IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED 27.04.2009 CORAM THE HONOURABLE MR. JUSTICE K. RAVIRAJA PANDIAN AND THE HONOURABLE MR. JUSTICE M.M.SUNDRESH W.P. NOS.23317 and 24211 OF 2008 D.Sivakumar .. Petitioner (in W.P.23317/2008) A.Chandrasekaran .. Petitioner (in W.P.24211/2008) Versus 1.The Government of Tamil Nadu Rep. by its Secretary to Government Industries Department Fort St. George Chennai – 600 009. 2.The Secretary to Government Public Works Department Fort St. George Chennai – 600 009. 3.Director of Geology and Mining Guindy, Chennai – 600 032. 4.The District Collector Krishnagiri District Krishnagiri. .. Respondents (in W.P.23317 & 24211/2008) PRAYER : Petitions filed Under Article 226 of the Constitution of India praying to issue a Writ of Declaration, to declare Rule 38-B of the Tamil Nadu Minor Mineral Concession Rules, 1959 and introduced by G.O.Ms.No.158, Industries (MMC I) Department dated 25.08.2008 as illegal, ultra vires, Section 15 of the Mines and Minerals (Development and Regulation) Act, 1957 and Article 14, 19 (1)(g) and 301 to 304 of the Constitution of India. https://hcservices.ecourts.gov.in/hcservices/ For Petitioner : Mr.V.T.Gopalan Senior Counsel for Mr.K.Ramakrishna Reddy For Respondents: Mr.P.S.Raman Additional Advocate General for Mr.S.M.Hasan Fizal Government Advocate * * * * * O R D E R M.M.SUNDRESH.,J. Heard the learned senior counsel for the petitioners and the learned Additional Advocate General for respondents. 2.In view of the common issues involved in the two writ petitions and also in view of the fact identical prayers have been sought for on same grounds a common order is passed in the writ petitions. These two writ petitions have been filed seeking a writ of declaration, declaring Rule 38(B) of the Tamil Nadu Minor Minerals Concession Rules, 1959, which is introduced by way of a Government Order in G.O.Ms.No.158 Industries (MMC I) Department, dated 25.08.2008 as illegal, ultra vires, Section 15 of the Minor and Minerals (Development and Regulation) Act, 1957 and Article 14, 19(1)(g) and 301 to 304 of the Constitution of India. 3.Rule 38(B) of the Tamil Nadu Minor Minerals Concession Rules, 1959 is as follows: "38-B Transport of Sand outside the State not to be made:- No transport of sand covered under rule 38- A of these rules shall be made across the border of other States." 4.The brief facts of the case are as follows: An order was passed by a Division Bench of the Hon'ble High Court dated 26.07.2002 directing the State Government to constitute a Committee of experts consisting of Geologists, Environmentalists and Scientists to study the river and riverbeds in the State with reference to the impact of the sand quarrying. The Hon'ble High Court directed the said Committee to submit a https://hcservices.ecourts.gov.in/hcservices/ report and further directed the Government to take necessary steps to arrest the exploitation and improve the situation. While passing the order this Court has observed as follows: "rivers are being plundered by a powerful mafia controlling the sand mining business. The illegal trade is driven by the unholy nexus between contractors, politicians, trade union leaders, panchayat and revenue officials and corrupt policemen, making a mockery of the regulations imposed by the Government. Contractors who quote marginal amounts for auction rights go on to make a killing, extracting many time the permitted amount of sand as enforcement agencies turn a blind eye" In compliance with the directions of the Hon'ble High Court, a six member High Level Committee was constituted by the Government in G.O.Ms.No.(2D) No.46, Industries Department, dated 25.09.2002. The Committee of the experts in turn gave their report pointing out that illicit, indiscriminate and haphazard sand mining has led to deepening of the river beds, widening of the rivers, damage to civil structures, depletion of ground water table, degradation of ground quality, damages to the rivers system and reduction of bio-diversity. Based upon the recommendation of the High Level Committee, the Government of Tamil Nadu introduced Rule 38-A of the Tamil Nadu Minor Minerals Concession Rules, 1959 by way of G.O.Ms.No.95, Industries Department, dated 01.10.2003. The objective of the said Government order was to eliminate indiscriminate and unscientific sand quarrying and also to prevent further damage as noted by the High Level Committee. Accordingly, in the said rule the right to exploit sand in the State of Tamil Nadu became vested with the Government through the Public Works Department. 5.The above said rule was challenged by lease holders in a batch of writ petitions and the Hon'ble High Court in (2004) 4 MLJ 418 (STATE OF TAMIL NADU v. P.KRISHNAMOORTHY) upheld the validity of the said rule. Not being satisfied with the same, the matter was taken to the Hon'ble Supreme Court and the Hon'ble Supreme Court has also upheld the validity of the Rule in (2006) 4 SCC 517 (STATE OF TAMIL NADU v. P.KRISHNAMURTHY). 