# Chhatarpur Crasher Asso. & Anr v. State of U.P. & Ors

- **Citation:** (2023) 8 ILRA 1065
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2023-08-18
- **Case number:** Writ-C No. 10037 of 2020
- **Bench:** Mahesh Chandra Tripathi, Prashant Kumar
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/chhatarpur-crasher-asso-anr-v-state-of-u-p-ors-50677
- **Pages:** 50

## Headnote

Civil Law - Uttar Pradesh Minor Minerals
(Concession) Rules, 2020 - Rule 21(4) &
70(2) - The writ petitions challenging the vires
of Rule 21(4) and Rule 70(2) of the Uttar
Pradesh Minor Minerals (Concession) Rules,
2020, Rule 21(5) and Rule 72(2) of the Uttar
Pradesh Minor Minerals (Concession) Rules,
2021,
and
Government
Orders
dated
24.02.2020 and 10.08.2022 imposing regulatory
fees of Rs. 50/- and Rs. 100/- per cubic meter
respectively on minor minerals (building stones,
ballast, boulders) transported from other St.s
into Uttar Pradesh are dismissed. The impugned
rules and government orders are intra vires the
Mines
and
Minerals
(Development
and
Regulation) Act, 1957 (MMRD Act), as the St.
Government has the power under Section 15(1A)(g)
to
impose
fees
for
regulating
transportation of minerals, including those
legally excavated in other St.s, as per Section
4(1-A) and Section 23-C, which empower the St.
to frame rules for transportation and storage of
minerals, not limited to illegal mining. The
regulatory
fees
are
imposed
to
fund
infrastructure (check gates, weighbridges, AI
technology)
to
prevent
illegal
mining,
transportation, and storage, aligning with the
objectives of the MMRD Act and the National
Mineral
Policy,

## Text

_Characters 0–39,961 of 169,935. This is a partial read: ask again with offset=39961 for what follows._

8 All. Chhatarpur Crasher Asso. & Anr. Vs. State of U.P. & Ors.
1065
cannot be applied for the electricity
supplied to the Lawyers Chambers. The
Lawyers chambers / offices shall be
charged only under LMV-1 Domestic
category as the lawyers neither do any trade
or business nor are involved in any
commercial activity.

3.
The
respondents
cannot
discriminate between the electricity supply
to the advocates' chambers in different
court compounds, in the same State, where
the rate schedules are approved by the same
authority.

38. Thus in view of the above
discussion, the writ petition is allowed. The
respondents are directed to charge for the
consumption of electricity by the lawyers
in their chambers in the court premises as
per the rate schedule LMV-I as approved by
the
U.P.
Electricity
Regulatory
Commission.
----------
(2023) 8 ILRA 1065
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 18.08.2023

BEFORE

THE HON'BLE MAHESH CHANDRA
TRIPATHI, J.
THE HON'BLE PRASHANT KUMAR, J.

Writ-C No. 10037 of 2020
with
Writ-C No. 37119 of 2022

Chhatarpur Crasher Asso. & Anr.
 ...Petitioners
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioners:
Sri Birendra Singh, Sri Shubham Agarwal,
Sr.Advocate(Sri Shashi Nandan), Sri Siddharth
Seth
Counsel for the Respondents:
C.S.C., Sri Deepak Kumar Jaiswal,Sri Nand
Kishor Mishra, Ms.Shilpa Ahuja

Civil Law - Uttar Pradesh Minor Minerals
(Concession) Rules, 2020 - Rule 21(4) &
70(2) - The writ petitions challenging the vires
of Rule 21(4) and Rule 70(2) of the Uttar
Pradesh Minor Minerals (Concession) Rules,
2020, Rule 21(5) and Rule 72(2) of the Uttar
Pradesh Minor Minerals (Concession) Rules,
2021,
and
Government
Orders
dated
24.02.2020 and 10.08.2022 imposing regulatory
fees of Rs. 50/- and Rs. 100/- per cubic meter
respectively on minor minerals (building stones,
ballast, boulders) transported from other St.s
into Uttar Pradesh are dismissed. The impugned
rules and government orders are intra vires the
Mines
and
Minerals
(Development
and
Regulation) Act, 1957 (MMRD Act), as the St.
Government has the power under Section 15(1A)(g)
to
impose
fees
for
regulating
transportation of minerals, including those
legally excavated in other St.s, as per Section
4(1-A) and Section 23-C, which empower the St.
to frame rules for transportation and storage of
minerals, not limited to illegal mining. The
regulatory
fees
are
imposed
to
fund
infrastructure (check gates, weighbridges, AI
technology)
to
prevent
illegal
mining,
transportation, and storage, aligning with the
objectives of the MMRD Act and the National
Mineral
Policy,
2021.
The
imposition
of
regulatory fees does not violate Part XIII of the
Constitution of India, as it constitutes a
reasonable restriction in public interest under
Article 304(b), not impeding the freedom of
trade, commerce, and intercourse under Article
301. The petitioners' association lacks locus
standi, as its members are not directly engaged
in mining or inter-St. transportation of minerals.
Parties to bear their own costs.

