# GUJARAT POTTERY WORKS v. B. P. SOOD, CONTROLLER OF MINING LEASES FOR INDIA & ORS

- **Citation:** [1967] 1 S.C.R. 695
- **Court:** Supreme Court of India
- **Decided:** 1966-10-03
- **Case number:** Civil Appeal No. 428 of 1964
- **Bench:** K. Subba Rao, M. Hidayatullah, S. M. Sjkri, R. S. Bachawat, Raghubar Dayal
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/gujarat-pottery-works-v-b-p-sood-controller-of-mining-leases-for-india-ors-3904
- **Pages:** 12

## Headnote

Ji.fines and
Minerals
(Regulation
and
Development) Act 1951Agreement to lease with possession in 1939-Lease deed in 1951-Modification by Controller under the Rules-Period of lease
if from commencement of Act or earlier-Validity of modification.
Mining Leases (Modification of Terms) Rules, 1956 r. 2(c)-"Existing Mining lease"J meaning of-Continuance and validity of Rules.
Constitution of India, Art. 31-A(I) (e)-"Wlnning" meaning of.
Along with an agreement to execute a perpetual lease of mineral right.
possession was delivered to the lessee in 1939. The lease was execut.ed
in 1951, in execution of a decree for specific performance. The leasee
transferred bis rights to the appellant in 1954.
In 1960 the respondent
Controller modified the terms of the lease under Mining Lease (Modification of Terms) Rules, 1956, which continued in force by s. 29 of the
Mines and Minerals (Regulation and Development)
Act, 1957.
The
modifications were that the period of lease was reduced to 25 years from
1939 and the renewal was to be regulated in accordance with the law and
rules in force.
The appellant's revision was dismissed by the Central
Government.
In appeal to this Court, the appellant challenged the order
on the grounds that ( i) the mining lease in favour of the appellant was
dated 1951, therefore, was not an "existing mining lease" as defined in
r. 2(c) of the Rules; (ii) the lease was not for the purpo.e of merely
"winriing" the mineral but was also for extracting the mineral and taldng
it away; therefore, the protection of Art. 31A(i)(e)
was not available
to save the reduction in the period of the lease without paying coml'ensation; (iii) the rules were made before enactment of the Consbtution
Seventh Amendment Act, and were therefore void as
till then Central
Legislature could enact with respect to acquiring of properly for Union
purpose only and .not for State purpo.e;
(iv) the rules were ultra vires
the 1948 Act and. therefore could not continue after the enactment of the
1957 Act as only valid rules could continue under s. 29 of the 1957 Act;
and (v) the Controller was not justified in limiting the period of the lease
to 25 years from 1939.
HELD: (Per Subba Rao, C.J., Sil<ri and Dayal,
JJ.) : The appeal
must be allowed to the effect that the period of lease shall be 20 years
from June 1, 1958, when the 1957 Act came into force, and its renewal
would be regulated in accordance with the law and rules in force. The
appeal in respect of other modifications must be dismissed.
[705 E]
(i) Th~ granting of a lease is different from the formal execution of
the lease deed. The execution of the formal deed is only compliance
with the legal requirements to make the grant legally enforceable. Rule
27 of the Mineral Concession Rules,. 1949 show that· it is really the sonctioning of the lease which amounts to the granting of the lease. Further,
the agreement to lease was acted upon by the parties and. gives all the
terms of the lease. [698 C, DJ
!Vl16Sup-CI/66-16
696
SUPllBMB COUllT llBPORTS
(1967] 1 S.C.R·
(ii) The expression "winning" in Art. 31A(l)(e) should be construed to mean "getting or extracting minerals from the mines and other incidental purposes."
