessive. This contention was,
however, not decided by the Court as the appeals in that case
were allowed on other points •

..The rule-making power conferred by section 15 (1) was
for regulating the grant of prospecting licences and mining
leases and for purposes connected therewith prior to the C
Amendment Act of' 1972 and thereafter is for regulating the
grant of quarry leases, mining leases and other mineral
rgncessions in respect of minor minerals and for purposes
connected therl;!with. The phraseology of section 15(1) is the
same as that of section 13(1) which confers rule-making power
\,. upon the Central Government with this difference that by the D
•\ Amendment Act of 1972 the expression "quarry leases, mining
leases or other mineral concessions" has been substituted in
section 15(1) for the words "prospecting licences and mining
leases" while the expression "prospecting licences and mining
leases" in section 13(1) remains unchanged,
E
The term "minerals" is defined by clause (a) of section
3 as including "all minerals except mineral oils". This
definition would thus include minerals which are minor
minerals as also minerals other than minor minerals. The term
-~"minor minerals" is, however, separately defined by clause (e)
- I because the power to make rules in respect thereof is vested F
· by section 15(1) in the State Governments while the power to
make rules with respect to minerals other than minor minerals
is vested in the Central Government. The word "minerals" in
different se"ctions of the 1957 Act is used with the meaning
assigned to it by clause (a) of section 3, that is, as
denoting "all minerals except mineral oils", unless the con\ G
text requires otherwise, and where the Act wishes to make a
..., minor minerals,
distinction between minor minerals and minerals other than
it does so expressly. For instance,
sub-section (l) of section 4A speaks of "premature termination
of a mining lease in respect of any mineral, other than a
·raf.nor mineral" and sub-section (2) of section 4A speaks of H
"premature termination of a mining lease in ·respect of any
526 SUPREME COURT REPORTS [19861 1 s.c.R.
A

minor mineral". To take another illustration, under section 19 .~
any prospecting licence or mining lease grante,d, renewed or
acquired in contravention of the provisions qf the 1957 Act or
any rules or orders made thereunder is to be void and of no
effect. This section would apply to a prospecting licenc'e or a
B mining lease both in respect of minor minerals and minerals
other than minor minerals. Were it not so, the result would be
startling for while a prospecting licence or a mining lease in
respect of minerals other than minor minerals would be void ~~
and of no effect if it is in contravention of the provisions .
of the 1957 Act or any rules or orders made thereunder, in the
c case of a prospecting licence or a mining lease in respect of
minor minerals such licence or lease would not b1~ void even if
it is in contravention of the provisions of the 1957 Act or
any rules or orders made thereunder. 'fhe Explanation to
section 19 is an illustration of a case wher.e the context
excludes a prospecting licence or a mining lease in respect of
D minor minerals and this is by reason of 1:he reference
' '
contained in that Explanation to section 6 b•icause by the '
express terms of section 14, section 6 does not apply to minor
minerals. Thus, the word "minerals" wherever used in the 1957
Act would include minor minerals unless minor minerals are
expressly excluded or the context otherwise requ:Lres.
E
Bearing this in mind, we now turn to examine the nature
of the rule-making power conferred upon the State Governments
by section 15(1 ). Although under section 14, section 13 is one
of the sections which does not apply to minor minerals, the

F
language of section 13(1) is in pad materia with the language
of section 15(1). Each· of these provisions confers the power \-
,.
to make rules for "regulating". The Shorter Oxford English
Dictionary, Third Edition, defines the word "'regulate" as
meaning "to control, govern, or direct by rule or regulations;
to subject to guidance or restrictions; to adapt to circums-
tances or surroundings". Thus, the power to regulate by rules
G given by sections 13(1) and 15(1) is a power to control,
govern and direct by rules and grant of prospecting licences
and mining leases in respect of minerals othe'r. than minor
minerals and for purposes connected therewith in the case of "
section 13(1) and the grant of quarry leases, mining leases
and other mineral concessions in respect of minor minerals and
H for purposes connected there...with in the case of section 15(1)
and to subject such grant to restrictions and to adapt them to
D.K. TRIVEDI v. STATE [MAOON, J) 527

~ .
the circumstances of the case and the surroundings with refer-.·
ence to which such power is exercised. It is pertinent to bear
in mind that the power to regulate conferred by sections 13(1)
and 15(1) is not only with respect to the grant of licences
and leases mentioned in those sub-sections but is also with
respect to "purposes connected therewith", that is, purposes
connected with such grant.

Entry 54 in the Union List uses the word "regulation".
;'Regulation" is defined in the Shorter Oxford English
Dictionary, Third Edition as meaning "the act of regulating,
or the state of being regulated". Entry 54 ·reproduces the
language of Entry 36 in the Federal Legislative List in the
Government of India Act, 1935, with the omission of the words
"and oiifields". When the Constitution came to be enacted, the
framers of the Constitution knew that since early days min~s
and minerals were being regulated by rules made by Local
" Governments. They also knew that under the corresponding Entry
• 36 in the Federal Legislative List, the 1948 Act had been
enacted and was on the statute book and that the 1948 Act
conferred wide rule-making power upon the Central Government
to regulate the grant of mining leases and for the conserva-
tion and development of minerals. It also knew that in the
exercise of such rule-making power the Central Government had
made the Mineral Concession Rules, 1949, and that by Rule 4·of
the said Rules the extraction of minor minerals was left to be
regulated by rules to be made by the Provincial Governments.
Thus, the makers of the Constitution were not only aware of
• the legislative history of the topic of mines and minerals but
- I were also aware how the Dominion Legislature had interpreted
Entry 36 in the Federal Legislative Listin enacting the 1948
Act. When the 1957 Act came to be enacted, Parliament knew
that different State Governments had, in pursuance of the
provisions of Rule 4 of the Mineral Concession Rules, 1949,
made rules for regulating the grant of leases in respect of
minor minerals and other matters connected .therewith and for
this reason it expressly provided in sub-section (2) of
..,section 15 of the 1957 Act that the rules in force immediately
before the commencement of that Act would continue in force
until superseded by rules made under sub-section (1) of
section 15. Regulating the grant of mining leases in respect
of minor minerals and other connected matters was, therefore,
not something which was done fur the first time by the 1957
528 SUPREME COURT REPORTS [1!186] 1 s.c.R.
A

Act but followed a well-recognized and accepted legislative .w
practice. In fact, even so far as minerals other than minor
minerals were concerned, what Parliament did, as pointed out
earlier, was to transfer to the 1957 Act certain provisions
which had until then been dealt with under the rule-making
B power of the Central Government in order to restrict the scope
of subordinate ?egislation. To take into account legislative
history and practice when considering the validity of a statu- 1.
tory provision or while interpreting a legislative entry is a 1 '·
well-established principle of construction of statutes : see,
for instance, State of llollbay v. Narotham:las Jetbabai and Anr.
[1951] s.c.R. 51 and State of Madras v. Gannon Dunkerley & Co.
(Madras) Ltd. [1959] s.c.R. 379.

There is no subst~nce in the contention that nu 1-
guidelines are provided in the 195 7 Act for the exercise of
the rule-making power of the State Governments under section
D 15(1), As mentioned earlier, section 15(1) ·is in psri materia "
with section 13(1), Section 13 0 however, contai11s sub-section •
(2) which sets out the particular matters wil:h respect to
which the Central Government may make rules "ln particular,
and without prejudice to the generality of the foregoing
power", that is, the rule-making power conferred by
E sub-section (1), It is well settled that where a statute
confers particular powers without prejudice to the generality
of a general power alreadp conferred, tt.e particular powers
are only illustrative of the general power and do not in any
way restrict the general power. Section 2 of the Defence of

F
India Act, 1939, as amended by section 2 of the Defence of t
India (Amendment) Act, 1940, conferred upon the Central -
Government the power to make such rules as appeared to it "to
be necessary or expedient for securing the defonce of Britis,h
India, the public safety, the maintenance of public order or
the efficient prosecution of war, or for maintaining supplies
and services essential to the life of the co1lllllll1ity". Sub-
G section (2) of section 2 conferred upon the Centnal Government
the power to provide by rules or to empower any authority to
make orders providing for various matters set out in the said•
sub-section. This power was expressed by the opening words of
the said sub-section (2) to be "Witho11t pr1~judice to the
generality of the powers conferred by sub-section ( 1)". In
H King Emperor v. Siboath Banerji and Ore., [1944-1945] 72 I.A.
241, the Judicial Committee of the Privy Council held (at
pages 258-9) :
D.K. TRIVEDI v. STATE [MAOON, J] 529
A
"In the opinion of their Lordships, the function or
sub-s. 2 is merely an illustrative one; the rule-
making power is conferred by sub-s. 1, and the
rules which are ref erred to in the opening sentence
of sub-s ,' 2 are the rules which ·are authorized by,
B
and made under, sub-s. l; the provisions of sub-s.
2 are not restrictive of sub-s. l,,as, indeed, is
expressly stated by the words 'without prejudice to
the generality of the powers conferred by sub-s.
1'."

The above proposition of law has been approved and accepted by
this Court in Om Prakash and Ors. v. Union of India and Ors.,
c
[1970] 3 s.c;c. 942,944-5 and Shiv Kirpal Singh v. Shri
V.V.Giri [1971] 2 s.c.R. 224-5.

A provision similar to sub-section (2) of section 13,
however, does not find place in section 15. In our opinion,
D
\ 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 parti-
E
cular, and without prejudice to the generality of the forego-
ing power", makes it clear that the topics set out in that
sub-section are already included.in the general power confer-
red by sub-section (1) but are being listed to particularize
• them and to focus attention on them. The particular matters in
-i respect of which the Central Government can make rules under
F
sub-section (2) of section 13 are, therefore, also matters
with respect to which under sub-section(l) of section 15 the
State Governments 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 there-
with". When seed.on 14 directs that "The provisions of
G
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 con-
cerned State Government by exercising its rule-making power as
H
a delegate of the Central Government. Sections 4 to 12 form a
530 SUPREME COURT REPORTS [1986] l s.c.R.

A
group of sections under the heading "General restrictions on .,,
undertaking prospecting and mining operations". The exclusion
of the application of these sections to mi.nor m:lnerals means
that these restrictions will not apply to m:lnor m:lnerals but,
that it is left to the State Governments to prescribe such
restrictions as they think fit by rules made under section
B 15(1). The reason for treating m:lnor m:lnerals differently from
minerals other than m:lnor m:lnerals ·is ob"ious. As seen from
the definition of m:lnor m:lnerals given in clause (e) of ,,
section 3, they are minerals which are mostly used in local
areas and for local purposes while m:lnerals other than m:lnor
minerals are those which are necessary for industrial develop-
C ment on a national scale and for the economy of the country.
That is why matters relating to m:lnor m:lnerals have been left
by Parliament to the State Governments while res•arving matters
relating to minerals other than m:lnor minerals to the Central
Government. Sections 13, 14 and 15 fall in the group of
sections which is headed ''Rules for regulating the grant of
D prospecting licences and m:lning leases". These three sections .,
have to be read together. In providing that SE!Ction 13 will
not apply to quarry leases, m:lning leases or •lther mineral
concessions in respect of minor minerals what was done was to
take away from the Central Government the power to'make rules
in respect of minor m:Lnerals and to confer that power by
E section 15(1) upon the State Governments. The ambit of the
power under section 13 and under section 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 m:lnor minerals while in the other case it
is the State Governments which do so in respect of m:lnor ·"' _
1
F 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 under section 15(1), and in the same way,
the State Governments have before them the re11trictions and
other matters provided for in sections 4 to 12 while fram:lng
G their own l'.llles under section 15(1).

