Durairaju Naidu vs The State of Tamil Nadu and others

Somasundaram, J.—This writ petition has been filed for the issue of a writ of declaration, declaring Rule 39 of the Tamil Nadu Minor

Mineral Concession Rules. 1959 (hereinafter referred to as Rules), as unconstitutional, illegal and null and void.

According to the petitioner he was granted lease with respect to quarry in Survey No. 782/1 in Kulathur village and he has been agitating for the

renewal of the said lease. His further case is that he apprehends that the respondent can exercise their prerogative under the impugned Rule to

grant lease to somebody else and that he has filed the present writ petition in order to safeguard his interest.

Entry 54 of List I of the seventh Schedule to the Constitution of India reads as follows:

Regulation of mines and mineral development to the extent of which such regulation and development under the control of the Union is declared

by Parliament by law to be expedient in the public interest.

Entry 23 of List II of the same Schedule to the Constitution of India reads as follows:

Regulation of mines and mineral development subject to the provisions of List 1 with respect to regulation and development under the control of

the Union.

The Parliament with reference to Entry 54, List I referred to above, enacted the Mines and Minerals (Regulation and Development) Act, 1957

(Central Act 67 of 1957), hereinafter called the Act. S. 2 of the Act reads thus:

Declaration as to expediency of Union Control: It is hereby declared that it is expedient in the public interest that the Union should take under its

control the regulation of mines and development of minerals to the extent hereinafter provided.

S. 3 of the Act defines certain expressions which include the expression ""minor minerals"" and S. 3(e) defines minor minerals as follows:

minor minerals'' means building stones, gravel, ordinary clay, ordinary sand other than sand used for prescribed purposes, and any other mineral

which the Central Government may, by Notification in the Official Gazette declare to be a minor mineral.

Ss. 4 to 12 of the Act deal with certain general restrictions on undertaking, prospecting and mining operations. S. 13(1) enables the Central

Government, by Notification in the Official Gazette to make rules for regulating the grant of prospecting licences and mining leases in respect of

minerals and for the purpose connected therewith. S. 14 says that the provisions of Ss. 5 to 13 shall not apply to quarry leases, mining leases or

other mineral concessions in respect of minor minerals.

In exercise of the power conferred by S. 13 of the Act, the Central Government by Notification dated 11-11-1960 made the Mineral Concession

Rules, 1960.

3.1 S. 15 empowers the State Government to make rules for regulating the grant of quarry leases, mining leases or other mineral concessions in

respect of minor minerals and for purpose connected therewith. The sub-clauses of S. 15(1-A) specify various matters in respect of which such

rules may be made, including collection of rent and royalty, transfer of lease, rehabilitation of flora destroyed by the quarrying or mining operations.

In exercise of the powers conferred by S. 15(1) of the Act, the State Government framed the Rules called Tamil Nadu Minor Minerals

Concession Rules, 1959 hereinafter called as the Rules, S. 11 of the Rules deals with Government lands in which the minerals belong to the

Government. S. 3 of the Rules deals with ryotwari lands in which minerals belong to the Government. S. 4 of the Rules deals with the lands in

which minerals do not belong to Government. The said Rules were amended from time to time. Rule 8 deals with granting of lease in respect of

stone quarries. Rule 8-A deals with granting of lease in respect of granite quarries in Government Poramboke lands. Rules 19 and 19-A deal with

granting of quarrying permission in respect of ryotwari patta lands. According to Rule 8-C of the Rules then in force, no lease to quarry black

granite in Government lands could be granted to private persons challenging the said Rule 8-C, several persons fited writ petitions and ultimately

the Supreme Court in State of Tamil Nadu Vs. Hind Stone and Others, upheld the validity of the above rule. Based on R. 8-C the applications for

renewal of leases were not entertained. Thereafter, several writ petitions were filed before the Supreme Court for reconsideration of the decision in

State of Tamil Nadu Vs. Hind Stone and Others, . While admitting the writ petition, the Supreme Court has ordered that the status quo shall be

maintained but no quarrying operations shall be made. Those writ petitions still pending before the Supreme Court. By G.O.Ms. No. 960

(Industries) dated 16-3-1984, the State Government has reserved the entire colour granite paradise of Dharmapuri District for State exploitation.

The validity of the said Government order was also challenged by several quarry owners unsuccessfully and the matters are now pending before

the Supreme Court.

