Karnataka High Court
National Mineral Development ... vs The State Of Karnataka, By Its ... on 24 May, 2004
Equivalent citations: ILR2004KAR3519, AIR 2004 KARNATAKA 397, 2004 AIR - KANT. H. C. R. 2219, (2004) ILR (KANT) (3) 3519, (2004) 5 KANT LJ 71
Author: P. Vishwanatha Shetty
Bench: P. Vishwanatha Shetty, Ajit J. Gunjal
JUDGMENT P. Vishwanatha Shetty, J.
1. Since these appeals are directed against the common order dated 6th January 2000 made in Writ Petition Nos. 7942 and 7943 of 1994 and connected Writ Petitions by the learned Single Judge, these appeals were heard together and disposed of by this common judgment.
2. The National Mineral Development Corporation Limited which was the petitioner in Writ Petition Nos. 7942-43 of 1994 is the appellant in Writ Appeal Nos. 1589 to 1590 of 2000. It is a Government of India undertaking incorporated under the provisions of the Companies Act, 1956 and is engaged in carrying on mining activity. The appellant in Writ Appeal No. 1169 of 2000 was the petitioner in Writ Petition No. 3718 of 1994. The appellant in Writ Appeal No. 4767 of 2000 was the petitioner in Writ Petition No. 34385 of 1995. It is a partnership firm carrying on business in exploitation of mines in the State of Karnataka. The appellants in Writ Appeal Nos. 1253 to 1260 of 2000 were the petitioners in Writ Petition Nos. 22894, 34439, 37793-94, 25551, 34728, 34817 of 1995 and Writ Petition No. 219 of 1996.
3. All the appellants were grantees of mining lease in respect of various portions of land situated in different villages in Bellary District by the Government of Karnataka in accordance with the provisions of The Minor Minerals (Regulation and Development) Act 1957 (hereinafter referred to as 'the MMRD' Act) read with Mineral Concession Rules, 1960. The lease of the lands in question relates to the forest area. In the Writ Petitions, the appellants have sought for a declaration declaring that the provisions of the Karnataka Forest Act (hereinafter referred to as 'the Forest Act'), and the Rules framed thereunder are in applicable for transportation and movement of iron ore mined by them and in respect of the mining activity carried on by them on the lands taken on lease by them; and for a further direction to the State and its authorities not to insist upon them to obtain transport permits/passes for transporting minerals from the mining leases covered under the lease agreements obtained by them. They had also prayed for quashing of the notices issued to them by the forest authorities directing them to obtain transit passes issued by the competent forest officers before transporting the minerals from the forest area and also striking down of Section 2(7)(b)(iv) of the Forest Act and the Rules framed there under to the extent they are inconsistent with the provisions of the MMRD Act.
4. The questions involved in all these appeals are fairly similar and identical. The learned Single Judge in the impugned order dismissed the Writ Petitions filed by the appellants. He negatived the contention of the appellants that the Forest Rules framed by the State Government encroaches upon the provisions of the MMRD Act by reason of declaration contained in Section 2 of the MMRD Act and took the view that the provision contained in the Rules are only regulatory in nature and they do not levy any charge on the element of royalty, dead rent etc. payable for excavation of rocks and minerals under the Act. He has further held that the power conferred by the State Legislature on the State Government to make Rules regarding the transit and movement of timber and forest produce does not encroach upon the power conferred by the MMRD Act on the Central Government. He was also of the view that the Rules framed under the Forest Act does not impose any additional liability on the royalty or the dead rent payable by the lessess under MMRD Act or Mineral Concession Rules and it would also not impose any restriction on the lessees in carrying on with their mining activity.
5. We have heard Sri M.R. Achar, learned Senior Counsel, Sri D.L.N. Rao and Sri Naganand, learned Counsel for the appellants and Sri A.N. Jayaram, learned Advocate General along with Smt. Ratna N. Shivayogimath, learned Government Pleader for the respondents.
6. The counsel for the appellants made two submissions challenging the correctness of the order impugned in these appeals. Firstly, they submitted that having regard to the declaration contained in Section 2 of the MMRD Act in terms of Entry 54 of List I of VII Schedule to the Constitution, the State Legislature is denuded of its power to legislate in respect of matters covered or occupied under MMRD Act and Mineral Concession Rules, 1960 and to that extent the provisions contained in Section 2(7)(b)(iv) of the Forest Act and the Rules made under the Act including Rules 145 to 148 should be either struck down as unconstitutional or they should be read down as not applicable in respect of the lands which are covered under the lease agreements obtained by the appellants. It is pointed out that it is not permissible for the Sate legislature to expand the definition of 'Forest Produce' under the Forest Act so as to include 'minerals' which is defined under Section 3(A) of the MMRD Act. It is also submitted that a grantee of a lease under the MMRD Act is entitled to mine, remove and transport minerals in terms of the lease obtained under MMRD Act, and any fetters or obstruction on such right by insisting on obtaining further permits on payment of pass fees amounts to trenching on the field occupied under MMRD Act and the Rules framed thereunder. Elaborating this contention, it was pointed out that when the lessee under MMRD Act and Mineral Concession Rule are permitted to mine, remove and transport minerals on payment of royalty, insistence of obtaining permits on payment of pass fees under State Law amounts to imposition of additional levy in addition to the levy imposed under Section 9 of the MMRD Act and the conditions under Rule 27 of the Mineral Concession Rules. The Counsel for the appellants referred to us extensively the provisions of the MMRD Act, more particularly Section 2, 8, 9, 9-A and 13 of the MMRD Act and the Rules framed there under, more particularly, Rules 22, 26, 27, 28 and 30 of the Rules; and the terms and conditions of the lease agreements. The learned Counsel for the appellants in support of their contentions relied upon the decisions of the Supreme Court in the case of THE INDIA CEMENT LTD. ETC. v. STATE OF TAMIL NADU ETC., AIR 1990 SC 84 in the case of THE DISTRICT COUNCIL OF THE JOWAI AUTONOMOUS DIST. JOWAI AND ORS. v. DWET SINGH RYMBAI ETC., ; in the case of THE STATE OF PUNJAB v. JULLUNDUR VEGETABLES SYNDICATE, ; in the case of COMMISSIONER OF INCOME TAX, BANGALORE AND ORS. v. B.C. SRINIVASA SETTY, ; in the case BIRLA CEMENT WORKS v. CENTRAL BOARD OF DIRECT TAXES AND ORS., ; in the case of K. RAMANATHAN v. STATE OF TAMILNADU AND ANR., in the case of THE HINGIR -RAMPUR COAL CO. LTD. AND ORS. v. THE STATE OF ORISSA AND ORS., ; in the case of ORISSA CEMENT LIMITED v. STATE OF ORISSA AND ORS., and the decision of this Court rendered in the case of R. PAMPATHY, AARPEE IRON ORE MINES v. STATE OF KARNATAKA, W.P. No. 35525 to 35546/1993 disposed of on 2nd July 1996 and also the judgment of this Court in Writ Appeal Nos. 3166 to 3170 of 1997 disposed of on 17th November 1998 confirming the order dated 2nd July 1996 made in Writ Petition Nos. 35525 to 35546 of 1993. It is their second submission that Rule 145(A), which speaks of levy of pass fees, has no application so far as it relates to transporting of minerals belonging to the lessees who become the owners of the said minerals after obtaining the lease and on payment of royalty. Elaborating this submission, they pointed out that the said Rule applies only in respect of movement of forest produce belonging to the Government and it does not apply to the movement of minerals mined by the lessees who have taken the land on lease from the State Government. The learned Counsel submitted that since Rule 145(A) provides for payment of fee for obtaining the pass, the said provision is required to be construed strictly. It is their submission that in interpreting a fiscal statute, the Court cannot proceed to make good the deficiencies if there be any, in the statute and the Court should interpret the statutes as it stands and in case of doubt it shall interpret the statute in a manner favourable to the tax payer. In support of this submission, they referred to us the decisions of the Supreme Court in the case of THE STATE OF PUNJAB v. JULLUNDUR VEGETABLES SYNDICATE in the case of COMMISSIONER OF INCOME - TAX, BANGALORE v. B.C. SRINIVASA SETTY, AIR 1971 SC 972 and in the case of BIRLA CEMENT WORKS v. CENTRAL BOARD OF DIRECT TAXES AND ORS..
