A. Srinivasan and Others vs District Collector and Others

D. Murugesan, J.—The issues raised for consideration in the writ appeals and writ petitions are common and hence they are taken up

together for disposal by this common order.

The points projected in the writ appeals and writ petitions are as to whether the appellants/writ petitioners to whom the leases were granted for

quarrying stone in the respective virgin areas prior to the amendment of Sub-rule (8) of Rule 8 of the Tamil Nadu Minor Mineral Concession

Rules, 1959, vide G.O. Ms. No. 391 Industries (MMC-I) Department dated 17th November, 2000 are entitled to quarry only for a period of five

years or are entitled to quarry for a period of ten years in terms of the amended rule and whether the said amended rule is applicable only to fresh

virgin quarries,

Before adverting to the issues, a reference can be made to the bone of contentions on facts. It is the contention of the appellants/writ petitioners

(hereinafter referred to as ""the lessees"") that they are the leaseholders for quarrying stone in respect of the virgin areas pursuant to the execution of

the lease deeds much prior to the issuance of the G.O. Ms. No. 391 Industries dated 17-11-2000. By virtue of the above lease deeds, the lessees

are entitled to quarry stone for a period of five years from the date of execution. During the currency of lease, the Government Order dated 17-

11-2000 came into force. Hence, by virtue of the abovesaid Government Order, they are entitled to quarry stone for a period of ten years

irrespective of the period fixed in the original lease, namely, five years to some lessees and less than five years for some other lessees, but were

permitted to quarry for the full period of five years pursuant to the orders of this Court.

For disposal of the writ appeals and writ petitions, we would only refer to the facts as put forth by one of the lessees, namely, the appellant in

W. A. No. 287 of 2005. The appellant-lessee became the successful bidder in respect of the stone quarry measuring 5.00.0 Hectares comprised

in Survey No. 99 (Part) quarry No. 5 situate in Keerapakkam village, Chengelpet Taluk, Kancheepuram District and the lease deed was executed

on 5-6-97 and the same was duly registered. The lease runs for a period of five years from 5-6-97 to 4-6-2002. Survey No. 99 (Part) was

divided into six bits and were called as quarry Nos. 1 to 6. Quarry No. 5 was leased out to the appellant-lessee and the quarry was virgin on the

date of the lease. As the quarry was virgin, the lessee had to develop the area for putting into commercial production and consequently the

quarrying operation could not be effectively carried for a full period from the date of execution of the lease deed. Hence representations were

made by the lessees similarly placed to the Government both collectively and individually seeking for extension of the lease period and on the basis

of the representations alone, the Government issued G.O. Ms. No. 391 Industries dated 17-11-2000 amending Sub-rule (8) of Rule 8 of the

Tamil Nadu Minor Mineral Concession Rules, 1959 permitting the grant of lease for a period of ten years to virgin areas instead of five years. As

the lease of the appellant-lessee was to end on 4-6-2002, he made an application on 31-10-2001 requesting the District Collector,

Kancheepuram to extend the lease for a further period of five years from the date of expiry of the lease in terms of the above Government Order.

The said application was rejected by the proceedings dated 29-12-2001 on the ground that as per the amended sub-rule, the lease could be

granted only in respect of virgin area and as the land was already subjected to quarrying operation, the area cannot be considered to be virgin.

Hence, the said amendment is not applicable.

The said Government Order was questioned in the writ petition on the ground that the amendment will apply to the existing lessees, as the

amendment relates to only procedural aspects. The said writ petition was resisted by the respondent, the District Collector, Kancheepuram solely

on the ground that the area has already been subjected to quarrying operation and therefore the amendment will not apply to the lessee. On

consideration of the rival contentions, the learned single Judge had negatived the submissions made by the lessee on the ground that the area cannot

be considered to be a virgin area and the amendment, being substantive in nature, cannot be given retrospective effect. Similar contentions raised

by the other lessees were also rejected by the order impugned in the writ appeals. The same issue is put before this Court by the lessees/writ

petitioners as well.