By G.O.Ms. No. 1273 (Industries) dated 9-12-1988, the Rules were amended thereby making it mandatory that one should have an existing

industry or should have a distinct industrial programme to set up an industry within the State of Tamil Nadu for cutting and polishing granite to get

eligible for obtaining quarrying lease or permission in Government lands or patta lands. Aggrieved by the said amended rules, several quarry

owners and exporters have challenged the validity of G.O.Ms. No. 1273 (Industries) dated 9-12-1988 by filing a batch of writ petitions before

this Court. By G.O.Ms. No. 608 (Industries) dated 2-9-1989 Rules 8-A and 19-A were further amended thereby introducing tender system for

granting lease in respect of Government lands and retaining the same conditions of G.O.Ms. No. 1273 (Industries) dated 9-12-1988 in respect of

patta lands. The validity of G.O.Ms. No. 608 (Industries) dated 2-9-1989 was also challenged. By a common judgment dated 12-10-1990 a

Division Bench of this Court dismissed all the writ petitions upholding the validity of both the Government orders. Aggrieved by the said judgment,

the quarry owners have filed S.L.Ps. before the Supreme Court. The Supreme Court while granting leave on 19-12-1990 directed that the status

quo as on date of the judgment dated 12-10-1990 should be maintained. Once again, the Government by G.O.Ms. No. 214 (Industries) dated

10-6-1992 amended Rule 8-A, Rule 19-A and inserted new Rules 8-D and 19-B thereby introducing canalization. Again by G.O.Ms. No. 216

(Industries) dated 10-6-1992 the Tamil Nadu Minerals Limited, hereinafter referred to as Tamin, a State owned company has been appointed as

canalizing agent. Aggrieved by the said Government orders, some of the quarry owners and exporters have chailenged the validity of the said

Government orders before this Court. By a common judgment dated 23-12-1992, a Division Bench of this Court has struck down the

amendments introduced to Rule 19-A and the new Rules 19-B and 8-D and G.O.Ms. No. 216 (Industries) dated 10-6-1992. As against the said

judgment of this Court dated 23-12-1992, the Government has filed S.L.Ps. before the Supreme Court, leave has been granted and the matter is

pending before the Supreme Court. In the above circumstances, the State Government has, by G.O.Ms. No. 97 (Industries) dated 8-3-1993

introduced the new Rule 39 empowering the State Government to grant or renew quarry lease or permission, etc., in special cases, in the interest

of mineral development and in public interest.

The circumstances leading to the introduction of the impugned Rule 39 have been stated in G.O.Ms. No. 97 (Industries) dated 8-3-1993 in the

following terms.

ORDER:

Parliament has enacted the Mines and Minerals (Regulation and Development) Act, 1957 (Central Act 67 of 1957) for Regulation and

Development of Mine and Mineral, S. 15 of the said Act empowers the State Government to make rules for regulating the grant of quarry leases,

Mining leases and other mineral concessions in respect of minor mineral and for purposes connected therewith. Accordingly the Tamil Nadu Minor

Mineral Concessions Rules, 1959 have been issued.

As early as in 1991, the Director of Geology and Mining brought to the notice of the Government that even though the State Government have

got powers to make and amend the rules governing the grant of quarry leases in respect of all minor minerals under S. 15(1) and (1-A) of the

Mines and Minerals (Regulation and Development) Act, 1957, the State Government have not so far expressly made any provision in respect of

minor minerals empowering themselves for grant or renew quarry leases or permission, etc. in special cases which are different from those laid

down in the rules.

The Director of Geology and Mining has also reported that the Uttar Pradesh and Kerala Minor and Mineral (Concession) Rules have provided

for such special Rule empowering the respective State Government to deal with extraordinary cases in public interest.

The Government, therefore, have considered and decided to empower themselves with power to grant of minor quarry leases or permission etc.

in special circumstances in the interest of mineral development and in the public interest.

The Notification appended to this order will be published in an extraordinary issue of the Tamil Nadu Government Gazette, dated 8-3-1993 and

in District Gazette.

The impugned Rule 39 runs as follows:

In exercise of the powers conferred by sub-sec. (1) and (1-A) of S. 15 of the Mines and Minerals (Regulation and Development) Act, 1957

(Central Act 67 of 1957) the Governor of Tamil Nadu hereby makes the following amendment to the Tamil Nadu Minor Mineral Concession

Rules, 1950.

The amendment hereby made shall come into force on the 8th March, 1992.

AMENDMENT

In the said Rules, after Rule 38, the following rule shall be added, namely;

Powers of State Government to grant or renew quarry lease or permission etc. in special cases:

Notwithstanding anything contained in these Rules, the State Government, if in any case, are of opinion, that in the interest of mineral development

and in the public interest it is necessary so to do, they may by order and for reasons to be recorded,

a. grant or renew a lease or permission to quarry any mineral; or

b. allow the working of any quarry for quarrying any mineral;

on terms and conditions different from those laid down in those rules"".

Mr. G. Subramaniam, learned senior counsel for the petitioner submitted that R. 39 is invalid and it is liable to be quashed on two grounds.

