1994 (2) TMI 302 - SC - Indian Laws

Supreme Court Upholds Tamil Nadu Mineral Rule, Ensures Fairness

PREMIUM GRANITES Versus. STATE OF T.N.

The Supreme Court upheld the constitutionality of Rule 39 of the Tamil Nadu Minor Mineral Concession Rules, 1959, finding that it did not confer arbitrary ... - Issues Involved:1. Constitutionality of Rule 39 of the Tamil Nadu Minor Mineral Concession Rules, 1959.2. Whether Rule 39 conferred arbitrary, uncanalised, and unguided power on the executive, thereby offending Article 14 of the Constitution of India.Summary:Constitutionality of Rule 39:The writ petitioner, Durai Raju Naidu, challenged Rule 39 of the Tamil Nadu Minor Mineral Concession Rules, 1959, as unconstitutional and void. The petitioner argued that the State Government had no power to frame a rule deviating from the Mineral Concession Rules already made u/s 15(1) of the Mines and Minerals (Regulation and Development) Act, 1957 (MMRD Act). The Division Bench of the Madras High Court upheld the second contention and declared Rule 39 unconstitutional and void.Arbitrary and Unguided Power:The petitioner contended that Rule 39 conferred arbitrary, uncanalised, and unguided power on the executive, thereby offending Article 14 of the Constitution of India. The expression 'public purpose and interest of mineral development' in Rule 39 was argued to be vague and lacking sufficient guidelines. The Supreme Court, however, found that Rule 39 contained guidelines, viz., the grant under Rule 39 can be made only 'in the interest of mineral development' and 'in public interest' for reasons to be recorded in writing. The Court held that these guidelines were sufficient to prevent arbitrary and capricious exercise of power.Judicial Scrutiny and Precedents:The Supreme Court noted that the power under Rule 39, being controlled by considerations 'in the interest of mineral development' and 'in public interest,' cannot be exercised arbitrarily and capriciously. The Court referred to various precedents where similar provisions were upheld, emphasizing that the requirement of recording reasons for exercising power excludes chances of arbitrariness. The Court also noted that the remedy of judicial review under Article 226 is available to challenge improper actions under Rule 39.Harmonious Construction and Reading Down:The Court rejected the argument that Rule 39 should be read down to only vary some terms and conditions of a lease. The Court held that Rule 39 was incorporated for a valid and reasonable purpose and that limiting its application would defeat the purpose for which it was introduced. The Court emphasized that the development of minor minerals should not be confined to a set principle or policy and should allow for flexibility to adapt to changing circumstances.Conclusion:The Supreme Court set aside the decision of the Madras High Court and declared Rule 39 of the Mineral Concession Rules as legal and valid. The Court clarified that while a lease granted under Rule 39 cannot per se be held invalid, the exercise of power under Rule 39 in a given case can always be questioned and reviewed by the High Court. The order of the High Court canceling leases granted under Rule 39 was also set aside.