THE QUARRY OWNERS ASSOCIATION ETC. v. THE STATE OF BIHAR AND ORS.

It seems to us that there are various decisions of this Court which A support the proposition that for a statutory provision for raising rev- enue for the purposes of the delegate, as the section now under consideration is, the needs of the taxing body for carrying out its functions under the statute for which alone the taxing power was conferred on it, may afford sufficient guidance to make the power to fix the rate of tax valid." B

Before we take up the history of delegation of the power of the State Government as delegatee, it is necessary to refer to two decisions of this Court in M/s. Bhatnagar & Co. and Am: v. Union of India and Ors., AIR ( 1957) SC

478. These cases also considered the history of the earlier provisions of the Act intesting the challenge of vires of a provision. It held: c " ... Thus, if the preamble and the relevant section of the earlier Act are read in the light of the preamble of the present Act, it would be difficult to distinguish this Act from the Essential Supplies Act with which this Court was concerned in Harishankar Bag la's case, AIR 1954 SC 465. Incidentally we may also observe that in Pannalal D Binjraj v. Union of India, Petns. Nos. 97 and 97A etc., of (1956) 8 AIR (1957) SC 397, (B), where the vires of s. 5 (7-A) of the Income tax Act were put in issue before this Court, the challenge was repelled and during the course of the judgment delivered on December 21, 1956, the previous history of the earlier Income tax Acts was taken into account to decide what policy could be said to underlie the provisions E of the impugned section."

This Court in Municipal Corporation of Delhi (Supra) also referred to the history of enactment while examining and testing vires of the Act. It records: F "According to our history also there is a wide area of delegation in the matter of imposition of taxes to local bodies sub~ct to controls and safeguards of various kinds which partake of the· nature of guid- ance in the matter of fixing rates for local taxation. It is in this historical background that we have to examine the provisions of the Act im- pugned before us." G

We may further examine this question from another angle. In order to adjudicate, whether any delegation of power is unbridled or excessive, the historical background of similar provisions which preceded the impugned provision which should be kept in mind as it is also a relevant consideration. H

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A In fact, D.K. Trivedi~· case (supra) itself has taken the note of its historical background. It is significant that Entry 54 List I of the Seventh Schedule of the Constitution of India, reproduces Entry 36 in the Federal Legislative List in the Government of India Act, 1935, except by omitting the words "and oil fields". Under this Entry 36 the Mines and Minerals (Regulation and Devel- opment) Act, 1948 was enacted as we have now the present 1957 Act under B Entry 54 List I. This Act conferred very wide rule making power upon the Central Government, for regulating and granting of mining leases. The consti- tutional maker also knew that Central Government in exercise of this rule making power, made the Minerals Concession Rules, 1949 and by Rule 4 the extraction of minor minerals was left to be regulated by the rules made by the Provincial Governments. When the present 1957 Act came into force, the c Parliament was aware that different State Governments in pursuance of this Rule 4 were regulating the grant of leases in respect of minor minerals includ- ing fixation of rate of royalties. This Parliament approved in the present Act through sub-sections (2) and (3) of Section 15, then existing Rules which were in force immediately before the commencement of this Act which included the rate of royalty/dead rent for it to be continue in force, unless superseded by the D Rules made under sub- section (1). Thus, the Parliament was fully aware that even in the past it was the State Governments which were entrusted and were dealing with minor minerals as a delegatee. The only difference being, earlier the State Governments were acting as sub-delegatee of the Central Government but now they act as delegatee of the Parliament. This was the pattern adopted and approved since inception. This seems to be also because minor minerals E being more useful for the local uses and the State Government being the highest executive in the State knowing fully well of its uses, management including fixation of its prices. Thus, in this historical background there is nothing wrong to delegate to the State Government to fix rate of royally/dead rent for the minor minerals.

F In D.K. Trivedi 's case (supra) this Court records:

" ... To take into account legislative history and practice when .. considering the validity of a statutory provision or while interpreting a legislative entry is a well established principle of construction of G statutes: see, for instance, State of Bombay v. Namthamdas Jethabai, [1951] SCR 51 and State of Madras v. Gannon Dunkerley & Co. (Madras) Ltd., [1959] SCR 379."

