Andhra HC (Pre-Telangana)
Suvarna Cements Limited And Anr. vs Union Of India And Ors. on 10 December, 2001
Equivalent citations: 2002(1)ALD330, 2001(6)ALT728, AIR 2002 ANDHRA PRADESH 244, (2002) 1 ANDHLD 330 (2001) 6 ANDH LT 728, (2001) 6 ANDH LT 728
JUDGMENT S.R. Nayak, J.
1. The 1st petitioner is a Public Limited Company registered under the Companies Act, 1956, of which the 2nd petitioner is the Managing Director, engaged in the business of manufacture and sale of cement. The petitioner has established a cement factory at Mellacheruvu in Nalgonda District with capacity to manufacture 2 lakh tonnes of cement per annum. The raw material required for manufacture of cement is limestone. Therefore, the petitioner-company in order to operate its cement plant has taken 350 acres of limestone mines on lease basis from the Government of Andhra Pradesh in the year 1986 and a deed of lease was executed on 24-4-1986. Among other terms and conditions, the said lease provides for payment of interest at 24% per annum on the amount due and payable to the Government.
2. The Assistant Director of Mines and Geology, Nalgonda, the 3rd respondent herein, has issued a demand notice dated 1-9-1998 to the Managing Director of the petitioner-company directing the company to clear off the outstanding dues of Rs. 60,41,136/- for the year 1997-98, which includes a sum of Rs. 47,68,281/- towards interest for delayed payment of dues, immediately. Similarly, the 3rd respondent has also issued another demand notice dated 20-5-1999 to clear off the dues of Rs. 64,24,938/- for the year 1998-89, which includes a sum of Rs. 40,77,256/- towards interest for delayed payment.
3. The petitioner, pleading that it has become a sick industry and has no capacity to pay the dues demanded in the above two demand notices and the demand made by the 3rd respondent towards interest is not legal, has filed this writ petition. The prayer in the writ petition reads -
"For the reasons stated in the accompanying affidavit, the petitioner prays that the Honourable Court may be pleased to issue a writ, order or direction more particularly one in the nature of writ of mandamus declaring (a) that the MMRD Act, 1957 does not authorise the levy of interest on delayed payment of royalty, (b) the action of respondent in levying interest amounting to Rs. 47,68,281-00 for delayed payment of royalty payable by the petitioner on the limestone mined and used from the area leased under the mining lease dated 24-4-1986 in S.No. 874 and 876 of Mellacheruvu village in Nalgonda District as unconstitutional, illegal, arbitrary and violative of petitioner's rights guaranteed under the Articles 14, 19(1)(g) and 300-A of the Constitution of India and consequently direct the respondents to refund an amount of Rs. 12 lakhs with interest being the amount paid by the petitioner towards interest on delayed payment of royalty and pass such other order or orders as this Hon'ble Court deems fit and proper."
4. Although the petitioners have not specifically prayed for striking down Rule 64-A of the Mineral Concession Rules, 1960 (for short, 'the Rules') in the prayer, at the time of hearing, Sri C. Kodanda Ram, learned Counsel for the petitioners, submitted that the main relief sought in the writ petition is to declare Rule 64-A of the Rules as ultra vires, illegal, arbitrary and unconstitutional. The learned Counsel drew our attention to paragraph 10 of the affidavit filed in support of the writ petition. It is true that in paragraph 10 of the affidavit, the petitioners have sought for a writ of mandamus declaring Rule 64-A as ultra vires, illegal, arbitrary and unconstitutional. The learned Advocate-General, who appeared for the State Government, quite farily agreed to go on with the hearing without taking any objection to the lapse of the petitioner in not specifically praying for a declaration that Rule 64-A of the Rules is invalid.
5. We have heard Sri C. Kodanda Ram, learned Counsel for the petitioners, the learned Advocate-General and Sri C.V. Ramulu, learned senior Standing Counsel for Government of India.
