Holding

The notification was only premature and unenforceable for the four‑month interregnum before 1 June 1970; it becomes valid thereafter, and the High Court’s order striking it down is set aside.

Summary

The Central Government issued a notification on 29 January 1970 raising the royalty on limestone to Rs.1.25 per tonne. The writ petitioners challenged it, arguing that the increase violated the proviso to section 9(3)(b) of the Mines and Minerals (Regulation and Development) Act, 1957, which bars more than one enhancement in any four‑year block. The Rajasthan High Court struck down the notification entirely. On appeal, the Supreme Court held that the four‑year block begins with the commencement of the rules (1 June 1966) and that the 1970 notification was merely premature, being unenforceable only for the four‑month period before 1 June 1970. Consequently, the Court set aside the High Court’s order, restraining the State from enforcing the notification only until 31 May 1970, after which the enhanced royalty is valid. The appeals were partly allowed.

Issues considered

Whether the notification of 29 January 1970 enhancing limestone royalty contravenes proviso (b) to section 9(3) of the Mines and Minerals (Regulation and Development) Act, 1957.
How the phrase ‘during any period of four years’ in the proviso is to be interpreted – from the date of the last enhancement or from the commencement of the rules.
Whether the High Court was correct in striking down the notification in its entirety or should have limited relief to the period of premature enforcement.
Whether the High Court exercised its jurisdiction under Article 226 appropriately.

Legislation cited

Mines and Minerals (Regulation and Development) Act, 1957s. 9(3)(b)

Subjects

royaltylimestoneMines and Minerals Actstatutory embargonotificationhigh court jurisdictionArticle 226interpretation of periodpremature enhancement

Judgment

.STAIB OF RAJASTHAN
A
, ·I V,
HINDUSTAN SUGAR MILLS LTD. & ORS.

JULY 14, 1988

[M.P. THAKKAR AND B.C. RAY, JJ.] B

Mines and Minerals (Regulation and Development) Act, 1957
Section 9(3) (b )-Levy and Collection of royalty on limestone-
Notification enhancing the levy-Validity of.

Constitution of India, 19§°=Art. 226-High Court ~xercising
high prerogative power-to moul.d relief in a just and fair manner as C
required by the demands of the situation.

The Central Government issued a Notification dated January 29,
1970 under the Mines and Minerals (Regulation and Development) Act,
1957 authorising the levy and collection of royalty on limestou'e at D
Rs.1.25 per tonne. The Respondents ·filed a writ petition in the High
Court challenging the Notification ..

The High Court struck down the impugned notification on the
ground that the Central Govt. had enhanced the rate of royalty by .
virtue of the said notification in disregard of the statutory embargo ,E
embodied in clause (b) of the proviso io section 9(3) of the Act whic.h
prohibits enhancement more than once during any period of four years.

The State of Rajasthan which was recovering .roy:dty at th• en.
hanced rates has filed these two appeals by special leave.
F
Allowing the appeals partly, this Court,

HELD: 1.1 The only vice in the impugned Notification is that the
enhancement was authorised nearly four months too soon in advance
i.e. on January 29, 1970. The enhancement could have been made with
impunity without violati11g proviso (b) to sub-section(3) of section .9. G
abont fonr months later. The enhancement was therefore unenforceable
only during this period of four months. The enhancement coul!l have
been lawfully made without any impediment on June 1, 1970. Dµriµg
this interregnum the Notification would have remained !forma11t.
Uoder the circums(ances ttie just and fair course to adopt is to issue a
Writ restraining the State of Rajasthan from enforcing the enhance- H
461
462 SUPREME COURT REPORTS [1988] Supp. 1 S.C.R.

A . ment for the interregnum of about four months expiring on 31st May,
1970 instead of striking down the Notification in absolute terms for all
times as has been done by the High Court. [4698-E]

1.2 The enhancement was merely premature and not void in the
sense that the enhancement could have been lawfully enforced with
B effect from June 1, 1970 and could not have been made enforceable on
the date of the issuance of the Notification on 29th January, 1970. Such
a Notification in the eye of law, must be treated as dormant for the
interregnum of about four months till it becomes enforceable on June 1,
1970 upon the commencement of the next four-year block. The enhan-
cement was authorised by the Legislature. However, there was an
C embargo making it enforceable only once during the course of the four-
year block. It would be taking a super-techni~al view to hold that a
fresh Notification could have been issued on June 1, 1970 and that Notifica-
tion issued on 29th January, 1970 should be quashed. I467G-H; 468A-B J

D.K. Trivedi & Sot1s and Ors. v. State·of Gujarat & Ors. etc.,
D I1986] Suppl. sec 20, relied on.
Mahendra Lal Jaini v. The State of Uttar Pradesh & Ors., [1963]
Suppl. 1SCR912 and Bhikaji Narain Dhakaras v. The State of Madhya
Pradesh, [1955] 2 SCR 589, distinguished.