This takes us to the next submission, whether the introduction of sub- section (3) of Sec!ion 28 by the Parliament in any way strengthen the guide- H line and put a check on the exercise of power by the State Government. Sub-

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section ( 1) of Section 28 refers to the placement of every rule and every notification made by the Central Government before each House of Parliament for a period of 30 days when the same becomes effective, subject to its modification, if any. Sub-section (3) of Section 28 directs placement of every rule or notification made by the State Government before each House of State Legislature. The submission is, there is no provision in sub-section (3) as in sub-section ( 1), of such rule being subject to scrutiny for its approval or modification by the State Legislature. The submission is, sub-section (3) in no way places any check on the State Government, as State Legislature is not entrusted with power to approve or modify. In other words, introduction of sub-section (3) is merely for the sake of information and nothing more. Further it is submitted, when language of two different sub-sections in the same Section are different it has to be differently interpreted, which cannot c be construed to connote same meaning and same effect. It is also submitted, even if sub-section (3) was brought on the Statute Book, it was not sufficient for the State, as it has to show that in fact both the impugned notifications Vfere so laid before both the Houses of the Legislature. The submission is, actually they were not so laid. Further reliance is placed in the case of Mis. D Atlas Cycle Industries Ltd. v. State of Haryana, [1979] 2 SCC 196 (para 30) where this Court held that a mere laying procedure is directory not mandatory. On the other hand, submission on behalf of the State is that this laying procedure before the Legislature cannot be a mere show, but it is for a purpose, the effect of which it has to be given. In our considered opinion, the incorporation of this by the Parliament cannot be said to be in futility. In fact, E this was brought in, in view of the observation made by this Court in the case of D.K. Trivedi's (supra).

It is true that the language of both sub-sections (1) and sub-sections (3) of Section 28 are different. They are reproduced below: F "28. Rules and notifications to be laid before Parliament and certain rules to be approved by Parliament. - (l) Every rule and every notification made by the Central Government under this Act shall be laid, as soon as may be after it is made before each House of Parliament while it is in session for a total period of thirty days which may be comprised in one session or in two or more successive G sessions and if, before the expiry of the session immediately follow- ing the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or notification or both Houses agree that the rule or notification should not be made, the rule or notification shall thereafter have effect only in such modified form H

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A or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under the rule or notification.

xxx xxx xxx

B (3) Every rule and every notification made by the State Govern- ment under this Act shall be laid, as soon as may be after it is made, before each House of the State Legislature where it consists of two Houses, or where such Legislature consists of one House, before that House."

c There is no difficulty for us to uphold their submission that in view of difference in the language of sub-section (3), the same meaning to it as that of sub-Section (I) cannot be given. This difference has been carved out for a purpose to give different projection to the said two provisions. In the case of major mineral which plays important role in the National growth and wealth and where the delegatee is the Central Government, Parliament re- D tained its full control but for the minor mineral, Parliament felt for the minor minerals as the subject is of local use and State Government being well versed to deal with it in the historical background, mere placement of rules, notifi- cations framed by it before the State Legislature would be a sufficient check on the exercise of its powers. Thus, this difference of language gives two different thrust as intended by the Parliament. Any act of the Parliament, far E less when it introduces any new provision through amendment, it could be said for it to be in futility. The purpose has to be found. What could be the purpose for such an amendment? One of the reasons is that this was brought in, in view of the observation made by this Court in D.K. Trivedi 's (supra). This Court records: F " .. .It was, therefore, for Parliament to decide whether rules and notifications made by the State Governments under Section 15(1) should be laid before Parliament or the legislature of the State ..,. " '· ... It, however, thought it fit to do so with respect to minerals other than minor minerals since these minerals are of vital importance to th'! G country" industry and economy, but did not think it fit to do so in the case of minor minerals because it did not consider them to be of equal importance .... ".

