Allahabad High Court
Vikash Shukla vs State Of U.P. And 2 Others on 8 May, 2026
Author: Saral Srivastava
Bench: Saral Srivastava
HIGH COURT OF JUDICATURE AT ALLAHABAD
HIGH COURT OF JUDICATURE AT ALLAHABAD
WRIT - C No. - 2488 of 2026
Reserved on 03.02.2026
Delivered on 08.05.2026
Vikash Shukla
..Petitioner(s)
Versus
State of U.P. and 2 others
..Respondent(s)
Counsel for Petitioner(s)
:
Devbrat Mukherjee, Siddharth Mukherjee
Counsel for Respondent(s)
:
C.S.C.
HON'BLE SARAL SRIVASTAVA, J.
HON'BLE SUDHANSHU CHAUHAN, J.
(Delivered by Honble Saral Srivastava,J)
1. Heard Sri Devbrat Mukherjee, learned counsel for the petitioner and Sri Rajeshwar Tripathi, learned Chief Standing Counsel-II for the State-respondents.
2. The petitioner by means of the present petition has assailed the order dated 22.11.2025 passed by the respondent no.2-District Magistrate, Mirzapur by which he has imposed penalty of Rs.5 lacs and has further directed the petitioner to deposit Rs.2,54,87,715/- for the illegal mining of building stone and sand stone.
3. It appears that a lease deed has been executed by the petitioner with the State Government in MM-6 for excavating building stone and sand stone on 15.05.2023. The lease deed was for a period of ten years and the period of lease is upto 14.05.2033.
4. The petitioner was issued a show cause notice on 05.07.2025 which was based on an inspection report dated 28.06.2025 alleging that the petitioner has misappropriated Form MM-11 for illegal transportation of sand stone to the tune of 46341.3 cubic meters. In the show cause notice, the competent authority incorporated the table given in the survey report which records geo-coordinates/measurement of pits made during mining operation and the quantity of mineral used in E-MM-11. The table given in the show cause notice is reproduced herein-below:
मौके पर स्वीकृत क्षेत्र में बने पिट्स का भू-निर्देशांक/पैमाईश का विवरणः-
पिट्स नं० अक्षांश एवं देशांतर पिट्स का क्षेत्रफल (वर्ग मीटर में) पिट्स की औसत गहराई (मीटर में) खनन कर परिवहन की गयी उपखनिज की मात्रा (घन मीटर में) पोर्टल के अनुसार उपभोग मात्रा (घन मी० में) प्रपत्र ई एम०एम० 11 का दुरुपयोग कर परिवहन की गयी खनिज की मात्रा (घन मी० में) 1 नवीन खनन का पिट्स A 250 13.26N 820448.48E B 250 13.76N 820447.41E C 250 14.62N 820447.70E D 250 14.14N 820449.12E 1137 1.2 1364.4 55734 46341.3 2 पूर्व का खनन पिट्स जिसमें वर्तमान में जल भरा है।
A 250 15.19N 820446.07E B 250 16.51N 820446.47E C 250 16.15N 820448.47E D 250 15.25N 820448.19E E 250 15.14N 820449.86E F 250 14.14N 820449.12E 3823 2.1 8028.3 योगः-
9392.7 55734 46341.3
5. Accordingly, the petitioner was charged for violating the U.P. Minor Minerals (Concession) Rules, 2021 (hereinafter referred to as 'Rules, 2021') and Section 21 of Mines and Minerals (Development and Regulation) Act, 1957 (hereinafter referred to as 'Act, 1957'). Consequently, petitioner was given a notice calling upon him to show cause with regard to misuse of Form MM-11 as 46341.3 cubic meter of the mineral found in excess.
6. The petitioner submitted a reply to the show cause notice. An order dated 04.09.2025 was passed by the District Magistrate, Mirzapur which was assailed by the petitioner before this Court by means of Writ-C No.35201 of 2025. Since in the order dated 04.09.2025, the District Magistrate did not advert to all the issues raised by the petitioner in the reply, therefore, this Court allowed the writ petition and remanded the matter to the District Magistrate by judgement and order dated 14.10.2025.
7. After the aforesaid order of remand by this Court, a fresh show cause notice was given to the petitioner on 24.10.2025, copy of which is appearing on page 29 of the writ petition.