6.Thereafter, the Government of Tamil Nadu introduced Rule 38-B of the Tamil Nadu Minor Minerals Concession Rules, 1959 purporting to exercise the power under Section 15(1) of the Mines and Minerals (Development and Regulation) Act, 1957. The validity of the said rule is put in issue in the writ petitions. The writ https://hcservices.ecourts.gov.in/hcservices/ petitions have been filed by the petitioners who are registered dealer and civil contractor respectively challenging the said rule 38-B. The writ petitioners sought for a prayer to declare the said rule 38-B as unconstitutional by raising several grounds. 7.Submissions on behalf of the petitioners: Shri.V.T.Gopalan, learned senior counsel appearing on behalf of the petitioners raised several contentions in support of the prayer to declare rule 38-B as unconstitutional and ultra vires the Parent Act. They are as follows: (i) The impugned rule 38-B is unconstitutional, since the same is in contravention of Article 301 and 304 of the Constitution of India. In other words rule 38-B does not have the legislative competence and sanction of the Constitution. (ii) Rule 38 is liable to be declared as ultra vires the Parent Act namely, the Mines and Minerals (Development and Regulation) Act, 1957. Section 15 of the said Act does not empower or authorise the State Government to pass such a rule thereby prohibiting the transport of sand outside the State of Tamil Nadu. (iii) Rule 38-B is liable to be set aside since even Section 23-C of the Mines and Minerals (Development and Regulation) Act, 1957, does not authorise such a rule making power resulting in the prevention and prohibition of transport of sand outside the State. (iv) As per the principle of ejusdem generis, the prior word "illegal mining" should be taken into consideration for interpreting and construing the subsequent words "transportation and storage of minerals". The learned senior counsel appearing on behalf of the petitioners has submitted that Section 23-C is only applicable in case of preventing illegal mining, illegal transportation and storage of illegally mined minerals and therefore, rule 38-B is liable to be declared as ultra vires. (v) The word regulation as mentioned in Section 23-C cannot be construed as prohibition and there cannot be any prohibition in view of the protection available under Article 301 and without following the procedure contemplated under Article 304 of the Constitution of India. 8.The submissions of Shri.P.S.Raman, learned Additional Advocate General are as follows: (a) The contention of the petitioners that rule 38-B is unconstitutional in view of the Articles 301 and 304 of the https://hcservices.ecourts.gov.in/hcservices/ Constitution of India has no legal basis since Article 301 is subject to Articles 302 to 304 and in any case they would not be applicable in the present case since the impugned rule has been passed by deriving power under the Central Act namely, the Mines and Minerals (Development and Regulation) Act, 1957. (b) Even though rule 38-B has been introduced purportedly deriving power under Section 15 of the Parent Act, the power can be traced in the plenary or enabling provisions. Further, in view of the power conferred on the States to make rules for preventing transportation under Section 23-C of the Act there is no basis that rule 38-B is in violation of Articles 301 and 304 of the Constitution of India. (c) The word regulation would necessarily mean prohibition and therefore the impugned rule is valid in law. (d) The principle of ejusdem generis would not apply when the words are very clear and there is no ambiguity in Section 23-C. Therefore, the principle of ejusdem generis is not applicable in the present case and the said principle will have to be made applicable always with caution. (e) The overwhelming public interest as well as the environmental issue also will have to be taken into consideration since the rule has been introduced in order to prevent indiscriminate sand mining. 9.We have considered the submissions made on behalf of the learned senior counsel appearing on behalf of the petitioners and the learned Additional Advocate General appearing on behalf of the respondents. 