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2007 Supreme(Pat) 607

PATNA HIGH COURT
Aftab Alam and Rekha Kumari JJ.
Hindustan Steel Works Construction Ltd.
Versus
State Of Bihar
Civil Writ Jurisdiction Case No. 12193 of 2005 ; 13573 of 2005 ;
Decided On : MARCH 23, 2007

The central legal point established in the judgment is the interpretation of the Mines & Minerals (Development & Regulation) Act, 1957 and the notifications issued by the Central and State Governments to determine the inclusion of 'ordinary earth used for filling or levelling purposes' as a minor mineral subject to royalty.

Headnote:

ordinary earth - Mineral Royalty - Mines & Minerals (Development & Regulation) Act, 1957, Sec.3(e), Sec.15 - The court discussed the definition of minor minerals under Sec.3(e) and the power of State Governments to make rules in respect of minor minerals under Sec.15. It highlighted the notifications issued by the Central and State Governments, clarifying the inclusion of 'ordinary earth used for filling or levelling purposes' as a minor mineral and the imposition of royalty.

Fact of the Case:

The petitioners were engaged in construction works using ordinary earth and received demands for royalty from the authorities. They contended that no royalty was leviable on ordinary earth for purposes other than commercial or for making Raniganj tiles.

Finding of the Court:

The court analyzed the relevant provisions of the Mines & Minerals (Development & Regulation) Act, 1957 and the notifications issued by the Central and State Governments. It concluded that 'ordinary earth used for filling or levelling purposes' became a minor mineral subject to royalty by the State Govt. from 18.4.2006.

Issues: The main issue was whether the demand for royalty on 'ordinary earth used for filling or levelling purposes' was legal, and the interpretation of the relevant provisions of the Act and notifications.

Ratio Decidendi: The court relied on the definition of minor minerals under Sec.3(e) of the Act, the power of State Governments to make rules under Sec.15, and the notifications issued by the Central and State Governments to determine the inclusion of 'ordinary earth used for filling or levelling purposes' as a minor mineral subject to royalty.

Final Decision: The court restrained the respondents from raising demands against the petitioners for the period prior to 18.4.2006 and disposed of all the writ petitions accordingly.

Judgment

Aftab Alam, J.

1. All the four writ petitions raise a common question about "ordinary earth used for filling or levelling purposes in construction of embankment, road, railways, buildings" being a minor mineral subject to levy of royalty etc. by the State Govt. All the writ petitions arise in similar facts. CWJC No. 12193 of 2005 is filed at the instance of Hindustan Steel Constructions Ltd. which is a Govt. of India Undertaking and a company registered under Sec. 617 of the Companies Act, 1956, engaged in erection and construction work. It was awarded the contract for earth work in south embankment (Patna end) blanketing construction of minor bridges nos. 1, 2, 3 and 4 in connection with construction of rail bridge across the river Ganges for laying down railway line between Patna and Sonepur stations. The petitioner in its turn gave out the work for execution to four sub-contractors under agreements entered into with them. The four sub-contractors of Hindustan Steel Works Construction Ltd. are the petitioners in CWJC No. 10271 of 2006. As noted above they were engaged by the principal contractor for execution of the above described work. The sub-contractors purchase ordinary earth from agriculturist or landholders in and around Patna and transport it for the purpose of making embankment(s). It is stated by them that the ordinary earth purchased and transported by them is used only for the purpose of creating embankment(s).

2. The petitioners in the other two writ petitions, CWJC Nos. 12752 of 2006 and 13573 of 2005 were similarly given contracts by the National Highway Authority of India for four laning, strengthening and widening of different portions of NH 31 under North-South and East-West Corridor Project (Phase II). The portion of road covered by the contract of the petitioner in CWJC No. 13573 of 2005 is from south of Kishanganj to Rampur, lying in the State of West Bengal and the portion of road falling under the contract of the petitioner in CWJC No. 12752 of 2006 is from KM 419 to KM 447 of Purnea Gayakota section of the highway in the State of Bihar. For the purpose of four laning, strengthening and widening the road, both the petitioners used/use ordinary earth.

3. All the petitioners received demands/ orders/notices from the authorities claiming royalty for the earth used by them in execution of the works under their respective contracts.

4. On behalf of the petitioners it is contended that the demands/orders/notices were illegal as no royalty was leviable on ordinary earth for a purpose other than commercial or for making Raniganj tiles.

5. In order to appreciate the rival contentions it will be necessary to examine the relevant provisions of the Mines & Minerals (Development & Regulation) Act, 1957. Sec.3(e) of the Act defines minor minerals as follows: "Minor minerals" means building stones, gravel, ordinary clay, ordinary sand other than sand used for prescribed purposes and any other mineral which the Central Government may by notification in the Official Gazette, declare to be a minor mineral."

6. Once a thing falls within the definition of minor mineral in terms of sec. 3(e) or a notification issued under that section by the Central Govt. it would come within the purview of the State Govt. that is empowered under Sec.15 of the Act to make rules in respect of minor minerals. Sec.15 of the Act, in so far as relevant for the present is as follows:

15. Power of State Governments to make rules in respect of minor minerals.-(1) The State Government may, by notification in the Official Gazette, make rules for regulating the grant of quarry leases, mining leases or other mineral concessions in respect of minor minerals and for purposes connected therewith. (1A) In particular and without prejudice to the generally of the foregoing power, such rules may provide for all or any of the following matters, namely:-

(a) xx xx xx

(b) xx xx xx

(c) xx xx xx

(d) xx xx xx

(e) xx xx xx

(f) xx xx xx

(g) the fixing and co




























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