7. However, the learned Advocate General countering the submissions urged by the counsel for the appellants submitted that while MMRD Act provides for terms and conditions of grant of lease relating to the land containing minerals, the provisions of the Forest Act and the Rules framed there under regulates the protection of forest wealth and forest produce in the State. Relying upon Section 116 of the Forest Act, the learned Advocate General submitted that since the said Section in express terms provides that nothing in the Act should be deemed to affect the operation of the MMRD Act and the Rules framed there under; the provisions of the Act should be understood as 'in addition to' and not in derogation of the provisions of the MMRD Act; it must be held that Section 2(7)(b)(iv) of the Forest Act in no way affects the operation of the MMRD Act; and the said provision should not be construed as having been made in respect of the field occupied by the legislation made by the Parliament as contended by the counsel appearing for the appellants. It is his submission that the Forest Act has been passed by the State Legislature in exercise of its power under Entry 17-A of List III of the seventh schedule of the Constitution. He strongly refuted the submissions of the learned Counsel for the appellants that the definition of 'forest produce' as set out under Section 2(7)(b)(iv) of the Act and Rules framed thereunder is beyond the competency of the State Legislature as the field is covered or occupied under MMRD Act and Mineral Concession Rules. He pointed out that there is no conflict between the provisions contained in MMRD Act and the Forest Act and the Rules framed there under as both the legislature intended to operate in different areas and to achieve different purposes. In support of this submission, he relied upon the decision of the Supreme Court in the case of STATE OF TRIPURA v. SUDHIR RANJAN NATH, . Secondly, the learned Advocate General submitted that the lands leased to the lessees admittedly belong to the State Government and the lessees are given only the right to exploit the land by virtue of the terms of the lease granted to them and therefore the submission of the learned Counsel for the appellants that the provisions of Rule 145 (A) has no application in so far as the lands covered under the lease agreements are concerned, is devoid of any merits. He further submitted that merely because the appellants have taken the lands in question on lease from the State authorising them to remove minerals, the lands in question do not cease to be Government lands and therefore there is no merit in the contention of the appellants that Rule 145(A) of the Rules has no application in so far as the removal and transportation of minerals from the said lands. It is also his submission that the contention of the appellants that Rule 145(A) of the Rules is applicable only in respect of Government lands and has no application in respect of the lands covered under lease obtained by the appellants, having not been urged before the learned Single Judge, the appellants cannot be permitted to urge the said contention for the first time in these appeals.
8. In the light of the rival contentions urged by the learned Counsel appearing for the parties, the only question that would arise for consideration in these appeals is as to whether the Order impugned passed by the learned Single Judge calls for interference in these appeals?
9. Before we proceed to consider the contentions advanced by the learned Counsel for the appellants, it is necessary to refer to Section 2(7)(b)(iv) of the Forest Act and Rules 144-146 of the Rules. Section 2(7)(b)(iv) of the Act reads thus:
"2(7)(b) the following when found in, or bought from a forest that is to say;
(i) to (iii) xxx xx
(iv) peat, surface soil, rock, and minerals (including limestone), laterite, mineral oils, and all products of mines or quarries."
Relevant portion of Rules 144, 145(A), 145(B) and 146 of the Rules read thus:
"144. Transport or movement of forest produce-
(Save as provided in Rules 154 and 155 no person shall transport or move or attempt or abet the transport or movement of any forest produce (into, within or outside the State of Karnataka) except under and in accordance with a pass issued by a Forest Officer duly authorised in this behalf by or under these rules to issue such pass.
XXX XXX XXX
(a) to (g) xxx xxx xxx 145 (A) Pass for transport or removal of forest produce -
(1) belonging to Government shall be white in colour and issue by Range Forest Officer or a subordinate officer duly authorised by him.
(i) in Form 25 if in respect of timber, and
(ii) in Form 26 if in respect of other forest produce (2) purchased from Government forest or depots shall be blue in colour and issued by a Forest Officer duly authorised in this behalf by the Divisional Forest Officer in Form 27;
(3) From inam lands or private lands including coffee lands shall be yellow in colour in Form 28 and issued by -
(i) Range Forest Officer or such Foresters as may be authorised by him if the forest produce to be moved is not more than 5 cubic meters of timber or 30 cart-loads of forewood, or 100 bags of charcoal of 1000 bamboos,
(ii) Divisional Forest Officer if the quantity exceeds the limit prescribed in (i) above;
(4) From private market or from outside the State shall be green in colour in Form 29 issued by a Forest Officer not below the rank of a Forester.
145(B) Application for a pass referred to in Sub-rule (A) shall be accompanied by a fee of rupees fifteen.
145(c) No goods vehicle as defined in Clause (8) of Section 2 of the Motor Vehicles Act, 1939 (Central Act 4 of 1939) shall enter a reserved forest without a pass given by a Forest Officer duly authorised in this behalf and an application for such a pass shall be accompanied by a fee of rupees twenty five.