Case Law:

1. St. of Tamil Nadu Vs M.P.P. Kavery Chetty,
(1995) 2 SCC 402;

2. St. of Gujarat Vs Jayeshbhai Kanjibhai
Kalathiya, (2019) SCC OnLine SC 297;

3. Ultratech Cement Ltd. Vs St. of M.P., Writ
Petition No. 9330 of 2021 (MP HC);
1066 INDIAN LAW REPORTS ALLAHABAD SERIES
4. Sri Sai Keshava Enterprises Vs St. of Karn.,
Writ Petition No. 8851 of 2021 (Karn HC);

5. St. of Orissa Vs M.A. Tulloch, AIR 1964 SC
1284;

6. Sheo Varan Singh Vs St., AIR 1980 All 92;

7. D.K. Trivedi Vs St. of Guj., (1986) Supp SCC
20;

8. St. of Tamil Nadu Vs Hind Stone, (1981) 2
SCC 205;

9. St. of West Bengal Vs Kesoram Industries,
(2004) 10 SCC 201;

10. Jindal Stainless Ltd. Vs St. of Har., (2017)
12 SCC 145;

11. Atiabari Tea Co. Ltd. Vs St. of Assam, AIR
1961 SC 232;

12. Automobile Transport (Rajasthan) Ltd. Vs
St. of Raj., AIR 1962 SC 1406.

(Delivered by Hon'ble Mahesh Chandra
Tripathi, J. for the Bench under Chapter VII
Rule 1(2) of the Allahabad High Court
Rules, 1952)

1. By means of writ petition
(C.M.W.P.
No.10037
of
2020)
the
petitioners, who are members of registered
society are, in the business of extracting,
crushing transporting, and selling the
minor minerals in Madhya Pradesh and in
other States, are challenging the 48th
Amendment in Uttar Pradesh Minor
Minerals (Concession) Rules, 1963, Rule
21 (4) and Rule 70 (2) of the Uttar
Pradesh Minor Mineral (Concession)
Rules, 2020, and Rule 21 (5) and Rule 72
(2) of the Uttar Pradesh Minor Mineral
(Concession)
Rules,
2021
and
the
Government Order dated 24.02.2020 and
10.08.2022.

2. While the aforesaid writ petition
was pending, the petitioners preferred a
Special Leave Petition before the Hon'ble
Supreme Court stating that the writ petition
was listed but neither the stay application
was heard, nor the main petition. On this,
Hon'ble Supreme Court directed this Court
to decide the proceedings expeditiously. In
view of the direction of the Hon'ble
Supreme Court, we have taken up the
present writ petition.

BACKDROP OF THIS CASE

3. Mines and Minerals (Regulation
and Development) Act, 1957 (herein after
referred as MMRD Act 1957 for the sake of
brevity),
has
been
enacted
by
the
Parliament to provide for development and
regulation of mines and minerals. The
relevant section which are important for the
adjudication of the current issues are being
reproduced herein for reference:

4. Section 15 of the Mines and
Minerals (Regulation and Development)
Act, 1957 is as follows:-

"15. (1) The State Government may,
by notification in the Official Gazette, 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.

(1A)
In
particular
and
without
prejudice to the generality of the foregoing
power, such rules may provide for all or
any of the following matters, namely:-

(a) the person by whom and the
manner in which, applications for quarry
leases, mining leases or other minerals
concessions may be made and the fees to be
paid therefor;
8 All. Chhatarpur Crasher Asso. & Anr. Vs. State of U.P. & Ors.
1067

(b) the time within which, and the form
in which, acknowledgement of the receipt of
any such applications may be sent;

(c)
the
matters
which
may
be
considered where applications in respect of
the same land are received within the same
day;

(d) the terms on which, and the
conditions subject to which and the
authority by which quarry leases, mining
leases or other mineral concessions may be
granted or renewed;

(e) the procedure for obtaining quarry
leases, mining leases or other mineral
concessions;

(f) the facilities to be afforded by
holders of quarry leases, mining leases or
other mineral concessions to persons
deputed by the Government for the purpose
of undertaking research or training in
matters relating to mining operations;

(g) the fixing and collection of rent,
royalty, fees, dead rent, fines or other
charges and the timewithin which and the
manner in which these shall be payable;

(h) the manner in which the rights of
third parties may be protected (whetherby
way of payment of compensation or
otherwise) in cases where any such party is
prejudicially affected by reason of any
prospecting or mining operations;

(i)
the
manner
in
which
the
rehabilitation of flora and other vegetation,
such as trees, shrubs and the like destroyed
by reasons of any quarrying or mining
operations shall be made in the same area
or in any other area selected by the State
Government
(whether
by
way
of
reimbursement of the cost of rehabilitation
or otherwise) by the person holding the
quarrying or mining lease;

(j) the manner in which and the
conditions subject to which, a quarry lease,
mining lease or other mineral concession
may be transferred;

(k) the construction, maintenance and
use of roads, power transmission lines,
tramways,
railways,
aerial
ropeways,
pipelines and the making of passage for
water for mining purposes on any land
comprised in a quarry or mining lease or
other mineral concession;

(l) the form of registers to be
maintained under this Act;

(m) the reports and statements to be
submitted by holders of quarry or mining
leases or other mineral concessions and the
authority to which such reports and
statements shall be submitted;

(n) the period within which and the
manner in which and the authority to which
applications for revision of any order
passed by any authority under these rules
may be made, the fees to be paid therefor,
and the powers of the revisional authority;
and

(o) any other matter which is to be, or
may be prescribed.