E 2. The High Court was exercising high prerogative jurisdiction
under Article 226 and could have moulded the relief in a just and fair
manner as required by the demands of the situation. The High Court
· could well have proceeded on the premise that the enhancement made
pursuant to the Notification dated January 29, 1970 was unenforce-
able for the four months preceding June 1, 1970 on which date the
F enhancement could have been lawfully enforced pursuant to the
Notification. [467F-G]

3. The order of the High Court quashing the impugned Noti-
fication dated January 29, 1970 is set aside. In place thereof the
State of Rajasthan is restrained from enforcing the impugned Noti-
G fication till 31st May, 1970 with the clarification that the enhance-
ment as per the said Notification authorising collection of levy at
Rs.1.25 per tonne would be enforceable with effect from June 1, 1970
onwards. [469G-H]

[This Court observed that such amount as remains to be
H recovered in the light of the present Judgment will have to be paid
STATEOFRAJASTHAN v:HJNDUSTAN SUGAR MILLS [THAKKAR, J.I 463

by the Respondents on or before September 30, 1989, failing which
the appellant will be entitled to· recover the same from the Respon- A
dents.] [469G-H]

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1743
& 1744 of 1973.
B
From the Judgment and Order dated 9.5.1972 of the Rajasthan
High Court in D.B. Civil Special Appeal No. 110 of 1972.

Badri Das Sharma for the Appellant.

G.L. Sanghi and A.K. Sanghi for the Respondent in C.A. No.
1743/ 1973. c
K.K. Jain, Bishambar Lal, P. Dayal and A.D. Sangar for the
Respondents in C.A. No. 1744/1973.

The Judgment of the Court was delivered by D

THAKKAR, J: The High Court having struck down the Notifi-
cation dated January 29, 1970 issued by the Central Government
authorising the levy and collection of royalty on limestone at Rs.1.25
per tonne, the State of Rajasthan which was recovering royalty at
the aforesaid rate under the Mines and Minerals (Regulation and E
Development) Act, 1957 (Act) has approached this Court by way of
these two allied appeals by special leave. The impugned Notification
has been struck down by the High Court on the gtdund that the Cent·
ral Government had enhanced the rate of royalty by virtue of the said
Notification in disregard of the statuto1y embargo embodied in clause
(b) of the proviso to Section 9(3) 1 of the Act which prohibits enhance- F
ment "more than once during any period of four years".

1. "S.9-Royalties in rcsper.:t of tnining leasi:.:s.

(3) The Central Government n1ay, by notification in the Official Gazette amend the
Second Schedule so as to enhance or reduce the rate at which royalty shall be
payab]e in respect of any mineral with effect from such date as may be specified G
in the Notification:

Provided that the Central Government shall note:

(a) xx x
(b) .Enhance the rate of royalty in r"espect of any mineral more than once during •
any period of four years." H
464 SUPREME COURT REPORTS [1988] Supp. 1 S.C.R.

The contention of the respondents (original Writ Petitioners in
A
the High Court) was that enhancement by amending the schedule
could be effected only once within four years of the 'earlier enhance-
ment'. The interpretation canvassed by them (referred to as Writ
Petitioners.hereafter) was that the expression "during any period oJi
four years" would mean during the block of four years 'Commencing
B from the last date on which the enhancement was made'. This interpre-
tation was accepted by the High Court. Now this Court in D.K. Trivedi
& Sons and Ors. v. State of Gujarat & Ors. etc., [1986] Suppl. Supreme
Court Cases 20 has interpreted this very expression in a provision
which is in pari-materia as prohibiting enhancement of royalty in
respect of any mineral more t.han o.nce during any period of fou~ years
'commencing from the. daut of the. ~nforcement of the Rules.' In oth~~
c words while the High Court has taken, th.e view that the poj11t of comm-
encement of the period o.f emba.rgo must begin with. effect from the
date on which the last enhancement.was inade, this Court has taken tl;le
view that the four year period of embargo must commence from the
date of the commencement of the Rules. And that further enhancement
D can be made only once during the subsequent block of four years su
computed. Of course in D. K. Trivedi' s case this Court was concerned
with an analogous provision in the Gujarat Rules. But the problem of
interpretation was identical namely whether the four-year block would
commence from the 'date of enforcement of the Rules' or whether each
block would commence from the 'date of last enhancement'. Madon, J.
E speaking for the Court has resolved the controversy in the passage
extracted hercinbelow:

