Orissa High Court

Afr M/S. Sgs Mines And Industries vs State Of Odisha & Ors on 21 September, 2022

                    ORISSA HIGH COURT: CUTTACK

                         W.P(C) NO. 4504 OF 2017

        In the matter of an application under Articles 226 and
        227 of the Constitution of India.
                               ---------------

AFR     M/s. SGS Mines and Industries
        Pvt. Ltd, Jharkhand & Anr.    .....                Petitioners

                                  -Versus-

        State of Odisha & Ors.            .....          Opp. Parties


            For Petitioners    : M/s. S. Nanda, A. Mahanta and
                                 K. Ray, Advocates


            For Opp. Parties : Mr. P.P. Mohanty,
                               Addl. Govt. Advocate
                               [O.Ps.No.1-2]

                                 Mr. P.K. Parhi, ASGI
                                 [O.P. No. 3]

        P R E S E N T:

THE HONOURABLE DR. JUSTICE B.R.SARANGI AND THE HONOURABLE MR JUSTICE G. SATAPATHY

Date of hearing: 08.09.2022 :: Date of Judgment : 21.09.2022

DR. B.R. SARANGI,J. This is a writ petition, by means of which,

a direction has been sought to the opposite parties to

grant prospecting license to the petitioner-company for // 2 //

decorative stone (granite) over an area 19.90 Hectare in

village-Gunthapada in the district of Ganjam, by

declaring Rule-4(12) of the Odisha Minor Mineral

Concession Rules, 2016 (OMMC Rules, 2016) as ultra

vires to the provisions of Mines & Minerals (Development

& Regulation) Act, 1957 (MMDR Act, 1957) and Article

19(1)(g) of the Constitution of India, so far as it relates to

grant of prospecting license for Granite field under the

provisions of Odisha Minor Mineral Concession Rules,

2004 read with Granite Conservation and Development

Rules, 1999 (GCD Rules, 1999), and by further declaring

Rule 4(4) of the OMMC Rules, 2016 as inconsistent with

and repugnant to Rule-4 of the GCD Rules, 1999, so far

as it prescribes reconnaissance permit prior to grant of

prospecting license and Rule-4(12) renders applications

for prospecting license prior to commencement of the

Rules as ineligible, being ultra vires to Articles-14,

19(1)(g) and 21 of the Constitution of India.

2. To succinctly put, the factual matrix of the

case, is that petitioner no.1 is a company incorporated

under the Companies Act, 1956 and is engaged in the // 3 //

business of production of granite. Petitioner no.2 is

Director of the petitioner-company and representing it in

this writ petition. The petitioner-company filed an

application for grant of prospecting license for granite

over an area 19.90 Hectare in village-Gunthapada of

district-Ganjam in prescribed Form 'A' under Rule-9 of

the OMMC Rules, 2004 before the Director of Mines-

Opposite Party No.2, along with application fees of

Rs.1000/-, as stipulated in the OMMC Rules, 2004,

which was also duly received by the department and

receipt of acknowledgement was issued in prescribed

Form 'C'. On receipt of the said application, the Mining

Officer, Ganjam Circle, Berhampur, on 20.04.2016,

requested to the Tahasildar, Aska and Divisional Forest

Officer, Ghumusara, Bhanjanagar to submit their report

with regard to nature of land involved. Whereafter, the

Tahasildar, Aska and DFO, Ghumusara in turn directed

their subordinates, namely, Revenue Inspector and

Range Officer respectively to furnish the details of the

land. On 12.08.2016, the Range Officer furnished a

report to its superior and in turn the same was // 4 //

forwarded to the Mining Officer for further action. On

22.08.2016, the Revenue Inspector and Range Officer

furnished the details of the land. The DFO, Ghumusara,

South Division, vide letter dated 28.09.2016, submitted

his report in respect of the subject land. Although the

Revenue and Forest authorities furnished their

respective reports, from revenue point of view and forest

point of view, the law requires that if upon directions to

submit report the same are not received within a period

of two months, it shall be deemed that the concerned

authorities do not have any objection. Therefore, despite

lapse of two months, even though the concerned

authorities did not furnish their reports, but still the

petitioner-company's application was not forwarded for

further action, it is deemed that the said authorities did

not have any objection.

2.1 It appears that the entire exercise has been

taken up by the Department in active consideration of

the application of the petitioner-company under the

provisions of OMMC Rules, 2004 and had the

application been processed strictly in accordance with // 5 //

the time frame prescribed under the OMMC Rules, 2004,

the petitioner could have been granted the lease much

prior to commencement of the OMMC Rules, 2016.

When the application dated 08.04.2016 of the petitioner-

company for grant of prospecting license was under

active consideration, the State of Odisha in the

Department of Steel and Mines, in exercise of powers

conferred under Section 15 of the MMDR Act, 1957 and

in supersession of the provisions contained under the

OMMC Rules, 2004, issued a Gazette Notification dated

14.12.2016 bringing into force the OMMC Rules, 2016.

2.2 Under Sub-rules (4) and (12) of Rule 4 of

OMMC Rules, 2016, there is a restriction with regard to

grant of prospecting license-cum-mining lease or mining

lease or quarry lease or quarry permit, which requires

that no prospecting license-cum-mining lease shall be

granted for a specified minor mineral over any area

unless it is satisfied that the reconnaissance survey (G4

level) has been carried out over the area applied for to

establish availability of mineral therein or evidence of

mineral in the area has been established otherwise, // 6 //

provided that this provision shall not be applicable for

areas in which mining has been carried out in the past

under a mining lease and all applications for prospecting

license and mining lease for specified minor minerals

received prior to the date of commencement of these

rules shall become ineligible. Hence, this writ petition.

3. Mr. S. Nanda, learned counsel appearing for

the petitioners contended that a declaration be issued

that a right has been accrued in favour of the petitioner-

company in view of statutory fiction/deeming provision

and even otherwise in view of inaction/delay on the part

of the State Government in disposing of its application

for grant of prospecting license prior to the coming into

effect of OMMC Rules, 2016 on 14.12.2016. As a

consequence thereof, if a right has been accrued in

favour of the petitioner-company, in view of provisions

contained in Section 6 of the General Clauses Act, 1897,

the prospecting license stands granted in favour of the

petitioner-company considering the processing of the

application and/or Sub-rule (12) of Rule-4 of OMMC

Rules, 2016 introducing disqualification clause is in the // 7 //

teeth of Article 13 of the Constitution of India, as the

same is arbitrary and ultra vires to Articles-14, 19(1)(g)

and 21 of the Constitution of India and repugnant to

Clause (i) of Sub-section (2) of the Section 18 of the

MMDR Act,1957 and inconsistent with GCD Rules,

1999. An alternative submission is also made that in

view of ambiguity and vagueness in Sub-rule (12) of

Rule-4 of OMMC Rules, 2016 regarding disqualification

of prospecting license/ mining lease application, the

same may be read down to exclude the prospecting

license application of the petitioner from being declared

"ineligible" as the prospecting license having been acted

upon and, in the instant case, the prospecting license is

deemed to have been granted in terms of 2nd proviso to

Sub-rule (1) of Rule-10 of the OMMC Rules, 2004 and/or

in view of the accrued right in terms of Section-6 of the

General Clauses Act, 1897 prior to the coming into force

of OMMC Rules, 2016 on 14.12.2016.

