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2008 DIGILAW 892 (JHR)

Quarry Owners Association v. State of Jharkhand

2008-08-07

D.G.R.PATNAIK

body2008
Order Prayer in this writ application is made for the following relief(s):- 1. For quashing the order dated 26.10.2002 vide letter no. 2032/M (Annexure-11) issued under the signature of Additional Secretary, Department of Mines and Geology (Respondent No. 3) whereby the respondents have intimated the petitioner-Association that the arrears of royalty shall be realized from the members of the Association with interest @ 24% in pursuance of the notification dated 21.9.1994 and in the light of the final order passed by the Supreme Court in Civil Appeal No. 5089 of 1997. 2. For quashing the letter no. 22061M dated 28.10.2002 (Annexure-12) issued by the Assistant Mining Officer, Pakur (Respondent No.4) by which members of the petitioner-Association have been directed to submit the relevant papers in order to assess the quantum of enhancement of royalty since 28.9.1994 @ 24% on account of default in payment of royalty and the enhanced royalty which the petitioner has already paid with interest @ 12% per annum in the light of the orders passed by the Supreme Court on 23.8.1997 shall be adjusted alternatively, the respondents shall fix the royalty amount on their own with the interest @ 24% which shall be payable by the petitioner-Association. 3. For issuance of a writ of mandamus commanding upon the respondents and restraining them from realizing interest @ 24% over the enhanced royalty for the period in between 1994-97. 2. The question rais8d in this writ application is, whether in the order dated 23.8.1997 passed in Civil Appeal No. 6089 of 1997 the Supreme Court while laying down the manner in which the payment of arrears of royalty would be made, has decided the issue relating to rate of interest payable to the petitioner and whether payment already made by the members of the petitioner-Association was in accordance with the direction, and whether in absence of any order vacating the order dated 23.8.1997, can the respondents further reopen the matter compelling the petitioner to pay interest @ 24%? 3. Petitioner is an Association of Quarry Owners of Pakur. The members of the Association have been given permit lease for extraction of stone within their respective area of operation. 3. Petitioner is an Association of Quarry Owners of Pakur. The members of the Association have been given permit lease for extraction of stone within their respective area of operation. The State Government in exercise of its powers under Section 15 of the Mines and Minerals (Regulation and Development) Act, 1957 had formulated Rules Known as Bihar Minor Mineral Concession Rules, 1972 fixing royalty to be paid by the quarry operators and in accordance with the Rules, the members of the petitioner Association have been paying royalty. However, vide Notification No. B/Mu.3-19/94-5023/M dated 28.9.1994 it was notified by the State Government through the Department of Mines and Geology that by amendment in the Bihar Minor Mineral Concession Rules, 1972, royalty of mines have been refixed and royalty rates have been enhanced from the date of issuance of notification. The petitioner-Association challenged the enhancement as illegal and ultra vires and on the grounds that the enhancement was made at an exorbitant rate, contrary to the guidelines prescribed, in this regard, a writ application vide CWJC No. 9821 of 1994 was filed before the Patna High Court, wherein, an interim order was passed on 7.2.1995 directing that no coercive step shall be taken against the petitioner. The writ petition was however finally dismissed on 16.10.1996 and against the order of dismissal, the petitioner had filed Special Leave Petition before the Supreme Court which was admitted and registered as Civil Appeal No. 5089 of 1997. After dismissal of the writ petition by the High Court, the respondents issued a fresh notice on 1.11.1996 calling upon the members of the petitioner-Association to pay arrears of amount of royalty with interest @ 24%. After hearing the parties on the interlocutory application filed by the petitioner in the aforesaid civil appeal, the Supreme Court on 23.8.1997 had passed the following orders:- "We have heard the learned counsel on the application. As regards arrears of Royalty up to July 1997, the Lessees of the Quarries shall pay the arrears with interest @ 12% per annum in 4 quarterly installments within a period of one year. The first installment will be paid before October 1997 and the rest of the installments Will be paid at the interval of 3 months." Civil Appeal No. 5089 of 1997 was finally dismissed by the Supreme Court vide order dated 8.8.2000. 4. The first installment will be paid before October 1997 and the rest of the installments Will be paid at the interval of 3 months." Civil Appeal No. 5089 of 1997 was finally dismissed by the Supreme Court vide order dated 8.8.2000. 4. Shri R. Krishna, learned counsel for the petitioner argues that the notice of the respondents demanding payment of royalty at the enhanced rate of interest @ 24% on being challenged before the Supreme Court in the civil appeal, the Apex Court had directed that the members of the petitioner-Association shall pay royalty at the rate of 12% per annum in four (4) quarterly installments within a period of one year commencing from October 1997. The aforesaid order, according to the learned counsel, has to be deemed as settling the issue that the rate of interest shall be 12% per annum and not 24%, as demanded by the respondents and since the order was not vacated, it has to be deemed that it has merged with the final order passed by the Supreme Court in the aforesaid Civil Appeal. Learned counsel argues further that when the matter was pending before the High Court in CWJC No. 9821 of 1994, the interim order dated 7.2.1995 was passed which was extended on 20.2.1995, whereby a direction was given to the respondents not to take any coercive steps against the petitioner in the matter of realization of demanded amount of royalty. As such the members of the petitioner-Association have not passed the amount of royalty to the consumers and the same has therefore to be paid now from the accounts of the members of the petitioner-Association. According to the learned counsel, demand of interest at the compound rate of 24% for the entire period including the period when there was an order of stay at the time of filing of the writ application and the demand that the entire sum exceeding Rs. 4.00 crores be paid by the members of the petitioner-Association at one go, is totally unjustified and unreasonable and would perpetrate injustice on the members of the petitioner-Association. Learned counsel submits further that the respondent Authority have threatened to initiate certificate proceeding against the members of the petitioner-Association. 