10. Whether Rule 38(B) is Violative of Article 301 and 304 of the Constitution: Article 301 and 304 of the Constitution of India are extracted hereunder: "301.Freedom of trade, commerce and intercourse – Subject to the other provisions of this Part, trade, commerce and intercourse throughout the territory of India shall be free. 304.Restrictions on trade, commerce and intercourse among States – Notwithstanding anything in article 301 or article 303, the Legislature of a State may by law - (a) impose on goods imported from other States https://hcservices.ecourts.gov.in/hcservices/ (or the Union territories) any tax to which similar goods manufactured or produced in that State are subject, so, however, as not to discriminate between goods so imported and goods so manufactured or produced; and (b) impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest: Provided that no Bill or amendment for the purpose of clause (b) shall be introduced or moved in the Legislature of a State without the previous sanction of the President." On a reading of Article 301 of the Constitution of India it is clear that trade, commerce and intercourse throughout India shall be free. Similarly, Article 304 of the Constitution grants power to the State Legislature to make law with regard to restrictions on trade, commerce and intercourse among States. The State legislature cannot introduce any bill regarding the above said subjects without the previous sanction of the president. Hence it is clear that the protection given under Article 301 of the constitution is subject to Article 304, provided the law has been made by the State Legislature by complying with the procedure contemplated under the proviso to Article 304. We may also note that Article 302 provides for making of the law by the parliament to impose restrictions on trade, commerce and intercourse. Shri.V.T.Gopalan has contended that the prohibition made under Rule 38(B) of the Tamil Nadu Minor Minerals Concession Rules, 1959 is in violation Article 301 since it infringes one's freedom of Trade and the said rule is also in violation of Article 304 since no prior sanction from the President of India has been obtained. We are not in agreement with the submission made by the learned counsel for the simple reason that the rule 38(B) has been introduced by the State as the delegate of the Parliament to carryout the purpose of Section 23-C of the Parent Act. In other words the contention raised by Shri.V.T.Gopalan does not arise for consideration, since rule 38(B) has been introduced not deriving the power under Article 304 of the Constitution of India but under Section 23-C of the Mines and Minerals (Development and Regulation) Act, 1957. The said issue has been considered by the Hon'ble Supreme Court in (1997) 3 SCC 665 (STATE OF TRIPURA v. SUDHIR RANJAN NATH). It is held therein in paragraph 21 of the said judgment that the impugned rule having been made by the State as the delegate of parliament to carry out the purpose of the Act https://hcservices.ecourts.gov.in/hcservices/ cannot be held to be in contravention of Article 301 of the Constitution. The Hon'ble Supreme Court has further held that in such a situation the compliance of the procedure contemplated under Article 304-B of the Constitution does not arise for consideration. Further the judgment relied on by Shri.V.T.Gopalan in (2006) 7 SCC 241 (JINDAL STAINLESS LTD., v. STATE OF HARYANA) does not have any application to the present case since the issue involved therein was as to whether the Compensatory Tax imposed by the State is valid or not. Hence we hold that the impugned Rule 38 is not unconstitutional being violative of Article 301 and 304 of the Constitution of India. 11. Whether Rule 38(B) is in Violation of Section 15 of the Mines and Minerals (Development and Regulation) Act, 1957: The learned senior counsel has contended that inasmuch as in the absence of any power under the Parent Act, the impugned rule is not good in law. In support of his contention, the learned senior counsel has relied upon AIR 2004 Madras 151 (K.P.ENTERPRISES v. DISTRICT COLLECTOR, SALEM); AIR 1995 SCC 858 (STATE OF TAMIL NADU v. M.P.P.KAVERY CHETTY); (2008) 3 SCC 735 (K.T.VARGHESE v. STATE OF KERALA), to contend that under Section 15(1) of the MMDR Act, 1957, there is no power to control the movement of any minerals after the sale. In the judgment reported in AIR 2004 MADRAS 151 (K.P.ENTERPRISES v. DISTRICT COLLECTOR, SALEM), unfortunately Section 23-C has not been brought to the notice of this Court. It is well settled principle of law that when a particular point of law is not consciously determined by the Court, that does not form part of ratio decidendi. It is further to be noted that a judgment rendered without reference to the statutory provisions cannot be considered as a ratio decidendi and in any case such a judgment will not be binding when an issue is before the Division Bench. In this regard, we may refer the judgment reported in (2000) 5 SCC 488 (ARNIT DAS v. STTE OF BIHAR), wherein the Hon'ble Supreme Court has held that a decision which is not expressed, not accompanied by reason and not proceeding on a conscious consideration of an issue cannot deem to be a law declared and the same is not the ratio decidendi. Similarly, in (2006) 1 MLJ 192 (TVL.N.V.S.AGRO DERIVATIVES v. COMMERICIAL TAX OFFICER, THENI), the Hon'ble High Court has