# DALMIA CEMENT (BHARAT) LTD v. STATE OF TAMIL NADU & ANOTHER

- **Citation:** [2013] 17 S.C.R. 529
- **Court:** Supreme Court of India
- **Decided:** 2013-12-16
- **Case number:** Civil Appeal No.5329 of 2002
- **Bench:** R.M. Lodha, J. Chelameswar, Madan B. Lokur
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/dalmia-cement-bharat-ltd-v-state-of-tamil-nadu-another-28795
- **Pages:** 30

## Headnote

Mines and Minerals (Development and Regulation) Act,
A
B
1957 - ss.3(e), 4, 9, 14 and.16- Mineral Concession Rules,
C
1960 - Chapters IV, V;;,:;d VI - Mining lease in the State of
. Tamil Nadu - Payment of royalty - Non-entitlement of a
ryotwari pattadar who secures mining lease under the 1957
Act to pay royalty at a concessional rate - Whether the State
Government has a discretion to collect royalty from any
D ·
lessee at a concessional rate, other than the one prescribed
under the Act in the absence of any specific provision under
"the Act and Rules conferring such discretion - Held: Answer
to the question depends upon the answer to 5 other questions/
issues - Pleadings in the writ petitions (culminating in the
E
present appeals) hopelessly ambiguous, bald and imprecise
to enable the Court to examine any one of the issues - But
one of the issues alreac[y referred to a larger Be.nch of the
Supreme Court, arising out of appeals from other parts of the
country - Requirement of symmetric application of law; in a
F
manner which is uniform throughout the country - Opportunity
granted to the appellants as well as the State Government to
suitably amend the pleadings in the writ petitions (which led
to the present appeals) and place the complete facts
necessary for adjudication of the questions on hand - Present
G
appeals accordingly tagged with Civil Appeal Nos. 4056-64
of 1999 etc. - The Estates (Abolition and Conversion into
Ryotwari) Act, 1948- The Tamil Nadu lnam Estates (Abolition
& Conversion into Ryotwari) Act - Madras lnam Estates
529
H
530
SUPREME COURT REPORTS [2013] 17 S.C.R.
A
(Abolition and Conversion of Ryotwari) Act, 1963 - s.3(b) -
Pleadings - Inadequate pleadings.
The Government of Tamil Nadu in the Industries
Department issued a letter No. 628 dated 10.5.1982
8 addressed to the Collectors of the various districts
asking them to stop sharing 50% of the royalty and dead
rent with the patta land holders in respect of mining
leases and to collect the whole amount due as royalty and
dead rent prescribed in the Second and third Schedules
C to the Mines and Minerals {Development a·nd Regulation)
Act, 1957 in the case of land in which the minerals vested
in the Government. Pursuant to the letter, the Collectors
called upon the appellant-cement companies to remit
royalty and the dead rent at the rates prescribed under
the Mines and Minerals {Development and Regulation)
D Act, 1957. Challenging the abovementioned two
proceedings, the \ippellant-cement companies filed writ
petitions.
The writ petitions were partly allowed by the High
E Court to the extent that during the currency of the leases,
which were in force as on the date of filing of the writ
petitions, the respondents were restrained from
demanding and collecting from the appellants, royalty in
excess of 50 percent insofar as patta lands are
F concerned. The appellants as well as the State
Government were aggrieved by the above-mentioned
judgment insofar as it went against them, and therefore,
the present appeals.
Directing the present appeals to be tagged with Civil
G Appeal Nos. 4056-64 of 1999 etc, the Court
HELD: 1.1. The writ petitions which culminated in the
present appeals contained wholly bald and vague
assertions. It is in the background of such pleadings, the
H High Court embarked upon a lengthy enquiry into the
DALMIA CEMENT (BHARAT) LTD. v. STATE OF
531
TAMIL NADU
rights of the pattadar in the sub-soil. [Paras 3, 12] [538A
B; 543-B-C]
1.2. In the adjudication of matters in exercise of the
jurisdiction under Article 226 of the Constitution,
unfortunately a system of paying minimum attention, (to
employ a mild expression of disapproval) has developed
over a period of time. When a number of matters are
(allegedly similar in nature) clubbed together for
adjudication, the problem gets compounded. [Para 13]
[543-D]
1.3. The assertion by Dalmia Cement that it is a
ryotwari pattadar itself is a doubtful statement of fact. An
enquiry whether such a pattadar is en

## Text

_Characters 0–39,334 of 57,234. This is a partial read: ask again with offset=39334 for what follows._

[2013] 17 S.C.R. 529
DALMIA CEMENT (BHARAT) LTD.
v.
STATE OF TAMIL NADU & ANOTHER
(Civil Appeal No.5329 of 2002)
DECEMBER 16, 2013
[R.M. LODHA, J. CHELAMESWAR AND
MADAN B. LOKUR, JJ.]
