Holding

The Mines and Minerals (Development and Regulation) Act, 1957 and its rules do not permit a concessional royalty rate for ryotwari pattadars, and royalty is a tax; therefore the State cannot collect royalty at a rate lower than that prescribed.

Summary

The cement companies, claiming to be ryotwari pattadars, challenged a Tamil Nadu Government order that required them to pay full royalty and dead rent on mining leases, arguing they were entitled to a 50% concessional rate. The High Court had partially restrained the State from demanding royalty above 50% for patta lands, leading to appeals before the Supreme Court. The Court examined whether a mining lease is a lease or a mere permission, whether sub‑soil ownership affects royalty liability, the true nature of royalty under the Mines and Minerals (Development and Regulation) Act, 1957, and whether the State has any discretion to levy royalty at a rate lower than that prescribed. It held that the Act and the Mineral Concession Rules contain no provision for a concessional royalty rate for ryotwari pattadars, that royalty is a tax/excise rather than a contractual consideration, and that the State has no discretion to deviate from the statutory rates. Consequently, the appeals were not disposed on merits but were remanded and tagged with related appeals for further pleading and factual clarification.

Issues considered

What is the legal character of a mining lease under the Mines and Minerals (Development and Regulation) Act, 1957?
Does ownership of sub‑soil rights by a ryotwari pattadar affect the State's right to collect royalty?
What is the nature of 'royalty' under the Act – tax or contractual consideration?
Does the State have discretion, under the Act or the Constitution, to levy royalty at a concessional rate different from that prescribed?
Does the character of royalty influence the existence of such discretion?

Legislation cited

Estates (Abolition and Conversion into Ryotwari) Act, 1948
Government of India Act, 1935
Mineral Concession Rules, 1960s. Chapter IV, s. Chapter V, s. Chapter VI
Mines and Minerals (Development and Regulation) Act, 1957s. 14, s. 16, s. 3(e), s. 4, s. 9
Tamil Nadu Inam Estates (Abolition & Conversion into Ryotwari) Act, 1963
Transfer of Property Act

Subjects

mining leaseroyaltyryotwari pattadarMines and Minerals Actconcessional ratesubsoil rightstaxationstate discretionArticle 226mineral concession

Judgment

[2013] 17 S.C.R. 529

DALMIA CEMENT (BHARAT) LTD. A
v.
STATE OF TAMIL NADU & ANOTHER
(Civil Appeal No.5329 of 2002)
DECEMBER 16, 2013
B
[R.M. LODHA, J. CHELAMESWAR AND
MADAN B. LOKUR, JJ.]

Mines and Minerals (Development and Regulation) Act,
1957 - ss.3(e), 4, 9, 14 and.16- Mineral Concession Rules, C
1960 - Chapters IV, V;;,:;d VI - Mining lease in the State of
. Tamil Nadu - Payment of royalty - Non-entitlement of a
ryotwari pattadar who secures mining lease under the 1957
Act to pay royalty at a concessional rate - Whether the State
Government has a discretion to collect royalty from any D ·
lessee at a concessional rate, other than the one prescribed
under the Act in the absence of any specific provision under
"the Act and Rules conferring such discretion - Held: Answer
to the question depends upon the answer to 5 other questions/
issues - Pleadings in the writ petitions (culminating in the E
present appeals) hopelessly ambiguous, bald and imprecise
to enable the Court to examine any one of the issues - But
one of the issues alreac[y referred to a larger Be.nch of the
Supreme Court, arising out of appeals from other parts of the
country - Requirement of symmetric application of law; in a F
manner which is uniform throughout the country - Opportunity
granted to the appellants as well as the State Government to
suitably amend the pleadings in the writ petitions (which led
to the present appeals) and place the complete facts
necessary for adjudication of the questions on hand - Present G
appeals accordingly tagged with Civil Appeal Nos. 4056-64
of 1999 etc. - The Estates (Abolition and Conversion into
Ryotwari) Act, 1948- The Tamil Nadu lnam Estates (Abolition
& Conversion into Ryotwari) Act - Madras lnam Estates

529 H
530 SUPREME COURT REPORTS [2013] 17 S.C.R.

A (Abolition and Conversion of Ryotwari) Act, 1963 - s.3(b) -
Pleadings - Inadequate pleadings.

The Government of Tamil Nadu in the Industries
Department issued a letter No. 628 dated 10.5.1982
8 addressed to the Collectors of the various districts
asking them to stop sharing 50% of the royalty and dead
rent with the patta land holders in respect of mining
leases and to collect the whole amount due as royalty and
dead rent prescribed in the Second and third Schedules
C to the Mines and Minerals {Development a·nd Regulation)
Act, 1957 in the case of land in which the minerals vested
in the Government. Pursuant to the letter, the Collectors
called upon the appellant-cement companies to remit
royalty and the dead rent at the rates prescribed under
the Mines and Minerals {Development and Regulation)
D Act, 1957. Challenging the abovementioned two
proceedings, the \ippellant-cement companies filed writ
petitions.

The writ petitions were partly allowed by the High
E Court to the extent that during the currency of the leases,
which were in force as on the date of filing of the writ
petitions, the respondents were restrained from
demanding and collecting from the appellants, royalty in
excess of 50 percent insofar as patta lands are
F concerned. The appellants as well as the State
Government were aggrieved by the above-mentioned
judgment insofar as it went against them, and therefore,
the present appeals.

Directing the present appeals to be tagged with Civil
G Appeal Nos. 4056-64 of 1999 etc, the Court

HELD: 1.1. The writ petitions which culminated in the
present appeals contained wholly bald and vague
assertions. It is in the background of such pleadings, the
H High Court embarked upon a lengthy enquiry into the
DALMIA CEMENT (BHARAT) LTD. v. STATE OF 531
TAMIL NADU
rights of the pattadar in the sub-soil. [Paras 3, 12] [538- A
B; 543-B-C]

1.2. In the adjudication of matters in exercise of the
jurisdiction under Article 226 of the Constitution,
unfortunately a system of paying minimum attention, (to B
employ a mild expression of disapproval) has developed
over a period of time. When a number of matters are
(allegedly similar in nature) clubbed together for
adjudication, the problem gets compounded. [Para 13]
[543-D]
c
1.3. The assertion by Dalmia Cement that it is a
ryotwari pattadar itself is a doubtful statement of fact. An
enquiry whether such a pattadar is entitled to the sub-soil
rights was wholly uncalled for as there is not even a
single sentence in the entire writ petition whereby Dalmia D
Cement asserted that the sub-soil rights vest in them.
[Para 21] [548-B-C]

1.4. No information regarding the number of leases
held by Dalmia Cement, the relevant dates on which such
E
leases were first granted or subsequently renewed (if
renewed) is available on the record. Nor the information
w.r.t. the mineral which is covered by any one of those
leases (if there is more than one lease) is available on the
. record. Therefore, it is not known whether the leases
pertain to a 'mineral' or 'minor mineral'. [Para 22] [548-D] F

1.5. The only fact which appears from the record is
that pursuant to a mining lease granted way back on
10.11.1945, Dalmia Cement has been carrying on mining
operations in some parcel of land. In 1945, there was no G
statute in this country regulating the activity of mining
operations. It appears that there were certain executive
instructions called the Madras Mining Manual which
governed mining operations in that part of the country
known as the Madras province. Whether the said mining H
532 SUPREME COURT REPORTS [2013) 17 S.C.R.

