Full Judgment Text
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PETITIONER:
AMBICA QUARRY WORKS & ANR.
Vs.
RESPONDENT:
STATE OF GUJARAT & ORS.
DATE OF JUDGMENT11/12/1986
BENCH:
MUKHARJI, SABYASACHI (J)
BENCH:
MUKHARJI, SABYASACHI (J)
SINGH, K.N. (J)
CITATION:
1987 AIR 1073 1987 SCR (1) 562
1987 SCC (1) 213 JT 1986 1036
1986 SCALE (2)1037
CITATOR INFO :
R 1988 SC2187 (35,36)
ACT:
Gujarat Minor Mineral Rules, 1966: Rule 18--Renewal of
lease-Lease granted prior to coming into operation of Forest
(Conservation) Act, 1980--Renewal whether mandatory.
Forest (Conservation) Act, 1980: Pre-existing mining
leases-Renewal of--Whether could be claimed as a matter of
right.
Interpretation of statutes--Interpretation must sub-
serve and help implement intention of Act. Expression ’may’
when not construed as ’shall’.
Constitution of India:’ Article 141--Precedent--Ratio of
a decision to be understood in the background of facts of
the case.
HEADNOTE:
Sub-clause (b)(i) of rule I8 of Gujarat Minor Mineral
Rules, 1966, which were framed under Act 67 of 1957, pro-
vides that the lease for all minerals specified in sub-
clause (i) of clause (a) may be renewed by the competent
officer for one or more periods not exceeding ten years at
one time.
Section 2 of the Forest (Conservation) Act, 1980,
brought into force on 25th October, 1980 provides that
notwithstanding anything contained in any other law for the
time being in force in a State, no State Government or other
authority shall make, except with the prior approval of the
Central Government, any order directing (i) dereservation of
reserved forest, and (ii) the use of forest land for non-
forest purposes.
The appellants had been granted leases for quarrying
minor minerals prior to the coming into operation of the
1980 Act. Their applications for renewal of leases under r.
18 of the Rules were rejected by the competent authority on
the ground that the lands fell under the reserved forests
which were governed by the 1980 Act. Their revision applica-
tions failed, and the High Court also rejected the writ
petitions filed by them.
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In the appeals by special leave, it was contended for
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the appellants that the conditions precedent for the opera-
tion of the Act were not existing, that there was no ques-
tion of extending for non-forest purposes forest lands,
since their’s were existing quarry leases in areas which
were at the relevant time dereserved forests, that they had
not committed any breach of the terms of grant nor there
were any other factors disentitling them to such renewal,
that the words ’may be renewed’ in r. 18(b)(i) should be
read as ’shall be renewed’, and so read they make it incum-
bent on the Government to renew the lease if the lessee so
desired, and as they had invested large sums of money in
mining operations a duty was cast on the authorities to
exercise the power granting permission in a manner that they
could receive full benefit of their investments.
For the respondents it was contended that after the
coming into operation of 1980 Act there was no question of
renewal of the leases because it had prevented renewal of
lease without the approval of the Central Government.
Dismissing the appeals, the Court,
HELD: 1. Whether the power is one coupled with a duty
must depend upon the facts and circumstances of each case
and must be so decided by the Courts in each case. [569D]
I.2 The Gujarat Minor Minerals Rules, 1966 dealt with a
situation prior to the coming into operation of the Forest
(Conservation) Act, 1980. While under r. 18 of the Rules
there was power to grant renewal, which might have cast a
duty on account of the investments made by the appellants in
the areas covered by the quarrying leases, they could not
claim renewals as a matter of right after the Act was
brought into force. Their applications were rejected on good
grounds. The orders of the appropriate authorities deal with
the situation. [569G, F, 570B]
Julius v. Lord Bishop of Oxford, [1880] 5 Appeal Cases
214 and Craies on Statute Law, 7th Edn. 229, referred to.
