IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.807 of 2010 1. M/S YOGENDRA RAI VILL- BANSHI BATARAHA, P.S. PHULWARIA, DISTT. GOPALGANJ THROUGH ITS PROPRIETOR YOGENDRA RAI, S/O SRI RAM CHHABILA RAI, R/O VILL- BANSHI BATARAHA, P.S. PHULWARIA, DISTT. GOPALGANJ Versus 1. EAST CENTRAL RAILWAY THROUGH THE CHIEF ADMINISTRATIVE OFFICER EAST CENTRAL RAILWAY, MAHENDRU GHAT, PATNA 2. THE CHIEF ENGINEER EAST CENTRAL RAILWAY, MAHENDRU GHAT, PATNA 3. THE DEPUTY CHIEF ENGINEER (CONSTRUCTION) II EAST CENTRAL RAILWAY, DARBHANGA 4. THE STATE OF BIHAR THROUGH THE PRINCIPAL SECRETARY/COMMISSIONER MINES AND GEOLOGY DEPTT., GOVT. OF BIHAR, PATNA 5. THE PRINCIPAL SECRETARY/COMMISSIONER MINES AND GEOLOGY DEPTT., GOVT. OF BIHAR, PATNA 6. THE DISTRICT MINING OFFICER DARBHANGA ----------- For the Petitioner :- Mr. V.R.P.Singh For the Railways :- Mr. Anil Kumar Sinha For the State :- Mr. V.M.K. Sinha, Spl. P.P. Mines. ----- 7 28/04/2010 Petitioner was awarded contract by the respondent railway authorities in terms of tender notice no. 16 of 2005- 06. Tender was filed initially by the petitioner on 25.01.2006 which was accepted on 19.4.2006 and an agreement between the petitioner and the respondent railway authorities was - 2 - executed on 31.05.2006. Work has been completed by the petitioner but the reason for him to approach the Court is the issue of payment of royalty for the earth used in the contract work. Whether it is to be paid by the petitioner or the railways is a question which has been raised in the present writ application. Submission of the learned counsel for the petitioner is that the schedule of rates fixed by the Railways way back in 1998 never envisaged any component of royalty for the earth which was used in filling of the embankments etc. because the amendment which was brought about in Minor Mineral Act and Rules was notified by the State of Bihar only on 19.04.2006. Petitioner, therefore, did not anticipate this liability from the tender and did not include this component in the rates which he had quoted before the railways. Petitioner has drawn attention of the Court to Clause 23.4 of the tender paper which is re-produced here-in- below: “23.4 – Rates to include all Taxes; the rates quoted shall be inclusive of all taxes levied by Central or State Government or by any Municipal/Local or any other body. However, change of rate of Statutory Taxes of the State/Central Government and levy of any new type of such statutory tax shall be on Railway Account.” - 3 - According to the petitioner a reading of the said clause of the agreement would show that any new type of such statutory tax has to be paid by the railways and not by the petitioner. That is the interpretation which is feasible by a plain reading of the agreement. Learned counsel representing the railways, however, controverts the stand of the petitioner by stating that the question of liability of payment of royalty became a subject matter of litigation before the Patna High Court in the case of Hindustan Steel Works Construction Ltd. and other analogous cases Vs. State of Bihar and others, reported in 2007(2) PLJR, 849. The Division Bench of this Court after due deliberations came to a considered opinion that no royalty is to be paid by the petitioners who happened to be the contractors prior to the date 18.04.2006 but liability to pay royalty thereafter was on the contractors. In view of the law having been laid down by the Division Bench, the date has significance. Obviously, since the agreement has been entered by the petitioner with the respondent railways on 31.05.2006, much after the notification the liability for payment of the royalty, as per clause 23.4 has to be read in - 4 - the above stated factual background. Another significant aspect which has been pointed out by the learned counsel for the railways is that the rates quoted by the petitioner is also a give way. A perusal of annexure – R/1 would show that the petitioner had quoted two different rates for the work in question. Where the earth was sought to be obtained from the railway land, the figure of Rs.452.46 has been quoted whereas for the earth from outside the railway land, a figure of Rs.783.74 has been quoted. Submission of the learned counsel for the respondents, therefore, is that the petitioner had well taken care of the royalty aspect of the matter as well while quoting his rates even though he may plead innocence or lack of knowledge with regard to development of levying of royalty when the contract was entered. The corresponding facts emerging from Annexure-R/1 filed on behalf of the railways is a sure give way. Taking into consideration the decision rendered by the Division Bench as regard to above and the factual position, the Court is not satisfied that the petitioner has a case to shift the burden of payment of royalty upon the - 5 - railways for the contract carried out by him more so since the agreement was entered on 31.05.2006. The writ application having no merit is dismissed. AMIN (Ajay Kumar Tripathi, J.)