146(1) Applications for pass - The application for pass in Form 28 shall be made in writing to the Range Forest Officer or Divisional Forest Officer, as the case may be, and shall contain the following particulars:-
(i) The name of the village, survey number or other description of the Inam land, private land or coffee land from which the forest producers to be removed.
(ii) The right supported by documents under which the applicant is authorised so to remove.
(iii) The approximate quantity of and description of the materials to be removed and the route by which and the place to which they are to be taken.
(iv) The time within which the applicant desires to remove, (b) xxx xxx xxx "
10. Now, we will proceed to consider the correctness of the contention that the provision contained in Section 2(7)(b)(iv) of the Forest Act and the Rules made under the Act including Rules 145 to 148 should be either struck down as unconstitutional or read down as not applicable in respect of lands which are covered under the lease agreements obtained by the appellant on the ground that the provisions of the Rules referred to above would encroach upon the matters covered or occupied under the MMRD Act. In the case of M/s. Orissa Cement Ltd. (supra), relied upon by the learned Counsel for the appellants, the Supreme Court after reviewing the law as to under what circumstances the State Legislature is denuded of its power of making legislature in respect of the field occupied by the Parliament, has taken the view that mere declaration of a law by Parliament that it is expedient for an industry or the regulation and development of mines and minerals to be under the control of Union under Entries 52 or 54 does not denue the State Legislature of their legislative powers with regard to the fields covered by the several entries in List II or List III. It is further observed that in the case of declaration under Entry 54, the legislative power would be eroded only to the extent control is assumed by the Union pursuant to such declaration as spelt out by the legislative enactment which makes the declaration and the measure of erosion turns upon the field of enactment framed in pursuant of the declaration; and whether on that account the State Legislature loses its competency to make a legislation, it is necessary to have regard to the object and purpose of the State Legislature and to the relevant previsions in the said legislature. In this connection, it is useful to refer to the observation made by the Supreme Court at paragraphs 50 and 52 of the judgment. At paragraph 50 it is stated as follows:
"50. It is clear from a perusal of the decisions referred to above that the answer to the question before us depends on a proper understanding of the scope of MMRD Act, 1957 and an assessment of the encroachment made by the impugned State legislation into the field covered by it. Each of the cases referred to above turned on such an appreciation of the respective spheres of the two legislations. As pointed out in Ishwari Khetan , the mere declaration of a law of Parliament that it is expedient for an industry or the regulation and development of mines and minerals to be under the control of the Union under Entry 52 or Entry 54 does not denude the State legislatures of their legislative powers with respect to the fields covered by the several entries in List II or List III. Particularly, in the case of declaration under Entry 54, this legislative power is eroded only to the extent control is assumed by the Union pursuant to such declaration as spelt out by the legislative enactment which makes the declaration. The measure of erosion turns upon the field of the enactment framed in pursuance of the declaration. While the legislation in Hingir Rampur (AIR 1961 SC 549) and Tulloch was found to fall within the pale of prohibition, those in Chanan Mal , Ishwari Khetan, and Western Coalfields, were general in nature and traceable to specific entries in the State List and did not encroach on the field of the Central enactment except by way of incidental impact. The Central Act, considered in Chanan Mal, seemed to envisage and indeed permit State legislation of the nature in question."
At paragraph 52 of the judgment it is observed thus:
"52. If one looks at the above provisions and bears in mind that, in assessing the field covered by the Act of Parliament in question, one should be guided as laid down in Hingir-Rampur and Tulloch , not merely by the actual provisions of the Central Act or the Rules made thereunder but should also take into account matters and aspects which can legitimately be brought within the scope of the said statute, the conclusion seems irresistible, particularly in view of Hingir-Rampur and Tulloch, that the State Act has trespassed into the field covered by the Central Act. The nature of the incursion made into the fields of the Central Act in the other cases were different. The present legislation, traceable to the legislative power under Entry 23 or Entry 50 of the State List which stands impaired by the Parliamentary declaration under Entry 54, can hardly be equated to the law for land acquisition or municipal administration which were considered in the cases cited and which are traceable to different specific entries in List II or List III."
The MMRD Act had come into force with effect from 1st June 1958 and it is an Act passed for regulation of the mines and development of minerals under the control of Union of India. Entry 54 of List I of the Constitution of India empowers the Parliament to make legislation relating to 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 empowers the State Legislation to make law relating to 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 of India. In view of the declaration contained in Section 2 of the MMRD Act, the legislative field covered by entry 23 of List II is denuded to that extent. The effect of declaration made under Section 2 of the MMRD Act is explained by the Supreme Court in the case of BAIJNATH KEDIA v. THE STATE OF BIHAR AND ORS., . It is useful to refer to the observation made by the Supreme Court, which reads thus:
"Entry 54 of the Union List speaks both of Regulation of mines and minerals development and Entry 23 of State List is subject to entry 54 of Union List. It is open to Parliament to declare that it is expedient in the public interest that the control should vest in Central Government. To what extent such declaration can go is for Parliament to determine and this must be commensurate with public interest. Once this declaration is made and the extent laid down, the subject of legislation to the extent laid down becomes an exclusive subject for legislation by Parliament. Any legislation by the State after such declaration and trenching upon the field disclosed in the declaration must necessarily be unconstitutional because that field is abstracted from the legislative competence of the State Legislature."
11. From the law laid down by the Supreme Court in the case of Sudhir Ranjan Nath (supra), it is clear that when the question arises as to whether the legislation made by the State Legislature is an encroachment in respect of the field occupied by the law made by the Parliament under the MMRD Act, the Court is required to examine both the legislations and the object and purpose of both the legislations. It is true that on account of the declaration contained in Section 2 of the MMRD Act the legislative field covered by Entry 23 of list II will pass on to Parliament by virtue of Entry 54 of List I, but in order to judge whether on that account the State Legislature loses its competence to pass the Forest Act, it is necessary to have regard to the object and purpose of the Forest Act and to the relevant provisions in the Forest Act and the Rules framed thereunder. In exercise of the power conferred on the Central Government under Section 13 of the MMRD Act, the Mineral Concession Rules 1960 have been framed. The object of these Rules appears to be for conservation of important minerals and for the efficient and economic working of mines in the national interest. Section 15 of the MMRD Act empowers the State Government to make Rules for regulating the grant of quarry lease, mining lease and or other mineral concession in respect of minor minerals and for purpose connected therewith. The State Government, in exercise of the said power, has framed the Karnataka Minor Minerals Concession Rules. In exercise of the power conferred under Entry 17 A of List III, the State Legislation has enacted the Forest Act. The object and purpose of the Act is to consolidate and amend the law relating to forest and forest produce in the State of Karnataka and also to put an end to smuggling of forest produce, to protect and safeguard the forest produce, reserve forest, reserve trees and thus to protect and increase the forest wealth and its proper utilisation. As noticed by us earlier, Section 2(7) of the Act defines 'Forest Produce'.
