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K.N. Srinivasachari and anr. Vs. the State of Mysore - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKarnataka High Court
Decided On
Case NumberWrit Petition Nos. 3652 and 3658 of 1969
Judge
Reported inAIR1972Kant66; AIR1972Mys66; (1971)2MysLJ189
ActsMysore Mines Act, 1906 - Sections 7, 8, 9, 10, 10(1), 10(2), 10(3), 11 and 34; Part B States (Laws) Act, 1951 - Sections 3, 6 and 6(2); Mines and Minerals (Regulation and Development) Act, 1948 - Sections 6(2); Mines and Minerals (Regulation and Development) (Amendment) Act, 1957 - Sections 2, 18(1), 18(2) and 29; Constitution of India - Articles 19(1), 226 and 254; General Clauses Act - Sections 6
AppellantK.N. Srinivasachari and anr.
RespondentThe State of Mysore
Appellant AdvocateV.K. Govindarajulu and ;V.G. Dharmakumar, Advs.
Respondent AdvocateK.S. Puttaswamy, High Court Govt. Pleader
DispositionPetitions allowed
Excerpt:
.....complaint is liable to be dismissed. - 7. section 9 of the act provided that no license shall be issued to any applicant unless the magistrate was satisfied that he was a person of good character and reputation. we do not see why the trade or professional activities of a goldsmith, like converting unwrought gold or silver into gold or silver jewellery, or vice versa or converting one kind of gold or silver jewel into another kind of jewel, should not also be regarded as one of the aspects of stock of gold silver which can be regulated under clause (h) of section 6 (2) of the central act of 1948 or under clause (f) of section 18(2) of the central!.....and the conditions of the goldsmith's license, appears to be to prevent smuggling of gold from the gold mines and the smelting and refinery sections (actions?) thereof in the kolar gold fields.15. mr. v. k. goyindarajulu,learned counsel for the petitioners, contended that sections 7. 8, 10 and 11 of the mysore mines act, were superseded by the mines and minerals (regulation and development) act, 1957 (hereinafter referred to as 'the central act of 1957') which came into force on 1-6-1958 and thereafter those sections of the mysore mines act ceased to be in force and that it was not competent for the authorities of the state to issue any license under the provisions of the mysore mines act or to enforce the conditions contained in such license or to place any restrictions on the.....
Judgment:

Chandrashekhar, J.

1. The petitioners are goldsmiths carrying on their profession at Robertsonpet in the Kolar Gold Fields. In these petitions under Article 226 of the Constitution, they have prayed for (i) a declaration that Sections 7, 8, 10 and 11 of the Mysore Mines Act, 1906 are illegal, ultra vires and unconstitutional; (ii) quashing the licences issued to them by the Ex Officio I Class Magistrate, Kolar; and (iii) a mandamus directing the State of Mysore not to interfere with their carrying on their profession as goldsmiths.

2. In order to appreciate the contentions of these Writ Petitions, it is necessary to set out certain provisions of the Mysore Mines Act, and the conditions of the license which goldsmiths are required to take in order to carry on their profession in the Kolar Gold Fields.

3. The Mysore Mines Act, 1906, was enacted by His Highness the Maharaja of Mysore, the then Ruler of the former State of Mysore. That Act was intended to consolidate and amend the law relating to mines in the State.

4. Section 7 of that Act provided that it shall not be lawful for any person to buy or sell unwrought gold or to receive unwrought gold by way of barter or pledge without a gold dealer's license, nor to carry on the profession of a goldsmith without a goldsmith's license as provided in that Act.

5. The proviso to that Section exempted mining proprietors from taking out goldsmiths' licenses for smelting, refining or other preparation of any gold obtained in their mining areas.

6. Section 8 of that Act empowered the First Class Magistrate to issue licenses referred to in Section 7 on payment of such fees as the State Government might, by rule, prescribe in that behalf. That section also provided that the gold dealer's license and the goldsmith's license shall be in such forms as might be prescribed.

