IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED:21.02.2011 CORAM: THE HON'BLE MR.JUSTICE P.JYOTHIMANI WRIT PETITION Nos.6042, 9475 and 10215 of 2003 B.C.Raman .. Petitioner in WP.6042/2003 R.Ganesan .. Petitioner in WP.9475/2003 T.Kujendran .. Petitioner in WP.10215/2003 vs. The District Collector Dharmapuri District Dharmapuri. .. Respondent in WP.6042/2003 The Revenue Divisional Officer Tiruchengode Taluk Namakkal District. .. Respondent in WP.9475/2003 1.The Revenue Divisional Officer Mayiladuthurai Taluk Nagapattinam District. 2.The District Collector Nagapattinam District Nagapattinam. .. Respondents in WP.10215/03 Writ Petitions filed under Article 226 of the Constitution of India praying for issuance of a Writ of Certiorari as stated therein. to call for the records of the respondents proceedings bearing (1) Na.Ka.No.1925/91(A mines) dated 4.2.2002 which was signed on 14.1.2003 and received by the petitioner on 25.1.2003 (in W.P.No.6042/03) 2.Na.Ka.2346/02/B dated 28.1.2003 signed and dispatched on 18.02.2003 and received by the petitioner on 28.02.2003(in W.P.No.9475/2003) 3.Na.Ka.No.220/2003 A4 dated -01-2003 signed and dispatched on 24.1.2003 as confirmed by the proceedings of the 2nd Respondent bearing RC.No.176/2002/G & M dated 21.03.2003 (in W.P.No.10215/2003 and quash the same. https://hcservices.ecourts.gov.in/hcservices/ For petitioners in all WPs : Mr.K.Ramakrishna Reddy For respondents in all WPs : Mr.R.Thirugnanam Spl.Govt. Pleader COMMON ORDER In all these cases, the petitioners have challenged the penalty imposed for the alleged illicit quarrying. 2. The writ petitioner in W.P.No.6042 of 2003, is the owner of patta land measuring 80 cents in survey No.464/1 and 20 cents in survey No.905/1 in Nagojanahalli village, Krishnagiri taluk, Dharmapuri District, which contains gray granite deposit. The Government in G.O.Ms.No.960, Industries Department dated 16.8.1994, reserved the entire gray granite deposited areas of Dharmapuri District including those in patta lands for exploitation by the State owned Corporation, viz., Tamil Nadu Minerals Limited. Challenging the said Government Order, the petitioner filed W.P.No.6154 of 1989 and there was an order of injunction in favour of the petitioner up to 12.10.1990. On that date, the Division Bench, while dismissing the writ petition, upheld the validity of the G.O. in a batch of writ petitions. (a) It is stated that some of the aggrieved persons approached the Supreme Court and there was an order of status quo as on 12.10.1990, based on which the petitioner was permitted to quarry continuously and the petitioner paid the seigniorage fees to transport the materials quarried and for transport permit and the petitioner paid a sum of Rs.96,372/- in excess. Since the transport permit was not granted in respect of granite quarried before 12.10.1990, the petitioner filed W.P.No.789 of 1991, which was allowed on 22.3.1991 directing the respondent to issue transport permit to transport the granite blocks quarried prior to 12.10.1990, for which seigniorage fees had already been paid. (b) Since the petitioner had already paid the seigniorage fees, with the support of the order passed in the writ petition in W.P.No.789 of 1991, he is stated to have transported the total quarried materials of 147-306 Cbm to meet foreign supply and according to the petitioner, the seigniorage fee for the said quarried goods was Rs.29,461.20 and the petitioner had already paid Rs.96,372 and hence, the petitioner is entitled for refund of Rs.66,910.80. According to the petitioner, thereafter he has not removed any stone quarried and the entire blocks are still lying unfit for export. The petitioner has been involved in 100% export business and the said 147-306 Cbm was the only marketable quantity of stones transported and exported and the Village Administrative https://hcservices.ecourts.gov.in/hcservices/ Officer has also taken the measurement of rest of blocks and reported to the respondent stating that the left out blocks are 12 undressed blocks. (c) It is stated that out of the marketable blocks of 59 from the total production of 92 blocks, 32 were already exported and 15 blocks were dressed and kept at the quarry and 12 are to be dressed. Therefore, according to the petitioner, there is no illicit transport. The respondent sent a notice on 14.8.1991 alleging that out of 92 blocks only 27 blocks were found at the quarry site and 65 were not found. Except 32 which had been exported, all other blocks are dumped in the quarry site. After the notice dated 14.8.1991, the petitioner appeared before the respondent and explained that there was no illicit transport and thereafter, it is stated that the District Collector has presumably dropped all proceedings. However, after 10 years, the respondent sent a notice dated 11.4.2001 alleging that 275-551 Cbm was illicitly transported and issued a show-cause notice, as to why penalty of a sum of Rs.10,44,354/- should not be levied which includes seigniorage of Rs.55,111/-, local