Civil Writ Jurisdiction Case No.11230 of 2009 ******* In the matter of an application under Article 226 of the Constitution of India. ******* M/S Kamla Construction Co., Kamla Awas, 201, Co-operative Colony, B.S. City, At P.O., P.S., Town & District- Bokaro-827001, through its Authorised Representative, Binod Kumar Singh, son of Sri Krishnadeo Singh at present residing at 201, Co-operative Colony, B.S. City, At, P.O., P.S., Town & District- Bokaro-827001. .... .... Petitioner. Versus 1. The State of Bihar, through its Chief Secretary, Old Secretariat, P.S. Sachivalaya, Patna. 2. The Principal Secretary, Department of Mines & Geology, Government of Bihar, Old Secretariat, P.S. Sachivalaya, Patna. 3. Mining Officer-cum- Collector, Madhubani, District- Madhubani. 4. Assistant Mining Officer, Madhubani, At & P.O. Madhubani. 5. IRCON International Ltd., Pallika Bhawan, Sector-XIII, R.K. Puram, New Delhi-110066 through its Chairman & Managing Director. 6. Additional General Manager, IRCON International Ltd., 1st Floor, Sone Annexie Bhawan, Daroga Prasad Rai Path, Patna-800001. .... .... Respondents. ******* For the Petitioner: Mr. Umesh Prasad Singh, Sr. Advocate. For the S t a t e: Mr. Bishwamohan Kumar Sinha, Special Public Prosecutor (Mines) For Respondent Nos.5 & 6: Mr. Ranjan Kumar Sinha, Advocate. ******** P R E S E N T THE HON’BLE MR. JUSTICE SUDHIR KUMAR KATRIAR THE HON’BLE MR. JUSTICE AHSANUDDIN AMANULLAH ******* S.K. Katriar, J. This writ petition is directed against the following orders: (i) Letter no.577, dated 13.5.2009 (Annexure-3), issued under the signature of respondent no.4, calling upon the petitioner to make payment of a sum of Rs. 15,90,000/-, 2 by way of royalty under the provisions of the Bihar Minor Mineral Concession Rules, 1972 (hereinafter referred to as „the Rules‟). (ii) This writ petition is further directed against the letter no.847, dated 9.7.2009 (Annexure-3/1), issued under the signature of respondent no.4, whereby the petitioner has been directed to undertake the mining operations of earth used for construction of roads after obtaining quarrying permit under the provisions of rule 28. 2. A brief statement of facts essential for the disposal of this writ petition may be indicated. Respondent nos.1 to 4 assigned work to respondent no.5 under a contract, for construction of the public road from Hanuman Nagar (Ch.16.471k.m.) to Samastipur- Mush Gharai (Ch.46.374k.m.) of SH-50- Package No.1B (III). Respondent no.5, a public sector undertaking of the Government of India, in its turn, entered into an agreement with the petitioner dated 20.1.2007, relevant portion of which is marked Annexure-A to the counter affidavit of respondent no.5, whereby the latter (respondent no.5) off-loaded the work in question to the petitioner on the terms and conditions mentioned in the agreement. In order to complete the work, the petitioner had utilised the earth of the adjoining or nearby land. Respondent no.4 issued impugned order dated 13.5.2009 3 (Annexure-3), calling upon the petitioner to pay a sum of Rs.15,90,000/- by way of royalty on the earth/soil so used, under the provisions of the Rules. Impugned order dated 9.7.2009 (Annexure- 3/1), is to the effect that the petitioner may proceed further with the quarrying of earth after obtaining the quarrying permit in terms of rule 28 of the Rules. 3. While assailing the validity of the impugned action, learned counsel for the petitioner submits that the petitioner is covered by entry 6 which provides imposition of royalty at the rate of Rs.2/- per cubit meter. In his submission, the authorities erred in applying entry 5 to the present case. Learned counsel has made a distinction between the expressions „ordinary earth‟, and „earth‟, used in entries 5 and 6, and also sought to make a distinction between the expressions „commercial use‟ and „commercial work‟ occurring in the two entries. He next submits that no reasonable classification is discernible from entry 5 and entry 6. He relies on the judgment of the Supreme Court in Ram Krishna Dalmia vs. Justice Tendolkar, AIR 1958 SC 538 (Para 11). He also submits that the petitioner has admittedly obtained earth from private lands of the raiyats under the provisions of the Mines and Minerals (Regulation and Development) Act 