Sunil Ambwani, Actg. C.J.@mdashThe Bajri Lease LOI Holders Welfare Society, through its President, Shri Naval Singh Ratnawat, has filed this writ petition under Article 226 of the Constitution of India, for declaring the Notification issued by the State Government bearing S.O. No. 185, dated 07.02.2014, and S.O. No. 188, dated 07.02.2014, as ultra vires Article 14 and 19(1)(g) of the Constitution of India and Section 2 and 15 of the Mines and Minerals(Development and Regulation) Act, 1957 (for short, ''the Act of 1957''), as well as ultra vires Section 2(b) and 2(d) of the Rajasthan Goods (Control of Production, Supply, Distribution and Trade and Commerce) Act, 2014 (in short, ''the Rajasthan Act, 2014''), as null and void ab initio. They have also prayed for a direction, to quash the order dated 11.02.2014, passed by the Collector and District Magistrate, Jhunjhunu, and the order of the same date, issued by the Collector and District Magistrate, Tonk, as ultra vires the Rajasthan Act, 2014. They have also prayed for a direction to the respondents restraining them from interfering in the right of the members of the petitioner-Association, to produce, stock, or sale the mineral ''Bajri'' under the LOI, including regulating the prices thereof.
2. Brief facts giving rise to the writ petition, are that for excavation of minor mineral ''Bajri'', under the Proviso to Rule 63(3) of the Rajasthan Minor Mineral Concession Rules, 1986 (for short, ''the Rules of 1986''), made under Section 15 of the Act of 1957, no concession by way of any lease, license or permit was provided. Anyone could excavate ''Bajri'' in the State of Rajasthan, but while crossing check posts, he had to pay royalty and permit fees. In view of the judgment of the Supreme Court in
3. In a writ petition being D.B. Civil Writ Petition(PIL) No. 13189/2012- Nature Club of Rajasthan v. State of Rajasthan, a Division Bench of this Court allowed six months time to the State Government, to give effect to the amended Rules for grant of mining leases for minor mineral ''Bajri''. The application for extension of time was dismissed by this Court on 21.10.2013. The State Government, on rejection of its application for extension of time on 21.10.2013, filed SLP(Civil) No. 34134/2013, in which a direction was issued by the Hon''ble Supreme Court on 25.11.2013, that till the end of February, 2014, the letter of intent holders for grant of leases, who had submitted their applications to the MOEF for clearance(numbering 82 only), can carry on mining operations in accordance with the Notification dated 21.06.2012, issued under the Rules of 1986.
4. It is submitted that 82 persons, who are the members of the petitioner-Association, were given LOI in a bidding process for grant of leases of respective areas. They had deposited 10% of the bid price, where bids were invited and accepted for mining in an auction for mining leases, and had further deposited 15% of the bid price within three days of the acceptance of the bid. The LOIs'' were issued with the conditions, namely (i) submission of duly approved mining plan prepared by the competent authority; (ii) submission of environmental clearance from the MOEF; and (iii) filing of an affidavit in respect of financial assurance under Section 37(J). All the formalities, except environmental clearance, for which the applications were duly made, were completed. The environmental clearance could not be granted on account of delay in the procedure for grant of such certificates. The members of the petitioner-Association, in view of the order of the Supreme Court, dated 25.11.2013, in SLP(Civil) No. 34134/2013, started excavating minor mineral ''Bajri'', pending execution of the lease deed for a period of five years, on deposit of further amount of 25% of the bid amount. All the members of the petitioner-Association, as LOI holders, have thus paid 50% of the premiums up till now for execution of lease deeds. The delay in formulating a policy for excavation of minor mineral ''Bajri'', and issuance of environmental clearance certificate, caused scarcity of ''Bajri'' in the State of Rajasthan, on which its prices started rising. The State Legislature, in the meantime, has enacted the Rajasthan Act, 2014, which came into effect on 07.02.2014 by a Notification, published by the State Government. The Rajasthan Act, 2014, was made applicable to only those goods, which were notified by the State Government as ''declared goods'' under Section 4(1) of the Rajasthan Act, 2014. Under Section 2, the Act was however not made applicable to the following:--
"(a) To the essential commodities specified in the Schedule to the Essential Commodities Act, 1955 (Central Act No. 10 of 1955);
(b) To the products of any industry where the control of such industry by the Union is declared by Parliament by law to be expedient in the public interest, and imported goods of the same kind as such products;
(c) To the products of any industry declared by Parliament by law to be necessary for the purpose of defence or for the prosecution of war; and
(d) To the goods in respect of regulation and control of manufacture, sale, supply and distribution of which Parliament has power to make law by virtue of the entries of List I of the Seventh Schedule to the Constitution."
