IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 18.06.2008 CORAM THE HONOURABLE MR. JUSTICE S. MANIKUMAR W.P.No.9056 of 2001 M/s.Himalaya Granites Limited, No.7, Sriman Srinivasan Cross Street, Alwarpet, Madras-18. ... Petitioner vs. The District Collector, Dharmapuri District, Dharmapuri. ... Respondent Writ Petition is filed under Article 226 of the Constitution of India praying for a Writ of Certiorarified Mandamus, to call for the records of the respondent bearing Roc.No.686/2001 (B.Mines), dated 23.04.2001, quash the same and direct the respondent to release the lorry bearing Block No.HG-2220 quarried in the State of Orissa and transported from Vizak of the State of Andra Pradesh, for which seigniorage has been paid to the State of Orissa. For Petitioner : Mr.K.Ramakrishna Reddy For Respondents : Mr.A.Arumugam, Additional Government Pleader O R D E R The petitioner has sought for a Writ of Certiorarified Mandamus to quash the order of the respondent, dated 23.04.2001 and direct him to release the lorry bearing Registration No.NL-01-3060, together with the granite block No.HG 2220 quarried in the State of Orissa and transported from Vizak in the State of Andra Pradesh, for which, seigniorage has been paid to the State of Orissa and for further orders. 2. Facts leading to the Writ Petition are as follows: The General Manager and Power Agent in his affidavit has stated that the petitioner is carrying on business of quarrying and marketing both finished and unfinished granite blocks of all colours and different sizes. The petitioner is having head office at Madras and branch offices at Diatan Village, Parasara Post, Balangir District, Orissa. The petitioner is owning granite quarries and trading in minerals both inside and outside the country. The petitioner has obtained quarry lease in respect of a granite quarry measuring 8-478 Hectares or 20-95 Acres, situated in Diatan village, Balangir District, Orissa. The said lease was for a period of ten years from 21-2-1995 to 20-2-2005. The colour of the granite available in the said quarry is named as "seaweed green" (Green Star Galaxy), which is available only in the State of Orissa and not in other places. 3. The Power Agent has further submitted that the usual procedure in granite trade is that, after quarrying the materials, the intending buyers, marking agents of the buyers would inspect the blocks and assign block numbers and identification marks. After marking the blocks, transport permits would be obtained mentioning the block numbers and the place of destination and necessary royalty/seigniorage would be paid. With valid transport permits, the said materials would be transported to the destination. The royalty/seigniorage shall be payable to the State, in which the concerned quarry site is situated, as they are the owners of the minerals and only the concerned State Minor Mineral Concession Rules will apply. It is also a well known fact that more than two blocks of granite will have the same measurements and each block is different from other. 4. The authorised representative of the petitioner has further submitted that in the course of the said business, the petitioner's foreign buyer M/s. Edmund International Inc., of Italy has marked 65-713 CBM of the said granite blocks and requested the petitioner to ship the same, by their purchase order dated 13-9-2000 as per the measurement list. Accordingly, the petitioner has transported a certified granite block bearing block No.HG-2220 measuring 8-273 CBM (305 x 175 x 155) for the purpose of export on 22-9-2000, by a lorry bearing Registration No.AP-70/T-8568 with a valid transport permit issued by the State of Orissa to Visakapatnam (Vizak) Port of Andhra Pradesh. The said measurement of 8-273 CBM is the net measurement and the gross measurement will be different, which is an allowance granted to the buyers as per the practice prevailing in granite trade. As the foreign buyer, by letter dated 31-10-2000, cancelled the order and failed to issue necessary permission to ship, the block of granite was lying at Vaizak port from September, 2000. Finally, the petitioner decided to transport the same to the factory of M/s. Bannari Amman Sugars Ltd., situated at Allathukumbai Village, Sathyamangalam Taluk of Tamil nadu, for processing the same, as the said block was purchased by them. As the origin of the material is from the State of Orissa, the petitioner has applied for fresh permit to transport the said granite block along with other blocks. The State of Orissa has issued a transport permit on 16-1-2001 and it was valid upto 18-3-2001. As there was some delay in re-transporting the same from Vizak Port to Sathyamangalam, once again the petitioner obtained fresh permit on 21-3-2001, as there is no procedure for revalidation of transport permit, in respect of the said block bearing No. HG-2220. Though the said permit was obtained on the same day, the said block was loaded to a lorry bearing NL-01-A-3060 at Vizak Port and intended to be delivered to M/s. Bannnari Amman Sugars Ltd, at Sathyamangalam Taluk, Tamilnadu. The said block was loaded and the lorry left Vizak Port on 21-3-2001, on which date, the fresh permit was issued by the State of Orissa and therefore, the fresh permit could not be sent along with the block, but a duly notarised affidavit executed by the petitioner was sent along with other relevant documents. 