Karnataka High Court Strikes Down Rule 42 (7) of Karnataka Minor Mineral Concession Rules, 1994 as Unconstitutional and Ultra Vires

Karnataka HC Strikes Down Rule 42 (7) of Karnataka Minor Mineral Concession Rules, 1994 as Unconstitutional and Ultra Vires

The Karnataka High Court by two judges benche Hon'ble Chief Justice Mr. Abhay S. Oka and Justice S. Vishwajith Shetty struck down Rule 42 (7) of the Karnataka Minor Mineral Concession Rules, 1994 inserted by way of an amendment notified in the Special Gazette 30th June, 2020 as unconstitutional and ultra vires the Mines and Minerals (Development and Regulation) Act, 1957 (Act of 1957) by way of writ in the nature of certiorari or any other appropriate writ, order or direction.

The main issue involved in these writ petitions was that, "whether the State Legislature has legislative competence to enact sub-rule(7) of Rule 42 of the Karnataka Minor Mineral Concession Rules, 1994 authorizing collection of entre fee from a person who transports certain category of minor minerals from other States with valid transit permit to the State of Karnataka?"

Shri. Arvind Kuloor Kamath, the learned Senior Counsel appearing for the petitioners submitted that the field of transportation of minerals and the regulation of mining is already occupied by the Act of 1957 which is law made by the Parliament. It was also submitted that the power of the State Government to make law for the levy of fees in accordance with Entry-66 of List II in the seventh Schedule of the Constitution of India can be exercised only to make a plenary law and not for exercising power of delegated legislation.

It was pointed out that neither the Section 15 nor Section of the Act of 1957 permitted the State Government to levy the fees for recovering the expenses relating to setting up of infrastructure for checking illegal transportation. Hence the contention of the State that the levy of such fee is a regulatory cannot be accepted and the test of quid pro quo would apply and the burden is on State Government to establish that the service has been rendered to the petitioners.

Hence the petitioners concluded that Article 14 and the impugned levy of fee is violative of Article 301 of the Constitution of India.

Advocate General, Shri Prabhuling K. Navadgi however pointed out that there is a general rule making power vested in the State Government as contemplated by Section 15 (1A) as well as Section 15 (1A)(o) of the Act of 1957. He urged that Section 23-C of the Act of 1957 confers powers on the State Government to make Rules for preventing illegal mining, transportation and storage of minerals.

The counsel further contended that there is a broad co-relation established between the fee collected and the service being rendered for the purpose of primary object of preventing illegal mining and the element of quid pro quo in the strict sense is not a sine qua non for levy of a fee. With this note the counsel submitted that the provision of sub-rule (7) of the Rule 42 is constitutionally valid and no interference is called for.

The Court after considering the submissions observed that Section 15 (1) confers an authority to make rules for regulating grant of quarrying leases, mining leases and other mineral concessions in respect of minor minerals and the purposes connected therewith.

The Court further highlighted, "This power can be exercised for dealing with mining or quarrying inside the State of Karnataka. This provision does not authorise the State Government to make rules concerning minor minerals lawfully excavated in the other states. It is pertinent to note here that provision of Section 23-C does not apply to only minor minerals, but it applies to all categories of minerals."

Therefore, the court stated that the provision of both Section 15 and Section 23-C do not authorise the State Government to make rules for regulating the minerals lawfully excavated in other states.

The Court further asserted that as the State Government has no legislative competence to make rules for levy of transportation fee or charge on minerals lawfully excavated in other States, the requirement of showing quid pro quothere was no requirement.

According to the Court, the argument advanced by the petitions with regard to breach of Article 301 and 304 of the Constitution was not necessary as it held that under Section 15 nor under Section 23-C of the Act of 1957, no power vests on the State Government to make rules regarding the entry of lawfully excavated minerals from the other state and to levy fees on the entry of lawfully excavated minerals from other states into Karnataka.

The petition was successful and the court accordingly passed the order by striking down Rule 42 (7) of the Karnataka Minor Mineral Concession Rules, 1994 inserted by way of an amendment as unconstitutional and ultra vires the Mines and Minerals (Development and Regulation) Act, 1957 (Act of 1957) by way of writ in the nature of certiorari.