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PETITIONER: STATE OF RAJASTHAN

       Vs.

RESPONDENT: HINDUSTAN SUGAR MILLS LTD. & ORS.

DATE OF JUDGMENT14/07/1988

BENCH: THAKKAR, M.P. (J) BENCH: THAKKAR, M.P. (J) RAY, B.C. (J)

CITATION:  1988 AIR 1621            1988 SCR  Supl. (1) 461  1988 SCC  (3) 449        JT 1988 (3)    57  1988 SCALE  (2)20

ACT:      Mines and  Minerals (Regulation  and Development)  Act, 1957 Section  9(3)(b)-Levy  and  Collection  of  royalty  on limestone-Notification enhancing the levy-Validity of.      Constitution  of   India,  1950-Art.   226-High   Court exercising high  prerogative power-to mould relief in a just and fair manner as required by the demands of the situation.

HEADNOTE:      The Central  Government  issued  a  Notification  dated January 29,  1970 under  the Mines  and Minerals (Regulation and  Development)   Act,  1957   authorising  the  levy  and collection of royalty on limestone at Rs.1.25 per tonne. The Respondents  filed   a  writ  petition  in  the  High  Court challenging the Notification.      The High Court struck down the impugned notification on the ground  that the  Central Govt. had enhanced the rate of royalty by  virtue of  the said notification in disregard of the statutory  embargo embodied in clause (b) of the proviso to section  9(3) of the Act which prohibits enhancement more than once during any period of four years.      The State  of Rajasthan which was recovering royalty at the enhanced  rates has  filed these  two appeals by special leave.      Allowing the appeals partly, this Court, ^      HELD:1.1 The  only vice in the impugned Notification is that the  enhancement was  authorised nearly four months too soon in  advance i.e.  On January  29, 1970. The enhancement could have been made with impunity without violating proviso (b) to  sub-section(3) of section 9 about four months later. The enhancement was therefore unenforceable only during this period of  four months.  The  enhancement  could  have  been lawfully made without any impediment on June 1, 1970. During this  interregnum   the  Notification  would  have  remained dormant. Under the circumstances the just and fair course to adopt is  to issue a Writ restraining the State of Rajasthan from enforcing the enhance- 462 ment for  the interregnum  of about  four months expiring on 31st May,  1970 instead of striking down the Notification in

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absolute terms  for all  times as  has been done by the High Court. [469B-E]      1.2 The  enhancement was  merely premature and not void in the  sense that  the enhancement could have been lawfully enforced with  effect from  June 1,  1970 and could not have been made  enforceable on  the date  of the  issuance of the Notification on  29th January,  1970. Such a Notification in the  eye  of  law,  must  be  treated  as  dormant  for  the interregnum of about four months till it becomes enforceable on June  1, 1970 upon the commencement of the next four-year block. The  enhancement was  authorised by  the Legislature. However, there  was an  embargo making  it enforceable  only once during  the course  of the four-year block. It would be taking  a   super-technical  view   to  hold  that  a  fresh Notification could have been issued on June 1, 1970 and that Notification issued on 29th January, 1970 should be quashed. [467G-H; 468A-B]      D.K. Trivedi & Sons and ors. v. State of Gujarat & Ors. etc., [1986] Suppl. SCC 20, relied on.      Mahendra Lal  Jaini v.  The State  of Uttar  Pradesh  & Ors., [1963] Suppl. 1 SCR 912 and Bhikaji Narain Dhakaras v. The  State   of  Madhya   Pradesh,   [1955]   2   SCR   589, distinguished.      2. The  High  Court  was  exercising  high  prerogative jurisdiction under  Article 226  and could  have moulded the relief in  a just and fair manner as required by the demands of the  situation. The  High Court could well have proceeded on the  premise that  the enhancement  made pursuant  to the Notification dated  January 29,  1970 was  unenforceable for the four  months preceding  June 1,  1970 on  which date the enhancement could  have been  lawfully enforced  pursuant to the Notification. [467F-G]      3. The  order of  the High  Court quashing the impugned Notification dated  January 29,  1970 is set aside. In place thereof the  State of Rajasthan is restrained from enforcing the impugned  Notification till  31st  May,  1970  with  the clarification  that   the  enhancement   as  per   the  said Notification authorising  collection of  levy at Rs.1.25 per tonne would  be enforceable  with effect  from June  1, 1970 onwards. [469G-H]      [This Court  observed that such amount as remains to be recovered in  the light of the present Judgment will have to be paid 463 by the  Respondents on or before September 30, 1989, failing which the  appellant will  be entitled  to recover  the same from the Respondents.] [469G-H]