The first ground of attack on the validity of R. 39 is that the rule making power conferred under S. 15(1) of the Act does not authorise the State

Government to make a rule deviating from the rules already made in exercise of the powers under the said S. 15(1) of the Act and therefore, R. 39

is ultra vires the Act. The contention of the learned counsel is that, though S. 15(1) of the Act empowers the State Government to make rules for

regulating the grant of quarry leases, mining leases or other mineral concessions in respect of minor minerals, the said Section does not empower

the State Government to make the impugned rule enabling the State Government to relax the rules already made in exercise of the powers under S.

15(1) and in special cases, to grant or renew quarry lease or permission, etc. on terms and conditions different from those laid down in the other

rules. The learned senior counsel further contended that S. 31 of the Act specifically provides for relaxation of the rules made by the Central

Government under S. 13 of the Act in special cases: there is no such corresponding provision in the Act providing for relaxation of the rules made

by the State Government under S. 15(1) of the Act and in the absence of such a provision for relaxation of the rules framed under S. 15(1), the

State Government has no power to make the impugned rule enabling the State Government in special cases, to grant or renew a lease or

permission to quarry any mineral or to allow the working of any quarry for quarrying any mineral on terms and conditions different from those laid

down in the other rules. In other words, the learned senior counsel for the petitioner contended that, since there is no specific provision in the Act

empowering the State Government to relax the rules already made by the State Government in exercise of the power under S. 15(1), the State

Government is not competent to make R. 39 referred to above and therefore, it is unconstitutional, invalid and liable to be struck down. In support

of the above contentions, the learned counsel for the petitioner relied on the decisions in Gram Panchayat, Village Kanonda Vs. Director,

Consolidation of Holdings, Haryana, Chandigarh and Others, and Chandeswar Prosad Singh and Another Vs. Sub Divisional Land Reforms

Officer, Barrackpore and Others, . We are unable to accept the above contentions of the learned counsel for the petitioner. S. 13(1) of the Act

enables the Central Government to make rules, for regulating the grant of prospecting licences and mining leases in respect of minerals and for

purpose connected therewith. The Central Government in exercise of the powers under S. 13(1) of the Act have framed the Mineral Concession

Rules, 1960. S. 14 of the Act says that provisions of Ss. 5 to 13 (inclusive) of the Act shall not apply to quarry leases, mining leases or other

mineral concessions in respect of minor minerals. Therefore, the rules framed under S. 13(1) do not relate to minor minerals and they apply only to

major minerals. S. 31 of the Act provides for relaxation of rules framed under S. 13 in special cases with regard to major minerals. S. 31 of the

Act reads thus:

Relaxation of rules in special cases:--

The Central Government may, if it is of opinion that in the interests of mineral development it is necessary so to do, by order in writing and for

reasons to be recorded, authorise in any case the grant, renewal or transfer of any prospecting licence or mining lease, or the working of any mine

for the purpose of searching for or winning any mineral, on terms and conditions different from those laid down in the rules made under S. 13"".

As already pointed out S. 31 deals only with the power of the Central Government to relax the rules framed under S. 13(1) with regard to major

minerals alone and it has nothing to do with the minor minerals. S. 15 of the Act empowers only the State Government to make rules with regard to

minor minerals. No doubt, there is no provision in the Act similar to S. 31 enabling the State Government to relax the rules already framed under S.

15(1) with regard to minor minerals in special cases. However on a careful examination of S. 15 of the Act and S. 21 of the General Clauses Act,

1897, we are satisfied that S. 15 of the Act read with S. 21 of the General Clauses Act, 1897 gives ample power to the State Government to add

the impugned R. 39 to the existing rules for the purpose of regulating the grant of quarry leases, mining leases or other mineral concessions in

respect of minor minerals and for purposes connected therewith on terms and conditions different from those laid down in the other rules already

made under S. 15(1). S. 15(1) empowers the State Government to make rules for regulating the grant of quarry leases, mining leases or other

mineral concessions in respect of minor minerals and for purposes connected therewith. In exercise of the power conferred under S. 15(1), the

State Government had already framed the Rr. 1 to 38 called the Tamil Nadu Minor Mineral Concession Rules, 1959. The newly introduced R. 39,

which is challenged in this writ petition provides that in special cases, the State Government may by an order and for the reasons to be recorded, in

the interests of mineral development and in public interest, grant or renew a lease or permission to quarry any mineral or allow the working of any

quarry for quarrying any mineral on terms and conditions different from these laid down in the other rules. Rules under S. 15(1), though made by

the State Government are rules made under a Central Act and therefore, the provisions of the General Clauses Act, 1897 will apply to such rules.

Under S. 21 of the General Clauses Act, where by any Central Act, a power to make rules is conferred, then that power to make rules includes a

power, exercisable in the like manner and subject to the like sanction and conditions if any to add to amend vary or rescind any rules so made.

