AMRITLAL NATHUBHAI SHAH KESHAVLAL NATHUBHAI SHAH Vs. UNION GOVERNMENT OF INDIA:UNION GOVERNMENT OF INDIA

JUDGEMENT

(1.) The appeals by certificate are directed against a common judgment of the High Court of Gujarat dated May 4, 1972. We have heard them together and will dispose them of by a common judgment. The facts giving rise to the appeals are similar in essential respects and may be shortly stated.

(2.) There are large deposits of bauxite in Gujarat State. The State Government issued a notification on December 31, 1963, intimating that the lands in all the talukas of Kutch district and in Kalyanpur taluka of Jamnagar district had been reserved for exploitation of bauxite in the public sector. A similar notification was issued on February 26, 1964. In respect of all areas of Jamnagar and Junagarh districts. Even so, the appellants made applications to the State Government for grant of mining lease for bauxite in the reserved areas. There were no other applications to that effect, but the State Government rejected the applications of the appellants on the ground that, as had been notified, it had reserved the areas for the public sector. The appellants felt aggrieved and applied to the Central Government's orders. The revision applications were dismissed after obtaining the comments of the State Government and the orders of rejection were upheld. In doing so, the Central Government referred to the fact that the minerals "vested" in the State Government which was "owner of minerals" and that the State Government had the "inherent right" to reserve any particular area for exploitation in the public sector. It also pointed out that once a notification had been issued by the State Government for the reservation of any particular area, no party could, as of right, claim any mineral concession in the reserved area. While making its orders of rejection, the Central Government explained the circumstances in which mineral leases were granted to Carborundum universal Limited and the Gujarat Mineral Development Corporation. The appellants felt aggrieved, and challenged the orders of the State Government and the Central Government by writ petitions to the Gujarat High Court. It was urged that the State Government had no authority to reserve any area of authority to reserve any area of land for exploitation of bauxite in the public sector, and that the refusal to grant mining leases to the appellants was based on a ground which was altogether extraneous and irrelevant and could not be supported with reference to the Mines and Minerals (Regulation and) Act, 1957, hereinafter referred to as the Act, and the rules made thereunder. It appears that although the writ petitions were based on that short ground, the controversy in the High Court ranged over a wider field including that relating to the scope of the executive power of the State Government in respect of the impugned reservations. The High Court therefore examined the controversy with reference to Articles 162 and 298 of the Constitution, and the relevant entries in the Lists in the Seventh Schedule, but we are not concerned with that aspect of the matter as the arguments before us have confirmed to the provisions of the Act and to the Mineral Concession Rules, 1960, hereinafter referred to as the Rules, made thereunder.

(3.) It may be mentioned that in pursuance of its exclusive power to make laws with respect to the matters enumerated in entry 54 of List I in the Seventh Schedule, Parliament specifically declared in Section 2 of the Act 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 provided in the Act. The State Legislature's power under entry 23 of List II was thus taken away and it is not disputed before us that regulation of mines and mineral development had therefore to be in accordance with the Act and the Rules. The mines and the minerals in question (bauxite) were however in the territory of the State of Gujarat and, as was stated in the orders which were passed by the Central Government on the revision applications of the appellants, the State Government is the "owner of minerals" within its territory, and the minerals "vest" in it. There is nothing in the Act or the Rules to detract from this basic fact. That was why the Central Government stated further in its revisional orders that the State Government had the "inherent right to reserve any particular area for exploitation in the public sector." It is therefore quite clear that, in the absence of any law or contract etc. to the contrary, bauxite, as a mineral, and the mines thereof, vest in the State of Gujarat and no person has any right to exploit it otherwise than in accordance with the provisions of the Act and the Rules. Section 10 of the Act and Chapters II, III and IV of the Rules, deal with the grant of prospecting licences and mining leases in the land in which the minerals vest in the Government of a State. That was why the appellants made their applications to the State Government.