A lease of 1945 was in fact a lease as defined under the
Transfer of Property Act or was a permission granted by
ti.e State to carry on mining activity in exercise of its
executive authority under the Government of India Act,
1935 requires examination, on an appropriate pleading.
B An inquiry into such matters is not really called for in the
absence of any specific pleading or issue. [Para 23] [548-
E-H]

2. In exercise of powers conferred under Section 13
C of the Mines and Minerals (Development and Regulation)
Act, 1957, the Government of India made rules known as
Mineral Concession Rules, 1960. Chapter IV of the said
rules deals with the procedure for grant and regulation
of the mining leases in respect of the land in which the
minerals vest in the Government. Chapter V of the said
D rules deals with the procedure for obtaining a
prospecting licence or mining lease in respect of land in
which the minerals vest in a person other than the
Government. Chapter VI of the said rules deals with the
mining leases in respect of land in which the minerals
E vest partly in the Government and partly in private person.
The rules deal with various classes of the lands covered
by the abovementioned three chapters and provide for
different procedures for securing the grant of a mining
lease and regulatory measures for working of such mines
F and allied matters. But none of the rules provide for
collection of royalty at a concessional rate in the case of
the lands where the minerals vest in a person other than
the Government. In ·any event, attention of this Court was
not drawn to any such rule. [Para 34] [552-E-F; 553-A-C]
G
3. No Rule framed by the State of Tamil Nadu (in case
any of the mining leases of the appellants pertains to
minor minerals) authorising the State to collect royalty at
a concessional rate w.r.t. a mining lease granted in favour
of a "ryotwari pattadar" of the land, is brought to the
H
DALMIA CEMENT (BHARAT) LTD. v. STATE OF 533
TAMIL NADU
notice of this Court. Nor is there any specific pleading in A
that regard. (Para 35) (553-C-D]

4. Even if it is assumed that the Cement companies
are pattadars (or the successor in interest of such
pattadars) either under the original ryotwari system or the B
holders of the 'ryotwari patta' pursuant to the abolition of
estates/imams, and also assume that each of the
appellant companies is also the owners of the subsoil
rights of their patta lands, such OWNERSHIP does not
make any difference insofar as the authority of the State C
to collect royalty. Even w.r.t. the original ryotwari patta
lands where admittedly the mineral vested in the pattadar,
the State had asserted (in BSO 10 dated 19.03.1888), its
authority to collect "a share in the produce of the
minerals worked commuted into money payment" -
which eventually acquired the nomenclature Royalty. D
[Para 36) (553-E-H]

Thressiamma Jacob & Ors. Vs. Geologist, Department
of Mining and Geology and Ors. (2013) 9 SCC 725 - referred
~- E
5. There is nothing either in the Mines and Minerals
(Development and Regulation) Act, 1957 or the Rules
framed thereunder which entitles a ryQtwari pattadarwho
secures a mining lease under the Act to pay royalty at a
F
concessional rate. The question then is whether the State
Government has a discretion to collect royalty from any
lessee at a concessional rate, other than the one
prescribed under the Act in the absence of any specific
provision under the Act and Rules conferring such
discretion. An answer to the question depends upon the G
answer to the following questions:

1. What is true legal character of a mining lease
i.e. whether mining lease is a lease within the
meaning of that expression as defined under H
534 SUPREME COURT REPORTS (2013] 17 S.C.R.

A the Transfer of Property Act or it is only a
permission to carry an mining activity?

2. Whether ownership of subsoil makes any
difference to the determination of the above
B
question?

3. · What is true legal character of the expression
Royalty under the Mines and Minerals
(Development and Regulation) Act, 1957, i.e.,

c Whether it is a Tax or a consideration for a
contract of mining lease?

4. Whether the State has any discretion either
under the provision13 of the Mines and Minerals
(Development an(I Regulation) Act, 1957 or
D
under the Scheme of the Constitution to
collect Royalty at rates lower than those
prescribed under the Act and the Rules?

5.
.
Whether the true character of Royalty makes
E any difference for the determination of
Question No.4? [Para 37] [556-C-D; 557-A-E]

6.1. The pleadings in the writ petitions (culminating
in the present appeals) are hopelessly ambiguous, bald
F and imprecise to enable the Court to examine any one of
the above-mentioned issues. But the third of the above-
mentioned issues already stands referred to a larger
Bench of this Court, arising out of appeals from other
parts of the country. Dismissal of these appeals may
eventually lead to asymmetric application of law; in a
G manner which is not uniform throughout the country
thereby impacting the coherent and uniform
interpretation of the Constitution. It is therefore deemed
appropriate to provide an opportunity to the appellants
as well as the State of Tamil Nadu to suitably amend the
H pleadings in the several writ petitions and place the
DALMIA CEMENT (BHARAT) LTD. v. STATE OF 535
TAMIL NADU
complete facts necessary for the adjudication of the A
questions on hand. [Para 38] [557-F-H; 558-A]

6.2. The appellants are called upon to file affidavits
disclosing the full facts necessary for adjudication of the
issues raised hereinabove. It is open to the State of Tamil B
Nadu to file a counter affidavit to such further affidavits
filed by the appellants, in case the State disputes anyone
of the facts to be newly brought on record. [Para 39] [558-
8]

6.3. The question "What is the true nature of royalty/ C
dead rent payable to minerals produced/mined/extracted
from mines" (alongwith certain other connected
questions) was referred to a larger Bench by an order of
this Court dated 30th March, 2011 in Mineral Area
Development Authority & Ors. Vs. Steel Authority of India & D
Ors. It is deemed appropriate that these appeals be
tagged with Mineral Area Development Authority & Ors. Vs.
Steel Authority of India & Ors., Civil Appeal Nos. 4056-64 of
1999 etc .. [Paras 40, 41) [558-C-E]
E
Mineral Area Development Authority & Ors. Vs. Steel
Authority of India & Ors. (2011) 4 SCC 450: 2011 (4) SCR
19 - referred to.

Case Law Reference:
(2013) 9 sec 125 F
referred to Para 36
2011 (4) SCR 19 referred to Para 40
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
5329 of 2002
G
From the Judgment and Order dated 04.03.2002 of the
Madras High court in Writ Appeal No. 685 of 1991.

WITH

Civil Appeal No. 1352 of 2005 H
536 SUPREME COURT REPORTS [2013] 17 S.C.R.