JUDGMENT:      CIVIL APPELLATE  JURISD1CTION: Civil  Appeal No. 1743 & 1744 of 1973.      From the  Judgment and  order dated  9.5  1972  of  the Rajasthan High  Court in D.B. Civil Special Appeal No 110 of 1972.      Badri Das Sharma for the Appellant.      G.L. Sanghi and A.K. Sanghi for the Respondents in C.A. No. 1743/1973.      K.K. Jain,  Bishambar Lal, P. Dayal and A.D. Sangar for the Respondents in C.A. No 1744/1973.      The Judgment of the Court was delivered by      THAKKAR, J:  The High  Court  having  struck  down  the Notification dated  January 29,  1970 issued  by the Central Government authorising the levy and collection of royalty on

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limestone at Rs.1.25 per tonne, the State of Rajasthan which was recovering royalty at the aforesaid rate under the Mines and Minerals  (Regulation and  Development) Act,  1957 (Act) has approached this Court by way of these two allied appeals by special  leave. The impugned Notification has been struck down by  the High  Court on  the  ground  that  the  Central Government had enhanced the rate of royalty by virtue of the said Notification  in disregard  of  the  statutory  embargo embodied in  clause (b)  of the  proviso to Section 9(3)’ of the Act  which prohibits  enhancement "more than once during any period of four years". 1.   "S.9-Royalties in respect to mining leases.      (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 he specified in the           Notification:           Provided that the Central Government shall note:           (a) xxx           (b)  Enhance the rate of royalty in respect of any                mineral more  than once  during any period of                four years". 464      The  contention   of  the  respondents  (original  Writ Petitioners in  A the  High Court)  was that  enhancement by amending the  schedule could  be effected  only once  within four years  of the ’earlier enhancement’. The interpretation canvassed  by   them  (referred   to  as   Writ  Petitioners hereafter) was  that the  expression "during  any period  of fol(r years"  would mean  during the  block  of  four  years ’Commencing from  the last date on which the enhancement was made’. This  interpretation was  accepted by  the High Court Now this  Court in  D.K. Trivedi & Sons and ors. v. State of Gujarat &  Ors. etc.,  [1986] Suppl.  Supreme Court Cases 20 has interpreted this very expression in a provision which is in puri-materia  as prohibiting  enhancement of  royalty  in respect of  any mineral  more than once during any period of four years  ’commencing from  the date of the enforcement of the Rules.’  In other  words while  the High Court has taken the view  that the  point of  commencement of  the period of embargo must  begin with  effect from  the date on which the last enhancement  was made,  this Court  has taken  the view that the  four year period of embargo must commence from the date of  the commencement  of the  Rules. And  that  further enhancement can  be made  only once  during  the  subsequent block of four years so computed. Of course in D.K. Trivedi’s case this Court was concerned with an analogous provision in the Gujarat  Rules. But  the problem  of interpretation  was identical namely  whether the four-year block would commence from the  ’date of enforcement of the Rules’ or whether each block would  commence from  the ’date  of last enhancement’. Madon,J. speaking for the Court has resolved the controversy in the passage extracted hereinbelow:           "As the  Gujarat Rules have been amended from time           to time  by the  impugned notifications  so as  to           enhance or reduce the rate of royalty or dead rent           or both,  it is  necessary at  this  stage  before           turning to  the Gujarat Pules to consider what the           expression  "during  any  period  of  four  years"           occurring in  the proviso to Section 15(3) mean It           is pertinent  to note  that the  words used in the           proviso are "shall not enhance the rate of royalty           ... for  more than  once during any period of four           years". This  is a  wholly  different  thing  from