6. Sri C. Kodanda Ram, learned Counsel appearing for the petitioners would contend that Rule 64-A of the Rules is ultra-vires of the Mines and Minerals (Regulation and Development) Act, 1957 (Act 67 of 1957), (for short, 'the Act') and the Rules framed by the Central Government in exercise of the power conferred upon it under Section 13 of the Act. In other words, learned Counsel would contend that neither the Act nor the rules empower the Government of India to frame the impugned Rule 64-A providing for levy of interest on delayed payment of royalty, cess and other dues. Learned Counsel submits that interest can be levied and charged only if the statute makes a specific provision authorising levy of interest on the delayed payment of tax, royally, cess etc., and in the instant case, the Act does not authorise levy of interest on delayed payment of royalty. The learned Counsel would also contend that neither Section 9(3) nor Section 13 of the Act would empower the Central Government to frame a rule providing for levy of interest on the delayed payment of cess, royalty etc. Learned Counsel would submit that provision for interest could be made only by way of substantive law and it cannot be an aspect of procedural law. In support of his submissions, the learned Counsel would place reliance on the judgments of the Apex Court in State of Kerala v. K.M. Charia Abdulla and Co., , Hukum Chand etc., Prithvi Chand v. Union of India and Ors., , Indian Newspapers (Bombay) Private Limited v. Union of India and Ors., , V.V.S. Sugars v. Government of Andhra Pradesh and Ors., (1999) 114 STC 47 (SC), J.K. Synthetics Limited v. Commercial Tax Officer, , India Carbon Limited v. State of Assam, and a judgment of the Division Bench of this Court in Rajasthan Trading Co. v. Registrar of Firms and another, .
7. The learned Advocate-General, on the other hand, would contend that framing of the impugned Rule 64-A is very much within the delegated power of the Central Government. The learned Advocate-General would draw our attention to Clauses (g) and (i) of Sub-section (2) of Section 13 of the Act and would maintain that Rule 64-A cannot be said to be ultra-vires of the Act. Learned Advocate-General would also draw our attention to Sub-section (2) of Section 25 of the Act, which refers to 'interest due on outstanding rent, royalty, tax, fee or other sum due to Government' and would maintain that the reference to interest in Sub-section (2) of Section 25 is a clear indication that the Parliament has delegated the power to the Central Government to frame rules providing for levy of interest on delayed payment of cess, royalty etc. The learned Advocate-General would contend that the question now raised by the petitioners in this writ petition is squarely covered by the judgment of the Apex Court in D.K. Trivedi and Sons v. State of Gujarat and Ors., AIR 1986 SC 1323, and in view of the judgment, this writ petition is liable to be dismissed in limine. Lastly, the learned Advocate-General would contend that the writ petition is liable to be dismissed in limine because the petitioner having obtained the lease in 1986 under a deed of lease with its eyes wide open, which provides for payment of interest at 24% per annum on the delayed payment of royalty, cess etc., it is not permissible for the petitioner-company to turn round and contend that it is not liable to pay interest on the delayed payment of royalty etc. The learned Advocate-General would contend that if the condition of lease, as incorporated in the deed of lease, is not acceptable to the petitioner-Company, the petitioner ought to have questioned the validity of the condition then and there, and it is not permissible for the petitioner now to question the same at this distance of time after exploiting the resources under the lease.
8. Sri C.V. Ramulu, learned senior Standing Counsel for Government of India appearing for the 1st respondent would adopt the argument of the learned Advocate-General.
9. Before proceeding to consider the contentions of the learned Counsel for the parties, it is appropriate to note the principles governing judicial review of subordinate legislation and scope of such judicial review. It is true that mandamus lies to quash a notification, order, rule, scheme or other form of subordinate legislation where it is ultra-vires or unconstitutional, that is to say, where it violates any of the fundamental rights guaranteed under Part HI of the Constitution of India or any other limitations imposed by the Constitution. A statutory instrument may be ultra-vires if it exceeds the power delegated to the subordinate authority or where it abuses its power by acting in bad faith or exercising it for an unauthorised purpose or acting on irrelevant considerations or by keeping out of relevant considerations or where it is perverse, in the sense that no fair minded person could have ever made, where it is manifestly erroneous having been made on the basis of facts which do not exist or where it is totally arbitrary or where statutory power is used for extraneous purposes which shocks the conscience of the Court. This position in law is well settled by the binding authoritative pronouncements of the Supreme Court in Maharashtra State Board of Secondary and Higher Secondary Education v. Paritosh Bhupeshkumar and Ors., , Rayappa v. State of Tamil Nadu, , Supreme Court Employees v. Union of India, , S.I. Syndicate v. Union of India, , DL Breweries v. D.B. Trading Co. (1986) UJSC 506, Venkata Ramana v. Union of India, , Indian Express Newspapers's case (supra). On the other hand, a statutory rule or regulation unlike a bye-law cannot be held invalid on the ground of unreasonableness as distinguished from arbitrariness nor can the Court question the wisdom of the policy behind the subordinate legislation.
