THE HON'BLE SRI JUSTICE P.S.NARAYANA W.P.No.459 of 2008 ORDER:- This Court issued rule nisi on 24-1-2008. 2. Counter affidavit and reply affidavit also had been filed. 3. Heard Sri V.Raja Gopal Reddy, the learned Counsel representing the Writ Petitioner and the learned A.G.P. for Mines and Geology had taken this Court through the respective stands taken by them in the affidavit filed in support of the writ petition, in the counter affidavit and also the reply affidavit and further placed reliance on certain decisions to substantiate their submissions. 4. Heard the Counsel in elaboration and perused the respective stands taken by the parties in the affidavit filed in support of the writ petition, in the counter affidavit and the reply affidavit as well and also the other material placed before this Court. 5. This Writ Petition is filed for a Writ of Mandamus declaring the Letter No.15914/Vg/2007, dt.7-7-2007, of the first respondent informing the petitioner to approached the Assistant Director of Mines and Geology, with documentary evidence of payment of Royalty by the Sponge Iron Companies, for the mineral and obtain transit passes for trading of Iron Ore fines as illegal and ultravires of the Mines and Minerals (Development & Regulation) Act, 1957 (hereinafter in short referred to as ‘the Act’ for the purpose of convenience) and pass such other suitable orders. 6. The relevant portion of the order under challenge dt.7-7-2007 reads as hereunder:- “In view of the above, M/s.Richa Enterprises is informed to approach the Assistant Director of Mines and Geology concerned along with documentary evidence of payment of Royalty by the said Sponge Iron Companies for the mineral and obtain transit passes for trading of Iron Ore fines. In absence of which the action taken by the checking squads is within ambit of various Acts and Rules. Alternatively Sponge Iron Companies who are also Mineral Dealer can obtain and Transit Permits and issue to whomsoever dispatch Iron Ore finer from them duly following the procedure laid down under Andhra Pradesh Mineral Development Rules, 2000.” 7. M/s.Richa Enterprises, the petitioner had stated in para 3 of the affidavit filed in support of the writ petition that the petitioner is a Trader of DUST which is a wasteful by-product of Sponge Iron Plants which are situated all around Ranga Reddy, Mahaboobnagar, Kurnool, Nalgonda and Hyderabad Districts. The DUST is generated after crushing the Iron Ore which these plants are getting from various sources in Andhra Pradesh, Karnataka and Madhya Pradesh. The petitioner is not a Mining Leaseholder for Iron Ore. The petitioner does not dig or extract Iron Ore from any area nor transport the Iron Ore Minerals to any place. The petitioner is only a Trader of DUST and has no role to play for the payment of Royalty. The Iron Ore Mining Leaseholders and the Sponge Iron plants who are consuming the Iron Ore may be responsible for payment of Royalty to the concerned authorities of Mines Department. During the manufacturing process of Sponge Iron Ore plant the DUST comes out as a by-product which is dumped in heaps. It is being thrown outside the Sponge Iron Ore plants causing pollution. It is not useful for any other purpose. The petitioner also stated that they supply the said DUST which is a wasteful by-product after processing of Iron Ore and they are not given any proof of payment of Royalty by the generators of the DUST. It is purely a trade and there is a compulsion for the Sponge Iron Plants for its disposal because it is causing lot of problems like pollution in and around the agricultural areas of the Sponge Iron Plants. There is also imperative need for the plants as the dust occupies huge space and there is a constant pressure from Pollution Control Board for its disposal. The dust is not at all useful in any manner to them. The Cement Industries are willing to purchase this DUST in connection with their manufacturing process. It is also stated that the DUST which the petitioner supplies is not a mineral nor the petitioner conducts any mining operations for transporting the same. The petitioner is only a link between the generator of DUST i.e., Sponge Iron Ore Plants and the Cement Industries which consumes the dust. No Royalty is payable on the DUST as it is purely a non-mineral. Further it is averred in para 5 of the affidavit filed in support of the writ petition that while transporting the DUST by the petitioner, the lorries were stopped by the Vigilance Department of the respondents who are demanding proof of payment of Royalty and they are threatening to impose a penalty of Rs.25,000/- per lorry if proof of payment of Royalty is not produced. While the petitioner has only the way bills, D.C.s and