Allahabad High Court
M/S Sunrise Stone Crusher Pvt Ltd vs State Of U.P. And 3 Others on 31 May, 2019
Equivalent citations: AIR 2020 (NOC) 633 (ALL.), AIRONLINE 2019 ALL 1354, 2020 (1) ALJ 210 (2019) 8 ADJ 484 (ALL), (2019) 8 ADJ 484 (ALL)
Bench: Pradeep Kumar Singh Baghel, Rohit Ranjan Agarwal
HIGH COURT OF JUDICATURE AT ALLAHABAD AFR Reserved on: 27.05.2019 Delivered on: 31.05.2019 Court No. - 21 Case :- WRIT - C No. - 14286 of 2019 Petitioner :- M/s. Sunrise Stone Crusher Pvt. Ltd. Respondent :- State Of U.P. And 3 Others Counsel for Petitioner :- Mukesh Prasad Counsel for Respondent :- C.S.C. With: Writ-C Nos.--10225 of 2019, 10443 of 2019, 10444 of 2019, 11641 of 2019, 11650 of 2019, 11989 of 2019, 12281 of 2019, 12513 of 2019, 12872 of 2019, 12963 of 2019, 12984 of 2019, 13102 of 2019, 13105 of 2019, 13107 of 2019, 13109 of 2019, 13565 of 2019, 14135 of 2019, 14143 of 2019, 14176 of 2019, 14264 of 2019, 14265 of 2019, 14266 of 2019, 14306 of 2019, 14311 of 2019, 14321 of 2019, 14330 of 2019, 14334 of 2019, 14491 of 2019, 14537 of 2019, 15005 of 2019, 15037 of 2019, 15039 of 2019, 15101 of 2019, 15187 of 2019, 15206 of 2019, 15219 of 2019, 15229 of 2019, 15234 of 2019, 15239 of 2019, 15247 of 2019, 15430 of 2019, 15433 of 2019, 15438 of 2019, 15731 of 2019, 15734 of 2019, 15740 of 2019, 15743 of 2019, 15745 of 2019, 15747 of 2019, 15946 of 2019, 15958 of 2019, 15970 of 2019, 15976 of 2019, 15978 of 2019, 15986 of 2019, 15987 of 2019, 15990 of 2019, 15992 of 2019, 15994 of 2019, 16541 of 2019, 16902 of 2019, 16903 of 2019, 16952 of 2019, 17084 of 2019, 17085 of 2019, 17086 of 2019, 17087 of 2019, 17167 of 2019, 17175 of 2019, 17199 of 2019, 17210 of 2019, 17232 of 2019, 17441 of 2019, 17443 of 2019, 17537 of 2019, 17538 of 2019, 17708 of 2019, 17717 of 2019, 17723 of 2019, 17870 of 2019, and 17873 of 2019. ---------- Hon'ble Pradeep Kumar Singh Baghel, J.
Hon'ble Rohit Ranjan Agarwal, J.
(Delivered by Hon'ble Pradeep Kumar Singh Baghel, J.) The petitioners in this batch of writ petitions have challenged vires of the Uttar Pradesh Minerals (Prevention of Illegal Mining, Transportation and Storage) (First Amendment) Rules, 20191.
All these writ petitions arise from a similar set of facts and raise identical question of law, hence they are collectively being disposed of by this common judgment. We are adverting to the facts of Writ-C No. 14286 of 2019, M/s. Sunrise Stone Crusher Pvt. Ltd. v. The State of U.P. and others, and it is treated as lead petition.
The relevant facts, as stated in the lead petition, are these: the petitioner is a private limited company. It has initiated these proceedings under Article 226 of the Constitution of India through its Director. It is engaged in the stone crushing business. The petitioner made an application for licence for storage of minerals. The District Officer, after making necessary enquiry, issued a licence to the petitioner on 06th December, 2014 in Form-B under the Uttar Pradesh Minerals (Prevention of Illegal Mining, Transportation and Storage) Rules, 20022. The said licence was effective from 06th December, 2014 to 05th December, 2024 (for a period of ten years) for storage of minor minerals, which include river bed minerals (RBM), sand, bajri and boulders and the storage capacity of the petitioner was 2,00,000 cubic meter at a time. The land to be used for storage purpose was over Gata No. 18/2, area 2.2250 hectare and Gata No. 18/3, area 2.428 hectare, total area 4.753 hectare, in Village Shikarpur, Tehsil Swar, District Rampur.
Pursuant to issuance of the said licence in the year 2014, the petitioner was carrying on its business in terms of the Rules, 2002 and the conditions mentioned in its licence.
On 20th December, 2018 the State Government rescinded the Rules, 2002 and made new set of rules known as the Uttar Pradesh Minerals (Prevention of Illegal Mining, Transportation and Storage) Rules, 20183, which was followed by two Government Orders dated 31st December, 2018 and 25th January, 2019. A large number of writ petitions, led by Writ-C No. 1657 of 2019, Uday Pal Singh v. State of U.P. and others, were filed by the licensees under the Rules, 2002 challenging Clause-2(1) of the Government Order dated 31st December, 2018 and 25th January, 2019. While the judgment was reserved in the said case, on 09th March, 2019 the State Government made the First Amendment Rules, 2019, thereby inserting Chapter-6, which provides Repeal and Saving, consisting Rule 17, in the Rules, 2018.
The Rules, 2018 was followed by a Government Order dated 31st December, 2018, wherein it was provided that the existing licence holders under the Rules, 2002 shall be given one month's time to dispose of their stored mineral materials and in case the licensee fails to dispose of its stored minerals, it shall be treated as the property of the State and it shall be disposed of in accordance with the orders issued by the State Government. The Government Order dated 31st December, 2018 also lays down the detailed procedure for its application and one of the conditions of the licence is that 90% stock of the stored minerals (sand, bajri, morum) must be disposed of on or before 30th June of the year and after disposal a declaration shall be made to the District Magistrate in the first week of October of the same year. It is also provided therein that the Rules, 2018 shall not be applicable to the stone crushers.
The Government Order dated 31st December, 2018 was amended on 25th January, 2019, whereby it was provided that one month's time granted to the licence holders vide Government Order dated 31st December, 2018 is extended till 28th February, 2019.
It is stated that the Court was informed about the subsequent amendment in 2019, hence this Court vide its judgment dated 15th March, 2019 disposed of all the writ petitions leaving it open to the petitioners therein to challenge the First Amendment Rules, 2019. The Court further provided that the interim protection granted earlier in the batch of writ petitions shall continue to remain operative for a period of 30 days from the date of judgment dated 15th March, 2019.
Aggrieved by the said order the petitioners have filed the present batch of the petitions challenging the vires of the First Amendment Rules, 2019. The reliefs sought in all the writ petitions in this batch of petitions are more or less same. Therefore, we extract the reliefs sought in the lead petition which read thus:
"(a). issue a writ, order or direction, in the nature of mandamus declaring the Uttar Pradesh Minerals (Prevention of Illegal Mining, Transportation and Storage) (First Amendment) Rules, 2019, ultra-vires Article 14, 19(1)(g), 20(1) of the Constitution of India and the provisions of the MMDR Act, 1957. (Annexure-1 to the writ petition).
(b). issue a writ, order or direction, in the nature of certiorari, quashing the Government Order dated 09.03.2019. (Annexure-2 to the writ petition).
(c). issue a writ, order or direction, in the nature of certiorari, quashing the order dated 11.04.2019 passed by the Sub Divisional Magistrate, Swar, Rampur. (Annexure-3).
(d). to issue a writ, order or direction in the nature of mandamus directing the respondent no. 2 and 3 to issue transit pass in form-C for selling and transporting the minerals stored by the petitioner, during the subsistence of his licence."
