MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA AND ORS.

A notwithstanding the fact that the lease has already expired:

Provided further that where an area reserved under Rule 58 or under section 17-A of the Act to be granted to a Government Company, no notification under clause (ii) shall be required to be issued; B (2) The Central Government may, for reasons to be recorded in writing relax the provisions of sub-rule (1) in any special case.

c 75. Rule 60 of the 1960 Rules has been amended twice, first vide Notification dated January 16, 1980 and thereafter by the Notification dated January 17, 2000. After amendment, Rule 60 reads as under :

"60.Premature applications.-Applications for the grant D of a reconnaissance permit, prospecting licence or mining lease in respect of areas whose availability for grant is required to be notified under rule 59 shall, if-

(a) no notification has been issued, under that rule; or E (b) where any such notification has been issued, the period specified in the notification has not expired, shall be deemed to be premature and shall not be entertained."

76Copy pinpoint76. Rule 63 of the 1960 Rules provides that where previous approval of the Central Government is required under the 1957 Act or the 1960 Rules, the application for such approval shall be made to the Central Government through the State Government. G

77Copy pinpoint77. The above provisions give us complete view of the statutory framework and legal regime with regard to regulation of mines and mineral development and the role and powers of the State Governments in that regard. H

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 729 AND ORS. [R.M. LODHA, J.] Decisions A Hingir-Rampur Coal Co. Ltd.

78Copy pinpoint78. A Constitution Bench of this Court in Hingir-Rampur Coal Co. Ltd.a was concerned with the question of the validity of Orissa Mining Areas Development Fund Act, 1952. lnter-alia, the contention raised on behalf of the petitioners was that even if the cess imposed thereunder was a 'fee' relatable to Entries 23 and/or 66 of List II, the same would be ultra vires Entry 54 of List I in light of declaration made in Section 2 of the 1948 Act which read, 'it is hereby declared that it is expedient in the public interest that the Central Government should take under its control the regulation of mines and oilfields and the development of minerals to the extent hereinafter provided' and other provisions. D

79Copy pinpoint79. The majority view considered the above contention as follows:

"23. The next question which arises is, even if the cess is a fee and as such may be relatable to Entries 23 and 66 in List II its validity is still open to challenge because the legislative competence of the State Legislature under Entry 23 is subject to the provisions of List I with respect to regulation and development under the control of the Union; and that takes us to Entry 54 in List I. This Entry reads thus: "Regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest". The effect of reading the two Entries together is clear. The jurisdiction of the State Legislature under Entry 23 is subject to the limitation imposed by the latter part of the said Entry. If Parliament by its law has declared that regulation and development of mines should in public interest be under the control of the Union, to the extent of such declaration the jurisdiction of the State Legislature is excluded. In other words, if a H

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A Central Act has been passed which contains a declaration by Parliament as required by Entry 54, and if the said declaration covers the field occupied by the impugned Act the impugned Act would be ultra vires, not because of any repugnance between the two statutes but because the B State Legislature had no jurisdiction to pass the law. The limitation imposed by the latter part of Entry 23 is a limitation on the legislative competence of the State Legislature itself. This position is not in dispute.

24 ............. If it is held that this Act contains the c declaration referred to in Entry 23 there would be no difficulty in holding that the declaration covers the field of conservation and development of minerals, and the said field is indistinguishable from the field covered by the impugned Act. What Entry 23 provides is that the legislative competence of the State Legislature is subject to the provisions of List I with respect to regulation and development under the control of the Union, and Entry 54 in List I requires a declaration by Parliament by law that regulation and development of mines should be under the control of the Union in public interest. Therefore, if a Central Act has been passed for the purpose of providing for the conservation and development of minerals, and if it contains the requisite declaration, then it would not be competent to the State Legislature to pass an Act in respect of the subject-matter covered by the said declaration. In order that the declaration should be effective it is not necessary that rules should be made or enforced; all that this required is a declaration by Parliament that it is expedient in the public interest to take the regulation and development of mines under the control of the Union. In such a case the test must be whether the legislative declaration covers the field or not. Judged by this test there can be no doubt that the field covered by the impugned Act is covered by the Central Act Liii of H 1948.

MONNET !SPAT & ENERGY LTD. v. UNION OF INDIA 731 AND ORS. [R.M. LODHA, J.]

25. It still remains to consider whether S. 2 of the said Act A amounts in law to a declaration by Parliament as required by Article 54. When the said Act was passed in 1948 the legislative powers of the Central and the Provincial Legislatures were governed by the relevant Entries in the Seventh Schedule to the Constitution Act of 1935. Entry B 36 in List I corresponds to the present Entry 54 in List I. It reads thus: "Regulation of Mines and Oil Fields and mineral development to the extent to which such regulation and development under Dominion control is declared by Dominion law to be expedient in public interest". It would c be noticed that the declaration required by Entry 36 is a declaration by Dominion law. Reverting then to S. 2 of the said Act it is ciear that the declaration contained in the said section is put in the passive voice; but in the context there would be no difficulty in holding that the said declaration by necessary implication has been made by Dominion law. It is a declaration contained in a section passed by the Dominion Legislature and so it is obvious that it is a declaration by a Dominion law, but the question is: Can this declaration by a Dominion law be regarded constitutionally as declaration by Parliament which is required by Entry 54 in List I."

The majority view found that the declaration by Parliament required under Entry 54, List I was absent as the declaration under Section 2 of the 1948 Act by the Dominion Legislature F was not held equivalent to declaration by the Parliament under Section 2 of the 1957 Act.

M.A. Tulloch & Co.

80Copy pinpoint80. In M.A. Tulloch & Co.b, a Constitution Bench of this G Court was concerned with legality of certain demands of fee under the Orissa Mining Areas Development Fund Act, 1952 (Orissa Act). The Constitution Bench considered the question, 'whether the extent of control and regulation provided by the H

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A 1957 Act takes within its fold the area or the subject covered by Act 27 of 1952 Act'. The High Court had held that fee imposed by the Orissa Act was rendered ineffective in view of the 1957 Act. The State of Orissa was in appeal from that judgment. The Court in para 5 and para 6 of the Report noted B as follows:

"5. Before proceeding further it is necessary to specify briefly the legislative power on the relevant topic, for it is on the precise wording of the entries in the 7th Schedule to the Constitution and the scope, purpose and effect of c the State and the Central legislations which we have referred to earlier that the decision of the point turns. Article 246(1) reads:

"Notwithstanding anything in clauses (2) and (3), D Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule (in this Constitution referred to as the Union List)"

and we are concerned in the present case with the State E power in the State field. The relevant clause in that context is clause (3) of the Article which runs:

"Subject to clauses (1) and (2), the legislature of any State ... has exclusive power to make laws for such State or any F part thereof with respect to any of the matters enumerated in List II in the seventh Schedule (in this Constitution referred to as the 'State List')."

Coming now to the Seventh Schedule, Entry 23 of the G State List vests in the State legislature power to enact laws on the subject of 'regulation of mines and mineral development subject to the provisions of List I with respect to regulation and development under the control of the Union'. It would be seen that "subject" to the provisions of List I the power of the State to enact Legislation, on the H

MONNET ISPAr & ENERGY LTD. v. UNION OF INDIA 733 AND ORS. [R.M. LODHA, J.] topic of "mines and mineral development" is plenary. The A relevant provision in List I is, as already noticed, Entry 54 of the Union List. It may be mentioned that this scheme of the distribution of legislative power between the Centre and the States is not new but is merely a continuation of the State of affairs which prevailed under the Government B of India Act, 1935 which included a provision on the lines of Entry 54 of the Union List which then bore the number Item 36 of the Federal List and an entry corresponding to Entry 23 in the State List which bore the same number in the Provincial Legislative List. There is no controversy that C the Central Act has been enacted by Parliament in exercise of the legislative power contained in Entry 54 or as regards the Central Act containing a declaration in terms of what is required by Entry 54 for it enacts by Section 2: D "It is hereby declared 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 hereinafter provided." E It does not need much argument to realise that to the extent to which the Union Government had taken under "its control" "the regulation and development of minerals" so much was withdrawn from the ambit of the power of the State legislature under Entry 23 and legislation of the State F which had rested on the existence of power under that entry would to the extent of that "control" be superseded or be rendered ineffective, for here we have a case not of mere repugnancy between the provisions of the two enactments but of a denudation or deprivation of State legislative G power by the declaration which Parliament is empowered to make and has made.

6. It would, however, be apparent that the States would lose legislative competence only to the "extent to which regulation and development under the control of the Union H

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A has been declared by Parliament to be expedient in the public interest". The crucial enquiry has therefore to be directed to ascertain this "extent" for beyond it the legislative power of the State remains unimpaired. As the legislation by the State is in the case before us the earlier one in point of time, it would be logical first to examine and analyse the State Act and determine its purpose, width and scope and the area of its operation and then consider to what "extent" the Central Act cuts into it or trenches on it.

In para 9, the question under consideration was whether 'the extent of control and regulation' provided by 1957 Act took within its fold the area or the subject covered by the Orissa Act. This Court in para 11 observed that the matter was concluded by earlier decision in Hingir-Rampur Coal Co. Ltd.a. While following Hingir-Rampur Coal Co. Ltd.a, it was observed in para D 12 of the Report that sub-sections (1) and (2) of Section 18 of 1957 Act were wider in scope and amplitude and conferred larger powers on the Central Government than the corresponding provisions of the 1948 Act.

