I.N. Modi, J.
1. This is a writ application under Article 226 of the Constitution by Sethi Marble and Stone Industries and others in which the validity of The Rajasthan Minor Mineral Concession Rules, 1955, (hereinafter called the Rajasthan Rules) made by the Rajasthan State, and the royalty imposed in accordance with certain notification issued thereunder is questioned as ultra vires and void.
2. The petitioners are stone merchants and are also manufacturers of stone ballast and chips and carry on business as such at Chittorgarh. They work certain quarries themselves and also purchase stone from other quarry-owners who have their quarries in Chittorgrah and certain other places within a radius of 10 miles from that place. The petitioners carry stone to their factories and prepare chips and ballast therein and then sell them.
Opposite Party No. 2 Chunnilal is a contractor appointed by the State of Rajasthan forcollecting royalty by virtue of a contract taken by him at a public auction, the period of the contract being from the 1st April, 1957 to the 31st March, 1958. This contract was given in accordance with the terms and conditions mentioned in the notification published in the Rajasthan Rajpatra dated the 7th March, 1957, at pp. 955-56 thereof.
Item No. 5 of this notification provides in effect that a royalty at the rate of Rs. 12/- per 100/ cubic feet will be charged on stone for making chips and ballast at the following places. namely, Manpura, Merda. Hadmala, Phootwad and Chittor, and the area within a radius of 10 miles from Chittor, while a royalty at the rate of one anna per maund will be charged on stone for burning lime.
It is common ground that this notification has been issued under the Rajasthan Rules which came into force on the 11th June, 1955. The case of the petitioners is that the said Rules are ultra vires and void because the Rajasthan Government has no authority to make these rules, and it is only the Central Government that can make them under the Mines and Minerals (Regulation and Development) Act (No. LIII) of 1948 (hereinafter called the Mines and Minerals Act), and in any case, Schedule No. I which prescribes the various rates of royalty under the Mineral Concession Rules, 1949 framed by the Central Government (hereinafter referred to as the Central Rules) must be allowed to prevail over the rates of royalty prescribed by this State under the Rajasthan Rules. It is, therefore, contended that the Rajasthan Rules are ultra vires and inoperative, and consequently, the notification issued thereunder must be held to be ineffective, and the royalty charged by the contractor in accordance with the notification issued under the Schedule of the Rajasthan Rules be struck down. It is also contended that the fixation of different rates of royalty for the same goods on the basis of different uses to which they may be put is discriminatory within the meaning of Article 14 of the Constitution.
Consequently, it is prayed that the contractor should be restrained from charging royalty at the rate of Rs. 12/- per 100 cubic feet on lime stone used for making chips and ballast.
3. This application has been opposed by the State, and the contractor Chunnilal. Their contentions, briefly put, are that the Rajasthan Rules are intra vires and valid and, therefore, the consequential action taken thereunder is unexceptionable and further that different rates of royalty have been laid down for different types of stone material, and the distinction is based on quality and market value thereof, and, therefore, the rate prescribed for the stone from which chips and ballast are made cannot be rightly held to be violative of Article 14 of the Constitution.
4. The first question for our determination is whether the Rajasthan Rules are within the legislative authority of this State. We desire to invite attention in this connection to serial No. 54 of List I (Union List) of the Constitution which is worded like this:
'Regulation of names 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 public interest.'
Then there is item No. 23 of List II (State List). This item is in these terms :--
'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.
In other words, the legislative authority of the State with respect to the regulation of mines and mineral development is subject to such laws as may have been made by the Parliament on the ground that such regulation and development should be under the control of the Union as being expedient in the public interest.
5. This brings us to the Mines and Minerals Act. Section 2 of that Act provides that it is expedient in the public interest that the Central Government should take under its control the regulation of mines and oil-fields and the developments of minerals to the extent hereinafter provided. Section 5 then provides that the Central Government may by notification in the official gazette make rules for regulating the grant of mining leases or for prohibiting the grant of such leases in respect of any mineral or in any area.
Section 8 is the next important section and it lays down that the Central Government may, by notification in the official Gazette, direct that any power exercisable under this Act shall be exercised, subject to conditions if any, as may be specified therein by such officer or authority as may be specified in the direction. We then come to the Central Rules (heretofore mentioned as the Mineral Concession Rules, 1949) made under Section 5 of the Mines and Minerals Act.