We have heard Sri Mukesh Prasad, learned Senior Advocate, assisted by Sri Amit Upadhyay, Sri S.G. Hasnain, learned Senior Advocate, assisted by Sri Syed Mohd. Fazal, Sri Alok Yadav, Sri Birendra Singh, Sri Tarun Agrawal, Sri Ankur Agrawal, and Sri S.K. Pathak, learned counsel appearing for the petitioner/s in the respective writ petitions, Sri Neeraj Tripathi, learned Additional Advocate General, assisted by Sri Shashank Shekhar, learned Standing Counsel appearing for the respondents.
Sri Mukesh Prasad, learned Senior Counsel appearing for the petitioners, has submitted that vide sub-rules (a) and (c) of Rule 17 of the First Amendment Rules, 2019 the State Government has attempted to abrogate accrued statutory right of the petitioners with retrospective effect and has also treated their lawful stored minerals illegal, after coming into force of the newly inserted Rule-17 on 09th March, 2019. Thus, it is hit by Article 21 of the Constitution since the same would lead to prosecution under Section 21(1) of the Mines and Minerals (Development and Regulation) Act, 19574.
The legally stored minerals on the validated form MM-11 will be liable to confiscation/seizure even though there is no statutory provision in the Act and Rules, under which the legally stored minerals can be seized. He further submits that the licence granted to all stone crushers are still subsisting although neither under the Act, 1957 nor the Uttar Pradesh Minor Minerals (Concession) Rules, 19635 the word 'licence' has been defined but the definition of 'licence' as given under Section 52 of the Act, 1957 is also not applicable because no transfer of immovable government property takes place.
It is submitted that the Rules, 2018, as amended by the First Amendment Rules, 2019, is manifestly arbitrary and violative of Article 14 of the Constitution. The persons involved in storage of minerals will be ousted from applying for mining lease, likewise persons holding a mining lease will be legally deprived of from obtaining a storage licence in the same district and thus, the lease holders will have no place to store their legally excavated minerals during rainy season when the entire mining area is submerged in water. It is submitted that the said action of the State violates the right of the petitioners under Article 19(1)(g) of the Constitution. He has submitted that the stone crushers are mostly located within 5 kms. of range and minimum cost for installing stone crusher including the land and machinery is 200 crore and if any mining lease is granted, the entire stone crusher unit will have to be shifted, for which huge cost will be incurred and local labourer in the area, most of whom work in stone crushers, will also be deprived of their livelihood. Thus, the said rules are grossly arbitrary and against the public interest. It was contended by the learned Senior Advocate that termination of old licences prematurely and granting new licences is wholly against public interest and will create acute crisis of minerals in the market since no new licences are being granted and the old licences have all been terminated, which will result in arbitrary and forced seizure of minerals since there will be no procedure of having valid licence under new storage rules.
Lastly, it was urged that even though under Section 21 of the General Clauses Act, 1897 the power to issue notifications, orders, rules or bye-laws includes the power to rescind but the said power is not available after an enforceable legal right has accrued and hence, the subsisting licences granted under the Rules, 2002 cannot be rescinded.
Sri S.G. Hasnain, learned Senior Counsel appearing for the petitioners, has submitted that the Rules, 2018 has no retrospective effect, thus it cannot take away vested right, which accrued in favour of the petitioners, by repealing of the Rules, 2002 and hence, the petitioners are entitled to carry out their business under the Rules, 2002 for the next ten years as the term of their licence is ten years. He further submits that the object of insertion of Section 23-C in the Act, 1957 is to prevent illegal mining, hence the Rules, 2018, which has taken away the accrued right, is ultra-vires. He further submits that it is a settled law that the legislature's power to introduce or amend is subject to judicial recognized limitation, amongst other, retrospectively must be reasonable and not excessively harsh and the power cannot be used to subvert a judicial decision without removing the statutory basis thereof. He further submitted that a substantive law creating a vested right operates prospectively and only a procedural or declaratory law operates retrospectively. Lastly, he urged that retrospective operation should not be given to statute so as to take away or empower any existing right or create a new obligation or impose a new liability otherwise than as regards matter of procedure.
Sri Hasnain has placed reliance on the judgments of the Supreme Court in the cases of Commissioner of Central Excise, Coimbatore v. ELGI Equipments Ltd.6, National Agricultural Cooperative Marketing Federation of India Ltd. and another v. Union of India and others7, Commissioner of Income Tax (Central)-I, New Delhi v. Vatika Township Private Limited8, Purbanchal Cables and Conductors Private Limited v. Assam State Electricity Board and another9, and Chairman, Railway Board and others v. C.R. Rangadhamaiah and others10.
Sri Birendra Singh, learned counsel for the petitioners, submits that the notification dated 20th December, 2018 itself provides that it will come into force on the date of its publication in the official gazette, thus it would not apply retrospectively. It is urged that the petitioners have been granted storage licence after following the procedure prescribed under the Concession Rules, 1963 for huge quantity of sand i.e. 30000 cubic meters and more, which has been purchased from different valid lease holders by spending huge amount more than crores with a view to earn profit during monsoon season when the mining operations are automatically suspended. The petitioners have been compelled to sell the sand at premature stage and no sufficient time has been granted to dispose of the stored sand and all the petitioners are dispossessed.
It is further urged that the new Rule 4(e) of the Rules, 2018 imposing a condition that lessee in case of river bed minerals of the concerned district shall not be eligible for grant of licence for storage of river bed minerals, is illegal and has been imposed with malafide and it has infringed the fundamental right of the petitioners guaranteed under sub-clause (f) and (g) of Article 19(1) of the Constitution of India, as due to the said amendment mining lease holders have been deprived of grant of licence for storage of minerals on following two reasons:
(i) Mining lease holder has been declared ineligible to hold storage licence under the aforesaid amendment;
(ii) The person who is holding storage licence is not eligible to participate in any other prospective bid in the district concerned, thus the petitioners have been deprived of their right to carry on their business in the same district by way of the said amendment as complete prohibition has been imposed upon the petitioners for holding mining lease and storage licence simultaneously.
Sri Singh has placed reliance on the judgments of the Supreme Court in the case of State of Gujarat and another v. Jayeshbhai Kanjibhai Kalathiya11, and Motilal Padampat Sugar Mills Co. Ltd. v. State Of Uttar Pradesh and others12.
Sri Alok Yadav, learned counsel appearing for the petitioners, contended that the licence granted to the petitioners, which was valid up to 16th February, 2023, cannot be terminated in violation of principles of natural justice even by subordinate legislation. If the Rules, 2002 and the Rules, 2018 are read side by side, they are substantially same but for unjustified reasons the Rules, 2018 was introduced. He further submitted that the Rules cannot be amended so as to make an unlawful act. The petitioners were given licence to store and trade up to 16th February, 2023 but by introduction of the Rules, 2018 the act done under the previous Rules becomes unlawful thus renders the Rules, 2018 manifestly illegal. Lastly, it was urged that by the Government Order dated 31st December, 2018 the stone crusher industry was not included within the ambit of the Rules, 2018, however, the stone crusher industry was included vide Government Order dated 09th March, 2019 as well as by amendment w.e.f. 20th December, 2018, the date when the Rules, 2018 was introduced, thus the stone crusher industry was given only 11 days' time to dispose of their minor minerals stored pursuant to the licence given under the Rules, 2002 and as such the same was discriminatory and was liable to be quashed. It is urged that no power under the Rules, 2018 seizes materials and Section 21(2) of the Act, 1957 was not applicable, therefore, seizure order dated 10th April, 2019 was liable to be quashed on the said ground and the petitioners were entitled to get time to dispose of the said minor mineral procured under the licence issued under the Rules, 2002. No other submission has been made by learned counsel for the parties.
Sri Yadav has placed reliance on the judgment of the Supreme Court in the case of State of T.N. and another v. P. Krishnamurthy and others13.
Sri Tarun Agrawal, Sri Ankur Agrawal, Sri S.K. Pathak and Sri Syed Mohd. Fazal, learned counsel appearing for the petitioners, have adopted the submissions of learned Senior Counsel.