12. The reading of various provisions of the Forest Act clearly indicate that the Act intends to protect, preserve all the forest product, growth and development of various types of forest produces in the State. Section 50 of the Act confers power on the State Government to make Rules to regulate the transit of all timber and other forest produce. Sub-section (2) of the said Section provides for framing of the Rules without prejudice to the generality of the power conferred under Sub-section (1) of Section 50 of the Act in respect of various matters set out in Clauses (a) to (I) of the said sub-section. From the reading of the said clauses, it is clear that the power is conferred on the State Government to frame Rules, by which alone, the forest produce may be transported or moved into from or within the State; and prohibits the transport of forest produce without a pass from an officer duly authorised to issue the same or otherwise than in accordance with the conditions of such pass; and provide for establishment of check-posts or erection of barriers at such places as the State Government may direct, with a view to prevent or check commission of forest offences in respect of forest produce; for the stoppage, reporting and examination of goods carried by any vehicle or vessel at such check posts or barriers; provide for establishment and regulation of depots to which the forest produce shall be taken by those in charge of it for examination, or for the payment of such money or in order that such marks may be affixed to it; authorise the transport of such timber or other forest produce across any land, and provide for the award and payment of compensation for any damage done by the transport of such timber or other forest produce, etc. Therefore, from the reading of Section 50 of the Act, it is clear that wide power is conferred on the State Government to frame Rules, regulate the transport of forest produce within the State and from outside the State. In exercise of that power conferred on the State Government, Rules known as 'Karnataka Forest Rules, 1969' have been framed. Rule 144 of the Rules provides that except as provided in Rules 154 and 155, no person shall transport or move or attempt or abet the transport or movement of any forest produce into, within or outside the State of Karnataka except under and in accordance with a pass issued by a Forest Officer duly authorised in this behalf by or under these Rules to issue such passes. However, the proviso given to the said Rule sets out, in respect of matters enumerated in Clauses (a) to (h) of the proviso, no pass is required for removal of the matters set out in the said provisions. Rule 145(A) of the Rules sets out the type of the pass to be issued for transport or removal of forest produce. Sub-Rule (1) of Rule 145(A) provides that for transport or removal of forest produce belonging to State Government, the pass shall be white in colour and should be issued by the Range Forest Officer or a subordinate officer duly authorised by him; and it shall be in Form 25 in respect of timber; and in Form 26 in respect of other forest produces. Sub-rule (3) of the said Rule provides for issue of pass for transfer or removal of forest produce from inam lands or private lands including coffee lands and it shall be yellow in colour and in Form 28. Rule 145(B) provides that an application for issue of a pass referred to in Sub-rule (A) of Rule 145 should be accompanied by a fee of rupees fifteen. Rule 146(1)(a) of the Rules provides that an application for pass in Form 28 should be made in writing to the Range Forest Officer or Divisional Forest Officer as the case may be and shall contain the particulars referred to in the said Rule. Sub-rule (2) of Rule 146 provides that the Range Forest Officer or Divisional Forest Officer, as the case may be, after such enquiry as he deems fit, if satisfied that the information furnished in the application is correct and the applicant is entitled for a pass, shall grant a pass, etc. Sub-rule (3) of the said Rule provides for right of appeal if the application for grant of pass is refused. Rule 147 provides for restriction for transport or movement of timber. Rule 148 provides for restriction of number of transport passes to be issued; and Rule 149 authorises the concerned Officers to issue way-permits, etc. Rule 150 provides for import of forest produce and Rule 151 provides for issue of import pass and fixing of import property marks. Rule 152 provides for transport of imported forest produce after entry into the State, Rule 153 provides for registration of property marks. Rule 154 provides that no person shall transport sandalwood into, within or outside the State of Karnataka except under and in accordance with the Rules under Rule 155 of the Rules. Rule 155 of the Rules provide for issue of pass for transport of sandalwood; Rule 160 provides for stoppage in transit of any forest produce in certain circumstances. Therefore, reading of several Rules set out in Chapter VI of the Rules, and particularly Rules 144 to 146, make it clear that the Rules have been framed providing for regulating movement of forest produce, and the object of the said rule is to protect and preserve forest produce and control illegal removal or transport of forest produce. In view of the declaration made under Section 2 of the MMRD Act, it is clear that the Union of India has taken under its control the regulation of mines and development of minerals to the extent it provided is under the Act. Therefore, if the provisions contained in the Act are covered by the MMRD Act, to that extent the said provisions have to be treated as either unenforceable or required to be struck down on the ground that the State Legislature has no power to make law in respect of the field occupied by the Central Legislation. But the question is, merely because under Section 2(7)(b)(iv) of the Forest Act, the definition of forest produce encompasses within its fold minerals (peat, surface soil, rock and minerals including limestone) whether the said provision and also Rules 144-148 of the Rules, which provides for obtaining of transport pass/permit for transport of forest produce, are required to be declared as illegal and void in law on the ground that it encroaches upon the field occupied by the Central Legislation? In our considered opinion, there is no scope to take such a view. No doubt, the appellants have taken various bits of land from the State Government, after obtaining previous consent of the Central Government for the purpose of carrying on mining operations by excavating, removing and transporting minerals out of the lands taken on lease by them. The inclusion of definition of forest produce set out under Section 2(7)(b)(iv) of the Forest Act, in our considered view, does not in any manner operate in conflict with the provisions contained in MMRD Act. The definition of forest produce under 2(7)(b)(iv) of the Forest Act has to be understood only for the purpose of giving effect to the regulatory measures provided under the Act and the Rules framed thereunder. Rules 144 to 148 of the Rules referred to above only provide for obtaining passes for removal or transportation of forest produce. The said provision, in our view, does not interfere in any manner with the right taken by the appellants by virtue of lease deeds executed in their favour in exploiting the minerals on the lands taken on lease by them. The Rules referred to above only obliges the appellants, or such other persons, who are entitled to transport or remove the minerals exploited by them to obtain necessary pass or permit. The object of the said Rules is only to control or regulate the movement or the activities of the people who deal with the forest produce, so that by virtue of the licence or lease obtained by them to remove minerals, they do not indulge in any other activity which would affect the other forest produce. It is not in dispute that the appellants have taken the lease to exploit minerals in the land belonging to the State after obtaining the sanction by the Government of India as provide in MMRD Act. Under these circumstances when they are given permission to exploit the minerals in an area where forest wealth, in the form of various types of forest produce is located, we do not find anything wrong or unreasonable on the part of the State Government providing for a law which obliges the person who exploits the minerals by virtue of the leases taken from the Government to obtain the transport or movement passes for the purpose of transportation of minerals exploited by him. The rules referred to above, in our considered view, are regulatory in nature. They cannot be considered as having been made in respect of the legislation occupied by the law made by the Parliament. The object of the MMRD Act and the Forest Act and the Rules framed thereunder are quite different and distinct and there is no conflict between the two. They intend to achieve different and distinct purpose. In a federal structure, where the Parliament and the State are given power to legislate on various matters as set out in three Lists given to seventh schedule of the Constitution, the attempt of the Courts should be to harmonise the area of exercise of power by the Central as well as the State legislature. When the question arises as to whether the State Legislature has encroached upon the field occupied by the legislation made by the Parliament; or the legislation made by the State legislature is in conflict with the legislation made by the Parliament, the matter requires to be examined with greater care and caution and keeping in mind that, the Courts will have to preserve the rights both the of the Parliament and the State Legislature in the scheme of power conferred on them by the scheme of legislative field assigned to each one of them. This examination is to be done by examining the provisions contained in both the Central and State legislation. As noticed by us earlier, we are of the view that Section 2(7)(b)(iv) of the Act and Rules 144-148 of the Rules cannot be struck down on the ground that the State legislature, by giving expanded definition of forest produce under Section 2(7)(b)(iv) of the Act so as to include Minerals also which has been provided under Section 3(a) of the MMRD Act has encroached upon the field occupied by the Central Government. None of the decisions relied upon by the Counsel for the Appellants is of any assistance to them to support their contentions. The observation made by the Supreme Court in the case of Sudhir Ranjan Nath (supra) relied upon by the learned Advocate General supports the view, we have taken above. In the said decision, the Supreme Court at Paragraph 20 has observed thus:
