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



Khaleed Pasha & Others v/s State of Karnataka, Represented by its Secretary Department of Commerce & Industries (MSME, Mines & Textile), Bangalore & Others


    Writ Petition Nos. 58505, 52907, 53084 to 53086, 53088, 53089, 57046 to 57048, 58502 to 58504, 58506, 60381, 61476, 63564 of 2016, 1272, 14675, 1541 of 2017, 7612 of 2019, 1020, 1182, 548, 3424, 3903 & 4195 of 2020 (GM-MM-S)

    Decided On, 01 June 2020

    At, High Court of Karnataka

    By, THE HONOURABLE CHIEF JUSTICE MR. ABHAY S. OKA & THE HONOURABLE MR. JUSTICE HEMANT CHANDANGOUDAR

    For the Petitioners: D.L.N. Rao, Senior Counsel, Anirudh Anand, B.V. Vidyulatha, K.B. Shiva Kumar, P. Mahesh, Sateesh M. Doddamani, M.M. Swamy, K. Shrihari, Vaishali Hegde, Basavaraj R. Bannur, H.M. Manjesh, S.B. Mathapati, L.M. Chidanandayya, N.D. Manjunath, B.S. Prakash, P. Mahesh, C.N. Srinivasan Rao, Sriyuths. H. Srinivas Rao, Srinivas, Badri, V.M. Sheelavant, M.V. Charati, B.V. Ganesh Nag, Suhas B. Sappannavar, D.C. Deepak, N. Praveen Kumar, P. Dhananjaya, Basavaraj S. Sappannavar, Mohamed Rizwan Ahamed, Ganapathi Bhat Vajralli, Naik Narayan Mastappa, P. Nataraju, G.M. Ananda, S.P. Ramesha, Advocates, Y.H. Vijayakumara, Government Advocate. For the Respondents: R. Subramanya, AAG, V.G. Bhanuprakash, AGA.



Judgment Text


(Prayer: This Writ Petition is filed Under Articles 226 and 227 of the Constitution of India, praying to declare by issue of an appropriate Writ, that the Karnataka Minor Mineral Concession (Amendment) Rules, 2016, dated 12.08.2016 vide Annexure-F is Unconstitutional, Null and Void & etc.

This Writ Petition is filed Under Articles 226 and 227 of the Constitution of India, praying to declare by issue of an appropriate writ, that Rule 36(5) the Karnataka Minor Mineral Concession (Amendment) Rules, 2016, dated 12.08.2016 produced at Annexure-E is Unconstitutional, Null and Void etc.

This Writ Petition is filed Under Articles 226 and 227 of the Constitution of India, praying to declare by issue of an appropriate writ, that the Karnataka Minor Mineral Concession (Amendment) Rules, 2016, Amended Vide Notification Dated 12.08.2016 Issued By The 1st respondent at Annexure-E to the writ petition Is Unconstitutional, Null and void in so far as the petitioner is concerned etc.

This Writ Petition is filed Under Articles 226 and 227 of the Constitution of India, praying To declare by issue of an appropriate writ, that Rule 36(5) of the Karnataka Minor Mineral Concession (Amendment) Rules, 2016 dated 12.08.2016 produced at Annexure-D is Unconstitutional, Null and Void etc.)

Abhay S. Oka, CJ.

OVERVIEW

1. There are broadly two issues involved in this group of writ petitions. The first issue is whether the holders of patta lands in the territory of Ex-Mysuru area who are the owners of sub-soil minerals in such patta lands can be forced to obtain a permission or a licence from the State Government for carrying out quarrying operations. Broadly speaking, a patta land is a privately owned land which is classified as a patta land. The State Government has framed the Karnataka Minor Mineral Concession Rules, 1994 (for short "the said Rules of 1994") in exercise of the power under Section 15 of the Mines and Minerals (Development and Regulation) Act, 1957 (for short "the said Act of 1957"). By the notification dated 12th August, 2016, the Karnataka Minor Mineral Concession (Amendment) Rules, 2016 (for short "the Amendment Rules") were published by which extensive amendments were carried out to the said Rules of 1994. The amendments were brought into force on 12th August, 2016. The amendments were made mainly to give effect to the amendments made with effect from 12th January, 2015 to the provisions of the said Act of 1957. By the Amendment Rules, Chapter-IVA was added to the said Rules of 1994 providing for grant of quarrying lease or composite licence by auction. Chapter-V which is now titled as "Permission for Quarrying Minor Minerals in Private or Patta lands" which includes Rule 32 was substantially amended firstly on 5th March 2014 by the Karnataka Minor Mineral Concession (Amendment) Rules, 2014 and subsequently by the Amendment Rules. Sub- rule (1) of Rule 32 as amended by the Amendment Rules provides that no person in possession of patta lands in Karnataka State in whose land sub-soil minor minerals are situated shall undertake quarrying operations of minor minerals in patta land except with a quarrying licence granted under said Chapter V. The second question is whether the amendments are constitutionally valid.

2. The real grievance of the petitioners in this group of writ petitions is about the amendment brought to sub-rule (1) of Rule 32 which requires the holders of patta lands to obtain a licence for quarrying the minor minerals though the persons holding the patta lands are the owners of the minerals in the sub-soil. We may note here that this issue relates only to patta lands in Ex-Mysuru area of the State of Karnataka. There are other consequential challenges to various other amendments made to Chapter-V.

3. Chapter-VI which deals with the payment of royalty, dead rent, security deposit etc., also underwent major amendments. There is a challenge to the 4th proviso incorporated in Rule 36 by the Amendment Rules. There is also a challenge to sub-Rule (5) of Rule 36 of the amended Rules which requires the grantee of a quarrying lease or licence to make payment of one tenth (1/10) of the royalty amount of the highest permitted annual production quantity of the minerals mentioned in the environmental clearance, in advance, in the form of a Bank Guarantee, a Fixed Deposit, a Demand Draft or any other mode of payment, as may be specified by the Government from time to time before execution of lease or licence . There is also a challenge to Rule 36-A inserted by the amendment Rules which requires every holder of the quarry lease or licence or composite licence of minor minerals (except ordinary sand) to make payment towards the District Mineral Foundation of the district in which mining operations are carried on.

THE CASE OF THE PETITIONERS

4. The main submissions are canvassed in writ petition No.58505/2016. Therefore, we are referring to the facts of the case in the said writ petition. This is a case where the petitioner is claiming to be the owner of a patta land more particularly described in paragraph-1 of the writ petition. It is the case of the petitioner that it is an un-cultivable land consisting of granite deposits which belong to him. It is his case that he is the owner of the land and granite found in the sub-soil. It is pointed out that the petitioner had applied for conversion of use of the said land from agricultural to non-agricultural purposes, in accordance with the provisions of Section 95 of the Karnataka Land Revenue Act, 1964 (for short "the said Act of 1964"). According to the case of the petitioner, a Full Bench of this Court, in the case of State of Karnataka -vs- Dundamada Shetty (ILR 1993 KAR 2605 (FB)= 1993 SCC online Kar-187) held that in view of Section 38 of the Mysuru Land Revenue Code, 1888 (for short 'the Mysuru Code'), the pattadars of the lands in old Mysuru area have absolute right over the sub-soil mineral granite and have right to excavate and transport the granite subject to obtaining transport permit. It is the case of the petitioner that this right of Pattadars in Ex-Mysuru area was recognized by the State Government by framing the Karnataka Minor Mineral Concession Rules, 1969 (for short 'the said Rules of 1969'). The said Rules of 1969 were repealed on coming into force of the said Rules of 1994. In the said Rules of 1994, as originally framed, a proviso was added to Sub-rule (1) of Rule 32 which clarified that the persons in possession of Patta lands in the Ex-Mysuru territory which are now situated in Karnataka State who were full owners of certain sub-soil minor minerals situated in their patta lands were not required to obtain a quarrying licence/permission in accordance with the provision of Sub-Rule (1) of Rule 32 of the said Rules of 1994. However, such pattadars were required to apply and obtain mineral dispatch permits. In the year 2014, an amendment was carried out to sub-rule (1) of Rule 32 of the said Rules of 1994 which provided that such owners of patta land who were full owners of sub-soil minor minerals in their patta lands were required to obtain working permission before undertaking quarrying operation of the minor minerals. By the Amendment Rules, with effect from 12th August 2016, it was made mandatory to all persons in possession of patta lands in the entire State of Karnataka, in whose land, sub-soil minor minerals are situated, to obtain a quarrying licence before undertaking quarrying operation of minor minerals in patta land.

5. The contention of the petitioner is that by the amendments brought in the year 2014 as well as by the Amendment Rules in the year 2016 to the said Rules of 1994, a right which is vested in pattadars in Ex-Mysuru area who are the owners of the minor minerals in the sub-soil to carry on quarrying operations without seeking any permission has been taken away. It is submitted that by amending Rule 32 in the years 2014 and 2016, the basis of the decision of the Full Bench in the case of Dundamada Shetty (supra) is not taken away. It is contended that without taking away the basis of the said decision, the same cannot be nullified by the said two amendments. The prayer in the writ petition is for challenging the Amendment Rules and for a declaration to the effect that the Amendment Rules are arbitrary, unconstitutional, null and void.

6. The averments made in the writ petition show that the challenge is to the amendment carried to sub-rule (1) of Rule 32 by the Amendment Rules and a challenge is also to various sub- Rules of Rule 32. Further, there is a challenge to the Rule 36-A which imposes a levy towards District Mineral Foundation. There is a challenge to the amendment made to Schedule-II of the said Rules of 1994 by increasing the rates of royalty on black granite. There is a challenge to sub-rule (5) of Rule 36 requiring the licencee/lessee to furnish a Bank Guarantee equivalent to certain percentage of royalty payable on the permitted annual production quantity mentioned in the environmental clearance. There is also a challenge to the timeline fixed regarding the transport of minor minerals under sub-rule (5) of Rule 42.

THE CASE OF THE STATE GOVERNMENT

7. The State Government has filed a statement of objections in writ petition No. 58505 of 2016 on which reliance is placed in all other connected writ petitions which are forming a part of the group. The State Government has set out the reasons for the amendments made by the Amendment Rules. It is submitted that the right of the pattadars who are the owners of the minerals in sub-soil is not taken away by the Amendment Rules. It is submitted that public interest requires that minerals which are a part of the natural resources cannot be permitted to be frittered away by its indiscriminate exploitation by pattadars. Therefore, it was sought to be regulated with the object of conservation of the natural resources. The other object was of effective implementation of mining and environmental laws. It was submitted in the statement of objections that a quarrying lease, mining lease or mineral concession do not stand on the same footing as the concept of the ordinary law of contracts. It was submitted that fundamental rights conferred under clause (1) (g) of Article 19 of the Constitution of India to carry on any trade or business is always subject to reasonable restrictions, as provided in clause (6) of Article 19 of the Constitution. It is submitted that mining by the Pattadars is sought to be regulated to avoid unscientific and uncontrolled quarrying of minerals, as it may cause pollution of air, water and environment. It is pointed out in the statement of objections as to how in certain districts of Karnataka, the pattadars were doing mining operations at their whims and fancies and are causing pollution of air, water and hence, the State Government brought on the rule book the impugned amendments with a view to ensure that the quarrying activity is conducted in a systematic and scientific manner.

SUBMISSIONS OF THE PETITIONERS

8. The main submissions on behalf of the petitioner were canvassed by the learned Senior Counsel representing the petitioner in writ petition No.58505/2016. The submissions were also canvassed by certain other counsel representing the petitioners in other connected writ petitions.

9. The learned Senior Counsel appearing for the petitioners in writ petition No.58505/2016 has taken us through the provisions of the said Rules of 1969, the said Rules of 1994 as originally framed and subsequent amendments carried thereto from time to time. He submitted that Form-E appended to the said Rules of 1994 which is a form of licence proceeds on the footing that the State Government is the owner of the minerals. His submission is that making a provision which requires the pattadars to obtain a working permission or a licence for quarrying operations of the sub-soil minerals vesting in them amounts to usurping the rights of the owners of the minerals. He invited our attention to Rules 3, 3B, 3C and 3D. He pointed out that the 4th proviso to Rule 36 requiring payment of average additional periodic payment in addition to royalty even by the Pattadars who are the owners of the minerals in sub-soil is arbitrary. He submitted that the State Government has accepted in the statement of objections that the law laid down by the Full Bench of this Court in Dundumada Shetty (supra) still holds good. He submitted that by carrying out the amendments to the said Rules of 1994 in the year 2014 and 2016, the State Government has not taken away the basis of the said decision of the Full Bench and the said amendments are made seeking to simply nullify the binding decision of the Full Bench. He urged that it is impermissible to do so. He submitted that under sub-section (3) of Section 15 of the said Act of 1957, the royalty cannot be enhanced more than once during the block period of three years starting from 1987. He submitted that by the Amendment Rules of 2016, the royalty was sought to be enhanced more than once during the period of three years. He placed reliance on the decision of the Apex Court in the case of D.K. Trivedi and sons and others -vs- state of Gujarat and others (1986 (supp) SCC 20). While pointing out that the issue of nature of royalty is pending before the larger Bench of the Apex Court, he submitted that the royalty is basically payable as a return to the owner of the minerals and therefore, the Pattadars in Ex-Mysuru area who are the owners of the minerals in the sub-soil cannot be held liable to pay royalty. He submitted that the several provisions contained in Chapter-II and II-A of the said Rules of 1994 cannot be made applicable to quarrying activities carried by the Pattadars who are the owners of the minerals.