7. Section 9 of the Act provided that no license shall be issued to any applicant unless the Magistrate was satisfied that he was a person of good character and reputation. That Section also provided for cancellation of such license on the licensee being convicted for certain offences.

8. Sub-section (1) of Section 10 provided that every licensed gold dealer shall keep at his place of business a book called the gold dealer's register in which the receipt of disposal of all gold and unwrought gold shall be immediately entered in such forms as might be prescribed by the State Government.

9. Sub-section (2) of Section 10 provided that every licensed goldsmith shall keep at his place of business a book called goldsmith's register in which the receipt or disposal of all gold, silver, gold or silver jewellery, unwrought gold or other gold stuff, received, treated or disposed of, by him, shall be immediately entered in such form as might be prescribed by the State Government. Sub-section (3) of Section 10 provided that such register shall be open to inspection by the authorities specified therein.

10. Section 11 provided that no licensed goldsmiths shall smelt, work, use or deal with any of the articles directed to be entered in his register under Section 10, until after the expiry of three clear days from the time when such article were received by him. The proviso to that section exempted articles of jewellery received for repairing.

11. Section 34 of the Act empowered the State Government to make rules for sanitation and sanitary administration of any local area within which mining operations might be carried on.

12. In the purported exercise of the powers conferred by the Mysore Mines Act, the Government issued Notification No. J. 106/Legis. 5.06.11 dated 9th July 1907, prescribing rules and forms of licenses with reference to Sections 8 and 10- That Notification sets out the forms of licenses to be issued to gold dealers and goldsmiths and in each of those forms certain conditions are set out.

13. Conditions (a) to (f) of the Goldsmith's License read;

(a) That the licensee.....shall carry on business in house No.....of..... village fitted with windows opening into the public street or line but not communicating with quarters used as residence and duly registered in the office of the Assistant Commissioner and 1st Class Magistrate, at the Kolar Gold Fields.

(b) That no operation of smelting or refining gold or other metal shall be carried on between the hours of sunset and sunrise.

(c) That the said licensee shall not smelt, work, use or deal with any of the articles such as gold, silver, gold or jewellery, unwrought gold or other gold stuff directed to be entered in his register under Section 10 of the Mysore Mines Regulation No. IV of 1906, until after the expiry of three clear days from the time when such article is received by him, provided that this condition shall not apply to the repairing of articles of jewellery by the licensee in any way which does not change or destroy the identity of such articles.

(d) That the said licensee shall keep a register in the form prescribed and hereto annexed (Schedule 'E') wherein he shall immediately enter the receipt or disposal of all gold, silver, gold or silver jewellery, unwrought gold or other gold stuff received, treated or disposed of by him.

(e) That the licensee shall not employ in his place of business to assist him in his profession as goldsmith any person without the written permission of the Magistrate. The dismissal or discontinuance of any such person so employed shall forthwith be reported to the Magistrate.

(f) That the license shall be liable to be cancelled if any of the above conditions are not complied with.

14. The purpose of the above Sections and the conditions of the goldsmith's license, appears to be to prevent smuggling of gold from the gold mines and the smelting and refinery sections (actions?) thereof in the Kolar Gold Fields.

15. Mr. V. K. Goyindarajulu,learned counsel for the petitioners, contended that Sections 7. 8, 10 and 11 of the Mysore Mines Act, were superseded by the Mines and Minerals (Regulation and Development) Act, 1957 (hereinafter referred to as 'the Central Act of 1957') which came into force on 1-6-1958 and thereafter those Sections of the Mysore Mines Act ceased to be in force and that it was not competent for the authorities of the State to issue any license under the provisions of the Mysore Mines Act or to enforce the conditions contained in such license or to place any restrictions on the activities of goldsmiths in the Kolar Gold Fields.

16. The Central Act of 1957 has been enacted by Parliament in exercise of the legislative power conferred in Entry 54 of List I (Union Legislative List) of the Seventh Schedule to the Constitution. That Entry reads:

'54. Regulation of Mines Mineral development to the extent to which such regulation and development under the control of the Union is declared by the Parliament by law to be expedient in the public interest.'

