Delegated mineral regulation cannot justify a blanket ban on lawful sand transport; the restriction also violates Article 301.

The SC held that State rules prohibiting transport of legally excavated sand outside the State were beyond the rule-making power conferred by the Mines and Minerals (Development and Regulation) Act, 1957. The delegation under Section 15 permits regulation of mineral concessions, while Section 23-C is aimed at preventing illegal mining, transport and storage; neither authorises a blanket ban on the movement or sale of lawfully mined minerals. The Court further held that such a prohibition directly burdened inter-State trade and commerce and was inconsistent with Article 301, as it was not supported by a constitutionally valid restriction under Part XIII. The striking down of the rules was therefore upheld.

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Issues: (i) Whether the impugned State rules prohibiting transportation of legally excavated sand beyond the State border were within the State Government's rule-making power under the Mines and Minerals (Development and Regulation) Act, 1957. (ii) Whether the impugned rules offended Part XIII of the Constitution of India, especially Article 301.

Issue (i): Whether the impugned State rules prohibiting transportation of legally excavated sand beyond the State border were within the State Government's rule-making power under the Mines and Minerals (Development and Regulation) Act, 1957.

Analysis: The statutory scheme of the Mines and Minerals (Development and Regulation) Act, 1957 shows a limited delegation to the State Government in respect of minor minerals. Section 15 authorises rules for regulating the grant of quarry leases, mining leases and other mineral concessions and matters connected therewith, while Section 23-C, inserted to curb illegal mining, transportation and storage, is directed to prevention of illegal mining and allied activities. The Court held that the power to regulate grant of leases does not extend to controlling the sale or transport of minerals after lawful excavation, and that the words in Section 23-C take colour from the object of preventing illegal mining. The impugned prohibition on movement of sand legally mined under a valid lease therefore had no statutory source in the Act.

Conclusion: The impugned rules were beyond the State Government's power and were ultra vires the Act.

Issue (ii): Whether the impugned rules offended Part XIII of the Constitution of India, especially Article 301.

Analysis: Article 301 guarantees freedom of trade, commerce and intercourse throughout India, subject to constitutionally recognised restrictions. The Court held that a blanket ban on transporting sand outside the State directly fettered inter-State trade and commerce, and could not be justified as a permissible regulatory measure under the MMDR Act. The Court also held that the constitutional scheme permits restrictions in public interest only through the channels prescribed by Articles 302 and 304, and the State could not achieve such a prohibition by subordinate legislation under a mines and minerals statute. The measure was therefore repugnant to the freedom protected by Article 301.

Conclusion: The impugned rules were violative of Part XIII of the Constitution, including Article 301.

Final Conclusion: The Court upheld the Gujarat High Court's decision, held that the State lacked power to impose the sand-export prohibition by the impugned rules, and declined to disturb the striking down of those rules.

Ratio Decidendi: A State's delegated power to regulate minor minerals under the MMDR Act does not authorise a blanket prohibition on the transport or sale of legally excavated minerals outside the State, and such a restriction, when imposed by subordinate legislation, also infringes Article 301 unless supported by constitutionally valid restriction-making power.

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