Calcutta High Court (Appellete Side)
Swapan Sarkar vs State Of West Bengal & Ors on 4 July, 2014
Author: Jyotirmay Bhattacharya
Bench: Jyotirmay Bhattacharya
IN THE HIGH COURT AT CALCUTTA
Civil Appellate Jurisdiction
Appellate Side
Present:
The Hon'ble Justice Jyotirmay Bhattacharya
and
The Hon'ble Justice Ishan Chandra Das
W.P 16526(W) of 2013
Swapan Sarkar
Vs.
State of West Bengal & Ors.
With
W.P 19472(W) of 2013
with
W.P 19474 (W) of 2013
With
W.P 19478 (W) of 2013
With
W.P 19480 (W) of 2013
With
W.P 19481 (W) of 2013
With
W.P 19483 (W) of 2013
With
W.P 19485 (W) of 2013
With
W.P 19486 (W) of 2013
With
W.P. 19638 (W) of 2013
For the petitioner : Mr. Ashoke Chakraborty,
: Mr. Pallav Chatterjee
Learned Advocate appears : Mr. Pranab Kumar Dutta,
representing Advocate General
For the State in W.P 16526(W) : Mr. Sadananda Ganguly,
of 2013 and in W.P.19474 (W) : Mr. Supratim Dhar
: Mr. D. Banerjee
For the State in W.P. 19472(W) : Mr. Arindam Sinha,
Of 2013 : Mr. S.N. Bhattacharya,
: Mr. Somnath Banerjee
for the State in W.P. 19474 (W) : Mr. Amitesh Banerjee,
of 2013 in W.P. 19478 (W) : Mr. Supratim Dhar,
of 2013 in W.P. 19638 (W) : Mr. Tulsi Das Ray,
of 2013
for the State in W.P.19480(W) : Mr. Sadhan Kr. Haldar,
of 2013 : Mr. K.M. Hossain,
for the State in W.P. 19481 (W) : Mr. Sakya Sen,
of 2013 : Miss Priyanka S. Tibrewal
For the State in W.P. 19483(W) : Mr. Pradip Dutta,
of 2013 : Miss Priyanka S. Tibrewal
for he State in W.P 19485(W) : Mr. P. P Banerjee,
of 2013 : Mr. Supratim Dhar,
: Mr. Arindam Sinha,
for the State in W.P 19486(W) : Miss Sipra Majumdar,
of 2013 : Ms. Srilekha Bhattacharya,
: Mr. Arindam Sinha.
Heard on : 04.04.2014, 25.04.2014,02.05.2014,06.06.2014,
13.06.2014, 20.06.2014 and 25.06.2014
Judgment on : 4th July, 2014
Jyotirmay Bhattacharya, J. : Since common question of law is involved in all these writ petitions,
all these writ petitions are heard analogously.
Let me indicate the basic facts involved in all these writ petitions which are
necessary for proper appreciation of the dispute between the parties leading to filing of
these writ petitions. Admittedly, mining leases were granted by the State Government in
favour of the writ petitioners by permitting them to extract sand from different plots of
land as mentioned in their respective lease deeds on payment of royalty and dead rent, as
per the rate prescribed in the Schedule‐I framed under Rule 20 of the West Bengal Minor
Minerals Rules, 2002 (hereinafter referred to as Rules of 2002). Those leases were granted
for a fixed period with a renewal clause, giving option to the lessees to apply for renewal
within a specified time before expiry of the leases. The petitioners applied for renewal of
their leases in terms of the renewal clause contained in their respective lease deeds. Their
applications for renewal were rejected by the concerned authority, by referring to the
amended provision of the West Bengal Minor Minerals Rules, 2002 which was introduced
in the year 2011, either during the continuance of the leases of the petitioners or pending
consideration of the petitioners' application for renewal.
The amendments which were made in the Rules of 2002 in 2011 become effective from 5th December,
2011. The said amendment introduced a total change in the procedure for grant of mining lease in respect of
river‐bed materials.
Under the West Bengal Minor Minerals Rules, 2002, prior to its amendment as it stood, mining lease
could have been granted by the State Government in favour of the lessee on the basis of the application of an
individual applicant. The procedure for grant of such mining lease and/or refusal thereof was prescribed
under Rule 5‐8 of the said Rules. Who will get priority amongst the applicants in case more than one
applicant applies for such lease in respect of a common plot of land was mentioned in Rule 9 thereof. How
much area can be given on lease for mining operation to the individual applicant was mentioned in Rule 10
thereof. Period for which such mining lease could have been granted was mentioned in Rule 11 of the said
Rule. Renewal of mining lease was prescribed under Rule 12. How much deposit is to be made by the
applicants towards preliminary expenses and security deposit, was dealt with in Rule 13 and 14
respectively. The period within which lease is to be executed was mentioned in Rule 15 of the said Rule.
Lapsing of lease was mentioned in Rule 16 thereof. Those were the relevant provisions of the Rules of 2002,
which governed the field of grant of mining lease and/or renewal thereof when the mining leases were
granted by the Government in favour of the petitioners. The amendment which was introduced in 2011
brought about a thorough change in the procedure for grant of mining lease in respect of the river‐bed
materials (excluding in‐situ hard rock), kankar, morrum and brick‐earth on land vested in Government. By
the said amendment, Rules 16A and 16B were introduced.
For understanding the changes which were introduced by amendment in 2011, I feel that the
provisions of both the unamended Rule and the amended Rule should be mentioned herein. Accordingly,
Rules of 2002 as it stood prior to its amendment and the Rules of 2002 as it now stands after its amendment,
are set out here under.
Rules as it stood prior to its amendment
5. Application for mining lease.‐
(1) A mining lease shall be granted by the State Government or by an
Officer authorized by the State Government in this behalf.
(2) An application for mining lease shall be made in 6(six) copies in Form
A accompanied by a challan showing non‐refundable deposit of Rs.500
(Rupees five hundred) only as an application fee to the State
Government or to the Officer authorized in this behalf through the
Chief Mining Officer or the Mining Officer in charge of the concerned
area.
(3) The application fee is to be deposited in Treasury Receipt Form No.7
Marked 'S' under the Head Account "0853‐00‐102‐001‐16" in the
Reserve Bank of India at Kolkata or any branch of the State Bank of
India in West Bengal doing the Treasury business or any Treasury or
Sub‐Treasury of the District, where the area applied for lease is
situated.
(4) Every application for mining lease other than an application from the West Bengal Mineral
Development and Trading Corporation Limited, Industrial Finance Corporation, State Trading
Corporation, any undertaking or Central Government or any Department of the State
Government shall be accompanied by:
(a) a clearance certificate of mining dues in Form B1 issued by the District Land and
Land Reforms Officer:
Provided that in case of a fresh applicant, who does not have any mining lease or
quarry permit anywhere in any mineral, submission of such clearance certificate of
mining dues is not necessary but an affidavit duly sworn in prescribed format (Form B2)
shall to be submitted by the applicant in this regard along with his application. The
District Land and Land Reforms Officer shall issue clearance certificate of mining dues to
the applicant within thirty days of the receipt of application for the purpose stating the
demand and payment and the balance due, if any, in respect of the said applicant
indicating the concerned leasehold area:
Provided further that where for the recovery of any such mining dues, any
injunction has been issued by a competent Court or by any other competent authority
staying the recovery of any such mining dues, non‐payment thereof shall not be treated
as a disqualification for the purpose of granting or renewing the said mining lease:
Provided also that the grant such of clearance certificate shall not discharge the
holder of such certificate from the liability to pay the mining dues which may
subsequently be found to be payable by him under the Act or rules made thereunder;
(b) Income Tax clearance certificate;
(c) a Sales Tax clearance certificate if the applicant is a dealer under the West Bengal
Sales Tax Act, 1994. If however an applicant is not a dealer under the (West Bengal
XLIX of 1994), Bengal Finance (Sales Tax) Act, 1994 an affidavit in Form B2 duly
sworn in the prescribed format shall have to be submitted by him along with the
application;
(d) an affidavit in Form B2 duly sworn in showing particulars of the areas mineral wise
in the State, which the applicant or any person jointly with him‐
(i) already holds under a mining lease or quarry permit,
(ii) has applied for but not granted and
(iii) has applied for simultaneously;
(e) a statement in writing that the applicant, where the land is not owned
by him, has obtained surface right over the area and has obtained a no
objection in writing from the owner for starting mining operations;
Provided that no such statement shall be necessary where the land is
owned by the Government;
(f) a land availability report on the applied area duly vetted by the District Land and
Land Reforms Officer for which the applicant shall submit an application to the
concerned District Land and Land Reforms Officer along with a non‐refundable fee
of Rs.200 (Rupees two hundred) deposited in the manner prescribed in sub‐rule (3)
of this rule. The District Land and Land Reforms Officer shall dispose of such
application within one month from the date of receipt of application;
(g) the land availability report in Form B3 will include a map of the mining area applied
for duly vetted by the District Land and Land Reforms Officer under his signature
and seal and also showing access road to the applied area.
