INTRODUCTION


An Act to provide for the regulation of [1] [**] oilfields and for the development of [2] [mineral oil resources]. Whereas it is expedient in the public interest to provide for the regulation of [3] [**] oilfields and for the development of [4] [mineral oil resources] [5] [***]; It is hereby enacted as follows:-



FOOTNOTES :



1. The words 'Mines and' were omitted in the long title and in the Preamble, by the Mines and Minerals (Regulation and Development) Act, 1957 (67 of 1957), Section 32 and Schedule III (with effect from 1-6-1958).



2. Substituted for 'minerals', by the Mines and Minerals (Regulation and Development) Act, 1957 (67 of 1957), Section 32 and Schedule III (with effect from 1-6-1958).



3. The words 'Mines and' were omitted in the long title and in the Preamble, by the Mines and Minerals (Regulation and Development) Act, 1957 (67 of 1957), Section 32 and Schedule III (with effect from 1-6-1958).



4. Substituted for 'minerals', by the Mines and Minerals (Regulation and Development) Act, 1957 (67 of 1957), Section 32 and Schedule III (with effect from 1-6-1958).



5. The words 'to the extent hereinafter specified' were omitted, by the Mines and Minerals (Regulation and Development) Act, 1957 (67 of 1957), Section 32 and Schedule III (with effect from 1-6-1958).



Statement of Object

"The question of Central regulation of mines and oilfields and mineral development has been engaging the attention of Government for some time. The need for Central regulation was amply illustrated in the last war when certain key minerals had to be controlled under the Defence of India Act. It is now well recognised that a planned and uniform policy of mineral development is essential to economic and industrial progress. The Industrial Policy Resolution of the 6th April 1948 included minerals amongst the industries whose location must be governed by economic factors of all India import or which require considerable investment or a high degree of technical skill and must consequently be the subject of Central regulation and control. This Bill has accordingly been drafted under Item 36 of the Federal Legislative List of the Seventh Schedule to the Government of India Act, 1935 to regulate mines and oilfields and mineral development on the lines contemplated in the Industrial Policy Resolution of the 6th April 1948. It seeks to give powers to the Central Government to frame rules for the regulation of the terms and conditions of mining lease, as also for the conservation and development of minerals. It also provides for modification of existing leases on payment of compensation. Clause 8 provides for delegation of powers to Provincial Governments or any officers or authority as may be specified in this behalf e.g. a Coal Commission. Clause 11 confers powers of entry and inspection on any officers authorised by the Central Government in this behalf. Finally, there is a clause prescribing penalties for contravention of any of the provisions of the Act or the rules made there under. The rules made under the Act will be laid before the Legislature as soon as may be after they are made, while rules relating to compensation to be paid for modification of existing leases will not be operative unless and until they are approved by the Legislature." Amending Act 39 of 1969:--Sections 5 & 6 of the Oilfields (Regulation and Development) Act, 1948 (53 of 1948) empower the Central Government to make rules for regulating the grant of mining leases and for prohibiting the grant of such leases in respect of any mineral oil as also or the development of mineral oil resources. Clause (i) of Sub-section (2) of Section 6 of the Act empowers the Central Government to make rules for "the levy and collection of royalties, fees or taxes in respect of mineral oils, mined, quarried, excavated or collected". The Petroleum and Natural Gas Rules, 1959 were formulated in exercise of the powers conferred by Sections 5 and 6 of the said Act. Rule 14 of the said Rules, inter alia, had stipulated that royalty at the rate of Rs. 7.50 per metric tonne of crude oil and casing-head condensate and a 10 per cent of the value at the well-head of the natural gas obtained by the lessee, shall be paid. The rate of royalty was decided upon by the award of the late Prime Minister in 1962. The award provided for a review of the rate of royalty after a period of four years. This was done and the Prime Minister has now given an award which provides for an increase in the rate of royalty payable for crude oil, etc., from Rs. 7.50 to Rs. 10.00 per metric tonne, with effect from 1st January, 1968. The enhanced rate has, therefore, to be applied not only to leases granted in future but also retrospectively to all leases with effect from 1st January, 1968. This object cannot be achieved by amending the Petroleum and Natural Gas Rules, 1959. It is necessary to make appropriate provisions in the Act itself for imposing a liability to pay enhanced rates of royalty in the existing leases also, notwithstanding anything contained in the instrument of the concerned lease. It is, accordingly, considered necessary to amend the Oilfields (Regulation and Development) Act, 1948 so as to make provisions for the payment of the royalty in the Act itself and to take power to enhance the royalty by notification subject to limitations analogous to those contained in Sub-section (2) of Section 9 of the Mines and Minerals (Regulation and Development) Act, 1957. The Bill is designed to give effect to the above proposals.

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