2.1 All interpretations must subserve and help implement
the intention of the Act. The primary purpose of the Act of
1980 is to prevent further deforestation and ecological
imbalances. Therefore, the concept that power coupled with
duty enjoined upon the respondents to renew the lease,
stands eroded by the mandate of the legislation manifest in
the Act. The primary duty was to the community and that
564
took precedence over the obligation to the individuals.
[573C,A,569H-570A]
2.2 The appellants are asking for renewal of the quarry
leases. It will lead to further deforestation or at least it
will not help reclaiming hack the areas where deforestations
have taken place. The Central Government has not granted
approval. If the State Government was of the opinion that
this was not a case where it should seek approval of the
Central Government, the State Government could not apparent-
ly seek such approval. [572G, S73A]
3. The ratio of any decision must he understood in the
background of the facts of that case. A case is only an
authority for what it actually decides, and not what logi-
cally follows from it. [572C]
Quinn v. Leathem, [1901] Appeal Cases 495, referred to.
State of Rajasthan v. Hari Shankar Rajendra Pal, [1965]
3 SCR 402, State of Bihar v. Banshi Ram Modi and Others,
[1985] 3 SCC 643, distinguished.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 4250-425
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1 of 1986.
From the Judgment and Order dated 9th August, 1985 of
the Gujarat High Court in Spl. Civil Appln. No. 2471 of 1985
and 62 18 of 1983.
Govind Dass, S.H. Sheth, Mrs. H. Wahi and M.V. Goswami
for the Appellants.
P.S. Potio, T.U. Mehta, and M.N. Shroff for the Respondents.
The Judgment of the Court was delivered by
SABYASACHI MUKHARJI, J: We grant leave in these two
special leave applications and dispose of these appeals
arising out of the decisions of the High Court of Gujarat by
the judgment herein.
The two appeals centre round the question of how to
strike balance between the need of exploitation of the
mineral resources lying hidden in the forests and the pres-
ervation of the ecological balance and to arrest the growing
environmental deterioration and involve common questions of
law. In the appeal arising out of special leave petition No.
12041 of 1985 the appellant firm had been granted a
565
quarry lease for the minor mineral black trap at S. No. 73
of Village Morai of Taluka--Pardi, in the District of Valsad
in the State of Gujarat..The lease was granted on or about
8th November, 1971 for a period of ten years. The area
comprised of 13 acres of land for quarrying purpose. Three
persons were granted-2-1/2 acres of land each and the re-
maining-5-1/2 acres of land were placed at the disposal of
Industries, Mines and Power Department for the purpose of
granting quarry lease from the same. The case of the appel-
lant was that the said lands were dereserved from the forest
area from 1971.
On or about 3rd August, 1981 when the appellant’s term
of lease was about to expire, the appellant applied for
renewal of lease asper rule 18 of Gujarat Minor Mineral
Rules, 1966 (hereinafter called the said Rules). The appli-
cation of the appellant for renewal of lease was rejected by
the Assistant Collector, Valsad, on the ground that the land
fell under the "Reserved Forest" area and hence the Forest
(Conservation) Act, 1980 (hereinafter called ’1980 Act’)
applied to the forests. The forest department of State of
Gujarat refused to give ’no objection’ certificate. The
contention of the appellant was that by the order dated 29th
November, 1971, the forest department had dereserved the
said land from the reserved area and had allotted the land
for the quarrying purpose to the appellant. The contention
of the appellant was as the land was under the control of
the Industries, Mines & Power department, the 1980 Act did
not apply to the same. An appeal was preferred by the appel-
lant which was dismissed by the Director, Industries, Mines
and Power department Government of Gujarat on or about 4th
March, 1985.
It is asserted by the appellant that on or about 29th
January, 1983, the Government had issued two circulars
instructing the Director of Geology and Mining and other
authorities not to issue the leases in the fresh area issued
by the State Government. The appellant thereafter filed a
writ petition in the High Court of Gujarat. The High Court
of Gujarat dismissed the petition. The appellant has come up
in appeal before this Court from the said decision. The
appeal arising out of S.L.P. No. 12041 of 1985, hereinafter
mentioned as first appeal.