17. Entry 23 of List II (State's Legislative List) of that Schedule, reads:

23. 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.

18. Section 2 of the Central Act of 1957 contains a declaration envisaged by the concluding portion of Entry 54 of List I, namely, that it is expedient in public interest that the Union should take under its control the regulation of Mines and the development of minerals to the extent mentioned in the subsequent Sections of that Act.

19. As pointed out by Rajagopala Iyengar, J., in State of Orissa v. M. A. Tulloch, : [1964]4SCR461 , to the extent to which the Union has taken over under its control 'the regulation and development of minerals', so much was withdrawn from the ambit of the power of the State Legislature under Entry 23 and the legislation of the State which had rested on the existence of power under that entry, would, to the extent of that 'control', be superseded or be rendered ineffective because there is not only repugnancy between the provisions of the two enactments but also a denudation or deprivation of State Legislative power by the declaration which Parliament is empowered to make and has made; but the State would lose legislative competence only to the extent to which regulation and development under the control of the Union has been declared by Parliament to be expedient in the public interest, and beyond it the legislative power of the State remains unimpaired.

20. As to the test of repugnancy between such Central legislation and such State legislation, His Lordship said that if a competent Legislature with superior efficiency, expressly or implied-ly, evinces by its legislation, an intention to cover the whole field, the enactments of the other legislature, whether passed before or after, would be over-borne on the ground of repugnance. His Lordship added that the inconsistency is demonstrated not by a detailed comparison of provisions of two statutes but by the mere existence of the two pieces of legislation.

21. Mr. Govindarajulu referred to clause (f) of Sub-section (2) of Section 18 of the Central Act of 1957. Sub-section (1) of that Section empowers the Central Government to make rules for the purpose of conservation and development of minerals in India. Sub-section (2) of that Section provides that without prejudice to the generality of the power under Sub-section (1), such rules may provide for the matters enumerated in clauses (a) to (h) of that subsection. Clause (f) reads:

(f) the regulation of the arrangements for the storage of minerals and the stocks thereof that may be kept by any person.

Mr. Govindarajulu argued that the words 'storage of minerals and the stock thereof that may be kept by any person' are wide enough to cover possession and disposal of unwrought gold and conversion of unwrought gold into ornaments and that the regulation of the activities of goldsmiths would come within the ambit of clause (f) of Section 18(2) of the Central Act of 1957.

22. On the other hand, the learned Government Pleader contended that the activities of goldsmiths do not come within the ambit of clause (f) of Section 18(2) of the Central Act of 1957, that at any rate, rules have not yet been made under that clause regulating storage or holding of stocks of gold or regulating the activities of goldsmiths, and that until such rules are made, the provisions of the Mysore Mines Act and the rules thereunder regulating the activities of goldsmiths, are not superseded by the provisions of the Central Act of 1957.

23. But Mr. Govindaraiulu argued that whether or not rules had actually been made in regard to the matter stated in clause (f) of Section 18(2) of the Central Act of 1957, the provisions of that Act must be regarded as covering the field occupied by Sections 7, 8, 10 and 11 of the Mysore Mines Act and the conditions of the Goldsmith's license. In support of that contention. Mr. Govindarajulu relied on the following observations of Rajagopala Iyengar, J., (who spoke for the court in : [1964]4SCR461 ), while repelling a contention similar to that advanced by the learned Government Pleader:--

'In the present case, having regard to the terms of Section 18 (1) it appears to us that the intention of Parliament was to cover the entire field and thus to leave no scope for the argument that until rules were framed, there was no inconsistency and no supersession, of the State Act.'

