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2012 DIGILAW 1560 (JHR)

Madhusudan Builders & Developers (P) Ltd. v. State of Bihar (now State of Jharkhand)

2012-10-31

JAYA ROY, PRAKASH TATIA

body2012
JUDGMENT By Court Heard counsel for the parties. 2. The facts of CWJC No.3495/2000R are being taken into consideration as the question of law involved in both the cases are same. 3. Petitioner's contention is that it is a company registered under the provisions of Indian Companies Act, 1956 and is engaged in developing lands and construction of multi-storeyed buildings, for which the company has to use building sand, grabble, bricks, stones and chips. These are admittedly the goods covered under the provisions of the then Bihar Minor Minerals Concession Rules, 1972 and these goods are subject to payment of royalty etc. However, since the petitioner is a private developer and contractor of multi-storeyed buildings and he is not covered under the definition of “Works Contractor” as defined in Explanation (ii) to sub-rule 10 of Rule 40 and is not dealing with the Department of Central or State Government or Company, Corporation, Undertakings, Autonomous body of the Government, who engages works contractors for any kind of construction on their behalf, and further the petitioner is neither a lessee, nor a licensee under the above Rules of 1972, therefore, it could not have been asked to pay royalty by invoking sub-rule 10 of Rule 40 of Rules 1972. It is submitted that the petitioner's business activities are not in dispute. It is also submitted that validity of sub-rule 10 of Rule 40 of Rules 1972 was challenged by the works contractors before the Ranchi Bench of Patna High Court in the case of M/s. Madhusudan Choudhary Vs. State of Bihar & Ors. reported in 1996(1) PLJR 723 and it has been held in the said judgment of the Division Bench of Ranchi Bench of Patna High Court that sub-rule 10 of Rule 40 of the Bihar Minor Mineral Concession Rules, 1972 is intra-vires. However, petitioner is not the works contractor but is a private builder and therefore, no royalty can be claimed from the writ petitioner. This position has been made clear in the judgment of Single Bench of this Court in the case of M/s. Awash Vs. State of Bihar & Ors. reported in 2002 (1) JCR 217, wherein it has been held that Mining Officer cannot demand royalty in respect of minor minerals used by contractors doing construction work of persons other than Central or State Governments or Corporation. State of Bihar & Ors. reported in 2002 (1) JCR 217, wherein it has been held that Mining Officer cannot demand royalty in respect of minor minerals used by contractors doing construction work of persons other than Central or State Governments or Corporation. The judgment of M/s. Awash was under consideration before the Division Bench of this Court (M/s. Awash Vs. State of Jharkhand & Ors. reported in 2004 (1) JCR 192 ). According to the learned counsel for petitioner, the Division Bench in paragraph 7 of the above judgment held that Rule 40(10) of Rules 1972 applies to the works contractors and not to “otherthantheworkscontractors”. In view of the above reasons, according to the learned counsel for the petitioner, the observation made by the learned Single Judge in the judgment of M/s. Awash in paragraph 16 stands overruled and therefore, respondents cannot demand the relevant documents of challans etc. from the private contractors to find out whether minor minerals carried or used by the private contractors are royalty paid materials or not. Learned counsel for the petitioner further relied upon the Division Bench judgment of Patna High Court delivered in the case of P.B.Enterprises Vs. State of Bihar & Ors. reported in 1992 (2) BLJ 581 , wherein on the basis of executive instruction, some presumption has been sought to be drawn of violation of Rule 40(1) of the Rules 1972 and this Court held that on the basis of such executive instruction, no presumption of illegal mining or removing mineral can be drawn. 4. In addition to the above, learned counsel for the petitioner submits that it is clear from Rule 40 that the person, who is guilty of illegal mining or illegal removal of minor mineral, alone can be proceeded for levy of penalty or sentence and the person, who has used the minor mineral, cannot be subjected to proceeding under Rule 40(1). In addition to the above, learned counsel for the petitioner submits that it is clear from Rule 40 that the person, who is guilty of illegal mining or illegal removal of minor mineral, alone can be proceeded for levy of penalty or sentence and the person, who has used the minor mineral, cannot be subjected to proceeding under Rule 40(1). It is submitted that it may be true that a person, who is in the process of excavating minor mineral or who is in the process of carrying minor mineral without payment of royalty or in violation of the Rules of 1972, can be subjected to penalty and punishment