The case of the appellants in the second appeal is that
on diverse dates quarry leases. had been granted to the said
appellants. There were ten of them. Eight of the appellants
got their first renewal of their quarry leases in 1976-77.
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Appellant No. 9 applied for first renewal in August, 1979.
Appellant No. 6 applied for first renewal on 20th July,
1982. In 1982, some of the appellants except appellants 6 to
9 applied
566
for second renewal to the Collector. In December, 1982,
second renewals were refused by the Collector. Revision
filed by the appellants against the order of the Collector
was rejected by the Director, Geology and Mining in 1983 and
in December, 1983, writ petition often described as special
civil application was filed before the High Court, challeng-
ing the refusal to renew. The High Court rejected the said
writ petition. The second appeal herein arises out of the
said decision in August, 1985 of the High Court of Gujarat.
Both these appeals involve the question, whether after
coming into operation of 1980 Act, the appellants were
entitled to renewal either first or second of their quarry
leases? In this connection it is necessary to refer to the
1980 Act. This was an Act passed by the Parliament to pro-
vide for the conservation of forest and for matters connect-
ed therewith or ancillary thereto. The Statement of Objects
of the said Act is relevant. It is stated that deforestation
caused ecological imbalances and led to environmental dete-
rioration. It recognised that deforestation had been taking
place on a large scale in the country and it had thereby
caused widespread concern. With a view to checking further
deforestation, an Ordinance had been promulgated on 25th
October, 1980. The Ordinance made the prior approval of the
Central Government necessary for dereservation of reserved
forests and for the use of forest land for non-forest pur-
poses. The Ordinance had also provided for the constitution
of an advisory committee to advise the Central Government
with regard to grant of such approval. The 1980 Act replaced
the said Ordinance. The Act extends to the whole of India
except the State of Jammu & Kashmir, and came into force on
25th October,: 1980. Section 2 of the said Act is only
relevant for our present purpose. It provides as follows:
"2. Restriction on the dereservation of for-
ests or use of forest land for non-forest
purpose --Notwithstanding anything contained
in any other law for the time being in force
in a State, no State Government or other
authority shall make, except with the prior
approval of the Central Government, any order
directing--
(i) that any reserved forest (within the
meaning of the expression "reserved forest" in
any law for the time being in force in that
state) or any portion thereof, shall cease to
be reserved;
(ii) that any forest land or any portion
thereof may be used for any non-forest pur-
pose.
567
Explanation.--For the purposes of this section
"non-forest purposes" means breaking up or
clearing of any forest land or portion thereto
for any purpose other than re-afforestation. "
The said section makes it obligatory for the State
Government to obtain the permission of the Central Govern-
ment for (1) dereservation of reserved forest and (2) for
use of forest land’ for non-forest purposes. It is apparent,
therefore, that the two dual situations were intended to be
prevented by the legislation in question., namely dereserva-
tion of reserved forest, and use of forest land for non-
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forest purposes.
In the instant appeals leases for quarrying purposes had
been granted prior to the coming into operation of the Act
in question. Shri Gobind Dass, learned counsel for the
appellant in the first appeal and Shri Sheth learned counsel
for the appellants in the second appeal contended that there
was no question of extending for non-forest purposes forest
lands. There were existing quarry leases in one case first
renewal was sought and in some other cases second or third
renewals were being sought. Therefore these were at the
relevant time dereserved forests. Neither of the two contin-
gencies sought to be prevented was there. The conditions
precedent for the operation of the Act were not there in the
facts of these appeals, it was urged.
Our attention was drawn to rule 18 of Gujarat Minor
Mineral Rules, 1966 which were framed under the Act 67 of
1957 by the Government of Gujarat. The rules provided for
the period of the lease, renewals and availability of areas
already granted and sub-clause (b)(i) of the said rule 18 of
the said Rules provides as follows:
"(b)(i) The lease for all minerals specified
in-sub-clause (i) of clause (a) may be renewed
by the competent officer for one or more
periods and the period of renewal at one time
shall not exceed ten years and the total
period for which the lease may be renewed
shall not exceed twenty years in the aggre-
gate."
