Case: Baijnath Kedia Vs. State Of Bihar &amp; Ors

2. One Jyoti Prakash Pandey obtained on March 23, 1955 from Babu Bijan Kumar Pandey and Smt. Anila Devi acting for herself and also as legatee under the will of one Baidyanath Pandey, registered leases to quarry stone ballast, boulders and chips from and upon Blocks Nos. 32. 45/1, 45/2 and 43/3 in tauzi No. 1452. Khata No. 1 in Mouza Malpahari No. 89 in Pakur Sub Division of Santhal Parganas. The leases were to commence from November 1, 1954 and to end on October 31, 1984, that is to say, they were for a total period of 30 years. Jyoti Prakash Pandey was working under the name and style of stone India. He sold his rights, title and interest by a registered sale-deed on September 9, 1963 to the present appellant. It is admitted that rent under the terms of the original lease was deposited upto September 1965.3. On the passing of the Bihar Land Reforms Act, 1959 (Act 30 of 1950) the ex-landlords ceased to have any interest from the date of vesting and in their place the State of Bihar became lessor under S. 10 (1) of the Land Reforms Act. The terms of S. 10 were as given below*. After the vesting of the estate of the intermediaries, the State of Bihar as the new lessor recognised the lease for the quarrying of stones for the remaining period and the Deputy Commissioner, Santhal Parganas asked for the rent from the date of vesting to 30 April, 1965 at the rate of Rs. 200 per year as stated in the original lease. This was by a letter issued from his office on February 2, 1963. On December 10, 1964 the appellants received a letter which gives the gist of the facts on which the present controversy starts and the relevant part may be quotedSubsisting leases of mines and minerals. - (1) Notwithstanding anything contained in this Act, where immediately before the date of vesting of the estate or tenure there is a subsisting lease of mines or minerals comprised in the estate or tenure or any part thereof, the whole or that part of the estate or tenure, comprised in such lease shall, with effect from the date of vesting, be deemed to have been leased by the State Government to the holder of the said subsisting lease for the remainder of the term of that lease, and such holder shall be entitled to retain possession of the leasehold property.(2)The terms and conditions of the said lease by the State Government shall mutatis mutandis be the same as the terms and conditions of the subsisting lease referred to in sub-section (1), but with the additional condition that, if in the opinion of the State Government the holder of the lease had not, before the date of the commencement of this Act, done any prospecting or development work, the State Government shall be entitled at any time before the expiry of one year from the said date to determine the lease by giving three months notice in writing:Provided that nothing in this subsection shall be deemed to prevent any modifications being made in the terms and conditions of the said lease in accordance with the provisions of any Central Act for the time being in force regulating the modification of existing mining leases.(3) The holder of any such lease of mines and minerals as is referred to in sub-section (1) shall not be entitled to claim any damages from the outgoing proprietor or tenure-holder on the ground that the terms of the lease executed by such proprietor or tenure-holder in respect of the said mines and minerals have become incapable of fulfilment by the operation of thishave been pleased to amend S. 10 of Bihar Land Reforms Act, 1950, according to which the terms and conditions in regard to leases for minor minerals stand statutorily substituted by the corresponding terms and conditions by the Bihar Minor Mineral Concessions Rules, 1964. As a result of this, rent and royalty, etc. in respect of minor minerals in the State irrespective of the date on which the lease was granted are to be paid by all categories of leases according to the rates given in the aforesaid Rules with effect fromappellants denied their liability to pay. The Government informed them by letter asis to inform you that the terms and conditions of your mining lease in so far as they are inconsistent with the Bihar Minor Mineral Concession Rules, 1964, framed by the State Government under Section 15 of the Mines and Minerals (Regulation and Development) Act, 1957, stand substituted by the corresponding terms and conditions prescribed by the Bihar Mineral Concession Rules, 1964, from 27-1-1964. Accordingly, dead rent, royalty and surface rent in addition to the other substitution as per Bihar Mineral Concession Rules, 1964, will be as follows:-1.Dead rent... Rs. 50 per acre per annum.2.Royalty... @ Rs. 3 per 100 cwt. of stone chips. ... @ Rs. 2 per 100 cft. of stone ballast and boulders. ... @ Rs. 4 per 100 cft. on building stones. ... @ Re. 1 per 100 Nos. of stones setts.3.Surface rent@ Rs. 10 per acre per year.