Provided that in case of extraction of sand and boulders from river beds no land
availability report from District Land and Land Reforms Officer is required to be
submitted along with the application for mining lease.
(5) In case of stone and granite, on receipt of communication from State Government of the precise
area to be granted, the applicant shall submit before execution of the lease deed the following
documents:
(a) a duly approved mining plan prepared by a recognized qualified person;
(b) a clearance certificate/no objection certificate from the appropriate authority for use of
explosives.
6. Acknowledgement of application .‐ (1) Where an application complete in all respects for the
grant or renewal of a mining lease is received, its receipt shall be acknowledged forthwith.
(2) * * *
(3) * * *
(4) The receipt of every such application shall be acknowledged in Form C1.
7. Disposal of application for mining lease.‐ An application for mining
lease shall be disposed of within one year from the last date of
receiving application mentioned in the public notice under rule 4A.
8. Refusal of application for grant of a mining lease.‐ (1) The State Government while disposing
of the applications may hear the applicant and give reasons in brief in making the choice among
the applicants.
9. Priority : (1) if an application for mining lease is received from the West Bengal Mineral
Development and Trading Corporation Limited or an undertaking of the State Government in
respect to any area, preference may be given to such an application;
Provided that priority may be given to the applicant who puts up an export unit based on
the minerals for which the lease has been applied for;
Provided further that in case of quarry permit or mining lease, priority shall be given to
the co‐operative societies or partnership firm compromised of the local unemployed Youth
including families living below the poverty line and those not living below the poverty line in the
ratio of 2:1 basis;
Provided also that if no co‐operative society or partnership firm is substituted in the 2:1
ratio, the lease or permit may e granted to any other organization or individual.
(2) Where more than one application for the same area is received, the State Government may,
after taking into consideration the matters specified in sub‐rule (3), grant mining lease to any
applicant as it deem fit or may distribute the applied area to all or some of such applicants.
(3) The matters referred to in sub‐rule (2) are as follows:
(a) any special knowledge or experience in mining operations possessed by the applicant;
(b) the financial sources of the applicant;
(c) the nature and quality of the technical staff employed or to be employed by the applicant;
(d) proximity of residence or office from the area applied for lease;
(e) name and address of the partners in case of a firm and directors in case of a company;
(f) arrangement for the transportation and marketing;
(g) declaration that the applicant or any of the partners or directors has not been convicted of
a charge of criminal offence and sentenced to imprisonment;
(h) whether the applicant is an undischarged insolvent.
(4) No applicant shall claim any priority by virtue of the fact that he had previously worked in the
area under application.
10. Area of mining lease. - (1) No person shall acquire in the state one or more mining lease covering a
total area in excess of three square kilometre.
Explanation - For the purpose of this rule, a person acquiring by himself or in the mane of another person
or with any other person jointly in interest with him a mining lease, which is intended wholly or partly for
himself shall be deemed to be acquiring the whole of it himself:
Provided that if the State Government is of opinion that in the interest of mineral development it is
necessary so to do, it may for reasons to be recorded in writing, permit any person to acquire one or more
mining lease in excess of the aforesaid maximum limit:
Provided further that this restriction shall not apply to the West Bengal Mineral Development and Trading
Corporation Limited or an Undertaking or Department of the State Government.
11. Period of Lease. - (1) The period for which a mining lease may be granted shall not be more than five
years, but if the State Government considers that a longer period of lease is necessary for proper
development and mechanization of the mine and working on a larger scale, a longer period of lease, not
exceeding thirty years may be granted:
Provided that this restriction shall not apply in the case of the West Bengal Mineral Development and
Trading Corporation Limited and Undertaking or Department which may apply for an take lease for
any period not exceeding thirty years.
(2) The date commencement of the period for which a mining lease is granted shall be the date on
which a duly executed lease deed is registered as per the conditions laid down by these rules.
12. Renewal of mining lease - (1) An application for renewal of a mining lease shall
be made to the State Government or to an officer duly authorized by the State
Government in this behalf in Form D at least six months before the date on which the
lease is due to expire but not before nine months from such date of expiry through the
Chief Mining Officer or the Mining officer in charge of the concerned area or such other
officer or officers as may be authorized by the State Government in this behalf:
Provided that no such renewal shall be granted if the performance of the lessee is
considered unsatisfactory by the State Government or by the officer so appointed in this
behalf by the State Government :
Provided further that an application for renewal of a mining lease shall be
accompanied by an up‐to‐date clearance certificate or mining dues in original in the form,
duly signed by the District Land and Land Reforms Officer, prescribed in Clause (a) of
sub‐rule (4) of Rule 5 of these Rules.
(2) No such renewal shall be granted more than once for a period exceeding the period
of original lease and the State Government or the Officer so authorized in his behalf
may refuse after giving reasons to be recorded in writing to renew a mining lease
over the whole or part of the area covered by the original lease for which the
renewal is applied for.
(3) Every application for renewal of mining lease shall be accompanied by a non‐
refundable fee of Rs.500 deposited in the manner prescribed in sub‐rule (3) of rule
5.
(4) Every application for renewal of mining lease, other than an application from the
West Bengal Mineral Development and Trading Corporation, State Trading
Corporation, Central Government or any other department of the Central
Government or the State Government shall also be accompanied by a valid and up‐
to‐date (i) Income Tax Clearance Certificate, (ii) a Sales Tax Clearance Certificate, if
the applicant is a dealer under the West Bengal Sales Tax Act, 1994.
(5) An application for renewal of mining lease shall be disposed of within nine months
from the date of its receipt.
(6) If an application for the renewal of a mining lease submitted to the receiving
authority within the time as referred to in sub‐rule(1) is not disposed of before the
date of expiry of the lease, the period of that lease shall be deemed to have been
extended for a further period of six months or period ending with the date of
receipt of orders of the State Government thereon, whichever is earlier.
12. Deposit for preliminary expenses. - (1) When required by the State Government,
an applicant for mining lease shall deposit Rs.500 (Rupees Five Hundred) only as
preliminary expenses for rant of the lease in the lease in the same manner as
prescribed in sub‐rule (3) of rule 5:
Provided that the applicant shall deposit such further sums on account of
preliminary expenses, as may be asked by the State Government within one month
from the date of demand of such deposit.
14. Security Deposit. - (1) The applicant shall deposit before execution of the mining
lease as security for due observance of the terms and conditions of the lease a sum of
Rs.2500 (Rupees two thousand five hundred) only in the manner as may be directed by
the State Government which shall be refunded to him after the expiry of the period of
the lease, unless the whole or a part of it is withheld or forfeited by the State
Government for any default on the part of the lessee including default in the payment
of amounts due to the State Government.
(2) No interest shall accrue on the security deposit.
15. Lease to be executed within six months. - (1) When an order has been made for
the grant of a mining lease, the deed of lease shall be executed within six months from
the date of the order granting the lease:
Provided that the Sate Government or the officer so authorized by it, may permit the
execution of the deed of lease after the expiry of the aforesaid period of six months if
it is satisfied that the applicant is not responsible for the delay in the execution of the
deed of lease.
16. Lapsing of lease. -(1) Subject to the other condition in these rules, where mining
operation has not been commenced within a period of one year from the date of
execution of the lease or is discontinued for a continuous period of one year after the
commencement of such operations, the State Government shall, by an order, declare
the mining lease as lapsed and communicate the said order to the lessee.
(2) where a lessee is unable to commence the mining operation within a period of one
year from the date of execution of the mining lease or discontinues mining operations
for a period exceeding one year for reasons beyond his control, he may submit an
application to the State Government through the Chief Mining Officer or the Mining
Officer in charge of the concerned area explaining the reasons for the same within a
period of one month after such expiry of the said one year.
(3) Every such application under sub‐rule(2) shall be accompanied by a fee of five
hundred rupees deposited in the manner provided in sub‐rule(3) of rule 5.