10. He extensively invited our attention to the decision of the Full Bench of this Court in the case of Dundamada Shetty (supra) which, according to him, holds that the holders of patta land situated in Ex-Mysuru territory are the full owners of sub-soil mineral granite situated in their patta lands and therefore, they are entitled to quarry granite without any restrictions from the State authorities but subject to restrictions that may be imposed on transport as per the Rules framed by the State Government. He pointed out that the Full Bench held that the restrictions contained in sub-section (1) of Section 4 of the said Act of 1957 do not apply to pattadars who are the owners of the minerals in sub-soil.

11. He pointed out that on 16th June 2015, the Government notified the draft of the proposed amendments to the said Rules of 1994 containing various amendments including the amendments to Rule 32. He submitted that detailed objections were filed to the said draft by the petitioner as well as by the Quarry Owners Association. However, while issuing the notification dated 12th August 2016, by which, the Amendment Rules were published, several additional amendments were added which were not incorporated in the draft published. He submitted that there are legal mala-fides on the part of the Government as reflected from the inclusion of such additional amendments. Learned Senior Counsel relied on the decision of the Apex Court in the case of Raja Anand Brahma Shah -vs- State of Uttar Pradesh and others (AIR 1967 SC 1081) and in particular what is held in paragraph 13 thereof which holds that the owner of a surface of the land is entitled ex jure to everything beneath the land. Thereafter, he relied upon another decision of the Apex Court in the case of Thressiamma Jacob and others -vs- Geologist, Department of Mining and Geology and others ((2013) 9 SCC 725) and invited the attention of the Court to paragraph 55 of the said decision. He contended that the said Act of 1957 neither purports to declare the proprietary rights of the State in the mineral wealth nor does it contain any provision for divesting any owner of a mine of his proprietary rights. He relied upon the decision of the Apex Court in the case of State of Tamil Nadu -vs- M.P.P. Kavery Chetty ((1995) 2 SCC 402) which holds that even in case of Government lands, if lessee exploits the minerals pursuant to a lease granted by the Government, there is no power vesting in the Government to fix the sale price of the minerals.

12. The learned Senior Counsel relied upon the decision of the Apex Court in the case of Gem Granites and another -vs- State of Tamil Nadu and others ((1995) 2 SCC 413) and contended that the State Government can, by publishing a notification in the official gazette, reserve any area for exploitation by Central or State Government companies or Corporations only if it has obtained the approval of the Central Government under sub-section (2) of Section 17-A of the said Act of 1957.

13. The learned Senior Counsel invited the attention of the Court to a recent decision of the Apex Court in the case of State of Meghalaya -vs- All Dimasa Students Union, DIMA- HASAO district Committee and others ((2019) 8 SCC 177) by pointing out that though the State Government may rely upon the said decision, in fact, the said decision is not against the petitioner. He made detailed submissions on the said decision even by way of reply to the submissions canvassed by the learned Additional Government Advocate which we are reproducing here.

14. He pointed out the nature of challenge before the Apex Court and question number 3 and 4 framed by the Apex Court in paragraph 53.3 and 53.4. He submitted that the issue whether any mining lease or licence is required to be obtained if the owner of the land and minerals therein wants to win the minerals did not specifically arise for consideration before the Apex Court. Relying upon the various paragraphs of the said decision, he submitted that the Apex Court has held that in respect of minerals found in a private land belonging to the owner, it is for the owner to grant a lease to a third party and the State Government has no power to grant the mining lease. He urged that it is not specifically held that the owner of the land who is the owner of sub-soil minerals is required to obtain a lease or a licence. He pointed out that the Apex Court relied upon clause (f) of sub- section (2) of Section 13 of the said Act of 1957 which confers a rule making power on the central Government to frame Rules laying down the procedure for obtaining licence or lease for mining in respect of any land in which minerals vest with the person other than the Government. He pointed out that under Section 15 of the said Act of 1957 which confers Rules making power on the State Government, there is no provision which is pari materia with clause (f) of sub-section (2) of Section 13. He urged that the Judgment of the Apex Court should be understood in the context in which it is rendered. He submitted that if paragraph 106 is read with paragraphs 112, 129, 130 and 131, it is clear that the owner of the minerals does not require any lease or licence to exploit the minerals available in his land. He also pointed out that the attention of the Apex Court was not invited to the amendments carried out to the said Act of 1957 on 12th January 2015 and to the fact that the Mineral Concessions Rules, 1960 have been repealed by the Minerals (other than Atomic and Hydro and Carbons Energy Minerals) Concession Rules, 2016.

15. Some of the other learned members of the Bar appearing for the petitioners argued that sub-rule (5) of Rule 36 which requires payment of one tenth (1/10) of the royalty amount in advance in the form of performance guarantee is completely arbitrary and illegal. Their submission is that the royalty, if payable, becomes payable only after removal of the minor minerals. It is submitted that the person who is permitted to excavate the minor minerals may not be able to excavate the entire quantity of minerals which is permitted. Our attention was also invited to sub-rule (7) of Rule 32 and it was submitted that it takes away the right of the owners of the minerals.

SUBMISSIONS OF THE ADDITIONAL ADVOCATE GENERAL

16. The learned Additional Advocate General heavily relied upon the decision of the Apex Court in the case of State of Meghalaya (supra) and more particularly, paragraph 101 which holds that the restriction under the sub-Section (1) of Section 4 of the said Act of 1957 is also applicable to the person who is the owner of the minerals. He also invited our attention to paragraph 104 wherein it was expressly held that the Rules can be framed for regulating excavation of the minerals vesting with any person other than the State Government. He would, therefore, submit that to that extent, the decision of the Full Bench rendered in Dundamada Shetty (supra) is no longer a good law.

17. He submitted that the rights of the Pattadars which were upheld by the Full Bench are not in any way disturbed or violated by the amendments made to Rule 32 and in particular by Sub- Rule 2 thereof. The provisions of the said Rules only seek to regulate the mining/quarrying activities in the larger interests of general public so as to ensure that by way of indiscriminate quarrying, the natural resources are not frittered away and damage is not caused to the environment as well as to the nearby properties. He submitted that a Rule making power is vested in the Government under Section 15 of the said Act of 1957 to frame the Rules for regulating the quarrying/mining activities of the persons who are the owners of the patta lands as well as the minerals in its sub-soil. He submitted that in the decision rendered by the Apex Court in the case of D.K. Trivedi (supra), the validity of Section 15 of the said Act of 1957 is already upheld by the Apex Court. He relied upon the decision of the Apex Court in the case of State of Tamil Nadu -vs- Hind Stone and others (AIR 1981 SC 711) and submitted that the Court must start with an assumption that every legislation is constitutionally valid. He relied upon the decision of the Apex Court in the case of Greater Bombay Co-Operative Bank Limited -vs- United Textile Yarn Tex (pvt) Limited and others ((2007) 6 SCC 236) on the right of the state to regulate in the context of clause (6) of Article 19 of the Constitution of India. He relied upon two decisions of the Apex Court in the cases of Deepak Theatre, Dhuri -vs- State of Punjab and others (1999 (Supp) 1 SCC 684) and Namith Sharma -vs- Union of India ((2013) 1 SCC 745). He submitted that if there are two possible interpretations of a legislation, the one in favour of the constitutionality should be adopted. He submitted that to save a statute from the vice of unconstitutionality, the Court can always adopt the method of reading down the provisions of the statute.

18. Inviting our attention to the averments made in the writ petition, he submitted that there are no grounds set out showing as to how the provisions of the Amendment Rules are unconstitutional. He submitted that in absence of any pleadings containing the prima facie and acceptable grounds of challenge, the plea involving a challenge to the constitutional validity has to be summarily rejected. The learned Additional Advocate General would, therefore, submit that there is absolutely no merit in the challenge to the amendments made to the said Rules of 1994 which were brought into force with effect from 12th August, 2016.

CONSIDERATION OF SUBMISSIONS

RIGHTS OF THE OWNERS OF PATTA LAND WITHIN THE TERITORRY OF EX-MYSURU STATE WHO ARE THE OWNERS OF THE MINERALS IN THE SUB-SOIL.

19. Before we deal with the provisions of the said Act of 1957 and the said Rules of 1994, we are dealing with the issue relating to the rights of the owners of patta lands within the territory of Ex- Mysuru State who were the owners of the Minerals in the sub-soil.

20. On finding that there was a conflict between a decision rendered by Hon'ble Shri Justice Chandrakantaraj Urs which was confirmed in writ appeal and a decision rendered by Hon'ble Shri Justice Doddakalegowda, a reference was made to the Full Bench in the case of Dundamada Shetty (supra).

21. The careful perusal of the findings recorded in paragraph 6 of the decision of the Full Bench shows that the issue before the Hon'ble Shri Justice Chandrakantaraj Urs was in respect of the rights of the owners of the patta lands in Ex-Mysuru State who were also the owners of granite, a minor mineral which was found in sub-soil of their lands. The issue dealt with in the decision of Hon'ble Shri Justice Doddakalegowda was the same. Therefore, issue before the Full Bench was confined to pattadars who were the owners of the land as well as the owners of minor mineral granite found in the sub-soil. This aspect is crystal clear from the question No.7 framed for consideration in paragraph 7 of the decision of the Full Bench which reads thus:

"7. Whether holders of patta lands in Ex- Mysuru State areas forming part of Karnataka State have any ownership rights in granite found in the sub-soil of their lands? If yes, whether they are required to follow any of the procedure laid down by Karnataka Minor Minerals Concession Rules, 1969?"

The case was considered in the context of Section 38 of the Mysuru Code which reads thus:

"38. Unless it is otherwise expressly provided by the terms of any grant made, or of any other instrument of transfer executed by the Government for the time being, the right to all precious metals, precious stones, coal and other minerals to be extracted by any process of mining from any lands whatsoever, shall vest absolutely in the Government, and the Government shall, subject to the provisions of Mines and Minerals (Regulation and Development) Act, 1948 (Central Act LIII of 1948), have all the powers necessary for the proper enjoyment or disposal of such rights:

Provided that--

(1) Nothing in this section shall be deemed to apply to limestone, granite and such other ordinary minerals as the Government, by notification in the Official Gazette, may from time to time exempt from the scope of this section;

(2) If, for the purpose of exercising any of the rights referred to in this section either by the Government or by any person acquiring such rights from the Government, any land in the holding or enjoyment of others is required, such land may be acquired in accordance with (the Mysuru Land Acquisition Act, 1894), and whenever, in the exercise of the rights aforesaid, any damage be caused to any holder of land by the disturbance of the surface of such land, and such holder and the Government be unable to agree as to the amount of compensation to be paid to such holder for such damage, the same shall be determined in accordance with the procedure prescribed by (the Mysuru Land Acquisition Act, 1894)."

(Emphasis added)

22. Section 38 of the Mysuru Code provided that unless it is otherwise expressly provided in terms of the grant made by the State Government, the right to all minerals extracted by any process of mining from any land whatsoever shall vest absolutely in the Government. This is a general principle laid down that irrespective of the ownership of the land, the minerals extracted by any process of mining from any land shall vest absolutely in the State Government. The first proviso created an exception to the general rule stated above which provided that nothing in section 38 shall be deemed to apply to lime-stone, granite and such other ordinary minerals as the Government, by a notification in the official gazette, may from time to time exempt from the scope of this section. To the general rule that all minerals in the lands irrespective of the ownership of the lands vest in the State Government, an exception was carved out only in case of three categories of minerals namely, (a) lime-stone (b) granite and (c) such other ordinary minerals, as may be specified by the notification published in the official gazette. Thus, Section 38 of the Mysuru Code which provides for vesting of all minerals in the State Government did not apply to a land in which minerals like Lime-stone or Granite were found or the land in which the other ordinary minerals as may be notified by the State Government in the official gazette were found. Thus, an exception to Section 38 of the Mysuru Code is not carved out in case of all the minerals. It is limited to three classes of minerals as specified in first proviso to Section 38. Therefore, as per Section 38, the owners of patta lands in Ex-Mysuru territory of the State were not the owners of all types of minerals except the three categories of minerals which are set out in the first proviso of the said Section 38 of the Mysuru Code. In case of all other minerals not covered by the first proviso, the same vested in the State Government.

23. The Mysuru Code was repealed by sub-section (1) of Section 202 read with clause (9) of the Schedule of the said Act of 1964. However, the proviso to sub-section (1) of Section 202 saved the rights, privileges and obligations acquired or accrued under the repealed laws including the Mysuru Code.

24. Section 70 of the said Act of 1964, prior to its amendment in the year 1983, provided that save as otherwise expressly provided under any law in force before the commencement of the said Act of 1964, the right to mines and mineral products shall absolutely vest in the State Government. Thus, Section 70, as it originally enacted, saved the rights of pattadars from Ex-Mysuru territory accrued under the first proviso to Section 38 of the Mysuru Code. However, by Section 2 of the Act No. 20 of 1993, the words in Section 70 "save as otherwise expressly provided under" were substituted by the words "notwithstanding anything contained in" with retrospective effect. The amended section reads thus:

"70. Right to mines and mineral products to vest in Government:

Notwithstanding anything contained in any law in force before the commencement of this Act or under the terms of any grant made or of any other instrument of transfer executed, by or on behalf of the Government for the time being, the right to mines, minerals and mineral products, shall vest absolutely in the State Government and the State Government shall, subject to the provisions of the Mines and Minerals (Regulation and Development) Act, 1957 (Central Act No. 67 of 1957), have all the powers necessary for the proper enjoyment or disposal of such rights."