Sri Neeraj Tripathi, learned Additional Advocate General, submits that it is the settled principle of jurisprudence that subordinate legislation can only be challenged on the grounds of incompetence, it is contrary to the provisions of Part III of the Constitution of India, repugnant to the parental Act and, of course, on the ground of arbitrariness. In the present case there is neither any foundation nor any basis whereby a subordinate legislation can be declared ultra vires. The petitioners have not come up with the case that the State is incompetent to frame the rules. It is also not the case of the petitioners that the said Rules are violative of Part III of the Constitution of India or are repugnant to the parent Act. So far as arbitrariness is concerned, the petitioners are unable to demonstrate as to why it is arbitrary. As regards the arguments advanced on behalf of the petitioners with regard to the hardship, it is a trite law that hardship cannot be a ground to declare the law ultra vires. Per contra, it is discernible from the records in question that the State Government is fully competent to frame the Rules and the said Rules are neither violative of Part III of the Constitution of India nor repugnant to the parental Act.
Sri Tripathi has further submitted that the petitioners have challenged only the amendment made in the Rules, 2018 by way of incorporating certain amendments through the First Amendment Rules, 2019. Therefore, the relief claimed by the petitioners in the present writ petitions is misconceived, inasmuch as the other provisions of the Rules, 2018, as amended, will remain in operation in absence of any such challenge to this effect. Hence, the writ petitions are liable to be dismissed on this ground alone.
It was further urged that the Supreme Court has taken serious note of rampant exploitation of natural resources in mining sector coupled with a total lack of concern for the environment and health and well being of the denizens. It was observed by the Court that the sole motive of the persons involved in the mining business seems to be to make profits and the attitude seems to be that if the rule of law is required to be put on the back-burner, so be it. It is stated that pursuant to the observations of the Supreme Court, which has been made in some of the recent cases, the State Government in exercise of its powers under Section 23 of the Act, 1957, which confers the rule-making power to the State Government to prevent illegal mining, transportation and storage of minerals, and taking into consideration the difficulties coming in the way in preventing the illegal mining, transportation and storage as well as the developments, which have taken place in all fields including technological field since framing of the Rules, 2002, had framed the new Rules, 2018 in supersession of the earlier Rules, 2002 and the earlier Rules, 2002 has been rescinded. Amongst other, one of the objects of the Rules, 2018 is to meet out certain difficulties and to ensure availability of minerals to the common person with ease and to effectively control illegal mining, transportation and storage of minerals.
Sri Tripathi has further submitted that the petitioners have no vested right to maintain the licence granted under the Rules, 2002, hence they cannot claim it as a matter of right after the repeal of the Rules, 2002. It is submitted that there is difference between lease and licence. Lastly, it was urged that the Courts' endeavour should be to uphold the validity of the legislation or the subordinate legislation.
Sri Tripathi has placed reliance on the judgments of the Supreme Court in the cases of A.P. Cooperative Oil Seeds Growers Federation Limited, Hyderabad, Andhra Pradesh v. D. Achyuta Rao and others14, Gammon India Ltd. v. Special Chief Secretary and others15, Howrah Municipal Corpn. and others v. Ganges Rope Co. Ltd. And others16, Mangal Amusement Park Private Limited and another v. State of Madhya Pradesh and others17, and Namit Sharma v. Union of India18.
In order to advert to the issue raised, it is important to examine the relevant statutory provisions at play in the instant cases. The Mines and Minerals (Development and Regulation) Act, 1957 i.e. the Act, 1957, the Uttar Pradesh Minor Minerals (Concession) Rules, 1963 i.e. the Concession Rules, 1963, the Rules, 2002, the Rules, 2018 and the executive orders issued by the State Government from time to time regulate the mining operations in the State. We will refer only those provisions which are relevant for the issue raised in these cases.
Entry-54 of List I- Union List of the Seventh Schedule of the Constitution of India deals with regulation of mines and mineral development under the control of the Union. Entry-54 of List-I reads as under:
"54. Regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest."
Entry-23 of List II- State List of the Seventh Schedule of the Constitution provides as under:
"23. Regulation of mines and mineral development subject to the provisions of List-I with respect to regulation and development under the control of the Union"
The Act, 1957 i.e. the Mines and Minerals (Development and Regulation) Act, 1957 is enacted by the Parliament to provide for the development and regulation of mines and minerals. Section 3(e) of the Act, 1957 defines 'minor minerals'. It reads thus:
"(e) "minor minerals" means building stones, gravel, ordinary clay, ordinary sand other than sand used for prescribed purposes, and any other mineral which the Central Government may, by notification in the Official Gazette, declare to be a minor mineral;"
Sub-section (1-A) of Section 4 of the Act, 1957 prohibits transportation and storage of minerals in the following manner:
"4(1-A) No person shall transport or store or cause to be transported or stored any mineral otherwise than in accordance with the provisions of this Act and the rules made thereunder."
Section 15 of the Act, 1957 gives power to the State Government to make rules in respect of minor minerals. Section 15 is extracted below:
"15. Power of State Governments to make rules in respect of minor minerals.-- (1) The State Government may, by notification in the Official Gazette, make rules for regulating the grant of quarry leases, mining leases or other mineral concessions in respect of minor minerals and for purposes connected therewith.
(1A) In particular and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:-
(a) the person by whom and the manner in which, applications for quarry leases, mining leases or other mineral concessions may be made and the fees to be paid 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, aerial 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.
(2) Until rules are made under sub-section (1), any rules made by a State Government regulating the grant of quarry leases, mining leases or other mineral concessions in respect of minor minerals which are in force immediately before the commencement of this Act shall continue in force.
(3) The holder of a mining lease or any other mineral concession granted under any rule made under sub-section (1) shall pay royalty or dead rent, whichever is more in respect of minor minerals removed or consumed by him or by his agent, manager, employee, contractor or sub-lessee at the rate prescribed for the time being in the rules framed by the State Government in respect of minor minerals:
Provided that the State Government shall not enhance the rate of royalty or dead rent in respect of any minor mineral for more than once during any period of three years.
(4) Without prejudice to sub-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 9B;
(b) the composition and functions of the District Mineral Foundation under sub-section (3) of section 9B; and
(c) the amount of payment to be made to the District Mineral Foundation by concession-holders of minor minerals under section 15A."
Section 23-C of the Act, 1957 gives power to the State Government to make rules for preventing illegal mining, transportation and storage of minerals. Section 23-C reads thus:
"23-C. Power of State Government to make rules for preventing illegal mining, transportation and storage of minerals.--(1) The State Government may, by notification in the Official Gazette, make rules for preventing illegal mining, transportation and storage of minerals and for the purposes connected therewith.
(2) 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) establishment of check-posts for checking of minerals under transit;
(b) establishment of weigh-bridges to measure the quantity of mineral being transported;
(c) regulation of mineral being transported from the area granted under a prospecting licence or a mining lease or a quarrying licence or a permit, in whatever name the permission to excavate minerals, has been given;
(d) inspection, checking and search of minerals at the place of excavation or storage or during transit;
(e) maintenance of registers and forms for the purposes of these rules;
(f) the period within which and the authority to which applications for revision of any order passed by any authority be preferred under any rule made under this section and the fees to be paid therefor and powers of such authority for disposing of such applications; and
(g) any other matter which is required to be, or may be, prescribed for the purpose of prevention of illegal mining, transportation and storage of minerals.
(3) Notwithstanding anything contained in section 30, the Central Government shall have no power to revise any order passed by a State Government or any of its authorised officers or any authority under the rules made under sub-sections (1) and (2)."
(Emphasis supplied) The State Government in exercise of the powers conferred under Section 23-C of the Act No. 67 of 1957 made the Uttar Pradesh Minerals (Prevention of Illegal Mining, Transportation and Storage) Rules, 2002 i.e. the Rules, 2002.