5. The Power Agent of the petitioner has further submitted that the said vehicle after crossing enroute check posts in Andhra Pradesh entered into the State of Tamilnadu on 27-3-2001 and while crossing Dharmapuri District, the Revenue Divisional Officer, Dharmapuri District, seized and detained the said lorry on 27-3-2001, on the ground that the vehicle was transporting granite block with a expired permit. The said seizure was done without any Mahazar or order. Thereafter, the vehicle along with the granite Block was taken to Pappireddipatti police station of Dharmapuri District and kept in the custody of the Inspector of Police, Pappireddipatti Police Station. 6. It is further submitted that when the representative of the petitioner approached the respondent on 10-4-2001 for release of the Vehicle with the granite block, the subordinates of the respondent asked the representative of the petitioner to give a statement to the effect that a reasonable fine would be paid for release of the said vehicle. According to the petitioner, he has not committed any offence. The Tamilnadu Minor Mineral Concession Rules will not apply to the mineral transported from other States. The representative of the petitioner was virtually forced to give a letter dated 10-4-2001 to the effect that he would pay a reasonable penalty. Inspite of the letter given by the petitioner, the respondent did not release the vehicle and therefore, the petitioner has sent a telegram on 17-4-2001 to the respondent, requesting him to release the said vehicle along with the granite block. While that be so, by proceedings dated 25-4-2001, the respondent has levied a penalty of Rs.5,02,544/-, by taking the gross measurement of the granite block, as detailed below: 1) Seigniorage fee for 10. 256 CBM of green coloured granite block at the True of Rs.l500/-per CBM as perAppendix-II,1959, Rs.1500 x 10.256 Rs.15,384/- 2) Enhanced seigniorage fee of 15 times the normal rate of seigniorage fee (Rs.15384x15=2,3CX760)asper Rule 36A(l)of TMMMCR 1959. Rs. 2,30,760/- 3) The price of the Green granite Block having 10.256 CBM at the rate of Rs.25,25,000/-perCBMas perRule 36 A(3) of TNMMCR 1959. Rs. 2,56,400/- ------------------- Total penalty levied Rs.5,02,544/- ---------------- 7. Assailing the impugned order, the power agent of the petitioner has submitted that the granite block belongs to the State of Orissa and Tamil Nadu Minor Mineral Concession Rules will not apply to the case. The respondents have failed to consider that transport permit is required only to transport mineral from the quarry site to a particular place of destination and for re-transportation of the same, no fresh transport permit is required. It is the further contention of the power agent that the validity period of any transport permit issued by the authority is only for removal of the mineral from the quarry site before the said expiry date and it does not mean that the material must reach the destination before the expiry date of the permit. 8. It is further submitted that Seawood Green granite is available only in the State of Orissa and that necessary seigniorage has already been paid to the owner of the mineral i.e., the State of Orissa and therefore, the respondent has no jurisdiction to invoke the provisions of Tamil Nadu Mines and Mineral Concession Rules and impose penalty and seigniorage. The power agent has further submitted that his representative was not authorised to give any statement before the Assisant Director of Mines, Dharmapuri and even assuming that he had given a statement, that does not confer any jurisdiction on the respondent to levy penalty. 9. It is the grievance of the petitioner that the respondent has failed to consider that no order of levy of penalty can be passed without giving any show cause notice or personal hearing. It is further submitted that the undertaking given by the representative without the knowledge of the petitioner, does not bind the petitioner and the said undertaking was virtually obtained by the subordinates by making a false promise for release of the vehicle. It is further contented that if the petitioner was given an opportunity of personal hearing or if the respondent had called for the particulars from the Office at Orrisa, the facts would have come to light, that the mineral was quarried from the State of Orissa and that the entire seignorage fee was already paid to the owner of the Mineral. 