To substantiate his contentions, learned

counsel for the petitioners has relied upon the

judgments in New Okhla Industrial Development // 8 //

Authority (Noida) v. Yunus., AIR 2022 SC 847; S.L.

Srinivasa Jute Twine Mills Private Ltd. V. Union of

India, (2006) 2 SCC 740; Sangam Spinners v.

Regional Provident Fund Commissioner-I, AIR 2008

SC 739; Chintaman Rao v. State of Madhya Pradesh,

AIR 1951 SC 118; Index Medical College, Hospital

and Research Centre v. State of Madhya Pradesh,

AIR 2021 SC 3090 and Indian Social Action Forum v.

Union of India (UOI), AIR 2020 SC 1363.

4. Mr. P.P. Mohanty, learned Additional

Government Advocate appearing for the State-opposite

parties, vehemently contended that the petitioner-

company's application for grant of prospecting license for

granite, which was made on 06.04.2016, i.e., prior to

commencement of OMMC Rules, 2016 on 14.12.2016,

having remained pending and not been granted so far,

has become ineligible in terms of Rule 4(12) of the

OMMC Rules, 2016. As the petitioner-company has not

been granted with prospecting license, no vested right

has been created in its favour.

// 9 //

4.1 It is further contended that the provisions of

OMMC Rules, 2016 are the policy decision of the State

Government, which, inter alia, seeks to bring

transparency in the allocation of mineral concessions by

providing that the mineral concessions for granite and

all other minor minerals shall henceforth be granted

only through auction. Prior to the said policy decision,

prospecting license and mining lease for granite were

being granted under the provisions of the OMMC Rules,

2004 without competitive bidding through auction.

Therefore, in the OMMC Rules, 2016, it has been

provided for auction of Prospecting License-cum-Mining

Lease and Mining Lease for granite and all other minor

minerals which is in public interest, as it seeks to bring

transparency in the grant of minor mineral concessions.

But OMMC Rules, 2016 contain provisions for protecting

of vested rights of the applicants who have been granted

prospecting license and mining lease prior to

commencement of these Rules, as provided in Rule

4(13).

// 10 //

4.2 It is also contended that exceptions provided

in Rule 4(13) are similar to the provisions of Section 10

A (2) of the MMDR Act, 1957 and all applications for

major mineral concessions received prior to date of

commencement of the MMDR Amendment Act, 2015

(i.e.12.01.2015) have been declared as having become

ineligible subject to the exceptions provided under

Section 10 A (2) thereof. In view of such position, since

the petitioner-company was not granted prospecting

license and its application was pending, in view of Rule-

4(12) of the OMMC Rules, 2016, the application has

become ineligible. Therefore, no illegality or irregularity

has been committed by the authority by declaring so.

Consequently, the question of declaration of such Rules

as ultra vires does not arise, in view of fact that the same

has been issued in consonance with the provisions

contained under Section-10 A (2) of the MMDR Act,

1957. As such, OMMC Rules, 2016 has been framed

under the rule making power of MMDR Act, 1957.

Therefore, making pari materia provisions in the Rules

cannot be said to be ultra vires and as such, it has been // 11 //

done within the competency of the authority concerned.

Consequentially, it is contended that the writ petition

merits no consideration and the same should be

dismissed.

5. Mr. P.K. Parhi, learned Assistant Solicitor

General of India appearing for opposite party no.3

contended that there is no violation of any provisions, as

alleged, and, as such, no vested right can be accrued in

favour of the petitioner-company, when his application

for prospecting license is pending for consideration. In

the meantime, by operation of law if the application has

been declared ineligible, in that case the application so

submitted by the petitioner-company can also be

declared as ineligible i.e. in consonance with the

provisions of law and, as such, it cannot be construed

that it is ultra vires of any provision, as alleged.

5.1 He further contended that the GCD Rules,

1999 have been framed by the Central Government

under Section 18 of the MMDR Act, 1957, whereas

OMMC Rules, 2016 have been framed by the State // 12 //

Government under Section 15 of the MMDR Act, 1957

and both are different. Meaning thereby, OMMC Rules,

2016 are framed for regulating grant of mineral

concession in respect of minor minerals, whereas GCD

Rules, 1999 are framed regarding conservation and

systematic development of granite. Therefore, these two

Rules have been framed under two separate provisions

for two separate purposes, therefore, it cannot be said

that Sub-rules (4) and (12) of Rule-4 of the OMMC Rules,

2016 are inconsistent to the GCD Rules, 1999. Thereby,

it is contended that learned counsel appearing for the

petitioners has misconstrued the provisions of law and,

as such, the contention raised by learned counsel for the

petitioners, that provisions contained in Sub-rules (4)

and (12) of Rule-4 of the OMMC Rules, 2016 are ultra

vires to GCD Rules, 1999 and also Articles-14, 19 (1)(g)

and 21 of the Constitution of India, is absolutely

misconceived one. Therefore, the writ petition merits no

consideration and is liable to be dismissed.

6. This Court heard Mr. S. Nanda, learned

counsel for the petitioner; Mr. P.P. Mohanty, learned // 13 //

Additional Government Advocate appearing for the State-

opposite parties no.1 & 2; and Mr. P.K. Parhi, learned

Assistant Solicitor General of India appearing for

opposite party no.3, in virtual mode. Pleadings having

been exchanged between the parties, with the consent of

learned counsel for the parties the writ petition is being

disposed of finally at the stage of admission.

7. At the outset, it is apt to mention that Part-XI

of the Constitution of India deals with relations between

the Union and the States. Chapter-1 thereof states about

Legislative relations. Articles-245 & 246 of the

Constitution of India, which come under Chapter-1, read

as follows:

"245. Extent of laws made by Parliament and by the Legislatures of States-(1) Subject to the provisions of this Constitution, Parliament may make laws for the whole or any part of the territory of India, and the Legislature of a State may make laws for the whole or any part of the State. (2) No law made by Parliament shall be deemed to be invalid on the ground that it would have extra- territorial operation.

xxx xxx xxx

246. Subject-matter of laws made by Parliament and by the Legislatures of States.-(1) Notwithstanding anything in clauses (2) and (3), Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I in // 14 //

the Seventh Schedule (in this Constitution referred to as the "Union List").