5. A counter-affidavit has been filed on behalf of the respondent no. 4 stating that the instant writ application is not maintainable and is liable to be dismissed. Learned counsel submits further that the respondent Authority have threatened to initiate certificate proceeding against the members of the petitioner-Association. 5. A counter-affidavit has been filed on behalf of the respondent no. 4 stating that the instant writ application is not maintainable and is liable to be dismissed. It is explained that the demand made by the respondents is for the dues in respect of difference of amount of interest payable to the State Government by the petitioner from 24.9.1994 to July 1997. The issue before the Supreme Court was related to enhancement of royalty and the claim of the respondent-State that the enhanced royalty shall be paid with interest @ 24% per annum, has been upheld by the Supreme Court. The order dated 23.8.1997, as passed by the Supreme Court was only by way of interim arrangement by which the petitioner was directed to deposit interest on the amount of enhanced royalty at the rate of 12% per annum within a period of one year in four (4) quarterly installments and it cannot be said therefore that the interim arrangement was a final decision of the Supreme Court on the major issue which was ultimately decided by the final order passed on 8.8.2000. Respondents are therefore, entitled to demand payment of the balance amount of interest @ 12% as per Rule 43A of the Bihar Minor Mineral Concession Rules, 1972 which the petitioner is liable to pay. 6. In Civil Appeal No. 5089 of 1997, the petitioner-Quarry Owners Association, had challenged the notification dated 17.8.1991 and 28.9.1994 issued by the State of Bihar enhancing the rate of royalty. After hearing the rival contentions placed on behalf of the petitioner and on behalf of the respondent-State, the Supreme Court has held that enhancement of royalty as per impugned notification, cannot be said to be arbitrary or otherwise illegal. 7. The controversy is therefore settled and that there can be no dispute to the fact that the respondent-State, pursuant to the notification issued by the State Government for enhancement of the royalty at the enhanced rate of interest @ 24% per annum, have a right to demand and realize the said enhanced amount of royalty from the members of the petitioner Association. 8. 8. The contention of the learned counsel for the petitioner that the interim order passed by the Hon'ble Supreme Court implies a final decision of the Apex Court on the issue relating to the rate of interest and it has to be deemed that the rate of interest has been reduced to 12% per annum and according to which, the petitioner has paid the arrears of royalty with interest @ 12% per annum and the respondents cannot therefore reopen the issue for demanding payment of balance of 12% of interest, appears to be misconceived. On bare reading of the interim order dated 23.8.1997, it would be manifest that order was passed on the interlocutory application filed by the petitioner after notice was served upon the petitioner by the respondent-State demanding payment of arrears of royalty with @ 24% interest on the balance amount. From the interlocutory application filed by the petitioner in the Civil Appeal before the Supreme Court (Annexure-6), it appears that prayer therein as made by the petitioner was for an ex parte ad interim stay of the judgment dated 16.10.1996 passed in CWJC; No. 9821 of 1994 by the High Court of Judicature at Patna and also for stay of the operation of the impugned notification dated 28.9.1994 under which the State had demanded payment of royalty at the enhanced rate of 24% per annum and for further direction to the respondents not to take any coercive action against the petitioner for realization of the amount due on the basis of the notification dated 28.9.1994 till the disposal of the Appeal. It is apparent therefore that on the basis of the submission made and the relief claimed, the Supreme Court by its order dated 23.8.1997, had only by way of interim relief to the petitioner, accorded protection to the petitioner from coercive action by the concerned authorities of the respondents-State, subject to the condition that the petitioner should deposit the enhanced royalty together with interest @ 12% per annum. The order does not suggest by any stretch of imagination that the Supreme Court had decided on the dispute raised by the petitioner as to whether interest demanded at the rate of 24% was illegal. The order does not suggest by any stretch of imagination that the Supreme Court had decided on the dispute raised by the petitioner as to whether interest demanded at the rate of 24% was illegal. On the other hand, when civil appeal came to be finally decided by the Supreme Court, the controversy which was initially raised by the Government in regard to the notification enhancing the royalty to be paid with interest @ 24% per annum, was finally settled upholding the validity of the notification. It cannot therefore be said that by the interim order, the Supreme Court had decided that the rate of interest payable by the petitioner should be 12% per annum and not 24% per annum. 9. The petitioner has already availed the benefit of payment of enhanced amount of royalty @ 12% per annum in easy installments. They are therefore liable to pay the difference of amount on interest payable to the State Government for the period from September 1994 to July 1997. Such payment ought to have been made by the petitioner immediately after the disposal of the civil appeal by the Supreme Court on 8.8.2000, but they have deliberately withheld such payment perhaps expecting that the State Government should first raise a demand for the payment. The petitioner has not made any ground whatsoever to quash the impugned orders (Annexures-11 and 12) by which, they have been directed to pay the difference amount of interest @ 12% per annum on the amount of royalty which was payable for the period from 28.9.1994 to July 1997. 10. For the reasons mentioned above, I do not find any merit in this application. Accordingly, this writ application is dismissed. 11. However, considering the fact that the total amount of arrears which the petitioner is liable to pay is quite, substantial, and calling upon them to pay the same in one lump sum may entail serious inconveniences, it is therefore directed that after the quantum of amount of royalty since 28.9.1994 till July 1997 at the balance rate of interest at 12% per annum is assessed in respect of the individual member of' the petitioner-Association, such members of the petitioner-Association shall pay the same in four (4) equal quarterly installments within a period of one year. The first installment will be paid before the end of September 2008 and the rest of installments should be paid at the intervals of three months.