Jharkhand High Court
Panem Coal Mines Ltd. Through Its ... vs The State Of Jharkhand Through Its ... on 15 May, 2026
Author: Sujit Narayan Prasad
Bench: Sujit Narayan Prasad, Sanjay Prasad
2026:JHHC:15205-DB
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P (C) No.736 of 2012
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PANEM Coal Mines Ltd. through its director Biswanath Dutta son of
Late Jasoda Dutta, having its registered office at 6, Poorvi Marg, III
Floor, Vasant Vihar, P.O. Vasant Vihar Block C Police Station Vasant
Vihar, Town and District New Delhi-110057 (N.C.R. of Delhi) and also
having its Office at Amrapara, P.O. & P.S. Amrapara, District Pakur,
Jharkhand. ....... ... Petitioner
Versus
1. The State of Jharkhand through its Secretary, Department of Mines &
Geology, Government of Jharkhand, Nepal House, P.O. & P.S.
Doranda, District Ranchi.
2. The Assistant Mining Officer, Pakur, P.O., P.S. & District Pakur.
3. Union of India, through its Secretary, Ministry of Coal, Shastri
Bhawan, P.O. & P.S. Parliament Street, Town & District New Delhi
(N.C.R. of Delhi).
4. The Coal Controller, Ministry of Coal, Government of India, 1
Council House Street, P.O. G.P.O. Kolkata, P.S. Hare Street, Town &
District Kolkata (West Bengal).
5. Punjab State Power Corporation Limited through its. Director having
office at the Mall Baradari Patiala-147001, Punjab.
...... ........... Respondents
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CORAM: HON'BLE MR. JUSTICE SUJIT NARAYAN PRASAD
HON'BLE MR. JUSTICE SANJAY PRASAD
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For the Petitioner : Mr. Indrajit Sinha, Advocate
Mr. Parangat Pandey, Advocate
Mr. Ankit Vishal, Advocate
For the Resp.-State : Mr. Sachin Kumar, AAG-II
For the Resp.No.5 : Mr. Gurminder Singh, Sr. Advocate
Mr. Anoop Kumar Mehta, Advocate
Ms. Anusha Nagrajan, Advocate
Ms. Akansha Bhula, Advocate
Mr. Manish Kumar, Advocate
For the UOI : Mr. Prashant Pallav, ASGI
Mr. Parth Jalan, AC to ASGI
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C.A.V on 30.04.2026 Pronounced on 15/05/2026
Per Sujit Narayan Prasad, J.
1. The instant writ petition under Article 226 of the Constitution of India has been preferred for the following reliefs:
2026:JHHC:15205-DB "(i) An appropriate writ, order or direction for quashing the demand notice as contained in letter No.1226/M dated 21.04.2011 issued by the Assistant Mining Officer, Pakur (respondent No.2), whereby a demand of Rs.14,87,35,277/- has been raised on account of alleged short payment of royalty for the period April 2010 to February 2011 along with interest thereon assessed at Rs.1,33,02,966/-.
(ii) Any other appropriate writ(s), order(s) or direction(s) as may be deemed fit and proper for doing conscionable justice to the petitioner."
Factual Matrix:
2. The brief facts of the case as per the pleadings made in the writ petition reads as under:
(i) The petitioner is a joint venture company formed by and between Eastern Mineral Trading Association and the Punjab State Electricity Board (now Punjab State Power Corporation Limited).
Prior to formation of the joint venture, the Eastern Mineral Trading Association had participated in a tender process, conducted by the then Punjab State Electricity Board for this purpose and was selected, inter alia, on the basis of the price offered by it, which ultimately formed part of the coal purchase agreement entered by the Petitioner and the Punjab State Electricity Board. It is further stated that in the petitioner company, the Punjab State Electricity Board (Punjab State Power Corporation Limited) holds 26% of voting equity share capital.
(ii) Further, Punjab State Electricity Board made an application to the Ministry of Coal, Government of India for allotment of a coal block in terms of Section 3(3) the Coal Mines (Nationalisation) Act, 1973 and consequently, by an order as contained in Notification No.192 dated 22.02.2002 issued by the Ministry of Coal & Mines (Department of Coal), Government of India a coal block in the 2 2026:JHHC:15205-DB Panchwara Central Coal Block in the district of Pakur, Jharkhand was specified as an end use the supply of coal by the petitioner company on an exclusive basis to the power plants of Punjab State Electricity for generation of thermal power subject to the condition that the Punjab State Electricity Board holds at least 26% of voting equity share capital of the petitioner company.
(iii) The allotment of the Panchwara Coal Block by the Central Government, as stated hereinbefore, the State of Jharkhand has executed a mining lease in favour of the petitioner company on 25.11.2004 and 06.01.2007.