The guidelines, for the exercise of the rule-making power ¥
under section 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 conces-
H sions in respect of m:lnor minerals and for purposes connected
D.K. TRIVEDI v. STATE [MADON, J] 531

A
" •therewith)", the meaning of the word "regulating", the scope
of the phrase "for -purposes connected therewith," illustra-
tive matters set out in sub-section (2) of section 13, and in
the restrictions and other matters contained in sections 4 to
12.
B
The next question to be considered is whether the rule-
making power of the State Governments under section 15(1)
.,.. includes a power to charge dead rent and royalty. Before
embarking upon a consideration of this question, it will be
useful to. know the meaning of the expressions "dead rent" and
"royalty" and their connotation. Wharton's "Law Lexicon",
Fourteenth Edition, at page 300, defines."dead rent" as: c
"Dead Rent. A rent payable on a mining lease in
addition to a royalty, so called because it is
payable whether the mine is being worked or not. 11

·i The definition of "dead rent" given in, Black's "Law D
Dictionary", Fifth Edition, at page 359, is as follows:

"Dead Rent. In English law, a rent payable on a
mining lease in addition to a royalty, so called
because it is payable although the mine may not be
worked." E

Jowitt' s "Dictionary of English Law", Second Edition, at page
555, defines "dead rent" as :
-~
-1 "Dead Rent,. a term sometimes used in mining leases
in contradistinction to a royalty, to denote a F
fixed rent to be paid whether the mine is produc-
tive or not. See RENT."

The same Dictionary states under the heading "Rent", at page
1544 :
G
" When a mine, quarry, brick-works, or similar
property is leased, the lessor usually reserves
not only a fixed yearly rent but als~ a royalty or
galeage rent, consisting of royalties (q.v.)
varying with the quantity of minerals, bricks,
etc., produced during each year. In tllis case the H
fixed rent is called a dead rent.''
532 SUPREME COURT REPORTS [1986 J 1 s.c.R.
A
''Royalty" is defined in Jowitt's "Dictionary of English"
Law", Second Edition, at page 1595,' inter alia, as :

"Royalty, a payment reserved by the, grantor of a
patent, lease of a mine or similar right, and
B payable proportionately to the use made of the
right by the grantee. It is usually a payment of
money, but may be a payment in kind, that is, of
part of the produce of the exercise of the right. 'I' ·
See Rent."

c "Royalty" is defined in Wharton's "Law Lexicon" Fourteenth
Edition, at page 839, as :

"Royalty, payment to a patentee by agreement on
every article made according to his patent; or to
an author by a publisher on every copy of his book
D sold; or to the owner of minerals for the right of ·i
working the same on every ton or other weight ,
raised."

The definition of "royalty" given in Black's "LEIW Dictionary",
Fifth Edition, at page 1195, is as follows :
E

"Royalty. Compensation for the use of property,
usually copyrighted material or natural resources,
expressed as a percentage of receipts from using
the property or as an account per unit produced. A ~
payment which is made to an author or composer by \ -
F
an assignee, licensee or copyright holder in
respect of each copy of his work which is sold, or
to an inventor in respect of each article sold
under the patent. Royalty is share of pmduct or
profit reserved by owner for permitting another to
G
use the property. In its broadest aspect, it is
share of profit reserved by owner for permitting
another the use of property ••••

In mining and oil operations, a share of the
product or profit paid to the owner of the
property • ••.• "
D.K. TRIVEDI v. STATE [MADON, J] 533

A
"In H.R.S. Murthy v. Collector of artttor and Anr., [1964] 6
S.C.R, 666, 673 this Court said that "royalty" normally con-
notes the payment made for the materials or minerals won from
the land.

In Hals bury' s "Laws of England", Fourth Edition in the B
volume which deals with ''Mines, Minerals and Quarries",
namely, volume 31, it is stated irr paragraph 224 as follows :
. ."J
"224. Rents and royalties. An agreement for a lease
usually contains stipulations as to the dead rents
and other rents and royalties to be reserved by,
and the covenants and provisions to be inserted in, C
the lease ....• "

The topics of dead rent and royalties are dealt with in
Halsbury's "Laws of England" in the same volume under the
,. sub-heading "Consideration", the main heading being "Property
·\ demised; Consideration". Paragraph 235 deals with "dead rent" D
and paragraph 236 with "royalties". The relevant passages are
as foltows ·'

"235. Dead rent. It is usual in mining leases to
reserve both a fixed annual rent (otherwise known
as a 'dead rent', 'minimum rent' or 'certain rent') E
and royalties varying with the amount of minerals
worked. The object of the fixed rent is to ensµre
that the lessee will work the mine; but it is some-
times ineffective for that purpose. Another
function of the fixed rent is to ensure a definite
minimum income to the lessor in respect of the F
demise.

If a fixed rent is reserved, it is payable until
the expiration of the term even though the mine is
not worked, or is exhausted during the currency of
the term, or is not worth working, or is difficult G
or unprofitable to work owing to faults or acci-
dents, or even i f the demised seam proves to be
non-existent."

"236. Royalties. A royalty, in the sense in which
the word is used in connection with mining leases, H
is a payment to the lessor proportionate to the
534 SUPREME COURT REPORTS [1986] l s.c.R.
A

amount of the demised mineral worked within a"
specific period."

In paragraph 238 of the same volume of Hals bury' s "Laws of
England" it is stated :
B
"238. Covenant to pay rent and royalties.

Nearly every mining lease contains a covenant by ~
the lessee for payment of the spec:lfied rent and
royalties."
c
Rent is an integral part of the concept of a lease. It is
the consideration moving from the lessee to the lessor for
demise of the property to him. Section.105 of the Transfer of
Property Act, 1982, contains the definitions of the terms
"lease", "lessor", "lessee", "premium" and "rent" and is as
D follows :
7

"105, Lease defined. A lease of immoveable property
is a transfer of a right to enjoy such property,
made for a certain time, express or implied, or in
perpetuity, in consideration of a price paid or
E promised, or of money, a share of crops, service or
any other thing of value, to be rendered
periodically or on specified occasions to the
transferor by the transferee, who . accepts the
transfer on such terms.
~
F Lessor, lessee, premium and rent defined. \-
The transferor is called the lessor, ~he transferee
is called the lessee, the price is called the
premium, and the money, share, service or other
thing to be so rendered is called the rent."
G .
In a mining lease the consideration usually moving from
the lessee to the lessor is the rent for the area leased ·
(often called surface rent), dead rent and royalty. Since the·~
mining lease confers upon the lessee the right not merely to
enjoy the property. as under an ordinary lease but also .to
H extract minerals from the land and to appropriate then! for his
own use or benefit, in addition to the usual rent for the srea
D.K. TRIVEDI v. STATE [~N, J] 535
A

"demised, the lessee is required to pay a certain amount in
respect of the minerals extracted proportionate to the
quantity so extracted. Such payment is called "royalty". It
may, however, be that the mine is not worked properly so as
not to yield enough return to the lessor in the shape of B
royalty. In order to ensure for the lessor a regular income,
whether the mine is worked or not, a fixed amount ~s provided
to be paid to him by the lessee. This is called "dead rent".

"Dead rent" is calculated on the basis of the area leased
while royalty is calculated on the quantity of minerals
extracted or removed. Thus, while dead rent is a fixed return c
to the lessor, royalty is a return which varies with the
quantity of minerals extracted or removed. Since dead rent and
royalty are both a return to the lessor in respect of the area
leased, looked at from one point of view dead rent can be
described as the minimum guaranteed &IK!Unt of royalty payable
D
~
to the lessor but calculated on the basis of the area leased
1 and not on the quantity of· minerals extracted or removed. In
'fact, clause (ix) of Rule 3 of the Rajas than Minor Mineral
Concession Rules, 1977, defines "dead rent" as meaning "the
minimum guaranteed amount of royalty per year payable as per
rules or agreement under a mining lease", Stipulations provid-
ing for the lessee's liability to pay surface rent, dead rent E
and royalty to the lessor are the usual covenants to be found
in a mining lease.

The grant of a mining lease would thus provide for the
- consideration for such grant in the shape of surface rent,
_f dead rent and royalty. The power to. make rules for regulating F
·the grant!' of such leases would, therefore, include the power
to fix the consideration payable by the lessee to the lessor
in the shape of ordinary rent or surface rent, dead rent and
royalty. If this were not so, it would lead to the absurd
result that when the ·Goyernment grants a mining lease, it is
granted gratis to a person who wants to extract minerals and G
profit from them. Rules for regulating the grant of mining
leases cannot be confined merely to rules providing for the
-.rorm in which applications for such leases are to be made, the
factors to be taken into account in granting or refusing such
applications and other cognate matters. Such rules must neces-
H
sarily include provisions with respect to the consideration
536 SUPREME COURT REPORTS [1986] l s.c.tl.

for the grant. Under section 15(1), therefore, the State..;
Governments have the power to make rules providing for payment
of surface rent, dead rent and royalty by the lessee to the
Government.

The Legislature and the rule-making authorities have
B also throughout understood the power to make rules in respect
of mining leases and minerals as including the power to
charge dead rent and royalty. Section 5( l) of the 1948 Act ;;
conferred powers upon the Central Government to make rules
"for regulating the grant of mining leases". Section 6(1) of
that Act conferred upon the Central Government the power to
c make rules "for the conservation and development of minerals".
Both section 5 and 6 contained a sub-section (<:) which set out
the different matters in respect of which the Central ~
Government could make rules and both these sub-"Sections opened
with the clause "In particular, and without prejudice to the
generality of the foregoing power". As seen earlier, the
D particular matters so set out were illustrative of the general .7
power conferred by the earlier sub-sections. Under clause (d)
of section 5(2), the rules to be made by the Central
Government could provide for "the fixing of the maxinllm and
mininrum rent payable by a lessee, whether the mine is worked
or not." This clause thus provided for a dead rent. Under
E clause (i) of section 6(2), the rules to be made by the
Central Government could provide for "the levy and collection
of royalties, fees or taxes in respect of minerals mined,
quarried, excavated or collected". Rule 41 of the Mineral
concession Rules, 1949, made by the Central Government in
exercise of the powers conferred by section 5 of the 1948 Act3 _
F prescribed the conditions which were to be include<! in every
1
mining lessee. The said Rule 41 provided for payment of royal-
ty on minerals at the rate specified in the First Schedule to
the said Rules in force on the date of the grant of the lease
as also to pay royalty at such revise~ rates as may be notifi-
ed from time to time. It also provided for payment of surface
G rent and further provided for payment of dead rent with a
proviso that the lessee was liable to pay dead rent or royal-
ty, whichever was higher in amount, but not both. Rules made~
by the State Governments in respect of minor minerals also
provided for payment of these charges. As seen earlier, Rule
(7) of the Saurashtra Rules provided for payment of surface
H rent and dead rent. Similarly, Rule 18 of the Bombay Minor
D.K. i'RiVEDI v. STATE lMAOON, J) 537
A

"'Mineral Extraction Rules, 1955, provided for the lessee of a
quarry lease to pay royalty at the rates specified in Schedule
I to the said Rules, such rates being liable to be .revised
once in every five years, as also surface rent and yearly dead
rent and also provided that the lessee shall be liable to pay B
the dead rent or royalty in respect of each minor mineral,
whichever be higher in amount, but not both. Section 7 of the
. 1948 Act conferred upon the Central Government the power to
-"» make rules for the purpose of modifying or altering the terms
and conditions of any mining lease granted prior to the
commencement of the 1948 Act so as ~o bring it into conformity
with the rules made under sections 5 and 6. In pursuance of c
this power, the Central Government made the Mining Lease
{Modification of Terms) Rules, 1956, by Notification No.
S.R.O. 2062 dated September 4, 1956, published in the Gazette
of India, dated September 15, 1956, Part II, section 3, at
pages 1548-54. Rule 2 of the said Rules defined certain terms.
, As originally made Rule 2 contained clause {g) which provided D
~that "'Royalty' includes 'Dead Rent'". Sub-rules (7), (8) and
(9) of Rule 6 of the said Rules provided for modification iri
such leases of the rate of royalty which by reason of the
definition given in clause (g) of Rule 2 included the rate of
dead rent. After the coming into force of the 1957 Act on June
1, 1958, clause (g) of Rule 2 and sub-rules (7), (8) and (9) E
·of Rule 6 were omitted from the said -Rules in view of the
provisions with respect to such leases contained in the -1957
Act.