A Civil Appeal Nos. 5332, 5333 and 5335-5336 of 2002

Rajiv Dtravan, R. Venkataramani, Gaurav Juneja, Saman
Ahsan, Rahul Chandra, Sanjeev K. Kapoor (for Khaitan & Co.),
Prabha Swami, Krishnamurthi Swami, U.A. Rana, M. Majumdar
B (for Gagrat & Co.), V. Vijay Lakshmi, Shodhan Babu, Neelam
Singh, B. Balaji, for the appearing parties.

The Judgment of the Court was delivered by

CHELAMESWAR, J. 1. By a common judgment dated 4th
C March, 2002, the High Court of Madras dismissed a batch of
writ appeals and some connected writ petitions. Aggrieved by
the said judgment, four companies, which are carrying on the
business of manufacture and sale of cement in the State of
Tamil Nadu, carried the matter to this Court in these appeals.
D
2. The Government of Tamil Nadu in the Industries
Department issued a letter No. 628 dated 10.5.1982
addressed to the Collectors of the various districts. The relevant
part of the letter reads -
E "I am directed to state that the rates of Royalty and dead
rent in respect of leases over patta lands have been fixed
at 50% (half rate) as a convention which has been followed
for a long time and this is not based on rules.

F 2. In 1977 in his Audit report, the Senior Deputy
Accountant General has pointed out the incorrect levy of
royalty at half the rates for mining in patta lands, since no
proportion has been prescribed in the Minerals
Concession Rules 1960 in regard to the share in the
G Minerals between the pattadar and the Government. The
Senior Deputy Accountant General has also pointed out
in his D.O. fourth cited that omission to levy royalty in the
state at the mandatory rate for mining patta lands where
minerals fully vest in Government resulted in the
H
DALMIA CEMENT (BHARAT) LTD. v. STATE OF 537
TAMIL NADU [J. CHELAMESWAR, J.]
Government forgoing revenue amounting to Rs.40.28 A
lakhs on 39.12 lakhs tones of minerals in respect of 29
leases during 1974 to 1976 alone. In pursuance of this
audit objection and in consultation with the Director of
lnduslries and Commerce erstwhile Board of Revenue and
the Government of Karnataka and Andhra Pradesh, the B
Government issued orders in their fifth cited the effect that
the existing system referred to in para 1 above might be
continued for the present.

3. The above order is not a final decision of the C
Government but it is only tentative order. The share of
minerals, to pattadars in respect of inam, manyam and
sarvanyam lands may vary with reference to the period and
nature of assignments. Further, the Senior Deputy
Accountant General has also pointed out that there was
heavy loss of revenue to the Government to the tune of D
Rs.40.28 lakhs in the year 1974-76 due to the levy of half
rate of royalty and dead rent prescribed in the second and
third Schedules to the Mines and Minerals (Regulation and
Development) Act, 1957 in respect of mining leases over
patta lands as in the case of Government lands. E
Accordingly, I am to request you to stop sharing 50% of
the royalty and dead rent with the patta land holders in
respect of mining leases and to collect the whole amount
due as royalty and dead rent prescribed in the second and
third schedul,es to the said Act as in the case of land in F
which the minerals vest in the Government with effect from
the date of issue of this Order.

I am also to state that inam<;lar and proprietor of the lands
permanently settled will be entitled to minerals rights G
subject to the conditions that the land holder and the
inamdar establishes his proportionate rights in the
minerals by means of document evidence."

Pursuant to the said letter, the Collectors called upon these
cement companies to remit royalty and the dead rent at the H
538 SUPREME COURT REPORTS [2013] 17 S.C.R.

A rates prescribed under the Mines and Minerals (Development
and Regulation) Act'.

3. Challenging the abovementioned two proceedings, writ
petitions were filed by the abovementioned cement companies
with (we are sorry to say) wholly bald and vague assertions. To
8
demonstrate the vagueness of pleadings, we extract, from W.P.
No. 7783/2002 which culminated in C.A. No.5329/2002.

"1. The petitioner is the ryotwari pattadar of several items
of lands, comprising an extent of about 355 acres in and
c around Dalmiapuram. The petitioner has been carrying on
mining operations in these lands for the last nearly 45
years. The mineral that is obtained from these lands is
lime-stone, gypsum etc. for the purpose of manufacture of
Cement. For the purpose of mining operations, the
D Government and the petitioner entered into registered
agreements about 45 years ago. Those agreements would
last till other end of this century. For the mining operations
to be carried on by the petitioner, the petitioner had to pay
royalty to the Government at the rates to be specified from
,E time to time.

2. Ever since the date of those agreements, the
Government had agreed to collect half the royalty from
persons who were carrying mining operations in their own
patta lands. In respect of poramboke lands belonging to
F the Government, the lessees for mining purposes have

1. Footnote The Government in their letter cited have instructed to levy
anQ collect the royalty and Dead Rent in respect of the patta lands leased
out' for mining purposes at the full rate of Royalty and dead rent prescribed
G in the Second and third Schedules to the Mines and Minerals (Regulation
and Development) Act. 1957, with effect ~ram 10.5.82.
2. Please therefore remit the royalty and Dead Rent at the rates prescribed
in the second and third schedules to the Mines Act and apply for transport
permits to the Special Tehsildar - Mines, Tiruchirapalli. The amount of
Royalty and Dead Rent should be remitted at the full rate as per statute
H provision in the Act and the rules thereunder with effect from 10.5.82.
DALMIA CEMENT (BHARAT) LTD. v. STATE OF 539
TAMIL NADU [J. CHELAMESWAR, J.]
been paying full royalty. The collection of Y, royalty from A
ryotwari pattadars was based on the understanding of the
ryotwari pattadars' rights as contemplated in the Madras
mining manual which then governed and regulated the
rights of parties."
B
4. It is apparent from the above that no details of survey
numbers or the villages in which the lands are located; the exact
extent of the land where the mining operation is carried on; or
details of the minerals said to have been exploited by the
petitioner, are furnished. Neither details of the relevant C
registered agreements allegedly executed some 45 years prior
to filing of the writ petitions nor copies thereof are given. The
entire writ petition proceeds on the basis that the petitioner as
a matter of right is liable to pay only 50% of the royalty payable
on extraction of the minerals. Such a right according to the
petitioner emanates from the law prevalent in regard to the D
subsoil rights 2 •

5. In the writ petition filed by Madras Cements Ltd. (Writ
Petition No. 3450 of 1983 culminating in Civil Appeal Nos.
5335-5336 of 2002) slightly better information is available E
though not adequate to adjudicate any issue projected in the
arguments. In para 3 of the writ petition, it is stated that Madras
Cements was granted two mining leases under G.0.Ms. No.
1238 i.e. lease dated 11.05.1971 and the lease deed dated
5.8.1971 for a period of 20 years and two corresponding lease F
deeds dated 30.8.1971 and 9.9.1971 were executed for a
period of 20 years each. According to the petitioner, they are
required to make payments:

"In respect of both the said mining leases, the rates of
G
2. Footnote Para 6 - ... Even since the petitioner and the Government had
entered into agreements for mining purposes (about 45 years ago), the
liability of the petitioner to pay 50% of the royalty was an effective term of
the contract based on the understanding of the low ad prevalent then in
regard to subsoil rights in different classes of lands. The Government is
bound by this Contract. H
540 SUPREME COURT REPORTS [2013] 17 S.C.R.