(4) The State Government may, on receipt of an application make under sub‐rule (2) and
on being satisfied about reasons for the non‐commencement of mining operations or
discontinuance, pass an order extending or refusing to extend the period of lease, as
the case may be, within six months after giving the applicant an opportunity of being
heirs.
Explanation.- Where the non‐commencement of mining operations within a period
of one year from the date of execution of mining lease is on account of:
(a) delay in acquisition of surface rights;
(b) delay in getting the possession of the leased area; or
(c) delay in supply or installation of machinery;
(d) orders passed by any statutory or competent authority; or
(e) operation becoming highly uneconomical; or
(f) strike or lock‐out.
And the lessee is able to furnish documentary evidence supported by an affidavit
duly sworn in, the State Government may consider any or all of these as sufficient reasons
for the non‐commencement of mining operations within the said period of one year.
Rule of 2002 as it now stands after amendment.
Rule 16 A runs as follows:-
Rule 5 to Rule 16 shall not be applicable in case of grant of mining lease in respect of river‐
bed materials (excluding in‐situ hard rocks), and minerals like kankar, morrum, and
brick‐earth on land vested in Government which will be governed by rule 16 B.
Rule 16B runs as follows:-
(i) Mining lease in respect of river‐bed materials (except in‐situ hard rocks), and minerals like kankar,
morrum, and brick‐earth on land vested in Government shall be granted only through public notice
inviting tenders in sealed cover. Such mining lease shall be for a period of not more than two years.
(ii) Tender shall be submitted in triplicate in Form H and the mining lease in favour of successful
bidder shall be granted as nearly as possible in Form I and the lessee will strictly abide by the terms
and conditions of such lease.
(iii) Tender conditions shall be specified in the Notice Inviting Tenders. Publication and issue of Notice
Inviting Tenders and procedure for consideration of tenders and for grant of such mining lease are
laid down in schedule VII of these rules.
(iv) Mining lease shall be granted by the District Magistrate of the concerned District following the
procedure laid down in schedule VII of this Rule.
(v) For schedule 1, substitute the following Schedule:‐
'Schedule‐I'
[See rule 20(1)(a) of the West Bengal Minor Mineral Rules, 2002]
Rates of Royalty
Name of Minor Minerals Rates
1. Boulder/Pebbles/Stones/Sand/Stone Rs.35/‐(Rupees Thirty Five) per cubic metre
2. Gravel Rs.35/‐(Rupees Thirty Five) per cubic metre
3. Granite ‐Black Rs.1000/‐ (Rupees One Thousand) per cubic metre.
‐Gray Rs.625/‐ (Rupees six hundred twenty five) per cubic metre
‐ Coloured Rs.825/‐ (Rupees eight hundred twenty five) per cubic metre
4. Impure Quartz, Kankar & Morrum Rs.23/‐ (Rupees twenty three) per cubic metre
5. Laterite Rs.23/‐ (Rupees twenty three) per cubic metre
6. Limeshell &Limestone used for Rs.62/‐ (Rupees sixty two) per cubic metre
building purpose
7. Marble Rs.950/‐(Rupees Nine hundred fifty) per cubic metre
8. Other Minor Minerals Rs.23/‐ (Rupees twenty three) per cubic metre
9. Ordinary clay/Fuller's Earth/brick Rs.18/‐ (Rupees Eighteen ) per cubic metre
earth
(3) for schedule II, substitute the following schedule:-
'Schedule-II'
[See rule 20(1)(b) of the West Bengal Minor Mineral Rules, 2002]
Rates of Dead Rent
First Year - Rs.1250.00 per acre
Second year - Rs.1850.00 per acre
Third year and onwards - Rs.3000.00 per acre per annum
(4) After Schedule VI, insert the following Schedule:-
Schedule‐VII'
[See rule 16B of the West Bengal Minor Mineral Rules, 2002 as amended]
1. Mining lease for river‐bed Materials viz., Sand, Stone, Boulder, etc. (except in situ‐hard
rocks), kankar morrum and brick‐earth on land vested in Government shall be granted
Panchayat‐wise/Block‐Wise by the District Magistrate for a maximum period of two
years.
2. Each block identified for exploitation shall be widely notified defining the boundary of
the areas with reference to Plot Nos, Mouzas, P.S. etc. by publication in the National
Dailies, local News Papers and also in the Notice Boards and the websites of the
concerned officer at least 30 days before the date of auction to be held at the office of
the respective D.L. &L.R.O.
3. Before auction, base price of the mineral to be auctioned is to be determined. For this
purpose, the District Magistrate will set up a committee comprising officers of D.L &
L.R.O., Director of Mines & Minerals and any other officer as deem fit.
4. Any person who intends to obtain a mining lease as notified shall submit sealed tender
in the prescribed form along with the documents as required with the deposit of 500/‐
(Rupees five hundred only) as application and fee Rs.10,000/‐ (Rupees Ten thousand
only) as earnest money to the appropriate head of account.
5. D.L. and L.R.O./ authorized officer will act as presiding officer of the auction. On
completion of the auction result will be announced by the presiding officer. Generally
highest bid offered by a tenderer will be accepted. However, bid will not be treated as
accepted unless confirmed by the District Magistrate. In case the highest bid amount
and one or more tender amount remain the same, the accepted bid shall be decided by
drawing lots.
6. The deposits as earnest money and application fee submitted by unsuccessful bidders
will be returned within fifteen days from the date of confirmation of the bid. The
provisionally selected bidder as announced in the D.L. & L.R.O. shall deposit 25% of
the bid amount in Govt. Treasury under the proper Head of Account and submit a
copy of chalan to the D.L. & L.R.O on the next working day after announcement.
7. The District Magistrate shall confirm the accepted amount of bid and select the bidder.
He may reject a tender without assigning any reason therefor. If no tender is received
over and above the base price he may grant lease on base price or he may order for
tender afresh.
8. The successful bidder on receipt of LOI/grant order from the D.M. shall deposit the
remaining 75% of the bid amount in Treasury. He will submit a draft lease deed in
Form‐I to the D.M. for execution along with copy of chalan showing the said deposit.
9. If the successful bidder fails to pay 25% of the bid amount or the remaining 75% of the
accepted amount before execution of the lease deed, the amount so far deposited by
the bidder shall be forfeited by the Government.
10. District Magistrate may cancel auction conducted by the D.L. & L.R.O if he is not
satisfied with the publicity, participation and the offered amount of bid.
11. A lease deed shall be executed in favour of successful bidder within one month from
the date of issue of grant order y the DM.
12. The successful bidder shall be bound to observe all the provisions of the Rules and
Regulations of the Mines and Minerals (Development and Regulation) Act, 1975 and
West Bengal Minor Mineral Rules, 2002 as amended and related Environment
Protection Rules.
The vires of the said amendment of West Bengal Minor Minerals Rules, 2002 is under
challenge in all these writ petitions. According to the petitioners, the impugned
notification dated 1st December, 2011 introducing Rule 16A, 16B and Schedule VIII to the
West Bengal Minor Minerals Rules, 2002 is ultra vires of Section 2,8,9,10,15 of the Mines
and Minerals (Development and Regulation) Act, 1957 as well as Entry 54, List -I, Seventh
Schedule and Articles 13, 14, 19,(i)(g), 21, 245 and 246 of the Constitution of India.
In fact the applications for renewal of the mining lease of the petitioners were all
rejected by the concerned authority by referring to the aforesaid amended provision of the
West Bengal Minor Minerals Rules, 2002. The legality and/or propriety of such order of
rejection of the petitioners' applications for renewal is also under challenge in all these
writ petitions.
Before considering the challenge with regard to the vires of the said amendment, some
important admitted facts should be borne in mind. Those facts are as follows:‐
The effect of this amendment was given prospectively from the date of issuance of the
notification i.e., 5th December, 2011. The lease deeds containing the renewal clauses were
all executed in favour of the petitioners before the amended provisions became effective.
The lease deeds record an agreement between the parties that the terms and conditions
mentioned in the lease deeds may be revised at the option of the Government in case any
Act or Rule is passed by the Central Government or the State Government introducing
change in the existing Rules, notwithstanding the fact that leases have been granted in
accordance with the West Bengal Minor Minerals Rules, 2002. It is also provided in the
lease deeds that in revising the terms, the lease shall be modified in such manner so that
the moulded terms of the leases maintain conformity with the amended Act or Rule and
for amendment of such terms, the State Government shall not be liable to pay any
compensation on any ground whatsoever for any loss and damages that may be suffered
by or caused to the lessee.