"As the Gujarat Rules h.ave been am.ended from time to
time by the impugned notificati9;1s so as to enhance or
reduce the rate of royalty or dead rent or both, it is neces-
F sary at this stage before turning to the Gujarat Rules to
consider what the expression "during any period of four
years" occm:ring in tl;le proviso to Section 15(3) mean. It is
pertine11.t to. note that the words used in the proviso are
"shall not enhance the rate of royalty ... for more than
once during any period of four years". This is a whol,ly
G different thing from saying that where the rate of royalty
has been enhanced once it shall not be enhanced again for a
period of four years or, in 0th.er words, until. a period 0£ four
years from the date of such enhanccm.ent h.as expired. The
period ojfour years for this purpose must be and can only be
r.~1;/1,011ed fro'!l the date of coming intoforc~ of, the rules, a.nd
it is open to a State Governmen.t. to. enh(m.ce. th!). r.ate ofiroy-
STATE OF RAJASTHAN v. HINDUSTAN SUGAR MILLS [THAKKAR, J .J 465

airy or dead rent at any time during the.·period of four years A
from the coming into force of the rules and after each period
of four years expires at any time during eiJ.ch succeeding
period of four years. The Gujarat Rules came i11.to force on
April 1, 1966. Therefore,. in the cas.e of Gujarat Rul.es the
first period of four years would be April 1, 1966 to March
31, 1970, the second period would be April 1, 1970 to B
March 31, 1974, the third period would be April 1, 1974 to
March 31, 1978, the fourth period would be April 1, 1978 to
March 31, 1982, the fifth would be April 1, 1982 to March
31, 1986. and so on thereafter. Thus, during any of these
periods of four years both dead rent am:\ royalty can be
enh;i.nced, by the Government of GuJarat but only once
during each such period."· c
(~mphasis added)

Thus. th.e question regarding interpretation is no more res-integra.
Applying the law as declared by this Court in Trivedi's case (supra) an
enhancement in the rate of royalty can be effected once in the succes- D
sive four-year blocks succeeding on the heels of the first four-year
block commencing from June 1, 1958 and expiring on 31st May, 1962.

In other words the rate of royalty could have been lawfully enhanced
once during each of the four-years blocks specified hereunder viz:
E
1.6.1962 to 31.5.1966
1.6.1966 to 31.5.1970
l.6.)970;\Q).~.5.1974.

Th.e rates. of royalty were however revised in the m.anner indicated
hereafter-. 1;)1,1.ring the first blo.ck of four years tlw.t is to say from F
1.6.1958 to 31.5.1962 the. rate of royalty on l.imestone was fixed_ a.t
Rs.O. 75. per tonn.e su.bject to, a rebate on extractions made by recou.rse
to, \l. (J;t!iliwlax- process (froth flo.tation methop). During the secon.d
block of four years commencing from 1.6.1962 to 31.5.1966, no change
was effectecNn the rate of royalty. In the third block commencing from
1.6.1966. to 3.1.5.1970, the Central Government issued a notification G
dated 1. 7-.1968 whereby tb.e rate of royalty in respect of limestone was
again revised.. The rele:vant entry reads thus:

."8:. Limestone;

(i) S:upetior g~ade with, 45% or n;t.Qre Ca.0. Rs.1.:?5 per- HI
tOJil;\l.C.
466 SUPREME COURT REPORTS [1988] Supp. 1 S.C.R.

(ii) Inferior grade with less than 45% CaO Rs.0. 75 per
A
tonne.''