The Full Bench has held that the amendment made to Section 70 of the said Act of 1964 by the Act No. 20 of 1983 was void, in the light of clause (1) of Article 254 of the Constitution of India. In paragraph 34, the Full Bench held thus:

"there is, therefore, no escape from the conclusion that the impugned provisions of the Ordinance and the Act are void in the light of Article 254(1) of the Constitution of India and are not saved by Article 254(2) thereof. They would also be void in the light of Article 31 of the Constitution of India as existing in 1964, as the amending provision is sought to be brought into force retrospectively from 1964. Second ground of attack raised by Mr. Shanti Bhushan against the impugned provisions of the Ordinance and the Act is found to be having substance and this ground must be upheld."

(emphasis added)

25. In paragraph 22 of the decision of the Full Bench, sub-section (1) of Section 4 of the said Act of 1957 was considered. Sub-section (1) of Section 4 of the said Act of 1957 reads thus:

"4. (1) No person shall undertake any prospecting or mining operations in any area, except under and in accordance with the terms and conditions of a prospecting licence or, as the case may be, a mining lease, granted under this Act and the rules made thereunder:

Provided further that nothing in this sub-section shall apply to any prospecting operations undertaken by the Geological Survey of India, the Indian Bureau of Mines, the Atomic Minerals Division of the Department of Atomic Energy of the Central Government, the Directorates of Mining and Geology of any State, Government (by whatever name called), and the Mineral Exploration Corporation Limited, a Government company within the meaning of Section 617 of the Companies Act, 1956".

(Emphasis added)

26. It was held by the Full Bench that when a person who is the owner of minerals wants to carry out the mining operations to win his own minerals, he cannot be brought within the words 'no person' contained in sub-section (1) of Section 4 of the said Act of 1957 and sub-section (1) of Section 4 will apply only when such owner of minerals desires to grant a lease of minor minerals/granite to any third party. The relevant portion of paragraph 22 of the decision of the Full Bench reads thus:

"Therefore, it must be held that Section 4(1) will cover cases where even a patta holder seeks to create a lease of minor mineral like granite, which may be belonging to him and which may be situated in his land. If such an occupant wants to give a lease of such minor mineral for the purpose of exploitation to any third party, lessee, he has to follow the provision of Section 4(1) of the Mines and Minerals Act. This conclusion of Mr. Justice Urs is well sustained on the language of Section 4(1). It is further supported by the connotation of the word 'mining lease' as defined by Section 3(c) which would include even a sublease granted for such purpose. It is obvious that sub-lease can be granted by the lessee, who is other than the lessor, who is the owner of the mineral. If the learned Advocate General's contention is accepted, then the entire definition of 'mining lease' under Section 3(c) would be rendered otiose. In fact, this very view on the interpretation of Section 4(1) was taken by a Division Bench of the Gujarat High Court in the case of Amritlal Nathubhai Shah and others v. Union Government of India and another. In that case, the Division Bench of Gujarat High Court consisting of Mr. P.N. Bhagwati, C.J., and Mr. D.A. Desai, J. (as they then were), while interpreting Section 4(1), observed that Section 4(1) will apply only to a person who is not the owner of the minerals and who can therefore obtain a mining lease from the owner. If a statute provides that no person shall do a particular act except on a particular condition, it is, prima facie, natural and reasonable to understand the Legislature as intending such persons, as, by the use of proper means, may be able to fulfil the condition; and not those who, though called 'persons' in law, have no capacity to do so at any time, by any means, or under any circumstances, whatsoever since a person who is the owner of minerals cannot obtain a mining lease for carrying on mining operations to win his own minerals; he cannot be brought within the words "no person" in Section 4(1)."

(Emphasis added)

27. That is how the Full Bench held that the rights conferred on the owners of the patta lands who are the owners of the minerals specified in the first proviso to Section 38 of the Mysuru Code remain un-affected even after the repeal of Mysuru Code by the said Act of 1964 and that such rights were not taken away even by amended Section 70 of the said Act of 1964. Thus, the Full Bench held that the owners of patta lands in Ex-Mysuru region who were the owners of the mineral found in the sub-soil continued to be the owners of the said minerals. However, it was held that the holders of patta lands granted under the Government Grant Rules have no ownership rights in the granite found in the sub-soil of their lands. Ultimately, what is held by the Full Bench is summarized in sub-clause (a) of clause (5) of paragraph-40 of its decision which read thus:

"40. (5) (a) The holders of patta lands situated in Ex-Mysuru State territory now comprised in Karnataka State and who are not holders of lands granted under Government Grant Rules are the full owners of sub-soil minor mineral granite situated in their patta lands and they are entitled to quarrying operations by themselves qua these minor mineral granite without any restrictions from the State authorities under the Minor Mineral Concession Rules, 1969 subject to the rider that they have to follow Rule 62A of the aforesaid Rules at the stage of transporting their quarried granite in so far as the said Rule would apply to such material sought to be transported".

(Emphasis added)

28. Thus, the declaration granted by the Full Bench is in respect of the holders of patta lands situated in Ex-Mysuru State territory who were the full owners of the sub-soil mineral granite. It was held that only such owners of the patta lands are entitled to do quarrying operations by themselves qua minor mineral-granite without any restrictions from the State authorities under the said Rules of 1969. As observed earlier, it was also held that sub- section (1) of Section 4 of the said Act of 1957 which makes it mandatory to apply and obtain a lease or a licence for carrying out quarrying operations is not applicable to such owners of patta lands who are the owners of sub-soil minor mineral-granite. The Full Bench held that sub-section (1) of Section 4 of the said Act of 1957 is not applicable to such owners and, therefore, the State Government by exercising its rule making power under the said Act of 1957, cannot provide for a licensing provision in case of such owners of patta lands.

29. If the finding of the Full Bench that sub-section (1) of Section 4 of the said Act of 1957 is not applicable to quarrying/mining operations carried out by the owners of the patta land in Ex-Mysuru area who are the owners of minor mineral granite continues to hold good, obviously, sub-rule (1) of Rule 32 of the said Rules of 1994 which requires such owners to obtain a permission or a licence will be bad in law, inasmuch as, the said provision does not take away the basis of the decision of the Full Bench rendered in Dundamada Shetty (supra).

30. At this stage, it is necessary for us to refer to the recent Judgment of the Apex Court in the case of State of Meghalaya (supra). The appeal before the Apex Court arose out of the orders passed by the National Green Tribunal. The points for consideration were framed by the Apex Court in paragraph 53. The questions 3 and 4 which are set out in paragraph 53.3 and 53.4 are relevant for our consideration which read thus:

" (3) Whether for mining the minerals from privately owned/community owned land in Hills Districts of Meghalaya, obtaining a mining lease is a statutory requirement under the MMDR Act, 1957 and the Mineral Concession Rules, 1960?

(4) Whether under the MMDR Act, 1957 and the Mineral Concession Rules, 1960, it is the State Government, who is to grant lease for mining of minerals in privately owned/community owned land or it is the owner of the minerals, who is to grant lease for carrying out mining operations?"

31. The consideration of Point No. 3 has been made by the Apex Court from paragraph 94 onwards. In paragraph 100, the Apex Court considered the provision of Section 4 of the said Act of 1957. In paragraph 101, the Apex Court interpreted sub- section (1) of Section 4 which reads thus:

"101. The use of words "no person" in Section 4(1) is without an exception. There is nothing in Section 4(1) to indicate that restriction contained in Section 4(1) does not apply with regard to a person who is owner of the mine. Further, words "any area" under Section 4(1) also have significance which does not have any exception. Further phrase "except under and in accordance with terms and conditions with a mining lease granted under the Act" are also significant which make the intent and purpose of prohibition clear and loud."

Thus, in so many words, the Apex Court held that even a person who is the owner of minor minerals in the sub-soil is not excluded from the applicability of sub-section (1) of Section 4 of the said Act of 1957.

32. In paragraph-103, the Apex Court has considered the Rule making power vesting in the Government. In paragraph 104, the Apex Court has recorded its finding which read thus:

"104. When we read clause (a) and clause (f), it makes clear that the Rules can be made for grant of mining lease in respect of land in which minerals vest in the Government as well as in respect of any land in which mineral vest in person other than the Government. The statutory scheme, thus, is clear that lease can be granted with regard to both the categories of land, land in which the Government is owner of minerals and land in which minerals vest in person other than the Government. The tribals, owners of the minerals shall expressly fall in rule-making power of the Government under Section 13(f)".

(Emphasis added)

33. Hence, there is a categorical finding recorded by the Apex Court to the effect that a lease can be granted with regard to both the categories of the land. The first category is of the lands of which the Government is the owner of the minerals and the second category is of the lands in which the minerals vest in the persons other than the Government.

34. The argument of the learned Senior Counsel appearing for the petitioners is that the decision of the Apex Court recording a finding that the provisions of sub-section (1) of Section 4 of the said Act of 1957 and consequent Rule making power of the Government is applicable only to a situation where a private person who is the owner of the land and minerals in it wants to grant a lease to a third party and it will not apply when the owner himself wants to win the minerals. A similar submission was also made before the Apex Court which has been specifically rejected by recording a finding in paragraph 106 which reads thus:

"106. The statutory scheme delineated by Section 13(2)(f) and the Mineral Concession Rules, 1960 clearly contemplate grant of mining lease, with regard to both the categories of land, that is, land in which minerals vest in the Government, and the land in which minerals vest in a person other than the Government. In statutory provisions there is no kind of exception as contended by the learned counsel for the appellant that when owner himself wants to win the minerals he does not require any mining lease. The submission is contrary to the express statutory scheme, in the event the submission of the appellant is accepted that with regard to minerals which vest in a private person no mining lease is required, the whole object of the Union by which it declared to have taken under its control regulation of mines and development of minerals shall be frustrated".

(emphasis added)

35. Thus, the Apex Court specifically rejected the submission that sub-section (1) of Section 4 will not apply when the owner himself wants to win the minerals owned by him and hence, he does not require any mining lease/licence/permit. After recording this finding, a specific submission was considered by the Apex Court which is recorded in paragraph 107. The submission was how the owner of minerals can grant a lease to himself. In paragraph 107, the Apex Court has recorded thus:

"107. Another limb of the submission of the appellant needs to be noticed here. Shri Naphade submits that there is no concept of owner of a land granting lease to himself. He submits that concept of lease is well known and well-recognised concept as contained in Section 105 of the Transfer of Property Act."

(Emphasis added)

While dealing with this submission, the Apex Court held that a lease, as defined under the Transfer of Property Act, 1882 is completely different from the concept of a mining lease. The word 'lease' is not used in the said Act of 1957 in a technical sense. The Apex Court referred to the Halsbury's Laws of England, 4th edition which defines the mining lease in paragraph 321. After considering some of its earlier decisions, the Apex Court has recorded categorical findings in paragraph 112 which reads thus:

"112. The words "mining lease" have been given specific meaning under the 1957 Act. It is well- settled principle of interpretation that the provisions of an Act including definition of a term are to be interpreted in a manner which may advance the object of the legislation. The essential characteristic of mining lease is that it is granted for the purpose of undertaking mining operation and mining operation means any operation undertaken for the purpose of winning the mineral. Applying the aforesaid definition in the Mineral Concession Rules, 1960 under Chapter V it cannot be said that no mining lease is contemplated with respect to land where mineral vests exclusively in a private person".

(Emphasis added)

The aforesaid findings answer the question-3 formulated by the Apex Court against the owners of the lands having mine.

As regard applicability of Chapter-V of the Rules, in paragraph-129, the Apex Court held thus:

"129. Thus, Chapter V of the 1949 Rules dealt with the mining lease granted by private persons i.e. the category where the minerals were not owned by the Government but were owned by private persons. Chapter V of the 1960 Rules contains substantially similar provisions. Thus, Chapter V of the 1960 Rules has to be treated to be dealing with minerals owned by private owners. The earlier statutory regime, which was enforced as per the 1949 Rules made it amply clear that mineral concessions are to be granted by private persons also, which is in substance retained in Chapter V of the 1960 Rules. Thus, mining lease to be granted as per Chapter V of the 1960 Rules is mining lease by the owner of mineral and similar concept has to be borrowed and read in Chapter V as noted above. Absence of any procedure to make an application for mining lease to the State Government in Chapter V of the 1960 Rules and lessor being the private persons and not the State Government, clearly indicates that the State Government is not to grant the lease in respect of land of privately owned/community owned owners".

(Emphasis added)

36. This finding is in respect of a case where the owners of minor minerals want to grant a lease. This portion relates to question 4. This finding does not deal with the contingency where the owner himself wants to win the minerals. Ultimately, in paragraph 131, the Apex Court held thus:

"131. We, thus, conclude that as per the statutory provisions contained in the 1960 Rules especially Chapter V, a mining lease for minerals, which belongs to a private owner or a community owner, it is not the State Government, which is entitled to receive any application or grant any mining lease, but it is the private owner or community owner, who is entitled to grant a lease for mining minerals owned by them. Issue 4 is answered accordingly".

(Emphasis added)

Again, this paragraph will be applicable only when the private owner of minerals wants to grant a lease to a third party.

