GUJARAT POTTERY WORKS versus B. P. SOOD, CONTROLLER OF MINING LEASES FOR INDIA & ORS.

Citation: [1967] 1 S.C.R. 695 · Decided: 03-10-1966 · Supreme Court of India · Bench: K. SUBBA RAO · Disposal: Appeal(s) allowed

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
c 
D 
E 
F 
G 
H 
GUJARAT POTTERY WORKS 
v. 
B. P. SOOD, CONTROLLER OF MINING LEASES FOR 
INDIA & ORS. 
October 3, 1966 
[K. SUBBA RAO, C. J., M. HIDAYATULLAH, S. M. SJKRI, 
R. S. BACHAWAT AND RAGHUBAR DAYAL, JJ.) 
Ji.fines and 
Minerals 
(Regulation 
and 
Development) Act 1951-
Agreement to lease with possession in 1939-Lease deed in 1951-Modi-
fication by Controller under the Rules-Period of lease 
if from com-
mencement of Act or earlier-Validity of modification. 
Mining Leases (Modification of Terms) Rules, 1956 r. 2(c)-"Exist-
ing Mining lease"J meaning of-Continuance and validity of Rules. 
Constitution of India, Art. 31-A(I) (e)-"Wlnning" meaning of. 
Along with an agreement to execute a perpetual lease of mineral right. 
possession was delivered to the lessee in 1939. The lease was execut.ed 
in 1951, in execution of a decree for specific performance. The leasee 
transferred bis rights to the appellant in 1954. 
In 1960 the respondent 
Controller modified the terms of the lease under Mining Lease (Modifi-
cation of Terms) Rules, 1956, which continued in force by s. 29 of the 
Mines and Minerals (Regulation and Development) 
Act, 1957. 
The 
modifications were that the period of lease was reduced to 25 years from 
1939 and the renewal was to be regulated in accordance with the law and 
rules in force. 
The appellant's revision was dismissed by the Central 
Government. 
In appeal to this Court, the appellant challenged the order 
on the grounds that ( i) the mining lease in favour of the appellant was 
dated 1951, therefore, was not an "existing mining lease" as defined in 
r. 2(c) of the Rules; (ii) the lease was not for the purpo.e of merely 
"winriing" the mineral but was also for extracting the mineral and taldng 
it away; therefore, the protection of Art. 31A(i)(e) 
was not available 
to save the reduction in the period of the lease without paying coml'ensa-
tion; (iii) the rules were made before enactment of the Consbtution 
Seventh Amendment Act, and were therefore void as 
till then Central 
Legislature could enact with respect to acquiring of properly for Union 
purpose only and .not for State purpo.e; 
(iv) the rules were ultra vires 
the 1948 Act and. therefore could not continue after the enactment of the 
1957 Act as only valid rules could continue under s. 29 of the 1957 Act; 
and (v) the Controller was not justified in limiting the period of the lease 
to 25 years from 1939. 
HELD: (Per Subba Rao, C.J., Sil<ri and Dayal, 
JJ.) : The appeal 
must be allowed to the effect that the period of lease shall be 20 years 
from June 1, 1958, when the 1957 Act came into force, and its renewal 
would be regulated in accordance with the law and rules in force. The 
appeal in respect of other modifications must be dismissed. 
[705 E] 
(i) Th~ granting of a lease is different from the formal execution of 
the lease deed. The execution of the formal deed is only compliance 
with the legal requirements to make the grant legally enforceable. Rule 
27 of the Mineral Concession Rules,. 1949 show that· it is really the sonc-
tioning of the lease which amounts to the granting of the lease. Further, 
the agreement to lease was acted upon by the parties and. gives all the 
terms of the lease. [698 C, DJ 
!Vl16Sup-CI/66-16 
696 
SUPllBMB COUllT llBPORTS 
(1967] 1 S.C.R· 
(ii) The expression "winning" in Art. 31A(l)(e) should be constru-
ed to mean "getting or extracting minerals from the mines and other in-
cidental purposes." 
(701 DJ 
The various definitions in the Act or the rules are for a limited pur-
pose and the word 'winning' or 'win' does not always have 
the same 
content, and, therefore, they cannot be any guide for construing the word 
'winning' in the constitutional provision of Art, 31A(l)(e). Therefore 
the rules for the modification 
of any rights accruing under this lease 
cannot be deemed to be void on the ground that they take away the rights 
conferred by Arts. 14, 19 or 31 of the Constitution. {702 C-E] 
(iii) The 1956 rules were made in connection with the regulation of 
mines and for the deve)opment of minerals and the Central Legislature 
was competent to provide for the making of such rules by tho 1948 Act. 
The rules do not come within the field of the acquisition and requisition-
ing of property. 
(702 HJ 
(iv) Even if the rules were not consistent with the provisions of tho 
1948 Act and were therefore void, they 
could be continued after the 
enforcement c.f the 1957 Act. 
The effect of

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