Despite such right to alter and/or amend the terms and conditions of the lease was
reserved by the State Government, no such revision was made by the State Government to
amend and/or alter the renewal clause contained in these lease deeds for bringing the
renewal clause in conformity with the amended provisions of the Rules of 2002. As a
result, notwithstanding the West Bengal Minor Minerals Rules, 2002 was amended in
2011, the renewal clause contained in the lease deeds remains unaltered.
However the State Respondents now contends that notwithstanding the terms of the
lease deeds having not been altered or changed by the government, the right of renewal of the mining lease will now be governed by the amended Rules, i.e, Rule 16 B. This court is required to consider the constitutional validity of the Amendment of 2011 and the legality and validity of the impugned order of rejection of the petitioners' applications for renewal of lease in the facts of the present case. Mr. Chakraborty, Learned Senior Counsel appearing for the petitioner submits that by amendment of the said Rules of 2002 in the year 2011, the State Government has introduced a completely different modality for grant of mining lease in respect of river‐ bed materials (excluding in situ‐hard rocks), kankar, morrum and brick‐earth on land vested in Government, by introducing Rule 16 A therein, which provides that nothing in Rule 5 to 16 will be applicable to grant of mining lease in respect of river‐bed materials (excluding in situ‐hard rocks), kankar, morrum and brick‐earth on land vested in Government. He pointed out that Rule 16 B prescribes the modality for grant of mining lease. Rule 16 B provides for grant of mining lease by auction. Details of the procedure as to how such auction will be held and how selection of the lessee for grant of such mining lease will be made and the conditions which are required to be fulfilled by such selected candidates for obtaining such mining lease, etc., have been provided in Rule 16 B. According to Mr. Chakraborty, provision relating to grant of mining lease by auction which is provided in Rule 16 B was made by the State Government in excess of the rule making authority of the State Government as grant of mining lease by auction is contrary to the guidelines mentioned in Section 15(1A) of the Mines and Minerals (Development And Regulation) Act, 1957 which the State Government was required to follow while framing rules on the subject of minor minerals. He further pointed out that though the procedure for renewal of lease, provided under Rule 12 of the West Bengal Minor Minerals Rules, 2002 was couched in conformity with the guidelines mentioned in Rule 15(1A) but while introducing Rule 16 B, no provision for renewal was made therein in compliance with the guidelines contained in Section 15(1A) (d) of the 2002 Rules. By referring to the provision contained in Rule 15(3) of the said Act of 1957, he submits that while framing West Bengal Minor Minerals Rules in 2002, provision for payment of royalty and/or dead rent was made by the State Government in Rule 20 of the West Bengal Minor Minerals Rules, 2002 which still remains effective as the amendment does not introduce any change in it. According to him, introduction of the scheme for grant of mining lease in respect of river‐bed materials by auction and grant of mining lease after acceptance of the highest bid from the highest bidder is not only contrary to the provision contained in Section 15(3) of the Mines and Minerals (Development and Regulation) Act, 1957 but it also infringes the provision contained in Rule 20 of the West Bengal Minor Minerals Rules, 2002 which is still in operation. Rule 20 is set out hereunder for the sake of convenience in understanding the present problem:‐ Rule 20: "Payment of royalty and rent, etc. - (1) (a) The holder of mining lease or any other mineral concession granted on or after the commencement of these rules, shall pay royalty in respect of mineral or minerals extracted or removed or consumed by him or his agent, manager, employee or contractor at the rate prescribed in Schedule 1:
Provided that the State Government shall not enhance the rate of royalty more than once during any period of three years.
(b) The lessee shall also pay, for every year, an yearly dead rent, at the rate prescribed in the Schedule II:
Provided that the lessee shall be liable to pay either the dead rent of the royalty in respect of each mineral, whichever is higher, but not both:
Provided further that the State Government shall not enhance the rate of dead rent more than once during any period of three years:
(c) The lessee shall also pay for the surface area occupied by him for the purpose of the mining operation surface rent at the rates fixed by the District Authority and specified in the lease;
(d) The lessee shall pay to the State Government water rent at the rate prescribed for the said purpose from time to time.
(2) Notwithstanding anything contained in the lease instrument or any other law in force at the time of commencement of these rules, the provisions of clauses (a) and (b) of Sub‐rule (1) shall apply to the holder of a mining lease granted before such commencement."
Since Rules 16 A and 16 B were introduced by way of amendment by the State Government in 2011, without following the guidelines provided in Section 15(1A), such amendment, according to Mr. Chakraborty, is ultra vires of Section 15 of the said Act inasmuch as, such amendment was made by the Government in excess of its rule making authority granted to it under Section 15 of the said Act In support of such submission, he relied upon the following decision of the Hon'ble Supreme Court:‐ (1) (2007)2 SCC 588 (Para ‐ 4) Ram Chandra Murarilal Bhattad & Ors. -Vs‐ State of Maharashtra & Ors.
(2) AIR 1980 SC 1872 (Para ‐ 4) Regional Transport Officer, Chittoor -Vs‐ Associated Transport Madras (P.) Ltd. & Ors.
(3) AIR 1972 SC 1917 (Para ‐2) - M/s. Tata Iron & Steel Co. Ltd. -Vs‐ workmen of M/s. Tata Iron & Steel Co. Ltd. & Ors.
He further contended that those amended provisions are also in conflict with the provision contained in Rule 20 of the said Rules of 2002. He thus submitted that two inconsistent provisions cannot be allowed to operate in the same field. Mr. Chakraborty, Learned Senior Counsel, thus submitted that the amended rules are ultra vires of Section 2, 8, 9, 10 and 15 of the Mines and Minerals (Development and Regulation) Act, 1957 as well as the Entry No.54, List‐I, Seventh schedule and Article 13, 14, 19 (i)(g), 21, 245 and 246 of the Constitution of India.
In addition to such challenge made by the petitioners with regard to vires of the amended provision of the said 2002 Rules, the petitioners have also challenged the legality of the impugned order passed by the concerned authority by which the petitioners' applications for grant of renewal of the mining lease were rejected by relying upon the provisions of the amended Rules of 2002.
In this regard, Mr. Chakraborty, Learned Senior Counsel, contended that if the Rules 16 A and 16 B, which were introduced in the Rule of 2002, are struck down by this Court then the impugned order, rejecting the petitioners' applications for renewal of mining lease passed by the competent authority, cannot be maintained as the order rejecting the petitioners' prayer for renewal was passed by referring to the provisions of the amended rules. .
He further argued that even if the amended Rules are found to be valid and intra vires, then also the petitioners' applications for renewal which were submitted by them in terms of the renewal clause contained in their respective lease deeds prior to enforcement of the amended provision, ought not to have been rejected by applying provision contained in the amended rules, which had no retrospective effect.
By referring to Section 6 of the General Clauses Act, he contended that the right which had accrued in favour of the petitioners for renewal of their leases under the agreement, cannot be upset and/or destroyed by the amended provision of the said rules as their accrued right of renewal which was deemed to have been saved remain unaffected by such amendment. In support of such submission, he relied up the following decisions of the Hon'ble Supreme Court.
(1) Glaxo Smith Kline Plc & Ors. v Controller of Patents & Designs & Ors.
reported in 2008(2) CLJ (SC)2014 (2) State of Punjab & Ors. v Bhajan Kaur & Ors. reported in AIR 2008 SC 2276. He further contended that since the impugned amendment is operating prospectively, it cannot take away the right of the petitioners accrued under Rule 12 of the West Bengal Minor Minerals Rules, 2002 which the parties agreed to follow in case of renewal of their leases. In support of such submissions, he relied upon the following decisions of the Hon'ble Supreme Court:‐ (1) (2008) 3 SCC 641 (Para -25) - A Manoharan & Ors. -Vs‐ Union of India & Ors. (2) AIR 1983 SC 1143 - (Para -5) A. Calton -Vs‐ Director of Education & Anr. (3) AIR 1990 SC 405 (Para -5) Sukhdarshan Singh -Vs‐ State of Rajasthan. Thus, he concluded by submitting that the petitioners' applications for renewal should have been considered in the light of the renewal clause contained in the agreement entered into between the parties on the basis of the existing Rule which was prevalent as on the date of execution of the lease deeds as neither the amended provision of the Rules of 2002 i.e, Rule 16 A and 16 B which were introduced in 2011 had any retrospective effect nor the terms of the lease deeds were subsequently modified as per Clause 12, Chapter IX of the said lease deeds which authorized the State Government to modify the terms of the said lease deeds for bringing the terms of the lease deeds in conformity with the amended rules.