Rule 4 of these rules clearly lays down that these rules shall not apply to minor minerals, the extraction of which shall be regulated by such rules as the , State Government may prescribe. Now, clause (ii) of R. 3 defines a 'minor mineral' as meaning building stone, boulder, shingle, gravel, limeshell, kankar and lime-stone used for lime burning, murrum, brick-earth, Fuller's earth, Bentonite, ordinary clay, ordinary sand, road metal, reh-matti, slate and shale when used for building material.
6. Having regard to these provisions of law, we have no hesitation in holding that under the Rules framed under the Mines and Minerals Act, the Central Government is concerned with the regulation and development of such minerals only as may be declared by it to be within its authority in the public interest, and under the Rules made under the Act, it has been clearly laid down that those rules shall not apply to minor minerals which will be allowed to be regulated by the State Government.
It appears to us that it is in pursuance of this authority read with the definition of minor minerals that the Rajasthan State was certainly within its authority to make its own rules so far as minor minerals are concerned. It is not contested before us that the material with which, we are concerned in the case before us is a minor mineral. Consequently, we have no hesitation in arriving at the conclusion that the Rajasthan Rules were and are within the legislative competence of this State.
It must follow from this that the rates of royalty prescribed in the Central Rules have no application in the case of the minor minerals as the regulation of their extraction falls within the ambit of the authority of the State, and it, is perfectly open to this State to prescribe its own rates of royalty therefor. Schedule I of the Rajasthan Rules prescribes such rates of royalty on various kinds of stone and other building material mentioned therein. We are clearly of opinion that any notification issued under these Rules cannot, therefore, be brushed aside on the mere ground that it was without jurisdiction or authority. We hold accordingly.
7. Now, before we proceed further, we should like to say a word about the meaning of the expression 'royalty'. The question came before a Division Bench to which one of us was a party in Bherulal v. State of Rajasthan AIR 1956 Raj 161 (A). There relying on Wharton's Law Lexicon, it was held that 'royalty' was in a case like the present a payment to the owner of minerals for the right of working the same, and that the charging was based on produce.
It was also held that this charge has nothing to do with the question where the purchaser may be taking the mineral or to whom he is going: to sell it, whether at the place where the mine is situated or at some other place hundreds of miles away. In other words, 'royalty' is a payment made to an owner for the right to exploit his property.
It is, therefore, indisputable that it would be open to the State as being the owner of the minerals to charge a royalty whether directly by itself or through a contractor. It further seems to us that a royalty may be charged as so much per weight or on the value of the produce.
8. The next contention on behalf of the petitioners before us is that it was not open to the State to fix different rates of royalty for the same goods on the basis of different uses to which they may be put, for that, according to the petitioners, would be a discriminatory act. We have carefully examined this aspect of the case. Now are the various rates of royalty prescribed in the Schedule applicable to the same kind or quality of goods or to different ones?
So far as we have been able to understand the true position, it does appear to us that though the classification adopted in Schedule I of the Rajasthan Rules may not stand the test of being a perfectly logical or scientific classification, what it really does is not to prescribe different rates of royalty for the same type or quality of goods but different rates of royalty have been fixed for different types or quality of goods.
Thus under the head 'Building Stone', a two-fold classification has been made: '(a) Ashlar and sized dimensional stone'-- Alternative rates of royalty depending either on weight or quantity have been prescribed under head (a), and under head (b) 'Masonry stones including Khandas, Boulder, Shingle etc.' a different and lesser rate of royalty has been prescribed. Then comes the second type or quality of stone which is called the lime stone.
This has again been divided into two classes: (a) for lime burning and (b) for other purposes. It is argued before us that all stone in that part of the country is lime stone, and, therefore, a differentiation of all lime stone into building stone and lime stone is obviously defective. What we wish to point out, however, is that 'lime stone' as used in the Schedule is obviously used in a sense different from and narrower than that of a building stone, and, consequently, whatever falls under the head of 'building stone', that is either being ashlar or dimensional stone or masonry stone, cannot fall under the head 'lime stone' either of a quality used for lime burning or for other purposes, such purposes being of course within the scope of the Rules.
Similarly, a different rate of royalty is prescribed for marble and for brick earth or for earth of various other kinds. It is, therefore, clear from a perusal of the Schedule as a whole that it is not the same type or the same quality of goods upon which varying rates of royalty have been prescribed, because if that had been done, that would be clearly open to the charge of unequal treatment.