10. In the counter affidavit, the respondent has submitted that as per Mines and Mineral (Development and Regulation) Act, 1957, transport permit was issued for the entire quantity of the mineral proposed to be transported. There is no provision in the Act and the rules to give allowances for transporting a block with net measurement as furnished by the lessee, while the gross measurement is more. The petitioner has to pay the royalty for the gross measurement and not for the net measurement. The respondent has further submitted that in the permission letter No.203, Mines, dated 19.1.2001, issued by the Mining officer, Balangir, the Mining Officer has permitted the petitioner to remove block No. HG 2220 having measurements Viz., 305 x 175 x 155 = 8.273 CBM, from their quarry in Diaton Village to Tamil Nadu and this permit was valid for only 30 days from the date of issue. In the permission letter dated 03.03.2001 issued by the Mining Officer, Balangir the Mining officer has allowed the petitioner a further time of another 15 days, for removal of the granite block No. HG 2220 which was permitted earlier in his letter, dated 19.1.2001. In both the letters, the Mining Officer, Balangir has not indicated the measurements of the granite blocks as net measurements and the petitioner was allowed to remove the block only from Diatan quarry to Tamil Nadu and not from Visakapattinam port. 11. The respondent has further submitted that as the granite block was found to be transported without valid transport permit, the Revenue Divisional Officer, Dharmapuri seized the lorry along with the granite block under proper Mahazar. The driver of the lorry has given a statement accepting the offence of transporting the granite block without valid permit. The Mahazar for the seizure of the lorry alongwith the granite block was received by the cleaner of the lorry from the Revenue Divisional Officer on 27.3.2001. According to the respondents, the provisions of the Mines and Mineral (Development and Regulation) Act, 1957, clearly prohibit illicit transport of mineral and therefore, the respondent has jurisdiction to take proper action and levy penalty. 12. The respondent has further submitted that from the statement, dated 27.3.2001 given by Mr.Ramesh, S/o. Jayaraman Naidu, the driver of the seized lorry, it is clear that he was not in possession of transport permit for transporting the granite block from Visakapattinam to Bannariamman Sugars Ltd., and that he had also agreed for payment of penalty. The authorised signatory of the petitioner in his statement dated 10.4.2001 has also agreed for levy of reasonable penalty. Therefore, for violation of transporting the granite block without a valid permit, the respondent has imposed penalty. 13. It is also stated that when the Act provides for seizure and confiscation of the minerals and vehicle, reliance placed on the letters of the Director of Geology and Mining, dated 10.7.92 will not be of any assistance. According to them, the contention of the petitioner that the District Collector has no jurisdiction to seize the material transported from other State is not correct, in view of the amended provision of the Mines and Minerals (Development & Regulation) Act 1997, vide Government of India notification dated 20.12.1999, in which, power has been granted to the competent authorities to effect seizure and cancellation of the permit of the vehicle. The intention of the Act is to prevent illicit quarrying and transportation. As the driver of the vehicle in his statement, dated 27.08.2002, as well as the authorised signatory in his statement, dated 10.07.2001 have already agreed to pay a reasonable penalty for non-possession of the permit, as on the date of check, the question of issuing a show cause notice does not arise. In view of the admission made by them, the District Collector in stead of proceeding for prosecution, agreed for compounding the offence. 14. The respondent has further contended that the authorities, including the Revenue Divisional Officer are empowered to take appropriate action, as per Section 21 of MM(DR) Act, 1957 and as per the Notification of Government of Tamil Nadu in G.O.Ms.No 167/industries/Dated 16.6.94. The lorry driver and the representative of the petitioner were given personal hearing and the seizure Mazahar was also given to the cleaner of the lorry as early as on 27.01.2001. As the petitioner has transported granite block without a permit, he has violated the relevant provisions of the Mines and Minerals (Development and Regulation) Act, 1957 and therefore, penalty levied is valid. It is also the contention of the respondent that the petitioner has failed to avail the statutory remedy available under the Tamil Nadu Minor Mineral Concession Rules and therefore, the Writ Petition is not maintainable. 