CHANDRA BHAN SINGH v. THE STATE OF UTTAR PRADESH
Discusses statutory interpretation, rule application, and state government powers regarding mineral concessions, useful for administrative and regulatory law.
Court: Supreme Court of India
Citation: 2025 INSC 763
Decision Date: 23-05-2025
List of Laws
Mines and Minerals (Development and Regulation) Act, 1957; Uttar Pradesh Minor Minerals (Concession) Rules, 1963; District Mineral Foundation Trust Rules, 2017
- Mines and Minerals (Development and Regulation) Act, 1957: The judgment discusses Section 9B of the Act, concerning the District Mineral Foundation (DMF). The appellant argued that the demand for 10% of the bid amount was contrary to Section 9B, which requires deposit as per the royalty fixed in the Second Schedule. The court notes the appellant's contention that DMF provides for charging an amount in addition to royalty, not exceeding one-third of such royalty. The respondent argued that Section 9B's applicability is restricted by Section 14. The court held that Section 9B is not applicable in light of Section 14, which states that Sections 5 to 13 do not apply to minor minerals. The judgment also refers to Section 9B(2) and (3), stating their applicability is limited by Section 15(4)(a) and (b). Section 15 of the Act, which confers powers on the State Government to make Rules in respect of minor minerals, is also discussed. The respondent argued that under Section 15(4), the government could make rules regulating the Act's provisions, including the DMF Trust's operation. The court quotes Section 15: "Power of State Government to make rules in respect of minor minerals - (4) Without prejudice to sub-sections (1), (2) and sub-section (3), the State Government may, by notification, make rules for regulating the provisions of this Act for the following, namely: (a) the manner in which the District Mineral Foundation shall work for the interest and benefit of persons and areas affected by mining under sub-section (2) of section 9B; (b) the composition and functions of the District Mineral Foundation under sub-section (3) of section 9B; and (c) the amount of payment to be made to the District Mineral Foundation by concession holders of minor minerals under section 15A.” The judgment also discusses Section 15A, empowering the State to prescribe payment to the DMF Trust. The court quotes Section 15A: “15A. Power of State Government to collect funds for District Mineral Foundation in case of minor minerals. - The State Government may prescribe the payment by all holders of concessions related to minor minerals of amounts to the District Mineral Foundation of the district in which the mining operations are caried on.” The court concluded that the State Government was empowered under Section 15A to determine and fix the amount. Section 14 is discussed, with the court quoting it: “14. Sections 5 to 13 not to apply to minor minerals – The provisions of sections 5 to 13 inclusive shall not apply to quarry leases, mining leases or other mineral concessions in respect of minor minerals.” The court held that Sections 5 to 13 of the 1957 Act would not be applicable to the present case as the mineral which is sought to be mined is a minor mineral i.e., sand.
- Uttar Pradesh Minor Minerals (Concession) Rules, 1963: The judgment discusses Rule 68 of the Rules, which enables the State Government to relax the Rules and grant mining leases. The appellant argued that the policy decision violated Rule 68. The court notes that the original records relating to the process of finalising the decision resulting in the issuance of the communication dated 22.04.2017 with reference to Rule 68 of the 1963 Rules were produced before the Court on 15.10.2024 which was perused and a copy of the original file was retained on record. The court found that the State was exercising its powers under Rule 68 and fulfilling the requirement of the Rule. The court also mentions that an Order dated 18.04.2017 was passed by the Lucknow Bench of the High Court in a Public Interest Litigation which had permitted and required the exercise of powers under Rule 68 of 1963 Rules by the State. The appellant also made reference to Rule 21 and Rule 54 of the Rules. The court also discusses Rule 23(3) of the Rules, quoting it: “23. Declaration of area for auction/tender/auction-cum-tender lease (3) On the declaration of the area or areas under sub-rule (1) the provisions of chapters II, III and VI of these rules shall not apply to the area of areas in respect of which the declaration has been issued. Such area or areas may be leased out according to the procedure described in this Chapter.” The court held that in case of e-tender process is being followed, Chapter II, III and VI of these Rules would not apply. Rule 21 falls in Chapter III whereas Rule 54 falls in Chapter VI and, therefore, the said Rules would not be operative, rather not available to be used.
- District Mineral Foundation Trust Rules, 2017: The judgment discusses sub-Rule (2) of Rule 10 of the Rules. The respondent argued that under these rules, every permit holder is required to deposit with the DMF Trust an amount equivalent to 10% of the royalty or as may be prescribed by the State Government. The court quotes Rule 10(2): "(2) In case of minor minerals- The holder of every mineral concession/permit shall in addition to the royalty, pay to the Trust of the district in which the mining operations are carried on, an amount which is equivalent to 10% of royalty or as may be prescribed by the State Government from time to time." The court held that apart from the royalty, an amount of 10% of the royalty is payable to the DMF Trust of the district in absence of any prescribed amount by the State Government. However, in case an amount is prescribed by the State Government then the said rate or amount would prevail and be payable at the end of the holder of the mineral concession or permit.
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