also the sales/invoices of the plants generating the DUST MATERIAL which are valid documents being proof of involving for the transportation of the DUST and that the petitioner is not liable to pay Sales Tax (VAT) to the Commercial Tax Department. The petitioner is not given any proof of payment of Royalty by the producers of this material i.e., DUST. Subsequently the petitioner approached the first respondent and submitted a representation on 2-5-2007 for issuing clarification or necessary instructions to the Vigilance Department directing them not to insist for proof of payment of Royalty on the DUST. The petitioner is finding it difficult to carry on the business and it may incur heavy losses if the lorries transporting the DUST are stopped by the Vigilance Department of the respondents. The petitioner also approached the 2nd respondent to issue transit slips (Form-E) so that the lorries representing the DUST are not stopped by the Flying Squad of the Vigilance Department of the Directorate of Mines and Geology. It is also brought to the notice of this Court that the DUST which the petitioner transporting helps in controlling the pollution as otherwise the said heaps of the DUST will destroy the standing crop in the neighbouring agricultural fields. It is also stated that in these circumstances unless this Court intervenes and issue suitable directions to the respondents, the petitioner will suffer hardship and irreparable loss. It is further stated that as the harassment by the Vigilance Squad of the Mines Department was causing very much inconvenience, the filed Writ Petition W.P.No.12795/2007 and this Court was pleased to dispose of the said Writ Petition with the following directions to the 1st respondent:- “It is to be noted that the petitioner has already made a representation before the first respondent – Director of Mines and Geology requesting to issue suitable instructions to the concerned Department not to insist on payment of Royalty, since the Dust being transported by the petitioner is not a mineral nor the petitioner is involved in any mining operations. Since the said representation is still pending before the first respondent, without expressing any opinion on merits, I deem it appropriate to dispose of the Writ Petition with a direction to the first respondent to consider the representation of the petitioner and pass appropriate orders in accordance with law within a period of four weeks from the date of receipt of a copy of this order. No costs.” Thereupon, the first respondent passed the impugned Order dt.7-7-2007 and the relevant portion of the order already had been referred to above. It is also the case of the petitioner that the 1st respondent had not applied his mind at all to the direction made by this Court. Hence, a representation DUST.29-8-2007 had been filed for issue of transit passes. It is also stated that the petitioner cannot insist the owners of the Sponge Iron Plants to produce documentary evidence of payment of Royalty and also cannot request them to obtain transit passes for trading for the DUST which is a by-product of the said plants. Further it is stated that the manufacturers of Sponge Iron are not extracting the Iron Ore from the Mines. They purchase Iron Ore from the lessees who pay the Royalty to the State Government. The Iron Ore looses its identity after the manufacturing process and the last end/by-product is the DUST which cannot be interpreted as “mineral”. It is only a waste product which can be put to use by the Cement Industries. It is further stated that as per Section 2(d) of the Act ‘Mining Operations’ means any operations undertaken for the purpose of winning any Mineral. Section 3(e) of the Act defines ‘Minor Mineral’ as follows: “Minor Minerals” means building stones, gravel, ordinary clay, ordinary sand other than sand used for prescribed purposes, and any other mineral which the Central Government may, by Notification in the official Gazette, declare to be a Minor Mineral.” So far, the Central Government has not issued any Notification including DUST which is a waste and by- product of Sponge Iron Plants as a ‘Minor Mineral’. The word “mineral” is understood as meaning of a substance obtained from underneath the surface of the earth by digging. Thus, the word is elastic and its meaning depends upon the setting and context for which it is used. Further it is stated that the expression Royalty is not defined either in the Act or in the Rules framed there- under by the Central Government. The meaning of the word ‘Royalty’ has been considered in some judicial decisions but they are mostly based on different dictionaries. “Royalty” is a charge by the owner of minerals from those to whom he gives the concession to