37. On conjoint reading of the findings recorded by the Apex Court in paragraphs 101, 104 and 106 to 112, it is crystal clear that the Apex Court has categorically held that the restrictions imposed by sub-section (1) of Section 4 of the said Act of 1957 will apply even when the owner of the land who is also the owner of the minerals found in the land himself wants to win the minerals. In fact, as narrated above, a specific submission made that the owner of a land cannot grant a lease to himself was negatived by the Apex Court. The subsequent findings which are recorded in paragraphs 129 to 131 are on issue No.4 which deals only with the provisions of the Mineral Concession Rules, 1960. The Apex Court held that there is no provision therein which provides for grant of a lease when the owner of the minerals wants to grant the lease to a third party. Nevertheless, the Apex Court in paragraphs 104 and 106 clearly holds that in view of the language used in sub-section (1) of Section 4 of the said Act of 1957, the argument that the same does not apply to a person who is the owner of a mine and who wants to win minerals, cannot be accepted. In fact, the Apex Court held that the mining lease, as contemplated by said Act of 1957 is entirely different from the traditional meaning of the 'lease' which is contemplated by the Transfer of Property Act, 1882. Moreover, in this case, we are dealing only with a licence which is in substance a permission granted for quarrying. The grant of such a licence will not in any manner affect the right of Pattadars who are the owners of the minerals in sub-soil. The reason is that, as held by the Apex Court in the case of Thressiamma Jacob (supra), the said Act of 1957 is enacted with an object of regulating the mining activities and it does not contain any provision divesting any owner of a mine of his proprietary rights over the land. Essentially, the provisions of the said Act of 1957 and the Rules framed thereunder are only for regulating the mining activities and therefore, sub-section (1) of Section 4 of the said Act of 1957 which requires grant of a permit or a licence or a lease as a condition of carrying out mining operations introduces a regulatory measure or regulatory mechanism for carrying on mining operations. When a quarrying lease or a licence is granted, it confers an authority on the person to whom it is granted to win the minerals in the sub-soil. If the owner of a land and minerals therein applies for and obtains a licence under Sub- Rule (1) of Rule 32 of the said Rules of 1994, it does not take away or affect his ownership rights. The provision is intended to regulate the mining activity. The provisions of the said Act of 1957 or the said Rules of 1994 do not purport to declare the proprietary rights of the State Government in the mineral wealth and the same do not divest any owner of the land of his proprietary rights.

38. Thus, after having considered the findings recorded by the Apex Court in paragraphs 100 to 112, it is clear that sub-section (1) of Section 4 of the said Act of 1957 is applicable to any person including the person who is the owner of the land as well as the owner of the minerals in the sub-soil. However, the decision of the Full Bench rendered in the case of Dundamada Shetty (supra) and more particularly, in paragraph 22 categorically holds that application of Section 4 (I) of the said Act of 1957 is totally ruled out for deciding the controversy between the parties. In fact, in the same paragraph and in the earlier portion, the Full Bench categorically records its approval to the view taken by the Hon'ble Shri Justice Chandrakantraj Urs that sub-section (1) of Section 4 will not cover the cases where a patta holder seeks to win minor minerals/granite belonging to him in his patta land. Moreover, the Full Bench in paragraph 22 specifically holds that:

"If a statute provides that no person shall do a particular act except on a particular condition, it is, prima facie, natural and reasonable to understand the Legislature as intending such persons, as, by the use of proper means, may be able to fulfil the condition; and not those who, though called 'persons' in law, have no capacity to do so at any time, by any means, or under any circumstances, whatsoever since a person who is the owner of minerals cannot obtain a mining lease for carrying on miningoperations to win his own minerals; he cannot be brought within the words "no person" in Section 4(1)."

In view of the interpretation put by the Apex Court in the case of State of Meghalaya (supra) to sub-section (1) of Section 4, the owner of the land who is also the owner of the minerals found in the sub-soil will have to apply for grant of a licence, as contemplated under sub-section (1) of Section 4 of the said Act of 1957. What will bind this Court is the latest decision of the Apex Court in the case of State of Meghalaya (supra). Only to that extent, the decision of the Full Bench will not be binding precedent.

39. The argument canvassed by the learned Senior Counsel appearing for the petitioner is that in Section 15 of the said Act of 1957 which confers a rule making power on the State Government, there is no provision which is pari materia with clause (f) of sub-section (2) of Section 13. However, the Apex Court specifically held that sub-section (1) of Section 4 of the said Act of 1957 will apply to a case where the owner of the minerals himself wants to win the minerals. There may not be a specific clause like clause (f) of sub-section (2) of Section 13 in Section 15 of the said Act of 1957, but clause (a) of sub-section 1-A of Section-15 confers a very wide rule making power on the State Government is very relevant. Section 15 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.

(1-A) 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 therefor;

(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 ropeways, 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 therefor, and the powers of the revisional authority; and

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

(Emphasis added)

Thus, there is a power to frame Rules vested in the State Government for determining the person by whom and the manner in which the applications for quarrying leases, mining leases or other mineral concessions may be made and the fees to be paid therefor. A rule making power is also conferred on the State Government for fixing and collecting the rent, royalty, fines and other charges and the manner in which the same shall be made payable. Thus, the rule making power conferred on the State Government also covers the power to frame the rules governing a case where the owner of the land and the owner of the minerals therein wants to himself win the minerals. Thus, there is a rule making power conferred on the state Government which empowers the State Government to frame the rules requiring the private owner of the land who is the owner of the minor minerals to apply for grant of mining licence. Sub-Section (1) of Section 4 of the said Act of 1957, as held by the Apex Court in the case of the State of Meghalaya (supra), applies to a situation where the owner of a private land who is the owner of mineral in the sub-soil wants to himself win the minerals. For giving effect to Sub-Section (1) of Section 4 of the said Act of 1957, rules can be framed even in exercise of powers under Sub-Section (1) of Section 15 of the said Act of 1957 which can apply to such category of owners. In this group of writ petitions, there is no challenge to the validity of sub-section (1) of Section 4 of the said Act of 1957 and the Rule making power conferred on the State Government by Section 15 of the said Act of 1957.

40. The argument of the learned Senior Counsel appearing for the petitioner was that without taking away the basis of the decision of the Full Bench rendered in Dundamada Shetty (supra) by amending sub-rule (1) of Rule 32 in the year 2014 and 2016, the decision of the Full Bench was nullified. However, we have already held that the decision of the Full Bench to the extent to which it holds that sub-section (1) of Section 4 of the said Act of 1957 is not applicable when the owner of the land who is the owner of the minerals wants to quarry the minerals is no longer a good law. We have taken this view in the light of the recent decision of the Apex Court in the case of State of Meghalaya (supra). The decision of the Apex Court, specifically holds that sub-section (1) of Section 4 will apply to the cases where the owner of the land who is the owner of the minerals himself wants to win the minerals. What holds the field is the aforesaid finding recorded by the Apex Court. The decision of the Full Bench continues to hold the field only insofar as it relates to the finding recorded that Section 70 of the said Act of 1964 does not take away the ownership rights of the owners of the patta lands in Ex- Mysuru region in respect of the three categories of the minor minerals specified in the first proviso to Section 38 of the Mysuru Code.

THE VALIDITY OF PROVISION OF SUB-RULE (1) OF RULE 32:

41. Sub-Rule (1) of Rule 32 of the said Rules of 1994 as amended reads thus:

"32. Quarrying licence - (1) No person in possession of patta lands in Karnataka State and in whose lands sub soil minor minerals are situated shall undertake quarrying operation of minor minerals in patta land except with a quarrying licence granted under this chapter.

Explanation.- Patta land means any private land classified as patta land owned by pattadar by inheritance or acquired through ancestral property."

Thus, in case of a patta land, the condition precedent for carrying on quarrying operations is of obtaining a licence. Thus, there is no requirement of obtaining a lease in such cases.

42. As a result of the finding of the Full Bench which protects the holders of patta lands who are the owners of the minor mineral granite in the sub-soil, sub-clause (g) of clause (1) of the Article 19 of the Constitution of India will protect the rights of the owners of the patta lands to conduct business of mining of granite by winning the same. However, under clause (6) of Article 19 of the Constitution of India, in the larger public interests, the Legislature is empowered to make a law imposing reasonable restrictions on the exercise of the fundamental right conferred by sub-clause (g) of clause (1) of the Article 19. The said Act of 1957 which is enacted to regulate mining or quarrying operations imposes certain restrictions by virtue of sub-section (1) of Section 4 thereof. Similarly, sub-rule (1) of Rule 32 of the said Rules of 1994, as amended, imposes restrictions on the right of mining even though the minerals are owned by the owners of patta lands. The State Government, in its statement of objections, has set out reasons for imposing such restrictions. It is pointed out that the minerals which are a part of natural resources cannot be permitted to be frittered away by indiscriminate exploitation by the holders of patta land. If such owners of patta land are permitted to quarry and exploit the minerals without any restrictions, the same would result in a permanent loss to the nature. It is pointed out that the amendment to Rule 32 has been introduced for ensuring sustainable excavation of minerals and also to avoid unscientific and uncontrolled quarrying of minerals, as it may cause pollution of air, water and environment. It is also pointed out that such unscientific and uncontrolled quarrying of minerals causes damage to the crops grown on the nearby lands and adversely affects the forest and wildlife. Therefore, quarrying activities are required to be regulated in order to ensure effective implementation of mining and environmental laws. In short, the stand is that a reasonable restriction of obtaining a licence or a permission has been imposed on a right to win minerals owned by the holders of patta land in the interests of general public.

43. On this aspect, it is necessary for this Court to refer to the decision of the Apex Court in the case of Deepak Theatre (supra). In that case, the appellant was running a cinema theater for exhibiting cinematograph films. He was granted a licence under Section 5 of the Punjab Cinemas (Regulation) Act, 1952. The respondent No.2, on 26th February 1975, classified the seats in the theater into four classes and fixed the rates of admission to the respective classes. This action of the respondent No.2 was questioned by the appellant before the Apex Court. The Apex Court held that it is well settled that the rules validly made under a statute for all intents and purposes are deemed to be a part of the statute. The Apex Court considered the argument canvassed based on the violation of fundamental right under sub-clause (g) of clause (1) of Article 19 of the Constitution of India. In paragraph 4, the Apex Court held that the Government has power to limit the number of shows in the licenced premises in a day with a view to ensure the public safety and other allied matters. The Apex Court observed that no law can be declared to be unreasonable because there is a reduction in the income of the citizen on account of regulation of business. In paragraph 7 and 10, the Apex Court held thus:

"7. Thus right or power of the owner of a theatre from the inception of its construction till exhibition of cinematograph is controlled by the regulations under the Act, the rules and conditions of the licences issued in this behalf. There is no compulsion to construct a cinema theatre, but by undertaking to construct a theatre to exhibit cinematograph films therein, the owner created a right in the cinegoing public, to have an easy access to the theatre. Thereby the private property of the owner is affected with public interest. It, thereby, ceases to be juris privati and is clothed with public interest. When used in a manner detrimental to public interest or welfare it would affect the community at large. By using the owner's property as theatre he/it submits himself or itself to the regulations for common good. The public acquire, thereby, direct and positive interest in exhibition of cinematograph films. Undoubtedly, in a private contract hedged with no public interest, the State has no power to regulate its trade but is subject to general law. The right to fix the rates of admission is not an unbridled power or right but by implication is subject to the regulation under the Act, rules and conditions of the licence. The owner/licensee has no unrestricted power or freedom to fix rates of admission at his whim. Therefore, fixation of rates of admission, though has its inception in the womb of private contract, but clothed with a public interest to be regulated under the Act, rules and conditions of the licence. The Division Bench in Prasada Rao case [AIR 1984 AP 75 : (1983) 2 Andh WR 344] , therefore, held: (AIR p. 106, para 139)

"[I]t is 'clothed with a public interest' as cinegoing public acquired direct and positive interest to have easy access of admission into the theatres. Thereby the business ceased to be 'juris privati' and the business tends to a common charge and became a thing of public interest and use. The business became a sort of public office nearing monopolisation. The legislature seeks to avoid this tendency in the interests of the public welfare. It becomes absolutely necessary to override the private rights of persons and property so as to effectuate the public order for the general welfare of the citizens."

"10. In the above view we hold that Section 5, read with Rule 4 and condition 4-A of the licence is a regulatory measure to fix the rates of admission and classification of the seating in the interest of the general public. It is within the power of the licensing authority. They do not impinge upon the fundamental right to trade, avocation or business of the licensee under the Act. It is a reasonable restriction imposed in the public interest. Accordingly, we do not find any ground, warranting interference. The appeal is dismissed, but with no orders as to costs".

44. By way of amendment to sub-rule (1) of Rule 32 of the said Rules of 1994 which was introduced in the year 2014, a provision was made for obtaining working permission by the owners of patta lands. By 2016 amendments, the word 'working permission' was substituted by the word 'quarrying licence'.

45. The ownership over the minerals by the owner of the patta land does not confer upon the owner an unrestricted right of excavating the minor minerals. The minerals are a part of the natural resources. The mining activities can be regulated by the Government to ensure that the minor minerals which are natural resources are not wasted and are equitably used. The excavation of minor minerals can be regulated to prevent the damage to the environment, damage to the adjacent properties and also damage that may be caused to the agricultural activities carried on the lands in the vicinity. The quarrying activities are likely to adversely affect the wildlife or forest, if the mine is close to a sanctuary or a forest, as the case may be. If there is a residential locality nearby, the quarrying operations may create pollution thereby infringing fundamental right of the citizens to live in a pollution free environment which is guaranteed by Article 21 of the Constitution of India. Similarly, quarrying operations are likely to cause extensive damage to the environment. It is the duty of the State to protect environment and to safeguard forests and wildlife in view of the mandate of Article 48 A of the Constitution of India. Therefore, the requirement of the owner of minerals obtaining a permission or a licence is a regulatory measure introduced by State in the interest of general public.