5. On 18.12.1999, the MMRD Act
1957 1 was amended Statement of Objects
and Reasons of the Amendment of the Act,
are as follows:

"STATEMENT OF OBJECTS AND
REASONS

The Mines and Minerals (Regulation
and Development) Act, 1957 provides for
the regular and development of minerals
other than petroleum and natural gas.
Consequent upon the decisions taken in the
Conference
of
the
State
Ministers/Secretaries
of
Mines
and
Geology held in December, 1996, a
Committee under the Chairmanship of the
then Secretary, Ministry of Mines was
constituted in February, 1997 to, inter alia,
make
recommendations
regarding
delegation
of
powers
to
the
State
1068 INDIAN LAW REPORTS ALLAHABAD SERIES
Governments relating to grant and renewal
of prospecting licences and mining leases
and other related approvals and to suggest
measures to reduce delay in this regard,
review of the existing laws and procedures
governing the regulation and development
of minerals to make them more compatible
with the changed policies and measures for
prevention
of
illegal
mining.
The
Committee in its report made wide-ranging
recommendations in the area of delegation
of powers to the state Governments,
procedural simplifications, etc. which will
go a long way to mitigate the problems
faced by the States and the prospective
investors while, at the same time, keeping
the interests of the mining industry in
particular and the national interest, in
general, intact. After careful consideration
of the recommendations of the Committee,
the Government has decided to amend the
Mines and Minerals (Regulation and
Development) Act, 1947.

2. Some of the more important
amendments to be made are as follows:

(i) .....

(ii) .....

(iii) A new provision is proposed to be
inserted
in
the
Act
prohibiting
transportation or storage or anything
causing transportation or storage of any
mineral except under the due provisions of
the Act, with a view to preventing illegal
mining. Further, the Act is proposed to be
amended to cover the breach of the
provisions of the proposed new provision of
the Act to be punishable. It is also proposed
to insert a new provision to provide for
anything seized under the Act as liable for
confiscation under court orders. A new
section is proposed to be inserted to
empower the State Governments to make
rules
for
preventing
illegal
mining,
transportation and storage of minerals and
for purposes connected therewith."

The
amended
Sections
were
as
follows:-

Section 4 (1A), Section 23-A and 23
(C)

Section 4 (1A) No person shall
transport or store or cause to be
transported
or
stored
any
mineral
otherwise than in accordance with the
provisions of this Act and the rules made
thereunder.

Section
23-C
(1)
The
State
Government may, by notification in the
Official Gazette, make rules for preventing
illegal mining, transportation and storage
of minerals and for the purposes connected
therewith.

(2) In particular and without prejudice
to the generality of the foregoing power,
such rules may provide for all or any of the
following mattes, namely:-

(a) establishment of check-posts for
checking of minerals under transit;

(b) establishment of weigh-bridges to
measure the quantity of mineral being
transported;

(c)
regulation
of
mineral
being
transported from the area granted under a
prospecting licence or a mining lease or a
quarrying licence or a permit, in whatever
name the permission to excavate minerals,
has been given;

(d) inspection, checking and search of
minerals at the place of excavation or
storage or during transit;

(e) maintenance of registers and forms
for the purposes of these rules;

(f) `the period within which and the
authority to which applications for revision
of any order passed by any authority be
preferred under any rule made under this
section and the fees to be paid therefor and
powers of such authority for disposing of
such applications; and
8 All. Chhatarpur Crasher Asso. & Anr. Vs. State of U.P. & Ors.
1069

(g) any other matter which is required
to be, or may be, prescribed for the purpose
of
prevention
of
illegal
mining,
transportation and storage of minerals. \

(3)
Notwithstanding
anything
contained in section 30, the Central
Government shall have no power to revise
any order passed by a State Government or
any of its authorised officers or any
authority under the rules made under subsections (1) and (2)."

6. Again an amendment was made in
the Act in 2021 wherein explanation was
added in Section 21

Section 21 Penalties.―5 [(1) ............

Explanation.-On and from the date of
commencement of the Mines and Minerals
(Development and Regulation) Amendment
Act,
2021,
the
expression
"raising,transporting or causing to raise or
transport any mineral without any lawful
authority" occurring in this section, shall
mean raising, transporting or causing to
raise or transportany mineral by a person
without prospecting licence, mining lease
or composite licence or in contravention of
the rules made under section 23C.

