2003 Supreme(Mad) 135

Madras High Court
E. PADMANABHAN
K.P.Enterprises - Appellant
Versus
District Collector, Salem - Respondent
Decided On : 01/31/2003

The main legal point established in the judgment is that the respondent acted without authority and jurisdiction in imposing penalties and detaining the granite block during inter-state transportation. The court emphasized that the Tamil Nadu Minor Mineral Concession Rules had no application to the transportation of granite of Kerala origin and cited relevant provisions of the Mines and Minerals (Regulation and Development) Act, 1957 to support its decision.

Headnote:

Jurisdiction - Inter-State Movement - Tamil Nadu Minor Mineral Concession Rules - 1. Preliminary - 1. Preliminary :- (1) These rules may be called the Tamil Nadu Minor Mineral Concession Rules, 1959. (2) They extend to the whose of the State of Tamil Nadu. (3) They shall apply to all the lands in the State of Tamil Nadu including the lands in the estates taken by the State Government under the Tamil Nadu Estates (Abolition and Conversion into Ryotwari) Act, 1948 (Tamil Nadu Act XXVI of 1948). - The impugned proceedings of the respondent is illegal, without jurisdiction and liable to be quashed. The respondent has acted without authority is seizing the granite and there-after directing the petitioner to pay a seigniorage fee and penalty at five times the normal seigniorage fee. Under the Rules, unless the granite is of Tamil Nadu origin, the respondent has no authority to levy the seigniorage fee penalty as has been imposed on the facts of the case. The entire action is without authority and jurisdiction. Concedingly, it is an Inter-State movement and it carried valid documents. The consignment of granite from Trivandrum to Kuppam in Andhra Pradesh was accompanied by all the requisite permits as prescribed by the Kerala authorities. The respondent has also no doubt in its mind that block is of Kerala origin. Yet, the respondent has ordered payment of seigniorage fee and a penalty of 5 times as if there is a violation of Tamil Nadu Minor Mineral Concession Rules in particular Rules 36-A(3), 36-A(5) and 36-5(b). It is a misconception of the provisions of the Tamil Nadu Minor Mineral Concession Rules. Though it is admitted that the granite block is of Kerala origin and it is consigned to a consignee in Andhra Pradesh, it is being transported through Tamil Nadu to a dealer in Andhra Pradesh, being an Inter-State movement, it is too extraordinary for the respondent to assume that the Tamil Nadu Minor Mineral Concession Rules applies and enforce seigniorage fee and penalty as well. The respondent has also corresponded with the Kerala authorities who also confirmed the factual position. The provisions of the Tamil Nadu Minor Mineral Concession Rules has no application at all. The respondent has acted without jurisdiction. That apart, it is an Inter-State movement. Section 21(4) of the Mines and Minerals (Development and Regulation) Act, 1957 also will not apply nor it confers power on the respondent and therefore the action is without jurisdiction. Under Section 15 of the Mines and Minerals (Regulation and Development) Act, 1957 the State has been conferred with a power to make Rules in respect of Minor Minerals for regulating the grant of quarry lease, mining lease and other mineral concession in respect of mining minerals and for purposes connected therewith in the State. Section 15(1)(a) also enables the State to provide for all the matters enumerated in the said sub-section. The various sub-clauses namely Sections 15(1)(a) to (o) will not enable the State Government to frame Rules in respect of minerals whose origin is admittedly from the other State and what is contemplated under the Rules is in respect of the quarries or minerals or granites quarried within the State there could be a regulation. The Tamil Nadu Rules has no application and Tamil Nadu State has no authority or right to impose or collect royalty in respect of black granite which is admittedly of Kerala origin. Nor, penalty could be levied. Under Section 13, the Central Government has the authority to frame rules regulating grant of prospecting license and mining leases. In State of Tamil Nadu v. Kaveri Chetty, reported in (1995) 2 SCC 402 : (AIR 1995 SC 858), while examining the scope of Section 15 of the Mines and Minerals (Regulation and Development) Act, 1957, the Apex Court held thus :- "21. The said Act is enacted to provide for the regulation of mines and the development of minerals under the control of the Union. Section 2 of the said Act declares that it is expedient in the public interest that the Union should take under its control the regulation of mines and the development of minerals to the extent provided in the said Act. Section 13 empowers the Central Government to make rules for regulating the grant of prospecting licences and mineral leases in respect of minerals and for purposes connected therewith. Sub-section (1) of Section 15 empowers the State Government to make rules for regulating the grant of quarry leases, mining leases and other mineral concessions in respect of minor minerals and for purposes connected therewith. Sub-section (1-A) of Section 15 states that such rules may provide for the matters set out therein, namely, the person by whom and the manner in which an application for a quarry lease, mining lease and the like may be made; the fees to be paid therefor; the time and the form in which the application is to be made; the matters which are to be considered where applications in respect of the same land are received on the same day; the terms and conditions on which leases may be granted or regulated; the procedure in this behalf; the facilities to be afforded to lease-holders; the fixation and collection of rent and other charges and the time within which they are payable; the protection of the rights of third parties; the protection of flora; the manner in which leases may be transferred; the construction, maintenance and use of roads, power transmission lines, etc. on the land; the form of registers to be maintained; reports and statements to be submitted and to whom; and the revision of any order passed by any authority under the said Rules. Clause (o) of sub-section (1-A) reads "any other matter which is to be or may be prescribed". Section 18 of the said Act states that it shall be the duty of the Central Government to take all such steps as may be necessary for the conservation and systematic development of the environment by preventing or controlling any pollution which may be caused by prospecting or mining operations. 23.It is difficult to see how granite resources can be protected by controlling the sale of granite after its excavation and fixing the minimum price thereof. 24.There is no power conferred upon the State Government under the said Act to exercise control over minor minerals after they have been excavated. The power of the State Government, as the subordinate rule-making authority, is restricted in the manner set out in Section 15. The power to control the sale and the sale price of a minor mineral is not covered by the terms of clause (o) of sub-section (1-A) of Section 15. This clause can relate only to the regulation of the grant of quarry and mining leases and other mineral concessions and it does not confer the power to regulate the sale of already mined minerals." Section 21(4) relied upon by the respondent has no application at all, nor it could be relied upon to the facts of the present case. In the circumstances, the order impugned deserves to be quashed and accordingly it is quashed. The writ petition is allowed and there will be a direction to release the bank guarantee furnished for release of the vehicle and granite block. The respondent shall release the bank guarantee within four weeks from the date of communication of this order. Consequently, connected WMP is closed. No costs.