10. In Charia Abdulla and Company case (supra), the Supreme Court held-
"If in making a rule, the Stale transcends Us authority, the rule will be invalid, for statutory rules made in exercise of delegated authority are valid and binding only if made within the limits of authority conferred. Validity of a rule whether it is declared to have effect as if enacted in the Act or otherwise is always open to challenge on the ground that it is unauthorised."
Dealing with the grounds on which a subordinate legislation could be invalidated, the Supreme Court in Indian Newspapers case (supra), observed -
"A piece of subordinate legislation does not carry the same degree of immunity which is enjoyed by a statute passed by a competent Legislature. Subordinate legislation may be questioned on any of the grounds on which plenary legislation is questioned. In addition it may also be questioned on the ground that it does not conform to the statute under which it is made. It may further be questioned on the ground that it is contrary to some other statute. That is because subordinate legislation must yield to plenary legislation. It may also be questioned on the ground that it is unreasonable, unreasonable not in the sense of not being reasonable, but in the sense that it is manifestly arbitrary. In England, the Judges would say "Parliament never intended authority to make such rules. They are unreasonable and ultra vires". The present position of law bearing on the above point is stated by Diplock, LJ. in Mixnam's Properties Limited v. Chertsey Urban District Council thus:
The various special grounds on which subordinate legislation has sometimes been said to be void........can, I think, today be properly regarded as being particular applications of the general rule that subordinate legislation, to be valid, must be shown to be within the powers conferred by the statute. Thus, the kind of unreasonableness which invalidates a bye-law is not the antonym of "reasonableness" in the sense in which that expression is used in the common law, but such manifest arbitrariness, injustice or partiality that a Court would say: "Parliament never intended to give authority to make such rules; they are unreasonable and ultra vires".......if the Courts can declare subordinate legislation to be invalid for "uncertainty" as distinct from unenforceable, this must be because Parliament is to be presumed not to have intended to authorise the subordinate legislative authority to make changes in the existing law which are uncertain."
11. The summary made by Prof. Alan Wharam in his article entitled "Judicial Control of Delegated Legislation: The Test of Reasonableness" in 36 Modern Law Review 611 at pages 622-23 and referred to by the Apex Court in the above judgment in paragraph 74 is as follows:
(I) It is possible that the Courts might invalidate a statutory instrument on the grounds of unreasonableness or uncertainty, vagueness or arbitrariness; but the writer's view is that for all practical purposes such instruments must be read as forming part of the parent statute, subject only to the ultra vires test.
(II) The Courts are prepared to invalidate bye-laws, or any other form of legislation, emanating from an elected, representative authority, on "the grounds of unreasonableness, uncertainty or repugnance to the ordinary law: but they are reluctant to do so and will exercise their power only in clear cases.
(III) The Courts may be readier to invalidate bye-laws passed by commercial undertakings under statutory power, although cases reported during the present century suggest that the distinction between elected authorities and commercial undertakings, as explained in Km. ie v. Johnson might not now be applied so stringently.
(IV) As far as subordinate legislation of non-statutory origin is concerned, this is virtually obsolete, but it is clear from In re French Prnlesimi Hp ipifal" that it would be subject to strict control. (See also HWR Wade Administrative Law (Fifth Edn.) pp. 747-748.