The Parliament through its wisdom, apart from above brought this amendment also to keep a check on the exercise of power by the State Government's as H delegatee. The question is whether mere laying rules and notification before

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the legislature, as in the present case, can be construed as a check on the State A Government power. Laying before House of Parliament are made in the three different ways. Laying of any rule may be subject to any negative resolution within specified period or may be subject to it confirmation. This is spoken as negative and positive resolution respectively. Third may be mere laying before the House. In the present case, we are not concerned with either affirmative or B negative procedure but consequence of mere laying before the legislature.

Administrative Law by HWR Wade & Forsyth, 7th Edition, page 898 records with reference to mere laying:

"Laying before Parliament c An Act of Parliament will normally require that rules or regulations made under the Act shall be laid before both Houses of Parliament. Parliament can then keep its eye upon them and provide opportunities for criticism. Rules or regulations laid before Parliament may be attacked on any ground. The object of the system is to keep them under D general political control, so that criticism in Parliament is frequently on grounds of policy. The legislation concerning 'laying' has already been explained.

Laying before Parliament is done in a number of different ways. E The regulations may merely have to be laid; or they may be subject to negative resolution within forty days; or they may expire unless confirmed by affirmative resolution."

Constillltional and Administrative Law, Stanely De Smith and Rodney Brazier, 7th Edn., records: F

" .. .If the instrument has merely to be laid, or laid in draft, before Parliament, it will be delivered to the Votes and Proceedings Office of the House of Commons. No opportunity is provided by parliamentary procedure for the instrument to be discussed, but its existence will at G least be brought to the notice of members and the Minister is more likely to be questioned about it than if it is not laid before Parliament at all."

In a democratic set up, every State Government is responsible to its State Legislature. When any statute require mere laying of any notification or Rule H

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A before the Legislature its execution, viz., State Government comes under the scrutiny of the concerned Legislature. Every function and every exercise of power, by the State Government is under one or other Ministry who in turn is accountable to the legislature concerned. Where any document, rule or notifi- cation requires placement before any House or when placed, the said House inherently gets the jurisdiction over the same. Each member of the House, B subject to its procedure gets right to discuss the same, they may put questions to the concerned Ministry. Irrespective of the fact that such rules or notifica- tions may not be under purview of its modification, such members may seek explanation from such Ministry of their inaction, arbitrariness, transgressing limits of their statutory orbit on any such matter. Short of modification power, c it has a right even to condemn the Ministry. No doubt in the case where House is entrusted with power to annual, modify or approve any rule, it plays positive role and have full control over it, but even where the matter is merely placed before any House, its positive control over the executive, makes even mere laying to play a very vital and forceful role which keeps a check over the concerned State Government. Even if submission for the appellant is accepted that mere placement before a House is only for the information, even then such information, inherently in it makes legislature to play an important role as aforesaid for keeping a check on the activity of the State Government. Such placement cannot be construed to be non est. No act of Parliament should be construed to be of having no purpose. As we have said mere discussion and questioning the concerned ministry or authority in the House in respect of such laying would keep such authority on guard to act with circumspection which is a check on such authority, specially when such authority is even otherwise answerable to such Legislature. Further examining the scheme of the Act, with its historical background, we find there is clear demarcation in dealing between the Major minerals and the Minor minerals. For minor minerals all its activity from before this Act has been delegated to the State Government as it having all conceivable knowledge over it, as it being of local use and not being of much national importance. For this difference also stricter control is made for the Major.minerals through Section 28(1) than for the minor minerals. Thus, this mere check on the State Government, as aforesaid, may have been found to be sufficient by the Parliament, with reference to the minor minerals. Thus, G the language of both sub-section (I) and sub-section (3) though different, this is only for two different purposes. Thus when Parliament introduced sub- section (3) through amendment, it was to further strengthen the control over the State Government power. Any other submission, the one made by the appellants, makes such an Act of the Parliament meaningless, which cannot be H attributed to the Parliament.