This Rules, 2002 was made with a view to prevent illegal mining, transportation and storage of minerals. Rule-3 of the Rules, 2002 prohibits transportation of the minerals by any means from its raising place to any other place without a valid transit pass issued by the holder of mining lease or mining permit or prospecting licence. Chapter II of the Rules, 2002 deals with transportation of minerals and Chapter III deals with storage of minerals. Rule 8 under Chapter III of the Rules, 2002 provides the procedure to make application for licence for storage of minerals. Rule 9 of the Rules, 2002 enjoins that the District Officer has the authority to grant the licence in 'Form B' for a period of ten years for such quantity as may be considered by him to be fit and proper. Rule 9 was amended by a notification dated 18th December, 2006 and it reduced the period to grant the licence in Form-B for a period of two years for such quantity as may be considered by him. Rule 11 imposes certain restrictions on storage and transportation of minerals. Sub-rule (c) of Rule 11 provides that the licensee shall not store the minerals on a land which do not belong to him or is not held by him under valid tenancy. Sub-rule (d) says that the licensee also cannot transport minerals from storage premises to any other place without issuing transit pass in 'Form C'.
All the petitioners in this batch of petitions are holding licence under the Rules, 2002 for a period of ten years.
The Rules, 2002 has been superseded by a fresh set of rules made by the State Government in exercise of the powers conferred by Section 23-C of the Act, 1957 read with Section 21 of the General Clauses Act, 1897. The fresh set of rules is known as the Uttar Pradesh Minerals (Prevention of Illegal Mining, Transportation and Storage) Rules, 2018 i.e. the Rules, 2018.
Rule 2(j) of the Rules, 2018 defines "illegal storage", which means storing of any mineral other than in accordance with the provisions of the Act, 1957 and the Rules, 2018. Rule 2(n) defines "storage license", it provides that the District Officer is the appropriate authority to issue a license to any person who wishes to possess, sell, trade in, transport, store, or otherwise deal with any mineral. Rule 2(o) defines "storage licensee", which means any person holding license under the Rules, 2018 to carry on business of buying, possessing, storing, selling, supplying, transporting, distributing or delivering for sale or processing of minerals. Rule 3 of the Rules, 2018 prohibits to carry on business of minerals of buying, possessing, storing, selling, etc. without holding a licence granted in these rules. Rule 4 prescribes the eligibility for grant of licence and storage of minerals. Chapter-2 of the Rules, 2018 deals with grant of storage licence and its renewal. Rule 5 of the Rules, 2018 lays down the procedure for grant of storage licence. Rule 6 requires that security deposit of 10% of the royalty of the quantum of the mineral is one of the requisite conditions. It also provides that in every mansoon season ending on 30th September the licensee has to produce the document showing liquidation of 90% of his stock. Chapter-3 of the Rules, 2018 deals with transport of minerals. Chapter-4 provides chek-post and barriers. Rule 12 under Chapter-4 of the Rules, 2018 provides for establishment of check-post, barrier and weigh-bridge and it also authorises the authority to check quality and quantity of minerals transported from lease-hold areas and depot. Sub-rule (3) of Rule 12 enjoins that every holder of mining lease and/or licensee shall provide necessary assistance to the authorised officer to inspect, verify and check the stocks and accounts of minerals. Rule 13 under Chapter-5 provides that whosoever is found to have contravened Rule 3 of this Rules of 2012 then the District Officer will recover penalty up to Rs.5,00,000/- and the price of such minerals including royalty, and in case of breach or contravention of any provision by a licensee, the District Officer after furnishing him opportunity may determine the license.
On the reading of the Rules, 2002 and the Rules, 2018 it is evident that the State Government with a view to prevent illegal mining, transportation and storage of minerals has made more stringent provisions by superseding the Rules, 2002 by the Rules, 2018 in the public interest as the illegal mining is one of the causes in degradation of environment and ecological balance.
The State Government vide a notification dated 09th March, 2019 amended the Rules, 2018 by the First Amendment Rules, 2019 i.e. the Uttar Pradesh Minerals (Prevention of Illegal Mining, Transportation and Storage) (First Amendment) Rules, 2019, which is under challenge in this batch of writ petitions. By the said amendment, Rule 4 under Chapter-1 of the Rules, 2018 was substituted and after Rule 16 of the Rules, 2018 a new chapter, being Chapter-6- Repeal and Saving containing Rule 17, has been inserted. For the sake of convenience, Rule 4, as was existing in the Rules, 2018 and as has been substituted by the Rules, 2019, and Chapter-6, Rule 17, which has been inserted by the Rules, 2019, are extracted below:
"COLUMN-I (Existing rule) COLUMN-II (Rule as hereby substituted) 4 Eligibility for grant of licence and storage of minerals-
(1) Every Person shall be eligible for grant of license except the following person:-
(a) a person who is not an Indian National;
(b) a company which is not the ambit of Companies Act, 2013:
(c) a person who is convicted by a court:
(d) a person whose license has been cancelled for violation of terms and condition of a previous licence (2) The storage of mineral shall be permitted if:
(a) it is not within a radius of 10km from the source there of:
(b) it is not outside the lease/ permit area of a lease/ permit holder;
(c) it is not stocked beyond the quantity specified in the licence;
4 Eligibility for grant of licence and storage of minerals-
(1) Every Person shall be eligible for grant of license except the following person:-
(a) a person who is not an Indian National;
(b) a company which is not the ambit of Companies Act, 2013:
(c) a person who is convicted by a court:
(d) a person whose license has been cancelled for violation of terms and condition of a previous licence:
(e) lessee in case of river bed minerals for the concerned district.
(2) the storage of mineral shall be permitted if:
(a) it is not within a radius of 05km from the leased out area in case of river bed minerals:
(b) it is not stocked beyond the quantity specified in the licence;"
"Chapter-6 Repeal and Saving
17. On the commencement of the Uttar Pradesh Minerals (Prevention of Illegal Mining, Transportation and Storage) Rules, 2019;
(a) the Uttar Pradesh Minerals (Prevention of Illegal Mining, Transportation and Storage) Rules, 2002 shall stand rescinded;
(b) any reference to the Uttar Pradesh Mineral (Prevention of Illegal Mining, Transportation and Storage) Rule, 2002 shall construed as the reference to the Uttar Pradesh Minerals (Prevention of Illegal Mining, Transportation and Storage) Rules, 2018;
(c) not withstanding such recission the licenses issued under The Uttar Pradesh Mineral (Prevention of Illegal Mining, Transportation and Storage) Rules, 2002 shall be valid for a period of 03 months from the commencement of the Uttar Pradesh Mineral (Prevention of Illegal Mining, Transportation and Storage) Rules, 2018."
By this amendment, existing Rule 4 of the Rules, 2018 has been substituted by inserting clause (e) in its sub-rule (1), which provides that now a lessee is also eligible for licence in the concerned district. Another amendment made by the Rules, 2019 is that in Rule 4(2)(a) of the existing rule the condition that storage of mineral shall be permitted if it is not within a radius of 10 km. from the source thereof, was substituted by reducing the radius from 10 km. to 5 km. from the leased out area in case of river bed minerals. By the said amendment, Chapter-6, which provides repeal and saving, has been inserted in the Rules, 2018. Sub-rule (c) of Rule 17 under Chapter-6 provides that notwithstanding such recission the licenses issued under the Rules, 2002 shall be valid for a period of three months from the date of commencement of the Rules, 2018.
On the same day i.e. 09th March, 2019 simultaneously a Government Order dated 09th March, 2019 was also issued. In Clause 2 (Ga) thereof it is provided that the Rules, 2019 shall also be applicable to the stone crusher and other industries, based on the minerals, and they shall also be eligible for the storage licence. Sub-clause (Gha) of Clause 2 of the Government Order provides that the period of licence issued under the Rules, 2002 shall be valid for three months from the date of notification of the Rules, 2018 (20th December, 2018) and to the said extent the Government Order dated 31st December, 2018 was amended.
On the basis of the submissions of learned counsel for the parties, we find that the questions raised in this batch of writ petitions are:
(i) Whether the Rules, 2018 has retrospective operation?
(ii) Whether the Rules, 2018 has taken away the vested and accrued right of the petitioners with retrospective effect?
(iii) Whether the petitioners, who are granted licence under the Rules, 2002, have vested and accrued right to continue till the expiry of their licence period?