E Baijnath Kadio

81Copy pinpoint81. In Baijnath Kadioc, the validity of proviso (2) to Section 10(2) added by Bihar Land Reforms (Amendment) Act, 1964 (Bihar Act 4 of 1965) and the operation of Rule 20(2) added on December 10, 1964 by a Notification of Governor in the F Bihar Minor Mineral Concession Rules, 1964 were in issue. The Court referred to the Government of India Act, 1935, 1948 Act and 1957 Act in light of Entry 54 of List I and Entry 23 of List 11 and the earlier decisions in Hingir-Rampur Coal Co. Ltd.• and M.A. Tulloch & Co. b and observed as under : G "13. .. ........... Entry 54 of the Union List speaks both of Regulation of mines and minerals development and Entry 23 is subject to Entry 54. It is open to Parliament to declare that it is expedient in the public interest that the control should rest in Central Government. To what extent

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 735 AND ORS. [R.M. LODHA, J.] such a declaration can go is for Parliament to determine and this must be commensurate with public interest. Once this declaration is made and the extent laid down, the subject of legislation to the extent laid down becomes an exclusive subject for legislation by Parliament. Any legislation by the State after such declaration and trenching upon the field disclosed in the declaration must necessarily be unconstitutional because that field is abstracted from the legislative competence of the State Legislature. This proposition is also self-evident that no attempt was rightly made to contradict it. There are also two decisions of this c Court reported in the Hingir Rampur Coal Co. Ltd. & Ors. v. State of Orissa & Ors. and State of Orissa v. M.A. Tulloch and Co. in which the matter is discussed. The only dispute, therefore, can be to what extent the declaration by Parliament leaves any scope for legislation by the State D Legislature. If the impugned legislation falls within the ambit of such scope it will be valid; if outside it, then it must be declared invalid.

14. The declaration is contained in Section 2 of Act 67 of 1957 and speaks of the taking under the control of the E Central Government the regulation of mines and development of minerals to the extent provided in the Act itself. We have thus not to look outside Act 67 of 1957 to determine what is left within the competence of the State Legislature but have to work it out from the terms of that F Act. In this connection we may notice what was decided in the two cases of this Court. In the Hingir Rampur case a question had arisen whether the Act of 1948 so completely covered the field of conservation and development of minerals as to leave no room for State G legislation. It. was held that the declaration was effective even if the rules contemplated under the Act of 1948 had not been made. However, considering further whether a declaration made by a Dominion Law could be regarded as a declaration made by Parliament for the purpose of H

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A Entry 54, it was held that it could not and there was thus a lacuna which the Adaptation of Laws Order, 1950 could not remove. Therefore, it was held that there was room for legislation by the State Legislature.

15. In the M.A. Tulloch case the firm was working a mining B lease granted under the Act of 1948. The State Legislature of Orissa then passed the Orissa Mining Areas Development Fund Act, 1952 and levied a fee for the development of mining areas within the State. After the provisions came into force a demand was made for c payment of fees due from July 1957 to March 1958 and the demand was challenged. The High Court held that after the coming into force of Act 67 of 1957 the Orissa Act must be held to be non existent. It was held on appeal that since Act 67 of 1957 contained the requisite declaration by D Parliament under Entry 54 and that Act covered the same field as the Act of 1948 in regard to mines and mineral development, the ruling in Hingir Rampur's case applied and as Sections 18(1) and (2) of the Act 67 of 1957 were very wide they ruled out legislation by the State Legislature. E Where a superior legislature evinced an intention to cover the whole field, the enactments of the other legislature whether passed before or after must be held to be overborne. It was laid down that inconsistency could be proved not by a detailed comparison of the provisions of F the conflicting Acts but by the mere existence of two pieces of legislation. As Section 18(1) covered the entire field, there was no scope for the argument that till rules were framed under that Section, room was available."

G Amritlal Nathubhai Shah

82Copy pinpoint82. In Amritla/ Nathubhai Shahd, a three-Judge Bench of this Court was concerned with an issue similar to the controversy presented before us. That was a case relating to grant of mining leases for bauxite in the reserved areas in the H State of Gujarat. On December 31, 1963, the Government of

MONNET !SPAT & ENERGY LTD. v. UNION OF INDIA 737 AND ORS. [R.M. LODHA. J.] Gujarat issued a Notification intimating that lands in all talukas A of Kutch district and in Kalyanpur taluka of Jamnagar district had been reserved for exploitation of bauxite in the public sector. By another Notification of February 26, 1964 in respect of all areas of Jamnagar and Junagarh districts, the exploitation of bauxite was reserved in the public sector. The appellants 8 therein made applications to the Government of Gujarat for grant of mining leases for bauxite in the reserved areas. Though there were no other applications, the State Government rejected the applications of the appellants on the ground that areas had already been notified as reserved for the public sector. The C appellants, aggrieved by the order of the State Government moved the Central Government invoking its revisional jurisdiction. The Central Government rejected the revision applications. The appellants then moved the High Court but they were unsuccessful there and from the common judgment of the High Court and the certificate granted by it, the matter reached D this Court. The Court considered Entry 54 of List I, declaration made by Parliament in Section 2 of 1957 Act and State Legislature's power under Entry 23 of List 11, and observed that in pursuance of its exclusive power to make laws with respect to the matters enumerated in Entry 54 of List I, Parliament E specifically declared in Section 2 of the 1957 Act that it was 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 Act. The State Legislature's power under Entry 23 of List II was, thus, taken F away and the regulation of mines and development of minerals had to be in accordance with 1957 Act and 1960 Rules. While saying so, this Court held as follows:

"3 .......... The mines and the minerals in question (bauxite) G were, however, in the territory of the State of Gujarat and, as was stated in the orders which were passed by the Central Government on the revision applications of the appellants, the State Government is the "owner of minerals" within its territory, and the minerals "vest" in it. H

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A There is nothing in the Act or the Rules to detra~t from this basic fact. That was why the Central Government stated further in its revisional orders that the State Government had the "inherent right to reserve any particular area for exploitation in the public sector". It is therefore quite clear 8 that, in the absence of any law or contract etc. to the contrary, bauxite, as a mineral, and the mines thereof, vest in the State of Gujarat and no person has any right to exploit it otherwise then in accordance with the provisions of the Act and the Rules. Section 10 of the Act and Chapters II, Ill and IV of the Rules, deal with the grant of c prospecting licences and mining leases in the land in which the minerals vest in the Government of a State. That was why the appellants made their applications to the State Government."

83Copy pinpoint83. In Amritlal Nathubhai Shahd, this Court referred to Section 4 of the 1957 Act and held that there was nothing in 1957 Act or 1960 Rules to require that the restrictions imposed by Chapters 11,111 and IV of the 1960 Rules would be applicable even if State Government itself wanted to exploit a mineral for, it was its own property. The Court held :

"4 .......... There is therefore no reason why the State Government could not, if it so desired, "reserve" any land for itself, for any purpose, and such reserved land would then not be available for the grant of a prospecting licence or a mining lease to any person."

84Copy pinpoint84. The Court then considered Section 10of1957 Act and held as follows :

G "5 ...... The section is therefore indicative of the power of the State Government to take a decision, one way or the other, in such matters, and it does not require much argument to hold that that power included the power to refuse the grant of a licence or a lease on the ground that H the land in question was not available for such grant by

MONNET !SPAT & ENERGY LTD. v. UNION OF INDIA 739 AND ORS. [R.M. LODHA, J.] reason of its having been reserved by the State A Government for any purpose.''

85Copy pinpoint85. With reference to Section 17, particularly, sub-sections (2) and (4) thereof, the Court held that the said provisions did not cover the entire field of the authority of refusing to grant a B prospecting licence or a mining lease to anyone else and the State Government's authority to reserve any area for itself was not taken away. It was further held :

"6 .......... As has been stated, the authority to order reservation flows from the fact that the State is the owner C of the mines and the minerals within its territory, which vest in it. But quite apart from that, we find that Rule 59 of the Rules, which have been made under Section 13 of the Act, clearly contemplates such reservation by an order of the State Government. ........ " D

86Copy pinpoint86. In Amritlal Nathubhai Shahd, the Court also considered Rules 58, 59 and 60 of the 1960 Rules and it was observed that it was not permissible for any person to apply for a licence or a lease in respect of a reserved area until after it becomes E available for such grant. It was held on the facts of the case that the areas under consideration had been reserved by the State Government for the purpose stated in its notifications and as those lands did not become available for the grant of prospecting licence or a mining lease, the State Government F was well within its rights in rejecting the applications of the appellants under Rule 60 as premature and the Central Government was also justified in rejecting the revision applications which were filed against the orders of rejection passed by the State Government. G

87Copy pinpoint87. In Chanan Mal', a four-Judge Bench of this Court was concerned with constitutional validity of Haryana Minerals (Vesting of Rights) Act, 1973 (for short, 'Haryana Act;). One of the contentions in challenging the Haryana Act was that enactment was beyond the competence of the State Legislature H

740 SUPREME COURT REPORTS [2012] 7 S.C.R.

A inasmuch as the filed in which the Haryana Act operated was necessarily occupied by the provisions of 1957 Act under Entry 54 of the Union List (List I) of the Seventh Schedule to the Constitution. The Bench considered extensively the provisions contained in the 1957 Act and earlier decisions of this Court B in Hingir-Rampur Coal Co Ltd.•, M.A. Tulloch & Companyb and Baijnath Kadio 0 • The Court then referred to Section 16(1)(b) and Section 17 of the 1957 Act and held as under:

"38. We are particularly impressed by the provisions of Sections 16 and 17 as they now stand. A glance at Section c 16( 1)(b) shows that the Central Act 67 of 1957 itself contemplates vesting of lands, which had belonged to any proprietor of an estate or tenure holder either on or after October 25, 1949, in a State Government under a State enactment providing for the acquisition of estates or tenures in land or for agrarian reforms. The provision lays down that mining leases granted in such land must be brought into conformity with the amended law introduced by Act 56 of 1972. It seems to us that this clearly· means that Parliament itself contemplated State legislation for vesting of lands containing mineral deposits in the State Government. It only required that rights to mining granted in such land should be regulated by the provisions of Act 67 of 1957 as amended. This feature coul~ only be explained on the assumption that Parliament did' not intend to trench upon powers of State legislatures under Entry 18 of List II, read with Entry 42 of List Ill. Again, Section 17 of the Central Act 67 of 1957 shows that there was no intention to interfere with vesting of lands in the States by the provisions of the Central Act." G lshwari Khetan Sugar Mills

88Copy pinpoint88. In /shwari Khetan Sugar Milfsv although question related to constitutional validity of U.P. Sugar Undertakings (Acquisition) Act, 1971 enacted by the State of U.P. and H different entries in List I and List II were involved but with

MONNET !SPAT & ENERGY LTD. v. UNION OF INDIA 741 AND ORS. [R.M. LODHA, J.] reference to the declaration made in Section 2 of the Industries A (Development and Regulation) Act, 1951 (for short, 'IDR Act') vis-a-vis the State Act under challenge, the majority judgment relying upon the earlier decisions of this Court in Baijnath Kadioc and Chanan Mal\ held that to the extent the Union acquired control by virtue of declaration in Section 2 of the IDR B Act, as amended from time to time, the power of the State Legislature under Entry 24 of List II to enact any legislation in respect of declared industry so as to encroach upon the field of control occupied by IDR Act would be taken away. It was held that 1957 Act only required that rights to mining granted in such c land should be regulated by the provisions contained therein.

Mis. Hind Stone

89Copy pinpoint89. In Mis. Hind Stone0 , the question under consideration was about the validity of Rule 8-C of the Tamil Nadu Minor D Mineral Concession Rules, 1959 which provided for lease for quarries in respect of black granite to the government corporation or by the government itself and that from December 7, 1977 no lease for quarrying black granite should be granted to private persons. The matter arose out of the application for renewal of lease. The Court considered Entry 23 of List II and Entry 54 of List I of Seventh Schedule and the earlier decisions of this Court in Hingir-Rampur Coal Co. 0 , M.A. Tulloch & Companyt' and Baijnath Kadioc. The Court made the following general observations with regard to minerals and natural resources and the scheme of 1957 Act:

"6. Rivers, Forests, Minerals and such other resources constitute a nation's natural wealth. These resources are not to be frittered away and exhausted by any one generation. Every generation owes a duty to all succeeding generations to develop and conserve the natural resources of the nation in the best possible way. It is in the interest of mankind. It is in the interest of the nation. It is recognised by Parliament. Parliament has declared that it is expedient H

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A in the public interest that the Union should take under its control the regulation of mines and the development of minerals. It has enacted the Mines and Minerals (Regulation and Development) Act, 1957. We have already referred to its salient provisions. Section 18, we have B noticed, casts a special duty on the Central \ Government to take necessary steps for the conservation and development of minerals in India. Section 17 authorises the Central Government itself to undertake prospecting or mining operations in any area not already held under any c prospecting licence or mining lease. Section 4-A empowers the State Government on the request of the Central Government, in the case of minerals other than minor minerals, to prematurely terminate existing mining leases and grant fresh leases in favour of a Government company or corporation owned or controlled by D government, if it is expedient in the interest of regulation of mines and mineral development to do so. In the case of minor minerals, the State Government is similarly empowered, after consultation with the Central Government. The public interest which induced Parliament E to make the declaration contained in Section 2 of the Mines and Minerals (Regulation and Development) Act, 1957, has naturally to be the paramount consideration in all matters concerning the regulation of mines and the development of minerals. Parliament'!? policy is clearly discernible from the provisions of the Act. It is the conservation and the prudent and discriminating exploitation of minerals, with a view to secure maximum benefit to the community. There are clear signposts to lead and guide the subordinate legislating authority in the matter of the making of rules. Viewed in the light shed by the other provisions of the Act, particularly Sections 4-A, 17 and 18, it cannot be said that the rule-making authority under Section 15 has exceeded its powers in banning leases for quarrying black granite in favour of private parties and in stipulating that the State Government themselves may

MONNET !SPAT & ENERGY LTD. v. UNION OF INDIA 743 AND ORS. [R.M. LODHA, J.] engage in quarrying black granite or grant leases for quarrying black granite in favour of any corporation wholly owned by the State Government. To view such a rule made by the subordinate legislating body as a rule made to benefit itself merely because the State Government happens to be the subordinate legislating body, is, but, to take too narrow a view of the functions of that body .......... "

90Copy pinpoint90. The Court then considered Rule 8-C in light of the statement made in the counter affidavit filed by the State of C Tamil Nadu and it was held that Rule 8-C was made in bona fide exercise of the rule making power of the State Government. In paragraph 10 of the Report, the Court stated thus:

"10. One of the arguments pressed before us was that Section 15 of the Mines and Minerals (Regulation and D Development) Act authorised the making of rules for regulating the grant of mining leases and not for prohibiting them as Rule 8-C sought to do, and, therefore, Rule 8-C was ultra vires Section 15. Well-known cases on the subject right from Municipal Corporation of the City of E Toronto v. Virgo [1896 AC 88] and Attorney-General for Ontario v. Attorney-General for the Dominions [1896 AC 348) up to State of U.P. v. Hindustan Aluminium Corporation Ltd. [1979 (3) sec 229] were brought to our attention. We do not think that "regulation" has that rigidity F of meaning as never to take in "prohibition". Much depends on the context in which the expression is used in the statute and the object sought to be achieved by the contemplated regulation. It was observed by Mathew, J. in G.K. Krishnan v. State of Tamil Nadu [1975 (1) SCC 375]: G "The word 'regulation' has no fixed connotation. Its meaning differs according to the nature of the thing to which it is applied." In modern statutes concerned as they are with economic and social activities, "regulation" must, of necessity, receive so wide an interpretation that in H

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A certain situations, it must exclude competition to the public sector from the private sector. More so in a welfare State. It was pointed out by the Privy Council in Commonwealth of Australia v. Bank of New South Wales [1950 AC 235]- and we agree with what was stated therein - that the B problem whether an enactment was regulatory or something more or whether a restriction was direct or only remote or only incidental involved, not so much legal as political, social or economic consideration and that it could not be laid down that in no circumstances could the c exclusion of competition so as to create a monopoly, either in a State or Commonwealth agency, be justified. Each case, it was said, must be judged on its own facts and in its own setting of time and circumstances and it might be that in regard to some economic activities and at some stage of social development, prohibition with a D view to State monopoly was the only practical and reasonable manner of regulation. The statute with which we are concerned, the Mines and Minerals (Development and Regulation) Act, is aimed, as we have already said more than once, at the conservation and the prudent and discriminating exploitation of minerals. Surely, in the case of a scarce mineral, to permit exploitation by the State or its agency and to prohibit exploitation by private agencies is the most effective method of conservation and prudent exploitation. If you want to conserve for the future, you must prohibit in the present. We have no doubt that the prohibiting of leases in certain cases is part of the regulation contemplated by Section 15 of the Act."

D.K. Trivedi and Sons G

91Copy pinpoint91. In D.K. Trivedi and Sons", this Court was concerned with the constitutional validity of Section 15(1) of 1957 Act; the power of the State Governments to make rules under that Section to enable them to charge dead rent and royalty in respect of leases of minor minerals granted by them and

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 745 AND ORS. [R.M. LODHA, J.] enhance the rates of dead rent and royalty during the subsistence of such lease, the validity of Rule 21-B of the Gujarat Minor Mineral Rules, 1966 and certain notifications issued by the Government of Gujarat under Section 15 amending the said Rules so as to enhance the rates of royalty and dead rent in respect of leases of minor minerals. The Court B traced the legislative history of the enactment; referred to Baijnath Kadioc and in paragraph 27 of the Report (Pgs. 46- 47) observed as follows:

"27. The 1957 Act is made in exercise of the powers conferred by Entry 54 in the Union List. The said Entry 54 C and Entry 23 in the State List fell to be interpreted by a Constitution Bench of this Court in Baijnath Kedia v. State of Bihar. 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 subject to D 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 Government. To what extent such a declaration can go is for Parliament to determine and this must be commensurate with public interest but once such declaration is made and the extent of such regulation and development laid down the subject of the legislation to the extent so laid down becomes 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 unconstitutional because that field is extracted from the legislative competence of the State legislature. 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 Union Judiciary, and the control of the Union which is to be exercised under the said two H

746 SUPREME COURT REPORTS [2012) 7 S.C.R.

A 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 fLniher held that the Union had taken all the power in respect of minor minerals to itself and had authorized the State Governments to make rules B for the regulation of leases and thus by the declaration made in Section 2 and the enactment of Section 15 the whole of the field relating to minor minerals came within the jurisdiction of Parliament and there was no scope left to the State legislatures to make any enactment with c respect thereto. The court also held that by giving the power 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 contentions raised in that case was that Section 15 was unconstitutional as the delegation of legislative power D made by it to 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."