(701 DJ
The various definitions in the Act or the rules are for a limited purpose and the word 'winning' or 'win' does not always have
the same
content, and, therefore, they cannot be any guide for construing the word
'winning' in the constitutional provision of Art, 31A(l)(e). Therefore
the rules for the modification
of any rights accruing under this lease
cannot be deemed to be void on the ground that they take away the rights
conferred by Arts. 14, 19 or 31 of the Constitution. {702 C-E]
(iii) The 1956 rules were made in connection with the regulation of
mines and for the deve)opment of minerals and the Central Legislature
was competent to provide for the making of such rules by tho 1948 Act.
The rules do not come within the field of the acquisition and requisitioning of property.
(702 H

## Text

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GUJARAT POTTERY WORKS
v.
B. P. SOOD, CONTROLLER OF MINING LEASES FOR
INDIA & ORS.
October 3, 1966
[K. SUBBA RAO, C. J., M. HIDAYATULLAH, S. M. SJKRI,
R. S. BACHAWAT AND RAGHUBAR DAYAL, JJ.)
Ji.fines and
Minerals
(Regulation
and
Development) Act 1951Agreement to lease with possession in 1939-Lease deed in 1951-Modification by Controller under the Rules-Period of lease
if from commencement of Act or earlier-Validity of modification.
Mining Leases (Modification of Terms) Rules, 1956 r. 2(c)-"Existing Mining lease"J meaning of-Continuance and validity of Rules.
Constitution of India, Art. 31-A(I) (e)-"Wlnning" meaning of.
Along with an agreement to execute a perpetual lease of mineral right.
possession was delivered to the lessee in 1939. The lease was execut.ed
in 1951, in execution of a decree for specific performance. The leasee
transferred bis rights to the appellant in 1954.
In 1960 the respondent
Controller modified the terms of the lease under Mining Lease (Modification of Terms) Rules, 1956, which continued in force by s. 29 of the
Mines and Minerals (Regulation and Development)
Act, 1957.
The
modifications were that the period of lease was reduced to 25 years from
1939 and the renewal was to be regulated in accordance with the law and
rules in force.
The appellant's revision was dismissed by the Central
Government.
In appeal to this Court, the appellant challenged the order
on the grounds that ( i) the mining lease in favour of the appellant was
dated 1951, therefore, was not an "existing mining lease" as defined in
r. 2(c) of the Rules; (ii) the lease was not for the purpo.e of merely
"winriing" the mineral but was also for extracting the mineral and taldng
it away; therefore, the protection of Art. 31A(i)(e)
was not available
to save the reduction in the period of the lease without paying coml'ensation; (iii) the rules were made before enactment of the Consbtution
Seventh Amendment Act, and were therefore void as
till then Central
Legislature could enact with respect to acquiring of properly for Union
purpose only and .not for State purpo.e;
(iv) the rules were ultra vires
the 1948 Act and. therefore could not continue after the enactment of the
1957 Act as only valid rules could continue under s. 29 of the 1957 Act;
and (v) the Controller was not justified in limiting the period of the lease
to 25 years from 1939.
HELD: (Per Subba Rao, C.J., Sil<ri and Dayal,
JJ.) : The appeal
must be allowed to the effect that the period of lease shall be 20 years
from June 1, 1958, when the 1957 Act came into force, and its renewal
would be regulated in accordance with the law and rules in force. The
appeal in respect of other modifications must be dismissed.
[705 E]
(i) Th~ granting of a lease is different from the formal execution of
the lease deed. The execution of the formal deed is only compliance
with the legal requirements to make the grant legally enforceable. Rule
27 of the Mineral Concession Rules,. 1949 show that· it is really the sonctioning of the lease which amounts to the granting of the lease. Further,
the agreement to lease was acted upon by the parties and. gives all the
terms of the lease. [698 C, DJ
!Vl16Sup-CI/66-16
696
SUPllBMB COUllT llBPORTS
(1967] 1 S.C.R·
(ii) The expression "winning" in Art. 31A(l)(e) should be construed to mean "getting or extracting minerals from the mines and other incidental purposes."