Article 39(b) of the Constitution of India provides that ownership and control of the material resources of the community shall be so distributed so as to best subserve the common good.
To begin with, it is apposite to refer the observations made by the Supreme Court in the case of Goa Foundation v. SESA Sterlite Limited and others19. Taking judicial notice of the mining operation in the country the Supreme Court has observed thus:
"2. Effective implementation and in some instances circumvention of the mining and environment related laws is a tragedy in itself. Laxity and sheer apathy to the rule of law gives mining leaseholders a field day, being the primary beneficiaries, with the State being left with some crumbs in the form of royalty. For the State to generate adequate revenue through the mining sector and yet have sustainable and equitable development, the implementation machinery needs a tremendous amount of strengthening while the law enforcement machinery needs strict vigilance. Unless the two marry, we will continue to be mute witnesses to the plunder of our natural resources and left wondering how to retrieve an irretrievable situation."
The Rules, 2018 was intended to restrict discriminate mining and exploitation of minerals having regard in particular to geographical and ecological condition. The State is entitled to safeguard and save it in larger public interest by formulating statutory provision. In the recent years, the environmental degradation has taken place due to illegal mining activities. The situation has reached at an alarming level and has drawn the attention of the Supreme Court which has dealt with the matter in a long line of decisions in the matter of mining operations.
The principal ground for the challenge in this batch of writ petitions is that the Rules, 2018 and particularly Rule-17, which has been inserted by the First Amendment Rules, 2019, is ultra vires. It is trite that a subordinate legislation is open to challenge on limited ground if it is in conflict with the Constitution or the Act, which permits the rule making authority to frame the rules, or if it is so arbitrary and unreasonable. The rule can also be challenged if it is beyond its limits permissible under the principal Act and it must be in good faith and in the public interest. In the case of State of U.P. and others. v. Renusagar Power Co. and others20 the Supreme Court has observed as under:
"79. If the exercise of power is in the nature of subordinate legislation the exercise must conform to the provisions of the statute. All the conditions of the statute must be fulfilled...."
A subordinate legislation can be declared ultra vires if it is found that the rule challenged is not within the scope of authority conferred on the rule maker by the parent Act. The Court cannot examine the wisdom or officiousness of the rules. It cannot consider the merit or demerit of a policy of the State. It is well settled law that delegatee cannot frame a rule which is not authorized by the parent statute. If the rule has not been framed within the powers delegated by the parent Act and if it is beyond the said power, only in those cases the court can declare it ultra vires.
De. Smith in his book in 'Principles of Judicial Review', 1999 Edition, at page 95 has observed as under:
"In essence, the doctrine of ultra vires permits the courts to strike down decisions made by bodies exercising public functions which they have no power to make. Acting ultra vires and acting without jurisdiction have essentially the same meaning, although in general the term "vires" has been employed when considering administrative decisions and subordinate legislative orders, and "jurisdiction" when considering judicial decisions, or those having a judicial flavour."
Sir William Wade and Christopher Forsyth in their book on 'Administrative Law', Eighth Edition, at page 35, has defined the ultra-vires in the following terms:
"The simple proposition that a public authority may not act outside its powers (ultra vires) might fitly be called the central principle of administrative law. The juristic basis of judicial review is the doctrine of ultra vires. To a large extent the courts have developed the subject by extending the refining this principle, which has many ramifications and which in some of its aspects attains a high degree of artificiality."
In the case of P. Krishnamurthy (supra) the Supreme Court has culled out the following principles:
"15. There is a presumption in favour of constitutionality or validity of a subordinate legislation and the burden is upon him who attacks it to show that it is invalid. It is also well recognized that a subordinate legislation can be challenged under any of the following grounds:
a) Lack of legislative competence to make the subordinate legislation.
b) Violation of fundamental rights guaranteed under the Constitution of India.
c) Violation of any provision of the Constitution of India.
d) Failure to conform to the statute under which it is made or exceeding the limits of authority conferred by the enabling Act.
e) Repugnancy to the laws of the land, that is, any enactment.
f) Manifest arbitrariness/unreasonableness (to an extent where court might well say that the legislature never intended to give authority to make such Rules)."
The Rules, 2002 and the Rules, 2018 have been framed by the State Government under Section 23-C of the Act, 1957. Section 23-C of the Act, 1957 has been inserted by the Act, 38 of 1999. The object of these rules is to empower the State Government to make rules for preventing illegal mining, transportation and storage of minerals. Section 23-C, as extracted above, would indicate that under sub-rule (d) the rule can be framed in respect of inspection, checking and storage of minerals at the place of excavation or storage or during transit. It is clear that Section 23-C empowers and mandates the State Government to frame such rule to prevent illegal mining and transportation. In view of the clear mandate mentioned above, it cannot be said that the Rules, 2018 has been framed by the State Government which lacks legislative competence.
Learned counsel for the petitioners have also failed to satisfy us that the provisions of the Rules, 2018 violate the fundamental right guaranteed under the Constitution. Likewise, no provision under the Rules, 2018 has been pointed out which has been made exceeding the limit of the authority conferred by the enabling Act. We are also not satisfied that the said Rule is unreasonable or arbitrary. As discussed above, the issue of the illegal mining is causing serious degradation of environment. In these cases the stand of the State Government is that in compliance of the mandate given by the Supreme Court in recent cases and to fulfill the legislative intent in view of the intent of Section 23-C of the Act, 1957, the State Government has framed the Rules, 2018 primarily to prevent the illegal mining, transportation and storage of minerals. The main object of the Rules, 2018 is to prevent illegal mining and to include the technological advancement in the mining field. We also find sufficient force in the submission of learned Additional Advocate General that in the writ petition there is neither any foundation nor any basis, on which the subordinate legislation can be declared ultra vires.
The next question arises is whether the Rules, 2018 is retrospective in operation.
It is worthwhile to mention that the Rules, 2018 has come into force from the date of notification viz. 20th December, 2018 and not prior to the said date. It is a trite law that retrospectivity cannot be inferred unless the Act/Rule expressed it or necessarily implied by the legislation in this context. Reference may be made to a passage in the 'Principles of Statutory Interpretation' by Justice G.P. Singh, 13th Edition 2012, Page 534, relevant part of which reads as under:
"The rule against retrospective construction is not applicable to a statute merely "because a part of the requisites for its action is drawn from a time antecedent to its passing". If that were not so, every statute will be presumed to apply only to persons born and things come into existence after its operation and the rule may well result in virtual nullification of most of the statutes. An amending Act is, therefore, not retrospective merely because it applies also to those to whom pre-amended Act was applicable if the the amended Act has operation from the date of its amendment and not from an anterior date."
It is a trite law that retrospectivity is not to be presumed, on the other hand, there is presumption against the retrospectivity. From the plain reading of the Rules, 2018 it is evident that there is no express intention of the rule-making authority to give its effect from the retrospective operation. In Zile Singh v. State of Haryana and others21 the Supreme Court has observed that "four factors are suggested as relevant: (i) general scope and purview of the statute; (ii) the remedy sought to be applied; (iii) the former state of the law; and (iv) what it was the legislature contemplated. The rule against retrospectivity does not extend to protect from the effect of a repeal, a privilege which did not amount to accrued right."
