w w w . L a w y e r S e r v i c e s . i n



K. Thirumalesh & Others v/s State of Karnataka, Rep. by its Chief Secretary Vidhana Soudha, Bengaluru & Others

    Writ Petition Nos. 10601 of 2019 c/w 54573, 35452, 54223, 56322, 40711, 57812, 35450, 35451, 49973, 52910, 53505 of 2018, 5046 to 5047, 2058, 5539, 15503, 16563, 16565, 22899 to 22901, 5522, 11817, 16431, 2452, 1222, 1228, 4377 of 2019

    Decided On, 16 August 2019

    At, High Court of Karnataka

    By, THE HONOURABLE CHIEF JUSTICE MR. ABHAY S. OKA & THE HONOURABLE MR. JUSTICE P.S. DINESH KUMAR

    For the Petitioners: R.G. Kolle, M. Keshava Reddy, Ganapathy Bhat Vajralli, B.S. Prakash, V. Jayanth, N. Naveen Chandra, K. Dhiraj Kumar, T. Seshagiri Rao, Sathish M. Doddamani, Ravindra V. Reddy, S.Chandini, Vishnu Hegde, K.V. Sateesh Chandra, T.M. Chowdareddy, K. Ananda, Kashyap N. Naik, K.B. Shiva Kumar, R.G. Kolle, V. Somu, Shivaprasad Shantanagoudar, S.Raghavendra, K.V. Sateeshchandra, A.B. Anjaneya, M. Babu Rao, Rameshchandra, Chokkareddy, K.M. Chandrashekar, Advocates, Party-In-Person. For the Respondents: V.G. Bhanuprakash, AGA, Vikram Huilgol, HCGP.



Judgment Text

(Prayer: This Writ petition is filed under Articles 226 and 227 of the Constitution of India, praying to direct the r-4 Deputy Director & Competent Authority, to grant & execute a quarry lease to extract ordinary building stone in Govt. land bearing Sy.No.96 of Bettahalli Village, Magadi Taluka, Ramnagar District, over an area of 04.36 Acres, pursuant to a quarry lease application dated 06.07.2016 produced at Annexure-B, by quashing or setting aside the endorsement issued by R-4 deputy director, dated 18.01.2017 produced at Annexure-A & etc.

This Writ petition filed under Articles 226 and 227 of the Constitution of India, praying to hold that the application of the petitioner seeking quarry lease vide Annexure-A dtd:14.6.2012 is saved under the amended Rule 8-B of the Rules and has to be processed under the un-amended provisions of the rules which existed before coming into force of the Karnataka Minor Mineral Concession [Amendment] Rules, 2016 & etc.

This Writ petition is filed Under Articles 226 and 227 of the Constitution of India praying to call for the records which ultimately resulting in passing the endorsement at Annexure-A dated 02.11.2017 passed by the R-3 in respect of the schedule property & etc.

This Writ Petition is filed under Articles 226 and 227 of the Constitution of India praying to declare by issuing an appropriate writ that the Karnataka Minor Mineral Concession [Amendment] Rules, 2016 dtd:12.8.2016, as per Annexure-F, in so far as Rule 8b[1] is Unconstitutional, null and void and same to be struck down & etc.)

Overview

1. This group of petitions concerns interpretation of various provisions of the Karnataka Minor Mineral Concession Rules, 1994 (for short 'the said Rules') and in particular Rule 8-B as well as a challenge to constitutional validity of sub-rule (1) of Rule 8-B. The Rules have been framed by the State Government in exercise of the power conferred by Section 15 of the Mines and Minerals (Development and Regulations) Act, 1957 (for short 'the said Act of 1957'). Under Section 15, a power is vested in the State Governments of making Rules for regulating the grant of quarry leases, mining leases, or other mineral concessions in respect of the minor minerals and for the purposes connected therewith. Minor Minerals are defined in clause (e) of Section 3 of the said Act of 1957. There were extensive amendments made to the said Act of 1957 by the Act No.10 of 2015 and in particular, by incorporating Section 10A, with effect from 12th January, 2015. By the said Act, the Central Legislature sought to remove discretion in the manner of granting mining leases or quarry leases. With the object of eliminating the discretion and improving transparency in the allocation of mineral resources, auction regime was introduced as a method of allotment of mining leases/prospecting licenses. Thus, with effect from 12th January, 2015, auction regime was introduced in the said Act of 1957.

2. Extensive amendments were made to the said Rules with effect from 12th August 2016, inter alia, for introducing auction regime. Rules 8-A and 8-B of the said Rules were substituted by the Karnataka Minor Mineral Concession (Amendment) Rules, 2016 (for short "the said Amending Rules") which were published by the Notification dated 12th August, 2016. The substituted Rule 8-B provided that all applications for grant of mining lease or license received and pending on the date of commencement of the amendment (i.e 12th August, 2016), shall become ineligible. Certain exceptions were carved out to the said Rule as provided in sub-rule (2) of Rule 8-B. The substituted Rule 8-A provided that from 12th August 2016, all the applications for grant of quarry leases shall be granted for a period of thirty years for specified minor minerals and for a period of 20 years for the non-specified minor minerals. It was also provided that all quarry leases or licenses granted before 12th August, 2016 shall be deemed tohave been granted for a period of thirty years in respect of specified minor minerals and for a period of twenty years in respect of non-specified minor minerals from the date of its original grant. Rule 8-B, as amended by the said Notification, is relevant for our consideration and it reads thus:

8-B. Status of applications received. (1) All applications received and pending for grant of lease or license prior to the date of commencement of the Karnataka Minor Mineral Concession (Amendment) Rules, 2016, shall become ineligible including the applications received for grant of mining leases of the minerals that are now classified as minor mineral.

(2) Notwithstanding anything contained in sub-rule (1), the following shall remain eligible on and from the commencement of the Karnataka Minor Mineral Concession (Amendment) Rules, 2016, namely:-

(a) Applications received upon the notification issued under Rule 8-B existed before the Karnataka Minor Mineral Concession (Amendment) Rules, 2016.

(b) Where the Committee that existed under the provisions of Rule 11 or District Task Force Committee has recommended for grant of a quarrying lease or license for grant of mining lease, before the commencement of the Karnataka Minor Mineral Concession (Amendment) Rules, 2016.

(c) Where in the case of minerals now re- classified as minor mineral by the Central Government by Notification No.S.O.423(E), dated 10.2.2015, no objection certificates from revenue and forest departments and the approved mining plan from the Indian Bureau of Mines (IBM) have been received before commencement of the Karnataka Minor Mineral Concession (Amendment) Rules, 2016.

(d) Applications received and pending for grant of lease or license in case of specified minor minerals before [16.6.2015] and for which No Objection Certificate (NOC) have been received in the office of Directorate of Mines and Geology from the Deputy Conservator of Forest for all Lands, Deputy Commissioner in case of Kharab lands, Assistant Commissioner (Revenue) and Deputy Director or Senior Geologist (Joint Inspection Report) in case of Gomala lands in accordance with the Circular No.RD.72.LGP. 98, dated 24.02.1999 before commencement of the Karnataka Minor Mineral Concession (Amendment) Rules, 2016 and shall be considered and disposed by the State Government, subject to obtaining No Objection Certificate (NOC) from the Deputy Commissioner of the concerned districts before grant;

[Note: The clause (d) printed above is a clause substituted by the notification dated 18th July, 2017. The clause (d) as amended on 12th August, 2016 read thus:

(d) Applications received before 16-6- 2015 and for which No Objection Certificates (NOC) and reports as under sub-rule (5) of Rule 8 of these Rules have been received from the concerned departments before commencement of the Karnataka Minor Mineral Concession (Amendment) Rules, 2016; and]

(d-1) Applications received and pending for grant of lease or license in the case of non-specified Minor Minerals before (16-6- 2015) and for which No Objection Certificates (NOCs) have been received in the Department of Mines and Geology of the concerned District Office, from the Deputy Conservator of Forest for all lands, Tahsildar in the case of Kharab lands, Assistant Commissioner and Deputy Director of Senior Geologist (Joint inspection report), in the case of Gomala lands, before commencement of the Karnataka Minor Mineral Concession (Amendment) Rules, 2016, and shall be processed and decided by the District Task Force Committee as under the existing rules before commencement of the Karnataka Minor Mineral Concession (Amendment) Rules, 2016.

[Note: The clause (d-1) was added by the notification dated 6th January, 2017, with effect from 12th August, 2016 and was amended on 16th November, 2017]

(e) These applications shall be considered for grant of quarrying lease or license, or otherwise as per the provisions the existed before the Karnataka Minor Mineral Concession (Amendment) Rules, 2016 subject to fulfillment of the conditions specified for the same, if any and registration of leases or license deed within a period of (twenty-four months) from the date of commencement of the Karnataka Minor Mineral Concession (Amendment) Rules, 2016.

[Note: In the 12th August, 2016 amendment, the words "twelve months" were incorporated. The same were substituted by "twenty four months" on 18th November, 2017]

Provided that in case of grant of quarrying lease or licence covered by clause (b), (c) and (d) of sub-rule (2), the lessee shall pay, in addition to the royalty, an amount which shall be equal to the Average Additional Periodic Payment payable by the holders of quarry lease or licence granted through auction within the Taluk, if such average is available for the Taluk, or within the district if such average is not available for the Taluk, or within the neighboring district if such average is not available for the district, and if such average is not available within the neighboring district, such Average Additional Periodic Payment shall be deemed to be fifty percent of royalty. This deemed percentage shall be reset after three years based on average obtained in auction by 31.03.2019; and if no auctions have taken place by 31.03.2019 for deriving the average from Taluk, district or neighboring districts, as the case may be, then the deemed rate will become the final rate for the Average Additional Periodic Payment;

Provided further that when such royalty and Average Additional Periodic Payment is paid, then the payment by the lessee for the District Mineral Foundation shall be as payable by the holders of lease or licence through auction.

Provided also that in respect of any mineral that are now re-classified as minor minerals by the Central Government vide Notification No.S.O.423 (E) dated 10.02.2015, no quarrying lease or licence shall be granted except with the previous approval of the State Government.

(3) Where before the commencement of the Karnataka Minor Mineral Concession (Amendment) Rules, 2016 a reconnaissance permit or prospecting license has been granted in respect of any land for any mineral, the permit holders or the licensee shall have a right for obtaining prospecting license followed by quarrying lease, or licence, as the case may be, in respect of that mineral in that land, if they have carried out the reconnaissance or prospecting in accordance with the terms and conditions stipulated in their permit or licence.

Provided that on grant of quarry lease or license in case of sub-rule (3), the lessee shall pay, in addition to the royalty, an amount which shall be equal to the Average Additional Periodic Payment payable by the holders of quarry lease or license granted thorough auction within the Taluk if such average is available for the Taluk, or within the District if such average is available for the taluk, or within the District if such average is not available for the Taluk, or within the neighboring Districts if such average is not available for the District, and if such average is not available within the neighboring Districts, such Average Additional Periodic Payment shall be deemed to be fifty percent of royalty. This deemed percentage shall be reset after three years based on average obtained in auctions by 31.03.2019; and if no auctions have taken place by 31.03.2019 for deriving the average from Taluk, District or neighboring districts, as the case may be, then the deemed rate will become the final rate for the Average Additional Periodic Payment:

Provided further that when such Royalty and Average Additional Periodic Payment is paid, then the payment by the lessee or holder of license to the District Mineral Foundation shall be as payable by the holders of lease or license through auction.

(emphasis added)

3. Rule 8-B which is quoted above was substituted for the earlier Rule 8-B. The earlier Rule 8-B was an enabling provision, permitting the Competent Authority to direct that the quarrying leases to quarry specified or non-specified minor mineral in any area belonging to the State Government and available for grant shall be granted by tender-cum-auction in accordance with the provisions of Chapter IV-A. Rule-8 underwent an amendment on 16th December 2013 and on 12th August, 2016. Rule 8, as amended by the aforesaid two notifications reads thus:

"8. Restrictions on grant or renewal of quarrying Lease or licence - (1) No quarrying lease or license shall be granted to any person other than an Indian Citizen except with the prior approval of the Central Government.

(1-A) No quarry lease/licence/working permission (amalgamation) shall be granted or renewed -

(i) In contravention of environment impact assessment notification dated 14.09.2006 issued by the Ministry of Environment and Forest, Government of India, as amended from time to time;

(ii) Without approved quarry plan or simplified quarrying plan; and

(iii) Without obtaining environmental clearance from concerned authorities.

(2) Quarrying lease may be granted in any forest land by the State Government with the prior approval of the Central Government under the Forest (Conservation) Act, 1980.

(3) No quarrying lease shall be granted in respect of any land notified by the State Government as reserved for use by the State or Central Government, any body or corporation owned or controlled by the State or Central Government or for any other public or special purposes.

(4) No quarrying lease or license or renewal shall be granted in respect of any minor mineral to any person if such person has been convicted for the violations of the provisions of t

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he Act or the Rules made thereunder or if the lease or licenses of such person has been determined or cancelled under sub-rule (3) of Rule 6 or Rule 39 or sub-rule (4) of Rule 44 or Rule 45 of these Rules.

(5) The Competent Authority shall before granting or renewing a lease, licence, working permission, consult-

(i) In case of specified minor minerals, the Deputy Commissioner of the district concerned and obtain No Objection Certificate;

(ii) In the case of non-specified minor minerals, the Tahsildar of the taluk concerned and obtain No Objection Certificate;

(iii) In case of all minor minerals, the Deputy Conservator of Forest of the concerned Jurisdiction and obtain No Objection Certificate

(iv) In case of all minor minerals in Gomal/Gayarana/Hullubani Kharab etc., type of lands, the Assistant Commissioner of Revenue Department and the Deputy Director/Senior Geologist concerned, who shall furnish a joint inspection report through Deputy Commissioner in accordance with Circular No. RD.72.LGP 98, dated 24.02.1999.

