Civil Appeal No.453 of 2016,Civil Appeal No.460 of 2016

20th January, 2016.

Petitioner Counsel: Mr. B. BALAJI

Cases Cited:
K.S. Paripoornan & Ors. Etc. Vs. State of Kerala & Ors., AIR 1992 SC 1488 [Para 9]
M/s Gujarat Pottery Works Private Ltd. Vs. B.P. Sood And Ors., AIR 1967 SC 964 [Para 9]
V. Karnal Durai Vs. District Collector, Tuticorin and Anr., (1999) 1 SCC 475 [Para 9]
Maxwell Vs. Murphy, (1957) 96 CLR 261 [Para 13]

JUDGMENT

A. K. SIKRI, J. :- Leave granted.

2. The short question of law which arises for consideration in these appeals is as to whether amended Rule 8(8) of the Tamil Nadu Minor Mineral Concession Rules, 1959 (hereinafter referred to as "1959 Rules"), which was amended by G.O.Ms.No. 391 dated 17.11.2000, would have retrospective effect or will become operational prospectively i.e. only from 17.11.2000. The issue has arisen in the following context:

3. In all these appeals the respondents were granted stone quarrying leases for a particular area some time in the year 1997. At that time, as per amended Rule 8(8) of 1959 Rules, lease could be granted for a period of five years initially and thereafter it could be renewed by another five years. On the basis of this Rule, the respondents herein in all these appeals were given the leases for a period of five years. However, when these leases were still in operation and the said period of five years for which these leases were granted had not expired, Rule came to be amended vide G.O. dated 17.11.2000. The amended rule provided that the period for quarrying stone in respect of virgin areas, which had not been subjected to quarrying earlier, shall be ten years whereas the period of lease for quarrying stone in respect of other areas shall be five years. On the basis of this amendment, these respondents pleaded that since they were granted lease for quarrying stone in respect of virgin areas, amended provision was made applicable in their cases and they were entitled to continue on lease for a period of ten years.

4. It is in this scenario that the question arose as to whether the aforesaid Rule can be made available even in respect of the leases which were granted before 17.11.2000. We may point out at this stage itself that the High Court has decided the issue in favour of the respondents holding that the aforesaid Rule deals only with the procedures to be adopted by the District Collector from the stage he invited tenders till he executed the lease deed which is not substantive in nature and therefore would apply even in those cases where leases were earlier but were continuing on the date when the amended Rule came into force. This decision contained in impugned judgment dated 23.04.2008 is questioned by the District Collector, Kancheepuram District in the State of Tamil Nadu in these appeals.

5. In order to have a better and clear understanding of the issue, the seminal facts need to be traversed. They are culled out from Civil Appeal arising out of SLP (Civil) No.3674 of 2010 and are as follows:

6. A notification dated 09.10.1996 was published by the appellant inviting applications for grant of stone quarrying in Survey No.99 (Part) quarry No.5 for an extent of 5.00.0 hectares in Karapakkam Village, Chengalpattu Taluk. This notification was issued under the provisions of Rule 8(8) of the 1959 Rules and it was stated therein that lease would be granted for a period of five years. Applications were thus invited for grant of ordinary stone quarrying lease for a period of five years i.e. from 01.04.1996 to 31.03.2001. Many persons including respondents herein submitted their applications pursuant to the aforesaid notification. A public auction was conducted on 13.05.1997 in which the respondent emerged as the highest bidder who submitted his bid in the sum of Rs. 5,35,000/- for a period of five years. His bid was accepted by the Collector vide his communication dated 05.06.1997 and on the very same date lease deed was executed for a period of five years that is from 05.06.1997 to 04.06.2002.

7. While the aforesaid lease was subsisting, the Government issued G.O. Ms. No.391 dated 17.11.2000 thereby incorporating amendment to Rule 8 of the 1959 Rules and stipulating that the period of lease for quarrying stone in respect of virgin areas which have not been subjected to quarrying so far shall be ten years. The amended Rule reads as under:

"8. Leasing of lands for quarrying minor minerals other than the minerals covered under Rules 8-A and 8-C of the rules:

xx xx xx

xx xx xx

(8) The period of lease for quarrying stone in respect of the virgin areas, which have not been subjected to quarrying so far, shall be ten years. The period of lease for quarrying stone in respect of other areas shall be five years. The period of lease for quarrying sand and other minor mineral, other than the minerals covered under rules 8-A and 8-C of the said rules, shall not exceed three years and shall not be less than one year and shall be subject to the following conditions, namely:

(i) The date of commencement of the period of lease granted under this rule shall be the date on which the lease deed is executed.

(ii) The lease shall expire on the date specified in the lease deed and in no case extension of the period shall be made.

(Substituted by G.O.Ms.No.391, Industries dt.17.11.20000"

8. On the basis of this amendment, the respondent claimed that since the lease was given to him in respect of virgin land with the application of the aforesaid Rule it automatically got the lease to be treated as granted for a period of ten years. He made a representation in this behalf which was not accepted and in these circumstances respondent filed writ petition under Article 226 of the Constitution in the High Court of Judicature at Madras. Interim stay was granted in favour of the respondent which was made absolute. This writ petition was ultimately dismissed by the learned Single Judge. The respondent herein preferred intra-court appeal against the judgment of the learned Single Judge. There were four other persons whose writ petitions similarly filed were also dismissed and they had also filed appeals. In the meantime, many other similarly situated persons filed writ petitions. All these writ petitions and writ appeals were heard by the Division Bench of the High Court and have been allowed by the High Court, vide its impugned judgment dated 23.04.2008.