While dealing with the meaning of the word 'regulation', E particularly the expression, 'the act of regulating, or the state of being regulated' and Entry 54 in the Union List, this Court stated in paragraph 31 of the Report (Pgs. 48-49) as follows :

"31. Entry 54 in the Union. List uses the word "regulation". "Regulation" is defined in the Shorter Oxford English F Dictionary, 3rd Edn., 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 oilfields". When the Constitution came to be G enacted, the framers of the Constitution knew that since early days mines 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 H

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 747 AND ORS. [RM. LODHA, J.] on the statute book and that the 1948 Act conferred wide A rule-making power upon the Central Government to regulate the grant of mining leases and for the conservation 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, 8 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 were also c aware how the Dominion legislature 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 Concession Rules, D 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 for the first time by the 1957 Act but followed a well recognized and accepted legislative 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 power of the Central Government in order to restrict the scope of subordinate legislation .......... "

Then in paragraph 33 of the Report (Pgs. 50-51 ), the Court with reference to sub-section (2) of Section 13 of the 1957 Act further held: H

748 SUPREME COURT REPORTS [2012] 7 S.C.R.

A "33 .......... The opening clause of sub-section (2) of Section 13, namely, "In particular, and without prejudice to the generality of the foregoing power", makes it clear that the topics set out in that sub-section are already included in the general power conferred by sub-section (1) but are B being listed to particularize them and to focus attention on them. The particular matters in respect of which the Central Government can make rules under sub-section (2) of Section 13 are, therefore, also matters with respect to which under sub-section (1) of Section 15 the State c 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 therewith". When Section 14 directs that ''The provisions of Sections 4 to 13 (inclusive) shall not apply to quarry leases, mining leases or other mineral concessions in D 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 E Central Government. Sections 4 to 12 form a group of sections under the heading "General restrictions on undertaking prospecting and mining operations". The exclusion of the application of these sections to minor minerals means that these restrictions will not apply to minor minerals but that it is left to the State Governments to prescribe such restrictions as they think fit by rules made under Section 15(1 ). The reason for treating minor minerals differently from minerals other than minor minerals is obvious. As seen from the definition of minor minerals given in clause (e) of Section 3, they are minerals which are mostly used in local areas and for local purposes while minerals other than minor minerals are those which are necessary for industrial development on a national scale and for the economy of the country. That is why matters relating to minor minerals have been left by Parliament to

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 749 AND ORS. [R.M. LODHA, J.] the State Governments while reserving matters relating to minerals other than minor 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 prospecting licences and mining leases". These three sections have to be read together. In providing that Section s 13 will not apply to quarry leases, mining leases or other 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 minerals and to confer that power by Section 15(1) upon the State c 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 minor minerals while in the other case it is the State Governments which do so in respect of minor minerals. Sub-section (2) of Section 13 which is illustrative of the general power conferred by Section 13(1) contains sufficient guidelines for the State Governments to follow in framing the rules under Section 15(1), and in the same way, the State Governments have before them the restrictions and other matters provided for in Sections 4 to 12 while framing their own rules under Section 15(1)."

Janak Lal F

92Copy pinpoint92. In Janak LaP, this Court had an occasion to consider meaning and scope of Rule 59 of 1960 Rules. The Court considered Rule 59, as it stood prior to amendment in 1963, and the provision after amendment. In paragraph 6 of the Report (Pg. 123) the Court held as under: G "6. Earlier the expression "reserved for any purpose" was followed by the words "other than prospecting or mining for minerals", which were omitted by an amendment in

1963. Mr. Dholakia, learned counsel for the respondents, appearing in support of the impugned judgment, has H

750 SUPREME COURT REPORTS [2012] 7 S.C.R.

A contended that as a result of this amendment the expression must now be confined to cases of prospecting or mining for minerals and all other cases where the earlier reservation was for agricultural, industrial or any other purpose must be excluded from the scope of the rule. We B are not persuaded to accept the suggested interpretation. Earlier the only category which was excluded from the application of Rule 59 was prospecting or mining leases and the effect of the amendment is that by omitting this exception, prospecting and mining leases are also placed c in the same position as the other cases. We do not see any reason as to why by including in the rule prospecting and mining leases, the other cases to which it applied earlier would get excluded. The result of the amendment is to extend the rule and not to curtail its area of operation. The words "any purpose" is of wide connotation and there D is no reason to restrict its meaning."

The Court clarified that intention of amendment in 1963 was to extend the rule and not to curtail its area of operation.

E Bharat Coking Coal

93Copy pinpoint93. In the case of Bharat Coking Coal, the Court said that the State Legislature was competent to enact law for the regulation of mines and mineral development under Entry 23 of State List but such power was subject to the declaration which may be made by Parliament by law as envisaged by Entry 54 of the Union List. It was held that the legislative competence of the State Legislature to make law on the topic of mines and mineral was subject to parliamentary legislation. While dealing with Section 18(1) prior to its amendment by amending Act 37of1986 and after amendment, the Court held in paragraph 16 of the Report (Pg. 572) as under:

"16 ......... The amended and unamended sections both lay down that it shall be the duty of the Central Government to take all such steps as may be necessary "for the

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 751 AND ORS. [R.M. LODHA, J.] conservation and development of minerals" in India and for that purpose it may make such rules as it thinks fit. The expression "for the conservation of minerals" occurring under Section 18(1) confers wide power on the Central Government to frame any rule which may be necessary for protecting the mineral from loss, and for its preservation. B The expression 'conservation' means "the act of keeping or protecting from loss or injury". With reference to the natural resources, the expression in the context means preservation of mineral; the wide scope of the expression "conservation of minerals" comprehends any rule c reasonably connected with the purpose of protecting the loss of coal through the waste of coal mine, such a rule may also regulate the discharge of slurry or collection of coal particles after the water content of slurry is soaked by soil. In addition to the general power to frame rules for D the conservation of mineral, ............. "

The Court further held in para 19 of the Report (Pgs. 575-576) as follows:

" ......... No doubt under Enfry 23 of List II, the State E legislature has power to make law but that power is subject to Entry 54 of List I with respect to the regulation and development of mines and minerals. As discussed earlier the State legislature is denuded of power to make laws on the subject in view of Entry 54 of List I and the F Parliamentary declaration made under Section 2 of the Act. Since State legislature's power to make law with respect to the matter enumerated in Entry 23 of List II has been taken away by the Parliamentary declaration, the State Government ceased to have any executive power in the G matter relating to regulation of mines and mineral development. Moreover, the proviso to Article 162 itself contains limitation on the exercise of the executive power of the State. It lays down that in any matter with respect to which the legislature of a State and Parliament have power H

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A to make laws, the executive power of State shall be subject to limitation of the executive power expressly conferred by the Constitution or by any law made by Parliament upon the Union or authority thereof .......... "

B Orissa Cement Ltd.

94Copy pinpoint94. A three-Judge Bench of this Court in Orissa Cement Limited was concerned with the validity of the levy of a cess based on the royalty derived from mining lands by States of Bihar, Orissa and Madhya Pradesh. The case of the petitioners therein was that similar levy had been struck down by a seven- Judge Bench of this Court in India Cement Limited• . The contention of the States, on the other hand, was that issue was different from the India Cement Limited• as the nature and character of the levies imposed by these States was different from Tamil Nadu levy. The Bench considered Entries 52 and 54 of the Union List and Entries 18, 23, 45, 49, 50 and 66 of the State List and also considered earlier decisions of this Court in HRS Murthy v. Collector of Chittoor', Hingir-Rampur Coal Co.•, M.A. Tulloch & Co. b, lshwari Khetan Sugar Mi/ls E (P) Ltd.Y, Baijnath Kadioc, ·M. Karunanidhi v. Union of India and Anr. mm , Mis. Hind Stoneo, I. T. C. & Ors. v. State of Kamataka & Ors. nn and Western Coalfields Limited v. Special Area Development Authority Korba & Anr. 00 • I shall cite paragraphs 49, 50, 51 and 53 (Pgs. 480-486) of the Report F which read as follows:

"49. It is clear from a perusal of the decisions referred to above that the answer to the question before us depends on a proper understanding of the scope of M.M.R.D. Act, 1957, and an assessment of the encroachment made by G the impugned State legislation into the field covered by it.

II. AIR (1965) SC 177. mm. (1979) 3 sec 431. nn. 1985 (Supp) SCC 476. H oo. 1982 (1) sec 125.

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 753 AND ORS. [R.M. LODHA, J.] Each of the cases referred to above turned on such an A appreciation of the respective spheres of the two legislations. As pointed out in lshwari Khetan, the mere declaration of a law of Parliament that it is expedient for an industry or the regulation and development of mines and minerals to be under the control of the Union under Entry B 52 or entry 54 does not denude the State legislatures of their legislative powers with respect to the fields covered by the several entries in List II or List Ill. Particularly, in the case of a declaration under Entry 54, this legislative power is eroded only to the extent control is assumed by the c Union pursuant to such declaration as spelt out by the legislative enactment which makes the declaration. The measure of erosion turns upon the field of the enactment framed in pursuance of the declaration. While the legislation in Hingir-Rampur and Tulloch was found to fall within the pale of the prohibition, those in Chanan Mal, lshwari Khetan and Western Coalfields were general in nature and traceable to specific entries in the State List and did not encroach on the field of the Central enactment except by way of incidental impact. The Central Act, considered in Chanan Mal, seemed to envisage and indeed permit State legislation of the nature in question."