8. The petitioner in response to the show cause notice has submitted a detailed reply on 31.10.2025 wherein petitioner has stated that the alleged joint inspection report dated 28.06.2025 was not supplied to the petitioner. The petitioner has also stated that no credible evidence and materials regarding alleged misappropriation of E-MM-11 has ever been given to the petitioner. The petitioner also stated that alleged inquiry is only confined to one pit and members of the Joint Inspection Committee did not inspect the other pits situated in the sanctioned area.
9. The District Magistrate after hearing the petitioner and after considering the reply of the petitioner passed an order dated 22.11.2025 which order has been assailed by the petitioner in the present petition.
10. Challenging the aforesaid order, learned counsel for the petitioner has contended that District Magistrate has failed to consider the objections raised by the petitioner inasmuch as the District Magistrate has not considered the reply submitted by the petitioner dated 31.10.2025. He contends that the order impugned is without jurisdiction inasmuch as if the impugned order is treated to be an order under Rule 58 of Rules, 2021, penalty can be imposed only after conviction of petitioner for contravention of Rule 3 of Rules, 2021.
11. He submits that in case District Magistrate has invoked Rule 58 of Rules, 2021, then it is incumbent upon him to comply with the mandatory requirement of Rules 76 of Rules, 2021 and proviso to sub-rule (2) of Rule 77. He submits that since in the instant case, there is no compliance of Rules 76 & 77 of Rules, 2021, therefore, proceeding under Rule 58 of Rules, 2021 is without jurisdiction and de hors the Rules, 2021.
12. He further submits that if present proceeding is treated to be under Rule 61 of Rules, 2021, the power is vested with the State Government to invoke such power and not with the District Magistrate, therefore, impugned order cannot be sustained in law.
13. He further contends that no basis has been given for calculating the cost of minerals, and thus, impugned order cannot be sustained in law. In support of the said contention, he has placed reliance upon the judgement of this Court in the case of Ranveer Singh Vs. State of U.P. and Others 2017(1) AWC 940.
14. Per contra, learned Chief Standing Counsel-II would contend that it is the term and condition of the lease deed that if petitioner violates any provision of Rules, 2021 or terms and conditions of lease deed or Environment Clearance Certificate or mining plan, a proceeding for such violation can be initiated against him. He further submits without admitting that if the argument of learned counsel for the petitioner with respect to invocation of Rule 58 of Rules, 2021 by the District Magistrate is accepted, that would not make the order bad inasmuch as it is evident from the show cause notice as well as impugned order that District Magistrate has also issued notice under Section 21 of the Act, 1957.
15. He submits that under Section 21 of the Act, 1957, though the power is vested with the State Government, but the State Government has delegated the power to the District Magistrate by Government Notification dated 10.02.1986. Accordingly, he submits that the District Magistrate has rightly invoked the power under Section 21 of the Act, 1957, and has passed an order of recovery for misappropriation of E-MM-6 to the extent of misuse of quantity of 46341.3 cubic meter.
16. He has further placed reliance upon Rule 2(m) of Rules, 2021 which defines 'pits mouth value' and has further relied upon sub-rule (3) of Rule 21 of Rules, 2021 to contend that value of the mineral is five times royalty, and accordingly, there is no illegality in calculating the royalty amounting to Rs.2,54,87,715/-. Accordingly, he submits that there is no illegality in the order impugned and this Court should refrain from interfering with the impugned order.
17. To the aforesaid submission, learned counsel for the petitioner submits that it is not a case where power under Section 21 of the Act, 1957 can be invoked inasmuch as it is not a case of illegal excavation of minerals rather it is a case of misuse or misappropriation of E-MM-11, and therefore, power has wrongly been exercised by the District Magistrate under Section 21 of the Act, 1957.