(v) In case of all minor minerals, jurisdictional Mines and Geology Officer and obtain technical report along with sketch duly mentioning GPS Coordinates; and shall take action in accordance with Chapter-III, in respect of specified minor minerals and in accordance with Chapter-IV and V, in respect of non-specified minor minerals, as the case may be;

(6) If the Deputy Commissioner or the Tahsildar or the Deputy Conservator of Forest or the Assistant Commissioner or the Deputy Director/Senior Geologist as the case may be, fails to give No Objection Certificate under Sub-Rule (5), within ninety days, it shall be deemed that the Deputy Commissioner or the Tahsildar or the Deputy Conservator of Forest or the Assistant Commissioner or the Deputy Director or Senior Geologist, as the case may be, has given his No Objection and the District Task Force (Mines) Committee shall communicate the same to the Competent Authority for processing such applications for conditional grant to that effect;

Provided that while communicating the deemed No Objection to the Competent Authority, a communication shall also be sent to the concerned Deputy Commissioner or the Tahsildar or the Deputy Conservator of Forest or the Assistant Commissioner or the Deputy Director or Senior Geologist as the case may be that taking into consideration the deemed no objection the matter has been further processed.

(7) The grant or renewal of lease/license/working permissions shall be subject to such other conditions, if any as specified by the Competent Authority from time to time."

(emphasis added)

Prior to the amendment made by the notification dated 16th December 2013, Rule 8 reads thus:

"8. Restrictions on grant or renewal of quarrying lease or license -(1) No quarrying lease or licence shall be granted to any person other than an Indian Citizen except with the prior approval of the Central Government.

(2) Quarrying lease may be granted in any forest land by the State Government with the prior approval of the Central Government under the Forest (Conservation) Act, 1980.

(3) No quarrying lease shall be granted in respect of any land notified by the State Government as reserved for use by the State or Central Government, any body or corporation owned or controlled by the State or Central Government or for any other public or special purposes.

(4) No quarrying lease or licence or renewal shall be granted in respect of any minor mineral to any person if such person has contravened the provisions of the Act or the Rules made thereunder.

(5) The Competent Authority shall before granting or renewing a lease consult -

(i) In case of specified minor minerals, the Deputy Commissioner of the district concerned,

(ii) In the case of non-specified minor minerals, the Tahsildar of the taluk concerned.

(6) The Deputy Commissioner or the Tahsildar, as the case may be, shall send his recommendation within ninety days from the date of receipt of communication from the Competent Authority.

Provided that if, no recommendation is received from the Deputy Commissioner or the Tahsildar, as the case may be, within ninety days from the date of receipt of communication from the Competent Authority, recommendation for grant or renewal of a quarrying lease shall be deemed to have been made by him."

4. After the Amendment of 16th December 2013, till 12th August 2016, Rule 8 read thus:

"8. Restrictions on grant or renewal of Quarrying Lease or licence(1) No quarrying lease or licence shall be granted to any person other than an Indian Citizen except with the prior approval of the Central Government.

(1-A) No quarry lease/licence/working permission shall be granted or renewed -

(i) in contravention of environment impact assessment notification dated 14.09.2006 issued by the Ministry of Environment and Forest, Government of India, as amended from time to time;

(ii) without approved quarry plan or simplified quarrying plan; and

(iii) without obtaining environmental clearance from concerned authorities.

(2) Quarrying lease may be granted in any forest land by the State Government with the prior approval of the Central Government under the Forest (Conservation) Act 1980.

(3) No quarrying lease shall be granted in respect of any land notified by the State Government as reserved for use by the State or Central Government, any body or corporation owned or controlled by the State or Central Government or for any other public or special purposes.

(4) No quarrying lease or licence or renewal shall be granted in respect of any minor mineral to any person if such person has contravened the provisions of the Act or the Rules made their under.

(5) The Competent Authority shall before granting or renewing a lease, licence, working permission, consult-

(i) In case of specified minor minerals, the Deputy Commissioner of the District concerned and obtain No Objection Certificate.

(ii) In the case of non-specified minor minerals, the Tahasildar of the taluk concerned and obtain No Objection Certificate.

(iii) In case of all minor minerals, the Deputy Conservator of Forests of the concerned jurisdiction and obtain No Objection Certificate.

(iv) in case of all minor minerals in Gomal/gayarana/hullubani kharab etc. type of lands, the Assistant Commissioner of Revenue Department and Deputy Director/Senior Geologist concerned, who shall furnish a joint Inspection report through Deputy Commissioner in accordance with Circular No.RD 72 LGP 98, dated 24-2-1999.

(v) in case of all minor minerals, jurisdictional Mines and Geology Officer and obtain technical report along with sketch duly mentioning GPS Coordinates; and shall take action in accordance with Chapter III, in respect of specified minor mineral and in accordance with Chapters IV and V, in respect of non-specified minor minerals as the case may be.

(6) If the Deputy Commissioner or the Tahsildar, or the Deputy Conservator of Forest are the Assistant Commissioner or the Deputy Director/Senior Geologist as the case may be, fails to give No Objection Certificate under sub-rule (5), within 90 days the same shall be placed invariably before the District Task Force (Mines) Committee in its monthly meetings by the Competent Authority. The opinion from concerned departmental officers shall be obtained in the meeting and recorded in the proceedings of the meeting and be disposed off accordingly.

(7) The grant or renewal of lease/licence/working permissions shall be subject to such other conditions, if any as specified by the Competent Authority from time to time."

The entire controversy in this group of writ petitions revolves around the provision of Rule 8-B, as amended by the said notification, with effect from 12th August 2016. we must note here that in most of the petitions in this group of writ petitions, the main challenge is only to the endorsements issued by the authorities, by which, applications for grant of quarrying lease made prior to 12th August, 2016 were rejected by relying upon sub-rule (1) of Rule 8-B, as amended with effect from 12th August, 2016. There are few cases where the applications filed prior to 12th August, 2016 have been kept pending for consideration. The challenge is to the constitutional validity of sub-rule (1) of Rule 8-B is in Writ Petition No.38427 of 2018. In Writ Petition No. 10601 of 2019, though there is no prayer to that effect, the learned counsel for the petitioner has made detailed submissions on the issue of constitutional validity.

Summary of submissions of the

petitioners on constitutional validity

5. The arguments which are canvassed are mainly on two aspects. Firstly, on the constitutional validity of Rule 8-B and secondly on the interpretation of Rule 8-B, assuming that it is valid. In fact, specific challenge to the constitutional validity of the Rules is in only one or two petitions.

6. On the constitutional validity, the first submission is that sub-rule (1) of Rule 8-B is violative of Article 14 of the Constitution of India and the same is arbitrary. It was submitted that two classes of applications for grant of quarrying leases have been created by the amendment made by the said Amending Rules. The first class is of all applications which were made prior to 12th August 2016 but were kept pending and the second class is of the applications made prior to the said date and were rejected prior to the said date. It is submitted that this classification has no rational basis and has no nexus with the purpose sought to be achieved. It was submitted that up to 12th August 2016, the auction regime was not mandatory for grant of quarrying lease/license and it was made mandatory only with effect from 12th August, 2016. Therefore, there was no reason to make all the applications pending on 12th August, 2016 as ineligible. It was submitted that sub-rule (1) of Rule 8-B operates retrospectively and takes away the rights vested in applicants who had made their applications prior to 12th August, 2016. It was contended that such applicants have a vested right to get their applications decided as per the Rules prevailing on the date of filing of the applications. The applicants belonging to the said category, who were eligible for grant of mining/quarrying leases on the dates of making their respective applications, acquired a vested right of grant of quarrying leases and therefore, their applications cannot be defeated solely because there was a delay on the part of the various authorities in granting clearances or no objection certificates. It was urged that in any case, a right was vested in the applicants who made applications prior to 12th August, 2016 to ensure that their applications are considered in accordance with the law/Rules prevailing at that time.

7. In support of the argument that Rule 8-B, as amended by the Amended Rule is invalid, our attention was invited to the fact that the Rules have been framed in exercise of the power conferred under Section 15 of the said Act of 1957 and the said Rules are ultra virus the Rule making power conferred on the State Government under Section 15 of the said Act of 1957. It was submitted that there was no power vested with the State Government either under sub-section (1) of Section 15 or any of the clauses of sub-section 1-A of Section 15 of the said Act of 1957 to frame the Rules for making the applications filed on or before a particular date as ineligible. It was urged that the fixation of cut-off date of 12th August, 2016 is arbitrary which amounts to violation of Article 14 of the Constitution of India, inasmuch as, there is no nexus between the said cut-off date and the object sought to be achieved by the amended Rules. It was urged that even after the amendment to the said Act of 1957, it was not mandatory for the State Government to introduce auction regime for grant of quarrying leases in respect of the minor minerals. It was contended that the applicants who applied for grant of quarrying leases prior to 12th August, 2016 acquired a vested right and their applications will have to be considered in accordance with the Rules prevailing as on 11th August 2016. It was also urged that sub- rule (1) of Rule 8-B violates the fundamental right under Article 19 (1) (g) of the Constitution of India of those who applied before 12th August 2016 and their applications were kept pending.

8. Various decisions were relied upon in support of the plea that the Rule 8-B is constitutionally not valid. We are referring to the said decisions in the subsequent part of the judgment. The learned AGA and learned HCGP supported Rule 8-B.

9. Before we refer to the other submissions, we must note here that in most of the petitions in this group of petitions, the main challenge is only to the endorsements issued by the authorities, by which, applications for grant of quarrying lease made prior to 12th August, 2016 were rejected by relying upon sub-rule (1) of Rule 8-B, as amended with effect from 12th August, 2016. There are few cases where the applications filed prior to 12th August, 2016 have been kept pending for consideration.

Summary of other submissions

10. In those petitions, where there is a no challenge to the constitutional validity of Rule 8-B, extensive submissions were made which are based on the mandatory requirements needed to be complied with on the basis of the applications made prior to 12th August, 2016. Our attention was invited to sub-rules (5) and (6) of Rule 8, as it stood prior to 12th August, 2016 and after the amendment dated 16th December, 2013. It was pointed out that in case of the applications filed from 16th December, 2013 till 12th August, 2016, the following requirements were provided in sub-rule (5) of Rule 8 for consideration of the applications for grant of mining leases/licenses which were required to be complied with by the Competent Authority:

(a) in respect of specified minor minerals, the Competent Authority was required to consult the Deputy Commissioner of the district concerned and obtain a no objection certificate;

(b) In case of non-specified minerals, the Competent Authority was required to obtain no objection certificate from the Tahsildar of the Taluk concerned;

(c) In case of all minor minerals, the Competent Authority was required to obtain no objection certificate of the concerned Deputy Conservator of Forest;

(d) In case of all minor minerals in Gomal/Gayarana/ Hullubani Kharab etc., types of lands, the Competent Authority was required to consult the Assistant Commissioner of Revenue Department and the Deputy Director/Senior Geologist concerned, who were required to furnish a joint inspection report through the Deputy Commissioner in accordance with the Circular dated 24th February, 1999.

(e) In addition to aforesaid requirements, in case of all minor minerals, the Competent Authority was required to consult jurisdictional Mines and Geology Officer and obtain technical report along with sketch duly mentioning GPS Coordinates.

(emphasis supplied)

11. The argument is that if for no fault on the part of the applicants, the Competent Authority failed to obtain aforesaid no objection certificates and the reports till 12th August 2016, sub-rule (1) of Rule 8-B cannot be applied and the applications should be processed under the un-amended Rules.

12. The learned counsel for the petitioners relied on sub-rule (6) of Rule 8, as amended by the notification dated 16th December 2013 which provided that if the Deputy Commissioner or the Tahsildar or the Deputy Conservator of Forest or the Assistant Commissioner or the Deputy Director/Senior Geologist, as the case may be, fail to give no objection certificates under sub-rule (5) within ninety days, by a deeming fiction, 'no objection certificates' shall be deemed to have been granted.

13. The learned counsel also invited attention of the Court to sub-rule (5) and (6) of Rule 8, as it existed prior to the amendment of 16th December, 2013. In the said sub-rule (5), in case of specified minor minerals, the Competent Authority was required to consult the Deputy Commissioner of the district concerned and in case of non-specified minor minerals,the Competent Authority was required to consult the Tahsildar of the Taluk concerned. It was also urged that under sub-rule (6), it was laid down that the Deputy Commissioner or the Tahsildar, as the case may be, shall send his recommendation within ninety days from the date of receipt of the communication from the Competent Authority and the proviso to sub-rule (6) provided that if no recommendation is received from the Deputy Commissioner or the Tahsildar, as the case may be, within ninety days from the date of receipt of the communication from the Competent Authority, the recommendation for grant or renewal of a quarrying lease shall be deemed to have been made by the Deputy Commissioner or the Tahsildar, as the case may be. It was contended that sub-rules (5) and (6) of Rule 8 will prevail over sub-rule (2) of Rule 8A.