remove them and the charge is on production, the rate being fixed according to weight. It is also stated that Royalty is a payment made to the land owner by the lessee of the mine, in turn of the privilege of working it. The word ‘Royalty’ is used in secondary sense to signify that part of the reddendum which is variable and depends upon the quantity of minerals taken out. It differs from rent. It is a kind of levy in proportion to the minerals worked. It is an imposition of tax or impost and comes under the definition given in Article 366 Clause (28) of the Constitution. From the above, it can be seen that the Royalty is payable only by the Lessee who extracts the mineral. The petitioner will not come any where as a Mine Owner or extracting the Mineral from the earth. The respondent cannot insist for showing the documentary evidence of payment of Royalty by the petitioner. Unless this Court intervenes and issue appropriate direction, the petitioner will be put to great hardship and irreparable loss. It is also further stated that as per clause 21 (iii) of II Schedule to the Act, a levy of Rs.4/- per tonne can be collected as Royalty after the beneficiation of Iron Ore lumps by the Sponge Iron Plants. The DUST generated may corresponds to low grade Iron Ore containing 40% or less which is under the same clause (iii) of the II schedule to the Act. The petitioner has informed the first respondent of his willingness to pay the said amt, for which there is no response whatsoever. Thus, the petitioner as an alternative submit that this Court may be pleased to issue suitable direction to the respondents to accept the payment of Rs.4/- per tonne towards Royalty as per clause 21 (iii) of II Schedule to the Act, though legally the petitioner is not entitled to pay the same. In such circumstances, the present Writ Petition had been filed. 8. The representation dated 29-8-2007 made to the 1st respondent – the Director, Department of Mines and Geology also had been placed before this Court and the said representation reads as hereunder:- “Kindly refer to your letter dated 7-7-2007 mentioned above, received on 8-8-2007. In this letter as directed by you, we approached The Assistant Director of Mines and Geology, Nallakunta, Hyderabad, for issue of Transit Passes. But he showed his inability to issue the same without the documentary evidence of payment of Royalty by the Sponge Iron Companies for the Iron Ore Fines obtained from them for our trading Fines. You are aware of the fact that, we are not in a position to obtain the proof of payment of Royalty in advance before lifting of the material from the Sponge Iron Plants. We also believe that, nobody obtains the proof of payment of Royalty prior to the dispatch of material, unless and until the material is lifted and transported to the destination, the transit permit cannot be obtained, hence we are not in a position to obtain the proof of payment of Royalty in advance for the purpose of Transit Passes. In such case, we as a business enterprise do not understand as how to conduct the business and obtain the proof of Royalty before hand without lifting the material, so as to obtain the transit permit from our concerned The Assistant Director, Department of Mines and Geology. In this connection, we would like to draw your kind attention to the para 3 of the Judgment given by Hon’ble High Court in Writ Petition No.12795/2007 (a copy of the same is enclosed for your kind reference), wherein, the order says that, the concerned Department not to insist the payment of Royalty, since “the dust being transported by the petitioner is not a mineral nor the petitioner is involved in any mining operations”. Hence, we pay that, the Department should not insist on us for the proof of payment of Royalty. To support our statement, we have submitted the copy and herewith enclosing again the Judgment given in the case of S.B.Sinha, C.J. and M.H.S.Ansari J of West Bengal v. Purulia District (AIR 2000 CALCUTTA 163) held that “the contractor also cannot supply the Certificate regarding payment of Royalty which is only the obligation of the lessee of the contractor appointed by quarry or the mines but the contractors who are merely the purchasers of minor minerals extracted by the lessee of a mine, they are not at all required either to pay royalty as has been held by this Court as referred to above or to supply Royalty certificate which is not in their hands”. As referred in our representation Dt.2-5-2007, wherein, we have said that this material (DUST) is a by-product of the Sponge Iron Plant. The Sponge Iron Plant obtains Iron Ore lumps which has suffered Royalty from Rs.21.50 to Rs.12.00 per tonne depending on the quality of the Ore having percentage of