5. In exercise of powers under the Rajasthan Act, 2014, the State of Rajasthan has made the Rajasthan Goods(Licensing and Control of Production, Supply, Distribution and Trade and Commerce) Order, 2014, whereby ''Bajri'' was declared as goods under the Rajasthan Act, 2014, regulating ''Bajri'' for storage and sale over and above the notified quantity, for which a license is required to be taken out.
6. On the declaration of the mineral ''Bajri'' as declared goods vide Notification dated 07.02.2014, another Notification, of the same date, was issued by the State Government under Section 6 of the Rajasthan Act, 2014, whereby the State Government has delegated powers to make orders in relation to the matters specified under Section 5(c), (e) and (f) of the Rajasthan Act, 2014, to the Collectors and District Magistrates, in relation to the area of his jurisdiction, subject to the conditions provided therein. Clauses (c), (e) and (f) of Section 5 of the Rajasthan Act, 2014, are reproduced as below:--
"(c) for controlling the price at which any declared goods may be bought or sold;
(e) for prohibiting the withholding from sale of any declared goods ordinarily kept for sale;
(f) for requiring any person holding in stock, or engaged in the production, or in the business of buying or selling, of any declared goods,-
(i) to sell the whole or a specified part of the quantity held in stock or produced or received by him, or
(ii) in the case of any such goods which is likely to be produced or received by him, to sell the whole or a specified part of such goods when produced or received by him,
to the State Government or to an officer or agent of the State Government or to a Corporation owned or controlled by the State Government or to such other person or class of persons and in such circumstances as may be specified in the order.
Explanation.--An order made under this clause in relation to food grains or edible oilseeds, may, having regard to the estimated production, in the concerned area, of such food gains and edible oilseeds, fix the quantity to be sold by the producers in such area may also fix, or provide for the fixation of, such quantity on a graded basis, having regard to the aggregate of the area held by, or under the cultivation of the producers."
7. In exercise of powers vested in the Collectors and District Magistrates under Section 5(c), (e) and (f) of the Rajasthan Act, 2014, vide Notification dated 07.02.2014, the Collectors and District Magistrates of Districts Jhunjhunu and Tonk, have passed the orders on 11.02.2014, fixing the maximum sale price per tonne of mineral ''Bajri'' in the market and pit mouth. The Collector and District Magistrate, Jhunjhunu, by order dated 11.02.2014, fixed the sale price per tonne of ''Bajri'' at pit mouth in respect of Udaipurwati, Nawalgarh, Khetri and Buhana. Similarly, the Collector and District Magistrate, Tonk, has also, in the same manner, fixed the price of mineral ''Bajri'', giving rise to the present writ petition.
8. It is submitted by learned counsel appearing for the petitioner-Association that the inclusion of mineral ''Bajri'' under the category of ''declared goods'' under Section 4(1) of the Rajasthan Act, 2014, and consequent orders passed in relation to the regulation and fixation of price of mineral ''Bajri'', are beyond the legislative competence of the State Government.