(2) Notwithstanding anything in clause (3), Parliament and , subject to clause (1), the Legislature of any State [***], have power to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule (in this Constitution referred to as the "Concurrent List").

(3) Subject to clauses (1) and (2), the Legislature of any State [***] has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule (in this Constitution referred to as the 'State List').

(4) Parliament has power to make laws with respect to any matter for any part of the territory of India not included [in a State] notwithstanding that such matter is a matter enumerated in the State List".

8. Thus, Article 245 sets out the limits of the

legislative powers of the Union and the States from the

geographical or territorial angle. In other words, Article

245 of the Indian Constitution talks about the extent of

laws made by Parliament and by the Legislatures of

States. Article 246 of the Constitution deals with the

subject-matter of laws made by the Parliament and the

Legislatures of States. In other words, Article 246 of the

Constitution deals with the division of power between the

Union and the States. It demarcates the powers of the

Union and the State by classifying their powers into 3

lists. They are the Union List, the State List and the // 15 //

Concurrent List. Article-254 of the Constitution of India

postulates that in case there is inconsistency in the law

made by the Parliament and the law of the State

Legislature, the Central Legislation has to prevail.

9. As per Entry 54 of List-1 of the Seventh

Schedule (Article 246) of the Constitution of India, the

Parliament enacted the MMDR Act, 1957 and the Rules

framed thereunder. Entry 54 of List-1 reads as follows:

"Regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the pubic interest".

10. Entry 23 under List-II of the Seventh Schedule

of the Constitution of India empowers the State to frame

laws in the "State List" which reads as follows:

"Regulation of mines and mineral development subject to the provisions of List I with respect to regulation and development under the control of the Union".

11. At this juncture, it is of relevance to note some

of the relevant provisions of the MMDR Act, 1957.

// 16 //

Section-3 of the MMDR Act, 1957 deals with

definitions. Sub-sections-(e), (g) & (h) of Section-3, being

relevant for the purpose of the case, are extracted

hereunder:-

"(e) "minor minerals" means building stones, gravel, ordinary clay, ordinary sand other than sand used for prescribed purposes, and any other mineral which the Central Government may, by notification in the Official Gazette, declare to be a minor mineral;

xxx xxx xxx

(g) "prospecting license" means a license granted for the purpose of undertaking prospecting operations;

(h) "prospecting operation" means any operations undertaken for the purpose of exploring, locating or proving mineral deposits;

xxx xxx xxx"

Section-4 of MMDR Act, 1957 states prospecting or

mining operations to be under license or lease, whereas

Section-5 deals with restrictions on the grant of

prospecting licenses or mining leases. Section-6 states

about the maximum area for which a prospecting license

or mining lease may be granted, whereas Section-7 deals

with the period for which prospecting licenses may be

granted or renewed. Section-8 deals with the period for

which the mining leases may be granted or renewed, // 17 //

Section-9 envisages with regard to royalties in respect of

mining leases, Section-9(A) deals with dead rent to be

paid by the lessee, Section-9(B) deals with District

Mineral Foundation, whereas Section-9(C) deals with

National Mineral Exploration Trust. Under the procedure

for obtaining prospecting license or mining lease in

respect of the land in which the mineral is vested with

the government, Section-10 deals with application for

prospecting licenses or mining leases and Section10-A

envisages the rights of existing concession holders and

applicants, whereas 10-B deals with grant of mining

lease in respect of notified minerals through auction.

Section-14 of the MMDR Act, 1957 reads as

follows:

"14. [Sections 5 to 13] not to apply to minor minerals- The provisions of [sections 5 to 13] (inclusive) shall not apply to [quarry leases, mining leases or other mineral concessions] in respect of minor minerals".

In view of the aforesaid provisions, it is made clear that

Sections 5 to 13 are meant for grant of major mineral

concession and they do not apply to minor minerals.

// 18 //

Section-15 states about power of State

Governments to make rules in respect of minor minerals.

Section-18 deals with mineral development. Sub-section

(1) of Section-18 postulates the duty of the Central

Government to take all such steps as may be necessary

for the conservation and systematic development of

minerals in India and for the protection of environment

by preventing or controlling any pollution which may be

caused by prospecting or mining operations and for such

purposes the Central Government may, by notification in

the Official Gazette, make such rules as it thinks fit.

Sub-section-2(i) of Section 18 states about the regulation

of prospecting operations. Thereby, the Central

Government and State Government, by two different

sections, have been vested with the power to frame their

rules in their respective fields.

12. In exercise of powers conferred by Sub-section

(1) of Section 15 of the MMDR Act, 1957, the State

Government made rules for regulating the grant of

mineral concessions in respect of minerals and for the

purposes connected therewith, called "Orissa Minor // 19 //

Minerals Concession Rules, 2004". Sub-rule (l) of Rule-2

defines "Granite" which reads as follows:

(l) "Granite" means dolerites, granite gneisses, migmatites, gabbros, anorthosites, rhyolites, syenites, leptynites, charnockites and other igneous and orthometamorphic rock types which are-

(i) amenable to be recovered as dimensional stone;

(ii) capable of taking polish; and

(iii) commercially exploitable".

Sub-rule (q) of Rule-2 reads as follows:

"(q) "prospecting license" means a license granted for the purpose of undertaking any operation for the purpose of exploring, locating or proving the deposits of decorative stones over a compact area;"

Rule-3 deals with restriction on prospecting/ mining/

quarrying operation. Rule-4 deals with restrictions on

grant of prospecting licenses or mining/quarry leases or

its renewal.

13. Chapter-II of OMMC Rules, 2004 deals with

grant of prospecting license for decorative stone. Rule-9

thereof states about application for prospecting license

and Rule 9(1) states an application for prospecting

license shall be made to the Director in Form-A in

triplicate through the Deputy Director or the Mining // 20 //

Officer having jurisdiction and shall be accompanied

with the documents prescribed under Rule-9(1) (i) to (xi).

Under Sub-rule (2) of Rule-9, every application received

by the Deputy Director/Mining Officer shall be entered in

the register of application for prospecting license in

Form-B and also acknowledgement receipt shall be

provided in Form-C as per sub-rule (3)(b) of Rule-9.

14. Rule-10 deals with disposal of the application.

Sub-rule (1) of Rule-10 reads as follows:

"(1) No application shall be granted unless the applicant submits the income-tax clearance certificate and sales-tax clearance certificates or non-assessment certificates in original and no objection of the concerned Tahasildar on revenue point of view and the concerned Gram Panchayat for grant of prospecting license:

Provided that the Mining Officer/Deputy Director of the respective jurisdiction shall seek a report from concerned Tahasildar on revenue point of view, Divisional Forest Officer on forest point of view and in case of Scheduled Area, from the concerned Gram Panchayat in the interest of tribal development of the area before forwarding the application to the Director for his consideration:

Provided further that in case the views of the Tahasildar and the concerned Gram Panchayat is not received within a period of two months of receipt of intimation, it would be deemed that the Tahasildar/Gram Panchayat has no objection for grant of prospecting license".

