judgement:
Civil Appeal No. 318 of 1970.
From the Judgment and Decree dated 31 7 1969 of the Orissa High Court in Appeal from Original Decree No. 78/58.
P.K. Chatterjee and Rathin Dass for the Appellant.
G.S. Chatterjee for the Respondent.
The Judgment of the Court was delivered by FAZAL ALI, J.
This appeal by certificate granted under article 133 of the Constitution is directed against a Division Bench judgment dated July 31, 1969 of the Orissa High Court and arises in the following circumstances.
The appellants plaintiffs had instituted a suit under section 62(2) of the Orissa Religious Endowment Act, 1939 (Act No. 4 of 1939) (hereinafter referred to as the 'Act ') (this Act applies only to public endowments) to set aside the order dated 4 8 1950 of the respondent defendant by which the temple of the appellants, whose deity was Radhakanta Deb, was declared to be a public temple and a trust and the endowment was held to be of a public nature and, therefore, was to be governed by the Act.
The Subordinate Judge decreed the appellants plaintiffs suit holding that the deity installed in the temple was a family deity of the Pani family and the endowment being of a private nature, the Act had no application and the Order passed by the respondent regarding the management was set aside.
The Respondent (Commissioner of Hindu Religious Endowments, Orissa) filed an appeal in the High Court against the decision of the 828 Subordinate Judge which was heard by the Division Bench referred to above.
The High Court reversed the decision of the Subordinate Judge and held that the temple and the deity installed therein being a public endowment fell within the four corners of the Act and the respondent was fully entitled to pass orders for its management.
Hence, this appeal by certificate before us.
The sole question that falls for determination in this appeal is as to whether or not the appellant temple was a public endowment as alleged by the respondent or a family deity as alleged by the appellant.
The learned counsel for the appellants, P.K. Chatterjee, has submitted that the approach made by the High Court was wholly incorrect and it has misconstrued the evidence and documents produced in the case to show that the endowment was a private one and the deity installed in the temple was purely a family deity having nothing to do with the public.
The learned counsel for the respondent.
however, supported the judgment of the High Court that the endowment was of a public nature The concept of a private endowment or a private trust is unknown to English law where all trusts are public trusts of a purely charitable and religious nature.
Thus, under the English law what is a public trust is only a form of Charitable Trust.
Dr. Mukherjee in his Tagore Law Lectures on the Hindu Law of Religious and Charitable Trusts (1952 Edition) has pointed out that in English law the Crown is the constitutional protector of all properties subject to charitable trusts as these trusts are essentially matters of public concern.
The learned author has further pointed out that one fundamental distinction between English and Indian law lies in the fact that there can be religious trust of a private character under the Hindu law which is not possible in English law.
It is well settled that under the Hindu law, however, it is not only permissible but also very common to have private endowments which though are meant for charitable purposes yet the dominant intention of the founder is to instal a family deity in the temple and worship the same in order to effectuate the spiritual benefit to the family of the founders and his descendants and to perpetuate the memory of the founder.
In such cases, the property does not vest in God but in the beneficiaries who have installed the deity.
In other words, the beneficiaries in a public trust are the general public or a section of the same and not a determinate body of individuals as a result of which the remedies for enforcement of charitable trust are somewhat different from those which can be availed of by beneficiaries in a private trust.
The members of the public may not be debarred 829 from entering the temple and worshipping the deity but their entry into the temple is not as of right.
This is one of the cardinal tests of a private endowment.
Similarly, even the Mahomedan law recognises the existence of a private trust which is also of a charitable nature and which is generally called Waqf allal Aulad, where the ultimate benefit is reserved to God but the property vests in the beneficiaries and the income from the property is used for the maintenance and support of the family of the founder and his descendants.
In case the family becomes extinct then the Waqf becomes a public waqf, the property vesting in God.
A public Waqf under the Mahomedan law is called Waqf fi sabi lil lah.
The question as to whether the religious endowment is of a private nature or of a public nature has to be decided with reference to the facts proved in each case and it is difficult to lay down any test or tests which may be of universal application.
It is manifest that where the endowment is lost in antiquity or shrouded in mystery, there being no document or revenue entry to prove its origin, the task of the court becomes difficult and it has to rely merely on circumstantial evidence regarding the nature of the user of the temple.
In the instant case, however, as there are two documents which clearly show the nature of the endowment, our task is rendered easier.
It is well settled that the issue whether a religious endowment is a public or a private one must depend on the application of legal concept of a deity and private endowment, as may appear from the facts proved in each case.
The essential distinction between a private and a public endowment is that whereas in the former the beneficiaries are specified individuals, in the latter they are the general public or class of unascertained people.
This doctrine is well known and has been accepted by the Privy Council as also by this Court in a large catena of authorities.
This being the essential distinction between the nature of a public or a private endowment, it follows that one of the crucial tests to determine the nature of the endowment would be to find out if the management of the property dedicated is in the hands of the strangers or members of the public or in the hands of the founders or their descendants.
Other factors that may be considered would be the nature of right of the worshippers, that is to say, whether the right to worship in the temple is exercised as of right and not as a matter of concession.
This will be the strongest possible circumstance to indicate that the endowment was a public one and the beneficiaries; are the worshippers and not particular family.
After all, an idol is a juristic person capable of holding property and the property dedicated to the temple vests in the deity.
If the main worshippers are the members of the public who worship as a matter of right then the real purpose is to confer benefit on God.
830 Some of the circumstances from which a public endowment can be inferred may be whether an endowment is made by a person who has no, issue and who after installing the deity entrusts the management to members of the public or strangers which is a clear proof of the intention to dedicate the temple to public and not to the members of the family.
Where, however, it is proved that the intention of the testator or the founder was to dedicate the temple merely for the benefit of the members of the family or their descendants, the endowment would be of a private nature.
The mere fact that members of the public are allowed to worship by itself would not make an endowment public unless it is proved that the members of the public had a right to worship in the temple.
In Deoki Nandan vs Murlidhar this Court observed as follows: "The distinction between a private and a public trust is that whereas in the former the beneficiaries are specific individuals, in the latter they are the general public or a class thereof.
While in the former the beneficiaries are persons who are ascertained or capable of being ascertained, in the latter they constitute a body which is incapable of ascertainment. .
The cardinal point to be decided is whether it was the intention of the founder that specified individuals are to have the right of worship at the shrine, or the general public or any specified portion thereof.
In accordance with this theory, it has been held that when property is dedicated for the worship of a family idol, it is a private and not a public endowment, as the persons who are entitled to worship at the shrine of the deity can only be the members of the family, and that is an ascertained group of individuals.
But where the beneficiaries are not members of a family or a specified individual, then the endowment can only be regarded as public, intended to benefit the general body of worshippers." (Emphasis supplied) This view was reiterated in a later decision of this Court in Mahant Ram Saroop Dasji vs S.P. Sahi, Special Officer In Charge of the Hindu Religious Trusts & Ors.
where S.K. Das, J. as he then was, speaking for the Court clarified the law thus: 831 "But the most usual and commonest form of a private religious trust is one created for the worship of a family idol in which the public are not interested.
Dealing with the distinction between public and private endowments in Hindu law, Sir Dinshah Mulla has said at p. 529 of his principles of Hindu Law (11th edition) 'Religious endowments are either public or private.
In a public endowment the dedication is for the use or benefit of the public.
When property is set apart for the worship of a family god in which the public are not interested the endowments is a private one '.
" In Narayan Bhagwantrao Gosavi Balajiwale vs Gopal Vinayak Gosavi & Ors.
the same principles were reiterated and it was pointed out that the entries made in the Inam Register showing the nature of the endowment were entitled to great weight and taken with the vastness of the temple, the mode of its construction, the long user by the public as of right and grants by Rulers and other persons were clear pointers to the fact that the endowment was of a public nature.
In the case of Bihar State Board Religious Trust, Patna vs Mahant Sri Biseshwar Das,(2) this Court laid down some important tests to determine the nature of the endowment.
In this connection, the fol lowing observations need specific mention: "Therefore, evidence that sadhus and other persons visiting the temple are given food and shelter is not by itself indicative of the temple being a public temple or its proper ties being subject to a public trust.
