This judgment shall dispose of Writ Petitions Nos.6855 of 1991, 941 of I 1991, 1482 of 1991 and 282 of 1992 in which similar questions arise for r decision.
2. In all these petitions, the petitioners have challenged the vires of the -, Punjab Minor Minerals Concession Rules, 1990 and the Notification dated 1 18-6-1991 imposing certain conditions for participation in the auctions of million minerals being held at various places by the Government of the Punjab.
3. The facts necessary for the disposal of these petitions are that Shaukat t Ali, petitioner in Writ Petition No.0855 of 1991, claims to be a lessor, who has ; been obtaining leases of minor minerals like ordinary stone, inter alia, of r Blocks No.2 and 6 of Chak No.116/SB, Sargodha. Through an advertisement appearing in daily 'Jang' dated 31st of August, 1991, the respondents announced their intention td hold auction of leases of areas in Sargodha I Region on 19th of August, 1991, and 25th of August, 1991, on the terms and I conditions mentioned in the notice, a copy of which has been riled as Annexure 'A' to this petition.
4. Similarly, Abdul Wahid, petitioner in Writ Petition No.1482 of 1991, claims that he is dealing in the business of sand mining and also held leases obtained by him in public auctions. He is aggrieved of the conditions mentioned in the notice Annexure 'A', which appeared in daily 'Jang' dated 15th of January, 1991.
5. In Writ Petition No.941 of 1991, the grievance of the petitioner is with regard to the conditions subject to which the auction of ordinary minerals was scheduled to be held for Sargodha Region.
Similar grievance has been raised in Writ Petition No.282 of 1992, which also pertains to Sargodha Region.
6. Raja Muhammad Anwar and Sh. Abdul Majid, the learned counsel appearing in support of these petitions have challenged the vires of the Punjab Minor Minerals Concession Rples, 1990, on the ground that these rules suffer from vice of excessive delegation. Reliance has been placed upon Haji Ghulam Zamin and another v. A.B. Khondkar and others PLD 1965 Dacca 156. The second objection of the learned counsel is to the validity of rules 6, 7, 12, 15 and 19 as being unreasonable.
Lastly, the learned counsel argued that the notification dated 4-6-1991 by virtue whereof certain conditions were imposed by the respondent NO.3 on the participants in auctions to be held is without jurisdiction.
The learned Advocate-General has, on the other hand, argued that neither the provisions of the rules nor of the notification dated 18th of June, 1991, are ultra vires and illegal.
7. As regards the first contention of the learned counsel for the petitioner, the Punjab Minor Minerals Concession Rules, 1990, have been framed in the exercise of powers conferred by section 2 of the Regulation of Mines and Oilfields and Mineral Development (Government Control) Act, 1948, which reads as follows:-- Power to make rules.--It is hereby declared to be expedient in the public interest that the appropriate Government shall have power to --make rules to provide for all or any of the following matters, namely:-- (1)the manner in which, and the authority to whom, application for the grant of renewal of an exploration or prospecting licence, a mining lease or other mining concession shall be made, and the prescribing of the fees to be paid on such application; (2)the conditions in accordance with which the grant or renewal of an exploration or prospecting licence, a mining lease or other mining concession. May be made, and the prescribing of forms for the execution or renewal of such licence, lease and concession; (3)the circumstances under which renewal of a licence, lease or concession as aforesaid may be refused, or any such licence, lease or concession whether granted or renewed may be revoked; (4)the determination of the rates at which, and the conditions subject to which, royalties, rents and taxes shall be paid by the licensees, lessees and grantees of mining concession; (5)the refinement of ores and mineral oils; (6)the control of production, storage and distribution of minerals and mineral oils; 7)the fixation of the prices at which minerals and mineral oils may be bought or sold; and (8)any. Matter ancillary or incidental to the matters set 'Out in the foregoing clauses of this section, and the appropriate Government may, by notification in the official Gazette make rules accordingly."
8. The learned counsel for the petitioner has maintained that as no guidelines have been provided in the section (2) for the Government while framing rules, the provisions of section 2 as also the rules framed thereunder are hit by the principle of excessive delegation as it is well settled that a, legislature cannot abdicate its authority in favour of the Executive Government.