Court's reasoning:
Although these supplementary arguments were raised it is obvious that they can arise according as the two main arguments are allowed or disallowed. Therefore it is necessary to address ourselves to the first argument that the legislative competence to enact the amendment to S. 10 of the Reforms Acts was wanting. As the amendment was made after Act 67 of 1957 we have to consider the position in relation to it. Entry 54 of the Union List speaks both of Regulation of mines and minerals Development and entry 23 is subject to entry 54.It is open to Parliament to declared that it is expedient in the public interest that the control should rest in Central Government. To what extent such a declaration can go is for Parliament to determine and this must be commensurate with public interest. Once this declaration is made and the extent laid down ,the subject of legislation to the extent laid down becomes an exclusive subject for legislation by Parliament. Any legislation by the State after such declaration and trenching upon the field disclosed in the declaration must necessarily be unconstitutional because that field is abstracted from the legislative competence of the State Legislature.This proposition is also self-evident that no attempt was rightly made to contradict it. There are also two decisions of this Court reported in the Hingir-Rampur Coal Co. Ltd. v. State of Orissa 1961-2 SCR 537   = (AIR 1961 SCR 459) and State of Orissa v. M. A. Tulloch and Co. 1964-4 SCR 461   = (AIR 1964 SC 1284  ) in which the matter is discussed. The only dispute, therefore, can be to what extent the declaration by Parliament leaves any scope for legislation by the State Legislature. If the impugned legislation falls within the ambit of such scope it will be valid; if outside it, then it must be declaredabolition of the rights of intermediaries in the mines and vesting these rights as lessors in the State Government was a topic connected with land and land tenures. But after the mining leases stood between the State Government and the lessees, any attempt to regulate those mining leases will fall not in entry 18 but in entry 23 even though the regulation incidentally touches land.The pith and substance of the amendment to S. 10 of the Reforms Act falls within entry 23 although it incidentally touches land and not vice versa. Therefore, this amendment was subject to the overriding power to Parliament as declared in Act 67 of 1957 in S. 15. Entry 18 of the State list, therefore, is of noMr. Lal Narain Sinha reads Union as equivalent to Union Government. This is erroneous. Union consists of its three limbs, namely, Parliament, Union Government and the Union Judiciary. Here the control is being exercised by Parliament, the legislative organ of the Union and that is also controlled by the Union. By giving the power to the State Government to make rules, the control of Union is not negatived. In fact, it establishes that the Union is exercising the control.In view of the two rulings of this Court referred to earlier we must hold that by enacting S. 15 of Act 67 of 1957 the Union has taken all the power to itself and authorised the State Government to make rules for the regulation of leases. By the declaration and the enactment of S. 15 the whole of the field relating to minor minerals came within the jurisdiction of Parliament and no scope was left for the enactment of the second proviso to S. 10 in the Land Reforms Act. The enactment of the Proviso was, therefore, without jurisdiction.We have already held that the whole of the legislative field was covered by the Parliamentary declaration read with the provisions of Act 67 of 1957, particularly S. 15. We have also held that entry 23 of List II was to that extent cut down by entry 54 of List I. The whole of the topic of minor minerals became a Union subject. The Union Parliament allowed rules to be made but that did not recreate a scope for legislation at the State level. Therefore, if the old leases were to be modified a legislative enactment by Parliament on the lines of S. 16 of Act 67 of 1957 was necessary. The place of such a law could not be taken by legislation by the State Legislature as it purported to do by enacting the second Proviso to S. 10 of the Land Reforms Act. It will further be seen that Parliament in S. 4 of Act 67 of 1957 created an express bar although S. 4 was not applicable to minor minerals. Whether S. 4 was intended to apply to minor minerals as well or any part of it applies to minor minerals are questions we cannot consider in view of the clear declaration in Section 14 of Act 67 of 1957 that the provisions of Ss. 4-13 (inclusive) do not apply. Therefore, there does not exist any prohibition such as is to be found in Sec. 4 (1), Proviso in respect of minor minerals. Although Section 16 applies to minor minerals it only permits modification of mining leases granted before October 25, 1949. In regard to leases of minor minerals executed between this date and December 1964 when R. 20 (1) was enacted, there is no provision of law which enables the terms of existing leases to be altered. A mere rule is not sufficient.Lal Narain Sinhas argument is unfortunately not tenable in view of the two rulings of this Court. On the basis of those rulings we have held that the entire legislative field in relation to minor minerals had been withdrawn from the State Legislature. We have also held that vested rights could only be taken away by law made by a competent legislature. Mere rule-making power of the State Government was not able to reach them. The authority to do so must, therefore, have emanated for Parliament. The existing provision related to regulation of leases and matters connected therewith to be granted in future and not for alteration of the terms of leases which were in existence before Act 67 of 1957. For that special legislative provision was necessary. As no such parliamentary law had been passed the second sub-rule to R. 20 was ineffective. It could not derive sustenance from the second Proviso to S. 10 (2) of the Land Reforms Act since that proviso was not validity enacted.