Amended (Ins. By Act 16 of 2021, S.
20 (w.e.f. 28-3-2021)2.

7. The State Government, under the
powers conferred under Section 15 of the
MMRD Act 1957 had framed Uttar
Pradesh Minor Minerals (Concession)
Rules, 1963.

8. The State of Uttar Pradesh in
exercise of power granted under the
Section 23 (C) framed a Rule which was
"Uttar Pradesh Minerals (Prevention of
Illegal Mining, Transport and Storage)
Rules 2002".

These Rules were superseded in 2018
by a new Rules which was "Uttar Pradesh
Minerals (Prevention of Illegal Mining,
Transport and Storage) Rules 2018".

These Rules of 2018 were again
amended in 2019 and the said Rules were
called "Uttar Pradesh Minerals (Prevention
of Illegal Mining, Transport and Storage)
Rules 2019"

9. The Uttar Pradesh Minor Minerals
(Concession) Rules, 1963 was amended in
2020 by the State Government, and was
called "Uttar Pradesh Minor Minerals
(Concession) (Forty Eight Amendment)
Rules, 2020", By this Rule 21 and Rule 70
were amended, and "Regulating Fees was
introduced". The amended Rules reads as
follows:-

"Rule 21. Royalty - (1) The holder of
a mining lease granted on or after the
commencement of these rules shall pay
royalty in respect of any mineral removed
by him from the lease area at the rates for
the time being specified in the First
Schedule to these rules.

(1-a) Notwithstanding anything to the
contrary contained in rule 3, royalty should
be payable by concerned brick kiln owner
or user of ordinary clay on ordinary earth
at the rate, for the time being, specified in
First Schedule to these rules:

Provided that the State Government
shall take fees to be known as Regulating
Fees from brick kiln owners in respect of
district categorized, on the basis of pay on
at such rates as may be notified from time
to time by it.

(2) The State Government may, by
notification in the Gazette, amend the First
Schedule so as to include: therein or
exclude there from or enhance or reduce
the rate of royalty in respect of any mineral
1070 INDIAN LAW REPORTS ALLAHABAD SERIES
with effect from such date as may be
specified in the notification:

Provided that the State Government
shall not enhance the rate of royalty in
respect of any mineral for more than once
during any period of three years and shall
not fix the royalty at the rate of more than
20 percent of the pit's mouth value.

(3) Where the royalty is to be charged
on the pit's mouth value of the mineral, the
State Government may assess such value at
the time of the grant of the lease and the
rate of royalty will be mentioned in the
lease deed. It shall be open to the State
Government to re-assess not more than
once in a year the pit's mouth value if it
considers
that
an
enhancement
is
necessary.

(4)
Regulating
Fees
may
be
determined by the State Government from
time to time on minerals entering the State
from other States."

Further, the amended Rule 70 (2)
reads as follows:-

"70. Restriction on transport of the
Minerals - (1 ) The holder of a mining
lease or permit or a person authorised by
him in this behalf shall issue a pass in
Form MM-11 or Form e-MM-11 prepared
through electronic to process to every
person carrying, a consignment of minor
mineral by a vehicle, animal or any other
mode of transport, the State Government
may, through the District Officer, make
arrangements for the supply of printed
MM-1 1 Form books on payment basis.

(2) No person shall carry, within the
State a minor mineral by a vehicle, animal
or any other mode of transport, excepting
Railway, without carrying a pass in Form
MM-11/ Form e-MM-11 issued under subrule (1), Valid transit pass issued under
rule 7(3) of Uttar Pradesh Mineral
(Prevention
of
illegal
Mining,
Transportation and storage) Rules, 2018 or
similar valid transit pass issued by any
other State:

Provided that if the State Government
enters into an agreement to collect the
Royalty through contractor, receipt of
royalty or zero receipt as the case may be
shall be issued by such contractor and in
such cases carrying out such receipt with
Form MM-11/Form e-MM-11 will be
mandatory for transportation:

Provided
further
that
the
transportation of the mineral will be valid
only after the State Government has
determined the regulation fees imposed
from time to time on the mineral coming
from other State.

(3) Every person carrying any minor
mineral shall, on demand by any officer
authorised under Rule 66 or such officer as
may be authorised by the State Government
in this behalf, show the said pass to such
officer and allow him verify the correctness
of the particulars of the pass with
references to the quantity of the Minor
Mineral.

(4)
The
State
Government
may
establish a check-post for any area
included in any mining lease or permit and
when a check post is so established public
notice shall be given to this fact by
publication in the Gazette and in such other
manner as may be considered suitable by
the State Government.

(5) No person shall transport a minor
mineral for which these rules apply from
such area without first presenting the
mineral at the check post established for
that area for verification of the Weight or
measurement of the mineral.