We have heard the submissions made by Mr. V.T. Gopalan, Mr. K. Alagirisamy, Mr. AR. L. Sundaresan, Mrs. Hema Sampath, learned Senior

Counsel, Mr. K. Muthukumarasamy, Mr. K.R. Krishnan and Mr. C. Godwin, learned Counsel for the lessees and Mr. R. Thirugnanam, Special

Government Pleader assisted by Mr. P. Subramanian, learned Government Advocate for the respondent.

It is the cardinal principle of construction that every statute is presumed to be prospective unless it is expressly or by necessary implication made

retrospective in operation. The issue as to the retrospective operation of a provision of law came up for consideration before the Apex Court in

more than one case. In the judgment in K.S. Pariapoornan and Others Vs. State of Kerala and Others, , the Apex Court considered a land

acquisition proceeding, where a notification was made on 21-3-78, declaration was made on 15-5-79, award was passed on 30-12-80 and

possession was taken sometime during 1981. On a reference, the award amount was enhanced u/s 18 by the Civil Court on 28-2-85. After the

award came to be passed and the possession was taken, the Land Acquisition Amendment Act came into force on 24-9-84 and by Section 15 of

the Amendment Act, Sub-section (1A) was introduced in Section 23, whereby it was added that in addition to the market value of the land, the

Court shall in every case award an amount calculated at the rate of twelve per cent per annum on such market value for the period commencing on

and from the date of publication of the notification u/s 4 in respect of such land to the date of the award of the Collector or the date of taking

possession of the land, whichever is earlier. Though the amendment came into force on 24-9-84, some of the newly introduced provisions in Sub-

section (1A) of Section 23, Sub-section (2) of Section 23, Sections 28 and 34 were given retrospective operation in terms of Section 30 of the

Amendment Act. As Sub-section (1) of Section 30 gives a limited retrospective effect to Sub-section (1A) of Section 23 only in respect of the

proceeding where no award has been made by the Collector before the said date, the same was put in issue on the ground that it will be applicable

only to pending acquisition proceedings where no award has been made as on 30-4-82 and also in respect of other proceedings for acquisition of

any land commenced after the date whether or not award has been made by the Collector before commencement of that date. The retrospective

operation came into consideration before the Apex Court and the Apex Court has held as follows:

A statute dealing with substantive rights differs from a statute which relates to procedure or evidence or is declaratory in nature inasmuch as while a

statute dealing with substantive rights is prima facie prospective unless it is expressly or by necessary application made to have retrospective effect,

a statute concerned mainly with matters of procedure or evidence or which is declaratory in nature has to be construed as retrospective unless

there is a clear indication that such was not the intention of the legislature.

Their Lordships have also held that the governing point for determining the amount of compensation to be awarded for the land acquired under the

Act is the date of notification u/s 4, which is a substantive provision making the land owner for entitlement to the determination of the quantum of

compensation. In fact their Lordships quoted with approval the following observation made in Alexander v. Mercourts (1979) 3 All ER 35, which

is as follows:

The question whether a particular statute operates prospectlvely only or has retrospective operation also will have to be determined on the basis of

the effect it has on existing rights and obligations, whether it creates new obligations or imposes new duties or levies new liabilities in relation to past

transactions. For that purpose, it is necessary to ascertain the intention of the legislature as indicated in the statute itself.

While the general rule is that a provision of statute would be only prospective in operation unless it is specifically provided otherwise under the

statute, a distinction could be made for the application of the general rule to procedural aspects. This is what declared to be permissible by the

Apex Court in K.S. Paripoornan''s case.