Fact of the Case:

The writ petitioner was granted mining lease to quarry black dimensional granite Stone owned by the State of Kerala in the lands comprised in 17/5-1, 17/7. 17/8, 17/16, Block No. 37 in Nagaroor Village, Chirayin Keezhu Taluk, Trivandrum District for a period a period of twenty years. The lease deed was executed on 21-11-1997 in the form prescribed under the Kerala Minor Mineral Concession Rules 1967. The petitioner secured a valid license in quarrying granite. The petitioner is transporting coloured dimensional black granite to different places in the State of Tamil Nadu, Andhra Pradesh etc., after paying necessary seigniorage fee to the State of Kerala with permits issued by the Department of Mining and Geology, Trivandrum District such as bulk permit and cash memorandum in form P issued under Rule 48-K of the Kerala Minor Mineral Concession Rules.

Finding of the Court:

The court found that the impugned proceedings of the respondent were illegal, without jurisdiction, and liable to be quashed. The respondent acted without authority in seizing the granite and directing the petitioner to pay a seigniorage fee and penalty at five times the normal seigniorage fee. The entire action was deemed to be without authority and jurisdiction. The court also noted that the provisions of the Tamil Nadu Minor Mineral Concession Rules had no application to the inter-state movement of the granite block, which was of Kerala origin and transported from Trivandrum to Kuppam in Andhra Pradesh.

Issues: The issues raised in the case included the jurisdiction of the respondent, the application of the Tamil Nadu Minor Mineral Concession Rules, the validity of the penalty imposed, and the legality of detaining the granite block during inter-state transportation.

Ratio Decidendi: The court's decision was based on the finding that the respondent had acted without authority and jurisdiction in imposing penalties and detaining the granite block. The court emphasized that the Tamil Nadu Minor Mineral Concession Rules had no application to the transportation of granite of Kerala origin in an inter-state movement. The court also cited relevant provisions of the Mines and Minerals (Regulation and Development) Act, 1957 to support its decision.

Final Decision: The writ petition was allowed, and the court quashed the impugned order of the respondent. The court directed the release of the bank guarantee furnished for the release of the vehicle and granite block. The respondent was ordered to release the bank guarantee within four weeks from the date of communication of the court's order. No costs were awarded.