In Gajraj Singh and others v. State Transport Appellate Tribunal and others22 the appellants were granted stage carriage permit under Section 47(3) of the Motor Vehicles Act, 1939 (for short, the "Act, 1939" for a period of three years. The said Act, 1939 was repealed by the Motor Vehicles Act, 1988 (for short, the "Act, 1988"), which came into force with effect from 01st July, 1989. The appellants' permit was renewed under Section 81 of the Act, 1988 from time to time. Later on, it was challenged on the ground that the renewal granted under the new Act was void since the renewal of the permit was not valid in law as they had not got any new permit under the Act, 1988. The said plea was upheld by the High Court and the matter was carried to the Supreme Court. The issue raised before the Supreme Court was whether a permit granted under the repeal Act of 1939 shall continue to have the same operation under the new Act of 1988 in the same terms and conditions and for the same period as if the repeal Act was in operation, and as if the new Act had not been passed. It was submitted before the Supreme Court that this is the fiction of law, by which though the Act, 1939 was wiped out, its operation gets revived. It was urged that the intention appears to be that the new Act breaths life into the dead permits and allows full play to the permits granted under the repealed Act. However, in the said case the Supreme Court held that if an Act is repealed, the effect is to obliterate the Act completely from the record as it had never passed and never existed. The repeal is not a mere matter of formality but a substance depending on the intention of the legislature. In case there is repeal and simultaneously re-enactment, Section 6 of the General Clauses Act would not be applicable unless the new legislation manifests intention contrary to the application of the section. Relevant part of the judgment of Gajraj Singh (supra) is quoted below:
"22. Whenever an Act is repealed it must be considered, except as to transactions past and closed, as if it had never existed. The effect thereof is to obliterate the Act completely from the record of the Parliament as if it had never been passed; it never existed except for the purpose of those actions which were commenced, prosecuted and concluded while it was an existing law. Legal fiction is one which is not an actual reality and which the law recognises and the court accepts as a reality. Therefore, in case of legal fiction the court believes something to exist which in reality does not exist. It is nothing but a presumption of the existence of the state of affairs which in actuality is non-existent. The effect of such a legal fiction is that a position which otherwise would not obtain is deemed to obtain under the circumstances. Therefore, when Section 217(1) of the Act repealed Act 4 of 1939 in effect came to be non-existent except as regards the transactions, past and closed or saved.
*** *** ***
24. When there is a repeal and simultaneous re-enactment, Section 6 of the GC Act would apply to such a case unless contrary intention can be gathered from the repealing Act. Section 6 would be applicable in such cases unless the new legislation manifests intention inconsistent with or contrary to the application of the section. Such incompatibility would have to be ascertained from all relevant provisions of the new Act. Therefore, when the repeal is followed by a fresh legislation on the same subject, the Court would undoubtedly have to look to the provisions of the new Act only for the purpose of determining whether the new Act indicates different intention. The object of repeal and re-enactment is to obliterate the Repealed Act and to get rid of certain obsolete matters.
*** *** ***
42. There is a distinction between right acquired or accrued, and privilege, hope and expectation to get a right, as rightly pointed out by the High Court in the impugned judgment. A right to apply for renewal and to get a favourable order would not be deemed to be a right accrued unless some positive acts are done, before repeal of Act 4 of 1939 or corresponding law to secure that right of renewal...."
In Gammon India Ltd. (supra) the effect of repeal and the rule of construction regarding the simultaneous repeal and enactment of the same statute, and Section 6 of the General Clauses Act, 1897 fell for consideration. The Supreme Court in this case has elaborately considered the effect of the repeal and has also referred a large number of judgments of the Law of England, America and Australia. Paragraphs-46, 52, 53 and 57 of the judgment read as under:
"46. The principle which has been laid down in this case is that whenever there is a repeal of an enactment, the consequences laid down in section 6 of the General Clauses Act will follow unless, as the section itself says, a different intention appears. In the case of a simple repeal there is scarcely any room for expression of a contrary opinion. But when the repeal is followed by fresh legislation on the same subject we would undoubtedly have to look to the provisions of the new Act, but only for the purposes of determining whether they indicate a different intention. The line of enquiry would be, not whether the new Act expressly keeps alive old rights and liabilities but whether it manifests an intention to destroy them. We cannot therefore, subscribe to the broad proposition that Section 6 of the General Clauses Act is ruled out when there is repeal of an enactment followed by a fresh legislation. Section 6 would be applicable in such cases also unless the new legislation manifests an intention incompatible with or contrary to the provisions of the section.
*** *** ***
52. In view of the interpretation what follows is absolutely clear that unless a different intention appears in the repealing Act, any legal proceeding can be instituted and continued in respect of any matter pending under the repealed Act as if that Act was in force at the time of repeal. In other words, whenever there is a repeal of an enactment the consequences laid down in Section 6 of the General Clauses Act will follow unless, as the section itself says, a different intention appears in the repealing statute.
53. In case the repeal is followed by fresh legislation on the same subject the court has to look to the provisions of the new Act for the purpose of determining whether they indicate a different intention. The question is not whether the new Act expressly keeps alive old rights and liabilities but whether it manifests an intention to destroy them. The application of this principle is not limited to cases where a particular form of words is used to indicate that the earlier law has been repealed. As this Court has said, it is both logical as well as in accordance with the principle, upon which the rule as to implied repeal rests, to attribute to that legislature which effects a repeal by necessary implication the same intention as that which would attend the case of an express repeal. Where an intention to effect a repeal is attributed to a legislature then the same would attract the incident of saving found in Section 6.
*** *** ***
57. When there is a repeal and simultaneous reenactment, Section 6 of the General Clauses Act would apply to such a case unless contrary intention has been gathered from the repealing Act. Section 6 would be applicable in such cases unless the new legislation manifests intention inconsistent with or contrary to the application of the section. When the repeal is followed by a fresh legislation on the same subject, the Court would undoubtedly have to look to the provisions of the new Act only for the purpose of determining whether the new Act indicates different intention. The object of repeal and reenactment is to obliterate the Repealed Act and to get rid of certain obsolete matters."
In Howrah Municipal Corpn. (supra) the Supreme Court has considered the words 'vested right' in the context of the amendment in the statutory provisions. The Court held as under:
"37. ...The claim based on the alleged "vested right" or "settled expectation" cannot be set up against statutory provisions which were brought into force by the State Government by amending the Building Rules and not by the Corporation against whom such "vested right" or "settled expectation" is being sought to be enforced. The "vested right" or "settled expectation" has been nullified not only by the Corporation but also by the State by amending the Building Rules. Besides this, such a "settled expectation" or the so-called "vested right" cannot be countenanced against public interest and convenience which are sought to be served by amendment of the Building Rules and the resolution of the Corporation issued thereupon."
Applying the aforesaid principle in the present case we find that after the repeal of the Rules, 2002 a fresh set of rules, i.e., the Rules, 2018 has been made by the State Government. By the First Amendment Rules, 2019 Chapter-6, Repeal and Saving, has been inserted. Rule 17(c) clearly shows the intention of the rule-making authority that its intention was only to save right of licensee only for three months. The language employed by the rule-making authority clearly manifests the intention to destroy all the rights of the licensee under the Rules, 2002 as it has saved them only for three months. Section 6 of the General Clauses Act, 1897 provides the effect of repeal. Section 6 of the General Clauses Act reads as under:
"6. Effect of repeal.-- Where this Act, or any Central Act or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not--
(a) revive anything not in force or existing at the time at which the repeal takes effect; or
(b) affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder; or
(c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or
(d) affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed; or
(e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid, and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed as if the repealing Act or Regulation had not been passed."
(Emphasis supplied) No provision of the Rules, 2018 indicates any different intention of the rule-making authority to continue the rights of the licensee for the entire period. The intendment of the rule-making authority is manifest that right of the licensee has not been saved except for three months. In view of the clear expression of the intention in the saving clause, in our considered opinion, Section 6 of the General Clauses Act has no application in the present case.
We find that the similar argument has been raised in the present case also. Since the petitioners were granted licence for ten years, their licence shall continue under the new Rules.
The next issue for consideration is that whether the petitioners, who are licence holders under the Rules, 2002, have a vested right to continue their licence in spite of the fact that the Rules, 2002 has been rescinded.
Under the provisions of the Rules, 2002 and the Rules, 2018 only licence is granted and there is no provision for lease. The word 'licence' has not been defined either under the Act, 1957 or under the Rules, 2002. The licence is defined under Section 52 of the Indian Easement Act, 1882, which reads as under:-
"52. "License" defined.--Where one person grants to another, or to a definite number of other persons, a right to do, or continue to do, in or upon the immovable property of the grantor, something which would, in the absence of such right, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a license."
