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2018 Supreme(Ker) 169

IN THE HIGH COURT OF KERALA AT ERNAKULAM
A.K. JAYASANKARAN NAMBIAR, J.
M/s Crystal Granites Limited & Ors. - Petitioners
Vs.
State of Kerala Represented by the Secretary, Department of Mining & Ors. - Respondents
W.P.(C). Nos. 13549 of 2014, 39371 of 2017, 7511 of 2018 & CONT. Case (C) No. 39 of 2018
Decided On : 03-04-2018

Advocates:
Advocate Appeared:
For the Petitioners: Sri. N. James Koshy, Sri. T. Sanjay
For the Respondents: Sri. Ranjith Thampan

Headnote:Mines and Minerals (Development & Regulation) Act 1957 - Land Conservancy Act 1957 (Kerala) - Constitution of India, Sch.VII List I Entry 54, Sch.VII List II Entry 23 & Sch.VII List II Entry 28 -For quarrying granite metal and license for quarrying leases obtained both from the State Government, from own lands as well as from Government puramboke lands agree to pay to the Government the seignorage payable warranted by the Government - The levy of seignorage is a levy does not contravene in the ground of mineral development which is engaged by the MMDR Act and Rules - The levy is authorized under the Kerala Land Conservancy Act and it is an enactment perceptible to Entry 18 of List II in the Seventh Schedule to the Constitution - The levy is confined to minerals detached from Government lands alone - The levy can be distinguished by the levy of royalty, and grant on it the authenticity and legality.

JUDGMENT :

As these writ petitions involve a common issue, they are taken up together for consideration and disposed by this common judgment. For the sake of convenience, the reference to facts and exhibits is from W.P.(C).No.13549/2014.

2. The petitioners in W.P.(C).No.13549/2014 are a private limited Company and a partnership firm respectively, both of whom have obtained quarrying leases from the State Government for quarrying granite metal, from lands belonging to them as well as from Government puramboke lands. It is not in dispute that in the orders passed by the Director of Mining and Geology granting the petitioners the quarrying leases, there is an express clause that obliges the petitioners to pay to the Government the seignorage payable, as and when demanded by the Government. The petitioners had accepted the said grant in their favour and commenced mining activities on the lands in question, with due compliance with the procedures mandated under the Mines and Minerals (Development & Regulation) Act, 1957 (hereinafter referred to as the 'MMDR Act') and Rules. The petitioners have also been paying the Royalty and other charges due to the Government, as mandated under the said Act and Rules. The petitioners approached this Court through the above writ petition when they were served with demand notices (Exts.P12 and P13) demanding payment of seignorage, as contemplated under the Kerala Land Conservancy Act and Rules. It is the case of the petitioners that, although the payment of seignorage was a condition in the grants made to them over Government lands, the State Government cannot lawfully demand seignorage in respect of lands covered by mining leases issued in terms of the MMDR Act and Rules. It is contended that, the levy of seignorage on the quantity of metal mined from the Government lands, over and above the Royalty amounts already collected by the Government on the said quantity of metal, would tantamount to an excessive collection of Royalty that is not permitted under the MMDR Act and Rules. In the alternative, the petitioners also dispute the quantification of seignorage, in the demand notices issued to them, stating that there are calculation errors in the said notices.

3. In W.P.(C).No.39371/2017, the challenge is against an order dated 28.11.2017 of the District Collector that refused to issue to the petitioner therein, a No Objection certificate [NOC] that was sought by the petitioner for supporting an application for the renewal of his mining lease. By the impugned order (Ext.P8), the District Collector held that the NOC could not be issued unless the petitioner had discharged his existing liability, as regards seignorage, to the Government. By an interim order dated 15.12.2017 passed in the said writ petition, this Court had directed the District Collector to consider the application for NOC without insisting on payment of seignorage, pending disposal of the writ petition. Alleging non-compliance with the directions in the said interim order, the petitioner has since instituted a Contempt of Court case – Cont. Case (Civil) No.39/2018. W.P.(C).No.7511/2018 is one filed by the same petitioners as in W.P.(C) No.13549/2014 and the challenge therein is against a subsequent demand notice for seignorage (Ext.P18), issued to them.

4. Counter affidavits and additional affidavits have been filed on behalf of the State Government, where the stand taken is that under Sections 5 and 6 of the Kerala Land Conservancy Act, a permission is required for any person to occupy Government land and further, if any material is removed from the Government land, then the Government is entitled to be adequately compensated for the same. Reference is also made to Rules 14 to 26 of the Kerala Land Conservancy Rules to contend that the statutory provisions do provide for the recovery of seignorage by the Government. It is stated that, in accordance with the statutory provisions, the Government has vide SRO No.59/2015 issued a notificati























































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