Mines and Minerals (Development and Regulation) Act,
A
B
1957 - ss.3(e), 4, 9, 14 and.16- Mineral Concession Rules,
C
1960 - Chapters IV, V;;,:;d VI - Mining lease in the State of
. Tamil Nadu - Payment of royalty - Non-entitlement of a
ryotwari pattadar who secures mining lease under the 1957
Act to pay royalty at a concessional rate - Whether the State
Government has a discretion to collect royalty from any
D ·
lessee at a concessional rate, other than the one prescribed
under the Act in the absence of any specific provision under
"the Act and Rules conferring such discretion - Held: Answer
to the question depends upon the answer to 5 other questions/
issues - Pleadings in the writ petitions (culminating in the
E
present appeals) hopelessly ambiguous, bald and imprecise
to enable the Court to examine any one of the issues - But
one of the issues alreac[y referred to a larger Be.nch of the
Supreme Court, arising out of appeals from other parts of the
country - Requirement of symmetric application of law; in a
F
manner which is uniform throughout the country - Opportunity
granted to the appellants as well as the State Government to
suitably amend the pleadings in the writ petitions (which led
to the present appeals) and place the complete facts
necessary for adjudication of the questions on hand - Present
G
appeals accordingly tagged with Civil Appeal Nos. 4056-64
of 1999 etc. - The Estates (Abolition and Conversion into
Ryotwari) Act, 1948- The Tamil Nadu lnam Estates (Abolition
& Conversion into Ryotwari) Act - Madras lnam Estates
529
H
530
SUPREME COURT REPORTS [2013] 17 S.C.R.
A
(Abolition and Conversion of Ryotwari) Act, 1963 - s.3(b) -
Pleadings - Inadequate pleadings.
The Government of Tamil Nadu in the Industries
Department issued a letter No. 628 dated 10.5.1982
8 addressed to the Collectors of the various districts
asking them to stop sharing 50% of the royalty and dead
rent with the patta land holders in respect of mining
leases and to collect the whole amount due as royalty and
dead rent prescribed in the Second and third Schedules
C to the Mines and Minerals {Development a·nd Regulation)
Act, 1957 in the case of land in which the minerals vested
in the Government. Pursuant to the letter, the Collectors
called upon the appellant-cement companies to remit
royalty and the dead rent at the rates prescribed under
the Mines and Minerals {Development and Regulation)
D Act, 1957. Challenging the abovementioned two
proceedings, the \ippellant-cement companies filed writ
petitions.
The writ petitions were partly allowed by the High
E Court to the extent that during the currency of the leases,
which were in force as on the date of filing of the writ
petitions, the respondents were restrained from
demanding and collecting from the appellants, royalty in
excess of 50 percent insofar as patta lands are
F concerned. The appellants as well as the State
Government were aggrieved by the above-mentioned
judgment insofar as it went against them, and therefore,
the present appeals.
Directing the present appeals to be tagged with Civil
G Appeal Nos. 4056-64 of 1999 etc, the Court
HELD: 1.1. The writ petitions which culminated in the
present appeals contained wholly bald and vague
assertions. It is in the background of such pleadings, the
H High Court embarked upon a lengthy enquiry into the
DALMIA CEMENT (BHARAT) LTD. v. STATE OF
531
TAMIL NADU
rights of the pattadar in the sub-soil. [Paras 3, 12] [538A
B; 543-B-C]
1.2. In the adjudication of matters in exercise of the
jurisdiction under Article 226 of the Constitution,
unfortunately a system of paying minimum attention, (to
employ a mild expression of disapproval) has developed
over a period of time. When a number of matters are
(allegedly similar in nature) clubbed together for
adjudication, the problem gets compounded. [Para 13]
[543-D]
1.3. The assertion by Dalmia Cement that it is a
ryotwari pattadar itself is a doubtful statement of fact. An
enquiry whether such a pattadar is entitled to the sub-soil
rights was wholly uncalled for as there is not even a
single sentence in the entire writ petition whereby Dalmia
Cement asserted that the sub-soil rights vest in them.
[Para 21] [548-B-C]
1.4. No information regarding the number of leases
held by Dalmia Cement, the relevant dates on which such
leases were first granted or subsequently renewed (if
renewed) is available on the record. Nor the information
w.r.t. the mineral which is covered by any one of those
leases (if there is more than one lease) is available on the
. record. Therefore, it is not known whether the leases
pertain to a 'mineral' or 'minor mineral'. [Para 22] [548-D]
B
c
D
E
F
1.5. The only fact which appears from the record is
that pursuant to a mining lease granted way back on
10.11.1945, Dalmia Cement has been carrying on mining
operations in some parcel of land. In 1945, there was no
G
statute in this country regulating the activity of mining
operations. It appears that there were certain executive
instructions called the Madras Mining Manual which
governed mining operations in that part of the country
known as the Madras province. Whether the said mining
H
532
SUPREME COURT REPORTS [2013) 17 S.C.R.
A lease of 1945 was in fact a lease as defined under the
Transfer of Property Act or was a permission granted by
ti.e State to carry on mining activity in exercise of its
executive authority under the Government of India Act,
1935 requires examination, on an appropriate pleading.
B An inquiry into such matters is not really called for in the
absence of any specific pleading or issue. [Para 23] [548E-H]
2. In exercise of powers conferred under Section 13
C of the Mines and Minerals (Development and Regulation)
Act, 1957, the Government of India made rules known as
Mineral Concession Rules, 1960. Chapter IV of the said
rules deals with the procedure for grant and regulation
of the mining leases in respect of the land in which the
minerals vest in the Government. Chapter V of the said
D rules deals with the procedure for obtaining a
prospecting licence or mining lease in respect of land in
which the minerals vest in a person other than the
Government. Chapter VI of the said rules deals with the
mining leases in respect of land in which the minerals
E vest partly in the Government and partly in private person.