Evidence that the mahants used to celebrate Hindu festivals when members of the public used to attend the temple and give offerings and that the public were admitted to the temple for darshan and worship is also not indicative of the temple being one for the benefit of the public.
The fact that members of the public used to come to the temple with out any hindrance also does not necessarily mean that the temple is a public temple, for members of the public do attend private temples.
Yet, the Privy Council held that the general effect of the evidence was that the family had treated the temple as family property and the mere fact of the members of the public having come to the temple and having made offerings and the mela having been held which 832 gave popularity to the temple and increased its esteem in the eyes of the public and the fact that they were never turned away were not enough to hold the temple and the properties as a public trust. .
Thus, the mere fact of the public having been freely admitted to that temple cannot mean that courtbs should readily infer therefrom dedication to the public.
The value of such public user as evidence of dedication depends on the circumstances which give strength to the inference that the user was as of right.
" It may thus be noticed that this Court has invariably held that the mere fact that the members of the public used to visit the temple for the purpose of worship without any hindrance or freely admitted therein would not be a clear indication of the nature of the endowment.
It is manifest that whenever a dedication is made for religious purposes and a deity installed in a temple, the worship of the deity is a necessary concomitant of the installation of the deity, and therefore, the mere factum of worship would not determine the nature of the endowment.
Indeed if it is proved that the worship by the members of the public is as of right that may be a circumstance which may in some cases conclusively establish that the endowment was of a public nature.
In Dhaneshwarbuwa Guru Purshottambuwa Owner of Shri Vithal Rukhamai Sansthan vs The Charity Commissioner State of Bombay all the aforesaid cases were summarised and the principles indicated above were reiterated.
In Gurpur Guni Venkataraya Narashima Prabhu & Ors.
vs B.G. Achia, Assistant Commissioner, Hindu Endowment, Mangalore & Anr.
Krishna Iyer, J., reiterated these very principles in the following words: "The law is now well settled that 'the mere fact of the public having been freely admitted to the temple cannot mean that courts should readily infer therefrom dedication to the public.
The value of such public user as evidence of dedication depends on the circumstances which give strength to the inference that the user was as of right '.
(See Bihar State Board Religious Trust, Patna vs Mahant Sri Biseshwar Das [1971] 3 SCR 680, 689).
" 833 Thus, on a conspectus of the authorities mentioned above, the following tests may be laid down as providing sufficient guidelines to determine on the facts of each case whether an endowment is of a private or of a public nature: (1) Where the origin of the endowment cannot be ascertained, the question whether the user of the temple by members of the public is as of right; (2) The fact that the control and management vests either in a large body of persons or in the members of the public and the founder does not retain any control over the management.
Allied to this may be a circumstance where the evidence shows that there is provision for a scheme to be framed by associating the members of the public at large; (3) Where, however, a document is available to prove the nature and origin of the endowment and the recitals of the document show that the control and management of the temple is retained with the founder or his descendants, and that extensive properties are dedicated for the purpose of the maintenance of the temple belonging to the founder himself, this will be a conclusive proof to show that the endowment was of a private nature.
(4) Where the evidence shows that the founder of the endowment did not make any stipulation for offerings or contributions to be made by members of the public to the temple, this would be an important intrinsic circumstance to indicate the private nature of the endowment.
Fortunately, in this case there are two important documents Ext.
A and Ext.
1 from which the nature of the endowment can be clearly spelt out and we would examine these documents in the light of the tests and the principles enunciated above because after going through the judgment of the High Court we are satisfied that the High Court has not properly construed some of the important features contained in the documents and the evidence and has in fact overlooked certain important aspects which completely negative the fact that the endowment was of a public nature.
A is an ancient document executed as far back as February 18, 1895.
The authenticity and the genuineness of this document is beyond question and the High Court itself has described this document as a document which has created the present endowment.
Even though the document may not be treated as having itself.
834 created the endowment but it gives clear indication that the endowment was created near about the date when this document was executed.
Some of the extracts of this document which are undisputed, in our opinion, clearly and conclusively show that the endowment was of a private nature and the intention of the founder was merely to instal a family deity in the temple.
In order to fortify our conclusions, it may be necessary to give certain important recitals from this document which may be extracted thus: "That I Gopinath Pani, my father Bhagyarathi Pani, Alekha Pani, father of Dinabandhu Pani and father 's brother of Basudeo Pani and Narsinha Pani father of Balabhadra Pani minor, having made the image of our family deity Sri Padhakanta Deb installed it in a temple which was built by them in Depur Sasan in Pipli Division and they endowed the Tanki Bajyapati, Tanki Baheli and Kharida Swata properties given below from the usufruct of which day to day Sibapuja and Janijatra of the deity was managed by them as the Sebait and Marfatdar and we are also managing in the same way.
For the proper management of the deity 's property and the Sebapuja of the deity in future, we lay down the following directions out of our own accord. . 1. we hereby appoint the said Adwait Charan Das Babaji, Sutradhari Gaudeswar Sampraday Baisnab by caste, worship and Sebapuja of the deity by profession as the Tatwabadharak and Sebait and hereby (appoint) him by this trust deed and we become aloof from those duties vesting in him the following properties of the deity. 2.
From this day the said Babaji will manage all the immovable and movable properties of the deity as the Sebait and Tatwabadharak.
He will realise the usufructs of the property and after giving the rent of the lands, he will manage the day to day Bhog and the festivities of the deity well according to the previous customs and rules and in the way we were doing and will keep the surplus amount in the store of the deity.
The day to day Bhoga and the festivities of the deity will be done according to the income of the properties of the deity and will never exceed the said income.
The said Babaji cannot incur any loan on behalf of he deity nor can he sell, mortgage, keep as surety or trust 835 any of the immovable or movable properties nor can he misappropriate any cash kind ornament or utensils of the deity. . 6.
If the said Babaji does anything contrary to the conditions laid down in items 4 & 5 written above he will be removed from his right of Sebaitship and Tatwabadharakship by us or cur heirs who will appoint another fit man in his place and take the charge of all the properties in the store of the deity . 9.
As the properties maintained herein have been endowed to the deity before, we or our successors had or will have no claim on this and any such claim made, shall be void. . 11.
Now or in future the man appointed as Tatwabadharak will work according to rules and directions mentioned herein and for the Sebapuja of the deity the directions and the menus are determined here for all days to come.
All other necessary expenses of the Jatra (festivals) repairing of the temple, utensils and the ornaments of the deity, etc. will be done according to the income. . 14.
Any pious man of our family at present and in future will see whether the work of the deity is being performed according to the direction as aforesaid by the appointed Tatwabadharak and will take proper action as mentioned above.
If in future there be no fit man in our family, any of the Baisnab Sampraday and any Hindu of reputation of the village and of the locality is entitled to take such action, we have no objection to this." (Emphasis supplied) The intention which can be gathered from this document is placed beyond doubt by a later document Ext.
1 which was executed on 17 11 1932 and is in the nature of a settlement Deed, the relevant portions of which may be quoted thus: "Our forefathers for the good of our family by making the family deity Sri Radhakanta Deb Thakur, erecting a 836 temple befitting.
His installation, installing Him therein and endowing the landed properties as described in the schedule below, used to carry out all the Sebapuja work of the deity in orderly manner by meeting the expenses from out of the income and yield of the said properties.
As the said Lalit Charan Das and Raghunath Pani a person of our family together misappropriated by utilising the income and yield of the properties of the deity in illegal expenditures and without carrying on the Sebapuja work in proper manner caused heavy damage to the movable and immovable properties of the deity in different unfair means, we have removed them from Sebapuja work of the deity and also from management and custody of the deity 's properties.
If the work of the deity is carried on for some time more in the manner in which the work is being managed now then the temple established by our forefathers as a mark of pride of our family and all the Debuttor properties of the deity will be destroyed in toto and the noble glory of the forefathers will perish .
We by this deed of trustee order determination appointed you as trustee for the Sebapuja work of our family deity Shri Radhakanta Deb Thakur and for the work of looking after His properties, according to the following conditions and terms, so that from today onwards on the strength of this deed of trustee order determination you from Chela to Bara chela by carrying on the Sebapuja, offerings, religious ceremonies and festivals and by preserving and looking after all the debuttor properties, realise the income and yield therefrom according to convenience. . 10.