14. It was urged in some of the petitions that wherever no objection certificates were already received or were already deemed to have been received in respect of the applications which were kept pending as on 12th August, 2016, sub-rule (1) of Rule 8-B will not apply. Even if no objection certificates were ready, but were not received by the competent Authority before 12th of August 2016, sub-rule (1) will not apply. The other contention which is canvassed in several matters is that under any circumstances, the Competent Authority which is empowered to decide the applications for grant of mining lease was under an obligation to consult the concerned authority and obtain 'no objections certificates' from various authorities. Placing reliance on the several orders passed by the various division Benches of this Court, it was further contended that it was the responsibility of the Competent Authority to obtain no objection certificates/reports from various authorities and should there be a default on the part of the Competent Authority, the embargo incorporated in sub-rule (1) of substituted Rule 8-B will not apply. Our attention was invited to several orders passed by the coordinate Benches of this Court, taking a similar view. In these cases, the applications which were pending on 12th August 2016 were ordered to be considered by giving a direction to the Competent Authority to obtain no objection certificates. It was urged that this Bench is bound by the said view taken by the coordinate Benches and therefore a different view cannot be taken. The learned counsel have relied upon several other decisions, to which, we are making a reference in the subsequent part of the judgment. The learned HCGP and learned AGA urged that sub-rule (1) of Rule 8-B is mandatory and apart from what is provided in sub- rule (2), no other exceptions to sub-rule (1) can be carved out. Their submission is none of the decisions of the coordinate Benches relied upon by the petitioners are binding precedents. They have relied upon certain decisions on this aspect. Some of the petitioners have contended that in case of adjacent orsimilar lands mining leases have been granted to the applicants who are similarly placed.

Consideration of submissions

on interpretation of Rule 8-B

15. We have given careful consideration to the submissions made across the Bar. The first issue is about the interpretation of Rule 8-B of the said Rules. As noted earlier, the said Rules have been framed in exercise of the rule making power conferred under Section 15 of the said Act of 1957. By the Act No.10 of 2015, extensive amendments were made to the said Act of 2015. It will be necessary to make a reference to the statements of objects and reasons of the Act No. 10 of 2015. Clause-3 of the statement of objects and reason refers to the decision of the Apex Court in the case of Center for public interest litigations and others -vs- Union of India others ((2012) 3 SCC-1), on allocation of natural resources, which has a direct relevance to the grant of mineral concessions. By the said decision, which is popularly known as 2-G case, the Apex Court introduced auction as a method for alienating the natural resources. Clause-4 of the statement of objects and reasons records that the said Act of 1957 does not permit auctioning of the mineral concessions. Clause-4 further records that auction of mineral concessions would improve transparency in allocation. Clause-5 of the statement of objects and reasons reads thus:

"5. In view of the urgent need to address these problems, the Mines and Minerals (Development and Regulations) Amendment Ordinance, 2015 was promulgated on 12th January 2015. The present Bill is to replace this Ordinance. This bill is designed to put in place mechanism for:

i) Eliminating discretion;

ii) Improving transparency in the allocation of mineral resources;

iii) Simplifying procedures;

iv) Eliminating delay in administration, so as to enable expeditious and optimum development of the mineral resources of the country;

v) Obtaining for the government an enhanced share of the value of the mineral resources of the country; and

vi) Attracting private investment and the latest technology."

(emphasis added)

Even sub clause (1) of clause-6 is important and reads thus:

"6. The salient features of MMDR Amendment Bill, 2015 are as follows:

(i) Removal of discretion; auction to be sole method of allotment: The amendment seeks to bring in utmost transparency by introducing auction mechanism for the grant of mineral concessions. The tenure of mineral lease has been increased from the existing 30 years to 50 years. There is no provision for renewal of leases."

(emphasis added)

16. That is how, by the Act No. 10 of 2015, major amendments have been carried out to the said Act of 1957. Section 10-B of the said Act, 1957 provides for grant of mining lease in respect of notified minerals through auction. Section- 11 introduces provisions for grant of prospecting licence-cum- mining lease through auction in respect of minerals other than notified minerals. The said Act No.10 of 2015 came into force 12th January, 2015. As a result of introduction of auction regime by virtue of Section 10-B and Section 11 of Act of 1957, for dealing with the applications for grant of prospecting license or mining leases which were pending as on 12th January, 2015, Section 10A was incorporated in the said Act, 1957 which reads thus:

"10-A. Rights of existing concessions holders and applicants.-(1) All applications received prior to the date of commencement of the Mines and Minerals (Development and Regulation) (Amendment) Act, 2015, shall become ineligible.

(2) Without prejudice to sub-section (1), the following shall remain eligible on and from the date of commencement of the Mines and Minerals (Development and Regulation) (Amendment) Act, 2015. -

(a) Applications received under Section 11-A of this Act;

(b) Where before the commencement of the Mines and Minerals (Development and Regulation) (Amendment) Act, 2015 a reconnaissance permit or prospecting licence has been granted in respect of any land for any mineral, the permit holder or the licensee shall have a right for obtaining a prospecting licence followed by a mining lease, or a mining lease, as the case may be, in respect of that mineral in that land, if the State Government is satisfied that the permit holder or the licensee, as the case may be.-

(i) has undertaken reconnaissance operations or prospecting operations, as the case may be, to establish the existence of mineral contents in such land in accordance with such parameters as may be prescribed by the Central Government;

(ii) has not committed any breach of the terms and conditions of the reconnaissance permit or the prospecting licence;

(iii) has not become ineligible under the provisions of this Act; and

(iv) has not failed to apply for grant of prospecting licence or mining lease, as the case may be, within a period of three months after the expiry of reconnaissance permit or prospecting licence, as the case may be, or within such further period not exceeding six months as may be extended by the State Government;

(c) where the Central Government has communicated previous approval as required under sub-section (1) of Section 5 for grant of a mining lease, or if a letter of intent (by whatever name called) has been issued by the State Government to grant a mining lease, before the commencement of the Mines and Minerals (Development and Regulations) (Amendment Act, 2015, the mining lease shall be granted subject to fulfilment of the conditions of the previous approval or of the letter of intent within a period of two years from the date of commencement of the said Act:

Provided that in respect of any mineral specified in the First Schedule, no prospecting licence or mining lease shall be granted under clause (b) of this sub-section except with the previous approval of the Central Government."

17. Sub-section (1) of Section 10-A provided that all applications received prior to 12th January, 2015 shall become ineligible. Sub-section (2) is an exception to sub-section (1) of Section 10-A which lays down that certain categories of applications which were filed before 12th January, 2015 can be considered. One such category of applications is the one covered by Section 11-A which is applicable to the applications made for carrying out coal mining operation by a Government company or corporation or a joint venture company formed by such company or corporation or between the Central Government or the State Government, as the case may be, or any other company incorporated in India. Section 11-A was brought on the statute book with effect from 21st October 2014, which provided for selection of the companies to carryout coal mining operation through auction by a competitive bidding.

18. The careful perusal of clauses (b) to (c) of sub-section (2) of Section 10-A of the said Act of 1957 will show that those applications filed prior to 12th January 2015 in respect of which all procedural formalities have been completed such as communication of previous approval by the Central Government as required under sub-section (1) of Section 5 or issuance of letter of intent by the State Government, can be considered notwithstanding sub-section (1) of section 10-A. However, in such cases, the mining leases/deeds were required to be executed and registered within two years from 12th January, 2015.

19. By a letter dated 11th August, 2015 addressed by the Secretary of the Ministry of Mines, Government of India to the Chief Secretaries of all State Governments, a direction of the Central Government under Section 20-A of the said Act of 1957 was communicated to the State Governments. The direction was that all the State Governments should take necessary steps to ensure that the process of grant of mining leases is dealt with in a fair and transparent manner. After referring to the Judgments of the Apex Courts, it was stated in the said letter that all processes for grant of mining licenses including mineral concessions of minor minerals should be fair, reasonable and transparent. Accordingly, the draft of the Amending Rules was published on 16th June 2015. A Cabinet note was drawn which refers to the amendment made by the Act 10 of 2015 to the said Act of 1957 and notes that the proposed amendments to the said Rules published on 16th June 2015 were based on the amendment to said Act of 1957 made by the said Act No.10 of 2015. Accordingly, the amendment to the said Rule was proposed to usher an auction regime.

20. Hence, with a view to give effect to the Legislative intent of the Central Legislature reflected from the said Act No.10 of 2015 and in terms of the direction issued under Section 20-A of the said Act of 1957, extensive amendments were carried out by the State Government to the said Rules on 12th August, 2016. Sub-rule (1) of Rule 8-B clearly lays down that all the applications received and pending for grant of lease or license in respect of minor minerals on the date of commencement of the said Amending Rules were declared to be ineligible. The said Amending Rules were brought into force with effect from 12th august 2016. Thus, all the applications received and pending prior to 12th August, 2016 were declared as ineligible. As pointed out earlier, similar provisions were incorporated by the said Act 10 of 2015 in the said Act of 1957 in the form of sub-section (1) of Section 10-A of the said Act of 1957 on the basis of which 12th August 2016 amendment to the said Rules was made. However, sub-section (2) of Section 10-A of the said Act, 1957 carves out an exception to sub-section (1) which made pending applications as on 12th January 2015 ineligible. Similarly, sub-rule (2) of Rule 8-B carves out an exception to what is laid down in sub-rule (1). Sub-rule (2) starts with a non-obstante clause and provides that in the cases covered by clauses (a) to (d) and (d-1), though the applications are filed before 12th August, 2016, the same will continue to be eligible. We must note here that clause (d1) was added not by the said Amending Rules of 2016, but by the Amending Rules of 16th November 2017 with retrospective effect from 12th August 2016. Thus, sub-rule (2) of Rule 8-B is an exception to the absolute proposition laid down in sub-rule (1) of Rule 8-B that all applications for grant of mining lease received prior to 12th August, 2016 shall become ineligible. Clause (a) to (d) and (d-1) of sub-rule (2) of Rule 8-B show that only those applications were saved from the applicability of the sub-rule (1) where the procedural formalities like obtaining no objection certificates were completed prior to 12th August, 2016. Clause (e) of sub- rule (2) provides that applications covered by clause (a) to (d) and (d-1) shall be considered as per the provisions of the said Rules which existed prior to 12th August, 2016. Though some argument was canvassed by learned HCGP that period of twenty four months is mandatory, we are not called upon to decide the said issue in these petitions.

21. Thus, the scheme of sub-rule (1) of Rule 8-B is that all pending applications received and pending for grant of quarrying lease or license in respect of the minor minerals prior to 12th August, 2016 shall become ineligible. On its plain reading, sub-rule (1) will have to be held as mandatory. This not only because it uses the word shall, but due to one more circumstance that sub-rule (2) which carves out an exception to Rule (1) starts with a non-obstante clause. If sub-rule (1) was not mandatory, there was no reason to provide a non- obstante clause in sub-rule (2) for overriding the sub-rule (1). The sub-rule (2) which starts with non-obstante clause clearly carves out an exception to sub-rule (1). Thus, sub-rule (1) creates a separate class of applications filed prior to 12th August 2016 which were pending on that day. The said applications were declared as ineligible. Only those applications filed before 12th August 2016 which fall in any of the categories specified in clauses (a) to (d) and (d1) of sub- rule (2) will be treated as eligible notwithstanding sub-rule (1) of Rule 8-B. Thus, the intention of the Legislature is clearly to give effect to the auction regime from 12th August 2016 and therefore, all the applications pending as on the said cut-off date were made ineligible. Only those applications in respect of which the entire process/procedural requirements were completed on the said date were saved from becoming ineligible. Thus, such applications which are saved by sub- rule (2) of Rule 8-B are required to be decided as per the Rules prevailing immediately prior to 12th August, 2016. Thus, it is crystal clear that no application for grant of mining lease which was pending prior to 12th August, 2016 can be considered as eligible, except where the application is covered by sub-rule (2) of Rule 8-B.

22. As regards the interpretation of 2015 amendments to the said Act of 1957, the Apex Court, in the case of Bhushan Power and Steel Limited -vs- S.L. Seal, Additional Secretary (Steel and Mines), State of Odisha and Others ((2017) 2 SCC 125) held thus:

"19. The Amendment Act, 2015, as is evident from the objects, aims at: (i) eliminating discretion; (ii) improving transparency in the allocation of mineral resources; (iii) simplifying procedures; (iv) eliminating delay on administration, so as to enable expeditious and optimum development of the mineral resources of the country; (v) obtaining for the Government an enhanced share of the value of the mineral resources; and (vi) attracting private investment and the latest technology.

20. The Amendment Act, 2015 ushered in the amendment of Sections 3, 4, 4-A, 5, 6, 13, 15, 21 and First Schedule; substitution of new sections for Sections 8, 11 and 13; and, insertion of new Sections 8-A, 9-B, 9-C, 10-A, 10-C, 11-B, 11-C, 12-A, 15-A, 17-A, 20-A, 30-B, 30-C and Fourth Schedule.

21. These amendments brought in vogue: (i) auction to be the sole method of allotment;(ii) extension of tenure of existing lease from the date of their last renewal to 31-3-2030 (in the case of captive mines) and till 31-3-2020 (for the merchant miners) or till the completion of renewal already granted, if any, or a period of 50 years from the date of grant of such lease; (iii) establishment of District Mineral Foundation for safeguarding interest of persons affected by mining related activities; (iv) setting up of a National Mineral Exploration Trust created out of contributions from the mining lease-holders, in order to have a dedicated fund for encouraging exploration and investment; (v) removal of the provisions requiring "previous approval" from the Central Government for grant of mineral concessions in case of important minerals like iron ore, bauxite, manganese, etc. thereby making the process simpler and quicker; (vi) introduction of stringent penal provisions to check illegal mining prescribing higher penalties up to Rs 5 lakhs per hectare and imprisonment up to 5 years; and (vii) further empowering the State Government to set up Special Courts for trial of offences under the Act.