"........... The object of the Act is to preserve and protect the forest wealth of the country and to regulate the cutting, removal transport and possession of the forest produce in the interest of the States and their people. It is for achieving the above purpose that the Act provides for declaration of reserve forests, formation of village forests and declaration of protected forests. It is for the Act vests, in the Government, control over forest and lands not being the property of the Government and controls even the collection and movement of drift and stranded timber. It is not a taxing enactment but an enactment designed to preserve, protect and promote the forest wealth in the interests of the nation. It must necessarily take within its fold catering to the needs of the people of the State and that is what Sub-rule (8) provides. In our opinion, therefore, Sub-rule (8) of Rule 3 is perfectly valid."
It is also necessary to point out that the inclusion of 'mineral' within the definition of Section 2(7)(b)(iv) of the Forest Act which sets out or defines the 'forest produce', should be understood as the 'forest produce' only for the purpose of giving effect to the provisions of the Act. Section 116 of the Forest Act in explicit terms makes it clear that nothing in the Act should be deemed to affect the operation of the MMRD Act and the Rules framed thereunder and the provisions of the Forest Act should be understood as 'in addition to' and not in derogation of the provisions of the MMRD Act. Therefore, the inclusion of 'minerals' under Section 2(7)(b)(iv) of the Act as the forest produce is only for the purpose of the provisions of the Act and it is not intended to make legislation in respect of the field occupied by the MMRD Act. The closer examination of the Act clearly shows that State has not reserved any right under the Forest Act for the disposal or exploitation of the minerals in respect of which provisions are made under the MMRD Act. The Rules in question, as noticed by us earlier, are only regulatory in nature which provides for obtaining a pass on payment of a nominal fee for issue of pass while transporting forest produce from the forest area. When minerals, exploitation of which is governed by the Central Act, are located in a forest area where State's forest wealth is located, the State legislature, which is conferred with the power to legislate on subject 'forest' under item 17A of List III while defining or setting out what are the forest produce for the purpose of the Act, in the absence of any provision made in the Act which in any manner runs counter to the provisions made under the MMRD Act, it is not possible to take the view that the mineral, which has been treated as a forest produce under the Act is liable to be struck down on the ground that the mineral falls within the provisions of the MMRD Act, and as such the State legislature has encroached upon the field occupied by the Parliament. The Courts should not take a very narrow, pendentic and technical view of the matter; and in our view, as noticed by us earlier, the efforts of the Courts should be to harmonise both the legislation and make both the legislation operative in the field which it is intended to be given effect to both by the Parliament and State legislature. The effect of declaration made in Section 2 of the MMRD Act is only to efface or to take away the effect of any legislation made by the State legislature if it encroaches upon the field or provisions covered under the provisions of the MMRD Act.
13. The next question is, whether there is any merit in the submission of the counsel for the appellants that since the grantee of lease of the land under the MMRD Act is entitled to remove and transport minerals in terms of lease obtained by them under the MMRD Act, any fetters or obstruction on such right by insisting on such lessees to obtain further permits/passes by payment of fees in terms of Rule 145(A) of the Rules amounts to trenching on the field occupied by MMRD Act and the Rules framed thereunder as it would amount to insisting on the lessees to pay or imposition of additional royalty in addition to the levy imposed under Section 9 of the MMRD Act and the condition under Rule 27 of the Mineral Concession Rules? In our view, there is no merit in the said contention. As noticed by us earlier, Rules 144-148 of the Rules in question only require a person who intends to transport forest produce, which includes the minerals, to obtain the pass. As it could be seen from Rule 145(B) of the Rules, the fees prescribed is, very nominal. It may not be even sufficient to meet the expenditure incurred by the State to secure the services of the staff for issue of pass as contemplated for transport of forest produce. Therefore, when the State is required to administer, manage and protect its forest produce other than the mineral; and when the mineral is also located within the forest area or in close proximity where other forest produce, in respect of which State has undoubtedly power to legislate, prescription of a nominal fee for obtaining pass in our considered view, cannot be considered as collection of additional royalty. The decision of the Supreme Court in the case of India Cement (supra) relied upon by the counsel for the Appellants, in our view, has no application to the facts of the present case; and the prescription of payment of Rs. 15/- along with application seeking for issue of pass, in our view, cannot be considered as encroachment by the State on the field occupied by the Parliament, made under the MMRD Act. We find considerable force in the submission of learned Advocate General that the payment of Rs. 15/- along with the application is in the nature of a fee for the services rendered for issue of transport pass/permit; and it is intended to cover the rough estimate of the expenditure the State is required to meet for maintaining the staff and issue of permits for the said purpose. No doubt, it is claimed by the appellants that they have taken the right to exploit the land in question for the purpose of removal of minerals by virtue of the lease-deeds executed in their favour by the State Government and they are required to part with substantial money as royalty for the said purpose. But, that does not mean the State is completely deprived or denuded of its right to protect various types of forest produce other than the minerals. While the State cannot interfere with the rights of the appellants to exploit, tap, remove and transport the minerals, in our view, the State has the right and a duty to protect the other forest produce and for the said purpose, it is permissible for the State to provide for regulations for movement of minerals which are admittedly located within the forest area. The right of the appellants secured to exploit, tap, remove and transport minerals cannot be appreciated in isolation and without reference to the right of the State legislature to make law under entry 23 of List II entry 17A of List III and its obligations to its people to protect the forest wealth in the State. The rights acquired by the appellants to exploit, tap, remove and transport the minerals from the lands in question by virtue of terms of the lease obtained by them, must be understood as subject to any regulations or restrictions that may be imposed by the State legislature to protect its forest wealth. While the State cannot encroach upon the field occupied by the Parliament under MMRD Act, the State, as noticed by us earlier, cannot also be denuded of its right to protect its property or its wealth and for that purpose to make appropriate legislation. Therefore, if the entire matter is viewed from this angle, the Rules in question does not suffer from any vice of encroaching upon the field occupied by the Central legislation and prescription of payment of fee for issue of pass/permit cannot be considered as imposition of additional royalty for removal and transportation of minerals. In our view, the Rules 145(A) and 145(B) being clear and there being no scope for any ambiguity, the decisions of the Supreme Court in the case of India Cements (supra) and other cases relied upon by the learned Counsel for the appellants are of no assistance to them.
