IMPORTANT POINT
Royalty – Bidder is advised to inspect and satisfy itself regarding mining area before participating in bidding process.

JUDGMENT

MANOJ MISRA, J.

1. The State of Uttar Pradesh (in short “the State of U.P.) is in appeal against the orders of the High Court of Judicature at Allahabad (in short, “the High Court”) dated 30.09.2022 and 12.05.2023 passed in Writ C No.37749 of 2019 and Civil Misc. Review Application No.525 of 2022 respectively.

FACTS

2. The respondent (original petitioner) was granted a mining lease to excavate five lakhs cubic meter of sand. The lease was for a period of five years viz., from 13.02.2019 to 12.02.2024. The royalty payable for the first year was Rs.26,35,00,000 and for each succeeding year it was to be higher by 10%.

3. The mining area was 25 hectares falling in plot nos.5 and 9 in village Bilharka, Tehsil Naraini, District Banda (State of U.P.).

4. Pursuant to the grant, the original petitioner obtained environmental clearance for mining in the area and in terms thereof the mining lease was executed appending therewith a map of the mining area.

5. According to the original petitioner, when he commenced mining operations, the district administration of Chhatarpur, State of Madhya Pradesh (in short, the State of M.P.) raised an objection to the mining operations conducted by the original petitioner on the ground that 300 meters of the demised mining area fell within the territorial limits of the State of M.P.

6. It is the case of the original petitioner that objection of the district administration of Chhatarpur was duly reported to the officers of the State of U.P. but they failed to resolve the boundary dispute. Rather, the State of U.P raised a demand of Rs.6,58,25,000/- as next instalment payable towards royalty. Aggrieved therewith, the original petitioner invoked the jurisdiction of the High Court under Article 226 of the Constitution of India by filing Writ C No.18794 of 2019 seeking a direction upon the State of U.P. as well as the State of M.P. – (a) to resolve the boundary dispute in the demised area and (b) to permit the original petitioner to continue mining operations in the demised area. In the alternative it was prayed that if the boundary dispute is not resolved, and the original petitioner is not permitted to carry out mining operations, further realization of royalty be suspended.

7. In Writ C No.18794 of 2019, the High Court called for instructions from the counsel representing the State of U.P. In response thereto, the Additional Chief Standing Counsel representing the State of U.P. produced a letter, dated 15.07.2019, written by the Chief Secretary, Government of U.P. to the Director, Geology and Mines, Government of U.P. wherein, with reference to the concerned mining area, a request was made to ban mining/mineral extraction till the mining area is properly demarcated.

8. By taking notice of the aforesaid letter dated 15.07.2019, the High Court disposed of Writ C No. 18794 of 2019 with a direction to the State of U.P. to resolve the dispute expeditiously in terms of the letter dated 15.07.2019. It was also directed that till the dispute is resolved, no coercive action be taken against the original petitioner to recover the royalty.

9. After disposal of Writ C No.18794 of 2019, a second writ petition i.e., Writ C No.37749 of 2019 was filed by the original petitioner before the High Court, claiming, inter alia, that since the State of U.P. could not resolve the boundary dispute, the State of U.P. and its officers be directed to refund the amount already deposited by the appellant including expenses amounting to Rs.26,65,66,666/- with 9% interest.

10. By the impugned order dated 30.09.2022, the High Court allowed Writ C No.37749 of 2019 on the ground that since the State had failed to deliver possession of the demised mining area, the amount of money paid for gaining mining rights was liable to be refunded. While allowing the writ petition, the submission made on behalf of the State of U.P. was noticed in paragraph 6 of the judgment, which is extracted below:

“6. On the other hand, learned counsel for the responde