This contention of the learned counsel is not well founded.
9. A reading of section 2 of the Act would show that it authorises the appropriate Government to frame rules to provide for all or any of the matters specified therein. Some of the matters so specified or the manner in which; and the authority to whom applications for the grant or renewal of an exploration or prospecting licence, a mining lease or other mining concession are be made - -and the prescribing of the fees to be paid on such applications. Similarly, clauses (2) and (3) of rule 2 authorise the appropriated Government to prescribe by rules the conditions in accordance with which the lease or licence, as the case may be, are to be granted or refused.
10. A reference to the preamble of the Act would show that the object in promulgating the same was to provide for matters connected with Regulation of Mines and Oilfields and Mineral Development under Government Control. A The power vested in Government under section 2 of the Act is regulatory in character. It is in fulfilment of that objective that Punjab Mining Concession Rules, 1990, have been framed. These rules lay down the necessary details and the manner in which the application for grant of lease and licence is to make the authority to whom the application is to be addressed, the necessary documents which must be riled along with the application and the procedure; for deciding the application and the conditions subject to which the lease/ licence is to be granted.
11. It is by now well settled that in the modern day complex society, it Is impossible for the legislature to provide for each and every eventuality which may arise and it may competently delegate some of its powers to another or a subordinate authority. In Craies on Statute Law (7th Edition) at page 290 it is stated that there are four main reasons why delegation has become a normal feature of law making:--
(i) Pressure on parliamentary time;
(ii) Technical character of modern legislation
(iii) Need for flexibility.
(iv) Emergency powers
12. In Rafluddin v. Chief Settlement and Rehabilitation Commissioner PLD 1971 SC 252 it was ruled that:-- "Having regard to the nature of the legislation itself it was impossible to expect the Legislature to provide for all possible eventualities which were likely to arise due to the complexities of the problems from day to day. This was a fit subject, therefore, in respect of which the power of making subsidiary provisions could be validly delegated to the executive or those responsible for administering the law."
13. The objection regarding excessive delegation is based upon the theory of separation or trichotomy of powers which is more peculiar to the American 113 Constitutional system and cannot be applied to our country with same rigidity as is clear from the following observation of Hamoodur-Rehman, J. In Province of East Pakistan v. Siraj-ul-Haq Patwari PLD 1966 SC 854 at page 951:-- "The principle, I venture to think, under our own Constitution is much the same. Even though our Constitution has a similar division of powers, namely, legislative, executive and judicial, it does not necessarily follow that the doctrine of excessive and impermissible delegation which has been considered to be a special characteristic of the American Constitutional system, must necessarily also be imported into our own constitutional system."
(Also see Zaiblun Textile Mills Ltd. v. Central Board of Revenue. PLD 1983 SC 358.
14 ' As regards the limits within which the power can be delegated by the Legislature, one can do no better than to reproduce the classic observations made by Hamood-ur-Rehman, J. In Siraj-ul-Haq Patwari's case (supra) which appear at page 952 of the report and reads as under:-- "I do not wish, however, to dispute that the Legislature cannot abdicate altogether from its legislative functions or totally efface itself but where the Legislature has sufficiently expressed its will and exercised its judgment as to the territorial extent, scope and subject--matter of the legislation, the provision of details, particularly when. Such details are by their very nature incapable of being laid down by the legislature itself, can well be left to be done by another agency in whom the Legislature places confidence."
In Messrs Sh. Abdur Rahim, Allah Ditta v. Federation of Pakistan and others PLD 1988 SC 670, it was observed that what is prohibited by the Legislature is the delegation of its function to make the law but not the authority exercised under and in pursuance of the law itself to another agency in regard to the provision of details when by the very nature these are incapable of being laid down by the Legislature itself.
