Purchasers of mine products are not obliged to pay royalty, and the notice for payment of royalty against the provisions of the law was invalid.

ORDER :- This writ petition has been filed by the petitioner against the respondents for issuing a writ, order or direction in the nature of certiorari quashing the impugned order dated 25-8-2007, passed by respondent No. 3 which is filed as Annexure-3 to the writ petition, by which the respondents have demanded royalty from the petitioner for the supply of stones and similar relief in the nature of mandamus directing the respondents not to withhold payment of the petitioner in pursuance of letter dated 25-8-2007, issued by respondent No. 3.

2. We have heard Sri I. P. Singh, learned counsel for the petitioner and Shri Vishnu Pratap, learned Standing Counsel appearing for respondents.

3. From the writ petition, it appears that the petitioner is a registered Contractor in District Budaun. The Executive Engineer (Flood Division), Budaun made an advertisement for construction of work known as "Ganga Mahawa Tatband" in Budaun Division. In response to said advertisement, the petitioner also filed tender, which was accepted. The work order was issued to the petitioner to supply Stone Boulders to Irrigation Department. He purchased the boulders from Rajasthan through M/s Pachauri Stone Supplier, Tatpur, Agra. When he submitted bills for payment, a notice was given to him to pay royalty, though he had already filed Rawannas along with bills. Since the petitioner was not a license holder of mining, therefore, he was not obliged to pay royalty and respondents had no right to with hold his payment for the work done by him. Aggrieved by the order and notice referred to above, the petitioner filed this petition.

4. Learned counsel for the respondents opposed the relief sought for by the petitioner.

5. This fact is not disputed that the petitioner being registered contractor was given work order by respondent No. 3 for supply of stone boulders to irrigation department for construction of "Ganga Mahawa Tatband" and he supplied same in accordance with the terms and conditions of the work order. This fact is also not disputed that the petitioner has completed the work and submitted bills to the irrigation department but his payment has not been made so far. A very substantial question of law has been raised by the petitioner in this writ petition regarding liability to pay royalty on the stones taken out from the mines. Section 9 of Mines and Mineral (Regulation and Development) Act 1957 lays down provisions for payment of royalty. For ready reference, Section 9 is quoted below :-

Section 9 :- Royalties in respect of mining lease - (1) The holder of a mining lease granted before the commencement of this Act shall, notwithstanding anything contained in the instrument of lease or in any law in force at such commencement, pay royalty in respect of (any mineral removed by or consumed by him or by his agent, manager employee, contractor or sub-lease from the leased area after such commencement, at the rate for the time being specified in the Second Schedule in respect of that mineral.

(2) The holder of a mining lease granted on or after commencement of this Act shall pay royalty in respect of (any mineral removed by or consumed by him or by his agent, manager, employee, contractor or sub-lessee) from the leased area the rate for the time being specified in the second schedule in respect of that mineral.

(2A). The holder of a mining lease, whether granted before or after the commencement of the Mines and Minerals ( Regulations and Development) Amendment Act, 1972 shall not be liable to pay any royalty in respect of any coal consumed by a workman engaged in a colliery provided that such consumption by the workman does not exceed one third of a ton per month).

(3) The Central Government may, by notification in Official Gazette amend the Second Schedule so as to enhance or reduce the rate at which royalty shall be payable in respect of any mineral with effect from such date as may be specified in the notification

Provided that the Central Government shall not

Click Here to Read the rest of this document