~ So far as the 1957 Act is concerned, under clause (i) of
- i section 13(2) the rules to be made by the Central Government F
,can provide "for the fixing and the collection of dead rent,
fines, fees or other charges and the collection of royalties".
Although clause (i) of section 13(2) speaks of fixing and
collec"tion in the case of dead rent and only collection in the
case of royalties, the reason is· not that the power to fix
royalties was not thought to be comprehended in the general G
rule-making power of the Central Government under section
,.J3(1). The reason was that a separate provision in that behalf
was made by section 9 with respect to mining leases granted
both before the commencement of the 1957 Act as also after the
commencement of the 1957 Act. Another reason for doing so was
to specify the rates for royalties in respect of different H
minerals other than minor minerals in the Second Schedule to
538 SUPREME COURT REPORTS [1986) 1 S.C.R.
A
the 1957 Act in order to restrict the scope of subordinate 7
legislation as pointed out in the Statement of Objects and
Reasons to the Legislative Bill No. 83 of 1972. As seen
earlier, Rule 27 of the Mineral Concession Rules, 1960, provi-
des that every mining lease is to contain a provision requir-
ing the lessee to pay surf ace rent and dead rent and a further
B
provision that the lessee shall be liable to pay dead rent or
royalty in respect of each mineral, whichever be higher in
amount, but not both. It is pertinent to note that these pro-~
visions were included in the said Rules when they were first
made and thus existed in. the said Rules DlllCh prior to the ll
insertion of section 9A in the 1957 Act by the Amendment Act
c of 1972, casting a liability upon the lessee to pay dead rent.

The Gujarat High Court in Smt. Sonbai' e Case held that
the intention of Parliament in enacting section 15(1) was not
to clothe the State Governments with power to impose any
financial liability upon the lessee but only to give them the Y
D
power to prescribe conditions for regulating the grant of •
leases other than conditions relating to financial liability
and that the power to prescribe conditions relating to
financial liability of a lessee were to be found only in
sub-section (3) of section 15. In order to ascertain this
intention attributed by it to Parliament, the Gujarat High
E
Court relied upon the provisions of section 9A and sub-section
(3) of section 15. The same view was taken by the Andhra
Pradesh High Court in M.V. Subba Rao v. State of Andhra II
Pradesh and another, A.IR. 1978 A.P. 453.
~
We find that the reliance placed by the Gujarat High I ·
F
Court in Smt. Sonbai'e Case, which is one of the two judgments
of that High Court challenged before us, and the Andhra
Pradesh High Court in M.V. Subba Rao'e Case on sub-section (3)
of section 15 and section 9A in order.to ascertain the inten-
tion of Parliament is misplaced. Though sub-section (3) was
inserted in section 15 with retrospective effect by the Amend-
G
ment Act of 1972, until it was so inserted it was not before
the courts when they came to construe the scope of the ..
rule-making power of the State Governments under section 15(1)
and even without sub-section (3) being before the courts,
various High Courts have held that the State Governments'
power to charge royalty is to be found in the rule-making
H
power conferred by section 15(1). The Patna High Court in
D.K. TRIVEDI v. STATE [MADON, J] 539
A
1cLaddu Mal and Ors. v. The State of Bihar and Ors., A.l.R, 1965
Patna 491, the Madhya Pradesh High Court in Banku Bihari. Saba
v. State Government of Madhya Pradesh and Ors., A. l.R, 1969
M.P. 210, the Punjab and Haryana High Court in Dr. Shanti
Saroop Sharma and Anr. v. State of Punjab and Ors., A.l.R. B
1969 Punj. & Har. 79 and M/s. Amar Singh Kodi Lal v. State of
Haryana and Ors., A.l.R. 1972 Punj. & Har. 356 and the
Rajasthan High Court in M/s. Brf.mco Bricks, Bbaratpur v. State
,,of Rajastban and Anr., A.l.R. 1972 Raj. 145 have all taken
' this view. These were all cases prior to the Amendment Act of
1972 when sub-section (3) of section 15 was not then on the
statute book. After the enactmer.t of the Amendment Act of c
1972, the Allahabad High Court in Sbeo Varm Singh v. State of
U.P., A.l.R. 1980 All 92 has held that the power of the State
Governments to Charge royalty and dead rent is to be found
only in section 15(1). The Rajasthan High Court in Bal KliaJnd
Arora etc. v. State of Rajastban and Ors., A. l.R. 1981 Raj, _95
has also taken the same view disagreeing with the view taken D
',by the Andhra Pradesh High Court in M.V. Subba Jlao's Case.
4 .
A proper reading of sub-section (3) of section 15 shows
that it does not confer any power upon the State Governments
to make rules with respect to royalty. Royalty is payable by
the holder -0f a quarry lease or mining lease or other mineral E'
concession granted under rules made Under sub-section (1) of
section 15. What sub-section (3) does is to make such holder
liable to pay royalty in respect of minor minerals removed or
consumed not only by him but also by his agent, manager,
,employee, contractor or sub-lessee. It thus casts a vicarious
4J:liability upon such holder to pay royalty in respect of the F
acts of persons other than himself. The very fact that under
sub-section (3) the liability of such holder is to pay royalty
"at the rate prescribed for· the time being in the ~~s framed
by the State Government in respect of minor minerals" shows
that the prescribing of the rate of royalty in respect of
minor minerals is to be done under the rule-making power of G
the State Governments which is to be found in sub-section (1)
of section 15. Yet another purpose of enacting sub-section (3)
""is to be found in the proviso to that sub-section which pro-
hibits the State Government from enhancing the rate of royalty
in respect of any minor mineral for more than once during any
period of four years. If the reliance placed by the Gujarat H
and the Andhra Pradesh High Courts on sub-section (3) of
540 SUPREME COURT REPOR1'S [19861 1 s.c.R.
A
section 15 in order to ascertain the 'intention of Parliament .,,
was misplaced, their reliance upon section 9A was even more
misplaced. Section 9A was inserted in the 1957 Act by the
Amendment Act of 1972 but it was not inserted with retrospec-
tive effect. It was, therefore, not there when section 15(1) .Ii
was placed upon the statute book while enacting the 1957 Act. ~
B
Section 9A was enacted with a two-fold purpose. It cast a
liability upon the holder of a mining lease whether granted
before or after the commencement of the 1972 Act, that is, ··fr
either before or after September 12, 1972, to pay to the State
Government dead rent at the rates specified for the time being
in the Third Schedule to the 1957 Act "notwithstanding any-
c thing contained in the instrument of lease or in any other law
for the time being in force." The purpose of inserting section
9A in the 1957 Act, as stated in the Statement of Objects and
Reasons to Legislative Bill No. 83 of 1972, was to make a
"pr,ovision of a statutory basis for calculation of dead rent".
Section 9A also provides that the liability of the lessee
D
would be to pay either royalty or dead rent whichever is /
greater, thus embodying in the Act what was contained in the
proviso to clause (c) of Rule 27 of the Minor Mineral Conces-
sion Rules, 1960. Section 9A was inserted also with a view to
prohibit the Central Government from enhancing 'the rate of
dead rent more than once during any period of four years. It
E
is pertinent to note that by the Amendment Act of 1972 section
9 was also amended. While under the original sub-section ( l)
of section 9 the liability of the holder of a mining lease was
only to pay royalty in respect of any mineral removed by him,
after the amendment he is made liable to pay royalty in
respect of any mineral "removed or consumed by him or by his ~
F
agent, manage.r, employee, contractor of sub-lessee". By the
Amend~nti ;~ 0£ f 972 the power of the Central Government to
amend 'by \ r cation the Second Schedule which specifies the
rate or ray . y ,was also curtailed by inserting a proviso to
section 9(3) ::'fn'-order to provide that the Central Government
shall not enhance the rate of royalty in respect of any
G
mineral more than once during any period of four years. The
amendments made by the Amendment Act of 1972 have, therefore,
no relevance for ascertaining the scope of the rule-m.aldng·~
power of the State Governments under section 15(1),

We therefore, hold that the view taken by the Gujarat
H
High Court in Smt. Sonbai 's Case and by the Andhra Pradesh
•
D.K. TRIVEDI v. STATE [MADON, J] 541
A

'11igh Court in M.V. Subtia Rao's Case was wrong and requires to
be overruled.

The next contention was that though under section 15(1)
the State Governments may have the power to make rules B
providing for payment of royalty and dead rent, sub-section
(3) showed that such power did not extend to amending the
rules so as to enhance the rate of dead rent. The submission
- i n this behalf was that the power to enhance the rate of
royalty by amending the rules was expressly provided for in
sub-section (3) by the use of the words "at the rate
prescribed for the time being in the rules framed by the State c
Government in respect of minor minerals" but there was no such
provision in section 15 with respect to dead rent. We are
unable to accept this submission. Rules under section 15(1),
though made by the State Governments, are rules made under a
Central Act and the provisions of the General Clauses Act,
>' 1897, apply to such rules. Under section 21 of the General D
''Clauaes Act, where by any Central Act, a power to make rules
is conferred, then that power includes a power, exercisable in
the like manner and subject to the like sanction and
conditions if any, to add to, amend, vary or rescind any rules
so made. The power to amend the rules is, therefore, com-
prehended within the power to make rules and as section 15(1) E
confers upon the State Governments the power to make rules
providing for payment of dead rent and royalty, it also
confers upon the State Governments the power to amend those
rules so as to alter the rates of royalty and dead rent so
""rescribed, either by enhancing or reducing such rates. The
- ~ource of the power to enhance the rate of royalty is not F
contained in sub-section (3) of section 15 as submitted at the
Bar. As pointed out earlier, the purpose of inserting the said
sub-section in section 15 with retrospective effect was an
entirely different one.