The rules deal with various classes of the lands covered
by the abovementioned three chapters and provide for
different procedures for securing the grant of a mining
lease and regulatory measures for working of such mines
F and allied matters. But none of the rules provide for
collection of royalty at a concessional rate in the case of
the lands where the minerals vest in a person other than
the Government. In ·any event, attention of this Court was
not drawn to any such rule. [Para 34] [552-E-F; 553-A-C]
G
H
3. No Rule framed by the State of Tamil Nadu (in case
any of the mining leases of the appellants pertains to
minor minerals) authorising the State to collect royalty at
a concessional rate w.r.t. a mining lease granted in favour
of a "ryotwari pattadar" of the land, is brought to the
DALMIA CEMENT (BHARAT) LTD. v. STATE OF
533
TAMIL NADU
notice of this Court. Nor is there any specific pleading in
A
that regard. (Para 35) (553-C-D]
4. Even if it is assumed that the Cement companies
are pattadars (or the successor in interest of such
pattadars) either under the original ryotwari system or the
B
holders of the 'ryotwari patta' pursuant to the abolition of
estates/imams, and also assume that each of the
appellant companies is also the owners of the subsoil
rights of their patta lands, such OWNERSHIP does not
make any difference insofar as the authority of the State
C
to collect royalty. Even w.r.t. the original ryotwari patta
lands where admittedly the mineral vested in the pattadar,
the State had asserted (in BSO 10 dated 19.03.1888), its
authority to collect "a share in the produce of the
minerals worked commuted into money payment" -
which eventually acquired the nomenclature Royalty.
D
[Para 36) (553-E-H]
Thressiamma Jacob & Ors. Vs. Geologist, Department
of Mining and Geology and Ors. (2013) 9 SCC 725 - referred
~-
E
F
5. There is nothing either in the Mines and Minerals
(Development and Regulation) Act, 1957 or the Rules
framed thereunder which entitles a ryQtwari pattadarwho
secures a mining lease under the Act to pay royalty at a
concessional rate. The question then is whether the State
Government has a discretion to collect royalty from any
lessee at a concessional rate, other than the one
prescribed under the Act in the absence of any specific
provision under the Act and Rules conferring such
discretion. An answer to the question depends upon the
G
answer to the following questions:
1.
What is true legal character of a mining lease
i.e. whether mining lease is a lease within the
meaning of that expression as defined under
H
534
A
B
SUPREME COURT REPORTS (2013] 17 S.C.R.
the Transfer of Property Act or it is only a
permission to carry an mining activity?
2.
Whether ownership of subsoil makes any
difference to the determination of the above
question?
3. · What is true legal character of the expression
Royalty under the Mines and Minerals
(Development and Regulation) Act, 1957, i.e.,
c
Whether it is a Tax or a consideration for a
contract of mining lease?
D
E
4.
Whether the State has any discretion either
under the provision13 of the Mines and Minerals
5.
(Development an(I Regulation) Act, 1957 or
under the Scheme of the Constitution to
collect Royalty at rates lower than those
prescribed under the Act and the Rules?
.
Whether the true character of Royalty makes
any difference for the determination of
Question No.4? [Para 37] [556-C-D; 557-A-E]
6.1. The pleadings in the writ petitions (culminating
in the present appeals) are hopelessly ambiguous, bald
F and imprecise to enable the Court to examine any one of
the above-mentioned issues. But the third of the abovementioned issues already stands referred to a larger
Bench of this Court, arising out of appeals from other
parts of the country. Dismissal of these appeals may
eventually lead to asymmetric application of law; in a
G manner which is not uniform throughout the country
thereby
impacting
the
coherent and
uniform
interpretation of the Constitution. It is therefore deemed
appropriate to provide an opportunity to the appellants
as well as the State of Tamil Nadu to suitably amend the
H pleadings in the several writ petitions and place the
DALMIA CEMENT (BHARAT) LTD. v. STATE OF
535
TAMIL NADU
complete facts necessary for the adjudication of the
A
questions on hand. [Para 38] [557-F-H; 558-A]
6.2. The appellants are called upon to file affidavits
disclosing the full facts necessary for adjudication of the
issues raised hereinabove. It is open to the State of Tamil
Nadu to file a counter affidavit to such further affidavits
filed by the appellants, in case the State disputes anyone
of the facts to be newly brought on record. [Para 39] [5588]
B
6.3. The question "What is the true nature of royalty/
C
dead rent payable to minerals produced/mined/extracted
from mines" (alongwith certain other connected
questions) was referred to a larger Bench by an order of
this Court dated 30th March, 2011 in Mineral Area
Development Authority & Ors. Vs. Steel Authority of India &
D
Ors. It is deemed appropriate that these appeals be
tagged with Mineral Area Development Authority & Ors. Vs.
Steel Authority of India & Ors., Civil Appeal Nos. 4056-64 of
1999 etc .. [Paras 40, 41) [558-C-E]
E
Mineral Area Development Authority & Ors. Vs. Steel
Authority of India & Ors. (2011) 4 SCC 450: 2011 (4) SCR
19 - referred to.