46. Statutes regulating or restricting the rights of the owners of a property to enjoy the property existed for several years. To give a simple example, even if an individual is the owner of the land, his right of constructing a building over his land can be regulated by imposing certain restrictions such as leaving marginal open spaces on the site and imposing a ceiling on constructed area by enacting rules relating to FAR. Another example is of a land in a close proximity of defence works. By the exercise of the powers conferred under the provisions of the Works of Defence Act, 1903, construction of a building on a privately owned land can be prohibited.

47. Therefore, by making an amendment to the provisions of Rule-32 of the said Rule 1994, by introducing a provision of obtaining a working permission or a licence as a condition precedent for quarrying activities, a regulatory mechanism has been introduced by the Government. Therefore, it is not possible for this Court to find fault with the provision regulating mining activities in the form of sub-rule (1) of Rule 32 of the said Rules 1994 on privately owned patta land especially in the light of the finding of the Apex Court in the case of the State of Meghalaya (supra) on the applicability of Sub-section (1) of Section 4 of the said Act of 1957. Even otherwise, the amendment to Sub-Rule (1) of Rule 32 of the said Rules of 1994 does not affect the rights of the pattadars upheld by the Full Bench in the case of Dundamada Shetty. The amended Sub-Rule (1) introduces only a regulatory measure in the interests of general public. If the argument of the petitioners is accepted, the pattadars will get unrestricted right of winning minerals at the cost of the environment.

47-A. Moreover, much water has flown after the decision of the Full Bench in the case of the Dundamada Shetty (supra). The law on the protection of the environment, prevention of pollution and preservation of natural resources has undergone a change. New principles have been evolved by the Courts. The Apex Court in the case of Intellectuals Forum v. State of A.P., ((2006) 3 SCC 549) held thus in paragraph 67:

"67. The responsibility of the State to protect the environment is now a well-accepted notion in all countries. It is this notion that, in international law, gave rise to the principle of "State responsibility" for pollution emanating within one's own territories (Corfu Channel case [ICJ Rep (1949) 4]). This responsibility is clearly enunciated in the United Nations Conference on the Human Environment, Stockholm 1972 (Stockholm Convention), to which India was a party. The relevant clause of this declaration in the present context is para 2, which states:

"The natural resources of the earth, including the air, water, land, flora and fauna and especially representative samples of natural ecosystems, must be safeguarded for the benefit of present and future generations through careful planning or management, as appropriate."

Thus, there is no doubt about the fact that there is a responsibility bestowed upon the Government to protect and preserve the tanks, which are an important part of the environment of the area."

(emphasis supplied)

In paragraph 73, on sustainable Development, the Apex Court held thus :

"73. In the light of the above discussions, it seems fit to hold that merely asserting an intention for development will not be enough to sanction the destruction of local ecological resources. What this Court should follow is a principle of sustainable development and find a balance between the developmental needs which the respondents assert, and the environmental degradation, that the appellant alleges."

(emphasis added)

Though in the case of Monnet Ispat & Energy Ltd. v. Union of India ((2012) 11 SCC 1), the Apex Court dealt with a case where the State Government was the owner of the minerals, the observations made in paragraph 132 by the Apex Court are relevant which read thus:

"Management of minerals: general observations

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

(emphasis added)

Therefore, considering all the above aspects, we hold that the requirement of obtaining a licence introduced by sub-rule (1) of Rule 32 of the said Rules of 1994, which is applicable to the owners of patta lands who are the owner of sub-soil mineral granite, is not illegal or unconstitutional. It does not take away rights of ownership of pattadars. The effect of grant of licence is that the provisions of Chapter IIA regarding systematic and scientific mining operation become applicable. Even the Rules for protection of environment have been included in the said Chapter.

The object of the provision regarding obtaining a licence is to ensure that quarrying activities are carried out in scientific and systematic manner. This provision is merely a regulatory measure which does not take away the right of ownership of pattadars over the mineral granite in sub-soil.

CHALLENGE TO OTHER SUB-RULES OF RULE 32

48. Now we go to the challenges made to the various other sub-rules of Rule 32 and other provisions introduced by the amendment Act.

49. For the sake of convenience, we are reproducing Rule 32 as amended up to date which reads thus:

"32. Quarrying licence - (1) No person in possession of patta lands in Karnataka State and in whose lands sub soil minor minerals are situated shall undertake quarrying operation of minor minerals in patta land except with a quarrying licence granted under this chapter.

Explanation.- Patta land means any private land classified as patta land owned by pattadar by inheritance or acquired through ancestral property.

(1-A). The provisions of this chapter shall be applicable for such minor minerals that may be notified by the State Government from time to time.

(2) The pattadar shall apply before the Competent Authority along with necessary documents to prove his ownership of the land and sketch of area for obtaining permission to quarry minor mineral under this chapter.

(3) The Competent Authority shall confirm the title, status of land with the Deputy Commissioner in case of specified minor mineral and with Tahasildar in case of non-specified minor mineral.

(4) No quarrying of minor mineral under this chapter shall be allowed in contravention of Environment Impact Assessment Notification dated 14-9-2006 issued by the Ministry of Environment and Forest, Government of India, as amended from time to time.

(5) The Competent Authority shall arrange for survey and demarcation of the area upon payment of the expenses by the pattadar at the rate as specified in Rule 17, 18.

(6) The provisions of Chapters II and II-A and Rules 13, 15-A, 17, 19, 19-A, 19-B, 19-C and Chapter VI, Chapter VII, Chapter VIII and Chapter IX shall mutatis mutandis apply for grant of quarrying licence under this chapter.

(7) Notwithstanding anything contained in this chapter, the provisions of this chapter shall not be applicable, except for provisions of sub-rule (6), for granted patta lands for which the rules in Chapter IV-A shall apply.

(8) licence may be given to GPA holders of patta lands or for holders of consent from the pattadars for extraction of minerals from patta lands:

Provided that every application under this rule shall be accompanied by a Consent Letter specified in form CFQ from the owner of the land to the effect that he has no objection for quarrying minor mineral by the applicant:

Provided further that this consent once given in the Consent Letter shall not be withdrawn for any reason during the pendency of the application for grant of quarrying licence or during the currency of the quarrying licence granted in favour of the applicant.

(9) Grant of licence in patta lands (to pattadars, GPA holder or consent holder) for specified minor minerals shall be done only after recommendation of the District Task Force and approval of the State Government.

(10) In cases where the mineral rights of minor mineral do not vest with the pattadar, the holder of the licence 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 Districts if such average is not available for the District, and if such average is not available within the neighbouring Districts, such Average Additional Periodic Payment shall be deemed to be fifty per cent of Royalty. This deemed percentage being reset after three years based on average obtained in auctions by 31-3-2019; and if no auctions have taken place by 31-3-2019 for deriving the average from Taluk, district or neighbouring districts, as the case may be, then the deemed rate will become the final rate for the Average Additional Periodic Payment:

Provided 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 through auction.

(11) All existing Working Permissions shall be converted into quarrying licences within a period of eighteen months from the commencement of these rules.

(12) Holders of Working permissions granted under these rules shall apply within nine months of commencement of these rules to convert their working permissions into quarrying licence.

(13) A quarrying licence granted under this chapter may be renewed for a further period of 20 years for non-specified minor mineral and 30 years for specified minor minerals, subject to establishment of mineral availability and workability of the quarry, and further subject to provisions of rules in Chapters II and II-A:

Provided that renewal of licence under this rule shall be done only on approval of the District Task Force for non-specified minor minerals, and on recommendation of other District Task Force and approval of the State government for specified minor minerals.

50. Sub-rule 1A of Rule 32 provides that the provisions of Chapter-V will apply only in case of minor minerals that may be notified by the State Government from time to time. Sub-rules (2) and (3) contemplate the verification of the claim of the person claiming to be the pattadar on the basis of the documents produced by him. The Amendment Rules which were brought into force with effect from 12th August, 2016 introduces auction regime except for the lands covered by Sub-Rule (1) of Rule 32. The said provision in Chapter-V is an exception to the auction regime which is made applicable to the other categories of lands having minor minerals. Therefore, for attracting the applicability for Chapter-V, the verification of title as claimed by the Pattadars or the persons claiming to be the owner of the patta lands is necessary. There is nothing arbitrary or illegal about it.

51. Even in the absence of a provision requiring a licence, no quarrying activity can be carried out in contravention of the Environment Impact Assessment notification dated 14th September 2006. Therefore, there is nothing wrong with sub- Rule (4) Rule 32.

52. As regards sub-Rule (5) of Rule 32, it is obvious that before a licence is granted for quarrying, the precise area of the land in respect of which the licence is to be granted must be ascertained. Therefore, there is a provision made for carrying out survey and consequently, for payment of survey fee.

53. Sub-Rule (6) provides that Chapter-II and IIA of the said Rules of 1994 as well as Chapter-VI, VII, VII and IX shall mutatis mutandis apply for grant of a quarrying licence to the owners of patta lands. Even the Rules 13, 15A, 17, 19, 19A, 19B, 19C are made applicable.

54. Now, we come to Chapter-II. Sub-Rule (1) of Rule 3 provides that no person shall undertake any quarrying operation in respect of any minor minerals in any land except under or in accordance with the terms of a quarrying lease or licence granted under the said Rules of 1994. Sub-Rule (2) of Rule 3 provides that no quarrying lease or licence shall be granted otherwise than in accordance with the said Rules of 1994. This provision is in terms of Sub-Section (1) of Section 4 of the said Act of 1957. Rule-3A provides for exemptions/exceptions to sub-Rule (2) of Rule 3 in certain cases, such as, removal of minor minerals (except sand) from the agricultural field for bonafide use and for betterment of agricultural land.

55. Sub-rule (1) of Rule 3-B thereof starts with a non-obstante clause which provides that District Task Force, after obtaining approval of the State Government, may grant quarrying lease or licence for minor minerals required in construction of National and State Highways, major irrigation works, railways or other infrastructure projects including airports. An argument was canvassed that Rule 3B violates Article 300A, as it confers power on the District Task Force to grant quarrying lease even in respect of the patta lands and especially those patta lands where the owner thereof is also the owner of minerals in the sub-soil. Article 300A provides that no person shall be deprived of property save by authority of law. Rule 3-B does not specifically lay down the procedure for granting quarrying lease or licence in respect of patta lands where the owner of the land is also the owner of the minerals. If a quarrying licence in exercise of power under Rule 3B is granted in respect of a patta land where the owner of the land is also the owner of the minerals, it will violate the rights conferred on such owner under Article 300A of the Constitution of India. However, it is well settled that it is the duty of the Court to consider whether a statutory provision can be read down so that it does not attract the vice of unconstitutionality.

56. There are two categories of patta lands which are covered by Chapter-V. The first category of patta lands is of the lands whose owners are also the owners of sub-soil including the minerals. The second category of patta lands is of the lands whose owners are not the owners of the minerals in the sub-soil which vest in the State Government. The second category will include patta lands in ex-Mysuru area in which minerals are found which are not covered by the proviso to Section 38 of the Mysuru Code. As far as the first category is concerned, the power under Rule 3B can be exercised only after acquiring the rights of the owner of patta land by taking recourse to the law relating to the compulsory acquisition. As far as the second category of patta lands is concerned, the issue has been dealt with by the Division Bench of this Court by the Judgment and order dated 19th November, 2019 passed in Writ Petition No.52904 of 2016 in the case of M/S. J.K. Cement Limited -vs- The State of Karnataka (W.P.No.52904/2016 decided on 19.11.2019). In paragraph 19, the Division Bench of this Court held thus:

"19. Coming back to the present case, the ownership rights of the third respondent are not disputed by the petitioner. There is no provision either under the said Act of 1957 or under the said Rules of 1960 which enables the holder of a mining lease granted by the State Government to enter a private land forming part of the lease for excavation of minerals without the consent of the owner of the land though the minerals in the land may belong to the Government. For excavating the minerals, the lessee has to enter the private property which cannot be done unless there is consent or unless proper proceedings are initiated to allow him entry for limited purpose of carrying over the excavation of mines and minerals".

(Emphasis added)

Even if the Government or a person authorized by the State Government, wants to excavate the minerals in privately owned land where the minerals are vesting with the State Government, they cannot dispossess the owner of the land without following the due process of law. The provision of Rule 3B does not contemplate dispossession of the owners of the patta land. The quarrying operations permitted by Rule 3B can be carried out on such a land provided the owners are dispossessed after following due process of law. Grant of a lease or a licence does not ipso facto authorize the holders of lease or licence to enter the patta lands of private ownership without following due process of law. In fact, when the holder of patta lands are the owners of minerals therein, they can be dispossessed only by taking recourse to the law of Compulsory Acquisition. In view of what we have held above, challenge to Rule 3B will not survive.

57. Rule 3C provides that in case of extreme shortage of ordinary building stone for the government works of significant importance in the district, the District Task Force Committee shall have the power to direct the quarry operators in the district to reserve specific percentage of their production for these specific works. Sub-rule (2) of Rule 3C makes it mandatory to a quarry operator, on receipt of such direction from the District Task Force Committee, to reserve specific percentage of his production, as directed by the Task Force Committee. The owner of a patta land who is also the owner of minerals in the sub-soil has a right to win the minerals subject to compliance with the provisions of obtaining a licence and making payment of requisite amounts, as provided in the said Rules of 1994. Thus, Rule 3C may result in depriving the owner of patta lands who is the owner of minerals of certain quantity of minerals reserved by District Task Force Committee.