On January 29, 1970 in the same block of four years commencing from
1.6.1966 to 31.5.1970, the Central Government issued another notifi-
cation, the impugned Notification (dated January 29, 1970) whereby
B the distinction between the two grades of limestone was abolished and
rate of royalty was fixed at Rs.1.25 per tonne. This was achieved by
substituting the entry pertaining to royalty leviable on limestone by an
entry in the following terms:

"Limestone-Rs.1.25 per tonne."
c The change effected by the impugned Notification vis-a-vis
earlier Notification is better comprehended when the entries are jux-
taposed as under:

'First' and 'second' 'Third' four-year
D four-year Blocks Block 1966-70
1958-62 & 1962-66

Date of Notification 29-6-68 29-1-70

Rate of royalty fixed Rs.0.75pertonne (a) Superior
E for limestone (subject to a grade
rebate of Rs.0.38 with
per tonne on lime- 45%or
stone beneficiated more
by froth floatation CaO-
process)., Rs. 1.25
F per
tonne. Limestone
Rs. l.25
(b) Inferior per
grade tonne.
with less·
G than
45%
CaO-
Rs. 0. 75
per
tonne.
H
STATE OF RAJASTIIAN v. HINDUSTAN SUGAR MILLS [THAKKAR, J.] 467

In the net result the position which emerges is this:
A

The Writ Petitioners were paying royalty at Rs.0. 75 per tonne subject
to a rebate which was granted on the extraction being made by re-
course to a particular process till the third four year block commencing
on June 1, 1968. Thereafter by virtue of the Notification dated June
29, 1968 the petitioners had to pay royalty at Rs.O. 75 per tonne for the 13
inferior grade limestone but the rebate was discontinued. Under the
circumstances the Writ Petitioners complained that as a matter of fact
enhancement was effected twice during the four-year block of 1966-70.
It was contended that by virtue of the Notification dated 29 .6.1968
inasmuch as the rebate of Rs.0.38 per tonne which was hitherto being
granted was withdrawn it constituted the first enhancement during this C
block and inasmuch as the rate of royalty was again enhanced to Rs. l.25
per tonne persuant to the impugned Notification dated January 29,
1970 it constituted an enhancement for the second time in the same
four-year block .. On these premises it was urged that the embargo
engrafted by Section 9(3)(b) of the Act was violated by the impugned
Notification and consequently the said Notification was null and void. D
The High Court upheld the plea and came to the conclusion that the
second enhancement would be being enforcd for the first time in the
fourth four-year block commencing from June 1, 1966. The learned
Counsel for the appellant is, under the circumstances, perfectly justi-
fied in submitting that the High Court instead of striking down the
Notification in toto could well have made the Notification unenforceable E
for a period of four months of the third four-year block expiring on
31st May, 1970, without prohibiting its enforcement even with effect
from June 1, 1970 from which date the fourth four-year block com-
menced, and the enhancement could have been made without any
impediment in law. The High Court was exercising high prerogative
jurisdiction under Article 226 and could have moulded the relief in a F
just and fair manner as required by the demands of the situation. The
High Court could well have proceeded on the premise that the
enhancement made pursuant to the Notification dated January 29,
1970 was unenforceable for the four months preceding June 1, 1970 on
which date the enhancement could have been lawfully enforced
pursuant to the Notification. Till then the Notification would have G
remained unenforceable for that limited period of four months during
which the embargo would have been in operation. In our opinion, the
enhancement was merely premature and not void in the sense that the
enhancement could have been lawfully enforced with effect from June
1, 1970 and could not have been made enforceable on the date of the
issuance of the Notification on 29th January, 1970. Such a Notifica- H
468 SUPREME COURT REPORTS [1988] Supp. I S.C.R.