18. We have considered the rival submissions advanced by learned counsel for the parties and perused the record.
19. So far as the contention of learned counsel for the petitioner that impugned order is without jurisdiction inasmuch as if the impugned order is treated to have been passed under Rule 58 of Rules, 2021, penalty can be imposed only after the petitioner is convicted for contravention of Rule 3 of Rules, 2021 for which the compliance of Rule 76 and proviso to sub-rule (2) of Rule 77 of Rules, 2021 is mandatory is concerned, we are of the view that the said contention is misconceived inasmuch as it is evident from the show cause notice dated 05.07.2025 that the notice has been issued to the petitioner for violation of terms and conditions of the lease deed, Rules, 2021 and Section 21 of the Act, 1957, and the power has been exercised under Section 21 of the Act, 1957, therefore, there is no illegality in the impugned order.
20. The reason for our aforesaid view is delineated in the later part of the judgement, therefore, we do not propose to deal with the argument of learned counsel for the petitioner that if Rule 58 of Rules, 2021 is invoked, penalty can be imposed only after conviction of the petitioner for contravention of Rule 3 of Rules, 2021 for which compliance of Rule 76 and proviso to sub-rule (2) of Rule 77 of Rules, 2021 is mandatory.
21. From the impugned notice dated 05.07.2025, it is evident that one of the provision under which the notice has been given to the petitioner is Section 21 of the Act, 1957.
22. Now, we proceed to consider as to whether the District Magistrate has rightly passed the order invoking power under Section 21 of the Act, 1957. In the impugned notice dated 05.07.2025, a table has been framed to show the misuse of form E-MM-11 by misappropriating 46341.3 cubic meters of mineral.
23. The petitioner in response to the said notice has submitted reply stating that exparte joint inspection report dated 28.06.2025 was not supplied to the petitioner. It has been stated by the District Magistrate in the impugned order that in the notice dated 05.07.2025 and order dated 04.09.2025, the inspection report dated 28.06.2025 has been reproduced with GPS Geographic Coordinate etc. The aforesaid finding has been recorded by the District Magistrate in the following words:-
जब कि नोटिस दिनांक 05.07.2025 व आदेश दिनांक 04.09.2025 में राजस्व व खनिज विभाग की आख्या दिनांक28.06.2025 मय जी०पी०एस० भूनिर्देशांक आदि विवरण सहित पूर्णतः अकित है.
24. We have perused the pleadings in the writ petition and could not find that correctness of the aforesaid finding has been assailed by the petitioner.
25. It is also relevant to note that the petitioner has not produced any documentary evidence to prove that the details of misappropriation stated in the table in the show cause notice are incorrect. Therefore, the finding of the District Magistrate holding that the petitioner has misappropriated 46341.3 cubic meters by misusing E-MM-11 form and has transported the said quantity illegally, is a finding of fact and cannot be interfered with until it is proved to be perverse or against the record by the petitioner.
26. It is also pertinent to note that the Apex Court in the case of Karnataka Rare Earth and Another Vs. Senior Geologist, Department of Mines & Geology and Another 2004 (2) SCC 783 has held that the demand by the State of Karnataka of the price of the mineral cannot be said to be lavy of penalty or a penal action. In the said case, the State of Karnataka has issued a recovery against the appellant for recovery of price of mineral excavated during the period of existence of interim order. The said recovery was upheld by the Apex Court. Paragraph nos.7, 8, 12, 13 and 14 being relevant of the said judgement are being reproduced herein below:-
7. In our opinion, the demand by the State of Karnataka of the price of the mineral cannot be said to be levy of penalty or a penal action. The marginal note of the section-"penalties", creates a wrong impression. A reading of Section 21 shows that it deals with a variety of situations. Sub-sections (1), (2), (4), (4-A) and (6) are in the realm of criminal law. Sub-section (3) empowers the State Government or any authority authorized in this behalf to summarily evict a trespasser. Sub-section (5) empowers the State Government to recover rent, royalty or tax from the person who has raised the mineral from any land without any lawful authority and also empowers the State Government to recover the price thereof where such mineral has already been disposed of inasmuch as the same would not be available for seizure and confiscation. The provision as to recovery of price is in the nature of recovering the compensation and not penalty so also the power of the State Government to recover rent, royalty or tax in respect of any mineral raised without any lawful authority can also not be called a penal action. The underlying principle of sub-section (5) is that a person acting without any lawful authority must not find himself placed in a position more b advantageous than a person raising minerals with lawful authority.
8. The correct principles of law applicable to the facts of the present case emanating from equity, and statutorily embodied in sub-section (5) of Section 21 abovesaid, are to be found dealt with extensively in a recent decision of this Court in South Eastern Coalfields Ltd. v. State of M.P.
