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2025 DIGILAW 1775 (JHR)

Central Coalfields Limited v. State of Jharkhand

2025-08-27

ARUN KUMAR RAI, SUJIT NARAYAN PRASAD

body2025
JUDGMENT : Sujit Narayan Prasad, J: 1. Reference may be made to order dated 25 th August, 2025. 2. Today, Mr. Munna Lal Yadav, learned Sr.S.C. (L&C)-II appearing for the respondents-State has submitted that now the file has been arranged. 3. However, Mr. Arava Rajkamal, Secretary, Department of Mines and Geology, Government of Jharkhand and Mr. Rahul Kumar Sinha, Director, Department of Mines and Geology, Government of Jharkhand are present before this Court. 4. Learned counsel for the respondents has further submitted that counter affidavit is ready to be filed, which may be accepted. 5. Let the counter affidavit be taken on record. 6. Heard learned counsel for the parties. 7. The instant writ petition has been filed under Article 226 of the Constitution of India for the following relief(s): I.For issuance of an appropriate writ/order/direction for quashing the order dated 31.08.2013, passed by learned Certificate Officer, (Mining), Hazaribagh, in Certificate Case No. 50/1991-92, whereby and whereunder the learned Certificate Officer, without considering the observation made by this Hon'ble Court in L.P.A. No. 250/2012 and without determining the issues for which the matter was remanded before the concerned authority had rejected the objection filed by the petitioner under section 9 (2) of the Bihar & Orissa Public Demand Recovery Act and directed the office to issue a demand notice of the certificate amount along with interest; AND (II) For any other relief or reliefs as your Lordships may deem fit and proper for which the petitioner is very much entitled under the facts and circumstances of the case. 8. The brief facts of the case, which requires to be enumerated reads as under: 9. The petitioner is a Government Company within the meaning of Section 615 of the COMPANIES ACT and the petitioner-company is liable to pay royalty on the coal which is vendible and which is removed from the leasehold area. 10. It is the case of the petitioner that in the process of mining coal the other several materials viz. shale, stones etc. also come out from the mines, which are neither coal nor vendible and the petitioner is liable to pay royalty on coal, which is vendible and removed from the leasehold area, since as per Mines and Mineral (Regulations and Development) Act, 1959, the royalty is payable on a mineral and is calculated on the basis of dispatches made from a colliery. However, in the colliery the stock shown includes the shale and stone also. It is stated that officers from the Headquarters visited the colliery and found that a huge quantity of shale, stone which are not coal and which are not vendible were found. Therefore, for the aforesaid non-vendible stone, shale, etc., no royalty is payable. Although in the stock it was shown as coal but after the inspection made by the officers from the Headquarters, the same was written-off as the same was not coal nor vendible. Accordingly after the inspection, necessary adjustment was made in the stock and the non-vendible articles, which were not coal, were written-off. Further, the quantity of coal which was written off was also approved by the Board of Directors of the petitioner-Company. 11. It is further relevant to mention here that Coal India Limited, which is parent body of the petitioner-Company, had made a lump sum ad hoc payment of Rs. Fifty Crores for the outstanding dues as well as future dues towards royalty and cess and this amount included and covered all dues of the petitioner-Company and out of Rs.Fifty Crores, the share of the petitioner-Company was Rs.23.40 crores towards payment of mining dues. 12. It is further stated that this Court vide judgment dated 06.11.1990 has struck down the provision of cess w.e.f. 25.10.1989. A further amount of Rs.323.74 crores became adjustable towards future dues. But, however, the issue was pending as the said judgment was challenged before the Hon'ble Supreme Court. But, subsequently, the said judgment was affirmed by the Hon'ble Supreme Court and the petitioner-Company became entitled to refund/adjustment of huge amount which the respondents illegally collected towards cess subsequent to the period 25.10.1989. 13. But, it has been stated that in spite of the above, the respondent No.3 sent a requisition to respondent No.2 for initiating a certificate proceeding for realization of the said royalty, whereupon Certificate Case No.50/91-92 was registered and notice was issued to the petitioner to pay the said amount. The petitioner-Company appeared and filed detailed objection under Section 9 of the Bihar and Orissa Public Demand Recovery Act, 1914. However, the Officer deputed to instruct the lawyer appearing before the respondent No.2 could not properly instruct and instead of giving the correct position, he intimated that the coal which was written off had actually burnt. The petitioner-Company appeared and filed detailed objection under Section 9 of the Bihar and Orissa Public Demand Recovery Act, 1914. However, the Officer deputed to instruct the lawyer appearing before the respondent No.2 could not properly instruct and instead of giving the correct position, he intimated that the coal which was written off had actually burnt. On the basis of the submissions made, the respondent no.3 by an order dated 03.03.1992 was