9. It is submitted that on the enactment of the Mines and Minerals(Development and Regulation) Act, 1957, with reference to the legislative powers of the Central Government under Entry 54 of List I of the Seventh Schedule of the Constitution of India, the legislative power of the State Governments, to make Rules in respect of minor minerals, is confined only to Section 15 of the Act of 1957. The Central Government, having enacted under Entry 54 of List I of the Seventh Schedule of the Constitution of India, the State Government did not have any powers under Entry 23 of List II of the Seventh Schedule, to enact the Rajasthan Act, 2014, to include any mineral, either minor or major, which are regulated by the Act of 1957. On the declaration of ''Bajri'', as declared goods, under the Rajasthan Act, 2014, and issuing Notification controlling its storage and prices, the State Government has acted contrary to the legislative powers vested in it under the Constitution of India. The inclusion of minor mineral ''Bajri'' under the Rajasthan Act, 2014, by virtue of Notification No. S.O. 185, dated 07.02.2014, is also contrary and ultra vires Section 2 of the Rajasthan Act, 2014, which provides that the Act shall not apply to the products of any industry where the control of such industry by the Union is declared by the Parliament by law, to be expedient in the public interest.
10. It is submitted that ''Bajri'' is a notified minor mineral, and the Parliament has power to make laws in respect of minor minerals by virtue of Entry 54 of List I of the Seventh Schedule of the Constitution of India. In view of the provisions of Section 2(b) and 2(d) of the Rajasthan Act, 2014, the State Government could not have issued any declaration under Section 4 with respect to ''Bajri''. The orders and the Notifications are, thus, violative of Article 19(1)(g) of the Constitution of India.
11. During the course of arguments, learned counsel appearing for the petitioner submits that in this writ petition, he is confining his arguments to the legislative power of the State Government, in enacting a law for regulating the mining, storage, transportation, sale and fixation of sale price, and the Notifications issued for minor mineral ''Bajri'' as goods under the Rajasthan Act, 2014. He states that at this stage, he does not want to challenge the consequential Notifications issued by the State Government, fixing the stock limit beyond which a license is required and the further orders issued by the Collectors and District Magistrates of Districts Jhunjhunu and Tonk, fixing the price of ''Bajri''. He has prayed for liberty to challenge these Notifications/orders and fixation of price of ''Bajri'', for which factual foundation of availability and the factors for fixing the prices will have to be pleaded, by filing a separate writ petition.
12. Learned counsel appearing for the petitioner-Association has relied on the judgments of the Supreme Court in
13. Relying on the judgments, cited as above, it is submitted that to the extent, to which the Union Government had taken under its control the regulation and development of mines and minerals, the State of Rajasthan is denuded of its powers to enact, on the same subject, under Entries 23, 26 and 27 of List II of the Seventh Schedule, or Entry 33 of List III of the Seventh Schedule of the Constitution of India. It is submitted that the law in this regard was laid down as early as in the year 1952 in
14. In reply, learned Advocate General of the State of Rajasthan submits, after taking preliminary objection to the maintainability of the writ petition by a Society, that the Rajasthan Act, 2014 has not been challenged by the petitioners. They have challenged the Notifications issued by the State Government including ''Bajri'' as declared goods under the Rajasthan Act, 2014, and by virtue of that Notification, challenge to the legislative competence of the State has been made for regulating the stock, transportation, and price of ''Bajri''. He submits that the writ petition, by a Society, is not maintainable, and in any case, the entire argument that the State Government does not have any power to give license on storage and transportation of ''Bajri'' beyond the notified limits, is devoid of any substance. He has relied on paragraphs 145 and 146 of the Constitution Bench judgment in
15. Learned Advocate General submits that the Act of 1957, enables control over regulation of mines and mineral development. The declaration does not take away the power of the State Government, to enact laws for licensing and fixing the price of such minerals, in public interest. He submits that regulation of mines and mineral development does not include power to license, to exercise control over the storage beyond a particular limit, and for control of price, where prices for any reason, have increased in the markets, detrimental to the public interest. He has defended the Rajasthan Act, 2014, and the Notifications issued under it, to include ''Bajri'' as declared good, under the powers of the State Government, given under Entry 26 and 27 of List II of the Seventh Schedule of the Constitution of India, which provides as follows:--
"26. Trade and commerce within the State subject to the provisions of entry 33 of List III.