From this, it follows that the power to add a new rule like the impugned R. 39 or the power to amend the existing rules is comprehended within the

power to make rules given under S. 15(1) of. the Act. Inasmuch as, S. 15(1) confers upon the State Government the power to make rules for

regulating the grant of quarry leases, mining leases or other mining concessions in respect of minor minerals, it also confers upon the State

Government the power to add a new rule or to amend the rules already made for the purposes mentioned in S. 15(1) of the, Act. In other words,

by virtue of S. 21 of the General Clauses Act, 1897, the power which, the State Government has under S. 15(1) to make rules, for the purposes

mentioned in that Section in respect of minor minerals, includes the power to add or to amend thel rules so issued already. In D. K. Trivedi and

Sons v. State of Gujarat, 1986 1 SCJ 475 : AIR 1986 SC 1323 the Apex Court deal with the question whether the power of the State

Government under S. 15(1) of the Act to make rules providing for payment of royalty and dead rent includes the power to enhance the rate of

dead rent, has held as follows (at page 1348 (of AIR)):

The next contention was that though under S. 15(1) the State Government may have the power to make rules providing for payment of royalty

and dead rent, sub-sec. (3) showed that such power did not extend to amending the rules so as to enhance the rate of dead rent. The submission in

this behalf was that the power to enhance the rate of royalty by amending the rules was expressly provided for in sub-sec. (3) by the use of the

words ""at the rate prescribed for the time being in the rules framed by the State Government in respect of minor minerals"" but there was no such

provision in S. 15 with respect to dead rent. We are unable to accept this submission. Rules under S. 15(1), though made by the State

Government, are rules made under a Central Act and the provisions of the General Clauses Act, 1897 apply to such rules. u/s 21 of the General

Clauses Act whereby a power, exercisable in the like manner and subject to the like sanction and conditions, if any, to add to, amend, vary or

rescind any rules so made. The power to amend the rules is therefore, comprehended within the power to make rules and as S. 15(1) confers

upon the State Governments the power to make rules providing for payment of dead rent and royalty, it also confers upon the State Governments

the power to amend these rules so as to alter the rates of royalty and dead rent so prescribed, either by enhancing or reducing such rates"".

The ratio of the above decision directly applies to the facts of the present case. Further as the impugned rule does not traverse beyond the scope

of the Act, the said rule cannot be held to be ultra vires the Act.

In exercise of the powers conferred by sub-sec. (I) and (1A) of S. 15, the State Government had already made Rr. 1 to 38 called the Tamil

Nadu Minor Mineral Concession Rules, 1959. By G.O.Ms. 97 (Industries) dated 8-3-1993, the State Government in exercise of the powers

conferred under S. 15(1) and (1A) of the Act has only amended the rules by adding the impugned R. 39. Therefore, the amendment made to the

rules by adding the impugned rule cannot be challenged on the ground that the State Government has no power to make such a rule, particularly

when the impugned rule is also made for the purpose of regulating the grant of quarry leases, mining leases or other mineral concessions in respect

of minor minerals.

Again as already pointed out, S. 31 of the Act empowers the Central Government to relax the rules relating to major minerals, since S. 31

specifically refers to S. 13 dealing with major minerals. Similarly, the impugned rule empowers the State Government to relax the rules with

reference to minor minerals in special cases. Further the impugned rule is made only for the carrying out purpose of the Act and not for purposes

extraneous to the Act. R. 39 having been enacted pursuant to the power conferred under S. 15(1), it cannot be said that the State Government has

usurped the power of relaxation for itself as contended by the learned counsel for the petitioner. The decisions in Gram Panchayat, Village

Kanonda Vs. Director, Consolidation of Holdings, Haryana, Chandigarh and Others, and Chandeswar Prosad Singh and Another Vs. Sub

Divisional Land Reforms Officer, Barrackpore and Others, , relied on by the learned counsel for the petitioner, are not helpful to the petitioner

because, the principles laid down in those decisions have no relevance for deciding the issue involved in this case. In these circumstances, it has to

be held that the State Government has power to make the impugned rule and that there is no merit in the first contention of the learned counsel for

the petitioner.

The second contention of Mr. G. Subramaniam, the learned counsel for the petitioner, is that even assuming that the State Government has the

power to frame the impugned Rule, the said Rule enabling the State Government to grant or renew a lease or permission to quarry any mineral or

allow the working of any quarry for quarrying any mineral on terms and conditions different from those laid down in the other Rules, is vague

without guidelines and is violative of Art. 14 of the Constitution of India. The learned counsel for the petitioner, further, submitted that the impugned

Rule confers arbitrary, unfettered and uncanalised power upon the State Government to pass an order granting or renewing a lease or permission

to quarry any mineral or allowing the working of any quarry for quarrying any mineral. The learned counsel for the petitioner also contended that

since the power given to the State Government as under R. 39 is completely unfettered and uncanalised power without any guidelines, the said

Rule is violative of Art. 19(i)(g) of the Constitution and therefore the impugned Rule is liable to be struck down.

