STATE OF TAMIL NADU AND ANR. versus P. KRISHNAMURTHY AND ORS.

Citation: [2006] 3 S.C.R. 396 · Decided: 24-03-2006 · Supreme Court of India · Bench: ARUN KUMAR

Cited by 11 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
STATE OF TAMIL NADU AND ANR. 
v. 
P. KRISHNAMURTHY AND ORS. 
MARCH 24, 2006 
[R.V. RA VEENDRAN AND ARUN KUMAR, JJ.] 
Mines and Minerals (Development and Regulation) Act 1957--Sections 
15, 4A-Tamil Nadu Minor Mineral Concession Rules 1959-Rule 38A. 
C 
Mining-Natural Justice-Premature Termination of Mining Leases/ 
Permissions-State Government making Rule providing for exclusive vesting 
of right to exploit sand in itself and terminating permaturely all existing 
mining /eases/permissions-Whether lease/permission holders are entitled to 
protection of section 4A (3) requiring giving a reasonable opportunity of 
D being heard to lease holders--Held, yes-However, lease agreement provided 
for termination simplicitor by six months notice in writing on either side 
without assigning cause-Held, lease can be terminated either by giving six 
months as per terms of contract or by giving a hearing uls 4A ( 3)-Lease 
holders permitted to carry on quarrying activities for 6 months. 
E 
Section 15-Rule 38A--Power of State to Regulate Mining-Scope of-
Held, power lo regulute vested in the State Government extend to total 
prohibition in appropriate cases-State can reserve exclusive right of quarrying 
sand to the exclusion of lease/permission holders-Rule 38A which vests the 
exclusive right to quarry sand in the State Government, held, was valid and 
F suffer from no infirmity. 
Sec 4A (3)-Rule 38A-Delegated Legislation-Natura/ Justice, 
applicability of-Parent statute conferring power on executive authority to 
prematurely terminate mining lease specifically requires observance of the 
principles of natural justice for doing the act-Held, the delegate cannot, 
G while making a rule in exercise of power granted under the Act, make provision 
for termination of all leases without giving an opportunity of hearing to the 
lease holders-Pare of Rule 38A which purports to terminate all leases 
without notice or hearing to the lessees, held, invalid 
Section 4(A}-Rule 38A-Rule making-Natural Justice-Application 
H 
396 
ST A TE OFT AMIL NADU v. P. KRISHNAMURTHY 
397 
to Legislative Action-Held, making of Rule 38A is a legislative act and not A 
an administrative act-It need not oblige the observance of rules of natural 
justice, unless the enabling statute require their observance. 
Section 4A-Premature termination of Mining Lease--Statutory 
provision conferring power on executive authority to terminate mining lease-
Held, is an executive act-Opportunity of hearing must be afforded to the B 
affected persons before taking decision under. 
Administrative Law-Delegated Legislation-Validity of-Grounds of 
i;:hallenge discussed-Held, subordinate legislation must conform to the parent 
statute. 
c 
The State Government granted quarrying leases/permissions to 
private agencies. On the recommendation of a High Level Committee, the 
State Government took a decision in public interest to stop quarrying of 
sand in Government lands and Ryotwari lands by private agencies and took 
upon itself exclusively, all sand quarrying activities in the State w.e.f. D 
2.10.2003. For this purpose a notification was issued inserting Rule 38A 
in the Tamil Nadu Minor Mineral Concession Rules 1959. Lease/ 
permission holders filed several writ petitions in the High Court 
challenging Rule 38A. The Division Bench upheld the validity of Rule 38A 
in so far as it created an exclusive right in the State to quarry sand. It 
was, however, of the view that the leases/permissions which had already E 
been granted and were in force as on 2.10.2003 when the Rule came into 
force, could not be terminated without giving a hearing to the lessees/ 
permission holders. The State came in appeal to this Court challenging 
the conditions stipulated by the High Court while upholding the validity 
of Rule 38A. 
Allowing the appeal in part, the Court 
HELD: I. The validity of Rule 38A in so far as it seeks to vest the 
exclusive right in the State Government, in regard to sand quarrying, does 
F 
not arise as the High Court has rightly held that creation of such monopoly G 
is not illegal having regard to the scheme of the Act and the decisions of this 
Court recognizing the right of the State to create such monopoly. 
[405-A, BJ 
State of Tamil Nadu v. Hind Stone and Ors., (1981) 2 SCC 205 and Gem 
Granites v. State of Tamil Nadu, 11995) 2 sec 413, relied upon. 
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398 
SUPREME COURT REPORTS 
(2006] 3 S.C.R. 
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2. There is a presumption in favour of constitutionality or 

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