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2019 DIGILAW 45 (ALL)

Arun Kumar Yadav v. State of U. P.

2019-01-04

SAUMITRA DAYAL SINGH

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JUDGMENT : Saumitra Dayal Singh, J. 1. Heard Sri H.N. Singh, learned Senior Counsel assisted by Sri Amitabh Tripathi and Sri Shubhranshu Shekhar, learned Additional Chief Standing Counsel for the State. 2. The present writ petition has been filed to challenge the order dated 23.11.2009 passed by the District Magistrate-Agra, District-Agra by which the petitioner's mining lease has been cancelled under Rule 60 of the Uttar Pradesh Minor Minerals (Concession) Rules, 1963 (hereinafter referred to as the Rules) and also a demand of Rs.9,88,125/-has been raised-towards recovery of royalty Rs.1,64,687.50/-and Rs.8,23,437.50/-towards value of allegedly illegally mined sand. 3. Admittedly, the petitioner had been granted a mining lease with respect to the plot different from the one giving rise to the present proceedings. While there is no dispute with respect to the mining conducted by the petitioner with respect to the lease granted to him, by a show cause notice dated 26.07.2008, it was alleged that the petitioner had illegally mined sand outside his leased plot resulting in loss of royalty Rs.1,64,687.50/-and loss of sand of value Rs.8,23,437.50/-. After making such factual allegation against the petitioner, the District Magistrate by the aforesaid show cause notice proposed to cancel the petitioner's lease for reason of his having violated the terms and conditions of the lease. 4. Admittedly, the petitioner had submitted the reply thereto by order dated 23.11.2009. The District Magistrate-Agra cancelled the lease of the petitioner. At the same time the demand for royalty and value of sand (described as five times the value in the order) was raised against the petitioner. 5. The aforesaid order was subject matter of challenge in appeal and revision before the statutory authority. However, those proceedings were also decided against the petitioner. Therefore the present writ petition. 6. Sri H.N. Singh, learned Senior Counsel submits that though the petitioner was initially aggrieved by the cancellation of the lease deed, however with passage of time that grievance is no longer subsisting. Therefore the present petition is confined to the recoveries being made from the petitioner loss of royalty and value of sand. 7. Therefore the present writ petition. 6. Sri H.N. Singh, learned Senior Counsel submits that though the petitioner was initially aggrieved by the cancellation of the lease deed, however with passage of time that grievance is no longer subsisting. Therefore the present petition is confined to the recoveries being made from the petitioner loss of royalty and value of sand. 7. In this regard, it has been submitted that though under Section 21(5) of the Mining and Minerals (Regulation & Development) Act, 1957, the State Government is competent to impose such a demand in certain circumstances, however, in the present case neither this circumstance existed nor has any procedure been followed before determination of the recoverable amount. 8. Elaborating his submission, learned Senior Counsel would submit that arising from the allegation made against the petitioner (vide show cause notice dated 26.07.2008), an FIR was first got registered by the respondent-authorities making similar allegation. Upon due investigation made by the police, the allegation made against the petitioner was found to be wrong. Consequently, closure / final report was submitted by the police. Therefore, it has been submitted that no eventuality existed as may have given rise to the proceedings under Section 21(5) of the Act. Since the petitioner had not indulged in any illegal mining, there could never arise an occasion for recovery of loss of royalty and loss of value of sand. 9. Alternatively, it has been submitted that before passing the order dated 23.11.2009, no show cause notice was ever issued to the petitioner requiring him to show cause why demand for loss of royalty and loss of value of sand may not be made from the petitioner. The notice dated 26.07.2008 proposed to cancel the lease deed of the petitioner and not to create any demand. Therefore the order dated 23.11.2009 insofar as it provides for such demand and recoveries is stated to be wholly illegal and in violation of the basic principles of natural justice. 10. Learned Additional Chief Standing Counsel on the other hand submits that the allegation of loss of revenue to the State and of illegal mining stands wholly established from the perusal of the order passed by the District Magistrate as has been upheld in appeal and revision. All statutory authorities have considered the grievance raised by the petitioner and have thereafter passed the order. All statutory authorities have considered the grievance raised by the petitioner and have thereafter passed the order. Therefore the grievance being raised by the petitioner is not real and only technical. 