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         saying that  where the  rate of  royalty has  been           enhanced once it shall not be enhanced again for a           period of  four years  or, in  other words until a           period  of  four  years  from  the  date  of  such           enhancement has  expired. The period of four years           for this  purpose must be and can only be reckoned           from the  date of  corning into force of the rules           and it  is open  to a  State Government to enhance           the rate of roy- 465           alty or dead rent at any time during the period of           four years from the coming into force of the ruIes           and after each period of four years expires at any           time during  each succeeding period of four years.           The Gujarat Rules came into force on April 1, 1966           Therefore, in  the case of Gujarat Rules the first           period of  four years  would be  April 1,  1966 to           March 31,  1970, the  second period would be April           1, 1970  to March 31, 1974, the third period would           be April  1, 1974  to March  31, 1978,  the fourth           period would  be April  1, 1978 to March 31, 1982,           the fifth would be April 1, 1982 to March 31, 1986           and so  on thereafter  Thus, during  any of  these           periods of  four years  both dead rent and royalty           can be  enhanced by  the Government of Gujarat but           only once during each such period."                                             (Emphasis added) Thus the  question regarding  interpretation is no more res- integra. Applying  the law  as declared  by  this  Court  in Trivedi’s case (supra) an enhancement in the rate of royalty can be  effected once  in the  successive  four-year  blocks succeeding  on  the  heels  of  the  first  four-year  block commencing from June 1, 1958 and expiring on 31st May, 1962. In other  words the rate of royalty could have been lawfully enhanced once during each of the four-years blocks specified hereunder viz:                    1.6.1962 to 31.5.1966                    1.6.1966 to 31.5.1970                    1.6.1970 to 31.5.1974 The rates  of royalty  were however  revised in  the  manner indicated hereafter.  During the  first block  of four years that is  to say  from 1.6.1958  to  31.5.1962  the  rate  of royalty on limestone was fixed at Rs. 0.75 per tonne subject to a  rebate on extractions made by recourse to a particular process (froth  flotation method) During the second block of four years  commencing from 1.6.1962 to 31.5 1966, no change was effected  in the  rate of  royalty. In  the third  block commencing  from   1.6.1966  to   31.5.1970,   the   Central Government issued  a notification dated 1.7.1968 whereby the rate of  royalty in  respect of limestone was again revised. The relevant entry reads thus:      "8. Limestone:           (i)  Superior grade  with 45%  or more CaO Rs.1.25                per tonne. 466           (ii) Inferior grade with less than 45% CaO Rs.0.75                per tonne On January  29,  1970  in  the  same  block  of  four  years commencing  from   1.6.1966  to   31.5.1970,   the   Central Government  issued   another  notification,   the   impugned Notification  (dated   January   29,   1970)   whereby   the distinction  between   the  two   grades  of  limestone  was abolished and  rate of  royalty was  fixed  at  Rs.1.25  per tonne.  This   was  achieved   by  substituting   the  entry pertaining to  royalty leviable  on limestone by an entry in