If we or any body amongst us misappropriate any money or property by taking secretly from the tenants or borrowers, we and our successors will be liable for punishment according to criminal law and you can realise any compensation you intend to take either mutually or with the help of the court.
We and our sons and grandsons shall be bound and liable to pay. . 22.
But if you might have obtained, any amount on loan against the income of the debuttor property and anything that you might have spent from your own pocket for the improvement of the deity of the muth and to save the property, we will be bound and liable to repay the said 837 amount alongwith just and prescribed rate of interest, and we shall repay.
If we do not repay voluntarily you and your successors will realise from us and from our and from our son 's and grandsons existing and to be acquired movable and immovable properties and from the existing and to be acquired debuttor properties of the deity according to law." (Emphasis supplied) Considering the two documents together the fundamental features, which now from the recitals extracted above, may be summarised as follows: (1) That the deity was installed in the temple purely as a family deity and the dedication WAS made only for a group of individuals who may be connected with the family of the Panis who were the founders of the deity.
This clearly establishes that the intention of the founders was to dedicate their properties and instal the deity in the temple only for purposes of the Pani family, and their descendants.
A perusal of the recitals extracted above would unmistakably show that there can be no two opinions on this question.
(2) Extensive private properties belonging to the Pani family alone were dedicated for the maintenance Of the temple and the deity and there is nothing to show that any contribution was called for from members of the public nor is there any averment in the deed to show that there was any stipulation for taking offerings from the members of the public to worship in the temple.
(3) There was no provision for framing any scheme by associating the members of the public or consulting them.
In fact, Ext.
1 shows that even after the descendants of the founders had fallen on evil days and were not in a position to provide sufficient funds for the maintenance.
Of the temple yet they appointed Udayanath Pattanayak to manage the affairs of the deity and bound themselves personally to reimburse the Manager for any out of pocket expenses incurred in connection with the maintenance of the temple.
This circumstance manifestly proves that the endowment was of a purely private nature right from the time it was created till 1932 when the management 838 was changed and continued to be of the same nature.
Indeed, the personal undertaking contained in Ext.
1 clearly shows that there was never any intention to treat the temple as a public one but the intention was, if at all, to continue it in the name of the family so long as the family continued.
(4) There is no recital in any of the documents to show that the members of the public or the vil lagers of the place where the temple was situated were entitled to worship as of right.
On the other hand, PWs 1 to 6 who were examined by the appellants plaintiffs have categorically stated that members of the public were not allowed to worship in the temple as of right.
In this connection PW 1 stated as follows: "Members of the public have no right to have Darsan of, or to offer bhog to the deity.
The villagers do not make Kirtan before the deity or take any part in any festivity of the deity.
The deity has no Bahari Jatra.
No member of the public made any gift to the deity.
No khairat is ever given.
The properties of the Thakur are all (sic) with rent.
" PW. 5 stated that the disputed deity was installed by the family of the other Panis and not by his ancestors and that the deity was not their family deity and was not dedicated to the public.
As against this oral evidence, the defence examined DW 1, Raghunath Pani, whose evidence has been rejected both by the Trial court and the High Court.
Thus, apart from the unimpeachable documentary evidence discussed above, even the oral evidence to prove that the endowment was of a private nature is clear and has not been rebutted by the defence.
In this state of the evidence we are indeed surprised to find how the High Court could hold that the endowment was of a public nature.
The High Court seems to have been carried away by factors or considerations which are of a very minor nature and by themselves do not prove that the endowment was of a public nature.
For instance, one of the circumstances that weighed with the High Court was that the temple was a massive structure of about 25 yards in height.
That by itself, divorced from other things, could not prove that the temple was a public one.
So far as the oral evidence is concerned.
the High Court observed thus: 839 "Apart from the above features disclosed by the oral evidence which are indicative of the institution having been treated as a public one.
the recitals in some of the clauses of the two documents. (Exts.
A & 1) also unequivocally indicate an intention of dedication in favour of public." These observations are not at all borne out by the evidence of PWs 1 to 5 which is the only oral evidence led in the case, the evidence of DW 1 having been rejected by the trial court as also the High Court.
The High Court took into consideration the fact that certain properties were needed for the maintenance of the temple and Seba puja and other ceremonies were being performed by the Shebaits and Marfatdars.
The High Court overlooked the fact that Shebait or the Marfatdars were appointed by the founders of the endowment and the entire management and control of the temple was retained by the family.
We are unable to agree as to how in these circumstances could it be said that the endowment was of a public nature.
Another circumstance that weighed with the High Court was that bhogs were offered during the day which, according to the High Court, was in consonance with the rules observed by the public.
This circumstance also is not of much consequence because bhogs are offered even in private temples.
The High Court also seems to have relied on clause 15 of Ext.
A to come to its decision that the endowment was of a public nature.
The High Court was of the view that under this clause in certain contingencies any member of the Vaishnav sect or Hindu resident of the village was authorised to exercise the powers and functions mentioned in clause 7 of the deed.
We are, however, unable to agree with the interpretation placed by the High Court on clause 15 of Ext.
A. Clause 15 merely provides that if in future the family becomes extinct and no fit person could be found then any of the Baisnab Sampraday or any reputed Hindu of the village could take action, namely, to perform the work of the deity.
This was a contingent provision and here also the founders did not confer the duty of performing all the work on the members of the public but they chose or selected only a particular person belonging to a particular community which also shows that even if the family was to become extinct, the private nature of the endowment was not to be changed.
Indeed if the intention was to instal the idol in the temple by way of a public endowment, clause 15 would have clearly provided 840 that in cast the family became extinct the members of the public or of the brotherhood or the Government could have taken over the management.
On the other hand, the interpretation of the various clauses of the documents clearly shows that sufficient care has been taken by the Pani family to see that the dedication to the family deity is not changed even if the family becomes extinct.
Having, therefore, carefully perused the oral and the documentary evidence in the case we are satisfied that the conclusions arrived at by the High Court are wrong and are based on misinterpretation of Ext.
A and Ext.
1 and misreading of the oral evidence led in the case, which, as we have shown, runs counter to the conclusions arrived at by the High Court.
For the reasons given above, we allow this appeal, set aside the judgment of the High Court, decree the plaintiffs appellants suit and restore the judgment of the trial court.
In the peculiar circumstances of this case, the appellants will be entitled to costs of the appeal in this Court quantified at Rs. 4,000/ (Rupees four thousand only) S.R. Appeal allowed.

summary/full:
Allowing the appeal by certificate, the Court ^ HELD: The tests which provide sufficient guidelines to determine on the facts of each case whether an endowment is of a private or of a public nature are: (1) Where the origin of the endowment cannot be ascertained, the question whether the user of the temple by members of the public is as of right; (2) The fact that the control and management vests either in a large body of persons or in the members of the public and the founder does not retain any control over the management.
Allied to this may be a circumstance where the evidence shows that there is provision for a scheme to be framed by associating the members of the public at large; (3) Where, however, a document is available to prove the nature and origin of the endowment and the recitals of the document show that the control and management of the temple is retained with the founder or his descendants, and that extensive properties are dedicated for the purpose of the maintenance of the temple belonging to the founder himself, this will be a conclusive proof to show that the endowment was of a private nature; (4) Where the evidence shows that the founder of the endowment did not make any stipulation for offerings or contributions to be made by members of the public to the temple, this would be an important intrinsic circumstance to indicate the private nature of the endowment.
[833 A E] Deoki Nandan vs Murlidhar, ; ; Mahant Ram Saroop Dasji vs S.P. Sahi, Special Officer in Charge of the Hindu Religious Trusts & Ors., [1959] 2 Supp.
SCR 583; Narayan Bhagwantrao Gosavi Balajiwale vs Gopal Vinayak Gosavi & Ors., ; ; Bihar State Board Religious Trust, Patna vs Mahant Sri Biseshwar Das, , Dhaneshwarbuwa Guru Purshottambuwa Owner of Shri Vithal Rukhamai Sansthan vs The Charity Commissioner, State of Bombay, ; ; Gurpur Guni Venkataraya Narashima Prabhu & Ors.
vs B.G. Achia, Asistant Commissioner, Hindu Endowment Mangalore & Anr., ; , followed.
In the instant case: (i) exhibit A, an ancient document executed as for back as February 18, 1895, the authenticity and the genuineness of which is beyond question, clearly and conclusively show that the endowment was of a private nature and the intention of the founder was merely to instal a family deity in the temple.
