CW 10947/08 //1// In the High Court of Judicature for Rajasthan Jaipur Bench ** 1-Civil Writ Petition No.10947/2008 Marudhar Enterprises Versus State & Ors. 2-Civil Writ Petition No.10948/2008 Girdhari Singh Versus State & Ors. Date of Order ::: 08/04/09 Hon'ble Mr. Justice Ajay Rastogi Mr. RP Garg, for petitioners Ms Raj Sharma, Addl. Govt. Counsel, for respondents-State. Since both the petitions involve common question, hence at request, are being disposed of together at admission stage. Instant petitions have been filed by petitioners assailing orders dt.18/09/07 (Ann.5- CWP-10948/08) & dt.19/09/08 (Ann.6-CWP-10947/08) passed by Assistant Mining Engineer raising additional demand from petitioners in violation of principles of natural justice and proviso to R.32(3) of Rajasthan Minor Mineral Concessions Rules, 1986 (“Rules, 1986”). Re. CWP-10947/2008 (Marudhar Enterprises) Notice Inviting Tender (NIT) was issued on 04/01/2003 for contract of royalty collection on building stone & masonary stone for Tehsils of Ramganj Mandi (Kota), Jhalrapatan & Pachpahar- Pindwa (Jhalawar). Petitioner's tender being highest was accepted and contract was executed for the period from 01/04/03 to 31/03/05 for an CW 10947/08 //2// amount of Rs.9,37,71,157/- on 31/03/2004 and accordingly petitioner submitted requisite security and completed all formalities in compliance of terms & conditions of the contract, as per which petitioner-Firm was under obligation to deposit contract amount proportionate to change in rates of royalty, which includes security & bank guarantee, as well. On 25/05/04, rate of royalty had increased from Rs.50 to 70; and as per terms of agrteement & proviso to Rule 32(3) of Rules, 1986, petitioner deposited contract amount proportionately for remaining period of contract (25/05/04 to 11/06/04), besides security & bank guarantee. However, petitioner-Firm successfully completed contract period on 31/03/05 and no dues was also issued for release of his Fixed Deposit receipts & security as is evident from letters dt.08/04/05 (Ann.3) and 09/04/05 (Ann.4); and therefore, petitioner got FDRs amount realised from the Bank on 12/04/05. However, under the garb of audit objection pointed out by audit party that contract amount to be deposited by petitioner on account of change in rates of royalty must include dead rent and since dead rent was not revised and deposited by petitioner during CW 10947/08 //3// relevant period, additional demand was raised vide order dt.19/08/08 (Ann.6) without affording opportunity of hearing after almost three years of completion of contract. Re. CWP-10948/2008 (Girdhari Singh) Notice Inviting Tender (NIT) was issued on 02/02/2007 for contract of royalty collection on building stone & masonary stone for Tehsils of Ramganj Mandi (Kota), Jhalrapatan & Pachpahar- Pindwa (Jhalawar). Petitioner's tender being highest was accepted and contract was executed for the period from 01/04/07 to 31/03/09 for an amount of Rs.Twenty One Crores on 31/03/2007; accordingly petitioner submitted requisite security and completed all formalities in compliance of terms & conditions of the contract, as per which petitioner was under obligation to deposit contract amount proportionate to change in rates of royalty, which includes security & bank guarantee, as well. On 01/09/07 rate of royalty in Schedule-I had increased from Rs.60 to 90; and later on decreased to Rs.75/- and as per terms of agreement & proviso to Rule 32(3) of Rules, 1986, petitioner deposited contract amount proportionately for remaining period of contract besides security & bank guarantee. CW 10947/08 //4// However, under the garb of audit objection pointed out by audit party that contract amount to be deposited by petitioner on account of change in rates of royalty must include dead rent and since dead rent was not revised and deposited by petitioner during relevant period, respondents raised additional demand vide order dt.18/09/07 (Ann.5) without affording opportunity of hearing. Counsel for petitioners submits that additional demand raised by respondents is wholly arbitrary and in violation of principles of natural justice and besides it, orders impugned are in violation of proviso to R.32(3) of Rules, 1986, where contractor is liable to pay royalty on account of change in rates of the amount which includes security amount & bank guarantee proportionately for remaining period of contract in terms of change/increase in rates of royalty as provided in Schedule-I; and as regards dead rent, it has been provided in Schedule-II, which was neither in terms of agreement nor is the requirement U/s 32(3) of Rules, 1986, as a result whereof action of respondents under orders impugned is without jurisdiction and deserves to be set aside. In their reply, respondents inter-alia CW 10947/08 //5// averred that audit party raised objections, which has been appended alongwith reply as Schedule A (CWP-10948/08) and further averred that revision in rate of royalty was not calculated as per terms & conditions of contract; therefore, audit party while audit inspection rightly raised objection that the department committed an error in revising contract amount on account of change/ revision in rates of royalty and dead rent remain unnoticed which was one of the components to be taken note of while computing the amount which contractor was under obligation to deposit and accordingly, additional demand was rightly raised to respective petitioners vide order impugned. Apart from merits, further objection has been raised that against orders impugned, there is a statutory remedy of appeal available U/r 43 of Rules, 1986 and in view of availability of remedy of appeal, these petitions are not maintainable and deserves to be dismissed. I have considered rival contentions of Counsel for the parties and with their assistance, examined material on record. As regards objection raised by Government Counsel in respect of maintainability of petitions on account of availability of remedy of appeal U/r 43 of Rules, 1986, suffice it to say that CW 10947/08 //6// existence of alternative remedy of appeal under law has not been considered as a bar while entertaining petitions invoking extra ordinary jurisdiction U/Art. 226 & 227 of the Constitution particularly in cases where action impugned, itself, is found to be in violation and flagrant disregard of principles of natural justice or where ends of justice would be defeated by refusing