(iv) It is stated that after the allotment of the aforesaid coal block and consequent execution of the mining lease, necessary statutory clearances and permissions were obtained by the Company and only subsequent thereto process of mining and winning of coal was started. The mining operations commenced on 02.11.2005 and coal dispatch from the Panchwara Coal Mine started on 10.03.2006.
(v) Since the petitioner company supplies coal solely to Punjab State Electricity Board for its captive consumption, for which a coal purchase agreement between the Punjab State Electricity Board and the petitioner company was executed on 30.08.2006 wherein it was agreed that the Punjab State Electricity Board shall purchase the entire quantity of specified coal supplied to it at a contract price calculated in terms of a formula given therein. Article 6 of the Coal Purchase Agreement dated 30.08.2006 provides for the contract price of coal. The contract price, inter alia, includes the royalty on coal.
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(vi) The basic pit head price on run of mine coal has been fixed by the petitioner in terms of Article 6 of the Coal Purchase Agreement dated 30.08.2006. The invoices for sale of coal are raised by the petitioner on the basis of the contract price arrived at by applying the formula provided by Article 6 of the Coal Purchase Agreement dated 30.08.2006.
(vii) In terms of the aforesaid agreement, the base price has been decided to be the notified price of coal of Bharat Coking Coal Limited. In view of the agreement, the notified price of BCCL is subject to a discount factor and only thereafter the basic pit head price is arrived at and the same is reflected in the invoices raised by the petitioner in favour of its sole purchaser Punjab State Electricity Board.
(viii) The Coal India Limited has issued notifications from time to time notifying price of coal. Such notifications of Coal India Limited are issued by dividing the State of Jharkhand into areas, namely, Rajmahal Area, Simlong Area, S.P. Mines Area, Mugma Area and other parts of BCCL Mines.
(ix) It is stated that in terms of Section 9 of the Mines and Minerals (Development & Regulation) Act, 1957 (hereinafter referred to as the MMDR Act), a holder of a mining lease is required to pay royalty in respect of any mineral removed or consumed by it from the leased area at the rate for the time being specified in the second schedule of the MMDR Act in respect of that mineral. It is further stated that item 11 of the second schedule specifies the rate of royalty payable on consumption or removal of coal from the leased area.
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(x) The Ministry of Mines, Government of India, in exercise of powers conferred by Section 9 (3) of the MMDR Act revised the rates at which royalty shall be payable in respect of coal by amending item 11 of the Second Schedule of the MMDR Act through a notification being GSR 522(E) dated 01.08.2007, published in the Gazette of India (Extraordinary) No.352 dated 01.08.2007.
(xi) By virtue of the aforesaid amendment in item 11 of the Second Schedule of the MMDR Act, rate of royalty shall be a combination of specific and ad valorem rates of royalty, which shall be as follows: -
R (Royalty Rupees/tonnes) = a+bP Where 'P' (price) shall mean basic pit head price of ROM (run-of-
mine) coal and lignite as reflected in the invoice, excluding taxes, levies and other charges and the value of 'a' (fixed component) and 'b' (variable component), which have been provided in item 11 of the Second Schedule of MMDR Act.
(xii) It has been stated that in terms of amended item 11 of the Second Schedule of MMDR Act was paying royalty to the State of Jharkhand in terms of the aforesaid formula of R=a+bP where 'P' was taken to be the basic pit head price of ROM as reflected in its invoices. The basic pit head price, it is reiterated, has been fixed as per the Coal Purchase Agreement dated 30.08.2006.
(xiii) It is stated that the Assistant Mining Officer, Pakur issued a demand notice as contained in letter No.649/M dated 08.05.2010 whereby demand of Rs.10,84,62,161.76 (Rupees Ten Crore Eighty Four Lakh Sixty Two Thousand One Sixty One and Paise Seventy 5 2026:JHHC:15205-DB Six) has been raised on account of alleged short payment of royalty for the period April 2008 to March 2009.
(xiv) The aforesaid demand notice, as contained in letter No.649/M dated 08.05.2010, was responded to by the petitioner vide its letter dated 22.06.2010, wherein, inter alia, it was stated that the ad valorem royalty is calculated and paid by the petitioner in terms of the price reflected in the invoices which has been fixed as per the Coal Purchase Agreement dated 30.08.2006.
(xv) It was also mentioned that the Panchwara Central Coal Block is a captive coal mine of the Punjab State Electricity Board and therefore, royalty cannot be determined on the basis of the price charged by Coal India Limited or its subsidiaries (in the command area). It was further mentioned that the base price, though fixed on the basis of BCCL's notified price, is subject to a discount factor as per the Coal Purchase Agreement dated 30.08.2006.