(701 DJ
The various definitions in the Act or the rules are for a limited purpose and the word 'winning' or 'win' does not always have
the same
content, and, therefore, they cannot be any guide for construing the word
'winning' in the constitutional provision of Art, 31A(l)(e). Therefore
the rules for the modification
of any rights accruing under this lease
cannot be deemed to be void on the ground that they take away the rights
conferred by Arts. 14, 19 or 31 of the Constitution. {702 C-E]
(iii) The 1956 rules were made in connection with the regulation of
mines and for the deve)opment of minerals and the Central Legislature
was competent to provide for the making of such rules by tho 1948 Act.
The rules do not come within the field of the acquisition and requisitioning of property.
(702 HJ
(iv) Even if the rules were not consistent with the provisions of tho
1948 Act and were therefore void, they
could be continued after the
enforcement c.f the 1957 Act.
The effect of s. 29 of the 1957 Act is that the rules which were made
or purported to have been made under the 1948 Act in respect of matters
for which rules could be made under the 1957 Act would be deemed to
have been made under the 1957 Act as if that Act had been in force on
tho date on which such rules were made and would continue in force.
[703 E, GJ
( v) The Controller was competent to modify the terms of the lease
in favour of the appellant in order to bring it into conformity with the
provisions of the 1957 Act 1llld the rules under s. 13 thereof.
[704 F]
Per Hidayatullah and Bachawat, JJ. The appeal must be dismissed.
The lease in 1939 was the only subsisting lease. In order to bring
the leas• in conformity with the Act and the Rules, its period could be
cut down to 20 years from 1939. Actually the Controller cut down the
period to 25 years from 1939. The
appellants had no just grievance
against this order.
(705 H; 706 A]
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 428 of 1964.
Appeal by special leave from the order dated 30th January
1962 of the Government of India, Ministry of Steel, Mines and Fuel
(Department of Mines & Fuel). New Delhi-I in case No. M-II-29
(26)/60.
G. L. Sanghi, J. B. Dadachanji, 0. C. Mathur and Ravinder
Narain, for the appellant.
Niren De, Addi. Solicitor-General,
R. Ganapathy Iyer and
R. H, Debar, for respondent Nos. I and 2.
R.H. Dhebar, for respondent No. 3.
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E. C. Agarwala and M.
S. Gupta, for respondents Nos.
4-20, 22---25 and 28 to 31.
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The Judgment of SUBBA RAo, c. 1., Soou and RAGHUB,l.R
DAYAL, JJ. was delivered by DAYAL, J. The dissenting Opinion
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GUJARAT POTTERY WORKS v. SOOD (Dayal, /.)
697
of
H!DAYATULLAH
and
BACHAWAT,
JJ.
was delivered by
BACHAWAT, J.
Raghubar Dayal, J. This appeal, by special leave, is against
the order dated January 30, 1962, of the Central Government
under r. 7 of the Mining Leases (Modification of Terms) Rules,
1956, hereinafter called the.1956 rules, on revision against the order
dated September 29, 1960, of the Controller of Mining Leases,
under r. 6 of the said rules.
It may be mentioned here that respondents Nos. 26 and 27,
who were formal parties, died during the pendency of the appeal
and an application to bring their legal representatives on record
has been rejected.
The facts leading to this appeal are as follows. Jairam Jagmal
originally held a perpetual lease from Chimanlal Chandulal Jani
and others, inamdars and owners of the mineral rights for
excavating white clay from the area leased and for taking it away.
The lessors entered into an agreement for executing the perpetual
lease, on December 2, 1939. They did not, however, execute the
lease, though possession over the leasehold land had been
delivered to the said Jairam Jagmal after the execution of the
agreement. Ultimately, the lease, was executed on November 3,
1951, in execution of a decree of a Civil Court for the· specific
performance of the agreement to lease.