1957 (hereinafter referred to as „the Act‟), read with the Rules which cover the cases only of mines 4 and minerals owned by the Government. The same do not cover earth of lands owned by private individuals. He relies on the following judgments of the Supreme Court: (i) State of Orissa and others vs. Union of India and another [(2001)1 SCC 429]. (ii) Union of India vs. Pramod Gupta and others [(2005)12 SCC 1] 3.1) He next submits that all the relevant provisions of the Act and the Rules speak of lessee. The petitioner, not being a lessee, cannot be called upon to make payment of royalty. He also submits that the basis for quantification is not stated in the impugned order and is, therefore, fit to be set aside. He next submits that the judgment dated 23.3.2007, passed by this Court in Hindustan Steel Works Construction Ltd. vs. State of Bihar [2007 (2) PLJR 849], dealt with the situation prior to promulgation of the amendments in the Rules and Schedule-II thereto sought to be applied in the present case and, therefore, the judgment is inapplicable. He lastly submits that all minerals may belong to the State of Bihar provided the land is owned by it, and ordinary earth can never be a mineral. 4. Learned counsel for respondent nos.5 and 6 submits that royalty is undoubtedly payable under the provisions of the Act and the Rules, and by the petitioner in the present case in view of the agreement inter-parties. He relies on the judgment in Som Datt 5 Builders Limited vs. Union of India and others [(2010)1 SCC 311. He also submits that the issues are concluded by the judgment of a Division Bench of this Court in Hindustan Steel Works Construction Ltd. vs. State of Bihar (supra). 5. Learned counsel for respondent nos.1 to 4 submits that the issues are concluded by the Division Bench judgment of this Court in Hindustan Steel Works Construction Ltd. vs. State of Bihar (supra), and the judgment of the Supreme Court in Som Datt Builders Limited vs. Union of India (supra). He submits that, in view of the notification dated 3.2.2000 (Annexure-1), issued by the Government of India, read with the Gazette Notification dated 19.4.2006 (Annexure-2), issued by the Government of India, the liability of royalty on extraction of earth for construction of road is no longer in doubt. Relying on the judgment in State of Orissa vs. Union of India (supra), he submits that the State is the owner of all mines and minerals within its territory, and the minerals vests in the State. He submits in the same vein that the liability with respect to particular item has to be covered by the definition of „minor minerals‟, occurring in section 3(e) of the Act, read with rule 2(x) of the Rules. He relies on the judgment of the Supreme Court in Som Datt Builders Limited vs. Union of India (supra). He submits that the basis and the yardstick to quantify the amount of royalty is indicated 6 in paragraph 8 of the writ petition, namely, estimated bill of quantities etc., though the same has been denied by the petitioner to be a sound basis. He submits that the quantification is essentially an issue of fact which cannot be adjudicated within the narrow confines of writ jurisdiction. The petitioner has approached this Court without exhausting the alternative remedy available to him under the Rules. 6. We have perused the materials on record and considered the submissions of the learned counsel for the parties. A brief statement of the law governing the issue may be recapitulated. The Parliament brought the Act on the statute book with effect from 28.12.1957. Section 2 provides the aims and objects of the enactment and declares that it is expedient in public interest that the Union should take under its control regulation of mines and development of minerals to the extent provided in the Act. Section 3(d) defines „mining operations‟, Section 3(e) defines „minor minerals‟, and are reproduced hereinbelow: “3. Definitions. - In this Act, unless the context otherwise requires.