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PETITIONER: AMBICA QUARRY WORKS & ANR.

       Vs.

RESPONDENT: STATE OF GUJARAT & ORS.

DATE OF JUDGMENT11/12/1986

BENCH: MUKHARJI, SABYASACHI (J) BENCH: MUKHARJI, SABYASACHI (J) SINGH, K.N. (J)

CITATION:  1987 AIR 1073            1987 SCR  (1) 562  1987 SCC  (1) 213        JT 1986  1036  1986 SCALE  (2)1037  CITATOR INFO :  R          1988 SC2187  (35,36)

ACT:     Gujarat  Minor Mineral Rules, 1966: Rule 18--Renewal  of lease-Lease granted prior to coming into operation of Forest (Conservation) Act, 1980--Renewal whether mandatory.     Forest  (Conservation)  Act, 1980:  Pre-existing  mining leases-Renewal  of--Whether could be claimed as a matter  of right.     Interpretation  of  statutes--Interpretation  must  sub- serve and help implement intention of Act. Expression  ’may’ when not construed as ’shall’.      Constitution of India:’ Article 141--Precedent--Ratio of a  decision to be understood in the background of  facts  of the case.

HEADNOTE:     Sub-clause  (b)(i) of rule I8 of Gujarat  Minor  Mineral Rules,  1966, which were framed under Act 67 of  1957,  pro- vides  that  the lease for all minerals  specified  in  sub- clause  (i)  of clause (a) may be renewed by  the  competent officer  for one or more periods not exceeding ten years  at one time.     Section  2  of  the  Forest  (Conservation)  Act,  1980, brought  into  force  on 25th October,  1980  provides  that notwithstanding anything contained in any other law for  the time being in force in a State, no State Government or other authority shall make, except with the prior approval of  the Central Government, any order directing (i) dereservation of reserved  forest, and (ii) the use of forest land  for  non- forest purposes.     The  appellants  had been granted leases  for  quarrying minor  minerals  prior to the coming into operation  of  the 1980 Act. Their applications for renewal of leases under  r. 18 of the Rules were rejected by the competent authority  on the  ground that the lands fell under the  reserved  forests which were governed by the 1980 Act. Their revision applica- tions  failed,  and the High Court also  rejected  the  writ petitions filed by them. 563     In  the appeals by special leave, it was  contended  for

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the appellants that the conditions precedent for the  opera- tion  of the Act were not existing, that there was no  ques- tion  of  extending for non-forest  purposes  forest  lands, since  their’s  were existing quarry leases in  areas  which were at the relevant time dereserved forests, that they  had not  committed  any breach of the terms of grant  nor  there were  any other factors disentitling them to  such  renewal, that  the  words ’may be renewed’ in r. 18(b)(i)  should  be read as ’shall be renewed’, and so read they make it  incum- bent  on the Government to renew the lease if the lessee  so desired,  and  as they had invested large sums of  money  in mining  operations  a duty was cast on  the  authorities  to exercise the power granting permission in a manner that they could receive full benefit of their investments.     For  the  respondents it was contended  that  after  the coming  into operation of 1980 Act there was no question  of renewal  of the leases because it had prevented  renewal  of lease without the approval of the Central Government. Dismissing the appeals, the Court,     HELD:  1. Whether the power is one coupled with  a  duty must  depend upon the facts and circumstances of  each  case and must be so decided by the Courts in each case. [569D]     I.2 The Gujarat Minor Minerals Rules, 1966 dealt with  a situation  prior to the coming into operation of the  Forest (Conservation)  Act,  1980. While under r. 18 of  the  Rules there  was power to grant renewal, which might have  cast  a duty on account of the investments made by the appellants in the  areas covered by the quarrying leases, they  could  not claim  renewals  as  a matter of right  after  the  Act  was brought into force. Their applications were rejected on good grounds. The orders of the appropriate authorities deal with the situation. [569G, F, 570B]     Julius  v. Lord Bishop of Oxford, [1880] 5 Appeal  Cases 214 and Craies on Statute Law, 7th Edn. 229, referred to.     2.1 All interpretations must subserve and help implement the intention of the Act. The primary purpose of the Act  of 1980  is  to prevent further  deforestation  and  ecological imbalances.  Therefore, the concept that power coupled  with duty  enjoined  upon  the respondents to  renew  the  lease, stands eroded by the mandate of the legislation manifest  in the Act. The primary duty was to the community and that 564 took  precedence  over the obligation  to  the  individuals. [573C,A,569H-570A]     2.2 The appellants are asking for renewal of the  quarry leases. It will lead to further deforestation or at least it will not help reclaiming hack the areas where deforestations have  taken  place. The Central Government has  not  granted approval.  If the State Government was of the  opinion  that this  was  not a case where it should seek approval  of  the Central Government, the State Government could not apparent- ly seek such approval. [572G, S73A]     3.  The ratio of any decision must he understood in  the background  of  the facts of that case. A case  is  only  an authority  for what it actually decides, and not what  logi- cally follows from it. [572C] Quinn v. Leathem, [1901] Appeal Cases 495, referred to.     State of Rajasthan v. Hari Shankar Rajendra Pal,  [1965] 3  SCR  402, State of Bihar v. Banshi Ram Modi  and  Others, [1985] 3 SCC 643, distinguished.

