JUDGMENT <NAME>, AG. C.J. - At the instance of the Commissioner of Income-tax <ORG> has referred to us the following questions for decision :-

"(1) In the circumstances of the case is the amount of Rs. 5,25,000 received as salami by the assessee taxable ?

(2) In the circumstances of the case is the amount of Rs. 1,76,306 received on account of cess by the assessee taxable ?"

For the assessment year 1941-42 <NAME>, the assessee, was assessed on a total sum of Rs. 21,65,265. The Income-tax Officer included in this sum Rs. 5,25,000 which was received by the assessee because in his opinion this so called salami was nothing but an advance payment of income. He also included a sum of Rs. 1,74,545 (the figure in the question sent to <ORG> is 1,76,306 and is agreed to be the correct figure) in the assessable income on the view that this amount was received from the lessees <ORG>, and the destination thereof after it was earned was immaterial, namely that it went to reimburse the assessee.

In appeal, the Appellate Assistant Commissioner, Mr. <NAME>, in a careful order came to the conclusion that the amount of salami was capital receipt and not taxable. He also came to the same conclusion regarding the amount of cess.

The Income-tax Officer went up in appeal to <ORG> contending that the amount received as salami and the amount recovered as cess should not have been deducted out of the assessable income. <ORG> agreed with the Appellate Assistant Commissioner.

It is now necessary to give the facts shortly in order to trace the origin and nature of the two sums in question which were admittedly received by the assessee in the previous year.

On the 26th of November, 1907, the then <NAME> Bahadur of Ramgarh gave a prospecting licence to <ORG> on receiving a salami of Rs. 1,00,000. The period of licence was three years but the licensee was given the option to have a renewal for another two years. The licensee also advanced to <NAME> a sum or Rs. 7,00,000 by way of loan on certain conditions mentioned in the document. The licensee was at liberty to transfer, assign or sub-let the whole or any part of his rights and interest. By clause 7 the licensee or his nominees were given the right to take a coal mining lease or leases of the whole or any portion of the coal fields covered by the licence upon certain terms, namely salami at the rate of Rs. 40 per standard bigha but not to exceed thirty thousand standard bighas except in certain events. After the expiry of one year from the date of the licence, a minimum royalty at the rate of Rs. 8,000 per annum was to be paid by the licensee to the <NAME> and in case the mining lease or leases were taken by the licensee this minimum royalty was payable so long as the minimum royalty payable under the lease or leases did not reach the figure of Rs. 8,000 per annum. Over and above that a further minimum royalty of one rupee per bigha on all lands actually taken up over and above an area of eight thousand standard bighas was also payable. The other terms are not important.

On the 6th of September, 1911, the prospecting licence was extended for seven years. The <NAME> Bahadur died on the 26th of January, 1913, and <ORG> assumed charge on behalf of the minor <NAME>.

On the 13th of December, 1917, the prospecting licence was extended for another five years.

On the 10th of April, 1919, the then <NAME>, who was the father of the present assessee, died, and as the assessee was then a minor, <ORG> continued to remain in charge of the estate. On the 30th of April, 1922, the licence was extended for another five years, and again on the 22nd of December, 1926, it was extended for another five years. On the 18th of July, 1932, <ORG> again extended the licence for a period of ten years. The assessee attained his majority on the 10th of August, 1937.

On the 9th of March, 1939, a notice was served on behalf of the assessee upon <ORG>, as the Managing Agents of <ORG> asserting that under the provisions of <ORG> Act it was not within the power of <ORG> to grant a prospecting licence and, therefore, the terms of the prospecting licence dated the 18th of July, 1932, the period of which was still unexpired, was not binding upon the assessee. It was also asserted that the leases which had been taken in the meanwhile based on the licence were ultra vires, and although he was legally justified in repudiating these leases but as royalty or minimum royalty was being paid on those leases, he was not repudiating them. Accordingly the assessee informed <ORG>, that he was entitled to make under-ground settlement of any portion of the Bokaro and Ramgarh coal fields other than the portion which was in their possession under the leases which were not being repudiated. A further claim was made on behalf of the assessee that he should be reimbursed in respect of the cess and income-tax which were paid on his behalf to the Government during the relevant period and he laid a claim at about Rs. 5,00,000 on account of cess and about Rs. 28,00,000 on account of income-tax and super-tax.