What is substantial or procedural would depend upon the applicability of the statute to the facts of each case. In fact in K.S. Paripoornan''s

case, though the amended provision of Section 23(1A) of the Land Acquisition Act was restricted in determination of compensation, the Apex

Court while holding that in view of the substantive provision, namely, the date on which Section 4(1) notification was issued would be the relevant

date for determining the compensation, has permitted the retrospective application of the benefit of Section 23(1A) to all other acquisition

proceedings as the same being procedural.

A similar question came up for consideration before the Apex Court in Gujarat Pottery Works Vs. B.P. Sood, Controller of Mining Leases for

India and Others, , where the Apex Court was considering a perpetual lease for excavating white clay and found that the grant of lease is different

from the formal execution of the lease deed and it has also been held that the Mineral Concession Rules, 1949 made u/s 5 of 1948 Act deal with

the procedure for grant of mining lease in respect of the land in which minerals belong to the Government and by holding so, the order of the

Controller of Mines modifying the terms of the lease by reducing it to 25 years from the date of grant of lease and not from the date of execution of

the lease was interfered on the ground that the period has to be calculated retrospectively from the date of grant of lease.

The issue as to the grant of mining lease itself came up for consideration before the Apex Court in the Judgment in V. Karnal Durai Vs. The

District Collector, Tuticorin and another, . In that case, the Apex Court held that the rule that was amended would alone be applicable wherever

the application for grant of lease stood pending at the time of dispossession and consequently applied the rule retrospectively.

So far as the Tamil Nadu Minor Mineral Concession Rules are concerned, they are only procedural. In fact Rule 8(1)(a) relates to the power

of the District Collector to publish a notice inviting tender application for grant of lease of areas for quarrying minor minerals other than the minerals

covered under Rules 8-A and 8-C of the Rules. Rule 8(1)(b) relates to the power of the District Collector to give further publicity to invite tender

application. Sub-rules (2), (3), (4), (5), (6) and (7) of Rule 8 relate to the procedures to be followed while considering the applications and either

acceptance or rejection of the same and in case of acceptance, the mode of payment of the lease amount etc. Sub-rule (8) of Rule 8 deals with the

period for which the lease can be granted. Prior to the amendment, the District Collector was empowered to grant lease for quarrying stone for a

period of five years. The said rule relating to the period was substituted by G.O. Ms. No. 391 Industries (MMC-I) Department, dated 17-11-

2000 and the said rule reads as follows:

(8) The period of lease for quarrying stone in respect of the virgin areas, which have not been subjected to quarrying so far, shall be ten years. The

period of lease for quarrying stone in respect of other areas shall be five years. The period of lease for quarrying sand and other minor minerals,

other than the minerals covered under Rules 8-A and 8-C of the said Rules, shall not exceed three years and shall not be less than one year and

shall be subject to the following conditions, namely:

(i) The date of commencement of the period of lease granted under this Rule shall be the date on which the lease deed is executed.

(ii) The lease shall expire on the date specified in the lease deed and in no case extension of the period of lease shall be made.

A combined reading of Rule 8 would show that it deals only with the procedures to be adopted by the District Collector from the stage he invites

tenders till he executed the lease deed. A decision to grant lease for quarrying operation provided in the Act is substantive in nature and as to how

the applications should be dealt with and lease should be granted are procedural. Fixation of period of lease is also procedural. The only restriction

would be that the District Collector is bound by the procedures and cannot grant the lease beyond the period provided under the rule.

It is argued by Mr. V.T. Gopalan. learned Senior Counsel that at the time when the lease was granted to all the lessees prior to 17-11-2000,

the areas were virgin. As the amended rule fixing the period is procedural, it must be construed that the benefit of the said rule should be extended

in respect of the virgin quarries on the date when the substitution of the rule was made. He would submit that there is no denial that the areas

granted to the lessees, which are the subject-matter of the writ appeals and writ petitions, were virgin on the date when they were granted and

therefore the lessees are entitled to quarry for a further period of five years i.e., in all ten years from the date of execution of the lease deeds. Per

contra, Mr. R. Thirugnanam, learned Special Government Pleader would submit that the amended rule contemplates the grant of lease for a period

of ten years only in respect of the virgin areas which have not been subjected to quarrying operation and not otherwise.