Fe between 62 to 65 percent. This material comes under the Second Schedule, in item 21 (i)(a & b). After the beneficiation of Iron Ore lumps mentioned above by the Sponge Iron Plants, the dust generated corresponds low grade ore containing 40 percent or less which is under the same schedule (iii), which attracts Rs.2.50 per tonne only. Since this material is generate in abundance in Sponge Iron Plants and it is health hazard and there is an imperative need for it immediate disposal and fortunately it can be used by the Cement plants. In view of the above, we propose to pay the Royalty to the Department in advance for getting a permit 1000 MTs by paying through cheque bearing No.134638, drawn on Vijaya Bank, for Rs.2,5000/- towards in order to avoid the provisions of imposing penalty under various Acts and Rules of the Department. Therefore, we request you to reconsider our representation in the proper perspective and issue us the Transit Passes on the merit of the case. Your speedy action can alleviate the sufferings.” 9. Counter affidavit had been filed on behalf of respondent No.3 – the Assistant Director of Mines and Geology, Nallakunta, Hyderabad. In para 2 of the said counter affidavit it is stated that the Director of Mines and Geology, Hyderabad vide Lr.No.15914/Vg/07, Dt.7-7-07 informed M/s.Richa Enterprises to approach Assistant Director of Mines and Geology, Hyderabad concerned along with documentary evidence of payment of Royalty by the Sponge Iron companies for the mineral dispatched and obtain transit passes for trading the Iron Ore fines in accordance with Mineral Concession Rules, 1960 and A.P.Mineral Dealer Rules, 2000. Alternatively, Sponge Iron companies who are mineral dealers can obtain transit passes and issued the same to whomsoever they dispatch the Iron Ore fines by duly following the procedure laid down under A.P.Mineral Dealer Rules, 2000. It is also stated that the leaseholders of Major minerals should obtain permits along with transit forms after payment of advance Royalty and transport the mineral along with the permits issued by the Mines and Geology Department in accordance with clause 39(i) & (ii) of Part V of covenant of mining lease deed executed in form “K” under Rules 31 r/w Rule 27(2)(a) of Mineral Concession Rules, 1960, the Sponge Iron manufacturers are supposed to produce Iron Ore mineral along with transit forms issued by the Mines and Geology Department. Since, the Sponge Iron manufacturers are involved in procuring of Iron Ore and disposal of Iron Ore dust which is a mineral product and a mineral as defined under Rule 3(a) of the Act, they should get registered under A.P.Mineral Dealer Rules, 2000. The Iron Ore dust which is a mineral product produced out of the mineral ore, shall be dispatched from the Iron Ore plant with the Transit Passes in form “E” issued by the Mines and Geology Department as per A.P.Mineral Dealer Rules, 2000. As the petitioner is involved in trading of Iron Ore dust (Mineral product) shall registered under A.P.Mineral Dealer Rules, 2000. The petitioner should procure the Iron Ore dust from Sponge Iron manufacturers along with the Transit Passes issued to the Sponge Iron manufacturers. The petitioner after producing the Transit Passes issued by the Sponge Iron manufacturers to the concerned Assistant Director of Mines and Geology as a documentary evidence of having paid the Royalty, should obtain the Transit Passes from the Assistant Director of Mines and Geology, Hyderabad for transportation of Iron Ore dust in accordance with A.P.Mineral Dealer Rules, 2000. It is the responsibility of the petitioner to procure the Iron Ore dust which is a mineral product from Sponge Iron manufacturers with documentary evidence of having paid Royalty. The contention of the petitioner that the Iron Ore dust is a waste material is not correct as it is a mineral product useful in many industries and a mineral as defined under Section 3(a) of the MM (D&R) Act, Sec.3 categorically states that minerals include all the minerals and therefore even the dust is a mineral as explained under the said provision. It is also stated that the petitioner and Sponge Iron Ore manufacturers are Mineral Dealers as per A.P.Mineral Dealer Rules, 2000 and shall do processing, business or trading or storage etc., of the mineral iron / Iron Ore products in accordance with A.P.Mineral Dealer Rules, 2000. It is also averred that Iron Ore fines/dust is a mineral product which has to be transported along with Transit Passes in form “E” issued by the Mines and Geology Department as A.P.Mineral Dealer Rules, 2000. In the absence of such forms, the vehicles transporting Iron Ore fines/dust are liable to penalty of Rs.25,000/- per vehicle under Section 