15. Mr.Ramakrishna Reddy, learned counsel for the petitioner submitted that the granite was permitted to be transported by the competent authority in Orissa, to be exported to a Foreign Company, M/s.Edmend Internation Incorporation of Italy, which subsequently failed to issue permission to ship the block and cancelled the order on 30.01.2000, due to which, the petitioner decided to transport the same to the factory of M/s.Bannari Amman Sugars Ltd., situated at Allathukumbai Village, Sathyamangalam Taluk of Tamil Nadu. When the granite was transported from Vizak Port, on 27.03.2001, it was intercepted by the Revenue Divisional Officer, Dharmapuri, to verify the details of the place of quarry, payment of seigniorage to the State of Orissa etc., and the respondent, without jurisdiction, has erroneously invoked rule 36-A of the Tamil Nadu Minor Mineral Concession Rules, 1959, and levied penalty, as if the mineral was quarried within the State of Tamil Nadu and transported without valid permit. 16. Relying on the decision reported in AIR 2004 Mad. 151 [K.P.Enterprises v. District Collector, Salem], learned counsel for the petitioner submitted that the Tamil Nadu Minor Mineral Concession Rules, 1959 are not applicable to the minerals transported from the outside State and the rules can be applied only to regulate the quarried mineral, within the State. He also submitted that when the granite was loaded at Vizak on 21.03.2003, a fresh permit was issued by the competent authority at Orissa, but it could not be handedover to the transporter or the lorry driver and merely because, the driver or the transporter was not in possession of the same, at the time of check made by the Revenue Divisional Officer, Dharmapuri, it should not be construed that the transport of granite was without a valid permit, warranting penal action under Section 36-A of the Tamil Nadu Minor Mineral Concession Rules. 17. Learned counsel for the petitioner further submitted that the admission of authorised signatory or the driver of the vehicle was only in respect of the non-possession of the permit at the time of inspection and that it does not amount to an unequivocal admission of the allegations levelled against the petitioner, as if the mineral was quarried in the State of Tamil Nadu. 18. Per contra, learned counsel for the respondent submitted that the permission granted by the competent authority from Orissa had already expired on 18.03.2001 and on the day when the vehicle was intercepted, it was found by the Revenue Divisional Officer, Dharmapuri, that the lorry bearing Registration No.NL-01-3060 transported green granite block without a valid permit and that the Deputy Tahsildar had taken the measurement of the seized block. The driver of the vehicle, Mr.Ramesh had admitted the violation of transporting the said mineral without valid permit. 19. Placing strong reliance on the statement of the authorised signatory, dated 10.04.2001, submitted before the Assistant Director of Mines, Dharmapuri, learned counsel for the respondent submitted that when the authorised signatory himself had agreed to pay a reasonable penalty, as per the Tamil Nadu Minor Mineral Concession Rules, 1959 for the violation of transporting the mineral without a permit and sought for release of the vehicle along with the block of granite, it is not open to the petitioner to turn around and contend that there is no violation. Lastly, he submitted that when the petitioner has failed to avail the alternative remedy provided under the Tamil Nadu Minor Mineral Concession Rules, 1959, the Writ Petition is not maintainable in law. In so far as the contention of violation of principles of natural justice is concerned, he submitted that as there was an admission of fact, by both the driver of the vehicle and the authorised signatory of the petitioner, there is no need to issue a show cause notice calling for explanation from the petitioner. Heard the learned counsel appearing for the parties and perused the materials available on record. 20. Perusal of the lease deed dated 21.02.1995, executed between the Government of Orissa and the petitioner, having its Office at Chennai, reveals that a lease was granted to the petitioner to quarry decorative stones for a period of 10 years from 21.02.1995 under the Orissa Minor Mineral Concession Rules, 1990 at Diatan Village, No.105 in the Registration District of Balangir. By order No.3911, Mines, dated 21.09.2000, the Mining Officer, Balangir Circle, Balangir has granted permission to the petitioner for removal of decorative stones raised from Diatan quarry and the place of destination, mentioned in the said order is Visak Port, for export purpose. The Block Numbers mentioned in the permit, which was valid for 30 days from the date of issue, the correspondance with the purchase order/inspection certificate of the buyer, Edmund International Inc., are as follows: S.No. Block No. Nett. Measurement CBM 1 2 3 4 5 6 7 8 2219 2220 2223 2244 2252 2253 2245 2111 270x185x175 305x160x170 255x175x180 275x175x135 315x185x190 305x180x185 280x185x170 290x135x105 8.741 8.296 8.033 6.497 11.072 10.157 8.806 4.111 65.713 21. Permit No.203, dated 19.01.2001, issued by the Mining Officer, Balangir Circle, Balangir shows that permit has been granted for the petitioner-company to transport mineral raised from Daitan to the following places of destination, viz., Tirupathi, Tamil Nadu and Hyderabad and the said permit was valid for 30 days from 19.01.2001. 