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2022 Supreme(Ker) 14

IN THE HIGH COURT OF KERALA AT ERNAKULAM
K.Vinod Chandran, C. Jayachandran, JJ.
Vallamattom Stone Aggregates (Pvt.) Ltd. – Petitioner
Versus
State Of Kerala, Represented By Its Secretary to Government, Revenue Department and ors. – Respondents
WA NO. 167 of 2020
Decided On : 19-01-2022

Advocates:
Advocate Appeared:
For the Petitioner: Shinoj. K.N, C.K.Rapheeque, K.B.Nidhinkumar, Philip J.Vettickattu,
Sajitha George, Advs.
For the Respondent: Ashwin Sethumadhavan, Sr. Government Pleader

Point of Law : MMDR Act, 1957, though takes away power of State to make laws under Entry 23 of List II, by S.15 of MMDR Act, power to regulate quarry leases, mining leases or other mineral concessions in respect of minor minerals have again been conferred on the State. This keeps in tact, power of State to legislate as provided under Entry 23 of List II.

Headnote:

Kerala Land Conservancy Act, 1957 - Section 6(3) - Kerala Minor Mineral Concession Rules, 2015 - Rule 89 - Mines & Minerals (Development & Regulation) Act, 1957 - Rule 48P - Minor Mineral Concession Rules, 1967 - Lease agreement - Permit lessees/licencees to quarry minor minerals - Power to demand damages or compensation under KLC Act - Possession of a quarry lease - Recovery of damages equivalent to compensation – Challenged - Whether said provision has application after Mines and Minerals [Development and Regulation] Act has come into effect - Damages were levied for quarrying operations carried out in excess of quantity permitted - Appellant was also one of the petitioners - Major grounds raised by way of an amendment of writ petition was that no quantity is prescribed under lease agreement and hence appellant, like other quarry owners, were liable to pay only the amount under the consolidated royalty payment; which enables unlimited quarrying.

Finding of the court :

There is power to levy penalty for any unauthorised quarrying, which takes within its ambit, quarrying beyond the prescribed limit, under MMC Rules, 1967 and MMC Rules, 2015, cannot at all be disputed. However in present proceedings, the levy is made under S.6 of the KLC Act and question looms large as to whether said provision has application after Mines and Minerals [Development and Regulation] Act [MMDR Act, 1957] has come into effect - The State is completely denuded of power to legislate and Act, 1957, which came into force on 01.05.1958 ceases to have any effect in so far as minor mineral leases, license or permits are concerned, after 01.06.1958, on which date MMDR Act, 1957 came into force. S.15 of MMDR Act, 1957 only confers Rule making power on State within the confines of 1957 Act and does not permit legislation on that count. Hence KLC Act would not stand saved even under S.15 of MMDR Act - Set aside order and the demand notices passed under S.6 of KLC Act. However court leave liberty to the authorities under MMC Rules to proceed under said Rules for any unauthorised mining or quarrying carried out by appellant with notice issued and after affording an opportunity of hearing, based on our finding that payment of consolidated royalty does not permit lessees/licencees to quarry minor minerals in excess of that permitted while granting such leases/licences, either in the permission granted, agreement or as applicable under MMC Rules.

Result : Writ appeal allowed

JUDGMENT :

Vinod Chandran, J.

A batch of writ petitions challenged the recovery of damages equivalent to compensation under S.6(3) of the Kerala Land Conservancy Act, 1957, [for brevity, 'the KLC Act'] initiated by the Revenue Department. The damages were levied for quarrying operations carried out in excess of the quantity permitted. The appellant was also one of the petitioners. The major grounds raised by way of an amendment of the writ petition was that no quantity is prescribed under the lease agreement and hence the appellant, like the other quarry owners, were liable to pay only the amount under the consolidated royalty payment; which enables unlimited quarrying.

2. The Government contended that though the quantity is not prescribed in the lease, the amounts to be paid under the lease agreement is specified, as also the tonnage charges, which more than anything specifies the quantity permissible under the lease agreement. The learned Single Judge extracted S.6 of the KLC Act and also Rule 89 of the Kerala Minor Mineral Concession Rules, 2015 (MMC Rules, 2015). S.6 was found to be dealing with removal of articles by securing licence/permits from the Government and also prescribes the fees payable. The contention that there is no rate fixed by the Government to determine the compensation and recover the same, was negatived based on Ext.R3(f), filed in W.P(C) No.7838 of 2018; a Government notification dated 02.02.2015, which indicates the schedule of fees. The argument that sub-section (3) of S.6 deals with only compensation and not damages, was also met by finding that the damages spoken of in S.6(3) is equivalent to the compensation under S.6(2). The contention of the petitioners that there is no statutory authorisation for recovery of damages, other than compensation was negatived. The contention raised on S.89 was brushed aside on the finding that it is applicable only to a quarry operator possessing a metal crusher unit; if he registers under the Rules by paying a fee of Rs.1,000/- and also opts for payment of consolidated royalty. It was held that since there were no materials produced to establish such option having been exercised, the appellant does not get the benefit under S.89. It was also held that there is no provision under the KLC Act or the Concession Rules enabling the appellant to go beyond the specific condition in the lease agreement. The appeals filed by the others were dismissed by a Division Bench in Binoy Kumar v. State of Kerala (2019 (2) KLT 227). The appellant's appeal was dismissed following the above decision. The appellant pursued the matter before the Hon'ble Supreme Court, by way of an SLP. Before the Hon'ble Supreme Court, the appellant contended that the order relied upon is not applicable in the case of the petitioner, on which ground, it was observed that the appellant could move the High Court itself. The SLP stood dismissed, without any expression on the merits of the case and leaving liberty to approach the Supreme Court, if it eventually becomes necessary. Based on this, a review was filed, which stood dismissed by the learned Single Judge. The order in review and the judgment are challenged before us.

3. The grounds urged for review were two fold, that the appellant is entitled to get the benefit of payment of consolidated royalty, under both the MMC Rules, ie: unlimited quarrying. The learned Single Judge found that, to get the benefit of Rule 89 of MMC Rules, 2015, a quarry owner, who has a metal crusher unit, has to opt for compounding and secure a separate registration by paying an amount of Rs.1000/-. Finding that there is no option exercised by the appellant, the review petition was rejected. The other ground raised is that after the Mines & Minerals (Development & Regulation) Act, 1957 the State is denuded of the power to demand damages or compensation under the KLC Act.

4. The learned counsel for the appellant argued that the demands raised against the appellant are with respect

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