Mr. Chakraborty, Learned Senior Counsel, thus, invited me not only to declare the amended Rules of 2002 which were introduced in 2011 as ultra vires of Section 2, 8, 9, 10 and 15 of the Mines and Minerals (Development and Regulation) Act, 1957 as well as Entry No.54, List‐I, Seventh Schedule and Article 13, 14, 19(i)(g), 21, 245 and 246 of the Constitution of India but also to interfere with the impugned order passed by the competent authority rejecting the petitioners' applications for renewal of lease with reference to the amended Rules. He also has prayed for issuance of direction upon the State Respondents to renew the lease deeds as per the said agreement read with the provision for renewal contained in Rule 12 of the West Bengal Minor Minerals Rules, 2002. Mr. Dutta, Learned Senior Advocate, appearing for the State Respondents supported the State action in amending the West Bengal Minor Minerals Rules, 2002, in the year 2011. He contended that since such rules were amended by invoking the State Government's authority to amend such Rules under Section 15 of the Mines and Minerals (Development and Regulation) Act, 1957, the introduction of Rule 16 A and Rule 16 B by way of amendment of the West Bengal Minor Minerals Rules, 2002, in 2011 cannot be held to be ultra vires. He contended that there are various instances where different State Governments made rules, making monopoly and/or reservation of Minor Minerals either for its own use or for the use of a Government company in Public Sector and thereby imposing total restriction on grant of any mining lease in respect of such minor minerals in favour of any individual and such reservation policy and/or declaration of monopoly in the field of grant of mining lease in respect of minor minerals were held to be valid by the Hon'ble Supreme court in the following cases:‐ (1) State of Andhra Pradesh & Ors. -Vs‐ Anupama Minerals and Ors. reported in 1995 Supp (2) SCC 117 (2) Ambika Quarry Works -Vs‐ State of Gujarat and Ors. reported in 1987(1) SCC 2013 (3) Amritlal Nathubhai Shah & Ors. ‐Vs‐ Union Government of India & Anr. reported in (1976)4 SCC 108.
(4) Premium Granites and Anr. -Vs‐ State of Tamil Nadu and Ors. reported in (1994)2 SCC 691.
He further contended that when ownership of minor minerals was vested in the State Government, its power to make rules for regulating the grant of mining lease in respect of minor minerals by auction after fixing the reserve price on the basis of predetermined price of minor minerals by the authority, cannot be held to be ultra vires of clause (d) of sub‐Section (1A) of Section 15 of the 1957 Act. in support of such submission, he relied upon a decision of the Hon'ble Supreme court reported in AIR 2000 SC 2870 (Quarry owners' Association -Vs‐ State of Bihar & Ors.). To support his above contention he also relied upon following decisions of the Hon'ble Supreme Court:‐ (1) Ishwari Khetan Sugar Mills (P.) Ltd. & Ors. -Vs‐ State of Uttar Pradesh & Ors. reported in (1980) 4 SCC 136 (2) Monnet Ispat and Energy Ltd. -Vs‐ Union Of India & Ors. reported in (2012) 11 SCC 1 He further contended that the guidelines mentioned in Section 15(1‐A) of the 1957 Act are not exhaustive. He thus, argued that in the absence of exhaustive guidelines, exercise of discretion by the State Government in amending rule for augmenting State's income by making some departure from the guidelines, would not render the amended provision invalid. To support his such contention he relied upon the decision of the Hon'ble Supreme court in the case of Premium Granites and Anr. -Vs‐ State of Tamil Nadu and Ors. (supra).
He further contended that renewal of a lease and extension of a lease are two different concepts altogether; in case of renewal, a new lease is required while in case of extension, the same lease continues in force during the additional period. He further contended that since a fresh lease is required in case of renewal, the rules which are applicable for grant of initial lease are also applicable to such renewal. According to him, renewal applications are required to be considered on the basis of the rules which are prevalent as on the date of consideration of such application for renewal. According to him, even if amended rules were not given retrospective effect still then since the amended Rules dealing with procedural laws were in operation on the date when the petitioners' applications for renewal were considered, the concerned authority did not commit any illegality by rejecting the petitioners' prayer for grant of renewal of the leases with reference to the amended provision of the West Bengal Minor Minerals Rules, 2002 as it is well settled that the amended rules dealing with procedural laws are applicable to the pending applications. To demonstrate the distinction between renewal of lease and extension of lease, he relied upon a decision of the Hon'ble Supreme Court in the case of Provash Chandra Dalui and Anr. -Vs‐ Biswanath Banerjee and Anr. reported in 1989 Supp (1) SCC 487. He, thus, ultimately contended that when the State Government which is the owner of the minor minerals in the State, in exercise of its rule making power granted to it under the Central Act of 1957, framed rules making provision for grant of mining lease in respect of river‐bed materials by auction to enrich the State Exchequer, the amended rules cannot be held to be ultra vires even though some of the guidelines mentioned in Section 15(1A) were not followed and/or taken care of while amending the Rules in 2011. To refute the submission of Mr. Chakraborty that vested right accrued to the petitioners cannot be taken away by prospective amendment, he relied upon a decision of the Hon'ble Supreme Court reported in (1981) 2 SCC 205 State of Tamil Nadu -Vs‐ M/s. Hind Stones & Ors., wherein it was held that no one has a vested right to have an application for grant or renewal of lease to be dealt with in a particular way, by applying a particular provision.
He further contended that the petitioners‐lessees had applied to the Government of West Bengal for grant of lease for extracting sand therefrom in accordance with the West Bengal Minor Minerals Rules, 2002 and the deed of leases executed between the Governor of West Bengal and the petitioners‐lessees was also made in accordance with the said West Bengal Minor Minerals Rules , 2002. Therefore, the lease deeds were not independent of the said Rules of 2002; rather it was the outcome of the said Rules. He contended that even assuming though not admitting that any right had accrued to the petitioners in terms of the said lease deeds which itself being subject to the provisions of the said Rules, any right, if at all accrued, would also be subject to the provisions of the said Rules or any amendment thereto. According to him, any subsequent amendment to the said Rules would have an overriding effect on the terms and conditions of the said lease deed as the said terms and conditions are subject to the said Rules having the force of law made by the Parliament within the meaning of Article 302 of the Constitution of India. Therefore, no right, could have accrued to the petitioners in terms of the lease deeds, independent of the said Rules.
Thus, he invited this court not to interfere with the impugned order passed by the concerned authority while rejecting the petitioners' application for renewal of the mining leases.
Mr. Ganguly, Learned Advocate appearing for the State Respondents submitted by relying upon a decision of this Hon'ble Court in the case of Bibhas Kumar Das versus the State of West Bengal & Ors. reported in 2013(4) CLT 181 that the concerned authority did not commit any wrong in rejecting the petitioners' applications for renewal of leases by applying the amended rules of the West Bengal Minor Minerals Rules, 2002 as the pending applications are all required to be considered with reference to the rule which was in existence as on the date of consideration of the petitioners' prayer for grant of renewal as per the said decision of the Division Bench of this Hon'ble Court.
He, thus, contended that even though the amended rule was not in existence at the time when such application for renewal was submitted and retrospective effect was not given to the amended rules, still then it cannot be held that the concerned authority committed any illegality in rejecting the petitioners' applications for renewal of mining leases by referring to the relevant provisions of the amended rules which were introduced, pending consideration of the petitioners' applications for renewal. Mr. Ganguly, Learned Advocate, also, thus, supported the State action and invited me to reject this writ petition.
A. Challenge with regard to the vires of the amendment Let me first of all consider the challenge with regard to the vires of the amendment of the West Bengal Minor Minerals Rules, 2002 which was made effective from 5th December, 2011. In this regard, I feel it necessary to consider, first of all, the source of legislative competence of the State Legislature to frame rules on the subject of grant of mining lease in respect of Minor Minerals, in order to ascertain as to whether the State Government while amending its rules exceeded its rule making authority or not and further as to whether introduction of such change by amendment is ultra vires of the basic structure or frame of the constitutional provision and/or the provision of the Minor Mines and Minerals (Development and Regulation) Act, 1957 and/or the West Bengal Mines and Minerals Rules, 2002 or not.