22. Newly inserted provisions of the Amendment Act, 2015 are to be examined and interpreted keeping in view the aforesaid method of allocation of mineral resources through auctioning, that has been introduced by the Amendment Act, 2015. Amended Section 11 now makes it clear that the mining leases are to be granted by auction. It is for this reason that sub-section (1) of Section 10- A mandates that all applications received prior to 12-1-2015 shall become ineligible. Notwithstanding, sub-section (2) thereof carves out exceptions by saving certain categories of applications even filed before the Amendment Act,2015 came into operation. Three kinds of applications are saved:

22.1. First, applications received under Section 11-A of the Act. Section 11-A, under new avatar is an exception to Section 11 which mandates grant of prospecting licence combining lease through auction in respect of minerals, other than notified minerals. Section 11-A empowers the Central Government to select certain kinds of companies mentioned in the said section, through auction by competitive bidding on such terms and conditions, as may be prescribed, for the purpose of granting reconnaissance permit, prospecting licence or mining lease in respect of any area containing coal or lignite. Unamended provision was also of similar nature except that the companies which can be selected now for this purpose under the new provision are different from the companies which were mentioned in the old provision. It is for this reason, if applications were received even under unamended Section 11-A, they are saved and protected, which means that these applications can be processed under Section 11-Aof the Act.

22.2. Second category of applications, which are kept eligible under the new provision, are those where the reconnaissance, permit or prospecting licence had been granted and the permit-holder or the licensee, as the case may be, had undertaken reconnaissance operations or prospecting operations. The reason for protecting this class of applicants, it appears, is that such applicants, with hope to get the licence, had altered their position by spending lot of money on reconnaissance operations or prospecting operations. This category, therefore, respects the principle of legitimate expectation.

22.3. Third category is that category of applicants where the Central Government had already communicated previous approval under Section 5(1) of the Act for grant of mining lease or the State Government had issued letter of intent to grant a mining lease before coming into force of the Amendment Act, 2015. Here again, the raison detre is that certain right had accrued to these applicants inasmuch as all the necessary procedures and formalities were complied with under the unamended provisions and only formal lease deed remained to be executed.

22.4. It would, thus, be seen that in all the three cases, some kind of right, in law, came to be vested in these categories of cases which ledParliament to make such a provision saving those rights, and understandably so."

(emphasis added)

23. The provisions of Section 10-A of the said Act of 1957 and provisions of Rule 8-B of the said Rules, to a great extent are pari materia. Section 10-A was introduced to give effect to the auction regime on 12th January 2015. The Apex Court held that all applications made prior to 12th January, 2015, in view of sub-section (1) of Section 10-A shall become ineligible and the exception will be only in respect of three categories of applications which are covered by clause (a), (b) and (c) of sub-section (2) of Section 10-A of the said Act of 1957. The Amending Rules of 12th August, 2016 were made in terms of the directions of the Central Government for giving effect to the auction regime. The Amending Rules introduced mandatory auction regime (as provided in Chapter IV-A introduced by the same amendment) and to give effect to the auction regime, which was introduced from 12th August 2016, by sub-rule (1) of Rule 8-B, the applications filed before the said date were made ineligible subject to exceptions carved out by sub-rule (2) of Rule 8-B. Exceptions are only in those cases where by virtue of the completion of the procedural requirements, rights were created in favour of the applicants.

24. There is one more decision of the Apex Court in the case of Muneer Enterprises -vs- Ramgad Minerals and Mining Limited and Others ((2015) 5 SCC 366) which is relevant. The Apex Court while dealing with the provisions of the said Act of 1957 (described therein as MMDR Act) in paragraph 76, held thus:

"76. Having considered the respective submissions on this question, there can be no two opinions that when the grant, operation and termination of mining lease is governed by the MMDR Act and the Mineral Concession Rules, any of those factors viz. either grant of lease, operation of the mines based on such grant and the termination of it either by way of surrender at the instance of the lessee or by way of termination at the instance of the State should be carried out strictly in accordance with the prescribed stipulations of the provisions of the above Act and the Rules".

(emphasis added)

Thus, it is apparent that the Apex Court has applied strict rule of interpretation to the provisions of the said Act of 1957 when it comes to grant of mining leases or termination of mining leases by holding that the grant or termination has to be strictly in accordance with the prescribed stipulations under the provisions of the said Act of 1957 and the Rules made there under.

The provisions of sub-rule (1) of Rule 8-B of the said Rules must be construed strictly as the same are mandatory. Unless expressly provided, exceptions to the mandatory rule cannot be invented or inferred. Otherwise, by carving out additional exceptions to sub-rule (1) which are not covered either by sub-rule (2) or by any other express Rule, the auction regime sought to be introduced will be completely defeated. That will completely defeat the legislative intent and the directions issued under section 20-A of the said Act of 1957.

25. As noted earlier, under sub-rule (5) of Rule 8, as it existed prior to 16th December 2013 up to 12th August 2016, it was the duty of the Competent Authority to obtain no objection certificates/reports from various authorities. The argument of the petitioners is that if there is a failure on the part of the Competent Authority to obtain the said no objection certificates/reports as on 12th August, 2016 for no fault on the part of the applicants, the embargo under sub-rule (1) of Rule 8-B will not apply. On plain reading of sub-rule (1) of Rule 8- B, all the applications received and pending for grant of lease prior to 12th August 2016 shall become ineligible irrespective of the status of the applications as on 12th August, 2016, unless the same fell in one of the categories covered by clauses (a) to (d) and (d-1) of sub-rule (2) of Rule 8-B. There is nothing in the said Rules to indicate that apart from what is provided under sub-rule (2) of Rule 8-B, there is any other exception to sub-rule (1) of Rule 8-B. No exception can be created to sub- rule (1) of Rule 8-B, unless such an exception is carved out by the said Rules itself. Accepting the above contention of the petitioners will amount to carving out an exception to sub-rule (1) of Rule 8-B which does not exist in the said Rules. It is not permissible for the Court to re-write the Rules.

26. Another argument is canvassed that under sub-rule (6) of Rule 8, as existed up to 16th December 2013, there was a deeming provision which provided that on the failure of the Deputy Commissioner or the Tahsildar or the Deputy Conservator of Forest or the Assistant Commissioner or the Deputy Director/Senior Geologist, as the case may be, to send recommendation within ninety days from the date of receipt of communication from the Competent Authority, it shall be deemed that no objection certificate has been granted. There is a similar deeming provision in sub-rule (6) of rule 8 as amended from 16th December, 2013. If no objection certificates/reports referred in clauses (b), (c), (d) and (d-1) of sub-rule (2) are deemed to have been granted prior to 12th August, 2016 in terms of a specific deeming provisions in the said Rules , then sub-rule (2) of rule 8-B will apply. But in absence of a specific deeming provision, clauses (a) to (d) and (d-1) of sub-rule (2) will not apply only because there is a failure on the part of the Competent Authority to obtain no objection certificates. Such failure cannot affect the operation of the mandatory provision of sub-rule (1) Rule 8-B. Merely because in some other cases, leases were granted contrary to sub-rule (1) of Rule 8-B, the petitioners cannot claim any right.

The issue whether the view taken above is contrary to binding precedents of coordinate Benches is discussed separately.

Issue of constitutional validity

27. Now we turn to the issue of constitutional validity of Rule 8-B(1). As far as the scope of judicial review of any legislation is concerned, it is well settled that a statute can be invalididated only on the following grounds:

(a) If it is not within the competence of the Legislature which passed the law;

(b) If it is in contravention of any of the fundamental rights or any other constitutional provisions;

(c) If it is manifestly arbitrary.

In case of a subordinate legislation, another ground is available that the subordinate legislation is ultra virus the parent legislation. In the case of State of Madhya Pradesh -vs- Rakesh Kohli and another ((2012) 6 SCC 312), the Apex Court while dealing with the constitutional validity of a provision regarding stamp duty payable on a power of attorney, dealt with the scope of interference with a legislation and held thus:

"16. The statute enacted by Parliament or a State Legislature cannot be declared unconstitutional lightly. The Court must be able to hold beyond any iota of doubt that the violation of the constitutional provisions was so glaring that the legislative provision under challenge cannot stand. Sans flagrant violation of the constitutional provisions, the law made by Parliament or a State Legislature is not declared bad."

(emphasis added)

In the case of Mohd. Hanif Quareshi and others -v-s State of Bihar and others (AIR 1958 SC 731), the Apex Court observed thus:

"(15) The meaning, scope and effect of Art.14, which is the equal protection clause in our Constitution, has been explained by this Court in a series of decisions in cases beginning with Charanjitlal Chowdhury v. Union of India, 1950 S C R 869: (AIR 1951 SC 41) (c) and ending with the recent case of Ramkrishna Dalmia v. Justice Tendolkar, C A Nos.455 to 457 and 656 to 658 of 1957 D/- 28-3-1958: (AIR 1958 SC 538) (D). It is now well established that while Art. 14 forbids class legislation it does not forbid reasonable classification for the purposes of legislation and that in order to pass the test of permissible classification two conditions must be fulfilled, namely, (i) the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group and (ii) such differentia must have a rational relation to the object sought to be achieved by the statute in question. The classification, it has been held, may be founded on different bases, namely, geographical, or according to objects or occupations or the like and what is necessary is that there must be a nexus between the basis of classification and the object of the Act under consideration. The pronouncements of this Court further establish, amongst other things, that there is always a presumption in favour of the constitutionality of an enactment and that the burden is upon him, who attacks it, to show that there has been a clear violation of the constitutional principles. The Courts, it is accepted, must presume that the Legislature understands and correctly appreciates the needs of its own people, that its laws are directed to problems made manifest by experience and that its discriminations are based on adequate grounds. It must be borne in mind that the Legislature is free to recognize degrees of harm and may confine its restrictions to those cases where the need is deemed to be the clearest and finally that in order to sustain the presumption of constitutionality the Court may take into consideration matters of common knowledge, matters of common report, the history of the times and may assume every state of facts which can be conceived existing at the time of legislation. We, therefore, proceed to examine the impugned Acts in the light of the principles thus enunciated by this Court."

(emphasis added)

In the case of Hamdard Dawkhana and another -vs- The Union of India (AIR 1960 SC 554) the Apex Court held thus:

(8) Therefore when the constitutionality of an enactment is challenged on the ground of violation of any of the articles in Part III of the Constitution, the ascertainment of its true nature and character becomes necessary i.e. its subject matter, the area in which it is intended to operate, its purport and intent have to be determined. In order to do so it is legitimate to take into consideration all the factors such as history of the legislation, the purpose thereof, the surrounding circumstances and conditions, the mischief which it intended to suppress, the remedy for the disease which the legislature resolved to cure and the true reason for the remedy; Bengal Immunity co. Ltd. v. State of Bihar, 1955-2 SCR 603 at pp. 632, 633: 9 (S) AIR 1955 SC 661 at p.674); R. M. D. Chamarbaughwala v. Union of India, 1957 SCR 930 at p.936: ( (S) AIR 1957 SC 628 at p. 631); Mahant Moti Das v. S.P. Sahi, AIR 1959 SC 942 at p.948."

(emphasis added)

28. Thus, there is a well settled proposition that a presumption is always there in favour of the constitutionality of a legislation. The challenge to a legislation cannot be casually dealt with. Moreover, while examining the challenge, the Court must ascertain the true nature, the area in which it is intended to operate, its purport and intent. In order to do so, it is legitimate to take into consideration all the factors such as history of the legislation, the purpose thereof, the surrounding circumstances and conditions, the mischief which it intended to suppress, the remedy for the disease which the legislature resolved to cure and the true reason for the remedy. Therefore, the amendment to the parent statute (the said Act of 1957) and the legislative intent to introduce the auction regime for getting rid of arbitrariness in the matter of grant of mining leases has to be considered in the present case. The exercise of the amendment was undertaken to make the procedure of allotments fair and transparent. The Rule 8-B was introduced by the State to give effect to the legislative intent of the Central legislature.

29. Sub-section (1) of Section 20-A of the said Act of 1957 reads thus:

20-A. Power of Central Government to issue directions - (1) Notwithstanding anything contained in this Act, the Central Government may issue such directions to the State Governments, as may be required for the conservation of mineral resources, or on any policy matter in the national interest, and for the scientific and sustainable development and exploitation of mineral resources.

By a letter dated 17th August 2015, the Secretary of the Ministry of Mines conveyed the decision under Section 20-A to the state Government. The said letter reads thus:

"Balvinder Kumar, IAS Secretary

Government of India

Ministry of Mines

Shastri Bhavan

Dr. Rajendra Prasad Road

New Delhi-110 001

F.No.16/119/2015-M-VI

17th August, 2015

Dear Sir,

As you are aware, the Central Government has amended the Mines and Minerals (Development & Regulation) Act, 2015, with effect from 12.02.2015.

2. The most important change that has been introduced by the Amendment Act is that mineral concessions henceforth can only be granted through auction. This step has been taken in order to ensure that the process of grant of mineral concessions conforms to the principles laid down in several judgments of the Supreme Court, notably the following:

1. Judgment dated 02/02/2012 in WP(Civil) 423/2010 and WP(Civil) 10/2011 (commonly known as 2G Judgment).

2. Supreme Court's opinion dated 27/09/2012 on President of India reference dated 12/04/2012.

3. Judgment dated 25/08/2014 in a WP(Crl.) No.120/2012 in the matter of Manohar Lal Sharma Vs. The Principal Secretary & Ors. (Allocation of coal blocks Judgment).

3. Relevant extracts of the judgment in these cases are enclosed. The principles laid down in these judgments are that all the processes must be fair, reasonable, non-discriminatory, transparent, non-capricious and non-biased. It should not be tainted by either favouritism or nepotism and should promote healthy competition and equal treatment amongst applicants.

4. Section 15 of the MMDR Act empowers the State Governments to make Rules for the grant of mineral concessions for minor minerals. The principles laid down by the Supreme Court by the Judgments cited above would apply equally to mineral concessions in respect of minor minerals.

5. This issue was discussed in the meeting of Central Coordination-cum-Empowered Committee (CCEC) of the Ministry of Mines held on 04.08.2015. It was noted that many States have already taken steps in the direction of instituting transparent and non-discriminatory process for grant of mineral concession. Further, some of the States observed that they had achieved encouraging results after introduction auction mode for granting mining leases. States were also of the view that mining plans are now to be compulsorily prepared for all minor minerals since an approved mining plan is a pre-requisite for grant of environmental clearance which has again been made compulsory for all leases irrespective of size. Under the circumstances, it is felt necessary that the States must discontinue arbitrary and discriminatory process of granting mineral leases, wherever applicable and adopt procedures keeping in mind the directions given by the Supreme Court.