QUARRY OWNERS ASSOCIATION v. STATE [MISRA, J.J 255 This takes us to the next submission. It is submitted that the State A Government, in spite of the mandate under sub-section (3) of Section 28, to place the rules and the notifications framed by it before each House of Leg- islature, the impugned notifications have not been placed. Appellants' case is, they were not placed, while for the respondent-State submission is, it were placed. Subsequent to the conclusion of the hearing, learned counsel for the State sought leave of this court, which was granted, to place affidavit with B annexures to substantiate to its submission. An additional affidavit by Mr. Anand Vardhan, District Mining Officer dated 1st May, 2000 was filed on behalf of the respondent State of Bihar. A reply affidavit dated 4th June, 2000 was filed by one Mr. Subhash Kumar, Secretary ,of the appellant's association.

It may be pointed here, out of the two impugned notifications only one c notification dated 28.9.1994 was required to be placed before the House of the State Legislature since sub-section (3) of Section 28 was only brought in the year 1994. As per the State affidavit, on the date the arguments concluded in this case, a fax message was received by the Standing Counsel that the notification dated 28.9.1994 had been placed before two houses in the May- D June 1994 and 1995 session through Administrative Report of the Department of Mines and Geology. The affidavit further states, every year Department of Mines and Geology prepares Administrative Report, which includes the rev- enue earned from mining and there is a section in the office which reports the prevailing rates of royalty and the notifications under which it is fixed. This report is sent every year to both the houses of the State Legislature E through their respective Sections. In 1994-95 Administrative Report, the impugned notification dated 28.9.1994 is mentioned in para 4.40 of Chapter IV at page 6 and notification as a whole is included as Annexure 6 at page

29. Similarly, the Administrative Report for 1995-96 mentions the fixation of royalty as fixed by notification dated 28.9.1994, is mentioned in para 4.4 of Chapter at page 7. Similarly, Administrative Report for 1996-97 also men- F . tions fixation ofroyalty on mines minerals through notification dated 28.9.1994 . Each year these reports were supplied to the Secretary, Bihar Vidhan Sabha with sufficient number of copies to enable its circulation to the members of the two Houses. About 400 copies were sent to Vidhan Sabha and 100 copies to Vidhan Parishad. Based on the aforesaid averment in the concluding para G of the affidavit it is averred:

'. .... .it is clear that the notification dated 28.9 .1994 fixing royalty had been laid before the two houses of the State legislature as required by Section 28(3) of the Mines and Minerals (Regulation and Devel- opment) Act, 1957". H

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A In the reply affidavit for the appellants one Mr.. Subhash Kumar, a letter dated 4.6.2000 which is in response to a quary is annexed, which is of under Secretary, State Minister Homes, annexing letter No. 4/99-4-7 dated 27th May, 2000 of the Dy. Secretary, Bihar Legislative Assembly, which records:

" ....... as per direction {l) have to inform that Bihar Legislative B Assembly has no knowledge of Bihar Minor Mineral Concession Rules, 1972 and amendment made therein of any regulation made in this connection:"

The perusal of the two affidavit makes it clear that truly as required by sub section (3) of Section 28 the impugned notification dated 28.9.1994 was c not placed. It seems various departments of the Government sends its admin- istrative report every year with respect to its functioning and revenue earned. It is in this context department of Mines and Geology prepared and sent its administrative report for 1994-95, 1995-96 and 1996-97 and the notification dated 28.9.1994 is referred in these reports. Further 400 copies for the Vidhan Sabha and 100 copies for Vidhan parishad were sent for circulation. There- D after there are no other document showing it was actually placed before the House. Even if these reports were sent and placed before the House it were administrative reports through which did contain the said notification dated 28.9.1994. In fact, the letter dated 27th May, 2000 from Shri Jagdish Prasad Yadav, Dy. Secretary Bihar Legislative Assembly, reveals that the House has no knowledge of the Bihar Mineral Concessions Rule 1972 and amendment made thereunder or any regulation made in this connection.

