JUDGMENT : TARLOK SINGH CHAUHAN, J. 1. The petitioner-Company has been granted a mining lease for mining of Limestone and Shale and aggrieved by the demand made by the respondents for recovery of Rs.18.15 lacs and Rs.14.28 lacs, respectively on account of interest on belated payment of royalty, has filed the instant petition for grant of following substantive reliefs: (a) Quash Rule 64-A of the Mineral Concession Rules, 1960, authorizing and/or permitting the respondents to recover interest on belated payment of royalty being ultra vires of the Minor Minerals (Regulation and Development) Act and/or beyond the legislative competence and without authority of law inasmuch as the statute Minor Minerals (Regulation and Development Act) does not authorize and/or provide for the same. (b) Quash the demand made by the respondents for the recovery of Rs.18.15 lacs and Rs.14.28 lacs on account of interest on belated payment of royalty vide notices Annexures P-4, P-6, P- 8, P-10 and P-12. (c) Prohibit the respondents from taking any steps pursuant to or in furtherance of the impugned notices seeking to recover the interest on belated payment of royalty as arrears of land revenue. (d) Declare that Clause 3 of Part VI of the said Mining Lease Agreement in favour of the petitioner Annexure P-2 hereto is ultra-vires, illegal, bad in law and null and void. (e) Refund the interest at 15 per cent which the petitioner had been wrongly compelled to deposit under coercion and threat.” 2. However, during the course of hearing, counsel for the petitioner stated that he is under instructions not to press reliefs (a) and (d) in view of the judgment rendered by the Hon’ble Supreme Court in South Eastern Coal Fields Ltd. vs. State of M.P. and others, 2003 (8) SCC 648 . 3. It is averred that the petitioner had been operating the minerals since March, 1995 and as mutually agreed between the officials of the petitioner-Company and the State Geologist, royalty was to be paid on quarterly basis and was being paid as such and once there was no direction to make the payment on monthly basis, therefore, the demand qua interest now raised by the respondents is not only bad in law as being contrary to the past practice but also against the doctrine of legitimate expectation. 4.
4. On the other hand, the respondents have opposed the petition by filing a reply wherein it is averred that on conjoint reading of Section 9(2) of Mines and Minerals (Development and Regulation) Act, 1957 (for short ‘Act’), Rule 64-A and Rule 64-B(2) of the Mineral Concession Rules, 1960 (for short ‘Rules), it is evident that royalty becomes due from the movement the mineral is removed/consumed by the lessee from the leased area and it is the effective date for the calculation of the royalty due. We have heard the learned counsel for the parties and gone through the records of the case carefully. 5. Section 9(2) of the Act, provides: “The holder of a mining lease granted on or after the commencement of this Act shall pay royalty in respect of any mineral removed or consumed by him or by his agent, manager, employee, contractor or sub-lessee from the leased area at the rate for the time being specified in the Second Schedule in respect of that mineral”. 6. Section 64-A provides: “The State Government may, without prejudice to the provisions contained in the Act or may other rule in these rules, charge simple interest at the rate of twenty four percent per annum on any rent, royalty or fee (other than the fee payable under sub-rule (1) of rule 54) or other sum due to that Government under the Act or these rules or under the terms and conditions of any prospecting license or mining lease from the sixtieth day of the expiry of the date fixed by that Government for payment of such royalty, rent, fee or other sum and until payment of such royalty, rent, fee or other sum is made”. 7. Rule 64-B(2) provides: “In case run-of-mine mineral is removed from the leased area to a processing plant which is located outside the leased area, then, royalty shall be chargeable on the unprocessed run-of-mine mineral and not on the processed product.” 8. A combined reading of all the aforesaid provisions, makes it clear that if Government has not fixed any other date for payment of royalty, then the due date for payment of royalty shall be by the operation of Section 9(2) of the Act and Rule 64-B(2) (supra), which provide that royalty is due the movement minerals are consumed/ removed by the lessee.