- xxx xxx xxx xxx xxx xxx (d) “mining operations” means any operations undertaken for the purpose of mining any mineral; (e) „minor minerals” means building stones, gravel, ordinary clay, ordinary sand other than sand used for prescribed purposes and any other mineral which the Central Government may by notification in the 7 official Gazette, declare to be a minor mineral.” In exercise of powers conferred by clause (e) of section 3 of the Act, the Central Government issued notification dated 3.2.2000 (Annexure-1), whereby the ordinary earth used for filling or levelling purposes in construction of embankments, road, railways, buildings to be a minor mineral in addition to the minerals already declared as minor minerals occurring in section 3(e) of the Act. In other words, by this notification, ordinary earth used for the purpose mentioned therein now part of „minor minerals‟ occurring in Section 3(e) of the Act. 6 .1) The Bihar Government issued notification whereby it amended Schedule II to the Bihar Rules, the relevant portion of which is now reads as follows: vuqlwph 2 (fu;e 26 (1) (ch) nz"VO;) LokfeLo Dz0 la[;k [kfut dk uke nj izfr ?kuehVj (:i;s esa) 1 xxx xxx xxx xxx xxx xxx xxx xxx 5 Lk/kkj.k feV~Vh/ ftldk mi;ksx jkuhxat [kiM+k] O;kikfjd dk;ksZa tks cka/k] lM+d ] jsyos] Hkou vkfn ds fuekZ.k esa Hkjus ;k leery djus ds mn~ns’; ls fd;k tkrk gSA 15.00 6 Lk/kkj.k feV~Vh ftldk mi;ksx O;olkf;d dk;ksZa ds fy;s fd;k tkrk gSA 2.00 8 Section 4 of the Act provides that prospecting or mining operations shall not be undertaken without licence or lease. Once an item, i.e. a mineral, falls within the definition of „minor mineral‟ in terms of section 3(e) of the Act, or a notification issued by the Central Government under that section, it would be within the purview of the State Government which is empowered under section 15 of the Act to make rules in respect of minor minerals. Section 15 of the Act in so far as it is relevant in the present context is reproduced hereinbelow: “15. Power of State Governments to make rules in respect of minor minerals.- (1) The State Government may, by notification in the Official Gazette, make Rules for regulating the grant of quarry leases, mining leases or other mineral concessions in respect to minor minerals and for purposes connected therewith. (1A) In particular and without prejudice to the generality of the foregoing power such rules may provide for all or any of the following matters, namely;- (a) xx xx xx (b) xx xx xx (c) xx xx xx (d) xx xx xx (e) xx xx xx (f) xx xx xx (g) the fixing and collection of rent, royalty, fees, dead rent, fines or other charges and the time within which and the manner in which these shall be payable” In exercise of powers under section 15(g) of the Act, the State legislature has enacted the Rules. Rule 26 provides for levy of rent, royalty and assessment. Rule 26(1) (b) provides that royalty shall be charged at the rates specified in Schedule II thereto. 9 7. Respondent nos.1 to 4 awarded a contract for construction of the road indicated hereinabove to respondent no.5, who later entered into an agreement with the petitioner and assigned the work to complete the job as a sub-contractor. It is admitted case of the parties that the petitioner has obtained/purchased earth from the land owners of the adjoining land or nearby lands who are private individuals. No portion of the earth has been purchased from the Government. In such a situation, we are of the view that the earth used by the petitioner is covered by the expression „minor clay‟ occurring in section 3(e) of the Act. It is, therefore, a mining operation within the meaning of section 3(d) of the Act. 8. It is thus evident on a plain reading of the definition of „minor minerals‟, occurring in section 3(e) of the Act, inter alia, used for construction of roads is a minor mineral with effect from 3.2.2000. It is further relevant to state that if ordinary earth is used for construction of road, then a lessee shall have to obtain a mining lease from the appropriate authority and shall be required to pay rent/royalty in terms of rule 26, read with the rates prescribed in Schedule II. The power to legislate in the three lists with respect to the item(s) in question has been elaborately discussed by the Supreme Court in Union of India vs. Pramod Gupta (supra). The Supreme Court has observed in the case of State of Orissa vs. Union of India 10 (supra), that the State is the owner of all the mines and minerals within its territory, and the mineral vests in the State. Entry 54 of List I of the