pleased to hold that the petitioner is liable to pay the amount of royalty and interest demanded thereon. The petitioner immediately thereafter filed an application for review of the said order, setting out the correct facts as stated hereinabove. But the respondent No.3 rejected the said application by an order dated 09.03.1992. Being aggrieved thereof, a writ application was filed before the Patna High Court, Bench at Ranchi being CWJC No.997 of 1992(R). This Court was pleased to issue notice upon the respondents and a direction was issued to deposit a sum of Rs.10.00 Lakhs without prejudice to the rights and contentions. It is stated that the petitioner, in compliance of the order passed by this Court, deposited a sum of Rs.10.00 Lakhs by an A/c. Payee cheque No.9070893 dated 04.04.1990 drawn in favour of the respondent No.3. The said writ petition, CWJC No.997 of 1992(R) came up for hearing before this Hon'ble Court and vide order dated 18.07.1996, the said writ application was allowed by quashing the orders dated 03.03.1992 and 09.03.1992. The Hon'ble Court was further pleased to remit the matter to the Certificate Officer to decide the objection filed by the petitioner. The Hon'ble Court also made it clear that in case the learned Certificate Officer shall have difficulty in deciding the objection, he shall also permit evidence to be adduced under Section 10 of the Act and thereafter proceed to determine the question raised by the parties. It has been submitted that immediately after disposal of the writ application, the petitioner started submitting petitions for allowing the petitioner to lead evidence and also to permit the petitioner to file supplementary objection under Section 9 of the Bihar and Orissa Public Demand Recovery Act. It has been submitted that immediately after disposal of the writ application, the petitioner started submitting petitions for allowing the petitioner to lead evidence and also to permit the petitioner to file supplementary objection under Section 9 of the Bihar and Orissa Public Demand Recovery Act. It is stated that for almost 8 to 9 years after the disposal of the writ petition being CWJC No.997 of 1992(R) on 18.07.1996, the respondent No.3, the Certificate Office, sat tight over the matter without passing any orders on the petitions filed by the petitioner and all of a sudden, by an order dated 12.02.2005 has been pleased to reject the objection filed by the petitioner purportedly on the ground that Civil Appeal No.8390-8396 of 2001 relating to M/s.C.C.L. has already been dismissed by the Hon'ble Supreme Court of India in its order dated 24.09.2003. 14. The petitioner challenged the order dated 12.02.2005 before this Court by filing writ petition being WPC No. 4398 of 2005, which was disposed of. Being aggrieved by and dissatisfied by the said order, the petitioner preferred an appeal before the Hon'ble Division Bench of this Hon'ble Court being L.P.A. No. 250 of 2012, which was allowed by order dated 16.04.2013 and the matter was again remanded to the learned Certificate Officer, who was directed to give opportunity to the petitioner to lead evidence, which may be documentary as well as oral also with respect to the petitioner's claim of payment of amount against the liability in question and the Certificate Officer was further directed to determine the issue preferably by 30th June, 2013. 15. On being remanded, the petitioner filed a detailed petition/objection before the Certificate Officer to which a rejoinder was filed by the respondents. The Certificate Officer vide order dated 31.08.2013 rejected the petition of the petitioner filed under Section 9 of the Bihar & Orissa Public Demand Recovery Act and directed for issuance of certificate for the entire certificate dues along with interest. 16. Being aggrieved with order dated 31.08.2013, passed by learned Certificate Officer, (Mining), Hazaribagh, in Certificate Case No. 50/1991-92, the petitioner has again approached this Court by invoking the writ jurisdiction of this Court conferred under Article 226 of the Constitution of India. 17. 16. Being aggrieved with order dated 31.08.2013, passed by learned Certificate Officer, (Mining), Hazaribagh, in Certificate Case No. 50/1991-92, the petitioner has again approached this Court by invoking the writ jurisdiction of this Court conferred under Article 226 of the Constitution of India. 17. It is evident from the aforesaid factual aspect that the subject matter of dispute is the liability/payment of royalty with respect to the "non-vendible stock of coal?, which has been assessed to be 8,99,789 tons amounting to Rs. 79,68,755.95/-. 18. It is the case of the writ petitioner-CCL that the moment the non-vendible stock has been assessed to be 8,99,789 tons then the demand with respect to non-vendible stock was required to be assessed on the basis of rate of the coal rather the different parameters ought to have been adopted by the District Mining Officer considering the fact that non-vendible stock cannot be compared with the nature of coal. 19. Submission has been made that non-vendible stock has also been accumulated at the time of mining operation in extracting the minerals like, coal herein. 