A Division Bench of this Court in M/s. Rajasthan Trading Company case (supra) while holding that Rule 4(2) of A.P. Partnership (Registration of Firms) Rules, 1957 which prescribed a time limit of 15 days for notice or intimation, as ultra-vires the power of the State Government under Section 71(2) of the Partnership Act, 1932, held-
"............The section itself does not prescribe any limitation as to the period within which notice should be filed. Notice should, however, be given within a reasonable time. The section, which is designed to give relief to the partners of the firm as well as the public, should be construed more benevolently.
...........In our opinion, Section 71(2) of the Act does not empower the State Government to prescribe the minimum period of limitation for the submission of the intimations or notices under the Act. But Rule 4(2) framed in exercise of the power under Section 71(2) specifically states that every statement, intimation or notice relating to a firm under Sections 60, 61, 62, 63 (1) or 63 (2) of the Act shall be sent or given to the Registrar together with the prescribed fee within 15 days from the date of such occurrence referred to in such statement, intimation or notice. As already noticed, Section 63(1) of the Act prescribes no such period of limitation nor does it authorise the rule-making authority to prescribe. That apart, in Section 63(1) itself permissive words are employed by the Legislature that a person may send intimation to the Registrar about the change in the constitution of the firm. The consequence of non-compliance with the provisions of section are not found in the section itself or in the rules. Further, if the notice sent after the prescribed period of 15 days about the change is rejected, (tat would result in defeating the manifest purpose of the legislation, namely, to have the names of the persons entered in the Register of Firms. We are, therefore, of the opinion that Rule 4(2) of the Andhra Pradesh Partnership Rules is beyond the rule-making power of the State Government."
12. In the premise of the above noted principles governing judicial review of subordinate legislation, let us consider the contentions of the learned Counsel for the parties in this case. The statutory provisions, which have a bearing on the decision-making, be noted first. Section 9 of the Act reads-
9. Royalties in respect of mining leases:--
(1) The holder of a mining lease granted before the commencement of the Act shall, notwithstanding anything contained in instrument of lease or in any law in force at such commencement, pay royalty in respect of any mineral removed or consumed by him or by his agent, manager, employee, contractor or sub-lessee from the leased area after such commencement, at the rate for the time being specified in the Second Schedule in respect of that mineral.
(2) The holder of a mining lease granted on or after the commencement of this Act shall pay royalty in respect of any mineral removed or consumed by him or by his agent, manager, employee, contractor or sub-lessee from the leased area at the rate for the time being specified in the Second Schedule in respect of that mineral.
(2-A) The holder of a mining lease, whether granted before or after commencement of the Mines and Minerals (Regulation and Development) Amendment Act, 1972 (56 of 1972), shall not be liable to pay any royalty in respect of any coal consumed by a workman engaged in a colliery provided that such consumption by the workman does not exceed one-third of a tonne per month.
(3) The Central Government, by notification, in the Official Gazette, amend the Second Schedule so as to enhance or reduce the rate at which royalty shall be payable in respect of any mineral with effect from such date as may be specified in the notification :
Provided that the Central Government shall not enhance the rate of royalty in respect of any mineral more than once during any period of three years.
Section 13(1), (2), (a), (g) and (i) reads-
13. Power of Central Government to make rules in respect of minerals:--(1) The Central Government may, by notification in the Official Gazette, make rules for regulating the grant of prospecting licences and mining leases in respect of minerals and for purposes connected therewith.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely :--
(a) the person by whom, and the manner in which, applications for prospecting licences or mining leases in respect of land in which the minerals vest in the Government may be made and the fees to be paid therefor;
(b) xx
(c) xx
(d) xx
(e) xx
(f) xx
(g) the terms on which, and the conditions subject to which, any other prospecting licence or mining lease may be granted or renewed;
(h) xx
(i) the fixing and collection of fees for prospecting licences or mining leases; surface rent, security deposit, fines, other fees or charges and the time within which and the manner in which the dead rent or royalty shall be payable.
XX X X Section 25(1) and (2) of the Act reads-
"25. Recovery of certain sums as arrears of land revenue :--(1) Any rent, royalty, tax, fee or other sum due to the Government under this Act or the rules made thereunder or under the terms and conditions of any prospecting licence or mining lease may, on a certificate of such officer as may be specified by the State Government in this behalf by general or special order, be recovered in the same manner as an arrear of land revenue.