58. In the case of K.T. Plantation (pvt) Limited -vs- State of Kerala ((2011) 9 SCC 1), the Apex Court held that the expression "property" described in Article 300A is not confined to a land alone but it includes even intangible property like copyright and other intellectual property and embraces every possible interest recognized by law. Therefore, on the face of it, Rule 3C violates the right conferred by Article 300A of the Constitution of India on the owners of the patta land who are the owners of the minerals in the sub-soil. Rule 3C seeks to take away the ownership of a pattadar of a part of the minerals owned by him. Therefore, Rule 3C of the Rules of 1994 to the extent to which it applies to the patta lands of which the owner is the owner of minerals in sub-soil will have to be struck down.

59. Sub-rule (1) and (2) of Rule 3D reads thus:

"3-D. Reservation of area for Government company or corporation and grant without auction - (1) The State Government may reserve any area not currently held under any prospecting license or quarry lease, for undertaking prospecting or quarry operations through a Government company or corporation owned or controlled by it, and where it proposes to do so, it shall by notification in the Official Gazette, specify the boundaries of such area and mineral or minerals in respect of which such area shall be reserved.

(2) If the State Government reserves any area for undertaking prospecting or quarry operations under sub-rule (1), the State Government shall grant prospecting license or quarry lease, as the case may be, in respect of such area to such Government Company or Corporation."

60. As far as the owners of the patta lands who are the owners of the minerals in the sub-soil are concerned, for the reasons which we have recorded while dealing with the issue relating to Rule 3B, we will have to hold that the action of reservation under Rule 3D and consequential action of granting prospective licence or quarry lease in respect of such area to the Government company or Corporation can be taken only if the land is acquired in accordance with the law of compulsory acquisition.

On the aspect of Rule 3D, Section 17A of the said Act of 1957 is very relevant which reads thus:

"17-A. Reservation of area for purposes of conservation.- (1) The Central Government, with a view to conserving any mineral and after consultation with the State Government may reserve any area not already held under any prospecting licence or mining lease and, where it proposes to do so, it shall, by notification in the Official Gazette, specify the boundaries of such area and the mineral or minerals in respect of which such area will be reserved.

(1-A) The Central Government may, in consultation with the State Government, reserve any area not already held under any prospecting licence or mining lease, for undertaking prospecting or mining operations through a Government company or corporation owned or controlled by it, and where it proposes to do so, it shall by notification in the Official Gazette, specify the boundaries of such area and the mineral or minerals in respect of which such area will be reserved.

(2) The State Government may, with the approval of the Central Government, reserve any area not already held under any prospecting licence or mining lease, for undertaking prospecting of mining operations through a Government company or corporation owned or controlled by it and where it proposes to do so, it shall by notification in the Official Gazette, specify the boundaries of such area and the mineral or minerals in respect of which such areas will be reserved.

2-A) Where in exercise of the powers conferred by sub-section (1-A) or sub-section (2), the Central government or the State Government, as the case may be, reserves any area for undertaking prospecting or mining operations, the State government shall grant prospecting licence or mining lease, as the case may be, in respect of such area to such Government company or corporation:

Provided that in respect of any mineral specified in Part A and Part B of the First Schedule, the State Government shall grant the prospecting licence or mining lease, as the case may be, only after obtaining the previous approval of the Central Government.

(2-B) Where the Government company or corporation is desirous of carrying out the prospecting operations or mining operations in a joint venture with other persons, the joint venture partner shall be selected through a competitive process, and such Government company or corporation shall hold more than seventy-four per cent of the paid up share capital in such joint venture.

(2-C) A mining lease granted to a Government company or corporation, or a joint venture, referred to in sub-sections (2-A) and (2-B), shall be granted on payment of such amount as may be prescribed by the Central Government.

(3) Where in exercise of the powers conferred by sub-section (1-A) or sub-section (2), the Central Government or the State Government, as the case may be undertakes prospecting or mining operations in any area in which the minerals vest in a private person, it shall be liable to pay prospecting fee, royalty, surface rent or dead rent, as the case may be, from time to time at the same rate at which it would have been payable under this Act if such prospecting or mining operations had been undertaken by a private person under prospecting licence or mining lease.

61. As per sub-section (1-A) of Section 17-A, it is the power of the Central Government to reserve any area for undertaking prospecting licence or mining operation through a Government company or Corporation owned or controlled by it. Thus, the power to reserve the land to enable a Government company or Corporation owned or controlled by the Government under the parent statute vests in the Central Government. Sub-Section (2) of Section 17A provides that the State Government may, with the approval of the Central Government, can make such reservation. Sub-Rule (1) of Rule 3D does not provide for obtaining any such approval of the Central Government. Thus, Sub-Rule (1) of Rule 3D will have to be harmoniously read with Sub-Section (2) of Section 17-A of the said Act of 1957 and it must be held that the power under Sub-Rule (1) of Rule 3D can be exercised only after approval of the Central Government in accordance with Sub- Section (2) of Section 17-A of the said Act of 1957. Therefore, Rule 3D cannot be applied to the aforesaid categories of patta lands unless the land required for quarrying is acquired in accordance with law and for imposing the reservation, approval of Central Government is obtained.

62. Rule 3E deals with the special provision for discovery of new minerals or use as different minerals or product. This rule imposes embargo on a lessee or a licensee winning and disposing of minor minerals not specified in the lease or licence. As, we are holding that sub-rule (1) of Rule 32 prescribing requirement of obtaining a licence is lawful, no interference can be made with Rule 3E. Rule 3F deals with the grant of exemption to certain category of persons. This rule will not affect the rights of the owners of patta lands.

63. Now we come to Rule 3G of Chapter-II. This is applicable only to quarrying leases granted under Rule-12 which has been now deleted. Therefore, as far as patta lands are concerned, the said rule has no relevance.

64. Rules 4 and 5 define the Competent Authority and the Controlling Authority. Rule 6 specifies the general conditions of quarrying leases and licences. Sub-rule (1) of Rule-6 provides for lapsing of a quarrying lease or a licence on the holder thereof failing to undertake quarrying operation for a period of one year after the date of execution of the lease or the date of grant of licence, as the case may be, or after having commenced the quarrying operations has discontinued the same for a period of one year. In such cases, it is provided that the quarrying lease or licence shall lapse on the last date of the period of one year. In the proviso, a power is conferred on the Competent Authority to revive the lease or licence.

65. Sub-rule (2) of Rule-6 provides for prohibition on carrying on any quarrying operations within the distance of a fifty meters if no blasting is involved and within the distance of two hundred meters if blasting is involved, from the boundary of any railway line, reservoir, tank bund, canal or other public structure or any road or building. It is not shown how the sub-rules (1) and (2) are arbitrary or violative of any of the provisions of the Constitution of India especially when sub-rule (1) of Rule 32 is held valid.

66. Sub-rule (3) of Rule 6 confers a power on the Competent Authority to cancel the lease or licence in case the lessee or the licensee committing breach of the terms and conditions of lease or licence or of the provisions of the said Rules of 1994. It is obvious that such termination on the ground of the breach of a rule can be made provided the concerned rule is applicable to the lease or the licence, as the case may be.

67. Sub-rule (4) of Rule 6 poses real difficulty as far as patta lands are concerned where the owner thereof is the owner of the minerals in the sub-soil. Sub-rule (4) of Rule-6 reads thus:

"6. General conditions of quarrying lease and licence – xxx

(4) Any minor mineral extracted from a quarry and not removed by the lessee or licencee before the date of termination or determination or expiry of the quarrying lease or licence shall be the property of the State Government"

In case of the patta lands where the owners thereof are the owner of the minerals, on termination of the licence granted under sub-rule (1) of Rule 32, the owner will become disentitled to carryout quarrying operations. However, the ownership of the minerals in the sub-soil cannot be taken over by the Government as it will violate the rights of the owners under Article 300A of the Constitution. Sub-Rule (4) to the extent to which it applies to such category of patta lands is in conflict with Article 300-A of the Constitution. Therefore, sub-rule (4) of Rule 6 of the said Rules of 1994, to that extent, will have to be struck down.

68. Rule 7 confers power on the Competent Authority to specify additional conditions. Rule 8 imposes restrictions on grant or renewal of quarrying lease or licence. The said sub-Rules are not shown to be illegal in any manner.

69. Chapter-IIA lays down provisions regarding systematic, scientific mining and protection of environment. Rule 8C provides that no quarrying licence can be granted or renewed unless there is a quarrying plan or simplified quarrying plan duly approved by the Approving Authority for the development of minor minerals deposit. Rule 8D requires that quarrying plan or simplified quarrying plan must be prepared by a recognized qualified person having the qualifications set out therein. Rule 8E provides for grant of recognition by the State Government to the qualified persons. Rule 8F deals with the submission and approval of quarrying plan/simplified quarrying plan. Rule 8G confers powers to modify the approved quarrying plan or simplified quarrying plan. Rule 8H deals with the final mine closure plan. Rule 8-I lays down that the person who can submit quarrying plan or simplified quarrying plan where mining operations have been commenced prior to the commencement of the Karnataka Minor Mineral Concessions (Amendment) Rules, 2013. Rule 8-K lays down that the quarrying operations must be carried by the lessee or licensee in accordance with quarrying plan/simplified quarrying plan. Rule 8-L deals with financial assurance that should be furnished by the lease or licence holder. The rates thereof are also prescribed by the said Rule. Rule 8-M requires that system of working in quarries in sheet rock shall be performed by formation of benches as per the Metalliferous Mines Regulations, 1961. Rule 8-N provides for separate stacking of non-saleable minerals. Rule 8-O requires the holders of lease or licence to employ the qualified persons as mentioned in the said Rule. Rule 8-P lays down the duties of the qualified persons. Rule 8-Q requires that every holder of a lease or a licence to prepare an environment management plan through recognized qualified person and to obtain approval from the Environmental Impact Assessment Authority. Rule 8-R, 8-T, 8-U, 8-W and 8-X are all relating to environmental safeguards and prevention of air, water and noise pollution.

70. Thus, Rules 8-C to 8-X of the Rules of 1994 lay down the various provisions which ensure that firstly, the mining operations and even the closure thereof is done in a systematic and scientific manner and secondly, while carrying out the mining operations, the environment is protected. Rule 8-Y requires the lessee or licensee to provide safety equipments to the workers, to provide with blasting shelters, potable drinking water, to organize health checkup camps for workers etc. It prohibits a lessee or a licensee from engaging bonded and child labour and requires him to exhibit social responsibilities. We do not see any illegality associated with any of the above rules in Chapter II-A.

71. Now, we come to Rule 13. It merely provides for maintaining the Register of quarrying lease or licences and composite licences. Rule 15-A prescribes the minimum area for grant of quarrying lease or licence. Rule 17 is about carrying out survey and demarcation of the area granted. In fact, the same provision is there in sub-rule (5) of Rule 32. Rule 19 is regarding the surrender of lease which will apply to the licences issued under sub-rule (1) of Rule 32. Rule 19-A deals with the transfer of leases or licences at the instance of lease or licence holder. Rule 19-B provides for power of amalgamation of quarrying leases. Sub-rule (1) of Rule 19-B makes it clear that the amalgamation of two or more existing quarrying leases or licences can be made when the leases or licences are held separately by the same person which are going to become contiguous after amalgamation. Rule 19-C provides for succession, in case of death of a licensee or a lessee. Thus, no illegality is attached to Rules 13, 15A, 17, 19, 19-A, 19-B and 19-C.

72. Chapter-VI deals with royalty, dead rent, security deposit, interest etc. We are dealing with the said chapter separately. Chapter-VII is regarding control of unauthorized transportation of minor minerals, checking of minerals in transit and unauthorized quarrying offences. Rule 43 confers power to seize the minor minerals which are being transported illegally. Rule 43-A is applicable for seizure of illegally stored minor minerals. Rule 44 deals with the offences. Sub-rule (1) of Rule 44 makes contravention of sub-rule (1) of Rule 42 as an offence. Rule 42 forms a part of Chapter-VI with which we are dealing with separately. Sub-rule (2) of rule 44 provides that any person who undertakes any quarrying operation without a licence or in contravention of the terms and conditions of the licence is liable to be penalized as per sub-rule (3) of Rule 44 which provides that if any person who undertakes quarrying operation in respect of the minor minerals without a licence is liable to pay penalty equal to five times of royalty. Sub-rule (4) of Rule 44 gives a power to levy penalty equal to five times of the royalty payable on the minerals dispatched or transported without valid permit. For the reasons which we have recorded separately, we are not dealing with the issue whether the owner of patta land who is also the owner of the minor minerals is liable to pay the royalty.

73. Rule 45 provides for termination of lease, in case, a lease holder or a licence holder commits any offence. Rule 46 confers power of entering the premises and inspection etc.

74. Rules 47 onwards which are part of Chapter-VIII deal with the disposal of seized or confiscated minor minerals in accordance with Chapter-VII. It also authorizes disposal of minor minerals left at the quarrying site after the expiry or termination of lease or licence. In view of the finding recorded by us on the issue of the validity of sub-rule (4) of Rule 6, the provisions in Chapter-VIII regarding disposal of the minor minerals left at the quarry after termination of lease or licence cannot apply to the licence granted under sub-rule (1) of Rule-32 where the licensee is the owner of the minor mineral. Even after termination of licence, the licence holder who is the owner of the minor minerals continues to be the owner thereof. To that extent, the second part of Sub-Rule (1) of Rule 47 will violate rights of the owners under Article 300-A of the Constitution. To that extent, provisions of Sub-Rule (1) of Rule 47 will have to be read down.