We have already referred to the judgment of the Apex Court in Gujarat Pottery Works Pvt. Ltd. case AIR 1967 SC 964, holding that the rule

being procedural it could be given retrospective effect. Only in the event the statute prohibits or imposes a restriction for giving effect to

retrospective operation, the rule must be read in the same manner by giving effect to the real meaning and the Court cannot import something new

into the said rule. But the said principle of law is not applicable to the given cases. A lease is known to be virgin by the fact whether it was virgin at

the time when it was granted for quarrying. So long as the lease period is in force, the area would be only known to the virgin till such time the

lease is over. The words ""which have not been subjected to quarrying so far"" in the amended rule shall relate only to date on which the lease was

granted and not subsequently. The intention of the legislature is clear in granting ten years for virgin quarries and only for five years in respect of

other quarries. The decision to grant ten years is with reference to virgin quarries. We do find any intention of the legislature to restrict the period to

existing virgin quarries and in fact by that rule, there is no such restriction. This would be the correct interpretation as the Government had duly

taken into consideration of the representations of the lessees who could not exploit the mineral for the entire full period of five years. As the area

being virgin, they had to develop the area before commencement of the quarrying operation and in that process, they would lose a substantial

portion of the lease period. Keeping the above grievance of the lessees only, the Government had extended the period of lease to ten years in

respect of virgin areas. Hence, the lessees are entitled to the lease for a period of ten years provided the areas that were leased to them were virgin

and there were no prior leases granted and the said quarries were not put into operation earlier.

In fact the applicability of the amended rule for existing lessees who were granted lease for the first time in virgin areas came up for

consideration before a Division Bench of this Court in W. A. No. 2887 of 2003 and by order dated 18-11 -2003, the Division Bench has in fact

relied upon the judgment of the Apex Court in V. Karnal Durai''s case and has held that the Government Order extending five years to ten years''

term is applicable to the existing lease, provided the fact-finding is recorded to the effect that the stone quarry, which was granted, was not already

quarried, but was a virgin. As the said judgment was rendered following the judgment of the Apex Court and the judgment being the co-ordinate

Bench, it is binding on another co-ordinate Bench, unless the subsequent Bench differs on the facts. In view of the fact, which we have discussed,

as to the entitlement of the lessees who were granted lease in virgin areas, we have no reason to take a different view than one taken by the above

Division Bench.

A similar view was also expressed by a Division Bench of this Court while granting interim orders in the present writ appeals by observing that

the amended rule would be applicable to the existing lessees who were granted lease of virgin areas. With the said observation, the Bench directed

that the quarrying site forming the subject-matter of the writ appeals shall not be dealt with in any manner by the Revenue Authorities exercising

power under the Tamil Nadu Minor Mineral Concession Rules, 1959, until further orders are passed.

We may also refer to the judgment of Justice P. Shanmugam made in W.P. Nos. 3551 of 1999 etc., dated 15-4-99. In that case, the learned

Judge was dealing with a similar amendment fixing the period of lease under Rule 8(8)(a)(i) as five years for quarrying stone and three years for

quarrying sand and minerals. By placing reliance on the judgment of the Apex Court in V. Karnal Durai''s case as well as in State of Tamil Nadu

Vs. Hind Stone and Others, , ultimately held that the amended rule being procedural in nature will have retrospective effect.

