1. The Petitioner is a company engaged in the business of manufacture of. cement at Bagalkot. For the purpose of its factory, it had obtained a mining lease over certain areas in the District of Bijapur to win lime-stone under a mining lease deed dated 27-10-1955 granted by the Government of Bombay, Under the lease the petitioner had to pay a certain sum of money by way of royalty over the quantity of lime-stone won by it. The said rate of royalty was varied from time to time by the Government of India in exercise of its powers under Section 9 of the Mines and Minerals (Regulation and Development) Act. 1957 (hereinafter referred to as the Act). One such variation was made by a notification dated 29-6-1968 bearing No. GSR 1263, which is marked as Exhibit 'B' in the case. Under that notification the royalty payable on limestone was notified as follows:--
'8. Limestone: (a) Superior grade with One rupee45% or more of Ca. O andtwenty-fivepaise pertonne.(b) Inferior grade with Seventy-fiveless than 45% Ca. O paise pertonne.
The rate of royalty fixed under the above notification was again modified by the Government of India by a Notification bearing No. GSR 200 dated 29-1-1970. The said notification reads as follows:--
'In exercise of the powers conferred by Sub-section (3) of 'Section 9 of the Mines and Minerals (Regulation and Development) Act, 1957 (67 of 1957), the Central Government hereby makes the following further amendment in the second schedule to the said Act namely:
In the said Schedule, for item 8 andthe entries relating, thereto, the following item and entries snail be substituted,namely-
'8. Limestone: One rupee and twenty, five paise per tonne'. This notification shall come intoforce on the date of its publication in,the official gazette.'
2. Aggrieved by the notification dated 29-1-1970, the petitioner has filed this writ petition.
3. Sri K. R. Karanth, the learnedcounsel for the petitioner, contended,Inter alia,
(i) that the notification was ultra vires of section 9 of the Act; -
(ii) that the variation of the rate of royalty to the disadvantage of the lessee was opposed to principles of natural justice;
(iii) the power conferred on theCentral Government by, Section 9 of theAct to vary, the second schedule of theAct in which the rates of royalty hadbeen fixed by the Parliament, was unguided and arbitrary, and, therefore, Section 9 of the Act suffered from the viceof excessive delegation of Legislativepower; and
(iv) that the impugned notification was violative of Articles 14, 245 and 263 of the Constitution.
4. It is unnecessary for us to deal with points (ii), (iii) and (iv) mentioned above, since we are of the opinion that this petition has to succeed on the first ground.
5. Section 9 of the Act reads as follows:--
'9 (1) The holder of a mining lease granted before the commencement of this Act shall, notwithstanding anything contained in the instrument of lease or in any law in force at such commencement, pay royalty in respect of any mineral removed by him from the leased area after such commencement, at the rate for the time being specified in the Second Schedule in respect of that mineral.
(2) The holder of a mining lease granted on or after the commencement of this Act shall pay royalty in respect of any mineral removed by him from the lease area at the rate for the time being specified in the Second Schedule in respect of that mineral,
(3) The Central Government may, by, notification in the Official Gazette, amend the Second Schedule so as to enhance or reduce the rate at which royalty shall be payable in respect of any mineral with effect from such date as may be specified in the notification:
'Provided that the Central Government shall not-
(a) fix the rate of royalty in respect of any mineral so as to exceed twenty per cent of the sale price of the mineral the pit's head, or
(b) enhance the rate of royalty in respect of any mineral more than once during any period of four years.' Sub-section (1) of Section 9 of the Act prescribes that the holder of a mining lease granted before the commencement of the Act shall notwithstanding the agreement or lease, pay the royalty in respect of any mineral at the rate specified in the Second Schedule of the Act. Sub-section (2) of the Act deals with the royalty payable by a person who obtains a mining lease after the commencement of the Act. Sub-section (3) of the Act confers power on the Central Government to amend the Second Schedule of the Act, either by enhancing or reducing the rate of royalty in respect of any mineral with effect from such date as may be mentioned in the the notification. The impugned notification has been issued in exercise of the power conferred on the Central Government by subsection (3) of Section 9 of the Act. It is to be seen that the power conferred on the Central Government by Sub-section (3) of Section 9 of the Act is controlled by the proviso thereto. The relevant part of the proviso is to be found in Clause (b) of the proviso which prohibits the enhancement of the rate of royalty in respect of any mineral more than once during any period of four years.
6. In this case admittedly by a notification dated 29-6-1968, the rates of royalty payable on limestone were fixed having in view two classifications, namely, limestone with the Ca. O content of 45% and above and limestone having Ca. O content less than 45%. In respect of the first category, Rs. 1-25 was fixed as the royalty per tonne and in respect of the second category i. e, inferior quality of limestone, o-75 per tonne was fixed as royalty. We are informed that the petitioner is winning only inferior kind of limestone, namely, limestone having Ca. O content less than 45%. The said statement is to be found in paragraph 12 of the affidavit of the petitioner and that statement remains uncontroverted. The contention of Sri Karanth is that by the impugned notification which was issued on 29-1-1970, a uniform rate of Rs. 1-25 per tonne was fixed as royalty payable in respect' of limestone irrespective of its quality. The resulting position, according to the petitioner, was that in respect of the limestone of inferior quality which it was winning, it had to pay at enhanced rate of Rs. 1-25 per tonne. We are informed that a demand was made by the State Government against the petitioner on the basis of the notification dated 29-1-1970 asking the petitioner to pay at the rate of Rs. 1-25 per tonne irrespective of the quality of limestone won by it.
The demand made on the petitioner, appears to us, is unenforceable in view of Clause (b) of the proviso to Sub-section (3) pf Section 9 of the Act, since the Impugned notification dated 29-1-1970 enhancing the fate of royalty in respect of inferior quality of limestone has been issued within four years form the date of the last notification which was issued on 29-6-1968. We are of the opinion that the Central Government had no power to issue the notification dated 29-1-1970 and any demand made on the basis of that notification is liable to be set aside. In our opinion, it is sufficient in this case to make an order directing the respondents not to enforce the notification dated 29-1-1970 against the petitioner in so far as limestone containing less than 45% Ca. O. is concerned. It is ordered accordingly. The demand already made on that basis is also hereby quashed. We however make it clear that it is open to the State Government to demand and collect royalty from the petitioner on the basis of the notification issued on 29-6-1968.
7. The writ petition is disposed of accordingly. There will be no order as to costs.