GRASIM INDUSTRIES LIMITED Vs. STATE OF M P

JUDGEMENT

(1.) In all these petitions, the challenge is, essentially, to the Circulars dated 19th December, 1992, and 11th August, 1993, respectively, in so far as it purport to provide for the mode of computation of royalty amount in respect of extracted Limestone by applying conversion factor of 1.6:1 metric tonne. As a consequence of these Circulars, each of the petitioners have been called upon to pay the royalty amount at an uniform rate on the assumption that they have removed and consumed 1.6 Metric Tonne Limestone for manufacturing of 1 Metric Tonne of Cement/Clinker.

(2.) For the nature of controversy, brought before this Court, it may not be necessary to advert to the factual position, in detail, in each of these writ petitions. Suffice it to observe that the petitioners are manufacturers of Cement (Ordinary Portland Cement and Pozzolana Portland Cement) and Clinker. The Limestone is the basic ingredient for manufacture of these products. The petitioners claim that they have subsisting mining lease. Some of the petitioners are engaged in the stated business for quite some time, in the concerned area. After expiry of the lease period and coming into force of the Mines and Minerals (Development and Regulation) Act, 1957 (herein after referred to as the "Act of 1957"), the lessees are required to execute lease deed as prescribed in Form-K, as specified under the Mineral Concession Rules, 1960 (herein after referred to as "the Rules of 1960").

(3.) The gravamen of the petitioners' case is that the two Circulars issued by the State Government dated 19th December, 1992, and 11th August, 1993, are repugnant to the legislative scheme governing the payment of royalty amount in relation to the excavated Limestone which is a major mineral. The Parliament has exclusive power to enact law providing for royalty amount therefor. By issuing the two Circulars, the State Government has encroached upon that field. Moreover, the conversion factor, propounded by the State Government, is unrealistic, unscientific and discriminatory. For, the intake of Limestone for manufacture of Cement/Clinker would largely depend upon the efficiency and performance of the Unit, on case to case basis. Resultantly, by applying the uniform notional conversion factor, the petitioners would be made liable to pay royalty amount on assumption and in respect of Limestone which has not been excavated or, in fact, wined away by them. Further, the State Government by issuance of Circulars, which, assuming are executive order or administrative instructions, had no power to propound on the matter of conversion factor for determining royalty amount payable by the lessee. According to the petitioners, the said conversion factor, as specified in the impugned Circulars, can be applied only in cases where the petitioners have not installed Weighing Machine/ Beltometer, as required in terms of Clause 13 of the mining lease deed.