15. Viewed in the light of the above principles, the delegation of powers in the present case by the Legislature to the appropriate Government for framing rules regarding matters enumerated in section 2 cannot be said to suffer from excessive delegation. Reference at this stage may be made to the authority of the Supreme Court of Pakistan in District Magistrate, Lahore v. Raza Kazim PLD 1%1 SC 178 wherein the provisions of section 17 of the Arms Act, 1878 which authorised the Central Government to make rules laying down the terms and conditions subject to which arms licence may be granted without further providing any criteria for guidance were challenged on the ground of excessive delegation. While repelling this plea, it was observed by the Supreme Court o Pakistan that:-- "We see no reason to depart from this long-established rule of interpretation of statutes enacted prior to the coming into force of the late Constitution, for, we should avoid, if possible, casting a doubt on a long course of legislation wherein similar provisions have been made.
Applying this test in the present case we rind on examining the language of the Indian Councils Act, 1861, and comparing the legislative powers of the Governor-General-in-Council under the said' Act with the provisions of the Arms Act, that in enacting section 17 of the latter Act that legislative authority could, in no sense of the term, be said to have abdicated or effaced itself or created a new legislative body or legislated beyond its competence. Having regard to the nature of the object sought to be achieved by the legislation it was impossible for the Legislature to attempt to provide for every detail and machinery to carry it into effect, hence, the legislature, whilst, retaining its legislative powers intact and maintaining its full legislative control authorised the executive merely to determine the manner of carrying it into effect by rules framed in that behalf."
The judgments of the Supreme Court of Pakistan in Zaibun Textile Mills Ltd. v. Central Board of Revenue and others PLD 1983 SC 358 and M/s. Sh. Abdur Rahim, Allah Ditta v. Federation of Pakistan PLD 1988 SC 670 are also instructive.
16. It is also interesting to note the dictum of the Privy Council in Cobb & Co. Ltd. And others and Norman Eggert Kropp (1967) I.A.C. 141). In that case, the appellants before the Privy Council had challenged the validity of the Transport Act, 1960 and State Transport Facilities Act, 1946, on the ground that the fee levied under the aforesaid two provisions was illegal and void as it was done without the authority of the competent legislature. While repelling the contention, it was observed (hat:-- "The legislature were entitled to use any agent or any subordinate agency or any machinery that they considered appropriate for carrying out the objects and purposes that they had in mind and which theydesignated. They were entitled to use the Commissioner for Transport as their instrument to fix and recover the licence and permit fees.
They-were not abrogating their power to levy taxes and were not transferring that power to the Commissioner. What they created by the passing of the Transport Acts could not reasonably be described as a new legislative power or separate legislative body armed with general legislative authority (See R.V. Burah). Nor did the Queensland legislature create and endow with its own capacity a new legislative power not -created by the Act to which it owes its own existence (see in re: The Initiative and Referendum Act). In no sense did the Queensland legislature assign or transfer or abrogate their powers or renounce or abdicate their responsibilities., They did not give away or relinquish their taxing powers. AH that wasdone was done under and by reason of, their authority. It was by virtue of their will that licence and permit fees became payable. Nor was there any alteration of the legislature."
17. As regards- the reliance of the learned counsel for the petitioner on the case of Haji Ghularn Zamin and another v. A.B. Khondkar and another (PLD 1965 Dacca 156), it is to be seen that the learned Judges in support of their conclusion had relied generally upon cases from American jurisdiction which in view of the observation of the Supreme Court of Pakistan in Siraj-ul-Haq Patwaei's case cannot be applied to our constitutional system. Even otherwise I am not in a position to follow the judgment relied upon by the learned -counsel in preference to the authorities of the Supreme Court to which reference has already been made.
18. This brings me to the next contention of the learned counsel for the petitioner that rules 6, 7, 12, 15 and 19 are not reasonable and, therefore, not valid. The precise objection was that these provisions restrict the right of a person to participate in the auction. This argument however is not we merited.
To participate in an auction or to obtain contract is neither a natural nor a fundamental right of any person. While holding the auction, it is open to the authorities concerned to regulate it by prescribing conditions subject to which and the manner in which the auction is to be held. The effect of the rules referred to is not to restrict the so-called right of individual to participate in the auction but to regulate it to which there can be no possible objection. Rule 14 authorises the authority to reject or accept the bid in auction without assigning D any reason. There cannot be any cavil that notwithstanding a person is the highest bidder, he has no right to obtain the contract, grant of which is in the discretion of the functionaries concerned. There may be other reasons which can impel them to reject the bid of an individual which may be perfectly justified.