(2) Any rent, royalty, tax, fee or other sum due to the Government either under this Actor any rule made thereunder or under the terms and conditions of any prosecting licence or mining lease may, on a certificate of such officer as may be specified by the State Government in this behalf by general or special order, be recovered in the same manner as if it were an arrear of land revenue and every such sum which becomes due to the Government after the commencement of the Mines and Mineral (Regulation and Development) Amendment . Act, 1972 (56 of 1972), together with the interest due thereon, shall be a first charge on the assets of the holder of the prospecting licence or mining lease, as the cese may be."
Rule 64-A of the Rules reads-
"64-A, The Stale Government may without prejudice to the provisions contained in the Act or any other rule in these rules, charge simple interest at the rate of twenty four per cent per annum or any rent, royalty or free (other than the fee payable under Sub-rule (1) of Rule 54 or other sum due to that Government under the Act or these rules or under the terms and conditions of any prospecting licence or mining lease from the sixtieth day of the expiry of the date fixed by that Government for payment of such royalty, rent, fee or other sum and until payment of such royalty, rent, fee or other sum is made."
Para 3 of Part (VI) of Form F prescribed under Rule 15 (2), which specifically deals with course of action if rents and royalties are not paid in time provides-
"Course of action if rents and royalties are not paid in time:-
3. Should any rent, royalty or other sums due to the State Government under the terms and conditions of these presents be not paid by the lessee/lessees within the prescribed time, the same may be recovered together with simple interest due thereon at the rate of twenty four per cent per annum on a certificate of such officer as may be specified by the State Government by general or special order in the same manner as an arrear or land revenue."
13. By Sub-section (1) of Section 13 of the Act, the Central Government is empowered to make rules for regulating grant of prospecting licences and mining leases in respect of minerals and for purposes connected therewith, whereas Sub-section (2) in its Clauses (a) to (r) enumerates the matters in respect of which the Central Government can make rules. Sub-section (2) merely illustrates the nature of the power granted to the Central Government under Subsection (1) and it does not restrict the general power under Sub-section (1). The words 'for purposes connected therewith' occurring in Sub-section (1) are very relevant and pertinent to understand the scope of power vested in the Central Government under Section 13 of the Act. Apart from this, under Clause (g) of Sub-section (2) of Section 13, the rules may provide the terms on which, and the conditions subject to which any mining lease may be granted or renewed. Under Clause (i) of Subsection (2) of Section 13 of the Act, the rule may provide for fixation and collection of fees for prospecting licences or mining leases, surface rent; security deposit, fines, other fees or charges and the time within which and the manner in which the dead rent or royalty shall be payable. Here again, the word 'charges' occurring in Clause (i) of Sub-section (2) of Section 13 of the Act is very significant. The word 'charge' as a noun, among other things, means cost or price; financial liability, a debt, a load or burden. (Chambers' Dictionary, New Edition). Therefore, it cannot be said that the term 'charges' occurring in Clause (i) of Sub-section (2) of Section 13 of the Act does not include 'interest'. Undoubtedly, interest payable by a lessee for delayed payment is a Financial liability on the lessee and, therefore, a debt. It may also be construed as a cost or price or compensation payable to the contracting State authority for delay in payment of dues such as cess, royalty etc.
14. Further, the impugned Rule 64-A which provides for levy of interest on delayed payment of dues, is a rule dealing with the terms on which and the conditions subject to which a mining lease may be granted or renewed within the meaning of Clause (g) of Sub-section (2) of Section 13 of the Act. It cannot be said that prescription for payment of interest on delayed payment of dues is not a term or condition subject to which the lease is granted. In that view of the matter, we are of the considered opinion that the power granted to the Central Government under Clauses (g) and (i) of Sub-section (2) of Section 13 of the Act covers the power of the Central Government to prescribe a rule providing for levy of interest on delayed payments by enacting Rule 64-A of the Rules. Alternatively, it is very pertinent to notice that the conditions enumerated in Clauses (a) to (r) in Subsection (2) of Section 13 of the Act are optional and it is permissible for the Central Government to impose any other condition or conditions as the Central Government may deem necessary to achieve the purposes of the Act.