The word 'licence' is also defined in the different dictionaries. In P. Ramanatha Aiyer's 'The Law Lexicon' 2nd Edition (1997), page 1121, the definition of "licence" is given in the following manner:
"Licence/License. "Where one person grants to another, or to a definite number of other persons a right to do, or continue to do, in or upon the immovable property of the grantor, something which would, in the absence of such right, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called license" [Indian Easement Act, S.52] An authority to do something which would otherwise be inoperative, wrongful or illegal; a formal permission from a constituted authority to do something. [S.52, Indian Easement Act] Permission or authority to do a particular thing.
"A License in respect of real estate is defined to be an authority to do a particular act or series of acts on another's land without possessing any estate therein."
"Licence" is described by Jones in his book on Easement as a personal and revocable privilege to do some act or series of acts upon the lands of another without possessing any estate therein. It gives immunity to the licensee while acting under the privilege but confers not vested right by which he can rightfully enjoy it contrary to the will of the grantor.
Licence is an excuse by reason of the consent of the plaintiff for an act which would otherwise be unlawful: as an entry upon the plaintiff's land, or the infringement of his parent or copyright.
In the popular as also in the legal sense, a licence is a permission to do something which, without the licence would not be allowable. In the secondary sense, it denotes a certificate or document which embodies the permission in question.[State of Punjab v. Raghunath Dass, AIR 1963 Punj 76, 80]"
According to Black's Law Dictionary, 8th Edition (South Asian Edition), page 938, the definition of "license" is thus:
"License: A permission, usu. revocable, to commit some act that would otherwise be unlawful: esp.: an agreement (not amounting to a lease or profit, a prendre) that it is lawful for the licensee to enter the licensor's land to do some act that would otherwise be illegal, such as hunting game."
Difference between the lease and the licence is no more res integra. The Supreme Court in the case of Mangal Amusement Park Private Limited (supra) has quoted with approval the law laid down by it in the case of Associated Hotels of India Ltd. v. R.N. Kapoor23 in paragraph-16 of the judgment, which reads thus:
"16. The issue concerning the distinction between lease and licence came up for consideration before this Court in Associated Hotels of India Ltd. v. R.N. Kapoor24. In para 27 of his judgment, Subba Rao, J. (as he then was) observed therein as follows with respect to lease: (AIR p. 1269) "27. There is a marked distinction between a lease and a licence. Section 105 of the Transfer of Property Act defines a lease of immovable property as a transfer of a right to enjoy such property made for a certain time in consideration for a price paid or promised. Under Section 108 of the said Act, the lessee is entitled to be put in possession of the property. A lease is therefore a transfer of an interest in land. The interest transferred is called the leasehold interest. The lessor parts with his right to enjoy the property during the term of the lease, and it follows from it that the lessee gets that right to the exclusion of the lessor."
Thereafter, the learned Judge referred to the definition of "licence", then observed as follows: (R.N. Kapoor case, AIR p. 1269, para 27) "27. ... Under the aforesaid section, if a document gives only a right to use the property in a particular way or under certain terms while it remains in possession and control of the owner thereof, it will be a licence. The legal possession, therefore, continues to be with the owner of the property, but the licensee is permitted to make use of the premises for a particular purpose. But for the permission, his occupation would be unlawful. It does not create in his favour any estate or interest in the property. There is, therefore, clear distinction between the two concepts. The dividing line is clear though sometimes it becomes very thin or even blurred."
In Puran Singh Sahni v. Sundari Bhagwandas Kripalani (Smt) and others25 the Supreme Court held that the licence was a privilege and not an interest in the property. Similar view has been taken by the Supreme Court in the case of C.M. Beena and another v. P.N. Ramachandra Rao26. The Supreme Court has held that the licensee gets a permission for a particular purpose or in a particular manner but for the permission so given the occupation would have been unlawful.
The principles laid down in the aforesaid judgments are in the context of the landlord and the tenant dispute. In the present case, it is worthwhile to mention that the present dispute is not in respect of occupation of any land as one of the essential requirements for grant of licence is that the land which is to be used for storage purpose shall be of the licensee. In this regard it is apposite to refer to Rule 11(c) of the Rules, 2002 which reads as under:
"(c) use any land for storage of minerals, which do not belong to him or is not held by him/her under valid tenancy,"
Thus, the law laid down in the above cases are helpful in the present batch of petitions to demonstrate that a licensee does not have any vested right for the storage of the minerals on his land. Since the minerals are regulated under the statutes, the licence is simply a permission by the State authorities to store and sell the requisite quantum of the minerals at a particular place.
Insofar as the submission of learned counsel for the petitioners that once a licence was granted for ten years, the petitioners have vested right which cannot be taken away, we find that the licence, as discussed above, is only a permission for the storage of the minerals at their own place.
Relevant it would be to mention that in certain cases a distinction is drawn between an existing right and vested right and it is a settled law that the rule against the prospective construction is applied only to save the vested right and not existing right. The vested right has been defined in the Concise Law Dictionary (Abridged Edition) by P. Ramanatha Aiyar, Third Abridged Edition Reprint, 2009, at page 1193, which is extracted below:
"Vested rights. The expression 'vested right' means an absolute or indefeasible right. It is an immediate fixed right in present or future enjoyment in respect of property. The claim based on the vested right or settled expectation to obtain sanction cannot be set up against statutory provisions. It cannot be countenanced against public interest and conveniences which are sought to be served. Howrah Municipal Corpn. v. Ganges Rope Co. Ltd., (2004) 1 SCC 633, 680, para 37. [Howrah Municipal Corporation Act (58 of 1980), S. 175] "
Reference may also be made to the judgment of the Supreme Court in the case of Trimbak Damodhar Raipurkar v. Assaram Hiraman Patil and others27. Relevant part of the judgment reads as under:
"(9) In this connection it is relevant to distinguish between an existing right and a vested right. Where a statute operates in future it cannot be said to be retrospective merely because within the sweep of its operation all existing rights are included. As observed by Buckley, L. J. in West v. Gwynne, 1911-2 Ch 1 at pp. 11, 12, retrospective operation is one matter and interference with existing rights is another.
"If an Act provides that as at a past date the law shall be taken to have been that which it was not that Act I understand to be retrospective. That is not this case. The question here is whether a certain provision as to the contents of leases is addressed to the case of all leases or only of some, namely, leases executed after the passing of the Act. The question is as to the ambit and scope of the Act, and not as to the date as from which the new law, as enacted by the Act, is to be taken to have been the law."
These observations were made in dealing with the question as to the retrospective construction of S. 3 of the Conveyancing and Law of Property Act, 1892 (55 & 56 Vict. c. 13). In substance S.3 provided that in all leases containing a covenant, condition or agreement against assigning, underletting, or parting with the possession, or disposing of the land or property leased without licence or consent, such covenant, condition or agreement shall, unless the lease contains an expressed provision to the contrary, be deemed to be subject to a proviso to the effect that no fine or sum of money in the nature of a fine shall be payable for or in respect of such licence or consent. It was held that the provisions of the said section applied to all leases whether executed before or after the commencement of the Act; and, according to Buckley, L. J., this construction did not make the Act retrospective in operation; it merely affected in future existing rights under all leases whether executed before or after the date of the Act. The position in regard to the operation of S. 5(1) of the amending Act with which we are concerned appears to us to be substantially similar."
Sri Mukesh Prasad has relied on the judgments of the Supreme Court in Controller of Estate Duty, Gujarat I. Ahmedabad v. M.A. Merchant28; District Collector, Vellore District v. K. Govindaraj29; Baraka Overseas Traders v. Director General of Foreign Trade and ors.30; Collector of Central Excise, Ahmedabad v. Orient Fabrics Pvt. Ltd.31; Industrial Infrastructure Development Corporation (Gwalior) M.P. Ltd. v. Commissioner of Income Tax, Gwalior32; Federation of Indian Mineral Industries and ors. v. Union of India (UOI) and ors.33; Lok Prahari v. The State of Uttar Pradesh and ors.34; and Cellular Operators Association of India and ors. v. Telecom Regulatory Authority of India and ors.35.
