1 IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.5892 of 2007 NEELAM KUMAR, son of Sri. Damodar Prasad, Resident of Mohalla- Habipura, Soh Sarai, P.S.-Soh Sarai, P.O.-Soh Sarai, District-Nalanda. ……..Petitoiner. Versus 1. The State Of Bihar 2. The Commissioner-cum-Secretary, Gramine Vikas Bhibhag, R.E.O. & Panchayati Raj, “Vishweshwarraiya Bhawan”, Bailey Road, Patna. 3. The Engineer-In-Chief-cum-Additional Commissioner, Rural Engineering Organisation,(R.E.O.) “Vishweshwarraiya Bhawan”, Bailey Road, Patna. 4. The Chief Engineer(South)-I, Rural Engineering Organisation(R.E.O.), “Vishweshwarraiya Bhawan”, Bailey Road, Patna. 5. The Commissioner-cum-Secretary, Mines, “Vikas Bhawan”, Patna 800015. 6. The Dy. Director(Mines), Patna Circle, “Vikas Bhawan”, Patna-800015. 7. The District Mining Officer, Nalanda(Biharsharif). 8. The Assistant Mining Officer, Nalanda at Biharsharif. 9. The District Treasury Officer, Nalanda at Biharsharif. 10. The Executive Engineer, Rural Engineering Organisation, Work Division, Bihar Sharif(Nalanda). ……..Respondents. ----------- 04. 01.05.2009 The State Government in the Department of Rural Engineering Works Department now Rural Works Department for strengthening and widening of Road from Nejai to Batha via Umerchak village under Rahui and Harnaut Block issued notice inviting tenders from contractors who were ready to do the said work for the State Government. Petitioner was ultimately selected and work order and agreement done on 09.03.2007. The work included digging up ordinary earth for filling up of road and road flanks for which petitioner was to be paid labour charges alone. This obviously was on correct premise that 2 the earth that was used was State property though a minor mineral and it was used by the petitioner as an agent of the State for the work of the State and to be affixed to earth again in the State work. Therefore, there was neither a sale or purchase of earth nor was there any transfer of property in earth either by way of sale or by way of accretion. It is merely the haulage charge paid to the petitioner. The work having been executed, payments were to made as per the agreed bills. Recently an objection was raised by the Treasury Officer, Nalanda at Biharsharif while entertaining the payment order in favour of the petitioner as issued by the Department. The objection was that the Department has not charged royalty on the amount of earth that has been used. Departmental opinion was that there being no transfer of property in the earth and it always remaining with the State, there could be no charge of royalty. Contractor like the petitioner was merely an agent of the State, doing State’s work and earth from the State’s lands were being removed and used for State’s work, no royalty was payable. Notwithstanding this view taken by the Department itself, the Treasury Officer has stood this ground and refused to honour this payment till deduction on account of royalty was made for bills payable to the petitioner. It is the correctness and validity of the stand of the Treasury officer which is in question before this Court. 3 Learned Special P.P., Mines Department has appeared and filed detail counter affidavit and supplementary counter affidavit. He submits that payment of royalty of ordinary earth is based on the principle of removal. Petitioner, it can not be disputed removed common earth and used it in execution of contract. Therefore he is liable to pay royalty. I am afraid the proposition is too broadly and generally stated. Section 9 of the Mines and Minerals(Regulation and Development) Act, 1956 creates the liability and charge of royalty. The charge is squarely on the lessee removing mineral under the lease hold rights. The charge does not extend any further. The charging event is excavation by a lessee under a lease and is payable on its removal from the lease hold site. The other provisions made under the Rules are only provisions for preventing evasion of royalty and they do not create a charge. Several judgments are then cited on behalf of the Mines Department to justify the demand. The effect of demand in view of this Court is that the State is demanding royalty from the agent of the State for doing the work of the Sate for the State. A bundle of contradictions. However in view of the order that I propose to pass, this question need not be decided. From the correspondences and opinions of the 4 Department which has been brought on record by the petitioner, it is clear that the Department consistently held the view that royalty was not payable whereas the Mines Department or the Treasury Officer acting on behalf of the Mines Department is now of the opinion that royalty is payable, even where State itself removes minor mineral belonging to the State itself for use in the work of the State itself. I accept the position of the Treasury Officer. The result would be if the contractor is now required to pay royalty, Department would be obliged to reimburse it to the contractor to the extent of royalty paid by it or charge to it. Mr. Sinha, learned special P.P. to Mines Department admitted that if one Department of the State uses the minor mineral then notwithstanding, it being the Department of State it was liable to pay royalty to the Department of Mines of the Sate. This, he submits is the true import of Rule 40 with its Sub-Rules. Ordinary earth was earlier not a declared minor mineral. It was declared minor mineral in the year 2000 but it was only on 19.04.2006 that it issued notification fixing royalty and defining ordinary earth/soil as miner mineral. Therefore the liability if any would only arise thereafter. It is because of this recent imposition, probably the Department took the stand that royalty was never charged on earth filling. Be that as it may, for the petitioner it makes a little difference 5 because if he is charged with royalty then simultaneously and immediately the State would be under obligation to pay the same to the petitioner as reimbursement of cost incurred. The two obligations are simultaneous and reciprocatory. Thus found the stand of the Treasury Officer being correct, the Respondents in the Department of Rural Works Department are obliged in respect of the said agreement to deducted royalty from the bills payable to the petitioner in proportion to the minor mineral used by the petitioner but at the same time are under legal obligation to reimburse petitioner for the same amount to the same extent simultaneously. It is made clear that now that controversy is over, no sooner payments on account of royalty are made to the petitioner, deduction would be permissible, bills of petitioner should now be cleared for payment preferably within one month. The writ application is thus disposed of. Shageer (Navaniti Prasad Singh, J)