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the following terms:      "Limestone-Rs.1.25 per tonne."      The change effected by the impugned Notification vis-a- vis earlier  Notification is  better comprehended  when  the entries are juxtaposed as under:                ’First’ and ’second’    ’Third’four-year                four-year Blocks        Block 1966-70                1958-62 & 1962-66 _______________________________________________________ Date of Notification                 29-6-68    29-1-70 Rate of royalty fixed Rs.0.75 per   (a) Superior for limestone         tonne (subject    grade                       to a rebate of    with                       Rs.0.38 per tonne 45% or                       on limestone      more                       beneficiated      CaO                       by froth float-   Rs.1.25                       ation process.)   per                                 tonne.       Limestone                                              Rs.1.25                                 (b) Inferior per                                     grade    tonne.                                     with less                                     than                                     45%                                     CaO-                                     Rs.0.75                                     per                                     tonne. 467      In the net result the position which emerges is this: The Writ  Petitioners were  paying royalty  at  Rs.0.75  per tonne  subject   to  a  rebate  which  was  granted  on  the extraction being  made by  recourse to  a particular process till the  third four  year block commencing on June 1, 1968. Thereafter by virtue of the Notification dated June 29, 1968 the petitioners  had to pay royalty at Rs.0.75 per tonne for the  inferior   grade   limestone   but   the   rebate   was discontinued. Under  the circumstances  the Writ Petitioners complained that as a matter of fact enhancement was effected twice  during   the  four-year  block  of  1966-70.  It  was contended that by virtue of the Notification dated 29.6.1968 inasmuch as  the rebate  of  Rs.0.38  per  tonne  which  was hitherto being  granted was  withdrawn  it  constituted  the first enhancement during this block and inasmuch as the rate of royalty  was again enhanced to Rs.1.25 per tonne persuant to the  impugned  Notification  dated  January  29  1970  it constituted an  enhancement for  the second time in the same four-year block..  On these  premises it  was urged that the embargo engrafted by Section 9(3)(b) of the Act was violated by the  impugned  Notification  and  consequently  the  said Notification was  null and  void. The  High Court upheld the plea and  came to the conclusion that the second enhancement would be  being enforced  for the  first time  in the fourth four-year block  commencing from  June 1,  1966. The learned Counsel for  the  appellant  is,  under  the  circumstances, perfectly  justified  in  submitting  that  the  High  Court instead of striking down the Notification in toto could well have made  the Notification  unenforceable for  a period  of four months  of the  third four-year  block expiring on 31st May, 1970,  without prohibiting  its enforcement  even  with effect from  June 1,  1970 from  which date the fourth four- year block  commenced, and  the enhancement  could have been made without  any impediment  in law.  The  High  Court  was exercising high  prerogative jurisdiction  under Article 226

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and could  have moulded the relief in a just and fair manner as required  by the demands of the situation. The High Court could  well   have  proceeded   on  the   premise  that  the enhancement made  pursuant to the Notification dated January 29, 1970  was unenforceable  for the  four months  preceding June 1,  1970 on  which date the enhancement could have been lawfully enforced  pursuant to  the Notification.  Till then the Notification  would have remained unenforceable for that limited period of four months during which the embargo would have been  in operation. In our opinion, the enhancement was merely  premature  and  not  void  in  the  sense  that  the enhancement could  have been  lawfully enforced  with effect from June  1, 1970  and could not have been made enforceable on the  date of  the issuance  of the  Notification on  29th January, 1970. Such a Notifica- 468 tion, in  the eye of law, must be treated as dormant for the interregnum  A   of  about   four  months  till  it  becomes enforceable on  June 1,  1970 upon  the commencement  of the fourth four-year  block. The  enhancement was  authorised by the Legislature.  However, there  was an  embargo making  it enforceable only  once during  the course  of the  four-year block. It  would be  taking a  super-technical view  to hold that a  fresh Notification could have been issued on June 1, 1970 and  that the Notification issued on 29th January, 1970 should be  quashed for  all times  notwithstanding the  fact that it  was unenforceable  only for the interregnum of four months and there was no impediment to its enforcement on the expiry of  the third  four-year block  on 31st May, 1970. An illustration will  make the  point clear. The Writ Petitions giving rise to both the appeals were instituted after fourth four-year block  which commenced on 1.6.1970 and the embargo no longer subsisted. The effect of the impugned Notification was that  it authorised  the appellant to collect royalty at the rate of Rs. 1.25 every day subsequent to the issuance of the Notification. For four months expiring on 31st May, 1970 the Writ  Petitioners could  successfully contend  that  the enhancement cannot  be enforced  in view  of  the  statutory embargo raised  by proviso (b) to sub-section (3) of Section 9 of  the Act.  But from  June 1,  1970 onwards  this  legal weapon  of   resistence  was   not  available  to  the  Writ Petitioners. They  could not  have sought  shelter under the umbrella of  proviso (b)  to sub-section (3) of Section 9 of the Act,  having regard to the fact that the enhancement was being enforced  for the  first time  in the  four-year block commencing on June 1, 1970. Such being the position the just and fair  order to  pass would  have been  to  restrain  the appellant  from   enforcing   the   Notification   for   the interregnum between  January 29,  1970 till  31st May, 1970, i.e.  for   about  four  months,  instead  of  quashing  the Notification. The  learned Counsel  for the Writ petitioners has however  contended that  enforcement even  subsequent to June 1,  1970 was  not permissible in law. Insupport of this proposition reliance was placed on Mahendra Lal Jaini v. The State of Uttar Pradesh & Ors, [1963] Suppl. 1 S.C.R. 912. We are unable  to accede  to this  submission. In  Mahendra Lal Jaini’s case  (supra) this  Court was  dealing with  a post- constitutional legislation  which was  inconsistent with the fundamental rights  conferred by  the Constitution  of India and was accordingly rendered void by virtue of Art. 13(2) of the Constitution  of India.  It was in this context that the expression ’still  born’ was  used in regard to the impugned legislation. Of  course having  regard to the constitutional command embodied  in Art.  13(2) no  State can  make any law abridging  the   rights  conferred   by  part   III  of  the