21(1) read with Section 4(1)(A) of the Act. Hence, the action of the Vigilance Officials of the Department to impose the penalty of Rs.25,000/- per lorry transporting Iron Ore fines without Transit Passes in form “E” is well within the ambit of Rules and Act. Further it is stated that the Director of Mines and Geology, Hyderabad through Lr.No.15914/Vg/2007, dated 7-7-2007 informed M/s.Richa Enterprises that the Government had framed A.P.Mineral Dealer Rules, 2000 with an intention to bring awareness and accountability on payment of Royalty by firms dealing with minerals and mere obtaining Mineral Dealer License will not entitle them for issue of tlps until and unless the firm produces documentary evidence in proof of having paid Royalty for the mineral under transportation, because the consumer of Iron Ore dust i.e., Cement units are again dealers under A.P.Mineral Dealer Rules, 2000. Finally, M/s.Richa Enterprises was informed to approach the Assistant Director of Mines and Geology along with documentary evidence of payment of Royalty by the said Sponge Iron Companies for the mineral and obtain Transit Passes for trading of Iron Ore fines. Alternatively, Sponge Iron companies who are also mineral dealers can obtain transit permit and issued the same to whomsoever they dispatch the Iron Ore fines by duly following the procedure laid down under A.P.Mineral Dealer Rules, 2000. The petitioner was also informed in the absence of documentary evidence, the action taken by the checking squads is well within the ambit of various Acts and Rules. Further it is stated that as per Section 3(a) of the Act, the minerals, all minerals, except mineral oils and the other definitions mentioned by the petitioner are not relevant in the instant case. It is further stated that as per Section 9 (A)(1) of the Act, the leaseholders should pay Royalty on any mineral removed or consumed. The rates of Royalty as per schedule II under Section 9 of the Act for Iron Ore lumps and fines are as follows:- S.No. Type of Iron Ore Unit Rate of Royalty (in Rupees) I. LUMPS (a) With 65% Fe content or more Tonne 27 (b) With 62% Fe content or more but less than 65% Fe content Tonne 16 (c) With less than 62% Fe content Tonne 11 II FINES (a) With 65% Fe content or more Tonne 19 (b) With 62% Fe content or more but less than 65% Fe content Tonne 11 (c) With les than 65% Fe content Tonne 8 III Concentrates prepared by benefication/or concentration of low grade oe containing 40% Fe or less Tonne 4 Further it is stated that the Director of Mines and Geology, Hyderabad in Lr.No.15914/Vg/07, dt.7-7-2007 informed the petitioner to approach the Assistant Director, Mines and Geology, Hyderabad with documentary evidence of payment of Royalty and the same is within the ambit of Mineral Concession Rules, 1960, A.P.Mineral Dealer Rules, 2000 and the Act. 10. In the reply affidavit filed by the petitioner, specific stand had been taken that the by-product cannot be equated with the main Iron Ore mineral. Similarly, the Sponge Iron which is by-product to Iron Ore mineral, is not liable for any cess or Royalty. Further it is stated that the coal which attracts Royalty is a mineral. After it is crushed into fine dust for its use, it does not attract any Royalty whatsoever. Likewise, steel is a product of Iron Ore and cement is a product of limestone mineral. The transporters or dealers of steel and cement are not demanded to produce payment of Royalty. Similarly the dust which is supplied by the petitioner to various cement plants is admittedly a by-product and a waste material of Sponge Iron plants. They throw the dust outside the factories which will cause environmental disturbance to the neighbouring agriculturists. Further it is stated that the Sponge Iron Ore plants are industrial units which are registered with the Department of Industries. They were given licences by the Director of Industries and they are not mineral dealers nor have anything to do with the Department of Mines and Geology. It is also reiterated by the petitioner that the dust cannot be equated with the mineral and it cannot attract any Royalty nor the petitioner can be demanded to produce proof of payment of Royalty. It is further averred that the invoice-cum-delivery challan is a proof enough that the material is purchased locally from Sponge Iron plants. The contention of the respondent No.3 that the vehicles transporting the dust areliable to penalty of Rs.25,000/- per vehicle under Section 21(1) read with Section 4(1)(a) of the Act is not applicable to transporting the material ‘dust’, which is a product of Iron Ore thrown out as a waste material by Sponge Iron plants/industries. Further the urgency for the disposal of the matter also had been pleaded in