' The facts, not in dispute, have been reproduced in the impugned order dated 17-12-1997, passed by respondent No,2. As recorded in the impugned order, the petitioner company was granted presenting license for Coal over an area of about 341.3 acres of land situated in District. Chakwal in 1961. This license was under Pakistan Mining Concession Rules, 1960, (hereinafter referred to as 1960 Rules). With effect from 17-3-1980, vide letter of respondent No,1, dated 12-6-1984; the license was converted into a mining: lease for twenty years. The leased area was subsequently enhanced to 529.01 acres vide letter, dated 22-4-1987, under the Punjab Mining Concession Rules, 1986, which were enforced on 10-9-1986, (hereinafter referred to as 1986 Rules). The petitioner-Company accepted the enhancement of the area vide its letter dated 16-5-1987 and undertook to be bound by the terms and conditions laid down in the 1986 Rules. The petitioner-Company has been paying royalty at the rate of Rs,2,35 per ton. Vide notification dated 19-2-1986, the Government of Punjab revised the rate of royalty to Rs,15 per metric ton with effect from 7-7-1985. Another notification dated 25-9-1986 was issued under rule 52 of the 1986 Rules fixing royalty rates for various minerals and for the Coal it was Rs,15 per metric ton. The petitioner-Company paid the royalty at the revised rate up to June, 1987, but subsequently started contending that the company was, liable to pay at the rate of Rs,2.35 per ton only. Thus, started the dispute between the parties. Respondent No,3 issued demand notices dated 19-7-1988 and 4-12-1988 in the sum of Rs,84,589.30 and 1,67,210.10, respectively, as balance of royalty plus penalty dues upto to half years ending 31-12-1987 and 30- 6-1988. Apparently these amounts were not paid. On the request of the petitioner-Company, the accounts were reconciled in the presence of the Company's represented on 31-5-1989 and a sum of Rs,6,84,836.17 was found to be outstanding. On 8-11-1989, the petitioner-Company filed Writ Petition No, 7387 of 1989 in this Court and challenged the rate of royalty. This petition was not pressed and was disposed of on 11-11-1989 apparently at the request that the petitioner-Company wanted to avail of the alternative remedy within the department, under the rules. Respondent No,3 issues a final notice on 8-8-1990 for payment of the outstanding dues within seven days failing which the petitioner-Company was warned that action under rule 90 of 1986 Rules will be. Taken and the lease may be cancelled. This notice dated 8-8-1990 was called in question by the petitioner-Company by filing appeal under rule 98 of the 1986 Rules before respondent No,2. While this appeal remained pending, the petitioner-Company also moved petitions dated 19-11-1990, 2- 11-1994 and 12-11-1994 claiming that dispute arising between the petitioner-Company and the Licensing Authority, respondent No,3, be decided by respondent No,2 as sole Arbitrator. The appeal as well as the later applications for arbitration were heard by respondent No,2 and vide the impugned order respondent Nn 2 fias rejected them all. It has been concluded that since 1986 Rules are applicable and the same do not have any arbitration clause, the arbitration petitions were incompetent. It has also been held that only an appeal is competent under 1986 Rules, and the same has been dismissed on merits. In other words, the notice, dated 8-8-1990 issued by respondent No,3 demanding royalty at the rate of Rs,15 per metric ton alongwith demand for penalty at the rate of 5% of the outstanding dues has been upheld. It may not be out of place to mention here that as per notice attached as Annexure "V", with C.M. 1 of 1999 filed by the petitioner, the outstanding arrears have swelled to Rs,43,32,607.40.
2. The arguments which have not prevailed with respondent No,2 have been repeated in this petition. It is contended that 1960 Rules are still applicable to the petitioner's lease and any dispute arising between the parties has to be resolved by way of arbitration under Rule 77 of 1960 Rules. It is pleaded in the alternative that at least 1960 Rules are applicable to the original area of 341.3 acres and 1986 Rules'ill govern the enhanced area. It is also contended that respondent No,3 has no authority to recover 5% penalty for non-payment/delayed payment as this provision contained in rule 52 of 1986 Rule is ultra vires of the parent act, namely, the Regulation of Mines and Oil Fields and Mineral Development (Government Control) Act, 1948 (Act XXIV of 1948), hereinafter referred to as the Act.
3. In the report and parawise comments the impugned order as well as he rate of royalty is defended. Further, it is factually pleaded that the petitioner accepted the revised rate and paid two-half yearly instalments at the same rate but subsequently attempted to back out. It is claimed that petitioner is estopped from resiling that position. It is averred that having itself filed the appeal under rule 98 of 1986 Rules, petitioner cannot be permitted to fall back upon rule 77 of 1960 Rules to claim arbitration. It is also pleaded that petitioner-Company is a persistent defaulter and has been avoiding to make payment by restorting to legal and judicial proceedings with a dishonest motive.