The assessee and the coal company entered into a settlement on the 10th of June, 1940, by which the assessee agreed to accept the various prospecting licences and their extensions and the leases which had been granted under the terms of those prospecting licences and extensions. The prospecting licence was extended for a period of seven years from the 26th of November, 1942, on the same terms as were in force on that date. The company agreed to pay to the assessee and the assessee agreed to receive Rs. 1,74,546 in full settlement of all claims for cesses and interest thereon up to and including March, 1939. The fifth term of the settlement may be quoted here :-

"In consideration of the extension of the prospecting licence and validating the leases and the licences and in full settlement of the claim for cesses from 1932-33 to 1938-39 (all claims for prior to 1932-33 having been foregone by you) we agree to pay to the <ORG> the following sums :-

(i) In full settlement of the claim for salami :

(a) In respect of the said extension of the prospecting licences Rs. 5,25,000, and

(b) Validating the leases and licences a capital lump sum of Rs. 40,000.

(ii) In full settlement of cesses from 1932-33 up to 1938-39 both years inclusive Rs. 1,74,545/14."

It is contended on behalf of <ORG> before us that the sum of Rs. 5,25,000 was nothing less than an advance royalty for seven years at the rate or Rs. 75,000 per annum. This argument is based upon the following observations by <NAME> J. (as he then was), in the case of <NAME> : "I concede that in some cases where the rent is ridiculously low and the premium abnormally high, it may be possible to argue that the premium includes advance rent."

In our opinion, the contention raised on behalf of <ORG> is not tenable. The matter was examined at great length by <NAME> (as he then was), and by me in the case of <NAME>. In the judgment we examined a number of cases and we came to the conclusion that it would be impossible to lay down any hard and fast rule that a salami can in no case be taxable. But the question must depend upon the facts and circumstances of each case. It is unnecessary to embark upon a review of those cases again. This decision was approved by <NAME>, <NAME>, and <NAME> (as he then was), in <ORG>. The head note correctly states : "It cannot be laid down as a hard and fast rule that salami or nazrana paid to the landlord for settlement of lands is payment of rent in advance and therefore assessable as income. In some cases it maybe payment of rent in advance; in other cases it might well be a lump sum payment for transfer of the leasehold interest, in which case it will be a capital receipt. Consequently, whether salami is a capital receipt or income can only be determined after a full investigation of all the facts relating to the settlement for which the salami or nazrana was paid."

A Special Bench of this Court consisting of <NAME>, <NAME>, <NAME>, J. (as he then was), and myself in the case of Maharaja <NAME> came to the same conclusion, namely, "salami could not be regarded as income as a matter of law. It may in certain cases be regarded as payment of rent in advance and in such cases it could rightly be regarded as income. Where, however, salami could not be regarded as a payment of rent in advance, it could not be regarded as income and would, therefore, not be taxable. Prima facie, salami is not income, and it is for the Income-tax authorities to show that there do exist facts which would make the salami income."

The question raised, therefore, is a question of fact in the main except in so far as it may be urge that on the facts found the inference in law follows that this particular salami was income.

The facts which I have set out above are so clear that I have no hesitation in agreeing with the opinion expressed by the Appellate Assistant Commissioner and the <ORG>. It is sufficient to state that here the salami was received not on account of any rent due to the assessee but for the settlement of his claim which he had put forward that the licences and the leases under which the coal company was holding the lands were invalid and ultra vires of <ORG> and, therefore, the assessee was requiring the coal company to vacate the premises. It is surprising that the Commissioner of Income-tax, not withstanding the clear case law laid down by this Court which appears to have been correctly applied by the Appellate Assistant Commissioner and the Appellate <ORG> to the facts of this case, had thought if fit to come up to this Court.

For these reasons <ORG> has correctly treated Rs. 5,25,000 as not being assessable to tax.

Cess : The claim of the Income-tax Commissioner to assess the amount of Rs. 1,76,306 is still more untenable. It will recalled that this amount was paid to the assessee because in the relevant period <ORG> had paid this sum to the Government although the liability to pay this sum was on the coal company. In other words the assessee has been reimbursed to the extent to which he was out of pocket by the omission of the coal company to bear this burden. How can this sum be treated as an income of the assessees in the previous year ? The facts have merely to be stated to show that <ORG> in agreement with the Appellate Assistant Commissioner came to the correct conclusion.