Regulation of mines and minerals development does not fall in the concurrent list. Both fall in the field of Parliament under Entry 54, List I and the State Legislature under Entry 23, List II. The conflict between the two lists can be resolved with reference to Entry 23, List II, which provides that "subject to provision of List‐I with respect to regulation and development under the control of the Union". Thus the supremacy of Parliament to enact law on this subject is recognized in the Constitution, as the State Legislature's power to enact law on this subject was limited to the restrictive clause included in Entry 23, List II of the Constitution.
Undisputedly, in terms of Entry 54 of List I of the Seventh Schedule read with Article 245 and 246 of the Constitution of India, the State Government has no independent power to legislate in relation to mines and minerals. The moment there was a declaration under Section 2 of the Mines and Minerals (Development and Regulation) Act, 1957, the Central Government became the owner of mines and minerals and as such the Central Government is competent to legislate and/or make rules relating to mines and minerals through out the Union of India.
When the Mines and Minerals (Development and Regulation) Act, 1957 was enacted, the Parliament, after considering the fact that the minor minerals are used locally, thought it fit to authorize the State Government to make rules in respect of minor minerals and as such while enacting Mines and Minerals (Development and Regulation) Act, 1957 incorporated Section 15 in the said Act authorizing the State Government to frame rules relating to minor minerals. Initially, details of the subject and/or the matters on which the State Government was authorized to frame rules in respect of minor minerals were not provided in the said Act. Section 15(1) of the said Act made generalized provision regarding the rule making power of the State Government in respect of Minor Minerals Rules, 2002. Section 13(1) of the said Act provides identical generalized provision authorizing the Central Government to make rules on major minerals. However, subsequently by following the direction of the Hon'ble Supreme Court in D.K Trivedi's case reported in 1986 Supplementary SCC 20, sub‐Section 1(A) was added to Section 15, authorizing the State Government to make Rules in respect of minor minerals for all or any of the matters as mentioned therein. The said sub‐Section (1A) was incorporated in the said Act through Act 37 of 1986 with effect from 16th February, 1987. Section 15(1A) was brought in the statute in order to bring parity with the Central Government's power to frame rules relating to major minerals as per Section 13(2) of the said Act. Sub‐Section 1(A) of Section 15 is exactly similar with that of Section 13(2) of the said Act. Section 13(2) is illustrative of the general power of the Central Government to frame rules relating to major minerals. Similarly Section 15(1A) is illustrative of the general power of the State Government to frame rules relating to minor minerals. The provisions contained in Section 13(2) and Section 15(1A) were not included in the Act either to limit or to restrict the power of the Central Government or the State Government, to frame rules in their respective fields, but these were included as guidelines which the Central Government and/or the State Government should take care of at the time of framing rules on their respective fields.
For proper appreciation of the scope and ambit of the power of the State Government to make rules in respect of minor minerals, Section 15 of the Mines and Minerals (Development and Regulation) Act, 1957 which gives power to the State Governments to make rules in respect of minor mineral, is set out here under.
"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 generally 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 undertaking research or training in matters relating to mining operations;
(g) the fixing and collection of rent, royalty, fees, deed 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 for 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 lese or other mineral concessions;
(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 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. Let me now consider as to whether the amendment which was introduced in the year 2011 in West Bengal Minor Minerals Rules, 2011 by introducing two new provisions, that is, Rule 16 A and 16 B in respect of grant of mining lease for river‐bed materials were made by the State Government in excess of its rule making authority under Section 15 of the said Act and/or as to whether such amendments are contrary to the guidelines and/or the provision of the West Bengal Minor Minerals Rules, 2002. Section 15(1) of the said Act gives general power to the State to make rules in respect of minor minerals. Sub‐Section (1A) of Section 15 specifies the matters on which such rules may be framed by the State Government in respect of minor minerals. If Section 15(1A) is considered carefully then it goes without saying that the said provision contemplates an application from an applicant intending to take a mining lease. The said provision also authorizes the State Government to make rules on the subject of renewal of lease in favour of the existing lessee. These guidelines were not strictly adhered to while introducing Rule 16 A and Rule 16 B in the West Bengal Minor Minerals Rules, 2002 by its amendment in 2011 as a different modality for grant of mining lease which is contrary to such guidelines, was prescribed under the Rule 16 B of the said rules in respect of grant of lease of the river‐bed materials. It introduces a modality for grant of mining lease by way of auction which was not in conformity with the guidelines mentioned in Section 15(1‐A) of the Mines and Minerals (Development and Regulation) Act, 1957. How the auction will be held and how a candidate will be selected and what are the formalities which are to be complied with, by the selected candidate for obtaining the lease are detailed in Schedule VII which provides that mining lease in respect of river‐bed materials can be granted by the District Magistrate for a maximum period of two years. It is provided therein that after identifying the plots, in respect of which such mining lease can be granted, notice will be published in the National Dailies, local Newspapers and also in the notice board and the Website of the concerned office, intimating the intention of the Government to lease out those plots for mining operations at least 30 days before the date of auction to be held in the office of the respective DL & LRO. Before holding auction, the base price of the minerals are to be determined by the Committee set up by the District Magistrate. Any person who intends to obtain a mining lease is required to submit sealed tender in the prescribed form along with documents as required with deposit of 500/‐(Rupees five hundred) only as application fee and fee of Rs.10,000.00 (Rupees ten thousand) only as earnest money to the appropriate head of account. After holding the auction by the DL & LRO and/or by the authorized officer who will act as Presiding Officer of such auction, will announce the result of such auction. The highest bid offered by a tenderer will be accepted generally but such acceptance is provisional. The provisional acceptance of the highest bid of the tenderer by the DL & LRO will be finalized when the District Magistrate confirms such acceptance. The District Magistrate is the ultimate authority to select the tenderer in whose favour lease will be granted. The District Magistrate at his discretion may even without assigning any reason, reject the tender of any bidder, including the highest bidder. It is further provided therein that once the highest bidder is provisionally selected by the concerned DL & LRO, such highest bidder is required to deposit 25% of the bid amount in Government Treasury and submit a copy of the challan to the DL & LRO on the next working day after announcement. Remaining 75% of the bid amount is required to be deposited by the bidder when his selection is ultimately finalized by the District Magistrate. It is provided that the deposit which will be made by the unsuccessful bidder will be returned to him. It is further provided therein that if the successful bidder, who after depositing 25% of the bid amount fails to pay the remaining 75% of the bid amount before execution of the lease dead, the amount which will be deposited till that date by the bidder shall be forfeited by the Government. The rule is, however, silent on the fate of such deposit of 25% of the bid money by the provisionally selected candidate who is not ultimately selected by the District Magistrate for such grant. The rule neither provides that the said money will be refunded to the unsuccessful tenderer nor it provides for forfeiture of such deposit. The rule is vague in this regard. Such an incomplete rule cannot be implemented.
That apart, on reading the scheme and/or the modalities for selection of the lessee as mentioned in Schedule VII of the amended rules, I fail to understand the reason for holding auction for grant of such mining lease. The Act and/or the rules framed thereunder does not permit the State Government to realize any amount of money under any other head, save and except, the heads as provided in Section 15(3) of the Act of 1957 and Rule 20 of the West Bengal Minor Minerals Rules, 2002. Rule 20 which was framed in the line of Section 15(3) of the said Act, provides that the holder of mining lease or any other mineral concession shall pay royalty in respect of minerals extracted or removed or consumed by him or his agent, manager, employee or contractor at the rate prescribed in Schedule‐I. The provision made thereunder clearly indicates that such royalty is realizable on the basis of the price of the mineral, actually extracted or removed or consumed by the lessee or his agent, manager, employee or contractor. Under the said rules there is no scope for assessment of the value of the minerals by the authority in advance and/or realization thereof from the lessee by the authority concerned before grant of lease.
It is also provided therein that the lessee is also required to pay dead rent every year at the prescribed rate in Schedule‐II. However, the lessee is not liable to pay both royalty and dead rent. He is liable to pay either dead rent or royalty in respect of the minerals whichever is higher. Liability of the lessee either to pay royalty or dead rent, cannot be determined by the authority concerned before grant of lease as amount of royalty payable by the lessee depends upon the value of the minerals to be extracted or removed or consumed by the lessee or his agents, subsequently. In addition to such payment of royalty and dead rent, the lessee is also required to pay surface rent at the rate fixed by the District Authority.