Case Law Reference:
(2013) 9 sec 125
referred to
Para 36
2011 (4) SCR 19
referred to
Para 40
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
5329 of 2002
F
G
From the Judgment and Order dated 04.03.2002 of the
Madras High court in Writ Appeal No. 685 of 1991.
WITH
Civil Appeal No. 1352 of 2005
H
536
SUPREME COURT REPORTS [2013] 17 S.C.R.
A Civil Appeal Nos. 5332, 5333 and 5335-5336 of 2002
Rajiv Dtravan, R. Venkataramani, Gaurav Juneja, Saman
Ahsan, Rahul Chandra, Sanjeev K. Kapoor (for Khaitan & Co.),
Prabha Swami, Krishnamurthi Swami, U.A. Rana, M. Majumdar
B (for Gagrat & Co.), V. Vijay Lakshmi, Shodhan Babu, Neelam
Singh, B. Balaji, for the appearing parties.
The Judgment of the Court was delivered by
CHELAMESWAR, J. 1. By a common judgment dated 4th
C March, 2002, the High Court of Madras dismissed a batch of
writ appeals and some connected writ petitions. Aggrieved by
the said judgment, four companies, which are carrying on the
business of manufacture and sale of cement in the State of
D
E
F
G
H
Tamil Nadu, carried the matter to this Court in these appeals.
2. The Government of Tamil Nadu in the Industries
Department issued a letter No. 628 dated 10.5.1982
addressed to the Collectors of the various districts. The relevant
part of the letter reads -
"I am directed to state that the rates of Royalty and dead
rent in respect of leases over patta lands have been fixed
at 50% (half rate) as a convention which has been followed
for a long time and this is not based on rules.
2. In 1977 in his Audit report, the Senior Deputy
Accountant General has pointed out the incorrect levy of
royalty at half the rates for mining in patta lands, since no
proportion has been prescribed in the Minerals
Concession Rules 1960 in regard to the share in the
Minerals between the pattadar and the Government. The
Senior Deputy Accountant General has also pointed out
in his D.O. fourth cited that omission to levy royalty in the
state at the mandatory rate for mining patta lands where
minerals fully vest in Government resulted in the
DALMIA CEMENT (BHARAT) LTD. v. STATE OF
537
TAMIL NADU [J. CHELAMESWAR, J.]
Government forgoing revenue amounting to Rs.40.28
A
lakhs on 39.12 lakhs tones of minerals in respect of 29
leases during 1974 to 1976 alone. In pursuance of this
audit objection and in consultation with the Director of
lnduslries and Commerce erstwhile Board of Revenue and
the Government of Karnataka and Andhra Pradesh, the
B
Government issued orders in their fifth cited the effect that
the existing system referred to in para 1 above might be
continued for the present.
3. The above order is not a final decision of the
C
Government but it is only tentative order. The share of
minerals, to pattadars in respect of inam, manyam and
sarvanyam lands may vary with reference to the period and
nature of assignments. Further, the Senior Deputy
Accountant General has also pointed out that there was
heavy loss of revenue to the Government to the tune of
D
Rs.40.28 lakhs in the year 1974-76 due to the levy of half
rate of royalty and dead rent prescribed in the second and
third Schedules to the Mines and Minerals (Regulation and
Development) Act, 1957 in respect of mining leases over
patta lands as in the case of Government lands.
Accordingly, I am to request you to stop sharing 50% of
E
the royalty and dead rent with the patta land holders in
respect of mining leases and to collect the whole amount
due as royalty and dead rent prescribed in the second and
third schedul,es to the said Act as in the case of land in
which the minerals vest in the Government with effect from
the date of issue of this Order.
F
I am also to state that inam<;lar and proprietor of the lands
permanently settled will be entitled to minerals rights
G
subject to the conditions that the land holder and the
inamdar establishes his proportionate rights in the
minerals by means of document evidence."
Pursuant to the said letter, the Collectors called upon these
cement companies to remit royalty and the dead rent at the
H
538
SUPREME COURT REPORTS [2013] 17 S.C.R.
A
rates prescribed under the Mines and Minerals (Development
and Regulation) Act'.
3. Challenging the abovementioned two proceedings, writ
petitions were filed by the abovementioned cement companies
8
with (we are sorry to say) wholly bald and vague assertions. To
demonstrate the vagueness of pleadings, we extract, from W.P.
No. 7783/2002 which culminated in C.A. No.5329/2002.
c
D
,E
F
"1. The petitioner is the ryotwari pattadar of several items
of lands, comprising an extent of about 355 acres in and
around Dalmiapuram. The petitioner has been carrying on
mining operations in these lands for the last nearly 45
years. The mineral that is obtained from these lands is
lime-stone, gypsum etc. for the purpose of manufacture of
Cement. For the purpose of mining operations, the
Government and the petitioner entered into registered
agreements about 45 years ago. Those agreements would
last till other end of this century. For the mining operations
to be carried on by the petitioner, the petitioner had to pay
royalty to the Government at the rates to be specified from
time to time.
2. Ever since the date of those agreements, the
Government had agreed to collect half the royalty from
persons who were carrying mining operations in their own
patta lands. In respect of poramboke lands belonging to
the Government, the lessees for mining purposes have
1.