JUDGMENT:     CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 4250-425

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1 of 1986.     From  the Judgment and Order dated 9th August,  1985  of the Gujarat High Court in Spl. Civil Appln. No. 2471 of 1985 and 62 18 of 1983.     Govind  Dass, S.H. Sheth, Mrs. H. Wahi and M.V.  Goswami for the Appellants. P.S. Potio, T.U. Mehta, and M.N. Shroff for the Respondents. The Judgment of the Court was delivered by     SABYASACHI  MUKHARJI,  J: We grant leave  in  these  two special  leave  applications and dispose  of  these  appeals arising out of the decisions of the High Court of Gujarat by the judgment herein.     The  two  appeals centre round the question  of  how  to strike  balance  between  the need of  exploitation  of  the mineral resources lying hidden in the forests and the  pres- ervation of the ecological balance and to arrest the growing environmental deterioration and involve common questions  of law. In the appeal arising out of special leave petition No. 12041 of 1985 the appellant firm had been granted a 565 quarry  lease for the minor mineral black trap at S. No.  73 of Village Morai of Taluka--Pardi, in the District of Valsad in  the State of Gujarat..The lease was granted on or  about 8th  November,  1971  for a period of ten  years.  The  area comprised  of 13 acres of land for quarrying purpose.  Three persons  were granted-2-1/2 acres of land each and  the  re- maining-5-1/2  acres of land were placed at the disposal  of Industries,  Mines and Power Department for the  purpose  of granting quarry lease from the same. The case of the  appel- lant was that the said lands were dereserved from the forest area from 1971.     On  or about 3rd August, 1981 when the appellant’s  term of  lease  was about to expire, the  appellant  applied  for renewal  of  lease asper rule 18 of  Gujarat  Minor  Mineral Rules, 1966 (hereinafter called the said Rules). The  appli- cation of the appellant for renewal of lease was rejected by the Assistant Collector, Valsad, on the ground that the land fell  under the "Reserved Forest" area and hence the  Forest (Conservation)  Act,  1980 (hereinafter called  ’1980  Act’) applied  to the forests. The forest department of  State  of Gujarat  refused  to give ’no  objection’  certificate.  The contention of the appellant was that by the order dated 29th November,  1971,  the forest department had  dereserved  the said  land from the reserved area and had allotted the  land for  the quarrying purpose to the appellant. The  contention of  the appellant was as the land was under the  control  of the  Industries, Mines & Power department, the 1980 Act  did not apply to the same. An appeal was preferred by the appel- lant which was dismissed by the Director, Industries,  Mines and  Power department Government of Gujarat on or about  4th March, 1985.     It  is asserted by the appellant that on or  about  29th January,  1983,  the  Government had  issued  two  circulars instructing  the  Director of Geology and Mining  and  other authorities not to issue the leases in the fresh area issued by  the State Government. The appellant thereafter  filed  a writ  petition in the High Court of Gujarat. The High  Court of Gujarat dismissed the petition. The appellant has come up in  appeal  before this Court from the  said  decision.  The appeal arising out of S.L.P. No. 12041 of 1985,  hereinafter mentioned as first appeal.     The case of the appellants in the second appeal is  that on diverse dates quarry leases. had been granted to the said appellants. There were ten of them. Eight of the  appellants got  their first renewal of their quarry leases in  1976-77.