15. In Shri Sudarsan Mineral Co. Ltd, Bhilwara v. Union of India and Anr., , the Apex Court while interpreting Section 13 of the Act has held-
"As is well settled, the power to make rules for regulating the grant of prospecting licences and mining leases in respect of minerals and for purposes connected therewith is to be found in Sub-section (1) of Section 13, Sub-section (2) merely illustrates the nature of the power. It does not restrict the general power under Sub-section (1). Even under Clause (g) of Sub-section (2) in particular the rules may provide the terms on which and the conditions subject to which any mining lease may be granted or renewed. Sub-rule (1) of Rule 27 requires every mining lease to be subjected to the conditions enumerated in Clauses (a) to (o) and such conditions have got to be incorporated in every mining lease. The conditions enumerated in Clauses (a) to (o) of Sub-rule (2) are optional and a mining lease may contain such other conditions as the State Government may deem necessary in regard to them.
Further, in D.K. Trivedi's case (supra), dealing with the question whether the rule-making power of the State Government under Section 15(1) of the Act includes the power to charge dead rent and royalty, the Supreme Court has observed and held---
"A provision similar to Sub-section (2) of Section 13 however, does not find place in Section 15. In our opinion, this makes no difference. What Sub-section (2) of Section 13, does is to give illustrations of the matters in respect of which the Central Government can make rules for "regulating the grant of prospecting licences and mining leases in respect of minerals and for purposes connected therewith." The opening clause of Sub-section (2) of Section 13, namely, "In particular, and without prejudice to the generality of the foregoing power", makes it clear that the topics set out in that sections are already included in the general power conferred by Sub-section (1) but are being listed to particularise them and to focus attention on them. The particular matters in respect of which the Central Government can make rules under Subsection (2) of Section 13 are, therefore, also matters with respect to which under Subsection (1) of Section 15 the State Governments can 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". When Section 14 directs that "the provisions of Sections 4 to 13 (inclusive) shall not apply to quarry leases, mining leases or other mineral concessions in respect of minor minerals", what is intended is that the matters contained in those sections, so far as they concern minor minerals, will not be controlled by the Central Government but by the concerned State Government by exercising its rule-making power as a delegate of the Central Government. Sections 4 to 12 form a group of Section under the heading "General restrictions on undertaking prospecting and mining operations". The exclusion of the application of these section to minor minerals means that these restrictions will not apply to minor minerals but that it is left to the State Governments to prescribe such restrictions as they think fit by rules made under Section 15(1). The reason for treating minor minerals differently from minerals other than minor minerals is obvious. As seen from the definition of minor minerals given in Clause (e) of Section 3, they are minerals which are mostly used in local areas and for local purposes while minerals other than minor minerals are those which are necessary for industrial development on a national scale and for the economy of the country. That is why matters relating to minor minerals have been left by Parliament to the State Governments while reserving matters relating to minerals other than minor minerals to the Central Government. Sections 13, 14 and 15 fall in the group of section which is headed "Rules for regulating the grant of prospecting licences and mining leases". These three sections have to be read together. In providing that Section 13 will not apply to quarry leases, mining leases or other mineral concessions in respect of minor minerals what was done was to take away from the Central Government the power to make rules in respect of minor minerals and to confer that power by Section 15(1) upon the State Governments. The ambit of the power under Section 13 and under Section 15 is, however, the same, the only difference being that in one case it is the Central Government which exercises the power in respect of minerals other than minor minerals while in the other case it is the State Governments which do so in respect of minor minerals. Subsection (2) of Section 13 which is illustrative of the general power conferred by Section 13(1) contains sufficient guidelines for the State Governments to follow in framing the rules under Section 15(1) and in the same way, the State Governments have before them the restrictions and other matters provided for in Sections 4 to 12 while framing their own rules under Section 15(1).
The guidelines for the exercise of the rule-making power under Section 15(1) are, thus, to be found in the object for which such power is conferred (namely, "for regulating the grant of quarry leases, mining leases or other mineral concessions in respect of minor minerals and for purposes connected therewith"), the meaning of the word "regulating", the scope of the phrase "for purposes connected therewith", the illustrative matters set out in Sub-section (2) of Section 13, and in the restrictions and other matters contained in Sections 4 to 12."
