Point of Law : State Government is not competent to demand an amount equivalent to 10% of royalty from an exporter of minor minerals who has excavated such minor minerals in another State and seeks to import such minor minerals.

JUDGMENT :

A.S. Chandurkar, J.

RULE. Rule made returnable forthwith and heard the learned counsel for the parties.

2. The competence of the State Government to require an exporter of minor minerals into the State of Maharashtra to pay an amount equivalent to 10% of royalty amount to the District Mineral Foundation constituted under Section 9-B of the Mines and Minerals (Development and Regulation) Act, 1957 is questioned in these writ petitions. A similar challenge is also raised by inter-State transporters of such minor minerals as the State of Maharashtra requires payment of 10% of the royalty amount to the District Mineral Foundation on entering the State borders which according to them results in imposing restrictions on inter-State trade.

3. In Writ Petition Nos.2078 of 2021 and 2086 of 2021, the petitioners claim to be engaged in the business of excavation and sale of sand in the State of Madhya Pradesh. The petitioners are lease holders under valid lease-deeds executed in their favour by the State of Madhya Pradesh. The petitioners sell sand that is excavated within the State of Madhya Pradesh and also export the same in the State of Maharashtra. By Circular dated 05.02.2021 the State Government through its Revenue and Forest Department required payment of an amount equivalent to 10% of the royalty amount to the District Mineral Foundation (for short, ‘the DMF’). It is this Circular that is challenged by the petitioners who are the exporters of sand into the State of Maharashtra. The petitioners have also sought a declaration that the State Government has no authority under the Mines and Minerals (Development and Regulation) Act, 1957 (for short, ‘the Act of 1957’) to regulate the entry of lawfully excavated minerals from another State nor is it competent to direct the deposit of such amount with the DMF in the State of Maharashtra.

4. Writ Petition Nos.172 of 2022 and 173 of 2022 have been filed by transporters of minor minerals challenging the imposition of an amount equivalent to 10% of royalty amount under Circular dated 05.02.2021. It is the case of the petitioners that they are in the business of transporting excavated minor minerals which includes such transport from other States into the State of Maharashtra. While transporting sand on the strength of a valid transit pass, the trucks of the petitioners were intercepted on the ground that 10% of the royalty amount under Circular dated 05.02.2021 was not paid to the DMF and hence their trucks came to be seized. This has given cause of action to the petitioners to challenge the Circular dated 05.02.2021 on the ground that such levy is not supported by any statutory provision under the Act of 1957, the Maharashtra District Mineral Foundation (Trust) Rules, 2016 (for short, ‘the State DMF Rules, 2016’) or the Maharashtra Minor Minerals (Contribution to District Mineral Foundation) Rules, 2017 (for short, ‘the Rules of 2017’).

5. Shri Devendra Chauhan, learned counsel for the petitioners who were exporters of sand in the State of Maharashtra after its excavation from the State of Madhya Pradesh referred to various provisions of the Act of 1957 and submitted that the object behind constituting the DMF was to establish a Trust as a non-profit body that would work for the interest and benefit of persons and areas that were affected by mining related operations. The exporters of sand were required to pay royalty in the State of Madhya Pradesh while undertaking its excavation. The area where such excavation was carried out would be the area affected by mining related operations. Inviting attention to Sections 2, 9-B, 15, 15-A and 23-C of the Act of 1957 it was submitted that the Act of 1957 did not confer any authority on the State Government to require any exporter of minor minerals in the State of Maharashtra to contribute to the DMF. The State Government was empowered to make rules in terms of Section 15(1) of the Act of 1957 for regulating the grant of quarry leases, mining