cess of Rs.24,800/-, local cess surcharge of Rs.1,37,778/- and penalty amount (15 time of local cess) Rs.8,26,665/-. (d) According to the petitioner, as per the judgment of the Supreme Court, the State Government has no jurisdiction to levy or demand or collect local cess and local cess surcharge. The petitioner gave a reply on 16.5.2001 denying the allegations and also stated that the petitioner stopped quarrying in the year 1990 itself. After the reply was given, there was no further response from the District Collector. However, the respondent issued the impugned proceedings on 4.2.2002 signed by the respondent on 14.1.2003 and received by the petitioner on 21.1.2003, wherein a sum of Rs.75,25,296/- was levied and demanded on the allegation that the petitioner transported 62 stone blocks. (e) The petitioner has challenged the said impugned order of the respondent on the ground that the same is illegal, arbitrary and passed without applying the principles of natural justice and without asking for any explanation and even without granting an opportunity for personal hearing. Even though an appeal remedy is available, inasmuch as the order has been passed contrary to the principles of natural justice without giving an opportunity of being heard, the petitioner has filed the present writ petition. According to the petitioner, there is no violation of either 4(1) or 21(3) or (4) or (4A) or (5) of the Mines and Minerals (Development and Regulation) Act,1957. 3. The writ petitioner in W.P.No.9475 of 2003 has challenged the order of the Revenue Divisional Officer, Thiruchengode Taluk, Namakkal District, viz., the respondent therein. The petitioner is stated to be the successful bidder in respect of sand quarrying measuring 10.00.0 hectares comprised in survey No.380, Komarapalayam https://hcservices.ecourts.gov.in/hcservices/ village, Paramathi-Velur taluk, Namakkal District under a registered lease agreement executed on 26.4.1999 for a period of three years. (a) The Public Works Department permitted the petitioner to quarry and transport 17,850 lorry loads for the year 1999-2000 however, the permit was obtained for 4450 lorry loads. Likewise, for the year 2000-01, the permitted quantity was 20,850 lorry loads but the petitioner was able to quarry 19,800 lorry loads and for the period from 1.4.2001 to 26.4.2002, the permitted quantity was 13,700 lorry loads. Therefore, the petitioner was not able to quarry even the permitted loads for want of man power, demand, etc. (b) As per Rule 6 of the Tamil Nadu Minor Mineral Concession Rules,1959, the public are permitted to quarry the sand for domestic and agricultural purposes, for which no lease or no transport permit is required. Even at the time when the petitioner had taken lease, there were already pits available. The respondent issued notice on 29.4.2002 alleging that on 31.10.2002, the Assistant Geologist and the Special Revenue Tahsildar (Mines) made surprise inspection and found that 4700 lorry loads of sand were removed from non-leased area and directed the petitioner to give explanation. (c) The petitioner gave a reply denying the charges, however, it is stated that there was no inspection that took place in the presence of the petitioner and no measurement was taken and no reports were prepared in the presence of the petitioner and no notice of inspection was served. It is stated that by letter dated 11.6.2002, the petitioner was directed to be present for personal hearing on 25.6.2002 and in the personal hearing, the petitioner reiterated everything. It is stated that the petitioner had obtained transport permit up to 28.2.2002 and no quarry operation took place thereafter. (d) In the subsequent personal hearing on 26.12.2002, the petitioner reiterated the same, however, the respondent issued the impugned proceedings dated 28.1.2003 levying a sum of Rs.3,76,040/- viz., seigniorage of Rs.61,880/-, two times penalty on the increased seigniorage amount of Rs.1,23,760/- and value of 476 lorry loads of sand at Rs.400/- of Rs.1,90,400/-. It is the case of the petitioner that he has never quarried the land outside the permitted area and therefore, the petitioner cannot be made liable. (e) That apart, it is stated that the measurements were taken behind the back of the petitioner and no copies of reports were provided along with the show cause notice and no enquiry was conducted and no evidence was let in and no offence was detected while quarrying or transporting or marketing the alleged sand. It is stated that during the quarrying operations, the officers were visiting every alternative day for inspection and to issue transport permit. It is stated that the materials collected behind the back of the petitioner cannot be used against the petitioner as per the judgment of the Madras High Court reported in Logasundari vs. The District Collector, Collector's Office, Madurai and others (1998 (1) https://hcservices.ecourts.gov.in/hcservices/ MLJ 43). (f) The impugned order is challenged on various grounds including that there is violation of the principles of natural justice as no inspection was conducted and no report was furnished to the petitioner and no cogent reason was given to the petitioner by mulcting with financial responsibility and no notice of inspection was given. 