4. The Act was enforced on 8-1-1948 and it was a Federal piece of legislation. It enabled the Central Government to make rules for grant of prospecting licenses and mining leases in respect of the mines, gas fields and oil fildes. The Act was amended by President's Order No, 1 of 1964 enforced on 28-5-1964. By the amendment in sections 2, 3 and 5, the word "Central Government" was replaced by the words "Appropriate Government". Section 6 was added to define the Appropriate Government. According to this definition, in relation to mines of nuclear substances, oil fields and gas fields, and development of such substances, mineral, oil and gas, "Appropriate Government" means "Central Government" and in relation to other mines and mineral development "the Provincial Government". The net result of the amendment was that with effect from 28-5-1964, the Coal and Coal Mines, the subject-matter of this writ petition, became a provincial subject and could only be dealt with by the Provincial Government and, in this case, Punjab Government.
5. In exercise of the powers conferred by the Act, the Central Government framed the Pakistan Mining Concession Rules, 1960. It is rule 77 of these rules which provides:-- "Any question or dispute regarding the license or lease, and any matter or thing connected therewith shall be referred to the Central Government in the appropriate ministry whose decision shall be final ' The rule further lists six matters regarding which the dispute will be referred to two Arbitrators, one to be nominated by the Central Government and the other by the license or lessee and, in the case of disagreement between the Arbitrators, the matter is to be determined by a Judge of the Supreme Court of Pakistan, to be appointed by the Arbitrators in writing. It so happened that in spite of reversion of all other minerals to the provinces, the 1960 Rules remained operative in the Province of Punjab with amendments made from time to time. As noted, finally the Punjab Mining Concession Rules, 1986, were framed under section 2 of the Act and enforced on 10-9-1986. The above in short is the legislative history of the various statutory provisions.
6. The primary argument of Mr. Farooq Amjad Mir, Advocate, for the petitioner-Company, is that the Company having been granted the license/lease under 1960 Rules, and these rules having not been repealed and done away with by the 1986 Rules, the Company can legitimately claim resolution of the dispute through arbitration as envisaged under rule 77 of 1960 Rules. It is claimed that acknowledgement of the company regarding applicability of 1986 Rules as well as filing of appeal by the Company against the demand notice dated 8-8-1990, under rule 98 of the 1986 Rules, does not debar the Company from raising the above argument as, according to Mr. Mir, there cannot be an estoppel against law. He has justified the filing of petition before respondent No,2 asking him to decide the dispute as Arbitrator and not as Appellate Authority.
7. Mr. Muhammad Amin Lone, the learned Assistant Advocate General, Punjab, has on the other hand, strenuously argued that petitioner-Company having accepted the 4, applicability of 1986 Rules through its letter by which the leased area was extended and by resorting to rule 98 of 1986 Rules, cannot now be heard to say to the contrary. He has also highlighted that the petitioner- Company is persistent defaulter and has not paid a single penny during the last six years or so, although it is enjoying the benefits of the lease. He has also pleaded that the company has mortgaged its leasing rights in favour of Industrial Development Bank of Pakistan and this is only permissible under the 1986 Rules and not 1960 Rules and this fact alone establishes the fact that the lease is exclusively governed by 1986 Rules. He has referred to rule 4 of the 1986 Rules for this purpose.
8. The confusion is arising because 1986 Rules, in terms and in so many words, do not say that henceforth 1960 Rules are repealed and will not be applicable. This silence has given rise to all the arguments raised. Otherwise the proposition is very clear. With the amendment in the Act brought by President's Order No,1 of 1964, Coal and Coal Mines fall within the purview of Punjab Government and from that date onward, the Central Government/Federal Government had nothing. To do with this item nor they could make any rule on the same. It is also a fact that after 1964, in respect of Coal, the Punjab Government has been making amendments in the 1960 Rules as well as passing other orders. On 10-9-1986, the Province of Punjab framed its own rules known as Punjab M;nine Concession Rules, 1986. Rule 4 matter beyond controversy and Lads:- "A license or lease granted or renewed or saved under the Pakistan Mining Concession Rules, 1960, shall be deemed to have been granted or renewed under these rules."