(ii) The fact that the temple was of a massive structure of about 25 yards in height, by itself, divorced from other things, could not prove that the temple was a public one.
(iii) The Shebaits or the Marfatdars were appointed by the founders of the endowment and the entire management and control of the temple was retained by the family.
(iv) The fact that bhogs 827 were offered during the day which was in consonance with the rules observed by the public is not of much consequence because bhogs are offered even in private temples.
(v) Clause 15 merely provides that if in future the family becomes extinct and no fit person could be found then any of the Baisnab Sampraday or any reputed Hindu of the village could take action, namely, to perform the work of the deity.
This was a contingent provision and here also the founders did not confer the duty of performing all the work on the members of the public but they chose or selected only a particular person belonging to a particular community which also shows that even if the family was to become extinct, the private nature of the endowment was not to be changed.
Indeed if the intention was to instal the idol in the temple by way of a public endowment, clause 14 would have clearly provided that in case the family become extinct the members of the public or of the brotherhood or the Government could have taken over the management.
On the other hand, the interpretation of the various clauses of the documents clearly shows that sufficient care has been taken by the Pani family to see that the dedication to the family deity is not changed even if the family becomes extinct.
[833 H, 834 A, 838 G H, 839 C, E H, 840 A B]


judgement:
Civil Appeal Nos.
2602 2604 of 1980.
Appeals by special leave from the Judgment and Order dated 20 6 1980 of the Madras High Court in Writ Petition Nos. 4467 of 1977, 2933 and 4793 of 1978.
Lal Narain Sinha Att.
of India for the Appellant in CA 2602/80.
Soli J. Sorabjee for the Appellant in CA 2603/80.
R. Krishnamurthy Adv.
for the appellant in CA 2604/80.
A. V. Rangam and K. Venkatawani for the Appellant in all the matters.
Y. section Chitale (Dr.), Mrs. section Ramachandran and Mukul Mudgal for Respondent Nos. 11 and 42.
P. Chidambaram and A. section Nambiyar for the Respondents.
F. section Nariman, A. V. Rangam and R. N. Sachthey for the interveners.
V. Srinivasan, A. Venkatarayana and P. N. Ramalingam for Respondent No. 45.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
Entry 23 of List II of the Seventh Schedule to the Constitution is, "Regulation of mines and mineral development subject to the provisions of List I with respect to regulation and development under the control of the Union".
Entry 54 746 of List of the Seventh Schedule is "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".
Thus while 'regulation of mines and mineral development ' is ordinarily a subject for State legislation.
Parliament may, by law, declare the extent to which control of such regulation and development by the Union is expedient in the public interest, and, to that extent, it becomes a subject for Parliamentary legislation.
Parliament has accordingly enacted the .
By section 2 of the Act it is declared that it is 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 thereafter provided.
It is now common ground between the parties that as a result of the declaration made by Parliament, by section 2 of the Act, the State legislatures are denuded of the whole of their legislative power with respect to regulation of mines and mineral development and that the entire legislative field has been taken over by Parliament.
That this is the true position in law is clear from the pronouncements of this Court in The Hingir Rampur Coal Co. Ltd. & Ors.
vs The State of Orissa & Ors.
State of Orissa vs M.A., Tulloch & Co. and Baijnath Kedia vs State of Bihar & Ors.
section 3 of the , defines various expressions occurring in the Act.
section 3 (a) defines 'minor minerals ' and it includes any mineral declared to be a minor mineral by the Central Government by a notification in the Official Gazette. 'Black granite ' has been so notified by the Central Government as a minor mineral.
Section 4 to 9A are grouped under the heading 'General Restrictions on undertaking prospecting and mining operations '.
These provisions as well as Sections 10 to 13 are made inapplicable to 'minor minerals ' by section 14.
section 4 prohibits all prospecting or mining operations except under a licence or a lease granted under the Act and the rules made thereunder.
S.4A(1) enables the State Government on a request made by the Central Government in the interest of regulation of mines and mineral development to terminate a mining lease pre maturely and grant a fresh mining lease in favour of a Government Company or Corporation owned or controlled by Government.
Perhaps because s.4A(1) is inapplicable to minor minerals because of the provisions of S.14, S.4A(2) has been expressly enacted making somewhat similar provision, as in S.4A(1), in respect of 'minor minerals ' also.
S.4A(2) 747 enables the State Government, after consultation with the Central Government, if it is of opinion that it is expedient in the interest of regulation of mines and mineral development so to do, to prematurely terminate a mining lease in respect of any minor mineral and grant a fresh lease in respect of such mineral in favour of a Government Company or Corporation owned or controlled by Government.
S.5 imposes certain restrictions on the grant of prospecting licences and mining leases.
S.6 prescribes the maximum area for which a prospecting licence or mining lease may be granted.
S.7 prescribes the period for which prospecting licences may be granted or renewed.
S.8 prescribes the period for which mining leases may be granted or renewed.
S.9 provides for the payment of royalty and S.9A for the payment of dead rent.
Sections 10, 11 and 12 constitute a group of sections under the title 'Procedure for obtaining prospecting licences or mining leases in respect of land in which the minerals vest in the Government '.
S.10 provides for making applications for prospecting licences or mining leases in respect of any land in which the minerals vest in the Government.
S.11 provides for certain preferential rights in favour of certain persons in the matter of grant of mining leases.
section 12 prescribes the Register of prospecting licences and mining leases to be maintained by the State Government.
S.13 empowers the Central Government to make rules for regulating the grant of prospecting licences and mining leases.
In particular we may mention that S.13(2) (a) empowers the Central Government to make rules providing for 'the persons by whom, and the manner in which, applications for prospecting licences or mining leases in respect of land in which the minerals vest in the Government may be made and the fees to be paid therefor".
S.13(2) (f), we may add, empowers the Central Government to make rules providing for 'the procedure for obtaining a prospecting licence or a mining lease in respect of any land in which the minerals vest in a person other than the Government and the terms on which, and the conditions subject to which, such a licence or lease may be granted or renewed '.
S.14 makes the provisions of Sections 4 to 13 inapplicable to minor minerals.
S.15 empowers the State Government to make rules for regulating the grant of quarry leases, mining leases and other mineral concessions in respect of minor minerals and purposes connected therewith.
S.15(3) provides for the payment of royalty in respect of minor minerals at the rate prescribed by the rules framed by the State Government.
S.16 provides for the modification of mining leases granted before October 25, 1949.
S.17 enables the Central Government, after consultation with the State Government to undertake prospecting or mining operations in any area not already held under any prospecting licence or mining lease, in which event the Central 748 Government shall publish a notification in the official Gazette giving the prescribed particulars.
The Central Government may also declare that no prospecting licence or mining lease shall be granted in respect of any land specified in the notification.
S.18 casts a special duty on the Central Government to take all necessary steps for the conservation and development of minerals in India.
Sections 19 to 33 are various miscellaneous provisions with which we are not now concerned.
Pursuant to the power vested in it under S.15 of the , the Government of Tamil Nadu has made the Tamil Nadu Minor Mineral Concession Rules, 1959.
Section II of the rules consisting of rules 3 to 16 is entitled "Government lands in which the minerals belong to the Government".
Rule 8 prescribes the procedure for the lease of quarries to private persons.
The ordinary procedure is to publish a notice in the District Gazette inviting applications, thereafter to hold an auction and finally to grant a lease to the highest bidder.
Rule 8A which was introduced by way of an amendment in 1972, provides for a special procedure for the sanctioning of leases in favour of applicants who require the minerals for their existing industries or who have an industrial programme for the utilisation of the mineral in their own industry.
Rule 8B was introduced in 1975 making special provision for the grant of leases for quarrying black granite.
The rule is as follows: "8 B. Lease of quarries in respect of black granite to private persons (1) Notwithstanding anything to the contrary contained in rules 8 and 8A, the authority competent to grant leases in respect of quarrying black granite shall be the State Government.
(2) An application for the grant of a quarrying lease in respect of any land shall be made to the Collector of the District concerned in the prescribed form in triplicate and shall be accompanied by a fee of Rs. 100/ .