27. Production, supply and distribution of goods subject to the provisions of entry 33 of List III."
16. Learned Advocate General submits that the legislation does not fall under any of the subjects mentioned in Entry 33 of List III, and that the subject matter of Rajasthan Act, 2014, is within the exclusive competence of the State legislature. Apart from this, Entry 34 of List III, clearly authorizes the State legislature, to make laws with regard to price control.
17. Paragraphs 145 and 146 of the Constitution Bench judgment of the Supreme Court in State of Went Bengal and another v. Kesoram Industries Ltd. and others(supra), read as follows:--
"145. It is true that once a central legislation declares regulation of mines and mineral development by law to be expedient in the public interest, the legislation relating to regulation of mines and development of minerals shall fall within the sweep of Entry 54 of List I. The entry has to be liberally and widely interpreted. Yet it cannot be lost sight of that the entry itself employs an expression "to the extent to which such regulation and development under the control of the Union is declared by Parliament by law" as qualifying the preceding expression stating the subject "regulation of mines and minerals development", Section 2 of MMDR Act too qualifies the relevant declaration by suffixing to it the expression "to the extent hereinafter provided". Section 15 of the Act has excepted and preserved the power of State Governments to make rules in respect of minor minerals. The qualifying words used in Entry 54 of List I end in Section 2 of the MMDR Act contain an in-built indication that in spite of an inclination on the part of the Courts to be liberal in assigning a wide meaning to the scope of the said provisions, the boundaries of limitation are there and the expanse of these provisions cannot be so stretched as to strike at the State Legislations which are adequately accommodated within the field of an Entry in List II which too shall have to be meaningfully and liberally construed.
146. The MMDR Act enables control over the regulation of mines and the development of minerals being exercised by the Central Government through legislation. The High Court has upheld the validity of the SADA Act by relating it to Entry 5 in List II which is local government''. Any local government exercising the power of governance over a local area shall have to administer, manage and develop the area lying within its territory which cannot be done without raising funds. It is usual for every piece of legislation giving birth to an institution of local government to feed it by incorporating provisions conferring power of generating funds for meeting the expenses of governance, The SA.DA Act intends to achieve a level of local governance which the usual models of local government such as boards and municipalities are not considered capable of achieving and that is why a special development area and a Special Area Development Authority. The fund established under the Act meets expenses of administration needed to be incurred by the authority. The funds cannot be utilized for any purpose other than the administration of the Act. There are pieces of land which though containing a mine yet fall within the territory of special development area. It was pointed out by the respondents before the High Court that in spite of the Act having been enacted in the year 1986 the successive State Governments, which had preceded, did not take care of the legislation and it was only the then government which became conscious of Its obligations under the SADA Act and commenced identifying special areas requiring development such as Sonbhadra, The imposition of cess envisaged through the SADA Act and the Rules was a step towards developing the special area, it is a matter of common knowledge, and does not need any evidence to demonstrate, that mining activity carried on the land within the special area involves extraction, removal, loading-unloading, and transportation of the minerals accompanied by its natural consequences entailed on the environment and the infrastructure such as roads, water and power supply etc. within the special area. The impugned cess can, therefore, be justified as a fee for rendering such services as would improve the Infrastructure and general development of the area the benefits whereof would be availed even by the stone crushers. Entry 66 in List II is available to provide protective constitutional coverage to the impugned levy as fee."
