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2026 Supreme(Gau) 363

THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) 
DEVASHIS BARUAH, J.
Mahabir Prasad Agarwalla, S/o. Lt. Kirorimal Agarwalla – Appellant
Versus
The State Of Assam, Rep. By The Commissioner And Secretary To The Govt And Ors. – Respondent
WP(C) 585 of 2015,  WP(C) 696 Of 2015,  WP(C) 180 Of 2015,  WP(C) 732 of 2015, 
Decided On : 27-02-2026

Advocates Appeared:
For the Appellant :Mr. O. P. Bhati, Advocate Mr. P. K. Gupta, Advocate
For the Respondents: Mr. P. Nayak, SC, PWD

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.

Headnote:(A) Mines and Minerals (Development and Regulation) Act, 1957 - Assam Minor Mineral Concession Rules, 2013 - Deduction of royalties from contractor's bills - Petitioner contends unauthorized deductions; Court clarifies that contractors are only liable to pay royalties when extracting minor minerals as per applicable laws. (Paras 10-19)

(B) Contract Law - Contractual clauses regarding taxation and deductions - Court holds that deductions based on contract provisions must align with statutory obligations, emphasizing no double payment of royalties. (Paras 10-19)

Facts of the case:
The petitioner, a contractor, claims illegal deductions made by the PWD from his bills for royalty payments on minor minerals used in contracts awarded before 2015. The legal standing on the Notification dated 01.09.2009 was also challenged, but the Forest Department was not a party in this petition.

Findings of Court:
Petitioner’s deductions are unjust. The Court directs a certificate from the vendor regarding royalty payments to release the retained amounts.

Issues: Whether the PWD can withhold payments based on alleged royalty liabilities that do not apply to the petitioner under law.

Ratio Decidendi: The court concluded that the petitioner cannot be compelled to provide a No-Dues Certificate for royalty if no liability to pay such royalties exists as per statutory provisions.

Result: Writ petitions disposed of with directions for final bill release upon proper certification.

JUDGMENT :

DEVASHIS BARUAH, J.

Heard Mr. O. P. Bhati, the learned counsel appearing on behalf of the petitioner in the instant batch of writ petitions. Mr. P. Nayak, the learned counsel appears on behalf of the PWD who have been arrayed as respondents in the instant proceedings.

PREFACE

2. All the writ petitions are filed by the same petitioner who claims that he is a Class-I registered contractor with the Public Works Department of the Government of Assam. Various contract works were issued to the petitioner and the details of which have been mentioned in the present writ petitions. It is however very pertinent to take note of that these contract works were awarded to the petitioner prior to 2015 and this aspect is apparent from the fact that the writ petitions were filed in the year 2015. The grievance of the petitioner in all the writ petitions was that the Respondent Authorities have deducted huge amounts of money against the bills of the petitioner on the ground of payment of royalties which was not permissible as per law.

CLAIMS OF THE PETITIONER IN THE FIVE WRIT PETITIONS

3. This Court finds it relevant to take note of the claims of the Petitioner in the five writ petitions and with specific reference to the contracts detailed out in each of the writ petitions. The same are given herein under:

(a) In WP(C) No.585/2015, the Petitioner herein has sought for direction for payment of Rs.4,23,762/- which the petitioner claims that the same have been illegally deducted from the running bills of the Petitioner. The details of the claim along with the specific contracts are given herein under:

412766 10996 423762

(b) In WP(C) No.180/2015, the Petitioner herein has sought for direction for payment of Rs.26,75,421/- which the petitioner claims that the same have been illegally deducted from the running bills of the Petitioner. The details of the claim along with the specific contracts are given herein under:

2402219 273202 2675421

(c) In WP(C) No.582/2015, the Petitioner herein has sought for direction for payment of Rs.44,92,202/- which the petitioner claims that the same have been illegally deducted from the running bills of the Petitioner. The details of the claim along with the specific contracts are given herein under:

4114233 377969 4492202

(d) In WP(C) No.696/2015, the Petitioner herein has sought for direction for payment of Rs.7,31,394/- which the petitioner claims that the same have been illegally deducted from the running bills of the Petitioner. The details of the claim along with the specific contracts are given herein under:

658960 72434 731394

(e) In WP(C) No.732/2015, the Petitioner herein has sought for direction for payment of Rs.7,12,737/- which the petitioner claims that the same have been illegally deducted from the running bills of the Petitioner. The details of the claim along with the specific contracts are given herein under:

630741 81996 712737

4. The records further reveal that during the pendency of the writ petitions, the petitioner had amended the writ petitions whereby appropriate directions sought for setting aside the Notification dated 01.09.2009 issued by the Environment and Forest Department, Government of Assam. It is however very apposite to mention that while challenging this Notification issued by the Forest Department of the Government of Assam, the Forest Department of the Government of Assam was not impleaded.

5. Be that as it may, it is very pertinent to take note of from the pleadings in the writ petitions that the challenge to the Notification dated 01.09.2009 is on the question as to whether the Notification dated 01.09.2009 is in violation to the provisions of the Assam Forest Regulation, 1891.

6. Taking into account that the Forest Department has not been arrayed as a party, this Court would not like to decide on the legality or validity of the Notification dated 01.09.2009.

ISSUE

7. The question therefore arises in the present writ petitions is as to whether the Respondent Authorities, i.e. the PWD co

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