Before considering the effect of the Central Act of 1957 on the provisions of the Mysore Mines Act, it is necessary to examine the effect of the Part B States (Laws) Act, 1951, (hereinafter referred to as the B States Laws Act) on the provisions of the Mysore Mines Act

24. Section 3 of the Part B States (Laws) Act provides for the extension of the Central Acts and Ordinances specified in the Schedule to that Act, to Part B States, from the appointed day (1-4-1951). Section 6 of that Act provides that any law in force in any Part B State immediately before the appointed day, corresponding to such Central Acts or Ordinances shall stand repealed. The proviso to that Sevtion,-which corresponds to Section 6 of the General Clauses Act, saves the previous operation of any law so repealed. The further proviso to that Section saves, inter alia, rules, regulations, bye-laws and forms made under repealed laws unless and until superseded by anything done under the Central Act or Ordinances so extended.

25. The Mines and Minerals (Regulation and Development) Act, 1948, (hereinafter referred to as the Central Act of 1848) is one of the Central Acts in the Schedule to the Part B States (Laws) Act, Hence under Section 6 of the Part B States (Laws) Act, the Central Act of 1948 repealed with effect from 1-4-1951 any law in force in the former Mysore State corresponding to that Act.

26. The Central Act of 1948 which was, in turn, repealed by the Central Act of 1957, was also an act to provide for regulation of mines and for the development of minerals. Section 6 of that Act corresponds to Section 18 of the Central Act of 1957 and empowered the Central Government to make rules for the conservation and development of minerals. Clause (h) of subsection (2) of Section 6 of the Central Act of 1948, is identical with clause (f) of Section 18(1) of the Central Act of 1957.

27. If we accept the contention of Mr. Govindarajulu that the words 'arrangements for the storage of minerals and stocks thereof as may be kept by any person' occurring in Clause (f) of Section 18(1) of the Central Act of 1957 are wide enough to cover, buying, receiving, selling, bartering and disposal of minerals and using such minerals to make any articles, it follows that the Central Act of 1948 which also provides for rules being made for regulation of arrangement for the storage of minerals and the stocks thereof by any person, repealed the corresponding law, namely. Sections 7, 8, 10 and 11 of the Mysore Mines Act.

28. Mr. Govindarajulu urged that the word 'regulation' occurring in clause (f) of Section 18(2) of the Central Act of 1957, cannot be narrowly interpreted, but must be construed to include all aspects of storage and stocks of minerals. In support of this argument, he relied on the decision of the Supreme Court in Indu Bhusan v. Rama Sundari, : [1970]1SCR443 . There, the expression 'regulation of house accommodation' came up for interpretation. After referring to the dictionary meaning of the word 'regulation', the Supreme Court held that such power to regulate or control includes within it all aspects of regulation of house accommodation and is not confined to allotment, of houses only.

29. Likewise, regulation of stocks of minerals that may be kept by a person, would, in our opinion, include all aspects of such stocks, namely, acquisition of such stocks of minerals by purchase, barter or otherwise, disposal of such stocks of minerals by sale, barter, return or otherwise and transformation of such stock of minerals from one form to another form. We do not see why the trade or professional activities of a goldsmith, like converting unwrought gold or silver into gold or silver jewellery, or vice versa or converting one kind of gold or silver jewel into another kind of jewel, should not also be regarded as one of the aspects of stock of gold silver which can be regulated under clause (h) of Section 6 (2) of the Central Act of 1948 or under Clause (f) of Section 18(2) of the Central!Act of 1957.

30. As the regulation and control of the activities of gold dealers and goldsmiths, sought to be effected under Sections 7, 8, 10 and 11 of the Mysore Mines Act, also came within the ambit of clause (h) of Section 6 (2) of the Central Act of 1948, Section 6 of the Part B States (Laws) Act, must be regarded as having repealed the corresponding law in Mysore State, namely. Sections 7, 8 10 and 11 of the Mysore Mines Act and those Sections ceased to operate from 1-4-1951.

31. Even so, the learned Government Pleader contended that the conditions in the goldsmith's license prescribed by rules made under Sections 8 and 10 of the Mysore Mines Act, are saved under the second proviso to Section 6 of the Part B States (Laws) Act and continue to operate as if they were made under the corresponding provisions of the Central Act of 1948 and that even after the Central Act of 1948 was repealed by the Central Act of 1957, Section 29 of the latter Act has saved the rules made or deemed to have been made under the Central Act of 1948- In other words, the contention of the learned Government Pleader was that rules made under Sections 8 and 10 of the Mysore Mines Act, continue to operate as if they were made under the Central Act of 1957 until they are superseded by the rules made under the latter Act.