For these reasons the answers to the two questions are as follows :-

Question No. 1 - In the circumstances of this case the amount of Rs. 5,25,000 received as salami by the assessee is not assessable to taxation.

Question No. 2 - In the circumstances of this case the amount of Rs. 1,76,306 received on account of cess by the assessee is not taxable.

The assess is entitled to the costs in this Court. I would assess the hearing fee at Rs. 500.

<NAME>, J. - I agree that the answers to both questions should be as proposed by my Lord the Chief Justice. As to the salami of Rs. 5,25,000, it was no doubt contended before us that this had nothing to do with the settlement of the claim regarding the previous leases and licences for which a capital lump sum of Rs. 40,000 was paid. It was contended that the salami or Rs. 5,25,000 was in respect of the extension of the prospecting licence and that it was really payment of rent in advance. As has been observed by my Lord the Chief Justice, the question if salami in a particular case is in really payment of rent in advance, or is a lump sum payment case is in reality payment of rent in advance, or is a lump sum payment for transfer of some interest in the property, is a question of fact which can only be determined after a full investigation of all facts relating to the settlement by which the salami or nazrana was paid. Even if it is conceded that the salami in this case was not paid for validating the previous leases and licences, it does not affect the reasoning by which <ORG> has come to the conclusion that the salami in this case was not payment of rent in advance. <ORG> has rightly drawn attention to clause 8 of the main indenture of the 26th November, 1907, where there is a provision for the payment of a sum of Rs. 8,000 per annum as minimum royalty in addition to the salami; it is also stipulated that there will be a further payment of a minimum royalty of one rupee per bigha per annum in respect of each bigha of land held under mining lease in excess of eight thousand bighas, but these payments will be on account of, and not in addition to, the royalties for the time being payable under any mining lease or leases then already taken up by the licensee. These stipulations, which are also incorporated in the indenture, dated the 12th of March, 1942, show that the salami paid in this case was not really advance payment of rent. On the contrary, it was a lump sum payment for the rights which were being given to the licensee, namely, the right to prospect the property for a certain number of years and also the right to get mining leases of the whole or such portion or portions of the lands where coal may be found, at some fixed rates; as a matter of fact, draft mining leases formed a part of the indenture of the 20th of November, 1907. In this view of the matter, the salami in question is undoubtedly a capital receipt, and is not income.

In the recent case of <ORG> v. Commissioner of Income-tax, their Lordships of <ORG> had to consider certain special grants under which exclusive rights were granted to prospect and work any number of mining locations within the area in question, and one of the questions for decision was if certain sums paid in consideration of the grants were "rents, royalties, premiums and profits arising from property" within the meaning of Section 5(f) of the Income-tax Ordinance of Northern Rhodesia. Their Lordships agreed with the learned Chief Justice of Northern Rhodesia that the sums received were the "fixed price paid on an outright transfer of certain benefits" and could not be regarded as "rents, royalties etc." The same is the case here, and the salami paid is the consideration received upon a transfer of certain benefits.

Reference answered accordingly.