"50. To turn to the respective spheres of the two legislations we are here concerned with, the Central Act (M.M.R.D. Act, 1957) demarcates the sphere of Union F control in the matter of mines and mineral development. While concerning itself generally with the requirements regarding grants of licences and leases for prospecting and exploitation of minerals, it contains certain provisions which are of direct relevance to the issue before us. G Section 9, which deals with the topic of royalties and specifies not only the quantum but also the limitations on the enhancement thereof, has already been noticed. Section 9A enacts a like provision in respect of dead rent. ......." H

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A "51. If one looks at the above provisions and bears in mind that, in assessing the field covered by the Act of Parliament in question, one should be guided (as laid down in Hingir- Rampur and Tulloch) not merely by the actual provisions of the Central Act or the rules made thereunder but should B also take into account matters and aspects which can legitimately be brought within the scope of the said statute, the conclusion seems irresistible, particularly in view of Hingir-Rampur and Tulloch, that the State Act has trespassed into the field covered by the Central Act. The c nature of the incursion made into the fields of the Central Act in the other cases were different. The present legislation, traceable to the legislative power under Entry 23 or Entry 50 of the State List which stands impaired by the Parliamentary declaration under Entry 54, can hardly be equated to the law for land acquisition or municipal administration which were considered in the cases cited and which are traceable to different specific entries in List 11 or List Ill.

"53. These observations establish on the one hand that the distinction sought to be made between mineral development and mineral area development is not a real one as the two types of development are inextricably and int.egrally interconnected and, on the other, that, fees of the nature we are concerned with squarely fall within the scope of the provisions of the Central Act. The object of Section 9 of the Central Act cannot be ignored. The terms of Section 13 of the Central Act extracted earlier empower the Union to frame rules in regard to matters concerning roads and environment. Section 18(1) empowers the G Central Government to take all such steps as may be necessary for the conservation and development of minerals in India and for protection of environment. These, in the very nature of things, cannot mean such amenities only in the mines but take in also the areas leading to and all around the mines. The development of mineral areas

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 755 AND ORS. [R.M. LODHA, J.] is implicit in them. Section 25 implicitly authorises the levy of rent, royalty, taxes and fees under the Act and the rules. The scope of the powers thus conferred is very wide. Read as a whole, the purpose of the Union control envisaged by Entry 54 and the M.M.R.D. Act, 1957, is to provide for proper development of mines and mineral areas and also to bring about a uniformity all over the country in regard to the minerals specified in Schedule I in the matter of royalties and, consequently prices ......... "

lndia11_ Metals and Ferro Alloys Ltd. c

95Copy pinpoint95. In Indian Metals and Ferro Alloys Ltd.p , a two-Judge Bench or this Court was concerned with the principal question as to whether the petitioners therein were entitled to obtain leases for the mining of chrome. While dealing with the principal question and other incidental questions, the Court considered D Entry 54 of List I, Entry 23 of List 11, the 1957 Act, particularly, Sections 2, 4, 10, 11, 17A and 19 thereof and the 1960 Rules including Rules 58, 59 and 60 thereof. While dealing with the reservation policy of the State Government in having the area reserved for exploitation in the public sectors, the Court E observed in paragraphs 39 and 40 (Pg. 133) as follows :

"39. The principal obstacle in the way of ORIND as well as the other private parties getting any leases was put up by the S.G., OMC and IDCOL. They claimed that none of F the private applications could at all be considered because the entire area in all the districts under consideration is reserved for exploitation in the public sector by the notification dated August 3, 1977 earlier referred to. All the private parties have therefore joined hands to fight the case of reservation claimed by the S.G., OMC and IDCOL. G We have indicated earlier that the S.G. expressed its preparedness to accept the Rao report and to this extent waive the claim of reservation. Interestingly, the OMC and IDCOL have entered caveat here and claimed that as H

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A public sector corporations they could claim, independently of the S.G.'s stand, that the leases should be given only to them and that the Rao report recommending leases to IMFA, FACOR and AIKATH should not be accepted by us.

40. The relevant provisions of the Act and the rules have B been extracted by us earlier. Previously, Rule 58 did not enable the S.G. to reserve any area in the State for exploitation in the public sector. The existence and validity of such a power of reservation was upheld in A.Kotiah Naidu v. State of A.P. (AIR 1959 AP 485) and Amritlal c Nathubhai Shah v. Union Government of India (AIR 1973 Guj. 117), the latter of which was approved by this Court in Amritlal Nathubhai Shah v. Union of India ([1977] 1 SCR 372). (As pointed out earlier, Rule 58 has been amended in 1980 to confer such a power on the S.G.). It D is also not in dispute that a notification of reservation was made on August 3, 1977. The S.G., OMC and IDCOL are, therefore, right in contending that, ex facie, the areas in question are not available for grant to any person other than the S.G. or a public sector corporation [rule 59(1 ), proviso] E unless the availability for grant is renotified in accordance with law [rule 59(1)(e)] or the C.G. decides ,to relax the provisions of Rule 59(1) [rule 59(2) ]. None of those contingencies have occurred since except as is indicated later in this judgment. There is, therefore, no answer to the plea of reservation put forward by the S.G., OMC and IDCOL."

Then in paragraph 45 (Pgs. 136-138), while considering Section 17A (1) that was inserted in 1957 Act by amendment in 1987, the Court held:

"45. Our conclusion that the areas in question before us were all duly reserved for public sector exploitation does not, however, mean that private parties cannot be granted any lease at all in respect of these areas for, as pointed H

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 757 AND ORS. [R.M. LODHA, J.] out earlier, it is open to the C.G. to relax the reservation A for recorded reasons. Nor does this mean, as contended for by OMC and IDCOL, that they should get the leases asked for by them. This is so for two reasons. In the first place, the reservation is of a general nature and does not directly confer any rights on OMC and IDCOL. This B reservation is of two types. Under Section 17A (1 ), inserted in 1986, the C.G. may after consulting the S.G. just reserve any area- not covered by a PL or a ML-with a view to conserving any mineral. Apparently, the idea of such reservation is that the minerals in this area will not c be exploited at all, neither by private parties nor in the public sector. It is not necessary to consider whether any area so reserved can be exploited in the public sector as we are not here concerned with the scope of such reservation, there having been no notification Under D Section 17A(1) after 1986 and after consultation with the S.G. The second type of reservation was provided for in Rule 58 of the rules which have already been extracted earlier in this judgment. This reservation could have been made by the S.G. (without any necessity for approval by the C.G.) and was intended to reserve areas for exploitation, broadly speaking, in the public sector. The notification itself might specify the Government, Corporation or Company that was to exploit the areas or may be just general, on the lines of the rule itself. Under Rule 59(1 ), once a notification under Rule 58 is made, the area so reserved shall not be available for grant unless the two requirements of Sub-rule (e) are satisfied: viz. an entry in a register and a Gazette notification that the area is available for grant. It is not quite clear whether the notification of March 5, 1974 complied with these requirements but it is perhaps unnecessary to go into this question because the reservation of the areas was again notified in 1977. These notifications are general. They only say that the areas are reserved for exploitation in the public sector. Whether such areas are to be leased out to OMC H

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A or IDCOL or some other public sector corporation or a Government Company or are to be exploited by the Government itself is for the Government to determine de hors the statute and the rules. There is nothing in either of them which gives a right to OMC or IDCOL to insist that B the leases should be given only to them and to no one else in the public sector. If, therefore the claim of reservation in 1977 in favour of the public sector is upheld absolutely, and if we do not agree with the findings of Rao that neither OMC nor IDCOL deserve any grant, all that we can do is to leave it to the S.G. to consider whether any portion of c the land thus reserved should be given by it to these two corporations. Here, of course, there are no competitive applications from organisations in the public sector controlled either by the S.G. or the C.G., but even if there were, it would be open to the S.G. to decide how far the lands or any portion of them should be exploited by each of such Corporations or by the C.G. or S.G. Both the Corporations are admittedly instrumentalities of the S.G. and the decision of the S.G. is binding on them. We are of the view that, if the S.G. decides not to grant a lease in respect of the reserved area to an instrumentality of the S.G., that instrumentality has no right to insist that a ML should be granted to it. It is open to the S.G. to exercise at any time, a choice of the State or any one of the instrumentalities specified in the rule. It is true that if, eventually, the S.G. decides to grant a lease to one or other of them in respect of such land, the instrumentality whose application is rejected may be aggrieved by the choice of another for the lease. In particular, where there is competition between an instrumentality of the C.G. and one of the S.G. or between instrumentalities of the C.G. inter se or between the instrumentalities of the S.G. inter se, a question may well arise how far an unsuccessful instrumentality can challenge the choice made by the S.G. But we need not enter into these controversies here. The H question we are concerned with here is whether OMC or

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 759 AND ORS. [R.M. LODHA, J.] IDCOL can object to the grant to any of the private parties on the ground that a reservation has been made in favour of the public sector. We think the answer must be in the negative in view of the statutory provisions. For the S.G. could always denotify the reservation and make the area available for grant to private parties. Or, short of actually dereserving a notified area, persuade the C.G. to relax the restrictions of Rule 59(1) in any particular case. It is. therefore, open to the S.G. to grant private leases even in respect of areas covered by a notification of the S.G. and this cannot be challenged by any instrumentality in the c public sector."