It was then contended that the very language of G
sub-section (1) of section 15 shows that it does not confer
-;any power upon the State Governments to enhance the rate of
royalty or dead rent because the rules which are to be made
under that sub-section are for regulating the grant of quarry
ieases, mining leases and other mineral concessions in respect
of minor minerals and, therefore, the rules under that H
sub-section can be made only with respect to the time when
.._.

542 SUPREME COURT REPORTS [1986] 1 S.C.R.
A
such leases or concessions are granted -and not with respect to_, ~
any point of time subsequent thereto and there being no
provision similar to sub-section (3) of section 15 with
respect to dead rent, any rule providing for increase in the
rate of dead· rent during the subsistence of a lease would be
ultra vires section 15, This subml.ssion is devoid of
B substance. As pointed out earlier, sub-section (3) of section
15 does not confer any power to amend the rules made under
section 15(1), for the power to amend the rules is comprehen- , . _
ded within the power to make the rules conferred by
sub-section (1) of section 15, The construction sought to be
placed upon the word "grant" in section 15(1) also cannot be
c accepted. While granting a lease it is open to the granter to
prescribe conditions which aro. to be observed during the
period of the grant and also to provide for the forefeiture of
the lease on breach of any of those conditions. If the grant
of a lease were not to prescribe such conditions, the lessee
could with impunity commit breaches of the conditions of the
D lease. Ordinary leases of immovable property at times provide•1
for periodic increases of rent and there is no reason why such
increases should not be made in a mining or quarry lease or
other mineral concession granted under a regulatory statute
intended for the benefit of the public and even less reason
why such a statute should not confer power to make rules pro-
viding for increases in the rate of dead rent during the sub-
sistence of the lease. In any event, the power to make rules
under section· 15(1) is also for purposes connected with the
grant of mining and quarry leases and other mineral conces-
sions and the expression "and for purposes connected there-~
with" read with the word "grant" would include the power to \ ~
F enhance the rate of dead rent during the subsistence of the
lease.

In support of the above contention it was also submitted
that in the absence of a provision like the one contained in
section 15(3) the power to enhance the rate of dead rent
G cannot be so exercised as to affect subsisting leases and that
unless •this construction were placed upon sub-section (1), the,-•/
'
power conferred by that sub-section wculd be bad in law as
being an arbitrary power. lt was submitted that a mining lease
is the result of a contract entered into between two pa~·:ies
and dead rent is part of the consideretbn for the grant of
H
the lease, and just as in the case of a contract of sale of
D.K, TRIVEDI v. STATE [MAlXlN, J] 543
A
'l!oods, it cannot be left to the sweet will of the seller to
charge what price he liked, in the same way in the case of
leases and concessions granted under section 15(1), it cannot
be left to the State Governments to amend the rules so as to
charge whatever dead rent they like and whenever they like
B
during the subsistence of the lease. We find no substance in
either of these submissions. A quarry lease, mining lease or
other mineral concession in respect of a minor mineral does
-not stand on the same footing as an ordinary contract. These
leases and concessions are granted by the State Governments
pursuant to rules made under the ·Statutory power conferred
upon them by a regulatory Act. Minerals are part of the
material resources which constitute a nation's natural wealth
c
and if the nation is to advance industrially and if its
economy is to be benefitted by the proper development and
exploitation of these resources, they cannot be permitted to
be frittered tJMay and exhausted within a few years by
, indiscriminate exploitation without any regard to public and
D
.f!.ational interest. The same view was expressed by the Court in
State of Tamil Madu v. Bind Stone Etc., (1981] 2.S.C.R. 742,
751. It was for achieving the object set out above that both
the 1948 Act and the 1957 Act were enacted. The long title of
the 1957 Act is "An Act to provide for the regulation of mines
and the development of minerals under the control of the
E
Union." The 1948 Act contained a preamble which stated
"WHEREAS it is expedient in the public interest to provide for
the regulation of mines and minerals and for the development
of minerals to the extent hereinafter specified". The makers
:j?f the Constitution recognized the importance to the nation of
~ the regulation of mines and mineral development and,
F
therefore, enacted Entry 54 of the Union List and Entry 23 of
the State List. In the exercise of the power conferred by
Entry 54, Parliament has made a declaration in section 2 ·of
the 1957 Act that "it is expedient in the public interest that
the Union should take under its control the regulation of
mines and the development of minerals to the extent herein-
G
after provided". The presumption is that an authority clothed
~-ith a statutory power will exercise such power reasonably,
and if in the public interest and for the efficacious regula-
tion of mines and quarries of minor minerals and the proper
development of such minerals, a State Government as the dele-
gate of the Union Government thinks fit to amend the rules so
H
as to enhance the rate of dead rent, it cannot be said that it
544 SUPREME COURT REPORTS (1986] t s.c.R.
A
is preven'ted from doing so by the principles of the ordinary-I
law of contracts. It may be that in certain cases by enhancing
the rate of dead rent the holders of leases in respect of
certain types of minor minerals may be adversely affected but
private interest cannot be permitted to override public inter-
est. Conservation of minerals and their proper exploitation
B
result in securing the maximum benefit to the community and it
is open to the State Governments to enhance the rate of dead
rent so as to ensure the proper conservation and development -
of minor minerals even though it may affect a lessee's liabi-
lity under a subsisting lease.
c Where a statute confers discretionary powers upon the
executive or an administrative authority, the validity or
constitutionality of such power cannot be judged on the
assumption that the executive or such authority will act in an
arbitrary manner in the exercise of the discretion conferred
upon it. If the executive or the administrative authority acts
D in an arbitrary manner, its action would be bad in law and ,1
liable to be struck down by the courts but the possibility of
abuse of power or arbitrary exercise of power cannot
invalidate the statute conferring the power or the power which
has been conferred by it.
E The next submission was that the rates of royalty and
dead rent cannot be enhanced unilaterally without giving an
opportunity of being heard to the lessees who would be
adversely affected thereby. This submission found favour with
the Gujarat High Court in Smt. sonbai's Case. It was sought to~
be supported by a reference to section 9(3), 9A(2) and 28. I~
F Under section 9(3) the Central Government can, by notification '
published in the Official Gazette, amend the second Schedule
to the 1957 Act so as to enhance or reduce the rate at which
royalty is payable and similarly under section 9A(2) the
Central Government can, by notification published in the
Official Gazette, amend the Third Schedule to the 1957 Act so
G as to enhance or reduce the rate at which dead rent is
payable. Under section 28, every rule and notification made by.,_
the Central Government is to be laid before Parliament and if
not approved, it is to be of no effect. There is no such
provision with respect to a rule or notification amending a
rule made by a State Government. It was, therefore, submitted
H that in the absence of any provision for legislative approval
D.K. TRIVEDI v. STATE [MADON, J] 545
A

~with respect to the rules made by the State Governments or a
notification amending such rules, it is all the more necessary
that an opportunity should be given to the concerned lessees
to raise their objections to any proposed enhancement. The
argument that the lessees who would be affected by an B
enhancement in the rate of royalty or dead rent should be
heard before making such enhancement is based upon a total
misunderstanding of the rule-making process and the power to
. . . make rules. The enhancement in the rates of royalty and dead
rent is made in the exercise of the power to amend the rules
framed under secton 15(1). It is thus made in the exercise of.
statutory power. There is no such principle of law that before C
such a statutory power is exerdsed, persons who may be
affected thereby should be heard. Whether any opportunity is
to be given to persons affected to make representations to the
Government would depend upon the form in which the rule-making
power is conferred. It is for the legislative body which
, confers the rule-making power ~o decide in what form such D
:, power should be conferred. In some Acts it is provided that
the draft of the rules proposed to be made as also any
proposed amendment thereto should be published in the Official
Gazette so that members of the public may have an opportunity
of making such representations or raising such objections as
they think fit. Some other Acts provide for rules to be laid E
before Parliament or the Legislature for its approval and to
be effective only after such approval is given or to continue
in force with such modifications as Parliament or the
Legislature may make, and if the approval is not given to
1cease to have any effect. It was, therefore, for Parliament to
·~ ldecide whether rules and notifications made by the State F
Governments under section 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 G
did not consider them to be of equal importance. An amendment
.,_of the rules made under section 15(1), even though it may have
the effect of enhancing the rates of royalty or dead rent does
not, therefore, become bad in law because no opportunity of
being heard or making a representation is given to persons who
would be prejudicially affected thereby. Section 15(1) does H
not contain any provision for giving any such opportunity and
no such provision can be imported into that sub-.section.
546 SUPREME COURT REPORTS [19861 l s.c.R. ···
A
Another submission which was made was that sub-sectio!l-1
(3) of section 15 speaks of a "lllining lease or any other
mineral concession" while sub-section (1) of section 15 speaks
of "quarry leases, mining leases or other mineral concessions"
and, therefore, the power to fix from titne to time the rate of
royalty under sub-section/(3) can only apply to mining leases
B
and other minor mineral concessions and not to quarry leases.
This sublllission was based upon the contention that the power
to charge royalty or enhance or reduce its rates from time to,.,._
time is to be found in sub-section (3) and not in sub-section
(1). As this contention .itself is erroneous as pointed out
c above, the submission based upon :f.t must also fall, Under
clause (c) of section 3, "mining lease" inter alia means "a
lease granted for ~he purpose of 'Uiidertaking mining
operations". Under clause (d) of section 3, the expression
"mining operations" means "any operations undertaken for the
purpose of winning any mineral", "Quarry" is define in the
Shorter Oxford English Dicfionary, Third Edition, as "an
D
excavation from which stone for building, etc. is obtained for, 1
cutting, blasting, or the like" and "to quarry" is defined in
the same Dictionary as meaning "to obtain (atone, etc.) by the
processes employed in a quarry", The Concise Oxford Dictio-
nary, Sixth Edition, defines "to quarry" as "Extract (stone)
from quarry". Quarrying minerals is, therefore, a mining
E
operation inasl!Jlch as l t consists of an operation undertaken
for the purpose of winning particular classes of minerals.
Clause (vi)' of Rule 2 of the Gujarat Rules defines "quarry
lease" as meaning "a kind of mining lease in respect of a
minor mineral granted under these rules," Quarry leases are'-\:
F
therefore, included in the term "mining leases", !-
Yet another contention raised was that the intention of
Parliament as shown by the proviso to section 15(3) was that
the lessees of mining ·and quarry leases and other mineral
concessions should have a sense of security that their finan-
ci~l liability will not be enhanced in rapid succession so as
G
to cast an unbearable burden upon them and make it unprofit-
able f.or them to work the quarry or the llline. lt was further.,_
submitted that though under the proviso to s~ction 15(3), the
rate of royalty in respect of a minor mineral cannot be
enhanced more than once during any period of four years, there
was no such restriction with respect to enhancing the rate of
H
D.K. TRIVEDI v. STATE [MADON, J) 547
A

I-dead rent and the State Governments cannot null. ify the prohi-
bition contained in the proviso to section 15(3) by repeatedly
and frequently enhancing the rate of dead rent and that the
absence of such a restrictive provision with respect to dead
rent shows that it was not the intention of Parliament to B
confer power upon the State Government to enhance the rate of
dead rent so as to affect subsisting leases. Although at the
first blush there seeros to be a considerable force in this
">: submission, on a closer scrutiny the true position would
appear to be otherwise.