PETITIONER: AMBICA QUARRY WORKS & ANR. Vs. RESPONDENT: STATE OF GUJARAT & ORS. DATE OF JUDGMENT11/12/1986 BENCH: <NAME>, <NAME> (J) BENCH: <NAME>, <NAME> (J) SINGH, K.N. (J) CITATION: 1987 AIR 1073 1987 SCR (1) 562 1987 SCC (1) 213 JT 1986 1036 1986 SCALE (2)1037 CITATOR INFO : R 1988 SC2187 (35,36) ACT: Gujarat Minor Mineral Rules, 1966: Rule 18--Renewal of lease-Lease granted prior to coming into operation of Forest (Conservation) Act , 1980--Renewal whether mandatory. Forest (Conservation) Act , 1980: Pre-existing mining leases-Renewal of--Whether could be claimed as a matter of right. Interpretation of statutes--Interpretation must sub- serve and help implement intention of Act. Expression 'may' when not construed as 'shall'. Constitution of India:' Article 141-- Precedent--Ratio of a decision to be understood in the background of facts of the case. HEADNOTE: Sub-clause (b)(i) of rule I8 of Gujarat Minor Mineral Rules, 1966, which were framed under Act 67 of 1957, pro- vides that the lease for all minerals specified in sub- clause (i) of clause (a) may be renewed by the competent officer for one or more periods not exceeding ten years at one time. Section 2 of the Forest (Conservation) Act, 1980, brought into force on 25th October, 1980 provides that notwithstanding anything contained in any other law for the time being in force in a State, no State <ORG> or other authority shall make, except with the prior approval of <ORG>, any order directing (i) dereservation of reserved forest, and (ii) the use of forest land for non- forest purposes. The appellants had been granted leases for quarrying minor minerals prior to the coming into operation of the 1980 Act. Their applications for renewal of leases under r. 18 of the Rules were rejected by the competent authority on the ground that the lands fell under the reserved forests which were governed by the 1980 Act. Their revision applica- tions failed, and <ORG> also rejected the writ petitions filed by them. 563 In the appeals by special leave, it was contended for the appellants that the conditions precedent for the opera- tion of the Act were not existing, that there was no ques- tion of extending for non-forest purposes forest lands, since their's were existing quarry leases in areas which were at the relevant time dereserved forests, that they had not committed any breach of the terms of grant nor there were any other factors disentitling them to such renewal, that the words 'may be renewed' in r. 18(b)(i) should be read as 'shall be renewed', and so read they make it incum- bent on the <ORG> to renew the lease if the lessee so desired, and as they had invested large sums of money in mining operations a duty was cast on the authorities to exercise the power granting permission in a manner that they could receive full benefit of their investments. For the respondents it was contended that after the coming into operation of 1980 Act there was no question of renewal of the leases because it had prevented renewal of lease without the approval of <ORG>. Dismissing the appeals, the <ORG>, HELD: 1. Whether the power is one coupled with a duty must depend upon the facts and circumstances of each case and must be so decided by the <ORG>s in each case. [569D] I.2 The Gujarat Minor Minerals Rules, 1966 dealt with a situation prior to the coming into operation of the Forest (Conservation) Act , 1980. While under r. 18 of the Rules there was power to grant renewal, which might have cast a duty on account of the investments made by the appellants in the areas covered by the quarrying leases, they could not claim renewals as a matter of right after the Act was brought into force. Their applications were rejected on good grounds. The orders of the appropriate authorities deal with the situation. [569G, F, 570B] Julius v. Lord Bishop of Oxford,  5 Appeal Cases 214 and Craies on Statute Law, 7th Edn. 229, referred to. 2.1 All interpretations must subserve and help implement the intention of the Act. The primary purpose of the Act of 1980 is to prevent further deforestation and ecological imbalances. Therefore, the concept that power coupled with duty enjoined upon the respondents to renew the lease, stands eroded by the mandate of the legislation manifest in the Act. The primary duty was to the community and that 564 took precedence over the obligation to the individuals. [573C,A,569H-570A] 2.2 The appellants are asking for renewal of the quarry leases. It will lead to further deforestation or at least it will not help reclaiming hack the areas where deforestations have taken place. The Central <ORG> has not granted approval. If the State <ORG> was of the opinion that this was not a case where it should seek approval of <ORG>, the State <ORG> could not apparent- ly seek such approval. [572G, S73A] 3. The ratio of any decision must he understood in the background of the facts of that case. A case is only an authority for what it actually decides, and not what logi- cally follows from it. [572C] <NAME> v. <NAME>,  Appeal Cases 495, referred to. <CITATION> ,  3 SCR 402, <CITATION> ,  3 SCC 643, distinguished. JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 4250-425 1 of 1986.

From the Judgment and Order dated 9th August, 1985 of <ORG> in Spl. Civil Appln. No. 2471 of 1985 and 62 18 of 1983.

<NAME>, <NAME>, Mrs. <NAME> and <NAME> for the Appellants.

<NAME>, <NAME>, and <NAME> for the Respondents. The <NAME>udgment of the Court was delivered by <NAME>, <NAME>: We grant leave in these two special leave applications and dispose of these appeals arising out of the decisions of <ORG> by the judgment herein.