Per contra, the learned Government Pleader submitted that when R. 39 confers discretionary power on the State Government the validity or

constitutionality of such power conferred under R.39 cannot be judged on the assumption that the State Government will act in an arbitrary manner

in the exercise of the discretion conferred upon it. The learned Government Pleader also contended that if the State Government, in exercise of the

power conferred under R. 39, acts in an arbitrary manner its action would be bad in law and liable to be struck down by the Court, but the

possibility of abuse of power or arbitrary exercise of power cannot invalidate R. 39. In support of the above contention the learned Government

Pleader relied on the decision reported in (1986) 1 SCJ 475 : AIR 1986 SC 1323.

Mrs. Nalini Chidanibaram, the learned senior counsel appearing for petitioners in W.H.Ps. 12882 and 12883 of 1993, filed to implead the

petitioners therein as party respondents in the present writ petition, contended as follows:--- R. 39 does not confer unguided, uncanalised,

unfettened power on the executive. The guidelines for exercise of the power is contained in S. 15 of the Act. The power to grant lease in special

cases should be exercised within the parameters of S. 15 of the Act and the preamble to the Act. Therefore, the impugned Rule does not suffer

from excessive delegation. Again, the exercise of power under R. 39 is subject to judicial review and all orders passed under R.39 can be

scrutinised to find out whether the power has been exercised properly. In support of the above contentions, the learned senior counsel relied on the

decisions reported in Pannalal Binjraj Vs. Union of india (UOI), ; Harishankar Bagla and Another Vs. The State of Madhya Pradesh, ; Jyoti

Pershad Vs. The Administrator for The Union Territory of Delhi, and Ranjit Singh Vs. The Commissioner of Income Tax, U.P. and Others, . Mr.

Vedan-tham Srinivasan, learned counsel appearing for the petitioner in W.H.P. No. 11843 of 1993, filed to implead the petitioner therein as party

respondent in the present writ petition, contended that the impugned Rule does not confer unfettered and uncanalised power on the State

Government, that the exercise of power conferred under R. 39 is subject to judicial review and therefore the impugned Rule is not violative of Arts.

14 and 19(g) of the Constitution.

The impugned R. 39 provides that notwithstanding anything contained in the Tamil Nadu Minor Minerals Concession Rules, 1959, the State

Government, if, in any case are of opinion that in the interest of, mineral development and in the public interest it is necessary so to do, they may by

order and for reasons to be recorded, grant or renew a lease or permission to quarry any mineral or allow the working of any quarry for quarrying

any mineral on terms and conditions different from those laid down in the other Rules. R.39 begins with a non-obstante clause and it empowered

the State Government in a special case to pass an order granting or renewing a lease on permission to quarry any mineral etc. on terms and

conditions different from those laid down in the other rules viz. Rr. 1 to 38 of the Rules. The State Government by invoking the power under R. 39

can pass an order granting or renewing a lease or permission to quarry any mineral or allowing the working of any quarry quarrying any mineral,

even if the conditions prescribed in any of the Rr. 1 to 38 of the Rules or all the Rules are not satisfied. A careful scrutiny of R. 39 shows that the

discretion given to the State Government under the said Rule is an unfettered, uncanalised and uncontrolled discretion and it amounts to conferment

of arbitrary power upon the State Government, because the said R. 39 begins with a non obstante clause and it also confers power on the State

Government to pass orders granting or renewing a lease or permission to quarry any mineral or allowing the working of any quarry for quarrying

any mineral, relaxing the terms and conditions prescribed under Rr. 1 to 38 of the Rules. An examination of the impugned Rule will also shows that

it does not contain any guidelines for the purpose of treating a particular case, as a special case, for invoking the power under the said Rule for

granting or renewing a lease or permission to quarry any mineral or for allowing working of any quarry for quarrying any mineral on terms and

conditions different from those laid down in the other Rules. Again, the impugned Rule suffers from the vice of vagueness. He must point out here

that the conditions imposed by R. 39 for granting or renewing a lease or permission to quarry any mineral are uncertain, vague and unintelligible

and consequently wide and unfettered power is conferred on the State Government in the matter of granting or renewing a lease or permission to

quarry any mineral. The State Government by invoking the power under R.39 can pass an order granting or renewing lease or permission to quarry

any mineral in favour of any person, if the Government are of opinion that in the interest of mineral development and in public interest it is necessary

to do so. The expression ""in the interest of mineral development"" used in R. 39 does not provide an objective standard, norm or guideline and it is

not capable of objective assessment and is bound to lead to great deal of uncertainty. Similarly, the other expression ""public interest"" used in R. 39

is also vague and uncertain. The said expression ""public interests"" also does not provide any objective standard or norm or guidelines. Therefore,

R. 39 confers such wide and vague power upon the State Government that it is difficult to limit its scope. There is ample scope for exercising the

power conferred by R. 39 by the State Government in an arbitrary manner. Thus, R. 39 does not provide any principle or objective standard on

which the State Government has to act for treating a particular case as a special case and in granting or renewing lease or permission to quarry any

mineral by invoking the power under the said Rule and in the absence of such principle or objective standard, we have to hold that there are no

restraints or limits within which the power of the State Government under the impugned Rule is to be exercised. In other words, the power vested

in the State Government under R. 39 is entirely unguided and untrammelled.