11. Having heard learned counsel for the parties and having gone through the record of the writ petition, in the first place, submission of closure / final report by the police may not be decisive factor for determination of loss of royalty and loss of value of sand inasmuch as the FIR was lodged for the purposes of initiating a prosecution against the petitioner for infringement of law while the proceedings under Section 21(5) of the Act are purely civil proceedings affecting the civil rights of the party whereby the State seeks to recover from the offender loss of revenue as also loss of minerals illegally extracted. It is not uncommon in law that a single event may give rise to both civil and criminal consequences as is the fact in the present case. Therefore, the outcome of the criminal proceeding if had resulted against the petitioner may have had some effect on the civil proceeding under Section 21(5) of the Act, however, the fact that the criminal prosecution did not arise and the FIR resulted in the closure / final report did not lead to an automatic or logical inference that the civil proceeding must necessarily fail. In the civil proceedings such as these which are in the nature of best judgment assessment as also for recompense in favour of the State, the rule of balance of evidence would apply and it would govern the outcome of the proceedings. Such proceeding would therefore stand independent of the fate of the criminal prosecution. 12. The report of the police as also other material that the petitioner may seek to rely upon may obviously remain open to the authority to consider at the appropriate stage, if required, however, the same may not alone govern the fate of the proceedings in entirety. The authorities would be bound to consider all evidence and material on record before making a final order under Section 21(5) of the Act. To that extent the challenge raised in the present writ petition must fail. 13. The authorities would be bound to consider all evidence and material on record before making a final order under Section 21(5) of the Act. To that extent the challenge raised in the present writ petition must fail. 13. As to the other ground of challenge raised by the petitioner being that the order dated 23.01.2009 is grossly illegal inasmuch as it has been based wholly exparte without issuance of any prior show cause notice to determine the loss of royalty or loss of value of minerals, the said argument is well founded and though the act does not appear to specifically provide for such opportunity of hearing to be given, however, it is too late in the day for the State to contest that it's authority could pass an order on a wholly exparte basis and thus determine the liability of loss of royalty and loss of value of minerals to be satisfied by the petitioner. For the provision to remain a valid piece of legislation, it is necessary to infer that before any order under Section 21(5) of the Act may be passed, a minimum opportunity of hearing was necessary to be provided to the extent that a show cause notice clearly stating the action proposed to be taken i.e. the amount of loss of royalty sought to be determined and the loss of value of minerals sought to be recovered be specified along with details of the land from which the petitioner is alleged to have caused the loss together with the period for which such loss may have been caused along with other fact and material as the State may choose to rely. Once such a show cause notice is issued, the petitioner be given a reasonable opportunity to respond to that notice and of personal hearing before the order is passed. The order that may be passed as a consequence of such proceedings may have also be required to be speaking and reasoned both as to the infringement made by the petitioner as also to the quantification of the loss of royalty and loss of value of goods. 14. Similar view appears to have been taken by this Court in the case of Ranveer Singh Vs. State of U.P. & 7 Others reported in 2017 (1) ADJ 240 wherein paragraph nos. 30, 32, 33 and 35 was held as follows:- "30. 14. Similar view appears to have been taken by this Court in the case of Ranveer Singh Vs. State of U.P. & 7 Others reported in 2017 (1) ADJ 240 wherein paragraph nos. 30, 32, 33 and 35 was held as follows:- "30. Thus law on the subject is clear that in case no procedure has been provided for as to in what way and manner the authority is to be exercised, then at the said point of time, the exercise of power by public authority has to be properly discharged i.e. it has to be decided with fairness and after following the principle of natural justice and the sense of justice and equity should continue to guide the Authorities concerned while conducting such proceedings in deciding the dispute on merit as the said decision in question would have large scale financial repercussions on the incumbent against whom proceedings in question have been initiated. 