The two appeals centre round the question of how to strike balance between the need of exploitation of the mineral resources lying hidden in the forests and the pres- ervation of the ecological balance and to arrest the growing environmental deterioration and involve common questions of law. In the appeal arising out of special leave petition No. 12041 of 1985 the appellant firm had been granted a quarry lease for the minor mineral black trap at S. No. 73 of Village Morai of Taluka--Pardi, in the District of Valsad in the State of Gujarat..The lease was granted on or about 8th November, 1971 for a period of ten years. The area comprised of 13 acres of land for quarrying purpose. Three persons were granted-2-1/2 acres of land each and the re- maining-5-1/2 acres of land were placed at the disposal of <ORG> for the purpose of granting quarry lease from the same. The case of the appel- lant was that the said lands were dereserved from the forest area from 1971.

On or about 3rd August, 1981 when the appellant's term of lease was about to expire, the appellant applied for renewal of lease asper rule 18 of Gujarat Minor Mineral Rules, 1966 (hereinafter called the said Rules). The appli- cation of the appellant for renewal of lease was rejected by the Assistant Collector, <NAME>, on the ground that the land fell under the "Reserved Forest" area and hence the Forest (Conservation) Act , 1980 (hereinafter called '1980 Act') applied to the forests. The forest department of State of Gujarat refused to give 'no objection' certificate. The contention of the appellant was that by the order dated 29th November, 1971, the forest department had dereserved the said land from the reserved area and had allotted the land for the quarrying purpose to the appellant. The contention of the appellant was as the land was under the control of the <ORG> department, the 1980 Act did not apply to the same. An appeal was preferred by the appel- lant which was dismissed by <ORG> of Gujarat on or about 4th March, 1985.

It is asserted by the appellant that on or about 29th January, 1983, the Government had issued two circulars instructing the Director of Geology and Mining and other authorities not to issue the leases in the fresh area issued by the State Government. The appellant thereafter filed a writ petition in <ORG>. <ORG> dismissed the petition. The appellant has come up in appeal before this Court from the said decision. The appeal arising out of S.L.P. No. 12041 of 1985, hereinafter mentioned as first appeal.

The case of the appellants in the second appeal is that on diverse dates quarry leases. had been granted to the said appellants. There were ten of them. Eight of the appellants got their first renewal of their quarry leases in 1976-77. Appellant No. 9 applied for first renewal in August, 1979. Appellant No. 6 applied for first renewal on 20th July, 1982. In 1982, some of the appellants except appellants 6 to 9 applied for second renewal to the Collector. In December, 1982, second renewals were refused by the Collector. Revision filed by the appellants against the order of the Collector was rejected by the Director, Geology and Mining in 1983 and in December, 1983, writ petition often described as special civil application was filed before <ORG>, challeng- ing the refusal to renew. <ORG> rejected the said writ petition. The second appeal herein arises out of the said decision in August, 1985 of <ORG> of Gujarat. Both these appeals involve the question, whether after coming into operation of 1980 Act, the appellants were entitled to renewal either first or second of their quarry leases? In this connection it is necessary to refer to the 1980 Act. This was an Act passed by the <ORG> to pro- vide for the conservation of forest and for matters connect- ed therewith or ancillary thereto. The Statement of Objects of the said Act is relevant. It is stated that deforestation caused ecological imbalances and led to environmental dete- rioration. It recognised that deforestation had been taking place on a large scale in the country and it had thereby caused widespread concern. With a view to checking further deforestation, an Ordinance had been promulgated on 25th October, 1980. The Ordinance made the prior approval of <ORG> necessary for dereservation of reserved forests and for the use of forest land for non-forest pur- poses. The Ordinance had also provided for the constitution of an advisory committee to advise <ORG> with regard to grant of such approval. The 1980 Act replaced the said Ordinance. The Act extends to the whole of India except the State of Jammu & Kashmir, and came into force on 25th October,: 1980. Section 2 of the said Act is only relevant for our present purpose. It provides as follows:

"2. Restriction on the dereservation of for- ests or use of forest land for non-forest purpose --Notwithstanding anything contained in any other law for the time being in force in a State, no State Government or other authority shall make, except with the prior approval of the Central Government, any order directing--

(i) that any reserved forest (within the meaning of the expression "reserved forest" in any law for the time being in force in that state) or any portion thereof, shall cease to be reserved;

(ii) that any forest land or any portion thereof may be used for any non-forest pur- pose.