A royalty, dead rent and surface rent was ordered to be as
follows, both under the order of Government and the terms
of the lease deed entered into between parties, as
referred to above.

B
1 Royalty Government land Rs. 1.25 Patt~
per tons Rs. 0.6 er
tons

2 Dead Rent 1st Year Nil Nil

c 2nd Year to Rs. 12.50 Rs. 6.25
5th year production per
hectare hectare
per annum
. per annum

6th year to Rs. 25/- Rs. 12.50
D 10th year p.a. p.a.

11th year Rs. 37.50 Rs. 18.75
onwards p.a. p.a.

E 6. In Civil Appeal No. 1352 of 2005 again Madras Cement
Ltd. is the appellant The subject matter of dispute in the writ
petition No. 6562 of 1998 is an extent of 23.36 acres of land
for which a mining lease for limestone was granted in GOMs
No. 240 industries dated 20.07.1982 for a period of 20 years.
F An absolutely confusing pleading in the following terms is set
out at para 2 of the writ petition.

"2. The Petitioner entered into a mining lease under G.O.
Ms. No. 240 industries dated 20.07.1982 for a period of
20 years in respect of ryoti lands in pandalgudi village in
G Ramanathapuram west district at Virudhunagar of the
extent of 23.36 acres for a period of 5 years, with the
Collector of Ramanatliapuram but was charged by ms.
494 to Rs. 10/- per tonne as royalty and dead rent Rs. 30/
- from 2nd year doubling every 5 years, as the third
H
DALMIA CEMENT (BHARAT) LTD. v. STATE OF 541
TAMIL NADU [J. CHELAMESWAR, J.)
respondent over these villages. The royalty fixed in the A
agreement was in accordance with part V of Act 57 of 57
namely that in respect of Government land it was Rs. 1.25
per tonne and in respect of patta lands it was Rs. 0.63 per
tonne and for deceases the petitioner has been promptly
and regularly paying the same." B

7. An equally callous and imprecise counter affidavit is filed
by the State of Tamil Nadu in the said writ petition. While
admitting grant of the above-mentioned mining lease, the
counter affidavit states as follows :-
c
" .. Consequent on the revision application filed by the
company to the Government of India and on the orders
passed by the Government of India, this State Government
in G.O. Ms. No. 494, Industries Department, dated 23.3.88
have sanctioned a mining lease for a period of 10 years D
from 23.11.82 over an extent of 23.36 acres in
Keelpandalgudi Village, Aruppukottai Taluk. In the
Government order, the Government fixed the rate of royalty
as Rs. 10/- per tonne for mineral removed from the qu_arry
and fixed the dead rent as follows: E

First Year - Nil -

Second to fifth year - Rs. 30/- per hectare per annum

Sixth to tenth year - Rs. 60/- per hectare per annum F

Eleventh Year onwards - Rs. 90/- per hectare per annum

3. It is further submitted that the Government of India, in
their notification dated 5.5.87, have fixed the royalty at Rs.
10/- per tonne for limestone and the dead rent as follows: G

First Year - Nil -

Second to fifth year - Rs. 30/- per hectare per annum

Sixth to tenth year - Rs. 60/- per hectare per annum H
542 SUPREME COURT REPORTS [2013] 17 S.C.R.

A Eleventh Year onwards - Rs. 90/- per hectare per annum

According to the notification of Government of India, the
first respondent Government have fixed the rate of royalty
and dead rent as noted above in G.O. Ms. No. 493
Industries Department dated 23.3.88.
B
4. Regarding the averments made in paragraph 1 of the
affidavit, it is submitted that the petitioner's contention that
he is the General Manager and the Principal Officer of the
Company and the company is entering into lease
c agreements with the Government for quarrying limestone
may be correct."

8. The absolute callousness of the deponent of the affidavit
is apparent from the above extracted portion, particularly para
0 4 of the counter affidavit. The deponent neither clearly admits
nor denies existence of the mining lease. alleged by the
petitioner.

9. Pleadings in the other writ petitions are no better.

E 10. All the writ petitions came to be disposed off by the
learned Judge of the Madras High Court by a common order
dated 15.3.1991. The operative portion of the order reads as
follows:-

"For the foregoing reasons, these writ petitions are partly
F
allowed to the extent that during the currency of the leases,
which were in force as on the date of filing of these writ
petitions, the Respondents are restrained from demanding
and collecting from the petitioners, royalty in excess of 50
percent in so far as patta lands are concerned. There will
G be no order as to costs."

11. Both the writ petitioners as well as the State of Tamil
Nadu were aggrieved by the above-mentioned judgment
insofar as it went against them. Therefore, all of them carried
H intra court appeals. The details of such appeals insofar as they
DALMIA CEMENT (BHARAT) LTD. v. STATE OF 543
TAMIL NADU [J. CHELAMESWAR, J.]
are relevant for the purpose of the appeals before us are. stated A
in the common counter affidavit filed by the State of Tamil Nadu
in the various special leave petitions which eventually
culminated in the present batch of appeals 3 •

12. It is in the background of such pleadings without even B
precisely identifying the issues that are required to be
examined - obviously even on an earnest attempt, the
identification of the issues would be difficult if not impossible -
the High Court embarked upon a lengthy enquiry into the rights
of the pattadar in the sub-soil.
c
13. In the adjudication of matters in exercise of the
jurisdiction under Article 226 unfortunately a system of paying
minimum attention, (to employ a mild expression of
disapproval) has developed over a period of time. When a
number of matters are (allegedly similar in nature) clubbed D
together for adjudication, the problem gets compounded.

14. The High Court recorded a "finding" that Dalmia

E
3. Footnote 6. It ·,s submitted that hence. there were two groups of Writ
Appeals filed before the Hon'ble High Court to decide the issues with regard
to the payment of 100% royalty in respect of patta land mines.
The following were the Writ Appeals filed by the petitioners.
SI. No. Name of the appellants No. of Writ Appeal
1. Dalmia Cements (B) Ltd. W.A. No. 685/91 F
2. Madras Cements Ltd., W.A. No. 686/91
3. India Cements Ltd., W.A. No. 698/91
4. Chemicals and Plastics (I) Ltd. W.A. No. 713/91
5. Dalmia Industries Ltd., W.A. No. 717/91
6. Associated Cement Companies WA No. 116/92
·G
Ltd.,
The following were the Writ Appeals filed by the Government:-
1. Writ Appeal Nos. 475 to 478, 480, 481, 483, 487, 488, 498 and 490 of
1993.
2. W.A. No. 479, 491 and 492 of 1993.
544 SUPREME COURT REPORTS [2013] 17 S.C.R.