Seventh Schedule confers power on the Union Legislature to have regulation of mines and minerals development under the control of the Union, as declared by Parliament by law to be expedient in public interest. The Act has obviously been enacted under Entry 54, of List-I. 9. The Supreme Court has held as follows in paragraphs 26 and 27 of the judgment in Som Datt Builders Limited vs. Union of India (supra): “26. Having held that “ordinary earth” is comprehended within the meaning of the word “any other mineral” in Section 3(e) of the 1957 Act, the question that now arises is whether the exercise of power by the Central Government under Section 3(e) of the 1957 Act in declaring the use of “ordinary earth” for filling or levelling purposes in construction of embankments, roads, railways and buildings as “minor mineral” is justified. 27. It was contended on behalf of the appellants that the Central Government cannot include any matter based on mere use nor can it make purpose-based distinction. Once the “ordinary earth” is found to be comprehended within the meaning of the word “any other mineral” for the purposes of Section 3(e) of the 1957 Act, in our view, there is no impediment for the Central Government to include or exclude the same based on a particular use or purpose. User can be a valid reason for exclusion as well as inclusion in declaring mineral, “minor mineral” in exercise of the powers conferred upon the Central Government under Section 3(e) of the Act and exercise of any such power based on use or purpose cannot be said to be arbitrary. We, accordingly, find no merit in the contention of the learned Senior Counsel for the appellants that the declaration of “ordinary earth” for the uses and purposes mentioned in the Notification dated 3-2-2000 is ultra vires the power conferred upon the Central Government.” (Emphasis added) 10. Learned counsel for the petitioner submits that it is 11 incongruous that ordinary earth on the lands belonging to private individuals is being described as a minor mineral. The question has been answered by the Supreme Court in the aforesaid judgment as well as the Division Bench judgment of this Court in Hindustan Steel Works Construction Ltd. vs. State of Bihar and (supra), that the issue whether or not an item is a minor mineral depends on the definition of „minor mineral‟ defined in the Act as amended from time to time. Once it is found that the earth used for levelling or construction of roads is covered by the definition „minor mineral‟ occurring in section 3(e) of the Act, the liability of payment of rent/royalty with respect to the mining operation has to be found under the Rules. As indicated hereinabove, Bihar Government has framed the Rules. Rule 26(1) (b) thereunder provides for levy of rent on mining operation with respect to minor minerals and the rates are prescribed in Schedule-II. 11. With this we pass on to the question whether the petitioner‟s case is covered by entry V or entry VI of Schedule-II. We have no hesitation in stating, as we have found hereinabove, that the ordinary earth used by the petitioner for levelling purposes in construction of road is undoubtedly covered by entry V of Schedule- II. The distinction sought to be made between „ordinary clay‟ and „mining earth‟ and „commercial use‟ and „commercial works‟ 12 occurring in entry-V and entry VI of Schedule-II, has been discussed by the Division Bench in Hindustan Steel Works Construction Ltd. vs. State of Bihar (supra), and it has been laid down therein that all such mining operations with respect to ordinary earth used for levelling purposes in construction of roads is covered by entry V of Schedule II of the Act with effect from 18.4.2006, the date on which the aforesaid notification marked 2 was promulgated. 