The original lessee, Jairam Jagmal, transferred his right, title
and interest in the lease to the appellant in 1954. On September
29, 1960, the Controller of Mines, modified the terms of the lease
after following the procedure laid down for modifying the lease
under the 1956 rules which continued to be in force in view of
s. 29 of the Mines and Minerals (Regulation and Development)
Act, 1957, hereinafter called the 1957 Act. The modifications were
that the period of the lease was reduc.:d to 25 years from December 2, 1939 and further renewal was to be regulated in accordance
with the law and rules in force. Dead rent was payable at the rate
of Rs. 10 per acre per annum. The lease was made further subject
to the rules made or deemed to have been made under ss. 13 and
18 of the 1957 Act and royalty was to be payable in accordance
with s. 9 of that Act.
The appellant preferred a revision before the Central Government under r. 7. That was rejected.
The correctness of the orders challenged in appeal is questioned on various grounds. The first is that the mining lease in
favour of the appellant is dated November 3, 1951 and therefore
is not an 'existing mining lease' as defined in r. 2(c) of the 1956
rules. The lease was executed on November 3. 1951 in execution
698
SUPREME COURT REPORTS
[1967] l S.C.R.
of the decree for specific performance. An agreement to lease
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was however executed on December 2, 1939. The question is
whether the lease can be said to be granted in 1939 or in 1951.
If it was granted in 1951, the contention for the appellant is sound,
but if it is held to be granted in 1939, the con<ention fails and the
lease would bz Ii.able to modification under the 1956 rules as r. 2(c)
defines an 'existing mining lease' to be a lease which has been
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granted before October 25, 1949.
The granting of a lease is different from the formal execution of
the lease deed. The Mineral Concession Rules, l 949, made under
s. 5 of the 1948 Act and hereinafter referred to as the l 949 rules,
deal with the procedure for the grant of mining leases in respect of
land in which the minerals belong to Government, under Chapter
C
IV.
Rule 27 deals with applications for mining leases.
Rule
28A provides that when a mining lease is granted the formal lease
shall be executed within six months of the order sanctioning the
lease and if no such lease is executed within the aforesaid period,
the order sanctioning the lease shall be deemed to have been revoked.
It is really the sanctioning of the lease which amounts to the granting
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of the lease.
Execution of the formal lease is only compliance
with the legal requirements to make the grant legally enforceable.
Further, the agreement of lease dated December 2, l 939 was
acted upon by the parties and gives all the terms of the lease. It
states:
"We have given possession of the land bounded as
follows, we execute this (agreement)
containing the
following terms."
After noting the boundaries, it states:
"The land bearing the above boundaries admeasured
about 2 bighas and is 'Kharaba'. Out of this land we hereby
give 'lease' to excavate white clay (Khadi) and to take the
same away on the following terms."
This is a clear statement about the giving of the lease of the land
for excavating white clay. Term No. 2 deals with royalty to be
paid. The various terms thereafter use expressions like 'leasehold
land', 'during the period of this lease', 'after the period of the lease
is over', 'any portion of the land leased' and about 'terminating
the lease' etc. Term No. 17 is:
"Pursuant to this agreement, we will execute the proper
lease and you will have to incur all the expenses in respect
thereof."
Term No. 19 is also significant and is:
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GUJARAT POTTERY WORKS v. SOOD (Dayal, /.)
699
"In case from this date continuously for three years
you do not excavate and thus you do not pay royalty
to us then in that event this Agreement is at an end and
this ts clearly understood. However, if you do. excavate
for three years and afterwards you do not agatn do the
work in the fourth year, then it is clearly understood t~t
the Agreement will continue permanently on your paymg
to us Rs. 200 (rupees two hundred). However, you
excavate in the fourth year, then we are entitled to demand
royalty, not the said sum of Rs. 200 but only royalty."
Thus the deed of agreement really granted the lease to Jagmal,
It was the mere execution of the proper lease which was put off
and the proper formal lease was to be executed later.