A Cement is a "ryotwari pattadar'' of a large extent in and around
Dalmiapuram, Tiruchirappalli District. In our opinion, such a
statement is both imprecise and inaccurate. In a document
marked by the petitioners as Annexure P-2 in Civil Appeal No.
5329 of 2002 which is an order of the Government of Madras
B now called Tamil Nadu in GOMs No. 903 dated 25th February,
1966, it is recorded that M/s. Dalmia Cement applied for grant
of mining lease over an extent of 1386.36 acres in
Chettichavadi Jaghir Village, Salem Taluk, Salem District. It is
further stated in the said document "As the entire inam estate
c of Chettichavadi Jaghir has been taken over by the Government
under the Madras lnam Estates (Abolition and Conversion into
Ryotwari) Act, 1963 (Madras Act 26of1963), thus Government
have decided to grant the mining lease applied for by the
company treating the lands as government lands"•.
D 15. From the contents of the said documents, it appears
that Dalmia Cement applied for a mining lease over a huge

4. Footnote G.O.Ms. No. 903 dated 25th February, 1966 - ORDER - Dalmia
Cement (Bharat) limited, Dalmiapuram have applied for the grant of mining
E lease for magnasite over an extent of 1386.36 acres in Cheltichavadi Jaghir
Village, Salem Taluk, Salem District, for a period of 20 years. · Out -of the
total extent of 1386.36 acres, applied for an extent 493.26 acres is covered
by the lease deed dated 10.11.1945 for which modification proposals are
pending with the controller mining leases for India so as to bring it in
conformity with other provisions of the Mines and Minerals (Regulation and
Development) Act, 1957 and the Rules framed there under. As regards
F the remaining extent of 893.1 acres, the applicant Company are carrying
on. mining operations in these land by virtue of the temporary permission
granted to them in accordance with ihe procedure prescribed in this
Government's proceedings No. 5303 development dated 28.12.1950.
Consequent on the coming in to force of the Mineral Coneession Rules,
1960 containing M.O.D. provisions for the grant of Minerals Concessions
in ryotwari and other intermediary tenure lands, the applicant have also
G applied for regularization of the permission already granted following the
procedures prescribed in the said Rules. As the entire lnam estate of
Chettichavadi Jaghir has been taken over by the Government under the
Madras lnam Estates (Abolition and Conversion into Ryotwari) Act, 1963
(Madras Act 26of1963), this Government have decided to grant the mining
lease applied for by the Company treating the lands as Government
H lands ....
DALMIA CEMENT (BHARAT) LTD. v. STATE OF 545
TAMIL NADU [J. CHELAMESWAR, J.]
extent of land of which a part i.e. 493.26 acres was covered A
by an existing lease deed dated 10.11.1945. In the
circumstances, the assertion of -Oalmia Cement in the writ
petition, that it was a ryotwari pattadar of an extent of 355 acres
becomes incomprehensible.
B
16. The expression "ryotwari pattadar" acquired a definite
legal connotation in the erstwhile province of Madras in British
India where two parallel systems of revenue administration were
in vogue. They were known as (1) the zamindari, and (2) the
ryotwari systems. The zamindari system came to be initially C
introduced by Lord Cornwalis in the province of Bengal. In the
year 1799, the East India Company ordered that the zamindari
system designed by Cornwalis be adopted even in the Madras
Presidency. Though such a system was initially introduced in
some parts of the Madras Presidency, in 1806 Lord William
Bentick, the then Governor of Madras recorded a minute that D
, "creation of zamindaris where none existed before was neither
calculated to improve the condition of the lower classes of
people nor politically wise with reference to the future security
of the Government". Eventually, in 1813, the Court of Directors
of East India Company prohibited introduction of zamindari E
system any further 5 .

17. In 1812, the Court of Directors of the East India
Company ordered that the ryotwari system should be
introduced in all the provinces where the settlement had not-ye! F
been finalised. The difference between the zamindari and~
ryotwari systems is very succinctly described by Sundararaja
Iyengar at page 153.

"The distinguishing feature of this system is that the state
is brought into direct contact with the owner of land and G
collects its revenue through its own servants without the

5. Footnote For detailed history of the zamindari system. see Land Tenures
in the Madras Presidency by S. Sundararaja Iyengar, Second Edition,
Chapter IV. H
546 SUPREME COURT REPORTS [2013] 17 S.C.R.

A intervention of an intermediate agent such as the zamindar
or farmer, and its object is the creation of peasant
proprietors. All the income derived from extended
cultivation goes to the state."

B 18. Therefore, the expression ryotwari pattadar was
understood to be a person holding a patta in the erstwhile
province of Madras under the system of ryotwari settlement.
Though a person/tenant cultivating land under the zamindari
system is also called a ryot and in some cases even the
zamindar issued certain documents called pattas in favour of
C such ryots, those pattas can never be equated by pattas issued
by East India Company or its successor governments.
Because, though the Zamindar/land holder of a permanently
settled estate held not only the surface but also the subsoil of
the estate, whether the tenant held any subsoil rights in a given
D case depended upon the terms on which the Zamindar granted
the tenancy. Such a possibility is recognised under Section 16
of the Mines and Minerals (Development and Regulation) Act,
1957 which says - "Where the rights under any mining lease
granted by the proprietor of an estate or tenure before the
E commencement of the Mines and Minerals (Regulation and
Development) Amendment Act, 1972 ...... ". Similarly, in lnam
estates whether the lnamdar held the subsoil rights depended
upon the terms on which the lnam was originally granted. [See
State of Andhra Pradesh vs. Duvurru Balaram Reddy AIR 1963
F SC 64].

19. Consequent upon the abolition of estates and lnams
in the State of Madras (present Tamil Nadu), by the
statutes called (1) The Estates (Abolition and Conversion
into Ryotwari) Act, 1948 (Act 26 of 1948) and (2) The Tamil
G Nadu lnam Estates (Abolition & Conversion into Ryotwari)
Act (Tamil Nadu Act XXVI of 1963), all the estates or
inams, as the case may be, stood transferred and vested
in the State in their entirety. Both the enactments declare

