IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE TWENTY NINTH DAY OF APRIL TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE G.CHANDRAIAH WRIT PETITION NO : 26448 of 2001 Between: M.Narendra Reddy, S/o. Late Mohana Rami Reddy, Hindu, R/o. 10-13-489, Reddy & Reddy Colony, Tirupathi, Chittoor District. ..... PETITIONER AND 1 The Superintending Engineer, I & CAD, Irrigation Circle, Chittoor, Chittoor District. 2 The Pay and Accounts Officer, Telugu Ganga Project, Srikalahasthi, Chittoor District. 3 The Assistant Director of Owner & Geology, Chittoor, Chittoor District. (as per the oral order of Court dt. 4-1-2002 the 3rd Respondent is added as a party) .....RESPONDENT(S) Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to to issue a WRIT OF MANDAMUS or any other appropriate Writ order or direction, declaring the action of the respondnets in deducting the seigniorage fee charges for the mineral utilised by the petitioner in the execution of the works bearing Agreement Swarnamukhi Anicut, Srikalahasthi Town, Chittoor District ignoring the fact of payment of seigniorage fee earlier in respect of the said mineral by the petitioner himself to the concerned leassees who sold the mineral to the petitioner which is evident from the various transit forms issued by the Mines and Geology Department for transportation of the mineral to the above work spot etc., as illegal, arbitrary and discrkimkinatory and consequently direct the respondnets to desist from deducting the seigniorage fee charges in respect of the mineral used by the petitioner in the above works from the bills payable to the petitioner in the above works from the bills payable to the petitioner and also to refund the amounts already deducted in this regard to the petitioner in respect of the above works and pass Counsel for the Petitioner:MR.M.CHANDRASEKHAR REDDY Counsel for the Respondent No.: GP FOR MINES AND GEOLOGY The Court made the following : THE HONOURABLE SRI JUSTICE G. CHANDRAIAH WRIT PETITION NO. 26448 OF 2001 ORDER: The writ petition is filed by the petitioner seeking issuance of writ of mandamus declaring action of the respondents in deducting the seigniorage fee charges for the mineral utilized by the petitioner in execution of the works bearing Agreement Nos. 3SE/2000-01 and 4 SE/2000-01, dated 31-10-2000 in respect of Swarnamukhi Anicut, Srikalahasthi Town, Chittoor district ignoring the fact of payment of seigniorage fee paid by the petitioner himself earlier in respect of the said mineral to the concerned lessees who sold the mineral to the petitioner which is evident from the various transit forms issued by the Mines and Geology Department for transportation of the mineral to the above work spot etc., as illegal arbitrary and discriminatory and consequently direct the respondents to desist from deducting the seigniorage fee charges in respect of the mineral used by the petitioner in the above works from the bills payable to the petitioner and also to refund the amounts already deducted in respect of the works. The case of the petitioner is that he is a Class –I Contractor in executing all civil works. 1st Respondent i.e. Superintendent Engineer, I & CAD, Irrigation Circle, Chittoor has called for tenders in respect of the works i.e. A.P.H.M. & E.C.R.P. Formation of flood banks from OM to 1260 M.D./S and from OM to 460 M upstream of Swarnamukhi anicut right side at Srikalahasthi town, Chittoor District and also in respect of another work i.e. A.P.H.M. & E.C.R.P. construction of flood walls from 470 M upstream to 900 M upstream and formation of Flood Bank from 900 M to 1200 M upstream of Swarnamukhi Anicut right side at Srikalahasthi town, Chittoor District. Pursuant thereto, the petitioner applied for the same and was found to be lowest bidder possessing all requisite qualifications and accordingly the works were awarded to him. The respective works were concluded by way of Agreement No.3 SE/2000-2001 and Agreement No.4SE/2000-2001 to the value of Rs.79,57,895-00 and Rs.83,42,221-00 respectively, to which the 1st respondent and the petitioner are the signatories. Both the agreements were executed in the month of October, 2000. It is the case of the petitioner that he utilized certain minor minerals in the course of execution of the works, which he purchased from the authorized lessees by paying necessary seigniorage fee etc., and transported the same to the work spot under transit forms issued by the officials of the Mines and Geology Department. As such, the entire minerals utilized by him in the said works have suffered the payment of seigniorage fee, but the second respondent, while ascertaining the crucial fact of payment of seigniorage fee in respect of the minor mineral utilized by the petitioner in execution of the works, has been mechanically deducting the seigniorage fee from the bills payable to him ignoring the fact that the mineral has already suffered payment of seigniorage fee earlier. It is case of the petitioner that if the contractor fails to substantiate that the mineral used by him in the course of execution of the work has not suffered payment of seniorage fee, then the respondent collect the same, but since the petitioner had a transit form issued by the Mines and Geology Department which clearly stipulate that he purchased the minor mineral from the concerned lessees and was permitted to transport the mineral to the work spot, no such fee can be levied again. It is further case of the petitioner that as he has got valid receipts issued by the lessees for the sand purchased by him, which clearly establish that the mineral used by him had already suffered payment of seigniorage fee once and therefore, the question of paying the same for the second time on the very same mineral, is illegal and arbitrary. It is also averred that inasmuch as the petitioner’s bills were subjected to the deduction towards seigniorage fee, he made a representation dated 20-12-2001 specifying that the quarry owners had already collected seigniorage fee from him in respect of the mineral utilized in the above works, and therefore, the deductions made from the bills is illegal and requested the 1st respondent to issue suitable instructions to the 2nd respondent not to deduct the seigniorage fee at source for the above works, which tantamount to double point taxation. It is also stated that he produced voluminous transit forms as well as the receipts issued by the contractors/lessees which clearly specify that whatever mineral he used in the execution of those works, has already suffered the payment of seigniorage fee and, therefore, deduction of Rs. 1,90,000/- towards