As pointed out earlier, since dead rent is the minimum c
guaranteed amount of royalty and partakes of the nature of
royalty, what, therefore, applies to royalty must necessarily
apply or should be made applicable to dead rent also. The
proviso to section 9(3) prohibits the Central Government from
enhancing the rate of royalty in respect of any mineral other
, than a minor mineral more than once during any period of four D
~years. The proviso to section 9A(2) also prohibits the Central
Government from enhancing the dead rent in respect of any area
more than once d11ring any period of four years. Halsbury's
Laws of England, Fourth Edition, Volume 31, paragraph 236,
points out that "usually the royalties are made to merge in
the fhed rent by means of a provision that the lessee, E
without any additional payment, may work, in each period for
which a payment of fixed rent is made, so much of the minerals
as would, at the royalties reserved, produce a sum equal to
the fixed rent." The same purpose is achieved by the proviso
~to section 9A(l) and in the Mineral Concession Rules, 1960, by
~1 the proviso to clause (c) of Rule 27 under which the lessee is F
liable to pay the dead rent or royalty in respect of each
mineral, whichever be higher in amount, but not both. In all
State rules which provide for payment of both dead rent and
royalty, there is a provision that only dead rent or royalty,
whicheve1' is higher in amount, is to be paid, but not both.
Rules made under t.he 1948 Act, as for example, Rule 41 of the G
Mineral Concession Rules, 1949, and Rule 18 of the Bombay
"'!-Mineral Extraction Rules, 1955, also contained a s.imilar pro-
vision. Thus, the practice followed throughout in exercising
the power to make rules regulating the grant of mining leases
has been to provide that either dead rent or royalty, which-
~ver is higher in amount, should be paid by the lessee, but H
not both.
548 SUPREME COURT REPORTS [19861 1 s.c.R.
A

A construction placed upon section 15(1) which leaveS-j
the State Governments free to enhance the rate of dead rent as
and when they like while the proviso to section 15(3)
prohibits them from enhancing the rate of royalty more than
once during a period of four years would amount to nullifying
B the object for which the proviso to section 15(3) was enacted.
The same restrictions as contained in the proviso to section
15(3) must, therefore, apply to dead rent. Such a construction
would be in consonance with practice, both past and present. ;/;'
Thus construed there cannot be anything objectionable in the
power of the State Governments to enhance dead rent. We
accordingly hold that the State Governments cannot enhance the
c rate of dead rent more than once during a period of four
years.

As an extension of the above submission, it was urged
that royalty and dead rent were one and the same and,
therefore, either royalty or dead rent alone could be enhanced
D
once during any period of four years but not both. According '(
to this argument, if during any period of four years royalty '
is enhanced, dead rent cannot be enhanced during that period
but can only be enhanced in the next period of four years.
Although in one sense dead rent may partake of the nature of
royalty, there is a substantial difference between both. The
E
base~ for calculating royalty and dead rent are different and
they are dealt with in different provisions of the 1957 Act
(namely, sections 9 and 9A) so far as minerals other than
minor minerals are concerned !ll'd in the rules made by the

F
State Governments under section 15(1) so far as minor minerals
are concerned. It is, therefore, not possible to accept the \ ~
.
above argument. According to us, during any one period of four
years, dead rent and royalty both can be enhanced but only
once.

As the Gujarat Rules have been amended from time to time
by the impugned Notifications so as to enhance or reduce the
G
rate of royalty or dead rent or both, it is necessary at this
stage before turning to the Gujarat Rules to consider what
the expression "during any period of four years" occurring in °l"
the proviso to section 15(3) means. It is pertinent to note
that the words used in the proviso are "shall not enhance the
rate of royalty. for more then once during any period of
H
four years." This is a wholly different thing from saying that
D,K, TRIVEDI v. STATE [MADON, J] 549
A

1-- where the rate of royalty has been enhanced once it shall not
be enhanced again for a period of four years or, in other
words, until a period of four years from the date of such
enhancement has expired. The period of four years for this
purpose must be and can only· be reckoned from the date of B
coming into force of the rules and it is open to a State
Government to enhance the rate of royalty or dead rent at any
time once during the period of four years from the coming into
·~ force of the rules and after each period of four years expires
at any time during each succeeding period of four- years. The
Gujarat Rules came into force on April 1, 1966, Therefore, in
the case of the Gujarat Rules tr.e first period of four years C
would be 1.4.1966 to 31.3,1970, the second period would be
1.4.1970 to 31.3,1974, the third period would be 1,4,1974 to
31,3.1978, the fourth 'period would be 1.4.1978 to 31.3.1982,
the fifth period would be 1.4.1982 to 31.3.1986 and so on
thereafter. Thus, during any of these periods of four years
,. both dead rent and royalty can be enhancect by the Government D
of Gujarat but only once during each such period.
1
In the light of what we have held above we will now
examine the Gujarat Rules and the validity of . the impugned
amendments thereto. The Gujarat Rules were made by the Govern-
ment of Gujarat by Notification No. GU 125-MCR 2164/5089 CHH E
dated Miirch 18, 1966. They extended to the whole of the State
of Gujarat and came into force on April 1, 1966. Clause (vi)
defines the term "Quarry lease" as meaning "a kind of mining
lease in respect of a minor mineral granted under these.
rules". Clause (viii) defines the term "Schedule" as meaning
"a Schedule appended to the rules". Chapter II of the Gujarat F
Rules deals with grant of quarry leases in respect of lands in
which the minerals vest in Government. Schedule I to the
Gujarat Rules specifies the rates of royalty on different
minor minerals and Schedule II the rates of dead rent. By
Notification dated August 25, 1969, a new chapter, namely,
Chapter III-A, was inserted in the Gujarat Rules providing for G
grant of parwana in respect of lands in which minerals belong
to Government. Clause (vi-A) which was inserted in Rule 2 by
'I'·· the same Notification defines "Quarrying parwana" as meaning
"a quarrying parwana granted under these rules to extract and
remove any minor mineral from land not exceeding a specified
area." H
550 SUPREME COURT REPORTS {19861 l s.c.R.
A
Rule 21 deals with rates of royalty. As originally made '1
it provided as follows :

"21. Rates of royalty. -

Royalty shall be leviable on minor minerals
B quarried from the leased area specified in column 1
of Schedule l at the rates respectively specified
against them in column 2 of the said Schedule." _,.

By Notification dated September 22, 1966, the said rule was
renumbered as sub-rule (1) and a new sub·-rule was inserted in
c Rule 21 as aub-rule (2), Sub-rule (2) provided as follows :
"(2) The Government may, by notification in th11
Official Gazette, amend Schedule l so as to enhance
or reduce the rate at which royalty shall be
payable in respect of any minor mineral:
0
Provided that the rate in respect of any minor
mineral shall not be enhanced before the expiry of
a period of three years from the commeneement of
these rules or, before the expiry of a period of
three years from tho date with effect from which
E the rate in respect of that minor mineral may have
been last: altered."
By Notification dated November 25, 1966, the Government of
Gujarat made the Gujarat Minor Mineral (Third Amendment)
Rulea, 1966, By this Notification an Explanation was inserted
F to Rule 21 which was as follows :
"lllpl~tion. - For the purpose of this rule Sche-
dule I means Schedule l as substituted by the
Gujarat Minor Minerals (Third Amendment) Rules,
1966,"
G
ay the aa11111 Notification Schedule l was substituted. Under the ~~'r
1ub1tituted Schedule I the rate& of royalty in respect of some
minor mineral& remained the iame but in respect of other minor
l!liner1l1 they were reduced, Accordingly, Rule 21-A was
inaarted in the Gujarat Rules providing for remission of any
H 11xcH1 Bll!Ount of royalty collected at the rates specified in
O,K, TRIVEDI v. STATE [t-!AOON, J] 551

A
~ the original Schedule I and further providing that where the
royalty had not been paid, collected or recovered, it was to
be paid, collected or recovered at the rates specified in the
substituted Schedule I,

li.ule 22 contains the general conditions to be included in B
every quarry lease. The relevant provisions of Rule 22 are as
follows :

"22. General Conditions of le11ae. -

Every qtiarry lease shall be subject to the
following conditions and such conditions shall be C
included in every quarry leaee :-

(i)(a) The lessee shall, during the subsistence of
the lease, pay to Government royalty on minor
minerals quarried from the leased area at the rates
for the time being specified in Schedule l at such D
times and in such lllll!lner as the Government may
prescribe.

(b) The lessee shall also pay to Government for
every year of the lease the yearly dead rent
apec:.ified in Schedule lI and if the lease perm1U E
the working of more than one minor mineral' in the
same area~,, the Director may fix &e);)arate dead rent
in respect of each mineral :

Provided that the lessee shall be liable to pay
the dead rent or royalty in respect of each mineral F
whichever is higher, but not both.

(ii) the lessee shall also pay to Government for
the surface area leased to him surface rent et the
rate prescribed by Government".
G
By Notification dated July 6, 1974, the word "Director" (that
-;:. is, the Director of Geology & Mining, Gujarat State) was
substituted by the words "competent officer". Under Rule
11(5), a deed of lease is to be executed in Form D or in a
form as near thereto as the circumstances of each case may
require. Form D appended to the Gujarat Rules inter !!!!. H
552 SUPREME COURT REPORTS (1986] 1 S.C.R.
A

provides for payment by a lessee to the State Government ·of -f
"the several rents and royalties mentioned in Part V" of the
Schedule to the said Form. Part V of the said Schedule
provides as follows

B " PART V

Rents and Royalties Reserved by this lease

1. To pay dead rent or royalty whichever is
greater.-
c
The lessee/lessees shall not be liable to pay in
respect of any yearly period, both the dead rent
reserved by Clause 2 of this Part and also the sum
of the royalties reserved by Clause 3 of this Part,
but shall pay only whichever of the said sums is
D
greater.

2. Rate and mode of payment of dead rent. -

Subject to the provision of Clause 1 of this Part,
as from the day of •••••••• 19 •••••••••••••• during
E
the subsistence of this lease the lessee/lessees
shall pay to the State Government annual .dead rent
at the following rates per hectare of the lands
described in Part I of this Schedule. (Here insert
the amount payable under Rule 22(iii) of the said
Rules).
F
3. Rate and mode of payment of royalty. -

Subject to the provisions of Clause 1 of this Part,
the lessee/lessees shall, during the subsistence of
this lease, pay to Government at such times and in
G
such manner as the Government may prescribe royalty
in respect of any minor minerals removed by
him/them from the leased area at the rates for the
time being in force under Schedule I to the Gujarat "'"
Mineral Rules, 1966.

4. Payment of surface rent:. -
D.K. TRIVEDI v. STATE [MADON, J] 553
A
The lessee shall pay rent to the State Government
for all parts of the surf ace area leased to him for
the purpose of quarrying surface rent at the rate
prescribed by Government.
B
Here insert the total amount payable at the begin-
ning of the year (i.e. on the date of execution of
lease deed in every year)."

