1955 (11) TMI 36 - HC - Central Excise

Petition to Manufacture Salt on Leased Land Dismissed

Bhoor Chand Versus The State Of Rajasthan And Ors.

The court dismissed the petition, ruling that the petitioner had no legal right to manufacture salt on leased land as the ownership of salt-producing ... - Issues Involved:1. Legality of the petitioner's right to manufacture salt on leased land.2. Ownership of minerals, including salt, in the former State of Marwar.3. Interpretation of the term 'mineral' under Section 231 of the Marwar Land Revenue Act.4. Impact of the Government of India's press-notes on the rights of the State of Rajasthan.Detailed Analysis:1. Legality of the Petitioner's Right to Manufacture Salt on Leased Land:The petitioner argued that he had obtained a lease for 2400 bighas of land and had been manufacturing salt on 1.5 acres of this land, which he claimed was within his legal rights as per a press-note dated April 23, 1948, issued by the Government of India under Section 6 of the Central Excise and Salt Act, 1944. This press-note allowed free production of salt without a license on land to which individuals had lawful access, provided the total area did not exceed 10 acres. However, the State contested this, asserting ownership over all minerals, including salt, irrespective of the land's status (Khalsa or jagir), based on Section 231 of the Marwar Land Revenue Act, 1949. The court noted that the petitioner's manufacturing operations were confined to 1.5 acres and that possession of a larger area was inconsequential as long as the operations were within the limitations set forth in the press-notes.2. Ownership of Minerals, Including Salt, in the Former State of Marwar:The principal question was whether the State of Marwar was the owner of all salt, regardless of whether it was produced in Khalsa or jagir areas. The court concluded that the State was indeed the owner of all salt-producing areas and salt deposits. This ownership extended to the present State of Rajasthan after integration. The court emphasized that the jagirdar could not divest the State of its ownership rights by granting a lease.3. Interpretation of the Term 'Mineral' under Section 231 of the Marwar Land Revenue Act:The court examined whether salt could be classified as a 'mineral' under Section 231 of the Marwar Land Revenue Act. The petitioner argued that salt was not a mineral, citing its separate listing in the Union List of the Constitution. However, the court rejected this argument, stating that the term 'mineral' in the Marwar Act should not be interpreted based on the Constitution, which was enacted later. The court referred to various sources and concluded that 'mineral' included substances of commercial value, whether extracted from mines or produced by surface workings. Therefore, salt, irrespective of its production method, was considered a mineral under the Marwar Act.4. Impact of the Government of India's Press-Notes on the Rights of the State of Rajasthan:The court held that the press-notes issued by the Government of India, which allowed free production of salt, did not affect the ownership rights of the State of Rajasthan. The press-notes permitted manufacturing without a license but did not grant lawful access to land where the State or a third party had ownership rights. The court emphasized that the rights of ownership vested in the former State of Marwar and subsequently in the State of Rajasthan could not be terminated by the press-notes.Conclusion:The court dismissed the petition, holding that the petitioner had no legal right to manufacture salt on the leased land as the ownership of salt-producing areas vested in the State. The concessions granted by the Government of India did not override the State's ownership rights. The petition was dismissed with costs awarded to the State.