4. The writ petitioner in W.P.No.10215 of 2003 was the successful bidder of river sand quarry lands measuring 10-00-0 hectares comprised in survey No.1 of Manalmedu west part Block-1 village, Mayiladuthurai taluk, Nagapattinam District and necessary lease agreements were executed on 26.2.2001 and registered on 16.3.2001 and the lease was for a period of three years. The lease site is situate in Kollidam river. The petitioner took possession of the quarry site and conducted the quarrying operations as per the Rules and Regulations without violating the conditions of agreements. (a) As per Rule 6 of the Tamil Nadu Minor Mineral Concession Rules,1959, the public can quarry and remove sand for domestic and agricultural purposes, for which no lease or licence is necessary and no transport permit is required. When the petitioner was carrying on the quarrying operations, the villagers in Pappakudi village demanded huge amount for the construction of a temple which was declined by the petitioner with the result the villagers prevented the petitioner from approaching the road. (b) The petitioner sent a representation to the second respondent, the District Collector on 7.1.2003 however, the first respondent suddenly issued a notice on 14.1.2003 signed and dispatched on 17.1.2003 alleging that the Assistant Director of Geology inspected the area on 13.1.2003 and found that the petitioner quarried outside the leased area and directed the petitioner to appear for personal hearing on 24.1.2003. The petitioner appeared on the said date and gave his written reply denying the charges. He also submitted an explanation on 24.3.2001. However, without conducting enquiry, by the impugned proceedings, the respondents demanded a sum of Rs.58,60,400/- which consists seigniorage of Rs.3,09,400/-, value of sand of Rs.9,10,000/- and 15 times penalty of Rs.46,41,000/-. (c) The said order is challenged on the ground that no measurements were taken in the presence of the petitioner and no notice was given prior to the inspection. It is stated that if really the petitioner had quarried and transported or marketed sand illegally, the Village Administrative Officer would not have kept quiet. It is stated that copies of reports were not furnished and that the materials were collected behind the back of the petitioner which is against the judgment of this Court reported in Logasundari vs. The District Collector, Collector's Office, Madurai and others (1998(1) MLJ 43) and the impugned order is opposed to the principles of natural justice. Apart from this, the petitioner has raised many https://hcservices.ecourts.gov.in/hcservices/ other grounds. 5. In the counter affidavit filed by the respondent/District Collector in W.P.No.6042 of 2003, it is stated that on 4.12.1990 the quarry site in Kattagaram was inspected and there was a stock of 92 stones as per the production register and they were measured and numbered from 1 to 92 and handed over to the Village Administrative Officer for safe custody. The order of status quo as on 12.10.1990 was passed by the Apex Court on 29.4.1991. When the site was inspected on 22.6.1991 by the Assistant Director of Geology and Mining, Dharmapuri along with the Revenue Inspector (Mines), it was noticed that 65 stones out of 92 stones were missing and those stones were removed by the petitioner without obtaining valid transport permit. It is stated that the total volume of granite removed without permit was 275.551 Cbm and therefore, a show-cause notice was issued on 14.8.1991 as to why seigniorage fee, local cess, local cess surcharge, 15 times the seigniorage fee as penalty and the market value of the stones should not be recovered from the petitioner. (a) The petitioner submitted a reply on 9.9.1991 stating that he quarried and transported the granite blocks based on the court orders. There was a personal enquiry conducted on 17.11.1992. It is stated that the permit was issued up to 12.10.1990 for transporting the quarried granite stones after payment of seigniorage fee and no permit was issued beyond 12.10.1990. After the dismissal of the writ petition, the granite block stones kept in the quarry site were inspected, measured and numbered from 1 to 92 and handed over to the Village Administrative Officer for safe custody and the same was measured as 275-551 Cbm and the lessee must obtain transport permit after remitting seigniorage fee. (b) It is stated that the Assistant Director of Geology and Mining, Dharmapuri on 22.6.1991 found that 65 granite blocks were missing and they were found to have been transported without paying seigniorage fees. Therefore, the removal of 65 stones between 31.1.1991 and 22.6.1991 is illegal without obtaining transport permit and therefore, on consideration of the illegal conduct of the petitioner, penalty as well as seigniorage fees have been imposed on him which is well within the powers of the respondent authority under the Act. 6. I have heard the learned counsel for the petitioners and the learned Special Government Pleader and gone through the files submitted by the learned Special Government Pleader. 