SAURASHTRA CEMENT AND CHEMICAL INDUSTRIES LIMITED versus THE UNION OF INDIA AND ANR.

Citation: [1993] SUPP. 3 S.C.R. 841 · Decided: 23-11-1993 · Supreme Court of India · Bench: R.M. SAHAI, A.S. ANAND · Disposal: Dismissed
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

SAURASHTRA CEMENT AND CHEMICAL 
INDUSTRIES LIMITED 
v. 
THE UNION OF INDIA AND ANR. 
NOVEMBER 23, 1993 
[R.M. SAHAI AND DR. AS. ANAND, JJ.) 
A 
B 
Mines and Minerals (Regulation and Development) Act, 1957-Sec-
tions 9(1) and 9(3)-Fi.xation of royalty-Notifications issued by Central 
Government-Rate of royalty for limestone-Revision of-Taking into account C 
average sale price-Not Unit-wise-Validity of the Notifications. 
The appellant, a manufacturer of cement, held a mining lease for 
excavating limestone. It was required to pay royalty on it at the rate 
specified in Second Schedule to the Mines and Minerals (Regulation an4 
Development) Act, 1957. From time to time notifications were issued by D 
the Central Government under S.9 of the Act, modifying the rate of royalty. 
Validity of these notifications was challenged by the appellant and it was 
claimed that the power to amend the Second Schedule and to t:nhance the 
rate of royalty was circumscribed-and limited by proviso to sub-section (3) 
of Section 9 in two respects, viz., (i) the rate of royalty could not -exceed E 
20% of the sale price of the mineral at the pit's head, and (ii) the Central 
Government could not enhance it more than once during four years. The 
High Court upheld the second challenge and negatived the first. 
Against the High Court's. order, the appellant preferred the present 
appeal. 
F 
Dismissing the appeal, this Court 
HELD : Payment of royalty under sub-section (1) of S.9 of the Mjnes 
and Minerals (Regulation) Act, 1957 is in respect of r-:11eral removal from 
area but fixation. under clause (a) of proviso to sub-section (3) is related G 
to mineral and not to area leased or the unit. The rate did not admittedly 
exceed 20% of the sale price of the mineral at the pit's head if the average 
sale price of the mineral for the entire country is taken into account. The 
law does not require that fixation of royalty should be made unit-wise only. 
It cannot, therefore, be said that the notifications issued by the Govern- H 
841 
842 
SUPREME COURT REPORTS (1993) SUPP. 3 S.C.R. 
A ment were violative of the proviso to sub-section (3) of Section 9 of the Act. 
[844-A-B] 
B 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2048 of 
1979. 
From the Judgment and Order dated 19.1.79 of the Gujarat High 
Court in Special Civil Application No. 367 of 1971. 
P.H. Par~kh for the Appellant. 
V.C. Mahajan, R. Singhvi, S.N. Terdol and Ms. A. Subhashini for the 
C Respondents. 
C.B. Babu and Anip Sachthey for the State of Gujarat. 
The Judgment of the Court was delivered by 
R.M. SAHAI, J. The only question that survives for consideration in 
D this appeal directed against judgment and order of the Gujarat· High Court 
is if the fJXation of royalty under the Mines and Minerals (Regulation and 
Development) Act of 1957, (referred to as 'the Act') was contrary to clause 
(a) of the proviso to sub-section (3) of Section 9 of the Act. 
The appellant, a manufacturer of cement held a mining lease for 
E excavating limestone. It was required to pay royalty on it at the rate 
specified in Second Schedule. Limestone appeared at item no. 8. The rate 
of royalty on it in the Act, when enacted was, 5% of the sale price at the 
pit's mouth subject to minimum of thirty seven naya paise per tonne. The 
Schedule was amended in October 1962. It substituted item no. 8 and 
F provided for payment of royalty at Rs. 0.75 per tonne subject to rebate of 
Rs. 0.38 per tonne to be given on limestone beneficiated by forth flotation 
method. The entry was again amended in 1968 and limestone was 
categorised as superior grade with 45% or more of CAO and inferior grade 
with less than 45% with CAO. The rate provided was at Rs. 1.25 per tonne 
for the superior grade and seventy five paise for the inferior grade. The 
G Schedule was amended, again, in January 1970 and the categorisation made 
in 1968 was done away with and the rate of royalty was fixed at Rs. 1.25 
per tonne. Validity of these notifications issued under Section 9 of the Act 
by the Central Government fJXing royalty was challenged by the appellant 
and it was claimed that the power to amend the Second Schedule and to 
H enhance the rate of royalty was circumscribed and limited by proviso. to 
.. 
•, 
SAURASHTRACEMENT v. U.O.L [SAHAI,J.] 
843 
sub-section (3) of Section 9 in two respects, one, the rate of royalty could A 
nor exceed 20% of the sale price of the mineral at the pit's head. second, 
the Central Government
Excerpt shown. Read the full judgment & AI analysis in Lexace.