The Apex Court while answering the above question has held-
"The grant of a mining lease would thus provide for the consideration for such grant in the shape of surface rent, dead rent and royalty. The power to make rules for regulating the grant of such leases would, therefore, include the power" "to fix the consideration payable by the lessee to the lessor in the shape of ordinary rent or surface rent, dead rent and royalty. If this were not so, it would lead to the absurd result that when the Government grants a mining lease, it is granted gratis to a person who wants to extract minerals and profit from them. Rules for regulating the grant of mining leases cannot be confined merely to rules providing for the form in which applications for such leases are to be made, the factors to be taken into account in granting or refusing such applications and other cognate matters. Such rules must necessarily include provisions with respect to the consideration for the grant. Under Section 15(1), therefore, the State Governments have the power to make rules providing for payment of surface rent, dead rent and royalty by the lessee to the Government."
In our considered opinion, the ratio of the judgment in D.K. Trivedi's case (supra) squarely answers the point raised in this writ petition also.
16. The intendment of the Parliament to grant the power to Central Government to enact the rule providing for levy of interest on delayed payment is apparent if one carefully reads the provisions of Sub-section (2) of Section 25 of the Act. Although Sri C. Kodanda Ram, learned Counsel appearing for the petitioners would contend that subsection (2) of Section 25 of the Act is procedural in nature for recovery of sums due to Government as land revenue, that submission is not acceptable to us. No doubt, Sub-section (1) of Section 25 of the Act deals with the procedure to be followed in the matter of recovery of Government dues as land revenue, but undoubtedly and clearly Sub-section (2) of Section 25 is a substantive provision, because it creates a charge on the assets of the holder of the prospecting licence or mining lease. A provision, which creates a charge on the assets of the holder of the prospecting licence or mining lease, cannot be said to be procedural in nature. It is trite that any provision of the statute, which creates rights/ obligations/privileges/exemptions, is always a substantive provision of the statute. If Sub-section (2) of Section 25 fastens a liability on the assets of the holder of the prospecting licence or mining lease in respect of any rent, royalty, tax, fee or other sum due to the Government either under the Act or any rule made thereunder or under the terms and conditions of any prospecting licence or mining lease, correspondingly it creates a right in the Government. Ordinarily right and liability go together. If the contention of the learned Counsel for the petitioner is accepted, then the corresponding right vested in the Government under Sub-section (2) of Section 25 to claim interest on the delayed payment of dues would become redundant and a mirage and such a construction can never be placed in construing a statute. As per the rule of 'purposive construction', the Parliament is presumed to intend that in construing an Act the Court, by advancing the remedy which is indicated by the words of the Act for the mischief being dealt with, and the implications arising from those words, should aim to further every aspect of the legislative purpose, construction which promotes the remedy.
17. There is also some force in the contention of the learned Advocate-General that the petitioners having obtained the lease under a deed of lease, which provides for payment of interest at 24% per annum on the delayed payment of dues, cannot turn round and claim that they are not liable to pay interest. Admittedly, the lease was granted as far back as in the year 1986. The petitioner-company without any demur accepted the mining lease and worked it for number of years before the impugned demands were raised. If the condition subject to which the mining lease was granted to the petitioner-company was not acceptable to it, the petitioner-company at the earliest point of time itself ought to have raised its objection to the condition. The petitioner-company for the reasons best known to it without any demur accepted the mining lease and exploited its rights flowing from the agreement. Hence, the petitioner-company cannot be permitted to approbate and reprobate. Apart from that the provision to pay interest to the State Government on delayed payment of dues is undoubtedly compensatory in nature. Interest on delayed payment of dues has almost become a normal practice. Looking from the angle also, it cannot be said that the impugned Rule 64-A, which provides for levy of interest is irrational or arbitrary.
18. In the result and for the foregoing reasons, we uphold the constitutional validity of Rule 64-A of the Mineral Concession Rules, 1960 and consequently dismiss the writ petition with no order as to costs.