(6) Any
person
found
to
have
contravened any provision of this rule then
the District Magistrate will recover penalty
of Rs. 25, 000/- (twenty five thousands)
8 All. Chhatarpur Crasher Asso. & Anr. Vs. State of U.P. & Ors.
1071
along with the price of such minor mineral
including royalty. After deposit of the entire
amount mentioned above the vehicle etc
including minor mineral will be released."

10. The Uttar Pradesh Minor Minerals
(Concession) Rules, 1963 was again
amended in 2021 by the State Government,
this was called "Uttar Pradesh Minor
Minerals (Concession) Rules, 2021". In this
Clause (5) was added in Rule 21 which
reads as follows:-

Rule 21(5)- Regulating Fees may be
determined by the State Government from
time to tome on minerals entering the State
from other States.

Rule 72(2)-.........

Provided
further
that
the
transportation of mineral will be valid only
after the State Government has determined
the regulation fee imposed from time to
time on the mineral coming from other
State.

This rule amended was only for
minerals which were brought in the State of
U.P. from the other States.

11. In furtherance to the Rules the
state government issued a Government
Order
on
24.02.2022,
imposing
a
Regulatory Fee of Rs. 50/- per cubic meter
in respect of transportation of Building
Stones, Ballast, Bolder transported from
other States into the State of Uttar Pradesh.
The reasons and object for issuing this G.O.
were as follows :-

"1- उपयुदक्त कवर्य िे सम्बन्ि में अवगत िराना है कि
खकनजों िे अवैि पररवहन पर प्रभावी कनयांत्रण शासन िा शीर्द
प्राथकमिता है, कजस हेतु प्रदेश में खकनज वाहनों िी जाांच िो
प्रभावी बनाये जाने िी आवश्यिता है। प्रदेश में अन्य राज्यों से भी
िाफी सांख्या में खकनज लदे वाहन आते है कजनिे जाांच हेतु
सीमावती कवकभन्न स्थानों पर आकटदकफकसयल इन्टेलीजेन्स युक्त चेि
गेट्स, कजस पर वे किज, िैमरा आकद िी सुकविा होगी, लगाये जाने
िा कनणदय कलया गया है। उपखकनजों िे पररवहन िो कवकनयकनत िरने
िे उद्देश्य से ऐसे चेि गेट्स िी स्थापना प्रदेश िे अन्य प्रमुख मागों
पर भी किया जाना है।

2- अतः अन्य राज्यों से आने वाले उपखकनजो िे वाहनों
िी सुगमतापूवदि जाांच किये जाने आकद िे उद्देश्य से स्थाकपत किये
जा रहे चेि गेट्स िी अवस्थापना/ अनुरक्षण में होने वाले व्यय िे
दृकष्टगत राज्य सरिार द्वारा उत्तर प्रदेश उपखकनज (पररहार)
कनयमावली, 1963 (यथासांशोकित) िे कनयम- 21(4) तथा
कनयम- 70(2) िे प्राकविान िे अन्तगदत उपखकनज ईमारती पत्थर,
कगट्टी, बोल्डर, बालू मौरम िे वाहनो पर रू0-50 प्रकतघन मी0 िी
दर से कवकनयमन शुल्ि अविाररत िरते हुये उसे अकिरोकपत किये
जाने िा कनणदय कलया गया है।"

12. The state government issued
another Government Order on 10.08.2022,
whereby which the Regulatory Fee of Rs.
50/- per cubic meter in respect of
transportation of Building Stones, Ballast,
Bolder transported from other States into
the State of Uttar Pradesh, was increased to
Rs 100/- per cubic meter.

13. A plain reading of the objects of
the Government Order, make it very clear
that the reasons for imposing the regulatory
fees was only to set up a proper
infrastructure for the strict compliance of
the conditions laid down by the in Section
23(c) of the MMRDA Act.

PETITIONER ARGUMENT

14. Heard Shri Siddharth Seth in Writ
Petition No. 10037 of 2020 on behalf of the
petitioners and Shri Shashi Nandan, learned
Senior Couns assisted by Shri Birendra
Singh on behalf of the petitioner in Writ
Petition No. 37119 of 2022.

15. The petitioner who claims himself
to be an association of stone-crusher, by
means of the writ petition (C.M.W.P.
1072 INDIAN LAW REPORTS ALLAHABAD SERIES
No.10037 of 2020) challenged the vires of
the Rules and the G.O. issued for charging
Regulatory Fees. The prayers made in the
writ petition were as follows :-

"(i) declare the sub-Rule (4) to Rule
21 of the Uttar Pradesh Minor Minerals
(Concession) Rules, 1963 as amended by
the
State
Government
through
Uttar
Pradesh Minor Minerals (Concession)
(Forty Eight Amendment) Rules, 2020
dated 05.02.2020 as ultra-vires to the
Constitution of India.

(ii) declare the proviso of sub-Rule (2)
of Rule 70 of Uttar Pradesh Minor Minerals
(Concession) Rules, 1963 as amended by
the
State
Government
through
Uttar
Pradesh Minor Minerals (Concession)
(Forty Eight Amendment) Rules, 2020
dated
05.02.2020
as
ultra-vires
the
Constitution of India.