also taken the same view. In so far as the judgment reported in (2008) 3 SCC 735 (K.T.VARGHESE v. STATE OF KERALA) is concerned, the facts of the said judgment are totally different from the present case. The said judgment pertains to the transaction of the year 1997-98 during that time Section 23-C was not in the statute book. So is the other judgment https://hcservices.ecourts.gov.in/hcservices/ in AIR 1995 SCC 858 (STATE OF TAMIL NADU v. M.P.P.KAVERY CHETTY) which was also rendered prior to coming into existence of Section 23-C of the Act. Hence these decisions are not favouring the case of the petitioners in any case. 12. Application of Section 23-C According to Shri.V.T.Gopalan, Section 23-C is only meant for illegal mining, illegal transportation and illegal storage of minerals. A perusal of Section 23-C would clearly show that the State Government could make rule preventing illegal mining, transportation and storage of minerals. The words transportation and storage are distinct and different forming a separate class or category than the word illegal mining. We are of the opinion that such an interpretation as canvassed by Shri.V.T.Gopalan cannot be given since the plain meaning should be given to the words transportation and storage. In this connection, Shri.P.S.Raman has relied upon the judgment of the Division Bench of the Andhra Pradesh High Court reported in AIR 2004 ANDHRA PRADESH 234 (C.NARAYANA REDDY v. COMMISSIONER OF PANCHAYAT RAJ) wherein the similar provision like rule 38-B was challenged before the Division Bench of the Andhra Pradesh High Court. In the said case rule 9-W of Andhra Pradesh Mineral Concessions Rules which prohibits movement of sand across the border to the neighbouring State was challenged. The Division Bench of the Andhra Pradesh High Court has upheld the rule by tracing the power under Section 23-C interpreting the words illicit mining, transportation and storage as distinct and different. We are in complete agreement with the said judgment. Further Section 4(1)(A) of MMDR Act, 1957 says as follows: "No person shall transport or store or cause to be transported or stored any mineral otherwise than in accordance with the provisions of this Act and the rules made thereunder." Section 4 of the said Act provides for prospecting or mining operation to be licensed or lease. Therefore, it is very clear that power has been conferred on the authorisers to regulate the transport and storage of minerals. We are of the opinion that when in a case of a prospecting or mining operation given under a license or lease such a restriction could be made, Section 23-C should necessarily be construed giving power to the State Government to control and regulate the movement of the minerals. We are also in an agreement with the contention raised by the learned Additional Advocate General appearing on behalf of https://hcservices.ecourts.gov.in/hcservices/ the respondents that even if the statute does not give the power for the Government to make rule the power can be traced to the enabling provision. Since Section 23-C provides for the rule making power resulting in the introduction of rule 38-B, we are of the opinion that Rule 38-B cannot be challenged on the ground that Section 15 of the Parent Act does not provide for such a power. In this connection, we also refer (1992) 2 SCC 683 (PINE CHEMICALS LTD., v. ASSESSING AUTHORITY) wherein the Hon'ble Supreme Court was pleased to hold that when the power is available with the Parent Act, the wrong quoting of the statute would not make the rule ultra-vires. We are also of the opinion that rule 38-B is constitutionally valid. In this connection, it is useful to refer (2000) 8 SCC 655 (QUARRY OWNERS' ASSOCIATION v. STATE OF BIHAR). The Hon'ble Supreme Court in paragraph 36 as stated as follows: "36. We have to keep in mind, in the present case, delegation of power is on the State Government which is the highest executive in the State, which is responsible to the State Legislature. In a parliamentary democracy every act of the State Government is accountable to its people through the State Legislature which itself is an additional factor which keeps the State Government under check not to act arbitrarily or unreasonably. When a policy is clearly laid down in a statute with reference to the minor minerals with the main object under the Act being for its conservation and development, coupled with various other provisions to the Act guiding it, checking it and controlling it, then how could such delegation be said to be unbridled?...". Therefore, we are of the opinion that rule 38-B is valid in law, having been introduced by invoking the power conferred under Section 23-C of the MMDR Act, 1957. 