20. The District Mining Officer, Hazaribagh, although, has admitted the aforesaid fact of non-vendible stock to the extent of 899789 tonne as per the documents available at Annexure-7 duly been signed by the District Mining Officer on 28.06.1992, but even then, while raising the demand said to be public demand within the meaning of Section 3 of the BIHAR AND ORISSA PUBLIC DEMANDS RECOVERY ACT , 1914, the said quantum of non-vendible stock (899789 tonne) has also been assessed the rate of coal at the time of assessing the royalty of the coal. 21. The said demand has been requisitioned for its recovery before the Certificate Officer and based upon the same, the Certificate Officer has initiated a proceeding and issued notice under Section 7 of the Act, 1914. 22. The petitioner has filed his objection, as required to be filed under Section 9 of the Act, 1914 stating inter-alia therein that the statement of payment of royalty for the period of 1989-1990 has duly been verified by the District Mining Officer and non-vendible stock deducted in the month of June, 1989, was reconciled. 23. But according to the writ petitioner, the said quantum of reconciled stock of non-vendible coal has even not been referred by the District Mining Officer, while assessing the Public Demand. 24. 23. But according to the writ petitioner, the said quantum of reconciled stock of non-vendible coal has even not been referred by the District Mining Officer, while assessing the Public Demand. 24. It has been contended that although the matter has been remitted before the Certificate Officer twice but the same has not been adjudicated and again, the demands have been raised with respect to non-vendible stock to the extent of 899789 tonne, therefore, the present writ petition. 25. Mr. Amit Kr. Das, learned counsel for the writ petitioner has submitted that the petitioner is not escaping from making payment of royalty over the non-vendible stock but the question which has been raised that royalty cannot be charged with respect to non-vendible stock at par with the rate of coal. But that aspect of the matter has not been considered by the District Mining Officer before raising the demand within the meaning of Section 3 of the Act, 1914. 26. The counter affidavit has been filed on behalf of the State. 27. We have gone through the content thereof. 28. The Secretary, Mines and Geology Department, Govt. of Jharkhand along with the Director, JSMDC, are present. 29. It needs to refer that the Secretary, Mines and Geology Department is present in pursuant to the order dated 25.08.2025 which we have dispensed with by passing the order as above but this Court has requested the Secretary to assist the Court on the issue involved in the present case. 30. The Secretary has submitted that the issue needs to be considered by the District Mining Officer itself. 31. We have heard the learned counsel for the parties and gone through the content as available in the writ petition as also the counter affidavit. 32. The question which is to be decided with respect to the rate of royalty; “Whether there will be same rate of royalty over the non-vendible stock of coal.” 33. As per the factual aspect involved in the present case, the Public Demand has been raised against the writ petition and after being requisitioned by the District Mining Officer, who came to the conclusion by holding the writ petitioner to be debtor. 34. As per the factual aspect involved in the present case, the Public Demand has been raised against the writ petition and after being requisitioned by the District Mining Officer, who came to the conclusion by holding the writ petitioner to be debtor. 34. The Certificate Officer has initiated a proceeding on receipt of the said certificate for recovery of the amount as per the reference made in the certificate by issuing notice upon the writ petitioner under Section 7 of the Act, 1914. 35. The writ petitioner has been asked to file objection as required to be filed under Section 9 of the Act, 1914.The writ petitioner has filed objection under Section 9 . 36. The petitioner, in the objection, has taken reference of the said admission on the part of the District Mining Officer with respect to reconciling non-vendible stock as per the certificate given by the District Mining Officer dated 20.06.1992, appended as Annexure-7. 37. The said statements find mentioned in the objection, as has been appended at running page-68 of the writ petition, part of para-(i) thereof. 38. The Certificate Officer has proceeded and has taken measures for recovery of the said amount. The writ petitioner has come to this Court by filing writ petition being CWJC No. 997 of 1992(R) invoking the jurisdiction conferred under Article 226 of the Constitution of India. 39. This Court, vide order dated 18.07.1996 after quashing the order passed by the Certificate Officer has remitted the matter before the Certificate Officer for passing the order afresh. 40. The Certificate Officer has again taken the same view, in consequence thereof, the writ petitioner has again approached to this Court by filing the writ petition and this Court again, quashed the order passed by the Certificate Officer by remitting it to pass the order afresh. 41. Again, the same order has been passed and thereby, the writ petitioner is again before this Court by filing the present writ petition. 42. We have gone through the consecutive orders passed by the Certificate Officer but we have not found any assessment with respect to the fact about reconciled non-vendible stock as per the „statement of payment of royalty? given by the District Mining Officer. 43. 