Madhya Pradesh High Court
M.P. Audhyogik Kendra Vikas Nigam vs Abrar Construction Company And Ors. on 13 January, 2005
Equivalent citations: 2005(2)MPHT172
Author: Dipak Misra
Bench: Dipak Misra, U.C. Maheshwari
ORDER Dipak Misra, J.
1. The grievance of the present petitioner, revisionist, the M.P. Audhyogik Kendra Vikas Nigam (in short 'the Nigam') is that for no fault of it, the M.P. Arbitration Tribunal (in short 'the Tribunal') in Reference Case No. 15 of 1999 filed by the claimant, respondent No. 1, has saddled the liability making the petitioner, Nigam as well as the State jointly and severally liable to pay a sum of Rs. 45,482/- and interest of Rs. 6367/- with a further postulate to pay 12% interest on Rs. 45,482/- from the date of presentation of reference petition that is 2-2-1990 till realisation. In addition, cost of Rs. 600/- and Counsel fee of Rs. 2000/- have also been awarded.
2. Sans unnecessary details, what is requisite to be stated is that the claimant had taken a contract for construction of 80 ft. wide bound metal road in the Industrial Area, Mandideep. On execution of Agreement No. 33/1984-85, the Nigam deducted Rs. 5000/- from the running bill and Rs. 42,800/- from the final bill on account of royalty payable by the claimant on metal and moorum that was used in the construction work. On the basis of letter written by Collector, the amount was deducted and remitted to the Collector. The stand of the claimant before the Tribunal was that the Nigam had deducted Rs. 47,800/- from the bills and had remitted a sum of Rs. 45,482/- to the Collector on account of royalty payable by the petitioner. The claimant had shown receipt for a sum of Rs. 2318/- which was refunded to him. On this foundation, it was put forth before the Tribunal that the claimant was entitled to Rs. 45,482/-deducted on amount of royalty as per Clause 36 of the agreement. It was set forth that the claimant had purchased the material, the metal or the moorum, from the open market on which royalty had already been paid and, therefore, the question of payment of further royalty did not arise.
3. The Nigam in oppugnation of the claim of the petitioner contended that at the instance of the Collector the amount was deducted and remitted to the Collector and, hence the Collector is alone competent to refund the amount to the Contractor.
4. The functionaries of the State in their turn apprised the Tribunal, the petitioner was given a show-cause by the Collector for recovery of royalty and he could produce the royalty receipt only up to Rs. 2918/- and in the absence of any receipt being produced the authority thought it appropriate to realise Rs. 45,482/- and resultantly, the direction was issued by the Collector to the Nigam to remit the sum of Rs. 45,482/-.
5. The Tribunal adverted itself to Clause 36 and commented upon clause that it was incomplete and further held that the said clause was of no assistance to the claimant. Thereafter, the Tribunal dwelled upon the facet whether the deduction by the Nigam was in fitness of things in the absence of any kind of postulates in the agreement. Eventually, in Paragraph 8, the Tribunal expressed the view as under :--
"Considering the position of the Collector, the direction for recovery of the sum of Rs. 45,482/- from the petitioner in the manner directed, was illegal and unwarranted. Royalty on minor mineral is recoverable but once at the time of its removal from the quarry. If a contractor is proved to have removed minor mineral from a quarry without payment of royalty, he may properly be made liable to pay royalty thereon, besides taking any other action against him. At the same time, the law does not prohibit trade in minor mineral. Royalty-paid minor mineral may be brought into the market and sold and re-sold. The person purchasing minor mineral from the open market is not required to pay any royalty. The royalty receipts initially issued may not have been preserved or their preservation might have become meaningless due to material getting unloaded and mixed up with other material in the market. It will be wrong to assume that a purchaser, who purchases material from the open market, brought it stealthily from the quarry without payment of royalty. The remedy to check the theft of minor mineral without payment of royalty from the quarries is for the Govt. to keep proper staff at the exit point, i.e., at the quarries. This has been laid down by M.P. High Court in their decision dated 23-6-1986 in Misc. Petition No. 553 of 1983, M.P. Contractors Sangh v. State of M.P. and Ors., of which a certified copy (Ex. P-7) has been filed. But if the