In the case of INDIA CEMENTS (supra) relied upon by the Counsel for the Appellants, the question that came up for consideration was whether the State legislature was competent to levy cess on royalty payable under the provisions of the MMRD Act. While considering the said question, the Supreme Court, took the view that royalty on mineral rights is a tax and such a cess on royalty being a tax on royalty was beyond the competence of State Legislature as Section 9 of the MMRD Act covers the field and the State Legislature is denuded of its competence under Entry 23 of List II of the Constitution. It also further took the view that cess on royalty cannot be sustained under Entry 49 of List II as being a tax on land and royalty on mineral rights is not a tax on land but a payment for the use of the land. In this connection it is useful to refer to observation made at paragraphs 30 and 34 of the judgment which read as hereunder:
"30. It seems, therefore, that attention of the Court was not invited to the provisions of Mines and Minerals (Regulation and Development) Act, 1957 and Section 9 thereof. Section 9(3) of the Act in terms states that royalties payable under the 2nd Schedule of the Act shall not be enhanced more than once during a period of 4 years. It is, therefore, a clear bar on the State Legislature taxing royalty so as to effect amend 2nd Schedule of the Central Act. In the premises, it cannot be right to say that tax on royalty can be a tax on land, and even if it is a tax, if it falls within entry 50 will be ultra vires the State legislative power in view of Section 9(3) of the Central Act. In Hingir-Rampur Coal Co. Ltd., v. The State of Orissa (supra), Wanchoo J. in his dissenting judgment has stated that a tax on mineral rights being different from a duty of excise, pertains only to a tax that is leviable for the grant of the right to extract minerals, and is not a tax on minerals as well. On that basis, a tax on royalty would not be a tax on mineral rights and would therefore in any event be outside the competence of the State Legislature."
"34. In the aforesaid view of the matter, we are of the opinion that royalty is a tax, and as such a cess on royalty being a tax on royalty, is beyond the competence of the State legislature because Section 9 of the Central Act covers the field and theState legislature is denuded of its competence under entry 23 of List II of Schedule 7 of the Constitution, In any event, we are of the opinion that cess on royalty cannot be sustained under entry 49 of list II as being a tax on land. Royalty on mineral rights is not a tax on land but a payment for the use of land."
In the case of Orissa Cement (supra), the Supreme Court while reiterating the principle laid down by it in the case of India Cements (supra), was once again required to consider the question whether levy of cess on royalty payable under the MMRD by a legislation made by the State Government was valid in law. This is clear from the observation made at paragraphs 50 and 52 of the judgment already referred to by us in the earlier part of this judgment.
In the case of MADHYA PRADESH v. MAHALAXMI FABRIC MILLS LTD., while considering the question of competency of the State Legislature to levy tax on royalty payable under MMRD Act, the Supreme Court in the course of the judgment observed thus:
".... It is, therefore, a clear bar on the State Legislature taxing royalty so as to infact amend second schedule of the Central Act. As seen earlier in paragraph 32 of the report in India Cement case, it has been clearly mentioned that in view of the express provisions of Mines and Minerals Act, 1957, Entry 50 cannot be of any assistance to sustain such legislation by the State. Oza, J., in his concurring judgment has highlighted one additional dimension of the matter in Para 40 of the report. It has been observed by Oza., J, that it is no doubt true that mineral is extracted from the land and it is available but it could only be extracted if there are three things:
(1) land from which mineral could be extracted: (2) Capital for providing machinery, instruments and other requirements, and (3) labour. It is, therefore, clear that unit of change of royalty is not only land but land + labour + capital. It is also clear that if royalty is a tax or an imposition of a levy, it is not on land alone but it is a levy or a tax on mineral, including land, labour and capital employed in extraction of the mineral. It is therefore clear that royalty is imposed by the Parliament could only be a tax not only on land but also on these three things stated above.
In view of the decision of Constitution Bench it is no longer open to the Writ Petitioners to submit that entry 50 of List II can still be available to State Legislature. It is easy to visualize that once the Parliament has occupied the field in connection with regulation of mines and minerals development in the country and when Parliament declares that it is expedient in the public interest so to do, Entry 23 of the State List regarding regulation of mines and minerals development would be of no avail to the State Legislature as Entry 23 List II is subject to the provision of List I; nor will Entry 50 of the State List can be of any assistance to the State Authorities. In short, both the entries will be out of way in enacting appropriate legislation imposing the rates of royalty to be paid by those who export minerals in the country. Once these Entries are out of picture, it is Entry 54 in the Union List which will operate......."
In the case of R. PAMPATHI AARPEE IRON ORE MINES case (supra), while considering the question whether the State Legislature was competent to levy Forest Development Tax under Section 98-A of the Forest Act on royalty payable under MMRD Act, this Court at paragraph 16 of the Order observed thus:
"It is thus evident that the essential condition necessary for levying forest development tax under Section 98A of the Forest Act, viz., disposal by State the forest produce, by way of sale or otherwise for consideration is absent in regard to extraction and removal of minerals by a lessee under a mining lease granted to him, by the State and payment of royalty by the lessee in regard to such minerals. Therefore, forest development tax cannot be levied or collected under Section 98A of the Forest Act in regard to the ore/mineral that is extracted by the petitioners from the leased lands under mining leases granted by the State Government."
