Jai Shri Bricks Manufacturing vs State of Rajasthan

Sunil Ambwani, Actg. C.J.

All the aforesaid connected Special Appeals arise out of the judgment of learned Single Judge dated 26th April, 2013 in M/s. R.P. Bricks Industries v. State & Ors. (S.B. Civil Writ Petition No. 10833/2010) alongwith 131 connected matters, the details of which are given in Schedule-A of the judgment.

Learned Single Judge dismissed all the writ petitions, by which the petitioners had challenged the demand of conversion charges under Section 90A of the Rajasthan Land Revenue Act, 1956, read with Rajasthan Land Revenue (Conversion of Agricultural Land for Non-Agricultural Purposes in Rural Areas) Rules, 2007, for conversion of agricultural land for non-agricultural purposes for mining of brick earth and manufacture of brick in the brick-kiln established on the land, whether in a colony area or khatedari agricultural land.

Brief facts giving rise to these Appeals are that all the appellants-petitioners have set up their brick-kilns on their respective agricultural lands. Some of these brick-kilns fall in the colony areas on the agricultural land under the Rajasthan Colonization Act, 1954, which included command area (irrigated through canals or water courses constructed by the State Government) or in uncommand areas. In all other cases, the brick-kilns have been set up on khatedari lands. In both the categories, the brick-kilns have been set up by the appellants-petitioners on the agricultural lands either in colony areas covered under the provisions of the Rajasthan Colonization Act, 1954 or other than colony area-khatedari agricultural lands covered by the provisions of the Rajasthan Land Revenue Act, 1956, after obtaining mining lease from the Mining Department for excavating brick earth, which is a minor mineral under the Rajasthan Minor Mineral Concession Rules, 1986 made under Section 15 of the Mines and Minerals (Development and Regulation) Act, 1957.

Learned Single Judge, after considering the provisions of the Rajasthan Minor Mineral Concession Rules, 1986, Rajasthan Land Revenue Act, 1956, Rajasthan Land Revenue (Conversion of Agricultural Land for Non-Agricultural Purposes in Rural Areas) Rules, 2007, Rajasthan Colonization Act, 1954, Rajasthan Colonization Project Areas Brick Kiln (Leases) Conditions, 1966, as well as the judgments of this Court in Liladhar v. State of Rajasthan (1963 RLW 423-DB), Shivchand Goyal v. State of Rajasthan (1967 RLW 30-DB), Mohd. Bux Vs. State of Rajasthan and Others, , Khushi Ram Kiln Company and Others Vs. State of Rajasthan and Others, and Hari Ram & Ors. v. State of Rajasthan & Anr. (S.B. Civil Writ Petition No. 7130/1985 decided on 10.12.2000) and the decision of the Supreme Court in State of Rajasthan v. Seator Kiln Company ((2002)10 SCC 253), held that the demand of conversion charges for use of agricultural land for non-agricultural purposes under section 90A of the Rajasthan Land Revenue Act, 1956, is not in conflict with the Rajasthan Minor Mineral Concession Rules, 1986, which have replaced the Rajasthan Minor Mineral Concession Rules, 1977, and which had in turn replaced the Rajasthan Minor Mineral Concession Rules, 1959. Both the Rules operate in different fields, and for different objects. There is no inconsistency between the two sets of Rules. Whereas the mining lease granted under the Rajasthan Minor Mineral Concession Rules, 1986 is for excavating brick earth, Section 90A of the Rajasthan Land Revenue Act, 1956 provides for conversion of agricultural land for non-agricultural purposes. Since the brick-kiln is an industry and that the setting up of such industry changes the user of the land from agricultural to non-agricultural, the use of khatedari land cannot be permitted for industrial purposes unless the conversion of the land is obtained from the competent authority, on payment of the scheduled rates prescribed under the Rules of 2007.