75. Now, we come to sub-rule (7) of Rule 32. It provides that except for provisions of sub-rule (6) of Rule 32, no other rule in the Chapter V will apply to granted patta land. In case of granted patta land, the grantee of the land will not be the owner of the minerals in the sub-soil. We are not dealing with this category of patta lands at all in this group of writ petitions. Sub-rule (8) of Rule 32 enables the grant of a licence to the power of attorney holder of the owner of the patta lands. Sub-rule (9) of Rule 32 provides that grant of licence under sub-Rule (1) of Rule 32 either to the owners or to the general power attorney holder shall be done only after recommendation of the District Task Force and approval of the State Government. As far as sub-Rule (10) of Rule 32 is concerned, we are dealing with the same while we deal with the challenge to the provisions of Chapter-VI. Sub-Rules (11) and (12) provide for conversion of working permissions granted earlier to the owners of patta lands into quarrying licences. We do not find any illegality in these two rules. Sub- Rule (13) is about the renewal of licence. Once we uphold the licencing provision, we cannot find fault with the provision regarding renewal.

LIABILITY TO PAY ROYALTY:

76. Now we turn to Rule 36 which reads thus:

"36. Payment of royalty and dead rent in advance.- (1) The holder of a quarrying lease or licence under these rules, shall pay dead rent at the rates specified in Schedule -1 as may be modified from time to time or royalty at the rates specified in Schedule II as may be modified from time to time whichever is more whether minor mineral is removed or consumed by him or his agent, manager, employee or contractor:

Provided that no such royalty shall be payable in respect of leases for clay in tank bed with an achcat not exceeding 100 hectares:

Provided further that if the lease or licence permits the working of more than one mineral in the same area the lessee or licencee shall be liable to pay the dead rent for the entire lease area on the mineral for which the dead rent is higher but not both:

Provided also that the State Government may provide for Royalty on any mineral to be charged on ad valorem basis on Sale Value or Average Selling Price of the mineral or the notified royalty per cubic meter or per metric tone whichever is higher:

Provided also that the State Government may prescribe an Additional Periodic Payment or Average Additional Periodic Payment as a percentage of Royalty to the charged, in addition to royalty, on lease or licences as per these rules.

Explanation.- Royalty shall also be payable under this rule in respect of minor minerals classified as waste rock having volume not exceeding 0.08 cubic metre] generated in any ornamental and decorative stone quarry and waste rock rejects of any size not exceeding 0.02 square metres generated in any "Shahabad stone" quarry.

Note: Amendment made to Rule 36 in explanation of sub-rule (1) for the figures "0.04" vide Notification No.170 MMn 2014, dated 1-9- 2014, w.e.f. 1-10-2014 does not appears in the said Rule.

(2) The dead rent shall be paid in advance at every six months.

(3) No person shall remove or transport or cause to be removed or transported any minor mineral without paying the royalty or dead rent.

(4) The State Government may be order exempt the dead rent or reduce the rate of dead rent payable by companies or undertakings owned by the State Government.

(5) Notwithstanding anything contained in this rule, the grantee of quarry lease or licence in Form PBS shall pay one-tenth of the royalty amount of the highest permitted annual production quantity mentioned in the environmental clearance in their validity period in advance as performance guarantee in the form of Bank guarantee, Fixed deposit receipts or Demand draft or in any other manner as may be specified by the Government from time to time before execution of lease or licence.

Provided that the holders of existing quarry lease or licence and mining leases, which are now considered as minor minerals shall also make the similar payment."

77. In the case of Mineral Area Development Authority and others -vs- Steel Authority of India and others ((2011) 4 SCC 450), a Bench of three Hon'ble Judges of the Apex Court, by the order dated 30th March, 2011 has referred the following questions to a larger Bench. The said questions read thus:

"1. Having heard the matter(s) for considerable length of time, we are of the view that the matter needs to be considered by a Bench of nine Judges. The questions of law to be decided by the larger Bench are as follows:

1. Whether "royalty" determined under Sections 9/15(3) of the Mines and Minerals (Development and Regulation) Act, 1957 (67 of 1957, as amended) is in the nature of tax?

2. Can the State Legislature while levying a tax on land under List II Entry 49 of the Seventh Schedule of the Constitution adopt a measure of tax based on the value of the produce of land? If yes, then would the constitutional position be any different insofar as the tax on land is imposed on mining land on account of List II Entry 50 and its interrelation with List I Entry 54?

3. What is the meaning of the expression "Taxes on mineral rights subject to any limitations imposed by Parliament by law relating to mineral development" within the meaning of Schedule VII List II Entry 50 of the Constitution of India? Does the Mines and Minerals (Development and Regulation) Act, 1957 contain any provision which operates as a limitation on the field of legislation prescribed in List II Entry 50 of the Seventh Schedule of the Constitution of India? In particular, whether Section 9 of the aforementioned Act denudes or limits the scope of List II Entry 50?

4. What is the true nature of royalty/dead rent payable on minerals produced/mined/ extracted from mines?

5. Whether the majority decision in State of W.B. v. Kesoram Industries Ltd. [(2004) 10 SCC 201] could be read as departing from the law laid down in the seven-Judge Bench decision in India Cement Ltd. v. State of T.N. [(1990) 1 SCC 12] ?

6. Whether "taxes on lands and buildings" in List II Entry 49 of the Seventh Schedule to the Constitution contemplate a tax levied directly on the land as a unit having definite relationship with the land?

7. What is the scope of the expression "taxes on mineral rights" in List II Entry 50 of the Seventh Schedule to the Constitution?

8. Whether the expression "subject to any limitations imposed by Parliament by law relating to mineral development" in List II Entry 50 refers to the subject-matter in List I Entry 54 of the Seventh Schedule to the Constitution?

9. Whether List II Entry 50 read with List I Entry 54 of the Seventh Schedule to the Constitution constitute an exception to the general scheme of entries relating to taxation being distinct from other entries in all the three Lists of the Seventh Schedule to the Constitution as enunciated in M.P.V. Sundararamier & Co. v. State of A.P. [AIR 1958 SC 468 : 1958 SCR 1422] [AIR p. 494 : SCR at p. 1481 (bottom)?

10. Whether in view of the declaration under Section 2 of the Mines and Minerals (Development and Regulation) Act, 1957 made in terms of List I Entry 54 of the Seventh Schedule to the Constitution and the provisions of the said Act, the State Legislature is denuded of its power under List II Entry 23 and/or List II Entry 50?

11. What is the effect of the expression "... subject to any limitations imposed by Parliament by law relating to mineral development" on the taxing power of the State Legislature in List II Entry 50, particularly in view of its uniqueness in the sense that it is the only entry in all the entries in the three Lists (Lists I, II and III) where the taxing power of the State Legislature has been subjected to "any limitations imposed by Parliament by law relating to mineral development"?"

(emphasis added)

78. In the case of Thressiamma Jacob (supra), the issue before the Apex Court was whether the owners of Jenmom lands in Malbar area of the Kerala State are the absolute owners and have proprietary rights over both soil and sub-soil and minerals underneath the soil. The said question was answered by the Full Bench of the Kerala High Court by holding that in case of such type of lands, the minerals belong to the Government. In paragraph 58, the Apex Court held thus:

"58. For the abovementioned reasons, we are of the opinion that there is nothing in the law which declares that all mineral wealth/sub-soil rights vest in the State, on the other hand, the ownership of sub- soil/mineral wealth should normally follow the ownership of the land, unless the owner of the land is deprived of the same by some valid process. In the instant appeals, no such deprivation is brought to our notice and therefore we hold that the appellants are the proprietors of the minerals obtaining in their lands. We make it clear that we are not making any declaration regarding their liability to pay royalty to the State as that issue stands referred to a larger Bench."

(emphasis added)

79. While upholding the rights of the owners of the land who are the owners of the minerals as well, the Apex Court observed that in view of the pendency of the questions relating to the nature of royalty before its larger Bench, the issue whether the owners are liable to pay the royalty was not being dealt with. That is the reason why we are not dealing with the issue of validity of sub-rule (1) of Rule 36 which requires payment of royalty and dead rent by the holders of a licence granted under sub-rule (1) of Rule 32. Even the issue whether the State Government is competent to levy the royalty based on the value of the minerals has been referred to the larger Bench of the Apex Court. Schedule-II referred in sub-rule (1) of Rule 36 prescribes the rates of royalty on the basis of certain percentage of sale value or an average selling price on ad-valorem basis or on the basis of the quantity of minerals. As the larger Bench of the Apex Court is seized of the issue, we are not going into the issue of the legality of the levy of royalty or dead rent in relation to the patta lands with which we are concerned.

80. There is some argument canvassed on the basis of the 4th proviso to sub-Rule (1) of Rule 36 in the context of sub-Rule (10) of Rule 32. Sub-Rule (10) of Rule-32 provides that in the cases where the mineral rights of minor mineral do not vest with the pattadar, the holder of the licence shall pay, in addition to the royalty, an amount which shall be equal to the average additional periodic payment payable by the holder of the quarry lease or licence granted through auction within taluk or district, if such average is not available for taluk. Thus, sub-Rule (10) which permits levy of additional amount is not applicable in case of patta lands, in respect of which the owners thereof are also the owners of minerals in the sub-soil. Though the 4th proviso to Rule 36 does provide that additional periodic payment or the average additional periodic payment as a percentage of royalty can be charged in addition to royalty, it is qualified by saying that it can be charged as per the said Rules. As per sub-Rule (10) of Rule 32, the owner of patta land who is also the owner of minerals in the sub-soil is not liable to pay the average additional periodic payment which is referred in 4th proviso to Rule 36. The expression 'additional periodic payment' has been defined in clause-aa of Rule 2 which reads thus:

"2. Definitions - (1) xxxx

(a-a) "Additional Periodic Payment" means the payment made or to be made by the holder of a lease or license, as percentage of Royalty, in addition to Royalty, for the concerned mineral on dispatch of that mineral as per the final price offer obtained in auction.

Provided also that the State Government may prescribe an Additional Periodic Payment of Average Additional Periodic Payment as a percentage of Royalty to be charged, in addition to royalty, on lease or licences as per these rules."

81. Thus, it is crystal clear that the 'additional periodic payment' or 'average additional periodic payment' cannot be levied on a licensee under sub-rule (1) Rule 32 who is the owner of patta land and who is also the owner of the minerals in sub-soil.

82. That takes us to sub-rule (5) of Rule 36 which requires grantee of a lease or a licensee to pay one tenth (1/10th) of the royalty amount of the highest permitted annual production quantity mentioned in the environmental clearance in advance as a performance guarantee in the form of Bank guarantee, fixed deposit receipts or demand draft before the quarrying operations starts. An argument was canvassed that there is no provision in the said Rules of 1994 for computing the royalty on the basis of the highest permitted annual production quantity mentioned in the environmental clearance. The rates of royalty are specified in Schedule-II to the said Rules of 1994 and there is no provision made for charging royalty on the basis of the highest permitted annual production quantity mentioned in the environmental clearance. The third proviso to Rule 36 confers power on the State Government to provide for payment of royalty on any mineral to be charged on ad valorem basis on sale value or average selling price of the mineral or the notified royalty per cubic meter or per metric tone, whichever is higher.

Section 9 of the said Act of 1957 provides for levy of royalty. However, by virtue of Section 14, Section 9 is not applicable to the minor minerals which are dealt with by the said Rules of 1994. Under Sub-Rule (1) of Rule 36, the royalty is payable in respect of the mineral removed or consumed by holder of a lessee or licencee. Therefore, sub-Rule (1) of Rule 36 can be broadly termed as a charging provision for imposing payment of royalty. The title of Rule 36 is "Payment of royalty and dead rent in advance". Moreover, neither in the provisions of the said Act of 1957 nor under the said Rules of 1994, there is any prohibition on making a demand of payment of royalty in advance.

83. Now, coming back to the rule making power conferred on the State Government under the said Act of 1957 under which the said Rules of 1994 have been framed, we find that under sub- section (1) of Section 15, there is a power to make Rules for regulating the grant of quarry leases, mining leases or other mineral concessions in respect of minor minerals and for the purposes connected therewith. Clause (g) of sub-section 1-A of Section 15 confers a rule making power for fixing and collection of rent, royalty, fees, dead rent and the manner in which the same shall be payable. The rule making power conferred is to frame Rules laying down the manner in which levy of royalty is to be made. Sub-Rule (5) of Rule 36 provides for payment of royalty in advance in the form of a performance guarantee. Thus, it is also a mode or manner of payment of royalty. Even if advance royalty amount is recovered, it is always subject to refund or adjustment. Sub-rule (5) is some sort of a guarantee to ensure payment of royalty. The guarantee given under the provision can be invoked only when the royalty is due and payable by the Licencee, but it is not paid by him within stipulated time. The guarantee cannot be invoked if the licence holder is not at all liable to pay the royalty. Therefore, in our view, the provision of sub-rule (5) of rule-36 is not ultra virus of the said Act of 1957. There is nothing to show that it violates any Constitutional provision. It is not shown to be manifestly arbitrary.

84. Rule 36-A of the said Rules of 1994 is also under a challenge which reads thus:

"36-A. Payment to District Mineral Foundation.- (1) Every holder of the quarry lease or licence or composite licence of minor minerals except Ordinary Sand shall, in addition to the royalty, make payment towards the District Mineral Foundation of the district in which the mining operations are carried on, an amount which is equivalent to ten percent of the royalty in case of leases granted through auction and thirty per cent or royalty in case of leases granted without auction:

Provided that for ordinary sand the payment to District Mineral Foundation by the Public Works, ports and Inland Water Transport Department or by holders of lease or licence or working permission for extractor of sand or removal of sand bars shall be ten per cent of Royalty.