Clause (3) of Part VI of the said Schedule confers upon the
State Government the power to enter upon the leased premises
and distrain all or any of the mineral or benef icisted c
processed/ dressed products or movable property there and to
sell the same or so much as is necessary to recover the rent
or royalties due and all costs and expenses in case the
royalty or rent or both reserved and made payable by the
lessee is not paid within sixty days after the date fixed in
~ the lease for the payment thereof. Under clause (3) of Part IX D
~ of the said Schedule, if a lessee or his transferee or
assignee commits any breach of any of the conditions specified
inter alia in clauses (i), (ii), (iii) and (iv) of Rule 22 of
the Gujarat Rules, the competent officer is to give notice in
writing to the lessee or his transferee or assignee, as the
case may be, asking him to remedy the breach within sixty days E
from the date of the notice and if the breach is not remedied
within such period, to determine the lease. By Notification
dated August 25, 1969; clause (12) was inserted in Part IX of
the Schedule to Form D. This clause provides as follows : .
...
•·' "12. This quarrying lease shall be subject to the F
Gujarat Minor Mineral Rules, 1966 as amended from
time to time."

By the 1974 Notification the Government of Gujarat made
the Gujarat Minor Mineral (Fourth Amendment) Rules, 1974,
which came into force with effect from December 1, 1974. By G
the 1974 Notification, Schedule I to the Gujarat Rules
..,c._prescribing the rates of royalty was substituted and Schedule
II which prescribing the rates of dead rent was amended. By
the substituted Schedule I the rates of royalty cin several
minor minerals were enhanced while in respect of a few they
remained the same. By the amendment of Schedule II the rates H
of dead rent were enhanced.
554 SUPREME COURT REPORTS [19861 1 s.c.R.
A

By the 1975 Notification, the Government of Gujarat made _,
the Gujarat Minor Mineral (Second Amendment) Rules, 1975,
which came into force on November 1, 1975, By the 1975
Notification the rates of royalty specified in Schedule I were
again altered so as to enhance the rates in respect of some
B minor minerals. The 1975 Notification also substituted Rule
21. The substituted Rule 21 is as follows

"21. Rate of Royalty. -

The holder of a mining lease or any other mineral
c concession granted under these rules shall pay
royalty in respect of minor minerals, specified in
column 1 of Schedule I, removed or consumed by him
or by his agent, manager, employee, contractor or
sub-lessee from the leased area at the rates
respectively specified against them in column 2 of
D the said schedule." '(
•
As mentioned earlier, the Gujarat High Court in Letters Patent
Appeal No. 61 of 1978 - Ambalal Manibbai Patel v. The State of
Gujarat and Anr. and other connected writ petitions held that
the 1974 Notification had not become operative and, therefore,
E the 1975 Notification did not violate the provisions of the
proviso to Rule 15(3) and was valid. This judgment is the
subject-matter of appeal before us in Civil Appeals Nos. 706
and 1934 of 1981,

In order to reach the conclusion that the 1974
F Notification was inoperative, the Gujarat High Court held that
for altering the rates of royalty specified in Schedule I, two
steps were required, namely, (1) the amendment of the
Explanation to Rule 21, and (2) the amendment of Schedule I,
and that by amending only Schedule I by substituting it but
leaving the· Explanation to Rule 21 intact, the intended
G amendment did not come into effect and that it was only when
Rule 21 was amended and a new Schedule I substituted by the
1975 Notification that a proper amendment in the rates of ::....
royalty was effected and, therefore, what was operative was
the 1975 Notification. We are unable to accept either the
above conclusions reached by the Gujarat High Court or the
H reasoning upon which these conclusions were based. The
Explanation to Rule 21 provided that "For the purpose of this
D,K, TRIVEDI v. STATE (MADON, J] 555
A

+.-rule Schedule I means Schedule I as substituted by the Gujarat
Minor Minerals (Third Amendment) Rules, 1966," Thus, the
reference to Schedule I in Rule 21 was to Schedule I as
substituted by the Notification dated November 25, 1966, That
Schedule was, however, again substituted by the 1974 B
Notification. The effect of such substitution was to repeal
the 1966 Schedule I and to substitute it by a new Schedule J:,
Under section 8(1) of the General Clauses Act, 1897, where the
">< said Act or any Central Act or Regulation male after the
commencement of the said Act, repeals and re-enacts, with or
without modification, any provision of a former enactment,
then references in any o~her enactment or in any instrument to C
the provision so repealed are, unless a different intention
appears, to be constured as references to the provision so
re-enacted. Though section 8(1) of the General Clauses Act
does not in express terms refer to niles made under an Act,
the same principle of construction would, in our opinion,
apply in the case of rules made under an Act. Thus, after the D
1
~ coming into force of the 1974 Notification, the Explanation to
Rule 21 must be read as "For the purpose of this rule Schedule
I means Schedule I as substituted by the Gujarat Minor Mineral
(Fourth Amendment) Rules, 1974" and references to Schedule I
in Rule 21 must be construed as references to Schedule I as so
substituted and not as references to Schedule I as substituted E
by the Gujarat Minor Minerals (Third Amendment) Rules, 1966.

The emphasis placed by the Gujarat High Court upon the
substitution of ·Rule 21 by the 1975 Notification in order to
~arrive at the conclusion that the 1974 Notification was
• l invalid and inoperative and the 1975 Notification. was valid F
was entirely misconceived. Rule 21 was not substituted for the
purpose of conferring upon the State Government the ·power to
enhance the rates of royalty specified in Schedule I. It was
substituted for a whotly different purpose, namely, to bring
the said Rule in conformity with sub-section (3) which was
inserted with retrospective effect in section 15 by the G
Amendment Act of 1972. Its object was to make the holder of a
~.mining lease or any ·other mineral concession liable for
payment of royalty not only in respect of minor minerals re-
moved or consumed by him but also by his manager, employee,
contractor or sub-lessee. The sole repository of the power of
the State Governments to amend the rules, including rules !I
specifying the rates of royalty, is sub-section (!) of sectlon
556 SUPREME COURT REPORTS (1986] l s.c.R.
A
15. Rule 21 did not have any relevance or bearing on the scope ~
or exercise of that power. In fact, sub-clause (a) of clause
(i) of Rule 22 and clause (3) of Part V of the Schedule to
Form D (namely, the Form of Quarrying Lease) appended to the
Gujarat Rules expressly provided a condition that the lessee
is to pay to the Government royalty at the rates for the time
B being specified in and in force under Schedule I to the
Gujarat Rules. Strangely enough, the High Court relied upon
clause (3) of Part V of the Schedule to Form D to the Gujarat, ><
Rules while repelling the challenge to the 1975 Notification
on the ground that the State Government harl no power to alter
the rates of royalty during the subsistence of a lease but
c altogether omitted to notice the said clause while dealing ·
with the question whether the 1974 Notification had become
operative or not. The High Court also omitted to notic~ clause
12 of Part IX of the Schedule to Form D under which a quarry-
ing lease is to be "subject to the Gujarat Minor Mineral
Rules' 1966. as amended from time to time". r
D I-
We, therefore, hold that the 1974 Notification was valid
in law and the amendments made thereby became operative with,
effect from December 1, 1974. Under the proviso to section ·
15(3), the State Government had no power to enhance the rate
·of royalty in respect of any minor mineral more than once
E during any period of four years. The enhancement in the rates,
of royalty by the 1974 Notification was in the third period of
four years reckoned from the date of coming into force of the
Gujarat Rules, namely, from April 1, 1966. This third period
was from April 1, 1974, to March 31, 1978. The rates of' ~ .•
royalty having been enhanced once by the 1974 Notification, f
F they could not be enhanced again during this period and could
only be enhanced during the subsequent period which commenced•
from April 1, 1978. The 1975 Notification, however, once again
enhanced during. the same period the rates of royalty in
respect of several minor ·minerals and to the extent that the
1975 Notification enhanced the rates of royalty in respect of
G those minor minerals, .it was invalid as violating the proviso
to section 15(3). The judgment under appeal of the Gujarat -~"'
High Court to the extent that it holds to the contrary is,
therefore, erroneous and requires to be reversed and set
aside.
H Yet another contention which was raised before us was
that under the definition of "minor minerals" given in clause
D.K, TRIVEDI v. STATE [MADON, J] 557
A

·i;,- (e)of section 3 of the 1957 Act, "building stones" are minor
· minerals and, therefore, under section 15(1) the State
Government can levy royalty only on building stones as such
and cannot classify them into different varieties for the
purpose of recovering royalty upon them at varying rates. This B
argument was also advanced before the Gujarat High Court and
was rejected by it. We fail to understand the point which is
sought to be made. As building stones have been defined as
.-,. being minor minerals, the rule-making power with respect
there~o vests in the State Governments under section 15(1).
The 1957 Act does not enjoin State Governments to charge a
uniform rate of royalty in respect of all varieties of build- c
ing stones.nor does it prohibit them from classifying building
stones into different varieties and charging royalty thereon
'c separate rates. This part of the judgment under appeal of
the Gujarat High Court must, therefore, be upheld.

By the 1976 Notification the Government of Gujarat made D
1 the Gujarat Minor Min·eral (Second Amendment) Rules, 1976,
~which came into force with effect from April 6, 1976. The 1976
Notification substituted Schedule 11 to the Gujarat Rules so
as to enhance the rates of dead rent. We have already held
that the rates of dead rent cannot be enhanced by the State
Government more than once during any period of four years. E
During this particular period of four years, namely, the third
period commencing on April 1, 1974, and ending on March 31,
1978, the rates of dead rent had already been enhanced with
, effect from December 1, 1974, by the 1974 Notification. The
. second enhancement Ciade during the same period by the 1976
• _ , Notification was not permissible in law and the 1976 F
Notification must, therefore, be held to be invalid.

By the 1979 Notification the Government of Gujarat made
the Gujarat Minor Minerals (Amendment) Rules, 1979, which came
into force with effect from April 1, 1979. The 19.1'9
Notification inserted a new rule in the Gujarat Rules, namely, G
Rule 21-B. The said Rule 21-B is as follows

"21-B. Rate of dead rent. -

The holder of a mining lease of any other mineral
concession granted ·under .these rules shall pay H
yearly dead rent in respect of minor minerals
558 SUPREME COURT REPORTS [19861 l s.c.R.

A
specified in· column I, for the areas mentioned in
column 2, at the rates respectively specified ·"I
against them in column 3 of Schedule II".

It further substituted in sub-clause (b) of clause (i) of Rule
22 the words "as may be specified from time to time" for the
B word "specified". It further substituted in clause (2) of Part
V of the Schedule to Form D afpended to the Gujarat Rules the
words "at the rate as may be specified from time to time" for
the words "at the rate mentioned". It also substituted ·'.""
Schedule I to the Gujarat Rules so as to reduce the rate of
royalty on all minor minerals to ten paisa per metric tonne.
c It also substituted Schedule II so as to enhance the rates of
dead rent. In Smt. Sonbai's Case the Gujarat High Court held
the 1979 Notification to be void as being ultra vires section
15 of the 195i Act and Article 19(l)(g) of the Constitution.
We have already discussed the correctness of that judgment and
have held that under the rule-making power conferred upon them
D by section 15(1), the State Government can make rules charging 1
dead rent as also can amend the rules to enhance the rates of c
dead rent so as to effect even subsisting leases and have
pointed out that the judgment of the Gu.J arat High Court in
S.:. Sonbai's case is not correct. The reasons given by the ,_,_

Gujarat High Court for coming to the conclusion that the 1979
E Notification violated Article 19(1)(g) were very much the same
as prompted it to hold that the State Government could not
enhance the rates of dead rent during the subsistence of a
lease. Those reasons are erroneous. We do not find that the ~··
enhancement in the rates of dead rent made by the 1979 Notifi- - -
. ·
cation amount to any unreasonable restrictions on the right of
F the holders of quarry leases to carry on their trade or
business. The rates of dead rent specified in the 1979 Notifi-
cation cannot be looked at in isolation but must be read in
conjunction with the drastic reduction made in the rates of
royalty and so read there is nothing unreasonable in them. We,
therefore, hold that the 1979 Notification was valid in law
G and constitutional. The Gujarat High Court in Smt. Sonbai's
case also held that the 1976 Notification was ultra vires
section 15 and Article 19(1)(g) of the Constitution for the_.,.
same reasons as in the case of the 1979 Notification. These
reasons are. not correct and cannot b!" sustained. We have,
however, held that the 1976 Notification is invalid on an
H
D.K, TRIVEDI v. STATE [MAOON, J] 559

A
, entirely different ground, namely, because it enhanced the
} rates of dead rent for the second time during the same period
of four years.