// 21 //

As per second proviso, it is made clear that in case the

views of the Tahasildar and the concerned Gram

Panchayat are not received within a period of two

months of receipt of intimation, it would be deemed that

the Tahasildar/Gram Panchayat has no objection for

grant of prospecting license. Therefore, the provision is

very clear to the extent that if no views are received from

the Tahasildar or the concerned Gram Panchayat within

a period of two months on receipt of the intimation, then

only it would be deemed that the Tahasildar/Gram

Panchayat has no objection for grant of prospecting

license. There is no provision emphasizing the fact that

the prospecting license has already been granted.

15. "No objection" for grant of prospecting license

stands altogether on a different footing than that of

"deemed grant of prospecting license" in favour of the

applicant and thereby the petitioner has misconstrued

the provision of deemed grant of prospecting license in

his favour due to non-receipt of any objection from the

Tahasildar/Gram Panchayat within a period of two

months. Therefore, the argument to that extent advanced // 22 //

by learned counsel for the petitioners cannot have any

justification so as to enlarge the scope of the provision,

which is very clear and unambiguous. On plain reading

of the provision of the statute, it conveys the language

implies that if no views are received from the

Tahasildar/Gram Panchayat within a period of two

months of receipt of the intimation, it would be deemed

that the Tahasildar/Gram Panchayat has no objection

for grant of prospecting license. Therefore, the language

is very plain and simple and there is no ambiguity and it

should be applicable in the manner as has been placed

in the Statute.

16. Rule-11 of OMMC Rules, 2004 deals with

refusal of application for a prospecting license and Sub-

rule (1) whereof states that the Director may, after giving

an opportunity of being heard and for reasons to be

recorded in writing and communicated to the applicant,

refuse to grant or renew a prospecting license over the

whole or part of the area applied for. In the present case,

that stage has not yet come. Admittedly, the application

submitted by the petitioner-company for grant of // 23 //

prospecting license was received in prescribed Form-A

and the same was entered in the Register of application

for prospecting license in Form-B. Accordingly,

acknowledgement was granted in Form-C in view of

Rule-9(2) of the OMMC Rules, 2004. At best it can be

said that the application for grant of prospecting license

is pending. At no stretch of imagination, it can be said

that there is deemed grant of prospecting license in

favour of the petitioner-company. Therefore, all other

arguments which have been advanced by learned

counsel for the petitioners cannot have legs to stand

when such application is pending for consideration.

17. Rule-80 of the Rules, 2004 deals with repeal

and savings. By commencement of OMMC Rules, 2004,

the earlier Rules, i.e. OMMC Rules, 1990 were repealed.

Sub-rule (2) of Rule-80 states that notwithstanding such

repeal anything done, any action taken or order passed

under the rules so repealed shall be deemed to have

been done, taken or passed under the corresponding

provisions of these rules, and shall be brought into

conformity with the provisions of these rules within three // 24 //

months from such commencement or such further time

as the Government may specify in this behalf. Thereby,

any order or any step taken under the OMMC Rules,

1990 has been protected under Sub-rule (2) of Rule-80

even after commencement of OMMC Rules, 2004.

18. In exercise of powers conferred by Sub-section

(1) of Section 15 of the Mines and Minerals (Development

and Regulation) Act, 1957 and in supersession of the

provisions contained in the Odisha Minor Mineral

Concession Rules, 2004, except as respects things done

or omitted to be done before such supersession, the

State Government framed rules for regulating the grant

of mineral concessions in respect of minor minerals and

for the purposes connected therewith, called "Odisha

Minor Mineral Concession Rules, 2016" (for short '

OMMC Rules, 2016'), which commenced from

14.12.2016.

19. The expressions 'decorative stone', 'granite'

and 'prospecting license-cum-mining lease', as have been

defined under Rule-2 (h),(n) and (t) are quoted below:-

// 25 //

"(h) "Decorative stone", means all types of granites as defined in the Granite Conservation and Development Rules, 1999 and any other rock suitable for decorative or export purpose including dimension stone.

xxx xxx xxx

(n) "Granite" means dolerites, granite gneisses, migmatites, gabbros, anorthosites, rhyolites, syenites, leptynites, charnockites and other igneous and orthometamorphic rock types which are-

(i) amenable to be recovered as dimensional stone.

(ii) capable of talking polish, and

(iii) commercially exploitable.

xxx xxx xxx

(t) "Prospecting license-cum-mining lease" means a two stage concession granted for the purpose of undertaking prospecting operation in respect of specified minor minerals followed by mining operation over a compact area."

20. Rule-4 of OMMC Rules, 2016, deals with

restriction on grant of prospecting license-cum-mining

lease or mining lease or quarry lease or quarry permit.

Rule-4 (4), (12) and (13), being relevant, are extracted

hereunder:-

xxx xxx xxx

"(4) No prospecting license-cum-mining lease shall be granted for a specified minor mineral over any area unless it is satisfied that the reconnaissance survey (G4 level) has been carried out over the area applied for to establish availability of mineral therein or evidence of // 26 //

mineral in the area has been established otherwise:

Provided that this provision shall not be applicable for areas in which mining has been carried out in the past under a mining lease.

xxx xxx xxx

(12) All applications for prospecting license and mining lease for specified minor minerals received prior to the date of commencement of these rules shall become ineligible.

(13) Notwithstanding anything contained in sub- rule (12), the following applications shall remain eligible for grant of mining lease under these rules:

(a) Where before the commencement of these rules, a prospecting licensee has been granted in respect of any land for any specified minor mineral, the licensee shall have the right to obtain mining lease in respect of that mineral in that land, if the State Government is satisfied that the licensee,

(i) has undertaken prospecting operations to establish the existence of mineral contents in such land in accordance with the provisions applicable during the period of license.

(ii) has not committed any breach of the terms and conditions of the license,

(iii) has not become ineligible for grant of mining lease,

(iv) has not failed to apply for grant of mining lease within a period of three months after the expiry of prospecting license or such further period as may be extended by the State Government.

(b) Where the State Government has communicated order (terms and conditions) to grant a mining lease before commencement of these rules, the mining lease shall be granted // 27 //

subject to fulfillment of terms and conditions of the grant order within the time stipulated in the grant order or such further time, not exceeding two years, as may be extended by the State Government".

