Hon'ble Judges/Coram:
Govind Mathur and G.R. Moolchandani

ORDER

Govind Mathur, J.

1. This batch of writ petitions is before us to examine constitutional validity of Rule 64-D of the Mineral Concession Rules, 1960 (hereinafter referred to as 'the Rules'), as amended by Government of India under the notification dated 10.4.2003. By the notification aforesaid an amendment is introduced in Rule 64-D of the Rules under heading guidelines. The amendment introduced pertains to manner of payment of royalty of minerals on ad valorem basis. The amendment introduced reads as follows:-

"Case 1: All non atomic and non fuel minerals and minerals other than aluminium, primary gold, silver, copper, lead, zinc, nickel and tin-

The Indian Bureau of Mines publishes 'Monthly Statistics of Mineral Production' which contains state-wise total value of each mineral produced during a month in a State. The state-wise average value for different individual minerals as published by Indian Bureau of Mines in the 'Monthly Statistics of Mineral Production' shall be the benchmark for computation of royalty by the concerned State Government in respect of any mineral produced any time during a month in any mine in that State. For the purpose of computation of royalty the State Government shall add twenty per cent to this bench mark value. This value shall be reckoned to be the sale price for the purpose of computation of royalty. Also the value of the minerals published in the latest published issue of the 'Monthly Statistics of Mineral Production' will be deemed to be applicable for the mineral mined in the previous month, irrespective of when the royalty actually accrues. If for a particular mineral, the information for a State is not published in a particular issue, the last information available for that mineral in the State in a previous issue shall be referred, failing which the latest published information for the mineral for all-India shall be referred."

2. The argument advanced on behalf of the petitioners, while questioning constitutional validity of the provision aforesaid, is that Section 9 of the Mines and Minerals (Development and Regulation) Act, 1957 (hereinafter referred to as 'the Act') provides that the holder of a mining lease granted on or after commencement of the 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. The Schedule Second appended with the Act provides for payment of royalty to the tune of 11% of the sale price on ad valorem basis. The determination of sale price is an issue relating to the conditions of contract between the seller and purchaser, as such the Central Government is having no authority to fix a notional sale price for determining the value of royalty. The amendment introduced under the notification dated 10.4.2003 permits notional determination of the sale price by adding 20% of benchmark value, as such is beyond the powers of the Central Government. It is emphasised that the authority of the Central Government under Section 13 of the Act is limited only to the extent of fixing and collection of fees for reconnaissance permits, prospecting licences or mining leases surface rent, security deposit, fines, other fees or charges and the time within which and the manner in which the dead rent or royalty shall be payable. As per the petitioners, the Act does not permit the Central Government to frame the Rules beyond the prescription of the manner in which the dead rent or royalty shall be payable.

3. To examine the question proposed, we would like to narrate necessary facts as given in DB Civil Writ Petition No. 169........