The rule itself is not as such discriminatory but if it is demonstrated in a proper case, while rejecting bid, the authority concerned has acted in an unjust and discriminatory manner, the exercise of that power can perhaps, be struck down. But in the present case, the discussion is merely academic in nature inasmuch as the auctions are still to be held and eventuality of the exercise of the powers envisaged by rule 14 has not arisen. The same is the position regarding rule 15. Even otherwise there is nothing objectionable in this rule which authorises the licensing authority, where it considers that the highest bid is not adequate, to call for all the parties who had participated in the auction and to negotiate with them for the purposes and improving the bid to its satisfaction.
19. The rationale behind rules 16, 17, 18 and 19 is self-evident which is to ensure that the auction is conducted in orderly manner between the persons who were really interested in obtaining the lease. The respondents are well within their rights to satisfy themselves about the genuineness of the bidders and also ensure that no loss is caused to public exchequer.
20. The last objection of the petitioner to the notification dated 18th of June, 1991 in which certain conditions have been prescribed which the participants in auction must fulfil before can be allowed to bid at the auction. This notification purports to have been issued in pursuance to rule 12(2), clause (ii)(d) of the Punjab Minor Minerals Concession Rules, 1990, which reads as under:-- "(2) Every application under sub-rule (1) shall be accompanied by
(i) earnest money as prescribed by the Government; and negotiate with them for the purposes and improving the bid
(ii) a copy of
(a) the National Identity Card if the applicant;
(b) income tax registration;
(c) the duly registered partnership deed where the applicant is a partnership firm;
(d) each document of immovable property and financial viability of the applicant as prescribed by the Licensing Authority, and
(e) the articles and in memorandum of association along with evidence of paid up capital, if the applicant is a Company.
In order to correctly understand the controversy, the notification may also be reproduced as under:-- "In supersession of this Directorate's Notification No.MD/DEV.CDN.1(22)/90, Vol. 111, dated 30-8-1990, the Licensing Authority is pleased to prescribe the following documentation for the fulfilment of the requirements of clause (ii)(d) of rule 12(2) of the Punjab Minor Minerals Concession Rules, 1990:--
(1) FOR PARTICIPATION IN AUCTION OF MINOR MINERAL BLOCKS WITH BID UPTO RS.1,00.000 CATEGORY 'C'
(i)Documents of financial viability for Rs.25,000 in the form of fixed deposits, defence saving certificates, NIT shares or statement of bank transactions for a period of 12 months (not older than a month on the date of riling of application) showing a minimum closing balance of Rs.25,000 and reasonable number of transactions of the same amount. During the year in the name of applicant(s); (ii)Documents regarding ownership of immovable property to the tune of Rs.1,00,000 in the name of the applicant(s) duly verified by the competent authority; (iii)In case, the applicant is unable to produce evidence of financial viability as required at (i) above, he/she may give additional evidence of ownership of movable/immovable property in his/her name to the tune of Rs.50,000 duly verified by I he competent authority.
(2) FOR PARTICIPATION IN AUCTION OF MINOR MINERAL BLOCKS WITH BID UPTO RS.50,00.000 -CATEGORY'B'.
Documents of financial viability for Rs. 1,00,000 in the form of fixed * deposits, defence saving certificates, NIT shares or statement of bank transactions for a period of 12 months (not older than a month on the date of riling of application ) showing a minimum closing balance of Rs.1,00,000 and reasonable number of transactions of the same amount during the year in the name of applicant(s); (H)Documents regarding ownership of immovable property to the tune of Rs.3,(X),O(X) in the name of the applicant(s) duly verified by the, competent authority; (iii)In case, the applicant is unable to produce evidence of financial viability as required at 2(i) above, he/she may give additional evidence of ownership of movable/immovable property in his/her name to the tune of Rs. 2,00.(W duly verified by the competent authority
(3) FOR PARTICIPATION IN AUCTION OF MINOR MINERAL BLOCKS WITH BID OF MORE THAN RS.5.00.000 CATEGORY'A'.