32. Here, the petitioner has been denying his indulgence in the activity of illegal mining and what we find from the decision making process and from the record is that rule of fair play has been breached with impunity, inasmuch as, after liberty has been accorded by the Apex Court, the petitioner has proceeded to file a detailed and exhaustive reply wherein each and every facet of the matter was sought to be denied/disputed and most conveniently, it is sought to be mentioned by the District Magistrate that the reply submitted by the petitioner was not satisfactory and in the earlier part of the order while dealing with respective notices, it has been mentioned that petitioner has not proceeded to place sufficient material to rebut the allegation. Decision maker in the present case has ignored the weight of reply available on record as extracted above and has dealt with the same in perfunctory manner with closed mind, whereas while exercising quasi-judicial authority was required to be free from bias i.e. there should be absence of conscious or unconscious prejudice to either of the parties. Here the tenor of proceedings are speaking for itself that District Magistrate while dealing with the matter was proceeding with pre-conceived notion that petitioner in-fact has indulged in illegal mining, whereas the said opinion could have been formed, only after enquiry was held. 33. Here the tenor of proceedings are speaking for itself that District Magistrate while dealing with the matter was proceeding with pre-conceived notion that petitioner in-fact has indulged in illegal mining, whereas the said opinion could have been formed, only after enquiry was held. 33. Once the liability was to be fastened on the shoulder of petitioner, then it was the obligation of the State to prove by way of credible evidence available that it was the petitioner, who has indulged in illegal mining and in the said direction, apart from issuing show cause notice, all the evidence that was sought to be relied upon i.e. the incumbents who have carried out the search and survey and the incumbents who have come forward to depose against petitioner, their names ought to have been disclosed and they ought to have been produced to support the case of State that petitioner in-fact has indulged in illegal mining. Not only this as a part of process, petitioner was entitled to have reasonable opportunity of defending himself by questioning the veracity of evidence produced against him and by adducing his own defence evidence, if any. Decision maker is bound to act fairly, as under the scheme of things provided for, the determination made by him will entail civil consequences, as qua the person charged with illegal mining on charges being proved financial liability would be shouldered and in contra situation, the State would be at loss. 35. Since in the present case the State/Competent Authority would conduct on enquiry into the allegation of illegal mining it would possess the character of quasi judicial proceeding. Recording of finding as to illegal mining being carried out by a particular incumbent for the purposes of fixing financial responsibility would certainly entail full-fledged enquiry, comprising allegation/evidence in support of charges coming forward followed by his case in defence and then findings arrived at based on evidence adduced. Recovery would follow if the finding returned is adverse to incumbent charged with allegation of illegal mining. Having regard to the character and complexion of proceedings in conjunction with the structure of power conferred by the Act/Rules, the inevitable conclusion is that proceedings in hand necessarily will have to be quasi- judicial proceedings wherein full play is required to be given to the rule of natural justice by the State/Competent Authority. " 15. Having regard to the character and complexion of proceedings in conjunction with the structure of power conferred by the Act/Rules, the inevitable conclusion is that proceedings in hand necessarily will have to be quasi- judicial proceedings wherein full play is required to be given to the rule of natural justice by the State/Competent Authority. " 15. Consequently, the present petition is allowed in part and the order dated 23.11.2009 is set aside and the matter is remitted to the District Magistrate-Agra to pass a fresh order in light of the observations made above. Such exercise may be completed, as expeditiously as possible, preferably within a period of three months from the date of production of certified copy of this order. 16. It is further provided that since the order dated 23.11.2009 clearly spells out the factual assertions on the basis of which the demand has been raised, the petitioner may treat the same as the notice issued to him for the purposes of quantification of demand inasmuch as loss of royalty and loss of value of minerals has been specified in the order and he submit his reply in writing along with such evidence as he may be advised, within a period of three weeks from today. The District Magistrate-Agra shall proceed to issue further notice to the petitioner for hearing upon receipt of such reply and shall decide the matter de novo without being prejudiced by any observations recorded in any of the impugned orders. All further recoveries shall abide by the order to be passed by the District Magistrate-Agra.