The previous enhancement in the rates of dead rent was
made by the 1974 Notification during the third period of four B
years, the enhancement in the rates of dead rent made by the
1976 Notification during the same period being invalid. The
')< enhancement in the rates of dead rent made by the 1979
Notification was during the fourth period of four years which
coomenced on April l, 1978 and ended on March 31, 1982. The
1979 Notification, therefo~e, did not violate the bar against
enhancing the rates of dead rent more than once during any C
period of four years.

As a consequence of the judgment of the Gujarat High
Court in Slit. Sonbai 's case the Government of Gujarat issued
the impugned Circular dated February 12, 1981. In the said
·y Circular it was stated that as the 1979 Notification had been D
-1 declared ultra vires by the High Court, the Government was
advised that royalty could be charged from April l, 1979, at
the rates which were in force on the eve of the publication of
the 1979 No~ification. By the said Circular instructions were
issued to all Collectors, District Development Officers and
the Director, Geology and Mining, Ahmedabad, to collect E
royalty on minor minerals quarried from April l, 1979, on this
basis and in msking such recovery to adjust the amounts paid
by the holder of the lease by way of dead rent. Accordingly,
royalty was demanded and collected from the lessees on the
basis of the rates specified in the 1975 Notification, the
validity of which had been upheld by the Gujarat High Court. F
'
The validity of the said Circular and the directions
given thereunder have been challenged on the ground that the
Gujarat High Court had merely held that the State Government
had no power to charge dead rent or to enhance its rates under
section 15 of the 1957 Act and, therefore, it was not justifi- G
ed in striking down the entire 1979 Notification including
..f-that part of it which related to royalty but should have
struck down only that part which dealt with dead rent. The
said Circular was also challenged on the ground that Schedule
I as substituted by the 1975 Notification having been substi-
i tuted by a new Schedule I by the 1979 Notification, such H
560 SUPREME COURT REPORTS [1986 J 1 s.c.R.

A
substitutions amounted to a repeal of Schedule I as notified _,
by the 1975 Notification and a re-enactment of Schedule I by .
the 1979 Notification. As we have held that the 1979 Notifi-
cation is valid and constitutional, these questions have
become academic and do not require to be decided, but the
second challenge to the validity of the said Circular falls to
B be decided by us with respect to other Notifications. As seen
above, the 1974 Notification substituted Schedule I and amend-
ed Schedule II, The 1975 Notification which again substituted '
Schedule I has been held by us to be invalid to the extent
that it enhanced the rates of royalty in respect of some of
the minor minerals, The 1976 Notification which enhanced the
C rates of dead rent specified in Schedule II has also been held
by us to be invalid. The question is whether by reason of
these Notifications being invalid, the rates of royalty anu
dead rent specified in the 1974 Notification revtved. A number
of authorities were cited before us in support of the conten-
Llon that when an Act or a statutory provision is struck down
1) by the Court, the Act or the statutory provision which had ~)
been renealed by such Act or the statutory provision does not
revive. It is unnecessary to refer to all the decisions of
this Court on this subject for all the previous decisions
have been reviewed by this Court'in State of Maharashtra etc.
v. The Central Provinces Manganese Ore Co. Ltd., [1971] 1
E S,C,R. 1002, In that case the Central Provinces and Berar
Sales Tax (Amendment) Act, 1949, substituced Explanation II in
clause (g) of section 2 of the Central Provinces and Berar'
Sales Tax Act, 1947. As such substitution did not receive the
assent of the Governor-General under section 107 of the
Government of India Act, 1935, it was void. The assessees
F contended that as the original Explanation II was validly
repealed by the Amending Act of 1949 and a11 no valid substitu-
tion of the repealed provision had taken place, only the
repeal survived with the result that neither the old Explana-
tion 11 nor the substituted Explanation 11 was in operation.
This contention was rejected by' this Court. This Court held
G (at pages 1009-1010) :
__...
''We do not think that the word 'substitution' '
necessarily or always cannotes two severable steps,
that is to say, one of repeal and another of a
fresh enactment even if it implies two steps.
H Indeed, the natural meaning of the word
D.K. TRIVEDI v. STATE [MADON, J] 561
A
'substitution' is to indicate that the process
cannot be split up into two pieces like this. If
the process described as 'substitution' fails, it
is totally ineffective so as to leave intact what
was sought to be displaced. That seems to us to be
B
the ordin?rY and natural meaning of the words
'shall be substituted'. This part could not become
effective without the assent of the Governor-
General. The State Governor's assent was
insufficient. It could not be inferred that, what
was intended was that, in case the substitution
failed or proved ineffective, some repeal, not
mentioned at all, was brought about and remained
c
effective so as to create what may be described as
a vacuum· in the statutory law on the subject
matter. Primarily, the question is one of gathering
the intent from the use of words in the enacting
provision seen in the light of the procedure gone
D
through. Here, no intention to repeal, without a
substitution, is deducible. In other words, there
could be no repeal if substitution failed. The two
were a part and parcel of a single indivisible
process and not bits of a disjointed operation."
E
The position before us is the same. It was not the intention
· of the Government ·of Gujarat that even if the new schedule of

l
royalty substituted by the 1975 Notification was void and
inoperative, Schedule I as substituted by the 1974
Notification would none the less stand repealed. It was
1
equally not the intention of the Government of Gujarat that
F
even if the rates of dead rent substituted in Schedule II by
the 1976 Notification were void and inoperative, the rates of
dead rent as substituted by the 1974 Notification would none
the less stand repealed. If the contention in this behalf were
correct, it would lead to the startling result that on and
from the date of the coming into force of the 1975
G
Notification no royalty was payable in respect of minor
~--minerals and that on and from the date of the coming into
force of the 1976 Notification no dead rent was payable in
respect of any leased area. The rates in Schedule I and
Schedule II were intended to be substituted by new rates. The
intention was not to repeal them in any event. If the
H
substitutions effected by the 1975 and 1976 Notifications were
562 SUPREME COURT REPORTS [1986 J 1 s.c.R.

A
invalid, such substitutions were equally invalid to repeal the ~
1974 Notification. The result is that the 1974 Notification
continued to be operative both as regards the rates of royalt.y
and the rates of dead rent until they were validly substituted
with effect from April l, 1979 by the 1979 Notification.

B Though the Government of Gujarat cannot be blamed for
issuing the said Circular, for it had to deal with the problem
posed by the judgment of the Gujarat High Court in Sat. ·.,,,..
Sonbai's case, the said Circular was none the less not valid
in law because the 1979 Notification as also Rule 22-B were
valid and operative and the State Government could not by a
c circular letter charge and collect royalty at rates different
from the rate specified in the 1979 Notification. The
directions contained in the said Circular were, therefore,
invalid.

As a further consequence of the judgment of the Gujarat r
D High Court in Sat. Sonbai' s case the Government of Gujarat 1-
made the Gujarat Minor Mineral (Amendment) Rules, 1981, by
issuing the 1981 Notification. The Gujarat Minor Mineral
(Amendment) Rules, 1981, came into force on June 20, 1981. As
a result of the amendments made by the 1981 Notification,
Schedule I was substituted and Schedule II deleted. Thus, with
E effect from June 20, 1981, only royalty became payable and not
dead rent.

It was contended that the rates of royalty specified in~
the 1981 Notification were so excessive and arbitrary as to be
totally unreasonable and, therefore, the 1981 Notification
F violated Article 19(l)(g) of the Constitution because it
placed unreasonable restrictions on the Fundamental Right of
the holders of quarry leases to carry on their trade and
business. We find no substance in this contention. It is true
that by the 1981 Notifi~3tion the rates of royalty have been
enhanced manifold. During the particular period of four years,
G namely, the fourth period coumencing on April, 1, 1978, and
ending on March 31, 1982, the rates of royalty had not been )o
enhanced but· drastically reduced by the 1979 Notification
while the rates of dead rent had been considerably enhanced by
the 1979 Notification. The enhancement in the rates of royalty
made by the 1981 Notificatiop was, therefore, the first
H enhancement made during the fourth period of four years• If
D. K. TRIVEDI v. STATE [MADON, J] 563
A

'" the rates of royalty so enhanced are looked at alone, it would
/-./'"-

appear that they are unreasonable, but when we take into
account the fact that dead rent is not payable after the
coming into force of the 1981 Notification, the position is
completely altered and it cannot be said that enhancement in B
the rates of royalty is unreasonable. The fallacy in the above
contention lies in comparing the rates of royalty specified in
l). the 1981 Notification with the uniform rate of ten paise per
metric tonne specified in the 1979 Notification. If we compare
the rates of royalty specified in the 1981 Notification with
those specified in .the 1974 Notification and we bear in mind
that under the 1974 Notification dead rent was also payable C
under the 1974 Notification, we find that in some cases the
rates of royalty are reduced, for example, the rate of royalty
in respect of dressed and carved marble and slabs of marble
was Rs.SS per metric tonne in the 1974 Notification while
under the 1981 Notification blocks and slabs of marble above
·; 15 ems. in size is only Rs.35 per metric tonne. Though by the o
..\ 1981 Notification the rates of royalty in respect of certain
minor minerals have been enhanced by no stretch of imagination
can such enhancement be said to be excessive or unreasonable
when compared with the rates of royalty specified in the 1974
Notification. This contention must, therefore, be rejected.
E
To summarize our conclusions :

l
(1) Sub-section (1) of section 15 of the Mines and
Minerals (Regulation ' and Development) Act, 1957, is
constitutional and valid and the rule-making power conferred
· thereunder upon the State Governments does not amount to F
excessive delegation of legislative power to the executive.

(2) There are sufficient guidelines provided in the 1957
Act for the exercise of the rule-making power of the State
Governments under section 15(1) of the 1957 Act. These
guidelines are to be found in the object for which such power G
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 the.restrictions and H
other matters contained in sections 4 to 12 of the 1957 Act.
564 SUPREME COURT REPORTS [1986] l S.C.R.

A (3) The power to make rules conferred by section 15(1) ·~-._ .....
-
includes the power to make rules charging dead rent and
royalty.

(4) The power to make rules under section 15(1) includes
the power to amend the rules so made, including the power to
amend the rules so as to enhance the rates of royalty and dead
B rent.