When there is nothing to guide the discretion of the State Government it is quite possible that by invoking the power under R. 39, the State

Government can abrogate the other Rr. 1 to 38 framed under S. 15(1) of the Act in the matter granting or renewing a lease or permission to quarry

any mineral in favour of any person, because in exercise of the power under R. 39 the State Government can grant or renew a lease or permission

to quarry any mineral on terms and conditions different from those laid down in the other Rules. In the absence of guidelines in R. 39 it is possible

that the State Government can grant or renew a lease or permission to quarry any mineral in favour of any person even if he does not satisfy any of

the conditions prescribed in the other Rules. We find no safeguard at all in R. 39, nor is there any guidelines for the State Government on the basis

of which it can grant or renew a lease or permission to quarry any mineral on terms and conditions different from those laid down in the other

Rules.

No doubt, the learned Government Pleader, Mrs. Nalini Chidambaram and Mr. Vedantham Srinivasan, learned counsel for the respondents,

submitted that any order passed by the State Government in exercise of power under R. 39 is subject to judicial review and therefore the

impugned Rule is not liable to be struck down on the ground that it does not contain any guideline. We are unable to accept the above contention

of the learned counsel for the respondents. We must point out that when there are no objective standards, norms or guidelines which control the

exercise of power under R. 39, there is nothing on the basis of which the Courts can decide whether the power has been properly exercised or

not. There are no guidelines with reference to which the Court can test the correctness of the order made under R.39. We are also unable to

appreciate and accept the other contention of the Government Pleader that there can be no guidelines, to the happening of special circumstances

necessitating the use of the impugned Rule.

In Harakchand Ratanchand Banthia and Others Vs. Union of India (UOI) and Others, the Apex Court while declaring that Ss. 27(6) and

27(2)(d) of the Gold (Control) Act, 1968 are constitutionally invalid on the ground that the above Sections confer vague and wide power upon the

administrator observed as follows (at page 1465):--

We now come to S. 27 of the Act which relates to licensing of dealers. It was stated on behalf of the petitioners that the conditions imposed by

sub-sec. (6) of S. 27 for the grant or renewal of licences are uncertain, vague and imintellingible and consequently wide and unfettered power was

conferred upon the statutory authorities in the matter of grant or renewal of licence. In our opinion this contention is well founded and must be

accepted as correct. S. 27(6)(a) states that in the matter of issue or renewal of licences the Administrator shall have regard to ""the number of

dealers existing in the region in which the applicant intends to carry on business as a dealer"". But the word ''region'' is nowhere defined in the Act.

Similarly S. 27(6)(b) requires the Administrator to have regard to ''the anticapated demand, as estimated by him, for ornaments in that region''. The

expression ''anticipated demand'' is a vague expression which is not capable of objective assessment and is bound to lead to a great deal of

uncertainty. Similarly the expressions ''suitability of the applicant'' in S. 27(6)(e) and ''public interest'' in S. 27(6)(g) do not provide any objective

standard or norm or guidance. For these reasons it must be held that clauses (a), (b), (e) and (g) of S. 27(6) impose unreasonable restrictions on

the fundamental right of the petitioner to carry on business and are constitutionally invalid. It was also contended that there was no reason why the

conditions for renewal of licence should be as rigorous the conditions for initial grant of licence. The requirement of strict conditions for the renewal

of licence renders the entire future of the business of the dealer uncertain and subjects it to the caprice and arbitrary will of the administrative

authorities. There is justification for this argument and the requirement of S. 26 of the Act imposing the same conditions for the renewal of the

licence as for the initial grant appears to be unreasonable. In our opinion clauses (a), (b), (e) and (g) are inextricably bound up with the other

clauses of S. 27(6) and form part of single scheme. The result is that clauses (a), (b), (c), (e) and (g) are not severable and the entire Section 27(6)

of the Act must be held invalid. S. 27(2)(d) of the Act states that a valid licence issued by the Administrator ''may contain such conditions,

limitations and restrictions as the Administrator may think fit to impose and different conditions, limitations and restrictions may be imposed for

different classes of dealers.'' On the face of it, this sub-section confers such wide and vague power upon the Admiii-istrator that it is difficult to limit

its scope. In our opinion S. 27(2)(d) of the Act must be struck down as an unreasonable restriction on the fundamental right of the petitioners to

carry on business"".

