THE HON’BLE SRI JUSTICE L.NARASIMHA REDDY WRIT PETITION No.33987 of 2011 ORDER: The petitioners are the Contractors and they were awarded a civil contract, which involves utilisation of sand. It is stated that in the estimates itself, the seigniorage fee payable on the sand was included and in the bills paid to the petitioners, the component of seigniorage fee is deducted. The grievance of the petitioners is that the respondents are levying one time penalty, equivalent to seigniorage fee by invoking Rule 9-Y(2) of the Andhra Pradesh Minor Mineral Concession Rules, 1966 (for short ‘the Rules’). 2. Heard the learned counsel for the petitioners and the learned counsel for the respondents. 3. It is no doubt true that Rule 9-Y(2) of the Rules provides for levy of seigniorage fee as well as one time penalty on the sand utilised for the Government works in case the procurement of sand is without valid permits issued by the Assistant Director of Mines and Geology concerned. 4. The question as to whether the sand that is utilised in such contracts was quarried on the basis of specific permits accorded by the Assistant Director of Mines and Geology would have been considered, if only inspection was conducted at the relevant point of time. A contractor or for that matter, the Government Department concerned, cannot be endowed with the duty to verify the existence of such permits. From the point of view of the Department of Mines and Geology, it should be sufficient in case the seigniorage fee is paid or deducted from the bills. The penalty cannot be levied on the presumption that the sand was quarried without the permission of the Assistant Director of Mines and Geology. 5. Hence, the writ petition is disposed of directing that in case the seigniorage fee on the sand utilised by the petitioners in the works executed by them is deducted from the bills and proof thereof is filed before the Assistant Director of Mines and Geology, the penalty shall not be levied. There shall be no order as to costs. 6. The miscellaneous petition filed in this writ petition also shall stand disposed of. ____________________ L. NARASIMHA REDDY, J November 28, 2012. KTL