6. The Central Government, in view of the above, in exercise of its power under Section 20A of the MMDR Act, 1957 directs that the State Government should take necessary steps to ensure that the complete process relating to grant of mineral concessions of minor minerals, is made fair, transparent and non-discriminatory. It is, therefore, requested that your government should review/revisit the mechanism/procedure relating to grant of concessions/leases of minor minerals expeditiously and take steps to ensure compliance of the principles laid down by the Supreme Court.

With warm regards,

Yours sincerely,

Sd/-

Balvinder Kumar

Shri. Kaushik Mukherjee, IAS

Chief Secretary, Government of Karnataka,

Secretariat, 3rd Floor, R. No.320, Vidhana Soudha,

Bengaluru-560 001.

Encl: The gist is felt desirable of 3 Supreme Court's

Judgments as above".

(emphasis added)

The amendment to the said Rules made on 12th August 2016 is to give effect to the above direction.

30. We have already observed that in the case in hand, the power exercised for framing the Rules is under Section 15 of the said Act of 1957 which reads thus:

"15. Power of State Governments to make rules in respect of minor minerals.?(1) The State Government may, by notification in the Official Gazette, 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.

[(1A) In particular and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:?

(a) the person by whom and the manner in which, applications for quarry leases, mining leases or other mineral concessions may be made and the fees to be paid there for;

(b) the time within which, and the form in which, acknowledgement of the receipt of any such applications may be sent;

(c) the matters which may be considered where applications in respect of the same land are received within the same day;

(d) the terms on which, and the conditions subject to which and the authority by which quarry leases, mining leases or other mineral concessions may be granted or renewed;

(e) the procedure for obtaining quarry leases, mining leases or other mineral concessions;

(f) the facilities to be afforded by holders of quarry leases, mining leases or other mineral concessions to persons deputed by the Government for the purpose of undertaking research or training in matters relating to mining operations;

(g) the fixing and collection of rent, royalty, fees, dead rent, fines or other charges and the time within which and the manner in which these shall be payable;

(h) the manner in which rights of third parties may be protected (whether by way of payment of compensation or otherwise) in cases where any such party is prejudicially affected by reason of any prospecting or mining operations;

(i) the manner in which rehabilitation of flora and other vegetation such as trees, shrubs and the like destroyed by reason of any quarrying or mining operations shall be made in the same area or in any other area selected by the State Government (whether by way of reimbursement of the cost of rehabilitation or otherwise) by the person holding the quarrying or mining lease;

(j) the manner in which and the conditions subject to which, a quarry lease, mining lease or other mineral concession may be transferred;

(k) the construction, maintenance and use of roads power transmission lines, tramways, railways, serial rope ways, pipelines and the making of passage for water for mining purposes on any land comprised in a quarry or mining lease or other mineral concession;

(l) the form of registers to be maintained under this Act;

(m) the reports and statements to be submitted by holders of quarry or mining leases or other mineral concessions and the authority to which such reports and statements shall be submitted;

(n) the period within which and the manner in which and the authority to which applications for revision of any order passed by any authority under these rules may be made, the fees to be paid therefore, and the powers of the revisional authority; and

(o) any other matter which is to be, or may be, prescribed.]

(2) Until rules are made under sub-section (1), any rules made by a state Government regulating the grant of [quarry leases, mining leases or other mineral concessions] in respect of minor minerals which are in force immediately before the commencement of this Act shall continue in force. [(3) The holder of a mining lease or any other mineral concession granted under any rule made under sub-section (1) shall pay [royalty or dead rent whichever is more] in respect of minor minerals removed or consumed by him or by his agent,manager, employee, contractor or sub-lessee at the rate prescribed for the time being in the rules framed by the State Government in respect of minor minerals:

Provided that the State Government shall not enhance the rate of [royalty or dead rent] in respect of any minor mineral for more than once during any period of [three] years.]

[(4. Without prejudice to sub-section (1), (2) and

(3) the State Government may, by notification, make rules for regulating the provisions of this Act for the following, namely:-

(a) the manner in which the District Minerals Foundation shall work for the interest and benefit of persons and areas affected by mining under sub-section (2) of Section 9-B;

(b) the composition and functions of the District Minerals Foundation under sub-section (3) of Section 9-B; and

(c) the amount of payment to be made to the District Minerals Foundation by concession holders of Miner Minerals under Section 15- A.]"

(emphasis added)

From plain reading of sub-section (1) of Section 15, it is apparent that generally, the rule making power has been conferred on the State Government to make Rules for regulating the grant of quarry leases, mining leases or other mineral concessions in respect of the Minor Minerals and for all other purposes connected therewith. A perusal of the said Act of 1957 will show that in clause (e) of Section 3, the 'minor minerals' have been defined. Under Section 10, it is provided that applications for prospecting licences or mining leases in respect of any land in which the minerals vest in the State Government shall be made to the State Government. Sub- section (3) of Section 10 provided that on receipt of an application, the State Government may, having regard to the provisions of the said Act of 1957 and the Rules made therein, can grant or refuse to grant permit/license or lease. Section 10-Bdeals with grant of mining lease in respect of notified minerals as defined in clause (ea) of Section 3.Section 11 deals with grant of prospecting licence-cum-mining lease by the State Government through auction in respect of minerals other than notified minerals.

31. Sub-section (1) of Section 15 confers a specific rule making power on the State Government to regulate grant of quarry leases, whereunder a general rule making power has been conferred. Sub-section (1-A) provides that without prejudice to the generality of the power conferred under sub- section (1), Rules could be framed on the list of matters set out therein. Clause (a) to (n) of sub-section (1-A) will show that the rule making power is conferred about various aspects of the applications for grant of mining lease and consideration thereof. Therefore, it is permissible to frame the Rules which provide for regulating grant of mining leases. It is permissible to provide by framing Rules that from a particular date, the grant of mining lease will be only by an auction. Hence, the Amending Rules made on 12th August 2016 are well within the Rule making power.

32. We have also carefully considered the objects and reasons of the Act of No.10 of 2015 by which the auction regime was introduced in the said Act of 1957. The statement of the objects and reasons records that with the object of eliminating the discretion and improving transparency in the allocation of mineral resources and for simplifying the procedures, auction regime was introduced in the said Act of 1957. In fact, the objects and reasons refer to a Judgment of the Apex Court relating to allocation of natural resources. The reference appears to be to a decision of the Apex Court in the case of Natural Resources Allocation, in Re Special Reference No.1 of 2012 ((2012) 10 SCC 1). Paragraphs 190 and 200 of the said decision are material which reads thus:

"190. Before adverting to anything else, it is essential to refer to Article 39(b) of the Constitution of India:

"39" Certain principles of policy to be followed by the State - The State shall in particular, direct its policy towards securing -

(a) ***

(b) that the ownership and control of the material resources of the community are so distributed as best to subserve the common good".

The Mandate contained in the Article extracted above envisages that all material resources ought to be distributed in a manner which would "best to subserve the common good". It is therefore, apparent that governmental policy for distribution of such resources should be devised by keeping in mind the "common good" of the community i.e. the citizens of this country. It has been expressed in the main opinion, that matters of policy fall within the realm of the legislature or the executive, and cannot be interfered with, unless the policy is in violation of statutory law, or is ultra vires the provision(s) of the Constitution of India. It is not within the scope of judicial review for a court to suggest an alternative policy, which in the wisdom of the court could be better suited in the circumstances of a case. Thus far, the position is clearly unambiguous."

"200. I would, therefore, conclude by stating that no part of the natural resource can be dissipated as a matter of largesse, charity, donation or endowment, for private exploitation. Each bit of natural resource expended must bring back a reciprocal consideration. The consideration may be in the nature of earning revenue or may be to "best subserve the common good". It may well be the amalgam of the two. There cannot be a dissipation of material resources free of cost or at a consideration lower than their actual worth. One set of citizens cannot prosper at the cost of another set of citizens, for that would not be fair or reasonable."

Auction regime was introduced to the said Rules for grant of mining lease in respect of notified minerals as well as for non- notified minerals, which is consistent with the intention of the Central legislature, as reflected by the amendment carried out by the Act No.10 of 2015 to the said Act of 1957. By the said Amendming Rules of 12th August 2016, auction regime was introduced in the said Rules. That is how, Rule 8-B was brought on the rule book which is substantially similar to the section 10-A of the said Act of 1957.

33. Thus, when an auction regime was introduced from a particular date, it follows that the applications which are pending for consideration on that date cannot be considered as per the old regime. However, as observed earlier, though all the applications pending on 12th August, 2016 were made ineligible by virtue of sub-rule (1) of Rule 8-B, by virtue of sub- rule (2) of Rule 8-B, few exceptions were carved out. After introduction of auction regime in the parent Act, the auction regime has to be introduced in the said Rules, with a view to give effect to the intention of the legislature. It follows that the auction regime has to be strictly applied from a particular date. Accordingly, the auction regime came into force on 12th August, 2016 under the said Rules. The public auction ensures that ownership and control of minerals vesting in the State is distributed as best to subserve common good. That is in consonance with clause (b) of Article 39 forming a part of Directive Principles of the State policy. While introducing transparent and fair procedure for distribution of State largesse, interests of few individuals is bound to be affected for taking care of the larger public interests.

34. Another argument was canvassed that once an application is made for grant of mining lease, a right is vested in the applicant to get the mining lease. Under section 67 of the Karnataka Land Revenue Act, 1964 (for short "the said Act of 1964"), all public roads, streets, lanes and paths, bridges, ditches, dikes and fences, on or beside the same, the bed of the sea and of harbours and creeks below high water mark and of rivers, streams, nallas, lakes and tanks and all canals and water courses and all standing and flowing waters, and all lands wherever situated which are not the property of individuals or of aggregate of persons legally capable of holding property vest in the State Government, unless the contrary is proved. The land as defined in clause (14) of section 2 of the said Act of 1964 includes minor minerals. There cannot be a vested right in any individuals to acquire a property vested in the State Government. The property of the State must be disposed of only by following a fair and transparent procedure. That is the well settled law.

35. On this aspect, it will be worthwhile to consider the decision of the Apex Court in the case of Howrah Municipal Corporation and another -vs- Ganges Rope Company Limited and others ((2004) 1 SCC 663). The Apex Court considered the question whether by merely making an application for grant of construction permission, any vested right is created in the applicant. The Apex Court held thus:

"18. To decide on the justification of the claim raised on behalf of the company that the order of the Court fixing a time limit for the Corporation to decide its application for sanction creates a vested right, it would be necessary to examine the relevant provisions of the Act, Rules and the Regulations. Chapter XII of the Act contains provisions regulating sanction for construction or erection of buildings in the area within the limits of the Corporation. Section 173 states:

"173. No person shall use any piece of land as a site for erection of a new building except in accordance with the provisions of this Act and of the rules and the regulations made under this Act in relation to such erection of building." Section 174 requires:

"174. Every person who intends to erect a building shall apply for sanction by giving notice in writing of his intention to the Commissioner in such form and containing such information or document as may be prescribed.

" Section 175 reads:

"175. The Commissioner shall sanction the erection of building ordinarily within a period of sixty days unless any further information or document be called for or sanction be refused in the meantime on such grounds as may be prescribed."

19. What is to be noted from Section 175 (quoted above) is that a period of sixty days is not a firm outer limit as the words "sixty days" are prefixed by the word "ordinarily." It is also to be noted that the provisions of the Act under consideration, compared with other Corporation Acts of other States, do not provide for "deemed sanction" or "deemed rejection" after expiry of the prescribed period fixed for deciding the application for sanction.

30. This Court, thus, has taken a view that the Building Rules or Regulations prevailing at the time of sanction would govern the subject of sanction and not the Rules and Regulations existing on the date of application for sanction. This Court has envisaged a reverse situation that if subsequent to the making of the application for sanction, the Building Rules, on the date of sanction, have been amended more favourably in favour of the person or party seeking sanction, would it then be possible for the Corporation to say that because the more favourable Rules containing conditions came into force subsequent to the submission of application for sanction, it would not be available to the person or party applying.

36. The above stated legal position is not disputed on behalf of the respondent company. What is being contended is that the order of the High Court fixing a period for the Corporation to decide its pending application for sanction creates a vested right in favour of the applicant company to seek sanction for its additional proposed construction on the basis of the Building Rules, as they stood prior to the amendment introduced to the Building Rules and the consequent Resolution of the Corporation restricting the height of buildings on G.T. Road. It is undeniable that after the amendment of the Building Rules and the Resolution passed by the Corporation there under, restrictions imposed on heights of buildings on specified wards, roads and localities would apply to all pending applications forsanction. The question is whether any exception can be made to the case of the applicant seeking sanction who had approached the court and obtained consideration of its applications for sanction within a specified period. We have extracted above, the various orders passed by the High Court in writ petitions successively filed by the company in an effort to obtain early sanction for its additional construction of three floors on the buildings in its multi-storeyed complex already completed up to 4th floor. In none of the orders of the High Court, there is a mandate issued to the Corporation to grant a sanction. What was directed by the High Court in the first order was merely a "liberty" or option to the company to seek sanction for additional three floors. In the subsequent order, an "expectation" was expressed for decision of the pending applications within a period of four weeks. There was, thus, in favour of the company an order of the High Court directing the Corporation to decide its pending applications for sanction within the allotted period but non- compliance therewith by the Corporation can not result in creation of any vested right in favour of the company to obtain sanction on the basis of the Building Rules as they stood on the date of making application for sanction and regardless of the amendment introduced to the Building Rules. Neither the provisions of the Act nor general law creates any vested right, as claimed by the applicant company for grant of sanction or for consideration of its application for grant of sanction on the then existing Building Rules as were applicable on the date of application. Conceding or accepting such a so- called vested right of seeking sanction on the basis of the unamended Building Rules, as in force on the date of application for sanction, would militate against the very scheme of the Act contained in Chapter XII and the Building Rules which intend to regulate the building activities in a local area for general public interest and convenience. It may be that the Corporation did not adhere to the time limit fixed by the court for deciding the pending applications of the company but we have no manner of doubt that the Building Rules with prohibition or restrictions on construction activities as applicable on the date of grant or refusal of sanction would govern the subject matter and not the Building Rules as they existed on the date of application for sanction. No discrimination can be made between a party which had approached the court for consideration of its application for sanction and obtained orders for decision of its application within a specified time and other applicants whose applications are pending without any intervention or order of the court.