but the person, who has consumed the minor mineral, cannot be subjected to penalty and punishment under the Rules of 1972 as there is no provision for the same under the said Rules providing that the person, who has consumed minor mineral which may not have been got after payment of royalty in accordance with the Rules or purchased from the persons who has not paid royalty etc. 5. Reverting to the facts of the case, the State Government issued a communication dated 17th December, 1997 asking all the Deputy Commissioners and concerned Officers of the Government Department that they are taking works contract from the works contractors but they are not taking care of getting royalty. In view of the said circular as well as in view of the decision of this Court delivered in the case of M/s. Madhusudan Choudhary Vs. State of Bihar & Ors. reported in 1996(1) PLJR 723 , the petitioner was asked to submit all the relevant documents with respect to the materials used by the petitioner for construction of buildings/apartments. The petitioner produced the documents to show that it has used the minor minerals which were royalty paid. No cost or penalty was demanded from the petitioner for which goods petitioner produced the relevant documents and cost and penalty were demanded for the goods for which petitioner could not produce challans. The petitioner, in pursuance of the order dated 8th August, 2000, paid Rs. 50,000/-as per the assessment made by the Officer concerned. The petitioner, therefore, has filed this writ petition for seeking a declaration that the petitioner is not liable to pay royalty or any amount and the amount of Rs. 50,000/-recovered may be ordered to be refunded to the petitioner. 6. 50,000/-as per the assessment made by the Officer concerned. The petitioner, therefore, has filed this writ petition for seeking a declaration that the petitioner is not liable to pay royalty or any amount and the amount of Rs. 50,000/-recovered may be ordered to be refunded to the petitioner. 6. We have already noticed the legal position, which cannot be disputed. That sub-rule 10 of Rule 40 applies to the works contractors, who are given contracts of the Departments of Central or State Government including company, corporation, undertakings, autonomous body of the Government, who engages works contractors for any kind of construction on their behalf. The petitioner admittedly is not the “works contractor” and is not doing the “works of the Department” as explained in Explanation (i) and (ii) of sub-rule 10 of Rule 40. The petitioner is, therefore, not liable to be proceeded under sub-rule 10 of Rule 40. 7. So far as another contention of the petitioner that even no documents of payment of royalty can be demanded from the petitioner is concerned, we are of the considered opinion that to give effect to sub-rule (1) of Rule 40 of Rules of 1972, the Officer-in-charge, for implementation of the said Rule, is authorized to watch and examine the movement of minor mineral as it is specifically provided that “Whoever” is found to be extracting or removing minor minerals “shall be punished with simple imprisonment which may extend to six months or with fine, which may extend to Rs. 5000/- or with both”. In the case of P.B. Enterprises (supra), some presumption has been sought to be drawn merely on the basis of some executive instruction and it has been held that since requisite affidavit has not been filed by the petitioners, they would be presumed to have violated Rule 40(1) and penalty was sought to be imposed and that has been quashed by the Division Bench of this Court in the case of P.B. Enterprises by holding that mere non-submitting of affidavits cannot be a conclusive proof of illegal removal of minor minerals by the concerned person and such provision cannot be made merely by executive instruction. 8. But this will not answer the contention raised by the learned counsel for the petitioner. 8. But this will not answer the contention raised by the learned counsel for the petitioner. The contention of the petitioner is that, a person, who has consumed minor minerals before he could have been intercepted while moving the minor minerals or excavating minor minerals, is not liable to be subjected to the provisions of even sub-rule (1) of Rule 40 and the person, who has not consumed minor minerals and is intercepted during the course of illegal mining or illegal removal, can be subjected to penalty and punishment under sub-rule (1) of Rule 40. Such argument deserves to be rejected summarily as it would lead to absurdity. If the contention of the petitioner is accepted, then it is to be held that a person, who is a smart one and admits that he has illegally excavated and also removed minor minerals but he has since consumed the same, therefore, he cannot be punished and at the same time, the person, who is intercepted before use and consumption of the minor minerals, will be liable to penalty and punishment under