In view of aforesaid provisions, it is made clear that no

prospecting license-cum-mining lease shall be granted

for a specified minor mineral over any area unless it is

satisfied that the reconnaissance survey (G4 level) has

been carried out over the area applied for to establish

availability of mineral therein, whereas Sub-rule (12)

contends that all applications for prospecting license and

mining lease for specified minor minerals received prior

to the date of commencement of these rules shall become

'ineligible' and Sub-rule (13) gives a rider to Sub-rule

(12) contending that notwithstanding anything contained

in Sub-rule (12), the applications shall remain eligible for

grant of mining lease. Admittedly, the application for

prospecting license and mining lease for 'granite' was

submitted by the petitioner-company on 08.04.2016, i.e.,

prior to commencement of OMMC Rules, 2016 w.e.f.

14.12.2016. Thereby, such application has become

'ineligible' but if the conditions stipulated in Sub-rule (a) // 28 //

of Rule-13 (i) to (iv) is adhered to, then that cannot be

construed to be ineligible, rather that is eligible for grant

of mining lease. As such, none of the conditions

mentioned therein specified so far as the application of

petitioner-company is concerned. Thereby, invoking

Rule-4(12) of OMMC Rules, 2016, the application for

prospecting license received on 08.04.2016 prior to

commencement of OMMC Rules, 2016, became

ineligible. Rule-4(12) is no way inconsistent with any of

the provisions rather it is in consistent with Section-10 A

(2) of the MMDR Act, 1957.

21. Rule-66 of OMMC Rules, 2016 deals with

transitory provisions, which reads as follows:

"66. Transitory provisions:- (1) Notwithstanding anything contained in these rules, the existing lessees of such of the specified minor minerals which were major minerals on the date of coming into force of the Mines and Minerals (Development and Regulaton) Amendment Act, 2015 (11 of 2015) shall be eligible for extension of the validity period of lease for such period and subject to such conditions as provided in Section 8A of the Mines and Minerals (Development and Regulation) Act, 1957.

(2) Notwithstanding anything to the contrary contained in these rules, the applicants for mineral concessions in respect of such of the specified minor minerals, which were major minerals on the date of coming into force of the Mines and Minerals (Development and Regulation) Amendment Act, 2015 (11 of 2015), and whose applications have remained eligible under the provisions of the sub-section (2) of // 29 //

Section 10A of the Act, shall remain eligible for grant of mineral concession for such period as prescribed under rule 8 of these rules subject to satisfaction of conditions prescribed in sub-rule (13) of rule 4 of these rules".

Under Sub-rule (2) of Rule-66, it is made clear that the

applicants for mineral concessions in respect of such of

the specified minor minerals, which were major minerals

on the date of coming into force of the Mines and

Minerals (Development and Regulation) Amendment Act,

2015 w.e.f. 12.01.2015 and whose applications have

remained eligible under the provisions of the Sub-section

(2) of Section 10A of the Act, shall remain eligible for

grant of mineral concession.

22. Initially, 'granite' was coming under the major

minerals, but after commencement of MMDR

Amendment Act, 2015, 'granite" has been considered as

minor mineral. Thereby, the application filed has to be

protected by virtue of such provision and this benefit is

made available to the petitioner. As such, considering

'granite' as minor mineral, the petitioner-company

submitted application under Rule-9 of OMMC Rules,

2004 and its application was duly acknowledged by // 30 //

taking follow up action. But in the meantime, since

OMMC Rules, 2016 came into force w.e.f. 14.12.2016, in

view of the provisions contained under Rule-4(12) of the

said Rules, the application of the petitioner-company

became ineligible. Thereby, no illegality or irregularity

has been committed by the authority and, as such, there

is no violation of any provisions of law so as to declare

the provisions contained in Sub-rule (12) of Rule-4 of

OMMC Rules, 2016 as ultra vires. Much argument has

been advanced by learned counsel for the petitioners

before this Court that because of pendency of application

for grant of prospecting license, a vested right has been

accrued in favour of the petitioner, that itself is

misconceived one.

23. So far as challenge to Sub-rule (12) of Rule-4

of OMMC Rules, 2016 is concerned, it is contended that

it carries with manifest arbitrariness, unreasonableness,

discriminatory and also violates fundamental rights and,

therefore, the same is in teeth of Article 13 of the

Constitution of India.

// 31 //

Looking at the provisions of Article-13 of the

Constitution of India, it would appear that the main

object of Article-13 is to secure the primacy of the

Constitution in regard to the fundamental rights. The

first clause relates to the laws already existing in force

and declares that pre-Constitution laws are void to the

extent to which they are inconsistent with the

fundamental rights. The second clause relates to post-

Constitution laws and prohibits the State from making a

law which either takes away totally or abrogates in part a

fundamental right. The expression "the State" is to be

construed in conformity with Article 12 as judicially

interpreted. It is further contended that the said sub-

rule (12) of Rule-4 of OMMC Rules, 2016 has to be

declared as ultra vires to Articles 14, 19(1)(g) and 21 of

the Constitution of India in view of deeming provision

and also accrued rights. As has been discussed above,

the petitioner has been misconstrued the deeming

provision contained in proviso to Rule-10 of OMMC

Rules, 2004 and as such, no right has been accrued in

favour of the petitioner-company, because no // 32 //

prospecting license has been granted to the petitioner-

company. Rather, the provision is very clear that in case

the views of the Tahasildar and the concerned Gram

Panchayat are not received within a period of two

months of receipt of intimation, it would be deemed that

the Tahasildar/Gram Panchayat has no objection for

grant of prospecting license. That does not mean,

prospecting license has been granted to the petitioner-

company. Mere expression of no objection for grant of

prospecting license by the Tahasildar/Gram Panchayat,

cannot be construed to be granting prospecting license

in favour of the petitioner-company. Under

misconception and misconstruction of the provisions,

the petitioner-company cannot take advantage

contending that a right has been accrued in its favour in

view of deeming provision.

24. More so, the contention raised, that

delay/inaction on the part of the State cannot take away

the vested right of the petitioner-company, has no force

at all. When no right has yet been vested with the

petitioner-company by granting prospecting license, in // 33 //

that case question of delay/ inaction on the part of the

State cannot be taken into consideration. More so, the

application for prospecting license was filed only on

08.04.2016 by following due process. The same was

scrutinized by two different authorities, namely, revenue

and forest authorities and when the same was pending

for consideration for grant of prospecting license, the

other follow up action as per the rules were taken. In the

meantime, the OMMC Rules 2016 came into force with

effect from 14.12.2016. Thereby, by operation of law, the

application filed by the petitioner-company for grant of

prospecting license became ineligible. Therefore, the

entire argument advanced by learned counsel for the

petitioner with regard to 'vested right', 'accrued right'

and 'deeming provision' are absolutely misconceived one

and more so reference made with regard to transitory

provision and saving clause, the benefit of which cannot

be admissible to the petitioner-company so as to raise

such contention before this Court. Thereby, the

argument so advanced by learned counsel for the

petitioner cannot sustain in the eye of law.