In LaLa Hari Chand Sarda Vs. Mizo District Council and Another, the Supreme Court, while declaring that S. 3 of Lushai Hills District

(Trading by non-Tribals) Regulation (2 of 1953) leaves to the licensing authority unrestricted power in the matter of granting or refusing licence or

its renewal to non-tribal proprietor and is therefore vio-lative of Art. 19(i)(g) of the Constitution, observed as follows (at page 833):

Section 3 of the Regulation lays down a prohibition against any one carrying on trade without a licence and except in accordance with the terms of

such licence. The effect of this section is that if a non-tribal wishes to carry on trade in the District but is refused the licence, such refusal would

result in a total prohibition against him from carrying on any trade. Even if a licence is issued it can only be a temporary licence for one year only. If

the Executive Committee to which this power is delegated by the Rules were to refuse to renew it such refusal would mean that he has to stop the

trade which he was until then carrying on. In the first case it is a prohibition and in the other a total extinction of his trade. It is clear from the

Regulation and the Rules made thereunder that there is no right of appeal to any superior authority against a refusal to grant or renew a licence.

There is also no provision either in the Regulation or in the Rules empowering any Civil Court to adjudicate against any such order of the Executive

Committee. A non-tribal trader therefore has no remedy whatsoever against such an order though the refusal to grant or renew a licence amounts

to his being totally barred from trading in one case and his business or trade being destroyed in the other. Even if a non-tribal obtains a licence and

starts in trade investing therein a large capital, there would be no security for such trade as the licence would be for one year only. The executive

Committee can refuse to renew his licence and such refusal would as aforesaid result in the total extinction of his trade. Under the second proviso

to S. 3 the Committee no doubt has to record the grounds for refusal but that is hardly a safeguard against an arbitrary refusal for the Regulation

does not constitute any superior authority with power to revise such an order or to examine whether the grounds are. legal or proper, Though the

Regulation provides that no non-tribal can carry on any trade without a licence issued by the council it is the Executive Committee under the Rules

to which an application has to be made for such a licence or for a renewal thereof and in the event of the Committee refusing to grant such a

licence or refusing to renew it the applicant is left without any remedy whatsoever. A perusal of the Regulation shows that it nowhere provides any

principles or standards on which the Executive Committee has to act in granting or refusing to grant the licence. The non-tribal trader either wishing

to start a trader either wishing to start a trade or continue his trade started on a grant of licence is entirely at the mercy of the Executive Committee

for the grant or the renewal of a licence. There being no principles or standards laid down in the Regulation there are obviously no restrains or

limits within which the power of the Executive Committee to refuse to grant or renew a licence is to be exercised. This situation is clearly seen from

the fact that though S. 9 of the Regulation authorises the Executive Committee to cancel a licence -- presumably both permanent and temporary --

if the licence is convicted of contravention of any of the provisions of the Regulation, the power of refusal under S. 3 is not limited or circumscribed

by any such provision or any other criterion. The power of refusal is thus left entirely unguided and untrammelled.

In paragraph 10 of the above judgment the Supreme Court has further observed as follows:

A provision which leaves an unbridled power to an authority cannot in any sense be characterised as reasonable. S. 3 of the Regulation is one

such provision and is therefore liable to be struck down as violative of Art. 19(1)(g)"".

In R.M. Seshadri Vs. The District Magistrate, Tanjore and Another, , one of the conditions of the licence issued under the Cinematograph Act

was that the licensee shall exhibit at each performance one or more approved films of such length and for such length of time, as the Provincial

Government or the Central Government, may, by general or special order, direct, this was challenged before the Supreme Court and the Supreme

Court took the view that neither the length of the film nor the period of time for which it must be shown is specified in the condition and the

Government is vested with an unregulated discretion to compel a licensee to exhibit a film of any length at its discretion which may consume the

whole or the greater part of the time for which each performance is given. The Supreme Court then observed as follows (at page 749 (of AIR)):

Now if there is nothing to guide the discretion of the Government it is open to it to require the licensee to show approved films of such great length

as may exhaust the whole of the time or the major portion of it intended for each performance. The fact that the length of the time for which the

approved films may be shown is also unspecified leads to the same conclusion, in other words, the Government may compel a licensee to exhibit

an approved film, say for an hour and a half or even 2 hours. As the condition stands, there can be no doubt that there is no principle to guide the

licensing authority and a condition such as the above may lead to the loss or total extinction of the business itself. A condition couched in such wide

language is bound to operate harshly upon the cinema business and cannot be regarded as a reasonable restriction. It savours more of the nature of

an imposition than a restriction.

The Supreme Court, in the above case, held that the condition is violative of the fundamental right under Art. 19(1)(g) of the Constitution. The

Supreme Court further found that there was no principle to guide the licensing authority and therefore the condition was bad. It is one of those

cases where the power was held to be arbitrary.