Learned Single Judge further held that the judgments of the Rajasthan High Court including the Full Bench judgment in Mohd. Bux v. State of Rajasthan (supra), which upheld the view taken in Shivchand Goyal v. State of Rajasthan (supra), do not at all cover or apply to the facts and the controversy in hand. In all these cases, the question of payment of conversion charges of agricultural land for non-agricultural purposes was not in issue. The controversy arose before different Benches of the Court in different perspectives when the revenue authorities insisted for giving fresh leases for using the land for running brick-kilns. The Full Bench of this Court in Mohd. Bux v. State of Rajasthan (supra) resolving the conflict between Liladhar v. State of Rajasthan (supra) and Shivchand Goyal (supra), held that the area for establishment of brick-kilns is to be made available by the Commissioner/Collector, Colonization and the allotment of leases shall be made by the Mining Department under the Rajasthan Minor Mineral Concession Rules, 1977. It was held that Rule 4(3) of the Rules of 1977 is ultra vires to that extent. It was further held that Conditions No. 6, 7, 9, 10, 11 and 12 of the Rajasthan Colonization Project Areas Brick Kiln (Leases) Conditions, 1966 are also ultra vires and were struck down as Entry-18 of List-II of the Seventh Schedule does not cover excavation of minerals. The Full Bench further held that the Rajasthan Colonization Project Areas Brick Kiln (Leases) Conditions, 1966 are beyond the authority/competence of the State Government to the extent of grant of mining lease. On the last question, the Full Bench held that the law laid down in Shivchand Goyal v. State of Rajasthan (supra) is a good law and the establishment of brick-kiln is covered by Entry-54 of List-I of the Seventh Schedule of the Constitution and not by Entry-18 of List-II of the Seventh Schedule of the Constitution. The Conditions of 1966 are ultra vires beyond the ear-marking of the area for establishment of brick-kilns.

Learned counsels appearing for the appellants-petitioners in D.B. Civil Special Appeal (Writ) No. 544/2013 M/s. Jai Shree Bricks Manufacturing v. State of Rajasthan and ors. submit that the appellant-petitioner was granted mining lease permitting him to excavate brick earth by the Mining Engineer under the Rajasthan Minor Mineral Concession Rules, 1986 on his khatedari agricultural lands situated in the colony area for five years on 27.1.2004. The second and third term of the lease was granted on 24.1.2009 and 3.2.2012 respectively. During these entire period, the State revenue authorities did not demand conversion charges from him for converting agricultural lands into lands for mining operations. A show cause notice was issued on 24.7.2012 calling upon the appellant-petitioner to show cause as to why the conversion charges be not recovered from him as per Section 177 of the Rajasthan Tenancy Act, 1955, payable under the Rules of 2007 made in exercise of the powers conferred under section 90A read with section 261 of the Rajasthan Land Revenue Act, 1956.

It is submitted that learned Single Judge has erred in law in holding that conversion charges could be demanded for converting the use of land from agricultural to industrial purposes. The grant of mining lease by the competent authority under the Rajasthan Minor Mineral Concession Rules, 1986 authorizes the use of land for establishing a brick-kiln. It is submitted that mining of brick earth and manufacture of bricks by setting up brick-kiln on the land is a single composite activity, which has been authorized in the mining lease. No further permission or conversion charges are required to be paid for using the land for the purpose of running and operating brick-kiln. In Mohd. Bux v. State of Rajasthan (supra), the revenue authorities of the State had tried to recover charges for the land covered by the mining leases, on the basis of the Rules framed under the Rajasthan Colonization Act, 1954 and the Rajasthan Land Revenue Act, 1956. The Full Bench declared the demand to be illegal. It held that since the excavation of minor mineral was governed by the provisions of the Rajasthan Minor Mineral Concession Rules, 1959 only (applicable at that time) and the authorities under the Mining Department, who were alone supposed to grant mining leases for mining rights, the revenue authorities could not interfere with such grant of leases even if the land fell within the colony area. The contention of the State that no mining rights are perfect in the colonies, which were declared under the Rajasthan Colonization Act, 1954, unless further sanction is obtained from the Colonization Department, was not sound as exploitation of mineral by manufacture of bricks after constructing brick-kilns does not fall within the purview of the purpose, for which the provisions of the Colonization Act are enacted by the legislature.

Learned counsel for the appellant-petitioner submits that in Shivchand Goyal v. State of Rajasthan (supra), the Division Bench had held that the grant of mining lease is a concern of the Government or the officers of the Mines and Geological Department as specified in Schedule-III and that a mining lease can be granted under the provisions of the Rajasthan Minor Mineral Concession Rules, 1986 and under no other law, as Section 19 of the Mines and Minerals (Development and Regulation) Act, 1957 is a clear bar for the grant of a mining lease by any other authority. The Statement of Conditions of 1960 under the Rajasthan Colonization Act cannot confer any power on the Collector to interfere with the working of the leases in respect of the brick earth validly granted under the provisions of the Rajasthan Minor Mineral Concession Rules, 1986. On this analogy, the Full Bench of this Court in Mohd. Bux v. State of Rajasthan (supra) has struck down the Conditions No. 6, 7, 9, 10, 11 and 12 of the Rajasthan Colonization Project Areas Brick Kiln (Leases) Conditions, 1966.