Rule 20 of the said rule has not been amended Rule 16 A and Rule 16 B which were introduced in the West Bengal Minor Minerals Rules, 2002 by way of amendment in 2011 also does not provide that Rule 20 need not be followed for realization of royalty and rent from the lessee in case of grant of mining lease in respect of river‐bed materials. If these rules are considered then I have no hesitation to hold that the scheme which was introduced by the State Government under the amended Rules for grant of lease in respect of river‐bed materials by auction is contrary to the provision contained in Rule 20 of the said rules. Rule 20 does not authorize the State Government to determine the base price of the minerals in advance.
Neither Section 15(3) of the Mines and Minerals (Development and Regulation) Act, 1957, nor Rule 20 of the West Bengal Minor Minerals Rules authorizes the State Government to realize and/or collect any other rent and/or fees on any other account which is unknown to the said Act and/or the said Rules. Section 15(3) of the said Act only authorizes the State Government to realize royalty and/or dead rent from the lessee and the amount of such realization is dependent upon the value/price of the minor minerals actually extracted and/or consumed by the lessee or his agent or subordinate. Thus, there is no scope for pre‐estimating the value of the minerals and/or for holding an auction for realization of the bid money above the pre‐estimated value of the minerals from the successful bidder as a condition for grant of mining lease in his favour. Again no provision has been made in the amended rules for refund of the excess money to be collected on account of bid money before grant of lease, if the money payable by the lessees under Rule 20 of the said rule is ultimately found to be falling short of the bid money collected from the lessees.
That apart it is impossible for the lessee to ascertain in advance as to how much target he will be able to fulfill as many unknown adverse eventualities may ultimately stand in the way of fulfillment of his ultimate target within the lease period. Thus, if the lessee is unable to extract and/or consume minerals which is equivalent to the value of the extracted and/or consumed minerals then how the lessee will be compensated is not provided in the rule.
Thus, the scheme which was so formulated under the amended Rules 16A and 16 B for grant of mining lease in respect of river‐bed materials, in my view, were contrary to the provision contained in Section 15(3) of the Mines and Minerals (Development and Regulation) Act, 1957 as well as Rule 20 of the West Bengal Minor Minerals Rules, 2002. That apart, Section 15(3) of 1957 Act and Rule 20 of the West Bengal Minor Minerals Rules, 2002 imposes a restriction on the Government to enhance the rate of royalty and/or dead rent more than once during the period of 3 years. The amended rule provides for grant of mining lease for a period of two years only. If the amended rules are followed and lease is granted for a maximum period of two years, then where is the scope of ascertaining the maximum price of the minerals by auction at the end of the lease period when restriction is imposed upon the State Government on enhancement of the rate of royalty and/or dead rent more than once during the period of three years. Before parting with, I like to mention here that Mr. Dutta, Learned Senior counsel appearing on behalf of the Learned Advocate General cited several judgements of the Hon'ble Supreme Court as mentioned above. I have considered those judgements carefully. None of these judgements, in my considered view, is applicable in the facts of the instant case. In those cases different State Governments amended their Minor Mineral Rules by declaring their reservation policy for use of the minor minerals belonging to the State either by the State itself or by Government company, etc. in the public Sector. By those declarations, the State Government in fact, declared that no lease will be granted to any private individual in respect of certain minor minerals. In all those decisions, the validity of such reservation policy of the State Government was considered by the Hon'ble Supreme Court. In some of such cases it was held that such reservation policy was valid as it was introduced for public interest and in some of the cases it was held that such reservation policy is valid in view of the subsequent enactment introduced by prohibiting grant of mining lease in respect of the plots of land and/or area within forest zone. In my view those decisions have no application in the facts of the instant case. Thus, if the legality of the amendment is considered in the context of Section 15 and 15 (1A) and Section 15(3) of the Mines and Minerals (Development and Regulation) Act, 1957 and Rule 20 of the West Bengal Minor Minerals Rules, 2002, then I have no hesitation to hold that the rules which were introduced by way of amendment are not only ultra vires of Section 15 of the Mines and Minerals (Development and Regulation) Act, 1957 but also these amended Rules are ultra vires of Entry 54, List I, Seventh Schedule and Entry No.23 of List II and Article 245 and 246 of the Constitution of India.
B. Challenge with regard to the validity of the order of the rejection of the petitioner's application for renewal.
Let me now deal with the challenge with regard to the legality of the impugned order passed by the concerned authority refusing to renew the petitioners' lease in the facts of the instant case. I have already mentioned above that the petitioners' application for renewal of their lease were rejected with reference to the amended provisions of the West Bengal Minor Minerals Rules, 2002. Since I have already held earlier that the amended rules are ultra vires of the constitutional provision as such amendments were made by the State Government in excess of its rule making authority granted by the Central Act through which the State Government derived its authority to frame rules, the impugned order of the competent authority rejecting the petitioners' application for renewal should be declared as invalid and illegal as such rejection order was passed with reference to the amended rules which are held to be unconstitutional. Even assuming that the amended rules are valid still then the decision for rejection of the petitioners' application for renewal, taken by the competent authority, cannot be supported. In this regard, I would like to mention here that first of all, since the amended rules were not given effect retrospectively and it was introduced with prospective operation, the right which was accrued in favour of the petitioner to have the lease renewed as per the terms of the lease deeds, cannot be nullified by applying the amended provision of the said rules. To clarify this position, I feel that the relevant clause of the lease deed is required to be taken note of. Part‐VIII Clause‐3 of the lease deed deals with the renewal. The relevant part of the said contract is set out hereunder :‐ " 3. The mining lease shall be renewable for one period not exceeding the period specified in Sub‐rule (2) of Rule 12 of the said Rules at the option of the Lessee. Provided, however, that the State Government may refuse to renew a mining lease over the whole part of the area covered by the original lease, for which the renewal is prayed for.
If the Lessee be desirous of taking a renewed lease of the premises hereby demised or of any part or parts of them for further term from the expiration of the term hereby granted and in otherwise eligible, he shall prior to the expiration of the last mentioned term give to the State Government six calendar months' previous notice in writing and shall pay rents, rates and royalties hereby reserved and shall observe and performed several covenants and agreements herein - contained and on the part of the Lessee to be observed and performed upto the expiration of the term hereby granted. The State Government on receipt of application for the renewal shall consider it in accordance with Rule 12 of the said Rules and shall pass order as it deem fit. If renewal is granted, the State Government will at the expense of the Lessee and upon his executing and delivering to the State Government, if required a counter‐part thereof execute and deliver to the Lessee a renewed lease of the said premises or part thereof for the further term of five years at such rents, rates and royalties and on such terms and subject to such covenants and agreements, including this present covenant to renew as shall be in accordance with the West Bengal Minor Rules, 2002, on the day next following the expiration of the term hereby granted"
The renewal clause makes it clear that the lease is renewable at the option of the lessee.
If a lessee is desirous of taking a renewed lease of the premises or any part thereof for a further term of 5 years then he is required to apply for such renewal before the concerned authority prior to expiration of the term of the lease by giving six calendar months previous notice in writing to the State Government. After receiving such application from the lessee, the State Government is required to consider the lessee's application for renewal in accordance with Rule 12 of the West Bengal Minor Minerals Rules, 2002 and pass necessary order as it deems fit. The terms of the said lease deed, also provides that the Government may refuse to renew the mining lease over whole or part of the area covered under the original lease for which renewal is prayed for. However, the Government cannot refuse to renew the lease as a whole, save and except under any of the grounds as mentioned in Rule 12 of the said rules. To demonstrate the ground for which renewal may be refused under Rule 12 of the said rule, Rule 12 (1)(2)(3) & (4) are set out hereunder.
"12. Renewal of mining lease - (1) An application for renewal of a mining lease shall be made to the State Government or to an officer duly authorized by the State Government in this behalf in Form D at least six months before the date on which the lease is due to expire but not before none months from such date of expiry through the Chief Mining Officer or the Mining Officer in charge of the concerned area or such other officer or officers as may be authorized by the State Government in this behalf:
Provided that no such renewal shall be granted if the performance of the lessee is considered unsatisfactory by the State Government or by the officer so appointed in this behalf by the State Government :
Provided further that an application for renewal of a mining lease shall be accompanied by an up‐to‐date clearance certificate or mining dues in original in the form, duly signed by the District Land and Land Reforms Officer, prescribed in Clause (a) of sub‐rule (4) of Rule 5 of these Rules.
(2) No such renewal shall be granted more than once for a period exceeding the period of original lease and the State Government or the Officer so authorized in his behalf may refuse after giving reasons to be recorded in writing to renew a mining lease over the whole or part of the area covered by the original lease for which the renewal is applied for.