So, it is not possible to hold, based on affidavits of the parties that the impugned notification dated 28.9.1994 was actually placed in terms of Sec- tion 28(3). It being part of some administrative report cannot constitute to be a fact to hold its placement in terms of said sub-section (3). Though the affidavit on behalf of State reveals that under rules of procedure and conduct of business of the Bihar Vidhan Sabha, there is a delegated legislation com- mittee, which examines, all the rules which are required to be laid before the House, which also inspects and examines the working of such personals involved under it. G Mis Atlas Cycle Industries Ltd. and Ors. (Supra). In this case also one of the contentions was that the notifications were not placed before the Parliament as required by sub-section (6) of Section 3 of the Essential Com- modity Act 1955 - The sub-section (6) of Section 3 of this Act requires that every order made under this section by the Central Government or by any H officer or authority of the Central Government shall be laid before both houses

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of Parliament, as soon as may be, after it is made. This is similar to the provision which we are considering under sub-section (3) of Section 28. The Court held such provision to be directory and hence for this default of not placing the Iron and steel control order 1956 and notification under clause 15(3) before the Parliament the order shall not become invalid.

However, since we have upheld that impugned notifications issued by the State to be within the ambit of delegation and that delegation is not excessive as there are enough guidelines and control over the State Govern- ment notwithstanding its check on the State under sub-section (3) of Section 28, it would not have any effect on its validity. But we make it clear when a statute as under sub-section (3) of Section 28 requires its placement, it is the obligation of the State Government to place such with this specific note c before each Houses of Parliament. Even if it has not been done, the State shall now do place it before each houses of the State legislature at the earliest the notification dated 28.9.1994 and will also do so in future while framing rules or issuing any notifications under the rules framed under sub-section ( 1) of Section 15 of the Act. D Another submission for the appellants is that the delegator or the Parliament must retain its control over the delegatee and such delegatee cannot be entrusted to another Legislature, namely, State Legislature as in the present case. To repel this submission learned counsel for the State, referred to the 'The Delegated Legislation Provisions (Amendment) Act, 1983'. This E Act amended various Parliament Acts to implement the recommendations of the Committees on Subordinate Legislation regarding laying of certain rules framed by the delegatee before the State legislatures. The Schedule of this Act, refers to the large number of such amendments made by the Parliament. Few of them are being referred hereunder, namely, The Religious Endow- ments Act, 1863, amendment Section 8 which requires "Every rule framed F under this section shall be laid, as soon as it is framed, before the State Legislature." By amending Section 20 of the Press and Registration of Books Act, 1867 it directs, "Every rule made by the State Government under this Section shall be laid, as soon as may be after it is made, before the State Legislature." Similarly Section 83 of the Indian Christian Marriage Act, 1872, G requires that "Every rule made by the State Government under this Section shall be laid, as soon as may be after it is made, before the State Legislature." The Registration Act, 1908 amended Section 91 ( 1) through which the fol- lowing was brought in "Every rule prescribed under this Section or' made under Section 69 shall be laid, as soon as it is made, before the State Legislature." H

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A We are not further enumerating such is large number of cases recorded in the Schedule itself. Each one of them were the act of Parliament in which with reference to a delegatee, provisions are made for placing its rules framed by it, before the State Legislature. Thus, placement of any notification or rules framed by the State Government under sub-section (3) of Section 28 cannot be said to be something out of any novel procedure but is a well recognised B principle. The submission was how can a delegatee under one legislature, viz., the Parliament be placed under the control of another legislature. This sub- mission has no merit. In a Federal structure of any constitution, their fields are well defined, sometime same subject may be under control of both legislatures as in the concurrent list of our Constitution. Thus in a given case, c as in the above, large number of such cases were a delegatee is of the Parliament were put under the control of the State legislature. This submission is sought to be challenged by learned senior counsel Mr. Nariman that the cases in the Schedule under the 1983 Act are all cases falling under the Concurrent List of the Seventh Schedule of our Constitution. This was be- cause both the Parliament and the State Legislature had the plenary power to make laws over the same subject. This in our considered opinion would make no difference. It is significant to record, though the subject we are dealing with, viz., 'Regulation of mines and mineral development' does not fall in the Concurrent List, but still both falls in the field of the Parliament under Entry 54 List I and the State legislature under Entry 23 List II, their possible conflict is resolved by the following words in Entry 23 List II, "subject to the provisions of List I with respect to regulation and development under the control of the Union". This control may be full, or partial. In the present case when this 1957 Act was passed, Union came in full control over this subject and no field was left for the State to make the law. But this covering of the entire field was by the 1957 Act itself not by any other constitutional limi- F tation. Then the Act which takes the entire field can also withdraw from it both partial or fully. In the present case since the Parliament has exercised its discretion under Item 54 List I, the State Legislature is denuded of its power under Entry 23 List II. It may be said so long that Act remains in force it eclipses the power of the State Legislature. In the present case as held in Baij Nath Kedia's case (supra) after passing of the aforesaid 1957 Act the G power of State Legislature has been completely denuded by the Parliament. If that be so, it is always open for the Parliament to withdraw partially the eclipse if so desires, may leave the Legislature for such part to exercise its power which it originally have by virtue of Item 23 of List II. It is in tl)is light when we examine the amendment by introducing sub-section (3) of Section H 2'8, with provision to lay the rule or notification made by the State Govern-