Footnote
The Government in their letter cited have instructed to levy
anQ collect the royalty and Dead Rent in respect of the patta lands leased
out' for mining purposes at the full rate of Royalty and dead rent prescribed
G
in the Second and third Schedules to the Mines and Minerals (Regulation
and Development) Act. 1957, with effect ~ram 10.5.82.
2. Please therefore remit the royalty and Dead Rent at the rates prescribed
in the second and third schedules to the Mines Act and apply for transport
permits to the Special Tehsildar - Mines, Tiruchirapalli. The amount of
Royalty and Dead Rent should be remitted at the full rate as per statute
H
provision in the Act and the rules thereunder with effect from 10.5.82.
DALMIA CEMENT (BHARAT) LTD. v. STATE OF
539
TAMIL NADU [J. CHELAMESWAR, J.]
been paying full royalty. The collection of Y, royalty from
A
ryotwari pattadars was based on the understanding of the
ryotwari pattadars' rights as contemplated in the Madras
mining manual which then governed and regulated the
rights of parties."
B
4. It is apparent from the above that no details of survey
numbers or the villages in which the lands are located; the exact
extent of the land where the mining operation is carried on; or
details of the minerals said to have been exploited by the
petitioner, are furnished. Neither details of the relevant
C
registered agreements allegedly executed some 45 years prior
to filing of the writ petitions nor copies thereof are given. The
entire writ petition proceeds on the basis that the petitioner as
a matter of right is liable to pay only 50% of the royalty payable
on extraction of the minerals. Such a right according to the
petitioner emanates from the law prevalent in regard to the
subsoil rights2 •
D
5. In the writ petition filed by Madras Cements Ltd. (Writ
Petition No. 3450 of 1983 culminating in Civil Appeal Nos.
5335-5336 of 2002) slightly better information is available
E
though not adequate to adjudicate any issue projected in the
arguments. In para 3 of the writ petition, it is stated that Madras
Cements was granted two mining leases under G.0.Ms. No.
1238 i.e. lease dated 11.05.1971 and the lease deed dated
5.8.1971 for a period of 20 years and two corresponding lease
F
deeds dated 30.8.1971 and 9.9.1971 were executed for a
period of 20 years each. According to the petitioner, they are
required to make payments:
"In respect of both the said mining leases, the rates of
2.
Footnote
Para 6 - ... Even since the petitioner and the Government had
entered into agreements for mining purposes (about 45 years ago), the
liability of the petitioner to pay 50% of the royalty was an effective term of
the contract based on the understanding of the low ad prevalent then in
regard to subsoil rights in different classes of lands.
The Government is
G
bound by this Contract.
H
540
SUPREME COURT REPORTS [2013] 17 S.C.R.
A
royalty, dead rent and surface rent was ordered to be as
follows, both under the order of Government and the terms
of the lease deed entered into between parties, as
referred to above.
B
1
Royalty
Government land Rs. 1.25
Patt~
per tons
Rs. 0.6
er
tons
2
Dead Rent 1st Year
Nil
Nil
c
2nd Year to
Rs. 12.50
Rs. 6.25
5th year
production
per
hectare
hectare
per annum
per annum
.
6th year to
Rs. 25/-
Rs. 12.50
10th year
p.a.
p.a.
D
11th year
Rs. 37.50
Rs. 18.75
onwards
p.a.
p.a.
E
6. In Civil Appeal No. 1352 of 2005 again Madras Cement
Ltd. is the appellant The subject matter of dispute in the writ
petition No. 6562 of 1998 is an extent of 23.36 acres of land
for which a mining lease for limestone was granted in GOMs
No. 240 industries dated 20.07.1982 for a period of 20 years.
F An absolutely confusing pleading in the following terms is set
out at para 2 of the writ petition.
"2. The Petitioner entered into a mining lease under G.O.
Ms. No. 240 industries dated 20.07.1982 for a period of
20 years in respect of ryoti lands in pandalgudi village in
G
Ramanathapuram west district at Virudhunagar of the
extent of 23.36 acres for a period of 5 years, with the
Collector of Ramanatliapuram but was charged by ms.
494 to Rs. 10/- per tonne as royalty and dead rent Rs. 30/
- from 2nd year doubling every 5 years, as the third
H
DALMIA CEMENT (BHARAT) LTD. v. STATE OF
541
TAMIL NADU [J. CHELAMESWAR, J.)
respondent over these villages. The royalty fixed in the
A
agreement was in accordance with part V of Act 57 of 57
namely that in respect of Government land it was Rs. 1.25
per tonne and in respect of patta lands it was Rs. 0.63 per
tonne and for deceases the petitioner has been promptly
and regularly paying the same."
B
7. An equally callous and imprecise counter affidavit is filed
by the State of Tamil Nadu in the said writ petition. While
admitting grant of the above-mentioned mining lease, the
counter affidavit states as follows :-
" .. Consequent on the revision application filed by the
company to the Government of India and on the orders
passed by the Government of India, this State Government
c
in G.O. Ms. No. 494, Industries Department, dated 23.3.88
have sanctioned a mining lease for a period of 10 years
D
from 23.11.82 over an extent of 23.36 acres in
Keelpandalgudi Village, Aruppukottai Taluk. In the
Government order, the Government fixed the rate of royalty
as Rs. 10/- per tonne for mineral removed from the qu_arry
and fixed the dead rent as follows:
E
First Year
Second to fifth year
Sixth to tenth year
- Nil -
- Rs. 30/- per hectare per annum
- Rs. 60/- per hectare per annum
F
Eleventh Year onwards
- Rs. 90/- per hectare per annum
3. It is further submitted that the Government of India, in
their notification dated 5.5.87, have fixed the royalty at Rs.