Therefore, interest is to be calculated after sixtieth day, the mineral was removed from the leased area and not on quarterly basis by computing calendar month as due date of royalty for the purpose of calculating interest on belated payment. 9. As regards the plea of past practice and even if such practice is followed by the department has to be consistent with the interpretation provided to the relevant rule. The past practice, therefore, must be referable to the applicability of the rule and cannot be dehors the rules. 10. Apart from the above, in contractual matters of the instant kind, the petitioner could have cause to maintain a petition only in case there was any infraction of the Constitution or statutory provision or there had been any violation of a contract that had been validly executed inter se the parties under Article 299 of the Constitution. This is not the fact situation obtaining in the present case. Therefore, the plea of the petitioner that there was an oral understanding between the petitioner and the respondents, cannot be accepted, after all the Government only acts on the basis of written instructions. 11. That apart, therefore, even if it is assumed that any concession was given by the State Geologist as alleged by the petitioner, the same cannot bind the Government as it is unsafe to rely on the wrong or erroneous or wanton concession made by some officers of the State unless it is in writing, that too, from the competent authority. 12. As regards the plea of legitimate expectation, the same is clearly misconceived. For it is more than settled that in contractual spheres as in all other State action, State and its instrumentalities have no unfettered discretion, that too, to act against a statutory provision. Therefore, the petitioner has no right to insist that since the respondents were not enforcing the mandate of law by not charging interest on late payment of royalty w.e.f. March, 1995 upto the year 2008, they should continue to do so in perpetuity that too by invoking the doctrine of legitimate expectation. 13. The doctrine of legitimate expectation has been described in Halsbury’s Laws of England, 4th Edition, in the following words: “81. Legitimate expectations.
13. The doctrine of legitimate expectation has been described in Halsbury’s Laws of England, 4th Edition, in the following words: “81. Legitimate expectations. – A person may have a legitimate expectation of being treated in a certain way by an administrative authority even though he has no legal right in private law to receive such treatment. The expectation may arise either from a representation or promise made by the authority, including an implied representation, or from consistent past practice.” 14. The same principle has been followed even by the Courts in India. Reference in this connection may be usefully made to the judgment of the Hon’ble Supreme Court in the case of Navjyoti Housing Cooperative Group Housing Society and others vs. Union of India, 1992 (4) SCC 477 , Supreme Court Advocate-on-Record Association and others vs. Union of India 1993 (4) SCC 441 , Food Corporation of India vs. Kamdhenu Cattle Feed Industries 1993 (1) SCC 71 and Union Territory of Chandigarh vs. Dilbagh Singh and others 1993 (1) SCC 154 . 15. In Madras City Wine Merchants’ Association and another vs. State of Tamil Nadu and another (1994) 5 SCC 509 the Hon’ble Supreme Court held that the legitimate expectation may arise:- “(a) if there is an express promise given by a public authority; or (b) because of the existence of a regular practice which the claimant can reasonably expect to continue; (c) such an expectation must be reasonable. However, if there is a change in policy or in public interest the position is altered by a rule or legislation, no question of legitimate expectation would arise.” 16. In Ram Pravesh Singh and others vs. State of Bihar and others (2006) 8 SCC 381 , the question as to what is the legitimate expectation was directly in issue before the Hon’ble Supreme Court and it was held as under: “15. What is legitimate expectation? Obviously, it is not a legal right. It is an expectation of a benefit, relief or remedy, that may ordinarily flow from a promise or established practice. The term 'established practice' refers to a regular, consistent predictable and certain conduct, process or activity of the decision-making authority. The expectation should be legitimate, that is, reasonable, logical and valid. Any expectation which is based on sporadic or casual or random acts, or which is unreasonable, illogical or invalid cannot be a legitimate expectation.
The term 'established practice' refers to a regular, consistent predictable and certain conduct, process or activity of the decision-making authority. The expectation should be legitimate, that is, reasonable, logical and valid. Any expectation which is based on sporadic or casual or random acts, or which is unreasonable, illogical or invalid cannot be a legitimate expectation. Not being a right, it is not enforceable as such. It is a concept fashioned by courts, for judicial review of administrative action. It is procedural in character based on the requirement of a higher degree of fairness in administrative action, as a consequence of the promise made, or practice established. In short, a person can be said to have a 'legitimate expectation' of a particular treatment, if any representation or promise is made by an authority, either expressly or impliedly, or if the regular and consistent past practice of the authority gives room for such expectation in the normal course. As a ground for relief, the efficacy of the doctrine is rather weak as its slot is just above 'fairness in action' but far below 'promissory estoppel'. It may only entitle an expectant : (a) to an opportunity to show cause before the expectation is dashed; or (b) to an explanation as to the cause for denial. In appropriate cases, courts may grant a direction requiring the Authority to follow the promised procedure or established practice. A legitimate expectation, even when made out, does not always entitle the expectant to a relief. Public interest, change in policy, conduct of the expectant or any other valid or bonafide reason given by the decision-maker, may be sufficient to negative the 'legitimate expectation'. The doctrine of legitimate expectation based on established practice (as contrasted from legitimate expectation based on a promise), can be invoked only by someone who has dealings or transactions or negotiations with an authority, on which such established practice has a bearing, or by someone who has a recognized legal relationship with the authority. A total stranger unconnected with the authority or a person who had no previous dealings with the authority and who has not entered into any transaction or negotiations with the authority, cannot invoke the doctrine of legitimate expectation, merely on the ground that the authority has a general obligation to act fairly.” 17.