37. The argument advanced on the basis of so- called creation of vested right for obtaining sanction on the basis of the Building Rules (unamended) as they were on the date of submission of the application and the order of the High Court fixing a period for decision of the same, is misconceived. The word "vest" is normally used where an immediate fixed right in present or future enjoyment in respect of a property is created. With the long usage the said word "vest" has also acquired a meaning as "an absolute or indefeasible right" [See K.J. Aiyer's 'Judicial Dictionary' (A complete Law Lexicon), Thirteenth Edition]. The context in which the respondent - company claims a vested right for sanction and which has been accepted by the Division Bench of the High Court, is not a right in relation to "ownership or possession of any property" for which the expression "vest" is generally used. What we can understand from the claim of a "vested right" set up by the respondent-company is that on the basis of the Building Rules, as applicable to their case on the date of making an application for sanction and the fixed period allotted by the court for its consideration, it had a "legitimate" or "settled expectation" to obtain the sanction. In our considered opinion, such "settled expectation", if any, did not create any vested right to obtain sanction. True it is, that the respondent-company which can have no control over the manner of processing of application for sanction by the Corporation cannot be blamed for delay but during pendency of its application for sanction, if the State Government, in exercise of its rule making power, amended the Building Rules and imposed restrictions on the heights of buildings on G.T. Road and other wards, such "settled expectation" has been rendered impossible of fulfilment due to change in law. The claim based on the alleged "vested right" or "settled expectation" cannot be set up against statutory provisions which were brought into force by the State Government by amending the Building Rules and not by the Corporation against whom such "vested right" or "settled expectation" is being sought to be enforced. The "vested right" or "settled expectation" has been nullified not only by the Corporation but also by the State by amending the Building Rules. Besides this, such a "settled expectation" or so-called "vested right" cannot be countenanced against public interest and convenience which are sought to be served by amendment of the Building Rules and the resolution of the Corporation issued thereupon."

(emphasis added)

36. In the above case, the Apex Court observed that so- called vested rights cannot be countenanced against public interest and convenience. Moreover, in the cases in hand, the amendment is made for introduction of a transparent and fair method of auction which is in public interest. Therefore, there is nothing like a vested right to get sanction for grant of quarry lease. By no stretch of imagination, any right is vested in the petitioners by making an application for grant of mining lease. By merely making an application for grant of mining lease, no legitimate expectation is created or no vested right is created. Therefore, the argument that the vested right is taken away by sub-rule (1) of Rule 8-B deserves to be rejected.

37. Right to carry on business which is a fundamental right is always subject to reasonable restrictions. The fundamental right conferred by clause (g) of clause (1) of Article 19 of the Constitution of India is subject to reasonable restrictions in public interest, as provided in clause (6) of Article 19 of the Constitution. In the cases in hand, auction as a mode of grant of mining lease is introduced in public interest which ensures that the property vested in the State is disposed of in a fair and transparent manner/method of a public auction. This ensures that the best possible price is fetched for the minor minerals which would ultimately benefit the State exchequer. Moreover, Rule 8-B does not prevent any person from applying for grant of mining lease, but he will have to compete with others by participating in public auction. Hence, there is no violation of the rights conferred under Article 19 (1) (g) of the Constitution as the restrictions, if any, are in public interest.

38. We must now deal with the argument of violation of Article 14 of the Constitution of India. The impugned amendment, introducing auction regime in the said Rules is consistent with the amendment carried out to the parent Act by the Act No.10 of 2015. Therefore, from some day, by ending the earlier regime, the auction regime had to be introduced in the said Rules which was done with effect from 12th August, 2016. The said Amending Rules came into force on 12th August 2016. Therefore, that was the cut-off date chosen. There is nothing arbitrary or irrational in the same.

39. There is one more aspect of the matter which requires to be noted. Even in the absence of Rule 8-B, the applications which were pending on 12th August, 2016 could not have been saved inasmuch as the Rules which prevail on the date of consideration of the applications would apply. But by introducing sub-rule (2) of Rule 8-B, in case of those applications, on the basis of which all the mandatory procedural formalities were completed prior to 12th August, 2016 and only an order of execution of lease remained to be passed, an exception was carved out to sub-rule (1) of rule 8- B. Those applications which are covered by sub-rule (2) can be decided on the basis of the rules applicable prior to 12th August, 2016. Therefore, there is no merit in the challenge to the validity of Rule 8-B. The amendment is well within the scope of the rule making power under section 15 of the said Act of 1957. Rule 8-B does not infringe any provision of the Constitution.

Decisions relied upon by the parties:

40. Now, we turn to the decisions relied upon by the parties.

(i) In the case of Directorate of Enforcement -vs- Deepak Mahajan and another ((1994) 3 SCC 440) it was held that the provisions of subsidiary rules should be construed so as further the ends of justice and not to frustrate the same. The Court cannot resort to judicial legislation but it can mould and creatively interpret the provisions to remove the difficulties in the implementation of the legislative intent. This decision relies upon the decision of the House of Lords, in the case of Attorney General -vs- H.R.H. Prince Ernest Augustus of Hanover 1957 (1) ALL.E.R.49.

(ii) In the case of Poppatlal Shah -vs- the State of Madras (AIR 1953 SC 274) the Apex Court held thus:

(7) It is a settled rule of construction that to ascertain the legislative intent, all the constituent parts of a statute are to be taken together and each word, phrase or sentence is to be considered in the light of the general purpose and object of the Act itself. The title of the Madras Sales Tax Act describes it to be an Act, the object of which is to provide for the levy of a general tax on the sale of goods in the Province of Madras and the very same words are repeated in the preamble which follows.

The title and preamble, whatever their value might be as aids to the construction of a statute, undoubtedly throw light on the intent and design of the Legislature and indicate the scope and purpose of the legislation itself. The title and preamble of the Madras Sales Tax Act clearly show that its object is to impose taxes on sales that take place within the province, though these words do not necessarily mean that the property in the goods sold must pass within the province. The expression "sale of goods" is a composite expression consisting of various ingredients or elements. Thus, there are the elements of a bargain or contract of sale, the payment or promise of payment of price, the delivery of goods and the actual passing of title, and each one of them is essential to a transaction of sale through the sale is not completed or concluded unless the purchaser becomes the owner of the property. The question is what element or elements have been accepted by the Madras Legislature as constituting a sale in the province upon which it is the object of the statute to levy tax. Section 2 (h) gives the definition of 'sale' and it is defined as meaning,

"every transfer of the property in goods by one person to another in the course of trade or business for cach or for deferred payment or other valuable consideration, but does not include a mortgage, hypothecation, charge or pledge."

We have followed the principles laid down above while interpreting Rule 8-B.

(iii) Reliance was also placed on the decision of the Constitutional Bench of the Apex Court rendered in the case of Bharath Aluminum Company-vs- Kaiser Aluminum Technical Services INC ((2012) 9 Supreme Court Cases 552).

(iv) The decision of the Apex Court in the case of Kusheshwar Prasad Singh -vs- State of Bihar ((2007) 11 SCC 447) was also relied upon.

(v) The decision of the Apex Court in the case of Jose Da Costa and another -vs- Bascora Sadasiva Sinai Narcornim and others ((1976) 2 SCC 917), wherein the Apex Court dealt with the issue of interpretation of retrospective statutes and held thus:

"31. Before ascertaining the effect of the enactments aforesaid passed by the Central Legislature on pending suits or appeals, it would be appropriate to bear in mind two well-established principles. The first is that while provision of a statute dealing merely with matters of procedure may properly unless that construction be textually inadmissible, have retrospective effect attributed to them, provisions which touch a right in existence at the passing of the statute are not applied retrospectively in the absence of express enactment or necessary intendment.

The second is that a right of appeal being a substantive right the institution of a suit carried with it the implication that all successive appeals available under the law then in force would be preserved to the parties to the suit throughout the rest of the career of the suit. There are two exceptions to the application of this rule, viz. (1) when by competent enactment such right of appeal is taken away expressly or impliedly with retrospective effect and (2) when the court to which appeal lay at the commencement of the suit stands abolished".

This decision has no bearing for more than one reason. Firstly, the said Rules do not deal with mere procedure. The Rules regulate grant of mining lease/licence. Secondly, even in the parent Act, namely the said Act of 1957 similar amendments were made, making the pending applications ineligible, subject to the exceptions provided in sub-section (2).

(vi) Another judgment relied upon is in the case of The Income Tax Officer, Alleppey -vs- M.C. Ponnoose and others. (AIR 1970 SC 385) The issue was whether a delegated authority can make delegated legislation having retrospective effect. The Apex Court held that whether the delegated authority can make retrospective legislation or not depends on the language employed in the statutory provision which may in express terms or by necessary implication empower the necessary authority concerned to make a rules or regulations with retrospective effect.

In the present case, Section15 of the said Act of 1957 confers power to frame the Rules for regulating grant and renewal of mining leases for minor minerals. Therefore, it can be said that by necessary implication, the State Government has been authorized to make the Rules having retrospective operation.

(vii) Another decision relied upon is in the case of Union of India and others -vs- Tushar Ranjan Mohanty and others, ((1994) 5 SCC 450) wherein a rule was struck down to the extent to which it was made operative retrospectively. It was struck down on the ground the retrospective operation of law could not deprive a person an accrued right vested in him under a statute or under constitution.

(viii) Another decision relied upon is in the case of Amireddy Raja Gopala Rao and others -vs- Amireddi Sitharamamma and others. (AIR 1965 SC 1970) The Apex Court held that a statute has to be interpreted, if possible, so as to respect vested rights, and if the words are open to another construction, such a construction should never be adopted.

These two decisions have been relied on the presumption that the applicants who made applications for grant of mining lease have vested right to get mining lease.

(ix) Reliance was also placed on the decision of the Andhra Pradesh High Court, in the case of N. Sarada Mani - vs- G. Alexander and another (AIR 1998 AP-157) wherein it was held that the cardinal principle is that a statute should be interpreted in such a way as to avoid absurdity and to have harmonious effect. It was held that the Court must construe a section so as to make it workable rather than make it meaningless.

(x) Reliance was also placed on the decision of the Apex Court in the case of State of Gujarat and others -vs- Jayeshbhai Kanjibhai Kalathiya (Civil Appeal Nos.10373-10374 of 2010) decided on 1st March, 2019. In the said decision, the issue was whether certain Rules framed viz., Gujarat Minor Mineral (Amendment) Rules, 2010, were ultra virus to the rule making power on the ground that the rule making power of the State Government does not empower and cannot be stretched to empower the State Government to make Rules directly prohibiting movement of mineral so as to impinge upon the freedom guaranteed by Article 301 of the Constitution. The challenge was in the context of Article 301 of the Constitution. The Apex Court struck down the aforesaid Rules as ultra virus. This decision has no relevance at all in these cases.

(xi) Our attention is also invited to the decision of the Division Bench of Hyderabad High Court in the case of Coromandel Mining and Exports Pvt. Ltd., Hyderabad and others -vs- Union of India and others (AIR 2016 Hyderabad 28) wherein amendments to Section-8, 10, 11 of the said Act of 1957 made by Act No.10 of 2015 were challenged and the validity thereof was upheld. In paragraph 33.2.2, it was held that an application for a lease has to be necessarily dealt with according to the Rules in force on the date of disposal of the application. That is precisely we have held earlier.

Consideration of the question whether the decisions of the coordinate Benches constitute binding precedents

41. Now we go to another set of judgments relied upon by the petitioners in support of the proposition that sub-rule (1) of Rule 8-A will have no application to those pending applications, where it can be demonstrated that the competent authority failed to take steps for obtaining no objection certificates on account of no fault of the applicants. An argument has been canvassed that a contrary view cannot be taken to what is held in series judgments of the coordinate benches of this Court.

i) The first decision relied upon by the petitioner is of a division bench which is of 29th June, 2018, in Writ Petition No.25924-25925/2018 (S.A. Ibrahim -vs- The State of Karnataka and others). The said judgment extensively relies upon another decision of the division bench dated 11th April, 2018 in a batch of writ petitions which were allowed. In fact, the said decision extensively quotes the judgment and order dated 11th April, 2018 in W.P.No.43235/2017 between (C. Venkatappa -vs- State of Karnataka and others). The said judgment and order dated 11th April, 2018 has been quoted in many other decisions relied upon by the petitioners. The relevant paragraphs of the said judgment read thus:

"The common features of these petitions are that the petitioners herein had filed respective applications seeking grant of quarry lease. Such applications have been rejected essentially on the ground that no objection certificates from the revenue/forest authorities as also the technical reports were not obtained or were not received.