The Collector shall after scrutiny, forward the application along with his remarks to the Director of Industries & Commerce who shall technically scrutinise the industrial programme given by the applicant and forward the application with his remarks to the Government." "(G. O. Ms. No. 993 Industries dt.
25 8 1975".
Rule 8 C was introduced by G. O. Ms. No. 1312 Industries dated December 2, 1977.
By this rule leases for quarrying black granite 749 in favour of private persons are banned.
Leases can only be granted in favour of a Corporation wholly owned by the State Government.
It is the vires of this rule which was under challenge before the High Court and is also under challenge now.
It will be useful to extract the same.
It is as follows: "8 C Lease of quarries in respect of black granite to Government Corporation, etc.
(1) Notwithstanding anything to the contrary contained in these rules, on and from 7th December, 1977 no lease for quarrying black granite shall be granted to private persons.
(2) The State Government themselves may engage in quarrying black granite or grant leases for quarrying black granite in favour of any corporation wholly owned by the State Government.
Provided that in respect of any land belonging to any private person, the consent of such person shall be obtained for such quarrying or lease".
Rule 9 provides for renewal of leases and it is in the following terms: "9.
Renewal of lease. (1) The Collector may on application renew for a further period not exceeding the period for which the lease was originally granted in each case if he is satisfied that (i) such renewal is in the interests of mineral development, and (ii) the lease amount is reasonable in the circumstances of the case.
(2) Every application for renewal shall be made to Collector, sixty days prior to the date of expiry of the lease: Provided that a lease, the period of which exceeds ten years shall not be renewed except with the sanction of the Director of Industries and Commerce".
A proviso was added to rule 9(2) in 1975 and it said: "provided also that the renewal for quarrying black granite shall be made by the Government".
Several persons who held leases for quarrying black granite belonging to the State Government and whose leases were about to expire, applied to the Government of Tamil Nadu for renewal of their leases.
In some of the cases applications were made long prior 750 to the date of G. O. Ms. No. 1312 by which Rule 8 C was introduced.
Some applications were made after Rule 8 C came into force.
There were also some applications for the grant of fresh leases for quarrying black granite.
All the applications were dealt with after Rule 8 C came into force and all of them were rejected in view of Rule 8C.
Several Writ Petitions were filed in the High Court questioning the vires of Rule 8C on various grounds.
Apart from canvassing the vires of Rule 8C, it was contended that Rule 8C did not apply to grant of renewals of lease at all.
It was also argued that in any event, in those cases in which the applications for renewal had been made prior to the coming into force of Rule 8C, their applications should have been dealt with without reference to Rule 8C.
The Madras High Court while not accepting some of the contentions raised on behalf of the applicants, struck down Rule 8C on the ground that it exceeded the rule making power given to the State Government under S.15 which, it was said, was only to regulate and not to prohibit the grant of mining leases.
As a consequence all the applications were directed to be disposed of without reference to Rule 8C.
It was also observed that even if Rule 8C was valid it applied only to the grant of fresh leases and not to renewals.
It was also held that it was not open to the Government to keep the applications pending for a long time and then to dispose them of on the basis of a rule which had come into force later.
The State Government has come in appeal against the judgment of the Madras High Court while the respondent applicants have tried to sustain the judgment of the Madras High Court on grounds which were decided against them by the Madras High Court.
The learned Attorney General who appeared for the Government of Tamil Nadu submitted that the approach of the High Court was vitiated by its failure to notice the crucial circumstance that the minerals belonged to the Government and the applicants had no vested or indefeasible right to obtain a lease or a renewal to quarry the minerals.
There were good reasons for banning the grant of leases to quarry black granite to private parties and in the light of those reasons the Government could not be compelled to grant leases which would result in the destruction of the mineral resources of the country.
Shri K. K. Venugopal, learned counsel who led the argument for the respondents submitted that the question of ownership of the minerals was irrelevant.
In making the rules the State Government was acting as a delegate and not as the owner of the minerals.
He submitted that it was not open to the State Government to exercise its subordinate legislative function in a manner to benefit itself as owner of the minerals, nor was it open to the State Government to create a monopoly by such means 751 According to Shri Venugopal creation of a monopoly in the State was essentially a legislative function and was incapable of delegation.
It was claimed that there was violation of Articles 301 and 303 of the Constitution.
It was further claimed that section 15 of the , enabled the State Government to make rules to regulate the grant of leases and not to prohibit them.
In any case it was said that Rule 8G had no application to renewals and that in any event it would not have the effect of affecting applications made more than 60 days before it came into force.
Rivers, Forests, Minerals and such other resources constitute a nation 's natural wealth.
These resources are not to be frittered away and exhausted by any one generation.
Every generation owes a duty to all succeeding generations to develop and conserve the natural resources of the nation in the best possible way.
It is in the interest of mankind.
It is in the interest of the Nation.
It is recognised by Parliament.
Parliament has declared that it is expedient in the public interest that the Union should take under its control the regulation of mines and the development of minerals.
It has enacted the .
We have already referred to its salient provisions.
section 18, we have noticed, casts a special duty on the Central Government to take necessary steps for the conservation and development of minerals in India.
section 17 authorises the Central Government itself to undertake prospecting or mining operations in any area not already held under any prospecting licence or mining lease.
S.4A empowers the State Government on the request of the Central Government, in the case of minerals other than minor minerals, to prematurely terminate existing mining leases and grant fresh leases in favour of a Government Company or Corporation owned or controlled by Government, if it is expedient in the interest of regulation of mines and mineral development to do so.
In the case of minor minerals, the State Government is similarly empowered, after consultation with the Central Government.
The public interest which induced Parliament to make the declaration contained in section 2 of the Mines & Minerals (Regulation and Development) Act, 1957.
has naturally to be the paramount consideration in all matters concerning the regulation of mines and the development of minerals.
Parliament 's policy is clearly discernible from the provisions of the Act.
It is the conservation and the prudent and discriminating exploitation of minerals, with a view to secure maximum benefit to the community.
There are clear sign posts to lead and guide the subordinate legislating authority in the matter of the making of rules.
Viewed in the light shed by the other provisions of the Act, particularly sections 4A, 17 and 18 752 it cannot be said that the rule making authority under section 15 has exceeded its powers in banning leases for quarrying black granite in favour of private parties and in stipulating that the State Government themselves may engage in quarrying black granite or grant leases for quarrying black granite in favour of any corporation wholly owned by the State Government.
To view such a rule made by the Subordinate legislating body as a rule made to benefit itself merely because the State Government happens to be the subordinate legislating body, is, but, to take too narrow a view of the functions of that body.
The reasons that prompted the State Government to make Rule 8 C were explained at great length in the common counter affidavit filed on behalf of the State Government before the High Court.
We find no good reason for not accepting the statements made in the counter affidavit.
It was said there: "I submit that the leases for black granite are governed by the Tamil Nadu Minor Mineral Concession Rules 1959 under which originally there was scope for auctioning of quarries of minor minerals.
In amendment issued in the G.O. dated 6 12 1972.
under Rule 8 A it was indicated that the Collector may sanction leases in favour of applicants who are having an industrial programme to utilise the minerals in their own industry.
This provision is applicable to all minerals including black granites.
However, it was found that there were several cases where lessees who obtained the black granite areas on lease by auction were not quarrying in a systematic and planned manner taking into consideration the welfare and safety measures of the workers as well as the conservation of minerals.
Even after the introduction of the amendment under Rule 8 A in most cases, the industry set up was of a flimsy nature more to circumvent the rule than to really introduce industry including mechanised cutting and polishing.
The lessees were also interested only in obtaining the maximum profit in the shortest period of time without taking into consideration the proper mining and development of the mineral.
There was also considerable wastage of new materials due to wasteful mining.
Therefore, Government issued a further amendment as Rule 8 B wherein the competent authority to grant leases in respect of the quarrying black granite was transferred from the Collector to the State Government level.
They also prescribed a standard form and an application fee to be paid with the application.
The amendment states that the Director of Industries and Commerce shall technically 753 scrutinise the industrial programme given by the applicant while forwarding the same to Government.
At the same time, in the G.O. issued along with amendment, it was stated that if any of the State Government Organisations like Tamil Nadu Small Industries Corporation Limited, Tamil Nadu small Industries Development Corporation Limited, Tamil Nadu Industrial Development Corporation Limited is interested to obtain a lease for black granite in a particular area, preference will be given to Government undertaking over other private entrepreneurs for granting the leases applied for by them.