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Appellant  No. 9 applied for first renewal in August,  1979. Appellant  No.  6 applied for first renewal  on  20th  July, 1982. In 1982, some of the appellants except appellants 6 to 9 applied 566 for  second  renewal to the Collector.  In  December,  1982, second  renewals  were refused by  the  Collector.  Revision filed  by the appellants against the order of the  Collector was rejected by the Director, Geology and Mining in 1983 and in December, 1983, writ petition often described as  special civil application was filed before the High Court, challeng- ing  the refusal to renew. The High Court rejected the  said writ  petition. The second appeal herein arises out  of  the said decision in August, 1985 of the High Court of Gujarat.     Both  these appeals involve the question, whether  after coming  into  operation  of 1980 Act,  the  appellants  were entitled  to renewal either first or second of their  quarry leases?  In this connection it is necessary to refer to  the 1980  Act. This was an Act passed by the Parliament to  pro- vide for the conservation of forest and for matters connect- ed therewith or ancillary thereto. The Statement of  Objects of the said Act is relevant. It is stated that deforestation caused ecological imbalances and led to environmental  dete- rioration. It recognised that deforestation had been  taking place  on  a large scale in the country and it  had  thereby caused  widespread concern. With a view to checking  further deforestation,  an  Ordinance had been promulgated  on  25th October, 1980. The Ordinance made the prior approval of  the Central  Government necessary for dereservation of  reserved forests  and for the use of forest land for non-forest  pur- poses. The Ordinance had also provided for the  constitution of  an advisory committee to advise the  Central  Government with regard to grant of such approval. The 1980 Act replaced the  said Ordinance. The Act extends to the whole  of  India except the State of Jammu & Kashmir, and came into force  on 25th  October,:  1980.  Section 2 of the said  Act  is  only relevant for our present purpose. It provides as follows:               "2.  Restriction on the dereservation of  for-               ests  or  use of forest  land  for  non-forest               purpose  --Notwithstanding anything  contained               in  any other law for the time being in  force               in  a  State,  no State  Government  or  other               authority  shall make, except with  the  prior               approval of the Central Government, any  order               directing--               (i)  that  any  reserved  forest  (within  the               meaning of the expression "reserved forest" in               any  law for the time being in force  in  that               state) or any portion thereof, shall cease  to               be reserved;               (ii)  that  any  forest land  or  any  portion               thereof  may be used for any  non-forest  pur-               pose.               567               Explanation.--For the purposes of this section               "non-forest  purposes"  means breaking  up  or               clearing of any forest land or portion thereto               for any purpose other than re-afforestation. "     The  said  section  makes it obligatory  for  the  State Government  to obtain the permission of the Central  Govern- ment  for (1) dereservation of reserved forest and  (2)  for use of forest land’ for non-forest purposes. It is apparent, therefore, that the two dual situations were intended to  be prevented by the legislation in question., namely dereserva- tion  of  reserved forest, and use of forest land  for  non-