Shri Sheth drew our attention to rule 3 of
Part VIII (page 62) of the Manual which deals
with the procedure of granting renewals under
the rules.
On the other hand Shri Mehta, counsel for the
respondents in the
568
first appeal and Shri Poti, counsel for the
respondents in the second appeal contended
before us that after coming into operation of
1980 Act there was no question of renewal of
the leases because this Act had prevented
renewal of the lease without the approval of
the Central Government.
Shri Gobind Dass, however, placed strong
reliance on State of Rajasthan v. Hari Shankar
Rajendra Pal, [1965] 3 SCR 402. That was a
decision dealing with Rajasthan Mines Minerals
Concession Rules, 1958. This Court in that
case was concerned with Rule 30 under Chapter
IV under the said Rajasthan Rules. This Court
observed that the word "may’ in the proviso in
rule 30 in regard to the extension of the
period by Government should be construed as
’shall’ so as to make it incumbent on Govern-
ment to extend the period of the lease if the
lessee desired extension. The Rajasthan Rules
provided, inter alia, as follows:
"Period of lease--A mining lease may be grant-
ed for a period of 5 years unless the appli-
cant himself desires a shorter period;
Provided that the period may be
extended by the Government for another period
not exceeding 5 years with option to the
lessee for renewal for another equivalent
period, in case the lessee guarantees invest-
ments in machinery, equipments and the like,
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at least to the tune of 20 times the value of
annual dead-rent within 3 years from the grant
of such extension. The value of the machinery,
equipment and the like shall be determined by
the Government. Where the lease is so renewed,
the dead rent and the surface rent shall be
fixed by the Government within the limits
given in the Second Schedule to these rules,
and shall" in no case exceed twice the origi-
nal dead-rent and surface rent respectively,
and the royalty shall be charged at the rates
in force at the time of renewal."
It was submitted by Shri Gobind Dass that the said rule
was in pari materia with sub-rule (b) of rule 18 of Gujarat
Minor Mineral Rules 1966. Often when a public authority is
vested with power, the expression ’may’ has been construed
as ’shall’ because power if the conditions for the exercise
are fulfilled is coupled with duty. As observed in Craies On
Statute Law, 7th Edition, page 229, the expression "may" and
"shall" have often been subject of constant and con-
569
flicting interpretation. "May" is a permissive or enabling
expression but there are cases in which for various reasons
as soon as the person who is within the statute is entrusted
with the power, it becomes his duty to exercise it. As early
as 1880 the Privy Council in Julius v. Lord Bishop of Ox-
ford, 1880, 5 Appeal Cases, 214. explained the position.
Earl Cairns, Lord Chancellor speaking for the judicial
committee observed dealing with the expression "it shall be
lawful" that these words confer a faculty or power and they
do not of themselves do more’ than confer a faculty or
power. But the Lord Chancellor explained there may be some-
thing in the nature of the thing empowered to be done,
sometimes in the object for which it is to be done, some-
thing in the conditions under which it is to be done, some-
thing in the title of the person or persons’ for whose
benefit the power is to be exercised, which may couple the
power with a duty, and make it the duty of the person in
whom the power is reposed, to exercise that power when
called upon to do so. Whether the power is one coupled with
a duty must depend upon the facts and circumstances of each
case and must be so decided by the courts in each case. Lord
Blackburn observed in the said decision that enabling words
were always compulsory where the words were to effectuate a
legal right.
Here the case of the appellants is that they have in-
vested large sums of money in mining operations. Therefore,
it was the duty of the authorities that the power of grant-
ing permission should have been so exercised that the appel-
lants had the full benefits of their investments. It was
emphasized that none of the appellants had committed any
breach of the terms of grant nor were there any other fac-
tors disentitling them to such renewal. While there was
power to grant renewal, and in these cases there were
clauses permitting renewals, it might have cast a duty to
grant such renewal in the facts and circumstances of the
cases specially in view of the investments made by the
appellants in the areas covered by the quarrying leases, but
renewals cannot be claimed as a matter of right for the
following reasons.