However, in spite of these amendments to regulate the grant of mining lease, there were a large number of lessees (exceeding 140), who were engaged in mining without proper technical guidance or safety measures etc.
for the workers.
These lessees made a strong representation to the then Government in 1976 expressing that though they had given assurance to set up industries to use the granites they were not able to do so far various reasons.
They also represented that they should be allowed to export the raw blocks of black granites.
Therefore, Government had issued a Government Order dated 15 2 1977 relating to relaxation of the ban of export of raw blocks and provision for setting up a polishing or finishing unit was not made a pre requisite.
They have also stated that the terms and conditions for the existing losses would remain in force.
However, on an examination of the performance of the lessees over the past several years, it has been found that excepting in a very few cases, none of the lessees had set up proper industries or developed systematic mining of the quarries.
The exports continue to be mainly on the raw black granite materials and not out and polished slabs.
A large number of the leases were not operating either due to speculation or lack of finance from the lessees.
Therefore, Government decided that there should be no further grant of lease to private entrepreneurs for black granite.
This was mentioned in G.O.Ms.
No. 1312 Industries dated 2 12 1977.
We are satisfied that Rule 8C was made in bonafide exercise of the rule making power of the State Government and not in its misuse to advance its own self interest.
We however guard ourselves against being understood that we have accepted the position that making a rule which is perfectly in order to be considered a misuse of the rule making power, if it advances the interest of a State, which really means the people of the State.
754 One of the submissions on behalf of the respondents was that monopoly was a distinct legislative subject under entry 21 of List III of the Seventh Schedule to the Constitution and therefore monopoly, even in favour of a State Government can only be created by plenary and not subordinate legislation.
Parliament not having chosen to exercise its plenary power it was not open to the subordinate legislating body to create a monopoly by making a rule.
Our attention was invited to H. C. Narayanappa & Ors.
vs State of Mysore & Ors.(1) where it was held that the expression 'Commercial and industrial monopolies ' in entry 21 of List III of the Seventh Schedule to the Constitution was not confined to legislation to control of monopolies but was wide enough to include grant or creation of commercial or industrial monopolies in favour of the State Government, also We are unable to agree with Shri Venugopal 's submission.
The very decision cited by him furnishes the answer.
The validity of a scheme for nationalisation of certain routes made pursuant to the powers conferred by Chapter IVA of the Motor Vehicles Act was under attack in that case.
One of the grounds of attack was that "by Chapter IVA of the , "Parliament had merely attempted to regulate the procedure for entry by the States into the business of motor transport in the State, and in the absence of legislation expressly undertaken by the State of Mysore in that behalf, that State was incompetent to enter into the arena of motor transport business to the exclusion of private operators;" Sustenance for the submission was sought to be drawn from the language of article 19(6) (ii) which provides that nothing in article 19(1) (g) shall 'prevent the State from making any law relating to ' 'the carrying on by the State, or by a Corporation owned or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise '.
The argument was that the State or a Corporation owned or controlled by the State could carry on a trade, business, industry or service to the exclusion, complete or partial, of citizens, only if the State made a law relating to it.
The argument was repelled by the Court in these words: "The plea sought to be founded on the phraseology used in article 19(6) that the State intending to carry on trade or business must itself enact the law authorising it to carry on trade or business is equally devoid of force.
The expression 'the State ' as defined in article 12 is inclusive of the Government and Parliament of India and the Government and the Legisla 755 ture of each of the States.
Under entry No. 21 of the Concurrent List, the Parliament being competent to legislate for creating commercial or trading monopolies, there is nothing in the Constitution which deprives it of the power to create a commercial or trading monopoly in the constituent States.
Article 19(6) is a mere saving provision: its function is not to create a Power but to immunise from attack the exercise of legislative power falling within its ambit.
The right of the State to carry on trade or business to the exclusion of others does not arise by virtue of article 19(6).
The right of the State to carry on trade or business is recognised by article 298; authority to exclude competitors in the field of such trade or business is conferred on the State by entrusting power to enact laws under entry 21 of List III of the Seventh Schedule, and the exercise of that power in the context of fundamental rights is secured from attack by article 19(6).
In any event; the expression 'law ' as defined in article 13(3) (a) includes any ordinance, order, bye law, rule, regulation, notification, custom, etc., and the scheme framed under s.68C may properly be regarded as 'law ' within the meaning of article 19(6) made by the State excluding private operators from notified routes or notified areas, and immune from the attack that it infringes the fundamental right guaranteed by article 19(1) (g)".
Earlier in Rai Sahib Ram Jawaya Kapur & Ors.
vs The State of Punjab, before the Seventh Amendment of the Constitution by which the present Article 298 was substituted for the old Article, the question arose whether it was beyond the competence of the executive Government to carry on a business without specific legislature sanction.
The answer was that it was not.
What was said by the Court in that case was incorporated in the Seventh Amendment of the Constitution.
In that case the facts were that the State of Punjab, by a series of executive orders had established for itself a monopoly in the business of printing and selling textbooks for use in schools.
The argument that legislative sanction was necessary to enable the State Government to carry on the business of printing and publishing text books was repelled and it was held that no fundamental right of the petitioners who had invoked the jurisdiction of the Court had been infringed.
Another of the submissions of the learned counsel was that G.O.Ms No. 1312 dated December 2, 1977 involved a major change of policy, which was a legislative function and therefore beyond the competence 756 of a subordinate legislating body.
We do not agree with the submission.
Whenever there is a switch over from private sector ' to 'public sector ' it does not necessarily follow that a change of policy requiring express legislative sanction is involved.
It depends on the subject and the statute.
For example, if a decision is taken to impose a general and complete ban on private mining of all minor minerals, such a ban may involve the reversal of a major policy and so it may require Legislative sanction.
But if a decision is taken to ban private mining of a single minor mineral for the purpose of conserving it, such a ban, if it is otherwise within the bounds of the authority given to the Government by the Statute, cannot be said to involve any change of policy.
The policy of the Act remains the same and it is, as we said, the conservation and the prudent and discriminating exploitation of minerals, with a view to secure maximum benefit to the community.
Exploitation of minerals by the private and/or the public sector is contemplated.
If in the pursuit of the avowed policy of the Act, it is thought exploitation by the public sector is best and wisest in the case of a particular mineral and, in consequence, the authority competent to make the subordinate legislation makes a rule banning private exploitation of such mineral, which was hitherto permitted we are unable to see any change of policy merely because what was previously permitted is no longer permitted.
One of the arguments pressed before us was that Sec.
15 of the authorised the making of rules for regulating the grant of mining leases and not for prohibiting them as Rule 8 C sought to do, and, therefore, Rule 8 C was ultra vires Act, section 15.
Well known cases on the subject right from Municipal Corporation of the City of Toronto vs Virgo and Attorney General for the Dominion General for the Dominion and the Distillers and Brewers Association of Ontario upto State of Uttar Pradesh & Ors.
vs Hindustan Aluminium Corporation Ltd. & Ors., were brought to our attention.
We do not think that 'Regulation ' has the rigidity of meaning as never to take in Prohibition '.
Much depends on the context in which the expression is used in the Statute and the object sought to be achieved by the contemplated regulation.
It was observed by Mathew J. in G. K. Krishnan etc.
vs The State of Tamil Nadu & Anr.
, "the word 'regulation has no fixed connotation.
Its meaning differs according to the nature of the thing to which it is applied".
In modern statutes concerned as they are with economic and social activities, 'regulation ' 757 must, of necessity, receive so wide an interpretation that in certain situations, it must exclude competition to the public sector from the private sector.
More so in a welfare State.
It was pointed out by the Privy Council in Commonwealth of Australia vs Bank of New South Wales(1) and we agree with what was stated therein that the problem whether an enactment was regulatory or something more or whether a restriction was direct or only remote or only incidental involved, not so much legal as political, social or economic consideration and that it could not be laid down in no circumstances could the exclusion of competition so as to create a monopoly, either in a State or Commonwealth agency, to be justified.
Each case, it was said, must be judged on its own facts and in its own setting of time and circumstances and it might be that in regard to some economic activities and at some stage of social development, prohibition with a view to State monopoly was the only practical and reasonable manner of regulation.