10/- per tonne for limestone and the dead rent as follows:
G
First Year
Second to fifth year
Sixth to tenth year
- Nil -
- Rs. 30/- per hectare per annum
- Rs. 60/- per hectare per annum
H
542
A
B
c
SUPREME COURT REPORTS [2013] 17 S.C.R.
Eleventh Year onwards
- Rs. 90/- per hectare per annum
According to the notification of Government of India, the
first respondent Government have fixed the rate of royalty
and dead rent as noted above in G.O. Ms. No. 493
Industries Department dated 23.3.88.
4. Regarding the averments made in paragraph 1 of the
affidavit, it is submitted that the petitioner's contention that
he is the General Manager and the Principal Officer of the
Company and the company is entering into lease
agreements with the Government for quarrying limestone
may be correct."
8. The absolute callousness of the deponent of the affidavit
is apparent from the above extracted portion, particularly para
0 4 of the counter affidavit. The deponent neither clearly admits
nor denies existence of the mining lease. alleged by the
petitioner.
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9. Pleadings in the other writ petitions are no better.
10. All the writ petitions came to be disposed off by the
learned Judge of the Madras High Court by a common order
dated 15.3.1991. The operative portion of the order reads as
follows:-
"For the foregoing reasons, these writ petitions are partly
allowed to the extent that during the currency of the leases,
which were in force as on the date of filing of these writ
petitions, the Respondents are restrained from demanding
and collecting from the petitioners, royalty in excess of 50
percent in so far as patta lands are concerned. There will
be no order as to costs."
11. Both the writ petitioners as well as the State of Tamil
Nadu were aggrieved by the above-mentioned judgment
insofar as it went against them. Therefore, all of them carried
H intra court appeals. The details of such appeals insofar as they
DALMIA CEMENT (BHARAT) LTD. v. STATE OF
543
TAMIL NADU [J. CHELAMESWAR, J.]
are relevant for the purpose of the appeals before us are. stated
in the common counter affidavit filed by the State of Tamil Nadu
in the various special leave petitions which eventually
culminated in the present batch of appeals3•
12. It is in the background of such pleadings without even
precisely identifying the issues that are required to be
examined - obviously even on an earnest attempt, the
identification of the issues would be difficult if not impossible -
the High Court embarked upon a lengthy enquiry into the rights
of the pattadar in the sub-soil.
13. In the adjudication of matters in exercise of the
jurisdiction under Article 226 unfortunately a system of paying
minimum attention, (to employ a mild expression of
disapproval) has developed over a period of time. When a
number of matters are (allegedly similar in nature) clubbed
together for adjudication, the problem gets compounded.
14. The High Court recorded a "finding" that Dalmia
3.
Footnote
6. It ·,s submitted that hence. there were two groups of Writ
Appeals filed before the Hon'ble High Court to decide the issues with regard
to the payment of 100% royalty in respect of patta land mines.
The following were the Writ Appeals filed by the petitioners.
SI. No. Name of the appellants
No. of Writ Appeal
1.
Dalmia Cements (B) Ltd.
W.A. No. 685/91
2.
Madras Cements Ltd.,
W.A. No. 686/91
3.
India Cements Ltd.,
W.A. No. 698/91
4.
Chemicals and Plastics (I) Ltd.
W.A. No. 713/91
5.
Dalmia Industries Ltd.,
W.A. No. 717/91
6.
Associated Cement Companies
WA No. 116/92
Ltd.,
The following were the Writ Appeals filed by the Government:-
1.
Writ Appeal Nos. 475 to 478, 480, 481, 483, 487, 488, 498 and 490 of
1993.
2.
W.A. No. 479, 491 and 492 of 1993.
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SUPREME COURT REPORTS [2013] 17 S.C.R.
A Cement is a "ryotwari pattadar'' of a large extent in and around
Dalmiapuram, Tiruchirappalli District. In our opinion, such a
statement is both imprecise and inaccurate. In a document
marked by the petitioners as Annexure P-2 in Civil Appeal No.
5329 of 2002 which is an order of the Government of Madras
B now called Tamil Nadu in GOMs No. 903 dated 25th February,
1966, it is recorded that M/s. Dalmia Cement applied for grant
of mining lease over an extent of 1386.36 acres in
Chettichavadi Jaghir Village, Salem Taluk, Salem District. It is
further stated in the said document "As the entire inam estate
c of Chettichavadi Jaghir has been taken over by the Government
under the Madras lnam Estates (Abolition and Conversion into
Ryotwari) Act, 1963 (Madras Act 26of1963), thus Government
have decided to grant the mining lease applied for by the
company treating the lands as government lands"•.
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15. From the contents of the said documents, it appears
that Dalmia Cement applied for a mining lease over a huge
4.