theft is not detected at the time of removal of the minor mineral from the quarry, it would be wrong to assume with respect to minor mineral purchased by any person from open market that the purchased material was one on which royalty had not been paid, or in other words, it was a stolen material. It has been held by M.P. High Court in the above said decision that a contractor, who purchases minor mineral from open market and utilises the same in the execution of any works contract, is not required to produce any royalty receipts before his bills are cleared for payment. A direction given by the Collector or Additional Collector in that case, that if the contractors failed to produce royalty clearance certificate, the royalty might be recovered by the Officer disbursing payment, from the contractors bills, was quashed in that case. There was no basis in the present case for the Collector to assume that material purchased by the petitioner and utilised in the execution of the construction in question, was not purchased by the petitioner from open market, but was one which was stealthily removed from the quarry without payment of royalty. There was, therefore, no justification to direct recovery of royalty from the petitioner in the manner done by the Collector. The direction for recovery of Rs. 45,482/- by deduction from the bills of the petitioner and its remission to the Collector, as given by the Collector to respondent No. 3, was in the circumstances, illegal and unwarranted."
6. We have reproduced the Paragraph 8 of the award passed by the Tribunal since the Tribunal as a matter of fact recorded that there was no justification on the part of the Collector to assume that material purchased by the petitioner and utilised in all the construction in question was not purchased from the open market.
7. Mr. Awinash, learned Counsel for the petitioner has raised the solitary contention that when the Tribunal came to an unequivocal and categorical conclusion that the amount was deducted by the Nigam and remitted to the Collector, there was no justification on the part of the Tribunal to hold that the respondents would be jointly and severally liable for payment of compensation. Mr. Agnihotri, learned Govt. Advocate has submitted that the State might have assailed the order of the Tribunal in some case but he is not in a position to say so. However he supported the order of the Tribunal.
8. At this juncture, we think it appropriate to refer to the interim order passed by this Court on 19-11-1996.
"The case was listed for final disposal on motion hearing but the hearing can not take place as the request has again been made on behalf of the State (respondent Nos. 2 and 3) to submit the return. Two months' time is granted for the purpose.
The order of stay passed by this Court on 2-3-1995, however, is modified by directing that the amount covered under the impugned award shall be deposited by the respondent Nos. 2 and 3 within a period of two months from today in the Court of District Judge, Bhopal being the executing Court and the said amount shall be paid to the contractor-respondent No. 1 on his furnishing security to the satisfaction of the District Judge, Bhopal for its restitution.
Two months' time is granted to the respondent Nos. 2 and 3 to submit the return."
9. Despite the time being granted, no return has been filed. The seminal question that arises for consideration is whether the Tribunal was justified in holding the Nigam liable alongwith functionaries of the State. On a perusal of the award, we are of the considered opinion that when the Tribunal has arrived at a conclusion that when the Tribunal has arrived at a conclusion that the authorities of the Nigam had deducted the sum from the claimant and remitted it to the Collector and further that such collection was not permissible even by the Collector. The direction for fixing joint and several liability was not necessary. Be that as it may, the amount has been found due for the payment and the same has been directed to be paid by the State, since the Tribunal has recorded the finding against the functionaries of the State. As a consequence, we are disposed to think, the Nigam should be exonerated from the liability and respondent Nos. 2 and 3 shall make good the award if not already made good by virtue of the interim order passed by this Court. The amount deposited by way of furnishing security be refunded and he be discharged of the security.
10. The Civil Revision is accordingly allowed and the award passed by the Tribunal is modified to the extent indicated above. There shall be no order as to costs.