12. Is sub-section (5) of Section 21 a penal enactment? Can the demand of mineral or its price thereunder be called a penal action or levy of penalty?
13. A penal statute or penal law is a law that defines an offence and prescribes its corresponding fine, penalty or punishment. (Black's Law Dictionary, 7th Edn., p. 1421.) Penalty is a liability composed (sic imposed) as a punishment on the party committing the breach. The very use of the term "penal" is suggestive of punishment and may also include any extraordinary liability to which the law subjects a wrongdoer in favour of the person wronged, not limited to the damages suffered. (See Aiyar, P. Ramanatha: The Law Lexicon, 2nd Edn., p. 1431.)
14. In support of the submission that the demand for the price of mineral raised and exported is in the nature of penalty, the learned counsel for the appellants has relied on the marginal note of Section 21. According to Justice Singh, G.P.: Principles of Statutory Interpretation (8th Edn., 2001, at p.147), though the opinion is not uniform but the weight of authority is in favour of the view that the marginal note appended to a section cannot be used for construing the section. There is no justification for restricting the section by the marginal note nor does the marginal note control the meaning of the body of the section if the language employed therein is clear and spells out its own meaning. In Director of Public Prosecutions v. Schildkamp Lord Reid opined that a sidenote is a poor guide to the scope of a section for it can do no more than indicate the main subject with which the section deals and Lord Upjohn opined that a sidenote being a brief prcis of the section forms a most unsure guide to the construction of the enacting section and very rarely it might throw some light on the intentions of Parliament just as a punctuation mark.
27. In the light of the principles enunciated in the aforesaid judgement, we are of the view that the respondent has sought to recover the price of mineral misappropriated by the petitioner which it can do under Section 21 of the Act, 1957.
28. So far as the contention of learned counsel for the petitioner that it is only the State Government who is empowered to pass an order under Section 21 of the Act, 1957 is concerned, we may note that the learned Chief Standing Counsel-II has produced Notification dated 10.02.1986 of Department of Industries, Government of India by which the Governor has been pleased to authorise the District Magistrate to exercise the power under Section 21 of the Act, 1957. The Notification dated 10.02.1986 is reproduced hereinbelow:-
8उद्योग अनुभाग- 12, अधिसूचना संख्या 1061/18-12-148-77, लखनऊः दिनांक 10 फरवरी, 1986 प.आ-76 दिनांक 6 फरवरी, 1979 के साथ पठित खान और खनिज (विनियम और विकास) अधिनियम, 1957 (अधिनियम संख्या 67 सन 1957 ) की धारा 26 की उपधारा (2) के अधीन शक्ति का प्रयोग करके, राज्यपाल उक्त अधिनियम की धारा 21 की उपधारा (4) के प्रयोजनों के लिए निम्नलिखित व्यक्तियों को विशेष रूप से अधिकार प्रदान करते हैं :-
1. जिला मजिस्ट्रेट ।
2. अपर जिला मजिस्ट्रेट (राजस्व एवं वित्त)
3. परगनाधिकारी"
29. In view of the aforesaid notification, the contention of the learned counsel for the petitioner that the District Magistrate has no power to pass an order under Section 21 of the Act, 1957 is misconceived and cannot be accepted.
30. So far as the submission of learned counsel for the petitioner that the inspection report dated 28.06.2025 was not supplied to the petitioner, we find that a categorical finding has been recorded by the District Magistrate that the inspection report dated 28.06.2025 has been extracted in the notice dated 05.07.2025. We have extracted the aforesaid finding of the District Magistrate above.
31. The petitioner in his objection has not disputed the correctness of the figures mentioned in the table extracted above regarding misappropriation of minerals by the petitioner. The only objection of the petitioner in his reply to the show cause notice is that the inspection report was not supplied to him.