12. We must also consider the contention advanced on behalf of the petitioner that it is evident on a perusal of the relevant provisions of the Act and the Rules that mining operations with respect to minor minerals cannot be undertaken without the requisite licence or quarrying permit contemplated by the Rules and the Act, failing which levy of rent/royalty is impermissible in law. The petitioner, not being a licensee, cannot be fastened with the liability. The question has been discussed by the Supreme Court in State of Orissa vs. Union of India (supra), which dealt with the Orissa Rules. It is stated in paragraph 5 of the judgment that the mining operations done with respect to minor minerals without obtaining the licence or the quarrying permit may result in action contemplated by the Act and the Rules, and the fiscal liability remains unaffected. So far as the Bihar Rules are concerned, rule 40 provides for penalty for unauthorized extraction and removal of minor minerals. In other 13 words, mining operations with respect to a minor mineral without the requisite licence or quarrying permit may result in action under rule 40 of the Act. It does not dilute the liability for payment of rent or royalty. Paragraph 5 of the judgment in State of Orissa vs. Union of India (Supra) is reproduced hereinbelow: “5. This being the position and the use of minor minerals on the railway track, after being extracted from the land, not coming within the expression “bona fide domestic consumption”, the said operation would be a quarrying operation under Rule 2(o), and consequently, the embargo contained in Rule 3 would apply. A combined reading of Rules 2(l), 2(o) and Rule 3 makes it crystal-clear that the Railway Administration, cannot undertake the quarrying operation unless a permit is granted in its favour and, consequently, if the Railway Administration utilises the minor minerals from the land, for the railway track, it would be bound to pay the royalty chargeable under the Orissa Minor Minerals Concession Rules. The liability for payment of royalty accrues under Rule 13 (sic 3) and no doubt, speaks of a lease deed. If the Railway Administration, though not a lessee and at the same time is not authorised under Rule 3 to undertake any quarrying operation for the purpose of extraction of minor minerals, then for such unauthorised action, the Railway Administration would be liable for penalties, as contained in Rule 24. This being the position and in view of the prohibition contained in sub-rule (2) of Rule 10 and taking into account the fact that such minor minerals would be absolutely necessary for laying down the railway track and maintenance of the same, we would hold that the Railway Administration would be bound to pay royalty for the minerals extracted and used by it, in laying down the railway track. The impugned judgment of the Orissa High Court is accordingly set aside and this appeal is allowed.” 14 13. The Supreme Court has laid down to the same effect in Som Datt Builders Limited vs. Union of India (supra). It appears to us on a perusal of Clause 56 (iii) of the agreement inter-parties that the contractor, i.e. the petitioner herein, shall have to pay all fees and royalties. 14. With this we pass on to the last submission advanced on behalf of the petitioner. He submits that the impugned order does not indicate the basis or the yard-stick for quantification of the amount of royalty. Learned counsel for respondent nos.1 to 4 rightly invites our attention to paragraph 8 of the writ petition which is a complete answer to the question. It challenges the estimated bill of quantities to be the basis for quantification. Therefore, it appears that the estimated bills of quantities have been made the basis for quantification to levy the amount of rent/royalty. Except making a bald statement, no sound logic has been advanced to challenge the same. Furthermore, quantification is essentially an issue of fact which cannot normally be permitted to be raised within the limited confines of writ jurisdiction. If the petitioner has approached this Court without exhausting the statutory remedies available to him under the Rules, which he has elected this as per his own volition, the writ petition shall not be rejected on this ground, and the petitioner shall have to be content with the limited scope of interference under the powers of judicial 15 review. The contention advanced on behalf of the petitioner is rejected. 15. In the result, we do not find any merit in this writ petition. It is dismissed. In the circumstances of the case, there shall be no order as to costs. (S K Katriar, J.) Ahsanuddin Amanullah: I agree. (Ahsanuddin Amanullah, J.) Patna High Court, Patna. Dated the 2nd day of August, 2011. S.K.Pathak/ (AFR).