42. We have gone through the consecutive orders passed by the Certificate Officer but we have not found any assessment with respect to the fact about reconciled non-vendible stock as per the „statement of payment of royalty? given by the District Mining Officer. 43. This Court, although, has interfered with the order passed by the Certificate Officer but we are of the view that the issue which is being raised in the writ petition is also required to be considered by the District Mining Officer. 44. Such requirement is there on the basis of object of the BIHAR AND ORISSA PUBLIC DEMANDS RECOVERY ACT , 1914, since, the Certificate Officer will have no domain to appreciate this fact, rather, the Certificate Officer to go by the demand, as raised by the Requisitioning Officer. 45. The thing is to be referred herein that in none of the writ petitions, requisitions have ever been challenged by the writ petitioner-CCL, rather, the best course ought to have been available with the CCL to challenge the requisition but without challenging the said requisition, they straightaway have challenged the Certificate Proceedings and present one is the third again to challenge that. 46. We, however, are not refraining ourselves in entertaining the writ petition on the aforesaid ground considering the fact that the issue, which has been raised requires to be considered so that the matter be set at rest and the multiplicity of proceedings, be avoided either in the certificate proceeding or before this Court. 47. This Court, therefore, is of the view that since the issue of demand as available in the requisition is the crux herein, which can only be adjudicated on consideration of the issue by the District Mining Officer, the Requisitioning Authority holding the writ petitioner to be the certificate debtor. 48. The law is well settled that if any error has been crept up at the original stage, the same cannot be rectified in the later stage, rather, the error if required any rectification, the same is to be considered by the original authority, reference in this regard may be made to the judgment rendered by the Hon?ble Apex Court in the case of Ritesh Tewari and Another v. State of Uttar Pradesh and Others [(2010) 10 SCC 677] wherein at paragraph 32 the Hon'ble Apex Court has held as under :- “32. It is settled legal proposition that if an order is bad in its inception, it does not get sanctified at a later stage. A subsequent action/development cannot validate an action which was not lawful at its inception, for the reason that the illegality strikes at the root of the order. It would be beyond the competence of any authority to validate such an order. It would be ironical to permit a person to rely upon a law, in violation of which he has obtained the benefits.” 49. In another judgment rendered in State of Orissa and Another v. Mamata Mohanty [ (2011) 3 SCC 436 ] , similar view has been taken by the Hon'ble Apex Court at paragraph 37 which is being quoted hereunder :- “37. It is a settled legal proposition that if an order is bad in its inception, it does not get sanctified at a later stage. A subsequent action/development cannot validate an action which was not lawful at its inception, for the reason that the illegality strikes at the root of the order. It would be beyond the competence of any authority to validate such an order. It would be ironic to permit a person to rely upon a law, in violation of which he has obtained the benefits. If an order at the initial stage is bad in law, then all further proceedings consequent thereto will be non est and have to be necessarily set aside. A right in law exists only and only when it has a lawful origin.” 50. This Court, is adverting to the factual aspect of the present case that herein since the decision of the requisitioning authority, the District Mining Officer has never been challenged, even though, the District Mining Officer has given „statement of payment of royalty? of reconciled non- vendible coal, as per Annexure-7 to the writ petition, hence, the matter needs to be considered by the District Mining Officer, Hazaribagh, whether the rate of non-vendible stock, can have the same rate of royalty as per the rate of royalty of the coal of different nature as per the schedule of the MMDR Act, 1957. 51. This Court, in view thereof, is of the view that the order dated 31.08.2013 passed by the Certificate Officer (Mining), Hazaribagh in Certificate Case No.50/1991-92 therefore needs interference. 52. 51. This Court, in view thereof, is of the view that the order dated 31.08.2013 passed by the Certificate Officer (Mining), Hazaribagh in Certificate Case No.50/1991-92 therefore needs interference. 52. Accordingly, the order dated 31.08.2013 passed by the Certificate Officer (Mining), Hazaribagh in Certificate Case No.50/1991-92, is hereby, quashed and set aside. 53. In the result, the instant writ petition stands allowed. 54. The matter is remitted before the District Mining Officer, Hazaribagh to answer the issue as has been formulated hereinabove, in accordance with law. 55. The District Mining Officer will take decision after providing an opportunity of hearing to the writ petitioner within the period of three months. 56. It is made clear that this Court has not expressed any view on the merit of the issue. 57. Personal appearance of the Officers, i.e., the Secretary, Mines and Geology Department and the Director, Department of Mines and Geology, Government of Jharkhand who are present before this Court, is dispensed with. 58. Pending Interlocutory Application, if any, stands disposed of.