There is one more aspect namely, there cannot be two different set of periods for the virgin quarries, one existed on the date of amended rules

i.e., on 17-11-2000 and another for the leases granted after the said period. The terms of contract and conditions of leases including the period

must be in consistent with the rules uniformly for all the leases granted in respect of all virgin areas. The Apex Court in Rajendra Singh Vs. State of

Madhya Pradesh and others, , has laid down that the terms of the contract should be in accordance with statutory rules. In matters, particularly, in

grant of lease, the terms and conditions shall be in tune with the statutory rules made for the purpose. When the statutory rule prescribes a period

of ten years for virgin quarries, the entitlement of the lease holders over a virgin quarry cannot be restricted for a period of five years only or lesser

periods in some cases, fixed at the time of grant of lease.

For all the above reasons, we are of the considered view that so long as the lease granted in respect of the virgin areas for the first time is in

force and the period of lease was not over on the date when the amendment came in force on 17-11-2000, those areas should be considered to

be virgin not subjected to quarrying operation and therefore the benefit of the period of ten years shall be extended to those lessees as the virgin

quarries are entitled to the grant of lease for a period of ten years as per the said amended rule. Factually, by various orders of this Court, some of

the lessees were allowed to quarry even beyond the period of five years and they are left only with one or two years'' period as the case may be.

This leads us to the next question on facts. For better appreciation the details of the lease granted to the lessees in the writ appeals and writ

petitions could be summarised below:

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Sl. No. Writ Appeal/Writ Date of Expiry of

Petition No. execution of lease period

lease deed

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1 W.A. No. 287 of 2005 05-05-97 06-04-02

2 W.A. No. 289 of 2005 13-10-97 10-12-02

3 W.A. No. 292 of 2005 13-12-96 12-12-01

4 W.A. No. 293 of 2005 10-09-97 10-09-02

5 W.A. No. 1383 of 2006 05-08-97 05-07-02

6 W.P. No. 24924 of 2002 17-07-97 16-07-02

7 W.P. No. 20138 of 2003 29-07-98 28-07-03

8 W.P. No. 27868 of 2003 16-11-98 15-11-03

9 W.P. No. 44330 of 2002 22-07-98 21-07-03

10 W.P. No. 44331 of 2002 18-06-98 17-06-03

11 W.P. No. 30248 of 2002 29-07-98 28-07-03

12 W.P. No. 30249 of 2002 16-07-98 15-07-03

13 W.P. No. 21286 of 2002 27-06-97 26-06-03

14 W.P. No. 33094 of 2002 09-12-97 09-11-02

15 W.P. No. 35621 of 2002 16-07-98 15-07-03

16 W.P. No. 21828 of 2002 19-02-96 18-02-01

17 W.P. No. 29403 of 2002 18-01-99 17-01-04

18 W.P. No. 16051 of 2004 26-12-97 25-12-02

19 W.P. No. 16052 of 2004 07-12-99 07-11-04

20 W.P. No. 11279 of 2004 07-12-99 07-11-04

21 W.P. No. 11788 of 2002 06-05-97 06-04-02

22 W.P. No. 13970 of 2004 06-07-99 06-06-04

23 W.P. No. 20362 of 2003 13-07-98 07-12-03

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From the pleadings, it is seen that the appellants in W. A. Nos. 287 and 289 of 2005 were granted lease for the full period of five years. The

appellants in W. A. Nos. 292, 293 of 2005 and 1383 of 2006 were granted lease less than five years, but pursuant to the orders passed in the

writ petitions they were allowed to quarry for the full five years. Before their lease came to an end, they have filed applications before the revenue

authorities for extension of the lease period for five more years based on the amended rule, but their applications were rejected solely on the

ground that the amended rule is only prospective in nature. However, the fact remains that on the date when the Government Order came into

force, they were quarrying stone in the virgin areas in question. Likewise the writ petitioners in W. P. Nos. 24924, 33094 of 2002, 16052, 11279,

13970 of 2004, 11788 of 2002 and 20362 of 2003 were granted lease for the full period of five years. In fact the petitioner in W.P. No. 13970

of 2004 had made an application seeking for extension of lease for a further period of five years, but the same was rejected by the order dated 22-

11-2003.