It is submitted that learned Single Judge has overlooked the ratio of the Division Bench judgments in Liladhar v. State of Rajasthan (supra) and Shiv Chand Goyal v. State of Rajasthan (supra), which were binding upon him. In Liladhar''s case (supra), it was held that conversion of land from agricultural purpose is not necessary for granting mining lease. In para 6 of the judgment, it was held that wherever lease is required to be given in respect of any minor mineral then it can be given under the provisions of the then Rajasthan Minor Mineral Concession Rules, 1959 only, irrespective of the fact whether the land wherefrom the minor mineral is to be used is an agricultural land or not. In para 10 of the judgment, it was held that the contention of the Deputy Government Advocate that in project area such lease can be granted only after obtaining permission from the Government or the Colonization Authority is not correct, inasmuch as, there is no provision in the Rajasthan Minor Mineral Concession Rules or the Rajasthan Colonization Act to this effect that in a colony such additional permission of the Government or the Colonization Officer is necessary to create a valid mining lease.

It is submitted that the question of legislative competence of the State Legislature to enact laws or the Rules was subject matter of consideration in State of Orissa Vs. M.A. Tulloch and Co., and Baijnath Kadio Vs. State of Bihar and Others, . The Apex Court held that after the enactment of the Act of 1957, the State Legislature ceased to have any power under Entry-23 of List-II of the Seventh Schedule, which empowers the State Government to legislate in relation to the mines and minerals. The powers of State Government to legislate under Entry-23 of List-II are subject to the regulation and development under the control of the Union. Entry 54 of List-I of the Seventh Schedule authorizes the Central Legislature to frame regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by the Parliament by law to be expedient in public interest. The enactment of the Mines and Minerals (Development and Regulation) Act, 1957 and the Rajasthan Minor Mineral Concession Rules, 1986 covers the entire field and thus, the State Legislature cannot enact on the subject.

Learned counsels appearing for the appellants-petitioners in other matters have argued that the Rajasthan Land Revenue (Conversion of Agricultural Land for Non-Agricultural Purposes in Rural Areas) Rules, 2007 are applicable to rural areas, whereas in many cases the mining leases have been granted and brick-kilns have been set-up in urban areas and thus, the demand made for conversion charges is wholly illegal and must be struck down.

Learned Additional Advocate General appearing for the State of Rajasthan submits that there is no error of law in the judgment of learned Single Judge. The entire law on the subject as well as the judgments cited at the Bar were considered and distinguished in arriving at a conclusion that the demand of conversion charges under section 90A of the Rajasthan Land Revenue Act, 1956 read with Rules of 2007, is valid and justified in law. He submits that in all the cases, the lands, on which the mining leases have been granted under the Rajasthan Minor Mineral Concession Rules, 1986, are khatedari lands. All these khatedari lands are held on tenures, under the Rajasthan Land Revenue Act, 1956. The lands held under the tenures as khatedari lands for agricultural purposes are not permitted to be used for any other purpose, unless the user is converted with permission of competent authority. Section 90A inserted by Section 3 of the Rajasthan Act No. 47 of 1958 with effect from 27.12.1958 provides for conversion of agricultural land for non-agricultural purposes on certain conditions. Sub-section (1) of Section 90A provides that no person holding any land for purpose of agriculture, and no transferee of such land or any part thereof shall use the same or any part thereof by the construction of buildings thereon or otherwise, for any purpose except with the written permission of the State Government obtained in the manner laid down and otherwise than in accordance with the terms and conditions of such permission. The Rajasthan Land Revenue (Conversion of Agricultural Land for Non-Agricultural Purposes in Rural Areas) Rules, 2007 have been made in exercise of the powers conferred by Clause(xi-A) of subsection (2) of Section 261 read with Section 90A of the Rajasthan Land Revenue Act, 1956. The Rules of 2007 define ''industrial purpose'' under Rule 2(g) as follows:

"(g) ''industrial purpose'' means the use of any premises or workshop or an open area for any industry including information Technology Industry, whether a small or medium or large scale unit, or a tourism unit and shall include a brick kiln or a kiln but shall not include any premises used for a purpose as defined in clause (b)."

It is submitted by Additional Advocate General that the Mines and Minerals (Development and Regulation) Act, 1957 and the Rajasthan Minor Mineral Concession Rules, 1986 provide for grant of mining lease by the Mining Engineer/Assistant Mining Engineer in respect of such mineral/minerals which may be notified in this behalf within his jurisdiction with approval of the Director. The grant of mining lease is for the purpose of mining of minor mineral. The mining lease does not authorize for carrying out any industrial activity over the land except for mining. The Rajasthan Minor Mineral Concession Rules, 1986 do not permit the change of user of the land, if the land is held by tenure holder as a khatedari land for agricultural purposes. The Mines and Minerals (Development and Regulation) Act, 1957 enacted by the Central Government under Entry 54 of List-I of the Seventh Schedule is not in any way in conflict with the Rajasthan Land Revenue Act, 1956 providing for different tenures and the Conditions on which the lands may be held by the tenure holders including the khatedari lands. The Rajasthan Land Revenue Act, 1956 has been enacted by the Government of Rajasthan with reference to Entry-18 of List-II of the Seventh Schedule. Both the Acts operate in different areas and for different object and purpose. There is no conflict between the areas and operation of the two Acts and that the authorities under the Acts exercise powers in their respective areas for the purpose for which such powers are conferred upon them. The demand of charges for conversion of khatedari lands for industrial use for running brick-kilns is in no way in conflict with the provisions for grant of mining lease for digging brick earth under the provisions of the Rajasthan Minor Mineral Concession Rules, 1986.