13. Definition of the word "Regulation" Shri.V.T.Gopalan has contended that the word regulation mentioned in Section 23-C of the Act should not be construed to mean prohibition. He further contended that a total prohibition is impermissible in law, violative of Article 19(1)(g) and therefore, the impugned rule is liable to be declared as bad and law. We are of the opinion that the word "regulation" has no fixed connotation. The said word will have to be given wider meaning when the public interest is involved. In the judgment reported in (1981) 2 SCC 205 (STATE OF TAMIL NADU v. HIND STONE), the Hon'ble Supreme Court has held as follows: https://hcservices.ecourts.gov.in/hcservices/ "10.One of the arguments pressed before us was that Section 15 of the Mines and Minerals (Regulation and Development) Act authorised the making of rules for regulating the grant of mining leases and not for prohibiting them as Rule 8-C sought to do, and, therefore, Rule 8-C was ultra vires Section 15. Well known cases on the subject right from Municipal Corporation of the City of Toronto v. Virgo and Attorney-General for Ontario v. Attorney-General for the Dominions up to State of U.P. v. Hindustan Aluminium Corporation Ltd., were brought to our attention. We do not think that 'regulation' has that rigidity of meaning as never to take in 'prohibition'. Much depends on the context in which the expression is used in the statute and the object sought to be achieved by the contemplated regulation. It was observed by Mathew, J. in G.K.Krishnan v. State of Tamil Nadu: "The word 'regulation' has no fixed connotation. Its meaning differs according to the nature of the thing to which it is applied". In modern statutes concerned as they are with economic and social activities, 'regulation' must, of necessity, receive so wide an interpretation that in certain situations, it must exclude competition to the public sector from the private sector. More so in a welfare State. It was pointed out by the Privy Council in Coommonwealth of Australia v. Bank of New South Wales – and we agree with what was stated therein – that the problem whether an enactment was regulatory or something more or whether a restriction was direct or only remote or only incidental involved, not so much legal as political, social or economic consideration and that it could not be laid down that in no circumstances could the exclusion of competition so as to create a monopoly, either in a State or Commonwealth agency, be justified. Each case, it was said, must be judged on its own facts and in its own setting of time and circumstances and it might be that in regard to some economic activities and at some stage of social development, prohibition with a view to State monopoly was the only practical and reasonable manner of regulation. The statute with which we are concerned, the Mines and Minerals (Development and Regulation) Act, is aimed, as we have already said more than once, at the conservation and the prudent and discriminating https://hcservices.ecourts.gov.in/hcservices/ exploitation of minerals. Surely, in the case of a scarce mineral, to permit exploitation by the State or its agency and to prohibit exploitation by private agencies is the most effective method of conservation and prudent exploitation. If you want to conserve for the future, you must prohibit in the present. We have no doubt that the prohibiting of leases in certain cases is part of the regulation contemplated by Section 15 of the Act." Similarly, in (2000) 8 SCC 655 (QUARRY OWNERS' ASSOCIATION v. STATE OF BIHAR) it has been held that the word regulation will have to be given a wide interpretation taking into consideration of social, economic and political justice. We are of the opinion that while deciding as to whether the prohibition is reasonable, the Court has to take into consideration the greater public and social interest as against the fundamental right of the citizen. In (2003) 7 SCC 589 (INDIAN HANDICRAFTS EMPORIUM v. UNION OF INDIA), the Hon'ble Supreme Court has held that prohibition of trade and ivory does not offend Article 19(1)(g) and the same is a reasonable restriction under Article 19(6) of the Constitution. It is also to be noted only sand is prohibited from taking outside the State in view of the overwhelming public interest. Therefore, we are of the opinion that the definition of the word regulation is wide enough to cover the prohibition and movement of minerals outside the State. 14.Statement and Reasoning of Section 23-C The learned senior counsel for the petitioners has further contended that in view of the statement and reasoning for Section 23-C of the Act, it cannot be construed that the word transport and storage are independent words and therefore, they should be read as illicit transport and illicit storage. On a plain reading of Section 23-C of the Mines and Minerals (Development and Regulation) Act, 1957, there is nothing to indicate that the words transport or storage would only mean illicit transport and illicit