The actual deed of lease executed in 1951 was executed in
pursuance of the aforesaid agreement of lease. This lease deed
also says:
"Besides, according to the terms of the said Agreement,
within the period of three years from the date of the Agreement, you continue· excavating clay from the said land
and if you abide by the other terms of the same Agreement,
then in that event, you were given right to get from us executed permanent lease."
The terms incorporated in this lease are practically the same as
were mentioned in the agreement.
We are therefore of opinion that the lease in favour of Jagmal
was really granted in December 1939 and that the execution of the
lease in November 1951 was only to give a formal- shape to the
lease granted much earlier. The lease in suit therefore is a lease
which comes within the expression 'existing mining lease' within
r. 2(c) of the 1956 rules.
It is next contended for the appellant that the rule contravenes
art. 31 of the Constitution and that art. 31A(i)(e) does not cover
the present case.
Sub-s. (2) of s. 7 of the Mines and Minerals (Regulation
and Development) Act, 1948· (Central Act 53 of 1948), referred
to shortly as the 1948 Act, provided that the rules made under
sub-s. (I) for the purpose of modifying or altering the terms and
conditions of the mining lease will provide for. the payment of
compensation by the party who would be benefited by the proposed
modification or alteration to the party whose rights under the
existing lease would thereby be adversely affected and will also
provide for the principles on which, the manner in which and the
authority by which the said compensation shall be determined.
Rules 9 and 10 of the 1956 rules deal with these matters.
700
SUPUMB OO~T UPOllTI
[1967] I S.C.Jl.
Rule 9 provides for the payment of compensation to the lessee
where the area of an existing mining lease is reduced the amount
of compensation being determined in the manner and i'n accordance
with .the principles set o~t .in r. 10. Clause (ii) of sub.-r. (2) of r.10
proV1des that m deterrmnmg the compensation payable under the
rule, the Controller and the Tribunal will have regard to the fact
that no compensation shall be payable in respect of the reduction
of the period of the lease or any modification in the amount of
royalty. It is therefore that no compensation had been allowed
or had been paid to the appellant for the modification in his lease
with respect to the reduction of the period of the lease from perpetuity to 2~ years and the royalty being payable in accordance with
the provisions of tlte Act.
Article 31A(I )(e) provides:
"Notwithstanding anything contained in article 13, no
law providing for the extinguishment or modification
of any rights accruing by virtue of any agreement, lease
or licence for the purpose of searching for, or winning, any
mineral or mineral oil, or the premature termination or cancellation of any such agreement, lease or licence, shall be
deemed to be void on the ground that it is inconsistent with,
or takes away or abridges any of the rights conferred by
article 14, article 19 or article 31."
It is said that the lease in favour of the appellant is not for the purpose of merely 'winning' the mineral but is for other purposes as
well, i.e., for the purpose of 'extracting the mineral and taking
it away' and that therefore this provision does not cover the case
of modification made in this lease. It is urged that 'winning a
mineral' means only 'getting at the mineral in order to make the
mine workable', and does not include the right to work the mine
thereafter and to carry the mineral away. Reliance for such an
interpretation is placed on some English cases. It was held in Lewis
v. Fothergill(') that the expression 'win coal' in the lease in that
case meant 'to put the mine in a state in which continuous working
can go forward in the ordinary way'. This meaning was adopted
in interpreting the expression 'win' in Lord Rokeby v. E//iot.(2)
According to the Shorter Oxford Dictionary, 'to win' has the
meanings: (i) to get or extract coal or other mineral from the mine,
pit or quarry; (ii) to sink shaft or make excavation so as to reach
a seam of coal or vein of ore and prepare it for working.
The expression 'to win' interpreted in the English cases was
in respect of the context of the expression used in certain leases.
The expr~.ssion 'winning' in a constitutional provision like art.
31A(l)(e) should be given a wider meaning as the Constitution-
(!) LR. S Cb. App. 103, JJJ.