A total stranger unconnected with the authority or a person who had no previous dealings with the authority and who has not entered into any transaction or negotiations with the authority, cannot invoke the doctrine of legitimate expectation, merely on the ground that the authority has a general obligation to act fairly.” 17. In Secretary, State of Karnataka and other vs. Umadevi (3) and others (2006) 4 SCC 1 , a Constitution Bench of the Hon’ble Supreme Court referred to the circumstances in which the doctrine of legitimate expectation can be invoked: “The doctrine can be invoked if the decisions of the administrative authority affect the person by depriving him of some benefit or advantage which either (i) he had in the past been permitted by the decision maker to enjoy and which he can legitimately expect to be permitted to continue to do until there have been communicated to him some rational grounds for withdrawing it on which he has been given an opportunity to comment; or (ii) he has received assurance from the decision maker that they will not be withdrawn without giving him first an opportunity of advancing reasons for contending that they should not be withdrawn.” 18. In Confederation of Ex-Servicemen Associations and others vs. Union of India and others (2006) 8 SCC 399 , another Constitution Bench of the Hon’ble Supreme Court referring to the doctrine of legitimate expectation held as under: “No doubt, the doctrine has an important place in the development of Administrative Law and particularly law relating to ‘judicial review’. Under the said doctrine, a person may have reasonable or legitimate expectation of being treated in a certain way by an administrative authority even though he has no right in law to receive the benefit. In such situation, if a decision is taken by an administrative authority adversely affecting his interests, he may have justifiable grievance in the light of the fact of continuous receipt of the benefit, legitimate expectation to receive the benefit or privilege which he has enjoyed all throughout. Such expectation may arise either from the express promise or from consistent practice which the applicant may reasonably expect to continue.” 19. The same reiteration of law is found in a judgment of the Hon’ble Supreme in Union of India and another vs. Lt. Col.
Such expectation may arise either from the express promise or from consistent practice which the applicant may reasonably expect to continue.” 19. The same reiteration of law is found in a judgment of the Hon’ble Supreme in Union of India and another vs. Lt. Col. P. K. Choudhary and others AIR 2016 SC 966 wherein it was held as under: “42. In Food Corporation of India v. Kamdhenu Cattle Feed Industries (1993) 1 SCC 71 : ( AIR 1993 SC 1601 ) one of the earlier cases on the subject this Court considered the question whether Legitimate Expectation of a citizen can by itself create a distinct enforceable right. Rejecting the argument that a mere reasonable and legitimate expectation can give rise to a distinct and enforceable right, this Court observed: “8.The mere reasonable or legitimate expectation of a citizen, in such a situation, may not by itself be a distinct enforceable right, but failure to consider and give due weight to it may render the decision arbitrary, and this is how the requirement of due consideration of a legitimate expectation forms part of the principle of nonarbitrariness, a necessary concomitant of the rule of law. Every legitimate expectation is a relevant factor requiring due consideration in a fair decision-making process. Whether the expectation of the claimant is reasonable or legitimate in the context is a question of fact in each case. Whenever the question arises, it is to be determined not according to the claimant’s perception but in larger public interest wherein other more important considerations may outweigh what would otherwise have been the legitimate expectation of the claimant. A bona fide decision of the public authority reached in this manner would satisfy the requirement of non-arbitrariness and withstand judicial scrutiny. The doctrine of legitimate expectation gets assimilated in the rule of law and operates in our legal system in this manner and to this extent.” (emphasis supplied) 43. To the same effect is the decision of this Court in Union of India v. Hindustan Development Corporation and Ors. (1993) 3 SCC 499, where this Court summed up the legal position as under: “28..... For legal purposes, the expectation cannot be the same as anticipation. It is different from a wish, a desire or a hope nor can it amount to a claim or demand on the ground of a right.