The statute with which we are concerned, the Mines and Minerals (Development and Regulation) Act, is aimed, as we have already said more than once, at the conservation and the prudent and discriminating exploitation of minerals.
Surely, in the case of a scarce mineral, to permit exploitation by the State or its agency and to prohibit exploitation by private agencies is the most effective method of conservation and prudent exploitation.
If you want to conserve for the future, you must prohibit in the present.
We have no doubt that the prohibiting of leases in certain cases is part of the regulation contemplated by Sec. 15 of the Act.
The submission of the learned counsel that the impugned rule contravened Articles 301 and 303 of the Constitution is equally without force.
Now, 'the restrictions freedom from which is guaranteed by article 301 would be such restrictions as directly and immediately restrict or impede the free flow or movement of trade" (Atiabari Tea Co. Ltd. vs State of Asssam & Ors.).(2) And, "regulatory measures or measures imposing compensatory taxes for the use of trading facilities do not come within the purview of restrictions contemplated by article 301".
"They are excluded from the purview of the provisions of Part XIII of the Constitution for the simple reason that they do not hamper, trade, commerce or inter course but rather facilitate them" The Automobile Transport Rajasthan Ltd. vs State of Rajasthan & Ors.(3).
The is, without doubt a regulatory measure, Parliament having enacted it for the express purpose of "the regulation of mines and the development of minerals".
The Act and the rules 758 properly made thereunder are, therefore, outside the purview of article 301.
Even otherwise article 302 which enables Parliament, by law, to impose such restrictions on the freedom of trade, commerce or intercourse between one State and another or within any part of the territory of India as may be required in the public interest also furnishes an answer to the claim based on the alleged contravention of article 301.
The is a low enacted by Parliament and declared by Parliament to be expedient in the public interest.
Rule 8C has been made by the State Government by notification in the official Gazette, pursuant to the power conferred upon it by Sec. 15 of the Act.
A statutory rule, while ever subordinate to the parent statute, is, otherwise, to be treated as part of the statute and as effective. "Rules made under the Statute must be treated for all purposes of construction or obligation exactly as if they were in the Act and are to be of the same effect as if contained in the Act and are to be judicially noticed for all purposes of construction or obligation. (State of U.P. & Ors.
vs Babu Ram Upadhya)(1); (See also Maxwell; Interpretation of Statutes, 11th Edn.
49 50).
So, Statutory rules made pursuant to the power entrusted by Parliament are law made by Parliament within the meaning of article 302 of the Constitution.
To hold otherwise would be to ignore the complex demands made upon modern legislation which necessitate the plenary legislating body to discharge its legislative function by laying down broad guidelines and standards, to lead and guide as it were, leaving it to the subordinate legislating body to fill up the details by making necessary rules and to amended the rules from time to time to meet unforeseen and unpredictable situations, an within the framework of the power entrusted to it by the plenary legislating body.
State of Mysore vs H. Sanjeeviah(2) was cited to us to show that rules did not become part of the statute.
This was case where by reference to Sec. 77 of the Mysore Forest Act which declared the effect of the rules, it was held that the rules when made did not become part of the Act.
That was apparently because of the specific provisions of Sec. 77 which while declaring that the rules would have the force of law stopped short of declaring that they would become part of the Act.
In the absence of any express provision, as now, the ordinary rule as enunciated in Maxwell and State of Uttar Pradesh & Ors.
vs Babu Ram Upadhya (supra) would perforce apply.
The next question for consideration is whether Rule 8C is attracted when applications for renewal of leases are dealt with.
The argument was that Rule 9 itself laid down the criteria for grant of renewal of leases and therefore rule 8C should be confined, in its application, to 759 grant of leases in the first instance.
We are unable to see the force of the submission.
Rule 9 makes it clear that a renewal is not to be obtained automatically, for the mere asking.
The applicant for the renewal has, particularly, to satisfy the Government that the renewal is in the interests of mineral development and that the lease amount is reasonable in the circumstances of the case.
These conditions have to be fulfilled in addition to whatever criteria is applicable at the time of the grant of lease in the first instance, suitably adapted, of course, to grant of renewal.
Not to apply the criteria applicable in the first instance may lead to absurd results.
If as a result of experience gained after watching the performance of private entrepreneurs in the mining of minor minerals it is decided to stop grant of leases in the private sector in the interest of conservation of the particular mineral resource, attainment of the object sought will be frustrated if renewal is to be granted to private entrepreneurs without regard to the changed outlook.
In fact, some of the applicants for renewal of leases may themselves be the persons who are responsible for the changed outlook.
To renew leases in favour of such persons would make the making of Rule 8C a mere exercise in futility.
It must be remembered that an application for the renewal of a lease is, in essence an application for the grant of a lease for a fresh period.
We are, therefore, of the view that Rule 8C is attracted in considering applications for renewal of leases also.
Another submission of the learned counsel in connection with the consideration of applications for renewal was that applications made sixty days or more before the date of G.O.Ms.
No. 1312 (2 12 1977) should be dealt with as if Rule 8C had not come into force.
It was also contended that even applications for grant of leases made long before the date of G.O.Ms.
No. 1312 should be dealt with as if Rule 8C had not come into force.
The submission was that it was not open to the Government to keep applications for the grant of leases and applications for renewal pending for a long time and then to reject them on the basis of Rule 8C notwithstanding the fact that the applications had been made long prior to the date on which Rule 8C came into force.
While it is true that such applications should be dealt with within a reasonable time, it cannot on that account be said that the right to have an application disposed of in a reasonable tune clothes an applicant for a lease with a right to have the application disposed of on the basis of the rules in force at the time of the making of the application.
None has a vested right to the grant or renewal of a lease and none can claim a vested right to have an application for the grant or renewal of a lease dealt with in a particular way, by applying particular provisions.
In the absence 760 of any vested rights in anyone, an application for a lease has necessarily to be dealt with according to the rules in force on the date of the disposal of the application despite the fact that there is a long delay since the making of the application.
We are, therefore, unable to accept the submission of the learned counsel that applications for the grant of renewal of leases made long prior to the date of G.O.Ms.
No. 1312 should be dealt with as if Rule 8C did not exist.
In the view that we have taken on the several questions argued before us all the appeals arising out of applications for the grant or renewal of leases for quarrying black granite in Government lands are allowed and the Writ Petitions filed in the High Court are dismissed.
Special leave is granted in cases in which leave had not been previously granted.
The appeals are allowed and disposed of in the same manner.
There are, however, a few appeals in which the applications were not for the grant or renewal of leases to quarry black granite in Government lands but were for permission to quarry black granite in Patta lands in which the right to minerals belonged to the applicants private owners themselves.
Apart from the fact that Rule 8C occurs in a group of Rules in Section II, which bears the head "Government lands in which the minerals belong to the Government" while the rules relating to lands in which the right to minerals belongs to private owners are dealt with in Section III.
The language of Rule 8C is clear that it cannot have any application to lands in which the right to minerals belongs to the applicants themselves.
Rule 8C is only concerned with leases for quarrying black granite and it cannot, therefore, have any application to cases where no lease is sought from the Government.
In the case of lands in which the right to minerals belongs to private owners and those owners seek permission to quarry black granite the applications will have to be dealt with under the relevant rules in Sec.
III of the Tamil Nadu Minor Mineral Concession Rules.
Rule 8C, it may be noted, does not impose a general ban on quarrying black granite but only imposes a bar on the grant of leases of quarrying black granite.
Appeals and Special Leave Petitions which arise out of applications for the grant of permission to quarry black granite in the Patta lands belonging to the applicants themselves, have therefore, to be dismissed.
The result is, Special Leave Petition Nos.
9257, 9259, 9260, 9271, 9273 to 9282 and 9284 of 1980 are dismissed and Special Leave Petition Nos 9234 to 9248, 9250 to 9256, 9258, 9261 to 9270,9272,9283,9285,9286,9288,9289 and 9290 of 1980 are granted and Appeals allowed.
Civil Appeal Nos. 2602 to 2604 of 1980 are allowed.
There will be no order as to costs.
N.K.A. Ordered accordingly.

dataset_name: IN-Abs

summary/full:
The Mines and Minerals (Regulation & Development) Act, 1957 (Central Act) was enacted in the public interest to enable the Union to take under its control the regulation of mines and the development of minerals.
