IN THE HIGH COURT OF GAUHATI, ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH
ARUN DEV CHOUDHURY, J.
M/s. RCN Constructions Pvt. Ltd. & Ors. - Petitioners
Versus
The State of Assam, Rep. by the Comm. and Secy. to the Govt. of Assam & Ors. - Respondents
WP(C) Nos. 9227, 4392, 6686, 2123, 2126, 9236, 471 of 2019, 3609 of 2017, WP(C) Nos. 5248, 3463, 8306, 2744, 8358, 8283, 3542, 3468, 3469, 2741 of 2018, WP(C) Nos. 3926, 4254, 4280, 4146, 4271, 429 of 2020, WP(C) Nos. 1919, 5971, 3326, 1884, 1895, 1897, 2224, 1927, 1898, 2196, 5330, 2057, 3490, 2860, 2061, 2845, 3011, 2065, 3354 of 2021, WP(C) Nos. 1506, 1161 of 2022
Decided On : 30-06-2022
Assam Forest Regulation, 1891 – MMC Rules, 2013 - Rule 5 - Procedure of collection of forest royalty from contractors – Whether State authority i.e. Public Works Department, Railways etc. can deduct forest royalty from bills/ Security Deposits of contractors in absence of any stipulation in Contract agreement empowering employer state to do so - Whether State in Forest Department can take action of recovery of forest royalty in all situations taking recourse to Provisions of Statutory Notification, issued in exercise of power under Assam Forest Regulation’ 1891 - Whether contractors executing works for Government & its Department are bound to procure minor mineral/ forest produce only through permit granted under Rule 5 of MMC Rules, 2013 - It was held that in a judicial system that is administered by court, one of primary principles to keep note of is that court under same jurisdiction must have similar opinions regarding similar questions, issues and circumstances. (Para 14)
Findings of Court :
Rule 5 of Concession Rules, 2013 is only a mode of permit provided under MMC Rules, 2013 and it is not mandatory, always for a contractor under State agencies to procure minor minerals through permits issued under Rule 5. They will be compelled to do so when contract condition provides that minor minerals must be collected through permit under Rule 5. Therefore, such Rule is not also mandatory in each and every contractual works inasmuch as MMC Rules, 2013 itself provides that mining lease/ contract/ query permits can be granted under Rule 8 or under Rule 18 or under Rule 23 respectively and therefore, contractors are within its liberty to purchase/procure minor minerals from other agencies, who are holding either mining lease/ contract/ query permits, until same is barred under condition of contract - Accordingly, argument of Additional Advocate General that Rule 5 of MMC Rules, 2013 is mandatorily binding, is rejected.
Result : Writ petitions disposed of.
JUDGMENT :
Heard both Mr. K.N. Choudhury and Mr. B.D. Das, learned Senior counsels for the petitioners. Also heard Mr. P.N. Goswami, learned Additional Advocate General, Assam and Mr. B. Gogoi, learned standing counsel, Finance Department, Assam.
2. Common issues involving questions of law out of similar set of fact arises in the present batch of writ petitions and all the learned counsels appearing for the contesting parties have agreed that the matters need to be heard analogously. Accordingly, matters were heard analogously. Though the learned counsel for the petitioners, submitted the fact of the each cases, the argument on the question of law was led by Mr. K.N. Choudhury, learned Senior counsel and Mr. B.D. Das, learned Senior counsel.
3. The issues:
The issues involved in the present batch of writ petitions, can be summarized as follows :
i. Whether the State authority i.e. Public Works Department, Railways etc. can deduct forest royalty from the bills/ Security Deposits of the contractors in absence of any stipulation in the Contract agreement empowering the employer state to do so?
ii. Whether the decision of the Division Bench on the first issue in Musilm Ali Vs. State of Assam reported in 2013 (2) GLT 945 is a binding precedent or the same is in conflict with the decision dated 04.05.2018 of another Division Bench in M/s Durga Krishna stores vs. Union of India (WA 168/2017)?
iii. Whether the State in Forest Department can take action of recovery of forest royalty in all situations taking recourse to the Provisions of the Statutory Notification dated 01.09.2009, issued in exercise of power under Assam Forest Regulation’ 1891?
iv. Whether the contractors executing works for Government & its Department are bound to procure minor mineral/ forest produce only through permit granted under Rule 5 of the MMC Rules, 2013?
4. The background:
i. The petitioners in this batch of writ petitions executed works contract under the State authority like Public Works Department, Railway etc. and in most of the cases recovery against forest royalty are sought to be made from their pending bills/security deposit/ earnest money etc. In some of the cases such recovery has already been made.
ii. The writ petitioners in all these writ petitions have projected that by virtue of the decision of the Division Bench in Muslim Ali (supra), the State authorities are not within their jurisdiction and competence to recover such forest royalty from the pending bills of the petitioners.
iii. Their further case is that the dicta in Muslim Ali (supra) has been followed consistently by all the co-ordinate benches such as, in M/s Trinayan Associates Vs. State of Assam reported in (2017) 2 GLT 859 and in writ petitions like Engineers and Engineers Vs. State of Assam (WP(C) 1066/2015), Rana Construction and Engineers Pvt. Ltd. Vs. State of Assam (WP(C) 872/2017), etc. Therefore the same is a binding precedent so far the same relates to the present writ petitions.
iv. Thus the learned counsels for the petitioners contend that the law is well settled in this regard and they are entitled for a similar order as decided by the Division Bench in Muslim Ali (supra) and by a Co-ordinate Bench in M/s Trinanayan Associates (supra).
5. Submissions of Mr. P.N. Goswami, learned Additional Advocate General:
Representing the Forest Department Mr. Goswami, learned counsel strenuously argues:
i. The law laid down in Muslim Ali (supra) is not a correct proposition of law as the same has been delivered without dealing with the provision of MMDR Act.1957, MMC Rules’2013 and Notification dated 01.09.2009 issued under Assam Forest Regulation, 1891.
ii. The Division Bench judgement in Durga Krishna Stores (supra) took a contrary view as that of the view taken in Muslim Ali and therefore, the matter needs to be referred to a larger Bench.
iii. In Muslim Ali (supra), it was not brought to the notice of the Hon’ble Division Bench, the existence of the Notification dated 01.09.2009 issued by the Gover
SupremeToday
Point of Law : It is well settled that to maintain certainty, stability and consistency in legal system, courts generally abide by things/issues already decided. Legal principles or rules that have b....
The main legal point established in the judgment is that the deduction of Forest Royalty from the bills of the Petitioner was unauthorized as there was no contractual provision mandating the procurem....
Contractors are liable to pay royalties only upon extraction of minerals, not based on purchasing, and may not be compelled to produce certificates without proper liability.
The employer has the competence and jurisdiction to recover forest royalty from the bills of the contractors, and recovery cannot be made without giving an opportunity to the contractors to produce p....
Royalty obligations under the Assam Minor Mineral Concession Rules 2013 do not extend to private construction projects, only applying to government-related works.
Royalty obligations under the Assam Minor Mineral Concession Rules 2013 do not extend to private construction projects, only applying to government-related works.
The specific terms of a contract regarding deductions take precedence over general judicial observations, and failure to comply with these terms permits such deductions.
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