In Dwarka Prasad Laxmi Narain Vs. The State of Uttar Pradesh and Others, a clause under the U.P. Coal Control Order (1953) was

challenged on the ground of violation of Art. 19(1)(g) of the Constitution. The clause related to the grant and refusal of licence and the Supreme

Court found that the licensing authority has been given absolute power to grant or refuse to grant, renew OF refuse to renew, suspend, revoke,

cancel or modify any licence under that order and the only thing he has to do is to record the reasons for the action he takes. That power could be

exercised by any person to whom the said Coal Controller may choose to delegate the same and the choice can be made in favour of any and

every person. The Supreme Court found that no Rule had been framed and no directions given on the matters to regulate or guide the discretion of

the licensing officer. The Supreme Court further held as follows:

Practically the Order commits to the unrestrained will of a single individual the power to grant, withhold or cancel licences in any way he chooses

and there is nothing in the Order which could ensure a proper execution of the power or operate as a check upon injustice that might result from

improper execution of the same.

When an argument was advanced in that case before the Supreme Court that the requirement of recording reasons was sufficient safeguard, that

argument was rejected because it was found that there was no higher authority prescribed in the Order who could examine the propriety of these

reasons and revise or review the decision of the subordinate Officers.

In Sri. Rani Lakshmi Ginning, Spinning and Weaving Mills Pvt. Ltd. and Others Vs. Textile Commissioner, Bombay and Others, , a Division

Bench of the this Court declared that the Notification dated 29-6-1979 issued under C1.21(5) of Cotton Textiles (Control of Movement) Order

(1948) is invalid on the ground that there are no guidelines which control the exercise of power under Cl. 21(5) of the said Control Order. The

Division Bench of this Court while further declaring'' that Cl. 21(5) referred to above is violative of Art. 19(I)(g) of the Constitution on the ground

that power given to the Textile Commissioner by Cl. 21(5) to regulate the packing of yarn is completely uncontrolled, uncanalized and arbitrary,

observed as follows (at page 79 (of AIR):

It is not necessary to catelogue all the decisionss which laid down that unchannelled and arbitrary discretion is patently violative of the

requirements of reasonableness in Art. 19 and of equility under Art. 14, of the Constitution. We will however refer to some latest decisions. The

first one is P.N. Kaushal and Others Vs. Union of India (UOI) and Others, . In paragraph 62 of the judgment after referring to State of Madras

Vs. V.G. Row, R.M. Seshadri Vs. The District Magistrate, Tanjore and Another, and LaLa Hari Chand Sarda Vs. Mizo District Council and

Another, in which it was observed that a provision which leaves an unbridled power to an authority cannot in any sense be characterised as a

reasonable, the Supreme Court observed as follows: .

''Other decisions in the same strain were cited, indeed an annual shower of decisions on this point issues from this Court. But the essential point

made in all these cases is that unchalnnell and arbitrary discretion is patently violative of the requirements of reasonableness in Art. 19 and of

equality under Art. 14, a proposition with which no one can now quarrel.......... Reasonableness and arbitrariness are not abstractions and must be

tested on the touchstone of principled piagniatism and living realism.

The ratio of the decisions referred to above directly applies to the facts of the present case. As already pointed out, the impugned Rule does

not prescribe any principle or objective standard or norm or guidelines on which the State Government has to act in granting or renewing a lease or

permission to quarry any mineral in exercise of the power under the said Rule. The expressions ""in the interest of mineral development"" and ""public

interest"" used in Rule 39 arc vague and uncertain and do not provide any objective standard or norm or guidelines on the basis of which the State

Government has to act while exercising the powei under the impugned Rule. On the lace of it. Rule 39 confers such wide powers upon the State

Government that it is difficult to limit its, scope. In these circumstances, we have no hesitation in holding that the power given to the State

Government under Rule 39 is completely uncontrolled, uncanalized and arbitrary and therefore the impugned Rule is violative of Arts. 14 and 19(1)

(g) of the Constitution of India. Consequently, the impugied Rule is liable to be declared as unconstitutional and invalid. The decision D. K. Trivedi

& Sons v. State of Gujarat reported in (1986) 1 SCJ 475: A1R 1986 SC 1323, relied on by the learned Government Pleader and the decisions

reported in Pannalal Binjraj Vs. Union of india (UOI), and Ranjit Singh Vs. The Commissioner of Income Tax, U.P. and Others, , relied on by

Mrs. Nalini Chidambaram, arc not helpful to the respondents because the said decisions are not authorities for the proposition that the validity of a

Rule can be upheld even where it does not provide any objective standard, norm or guidelines and even when the Rule confers such uncontrolled,

uncanalized and arbitrary power upon an authority that it is difficult to limit its scope.

For all the reasons stated above, we allow the writ petition and declare that Rule 39 of the Tamil Nadu Minor Mineral Concession Rules,

1959 is unconstitutional and void. No costs.

Petition allowed.