(xvi) It was also brought to the notice of the Assistant Mining Officer by the reply dated 22.06.2010 that in the definition of sale value under the Jharkhand Value Added Tax Act and/or the Central Sales Tax Act, discounted value is considered as sale amount for the purposes of charging sales tax and, thus, discounted value charged to Punjab State Electricity Board is the basic pit head price as reflected in the invoices raised.
(xvii) It is stated that without even waiting for the response of the petitioner to the demand notice 08.05.2010, the Assistant Mining Officer, Pakur, on 11.06.2010, made a requisition for issuance of a certificate in terms of Section 5 of the Bihar & Orissa, Public Demands Recovery Act, 1914 (herein referred as Act 1914).6
2026:JHHC:15205-DB (xviii) Consequently, a notice was issued by the Certificate Officer-cum-Deputy Director of Mines, Santhal Pargana Circle, Dumka to the Director of the petitioner company in purported exercise of powers under Section 7 of the Bihar & Orissa (Public Demand Recovery) Act, 1914 informing him about filing of a certificate for Rs. 10,84,62,161.76 (Rupees Ten Crore Eighty Four Lakh Sixty Two Thousand One Sixty One and Paise Seventy Six) on account of alleged short payment of royalty for the period April 2008 to March 2009 and also calling upon him to file an objection denying the liability within 30 days from receipt of the notice, failing which it was mentioned that the certificate would executed under the provisions of the Bihar & Orissa (Public Demand Recovery) Act, 1914. By the said notice dated 24.06.2010, the petitioner was also prohibited from alienating immovable properties or any part of it by sale, gift, mortgage or otherwise. The proceedings so initiated by issuance of the notice dated 24.06.2010 was numbered as C.C. No.2/2010-11.
(xix) After receipt of the notice dated 24.06.2010, the petitioner filed an objection in terms of Section 9 of the PDR Act, on 05.08.2010, denying its liability to pay the said amount . (xx) The petitioner sought for a clarification from the Coal Controller, Government of India, Ministry of Coal vide its letter dated 20th September, 2010 on the payment of royalty. (xxi) The Deputy Director, Office of the Coal Controller, Ministry of Coal, Government of India, responded to the petitioner's letter dated 20.09.2010, by his letter dated 06.10.2010, wherein with reference to the gazette notification dated 01.08.2007, it was stated 7 2026:JHHC:15205-DB that the price shall mean the basic pit head price of ROM coal as reflected in the invoice (excluding taxes, levies and other charges). (xxii) The petitioner filed a supplementary petition on 16.11.2010 bringing on record the Coal Purchase Agreement dated 30.08.2006 and also copies of the invoices for the financial year 2008-2009 in which the pit head price is reflected on the grade of coal as determined by the Coal Controller.
(xxiii) The petitioner thereafter filed a writ petition being W.P.(C) No.1 of 2011 before this Hon'ble Court for redressal of grievances.
(xxiv) It is stated that during pendency of aforesaid writ petition being W.P.(C) No.1 of 2011, the petitioner was communicated with the order dated 20/28.12.2010 passed by the Certificate Officer (Mines), Dumka under Memo No.214 dated 28.12.2010 whereby and whereunder the objection petition filed by the petitioner has been rejected and it has been directed to pay the full certificate dues with interest and expenses etc. to the Assistant Mining Officer, Pakur Certificate Holder within 30 days next.
(xxv) The petitioner challenged the aforesaid order in the said writ petition by way of an interlocutory application. (xxvi) In the said writ petition state-respondent filed their counter affidavit and raised a preliminary objection with regard to availability of alternative remedy of filing appeal and relied on a decision of the Hon'ble Supreme Court to show that the appellate authority has all the powers even to decide the jurisdiction of the authority raising the demand. In the light of the objection raised by the State-respondents, the said writ petition was permitted to be 8 2026:JHHC:15205-DB withdrawn and the petitioner was directed to file the appeal by 04.02.2011 and deposit the statutory amount by 28.02.2011. (xxvii) In the light of the aforesaid order passed by this Hon'ble Court, the petitioner filed an appeal before the Deputy Commissioner-cum-Appellate Authority on 02.02.2011 and also deposited the statutory amount, i.e., 40% of the certificate amount of Rs.4,33,84,887/- by way of a demand draft bearing Sl. No.127984 dated 24.02.2011 drawn on State Bank of India. (xxviii) Despite the pendency of the appeal, the petitioner was served with a demand notice, as contained in letter No.444 dated 26.02.2011 issued under the signature of the Assistant Mining Officer, Pakur whereby a demand has been made for alleged short payment of royalty during the period 2007-08 and 2009-10. The principal amount, which is said to be payable by the petitioner for the aforesaid two years is Rs.20,34,45,619/- [Rs.5,69,83,242.63 (2007-08) and Rs.14,64,62,377/- (2009-10)] and the interests thereon sought to be recovered has been assessed at Rs.7,83,96,724/- [Rs.3,99,37,434/-(2007-08) and Rs.3,84,59,290/- (2009-10)].