(3) Every application for renewal of mining lease shall be accompanied by a non‐ refundable fee of Rs.500 deposited in the manner prescribed in sub‐rule (3) of rule 5.
(4) Every application for renewal of mining lease, other than an application from the West Bengal Mineral Development and Trading Corporation, State Trading Corporation, Central Government or any other department of the Central Government or the State Government shall also be accompanied by a valid and up‐to‐date (I) Income Tax Clearance Certificate, (ii) a Sales Tax Clearance Certificate, if the applicant is a dealer under the West Bengal Sales Tax Act, 1994."
The said rules thus, make it clear that renewal can be refused only when the performance of the lessee for the previous period is considered unsatisfactory by the Government or by the Officer so appointed in this behalf by the State Government. However, prayer for renewal may also be refused under Rule 12 due to procedural lapses on the part of the applicant. Prayer for renewal of lease, in my view, cannot be rejected for procedural lapses, if the procedural irregularities are rectified by the petitioner to bring his application for renewal in conformity with the provisions of the said rule within a reasonable time after such defects are pointed out by the authority and if the application for renewal is submitted before the concerned authority within the time as mentioned in Rule 12(1).
In view of such renewal clause provided in the lease deed itself, it cannot be held that no right was vested upon the lessee for renewal of the lease. Such right of renewal is vested with the lessee under the contract itself, which of course, no doubt could have been modified by the State Government at its instance, in terms of Clause 12, Part IX of the said lease deed, for bringing the terms of the said lease in conformity with the amended rules of 2002. The terms of the contract which is provided in Clause 12 in Part IX thereof is relevant for present consideration as the State Government's right to modify the contract for bringing it in conformity with the amended rules was reserved in the said clause, which is set out hereunder.
"12. The terms and conditions herein - contained may be revised at the option of the State Government when any act or rules are passed by the Central Government or the State Government for the revision of the same, notwithstanding the fact that this lease has been granted in accordance with the West Bengal Minor Minerals Rules, 2002. In revising the terms the lease shall be modified so as to ensure conformity with such act or rules and in such case the State Government shall not be liable to pay any compensation whatsoever on any ground whatsoever for any loss and damages that may be suffereed or caused to the lessee."
If this part of the terms of the said lease is considered, then it goes without saying that State Government reserved its right to amend the terms of the lease deed to bring the lease deed in conformity with the amended rules. The lease deed does not provide any deeming provision for automatic revision of the terms of the lease deed, following amendment of the Rules. As such, State Government was required to take steps for such revision of the terms of the lease deed which having not been done in instant case, during the continuance of the lease period, this court has no hesitation to hold that the petitioners' prayer for renewal is required to be considered in terms of the said renewal clause contained in the lease deeds. I, thus, hold that in the instant case despite such amendment was made in the West Bengal Minor Minerals Rules, 2002 in 2011, the petitioners' right to get his lease renewed which is a right vested in him under the contract cannot be nullified by the impugned amendment. In this regard reference may be made to the decision of the Hon'ble Supreme Court in the case of Monnet Espat and Energy Ltd. -Vs‐ Union of India reported in (2012) 11 SCC 1 para 215 wherein a line of distinction was drawn between the contract and a M.O.U. Para 215 of the said judgment of the Hon'ble Court is set out hereunder:‐ "It is well settled that no one has legal or vested right to the grant or renewal of a mining lease. Monnet cannot claim a legal or vested right for grant of the mining lease. It is true that by the M.O.U. entered into between the State Government and Monnet certain commitments were made by the State Government but firstly, such M.O.U is not a contract as contemplated under Article 299(1) of the Constitution of India and secondly, in grant of mining lease of a property of the State, the State Government has a discretion to grant or refuse to grant any mining lease. obviously, the State Government is required to exercise its discretion, subject to the requirement of law. In view of the fact that an area is reserved for exploitation of mineral is public sector, it cannot be said that the discretion exercised by the State Government suffers from any legal flaw". In this regard, I have considered the decision of the Hon'ble Supreme Court in Provash Chandra Dalui and Anr. vs. Biswanath Banerjee and Anr. (supra) as well as the decision of the Hon'ble Supreme Court in the case of State of Tamil Nadu vs M/s Hind Stone and Ors (supra) cited by Mr. Dutta, learned Senior Advocate, but in my reading, the facts of the instant case giving rise to the present cause of action, are different from the facts of those cases which were there before the Hon'ble Supreme Court in these cases. In those cases, the right of the parties to get the lease renewed did not emanate from the contract between the parties. In those cases, right of renewal was regulated by statutory rules and when the rules are amended, no one can claim any right of renewal under the pre‐amended rules. But in the present case before me, the right to apply for renewal flows from the contract itself and the petitioners' right to get their leases renewed as per the provision contained in Rule 12 of the West Bengal Minor Minerals Rules, 2002 is recognized in the contract itself. As such the citations relied upon by Mr. Dutta, have no application in the present case.
To conclude let me now consider the submission of Mr. Ganguly, Learned Advocate appearing for the State respondents who by relying upon a decision of the Hon'ble Division Bench of this Court, reported in Bibhas Kumar Das Vs State of West Bengal & Ors (supra) submitted that pending applications are required to be considered in the light of amended rules even though the amendments have no retrospective effect. Of course, in one of the decisions of the Hon'ble Supreme Court cited by Mr. Dutta i.e., State of Tamil Nadu Vs. M/s. Hind Stone and Ors (supra), it was identically held that in the absence of any vested right in any one, an application for lease is necessarily to be dealt with according to the rules in force on the date of disposal of the application, despite the fact that there was long delay in considering these applications, since the making of the application.
On perusal of the said decision, I find that the facts of that case is essentially different from the facts of the present case. No time limit is fixed under the Tamil Nadu Minor Minerals Concessions Rules for consideration of such application for renewal. The consequence of non consideration of such application for renewal within the time limit, is not provided in the said rules. However, in the West Bengal Minor Minerals Rules, 2002, time limit is fixed for consideration of the application for renewal. Rule 12 (5) provides that an application for renewal of lease shall be disposed of within 9 months from the date of its receipt. It is a mandatory provision. It can not be regarded as a directory provision as the consequence for not disposing of such an application within the time limit framed under Rule 12 (5), is provided in Rule 12(6) which provides that if an application for renewal of mining lease submitted to the receiving authority within the time as mentioned in sub‐rule 1, is not disposed of before expiry of the lease, the period of that lease shall be deemed to be extended for a further period of six months or the period ending with the date of decision of the State Government thereon, whichever is earlier. Thus, there is a deeming provision regarding automatic renewal of lease in case the time limit in considering the lessee's application for renewal is not adhered to by the State Government.
In such set of facts, the principles which were laid down by the Hon'ble Supreme Court in the said decision cited by Mr. Dutta cannot be fitted in the facts of the present case.
Conclusion:
As such I have no hesitation to hold that the impugned decision which was taken by the concerned authority in refusing to grant the renewal of lease in favour of the petitioners, is illegal and the same is set aside. The concerned authority is thus directed to consider the petitioners' application for renewal in the light of the provision contained in Rule 12 of the West Bengal Minor Minerals Rules, 2002 and take its ultimate decision in this regard without applying the provisions of the amended rules which have already been declared as ultra vires and until such decision is taken, the petitioners' lease is deemed to be extended. It is made clear that the petitioners are also required to pay royalty and/or dead rent and/or other fees realizable from them as per Rule 20 of the West Bengal Minor Minerals Rules, 2002 for the period during which the lease will continue as per the deeming provision of Rule 12(6) of the West Bengal Minor Minerals Rules, 2002 and the fate of their application for renewal will be ultimately determined by the prescribed authority in the manner as indicated above.
All these writ petitions are disposed of.
Urgent photostat certified copy of this order, if applied for, be given to the parties as expeditiously as possible.
(Jyotirmay Bhattacharya) Later After delivery of the judgment Mr. Dutta, learned Senior Counsel prays for stay of the operation of the order for a limited period for enabling his client to think about the steps to be taken by his client in this matter. Such prayer for stay is opposed by learned Advocate appearing for the petitioner. However, considering the submission of the respective parties, I feel that for the ends of justice, operation of the order passed hereinabove should remain stayed for a limited period.
Accordingly, it is directed that the operation of the order will remain stayed for a period of four weeks with this rider that the rights of the petitioners under their respective lease deeds will continue in the meantime.
(Jyotirmay Bhattacharya, J)