(iii) issue a writ, order or direction in
the nature of certiorari quashing the
Government Order dated 24.02.2020 issued
by the Secretary (Bhutatav Evam Khaniz
Karm), Government of Uttar Pradesh,
Lucknow ;

(iii-a) issue a writ, order or direction in
the nature of certiorari quashing the
Government Order dated 10.08.2022 ;

(iii-b) this Hon'ble Court may be
pleased to declare Rule 21 (5) and Rule 72
(2) U.P. Minor Minerals (Concession)
Rules, 2021 and the corresponding Rules
under the U.P. Mines and Minerals
(Concession) Rules, 2021 which prescribes
the imposition/levy of such regulating fee
as ultravires the provisions contained in
Mines and Minerals (Development and
Regulation) Act, 1957 and the relevant
provisions emanated under Constitution of
India.

(iv) issue any other writ, order or
direction in favour of the petitioners, which
this Hon'ble Court may deem just and
reasonable in the circumstances of the case;
and
(v) award the cost of the petition in favour
of the petitioners."

16. The counsel for the petitioner
submitted that on 05.02.2020 by way of the
48th amendment the State Government
notified Uttar Pradesh Minor Minerals
(Concession) (Forty Eight Amendment)
Rules, 2020 (herein after referred to as
'Rules
2020'),
whereby,
the
State
Government has added Rule 21 (4) as well
as added a proviso under the Rule 70 (2) of
Rules 1963. By Rule 21 (4) of the
Amended
Rules
2020,
the
State
Government has reserved the power to
impose regulating fees, on minerals which
were brought from other States into the
State of Uttar Pradesh.

17. Counsel for the petitioners
submitted that the Regulating Fees was
imposed because of the difference of rate in
minor minerals in other State as compared
to the State of Uttar Pradesh. This reason
for imposing regulating fees violates the
very objective for which the Rules have
been framed. The State has exceeded its
jurisdiction by incorrect interpretation of
law and passed such an order. Therefore,
the Government Order dated 24.02.2020
and G.O. dated 10.08.2022 deserves to be
quashed.

18. He further submitted that the
amended rules under challenge and the
government orders, dated 24.02.2020 and
10.08.2022 have been issued by the State
Government under the purported exercise
of powers conferred under Section 15 read
with Section 23(C) of the Act, 1957. By
way of these amended rules, the State has
illegally and arbitrarily levied a Regulation
Fees of Rs. 50/- per cubic meter which was
8 All. Chhatarpur Crasher Asso. & Anr. Vs. State of U.P. & Ors.
1073
later enhanced to Rs. 100/- per cubic metre,
by two different Government Orders, which
is grossly arbitrary and illegal and is also
ultra vires the provisions contained in the
Act of 1957. The State has no authority to
levy any fees or tax on the minerals which
have been legally extracted by them and on
which royalty has been paid. Further, These
Government Orders are illegal as the
reason given by the State Government is
beyond the statutory provisions and Rules
framed there under

19. The field of minerals is already
covered by the parliamentary Act within
the parameters laid down under List-1.
Hence, the State has no control after a
mineral that has been excavated in other
States. The State cannot create any
impediment on the management of these
minerals into the State of U.P.

20. Article 301 of the Constitution of
India grants freedom of trade, commerce,
and intercourse through out the territory of
India, and any impediment created would
amount to violation of the said article.
Imposition of Regulatory Fee, amounts to
restriction of freedom of Trade by virtue of
Article 301 of the Constitution of India.

21. The Rules under challenge herein,
violate Part XIII of the Constitution of
India as the effect thereof is to fetter the
freedom
of
trade,
commerce
and
intercourse under Article 301 of the
Constitution.
Under
this Article,
the
expression 'freedom' must be read with the
expression 'throughout the territory of
India'

22. Under Article 302, Parliament
may impose restrictions on the freedom of
trade, commerce or intercourse between
one State and another as may be required in
the public interest. However, Article 302 is
qualified by Article 303 which prohibits
Parliament and the State Legislatures from
making any law that gives preference to
one State over another or discriminates
between one State and another. The power
of State Legislature to impose reasonable
restrictions on the freedom of trade,
commerce or intercourse, as may be
required in the public interest, requires such
a Bill or amendment to be moved in the
State Legislature only after receiving
previous sanction from the President. The
President, being the head of the State and
the guardian of the federation, must be
satisfied that such a law is indeed required
and, thus, acts as a check on the promotion
of
provincial
interests
over
national
interest.

23. He further submitted that MMRD
Act, 19573 was amended with the objective
of preventing illegal mining, transportation
and
storage
of
minerals,
except
in
accordance with the provisions of the
MMRD Act, 1957 and Rules framed
thereunder with a view to preventing illegal
mining,
transportation
and
storage.
Prohibition or restriction of inter-State
trade of any minerals was neither intended
nor provided or envisaged either expressly
or by necessary implication.