// 34 //

25. It was further contended by learned counsel

for the petitioners that Rule-4(4) of the OMMC Rules,

2016 is repugnant to Rule-4 of the GCD Rules, 1999 and

ultra vires to the MMDR Act, 1957. Rule-4 of the GCD

Rules, 1999 reads as follows:

"4. Prospecting to precede mining operations.- No lease shall be granted by the State Government unless it is satisfied that there is evidence to show that the area for which the lease is applied for has been prospected earlier for granite or the existence of granite therein has been established otherwise".

On perusal of the aforesaid provision, it appears that

there is no contradiction between the provision of Rule-4

of the GCD Rules, 1999 and Rule-4(4) of the OMMC

Rules, 2016. Rule-4 of the GCD Rules, 1999 provides

that the existence of granite should be evident in the

area for grant of mining lease. Similarly, Rule-4(4) of the

OMMC Rules, 2016 provides that reconnaissance survey

(G4 level) should be carried out over the area applied or

to establish availability of mineral therein or evidence of

mineral in the area should be established otherwise in

the area for grant of prospecting license-cum-mining

lease in the area. The State Governments are empowered

to make rules for regulation of the grant of mineral // 35 //

concession in respect of minor minerals under Section

15 read with Section 14 of the MMDR Act, 1957.

Thereby, neither the provision of the MMDR Act, 1957

nor the GCD Rules, 1999 is a bar to the State

Government from inserting any mandatory provision in

respect of minor minerals for regulating the grant of

quarry leases or mining leases and for the purposes

connected therewith. As such, there exists legislative

competency to frame such rules. Therefore, it cannot be

declared as ultra vires to any provisions of the Statute or

the Constitution. The matters relating to regulation of

grant of concessions for minor minerals, as explained,

comes under the legislative and administrative

jurisdiction of the State. As a consequence thereof, the

contention of the petitioner-company cannot sustain in

the eye of law and accordingly, the same cannot be

accepted.

26. Considering the same from another angle, it is

made clear that the provisions contained in OMMC

Rules, 2016 are the policy decision of the State

Government, which, inter alia, seek to bring // 36 //

transparency in the allocation of mineral concessions by

providing that the mineral concessions for granite and

all other minor minerals, shall be granted only through

auction. Prior to this Policy decision, prospecting license

and mining lease for granite were being granted under

the provisions of the OMMC Rules, 2004 without

competitive bidding through auction. In the OMMC

Rules, 2016, it has been provided for auction of

prospecting license-cum-mining lease and mining lease

for granite and all other minor minerals which is in

public interest as it seeks to bring transparency in the

grant of minor mineral concessions. But, OMMC Rules,

2016 contain provisions for protecting of vested rights of

the applicants who have been granted prospecting

license and mining lease prior to commencement of

these rules as provided under Rule 4(13). The exceptions

provided in Rule 4(13) are similar to the provisions of

Section 10A(2) of the MMDR Act, 1957 and all

applications for major mineral concessions received prior

to date of commencement of the MMDR Amendment Act,

2015 have been declared as having become ineligible // 37 //

subject to the exceptions provided under Section 10A(2)

thereof. Similarly, all applications received prior to

commencement of OMMC Rules, 2016, i.e. 14.12.2016,

have become ineligible subject to exception provided

under Sub-rule (13) of Rule-4 OMMC Rules 2016 and

the petitioner does not fall within the exception clause of

Rule-4(13) so as to claim the benefit and, as such, the

application submitted by the petitioner-company for

grant of prospecting license, being pending, it comes

under the fold of Rule-4(12). Thereby, it has become

ineligible, reason being the OMMC Rules, 2016,

providing among other things, auction as the only

method of settlement/grant of prospecting license and

mining lease of minor mineral is the outcome of judicial

dictum and to achieve the above said objective.

27. Rule-52 of the GCD Rules, 1999 provides that

the provisions of the Minor Mineral Concession Rules or

any other rules framed by the State Government under

Section 15 of the MMDR Act, 1957 shall be applicable to

granite quarry leases to the extent they are not

repugnant to or inconsistent with the GCD Rules, 1999.

// 38 //

There is no such provision in the GCD Rules, 1999 that

prohibits the State Government from taking policy

decision to grant the license or leases through

competitive bidding and from prescribing the procedure

for grant of prospecting license. Therefore, the OMMC

Rules, 2016 cannot be considered to be repugnant to the

provisions of the GCD Rules, 1999 insofar as the same

provides for auction of prospecting license-cum-mining

lease/mining lease for granite and declaration of pending

prospecting license applications as ineligible.

Furthermore, due procedure has been followed in

framing the OMMC Rules, 2016 and that the

requirement of Section-28 of MMDR Act, 1957 has also

been complied with, as the said rules have been laid

before the State Legislative Assembly. Thereby, no

illegality or irregularity has been committed in framing

OMMC Rules, 2016 and, as such, the prayer made to

declare the same as ultra vires cannot sustain in the eye

of law.

28. In C.C.S.U. v. Min., (1984) 3 AII ER 935, it

has been held that it is not for the Courts to determine // 39 //

whether a particular policy or particular decision taken

in fulfillment of that policy are fair. They are concerned

only with the manner in which those decisions have

been taken, if that manner is unfair, the decision will be

tainted with what LORD DIPLOCK labels as 'procedural

impropriety'.

29. In Sangwan v. Union of India, (1980) Supp.

SCC 559 : AIR 1981 SC 1545, the apex Court held that

though in the absence of any statutory fetter, the

Government, in the exercise of its executive power, is

competent to change its policy, even then a change in

policy must be made fairly and should not give the

impression that it was so done arbitrarily or by any

arbitrary criteria.

If the Government, as a matter of principle,

decided to go for auction in the public interest and

declare the pending applications are ineligible in

consonance with the provisions contained in Rule-4(12)

that cannot be construed as arbitrary, unreasonable and

contrary to the provision of Articles-14 and 19(1)(g) of // 40 //

the Constitution of India. More so, in regard to relative

merits of different economic policies, the Court cannot

examine the same and it cannot strike down one policy

on the ground that another policy would be fairer and

better. In the case of policies, as a matter of good

governance and administration, wherever policy decision

are taken, it is desirable that there should be wide range

of consultation including considering the representation,

but law do not require that there should be a hearing

before a decision taken. It has held that such hearing is

also impossible in public interest and also impracticable.

30. In New Okhla Industrial Development

Authority (supra), the apex Court held that when a legal

fiction is employed by the legislature, it becomes a duty

of the Court to interpret it and to give it meaning. In

gleaning its meaning, the Court is duty bound to

ascertain the purpose of this legislative device. It is

further held that it is the bounden duty of the Court to

ascertain for what purpose the legal fiction has been

created. It is also the duty of the Court to imagine the

fiction with all real consequences and instances unless // 41 //

prohibited from doing so. The use of the term "deemed"

has to be read in its context and further the fullest

logical purpose and import are to be understood. It is

because in modern legislation, the term "deemed" has

been used for manifold purposes.