Footnote G.O.Ms. No. 903 dated 25th February, 1966 - ORDER - Dalmia
Cement (Bharat) limited, Dalmiapuram have applied for the grant of mining
lease for magnasite over an extent of 1386.36 acres in Cheltichavadi Jaghir
Village, Salem Taluk, Salem District, for a period of 20 years. · Out -of the
total extent of 1386.36 acres, applied for an extent 493.26 acres is covered
by the lease deed dated 10.11.1945 for which modification proposals are
pending with the controller mining leases for India so as to bring it in
conformity with other provisions of the Mines and Minerals (Regulation and
Development) Act, 1957 and the Rules framed there under.
As regards
the remaining extent of 893.1 acres, the applicant Company are carrying
on. mining operations in these land by virtue of the temporary permission
granted to them in accordance with ihe procedure prescribed in this
Government's proceedings No. 5303 development dated 28.12.1950.
Consequent on the coming in to force of the Mineral Coneession Rules,
1960 containing M.O.D. provisions for the grant of Minerals Concessions
in ryotwari and other intermediary tenure lands, the applicant have also
applied for regularization of the permission already granted following the
procedures prescribed in the said Rules.
As the entire lnam estate of
Chettichavadi Jaghir has been taken over by the Government under the
Madras lnam Estates (Abolition and Conversion into Ryotwari) Act, 1963
(Madras Act 26of1963), this Government have decided to grant the mining
lease applied for by the Company treating the lands as Government
lands ....
DALMIA CEMENT (BHARAT) LTD. v. STATE OF
545
TAMIL NADU [J. CHELAMESWAR, J.]
extent of land of which a part i.e. 493.26 acres was covered
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by an existing lease deed dated 10.11.1945. In the
circumstances, the assertion of -Oalmia Cement in the writ
petition, that it was a ryotwari pattadar of an extent of 355 acres
becomes incomprehensible.
16. The expression "ryotwari pattadar" acquired a definite
legal connotation in the erstwhile province of Madras in British
India where two parallel systems of revenue administration were
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in vogue. They were known as (1) the zamindari, and (2) the
ryotwari systems. The zamindari system came to be initially
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introduced by Lord Cornwalis in the province of Bengal. In the
year 1799, the East India Company ordered that the zamindari
system designed by Cornwalis be adopted even in the Madras
Presidency. Though such a system was initially introduced in
some parts of the Madras Presidency, in 1806 Lord William
Bentick, the then Governor of Madras recorded a minute that
D
, "creation of zamindaris where none existed before was neither
calculated to improve the condition of the lower classes of
people nor politically wise with reference to the future security
of the Government". Eventually, in 1813, the Court of Directors
of East India Company prohibited introduction of zamindari
system any further5.
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17. In 1812, the Court of Directors of the East India
Company ordered that the ryotwari system should be
introduced in all the provinces where the settlement had not-ye!
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been finalised. The difference between the zamindari and~
ryotwari systems is very succinctly described by Sundararaja
Iyengar at page 153.
"The distinguishing feature of this system is that the state
is brought into direct contact with the owner of land and
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collects its revenue through its own servants without the
5.
Footnote
For detailed history of the zamindari system. see Land Tenures
in the Madras Presidency by S. Sundararaja Iyengar, Second Edition,
Chapter IV.
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SUPREME COURT REPORTS [2013] 17 S.C.R.
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intervention of an intermediate agent such as the zamindar
or farmer, and its object is the creation of peasant
proprietors. All the income derived from extended
cultivation goes to the state."
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18. Therefore, the expression ryotwari pattadar was
understood to be a person holding a patta in the erstwhile
province of Madras under the system of ryotwari settlement.
Though a person/tenant cultivating land under the zamindari
system is also called a ryot and in some cases even the
zamindar issued certain documents called pattas in favour of
C such ryots, those pattas can never be equated by pattas issued
by East India Company or its successor governments.
Because, though the Zamindar/land holder of a permanently
settled estate held not only the surface but also the subsoil of
the estate, whether the tenant held any subsoil rights in a given
D case depended upon the terms on which the Zamindar granted
the tenancy. Such a possibility is recognised under Section 16
of the Mines and Minerals (Development and Regulation) Act,
1957 which says - "Where the rights under any mining lease
granted by the proprietor of an estate or tenure before the
E commencement of the Mines and Minerals (Regulation and
Development) Amendment Act, 1972 ...... ". Similarly, in lnam
estates whether the lnamdar held the subsoil rights depended
upon the terms on which the lnam was originally granted. [See
State of Andhra Pradesh vs. Duvurru Balaram Reddy AIR 1963
F SC 64].
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19. Consequent upon the abolition of estates and lnams
in the State of Madras (present Tamil Nadu), by the
statutes called (1) The Estates (Abolition and Conversion
into Ryotwari) Act, 1948 (Act 26 of 1948) and (2) The Tamil
Nadu lnam Estates (Abolition & Conversion into Ryotwari)
Act (Tamil Nadu Act XXVI of 1963), all the estates or
inams, as the case may be, stood transferred and vested
in the State in their entirety. Both the enactments declare
DALMIA CEMENT (BHARAT) LTD. v. STATE OF
547
TAMIL NADU [J. CHELAMESWAR, J.]
that such transfer includes "mines and minerals"6 amongst
others. However, on such vesting the State is obligated
under both the enactments to recognise the right of the
cultivating tenant under the estate holder or lnamdar, as
the case may be, for the grant of "RYOTWARI PATTA"7
after an appropriate statutory enquiry.