The legal position post amendment in 1957 Act by Central Act 37 of 1987 was explained (para 46; Pgs. 138-139) in the following manner: D "46. Before leaving this point, we may only refer to the position after 1986. Central Act 37 of 1986 inserted Sub- section (2) which empowers the State Government to reserve areas for exploitation in the public sector. This provision differs from that in Rule 58 in some important E respects-

(i) the reservation requires the approval of the C.G.;

(ii) the reservation can only be of areas not actually held under a PL or ML; F

(iii) the reservation can only be for exploitation by a Government company or a public sector corporation (owned or controlled by the S.G. or C.G.) but not for exploitation by the Government as such. G Obviously, Section 17A(2) and rule 58 could not stand together as Section 17A empowers the S.G, to reserve only with the approval of the C.G. while Rule 58 contained no such restriction. There was also a slight difference in H

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A their wording. Perhaps because of this Rule 58 has been omitted by an amendment of 1988 (G.S.R. 449E of 1988) made effective from April 13, 1988. Rule 59, however, contemplates a relaxation of the reservation only by the C.G. By an amendment of 1987 effective on February 10, B 1987, (G.S.R. 86-E of 87) the words "reserved by the State Government" were substituted for the words "reserved by the Government" in Rule 59(1)(e). Later, Rule 59(1) has been amended by the insertion of the words "or Under Section 17-A of the Act" after the words "under Rule 58" c in Clause (e) as well as in the second proviso. The result appears to be this:

(i) After March 13, 1988, certainly, the S.G. cannot notify any reservations without the approval of the C.G., as Rule 58 has been deleted. Presumably, the position is the D same even before this date and as soon as Act 37of1986 came into force.

(ii) However, it is open to the S.G. to denotify a reservation made by it under Rule 58 or Section 17A. Presumably, E dereservation of an area reserved by the S.G. after the 1986 amendment can be done only with the approval of the C.G. for it would be anomalous to hold that a reservation by the S.G. needs the C.G.'s approval but not the dereservation. Anyhow, it is clear that relaxation in F respect of reserved areas can be permitted only by the C.G.

(iii) It is only the C.G. that can make a reservation with a view to conserve minerals generally but this has to be done with the concurrence of the S.G." G Dharambir Singh

96Copy pinpoint96. In Dharambir Singh vs. Union of India & Ors.PP, a

H pp. 1996 (6) sec 102.

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 761 AND ORS. [R.M. LODHA, J.] three-Judge Bench of this Court while considering Section A 10(3) and 11 (2) of the 1957 Act, observed that in grant of mining lease of a property of the State, the State Government has a discretion to grant or refuse to grant any prospective licence or licence to any applicant. No applicant has a right, much less vested right, to the grant of mining lease for mining B operations in any place within the State. But, the State Government is required to exercise its discretion subject to the requirement of the law.

Bhupatrai Maganlal Joshi c

97Copy pinpoint97. In Bhupatrai Magan/al Joshi•, a Constitution Bench of this Court was concerned with the correctness of the High Court's decision on the question whether the reservation of land for exploitation of mineral resources in the public sector was permissible under the 1957 Act read with 1960 Rules. The High D Court had answered the question in the affirmative from which the matter reached this Court. In a very brief order this Court agreed with the reasoning and conclusion of the High Court.

M.P. Ram Mohan Raja E

98Copy pinpoint98. In the case of M.P. Ram Mohan Raja vs. State of T.N.& Ors.qq, this Court relied upon the decision of this Court in M/s. Hind Stoneo and reiterated that so far as grant of mining and mineral lease is concerned no person has a vested right in it. F

Sandur Manganese and Iron Ores Limited

99Copy pinpoint99. In a comparatively recent decision in Sandur Manganese and Iron Ores Limited.,m the diverse issues which were under consideration are noted in paragraph 6 of the G Report. The Court considered statutory provisions contained in the 1957 Act, 1960 Rules and decisions of this Court in Hingir- Rampur Coal Co.a , M.A. Tulloch & Co.b, Baijnath Kadioc,

qq. 2001 (9) sec 78. H

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A Bharat Coking Coal; and few other decisions, and it was observed with reference to Section 2 of the 1957 Act that State Legislature was denuded of its legislative power to make any law with respect to the regulation of mines and minerals development to the extent provided in the 1957 Act. In B paragraphs 61, 62 and 63 (Pgs. 30-31) of the Report, the Court held as follows :

"61.- In addition to what we have stated, it is relevant to note that Section 11 (5) again carves out an exception to the preference in favour of prior applicants in the main c provision of Section 11 (2). It permits the State Government, with the prior approval of the Central Government, to disregard the priority in point of time in the main provision of Section 11 (2) and to make a grant in favour of a latter applicant as compared to an earlier applicant for special reasons to be recorded in writing. It also gives an indication that it can have no application to cases in which a notification is issued because, in such a case, both the first proviso to Section 11 (2) and Section 11 (4) make it clear that all applications will be considered together as having been received on the same date. In view of our interpretation, the proceedings of the Chief Minister and the recommendation dated 06.12.2004 are contrary to the Scheme of the MMDR Act as they were based on Section 11 (5) which had no application at all to the applications made pursuant to the notification dated 15.03.2003.

62. We have already extracted Rules 59 and 60 and analysis of those rules confirms the interpretation of Section 11 above and the conclusion that it is Section G 11 (4) which would apply to a Notification issued under Rule 59( 1). Rule 59( 1) provides that the categories of areas listed in it including, inter alia, areas that were previously held or being under a mining lease or which have been reserved for exploitation by the State Government or under H

MONNET !SPAT & ENERGY LTD. v. UNION OF INDIA 763 AND ORS. [R.M. LODHA, J.] Section 17A of the Act, shall not be available for grant A unless (i) an entry is made in the register and (ii) its availability for grant is notified in the Official Gazette specifying a date not earlier than 30 days from the date of notification. Sub-rule (2) of Rule 59 empowers the Central Government to relax the conditions set out in Rule B 59(1) in respect of an area whose availability is required to be notified under Rule 59 if no application is issued or where notification is issued, the 30-days black-out period specified in the notification pursuant to Rules 59(1)(i) and (ii) has not expired, shall be deemed to be premature and c shall not be entertained.

63. As discussed earlier, Section 11 (4) is consistent with Rules 59 and 60 when it provides for consideration only of applications made pursuant to a Notification. On the other hand, the consideration of applications made prior to the Notification, as required by the first proviso to Section 11 (2), is clearly inconsistent with Rules 59 and 60. In such circumstances, a harmonious reading of Section 11 with Rules 59 and 60, therefore, mandates an interpretation under which Notifications would be issued under Section 11 (4) in the case of categories of areas covered by Rule 59(1). In these circumstances, we are unable to accept the argument of the learned senior counsel for Jindal and Kalyani with reference to those provisions." F

Paragraph 7 of Amritlal Nathubhai Shahd was considered in paragraph 65 of the Report and then in paragraph 66 (Pg. 32), the Bench observed as follows :

"66.- Even thereafter, this Court has consistently taken the G position that applications made prior to a Notification cannot be entertained. In our view, the purpose of Rule 59(1), which is to ensure that mining lease areas are not given by the State Governments to favour persons of their H

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A choice without notice to the general public would be defeated. In fact, the learned single Judge correctly interpreted Section 11 read with Rules 59 and 60. The said conclusion also finds support in the decision of this Court in State of Tamil Nadu v. Hindstone, (1981) 2 SCC B 205 at page 218, where it has been held in the context of the rules framed under the MMDR Act itself that a statutory rule, while subordinate to the parent statute, is otherwise to be treated as part of the statute and is effective. The same position has been reiterated in State of UP. v. Babu c Ram Upadhya (1961) 2 SCR 679 at 701 and Gujarat Pradesh Panchayat Parishad v. State of Gujarat (2007) 1 sec 718." As regards the legislative and executive power of the State under Entry 23 List II read with Article 162 of the Constitution, D the Court in Sandur Manganese and Iron Ores Limited"' in paragraph 80 (Pg. 36) stated as under :

"80. It is clear that the State Government is purely a delegate of Parliament and a statutory functionary, for the purposes of Section 11 (3) of the Act, hence it cannot act in a manner that is inconsistent with the provisions of Section 11 (1) of the MMDR Act in the grant of mining leases. Furthermore, Section 2 of the Act clearly states that the regulation of mines and mineral development comes within the purview of the Union Government and not the State Government. As a matter of fact, the respondents have not been able to point out any other provision in the MMDR Act or the MC Rules permitting grant of mining lease based on past commitments. As rightly pointed out, the State Government has no authority under the MMDR G Act to make commitments to any person that it will, in future, grant a mining lease in the event that the person makes investment in any project. Assuming that the State Government had made any such commitment, it could not be possible for it to take an inconsistent position and H

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 765 AND ORS. [R.M. LODHA, J.] proceed to notify a particular area. Further, having notified A the area, the State Government certainly could not thereafter honour an alleged commitment by ousting other applicants even if they are more deserving on the merit criteria as provided in Section 11 (3)." B Whether 1962 and 1969 Notifications are ultra vires?

100Copy pinpoint100. Now, in light of the above, I have to consider whether 1962 and 1969 Notifications issued by the Government of erstwhile State of Bihar notifying for the information of public that iron ore in the subject area was reserved for exploitation C in the public sector are ultra vires and de hors 1957 Act and 1960 Rules.