seigniorage fee from the bills of the petitioner is the result of non verification of the payment made by the petitioner and, therefore, the said sum is liable to refunded to him, otherwise, the petitioner would be put to heavy loss. The counter affidavit filed on behalf of the 1st respondent shows that in terms of G.O.Ms. No. 23 Irrigation & CAD (PW-COD) Department, dated 5-3-1999, the contractor will no longer be required from now onwards to produce clearance certificate from the Mines Department and Seigniorage charges will be deducted by the concerned works Department from the bills of the contractors for the materials used on the work and, therefore, in terms of the said GO, seigniorage fee on the minor minerals utilized by the petitioner for the above contract works, was deducted from the bills of the petitioner. It is also stated that the petitioner has to produce evidence whether the minor mineral utilized by the petitioner on the said contract works has suffered seigniorage fee. In the absence of the same, the respondents are bound to follow G.O.Ms. No. 23, dated 5-3-1999. It is also stated that seigniorage fee has been collected as per the revised rates prescribed by the Government vide G.O.Ms. NO. 331 Industries & Commerce ( M.I) Department, dated 21-6-2000. It is also stated that the Contractor bills would be passed by the Executive Engineer, Srikalahasti and will be forwarded for payment to the 2nd Respondent and the 2nd respondent is only a disbursing authority and he has no power to alter the sum. It is also stated that the Executive Engineer, Irrigation Division, Srikalahasti vide letter No. Supdt./S12(A)/346 SE dated 2-7-2002, has informed that in spite of interim orders passed by this Court on 4-1-2002 the petitioner has not produced any material evidence or documentary evidence towards payment of seigniorage fee by the lessees in respect of the minor mineral utilized by the petitioner in execution of the above contract works and, therefore, the writ petition is liable to be dismissed. Learned counsel appearing for the petitioner submits that under sub-Rule (3)(a) of Rule 10 of A.P. Minor Mineral Concessions Rules, 1966 the seigniorage fee will be paid by the lessee at the time of execution of the lease deed and for subsequent years, every year in advance by the lessee only, when the quarry lease is granted. Therefore, it is the duty of the leaseholder or the lessee of the quarry to pay the seigniorage fee, but not contractor. Whereas, pursuant to the bid by the petitioner he was awarded the contract as such, as a contractor, no deduction can be made from his bills and the obligation rests on the part of the lessee to pay the seigniorage fee and not the petitioner as a contractor. On the other hand learned Assistant Government Pleader for Irrigation submits that G.O.Ms. No. 23 Irrigation & CAD (PW-COD) Department dated 5-3-1999 contemplates that the contractor will no longer required to produce the clearance certificate from the Mines Department and Seigniorage charges will be deducted from the bills of the contractor for the minor mineral utilized at the work spot and, therefore, basing on the material utilized by the petitioner for the above contract works, fee shall be deducted from the bills of the petitioner. However, as an interim measure the petitioner sought for a direction to the respondents not to deduct Seigniorage fee from his bills in respect of the minerals utilized by him in connection with the execution of the works in respect of the Work Agreement bearing Nos.3SE/2000-01 and 4SE/2000-01 dated 31-10-2000 in respect of Swarnamukhi Anicut, Srikalahasthi town, Chittoor district. This Court by order dated 4-1-2002 in W.P.M.P.No. 33480 of 2001 passed the following order. “Petitioner is permitted to furnish necessary material before the Pay and Accounts Officer about the seigniorage fee paid by him for the material used in execution of the contract and the same shall be considered by the respondents while passing revised bills and the same shall not be deducted from the bills”. In the counter affidavit filed by the 1st respondent it is stated that the Executive Engineer Irrigation, Srikalahasthi wrote a letter dated 2-7-2002 and informed the petitioner to produce the relevant material evidencing payment of seigniorage fee pursuant to the interim orders granted by this Court, but the petitioner failed to produce any document evidencing his payment of seigniorage fee. Learned counsel for the petitioner submits that he is prepared to furnish the necessary information and material before the authorities with regard to the payment of the seigniorage fee. It is further submitted by the learned counsel for the petitioner that in the event of the petitioner producing evidence in respect of payment of seigniorage fee by the petitioner or by the lessee, the respondents may be directed to consider the same and refund the amount already paid by the petitioner. Therefore, it is directed that the 2nd respondent shall not deduct any amount from the bills of the petitioner, if it is found that the petitioner is able to prove before the authority towards payment of said seigniorage fee. Having regard to the submissions made by both the counsel particularly the submission of the learned counsel for the petitioner that since the petitioner has not produced any material so far before the authority concerned in compliance of the interim orders granted by this Court, while making the interim order as the final order in this writ petition, the petitioner is given liberty to produce the relevant material to show that either himself or the lessee had paid the seignorage fee. In case, any amount is deducted from the bills of the petitioner having been paid by himself or the lessee towards seignorage fee earlier, shall be refunded back to the petitioner. As submitted, if relevant seniorage fee was already paid, it is directed that no deduction shall be made from the bills of the petitioner. The petitioner has to produce the material before the authority concerned within two months and on such material being produced by the petitioner, the respondents are directed to pass appropriate orders. With the above direction, this writ petition is disposed of. No order as to costs. The petitioner is directed to produce material within two months before the concerned authorities and the respondents are directed to pass necessary order on the issue involved in this writ petition. No order as to costs. _____________________ Justice G. Chandriah 29th April, 2009. KM THE HONOURABLE SRI JUSTICE G. CHANDRAIAH WRIT PETITION NO. 26448 OF 2001 29th April, 2009.