9. A perusal of the impugned judgment would reflect that the High Court was conscious of the cardinal principle that every Statute is presumed to be prospective unless expressly or by necessary implication is retrospective in operation. For this proposition, it has referred to some of the judgment of this Court, namely, K.S. Paripoornan & Ors. Etc. v. State of Kerala & Ors., AIR 1992 SC 1488, M/s Gujarat Pottery Works Private Ltd. v. B.P. Sood And Ors., AIR 1967 SC 964 and V. Karnal Durai v. District Collector, Tuticorin and Anr., (1999) 1 SCC 475

10. Relying upon the aforesaid judgments, the High Court recorded that while the general rule is that a provision of a Statute would be only prospective in operation unless it is explicitly provided otherwise under the Statutes, a distinction could be made for the application of the general rule to procedural aspect meaning thereby that if the provision is procedural in nature it will apply to pending cases as well. What is substantially procedural would depend upon the applicability of Statutes to the facts in each case.

11. After stating the aforesaid position in law about which there is no quarrel, the High Court referred to Rule 8(8) of 1959 Rules as amended and came to the conclusion that so far as the 1959 Rules are concerned they are only procedural. As a consequence, the High Court held that it is the amended rule which would apply to those leases as a whole which was still operational and period whereof did not expire inasmuch as such amended Rule will be given retrospective effect.

12. Mr. Subramonium Prasad, learned senior counsel appearing for the appellants, submitted that though the principle of law is rightly stated by the High Court it has committed an error in holding that the Rule in question is procedural in nature. He argued that even if the amendment to the Rules was substantially procedural, the Rule in question, that is, Rule 8 (8) which provided for the period of lease for quarrying stone was of substantive nature inasmuch as by grant of lease under this Rule certain rights were conferred upon the lessee and such a provision cannot be procedural.

13. As mentioned above, though the Legislature has plenary powers of legislation within the fields assigned to it and can legislate prospectively or retrospectively, the general rule is that in the absence of the enactment specifically mentioning that the concerned legislation or legislative amendment is retrospectively made, the same is to be treated as prospective in nature. It would be more so when the statute is dealing with substantive rights. No doubt, in contrast to statute dealing with substantive rights, wherever a statute deals with merely a matter of procedure, such a statute/amendment in the statute is presumed to be retrospective unless such a construction is textually inadmissible. At the same time, it is to be borne in mind that a particular provision in a procedural statute may be substantive in nature and such a provision cannot be given retrospective effect. To put it otherwise, the classification of a statute, either substantive or procedural, does not necessarily determine whether it may have a retrospective operation. In Maxwell v. Murphy, (1957) 96 CLR 261, Dixon C.J. formulated the aforesaid procedure in the following words:

"The general rule of the common law is that a statute changing the law ought not, unless the intention appears with reasonable certainty, to be understood as applying to facts or events that have already occurred in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to the past events. But given rights and liabilities fixed by reference to the past facts, matters or events, the law appointing or regulating the manner in which they are to be enforced or their enjoyment is to be secured by judicial remedy is not within the application of such a presumption."

14. When we keep the aforesaid principle in mind and apply to the facts of the present case, we find adequate force in the aforesaid submission of learned counsel for the appellants. It is to be borne in mind that by way of amendment, for the first time, the categories of virgin areas and non-virgin areas were carved out and virgin areas were given better treatment, which was not the position under the unamended Rule. This right, which is substantive in nature, accrued to the virgin areas for the first time by way of amendment only. Under the unamended Rule leases for quarrying stones could be given for a period of five years and no distinction was made between virgin areas and non-virgin areas. It is thus unamended Rule under which the notification was issued and tenders were invited and auction held. Under the notification it is stipulated that the lease would be given for a period of five years which was in tune with the aforesaid Rule that was prevailing at that time. Not only this, even when the lease was granted lease deeds with the respondent herein were executed for a specified period namely five years. We find that Rule 8 (8) of the 1959 Rules which prescribes period for grant of lease is not procedural but substantive in nature. By amendment, change in the said Rule was effected with the classification of areas into "virgin area" and "other areas that is non-virgin areas". It is only in respect of virgin areas that the period of lease stands enhanced to ten years whereas in respect of other areas the period of lease continues to be five years. This was clearly a substantive amendment which had nothing to do with any procedure. There was no concept of "virgin area" in the unamended rule which has been introduced for the first time by way of aforesaid amendment. The High Court has simply gone by the manner in which the leases are to be given under the aforesaid Rules and on that basis treated the Rules as procedural in nature. It needs to be emphasized that even where the Rules are procedural, some of the provisions therein may be of substantive nature. An error is committed by the High Court in holding that fixation of period of lease is also procedural. When a decision to grant lease is substantive in nature, the period for which the lease is to be granted would also be substantive. Thus, the conclusion arrived at by the High Court is contrary to law.

15. These appeals are, accordingly, allowed. However, in the facts and circumstances of the case there shall be no order as to costs.

Appeal allowed.