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ment before the State Legislature it cannot be said it can only be when it is A in the concurrent list. Thus such placement cannot be said to be incompetent or keeping if beyond the control of the Parliament. As we have said this placement before the State legislature is for a limited purpose for which the Parliament is competent. Thus introd~ction of sub-section (3) in Section 28, in this light cannot be said to be of no consequence. It was done for a purpose, as aforesaid, and that purpose, is sufficient to hold the State Government B under check while exercising its power as a delegatee.

We also find there are few provisions in our Constitution which require mere laying before the Parfiament. Article 151 requires laying of the report of the Comptroller and Auditor-General of India before each House of Par- liament and with reference to the State, to be laid before the Legislature of c the State. Article 338 (5) requires placing of the report of the Conunission before each House of Parliament and with reference to the State Govl!rnment, under sub-Article (7) it to be laid before the Legislature of the State. Though they are mere provisions of mere laying before the Parliament, but it is always open to any Member of the House to discuss and comment on the said report. D Next coming to the quantum of imposition, on the facts of this case, the imposition of royalty/dead rent could be said to be arbitrary or excessive by the State Government. We do not find any material placed by the appel- lants in the writ petition to come to such a conclusion. Though by proviso to sub-section (3) of Section 15 it is open for the State Government to revise the royalty every three years but the history shows it has not done so. Since 1975 the State Government has increased royalty only four times and there is no increase since 28th September 1994 despite lapse of six years, in other words, raising royalty only four times during 25 years. Even in the case of D.K. Trivedi'.~ case (supra) as we have recorded above a large percentage of increase in royalty has been made yet it was not struck down on that account.

Before concluding we would like to record our appreciation in the manner in which learned counsels for the parties made their valuable submis- sions which made our task easy. Though at times their ingenuity made us to think and rethink but the precision through which the submissions were made helped us to conclude to the best of our conscience.

In view of the aforesaid discussion and findings we conclude:

(a) The impugned two notifications dated 17th August, 1991 and 28th September, 1994 are valid. H

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A (b) The State Government while acting as delegatee under Section 15(1) of the Act is not confined to fix the royalty/dead rent within the peripheral ambit of Entry 54 Schedule II of the Act. Neither D.K. Trivedi (Supra) has said so, nor can it be construed to be so.

B (c) The State Government has acted within the ambit of the power delegated to it and such delegation is with sufficient guidelines and check in view of the Pream~le, object and reasons and various provisions of the Act.

(d) Requirement of mere placement of the Rules or the Notifica- c lions before the State Legislature is also one of the form of check on the State Government to exercise its powers as a delegatee.

(e) In this case the impugned notification dated 28.9.1994 has not been placed as required by sub-section (3) of Section 28 of the D Act. The State Government is directed to do so now at the earliest.

(f) However, non-placement of the said notification would not invalidate the same, as this requirement is only directory.

E (g) The enhancement of royalty on the facts and circumstances of this case cannot be said to be arbitrary or otherwise illegal.

In view of the aforesaid findings, we do not find any merit in these appeals and accordingly they are dismissed. We uphold the judgment of the High Court but on a different reasoning as recorded by us earlier. The appeals F stand dismissed with costs.

A.Q. Appeals dismissed.