The objective of the Schedule clearly is to levy different rates of royalty on different types of goods though in doing so we are prepared to concede that it is not quite easy to make the classification logically watertight; but we have no doubt that people who are dealing with the industry should have really no difficulty in understanding the basis on which the distinction is based.
We also wish to call attention in this connection to two other circumstances: firstly, that each kind of the goods which is mentioned in the Schedule even though some of which may be worked in the same mine has a definite market value, and secondly, that that value is different from one type of goods to another. In this state of circumstances, we are unable to agree with the contention of learned counsel for the petitioners that different rates of royalty are levied by the contractor for the same goods, and that this difference is based on the different uses to which the goods are to be put. As we look at the whole matter, the difference in the rates of royalty is essentially based not on the different kinds of use to which the articles are put or may be put, but the basis of classification is the difference in the quality of goods and the value such goods are likely to fetch in the open market. We see nothing inherently wrong in such a basis of classification, and in any case, we do not see our way to hold, under the circumstances, that the different rates of royalty are hit by the doctrine of discrimination.
9. It was also contended before us that a quarry-holder selling chips to a manufacturer would have to pay under the terms of the contract a different rate from a case in which the quarry-holder may be selling to a consumer, who is not a manufacturer. This distinction again is not borne out by the terms of the contract. The reason to our mind is that the rate of royalty depends really not upon the person to whom the goods may be sold but upon the types of goods sold; and as we have already pointed out above, different types of goods may well bear different rates of royalty without being open to any charge of discrimination.
10. It seems to us that the notification, which was issued by the Mining Engineer, Udaipur, and published in the Rajasthan Rajpatra dated 7-3-1957, at pp. 955-56 thereof was not quite happily worded in so far as it appears to levy a royalty of Rs. 12/- per 100 cubic feet on the making of chips and ballast and other things. The exact language may be well quoted here to make our meaning plain:
^^bl Bsds dh jk;YVh 'kjg fuEuizdkj ls gksxh%&
1- ,d vkuk Qh eu pwuk cukus dsiRFkj ij vkSj fpIl vFkok fxV~Vh o nhxj phtsa cukus ij 12 ckjg :i;k 100,d lkS D;wfcd QhV ij A**
It may be argued that the royalty is required to be charged not on the stone for making chips or ballast but after chips and ballast and other things had been made in other words that the charge was not on production but on manufacture. We have carefully examined the matter, and we have no hesitation in saying that the language of the notification was not happy at all, and we are disposed to think that the words^^ds iRFkj**after ^^nhxj phtsa cukus** have been omitted by an oversight, so that if the words which we think have been omitted be added, the wording would then be like this:
^^fpIl vFkok fxV~Vh cukus ds iRFkj ij**
Read in this way, the royalty would be chargeable on the produce and not on the manufacture. We may also point that the words^^nhxj phtsa**in this clause are extremelyvague and may lead to trouble, and that an expression like that should have been substituted by something more concrete and definite; but we leave the matter there as the controversy before us does not depend upon something connoted by the use of that expression but upon the levy of royalty on the stone from which chips and ballast are produced.
11. It was also argued before us on behalf of the State that the quality of stone used in producing chips is not the same as that of the building stone or of the masonry stone, and that jt is a superior one and further that the stone usea for manufacturing chips was of various colours such as yellow, green or pink, and it is not found in the same quarries from which masonry or building stone is quarried.
On the other hand, this position is stoutly denied on behalf of the petitioners, and it was(Contended before us that there are no separate quarries for building stones as for, chips and ballast, and that the same quarries produce stones which may be of rectangular shape or of some other regular dimensions and they also produce stones of irregular shapes which are used for the purpose of manufacturing chips and ballast.
We may point out that these are matters offact into which we do not wish to and cannot possibly enter for the purpose of deciding the present application. If the contention of the petitioners is that the charge of royalty on these stones cannot be equitably based on any such distinction as is sought by the State to be enforced, and that the levy of royalty on chips and ballast is altogether unreasonable or unconscionable and out of all proportion to the market value thereof we leave it to the petitioners to represent the matter to the State or to have it 'fought out in regular courts of law.
12. For the reasons mentioned above, we find that there is no force in this application, and, consequently, we dismiss it with costs.