H
DALMIA CEMENT (BHARAT) LTD. v. STATE OF 547
TAMIL NADU [J. CHELAMESWAR, J.]
that such transfer includes "mines and minerals"6 amongst A
others. However, on such vesting the State is obligated
under both the enactments to recognise the right of the
cultivating tenant under the estate holder or lnamdar, as
the case may be, for the grant of "RYOTWARI PATTA"7
after an appropriate statutory enquiry. B
20. Going by the recitals of G.O.Ms. No. 903, the entire
extent of land with reference to which an application was made
by Dalmia Cement is part of Chettichavadi Jaghir Village. By
virtue of Section 3(b) 6 of the Madras lnam Estates (Abolition
c
6. Footnote Sec. 3(b) of the Estates (Abolition & Concession) Act, 1948 - the
entire estate (including minor imams (Post-settlement of pre-settlement) included in
the assets of the zamindari estate at the permanent settlement of that estate; all
communal lands and porambokes; other non-ryoti lands; waste lands; pasture lands;
Lanka lands; forests; mines and minerals; quarries; rivers and streams; tanks and
irrigation works; fisheries; and ferries, shall stand transferred to the Government D
and vest in them, free of all encumbrances; and the Andhra Pradesh (Andhra Area)
Revenue Recovery Act, 1864, the Andhra Pradesh (Andhra Area) Irrigation Cess
Act, 1865 and all other enactments applicable to ryotwari areas shall apply to the
estate;
Also See Footnote 5 for the corresponding provision under the lnams Abolition Act,
1963
E
7. Footnote Section 11. Lands in which ryot is entitled to ryotwari patta - Every
ryot in an estate shall, with effect on and from the notified da\0 •. be entitled to a
ryotwari patta in respect of -
Section 10.(1) In the case of an existing inam estate every ry~t shall, with effect
on and from the.notified date, be entitled to ryotwari patta in r~spect of -
8A. "Ryot" is defined under Section 3(15) of Estates Land Act'as a person who
holds for the purpose of agriculture, ryot land in an estate on condition of paying to F
the landholder the rent which is legally! due upon it. The same definition for the
purposes of both the Estates Abolition and lnam Abolition Acts, the definition of the
expression "ryot" is the same as in the Estates Land Act, 1908 by virtue of Sections
2(1) and 2(16) of the said enactments respectively.
8. Footnote Sec. 3 (b) - the entire inam estate (including all communal lands and
porambokers, other non-ryoti lands, waste lands, pasture lands, forests, mines and G
minerals, quarries, rivers and streams, tanks and ooranies (including private tanks
and ooranies) and irrigation works, fisheries and ferries), shall stand transferred to
the Government and vest in them, free of all encumbrances, and the Tamil Nadu
Revenue Recovery Act, 1864 (Tamil Nadu Act II of 1864), the Tamil Nadu Irrigation
Cess Act, 1865 (Tamil Nadu Act VII of 1865) and, all the reenactments applicable to
ryotwari areas shall apply to the inam estate.
H
548 SUPREME COURT REPORTS [2013] 17 S.C.R.

A and Cqnversion of Ryotwari) Act, 1963 (Act 26 of 1963) with
effect from the notified date [a defined expression under
Section 2(1 O)] the entire lnam estate including mines and
minerals, quarries etc. stood transferred to the Government and
vests in them free of all encumbrances.
B
21. Therefore, the assertion by Dalmia Cement that it is a
ryotwari pattadar itself is a doubtful statement of fact. An enquiry
whether such a pattadar is entitled to the sub-soil rights was
wholly uncalled for as there is not even a single sentence in the
C entire writ petition whereby Dalmia Cement asserted that the
sub-soil rights vest in them.

22. No information regarding the number of leases held
by Dalmia Cement, the relevant dates on which such leases
were first granted or subsequently renewed (if renewed) is
D available on the record. Nor the information w.r.t. the mineral
which is covered by any one of those leases (if there is more
than one 'lease) is available on the record. Therefore, it is not
known whether the leases pertain to a 'mineral' or 'minor
mineral'.
E
23. The only fact which appears from the record is that
pursuant to a mining.Jease granted way back on 10.11.1945,
Dalmia Cement has been carrying on mining operations in
some parcel of land. In 1945, there was no statute in this country
F regulating the activity of mining operations. It appears that there
were certain executive instructions (we presume so in the
absence of any specific material before us) called the Madras
Mining Manual which governed mining operations in that part
of the country known as the Madras province. Whether the said
mining lease of 1945 was in fact a lease as defined under the
G Transfer of Property Act or was a permission granted by the
State to carry on mining activity in exercise of its executive
authority under the Government of India Act, 1935 requires
examination, on an appropriate pleading. An inquiry into such
matters is not really called for in the absence of any specific
H pleading or issue.
DALMIA CEMENT (BHARAT) LTD. v. STATE OF 549
TAMIL NADU [J. CHELAMESWAR, J.]
I
24. Be that as it may. Subsequent to 1945, an enactment A
known as Mines and Minerals (Regulation and Development)
Act, .1948 came into existence.

25. Section 4 of the said Act declares that after the
commencement of the said Act, no mining lease shall be
B
granted otherwise than in accordance with the rules made
under the Act and any lease granted contrary would be void.

26. Sections 5 and 6 empower the Central Government
to make rules for regularising various aspects of the mining
activities. The details are not necessary for the purpose of the c
present adjudication.

27. Section 79 authorises the Government of India to make
rules for the purpose of modifying or altering the terms and
conditions of any mining lease granted prior to the D
commencement of the said Act in order to bring such existing
leases in conformity with the rules made under Sections 5 and
6.

9. Footnote 7. Power to make rules for modification of existing leases - (1)
The Central Government may, by notification in the official Gazette, m~ke E
rules for the purpose of modifying or altering the terms and conditions of
any mining lease granted prior to the commencement of this Act so as to
bring such lease into conformity wiih the rules made under sections 5 and
6• .

Provided that any rules so made which provide for the matters mentioned
in clause (c) of sub-section (2) shall not come into force until they have F
been approved, either with or without modifications, by the Central
Legislature.
(2) The rules made under sub-section (1) shall provide -
(a) for giving previous notice of the modification or alteration proposed to
be made thereunder to the leases, and where the lessor is not the Central
Government, also to the lessor and for affording them an opportunity of G
snowing cause against the proposal;
(b) for the payment of compensation by the party who would be benefited
by the proposed modification or alteration to the 1· 3rty whose rights under
the existing lease would thereby be adversely affected; and
(c) for the principles on which, the manner in which and the authority by
which the said compensation shall be determined. H
550 SUPREME COURT REPORTS [2013] 17 S.C.R.

A 28. The said Act was repealed by the Mines and Minerals
(Development and Regulation) Act, 1957, Act No.67 of 1957
(hereinafter referred to as "the 1957 Act"). Though the 1948
Act did not make any classification of the minerals, the 1957
Act creates such classification. The expression 'minor mineral'
B is defined under Section 3(e) 10 .The expression 'mineral' itself
is defined in inclusive terms under Section 3(a) 11 . Therefore,
under the 1957 Act there are MINERALS and MINOR
MINERALS.

29. Section 14 12 of the 1957 Act declares that Sections 5
C to 13 (both inclusive) do not apply to minor minerals.

30. Section 4 of the Act prohibits undertaking of any
reconnaissance, prospecting or mining activities (of either
class of minerals) except under and in accordance with the
D terms and conditions of a reconnaissance permit or
prospecting licence of a lease granted under the Act and the
rules made thereunder' 3 .