Explanation.--For the purposes of this section "non-forest purposes" means breaking up or clearing of any forest land or portion thereto for any purpose other than re-afforestation. "

The said section makes it obligatory for <ORG> to obtain the permission of <ORG> for (1) dereservation of reserved forest and (2) for use of forest land' for non-forest purposes. It is apparent, therefore, that the two dual situations were intended to be prevented by the legislation in question., namely dereserva- tion of reserved forest, and use of forest land for non- forest purposes.

In the instant appeals leases for quarrying purposes had been granted prior to the coming into operation of the Act in question. <NAME>, learned counsel for the appellant in the first appeal and <NAME> learned counsel for the appellants in the second appeal contended that there was no question of extending for non-forest purposes forest lands. There were existing quarry leases in one case first renewal was sought and in some other cases second or third renewals were being sought. Therefore these were at the relevant time dereserved forests. Neither of the two contin- gencies sought to be prevented was there. The conditions precedent for the operation of the Act were not there in the facts of these appeals, it was urged.

Our attention was drawn to rule 18 of Gujarat Minor Mineral Rules, 1966 which were framed under the Act 67 of 1957 by the Government of Gujarat. The rules provided for the period of the lease, renewals and availability of areas already granted and sub-clause (b)(i) of the said rule 18 of the said Rules provides as follows:

"(b)(i) The lease for all minerals specified in-sub-clause (i) of clause (a) may be renewed by the competent officer for one or more periods and the period of renewal at one time shall not exceed ten years and the total period for which the lease may be renewed shall not exceed twenty years in the aggre- gate."

<NAME> drew our attention to rule 3 of Part VIII (page 62) of the Manual which deals with the procedure of granting renewals under the rules.

On the other hand <NAME>, counsel for the respondents in the first appeal and <NAME>, counsel for the respondents in the second appeal contended before us that after coming into operation of 1980 Act there was no question of renewal of the leases because this Act had prevented renewal of the lease without the approval of <ORG>.

<NAME>, however, placed strong reliance on <CITATION> ,  3 SCR 402. That was a decision dealing with Rajasthan Mines Minerals Concession Rules, 1958. This Court in that case was concerned with Rule 30 under Chapter IV under the said Rajasthan Rules. This Court observed that the word "may' in the proviso in rule 30 in regard to the extension of the period by <ORG> should be construed as 'shall' so as to make it incumbent on Govern- ment to extend the period of the lease if the lessee desired extension. The Rajasthan Rules provided, inter alia, as follows: "Period of lease--A mining lease may be grant- ed for a period of 5 years unless the appli- cant himself desires a shorter period; Provided that the period may be extended by the <ORG> for another period not exceeding 5 years with option to the lessee for renewal for another equivalent period, in case the lessee guarantees invest- ments in machinery, equipments and the like, at least to the tune of 20 times the value of annual dead-rent within 3 years from the grant of such extension. The value of the machinery, equipment and the like shall be determined by the <ORG>. Where the lease is so renewed, the dead rent and the surface rent shall be fixed by the <ORG> within the limits given in the Second Schedule to these rules, and shall" in no case exceed twice the origi- nal dead-rent and surface rent respectively, and the royalty shall be charged at the rates in force at the time of renewal."

It was submitted by <NAME> that the said rule was in pari materia with sub-rule (b) of rule 18 of Gujarat Minor Mineral Rules 1966. Often when a public authority is vested with power, the expression 'may' has been construed as 'shall' because power if the conditions for the exercise are fulfilled is coupled with duty. As observed in Craies On Statute Law, 7th Edition, page 229, the expression "may" and "shall" have often been subject of constant and con-