The rules dealt with a situation prior to the coming
into operation of 1980 Act. ’ 1980 Act’ was an Act in recog-
nition of the awareness that deforestation and ecological
imbalances as a result of deforestation have become social
menaces and further deforestation and ecological imbalances
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should be prevented. That was the primary purpose writ large
in the Act of 1980. Therefore the concept that power coupled
with the duty enjoined upon the respondents to renew the
lease stands eroded by the mandate of the legislation as
manifest in 1980 Act in the facts and circumstances of these
cases. The primary
570
duty was to the community and that duty took precedence, in
our opinion, in these cases. The obligation to the society
must predominate over the obligation to the individuals.
For the same reasons we are unable to accept the view
that the ratio of the decision of this Court in the case of
State of Rajasthan v. Hari Shankar Rajendra Pal (supra)
could be invoked in the facts and circumstances of these
cases to demand renewal. Furthermore it appears to us from
the affidavits in opposition filed on behalf of the respond-
ents that there were good Founds for not granting the renew-
al of the lease. The orders of the appropriate authorities
in both these cases deal with the situation.
Both Shri Gobind Dass as well as Shri Sheth, however,
relied very heavily on the decision of this Court in State
of Bihar v. Banshi Ram Modi and Others, [1985] 3 SCC 643. As
the said decision dealt with section 2 of the 1980 Act, it
is necessary to refer to the facts of that case. There a
mining lease for winning mica was granted by the State
Government in respect of an area of 80 acres of land which
formed part of reserved forest before coming into force of
1980 Act. However, the forest land had been dug up and
mining operations were being carried on only in an area of 5
acres out of the total lease area of 80 acres. While carry-
ing on mining operations, the respondent came across two
associate minerals felspar and quartz in the area. The
respondent in that case, therefore, made an application to
the State Government for execution of a Deed of Incorpora-
tion to include the said minerals also in the lease. Though
the 1980 Act had come into force, the State Government
executed the Deed of Incorporation incorporating these items
without obtaining prior sanction of the Central Government
under section 2 of 1980 Act. Since the respondent in that
case made a statement before the Court that he would carry
on the mining operations only on 5 acres of land which had
already been utilised for non-forest purposes even before
the Act came into force, the question for determination was
whether prior approval of the Central Government under
section 2 of 1980 Act in the facts of that case was neces-
sary for the State Government for granting permission to win
associate minerals also within the same area of 5 acres of
land? This Court answered the question in negative and
affirmed the judgment of the High Court. This Court observed
at pages 647 and 648 of the report as follows:
"The relevant parts of Section 2 of
the Act which have to be construed for pur-
poses of this case are clause (ii) of and
571
the Explanation to that section. Clause (ii)
of Section 2 of the Act provides that notwith-
standing anything contained in any other law
for the time being in force in a State, no
State Government or other authority shall
make, except with the prior approval of the
Central Government, any order directing that
any forest land or any portion thereof may be
used for any non-forest purpose. Explanation
to Section 2 of the Act defines "non-forest
purpose" as breaking up or clearing of any
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forest land or portion thereof for any purpose
other than reforestation. Reading them togeth-
er, these two parts of the section mean that
after the commencement of the Act no fresh
breaking up of the forest land or no fresh
clearing of the ’forest on any such land can
be permitted by any State Government or any
authority without the prior approval of the
Central Government. But if such permission has
been accorded before the coming into force of
the Act and the forest land is broken up or
cleared then obviously the section cannot
apply. In the instant case it is not disputed
that in an area of five acres out of eighty
acres covered by the mining lease the forest
land had been dug up and mining operations
were being carried on even prior to the coming
into force of the Act. If the State Government
permits the lessee by the amendment of the
lease deed to win and remove felspar and
quartz also in addition to mica it cannot be
said that the State Government has violated
Section 2 of the Act because thereby no per-
mission for fresh breaking up of forest land