18. In the present case, on account of the judgment of the Supreme Court in Deepak Kumar And Another v. State of Haryana And Others (supra), providing for environmental clearance certificate, to be obtained for any leases for excavating minerals, and the Notification issued by the State Government, providing for execution of leases for excavation of ''Bajri'', which was earlier free to be excavated, and the delay in obtaining an environmental clearance certificate, which gave rise to the writ petitions, in public interest, for making the ''Bajri'' available in the market, and thereafter the order of the Hon''ble Supreme Court in a SLP, filed by the State of Rajasthan, there was a stage of uncertainty to the extent of excavation and availability of ''Bajri'' in the markets, which escalated the prices of ''Bajri'' extremely high in the State of Rajasthan. In the circumstances, considering the public interest involved, the cost and delay in infrastructure projects including the projects of the State Government, it was thought proper to regulate the supply and distribution of ''Bajri''. The State Government, as such, declared ''Bajri'', as goods, under Section 4 of the Rajasthan Act, 2014. The regulation of supply and distribution of ''Bajri'' did not, in any manner, entrench the powers of the Central Government to the extent it was regulated under Section 2 of the Act of 1957, and the Rules made thereunder.
19. In our considered view, after clarification of the law in State of Went Bengal and another v. Kesoram Industries Ltd. and others (supra), referring to the entire case law on the subject, the Supreme Court has in clear terms settled the law that the regulation of mines and mineral development under Section 2 of the Act of 1957 to the extent it sought to be regulated by the Act of 1957 and the Rules made under Section 15 of the Act of 1957, does not take away the powers of the State Government under List II and List III of the Constitution of India, to enact laws on any of the items, in public interest.
20. In the present case, the Rajasthan Act, 2014 has been enacted under Entry 26 and 27 of List II of the Seventh Schedule of the Constitution of India, and not under any of the subjects mentioned in Entry 33 of List III. Entry 34 of List III, authorizes the State legislature to make laws with regard to price control of any of the items/goods, on which it has enacted under Entries 26 and 27 of List II of the Seventh Schedule.
21. We do not find any force in the submission that ''Bajri'' cannot be included as goods, in view of the provisions of Section 2(b) and 2(d) of the Rajasthan Act, 2014, inasmuch as ''Bajri'' is not a product of any industry, on which the Parliament has declared, by law, its control by the Union, to be expedient in public interest, nor ''Bajri'' is imported goods of the same kind as such products, and further ''Bajri'' is not goods in respect of regulation and control of manufacture, sale, supply and distribution, the Parliament alone has power to make law by virtue of the entries of List I of the Seventh Schedule of the Constitution of India. The Constitution Bench judgment in State of Went Bengal and another v. Kesoram Industries Ltd. and others(supra), has laid to rest the doubts in this regard on the powers of the State Government to enact laws in clear terms. The ''Bajri'' is a minor mineral, in respect of which regulation and control of stocks, sale, supply and distribution, has not been made by the Parliament under the Act of 1957, or the Rules made thereunder in Section 15 by either the Central Government or the State Government, or by virtue of any of the entries of List I of Seventh Schedule of the Constitution. The challenge to legislative powers of the State Government to enact the Rajasthan Act, 2014, is thus devoid of any substance.
22. We accept the request of learned counsel appearing for the petitioner, to confine the writ petition to the legislative competence of the State Government and in issuing the impugned Notifications including ''Bajri'' as declared goods, even though the Rajasthan Act, 2014, was not specifically challenged, and to leave the rest of the matters including the Notifications/orders, providing limits on stock, beyond which a license is required, and the fixation of price of ''Bajri'' by the respective Collectors and District Magistrates, both at pit mouth value, transportation and for sale in the respective areas, including cost of its loading and transportation, giving reasonable margin of profit. A challenge to these Notifications will require the establishment of the facts, for which the members of the petitioner-Association are given liberty to file separate writ petition, on such facts and circumstances, which may be brought before the Court, at the relevant time.
23. The writ petition is dismissed.