tion, in the eye of law, must be treated as dormant for the intenegnum
A of about four months till it becomes enforceable on June 1, 1970 upon
the commencement of the fourth four-year block. The enhancement
was authorised by the Legislature. However, there was an embargo
making it enforceable only once during the course of the four-year
block. It would be taking a super-technical view to hold that a fresh
B Notification could have been issued on ·June 1, 1970 and that the
Notification issued on 29th January, 1970 should be quashed for all
times notwithstanding the fact that it was unenforceable only for the
interregnum of four months and there was no impediment to its
enforcement on the expiry of the third four-year block on 31st May,
1970. An illustration will make the point clear. The Writ Petitions
giving rise to both the appeals were instituted after fourth four-year
c block which commenced on 1.6.1970 and the embargo no longer sub-
sisted. The effect of the impugned Notification was that it authorised
the appellant to collect royalty at the rate of Rs.1.25 every day subse-
quent to the issuance of the Notification. For four months expiring on
31st May, 1970 the Writ Petitioners could successfully contend that the
D enhancement cannot be enforced in view of the statutory embargo
raised by proviso (b) to sub-section (3) of Section 9 of the Act. But
from June 1, 1970 onwards this legal .weapon of resistence was not
available to the Writ Petitioners. They could not have sought shelter
under the umbrella of proviso (b) to sub-section (3) of Section 9 of the
Act, having regard to the fact that the enhancement was being
E enforced for the first time in the four-year block commencing on June
1, 1970. Such being the position the just and fair order to pass would
have been to restrain the appellant from enforcing the Notification for
the interregnum between January 29, 1970 till 31st May, 1970, i.e. for
about four months, instead of quashing the Notification. The learned
Counsel for the Writ petitioners has however contended that enforce-
F ment even subsequent to June 1, 1970 was not permissible in Jaw. In
support of this proposition reliance was placed on Mahendra Lal Jaini
v. The State of Uttar Pradesh & Ors, [1963] Suppl. I S.C.R. 912. We
are unable to accede to this submission. In Mahendra Lal Jaini's case
(supra) this Court was dealing with a post-constitutional legislation
which was inconsistent with the fundamental rights confened by the
G Constitution of India and was accordingly rendered void by virtue of
Art. 13(2) of the Constitution of India. It was in this context that the
expression 'still born' was used in regard to the impugned legislation.
Of course having regard to the constitutional command embodied in
Art. 13(2) no State can make any Jaw abridging the rights conferred by
part III of the Constitution of India and any such law made in contraven-
H tion of this clause would be void. As a matter of fact in Mahendra Lal
STATE OFRAJASTHAN v. HINDUSTAN SUGAR MILLS [THAKKAR, J.] 469

Jaini's case the doctrine of eclipse enunciated in Bhikaji Narain Dhakaras A
v. The State of Madhya Pradesh, [ 1955] 2 S.C.R. 589 to the effect that the
questioned law would remain dormant till the clout was removed
whereupon it would become alive, has been approved. In the present
case we are not concerned with a piece of legislation which offends
Art. 13(2) of the Constitution of India. It is therefore futile to contend B
that the principle enunciated in Mahendta Lal Jaini's case would
justify striking down of the Notification for all times in future. As has
been observed earlier the only vice in the impugned Notificatiort is that
the enhancement was authorized nearly four months too soon in
advance. The enhancement could have been made with impunity with-
out violating proviso (b) to sub-section (3) of Section 9 about four
months later. The enhancement was therefore unenforceable only C
during this period of four months. It is not even disputed that the
enhancement could have been lawfully made without any impediment
on June 1, 1970. Inasmuch as it was made nearly four month too soon,
on January 29, 1970, the enhancement would be unenforceable during
this interregnum of approximately four months. During this period the D
Notification would have remained dormant. Under the circumstances
the just and fair course to adopt is to issue a Writ restraining the State
of Rajasthan from enforcing the enhancement for the interregnum of
about four months expiring on 31st May, 1970 instead of striking down
the Notification in absolute tetms for all times as has been done by the
High Court. It would have become vibrant and enforceable with effect E
from June 1, 1970. There is absolutely no warrant or justification to
restrain recovery at .the enhanced rate for the period subsequent to
June 1, 1970 notwithstanding the fact that there is no legal bar under
proviso (b) to sub-section (3) of Section 9 to give effect to the Notifica-
tion with effect from that date. Under the circumstances we allow the
appeals partly. The order passed by the learned Single Judge of the F
High Court quashing the impugned Notification dated January 29,
1970 as confirmed by the Division Bench of the High Court is set aside.
In place thereof the State of Rajasthan is restrained from enforcing the
impugned Notification till 31st May, 1970 with the clarification that the
enhancement as per the said Notification authorising collection of levy
at Rs.1.25 per tonne would be enforceable with effect from June 1, G
1970 onwards. Such amount as remains to be recovered in the light of
this Judgment will have to be paid by the Writ petitioners on or before
September 30, 1989. On failure of the Writ Petitioners to do so the
appellant will be entitled to recover from them the sum representing
the difference between the sum recoverable as pet this Judgment and
the sum paid by the Writ Petitioners. We substitute the order ih the H
470 SUPREME COURT REPORT~ l1988] Supp. 1 S.C.R.

A aforesaid terms in place of the order passed by the High Court which
we have set aside.

The appeals are partly allowed accordingly. There will be no
order regarding costs throughout.
B
G.N. Appeals allowed.

•