22. From the above documents, it is evident that the mineral was excavated from Daitan Village of Balangir Circle, State of Orissa and as per the terms and conditions of the lease, dated 21.02.1995, the lessee had to pay royalty/seigniorage, in respect of mineral removed from the lease area at the rates prescribed. As rightly contented by the learned counsel for the petitioner that had the respondent called for the relevant details from the petitioner or from the authorities from the State of Orissa, it would have come to light that the mineral transported, was not quarried in Tamil Nadu and therefore, the payment of seigniorage to the State of Tamil Nadu would not arise. 23. In K.P.Enterprises v. District Collector, Salem, reported in AIR 2004 Madras 151, this Court considered as to whether the provisions of the Tamil Nadu Minor Mineral Concession Rules, would apply to the inter-state transportation of mineral from other States. The facts of the reported case are that the petitioner therein was granted mining lease to quarry black dimensional granite stone owned by the State of Kerala. The lease deed was executed under the Kerala Minor Mineral Concession Rules. The petitioner was transporting the coloured dimensional black granite to different places in the State of Tamil Nadu, Andra Pradesh etc., after paying necessary seigniorage fee to the State of Kerala with permits issued by the Department of Mining and Geology, Trivandrum District, for supply of minerals to the Companies at Andra Pradesh, Maharastra and Tuticorin. On payment of seigniorage fee, bulk permits were obtained from the Department of Mining and Geology, Kerala and permit was issued for the period between 18.12.1999 to 26.12.1999. On the strength of the above permits, the petitioner despatched granites to the Company at Andra Pradesh. The Tahsildar, Sankari intercepted the lorry on 22.12.1999 and inspite of production of documents, the vehicle was seized along with the granite block and the District Collector imposed a penalty, directing the petitioner therein to pay seigniorage fee to the State of Tamil Nadu on the premise, that the granite was illegally quarried under the Tamil Nadu Minor Mineral Concession Rules, 1959. When the action was challenged in this Court, the main contention of the petitioner inter-alia was that the respondent therein had no jurisdiction to initiate action under the Tamil Nadu Minor Mineral Concession Rules, as the seigniorage fee had already been paid to the State of Kerala and that bulk permits have also been issued to the transporter. The Writ Petition was resisted on the ground, that the petitioner therein did not produce the despatch slips under the Tamil Nadu Minor Mineral Concession Rules, at the time of check and therefore, the transportation was illegal, warranting imposition of penalty. While dealing with the above aspect, this Court at Pagaraphs 20 and 21 of the judgment, held as follows: "20. The respondent has acted without authority in seizing the granite and thereafter directing thepetitioner to pay a signiorage fee and penalty at five times the normal seignorage fee. Under the Rules, unless the granite is of Tamil Nadu origin, the respondent has no authority to levy the seigniorage fee penalty as has been imposed on the facts of the case. The entire action is without authority and jurisdiction. 21. Concedingly, it is an inter-state movement and it carried valid documents. The consignment of granite from Trivandrum to Kuppam in Andra Pradesh was accompanied by all the requisite permits as prescribed by the Kerala authorities. The respondent has also no doubt in its mind that block is of Kerala origin. Yet, the respondent has ordered payment of seigniorage fee and a penalty of 5 times as if there is a violation of Tamil Nadu Minor Mineral Concession Rules, in particular Rules 36-A(3), 36-A(5) and 36-5(b). It is a misconception of the provisions of the Tamil Nadu Minor Mineral Concession Rules. Though it is admitted that the granite block is of Kerala origin and it is consigned to a consignee in Andra Pradesh. It is being transported through Tamil Nadu to a dealer in Andra Pradesh, being an Inter-State movement, it is too extraordinary for the respondent to assume that the Tamil Nadu Minor Mineral Concession Rules applies and enforce seigniorage fee and penalty as well." 24. For violation of Section 4 and 4(1)A of the Mines and Mineral (Development and Regulation) Act, 1957, action can be taken under Section 21(4) of the Act; the officer or the authority empowered in this behalf,