In District Collector, Vellore District (supra) the respondents therein were holding stone quarrying leases for five years. The rule provided that it could be renewed for another five years. When their lease were still in operation, the State Government amended the rules vide a Government Order providing that the period of quarrying stone in respect of virgin area shall be ten years, whereas the period of lease for quarrying stone for the other areas shall be five years. It was contended on behalf of the petitioners that since they were granted lease for quarrying stone in respect of virgin area, therefore, they were entitled to continue to lease for a period of ten years. In the said fact a question arose whether the amended rule can be made applicable even in those cases where the lease were granted before 17th November, 2000 when the amendment was made. The Madras High Court held that the petitioners were entitled to continue for ten years as the lease had not expired on the date when the amended rule came into force. The State Government went in appeal. The Supreme Court found that the High Court has committed error in holding that fixation of period of lease is also procedural, therefore, the petitioners were entitled to get the benefit of the amended rule, which was made in respect of the virgin area, where the period of the lease was ten years. We find that the said case has no application in the facts of the present case.
In the case of Baraka Overseas Traders (supra) the Supreme Court was called upon to deal with the Central Government's scheme known as 'Duty Exemption Scheme' under the Export and Import Policy of 1997-2002 (for short, the 'EXIM Policy'). In the said scheme advance licences were issued for import of certain items. The appellant before the Supreme Court had moved applications for an endorsement for transferability after fulfillment of the stipulated export obligation. His application was rejected by the Director General of Foreign Trade. The said order was challenged by the appellant in the Andhra Pradesh High Court. The writ petition was dismissed. Dissatisfied with the judgment of the High Court the petitioner preferred a special leave petition. The Supreme Court found that the appellants were granted the advance licences and the licences issued to the appellant under the Duty Exemption Scheme were in the 'norms category' or 'no norms category'. In both the cases, the licence was transferable. The Court held that if some right had accrued under the old policy, the appellants were entitled to the benefit under the new policy also. The Court observed that the order of the DGFT was in violation of the principle of natural justice. Hence, an opportunity was necessary. In the said case, the stand of the respondent was that grant of licence does not confer any vested right in favour of the licensee if the licence has been obtained by misrepresentation. The Court observed that if the licencing authority was of the opinion that the licence was obtained by misrepresentation then a show cause notice should have been given to the appellants therein. Since no opportunity was given to the appellants nor their licence was cancelled, the view taken by the High Court was found to be incorrect. We find that the said case was decided on its own facts, therefore, it has no application in the facts of the present case.
Sri Alok Yadav, learned counsel for the petitioners, has laid much emphasis on the judgment of the Supreme Court in the case of P. Krishnamurthy (supra). In the said case a public interest litigation was filed alleging about indiscriminate illicit quarrying of the sand in riverbeds. Certain directions were issued by the Madras High Court to the State Government. In compliance of the directions of the High Court, the State Government appointed a high level committee of experts. The Committee made a recommendation to impose total prohibition of quarrying by private parties. The State Government accepted the recommendation in the pubic interest to stop quarrying of the sand by the private agencies and inserted Rule 38A by a notification in Tamil Nadu Minor Mineral Concession Rules, 1959. Under Rule 38A all the existing licences were cancelled. Said amendment was challenged. The Supreme Court upheld the validity of Rule 38A but only read down the provision which purports to terminate the quarrying lease forthwith. The reason for reading down the said provision was that it was contrary to the principles of natural justice as the decision of the State Government was found to be contrary to the amended Section 4A of the Act, 1957.
In view of the above, the judgment of the Supreme Court does not support the contention of the petitioners to declare the Rules, 2018 and its Rule-17 ultra vires. As noticed above, the Supreme Court has upheld the validity of Rule-38A.
Sri S.G. Hasnain, learned Senior Advocate has placed reliance on a judgment of the Supreme Court in the case of Vatika Township Private Limited (supra). The said case deals with the interpretation of taxing provision. The Court held that fairness doctrine is applicable to the taxing statute also. The question of principle against retrospectivity was also considered by the Supreme Court. In our view, the said case is distinguishable in facts and circumstances of the present case.
In the case of Purbanchal Cables and Conductors Private Limited (supra) the Supreme Court has considered the retroactive operation of law. The matter was under the debt, financial and monitory law. The Supreme Court has observed that the substantive law creating a vested right operates prospectively and procedural or declaratory law operates retrospectively unless expressly provided or otherwise in the statute itself. In the present case we have found that the Rules, 2018 are not retrospective, hence the law laid down in this case has no application in the present case.
We have also considered the judgements of the Supreme Court relied upon by Sri Hasnain in the cases of C.R. Rangadhamaiah (supra) and National Agricultural Cooperative Marketing Federation of India Ltd. (supra). These cases are distinguishable and have no application in the facts of the present cases. In view of the view we have expressed above, it is not necessary for us to refer in detail to the rulings relied upon by the learned counsel for the petitioners.
One of the common submissions of all the learned counsel appearing for the petitioners is that granting only three months' time to the licence holders and ten days' time to the stone crushers is arbitrary and illegal.
It is a common ground that the licence of the petitioners was granted for ten years under the Rules, 2002. On 20th December, 2018 the State Government has framed the Rules, 2018. On 31st December, 2018 the State Government issued a Government order, wherein one month's time was allowed to the existing licence holders under the Rules, 2002 to dispose of their stored minerals. Clause-9 of the said Government order dated 31st December, 2018 provides as under:
"9- izns'k ds LVksu dzs'kj m|ksx m0iz0 [kfut ¼voS/k [kuu] ifjogu ,oa Hk.Mkj.k dk fuokj.k½ fu;ekoyh] 2018 ls vkPNkfnr ugha gksaxsA "
The said Government order was amended by an order dated 25th January, 2019 issued by the State Government whereby the period of one month was extended till 28th February, 2019. The aforesaid Government order was followed by order dated 09th March, 2019. Clause-2(Ga) of the Government order provides that the First Amendment Rules, 2019 shall be applicable to the stone crusher and other industry based on minerals and they shall also be eligible for storage licence. Sub-clause (Gha) of Clause 2 of the Government order dated 09th March, 2019 provides that the period of licence issued under Rules, 2002 shall be valid for three months from the date of notification of the Rules, 2018 (20th December, 2018). Thus, in fact, the stone crushers have practically got only 11 days' time to dispose of their entire minerals as the amendment made on 09th March, 2019 provides three months time from the date of notification of the Rules, 2018, which is 20th December, 2018. The petitioner in the lead petition was granted licence for the storage of river bed minerals (RBM), sand, bajri, boulders to the quantity of 2,00,000 cubic meter. The period of licence was from 06th December, 2014 to 05th December, 2024 i.e. for ten years. In our view, grant of only 11 days' time to the stone crushers and three months' time for other licence holders is unreasonable. It would be difficult that the entire quantity stored by the licence holders can be disposed of in such a short span of time. The disposal of the huge quantity of the mineral depends upon the demand of the market. Hence, we find that grant of three months' time to the other licence holders and only 11 days' time to the stone crushers industry is arbitrary and violative of Article 14 of the Constitution of India.
For all the reasons mentioned above, we are of the considered opinion that the First Amendment Rules, 2019 inserting Rule 17 in the Rules, 2018 is valid and intra vires. But we read down Rule 17(c) of the Rules, 2018, wherein three months' time from 20th December, 2018 has been provided to dispose of the entire material. In our view, it would be just and fair to extend the period. Hence, the period provided under the Rules, 2018, for the reasons discussed above, is extended upto 30th June, 2019. The petitioners are permitted to dispose of their stored material till 30th June, 2019 and no action shall be taken against them till the said date. Since we have read down Rule 17 (c) of the Rules, 2018, any coercive action including seizure taken against the petitioners under the Rules, 2018 after expiry of the period mentioned in Rule 17 (c) stands set aside.
All the writ petitions are disposed of in the above terms.
No order as to costs.
Date: 31st May, 2019 SKT/Digamber