In the case of ASSOCIATED COMPANIES LTD. (supra) this Court while considering the similar contention, at paragraph 5 of the judgment, has observed thus:
"5. In order to appreciate the contentions urged on behalf of the either side on this aspect of the matter, it is necessary to look to the dicta laid down in India Cement Ltd.'s case. At para 21 thereof, the distinction between the land revenue and the royalty is noticed. It is clearly stated therein that what was sought to be collected in that case was cess on royalty which was impermissible and cannot be sustained because land revenue and royalty are distinct concepts. Again, in para 23 thereof, it was noticed that no tax could be levied or is leviable under the Act if no mining activities are carried on. Hence, it is manifest that it is not related to land as a unit which is the only method of valuation of land under Entry 49 of List II, but is relatable to minerals extracted. As long as the land revenue levied in the present case is not relatable to the minerals extracted or royalty proper in as much as proportion of the minerals extracted. In this context, it may also be necessary to note that there are different aspects of levies which can be made by the State and this position has been explained fully by the Supreme Court in EXPRESS HOTELS v. STATE OF GUJARAT, wherein the Supreme Court explained on different aspects of an activity or on different facets levies could be made. In those case, Hotel receipts tax was levied by the Union, while the State levied luxury tax for certain categories of hotels. Both the legislations were sustained by resort to this principle of aspect legislation. On the aspect of the mining activity, royalty is collected and on the aspect of land being held, land tax can be levied. The two enactment, one relating to levy of royalty and another relating to land revenue operate in different fields. Thus, both royalty as well as land revenue could be collected by the State, in that view of the matter, we do not think, it would be appropriate to accept the contention on behalf of the petitioner that royalty payable by concept would include the land revenue thereof."
14. Therefore, in all the cases referred to above, it is necessary to point out that the Courts were concerned with the validity of the State enactment which levied either cess on royalty or tax on royalty or Forest Development Tax on royalty, etc., payable for extraction of minerals under MMRD Act. The decision of this Court in the case of ASSOCIATED COMPANIES LTD. (supra) referred to by us earlier, also supports the view we have taken above, wherein this Court has taken the view that two enactments, one relating to levy of royalty and the other relating to the land revenue could co-exist as they operate in different field and it is permissible for the State to collect both royalty as well as the land revenue. In our considered view, as noticed by us earlier, the question that came up of consideration in the decisions referred to above and principles enunciated by the Apex Court and by this Court, has no application to the facts of the present case. Therefore, the Counsel for the Appellants cannot derive any assistance from the said decisions.
In the case of Ishwari Khetan Sugar Mills (supra), the Supreme Court while considering the question as to under what circumstances the State is denuded of its legislative competence to make a legislation in respect of the law made by the Parliament in exercise of the power conferred on it under Entry 52 of List I, has at paragraphs 6 and 7 observed as follows:
"6. Legislation for assuming control containing the declaration will spell out the limit of control so assumed by the declaration. Therefore, the degree and extent of control that would be acquired by Parliament pursuant to the declaration would necessarily depend upon the legislation enacted spelling out the degree of control assumed. A mere declaration unaccompanied by law is incompatible with entry 52, List I. A declaration for assuming control of specified industries coupled with law assuming control is a pre-requisite for taking legislative action under entry 52, List I. The declaration and the legislation pursuant to declaration to that extent denude the power of State Legislature to legislate under entry 24, List II. Therefore, the erosion of the power of the State legislature to legislate in respect of declared industry would not occur merely by declaration but by the enactment consequent on the declaration prescribing the extent and scope of control. When a declaration is made as contemplated by entry 52, List I in respect of any particular industry, it is contended that, that industry as a topic of legislation would be removed from the legislative sphere of the State. What is the effect of a declaration made in respect of mines and minerals as contemplated by entry 56 has been succinctly laid down by a Constitution Bench of this Court in Baijnath Kedia v. State of Bihar , in the following terms:
Once this declaration is made and the extent laid down, the subject of legislation to the extent laid down becomes an exclusive subject for legislation by Parliament. Any legislation by the State after such declaration and trenching upon the field disclosed in the declaration must necessarily be unconstitutional because that field is abstracted from the legislative competence of the State Legislature ... The only dispute, therefore, can be to what extent the declaration by Parliament leaves any scope for legislation by the State legislature. If the impugned legislation falls within the ambit of such scope it will be valid, if outside it, then it must be declared invalid."
7. Sugar is a declared industry. Is it, however, correct to say that once a declaration is made as envisaged by entry 52, List I, that industry as a whole is taken out of entry 24, List IIP in respect of an identical entry 54, List I in the passage extracted above it is said that to the extent declaration is made and extent of control laid, that much and that much alone is abstracted from the legislative competence of the State Legislature. It is therefore, not correct to say that once a declaration is made in respect of an industry that industry as a whole is taken out of entry 24, List II. Similarly, in State of Haryana v. Chanan Mal,. , while upholding the constitutional validity of the Haryana Minerals (Vesting of Rights) Act, 1973, after noticing the declaration made in Section 2 of the Mines & Minerals (Regulation and Development) Act, 1957, ('Mines and Minerals Act' for short) as envisaged by entry 54, List I it was held:
"Moreover, power to acquire for purposes of development and regulation has not been exercised by Act 67 of 1957. The existence of power of Parliament to legislate on this topic as an incident of legislative power on another subject is one thing. Its actual exercise is another. It is difficult to see how the field of acquisition could become occupied by a Central Act in the same way as it had been in the West Bengal case even before Parliament legislates to acquire land in a State."
These pronouncements demonstrably show that before State legislature is denuded of power to legislate under Entry 24, List II in respect of a declared industry, the scope of declaration and consequent control assumed by the Union must be demarcated with precision and then proceeded to ascertain whether the impugned legislation trenches upon the excepted field."
In the cases of WESTERN COAL FIELDS LTD. v. SPECIAL AREA DEVELOPMENT AUTHORITY, KOREA AND ANR., the Supreme Court took the view that the declaration made under Section 2 of the MMRD Act does not result in invalidation of every State legislation relating to mines and minerals. At paragraph 28 of the judgment, the Court observed thus:
"28. That the declaration in Section 2 of the Mines and Minerals (Regulation and Development) Act, 1957 does not result in invalidation of every State legislation relating to mines and minerals is demonstrated effectively by the decision in State of Haryana v. Chanan Mal . The Haryana State Legislature passed the Haryana Minerals (Vesting of Rights) Act, 1973, under which two notifications were issued for acquisition of right to saltpetre, a minor mineral and for auctioning certain saltpetre bearing areas. It was held by this Court that the Haryana Act was not in any way repugnant to the provisions of the Act of 1957 made by Parliament and that the ownership rights could be validly acquired by the State Government under the State Act."