to invoke extra-ordinary jurisdiction of this Court. Apex Court in Whirlpool Corporation Vs. Registrar of Trade Marks (AIR 1999 SC 22=1998(8) SCC 1) observed ad infra: “20. Much water has since flown beneath the bridge, but there has been no corrosive effect on these decisions which though old, continue to hold the field with the result that law as to the jurisdiction of the High Court in entertaining a Writ Petition under Article 226 of the Constitution, in spite of the alternative statutory remedies, is not affected, specially in a case where the authority against whom the Writ is filed is shown to have had no jurisdiction or had purported to usurp jurisdiction without any legal foundation.” (Emphasis added) CW 10947/08 //7// In State of HP Vs. Gujarat Ambuja Cement Ltd (AIR 2005 SCW p.3727) ad infra: “22. In Harbans Lal Sahnia v. Indian Oil Corporation Ltd., [2003] 2 SCC 107, this Court held that the rule of exclusion of writ jurisdiction by availability of alternative remedy is a rule of discretion and not one of compulsion and the Court must consider the pros and cons of the case and then may interfere if it comes to the conclusion that the petitioner seeks enforcement of any of the fundamental rights; where there is failure of principles of natural justice or where the orders or proceedings are wholly without jurisdiction or the vires of an Act is challenged.” “24. ..There are two well recognized exceptions to the doctrine of exhaustion of statutory remedies. First is when the proceedings are taken before the forum under a provision of law which is ultra vires, it is open to a party aggrieved thereby to move the High Court for quashing the proceedings on the ground that they are incompetent without a party being obliged to wait until those CW 10947/08 //8// proceedings run their full course. Secondly, the doctrine has no application when the impugned order has been made in violation of principles of natural justice. We may add that where the proceedings itself are an abuse of process of law the High Court in an appropriate case can entertain a writ petition.” (Emphasis added) In the light of what has been observed by Apex Court (supra), certainly if there is a violation of principles of natural justice or where there is an allegation of infringement of fundamental rights or when on the undisputed facts, the authorities assumed jurisdiction, which they do not possess or where the vires of any provision are under challenge, that can certainly be the grounds, on which the writ petitions U/Art.226 & 227 of the Constitution can be entertained. In instant case, the facts are not in dispute and the action of respondents was in violation of principles of natural justice and beyond competence under law. Thus, in aforesaid eventuality, availability of alternative remedy cannot be considered as a bar to exercise extra ordinary jurisdiction of this Court U/Art.226 of the Constitution and accordingly, preliminary CW 10947/08 //9// objection raised by Government Counsel in the facts of instant case stands over-ruled. As regards merits, firstly I would like to reproduce relevant terms of contract ad infra: "यिद राज् य सरकार Ʈारा रायल् टी की दर में वुिƨ की जाती है तो उसी अनुपात में ठेके की रािश व ूितभूित की रािश में ः वत: बढोतरी उसी िदन से मानी जाएगी िजस िदनांक से रायल् टी की दर में बढोतरी हई है उसी के ु अनुसार ूितभूित व िकँ त ठेकेदार को जमा करानी होगी" As per conditions of the agreement, contractor (petitioner) was under obligation to deposit increased contract money including security and guarantee amount in proportionate to enhancement in rates of royalty made by State Government from time to time; and the condition of contract (supra) was in consonance with R.32(3) of Rules, 1986 which reads ad infra: “32. Grant of Royalty Collection Contract: - Royalty Collection contract /Excess Royalty Collection contract with or without collection of permit fee/other charges: - (3) The amount to be paid annually by the contractor to the Government shall be determined in auction or by tender to be submitted for acceptance by the authority competent to grant the CW 10947/08 //10// contract: Provided that in case of enhancement in the rate of royalty/ (permit fee/other charges) given in the Schedule-I, the contractor shall be liable to pay an increased amount of contract money security amount and guarantee in proportion to the enhancement for the remaining period of contract from the date of such enhancement.” It clearly emerges from proviso to R.32(3), ibid, that whenever there is enhancement or change in rates of royalty, one has to deposit charges as per Schedule-I and the contractor has to deposit apart from increased amount, security & guarantee amount in proportion to rates of royalty for remaining period of contract from the date of such enhancement as given in Schedule-I to Rules, 1986. It is not the case of respondents that rates of royalty and charges provided in Schedule-I as referred to in R.32(3) has not been deposited by petitioners. Demand has been raised by respondents vide order impugned particularly on the premise that on account of change in rates of royalty, they failed to include dead rent while contractor deposited enhanced contract amount. Suffice it to say that the permit fee and other charges as referred to in R.32(3) is in CW 10947/08 //11// reference to Schedule-I to Rules, 1986; as regards dead rent, it has been specifically provided in Schedule II to Rules, 1986 and Schedule-II is not a part U/r 32(3); in absence whereof, in the opinion of this Court, dead rent in no manner can be considered as component while computing charges included in Schedule I to be charged on account of change in rates of royalty made by State Government from time to time. It appears from the record that in CWP- 10947/08, no dues was granted to petitioner and his FDRs and Bank guarantee were also realized way back in 2005. Subsequently, demand was raised under order impugned only on account of audit objection; suffice it to say that when Schedule- II is not a part of proviso to R.32(3) of Rules, 1986, contractor was not under obligation to pay additional charges towards dead rent on account of change in rates of royalty under proviso to R.32(3) of Rules, 1986. Consequently, writ petitions succeed & are hereby allowed. Orders dt.18/09/07 (Ann.5- CWP-10948/08) & dt.19/09/08 (Ann.6-CWP-10947/08) are quashed & set aside. No costs. (Ajay Rastogi), J. K.Khatri/p.11/10947CW08(2RsrApr08.doc