Constitutional philosophy about law making in relation to mines and minerals D

101Copy pinpoint101. Entry 36 in List I (Federal List) and Entry 23 in List II (Provincial List) in the Seventh Schedule of Government of India Act, 1935 correspond to Entry 54 in List I (Union List) and Entry 23 in List II (State List) in our Constitution. It is interesting to note that in the course of debate in respect of the above entries in the Government of India Bill, the Solicitor General in the House of Commons stated that the rationale of including only the 'regulation of mines' and 'development of minerals' and that too only to the extent it was considered expedient in the public interest by a Federal law was to ensure that the Provinces were not completely cut-out from the law relating to mines and minerals and if there was inaction at the Centre, then the Provinces could make their own laws. Thus, powers in relation to mines and minerals were accorded to both the Centre and States. The same philosophy is reflected in our Constitution. G The management of the mineral resources has been left with both the Central Government and State Governments in terms of Entry 54 in List I and Entry 23 in List II. In the scheme of our Constitution, the State Legislatures enjoy power to enact legislation on the topics of 'mines and mineral development'. H

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A The only fetter imposed on the State Legislatures under Entry 23 is by the latter part of the said entry which says 'subject to the provisions of List I with respect to regulation and development under the control of the Union'. In other words, State Legislature loses its jurisdiction to the extent to which B Union Government had taken over control, the regulation of mines and development of minerals as manifested by legislation incorporating the declaration and no more. If Parliament by its law has declared that regulation of mines and development of minerals should in the public interest be under c the control of Union, which it did by making declaration in Section 2 of the 1957 Act, to the extent of such legislation incorporating the declaration, the power of the State Legislature is excluded. The requisite declaration has the effect of taking out regulation of mines and development of minerals from Entry 23, List II to that extent. It needs no elaboration that to the extent 0 to which the Central Government had taken under 'its control' 'the regulation of mines and development of minerals' under 1957 Act, the States had lost their legislative competence. By the presence of expression 'to the extent hereinafter provided' in Section 2, the Union has assumed control to the extent provided in 1957 Act. 1957 Act prescribes the extent of control and specifies it. We must bear in mind that as the declaration made in Section 2 trenches upon the State Legislative power, it has to be construed strictly. Any legislation by the State after such declaration, trespassing the field occupied in the declaration cannot constitutionally stand. To find out what is left within the competence of the State Legislature on the declaration having been made in Section 2 of the 1957 Act, one does not have to look outside the provisions of 1957 Act but as observed in Baijnath Kadioc , 'have to work it out from the terms of that Act'. In order that the declaration made by the Parliament should be effective, the making of rules or enforcement of rules so made is not decisive.

102Copy pinpoint102. The declaration made by Parliament in Section 2 of H 1957 Act states that it is expedient in the public interest that

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 767 AND ORS. [R.M. LODHA, J.]

the Union should take under its control the regulation of mines A and the development of minerals to the extent provided in the Act itself. Legal regime relating to regulation of mines and development of minerals is thus guided by the 1957 Act and 1960 Rules. Whether reservation made by 1962 and 1969 Notifications is in any manner contrary or inconsistent with 1957 B Act? In my view not at all. Whether the impugned Notifications impinge upon the legislative power of the Central Government? My answer is in negative. Whether the Government of erstwhile State of Bihar did not have the power to make reservation which it did by 1962 and 1969 Notifications? I think there was c no lack of power in the State in making such reservation. I indicate the reasons therefor.

Management of minerals : general observations

103Copy pinpoint103. First, few general observations. Minerals - like rivers and forests - are a valuable natural resource. Minerals constitute our national wealth and are vital raw-material for infrastructure, capital goods and basic industries. The conservation, preservation and intelligent utilization of minerals are not only need of the day but are also very important in the interest of mankind and succeeding generations. Management of minerals should be in a way that helps in country's economic development and which also leaves for future generations to conserve and develop the natural resources of the nation in the best possible way. For proper development of economy and industry, the exploitation of natural resources cannot be permitted indiscriminately; rather nation's natural wealth has to be used judiciously so that it may not be exhausted within a few years.

No fundamental right in mining G

104Copy pinpoint104. The appellants have applied for mining leases in a land belonging to Government of Jharkhand (erstwhile Bihar) and it is for iron-ore which is a mineral included in the First Schedule to the 1957 Act in respect of which no mining lease H

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A can be granted without the prior approval of the Central Government. It goes without saying that no person can claim any right in any land belonging to Government or in any mines in any land belonging to Government except under 1957 Act and 1960 Rules. No person has any fundamental right to claim B that he should be granted mining lease or prospecting licence or permitted reconnaissance operation in any land belonging to the Government. It is apt to quote the following statement of

0. Chinnappa Reddy, J. in Mis. Hind Stone0 , albeit in the context of minor mineral, 'The public interest which induced c Parliament to make the declaration contained in Section 2 ...... . has naturally to be the paramount consideration in all matters concerning the regulation of mines and the development of minerals'. He went on to say, 'The statute with which we are concerned, the Mines and Minerals (Development and Regulation) Act, is aimed ........... at the conservation and the 0 prudent and discriminating exploitation of minerals. Surely, in the case of a scarce mineral, to permit exploitation by the State or its agency and to prohibit exploitation by private agencies is the most effective method of conservation and prudent E exploitation. If you want to conserve for the future, you must prohibit in the present.'

State Government's ownership in mines and minerals within its territory and the power of reservation

105Copy pinpoint105. It is not in dispute that all rights and interests, including rights in mines and minerals in the subject area, had vested absolutely in the erstwhile State of Bihar free from all encumbrances. At the commencement of Constitution, the erstwhile State of Bihar was a Part-A State specified in the First G Schedule of the Constitution and prior thereto the Province of Bihar. By virtue of Article 294, all properties and assets which were vested in His Majesty for the purposes of the Government of Province of Bihar stood vested in the corresponding State of Bihar. By 1950 Bihar Act, all other lands i.e., estates and tenures of whatever kind, including the mines and minerals

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 769 AND ORS. [R.M. LODHA, J.] therein, stood vested in the State of Bihar. Thus, all lands and minerals on or under land situate in the erstwhile State of Bihar came to vest in it. Thereafter with effect from November 15, 2000, the State of Jharkhand was carved out of the State of Bihar pursuant to the Bihar Re-Organisation Act, 2000. Accordingly, all lands, inter alia, belonging to the then State of B Bihar and situated in the transferred territories of Singhbhum (East) and Singhbhum (West) Districts, passed to the newly created State of Jharkhand. The admitted position is that the State Government (erstwhile Bihar and now Jharkhand) is the owner of the subject area. Mines and minerals within its territory c vest in it absolutely. As a matter of fact it is because of this position that the appellants made their application for grant of mining lease to the State Government. The question now is, the regulation of mines and development of minerals having been taken under its control by the Central Government, whether the provisions contained in 1957 Act or 1960 Rules come in the way of the State Government to reserve any particular area for exploitation in the public sector.

106Copy pinpoint106. The legislation on the subject of mines and minerals as contained in 1957 Act and 1960 Rules has been extensively quoted in the earlier part of the judgment. Suffice it to say that Section 4 is a pivotal provision around which the legal framework for the regulation of mines and development of minerals as laid down in 1957 Act revolves. F

107Copy pinpoint107. The character of the impugned Notifications making reservation of the area set out therein for exploitation of iron ore in public sector has to be judged in light of the provisions in 1957 Act and 1960 Rules. The object and effect of declaration made by Parliament in Section 2 and the provisions G that follow Section 2 in 1957 Act, which have been extensively referred to above, even remotely do not suggest that the Government of the erstwhile State of Bihar lacked authority or competence to make reservation of subject mining areas within its territory relating to iron ore which vested in it for public sector H

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A undertaking by 1962 and 1969 Notifications. Whatever way it is seen, whether 'reservation' topic was covered by 1957 Act when 1962 and 1969 Notifications were issued and published by the State Government or whether the provisions of 1957 Act, as were then existing, enabled the State Government to B reserve the subject area for its own use through the agency in public sector, I am of the opinion that since the State Government's paramount right over the iron ore being the owner of the mines did not get affected by 1957 Act, the power existed with the State Government to reserve subject areas of c mining for exploitation in public sector undertaking. It was, however, argued that by 1957 Act the State's ownership rights insofar as 'development of minerals' was concerned stood frozen. 'Development' includes exploitation of mineral resources and to allow to exploit or not to allow to exploit is all covered by 1957 Act and by Section 4 the right of the State Government 0 with regard to development of minerals was taken away and the State Government ceased to have any inherent right of reservation.

108Copy pinpoint108. I do not agree. In the first place, the declaration made by Parliament in Section 2 and the provisions that follow Section 2 in 1957 Act have left untouched the State's ownership of mines and minerals within its territory although the regulation of mines and the development of minerals have been taken under the control of the Union. Section 4 deals with activities in relation to land and does not extend to extinguish the State's right of ownership in such land. Section 4 regulates the right to transfer but does not divest ownership of minerals in a State and does not preclude the State Government from exploiting its minerals. Section 4(1) can have no application where the G State Government wants to undertake itself mining operations in the area owned by it. On consideration of Section 5, I am of the view that the same conclusion must follow. Section 5 or for that matter Sections 6, 9, 10, 11 and 13(2)(a) also do not take away the State's ownership rights in the mines and minerals within its territory. The power to legislate for regulation of mines

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 771 AND ORS. [R.M. LODHA, J.] and development of minerals under the control of the Union may definitely imply power to acquire mines and minerals in the larger public interest by appropriate legislation, but by 1957 Act that has not been done. There is nothing in 1957 Act to suggest even remotely - and there is no express provision at all - that the mines and minerals that vested in the States have been acquired. Rather, the scheme and provisions of 1957 Act themselves show that Parliament itself contemplated State legislation for vesting of lands containing mineral deposits in the State Government and that Parliament did not intend to trench upon powers of State Legislatures under Entry 18, List c II. As noted above, the declaration made by Parliament in Section 2 of 1957 Act states that it is expedient in the public interest that the Union should take under its control the regulation of mines and development of minerals to the extent provided in the Act itself. The declaration made in Section 2 is, thus, not all comprehensive.