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forest purposes.     In the instant appeals leases for quarrying purposes had been  granted prior to the coming into operation of the  Act in  question.  Shri  Gobind Dass, learned  counsel  for  the appellant in the first appeal and Shri Sheth learned counsel for the appellants in the second appeal contended that there was no question of extending for non-forest purposes  forest lands.  There were existing quarry leases in one case  first renewal  was sought and in some other cases second or  third renewals  were  being sought. Therefore these  were  at  the relevant time dereserved forests. Neither of the two contin- gencies  sought  to be prevented was there.  The  conditions precedent for the operation of the Act were not there in the facts of these appeals, it was urged.     Our  attention  was drawn to rule 18  of  Gujarat  Minor Mineral  Rules, 1966 which were framed under the Act  67  of 1957  by the Government of Gujarat. The rules  provided  for the period of the lease, renewals and availability of  areas already granted and sub-clause (b)(i) of the said rule 18 of the said Rules provides as follows:               "(b)(i)  The lease for all minerals  specified               in-sub-clause (i) of clause (a) may be renewed               by  the  competent  officer for  one  or  more               periods and the period of renewal at one  time               shall  not  exceed  ten years  and  the  total               period  for  which the lease  may  be  renewed               shall  not exceed twenty years in  the  aggre-               gate."                   Shri Sheth drew our attention to rule 3 of               Part VIII (page 62) of the Manual which  deals               with the procedure of granting renewals  under               the rules.               On the other hand Shri Mehta, counsel for  the               respondents in the               568               first  appeal and Shri Poti, counsel  for  the               respondents  in  the second  appeal  contended               before us that after coming into operation  of               1980  Act there was no question of renewal  of               the  leases  because this  Act  had  prevented               renewal  of the lease without the approval  of               the Central Government.                   Shri  Gobind Dass, however, placed  strong               reliance on State of Rajasthan v. Hari Shankar               Rajendra  Pal,  [1965] 3 SCR 402. That  was  a               decision dealing with Rajasthan Mines Minerals               Concession  Rules,  1958. This Court  in  that               case was concerned with Rule 30 under  Chapter               IV under the said Rajasthan Rules. This  Court               observed that the word "may’ in the proviso in               rule  30  in regard to the  extension  of  the               period  by Government should be  construed  as               ’shall’ so as to make it incumbent on  Govern-               ment to extend the period of the lease if  the               lessee desired extension. The Rajasthan  Rules               provided, inter alia, as follows:               "Period of lease--A mining lease may be grant-               ed  for a period of 5 years unless the  appli-               cant himself desires a shorter period;                         Provided  that  the  period  may  be               extended by the Government for another  period               not  exceeding  5  years with  option  to  the               lessee  for  renewal  for  another  equivalent               period, in case the lessee guarantees  invest-               ments  in machinery, equipments and the  like,

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             at least to the tune of 20 times the value  of               annual dead-rent within 3 years from the grant               of such extension. The value of the machinery,               equipment and the like shall be determined  by               the Government. Where the lease is so renewed,               the  dead rent and the surface rent  shall  be               fixed  by  the Government  within  the  limits               given  in the Second Schedule to these  rules,               and shall" in no case exceed twice the  origi-               nal  dead-rent and surface rent  respectively,               and the royalty shall be charged at the  rates               in force at the time of renewal."     It was submitted by Shri Gobind Dass that the said  rule was in pari materia with sub-rule (b) of rule 18 of  Gujarat Minor  Mineral Rules 1966. Often when a public authority  is vested  with power, the expression ’may’ has been  construed as ’shall’ because power if the conditions for the  exercise are fulfilled is coupled with duty. As observed in Craies On Statute Law, 7th Edition, page 229, the expression "may" and "shall" have often been subject of constant and con- 569 flicting  interpretation. "May" is a permissive or  enabling expression but there are cases in which for various  reasons as soon as the person who is within the statute is entrusted with the power, it becomes his duty to exercise it. As early as  1880 the Privy Council in Julius v. Lord Bishop  of  Ox- ford,  1880,  5 Appeal Cases, 214. explained  the  position. Earl  Cairns,  Lord  Chancellor speaking  for  the  judicial committee observed dealing with the expression "it shall  be lawful" that these words confer a faculty or power and  they do  not  of  themselves do more’ than confer  a  faculty  or power. But the Lord Chancellor explained there may be  some- thing  in  the  nature of the thing empowered  to  be  done, sometimes  in the object for which it is to be  done,  some- thing in the conditions under which it is to be done,  some- thing  in  the  title of the person or  persons’  for  whose benefit  the power is to be exercised, which may couple  the power  with  a duty, and make it the duty of the  person  in whom  the  power  is reposed, to exercise  that  power  when called upon to do so. Whether the power is one coupled  with a duty must depend upon the facts and circumstances of  each case and must be so decided by the courts in each case. Lord Blackburn observed in the said decision that enabling  words were always compulsory where the words were to effectuate  a legal right.     Here  the case of the appellants is that they  have  in- vested large sums of money in mining operations.  Therefore, it was the duty of the authorities that the power of  grant- ing permission should have been so exercised that the appel- lants  had  the full benefits of their investments.  It  was emphasized  that  none of the appellants had  committed  any breach  of the terms of grant nor were there any other  fac- tors  disentitling  them to such renewal.  While  there  was power  to  grant  renewal, and in  these  cases  there  were clauses  permitting renewals, it might have cast a  duty  to grant  such  renewal in the facts and circumstances  of  the cases  specially  in  view of the investments  made  by  the appellants in the areas covered by the quarrying leases, but renewals  cannot  be claimed as a matter of  right  for  the following reasons.     The  rules  dealt with a situation prior to  the  coming into operation of 1980 Act. ’ 1980 Act’ was an Act in recog- nition  of the awareness that deforestation  and  ecological imbalances  as a result of deforestation have become  social menaces and further deforestation and ecological  imbalances