' In the presence of the above provision the argument regarding availability and applicability of 1960 Rules in the present case, in respect of Coal and Coal Mines evaporates in thin air. It has not been argued by Mr. Mir that 1986 Rules or for that matter rule 4 is incompetently framed. After 10-9- 1986, under compulsion of law, the petitioner-Company is holding the lease under 1986 Rules. In rule 4, the expressions used are of wide import. It says that any license or lease granted or renewed are saved shall be deemed to have been granted or renewed under these rules. Petitioner- Company as originally granted a territory of 341 acres which was enhanced to 529 acres on 22-4- 1987 which enhancement was accepted by the Company on 16-5-1987. This option or enhancement or even continuation of original leased area could only be under the 1986 Rules. The argument, therefore, that petitioner can ask for arbitration under rule 77 of 1960 Rules is devoid of force. It otherwise cannot be accepted without doing violence to the language of rule 77. That rule envisages arbitration by the Central Government in the appropriate ministry. Mr. Mir wants respondent No,2, the Secretary to the Punjab Government, to arbitrate. How can respondent No,2 have jurisdiction or exercise jurisdiction conferred by rule 77 upon the Central Government? The argument is clearly contradictory and cannot be accepted. I hold that with effect from 10-9-1986, 1986 Rules apply and 1960 Rules will have no application in the Province of Punjab, in respect of mines not mentioned in section 6 of the Act.
9. In view of the above clear finding, the argument whether the petitioner is estopped or not estopped, need not be examined in detail. Suffice it to say that petitioner-Company initially accepted the above legal position by its own conduct when (i) it mortgaged its leasing rights, which could only be done under the 1968 Rules; (ii) when it filed appeal under section 98 of the 1986 Rules and (iii) admittedly when it also deposited two-half yearly instalments of royalty at the enhanced rate i,e, Rs, 15 per metric ton. On no principle of law or equity, the petitioner-Company can be permitted to resile from the above position. Equally in view of the above finding that in the Province of Punjab in respect of certain mines, only 1986 Rules are operative after 10-9-1986, the argument of Mr. Mir based on reconciliation of two sets of rules loses its relevance. It is clear that both the rules will operate in their own fields after the amendment brought about by President's Order No,1 of 1964. 1960 Rules deal with oil fields and other minerals mentioned in section 6 while 1986 Rules will deal with minerals/items not mentioned in section 6.
10. Mr. Mir has also challenged the imposition of 5% penalty on the dues, which the petitioner- Company failed to pay in time. The challenge is grounded on the fact that such a provision in rule 52 of 1986 Rules travels beyond the parent act. It is argued to at under section 3(b) of the Act, breach of any rule framed under section 2 can be punished with imprisonment for a term which may extend to three years or with fine of with both and provision for imposition of 5% penalty on unpaid charges can have no sanction under section 3. Learned Assistant Advocate-General has met this argument by relying on section 2(8) of the Act which enables the appropriate Government to make rules on "any matter ancillary or incidental to the matters set out in the foregoing clause of this section". He submits that under rule 52(1) "a lessee shall, on the first day of the month of January and July each year, pay royalty at such rate as is prescribed by the Government from time to time on all minerals produced and carried away" sub-rule (2) lays down that "In case of non- payment of rent and royalty dues, within the gross period of two months, the penalty at the rate of 5% of the outstanding dues for the delay of every month or part thereof will be charged from the date the payment became due". Learned Assistant Advocate-General states that the provision of penalty is a matter ancillary and incidental and, therefore, has been legitimately provided for in his submission section 3 of the Act does not debar other measures to enforce recovery.
11. The provision made in rule 52(2) can be made in terms of section 2(8) of the Act. It is clearly a matter of incidental and on ancillary to the matters set out in clauses (1) to (7) of this section, in particular to clause (4). To this extent there cannot be any serious objection. Mr. Mir, however, insisted that section 3 having provided a mode of enforcement of rules, impliedly excludes other measures to compel compliance of the rules or to enforce payment. I am afraid; this argument of Mr. Mir has to be rejected. Section 3 of the Act is permissive inasmuch as it says "any rules made under section 2 may provide that the breach of any of the rules shall be punishable with imprisonment. It does not prohibit the provision of other measures in the rules to force compliance or to compel recoveries under the rules. The prohibition against provision of other measures cannot be culled from section 3. I, therefore, hold that provision of rule 52(2) of 1986 Rules is intra vires of the Act. In this connection Mr. Muhammad Amin Lone, the learned Assistant Advocate- General, is equally correct in relying on condition No,X in the lease agreement (copy Annexure "B").
After having accepted that condition, the petitioner cannot be permitted to wriggle out of the same.
12. For all the above reasons, this petition is without merit and is dismissed, leaving the parties to bear their own costs.