(1993) 3 SCC 499, where this Court summed up the legal position as under: “28..... For legal purposes, the expectation cannot be the same as anticipation. It is different from a wish, a desire or a hope nor can it amount to a claim or demand on the ground of a right. However earnest and sincere a wish, a desire or a hope may be and however confidently one may look to them to be fulfilled, they by themselves cannot amount to an assertable expectation and a mere disappointment does not attract legal consequences. A pious hope even leading to a moral obligation cannot amount to a legitimate expectation. The legitimacy of an expectation can be inferred only if it is founded on the sanction of law or custom or an established procedure followed in regular and natural sequence. Again it is distinguishable from a genuine expectation. Such expectation should be justifiably legitimate and protectable. Every such legitimate expectation does not by itself fructify into a right and therefore it does not amount to a right in the conventional sense.” 33. On examination of some of these important decisions it is generally agreed that legitimate expectation gives the applicant sufficient locus standi for judicial review and that the doctrine of legitimate expectation is to be confined mostly to right of a fair hearing before a decision which results in negativing a promise or withdrawing an undertaking is taken. The doctrine does not give scope to claim relief straightaway from the administrative authorities as no crystallised right as such is involved. The protection of such legitimate expectation does not require the fulfilment of the expectation where an overriding public interest requires otherwise. In other words where a person’s legitimate expectation is not fulfilled by taking a particular decision then decision-maker should justify the denial of such expectation by showing some overriding public interest. Therefore even if substantive protection of such expectation is contemplated that does not grant an absolute right to a particular person. It simply ensures the circumstances in which that expectation may be denied or restricted. A case of legitimate expectation would arise when a body by representation or by past practice aroused expectation which it would be within its powers to fulfil. The protection is limited to that extent and a judicial review can be within those limits.
It simply ensures the circumstances in which that expectation may be denied or restricted. A case of legitimate expectation would arise when a body by representation or by past practice aroused expectation which it would be within its powers to fulfil. The protection is limited to that extent and a judicial review can be within those limits. But as discussed above a person who bases his claim on the doctrine of legitimate expectation, in the first instance, must satisfy that there is a foundation and thus has locus standi to make such a claim. In considering the same several factors which give rise to such legitimate expectation must be present. The decision taken by the authority must be found to be arbitrary, unreasonable and not taken in public interest. If it is a question of policy, even by way of change of old policy, the courts cannot interfere with a decision. In a given case whether there are such facts and circumstances giving rise to a legitimate expectation, it would primarily be a question of fact. If these tests are satisfied and if the court is satisfied that a case of legitimate expectation is made out then the next question would be whether failure to give an opportunity of hearing before the decision affecting such legitimate expectation is taken, has resulted in failure of justice and whether on that ground the decision should be quashed. If that be so then what should be the relief is again a matter which depends on several factors.” (emphasis supplied). 20. It would be evident from the aforesaid exposition of law that the doctrine of legitimate expectation cannot be applied in cases of invalid expectation. The expectation should be legitimate, that is, reasonable, logical and valid. Any expectation which is based on sporadic or casual or random acts, or which is unreasonable, illogical or invalid cannot be a legitimate expectation. For the application of doctrine of legitimate expectation, representation or promise should be made by an authority, a person unconnected with the authority, who had no previous dealing and who has not entered into any transactions or negotiations with the authority cannot invoke doctrine of legitimate expectation. Therefore, a person who bases his claim on the doctrine of legitimate expectation has to satisfy that he has relied on the said representation and the denial of that expectation has worked to his detriment.
Therefore, a person who bases his claim on the doctrine of legitimate expectation has to satisfy that he has relied on the said representation and the denial of that expectation has worked to his detriment. (See: State of Uttar Pradesh and others vs. United Bank of India and others (2016) 2 SCC 757 ). 21. A person who bases his claim on the basis of legitimate expectation, in the first instance, must satisfy that there is a foundation and thus has locus standi to make such a claim. In considering the same, several factors which give rise to such legitimate expectation must be present. In a given case whether there are such facts and circumstances giving rise to a legitimate expectation, it would primarily be a question of fact. However, it is more than settled that where there is no promise, the doctrine of legitimate expectation does not apply. 22. Bearing in mind the aforesaid principles it would be noticed that there is practically no material placed by the petitioner on record which may even remotely indicate that any promise was made or any assurance at any point of time was ever held out by the respondents that the petitioner was not required to pay royalty in terms of the provisions of the Act and Rules supra. 23. In view of the aforesaid discussion and for the reasons stated above, we find no merit in this petition and the same is accordingly dismissed, so also the pending application(s), if any, leaving the parties to bear their own costs.