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should be prevented. That was the primary purpose writ large in the Act of 1980. Therefore the concept that power coupled with  the  duty enjoined upon the respondents to  renew  the lease  stands  eroded by the mandate of the  legislation  as manifest in 1980 Act in the facts and circumstances of these cases. The primary 570 duty was to the community and that duty took precedence,  in our  opinion, in these cases. The obligation to the  society must predominate over the obligation to the individuals.      For  the same reasons we are unable to accept the  view that the ratio of the decision of this Court in the case  of State  of  Rajasthan v. Hari Shankar  Rajendra  Pal  (supra) could  be  invoked in the facts and circumstances  of  these cases  to demand renewal. Furthermore it appears to us  from the affidavits in opposition filed on behalf of the respond- ents that there were good Founds for not granting the renew- al  of the lease. The orders of the appropriate  authorities in both these cases deal with the situation.      Both  Shri Gobind Dass as well as Shri Sheth,  however, relied  very heavily on the decision of this Court in  State of Bihar v. Banshi Ram Modi and Others, [1985] 3 SCC 643. As the  said decision dealt with section 2 of the 1980 Act,  it is  necessary  to refer to the facts of that case.  There  a mining  lease  for  winning mica was granted  by  the  State Government  in respect of an area of 80 acres of land  which formed  part of reserved forest before coming into force  of 1980  Act.  However,  the forest land had been  dug  up  and mining operations were being carried on only in an area of 5 acres out of the total lease area of 80 acres. While  carry- ing  on  mining operations, the respondent came  across  two associate  minerals  felspar  and quartz in  the  area.  The respondent  in that case, therefore, made an application  to the  State Government for execution of a Deed of  Incorpora- tion to include the said minerals also in the lease.  Though the  1980  Act  had come into force,  the  State  Government executed the Deed of Incorporation incorporating these items without  obtaining prior sanction of the Central  Government under  section 2 of 1980 Act. Since the respondent  in  that case  made a statement before the Court that he would  carry on  the mining operations only on 5 acres of land which  had already  been utilised for non-forest purposes  even  before the Act came into force, the question for determination  was whether  prior  approval  of the  Central  Government  under section  2 of 1980 Act in the facts of that case was  neces- sary for the State Government for granting permission to win associate  minerals also within the same area of 5 acres  of land?  This  Court  answered the question  in  negative  and affirmed the judgment of the High Court. This Court observed at pages 647 and 648 of the report as follows:                        "The  relevant parts of Section 2  of               the  Act which have to be construed  for  pur-               poses of this case are clause (ii) of and               571               the  Explanation to that section. Clause  (ii)               of Section 2 of the Act provides that notwith-               standing  anything contained in any other  law               for  the  time being in force in a  State,  no               State  Government  or  other  authority  shall               make,  except with the prior approval  of  the               Central  Government, any order directing  that               any forest land or any portion thereof may  be               used  for any non-forest purpose.  Explanation               to  Section 2 of the Act  defines  "non-forest               purpose"  as  breaking up or clearing  of  any