24. The composite scheme of the Act,
1957 contained in the provisions of
Sections 4(1-A), 15, 18, 21 and 23-C of the
Act,
1957
clearly
indicate
that
the
delegation of power to regulate or make
Rules for transportation or storage of
minerals, including minor minerals, does
not empower and cannot be stretched to
empower the State Government to make
Rules directly prohibiting or imposing
additional
charges
in
movement
of
minerals, in the name of Regulating Fees.
1074 INDIAN LAW REPORTS ALLAHABAD SERIES

25. Section 15 of the Act, 1957,
which empowers the State Government to
make Rules in respect of mines and
minerals, does not extend to the Regulation
of already excavated minor minerals under
the terms and conditions of a mining lease.
The Hon'ble Supreme Court in the case of
State of Tamil Nadu Vs. M.P.P. Kavery
Chetty, (1995) 2 SCC 402,4 upheld the
striking down of Rules made by the State
of
Tamil
Nadu,
where
the
State
Government had fixed minimum price on
the sale of granite after its excavation. In
that case, the Hon'ble Supreme Court had
emphatically
held
that,
the
State
Government had no power under Section
15 of the Act, 1957 to exercise to control
over minor minerals after they had been
excavated.

26. Counsel for the petitioners further
argued that Section 15 of the MMRD Act
1957 gives power to the State Government
to make rules to regulate the grant of
mining leases and for the 'purposes
connected therewith'. This phrase 'purpose
connected therewith' will not include
charging of fees on transportation of minor
minerals from other State. He further
submitted that minerals legally excavated
from different States, which are brought in
the State of Uttar Pradesh and on that the
State of U.P. cannot charge a regulating
fees. The Rules under which Regulatory
Fee is charged and the Government Order
dated 24.02.2020 and 10.08.2022 should be
quashed as the same are ultra vires.

27. Counsel for the petitioners
submitted that the State can only recover
fees which are conferred by Section 15 and
Section 23-C of the Act of 1957, and
Section 23-C makes it very clear that the
purpose behind it is to prevent illegal
mining, transportation and it does not give
any power to impose any fees on the
legally excavated minerals, to buttress this
argument he relied heavily on the judgment
passed by Hon'ble Supreme Court in the
matter of State of Gujarat and Others
etc. Vs. Jayeshbhai Kanjibhai Kalathiya
etc.5 and also placed reliance of a Division
Bench judgment passed by the Madhya
Pradesh High Court at Indore in the matter
of Ultratech Cement Vs. State of
Madhya Pradesh .6

28. Even under powers granted under
Section 15 of the Act of 1957, the State of
U.P.
while
framing
Minor
Mineral
(Concession) Rules, cannot frame any law
in respect of minor mineral excavated in
another State. Hence, the state of UP lacks
the power to frame any rules for the
minerals excavated in other states.

29. Section 15(1) or 15(1-A) of the
MMRD Act does not provide for imposing
a regulatory fee. The word used is "fixing
and collection". The Rule making power is
confined only for fixing and collection and
there is no power to impose "Regulatory
Fee".

30. The sub-ordinate legislation made
under the provisions of Section 15(1) of the
MMRD Act can only be exercised in
respect of minerals found and excavated in
Uttar Pradesh. It is the burden on the State
to prove that, it has legislative power to
impose tax or fee in respect of minerals,
which is not mined or excavated in U.P.

31. The provisions of Section 23-C
will only apply in respect of minerals
which have been found and excavated in
the State of Uttar Pradesh. Further, the
basic word in this Section is "illegal
mining" and all the activities enumerated in
this Section are confined to the activities
8 All. Chhatarpur Crasher Asso. & Anr. Vs. State of U.P. & Ors.
1075
around illegal mining and further this
Section does not give power to the State to
impose fees on the goods which are legally
excavated and are just brought in the state
of U.P.

32. The purpose of fixing a checkpost is to prevent illegal transportation of
mineral for that the check-post should be
made in the entire State of U.P. and not
necessarily on the borders of the State. If
illegal mineral is transported within the
State of U.P. then there is no mechanism to
check such transportation. If the purpose of
check-post is to prevent illegal transporting
then the check-post have to be on all the
roads in the State.

33. If the provisions of rule 21(5)
and rule 72(2) of the 2021 Rules are read
together which shows that the imposition
of fees is only for certain class of
minerals which are brought from other
States. The minerals excavated in U.P.
does not attract Regulatory Fees, whereas
minerals brought from other States do
attract a Regulatory Fees. This is clearly
discriminatory. It seems the purpose of
imposing Regulatory Fees is not to check
illegal transportation but to make a
source of income.

34. The Regulatory Fees which is
being imposed through Rules 2021, is
clearly not for preventing illegal mining but
it is just a fee on import of minerals, or to
prevent free trade from other states. Going
by the aforesaid scheme, it becomes
apparent
that
when
there
are
such
restrictions on a State Legislature, then the
State Government could not have imposed
such a prohibition under a statute whose
object is to regulate mines and mineral
development, and not trade and commerce
per-se.