In the case of STATE OF HARYANA v. CHANAN MAL, while considering the question whether the State of Haryana was denuded of its legislative competence to pass a legislation known as the Haryana Minerals (Vesting of Rights) Act, 1973, which empowered the State of Haryana to acquire rights in a minor mineral, the High Court of Haryana took the view that the field covered by the Haryana Act having been already fully occupied by the MMRD Act, the State Act had to be held to be inoperative and void by repugnancy. However, the Supreme Court reversing the judgment of the High Court took the view that the character of the Haryana Act was required to be judged by the substance of effect of its provisions and not merely by the purpose given in the statement of reasons and objects behind it. On examining the provisions of the Haryana Act, the Supreme Court held that the object and effect of the Haryana Act was to acquire property rights to mineral deposits in land and its provisions do not mention about lease-hold or licence rights as they are governed by the provisions of the MMRD Act. In this connection, it is useful to refer to the observation made at paragraph 31 of the judgment which reads as hereunder:
"31. On the other hand, the learned Counsel for the respondents has urged that the cases before us are covered completely by the decision of this Court discussed above, and, in particular by those in Tulloch Co's., case (supra) and Baijnath Kedia's case (Supra). It is urged that, when acquisition is only a means of conservation or development of mineral resources, even this field must be held to be necessarily excluded by the declaration in Section 2 and other provisions of Central Act 67 of 1957 which will be come unworkable if the provisions of the Haryana Act were permitted to operate. It seems difficult to sustain the case that the provisions of the Central Act would be really unworkable by mere change of ownership of land in which mineral deposits are found. We have to judge. We have to judge the character of the Haryana Act by the substance and effect of its provisions and not merely by the purpose given in the statement of reasons and objects behind it. Such statements of reasons are relevant when the object or purpose of an enactment is in dispute or uncertain. They can never override the effect which follows logically from the explicit and unmistakable language of its substantive provisions. Such effect is the best evidence of intention. A statement of objections and reasons is not a part of the statute, and, therefore, not even relevant in a case in which the language of the operative parts of the Act leaves no room whatsoever, as it does not in the Haryana Act, to doubt what was meant by the legislators. It is not disputed here that the object and effect of the Haryana Act was to acquire proprietary rights to mineral deposits in "land". Its provisions, however, do not mention leasehold or licensee rights. Obviously, this is so because these rights are governed by the Central Act 67, of 1957."
The observation made by the Supreme Court in the decisions referred to above by us also fully supports the view we have expressed above. Therefore, we do not find any merit in the first submission made by the learned Counsel for the appellants that the State has by including 'minerals' in the definition of 'forest produce' under Section 2(7) of the Act and the Rules made under the Act referred to earlier, has encroached upon the field occupied by the law made by the Parliament.
15. The only contention that remains to be considered is, whether there is any merit in the submission made by the Counsel for the Appellants that Rule 145(A) of the Rules which speaks of issue of pass for transport or removal of forest produce belonging to the State Government has no application so far as it relates to transportation of minerals belonging to lessees who becomes the owners of the said minerals after obtaining the lease and payment of royalty? As noticed by us earlier, this submission proceeds on the basis that once the appellants have acquired right to remove and transport the minerals from the land belonging to the State in terms of the lease granted to them, the minerals, though they are forest produce within the meaning of Section 2(7)(b)(iv) of the Forest Act, they cease to belong to Government. Therefore, the question that is required to be considered is, once the appellants have acquired right to exploit minerals by virtue of the lease of the lands granted to them, whether the minerals removed and transported from such land, cease to belong to Government? Rule 145(A) provides that issue of pass for transport or removal of forest produce belonging to Government shall be white in colour and issued by Range Forest Officer or any Forest Officer duly authorised by him. Sub-rule (2) of Rule 145(A) further provides that transport or removal of forest produce purchased from Government forest or depots shall be in blue colour and issued by a Forest Officer duly authorised on that behalf by the Divisional Forest Officer in Form 27. Sub-Rule (3) provides for issue of pass in respect of forest produce obtained from inam lands or private lands including coffee lands and shall be in yellow colour in Form 28. Sub-Rule (4) provides for obtaining of pass for transport or removal of forest produce from private market or from outside the State and the same shall be in green colour. Rule 145(B) provides for an application being made for issue of pass referred to in sub-rule 145(A) and it further provides that such an application should be accompanied by a fee of Rs. 15/-. From the reading of sub-rules (1) to (4) of Rule 145 (A) of the Rules, it is clear that the forest produces have been identified as one obtained for removal and transport of forest produce from (1) land belonging to Government; (2) purchased from Government forest or depots; (3) from inam lands or private lands including coffee lands; and (4) from private market or from outside the State. It is not in dispute that the appellants are removing and transporting the forest produce out of the lands belonging to the State Government and taken on lease from the State Government. Under these circumstances, though the appellants have taken the right to exploit, tap, remove and transport the minerals from the lands which they have taken on lease from the State Government, it is not possible to take the view in the context the right secured by the appellants by virtue of lease deed to exploit, tap, remove and transport the minerals out of the lands belonging to the State Government that the minerals does not belong to the State Government. Sub-Rule (1) of Rule 45(A) of the Rules, which refers to secure a pass for removal or transportation of forest produce belonging to the Government, should be understood as with regard to the source of the title of the forest produce at the time or removal or transportation of such of the forest produce. Since the lands in respect of which lease has been obtained wherein right to exploit, tap, remove and transport minerals is granted admittedly belongs to the State Government, such minerals in the context has to be understood as belonging to the Government. The lease only authorises the lessee to exploit, tap, remove and transport the minerals in question. By virtue of such a right, the said minerals would not lose its original character of one earlier belonging to the State Government, though ultimately the lessee would be the owner of such minerals by virtue of the right secured by it to exploit, tap, remove and transport the mineral from the land in question. It is necessary to point out that what is referred to in Sub-rule (1) of Rule 145 (A) is the source of title of the forest produce at the stage of removal and transport. Therefore, we are unable to accept the submission of the learned Counsel for the appellants that Sub-rule (1) of Rule 145 (A) of the Rules has no application in so far as the minerals removed and transported by the appellants, from the lands taken on lease by them. No doubt, it is the contention of the Advocate General that this contention was not urged before the learned Single Judge and as such the counsel for the Appellants should not be permitted to urge the said contention in these appeals. However, since the contention urged being purely a question of law, without going into the controversy as to whether the said contention was urged before the learned Single Judge or not, we preferred to examine the same on merits, as noticed by us earlier.
16. Therefore, in the light of the discussion made above, we do not find any merit in these appeals and therefore they are liable to be dismissed. Accordingly, they are dismissed, however, without any order as to costs.