109Copy pinpoint109. The regulation of mines and development of minerals has been taken over under its control by the Central Government to the extent it is manifested in 1957 Act which does not contemplate acquisition of mines and minerals. By the presence of keynote expression 'to the extent hereinafter provided' in Section 2, the Union has assumed control to the extent specified in the provisions following Section 2. In my view, although the word ·regulation' must in the context receive wide interpretation, but the extent of control by Union as specified in 1957 Act has to be construed strictly. The decisions of this Court in M.A. Tulloch & Co. b, Baijnath Kadio 0 , Bharat Coking Coal and few other decisions where this Court has held with reference to declaration made by Parliament in Section 2 of 1957 Act and the provisions of that Act that the whole of the legislative field was covered were in the context of specific State legislations under consideration. In the context of subject State legislation, the whole legislative field was found to be occupied by the Central law. The same is the position in the case of Hingir-Rampur Coal Co.• where whole of the H

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A legislative field relating to 'minerals' was found to be covered by the declaration made in Section 2 of the 1948 Act in the context of the State legislation under consideration. In Hingir- Rampur Coal Co.• while examining the constitutional validity of the Orissa Mining Areas Development Fund Act, 1952 this B Court held that the State Act was covered by the 1948 Act. In M.A. Tulloch & Companyl' , this Court was concerned with the same Orissa Act which was under consideration in Hingir- Rampur Coal Co.• and in light of Section 18(1) of the 1957 Act which was under consideration it was held that the intention c of Parliament was to cover the entire field. In Baijnath Kadio", this Court was concerned with the constitutional validity of proviso (2) to Section 10(2) added by Bihar Land Reforms (Amendment) Act, 1964. While examining the constitutional validity of the above provision, the Constitution Bench of this Court analysed 1957 Act. In light of Entry 54 in List I and Entry 0 23 in List II the observation that whole of the legislative field was covered by the Parliamentary declaration read with 1957 Act was with reference to the State legislations under consideration and the whole of the legislative field was found to be occupied by 1957 Act. Similar observations in various other decisions by this Court were made in the context of the topic under consideration.

110Copy pinpoint110. I am supported in my view by a three-Judge Bench decision of this Court in Orissa Cement Limitecf wherein it was emphatically asserted that in the case of a declaration under Entry 54, the legislative power of the State Legislatures is eroded only to the extent control is assumed by the Union pursuant to such declaration as spelt out by the legislative enactment which makes the declaration. The three-Judge G Bench on careful consideration said, 'The measure of erosion turns upon the field of the enactment framed in pursuance of the declaration. While the legislation in Hingir-Rampur Coal Co.• and M.A. Tulloch & Co.b was found to fall within the pale of the prohibition, those in Chanan Ma/X, lshwari Khetan Sugar H Mif/sY and Western Coalfield" Limitedoo were general in nature

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 773 AND ORS. [R.M. LODHA, J.] and traceable to specific entries in the State List and did not A encroach on the field of the Central enactment except by way of incidental impact'.

111Copy pinpoint111. Secondly, after enactment of 1957 Act and 1960 Rules made thereunder, the Central Government has all 8 throughout understood that the State Governments as owner of mines and minerals within their territory have inherent right to reserve any particular area for exploitation in the public sector. This position is reflected from the order of the Central Government that was passed by it and which was under challenge in Amritlal Nathubhai Shahd. In its order the Central C Government had stated, ' .... The State Government had the inherent right to reserve any particular area for exploitation in the public sector. Mineral vest in them and they are owners of minerals ....... and Central Government are in agreement with the State Government in so far as the reservation of areas is D concerned ..... "

112Copy pinpoint112. The above position held by the Central Government has been approved by this Court in Amritlal Nathubhai Shahd. I have already referred to the facts in the case of Amritlal E Nathubhai Shahd and the issue involved therein - an issue similar to the controversy presented before us - in earlier part of this judgment. In Amritlal Nathubhai Shahd, the Court referred to Section 4 of 1957 Act and it was held that there was nothing in 1957 Act or 1960 Rules to conclude as to why the F State Government could not, if it so desired, 'reserve' any land for itself, for any purpose, and such reserved land would then not be available for the grant of a prospecting licence or a mining lease to any person. The Court then pointed out, 'the authority to order reservation flows from the fact that the State G is the owner of the mines and the minerals within its territory'. It was also held that quite apart from that, Rule 59 of 1960 Rules clearly contemplated reservation by an order of the State Government. The above legal position has been reiterated by this Court in Indian Metals and Ferr° Alloys Ltd.P. H

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A Whether Amritlal Nathubhai Shah is not a binding precedent

113Copy pinpoint113. Learned senior counsel for the appellants, however, vehemently contended that Amritlal Nathubhai Shahd is not a B binding precedent being per incuriam inasmuch as earlier judgments of this Court have not been considered and applied. It was argued that decision in Amritlal Nathubhai Shahd was limited to its own facts and that decision did not deal with reservation prior to amendment in Rule 59. In that case Notification was of December 31, 1963 whereunder lands in C particular areas had been reserved for exploitation of bauxite in the public sector. At that time Rule 59 of 1960 Rules had been amended and, moreover, that was a case of exploitation of mineral by the State itself and in case of exploitation other than by State it could only be done in accord with the 1957 Act D and 1960 Rules.

114Copy pinpoint114. I am afraid that the distinguishing features highlighted by learned senior counsel for the appellants are not substantial and do not persuade me not to follow Amritlal Nathubhai E Shahd. The judgment of this Court in Amritlal Nathubhai Shahd establishes the distinction between the power of reservation to exploit a mineral as its own property on the one hand and the regulation of mines and mineral development under the 1957 Act and the 1960 Rules on the other. The authority of the S.tate F Government to make reservation of a particular mining area within its territory for its own use is the offspring of ownership; and it is inseparable therefrom unless denied to it expressly by an appropriate law. By 1957 Act that has not been done by Parliament. Setting aside by a State of land owned by it for its G exclusive use and under its dominance and control, in my view, is an incident of sovereignty and ownership. There is no incongruity or inconsistency in the decisions of this Court in Hingir-Rampur Coal Co. 0 , M.A. Tulloch & Co. b, Baijnath Kadioc and Amritlal Nathubhai Shahd. The Bench in Amritlal Nathubhai Shahd was alive to the legal position highlighted by H

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 775 AND ORS. [R.M. LODHA, J.] this Court in Hingir-Rampur Coal Co.•, M.A. Tulloch & Co.b A and Baijnath Kadio 0 although it did not expressly refer to these decisions. This is apparent from the observations made in para 3 wherein it has been stated that in pursuance of its exclusive power to make laws with respect to the matters enumerated in Entry 54 of List I in the Seventh Schedule, Parliament specifically B declared in Section 2 of the 1957 Act that it was expedient in the public interest that the Union should take under its control, regulation of mines and the development of minerals to the extent provided therein. The Bench noticed that State Legislature's power under Entry 23 of List II was, thus, taken c away and regulation of mines and mineral development had therefore to be in accordance with the 1957 Act and 1960 Rules. The legal position exposited in Amritlal Nathubhai Shahct is that even though the field of legislation with regard to regulation of mines and development of minerals has been covered by the declaration of the Parliament in Section 2 of the 1957 Act, but that can not justify the inference that the State Government has lost its right to the minerals which vest in it as a property within its territory and hence no person has a right to exploit the mines other than in accordance with the provisions of the 1957 Act and the 1960 Rules. The authority of the State Government to order reservation flows from the fact that it is the owner of the mines and the minerals within its territory. Such authority is also traceable to Rule 59 of 1960 Rules.

115Copy pinpoint115. Yet another considerable point was made that 1962 F and 1969 Notifications are not relatable to statutory provisions contained in 1957 Act and 1960 Rules. Reference was made to Sections 17 and 18 and Rules 58 and 59 of 1960 Rules and it was argued that these provisions are indicative of the position that reservation made by the State Government for exploitation G of minerals in public sector was unsupportable and unsustainable in law.

Section 17 - not all - comprehensive provision

116Copy pinpoint116. I am of the opinion that Section 17 is not all - H

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A comprehensive on the subject of refusal to grant prospecting licence or mining lease. Section 17 has nothing to do with public or private sector. It does not deal directly or indirectly with the State Government's right for reservation of its own mines and minerals. Its application is not general but it is confined to B a specific situation where the Central Government proposes to undertake prospecting or mining operations in any area not already held under any prospecting licence or mining lease. The above view with regard to Section 17 finds support from Amritlal Nathubhai Shahd. Insofar as Section 18 is concerned, c it basically confers additional rule making power upon the Central Government for achieving the objectives, namely, conservation and systematic development of minerals articulated therein. If the State Government makes reservation in public interest with respect to minerals which vest in it for exploitation in public sector, I fail to see how such reservation 0 can be seen as impairing the obligation cast upon the Central Government under Section 18.

Rule 59 and Janak Lal

117Copy pinpoint117. It is true that Rule 58 as it existed originally did not enable the State Government to reserve any area in the State for exploitation of minerals in public sector. But Rule 59 did recognise the State Government's authority to make reservation for any purpose. It was, however, argued by Dr. Rajiv Dhavan F that Rule 59, as it then stood, allowed reservation for any purpose other than prospecting or mining for minerals. He relied upon decision of this Court in Janak La/i. In Janak La/i, admittedly the disputed area was reserved for nistar purposes. When an application for grant of mining lease was earlier made by a third party it was rejected on the ground that it was so reserved. It was also an admitted position before this Court that the procedure under Rule 58 was not followed before grant was made in favour of respondent no. 4 therein and no opportunity was given to any other perscn before entertaining application of respondent no. 4. In the backdrop of the above admitted