For ready reference, the facts relating to W.P. No.43235/2017 may be noticed. The petitioner herein filed the application on 10.06.2015 in prescribed format-AQL along with prescribed fees, security deposit, GPS sketch etc., while seeking grant of quarry lease to extract ornamental stones over an area of 10 acres in Government land bearing Survey No.46 of Shambhonahalli Village in Madhugiri Taluk, Tumakuru District. The application was rejected by way of the endorsement dated 11.09.2017, essentially on the ground that as per the amended Karnataka Minor Mineral Concession Rules, 1994 ('the Rules'), all such applications, for which no objection certificates and reports required under Rule 8(5) of the Karnataka Minor Mineral Concession (Amendment) Rules, 2016 were not received earlier to 12.08.2016, were to be considered ineligible.

The petitioners would submit that all the referred reports under Rule 8(5) of the Rules were required to be obtained by the Director, Department of Mines and Geology, within a period of 90 days; and the application ought to have been decided within a period of 4 months from the date of receipt as per Rule 14 of the Rules. It is submitted that the authorities concerned having failed to carry out their responsibilities; the applicant could not have been considered ineligible. It is pointed out that several similar petitions have already been considered and allowed by this Court while disapproving similar nature endorsements and while restoring the applications for reconsideration. The orders dated 31.08.2017 in W.P. No.37185/2017; dated 12.09.2017 in W.P. No.41348/2017; dated 24.10.2017 in W.P. No.44260/2017; and dated 22.03.2018 in W.P. No.60155/2016 have been referred.

In the order dated 24.10.2017 in W.P.No.44260/2017, this Court has taken note of the provisions contained in the amended Rule 8-B of the Rules and has also taken note of the candid submissions of the learned Additional Government Advocate as under:-

"5. Learned Additional Government Advocate submits that this Court in Writ Petition No.25421/2017 (DD 04.07.2017) and in several other matters has held that applications as that of the petitioner do not become ineligible if the application was received by the Competent Authority before 16.06.2015 and further, it is held that it is the responsibility of the Competent Authority to consult the authorities referred to in Rule 8(5) of the Rules and to obtain the certificates and reports referred to therein. He further submits that the application of the petitioner was received by the Competent Authority before 16.06.2015."

This Court has also considered the earlier orders passed in the matters and has allowed W.P. No.60155/2016 by the order dated 22.03.2018, while observing as under:

"Having regard to the submissions made, this petition stands disposed of at this stage itself, while requiring that the concerned authorities shall send their views/opinions to the authorities of the Mines and Geology Department within two weeks from today.

The authorities concerned shall consider and finally decide on the prayer of the writ petitioner for execution of the lease deed within four weeks from the date of production of the certified copy of this order.

No costs."

The proposition aforesaid, for all practical purposes, apply to these cases too. This Court has repeatedly observed that it was the responsibility of the concerned authority / authorities to obtain the clearances and technical reports; and for their omissions, the applications could not have been rejected. We find no reason to take any different view of the matter.

Accordingly, all these petitions stand disposed of at this stage itself, while requiring that the concerned authorities shall send their views / opinion / reports to the authorities of Mines and Geology Department within two weeks from today.

The authorities concerned shall consider and finally decide on the prayer of the writ petitioners for execution of the lease deeds within four weeks from the date of production of the certified copy of this order".

(emphasis added)

ii) Another decision relied upon is dated 4th July, 2017 of a Division Bench in W.P.No.25421 of 2017 between (R. Kirankumar -vs- the State of Karnataka and others). Paragraphs- 3 to 6 of the said judgment and order dated 4th July, 2017 read thus:

" 3. Admittedly, the application for grant of lease was made prior to the amendment of the Karnataka Minor Mineral Concession Rules, 1994. Therefore, the endorsement issued against the writ petitioner was erroneous, inasmuch as the authorities proceeded on the erroneous assumption that the petitioner was ineligible.

4. Mr. Bhanuprakash, learned additional government advocate, submits that till today, no objection from the Environment Department has not reached the concerned authorities. It is the responsibility of the authorities to obtain such clearance as, also the technical reports, if any.

5. The concerned authorities are directed to send their opinion to the authorities of the Mines and Geology Department within two weeks.

6. We set aside the endorsement produced as Annexure-A to the writ petition and direct the authorities to consider the request of the petitioner for execution of the lease deed in his favour, within four weeks from the date of communication of this order, subject to no-objection from the environment department as, also, the technical report from the departments concerned".

iii) In the decision dated 24th October, 2017 of a Division bench in Writ Petition No. 44260/2017 between (M/S. Mahadeva Minerals -vs- The State of Karnataka and others), in paragraph-3 it was observed thus:

"3. It is stated by the learned Additional Government Advocate that the application is rejected by the aforesaid order on the ground that the application became ineligible in view of Rule 8- B(1) of the Karnataka Minor Mineral Concession Rules, 1994 ('the Rules').

The case of the petition is that his application comes under the exception stated in Clause (d) of Rule 8-B(2) of the Rules, and therefore, the application remained eligible."

Paragraph-4 of the above order quotes Rule 8-B of the said Rules and thereafter, in paragraphs 5 & 6, the Division bench observed thus:

5. Learned Additional Government Advocate submits that this Court in Writ Petition No.25241/2017 (DD 04.07.2017) and in several other matters has held that applications as that of the petitioner do not become ineligible if the application was received by the Competent Authority before 16.06.2015 and further, it is held that it is the responsibility of the Competent Authority to consult the authorities referred to in Rule 8(5) of the Rules and to obtain the certificates and reports referred to therein. He further submits that the application of the petitioner was received by the Competent Authority before 16.06.2015.

6. In view of the above, the matter requires to be reconsidered by respondent No.3 -the Senior Geologist. The impugned order dated 08.09.2017 is accordingly set aside. The matter is remitted to respondent No.3 for reconsideration in accordance with law. The reconsideration shall be made within eight weeks from the date of receipt of a copy of this order. The petitioner shall furnish a copy of this order to respondent No.3 to enable him to consider the matter within the time stipulated above."

42. There are other decisions relied upon which are on the same lines. A careful perusal of the said decisions show that the same relate to applications for grant of mining lease made before 12th August, 2016. The said decisions note that under sub-rule (1) of Rule 8-B, all the applications received prior to the said date shall become ineligible. The Division benches were impressed by the submission that on the basis of the applications made prior to 12th August, 2016, the Director, Department of Mines and Geology was required to obtain all the clearances/no objection certificates/reports covered under sub-rule (5) of Rule 8 within a period of ninety days and Rule 14 (which was omitted with effect from 12th August, 2016) required the authorities to dispose of the applications within a period of four months from the date of receipt of the applications. Therefore, the Courts have taken a view that where there is a failure on the part of the authorities to obtain clearances/no objection certificates/reports as required under sub-rule (5) of rule-8, the embargo of sub-rule (1) of rule 8-B of making applications ineligible cannot be applied. Therefore, in the cases where applications pending on 12th August, 2016 which were rejected by subsequent endorsements relying upon sub-rule (1) of Rule 8-B, as amended, the Division benches directed the concerned authorities to obtain clearances/no objection certificates/reports and thereafter deal with the applications, virtually by applying the Rules which are prevailing prior to 12th August, 2016.

43. Now the question is whether the said decisions can be said to be binding precedents to decide the issues which arise for consideration in the present petitions. To decide the said question, we must note here that the issue whether sub-rule (1) of Rule 8-B was mandatory was neither canvassed nor considered in any of these orders. The issue which arises in this group of petitions is whether sub-rule (1) of Rule 8-B is mandatory. This issue was not considered in the aforesaid decisions. Therefore, the said decisions of coordinate Benches are not at all binding precedents on the issue. In addition, the following most relevant aspects were not brought to the notice of the Court when the aforesaid matters were decided:

(a) The amendments made to the said parent Act of 1957 by the Act No.10 of 2015 especially by insertion of Section 10-A and introduction of auction regime;

(b) To give effect to the auction regime, sub-section (1) of Section 10-A provided that the applications received prior to the date of commencement of Act No.10 of 2015 (12th January 2015) shall become ineligible. Sub-section (2) of Section 10-A carved out an exception to sub-section (1) of Section 10- A. The Rule 8-B is pari materia with section 10-A;

(c) The objects and reason of the Act No.10 of 2015 clearly provided that for making the process of grant of mining leases more transparent, the Legislature intended to introduce auction regime. For that reason all the applications pending as on 12th January 2015 were made ineligible subject to specific exceptions carved out under sub-section (2) of Section 10-A;

(d) A direction was issued under section 20-A of the said Act of 1957 by the Central Government to all the State Governments to revisit the mechanism/procedure relating to grant of concessions so that the process is made fair and transparent;

(e) As noted earlier, the said Rules have been framed under the said Act of 1957 and thus, it is clear that the State of Karnataka carried out amendments by the amended Rules, with effect from 12th August, 2016 for giving effect to the amendments made to the parent Act with effect from 12th January, 2015 by which all the pending applications were made ineligible and auction regime was introduced;

(f) Attention of the Division benches was not invited to the interpretation put by the Apex Court to Section 10-A in the case of Bhushan Power and Steel Limited (supra) which lays down what were the objects sought to be achieved by the Act No. 10 of 2015 and the interpretation put by the Apex Court to Section 10-A and in particular, sub-section (1) and sub-section (2) thereof. We have already quoted paragraph-22 of the said decision which interprets sub-section (1) and sub-section (2) of Section 10-A;

(g) We have also noted that sub-rule (1) and (2) of Rule 8-A are on lines of sub-section (1) and sub-section (2) of Section 10-A which were considered in the aforesaid decision of the Apex Court;

(h) The decision of the Apex Court in the case of Muneer Enterprises (supra) which we are quoted above was not brought to the notice of the Division benches which lays down that grant and termination of lease shall be strictly in accordance with the prescribed stipulations of the said Act of 1957 and Rules made therein;

(i) The effect of the provision of Rule 14 of the said Rules which was existed in the rule book as on 12th August, 2016 has not been noticed by the Division benches. The provisions rule-14 which was existed in the rule book, prior to 12th August, 2016 read thus:

"14. Disposal of application for grant or renewal of lease - (1) Application for grant or renewal of lease shall be disposed of -

(i) in the case of an existing industry within a period of One hundred and eighty days from the date of receipt of application failing which the applicants shall be informed of the reasons for delay within fifteen days after the expiry of the disposal period.

(ii) in all other cases within a period of four months from the date of receipt of applications failing which the applicants shall be informed of the delay within fifteen days after the expiry of the disposal period."

Sub-rule (2) of the above Rule-14 (prior to amendment) provided that the applications for grant of mining leases shall be disposed of within four months from the date of receipt of the applications. More importantly, it provided for consequences of not deciding the applications within four months. The Rule does not introduce a deeming fiction that the application shall be deemed to have been granted. On the contrary, sub-rule (2) merely provided that the applicants shall be informed of delay, within fifteen days after the expiry of four months. Thus, the intention of the rule makers was never to provide for a deeming fiction.

i) It was not brought to the notice of the Division benches that except sub-rule (2) of Rule 8-B, no other provision was introduced for saving the applications which were filed prior to 12th August, 2016 from the applicability of sub-rule (1) of amended Rule 8-B. The exception to sub-rule (1) of Rule 8-B was carved out only by sub-rule (2) which starts with non-obstante clause. Clause (e) of sub-rule (2) provides that only in the cases covered by clauses (a) to (d) and (d-1) that the applications which were pending on 12th August, 2016 will be decided as per the Rules prevailing prior to 12th August, 2016; and

j) It was not pointed out to the Division benches that by operation of sub-rule (1) of Rule 8-B read with sub-rule (2) of Rule 8-B which starts with non- obstante clause, all applications which were pending on 12th August, 2016 were made ineligible except the applications covered by sub-rule (2) of Rule 8-B. It was not pointed out that sub-rule (1) was mandatory subject to exceptions carved out by sub-rule (2).

43. The argument of learned High Court Government Pleader was that these decisions are not binding precedents. He relied upon the decision of the Apex Court in the case of State of Uttar Pradesh and another -vs- Synthetics and Chemicals Limited and another. ((1991) 4 SCC 139) In paragraph- 40 and 41 of the said decision, it was held thus:

"40. 'Incuria' literally means 'carelessness'. In practice per incurium appears to mean 'per ignoratium.' English Courts have developed this principle in relaxation of the Rule of stare decisis.

The 'quotable in law' is avoided and ignored if it is rendered, 'in ignoratium of a statute or other binding authority'. (Young v. Bristol Aeroplane Co.Ltd.). Same has been accepted, approved and adopted by this Court while interpreting Article 141 of the Constitution which embodies the doctrine of precedents as a matter of law. In Jaisri Sahu v. Rajdewan Dubey, this Court while pointing out the procedure to be followed when conflicting decisions are placed before a Bench extracted a passage from Halsbury's Laws of England incorporating one of the exceptions when the decision of an Appellate Court is not binding.

41. Does this principle extend and apply to a conclusion of law, Which was neither raised nor preceded by any consideration. In other words can such conclusions be considered as declaration of law? Here again the English Courts and jurists have carved out an exception to the Rule of precedents. It has been explained as Rule of sub-silentio. "A decision passed sub-silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the Court or present to its mind". (Salmond on jurisprudence 12thEdition., p.153). In Lancaster Motor Company (London) Ltd. v. Bremith Ltd. the Court did not feel bound by earlier decision as it was rendered 'without any argument, without reference to the crucial words of the Rule and without any citation of the authority'. It was approved by this Court in Municipal Corporation of Delhi v.Gurnam Kaur. The Bench held that, 'precedents sub-silentio and without argument are of no moment'.The Courts thus have taken recourse to this principle for relieving from injustice perpetrated by unjust precedents. A decision which is not express and is not founded on reasons nor it proceeds on consideration of issue cannot be deemed to be a law declared to have a binding effect as is contemplated by Article 141. Uniformity and consistency are core of judicial discipline. But that which escapes in the judgment without any occasion is not ratio decidendi. In B. Shama Rao v. Union Territory of Pondicherry it was observed, 'it is trite to say that a decision is binding not because of its conclusions but in regard to its ratio and the principles, laid down therein'. Any declaration or conclusion arrived without application of mind or preceded without any reason cannot be deemed to be declaration of law or authority of a general nature binding as a precedent.