(2) L.R. (1878) 9 Ch. D. 68S, 689.
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GUJARAT POTTERY WORKS V. SOOD (Dayal, J.)
• 701
makers would be using it to cover cases which deal with the obtaining of minerals and in that case that wider meaning would be 'to
get or extract the mineral from the mine'. The object of the constitutional provision was to make the law providing for the extinguishment or modification of a lease etc., in connection with mineral
rights immune from the provisions of arts. 14, 19 and 31. There
could be no logical reason for not to cover the leases which allowed
the working of the mines after the minerals in the mines had been
won, in the narrow sense, i.e., the making of such arrangements
which would allow the working of the mine. Modifying the provisions of any lease merely for making arrangements for the working
of the mine could not be effective in making the law free from the
requirements of the various minerals in the public interest. Modification of the leases governing the working of the mines could be
necessary for the public interest. Section 2 of both the 1948 and
the 1957 Acts declared that it was expedient in the public interest
that the Union should take under its control the regulation of mines
and the development of minerals to the extent thereinafter provided.
We are therefore of opinion that the expression 'winning' in
art. 31A(l)(e) be construed to mean 'getting or extracting minerals
from the mines and other incidental purposes'.
Our attention has been drawn to the use of the word 'winning'
along with other expressions necessary for the proper working
of a mine in the Acts and Rules, and it is urged that the word 'winning' has been there used in a narrow sense. In the context of the
Acts and Rules, the Legislature or the rule-making authority had
to use all possible expressions for the purposes of the mining leases
so that all conceivable types of mining leases could be covered by
the provisions of the enactment and the rules. 'Mining lease',
according to s. 3, cl. ( d) of the 1948 Act, means a lease granted for
the purpose of searching for, winning, working, getting, making
merchantable, carrying away or disposing of minerals or for the
purposes connected there1Yith and includes an exploring or a prospecting license. The definition is very comprehensive and is with
the object indicated earlier.
It is significant to notice that the expression 'mine', according
to cl. (b) of s. 3, means any excavation for the purpose of searching
for or obtaining minerals. Here the word 'obtain' is used to cover
the various processes necessary to get the mineral and would include the processes covered by the expressions 'winning', 'working',
'getting' etc.
'Mining lease', according to r. 3(i) of the 1949 rules, means a
lease to mine, quarry, bore, dig and search for, win, work and
carry away any
mineral
specified therein.
This definition
of the 'mining lease' does not cover all the purposes mentioned in
s. 3(d) of the 1948 Act. The definition deals with such matters
702
SUPRBMB COUllT REPORTS
[1967] l S.C.R.
which are covered by the rules, as a 'mining lease' is defined for the
purposes of the rules.
Rule 41(1)(ii) of the 1949 rules reads:
"If any mineral not specified in the lease is discovered
in the leased area he shall not win and dispose of such
mineral without obtaining a lease therefor .... "
It is clear that the word 'win' here includes the getting of the mineral
as it is only thereafter that the lessee can dispose of it.
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Section 3(c) of the 1957 Act defines 'mining lease' to mean
a lease granted for the purpose of undertaking mining operations
and includes a sub-lease granted for mining operations.
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It follows that the various definitions in the Act or in the rules
referred to above are for a limited purpose and that the word 'winning' or 'win' does not always have the same content, and that therefore they cannot be any guide for construing the word 'winning'
in the constitutional provision of art. 31A(l)(e).
We therefore hold that the lease in suit is a lease for the purpose
of winning coal and comes within art. 31A(l)(e) of the Constitution and that therefore the rules for the modification of any rights
accruing under this lease cannot be deemed to be void on the ground
that they take away the rights conferred by arts. I 4, 19 or 31 of
the Constitution.