31. Section 9 14 of the Act declares that notwithstanding
E
10. Footnote 3(e) "minor minerals" means building stones, gravel, ordinary
clay, ordinary sand other than sand used for prescribed purposes, and
any other mineral which the Central Government may, by notification in the
Official Gazette, declare to be a minor mineral.
11. Footnote 3(a) "minerals" includes all minerals except mineral oils;
F
12. Footnote 14. Sections 5 to 13 not to apply to minor minerals - The
provisions of sections 5 to 13 (inclusive) shall not apply to quarry leases,
mining leases or other mineral concessions in respect of minor minerals.
13. Footnote 4. Prospecting or mining operations to be under licence or
lease- (1) No person shall undertake any reconnaissance, prospecting or
mining operations in any area, except under and in accordance with the
G terms and conditions of a reconnaissance permit or of a prospecting
liocence or, as the case may be, of a mining lease, granted under this Act
and the rules made thereunder.
14. Footnote 9. Royalties in respect of mining leases - (1) The holder of a
mining lease granted before the commencement of this Act shall,
notwithstanding anything contained in the instrument of lease or in any
H ~" in force at such commencement, pay royalty in respect of any mineral
DALMIA CEMENT (BHARAT) LTD. v. STATE OF 551
TAMIL NADU [J. CHELAMESWAR, J.]
anything contained in the instrument of lease granted or in any A
law in force, prior to the commencement of the 1957 Act, the
holder of a mining lease granted either prior to or after the
commencement of the Act shall pay royalty from the date of the
commencement of the Act at the rates specified in the Second
Schedule in respect of that mineral. B

32. Section 13 15 of the Act authorises the Government of
India "to make rules for regulating the grant of reconnaissance
permits, prospecting licences and mining leases in respect of
minerals and for purposes connected therewith". Obviously, C
such rules are with reference to minerals other than the minor
minerals. Insofar as minor minerals are concerned, Section 1516

removed or consumed by him or by his agent, manager, employee,
contractor or sub-lessee from the leased area after such commencement,
at the rate for the time being specified in the Second Schedule in respect D
of that mineral.
(2) The holder of a mining lease granted on or after the commencement of
this Act shall pay royalty in respect of any mineral removed or consumed
by him or by his agent. manager, employee, contractor or sub-lessee from
the leased area at the rate for the time being specified in the Second
Schedule in respect of that mineral.
15. Footnote 13. Power of Central Government to make rules in respect of E
minerals - (1) The Central Government may, by notification in the Official
Gazette, make rules for regulating the grant of reconnaissance permits,
prospecting licences and mining leases] in respect of minerals and for
purposes connected therewith.
(2) In particular, and without prejudice to the generality of the foregoing
power. such rules may provide for all or any of the following matters, namely:- F

(a) the person by whom, and the manner in which, applications for
reconnaissance permits, prospecting liCences or mining leases in respect
of land in which the minerals vest in the Government may be made and
the fees to be paid therefor;
************ ************** ******""**"'*** G
(qq) the manner in which rehabilitation of flora and other vegetation, such
as trees, shrubs and the like destroyed by reason of any prospecting or
mining operations shall be made in the same area or in any other area
selected by the Central Government (whether by way of reimbursement of
the cost of rehabilitation or otherwise) by the person holding the
prospecting licence or mining lease; and H
552 SUPREME COURT REPORTS [2013] 17 S.C.R.

A of the Act authorises the State Government to make
appropriate rules regulating the grant of leases, fixing of rents,
royalty, fees etc with respect to minor minerals and various other
connected and incidental matters.

33. Section 16 of the Act, as originally enacted, read as
8
follows:

'"16. Power to modify mining leases granted before 25th
October, 1949 - (1) All mining leases granted before the
25th day of October, 1949, shall, as soon as may be after
C the commencement of this Act, be brought into conformity
with the provisions of this Act and the rules made under
sections 13 and 15."

It can be seen from the language of Section 16 that it is
mandatory that all mining leases (irrespective of the fact whether
0
such a lease is w.r.t. a 'mineral' or 'minor mineral' as classified
under the 1957 Act) granted before the 25th day of October,
1949 be brought into conformity with provisions of the 1957 Act
and the rules made under Sections 13 and 15.

E 34. In exercise of powers conferred under Section 13,
Government of India made rules known as Mineral Concession
Rules, 1960. Chapter IV of the said rules deals with the
procedure for grant and regulation of the mining leases in
respect of the land in which the minerals vest in the
F Government. Chapter V of the said rules deals with the
procedure for obtaining a prospecting licence or mining lease
in respect of land in which the minerals vest in a person other

(r) any other matter which is to be, or may be, prescribed under this Act.
Footnote 15. Power of State Governments to make rules in respect of
G minor minerals - (1) The State Government may, by notification in the Official
Gazette, make rules for regulating the grant of quar,Y leases, mining leases
or other mineral concessions in respect of minor minerals and for purposes
connected therewith.
(1A) In particular and without prejudice to the generality of the foregoing
power, such rules may provide for all or any of the following matters, namely:-
H
I
DALMIA CEMENT (BHARAT) LTD. v. STATE OF 553
TAMIL NADU [J. CHELAMESWAR, J.]
than the Government. Chapter VI of the said rules deals with A
the mining leases in respect of land in which the minerals vest
partly in the Government and partly in private person. The rules
deal with various classes of the lands covered by the
abovementioned three chapters and provide for different
procedures for securing the grant of a mining lease and B
regulatory measures for working of such mines and allied
matters. But none of the rules provide for collection of royalty
at a concessional rate in the case of the lands where the
minerals vest in a person other than the Government. In any
event, our attention has not been drawn to any such rule.
c
35. No Rule framed by the State of Tamil Nadu (in case
any of the mining leases of the appellants herein pertains to
minor minerals) authorising the State to collect royalty at a
concessional rate w.r.t. a mining lease granted in favour of a
"ryotwari pattadar" of the land, is brought to our notice. Nor is D
there any specific pleading in that regard.

36. Even if we assume for the sake of argument that the
Cement companies are pattadars (or the successor in interest
of such pattadars) either under the original ryotwari system or E
the holders of the 'ryotwari patta' pursuant to the abolition of
estates/imams, and also assume for the sake of argument that
each of the appellant companies is also the owners of the
subsoil rights of their patta lands as, in our opinion, such
OWNERSHIP does not make any difference insofar as the
F
authority of the State to collect royalty. It may be remembered
that even w.r.t. the original ryotwari patta lands where admittedly
the mineral vested in the pattadar, the State had asserted (in
BSO 1O dated 19.03.1888, which was extracted by us in
Thressiamma Jacob fl, Ors. Vs. Geologist17 , Department of
Mining and Geology and Ors. , and we extract it again), its G
authority to collect "a share in the produce of the minerals
worked commuted into money payment" - which eventually
acquired the nomenclature Royalty-
17. Footnote (2013) 9 SCC 725.
H
554 SUPREME COURT REPORTS [2013] 17 S.C.R

A RESOLUTION - dated 19th March 1888, No. 277.

