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

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 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 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, 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 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 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 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 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 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 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 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 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 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 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.

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 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 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

3Copy pinpoint3. 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.

4Copy pinpoint4. 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 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, 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 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 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 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 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 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 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 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 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 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 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 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 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, 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 enhancement made during the fourth period of four years• If

D. K. TRIVEDI v. STATE [MADON, J] 563

'" 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 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 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 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 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 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 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 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 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, 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.