It has been contended that the 1956 rules which came into
effect on September 15,
I 956 were made before the enactment
of the Constitution VII Amendment Act, I 956, and were therefore
void as till then the Central Legislature could enact with respect to
acquiring of property for Union purposes only and not for State
purposes. The VII Amendment came into force on November,
1, I 956. This Amendment deleted entries Nos. 33 of List I and 36
of List II which dealt with acquisition and requisition of property
and the Central Legislature could legislate in this regard for the
pu1pose of the Union only. The Amendment Act substituted
an entry for item 42 of List III. The substituted entry was 'acquisition and requisitioning of property'.
Besides these entries, entry No. 54 of List I was 'Regulation of
mines and mineral development to the extent to which such regulation and development under the control of the Union is declared
by Parliament by law to be expedient in the public interest'. The
1956 rules were made in connection with the regulation of mines
and for the development of minerals and the Central Legislature
was competent to provide for the making of such rules by the
1948 Act. The rules do not come within the field of acquisition
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GUJARAT POTTERY WORKS V. SOOD (Dayal,/.)
703'
and requisitioning of property, We do not consider this contention for the appellant to be sound.
it has been contended that the Legislature was not competent
to make a law providing for the property of an individu.al to be
given to another and that therefore the 1956 rules were void. The
objection really is that the modifications made to the appellant's
lease benefit the lessors, the owners of the minerals leased and a
law providing for benefitting the lessors who were private persons
at the expense of the lessees, the appellant, contravenes art. 14
of the Constitution inasmuch as the rules deny equal proteetion of
laws and equality before the law by treating similarly situated persons
viz., the lessors and the lessees, differently. The contention is
not open to the appellant in view of art. 31A(l)(e). Further,.
the modifications have not been made to benefit the owners. They
have been made in the public interest. It is only incidental that
the lessors may get some advantage. It may be mentioned here
that the lessors too were not agreeable to the proposed modifications.
and had raised objections before the Controller.
It has also been contehded that the 1956 rules were ultra vires
the 1948 Act and therefore could not continue after the enactment
of the 1957 Act as only valid rules could continue under s. 29 of
the 1957 Act. Even if the rules were not consistent with the provisions of the 1948 Act and were therefore void, we do not agree
that they could not have continued after the enforcement of the
1957 Act. Section 29 reads:
"All rules made or purporting to have been made under
the Mines and Minerals (Regulation and Development)
Act, 1948, shall, in so far as they relate to matters for
which provision is made in this Act and are not inconsistent
therewith, be deemed to have been made under this Act
as if this Act had been in force on the date on which such
rules were made and shall continue in force unless and until
they are superseded by any rules made under this Act."
The effect of this section is that the rules which were made or purported to have been made under the 1948 Act in respect of matters
for which rules could be made under the 1957 Act would be deemed
to have been made under the 1957 Act as if that Act had been in
force on the date on which such rules were made and would continue
in force. The Act of 1957 in a way is deemed to have been in force
when the modification rules were framed in 1956. The 1956 rules
would be deemed to be framed under the 1957 Act and therefore
their valillity and continuity depends on the provisions of the 1957
Act. and not of the 1948 Act.
704
SUPREME COUllT llBPOllTS
(1967] l S.C.ll.
In this connection we may refer to the case reported as Abdul
Majid v. P.R. Nayak(1). In that case s. 58 of Act XXXI of 1950
repealed Ordinance No. XXVII of 1949 and provided as follows:
"The repeal by this Act of the Administration of Evacuee Property Ordinance 1949 (XXVII of 1949) shall not
affect the previous operation thereof, and subject thereto,
anything done or any action taken in the exercise of any
power conferred by or under that Ordinance shall be
deemed to have been done or taken in the exercise of the powers conferred by or under 1his Act, as if this Act were in
force on the day on which such thing was done or action
was !aken."
