Kaladwas Chamber Of Commerce Ind.And Ors. vs. State Of Rajasthan And Ors.

Held

The Court held that the judgment of the Coordinate Bench in Ajitgarh Audyogik Kshetra Udyami Sanstha Vs. State of Raj. & Ors. covered the challenge to Rules 2(xvi) and 60(4) of the Rules of 2017. The Court agreed with the respondents that once the substantive provision requiring transit passes (Rule 60(4)) was upheld, there was little to discuss regarding the ministerial provision (Rule 92). The Court found Rule 92 to be a machinery provision for issuing transit passes and noted no argument was advanced to demonstrate its invalidity. The Court distinguished the Supreme Court judgment in M.P.P. Kavery Chetty, stating it dealt with substantive provisions for price fixation and had no bearing on the validity of Rule 92, and also differed in facts and provisions from the present case. The Court concluded that the requirement of transit passes under Rule 60(4) has a nexus with curbing evasion of royalty and falls within the sweep of Section 15(g) of the MMDR Act. Therefore, Rule 92 was held to be within the State's rule-making power and constitutionally valid. While not inclined to interfere with Rule 60(4) and other orders, the Court disposed of the writ petition with directions to prevent harassment, allowing videography during inspections as evidence.

Facts

The petitioners, including the Kaladwas Chamber of Commerce Industries and individual proprietors of mineral businesses, challenged the vires of Rules 2(xvi), 60(4), and 92 of the Rajasthan Minor Mineral Concession Rules, 2017. These rules pertain to the definition of a 'dealer', the requirement for owners of vehicles carrying minerals to possess valid transit documents, and the procedure for obtaining transit passes. The petitioners argued that these rules, particularly the requirement of transit passes for mineral slurry and waste, were illegal, arbitrary, and an unnecessary hindrance to their trade. They also contended that the State Government lost its authority to control minerals once excavated. The respondents, represented by the State of Rajasthan, argued that the rules were valid and within the State's rule-making power, citing previous judgments upholding similar provisions.

Key Issues

1. Whether Rules 2(xvi) and 60(4) of the Rajasthan Minor Mineral Concession Rules, 2017, are ultra vires Section 15 of the Mines and Minerals (Development & Regulation) Act, 1957, and the Constitution of India, particularly concerning the requirement of transit passes for mineral slurry and waste. The petitioners argued that these rules impose an illegal and arbitrary burden on their right to trade, and that the State lacks the power to control minerals post-excavation, relying on the Supreme Court judgment in State of T.N. Vs. M.P.P. Kavery Chetty. The respondents contended that these rules are validly framed and within the State's rule-making power to regulate excavation and sale of minor minerals, referencing a coordinate bench's decision in Ajitgarh Audyogik Kshetra Udyami Sanstha Vs. State of Raj. & Ors. and a prior judgment on analogous provisions in M/s Shri Grinding Mills & Ors. Vs. State of Raj. & Anr. 2. Whether Rule 92 of the Rajasthan Minor Mineral Concession Rules, 2017, which prescribes the procedure for issuing transit passes, is valid. The petitioners argued that this rule, not having been specifically examined by the Jaipur bench, was also subject to challenge. The respondents argued that Rule 92 is a machinery provision and its validity is consequential to the substantive provision requiring transit passes, which they asserted has been upheld.