20. Going by the recitals of G.O.Ms. No. 903, the entire
extent of land with reference to which an application was made
by Dalmia Cement is part of Chettichavadi Jaghir Village. By
virtue of Section 3(b)6 of the Madras lnam Estates (Abolition
6.
Footnote
Sec. 3(b) of the Estates (Abolition & Concession) Act, 1948 - the
entire estate (including minor imams (Post-settlement of pre-settlement) included in
the assets of the zamindari estate at the permanent settlement of that estate; all
communal lands and porambokes; other non-ryoti lands; waste lands; pasture lands;
Lanka lands; forests; mines and minerals; quarries; rivers and streams; tanks and
irrigation works; fisheries; and ferries, shall stand transferred to the Government
and vest in them, free of all encumbrances; and the Andhra Pradesh (Andhra Area)
Revenue Recovery Act, 1864, the Andhra Pradesh (Andhra Area) Irrigation Cess
Act, 1865 and all other enactments applicable to ryotwari areas shall apply to the
estate;
Also See Footnote 5 for the corresponding provision under the lnams Abolition Act,
1963
7.
Footnote Section 11. Lands in which ryot is entitled to ryotwari patta - Every
ryot in an estate shall, with effect on and from the notified da\0 •. be entitled to a
ryotwari patta in respect of -
Section 10.(1) In the case of an existing inam estate every ry~t shall, with effect
on and from the.notified date, be entitled to ryotwari patta in r~spect of -
8A. "Ryot" is defined under Section 3(15) of Estates Land Act'as a person who
holds for the purpose of agriculture, ryot land in an estate on condition of paying to
the landholder the rent which is legally! due upon it. The same definition for the
purposes of both the Estates Abolition and lnam Abolition Acts, the definition of the
expression "ryot" is the same as in the Estates Land Act, 1908 by virtue of Sections
2(1) and 2(16) of the said enactments respectively.
8.
Footnote Sec. 3 (b) - the entire inam estate (including all communal lands and
porambokers, other non-ryoti lands, waste lands, pasture lands, forests, mines and
minerals, quarries, rivers and streams, tanks and ooranies (including private tanks
and ooranies) and irrigation works, fisheries and ferries), shall stand transferred to
the Government and vest in them, free of all encumbrances, and the Tamil Nadu
Revenue Recovery Act, 1864 (Tamil Nadu Act II of 1864), the Tamil Nadu Irrigation
Cess Act, 1865 (Tamil Nadu Act VII of 1865) and, all the reenactments applicable to
ryotwari areas shall apply to the inam estate.
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SUPREME COURT REPORTS [2013] 17 S.C.R.
A and Cqnversion of Ryotwari) Act, 1963 (Act 26 of 1963) with
effect from the notified date [a defined expression under
Section 2(1 O)] the entire lnam estate including mines and
minerals, quarries etc. stood transferred to the Government and
vests in them free of all encumbrances.
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21. Therefore, the assertion by Dalmia Cement that it is a
ryotwari pattadar itself is a doubtful statement of fact. An enquiry
whether such a pattadar is entitled to the sub-soil rights was
wholly uncalled for as there is not even a single sentence in the
C entire writ petition whereby Dalmia Cement asserted that the
sub-soil rights vest in them.
22. No information regarding the number of leases held
by Dalmia Cement, the relevant dates on which such leases
were first granted or subsequently renewed (if renewed) is
D available on the record. Nor the information w.r.t. the mineral
which is covered by any one of those leases (if there is more
than one 'lease) is available on the record. Therefore, it is not
known whether the leases pertain to a 'mineral' or 'minor
mineral'.
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23. The only fact which appears from the record is that
pursuant to a mining.Jease granted way back on 10.11.1945,
Dalmia Cement has been carrying on mining operations in
some parcel of land. In 1945, there was no statute in this country
F regulating the activity of mining operations. It appears that there
were certain executive instructions (we presume so in the
absence of any specific material before us) called the Madras
Mining Manual which governed mining operations in that part
of the country known as the Madras province. Whether the said
mining lease of 1945 was in fact a lease as defined under the
G Transfer of Property Act or was a permission granted by the
State to carry on mining activity in exercise of its executive
authority under the Government of India Act, 1935 requires
examination, on an appropriate pleading. An inquiry into such
matters is not really called for in the absence of any specific
H pleading or issue.
DALMIA CEMENT (BHARAT) LTD. v. STATE OF
549
TAMIL NADU [J. CHELAMESWAR, J.]
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24. Be that as it may. Subsequent to 1945, an enactment
known as Mines and Minerals (Regulation and Development)
Act, .1948 came into existence.
25. Section 4 of the said Act declares that after the
commencement of the said Act, no mining lease shall be
granted otherwise than in accordance with the rules made
under the Act and any lease granted contrary would be void.
26. Sections 5 and 6 empower the Central Government
to make rules for regularising various aspects of the mining
activities. The details are not necessary for the purpose of the
present adjudication.
27. Section 79 authorises the Government of India to make
rules for the purpose of modifying or altering the terms and
conditions of any mining lease granted prior to the
commencement of the said Act in order to bring such existing
leases in conformity with the rules made under Sections 5 and
6.
9.
Footnote
7.