PETITIONER:
GEM GRANITES & ANR.
Vs.
RESPONDENT:
STATE OF TAMIL NADU & ORS
DATE OF JUDGMENT19/01/1995
BENCH:
BHARUCHA S.P. (J)
VERMA, JAGDISH SARAN (J)
PARIPOORNAN, K.S.(J)
CITATION:
1995 SCC (2) 413 JT 1995 (1) 629
1995 SCALE (1)273
ACT
HEADNOTE
JUDGMENT
1. What has been urged in these writ petitions is that rule 8-C, as amended by G.O.M.No.214 issued by the Government of Tamil Nadu on 10th June, 1992, and rule 38 of the Tamil Nadu Minor Mineral Concession Rules, 1959, are bad in law. The challenge is grounded on the provisions of subsection 2 of section 17-A of the Mines & Minerals (Regulation & Development) Act, 1957, which was inserted in the statute by Amending Act 3 7 of 1986. 2. Rule 8-C is in Section 11 of the Said Rules, which deals with Government lands in which minerals belong to the Government. The relevant portion of rule 8-C, as amended, reads thus:
"8-C. Lease of quarries in respect of black,
red, pink, grey, green, white or other
coloured or multi-coloured granites or any
rock suitable for use as ornamental and
decorative stones to a State Government
Company or Corporation owned. or controlled by
the State Government (1) (a) Notwithstanding
anything contained in these rules but subject
to rule 8-A and clause (b) of this sub rule,
on and from the 10th June 1992, no lease for
quarrying black, red,pink, grey, green, white
or other coloured or multi-coloured granites
or any rock suitable for use as ornamental and
decorative stones shall be granted to any
person.
(b) The State Government themselves nay
engage in quarrying black, red, pink, grey ,
green, white or other coloured or multi-
coloured granites or any rock suitable for use
as ornamental and decorative stones or may
grant or renew leases for we above minerals to
a State Government Company or Corporation
owned or controlled by the State Government." Rule 39 in Section V, dealing with miscellaneous matters. It reads thus:
"38. Reservation of area for exploitation
631
in the public sector, etc.- The State Gov-
ernment may, by notification in the Official
Gazette, reserve any area for the exploitation
by the Government, a Corporation established
by any Central , State or Provincial Act or a
Government Company within the meaning of
section 617 of the Companies Act, 1956
(Central Act 1 of 1956)".
Section 17-A of the Act reads thus:
" 17-A. Reservation of area for purposes of
conservation (1). The Central Government,
with a view to conserving any mineral and
after consultation with the State Government,
may reserve any area not already held under
any prospecting licence or mining lease and,
where it proposes to do so, it shall, by
notification in the official Gazette, specify
the boundaries of such area and the mineral or
minerals in respect of which such area will be
reserved.
(2) The State Government may, with the
approval of the Central Government, reserve
any area not already held under any
prospecting licence or mining lease, for
undertaking prospecting or mining operations
through a Government Company or Corporation
owned or controlled by it or by the Central
Government and where it proposes to do so, it
shall, by notification in the official
Gazette, specify the boundaries of such area
and the mineral or minerals in respect of
which such areas will be reserved.
(3) Where jin exercise of the powers con-
ferred by sub-section (2) the State Government
undertakes prospecting or mining operations in
any area in which the minerals vest in a
private person, it shall be liable to pay
prospecting. fee royalty, surface rent or dead
rent, as the case may be, from time to time at
the same rate at while it would have been
payable under this Act if such prospecting or
mining Operations had been undertaken by a
private person under prospecting licence or
mining lease." 3. It is an admitted position that the approval of the Central Government was not obtained to rule 8-C as amended on 10th June, 1992, either before or after that date. 4. Section 17A (2) empowers the State Government to reserve any area not already held under a mining lease for undertaking mining operations through a Government Company or corporation owned or controlled by it may do so only with the approval of the Central Government. When it purposes to do so it must, by notification in the Official Gazette, specify the boundaries of that area and the mineral or minerals in respect of which that area is to be reserved. Rule 8-C, as amended on 10th June 1992, states that no lease for quarrying the granites therein specified and any rock suitable for use for ornamental or decorative stones shall be granted to any person. It is also states that the State Government itself may engage in quarrying such granites or rock or may grant or renew leases to quarry the same to a State Government company or corporation. 5. This Court in Amritlal Nathubhai Shah & ors. v. Union Government of India and anr. (1977) 1 S.C.R.372, considered the provisions of section 17 of the said Act, it was argued on behalf of the appellants that they were only provisions for specifying the boundaries of the reserved areas and, as they related to prospecting or mining operations to be undertaken by the Central Government, they showed that the said Act did not contemplate or provide for reservation by any 632 other authority or for any other purpose. The argument was repelled by this Court in these words:
"The argument is however untenable because the
aforesaid sub-sections of section 17 do not
cover the entire field of the authority of
refusing to grant a prospecting licence or a
mining lease to any one else, and do not deal
with the State Government’s authority to
reserve any area for itself. As has been
stated, the authority to order reservation
flows from the fact that the State is the
owner of the ?nines and the minerals within
its territory, which vest in it. " (Emphasis
supplied). 6. Mr. Sanghi, learned counsel for the respondent State, was, therefore, justified in asserting that rule 8-C, as amended, did not, in any event, debar the State Government from making a rule that no lease to quarry the said granites and rock would be granted to any person and that the State Government itself could engage in such quarrying. As the owner of the said granites and rock the State Government may decline to give to anyone a lease to quarry the same and engage in such quarrying operations in itself 7. The real question is whether the State Government is entitled to go further and state that it would be free to grant or renew leases to quarry the said granites and rock to a State Government company or corporation. Mr. Sanghi argued that the provisions of Rule 8-C, as amended, were not intended to make a reservation of such granites and rock in favour of the State Government or its companies or corporations but to preserve the same and, therefore, the State Government was not obliged to obtain the approval of the Central Government thereto under the provisions of Section 17A-(2). We cannot agree. Clearly, rule 8-C, as amended, is intended to reserve the quarrying of be said granites and rock for the State Government and for a State Government companies and corporations. Insofar as the reservation is for State Government companies and corporations, it is hit by the provisions of Section 17-A(2) because, for such reservation, the approval of the Central Government is required and has not been obtained. 8. Rule 38 purports to permit the State Government to reserve any area for exploitation by the Government or Central or State Government corporations companies. The provisions of rule 38, insofar as they relate to the State Government itself, are unexceptionable but, insofar as they relate to Central or State Government companies or corporation they must be read in conjunction with the provisions of section 17-A(2). In other words, the State Government may, by notification in the Official Gazette, reserve any area for exploitation by Central or State Government companies or corporation only if it has obtained the approval of the Central Government under section 17-A(2) for doing so. 9. The writ petitions are partly allowed in that rule 8-C as amended by G.O.M.No.214 dated 10th June, 1992, is declared to be bad in law and is struck down in so far as it permits the State Government to grant or renew leases in favour of State Government companies and con porations to quarry the granites and rock therein mentioned and that rule 38 must be read as being subject to the provisions of Section 17-A(2). 10.There shall be no order as to costs. 633