In view of the discussion made above, this

judgment has no application to the petitioners, rather it

supports the case of the opposite parties.

31. In S.L. Srinivasa Jute Twine Mills P. Ltd.

(supra), the apex Court, considering the effect of repeal

and taking into consideration Section 6 of the General

Clauses Act, 1897, held that unless a different intention

appears, the repeal shall not affect any right, privilege,

obligation or liability acquired, accrued or incurred

under any enactment so repealed. The effect of

commencement of OMMC Rules, 2016 is the same. As

such, the said judgment is not applicable to the

petitioners. There is no vested right accrued in favour of

the petitioner-company merely filing an application for

grant of prospecting license pending for consideration.

// 42 //

32. In Sangam Spinners (supra), interpretation

of Section-6 of the General Clauses Act, 1897 also taken

into consideration so far as effect of repeal is concerned

in Chintaman Rao (supra), wherein the provision is

declared to be ultra vires has been considered and the

question for decision is whether the statute under the

guise of protecting public interests arbitrarily interferes

with private business and imposes unreasonable and

unnecessarily restrictive regulations upon lawful

occupation; in other words, whether the total prohibition

of carrying on the business of manufacture of bidis

within the agricultural season amounts to a reasonable

restriction on the fundamental rights mentioned in

Article-19(1)(g) of the Constitution. While considering the

meaning of 'reasonable restriction', the apex Court held

that the orders issued by the Deputy Commissioner are

void, inoperative and ineffective. As such, the said

judgment has been considered all together on a different

context on the factual matrix of the said case. Thereby,

the same cannot have any application to the present

case.

// 43 //

33. In Index Medical College, Hospital and

Research Centre (supra), the apex Court held that

regarding admission of medical students, where

prescribing medical institutions from filling up seats

which fall vacant due to candidates in mop-up round not

taking admission or submitting resignation after taking

admission amounts to unreasonable restriction. But the

factual matrix of the said case is completely different

from the present case.

34. In P.R. Aiyar, Advanced Law Lexicon, Vol.4

(2005) 4796 and Encyclopedic Law Lexicon, Vol. 4

(2009) 4838-4839 the expression "ultra vires" has been

defined to mean beyond power or authority or lack of

power. An act may be said to be "ultra vires" when it has

been done by a person or a body of persons which is

beyond his, its or their power, authority or jurisdiction.

35. Wade & Forsyth, Administrative Law

(2009) states "ultra vires" relates to capacity, authority

or power of a person to do an act. It is not necessary that

an act to be ultra vires must also be illegal. The act may // 44 //

or may not be illegal. The essence of the doctrine of ultra

vires is that an act has been done in excess of power

possessed by a person.

36. D.D. Basu, Administrative Law (1993) 94

states that whenever any person or body of persons,

exercising statutory authority, acts beyond the powers

conferred upon him or them by statute, such act

becomes ultra vires and, accordingly, void. In other

words, substantive ultra vires means the delegated

legislation goes beyond the scope of the authority

conferred on it by the parent statute. Therefore, it is a

fundamental principle of law that a public authority

cannot act outside the powers, i.e. ultra vires, and it has

been rightly described as "the central principle" and

"foundation of large part of administrative law". Thereby,

an act which is for any reason in excess of power is ultra

vires.

37. Schwartz Administrative Law (1984) states

as follows:

"If an agency acts within the statutory limits (intra vires), the action is valid; if it acts outside (ultra // 45 //

vires), it is invalid. No statute is needed to establish this; it is inherent in the constitutional position of agencies and courts".

Power delegated by statute is limited by its terms and

subordinate to its objects. The delegate must act in good

faith, reasonably, intra vires the power granted and on

relevant consideration of material facts. All his decisions

must be in harmony with the Constitution and other

laws of the land.

38. In Daymond v. S.W. Water Authority, (1976)

1 All E.R. 1039 (H.L.), it is held that in order to

determine whether the subordinate legislation exceeds

the power granted by the Legislature, the Court has to

interpret the enabling statue.

The above view has also been taken in Hotel

Industry Board v. Automobile Ltd. (1969) 2 All E.R.

582 H.L. and McEldowney v. Forde, (1969) 2 All E.R.

1039.

39. In Durga Prasad v. Suptd., AIR 1966 S.C.

1209, the apex Court held that where the authority to

make a Rule is conferred for exercising a particular // 46 //

power, the Court would not construe the Rule in such

manner as to include a separate and independent power.

40. In U.S. v. Eaton, (1892) 144 U.S. 677, it is

held that subordinate law-making body cannot go

beyond the policy laid down in the statue, so as to alter

or amend the law.

The same view has also been taken in U.S. v.

Grimand, (1911) 220 U.S. 506.

41. In U.S. v. Two Hundred Barrels of Whiskey,

(1877) 95 U.S. 571, it is held that the purpose of

subordinate legislation is to carry into effect the existing

law and not to change it.

The same view has also been taken by the

apex Court in Venkateswara v. Govt. of A.A., AIR 1966

SC 629.

42. There is always a presumption in favour of

constitutionality, and a law will not be declared

unconstitutional unless the case is so clear as to be free

from doubt; "to doubt the constitutionality of a law is to

resolve it in favour of its validity". Where validity of a // 47 //

statute is questioned and there are two interpretations,

one of which will make the law valid and the other void,

the former must be preferred and the validity of the law

upheld.

43. In Karnataka Bank Ltd. v. State of A.P.,

(2008) 2 SCC 254, the apex Court held in pronouncing

on the constitutional validity of a statute, the Court is

not concerned with the wisdom or un-wisdom, the

justice or injustice of the law. If that which is passed into

law is within the scope of the power conferred on a

Legislature and violates no restrictions on that power,

the law must be upheld whatever a Court may think of

it. The parent act may be unconstitutional on several

grounds, i.e. (i) excessive delegation; or (ii) breach of a

Fundamental Right; or (iii) on any other ground such as,

distribution of powers between the Centre and the State.

44. In Hinsa Virodhak Sangh v. Mirzapur Moti

Kuresh Jamat, (2008) 5 SCC 33, the apex Court held

that there is presumption in favour of constitutionality of

statutes as well as delegated legislation and it is only // 48 //

when there is clear violation of constitutional provision

(or of a parent statute, in the case of delegated

legislation) beyond reasonable doubt that the Court

should declare it to be unconstitutional.

45. In Indian Express Newspapers v. Union of

India, (1985) 1 SCC641 : AIR 1986 SC 515, the apex

Court held as follows:

"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".

