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Issues: (i) Whether the rule conferring exclusive quarrying rights on the State could validly terminate all existing sand quarrying leases and permissions forthwith without notice or hearing to the affected holders. (ii) Whether the High Court's conditions protecting existing leaseholders and permission-holders required modification, and to what extent Rule 38A could be read down and sustained.
Issue (i): Whether the rule conferring exclusive quarrying rights on the State could validly terminate all existing sand quarrying leases and permissions forthwith without notice or hearing to the affected holders.
Analysis: Rule-making under Section 15 of the Mines and Minerals (Development and Regulation) Act, 1957 is subordinate legislation and must conform to the parent Act. The Act, particularly Section 4A(2) and Section 4A(3), contemplates premature termination of mining leases only by an order and only after giving the holder a reasonable opportunity of being heard. The legislative scheme protects subsisting leasehold rights during the currency of the lease, and the power of termination is not a wholesale power to extinguish all existing rights in one stroke. While a delegated rule may regulate or even prohibit exploitation in appropriate cases, it cannot override the statutory safeguard of hearing where the Act itself requires it. Accordingly, the part of Rule 38A that purported to bring all existing leases and permissions to an end with immediate effect, without notice or hearing, was inconsistent with the Act.
Conclusion: That part of Rule 38A was invalid to the extent it terminated subsisting leases and permissions forthwith without hearing; the State's challenge succeeded only in part.
Issue (ii): Whether the High Court's conditions protecting existing leaseholders and permission-holders required modification, and to what extent Rule 38A could be read down and sustained.
Analysis: The exclusive vesting of the right to quarry sand in the State was upheld, as the Act permits such regulatory control. However, the offending portion of Rule 38A could be saved by reading it down so that existing quarrying leases were treated as terminable in accordance with the lease deed, namely on six months' notice, or for the remaining unexpired period, whichever was less. Persons quarrying without subsisting leases or permissions ceased to have any right from the date the rule came into force. The order of the High Court was therefore modified to the limited extent necessary to preserve the valid part of the rule while removing the impermissible immediate termination of subsisting leasehold rights.
Conclusion: The rule was upheld in part and read down in part; the High Court's broader protective conditions were displaced by the limited relief formulated by the Court.
Final Conclusion: The appeals were allowed only to a limited extent: the State's exclusive right to quarry sand was sustained, but immediate termination of existing subsisting leases and permissions without hearing was not permitted, and the rule was saved only by reading it down to conform with the statutory scheme.
Ratio Decidendi: A delegated rule cannot extinguish subsisting mining rights contrary to the parent Act's mandatory requirement of notice and hearing, though the valid portion of the rule may be preserved by reading it down where severable.
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