We have heard learned counsel for the parties and do not find any error in the judgment of learned Single Judge dismissing the writ petitions. The entire arguments raised at the Bar challenging the judgment are based on the judgment of the Full Bench of this Court in Mohd. Bux v. State of Rajasthan (supra). The facts and the issues raised in Mohd. Bux''s case (supra) were entirely different. The Full Bench had posed itself the questions as to whether under the Rules of 1977 in the lease of brick-earth, establishment of brick-kiln is also implied and if so whether subject matter of allotment of sites for establishment of brick-kilns is covered by the Rules of 1977. The second question posed was with respect to operation of the Rajasthan Colonization Project Areas Brick Kiln (Leases) Conditions, 1966, which deal with the allotment of sites for establishment of brick kiln and further, whether the Rajasthan Colonization Project Areas Brick Kiln (Leases) Conditions, 1966 are beyond the authority of the State Government and as such, ultra vires its powers. In Mohd. Bux v. State of Rajasthan (supra), after discussing the facts of the case and the questions posed by the Full Bench to be answered, it was held that the power to grant mining leases has been delegated by the State Government under the Rules of 1977 on the Mining Engineer and that no mining lease shall be granted or renewed in any area which is a colony within the meaning of Rajasthan Colonization Act, 1954 unless the applicant produces a no objection certificate from the Colonization Commissioner under the said Act. It was held that to that extent the Condition No. 4 provides for reservation of areas for establishment of brick kilns is not in conflict with the Rules of 1977. Condition No. 5 for demarcation of plots and Condition No. 8 for description of the plots are also not ultra vires the Rules of 1977. The rest of the Conditions regarding procedure for allotment contained in Condition No. 6, auction notice under Condition No. 7, the provision relating to rent in Condition No. 9, lease period in Condition No. 10, the obligations of lessees in Condition No. 11 and grant of mining lease to be conditional on the order of the Collector under Condition No. 12, cannot be said to be valid. The moment Collector reserves the land and demarcates the plots and gives the description of the plots, the action of the Collector can be justified under the Conditions of 1966 made under the Rajasthan Colonization Act, 1954, but beyond that he has no authority and he cannot direct the Mining Department as to what they should do and how they will grant the leases.

In the present case, we are not concerned with the powers of the Collector for granting leases for running brick-kilns. The issue is confined to the conversion of the khatedari land under section 90A of the Rajasthan Land Revenue Act, 1956 read with Rules of 2007 from agricultural to industrial purposes. The conversion of the land from agricultural to industrial purpose is not an encroachment or is in conflict with the powers of the Mining Engineer to grant mining lease on the land. The grant of mining lease does not authorize the licensee to establish and run brick-kiln on the land, which is a khatedari land. It is a permission given for change of user of khatedari land from agricultural to industrial purposes and this permission has to be granted on certain conditions and on payment of minimum rates, which are prescribed under the Rules of 2007. There is no conflict between the powers conferred on the Mining Engineer under Rule 4 of the Rajasthan Minor Mineral Concession Rules, 1986 and the powers conferred on the revenue authorities under section 90-A of the Rajasthan Land Revenue Act, 1956 for conversion of agricultural land for industrial use, for which the procedure and rates are prescribed under the Rajasthan Land Revenue (Conversion of Agricultural Land for Non-Agricultural Purposes in Rural Areas) Rules, 2007.

We do not find that the petitioners, who are appellants before us, had challenged the Rajasthan Land Revenue (Conversion of Agricultural Land for Non-Agricultural Purposes in Rural Areas) Rules, 2007 and thus, we are relieved of adjudicating the question of validity of the Rules of 2007, the procedure and rates prescribed thereunder for conversion of agricultural land for industrial purposes.

We do not find that there is any foundation for the argument that the land for which the notice has been given for conversion to industrial use is not a khatedari land or that such land is not situate in rural areas. There are no pleadings to support the argument raised regarding the location of the land in areas other than rural areas.

For the aforesaid reasons, we do not find any merit in the Special Appeals. All these Special Appeals are accordingly dismissed. A copy of the judgment be placed in all the files.