Rule 40(1) of the Rules of 1972. It appears that according to the learned counsel for the petitioner, a smart offender is required to be exonerated from the purview of Rule 40(1) or a fortuitous offender may be exonerated from the purview of Rule 40(1) and such interpretation cannot be given to sub-rule (1) of Rule 40. It appears that confusion may have crept because of the reason that in the case of P.B. Enterprises (Supra), the Department sought to straightway punish the persons under Rule 40(1) of the Rules of 1972 on the basis of presumption on the basis of executive instructions rather than holding any enquiry and after giving opportunity of hearing to the concerned person and therefore, the petitioner tried to take help from the judgment rendered in the case of P.B.Enterprises, wherein it has been held that penalty cannot be imposed on the basis of such presumption. The possession of minor minerals itself can be a fact for drawing presumption that the minor minerals may have been removed without valid permission under the Rules of 1972 subject to strict condition that no explanation is given by the person possessing the mineral or who is mining or removing minor minerals. The possession of minor minerals itself can be a fact for drawing presumption that the minor minerals may have been removed without valid permission under the Rules of 1972 subject to strict condition that no explanation is given by the person possessing the mineral or who is mining or removing minor minerals. Therefore, once a person, who is possessing the minor minerals, is asked to show the relevant documents of challans etc., and if he fails to satisfy the concerned authority of payment of royalty of minor minerals, then a proceeding under Rule 40(1) of the Rules of 1972 can be initiated. But mere non-production of the documents on the spot itself may not be a conclusive proof of the guilt of the person carrying minor minerals or who has consumed the minor minerals. It is true that every builder or an owner of the building cannot be asked to show at any point of time that since he has used minor minerals in construction activities or construction of his own building, he must show the relevant documents of royalty etc. as are required under the Rules of 1972 and therefore, the concerned Officer under the Rules of 1972 cannot indiscriminately ask any body to explain as to from where he got minor minerals which have been used in his building construction long ago. These issues can be very well taken care of under the proceedings initiated under Rule 40(1) of the Rules of 1972. Thus, we are of the considered opinion that the Division Bench of this Court in the case of M/s. Awash rightly held that Rule 40(10) has application to the works contractors and not to the private builders or contractors. Yet, if private builders or contractors are found guilty of illegal mining or removal of minor minerals, they can be proceeded under Rule 40(1) of the Rules of 1972 and can be penalized and punished only in accordance with law after recording findings after hearing concerned persons with respect to the allegation of illegal excavation and illegal removal of minor minerals as Rule 40(1) applies to all persons irrespective of the fact that whether he is a lessee or licensee or an agent, a manager, an employee or a contractor or a sub-lessee. No one has been spared from the purview of Rule 40(1) and he may be even an individual or may be a builder or may be an user himself as none has been given liberty to indulge in illegal excavation or removal of minor minerals. 9. However, in this case, the petitioner was a private builder. This fact is not in dispute. In the present case, the petitioner, who consumed the minor minerals, was asked to show relevant material documents to find out whether the minor minerals used by the petitioner was already subjected to payment of royalty etc. under the Rules of 1972. The petitioner appeared before the same authority and submitted his documents and after considering all documents, the authority, in the order dated 8th August, 2000, found that challans for 3,86,500 bricks were not produced by the petitioner. In view of the above finding of fact, a penalty of Rs. 50,000/-, which includes the royalty, was imposed on the petitioner. Therefore, in the facts of this case, Rule 40(1) was complied with before imposing the levy of penalty. 10. In view of the above reasons, it is held that the petitioner as a private developer and builder was not covered under sub-rule 10 of Rule 40 but the Revenue authorities had jurisdiction to proceed against the petitioner to enquire whether the minor minerals consumed by the writ petitioner was royalty paid minor minerals or not. The Revenue authorities, after giving full opportunity to the writ petitioner under Rule 40(1), recovered the cost of minor minerals and penalty thereon. Thus, there is no illegality in the order impugned. Hence, the writ petitions are dismissed.