(i) Documents of Financial viability for Rs.3,00,000 in the form of fixed deposits, defence saving certificates, NIT shares or statement of bank transactions for a period of 12 months (not older than a month on the date of filing of application) showing a minimum closing balance of Rs.3,00,000 and reasonable number of transactions of the same amount during the year in the name of applicant(s);
(ii) Documents regarding ownership of immovable property to the tune of Rs.9,00,000 in the name of the applicant(s) duly verified by the competent authority.
(iii)In case, the applicant is unable to produce evidence of financial viability as required at 3 (i) above, he/she may give additional evidence of ownership of movable/immovable property in his/her name to the tune of Rs.6,00,000 duly verified by the competent authority.
NOTE:- In case of limited companies proper evidence of authorised and paid-up capital shall be furnished. The paid up capital of the company should be comparable with the financial qualifications stated above."
21. The learned counsel for the petitioner has contended that tile conditions imposed by the respondents under the aforesaid notifications we onerous and unreasonable. The first aspect which has, however, to be considered is as to whether the licensing authority/Joint Director Mineral Development, Punjab has any power to issue such a notification. Although Rule 12(ii)(d) authorises the licensing authority to prescribe the * nature of documents which should accompany the application for licence but this delegation to the licensing authority is without any legal backing. It would be appreciated that under section 2 of the Regulation of Mines and Oilfields and Mineral Development (Federal Control) Act, 1948, the power to frame rules vests in appropriate Government which alone can inter alia prescribe the conditions for auction and grant of licenses.
The appropriate Government being itself a delegatee cannot further delegate this power to the licensing authority in the absence of any provision in the Act authorising it to do so. It is well- established law that a delegatee cannot further delegate its powers without permission of the delegator. (Delegations non polest delegose or delegasi). As observed by this Court in Muhammad and another v. Custodian, Evacuee Property, West Pakistan, Lahore and 4 others PLD 1976 Lah. 109, the principle' applies to delegation of all classes of powers. In SA.De. Smith's Judicial Review of Administrative Action (Fourth Edition) at page 300, the following statement of law appears:-- "'There is a strong presumption against construing a grant of delegated legislative power as empowering the delegate to sub-delegate the whole or any substantial part of the law-making power entrusted to it. In New Zealand cases this presumption has been invoked as a ground for holding regulations and orders made by the sub-delegate to be invalid."
In O. Hood Phillips Constitutional and Administrative Law (Seventh Edition) while considering the subject of sub-delegation of powers, it is stated that:- 'Stih-deley-ation of Powers.--The prima facie rule is that a person or body to whom powers are entrusted may not delegate them to another- delegatus non potest delegare--unless expressly or impliedly authorised to do so. Thus in Angharn v. Minister of Agriculture a Divisional Court held that the Bedfordshire War Agricultural Committee, to which the Minister of Agriculture had validly delegated his power under Defence Regulations to give directions with respect to the cultivation of land, and which had decided that sugar beet should be grown on eight acres of the appellant's land, had no power to delegate to their executive officer the power to specify the particular field to be cultivated."
22. Even otherwise, the Notification appears to be highly unreasonable and discriminatory.
Although no possible objection can be taken to the right of the respondents to satisfy themselves about the financial status and the genuineness of the parties participating in the bid but the rationale for insisting that before a person' can be allowed to take part in the auction, lie must provide documents regarding his movable/immovable property is not understandable. A person may not own any immovable property but yet he cannot be precluded on that ground from participating in the auction. Similarly the reason for insistence that an applicant must produce fixed deposits, defence saving certificates or NIT units can also not be comprehended. It is also to be seen that the respondents in the rules have provided sufficient safeguards like furnishing of security as a condition to participate in the auction and, therefore, further conditions laid in the above notification are not sustainable.
23. The notification also appears to be against the directive principles of policy provided in the Constitution which embody the Islamic principles of social justice, to the effect that concentration of wealth in the hands of few must as far as possible be avoided. The conditions imposed by the notification tire also likely to prevent fair competition. Even the learned Advocate-General did not seriously contest this point.
In view of what has been said above, all these petitions ate allowed only to the extent that the notification dated 18-6-1991 issued by respondent No.3 is declared to be without lawful authority and of no legal effect and to the remaining extent, all the petitions are dismissed with no order as to costs.
A.A/S-99/L