Exercising its power under this Act, the Central Government declared by a notification that black granite was a minor mineral.
Exercising power vested in it by section 15 of the Act, the State Government made the Tamil Nadu Minor Mineral Concession Rules, 1959.
Rule 8 of the Rules prescribes the procedure for lease of quarries to private persons.
By rule 8 C, introduced in 1977, leases for quarrying black granite in favour of private persons were banned.
Sub rule (2) of this rule enacts that the State Government themselves may engage in quarrying black granite or grant leases for quarrying black granite in favour of any corporation wholly owned by the State Government.
Several applications for the grant of fresh leases as well as for the renewal of leases for quarrying black granite belonging to the State Government were submitted to the State Government, some prior to the introduction of rule 8C and some after the rule came into force.
The State Government considered all the applications and rejected all of them in view of rule 8C.
The respondents filed writ petition questioning the vires of Rule 8 C on various grounds.
The High Court struck down Rule 8 C on the ground that it exceeded the rule making power given to the State Government and held that it was not open to the appellant Government to keep the applications pending for a long time and then to dispose them of on the basis of a rule which had come into force later.
As a result all the applications were disposed of without reference to rule 8 C.
The appellant contended that: (I) The approach of the High Court was vitiated by its failure to notice the crucial circumstance that the minerals belonged to the Government, (II) The respondents had no vested or indefeasible right to obtain a lease or a renewal to quarry the minerals, (III) There were good reasons for banning the grant of lease to quarry black granite to private parties and (IV) The Government could not be compelled to grant leases which would result in the destruction of the mineral resources of the country.
On behalf of the respondent it was submitted that (I) the question of ownership of the minerals was irrelevant, (II) It was not open to the appellant 743 to exercise its subordinate legislative function in a manner to benefit itself as owner of the minerals, nor was it open to the appellant to create monopoly by such means, (III) There was violation of articles 301 and 303 of the Constitution, (IV) Rule 8 C had no application to renewals and (V) That in any event it would not have the effect of affecting applications made more than 60 days before it came into force.
Accepting the appeals, it was ^ HELD: Rule 8 C was made in bonafide exercise of the rule making power of the Appellant Government and not in its misuse to advance its own self interest.
Making a rule which is perfectly in order is not to be considered a misuse of the rule making power, if it advances the interest of State, which really means the people of the State.
Rivers, forests, minerals and as such other resources constitute a nation 's natural wealth.
These resources are not to be frittered away and exhausted by any one generation.
Every generation owes a duty to all succeeding generations to develop & conserve the natural resources of the nation in the best possible way.
It is in the interest of mankind.
It is in the interest of the Nation.
It is recognised by Parliament.
Parliament has declared that it is expedient in the public interest that the Union should take under its control the regulation of mines and the development of minerals.
[751C D, 753G H] 2.
The Public interest which induced Parliament to make the declaration contained in S.2 of the Mines & Minerals (Regulation and Development) Act, 1957 has naturally to be the paramount consideration in all matters concerning the regulation of Mines & Minerals.
Parliament 's Policy is clearly discernible from the provisions of the Act.
It is the conservation and the prudent and discriminating exploitation of minerals, with a view to secure maximum benefit to the community.
There are clear sign posts to lead and guide the subordinate legislating authority in the matter of the making of rules.
[751G H] 3.
The other provisions of the Act, particularly sections 4A, 17 and 18, indicate that the rule making authority under S.15 has not exceeded its powers in banning leases for carrying black granite in favour of private parties and in stipulating that the State Government themselves may engage in quarrying black granite or grant leases for quarrying black granite in favour of any corporation wholly owned by the State Government.
To view such a rule made by the Subordinate legislating body as a rule made to benefit itself merely because the State Government happens to be the subordinate legislating body is, but, to take too narrow a view of the functions of that body.
[751H, 752A B] H. C. Narayanappa & Ors.
vs State of Mysore & Ors.
; @ 745, 752 753 referred to.
Whenever there is a switch over from 'private sector ' to 'public sector ' it does not necessarily follow that a change of policy requiring express legislative sanction is involved.
It depends on the subject and the statute.
But if a decision is taken to ban private mining of a single minor mineral for the purpose of conserving it, such a ban, if it is otherwise within the bounds of the authority given to the Government by the Statute, cannot be said to involve any change of policy.
The policy of the Act remains the same and it is, the conservation and the prudent and discriminating exploitation of 744 minerals, with a view to secure maximum benefit to the community.
Exploitation of minerals by the private and/or the public sector is contemplated.
If in the pursuit of the avowed policy of the Act, it is thought exploitation by the public sector is best and wisest in the case of a particular mineral and, in consequence, the authority competent to make the subordinate legislation makes a rule banning private exploitation of such mineral, which was hitherto permitted.
There is no change of policy merely because that was previously permitted is no longer permitted.
[756A D] Municipal Corporation of the City of Toronto vs Virgo , Attorney General for Ontario vs Attorney General for the Dominion and the Distillers and Brewers Association, , State of Uttar Pradesh and Others vs Hindustan Aluminium Corporation Ltd. and Ors., ; , G. K. Krishnan etc.
vs The State of Tamil Nadu and Anr. etc.
[1975] 2 SCR 715 @ 721, Commonwealth of Australia vs Bank of New South Wales referred to.
The restrictions, freedom from which is guaranteed by article 301 would be such restrictions as directly and immediately restrict or impede the free flow or movement of trade.
The Act and the rules properly made thereunder are, therefore, outside the purview of article 301.
Even otherwise article 302 which enables Parliament, by law, to impose such restrictions on the freedom of trade, commerce or intercourse between one State and another or within any part of the territory of India as may be required in the public interest also furnishes an answer to the claim based on the alleged contravention of article 301.
[757F H, 758A B] 7.
The Mines and Minerals (Regulation and Development) Act is a law enacted by Parliament and declared by Parliament to be expedient in the public interest.
Rule 8 C has been made by the appellant Govt.
by notification in the official Gazette, pursuant to the power conferred upon it by sec.
15 of the Act.
A statutory rule, while ever subordinate to the parent statute, is, otherwise, to be treated as part of the statute and as effective. "Rules made under the Statute must be treated for all purposes of construction or obligation exactly as if they were in the Act and are to be of the same effect as if contained in the act and are to be judicially noticed for all purposes of construction or obligation.
[758B G] Atiabari Tea Co. Ltd. vs State of Assam & Ors. ; The Automobile Transport Rajasthan Ltd., vs State of Rajasthan & Ors.
[1963] 1 SCR 491 and State of U.P. & Ors.
vs Babu Ram Upadhya ; , referred to.
Rule 9 makes it clear that a renewal is not to be obtained automatically, for the mere asking.
The applicant for the renewal has, particularly, to satisfy the Government that the renewal is in the interests of mineral development and that the lease amount is reasonable in the circumstances of the case.
These conditions have to be fulfilled in addition to whatever criteria is applicable at the time of the grant of lease in the first instance, suitably adapted, of course, to grant of renewal.
Not to apply the criteria applicable in the first instance may lead to absurd results.
Therefore rule 8 C is attracted in considering applications for renewal of leases also.
[759A D] 9.
While the applications should be dealt with within a reasonable time, it cannot on that account be said that the right to have an application disposed 745 of in a reasonable time clothes an applicant for a lease with a right to have the application disposed of on the basis of the rules in force at the time of the making of the application.
No one has a vested right to the grant or renewal of a lease and none can claim a vested right to have an application for the grant or renewal of a lease dealt with in a particular way, by applying particular provisions.
In the absence of any vested rights in any one, an application for a lease has necessarily to be dealt with according to the rules in force on the date of the disposal of the application despite the fact that there is a long delay since the making of the application.
[759G H, 760A] 10.
The language of Rule 8 C is clear that it can not have any application to lands in which the right to minerals belongs to the applicants themselves.
In the case of lands in which the right to minerals belongs to private owners and those owners seek permission to quarry black granite the applications will have to be dealt with under the relevant rules in Sec.
III of the Tamil Nadu Minor Mineral concession Rules.
Rule 8 C does not impose a general ban on quarrying black granite but only imposes a bar on the grant of leases for quarrying black granite.
[760D F]