is being given. The result of taking the
contrary view will be that while the digging
for purposes of winning mica can go on, the
lessee would be deprived of collecting felspar
or quartz which he may come across while he is
carrying on mining operations for winning
mica. That would lead to an unreasonable
result which Would not in any Way subserve the
object of the Act. We are, therefore, of the
view that while before granting permission to
start. mining operations on a virgin area
Section 2 of the Act has to be complied with
it is not necessary to seek the prior approval
of the Central Government for purposes of
carrying out mining operations in a forest
area which is broken UP or cleared before the
commencement of the Act. The learned counsel
for respondent 1 has also given an undertaking
that respondent 1 would confine his mining
operations only to the extent of five acres of
land on which mining operations
572
have already been carried out and will not
feel or remove any standing trees thereon
without the prior permission in writing from
the Central Government. Taking into considera-
tion all the relevant matters, we are of the
view that respondent 1 is entitled to carry on
mining operations in the said five acres of
land for purposes of removing felspar and
quartz subject to the above conditions."
The aforesaid observations have been set in detail in
order to understand the true ratio of the said decision in
the background of the facts of that case. It is true that
this Court held that if the permission had been granted
before the coming into operation of the 1980 Act and the
forest land has been broken up or cleared, clause (ii) of
section 2 of 1980 Act would not apply in such a case. But
that decision was rendered in the background of the facts of
that case. The ratio of any decision must be understood in
the background of the facts of that case. It has been said
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long time ago that a case is only an authority for what it
actually decides, and not what logically follows from it.
(See Lord Halsbury in Quinn v. Leathem) [1901] Appeal Cases
495. But in view of the mandate of Article 141 that the
ratio of the decision of this Court is a law of the land,
Shri Gobind Dass submitted that the ratio of a decision must
be found out from finding out if the converse was not cor-
rect. But this Court, however, was cautious in expressing
the reasons for the said decision in State of Bihar v.
Banshi Ram Modi & Others (supra). This Court observed in
that decision that the result of taking the contrary view
would be "that while digging for purposes of winning mica
can go on, the lessee would be deprived of collecting fel-
spar or quartz which he may come across while he is carrying
on mining operations for winning mica. That would lead to an
unreasonable result which will not in any way sub-serve the
object of the Act." There was an existing lease where mining
operation was being carried on and what was due by incorpo-
ration of a new term was that while mining operations were
being carried on some other minerals were available, he was
given right to collect those. The new lease only permitted
utilisation or collection of the said other minerals.
In the instant appeals the situation is entirely differ-
ent. The appellants are asking for a renewal of the quarry
leases. It will lead to further deforestation or at least it
will not help reclaiming back the areas where deforestations
have taken place. In that view of the matter, in the facts
and circumstances of the case, in our opinion, the ratio of
the said decision cannot be made applicable to support the
appellants’ demands in these cases because the facts are
entirely diffe-
573
rent here. The primary purpose of the Act which must sub-
serve the interpretation in order to implement the Act is to
prevent further deforestation. The Central Government has
not granted approval. If the State Government is of the
opinion that it is not a case where the State Government
should seek approval of the Central Government, the State
Government cannot apparently seek such approval in a matter
in respect of, in our opinion, which it has come to the
conclusion that no renewal should be granted.
In that view of the matter and the scheme of the Act, in
our opinion, the respondents were fight and the appellants
were wrong. All interpretations must sub-serve and help
implementation of the intention of the Act. This interpreta-
tion, in our opinion, will sub-serve the predominant purpose
of the Act.
In that view of the matter, we are unable to sustain the
submissions urged in support of these appeals. The appeals
therefore fail and are accordingly dismissed. In view of the
facts and circumstances of these appeals, however, we direct
the parties to pay and bear their own costs.
P.S.S. Appeals
dismissed.
574