32. It was also submitted by the learned Government Pleader that it has not been shown that any rules had been made under clause (h) of Section 6 (2) of the Central Act of 1948 or under clause (f) of Section 18(2) of the Central Act of 1957, which have superseded the rules made under Sections 8 and 10 of the Mysore Mines Act.

33. Before considering whether the conditions in goldsmith's license, purporting to have been made in exercise of the rule-making power under Sections 8 and 10 of the Mysore Mines Act, have been saved under the second proviso to Section 6 of the Part B States (Laws) Act and Section 29 of the Central Act of 1957, it is necessary to examine whether those rules were within the scope of the rule-making power under the Mysore Mines Act and hence were intra vires of that Act. If those conditions were ultra vires of the Mysore Mines Act, and consequently invalid, they could not have been saved by the second proviso to Section 6 of the Part B State (Laws) Act and Section 29 of the Central Act of 1957.

34. As stated earlier, Section 34 of the Mysore Act empowered the State Government to make rules for sanitation and sanitary administration in any local area in which mining operations may be carried on. That Section did not empower the Government to make rules for regulating the activities of gold dealers and goldsmiths. However, the learned Government Pleader contended that Section 8 of the Mysore Mines Act empowered the Government to prescribe, by rules, the conditions in the goldsmith's license.

35. Section 8 of the Mysore Mines Act read:--

8 (1) The Licenses referred to in Section 7 may be issued by a Magistrate of the First Class on payment of such fee as the (State Government) may by rule prescribe in that behalf, and every license shall terminate on the 31st day of December of the year in , which it is issued.

(2) .... .... .... .... All that the above section empowered the Government to do was to prescribe by rules any foe that has to be paid by an applicant for license thereunder and the form in which such license may be granted. We cannot accede to the contention of the learned Government Pleader that the power to prescribe the form in which a license may be granted, would include the power to prescribe conditions subject to which such license is granted. No doubt, the form prescribed by the Government for the goldsmith's license, sets out the conditions to be fulfilled by the license. But those conditions cannot be regarded as constituting the contents of a form.

The dictionary meaning of the word 'form' is a specimen document for imitation or a schedule to be filled with details- The conditions contained in the goldsmith's licence, cannot be regarded as mere details or particulars which can constitute a part of a form. In the guise of prescribing a form it was not competent for the Government to prescribe the conditions to be observed or fulfilled by a licensee because neither Section 8 nor Section 10 of the Mysore Mines Act empowered the Government to prescribe such conditions.

36. In our opinion, the conditions contained in the form of the Goldsmith's license prescribed under the Notification of the Government dated 9-7-1907, were beyond the rule-making power conferred on the Government under Sections 8 and 10 of the Mysore Mines Act. Those conditions were ultra vires of the Mysore Mines Act and invalid even at their inception. Hence, they could not have been saved under the second proviso to Section 6 of the Part B States (Laws) Act or under Section 29 of the Central Act of 1957.

37. In the view we have taken, it becomes unnecessary to consider the contention of Mr. Govindarajulu that the conditions in the goldsmith's license, impose unreasonable restrictions on the petitioner's fundamental right to carry on their trade or profession as guaranteed under Article 19(1)(g) of the Constitution and that such conditions are unconstitutional.

38. In the result, we declare that Sections 7, 8, 10 and 11 of the Mysore Mines Act, 1906, have been superseded and have ceased to be in force and that the conditions contained in the goldsmith's license in the form prescribed by the Government Notification dated 9-7-1907, are ultra vires and invalid. We issue a mandamus restraining the State of Mysore and its officers and servants from enforcing against the petitioners any of the provisions of Sections 7. 8, 10 and 11 of the Mysore Mines Act, and the conditions in the form of the goldsmith's license.

39. In the circumstances of these petitions, we direct the parties to bear their own costs.


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