(2) Payment to the District Mineral Foundation shall be deposited into an account as per the provisions of the rules made by the State Government under sub-section (4) of Section 15 of the Act."

85. Section 9-B of the said Act of 1957 provides for establishment of District Mineral Foundation. The said provision reads thus:

"9-B. District Mineral Foundation - (1) In any district affected by mining related operations, the State Government shall, by notification, establish a trust, as a non-profit body, to be called the District Mineral Foundation.

(2) The object of the District Mineral Foundation shall be to work for the interest and benefit of persons, and areas affected by mining related operations in such manner as may be prescribed by the State Government.

(3) The composition and function of the District Mineral Foundation shall be such as may be prescribed by the State Government.

(4) The State Government while making rules under sub-sections (2) and (3) shall be guided by the provisions contained in Article 244 read with Fifth and Sixth Schedules to the Constitution relating to administration of the Scheduled Areas and Tribal Areas and the Provisions of the Panchayats (Extension to the Scheduled Areas) Act, 1996 (40 of 1996) and the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 (2 of 2007).

(5) The holder of a mining lease or a prospecting licence-cum-mining lease granted on or after the date of commencement of the Mines and Minerals (Development and Regulation) (Amendment) Act, 2015, shall, in addition to the royalty, pay to the District Mineral Foundation of the district in which the mining operations are carried on, an amount which is equivalent to such percentage of the royalty paid in terms of the Second Schedule, not exceeding one- third of such royalty, as may be prescribed by the Central Government.

(6) The holder of a mining lease granted before the date of commencement of the Mines and Minerals (Development and Regulation) (Amendment) Act, 2015, shall, in addition to the royalty, pay to the District Mineral Foundation of the district in which the mining operations are carried on, an amount not exceeding the royalty paid in terms of the Second Schedule in such manner and subject to the categorization of the mining leases and the amounts payable by the various categories of lease holders, as may be prescribed by the Central Government."

In this context, Section 15-A of the said Act of 1957 will have to be also considered which reads thus:

"15-A. Power of State Government to collect funds for District Mineral Foundation in case of minor minerals - The State Government may prescribe the payment by all holders of concessions related to minor minerals of amounts to the District Mineral Foundation of the district in which the mining operations are carried on"

86. Section 9-B of the said Act of 1957 confers power on the State Government to establish a Trust, a non-profit body to be called as District Mineral Foundation. Section 15-A confers rule making power on the State Government to prescribe the

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payment by all holders of concessions related to minor minerals of amounts to the District Mineral Foundation. Even sub-section (4) of Section 15 of the said Act of 1957 provides for such a rule making power. At this stage, it is necessary to advert to Section 14 of the said Act of 1957. It reads thus: "14. [Sections 5 to 13] not to apply to minor minerals.--The provisions of [Sections 5 to 13] (inclusive) shall not apply to [quarry leases, mining leases or other mineral concessions] in respect of minor minerals." Thus, Section 9-B is not applicable to quarrying of minor minerals. But sub-Section (4) of Section 15 of the said Act of 1957 reads thus: 15. Power of State Governments to make rules in respect of minor minerals.-- (1)................ [(4) Without prejudice to sub-sections (1), (2) and sub- section (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 Mineral 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 Mineral Foundation under sub-section (3) of Section 9-B; and (c) the amount of payment to be made to the District Mineral Foundation by concession holders of minor minerals under Section 15-A.] (Emphasis added) A licensee under sub-rule (1) of Rule 32 is a holder of a concession, as contemplated by Section 15-A. Sub-Section (4) of Section 15 confers rule making power to frame Rules regarding the functioning of the District Mineral Foundation and the amount of payment to be made to the said Fund. Clause (c) of sub- section (4) of Section 15 specifically refers to section 15-A which is also applicable to minor minerals. Rule 36-A has been framed in exercise of the said rule making power read with Section 15-A. In the absence of a challenge to Section 15-A and clause (c) of sub-Section (4) of Section 15 of the said Act of 1957, it cannot be said that Rule 36-A is ultra virus the said Act of 1957. There is nothing pointed out to show that Rule 36-A of the said Rules of 1994 is in contravention of any of the provisions of the Constitution of India or any other provisions of the said Act of 1957 and that it is arbitrary. Hence, challenge to Rule 36-A cannot be upheld. 87. The proviso to sub-section (3) of Section 15 of the said Act of 1957 lays down that the Government shall not enhance the rate of royalty or dead rent in respect of any minor minerals for more than once during any period of three years. In the said Act of 1957, earlier block period under the said provision was of four years which was reduced to three years from 10th February 1987. This provision has been interpreted by the Apex Court in the context of Gujarat Rules in the case of D.K.Trivedi (supra). In paragraph 57, the Apex Court held thus: "57. As the Gujarat Rules have been amended from time to time by the impugned notifications so as to enhance or reduce the rate of royalty or dead rent or both, it is necessary at this stage before turning to the Gujarat Rules to consider what the expression "during any period of four years" occurring in the proviso to Section 15(3) means. It is pertinent to note that the words used in the proviso are "shall not enhance the rate of royalty ... for more than once during any period of four years". This is a wholly different thing from saying that where the rate of royalty has been enhanced once it shall not be enhanced again for a period of four years or, in other words, until a period of four years from the date of such enhancement has expired. The period of four years for this purpose must be and can only be reckoned from the date of coming into force of the rules and it is open to a State Government to enhance the rate of royalty or dead rent at any time once during the period of four years from the coming into force of the rules and after each period of four years expires at any time during each succeeding period of four years. The Gujarat Rules came into force on April 1, 1966. Therefore, in the case of the Gujarat Rules the first period of four years would be April 1, 1966 to March 31, 1970, the second period would be April 1, 1970 to March 31, 1974, the third period would be April 1, 1974 to March 31, 1978, the fourth period would be April 1, 1978 to March 31, 1982, the fifth period would be April 1, 1982 to March 31, 1986 and so on thereafter. Thus, during any of these periods of four years both dead rent and royalty can be enhanced by the Government of Gujarat but only once during each such period." (Emphasis added) Thus, following the dictum of the Apex Court, the block periods of three years will have to be computed from 28th May 1994 when the said Rules of 1994 came into force. That is very clear from paragraph 57 above which reiterated in paragraph 65 of the same decisions. Thus, the block periods in the present case will be 1994-97, 1997-2000, 2000 to 2003,2003 to 2006, 2006 to 2009, 2009 to 2012, 2012 to 2015 and 2015 to 2018. It is not disputed in the statement of objections that on 5th March, 2014, there was an enhancement in the rates of royalty. The enhancement was made by the Karnataka Minor Mineral Concession (third Amendment) Rules, 1994 by substituting the Schedule-II. By the Amendment Rules, with effect from 12th August, 2016, the Schedule-II was again substituted. Hence, the enhancement of royalty made in the years 2014 and 2016 is in separate block periods. Thus, there is no merit in the contention that the enhancement of royality by the Amendment Rules will be contrary to proviso to sub-Section (3) of Section 15 of the said Act of 1957. A GENERAL ARGUMENT REGARDING VALIDITY OF THE AMENDMENT RULES 88. There is one more argument that was canvassed across the Bar. In the year 2015, draft Amendment Rules were published to which objections were raised by the owners of the mines and their association as well. The contention is that while finally notifying the said Amendment Rules, an altogether new set of Rules have been added which is impermissible, as no opportunity was available to them to raise objections to the said set of Rules. 89. As pointed earlier, the rule making power is vested in the State Government by virtue of Section 15 of the said Act of 1957. The only requirement contemplated under sub-section (1) of Section 15 is of making the rules by a notification in the Official Gazette. There is no requirement under the said Act of 1957 of prior publication of the draft rules and granting opportunity to submit objections to the draft rules. It is well settled that the power to amend the rules has to be also exercised in the manner in which the power to frame rules is exercised, unless the statute under which the rules are framed prescribes a different procedure for amending the rules. Therefore, there was no requirement in law to publish the draft rules by a notification and to invite the objections and suggestions. Therefore, the said argument canvassed by the petitioners deserve to be rejected. CHALLENGE TO SUB-RULE (5) OF RULE 42 90. Another challenge was to sub-rule (5) of Rule 42 which provides that the validity of Computerized Mineral Dispatch Permit (CMDP) shall be one hour for each ten kilometre of distance or fraction thereof from the date of issue and two hours of additional time together for loading and unloading of the minor minerals. However, on perusal of the pleadings, there is no challenge in this group of petitions to the validity of Rule 42 which requires that no person shall transport or cause to be transported any minor mineral except under or in accordance with a CMDPs. All that sub-rule (2) of Rule 42 provides is that the validity of CMPDPs is for a limited duration, as specified in sub-rule (5) of Rule 42. However, the proviso of sub-rule (5) of Rule 42 confers powers on the Competent Authority to renew the permit and even in case of minerals in transit, the renewal can be made subject to payment of processing fee and Special Security Permit Paper (SSPP) fee. A permit granted to transport to minor mineral can be acted upon or utilized within a reasonable time and it is not permitted to be utilized beyond the specified time. Such time restriction has been imposed only with a view to avoid misuse of such permits. Therefore, we find that there is no illegality associated with the time limit imposed by sub-rule (5) of Rule 42 of the said Rules of 1994, especially when the proviso to sub-rule (5) of Rule 42 provides for granting extension or renewal of such permit by the Competent Authority. 91. Accordingly, we dispose of these writ petitions by passing the order: a) In view of the law laid down by the Full Bench of this Court in the case of State of Karnataka -vs- Dundamada Shetty, the owners of patta lands in Ex-Mysuru State area forming a part of Karnataka State who had ownership rights in granite or any other minerals in the sub-soil which are covered by the first proviso to Section 38 of the Mysuru Land Revenue Code, 1888 will continue to have ownership rights over such minerals notwithstanding the provisions of Section 70 of the Karnataka Land Revenue Act, 1964; b) In view of the subsequent decision of the Apex Court in the case of State of Meghalaya (supra), we hold that sub-section (1) of Section 4 of the Mines and Minerals (Development and Regulation) Act, 1957 is also applicable to a case where the owner of patta land in Ex-Mysuru area forming a part of Karnataka State himself wants to win granite, a minor mineral found in the sub-soil of his land of which he is the owner. To that extent, the law laid down by the Full Bench in the case of Dundamada Shetty (supra) will not constitute a binding precedent; c) We hold that sub-rule (1) of Rule 32 of the Karnataka Minor Mineral Concession Rules, 1994, as amended with effect from 12th August, 2016 is legal and valid; d) We hold that even if a lease or licence is granted under sub-rule (1) of Rule 3-B of the said Rules of 1994 in case of patta lands in Ex-Mysuru area in respect of which the owners are also the owners of minor mineral granite in the sub-soil, the lease or licence cannot be acted upon unless the concerned land is acquired under the provisions of the law relating to the Compulsory Acquisition; e) Rule 3-C of the said Rules of 1994 is hereby struck down only to a limited extent to which it is applicable to minor mineral granite found in the sub-soil of patta lands in Ex-Mysuru State area forming part of Karnataka State where the owner of the land is also the owner of mineral; f) We hold that when a land described in clause (a) above is reserved in accordance with Rule 3-D of the said Rules of 1994, the same cannot be used for carrying on quarrying operations by a Government owned company or a Corporation, without acquiring the land under the provisions of the law relating to Compulsory Acquisition. We also hold that the State Government cannot reserve such a land without obtaining the approval of the Central Government in accordance with sub-section (2) of Section 17-A of the said Act of 1957; g) We strike down sub-rule (4) of Rule 6 of the said Rules of 1994 only to the extent to which the said Rule is applicable to a licence holder who is the owner of patta land in Ex-Mysuru State area forming a part of Karnataka State and who is also the owner of granite found in the sub-soil of the land; h) The following portion of sub-rule (1) of Rule 47 of the said Rules of 1994 is hereby struck down, insofar it is applicable to minor minerals granite found in the sub- soil of patta land in Ex-Mysuru State area forming a part of Karnataka State where the owner of the said land is also the owner of the said mineral found in the sub-soil. The portion which we have struck down reads thus: "47 (1) xxxx and minor minerals left at the quarry after the expiry or termination of lease or licence" i) We hold that sub-rule (10) of Rule 32 as well fourth proviso to sub-rule (1) of Rule 36 of the said Rules of 1994 shall not apply in case of a licence granted to win the minor mineral granite found in the sub-soil of the patta land in Ex-Mysuru State area forming a part of Karnataka State where the land owner is also the owner of the said mineral. j) We hold that the fourth proviso to Rule 36 of the said Rules of 1994 incorporated by the Amendment Rules will apply only to the cases where the right to minor minerals in patta lands does not vest in the owners of patta land and the same will not apply when the mineral rights in respect of granite minor mineral found in sub-soil of patta land in Ex-Mysuru State area vest in the holders of patta land; k) The issue regarding the nature and legality of levy of royalty and dead rent is pending before a larger Bench of the Apex Court. Hence, we have not decided the issue whether the holders of patta lands of aforesaid category mentioned in clause (a) are liable to pay the royalty or dead rent and the said issue remains open; l) As held in the judgment, all other provisions which are subject matter of challenge in this group of writ petitions, are declared as Constitutionally valid; m) Considering the prevailing situation, we direct that the interim relief granted in these writ petitions which was operative till today shall continue to operate for a further period of four months from today; n) The writ petitions are disposed of on the above terms, with no order as to the costs.
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