(5) A State Government is· entitled to amend the rules
under section 15(1) enhancing the rates of royalty and dead
rent even as regards leases subsisting at the date of ·such
amendment.
c
(6) Sub-section (3) of section 15 does not confer upon
the State Governments the power to make rules charging royalty
or to enhance the rate of royalty so charged from time to
time.
D
(7) The sole repository of the power of the State
Governments to make rules and amendments thereto, including
amendments enhancing the rates of royalty and dead rent, is
sub-section (l) of section 15.

(8) A State Government is not required to give an
E opportunity of a hearing or of making a representation to the .
lessees who would be affected by any amendments of the rules
before making such amendments.

(9) A quarry lease is a mining lease. i

(10) By reason of the prohibition contained in the
proviso to section 15(3) a State Government cannot enhance the
rate of royalty in respect of any minor mineral more than once
during any period of four years.

( 11) A State Government is also not entitled to enhance
G the rate of dead rent ..,re than once during any period of four -~
years.

(12) During any period of four years the State Government
can enhance both dead rent and royalty, but only once.
D,K, TRIVEDI v. STATE [MAOON, J] 565
A

( 13) The period of four years for the purpose of
enhancing the rates of dead rent and royalty is to be reckoned
from the date of coming into force of the rules made by the
particular State Government.
B
(14) Building stones being minor minerals, the State
Government has. the power to classify them into different
varieties and to charge a different rate of royalty in respect
':> of each such variety.

(15) Notification No. GU-74/12l(A)/MCR-2173(49)7268/CHH
dated November 29, 1974, whereby the Government of Gujarat c
made the Gujarat Minor Mineral (Fourth Amendment) Rules,
1974, was validly issued and became operative with effect from
December 1, 1974.

(16) Notification No. GU-75/ll 7-MCR-2173(49)/6431/Cllli
., dated October 29, 1975, whereby the Government of Gujarat made D
~ the Gujarat Minor Mineral (Second Amendment) Rules, 1975, to
the extent that it enhanced the rates of royalty in respect ot
certain minor minerals was void as offending the prohibition
contained in the proviso to section 15(3).

( 17) The Judgment of the Gujarat High Court in Letters E
Patent Appeal No. 61 of 1978 - Ambalal Manibbai Patel v. ?be
State of Gujarat and Anr., and connected writ petitions is
wrong to the extent that it holds that the Notification dated
November 29, 1974, was invalid and inoperative and that the
.. Notification dated October 29, 1975, was valid and operative
( and that part of the said judgment is hereby reversed.
' F

(18) Notification No. GU-76/39/MCR-2175(68)4675-<:HH dated
April 6, 1976, whereby the Government of Gujarat made the
Gujarat Minor Mineral (Second Amendment) Rules, 1976 was void
as it enhanced the rates of dead rene for the second time
during the same period of four years. G

-J.-. (19) Notification No.GU/79/118/MCR-2178(127)-167 dated
· March 26, 1979, whereby the Government of Gujarat made the
Gujarat Minor Minerals (Amendment) Rules, 1979, was valid and
was not ultra vires either section 15 or Article 19(l)(g) of
the Constitution. H
566 SUPREME COURT REPORTS [1986] 1 S.C.R.
A
(20) The case of Smt. Sonbai Patbalji v. State of Gujarat ~
& Anr., was wrongly decided by the Gujarat High Court and the
judgment in that case is hereby reversed.

(21) The case of M.V. Sobba Rao v. State of Andhra
B
Pradesh & Anr., was wrongly decided by the Andhra Pradesh High
Court and that decision is hereby overruled.
,..
(22) The rates of royalty and dead rent specified by the
Notification dated November 29, 1974, namely, the Gujarat
Minor Mineral (Fourth Amendment) Rules, 1974, continued to be
c operative and in force until the coming into force of the
Notification dated March 26, 1979, on April 1, 1979.

(23) The directions contained in the Circular No. M.C.R.
2180(166) CHH dated February 12, 1981, issued by the
Government of Gujarat were invalid and inoperative.
D
(24) Notification No. GU-81/75/MCR -2181/(168)-4536-<:HH "-
dated June 18, 1981, whereby the Government of Gujarat made
the Gujarat Minor Mineral (Amendment) Rule, 1981, is valid and
constitutional and does not offend Article 19(1 )(g) of the
Constitution.
E
In the light of the above conclusions reached by us, we
will now deal with each individual matter.

Civil Appeals Nos. 706 and 1934 of 1981 are directed
against the judgment of the Division Bench of the Gujarat High \
Court delivered on September 16-17, 1980, in Letters Patent •
F
Appeal No. 61 of 1978 - Anibal.al Kanibhai Patel v. The State of
Gujarat &Anr. and connected writ petitions. These appeals are
accordingly partly allowed and the judgment appealed against
is reversed to the extent that it holds that the enhancement
in the rates of royalty made by the Notification dated
November 29, 1974, was invalid and inoperative and the
G
enhancement in the rates of royalty made by the-Notification
dated October 29, 1975, was valid and operative. The said .;.
judgment is confirmed in so far as it holds that the State
Government has the power to classify building stones into
different varieties and levy a different rate of royalty in
H
respect of each such variety. It is also confirmed in so far
as it holds that the State Government has the power to enhance
D.K. TRIVEDI v. STATE [MAOON, J) 567

A
/·the rates of royalty. The orders dismissing the writ petitions
under Article 226 of the Constitution of India filed by the
Appellants in these Appeals in the Gujarat High Court are set
aside and the said writ petitions are allowed in part and it
is declared that the enhancement in the rates of royalty made
by the Notification dated November 29, 1974, was valid and B
became operative with effect from December l, 1974, and that
._. the enhancement in the rates of royalty made by the Notifica-
tion dated October 29, 1975, was invalid. We also restrain the
State of Gujarat and its officers from recovering any amount
by way of royalty and at the enhanced rates specified in the ·
Notification dated October 29, 1975, or from retaining any
such amount, if recovered, in excess of the amount which would c
by payable in accordance with the Notification dated November
29, 1974, and we further direct the State of Gujarat to refund
to the Appellants in these Appeals any such excess· amount
subject to the directions given hereinafter with respect to
J payment and refund.
-i, D
Civil Appeals Nos. 1489 and 1675 of 1981 are directed
against the orders passed by the learned Single Judge of the
Gujarat High Court dismissing in view of the judgment of the
Division Bench of the Gujarat High Court in Sd;. Sonbai
Patbalji v. State of Gujarat & Anr., the writ petitions filed
by the Appellants in these Appeals challenging the validity of E
the directions contained in the Circular No. M.C.R.2180(166)
CHH dated February 12, 1981, and for an order restraining the
State of Gujarat and its officers from acting upon the said
., ( Circular and the Notification dated October 29, 1975, and
directing the State of Gujarat to implement the Notification
dated March 26, 1979. We accordingly allow both these appeals, F
reverse the judgment of the Gujarat High Court in Smt. Sonbai
Patbalji v. State of Gujarat & Anr., set aside the orders of
the learned Single Judge appealed against, restrain the State
of Gujarat and its officers from acting upon the directions
contained in the said Circular dated February 12, 1981, and
direct the State of Gujarat to collect royalty and· dead rent G
-.f--in accordance with the Notification dated March 26, 1979, for
the period commencing on April l, 1979 and ending on June 19,
1981.

Writ Petitions Nos. 1656, 2108, 4097 and 7697 of 1981,
762, 874 to 942, 946 to 968, 1616 and 1617, 4455 to 4473, 4479 H
568 SUPREME COURT REPORTS [1986) 1 S.C.R.

A
to 4484, 5589 to 5605, 5895 to 5969, 5971 to 6005, 6309, 6463
to 6479 and 10104 to 10122 of 1982 and 3993 to 4003, 8813 to
-tllll
8820 and 9539 to 9549 of 1983 seek the same reliefs as the
Appellants in Civil Appeals Nos. 1489 and 1675 of 1981 had
done in their writ petitions filed in the Gujarat High Court
under Article 226 of the Constitution. We accordingly allow
B the above Writ Petitions and restrain the State of Gujarat and
its officers from acting upon the directions contained in the
Circular No. M.C.R. 2180(166)CHH dated February 12, 1981, and {~
direct the State of Gujarat to collect royalty and dead rent
in accordance with the Notification dated March 26, 1979, for
the period commencing on April 1, 1979, and ending on June 19,
c 1981.

Writ Petition Nos. 7103 and 7104 to 7128 of 1981 and 4208
to 4217 of 1983 challenge the constitutionality of section 15
of the Mines and Minerals (Regulation and Development) Act,
1957, and the validity of Notification No. GU-81/75/MCR 2181/
D (168)-4536 -CHH dated June 18, 1981, whereby the Government of ~
Gujarat made the Gujarat Minor Mineral (Amendment) Rules,
1981. All these writ petitions are accordingly dismissed.

Writ Petitions Nos. 6419 to 6422 of 1982 and 4912 to 4924
and 5167 to 5182 of 1983 challenge the validity of the
E directions contained in the Circular dated February 12, 1981
as also the Notification dated June 18, 1981. These Writ
Petitions are allowed so far as the Circular dated February
12, 1981 is qmcerned, and accordingly we restrain the State
of Gujarat and its officers from acting upon the directions .\
contained in the said Circular and direct the State of Gujarat I "
F to collect royalty and dead rent in accordance with the
Notification dated March 26, 1979 for the period commencing on
April 1, 1979 and ending on June 19, 1981. The Writ Petitions
are dismissed so far as the challenge to the Notification
dated June 18, 1981 is concerned.

G Civil Appeal Nos. 1525 and 1526 o.f 1982 are directed
against the order of the Gujarat High Court dismissing the ~
writ petitions filed by the Appellants challenging the
constitutionality of section 15 of the Mines and· Minerals
(Regulation and Development) Act, 1957, and the validity of
Notification No.GU-81/75/MCR2181/(168)-4536-CHH dated June
H 18, 1981, and directing the Appellants to approach the Supreme
D. K. TRIVEDI v. STATE [MADON, J] 569

~Court
A
as similar matters were· pending there. In our opinion,
the course adopted by the High Court was not correct. If the
High Court thought that the point raised by the Appellants was
the same as was pending in this Court, it ought to have stayed
the hearing of the writ petitions until this Court disposed of
the other matters. As we have, however, held section 15 and B
- the amendments made by the said Notification dated June 18,
-\ 1981, to be valid and constitutional, both these appeals are,
therefore, dismissed.

1 All interim orders passed in all the above matters are
i hereby vacated. If as a result of this Judgment and the
· interim orders passed by this Court, any amount becomes c
payable by any lessee of any mining lease or quarry lease to
the State of Gujarat, the same will be paid by him to the
State of Gujarat after giving such lessee credit for the
amount already paid in respect of the sa.me period as also any
excess amount paid in respect of any other period. Such
_, payment will be made by such lessee within six months from D
~

· today. Correspondingly, if any amount becomes refundable by
the State of Gujarat to any lessee of any mining lease or
quarry lease, the State of Gujarat will refund the same to
such lessee after adjusting against the amount refundable the
amount actually recoverable in law and recovered by the State
of Gujarat from such lessee. Such payment will be made by the E
State of Gujarat within six months from today.

The parties will bear and pay their own costs of these
Writ Petitions and Appeals.

F

S.R.