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             forest land or portion thereof for any purpose               other than reforestation. Reading them togeth-               er,  these two parts of the section mean  that               after  the  commencement of the Act  no  fresh               breaking  up  of the forest land or  no  fresh               clearing  of the ’forest on any such land  can               be  permitted by any State Government  or  any               authority  without the prior approval  of  the               Central Government. But if such permission has               been accorded before the coming into force  of               the  Act and the forest land is broken  up  or               cleared  then  obviously  the  section  cannot               apply. In the instant case it is not  disputed               that  in an area of five acres out  of  eighty               acres  covered by the mining lease the  forest               land  had  been dug up and  mining  operations               were being carried on even prior to the coming               into force of the Act. If the State Government               permits  the  lessee by the amendment  of  the               lease  deed  to  win and  remove  felspar  and               quartz  also in addition to mica it cannot  be               said  that the State Government  has  violated               Section  2 of the Act because thereby no  per-               mission  for fresh breaking up of forest  land               is  being  given.  The result  of  taking  the               contrary  view will be that while the  digging               for  purposes of winning mica can go  on,  the               lessee would be deprived of collecting felspar               or quartz which he may come across while he is               carrying  on  mining  operations  for  winning               mica.  That  would  lead  to  an  unreasonable               result which Would not in any Way subserve the               object  of the Act. We are, therefore, of  the               view that while before granting permission  to               start.  mining  operations on  a  virgin  area               Section  2 of the Act has to be complied  with               it is not necessary to seek the prior approval               of  the  Central Government  for  purposes  of               carrying  out  mining operations in  a  forest               area which is broken UP or cleared before  the               commencement  of the Act. The learned  counsel               for respondent 1 has also given an undertaking               that  respondent  1 would confine  his  mining               operations only to the extent of five acres of               land on which mining operations               572               have  already  been carried out and  will  not               feel  or  remove any  standing  trees  thereon               without  the prior permission in writing  from               the Central Government. Taking into considera-               tion  all the relevant matters, we are of  the               view that respondent 1 is entitled to carry on               mining  operations in the said five  acres  of               land  for  purposes of  removing  felspar  and               quartz subject to the above conditions."     The  aforesaid observations have been set in  detail  in order  to understand the true ratio of the said decision  in the  background of the facts of that case. It is  true  that this  Court  held that if the permission  had  been  granted before  the  coming into operation of the 1980 Act  and  the forest  land has been broken up or cleared, clause  (ii)  of section  2 of 1980 Act would not apply in such a  case.  But that decision was rendered in the background of the facts of that  case. The ratio of any decision must be understood  in the  background of the facts of that case. It has been  said

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long  time ago that a case is only an authority for what  it actually  decides, and not what logically follows  from  it. (See Lord Halsbury in Quinn v. Leathem) [1901] Appeal  Cases 495.  But  in view of the mandate of Article  141  that  the ratio  of the decision of this Court is a law of  the  land, Shri Gobind Dass submitted that the ratio of a decision must be  found out from finding out if the converse was not  cor- rect.  But this Court, however, was cautious  in  expressing the  reasons  for  the said decision in State  of  Bihar  v. Banshi  Ram  Modi & Others (supra). This Court  observed  in that  decision that the result of taking the  contrary  view would  be "that while digging for purposes of  winning  mica can  go on, the lessee would be deprived of collecting  fel- spar or quartz which he may come across while he is carrying on mining operations for winning mica. That would lead to an unreasonable result which will not in any way sub-serve  the object of the Act." There was an existing lease where mining operation was being carried on and what was due by  incorpo- ration  of a new term was that while mining operations  were being carried on some other minerals were available, he  was given  right to collect those. The new lease only  permitted utilisation or collection of the said other minerals.     In the instant appeals the situation is entirely differ- ent.  The appellants are asking for a renewal of the  quarry leases. It will lead to further deforestation or at least it will not help reclaiming back the areas where deforestations have  taken place. In that view of the matter, in the  facts and circumstances of the case, in our opinion, the ratio  of the  said decision cannot be made applicable to support  the appellants’  demands  in these cases because the  facts  are entirely diffe- 573 rent  here. The primary purpose of the Act which  must  sub- serve the interpretation in order to implement the Act is to prevent  further deforestation. The Central  Government  has not  granted  approval. If the State Government  is  of  the opinion  that  it is not a case where the  State  Government should  seek approval of the Central Government,  the  State Government cannot apparently seek such approval in a  matter in  respect  of, in our opinion, which it has  come  to  the conclusion that no renewal should be granted.     In that view of the matter and the scheme of the Act, in our  opinion, the respondents were fight and the  appellants were  wrong.  All interpretations must  sub-serve  and  help implementation of the intention of the Act. This interpreta- tion, in our opinion, will sub-serve the predominant purpose of the Act.     In that view of the matter, we are unable to sustain the submissions  urged in support of these appeals. The  appeals therefore fail and are accordingly dismissed. In view of the facts and circumstances of these appeals, however, we direct the parties to pay and bear their own costs. P.S.S.                                               Appeals dismissed. 574