Section 58 was construed thus:
"The language used in s. 58 is both striking and significant. lt does not merely provide that the orders passed
under the Ordinance shall be deemed to be orders passed
under the Act, hut it provides that the orders passed under
the Ordinance shall he deemed to be orders under this Act
as if this Act were in force on the day on which certain things
were done or action was taken. Therefore the object of this
section is, as it were, to antedate this Act so as to bring it
into force on the day on which a particular order was passed
which is being challenged. In other words, the validity
of an order is to be judged not with reference to the
Ordinance under which it was passed, but with reference to
the Act subsequently passed by Parliament."
The\rules have not been challenged to be ultra vires the 1957 Act
in the instant case.
It follows that the Controller was competent to modify the
terms of the lease in favour of the appellant in order to bring it
into conformity with the provisions of the 1957 Act and the rules
made under s. 13 thereof.
The only other question to be dealt with now is whether the
Controller was justified in limiting the period of the lease to 25
years from December 2, 1939. Sub-s. (I) of s. 8 of the 1957 Act
reads:
"The period for which a mining lease-may be granted
shall not-
(a) in the case of coal, iron ore or bauxite exceed thirty
years; and
A
B
c
..
D
E
F
G
(b) in the case of any other mineral, exceed twenty
H
years."
(1 .A.t.R. 1951 Bom. 44a.
A
B
c
D
E
F
G
H
GU.JARAT POTTERY WORKS v. SOOD (Bachawizt, I.)
705
The lease in suit is for excavating white clay and therefore a mining
lease for this purpose is not to exceed 20 years. The question
raised is that this period of 20 years for the purpose of the lease
to be modified should run from the date the 1957 Act came into
force and not from the original date of the lease.
We agree with this contention. The period of the lease is to
be brought in conformity with the provisions of the Act for future
and the period for which a lease can be granted is not to exceed
20 years. The Act is concerned for the regulation of mines subsequent to its enactment and has nothing to take into consideration
with what has taken place earlier. As a new lease is granted after
the enforcement of the Act and can run up to 20 years, there is no
reason why the term of an existing lease for mining be not so modified
as to make it run up to 20 years after the enforcement of the Act.
We therefore accept the contention for the appellant and h<;>ld that
the Controller was in error in limiting the period of the lease to 25
years from December 7, 1939. The period of the lease could be
limited to a period of 20 years commencing from June l, 1958,
the date notified as the date on which the 1957 Act came into
force.
We therefore allow the appeal and modify the order of the
Central Government dated January 30, 1962 and the order of the
Controller dated September 29, 1960 to the effect that the period
of the lease shall be 20 years counting from June I, 1958, when the
Act of 1957 came into force, and that its renewal would be regulated
in accordance with the law and rules in force when it falls due.
The appeal with respect to the other modifications of the lease
will stand dismissed.
In the circumstances of the case, we direct the parties to bear
their own costs.
Bacbawat, J, We cannot accept the contention that the agreement dated December 2, 1939 is not a lease. The document, though
in form an agreement to lease, finally ascertained the terms of the
lease, gave the lessee a right to exclusive possession immediately
and operated as a present demise. Counsel submitted that in view
of the instrument of lease dated November 3, I 951, there was an
implied surrender of the lease, if any, created by the document
dated March 2, 1939. There is no force in this contention. The
lease dated November 3, 1951 was not granted in accordance with
the Rules made under the Mines and Minerals (Regulation and
Development) Act, 1948 and by s. 4(2) of that Act was v<lid and of
no effect. The lease dated Pecember 2, 1939 is the only subsisting
lease and could properly be modified by the Controller.
The lease was for excavating white clay. In order to bring
it in eonformity with the Act and the Rules, its period could be cut
706
SUPREME COURT REPORTS
[1967] l S.C.R.
down to 20 years from D~cembcr 2, 1939.
Actually, the Controller
cut down the period to 25 years from December 2, 1939. The
appellant can have no ju'! grievance against this order.
For
the reasons given in our judgment in C.A. Nos. 172-174 of 1963,
the other contentions of the appellant arc rejected.
The appeal is dismissed with costs.
Y. P.
Appeal partly allowed.
A
B