7. The admitted facts in all these case are that the impugned orders came to be passed imposing seigniorage fees, penalty, etc., on the basis of the report of the Assistant Director of Geology and https://hcservices.ecourts.gov.in/hcservices/ Mining. It is not in dispute that such reports have not been furnished to the petitioners before imposing such huge amount of penalty as well as seigniorage fees. Admittedly, after the period of lease granted, there was no quarrying operation and in respect of W.P.No.6042 of 2003, there was no quarrying operation after 12.10.1990. According to the petitioner therein, the materials quarried have not been transported. If really on inspection, it was found that after expiry of lease period and also after the expiry of the order granted by this Court, the petitioner removed the quarried stones or sand, in all fairness, there should have been an enquiry conducted in the presence of the petitioner on the basis of the materials and then alone, the petitioners can be made liable for such penalty. These are not cases where the persons involved in transporting of minerals such as, granite and sand were caught red- handed. But these are cases where after quarrying operations were over and after the lease period, there was shortage in quarried minerals found out after many years and on report, and therefore, liability has been mulcted on the petitioners. If that is the case, necessarily the principles of natural justice required not only an opportunity of being heard which should have been given to the petitioners, but also the minimum requirement of copy of the reports of the Assistant Director of Geology should have been furnished to the petitioners so as to enable them to give their reply. 8. In W.P.No.6042 of 2003, admittedly the respondent viz., the District Collector permitted the petitioner to quarry granite stones based on interim orders of the Court. On the crux of the issue involved in all these cases, it is clear that what is complained of by the petitioners is the violation of principles of natural justice. The entire action has been taken based on the reports of the Assistant Director of Geology, who is stated to have conducted inspection and filed reports during which time the petitioners were not directed to be present. Even though in normal circumstances, appeal remedy is available against the impugned orders, the availability of alternative remedy is not a bar for this Court to invoke its jurisdiction under Article 226 of the Constitution of India since there is a complaint of violation of the principles of natural justice, especially after pendency of these writ petitions from 2003. 9. Admittedly in W.P.No.6042 of 2003, the report of Assistant Director of Geology dated 20.6.1991 which is referred to in the impugned order has not been served on the petitioner. It is not a case of mere technicality that the petitioner was not permitted to cross-examine the witness and therefore, the judgment of the Supreme Court in State Bank of India v. Allied Chemical Laboratories and another [(2006) 9 SCC 252] on which reliance was placed by the learned Special Government Pleader, wherein it was held that the mere fact that there was no opportunity given to cross-examine the https://hcservices.ecourts.gov.in/hcservices/ deponent is not sufficient to come to the conclusion that there is violation of principles of natural justice and that Article 226 of the Constitution of India can be pressed into service, is not helpful to the case of the respondent. 10. In the present cases, the facts are different. Here, it is not complained of that the petitioners have not been permitted to cross-examine the witnesses, but the case of the petitioners is that copies of reports on which reliance was placed have not been furnished. The contention of the learned Special Government Pleader that the petitioners have not called for copies of such reports of the Assistant Director of Geology and hence, there was no duty on the part of the respondent to furnish such reports has no meaning. It cannot be said that the non-furnishing of copies of such reports is not fatal to the case of the respondent. 