The petitioners in W.P. Nos. 20138, 27868 of 2003, 44330, 44331, 30248, 30249, 21286, 35621, 21828, 29403 of 2002 and 16051 of

2004 were granted lease less than five years, but pursuant to the orders passed in the writ petitions they were allowed to quarry for the full five

years. Even in the counter-affidavits filed in the W.A. Nos. 287, 289, 292 and 293 of 2005, there is no specific denial by the authorities that the

areas covered are not virgin except a bald denial. In fact in the counter-affidavit filed in W.P. No. 20362 of 2003, the respondent-authority has

accepted that the quarry was leased out for the first time to the petitioner on 10-6-98 and in the counter-affidavits filed in W.P. Nos. 24924,

21286, 35621, 21828 and 29403 of 2002, the respondent authorities have not specifically denied that the areas are not virgin except a bald

denial.

From the above, it is seen that the respondent-authorities have not denied the fact that at the time when the leases were granted to the lessees,

the areas were virgin and in these circumstances they are entitled to the benefit of the amended Rule 8(8) of the Tamil Nadu Minor Mineral

Concession Rules and consequently the lease should be granted for a period of ten years from the date of execution of the lease deeds.

So far as the petitioner in W.P. No. 29402 of 2002 is concerned, it is the specific stand of the respondent that the lease granted to the

petitioner expired on 31-3-99 and, therefore, he is not entitled to the benefit of the Government Order, as he was not a lessee on the date of

issuance of the Government Order. In view of the said stand, W.P. No. 29402 of 2003 shall stand dismissed and the interim order shall stand

vacated.

So far as the petitioner in W.P. No. 11955 of 2005 is concerned, he has challenged the auction notification dated 10-3-2005 pertaining to the

subject quarry in W. A. No. 287 of 2005. As we have held that the amended rule is applicable to the appellant, the said writ petition has to be

allowed. Accordingly, the auction notification dated 10-3-2005 is quashed and the W.P. No. 11955 of 2005 is allowed.

So far as W.P. No. 9273 of 2004 is concerned, it is the case of the petitioner that though the lease is for a period of five years from 1-8-95 to

31-3-2000, as the lease deed was executed on 6-9-95, the period of five years shall be counted from 6-9-95 and if that be so, he is entitled to

five months and five days more. In fact he has filed a writ petition in W.P. No. 8272 of 2004 and the said writ petition is pending. But in this case,

as the lease expired on the date of the amended rule, he is not entitled to the benefit of the said rule. Hence W.P. No. 9273 of 2004 is dismissed

and the interim order shall stand vacated.

For all the above reasons, the impugned proceedings of the respondent-authorities are quashed and W.A. Nos. 287, 289, 292 and 293 of

2005 and W.P. Nos. 24924, 21286, 35621, 21828, 29403 of 2002 and 20362 of 2003 are allowed directing the respondent-authorities to

extend the lease period for a further period of five years from the date of execution of the lease deeds and allow the lessees to quarry for rest of

the periods.

So far as W. A. No. 1383 of 2006 and W.P. Nos. 20138, 27868 of 2003, 44330, 44331, 30248, 30249, 33094, 11788 of 2002, 16051,

16052, 11279, 13970 of 2004 are concerned, as there are no counter-affidavits filed, we are not in a position to find out as to whether at the time

when the lease was granted the areas were virgin or not. Hence the above writ appeal and the writ petitions are disposed of giving liberty to the

appellant/writ petitioners to approach the respondent-State Government and establish the said fact for their entitlement to the grant of lease for a

further period of five years. The respondent-State Government shall complete the exercise within a period of two months from the date of receipt

of a copy of this order or on production of the same by the appellant/petitioners.

All the writ appeals and writ petitions stand disposed of with the aforesaid observations. Consequently, the connected miscellaneous petitions

in the writ appeals and writ petitions are closed. There will be no order as to costs.