35.

The
enforcement
of
the
Regulatory fees on the minerals brought
from other States is a clear discrimination
as compared with the minerals mined and
excavated in the state of Uttar pradesh, as
there is no such Regulating Fee/ restriction
on their transportation.

36. The petitioner placed reliance on a
judgment passed by Hon'ble Supreme
Court in the matter of State of Tamilnadu
vs. M.P.P. Kavery Chetty (supra),7
wherein, the court has held as follows:-

22.Rules 8D and 19B empowers the
State Government company or corporation
as the State Government may direct to
control the sale by every permit-holder of
quarried granite or other or rock suitable
for ornamental or decorative purposes.
They also empower the State Government
or its officers or a State Government
company or corporation, as the case may
be, to fix the minimum price for the sale
thereof. The object, as is shown by the
terms of Government Order No. 214 dated
10th June, 1992, quoted above, is to
conserve and protect granite resources.

23. It is difficult to see how granite
resource scan be protected by controlling
the sale of granite after its excavation and
fixing the minimum price thereof.

24. There is no power conferred upon
the State Government under the said Act to
exercise control over minor minerals after
they have been excavated. The power of the
State Government, as the subordinate rule
making authority, is restricted in the
manner set out in Section 15. The power to
control the sale and the sale price of minor
mineral is not covered by the terms of
clause (o) of sub- section (IA) of Section
15. This clause can relate only to the
regulation of the grant of quarry and
mining
leases
and
other
mineral
1076 INDIAN LAW REPORTS ALLAHABAD SERIES
concessions and it does not confer the
power to regulate the sale of already mined
minerals.

This judgment makes it clear that the
State can not exercise control over the
minerals after they have been excavated.

37. The counsel for the petitioner then
placed reliance on a judgment passed by
the Hon'ble Supreme Court in the case of
State
of
Gujarat
and
Others
v.
Jayeshbhai Kanjibhai Kalathiya and
Others (supra)8 wherein the Court has held
has follows:-

"17) To support the above plea, he
invited the attention of this Court to the
judgment in D.K. Trivedi & Sons and
Others v. State of Gujarat and Others this
Court considered the power of the State
Governments to make rules under the said
Section 15 enable them to charge dead rent
and royalty in respect of leases of minor
minerals granted by them and to enhance
the rates of dead rent and royalty during
the subsistence of such leases - a power
exercised by the State to govern conditions
subsequent to the grant of the lease. After
tracing the legislative history in respect of
minor minerals, it was observed that by virtue
of the Act the whole of the field was taken over
by Parliament and thereafter all powers in
respect of minor minerals had been delegated
to the State Governments. The Court also
observed, inter alia, that the power to regulate
minor minerals under Section 15 is extremely
wide; that control over minor minerals fell
exclusively within the domain of the State
Governments; that minor minerals have
historically been viewed by the Legislature,
both pre and post Independence, as being for
the use of local areas and local purposes; and it
is left to the State Governments to prescribe
such restrictions as they think fit by rules
made under Section 15 (1).
26) Having regard to the fact that it is the
Union which can regulate and control the
minerals in this country and States exercise
power of minor minerals as delegates of the
Union, this Court had deemed it fit to issue
notice of these proceedings to Union of
India as well in order to elicit its stand on
this issue. The Union of India has filed its
reply, taking a specific stand that there is
no such power to frame rule like 44-BB of
the 1966 Rules or Rule 71 of the 2010
Rules.
Ms.
Madhavi
Divan,
learned
Additional Solicitor General, appeared for
Union of India and pitched the case to even
a higher level. Her argument was that there
is no such power even with the Union of
India to frame rules of the nature impugned
in these proceedings as these would be
offensive of Article 301 of the Constitution.
Therefore, under no circumstances, such a
power can vest with the State Government.
She
argued
that
Section
15
which
empowers the State Government to make
rules in respect of minor minerals does not
extend to the regulation of already
excavated minor minerals under the terms
and conditions of a mining lease. This is
made clear by the three Judge Bench in
M.P.P. Kavery Chetty wherein this Court
upheld the striking down of rules made by
the State Government to fix minimum price
for the sale of granite after its excavation.
The Court emphatically held that the State
Government had no power under Section
15 of the MMRD Act to exercise to control
over minor minerals after they had been
excavated. The power under Section 15 was
restricted and did not empower the State to
control the sale or sale price of minor
minerals once they had been mined. The
latter judgment has been followed in
another three Judge Bench judgment in K.
T. Varghese & Ors. v. State of Kerala &
Ors.. In the latter case, one of the
impugned conditions of the license was that
8 All. Chhatarpur Crasher Asso. & Anr. Vs. State of U.P. & Ors.
1077
minerals could be sold only within the State
of Kerala, that too for domestic and
agricultural purposes. The same was found
impermissible. She also submitted that
there is no conflict whatsoever between the
judgments of this Court in Amritlal
Nathubhai Shah and D.K.