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Constitution of India and any such law made in contravention of this  clause would  be void.  As  a  matter  of  fact  in Mahendra Lal 469 Jaini’s case  the doctrine  of eclipse enunciated in Bhikaji Narain Dhakaras  v. The  State of  Madhya Pradesh,  [1955] 2 S.C.R. 589  to the  effect that  the  questioned  law  would remain dormant till the clout was removed whereupon it would become alive,  has been approved. In the present case we are not concerned with a piece of legislation which offends Art. 13(2) of  the Constitution  of India. It is therefore futile to contend  that the  principle enunciated  in Mahendra  Lal Jaini’s case would justify striking down of the Notification for all  times in  future. As  has been observed earlier the only  vice   in  the   impugned  Notification  is  that  the enhancement was  authorized nearly  four months  too soon in advance. The  enhancement could have been made with impunity without violating  proviso (b) to sub-section (3) of Section 9 about  four months  later. The  enhancement was  therefore unenforceable only  during this period of four months. It is not even  disputed that  the  enhancement  could  have  been lawfully made  without  any  impediment  on  June  1,  1970. Inasmuch as  it was  made nearly  four month  too  soon,  on January 29,  1970, the  enhancement would  be  unenforceable during this interregnum of approximately four months. During this period  the Notification  would have  remained dormant. Under the circumstances the just and fair course to adopt is to issue  a Writ  restraining the  State of  Rajasthan  from enforcing the  enhancement for the interregnum of about four months expiring  on 31st  May, 1970 instead of striking down the Notification in absolute terms for all times as has been done by  the High  Court. It  would have  become vibrant and enforceable  with   effect  from  June  1,  1970.  There  is absolutely no  warrant or justification to restrain recovery at the  enhanced rate  for the  period subsequent to June 1, 1970 notwithstanding  the fact  that there  is no  legal bar under proviso  (b) to  sub-section (3)  of Section 9 to give effect to the Notification with effect from that date. Under the circumstances  we allow  the appeals  partly. The  order passed by  the  learned  Single  Judge  of  the  High  Court quashing the impugned Notification dated January 29, 1970 as confirmed by  the Division  Bench of  the High  Court is set aside. In place thereof the State of Rajasthan is restrained from enforcing the impugned Notification till 31st May, 1970 with the  clarification that the enhancement as per the said Notification authorising  collection of  levy at Rs.1.25 per tonne would  be enforceable  with effect  from June  1, 1970 onwards. Such amount as remains to be recovered in the light of  this   Judgment  will  have  to  be  paid  by  the  Writ petitioners on  or before  September 30, 1989. On failure of the Writ Petitioners to do so the appellant will be entitled to recover  from them  the sum  representing the  difference between the sum recoverable as per this Judgment and the sum Paid by the Writ Petitioners. We substitute the order in the 470 aforesaid terms  in place  of the  order passed  by the High Court which we have set aside      The appeals  are partly allowed accordingly. There will be no order regarding costs throughout. G.N.                                   Appeals allowed. 471