<NAME>

flicting interpretation. "May" is a permissive or enabling expression but there are cases in which for various reasons as soon as the person who is within the statute is entrusted with the power, it becomes his duty to exercise it. As early as 1880 <ORG> in <NAME> v. Lord Bishop of Ox- ford, 1880, 5 Appeal Cases, 214. explained the position. <NAME>, Lord Chancellor speaking for the judicial committee observed dealing with the expression "it shall be lawful" that these words confer a faculty or power and they do not of themselves do more' than confer a faculty or power. But the Lord Chancellor explained there may be some- thing in the nature of the thing empowered to be done, sometimes in the object for which it is to be done, some- thing in the conditions under which it is to be done, some- thing in the title of the person or persons' for whose benefit the power is to be exercised, which may couple the power with a duty, and make it the duty of the person in whom the power is reposed, to exercise that power when called upon to do so. Whether the power is one coupled with a duty must depend upon the facts and circumstances of each case and must be so decided by the courts in each case. Lord <NAME> observed in the said decision that enabling words were always compulsory where the words were to effectuate a legal right.

Here the case of the appellants is that they have in- vested large sums of money in mining operations. Therefore, it was the duty of the authorities that the power of grant- ing permission should have been so exercised that the appel- lants had the full benefits of their investments. It was emphasized that none of the appellants had committed any breach of the terms of grant nor were there any other fac- tors disentitling them to such renewal. While there was power to grant renewal, and in these cases there were clauses permitting renewals, it might have cast a duty to grant such renewal in the facts and circumstances of the cases specially in view of the investments made by the appellants in the areas covered by the quarrying leases, but renewals cannot be claimed as a matter of right for the following reasons.

The rules dealt with a situation prior to the coming into operation of 1980 Act. ' 1980 Act' was an Act in recog- nition of the awareness that deforestation and ecological imbalances as a result of deforestation have become social menaces and further deforestation and ecological imbalances should be prevented. That was the primary purpose writ large in the Act of 1980. Therefore the concept that power coupled with the duty enjoined upon the respondents to renew the lease stands eroded by the mandate of the legislation as manifest in 1980 Act in the facts and circumstances of these cases. The primary duty was to the community and that duty took precedence, in our opinion, in these cases. The obligation to the society must predominate over the obligation to the individuals.

For the same reasons we are unable to accept the view that the ratio of the decision of this Court in the case of <CITATION> (supra) could be invoked in the facts and circumstances of these cases to demand renewal. Furthermore it appears to us from the affidavits in opposition filed on behalf of the respond- ents that there were good Founds for not granting the renew- al of the lease. The orders of the appropriate authorities in both these cases deal with the situation.

Both <NAME> as well as <NAME>, however, relied very heavily on the decision of this Court in <CITATION> ,  3 SCC 643. As the said decision dealt with section 2 of the 1980 Act, it is necessary to refer to the facts of that case. There a mining lease for winning mica was granted by <ORG> in respect of an area of 80 acres of land which formed part of reserved forest before coming into force of 1980 Act. However, the forest land had been dug up and mining operations were being carried on only in an area of 5 acres out of the total lease area of 80 acres. While carry- ing on mining operations, the respondent came across two associate minerals felspar and quartz in the area. The respondent in that case, therefore, made an application to <ORG> for execution of a Deed of Incorpora- tion to include the said minerals also in the lease. Though the 1980 Act had come into force, <ORG> executed the Deed of Incorporation incorporating these items without obtaining prior sanction of <ORG> under section 2 of 1980 Act. Since the respondent in that case made a statement before the Court that he would carry on the mining operations only on 5 acres of land which had already been utilised for non-forest purposes even before the Act came into force, the question for determination was whether prior approval of <ORG> under section 2 of 1980 Act in the facts of that case was neces- sary for <ORG> for granting permission to win associate minerals also within the same area of 5 acres of land? This Court answered the question in negative and affirmed the judgment of <ORG>. This Court observed at pages 647 and 648 of the report as follows:

"The relevant parts of Section 2 of the Act which have to be construed for pur- poses of this case are clause (ii) of and the Explanation to that section. Clause (ii) of Section 2 of the Act provides that notwith- standing anything contained in any other law for the time being in force in a State, no State Government or other authority shall make, except with the prior approval of <ORG>, any order directing that any forest land or any portion thereof may be used for any non-forest purpose. Explanation to Section 2 of the Act defines "non-forest purpose" as breaking up or clearing of any forest land or portion thereof for any purpose other than reforestation. Reading them togeth- er, these two parts of the section mean that after the commencement of the Act no fresh breaking up of the forest land or no fresh clearing of the 'forest on any such land can be permitted by any State Government or any authority without the prior approval of <ORG>. But if such permission has been accorded before the coming into force of the Act and the forest land is broken up or cleared then obviously the section cannot apply. In the instant case it is not disputed that in an area of five acres out of eighty acres covered by the mining lease the forest land had been dug up and mining operations were being carried on even prior to the coming into force of the Act. If <ORG> permits the lessee by the amendment of the lease deed to win and remove felspar and quartz also in addition to mica it cannot be said that <ORG> has violated Section 2 of the Act because thereby no per- mission for fresh breaking up of forest land is being given. The result of taking the contrary view will be that while the digging for purposes of winning mica can go on, the lessee would be deprived of collecting felspar or quartz which he may come across while he is carrying on mining operations for winning mica. That would lead to an unreasonable result which Would not in any Way subserve the object of the Act. We are, therefore, of the view that while before granting permission to start. mining operations on a virgin area Section 2 of the Act has to be complied with it is not necessary to seek the prior approval of <ORG> for purposes of carrying out mining operations in a forest area which is broken UP or cleared before the commencement of the Act. The learned counsel for respondent 1 has also given an undertaking that respondent 1 would confine his mining operations only to the extent of five acres of land on which mining operations have already been carried out and will not feel or remove any standing trees thereon without the prior permission in writing from <ORG>. Taking into considera- tion all the relevant matters, we are of the view that respondent 1 is entitled to carry on mining operations in the said five acres of land for purposes of removing felspar and quartz subject to the above conditions."

The aforesaid observations have been set in detail in order to understand the true ratio of the said decision in the background of the facts of that case. It is true that this Court held that if the permission had been granted before the coming into operation of the 1980 Act and the forest land has been broken up or cleared, clause (ii) of section 2 of 1980 Act would not apply in such a case. But that decision was rendered in the background of the facts of that case. The ratio of any decision must be understood in the background of the facts of that case. It has been said long time ago that a case is only an authority for what it actually decides, and not what logically follows from it. (See Lord <NAME> in <NAME> v. <NAME>)  Appeal Cases

495. But in view of the mandate of Article 141 that the ratio of the decision of this Court is a law of the land, Shri <NAME> submitted that the ratio of a decision must be found out from finding out if the converse was not cor- rect. But this Court, however, was cautious in expressing the reasons for the said decision in <CITATION> (supra). This Court observed in that decision that the result of taking the contrary view would be "that while digging for purposes of winning mica can go on, the lessee would be deprived of collecting fel- spar or quartz which he may come across while he is carrying on mining operations for winning mica. That would lead to an unreasonable result which will not in any way sub-serve the object of the Act." There was an existing lease where mining operation was being carried on and what was due by incorpo- ration of a new term was that while mining operations were being carried on some other minerals were available, he was given right to collect those. The new lease only permitted utilisation or collection of the said other minerals. In the instant appeals the situation is entirely differ- ent. The appellants are asking for a renewal of the quarry leases. It will lead to further deforestation or at least it will not help reclaiming back the areas where deforestations have taken place. In that view of the matter, in the facts and circumstances of the case, in our opinion, the ratio of the said decision cannot be made applicable to support the appellants' demands in these cases because the facts are entirely diffe-

rent here. The primary purpose of the Act which must sub- serve the interpretation in order to implement the Act is to prevent further deforestation. <ORG> has not granted approval. If <ORG> is of the opinion that it is not a case where <ORG> should seek approval of <ORG>, <ORG> cannot apparently seek such approval in a matter in respect of, in our opinion, which it has come to the conclusion that no renewal should be granted. In that view of the matter and the scheme of the Act, in our opinion, the respondents were fight and the appellants were wrong. All interpretations must sub-serve and help implementation of the intention of the Act. This interpreta- tion, in our opinion, will sub-serve the predominant purpose of the Act.

In that view of the matter, we are unable to sustain the submissions urged in support of these appeals. The appeals therefore fail and are accordingly dismissed. In view of the facts and circumstances of these appeals, however, we direct the parties to pay and bear their own costs.

P.S.S. Appeals dismissed.