Restraint in dissenting or overruling is for sake of stability and uniformity but rigidity beyond reasonable limits is inimical to the growth of law."

(emphasis added)

He also relied upon another decision of the Apex Court in the case of Delhi Airtech Services Private Limited and another -vs- State of Uttar Pradesh and another. ((2011) 9 SCC 354) In particular, on paragraphs- 43 and 44 which read thus:

"43. The concept of "sub silentio" has been explained by Salmond on jurisprudence, 12th edition as follows: (Gurnam Kaur case, SCC pp. 110-11 para-11)

"11....... 'A decision passes sub silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the Court or present to its mind. The Court may consciously decide in favour of one party because of point A, which it considers and pronounces upon. It may be shown, however, that logically the court should not have decided in favour of the particular party unless it also decided Point B in his favour; but point B was not argued or considered by the Court. In such circumstances, although Point B was logically involved in the facts and although the case had a specific outcome, the decision is not an authority on point B. Point B is said to pass sub silentio' ". (AIR p.43, para 11)

43. The aforesaid passage has been quoted with approval by the three Judge Bench in Gurnam Kaur. This Court in Gurnam Kaur, in order to illustrate the aforesaid proposition further relied on the decision of the English Court in Gerard v. Worth of Paris Ltd. In Gerad, the only point argued was on the question of priority of the claimant's debt. The Court found that no consideration was given to the question whether a garnishee order could be passed. Therefore, a point in respect of which no argument was advanced and no citation of authority was made is not binding and would not be followed. This Court held that such decisions, which are treated having been passed sub silentio and without argument, are of no moment. The Court further explained the position by saying that one of the Chief reasons behind the doctrine of precedent is that once a matter is fully argued and decided the same should not be reopened and mere casual expressions carry no weight."

He also relied upon a decision of the Apex Court in the case of Purbanchal Cables and Conductors Private Limited -vs- Assam State Electricity Board and another ((2012) 7 SCC 462) and in particular what is held in paragraphs 59 to 62 which reads thus:

"59. The learned Senior Counsel would rely on the decision of this Court in Municipal Corporation, Delhi Vs. Gurnam Kaur. This Court has held: (SCC pp.110-11, paras 11-12)

"11. Pronouncements of law, which are not part of the ratio decidendi are classed as obiter dicta and are not authoritative. With all respect to the learned Judge who passed the order in Jamna Das case and to the learned Judge who agreed with him, we cannot concede that this Court is bound to follow it. It was delivered without argument, without reference to the relevant provisions of the Act conferring express power on the Municipal Corporation to direct removal of encroachments from any public place like pavements or public streets, and without any citation of authority. Accordingly, we do not propose to uphold the decision of the High Court because, it seems to us that it is wrong in principle and cannot be justified by the terms of the relevant provisions. A decision should be treated as given per incuriam when it is given in ignorance of the terms of a statute or of a rule having the force of a statute. So far as the order shows, no argument was addressed to the court on the question whether or not any direction could properly be made compelling the Municipal Corporation to construct a stall at the pitching site of a pavement squatter. Professor P.J. Fitzgerald, editor of the Salmond on Jurisprudence, 12th Edn. explains the concept of sub silentio at p. 153 in these words:

"A decision passes sub silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the court or present to its mind. The court may consciously decide in favour of one party because of Point A, which it considers and pronounces upon. It may be shown, however, that logically the court should not have decided in favour of the particular party unless it also decided Point B in his favour; but Point B was not argued or considered by the court. In such circumstances, although Point B was logically involved in the facts and although the case had a specific outcome, the decision is not an authority on Point B. Point B is said to pass sub silentio."

12. In Gerard v. Worth of Paris Ltd., the only point argued was on the question of priority of the claimant's debt, and, on this argument being heard, the court granted the order. No consideration was given to the question whether a garnishee order could properly be made on an account standing in the name of the liquidator. When, therefore, this very point was argued in a subsequent case before the Court of Appeal in Lancaster Motor Co. (London) Ltd. v. Bremith Ltd., the Court held itself not bound by its previous decision. Sir Wilfrid Greene, M.R., said that he could not help thinking that the point now raised had been deliberately passed sub silentio by counsel in order that the point of substance might be decided. He went on to say that the point had to be decided by the earlier Court before it could make the order which it did; nevertheless, since it was decided 'without argument, without reference to the crucial words of the Rule, and without any citation of authority', it was not binding and would not be followed. Precedents sub silentio and without argument are of no moment. This Rule has ever since been followed. One of the chief reasons for the doctrine of precedent is that a matter that has once been fully argued and decided should not be allowed to be reopened.The weight accorded to dicta varies with the type of dictum. Mere casual expressions carry no weight at all. Not every passing expression of a judge, however eminent, can be treated as an ex cathedra statement, having the weight of authority."

60. In State of U.P. V. Synthetics and Chemicals Ltd., His Lordship R.M. Sahai. J., in his concurring judgment set out the principles of per incurium and sub silentio and has held thus: (SCC pp. 162-63, paras 40-41)

"40. 'Incuria' literally means 'carelessness'. In practice per incuriam appears to mean per ignoratium. English courts have developed this principle in relaxation of the Rule of stare decisis. The 'quotable in law' is avoided and ignored if it is rendered, 'in ignoratium of a statute or other binding authority'. (Young v. Bristol Aeroplane Co. Ltd.). Same has been accepted, approved and adopted by this Court while interpreting Article 141 of the Constitution which embodies the doctrine of precedents as a matter of law. In Jaisri Sahu v. Rajdewan Dubey, this Court while pointing out the procedure to be followed when conflicting decisions are placed before a Bench extracted a passage from Halsbury's Laws of England incorporating one of the exceptions when the decision of an appellate court is not binding.

41. Does this principle extend and apply to a conclusion of law, which was neither raised nor preceded by any consideration. In other words can such conclusions be considered as declaration of law? Here again the English courts and jurists have carved out an exception to the Rule of precedents. It has been explained as Rule of sub-silentio. "A decision passes sub- silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the court or present to its mind." (Salmond on Jurisprudence, 12thEdn., p. 153). In Lancaster Motor Co. (London) Ltd. v. Bremith Ltd. the Court did not feel bound by earlier decision as it was rendered 'without any argument, without reference to the crucial words of the Rule and without any citation of the authority'. It was approved by this Court in Municipal Corporation of Delhi v. Gurnam Kaur. The bench held that, 'precedents sub-silentio and without argument are of no moment'. The courts thus have taken recourse to this principle for relieving from injustice perpetrated by unjust precedents. A decision which is not express and is not founded on reasons nor it proceeds on consideration of issue cannot be deemed to be a law declared to have a binding effect as is contemplated by Article 141. Uniformity and consistency are core of judicial discipline. But that which escapes in the judgment without any occasion is not ratio decidendi. In B. Shama Rao v. Union Territory of Pondicherry it was observed, 'it is trite to say that a decision is binding not because of its conclusions but in regard to its ratio and the principles, laid down therein'. Any declaration or conclusion arrived without application of mind or preceded without any reason cannot be deemed to be declaration of law or authority of a general nature binding as a precedent. Restraint in dissenting or overruling is for sake of stability and uniformity but rigidity beyond reasonable limits is inimical to the growth of law."

61. In Arnit Das V. State of Bihar this Court held: (SCC p.498, para 20)

"20. A decision not expressed, not accompanied by reasons and not proceeding on a conscious consideration of an issue cannot be deemed to be a law declared to have a binding effect as is contemplated by Article 141. That which has escaped in the judgment is not the ratio decidendi. This is the Rule of sub silentio, in the technical sense when a particular point of law was not consciously determined. (see STATE OF U.P. V. SYNTHETICS & CHEMICALS LTD., SCC, para 41.)"

62. In Tika Ram V. State of Uttar Pradesh, it was held: (SCC pp.740-41 para 104)

"104. We do not think that the law laid down in these cases would apply to the present situation. In all these cases, it has been basically held that a Supreme Court decision does not become a precedent unless a question is directly raised and considered therein, so also it does not become a law declared unless the question is actually decided upon. We need not take stock of all these cases and we indeed have no quarrel with the propositions settled therein".

(emphasis added)

45. As noted earlier, in the aforesaid decisions of this Court which are relied upon by the petitioners, there is a reference to sub-rule (1) of Rule 8-A. The only factual aspect noted therein is that the concerned authorities have made no efforts to get the clearances/no objection certificates/reports, as contemplated by sub-rule (5) of Rule-8. Attention of the Courts was not brought to the notice of the similar amendments made to the parent Act 1957. In fact, the effect of sub-rule (2) of Rule 8-B which starts with non-obstante clause was not brought to the notice of the Division benches of this Court. Apart from that, a binding precedent of the decision of the Apex Court holding that the applications for grant of mining lease must be decided strictly in accordance with law was also not brought to the notice of the benches. Moreover, interpretation put by the Apex Court to Section 10-A of the parent Act namely, the said Act of 1957, was not brought to the notice of the Division benches. Therefore, in our considered view, none of the decisions of the aforesaid division benches, relied upon by the petitioners are the binding precedents, inasmuch as, the division benches were not called upon to interpret the provisions of sub-rule (1) read with sub-rule (2) of Rule 8-B, as amended with effect from 12th August, 2016 and that also in the context of the intention of the Legislature which is reflected from introduction of various amendments in the said parent Act of 1957, including Section 10-A with effect from 12th January, 2015. If the said amendments to the said Act of 1957 were brought to the notice of the division benches, interpretation which is contrary to the intention of the Legislature would not have been allowed to be canvassed by the Division Benches.

46. One of the petitioners relied upon a decision of the learned single Judge of this Court in the case ofVenkateshwara Hill Crushers and others -vs- The State of Karnataka and others. (2008 (4) KLJ 230) The said decision has no bearing on the controversy involved in these petitions, as the rule 8-B, as amended did not fall for consideration of the Court. In effect, the Court held that the provisions of law prevail over a circular issued by the Government.

Conclusions

47. In short the conclusions can be summarized as under:

(a) Rule 8-B of the said Rules, as amended on 12th August, 2016 is constitutionally valid;

(b) All pending applications for grant of mining leases/licenses under the said Rules which were filed before 12th August, 2016 and pending on the said date shall become automatically ineligible unless the cases specifically fall within any of the exceptions specifically carved out in clauses (a) to (d) and (d-1) of sub-rule (2) of Rule 8-B.

(c) Only those application which were filed before 12th August, 2016 to which any of the clauses (a) to (d) and (d-1) of sub-rule(2) of Rule 8-B applies, can be decided in accordance with the Rules prevailing prior to 12th August, 2016;

(d) While deciding the question whether clauses (a) to (d) and (d-1) of sub-rule (2) of Rule 8-B are attracted, if any deeming fiction providing for grant of deemed no objection certificates is expressly available under any of the express provisions of the said Rules such as sub-rule (6) of Rule 8, the same could be applied;

(e) In view of express provisions of sub-rule (1) and (2) of Rule 8-B, merely because there is a failure on the part of the authorities to obtain clearances/no objection certificates/reports, the mandate of sub-rule (1) of Rule 8-B cannot be ignored and it shall apply with full force inasmuch as by sub-rule (1) of Rule 8-B, all applications received prior to 12th August, 2016 were made ineligible. The only exception provided is in the sub-rule (2) in case of the applications which are governed by clause (a) to (d) and (d-1) of sub-rule (2). No other exception to sub-rule (1) of Rule 8-B has been provided in the said Rules and therefore, cannot be carved out by the Court.

48. Now coming to the petitions in hand, wherever the applications made before 12th August, 2016 are pending as of today, the same will have to be considered only in the context of applicability of exceptions carved out by sub-rule (2) of Rule 8-B. In case of those applications where endorsements/ rejection have been issued, those applications will have to be reconsidered only for ascertaining whether any of the clauses (a) to (d) and (d-1) of sub-rule (2) of Rule 8-B are attracted. To decide whether any of the clauses (a) to (d) and (d-1) are applicable, factual adjudication will have to be made. It must be noted here if on holding inquiry, it is held that none of the clauses (a) to (d) and (d-1) are attracted, then the applications will have to be held as ineligible. In some cases, deeming provision of sub-rule (6) of Rule 8 has been invoked to establish applicability of sub-rule (2) of Rule 8 (B). Whether deeming fiction is applicable or not is an issue which requires factual adjudication. We must note here that as, in this group we are not called upon to decide the issue of interpretation of applicability of outer limit of 24 months provided in clause (e) of sub-rule (2) of Rule 8-B, the said issue is kept open. However, Writ Petition No 38427 of 2018 will be governed by the order dated 28th June, 2019 and will stand disposed of in terms of the said order.

49. Accordingly, in view of the law which we have laid down, we pass the following order in all petitions, except Writ Petition No 38427 of 2018:-

i) In those petitions where applications made for grant of mining leases made before 12th August 2016 are pending, the same shall be examined by the Competent Authority only in the context of applicability of sub-rule (2) of Rule 8-B as amended in the light of what we have held earlier;

(ii) In those cases where endorsements of rejection have been issued, by withdrawing the said endorsements, the applications for mining leases filed before 12th August 2016 shall be reconsidered only in the context of applicability of sub-rule (2) of Rule 8-B. Even applicability of deeming fiction under sub-rule (6) of Rule 8 shall be decided wherever such a plea is raised. Appropriate order shall be passed within a period of three months from today;

(ii) Appropriate order shall be passed in the light of what is held by us in paragraph 47 (forty-seven) above;

(iii) The writ petitions are disposed of on the above terms;

(iv) There will be no order as to costs
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