46. In J.K. Industries Limited v. Union of

India, (2007) 13 SCC 673, relying upon the aforesaid

judgment in the case of Indian Express Newspaper

(supra), the apex Court held that, any inquiry into its

vires must be confined to the grounds on which plenary

legislation may be questioned, to the grounds that it is // 49 //

contrary to the statute under which it is made, to the

grounds that it is contrary to other statutory provisions

or on the ground that it is so patently arbitrary that it

cannot be said to be inconformity with the statute. It can

also be challenged on the ground that it violates Article

14 of the Constitution. The apex Court also further held

that a subordinate legislation may be struck down as

arbitrary or contrary to the statute if it fails to take into

account the vital facts which expressly or by necessary

implication are required to be taken into account by the

statute or the Constitution. This can be done on the

ground that the subordinate legislation does not conform

to the statutory or constitutional requirements or that it

offends Article 14 or Article 19 of the Constitution.

It is also further clarified in the said judgment

that where the validity of subordinate legislation is

challenged, the question to be asked is whether the

power given to the rule making authority is exercised for

the purpose for which it is given. Before reaching the

conclusion that the Rule is intra vires, the court has to

examine the nature, object and the scheme of the // 50 //

legislation as a whole and in that context, the Court has

to consider, what is the area over which powers are given

by the section under which the Rule Making Authority is

to act. However, the Court has to start with the

presumption that the impugned Rule is intra vires. This

approach means that, the Rule has to be read down only

to save it from being declared ultra vires if the court

finds in a given case that the above presumption stands

rebutted. The basic test is to determine and consider the

source of power, which is relatable to the rule. Similarly,

rule must be in accordance with the parent statute as it

cannot travel beyond.

47. In State of Uttar Pradesh v. Renusagar, AIR

1988 SC 1737: (1988) 4 SCC 59, the apex Court held

that if the exercise of power is in the nature of

subordinate legislation, the exercise must conform to the

provisions of the statute. All the conditions of the statute

must be fulfilled.

48. The doctrine of "ultra vires" has two aspects,

(1) substantive ultra vires and (2) procedural ultra vires.

// 51 //

In view of law laid down by the apex Court in Indian

Express Newspapers (supra), it becomes clear that a

delegated legislation may be challenged on the ground of

substantive ultra vires in the following circumstances:

"1.Where parent Act is unconstitutional;

2.Where parent Act delegates essential legislative functions;

3. Where delegated legislation is inconsistent with parent Act;

4. Where delegated legislation is inconsistent with general law;

5. Where delegated legislation is unconstitutional is unconstitutional;

6. Where delegated legislation is arbitrary;

7. Where delegated legislation is unreasonable;

8. Where delegated legislation is mala fide;

9. Where delegate further delegates (sub- delegation);

10. Where delegated legislation excludes judicial review; and

11. Where delegated legislation operates retrospectively".

49. In Indian Council of Legal Aid and Advice

v. Bar Council of India, AIR 1995 SC 691: (1995) 1

SCC 732, the apex Court held that to apply the doctrine

of substantive ultra vires, the Court first interprets the

relevant statutory provisions to determine the scope of

delegation of power and then interprets the impugned

delegated legislation and finally adjudge whether the // 52 //

same is within, or without, the statutory power

conferred.

50. In Lohia Machines Ltd. v. Union of India,

AIR 1985 SC 421: (1985) 2 SCC 197, the apex Court held

that declaring delegated legislation ultra vires also

becomes difficult because of judicial attitude. The

judicial policy generally is to interpret the delegating

provision rather broadly.

51. In Om Prakash v. State of U.P., (2004) 3

SCC 402 : AIR 2004 SC 1896, basing reliance on H.C.

Suman v. Rehabilitation Ministry Employees'

Cooperative Housing Building Society Ltd. (1991) 4

SCC 485 : AIR 1991 SC 2160, the apex Court held that

Courts should be slow to interfere with byelaws made by

public representative bodies unless they were manifestly

partial and unequal in operation or unjust, mala fide or

effect unjustified interference with liberty.

52. In Kunj Behari Lal Butail v. State of

Himachal Pradesh, AIR 2000 SC 1069 : (2000) 3 SCC

40, the apex Court held that often the rule-making power // 53 //

is conferred without specifying the purposes as such, but

generally "for carrying out the purposes of the Act." This

is a general delegation without laying down any

guidelines. This power cannot be so exercised in such a

way as to bring into existence substantive rights or

obligations or disabilities not contemplated by the parent

Act itself.

53. In Laghu Udhyog Bharati v. Union of India

(1999) 6 SCC 418, it was held by the apex Court that

when the Act confers rule making power for carrying out

purposes of the Act, rules cannot be so framed as not to

carry out the purpose of the Act or be in conflict with the

same. Legal effect of the formula is to confer a plenary

power on the delegate to make rules subject to the

overall requirement that the rules made ought to have a

nexus with the purpose of the Act.

54. In Kerala Samsthana Chethu Thozhilali

Union v. State of Kerala, (2006) 4 SCC 327 : AIR 2006

SC 3480, the apex Court considered the Court's power

and held when such a power is given, the Court seeks to // 54 //

ascertain the purpose of the enactment and then to

ascertain whether the rules framed further that purpose.

A rule may be held as ultra vires if it has no nexus with

the purpose of the parent Act or if it scuttles the same.

55. The efficacy of judicial control of delegated

legislation is very much dependant on how broad is the

statutory formula conferring power of delegated

legislation on the delegate. Usually, the application of the

ultra vires rule becomes very difficult in practice because

of three main reasons;

(1) Powers are usually delegated in broad language;

(2) Generally speaking, the courts interpret the enabling provision rather broadly;

(3) The courts adopt a deferential, rather than a critical, attitude towards delegated legislation and, thus, lean towards upholding the same.

56. In Goodricke Group Ltd. V. State of West

Bengal, 1995 Supp (1) SCC 707, the apex Court held

that "entries in the Seventh Schedule to the Constitution

are legislative heads or fields of legislation. The

legislature derives its power from Article 246 of the // 55 //

Constitution and not from the respective entries. The

language of the respective entries, therefore, should be

given widest meaning. It is well-recognized that where

there are three lists containing a large number of entries,

there is bound to be some overlapping among them. In

such a situation, the rule of "pith and substance" has to

be applied to determine the competence of the

legislature. Each general word should be held to extend

to all ancillary or subsidiary matters which can fairly

and reasonably be comprehended in it".

57. In Jilubhai Nanbhai v. State of Gujarat,

1995 Supp (1) SCC 596: AIR 1995 SC 142, the apex

Court held as follows:

"It must be remembered that we are interpreting the Constitution and when the Court is called upon to interpret the Constitution, it must not be construed in any narrow or pedantic sense and adopt such construction which must be beneficial to the amplitude of legislative powers. The broad and liberal spirit should inspire those whose duty is to interpret the Constitution to find whether the impugned Act is relatable to any entry in the relevant list".