32. Since, the inspection report has already been extracted in the notice dated 05.07.2025, and a finding in this regard has been recorded by the District Magistrate in his order which has already been extracted above, and the petitioner has not assailed the correctness of the said finding of the District Magistrate, therefore, even if the inspection report has not been supplied to the petitioner, that has not prejudiced the petitioner as the relevant part of inspection report recording details of misappropriation has been recorded in the table extracted above which has been incorporated in the show cause notice, and the petitioner has not disputed the correctness of details given in the table recording the details based on which authority calculated the quantity misappropriated by the petitioner in his reply. Therefore, the contention of learned counsel for the petitioner in respect to non-supply of inspection report is also misconceived and is rejected.
33. So far the contention of learned counsel for the petitioner that the District Magistrate has not considered the objection of the petitioner is concerned, the only objection which has been raised by the petitioner in his representation against the show cause notice is that he has not been supplied the inspection report dated 28.06.2025, and the impugned order is based on no evidence.
34. So far as non-supply of inspection report to the petitioner is concerned, we have already held above that non-supply of inspection report has not prejudiced the petitioner. Further, we find that the impugned order is based upon material on record, and thus, the contention of petitioner that same is not based on material on record is also misconceived and is hereby rejected.
35. So far as the judgement relied upon by the learned counsel for the petitioner in the case of Ranveer Singh (supra) is concerned, there is no quarrel with the proposition laid down in the said judgement that the proceeding under Section 21 of the Act, 1957 is a quasi-judicial proceeding, and full play is required to be given to rule of natural justice by the competent authority. However, in the present case, we have already held that the District Magistrate has followed the principles of natural justice by issuing show cause notice to the petitioner, and after receiving objection of the petitioner has passed an elaborate order giving reasons for recovery of the aforesaid amount.
36. Rule 2(m) of Rules, 2021 defines pits mouth value which is reproduced herein below:-
2. Definitions.-
(m) Pits mouth value means the sale price of the minor mineral at the pit head or at the point of production.
37. Rule 21 of Rules, 2021 defines royalty which is also reproduced herein below:-
21. Royalty-(1) The holder of a mining lease granted on or after the commencement of these rules shall pay royalty in respect of any mineral removed by him from the lease area at the rates for the time being specified in the First Schedule to these rules.
(2). Notwithstanding anything to the contrary contained in Rule 3, royalty should be payable by concerned brick kiln owner or user of ordinary clay or ordinary earth at the rate, for the time being, specified in First Schedule to these rules:
Provided that the State Government shall take fees to be known as Regulating Fees from brick kiln owners in respect of district categorized, on the basis of payas at such rates as may be notified from time to time by it.
(3). The State Government may, by notification in the Gazette, amend the First Schedule so as to include therein or exclude there from or enhance or reduce the rate of royalty in respect of any mineral with effect from such date as may be specified in the notification:
Provided that the State Government shall not enhance the rate of royalty in respect of any mineral for more than once during any period of three years and shall not fix the royalty at the rate of more than 20 percent of the pits mouth value.
(4). Where the royalty is to be charged on the pits mouth value of the mineral, the State Government may assess such value at the time of the grant of the lease and the rate of royalty will be mentioned in the lease deed. It shall be open to the State Government to re-assess not more than once in a year the pits mouth value if it considers that an enhancement is necessary.
(5). Regulating Fees may be determined by the State Government from time to time on minerals entering the State from other States.
38. As per proviso to sub-rule (3) of Rule 21 of Rules, 2021, the value of mineral is five times to royalty. We find that calculation of royalty has been made as per above, and therefore, the contention of learned counsel for the petitioner that royalty has wrongly been calculated is not sustainable in law.
39. We may also record that so far as the penalty of Rs.5 lacs imposed upon the petitioner is concerned, we find that the show cause notice does not indicate that it has also been issued in respect to imposition of penalty of Rs.5 lacs, therefore, we are of the view that imposition of penalty of Rs.5 lacs is illegal, and is, hereby set aside.
40. Accordingly, we hold that recovery of Rs.2,54,87,715/- is correct and the respondents are well within their jurisdiction to recover the said amount which is the price of mineral misappropriated by the petitioner, but the imposition of penalty of Rs.5 lacs is illegal.
41. Accordingly, the writ petition is allowed to the extent of imposition of penalty by the impugned order. However, we dismiss the writ petition so far as it relates to recovery of Rs.2,54,87,715/-.
(Sudhanshu Chauhan,J.) (Saral Srivastava,J.) May 8, 2026 Sattyarth