In supersession of the existing Standing Order, the
following is issued as Standing Order No. 10 :-

1. The State lays no claim to minerals -
B
G.O. 26th May, 1882, No. 511 (a) In estates held on
(Notification, paragraph 1). sanads of permanent
settlement

G.O. 28th October 1882 No.1181 (b) In enfranchised inam
c lands

G.O. 28th April 1881 No.861 (c) In religious service
tenements confirmed
under the inam rules on
D perpetual service
tenure.

d) In lands held on title -
deeds, issued under the
waste land rules, prior
E
to 7th October, 1870, in
which no reservation of
the right of the State to
minerals is made.

F 2. The right of the State in minerals is limited in the
following cases to a share in the produce of the minerals
worked, commuted into a money payment, if thought
necessary, by Government, in like manner with and in
addition to the land assessment :-
G
G.O. 8th October 1883 No.1248. (a) In lands occupied fm
agricultural purposes .
under ryotwari pattas

G.O. 23rd January 1881 No.121 (b) In janmom lands in
H Malabar
DALMIA CEMENT (BHARAT) LTD. v. STATE OF 555
TAMIL NADU [J. CHELAMESWAR, J.)
G.O. 16th December 1881 No.1384 A

Persons intending to work minerals in those lands should give
notice of their intention to the Collector of the district, specifying
the lands in which they intend to carry on mining operation and
should pay in two half-yearly instalments a special assessment B
for minerals in addition to the land assessment at the following
rates:-

Per acre (Rs.)

1. For mining for gold 5 c
2. For mining for metals other than gold 2

3. For mining for diamonds and other 15
precious stones
D
4. For mining for coal, lime-stone or quarrying for
building stone ... (Such rates as may be fixed by the Board
from time to time

The rates will be doubled if mining operations are carried on
without giving notice to the Collector. E

The special assessment will be
Board's procedeings dated entered in the patta granted for
10th July 1182 No. 1751. the land and collected under
the provisions of Act II of 1834 F
Madras. No charge will be
made for merely prospecting
for minerals in patta lands if
mines are not regularly worked.
No remission"will be granted in G
respect of any land rendered
unfit for surface cultivation by
the carrying on of mining
operations. This rule does not
of course afeet in any way the . H
556 SUPREME COURT REPORTS [2013) 17 S.C.R.

A right which all holders of lands
on patta possess of digging
wells in their lands and of
disposing of the gravel and
stones which may be thrown up
B in the course of such
excavation.

This Court had held that such authority flows from the
sovereignty of the State-lmperium 18 .

C 37. There is nothing either in the Mines and Minerals
(Development and Regulation) Act, 1957 or the Rules framed
thereunder which entitles a ryotwari pattadar who secures a
mining lease under the Act to pay royalty at a concessional rate.
The question then is whether the State Government has a
D discretion to collect royalty from any lessee at a concessional
rate, other than the one prescribed under the Act in the absence
of any specific provision under the Act and Rules conferring
such discretion. An answer to the question depends upon the
answer to the following questions:
E
18. Footnote We are of the clear opinion that the recitals in the patta or the
Collector's standing order that the exploitation of mineral wealth in the patta
land would attract additional tax, in our opinion, cannot in any way indicate
the ownership of the State in the minerals. The power to tax is a necessary
incident of sovereign authority (imperium) but not an incident of proprietary
F rights (dominium). Proprietary right is a compendium of rights consisting
of various constituent, rights. If a person has only a share in the produce
of some property, it can never be said that such property vests in such a
person. In the instant case, the State asserted its 'right' to.demand a share
in the 'produce of the minerals worked' though the expression employed
is right - it is in fact the Sovereign authority which is asserted. From the
language of the BSO No.10 it is clear that such right to demand the share
G could be exercised only when the pattadar or somebody claiming through
the pattadar, extracts/works the minerals - the authority of the State to
collect money on the happening of an event - such a demand is more in
the nature of an excise duty/a tax. The assertion of authority to collect a
duty or tax is in the realm of the sovereign authority, but not a proprietary
right. [Para 51 of the judgment in Threesiamma Jacob & Ors. Vs. Geologist.
H Deptt. Of Mining & Geology & Ors., (2013) 9 SCC 725]
DALMIA CEMENT (BHARAT) LTD. v. STATE OF 557
TAMIL NADU [J. CHELAMESWAR, J.]
1. What is true legal character of a mining lease i.e. A
whether mining lease is a lease within the meaning
of that expression as defined under the Transfer of
Property Act or it is only a permission to carry an
mining activity?
B
2. Whether ownership of subsoil makes any difference
to the determination of the above question?

3. What is true legal character of the expression
Royalty under the Mines and Minerals
(Development and Regulation) Act, 1957, i.e., c
Whether it is a Tax or a consideration for a contract
of mining lease?

4. Whether the State has any discretion either under
the provisions of the Mines and Minerals D
(Development and Regulation) Act, 1957 or under
the Scheme of the Constitution to collect Royalty at
rates lower than those prescribed under the Act and
the Rules?
E
5. Whether the true character of Royalty makes any
difference for the determination of Question No.4?

38. As already indicated, the pleadings in the writ petitions
are hopelessly ambiguous, bald and imprecise to enable the
F
Court to examine any one of the above-mentioned issues. In
the normal course, we should have dismissed all these appeals
on the ground of inadequate pleadings. But the third of the
above-mentioned issues already stands referred to a larger
Bench of this Court, arising out of appeals from other parts of
the country. Dismissal of these appeals may eventually lead to G
asymmetric application of law; in a manner which is notuniform
throughout the country thereby impacting the coherent and-
uniform interpretation of the Constitution. We therefore deem ·
it appropriate to provide an opportunity to the appellants as well
H
558 SUPREME COURT REPORTS (2013] 17 S.C.R.

A as the State of Tamil Nadu to suitably amend the pleadings in
the several writ petitions and place the complete facts
necessary for the adjudication of the questions on hand.

39. We, therefore, call upon the appellants in these appeals
to file affidavits disclosing the full facts necessary for
8 adjudication of the issues raised herP.inabo\te. Needless to say,
it is open to the State of Tamil Nadu to file a counter affidavit
to such further affidavits filed by the appellants, in case the
State disputes anyone of the facts to be newly brought on
record.
c
40. The question "What is the true nature of royalty/dead
rent payable to minerals produced/mined/extracted from mines"
(alongwith certain other connected questions) was referred to
a larger Bench by an order of this Court dated 30th March, 2011
o in Mineral Area Development Authority & Ors. Vs. Steel
Authority of India & Ors., reported in (2011) 4 SCC 450.

41. We deem it appropriate that these appeals be tagged
with Mineral Area Development Authority & Ors. Vs. Steel
Authority of India & Ors., Clvil Appeal Nos. 4056-64 of 1999
E etc .. Ordered accordingly.
Bibhuti Bhushan Bose Matter tagged with another set of appeals