11. The judgment of the Supreme Court in Jagmodhan Mehatabsing Gujaral and others vs. State of Maharashtra [(2006) 8 SCC 629] on which reliance was placed by the learned Special Government Pleader, particularly the paragraph 23, which is as follows: " 23. The trial court had dealt with the aspect of giving 48 hours’ notice before conducting the raid. In a case of a surprise raid 48 hours’ notice to the appellants is not envisaged by the legislature and otherwise also it would have been counterproductive, because there was a strong possibility of obliterating and/or destroying the entire evidence to connect the appellants with the crime. Moreover, even if it is so accepted, it is on record that the watchman and Bapu Bhagwan Alder were found present in the premises on behalf of the appellants and that they did assist the raiding team to carry on their work. It is reported by the police in reply to summons that Bapu Bhagwan Alder was serving in some glass factory in Pune, but he could not be traced out for the purpose of tendering the evidence before the court. In fact, it was possible for the appellants to bring him in the box, at least as defence witness, to state that he had no concern with the industry of the accused. Moreover, the employment record or muster roll of the industry of the accused was not brought for inspection by this Court. Suppression of this clearly gives rise to considerable substance in the allegations of the prosecution. By and large this negatives the arguments on behalf of the appellants that the raid is illegal or otherwise defective. Therefore, we do not find any substance in this submission made by the appellants. has no application to the facts of the present cases. That was a case where 48 hour notice was given which was challenged as violative of https://hcservices.ecourts.gov.in/hcservices/ the principles of natural justice in full sense and the same was rejected by the Supreme Court. But, that is not the fact in the present cases. 12. Further, the reliance placed on the order passed by me in K.Muniappan vs. The Secretary to Government, Home Department, Fort St.George, Chennai 600 009 and others in W.P.No.420 of 2008 dated 6.11.2009, wherein under the provision of Rule 3(1) of the Tamil Nadu Subordinate Service (Discipline and Appeal) Act, 1955, minor punishment was imposed and the theory of prejudice was raised is not applicable, since here it is not the case that no prejudice has been caused by non-furnishing of enquiry report. 13. Further, in similar circumstances, while dealing with the Tamil Nadu Minor Mineral Concession Rules, 1959 in respect of quarrying of sand and silicon unauthorisedly in a non-leasehold area, I had an occasion to consider the requirement of principles of natural justice to be followed in V.S.O.Balakrishnan and others vs. P.K.Selvaraj and others [2009 (2) MLJ 577], wherein it was held that when penal liability is sought to be imposed, the principles of natural justice have to be followed in full sense and the relevant portion of the judgment is as follows: " 12. This is relevant because what is contemplated under the impugned orders is penal liability and therefore it goes without saying that unless proper proof or materials are placed to the effect that the petitioners individually have been carrying on illicit quarrying, imposition of penal liability would certainly be impermissible in law. It is the admitted case of the respondents in all these cases that even before show-cause notices were given, surprise inspection had been done by responsible officials and based on their reports only, show-cause notices came to be issued. While it is stated in the counter affidavits filed in two cases that some Lorry Owners' Association complained about the illicit quarrying, admittedly, such persons have not been examined. A reference to the impugned orders make it clear that there was no personal hearing or any enquiry conducted in these cases. The show-cause notice which was issued based on inspection stated to have been conducted by responsible officials of the respondents actually is pre-determined that the petitioners were involved in illicit quarrying. It is not even the case of the respondents that copy of inspection report has been furnished to the petitioners while issuing the show-cause notice. Therefore, there are two patent errors in the decision making process, viz., show-cause notice has been issued not only with pre- https://hcservices.ecourts.gov.in/hcservices/ determination, but also without furnishing copy of inspection report and secondly, the very impugned orders have been passed without conducting any enquiry in the manner known to law. In the same judgment, after referring to various decisions on the issue, especially relying upon the judgment in Himachal Pradesh and others vs. Gujarat Ambuja Cement Ltd., and another [(2005) 6 SCC 499], wherein it was held that in extraordinary circumstances the jurisdiction under Article 226 of the Constitution cannot be ousted especially when there is violation of principles of natural justice, it has been held that in the absence of any direct evidence to show that the petitioners therein were illegally quarrying either silicon or granite, the licensees cannot be mulcted with any responsibility. 14. Under section 21(5) of the Mines and Minerals (Regulation and Development) Act, 1957 which is as follows: "21.Penalties.- (1)to (4) xxxx (5) Whenever any person raises, without any lawful authority, any mineral from any land, the State Government may recover from