(xxix) The aforesaid demand notice was responded to by the petitioner by a letter dated 04.03.2011 and thereafter by a letter dated 12.03.2011 in which the petitioner has reiterated its stand taken before the appellate authority and has further stated that the rate adopted for the purposes of computation of royalty, i.e., the rate of Simlong Mines of M/s. Eastern Coalfields Ltd. is untenable, improper as the said mine is a long flame non-coking coal whereas 9 2026:JHHC:15205-DB the run of mine produced at the petitioner's coalfield is a non-long flame non-coking coal.
(xxx) In view of the aforesaid facts and background, petitioner moved before this Hon'ble Court by preferring a writ petition being W.P.(C) No. 1474 of 2011, inter alia, praying therein for quashing the demand notice as contained in letter No.444/M, dated 26.02.2011 issued by the Assistant Mining Officer, Pakur whereby a demand of Rs.20,34,45,619.98 has been raised on account of alleged short payment of royalty for the period August, 2007 to March, 2008 and for the period 2009-10 along with interest thereon assessed at the rate of Rs.7,83,96,224/-.
(xxxi) It is pleaded that during the pendency of the aforesaid writ petition being W.P.(C) No. 1474 of 2011, by an order as contained in letter No.647/M dated 07.03.2011, the Assistant Mining Officer, Pakur informed the petitioner that the reply given by the petitioner to the demand notice dated 26.02.2011 has not been accepted and consequent thereupon the demand raised by the notice dated 26.02.2011 was directed to be fulfilled within one week. The said letter was received by the petitioner on 23.03.2011. (xxxii) After passing of the aforesaid order dated 07.03.2011, the respondents initiated a certificate proceeding being C.C. No.61 of 2010-11 for recovery of Rs.28,18,42,344/- from the petitioner on account of short payment of royalty during the period 2007-08 and 2009-10 along with the interest. A notice under Section 7 of the Public Demand Recovery Act, 1914 was issued on 18.03.2011 which was received by the petitioner on 23.03.2011. 10
2026:JHHC:15205-DB (xxxiii) It is pleaded that though under the Public Demand Recovery Act, a certificate Debtor is entitled to 30 days' time to file an objection under Section 9 of the Act denying the liability, but, in the instant case, the petitioner was directed to appear on 03.02.2011. The petitioner was constantly being coerced by the respondents to fulfill the certificate amount before even lapse of 30 days statutory period failing which the petitioner was informed that the petitioner's entire machinery and equipment at the coal mines would be attached and steps would also be taken for attaching its bank accounts after passing an order in the certificate case. The respondents were trying to realize the amount only on account of the fact that the financial year was coming to an end. It is because of such pressure the petitioner has been compelled to pay a sum of Rs.5 crore against the certificate amount, which has been deposited on 30.03.2011.
(xxxiv) In view of the aforesaid facts, the petitioner filed an interlocutory application in the aforesaid writ petition being W.P.(C) 1474 of 2011, inter alia, praying therein for amendment in the writ petition by adding the aforesaid facts in the writ petition and by allowing the petitioner to add the following in paragraph 1 and prayer portion of the writ petition after the existing prayer for quashing the order as contained in letter No.647/M dated 07.03.2011 issued by the Assistant Mining Officer, Pakur whereby and whereunder it has been informed to the petitioner that the reply given by the petitioner to the demand notice dated 26.02.2011 has not been accepted and consequent thereupon the demand raised by the notice dated 26.02.2011 has been directed to be fulfilled within 11 2026:JHHC:15205-DB one week; as also for quashing the certificate proceeding being C.C. No.61 of 2010-11.
(xxxv) It is stated that the aforesaid interlocutory application was numbered as I.A No.1030 of 2011 and was taken up by this Hon'ble Court on 31.03.2011 and this Hon'ble Court by an order on the said date while passing an order that interlocutory application shall form part of the main writ petition and granting four weeks' time to the State to file counter affidavit, also passed an order that till further orders, no coercive steps shall be taken against the petitioner. (xxxvi) While the aforesaid writ petition is pending before this Hon'ble Court, the Assistant Mining Officer, Pakur issued another demand notice as contained in letter No.1226/M dated 21.04.2011, whereby a demand of Rs.14,87,35,277/- has been raised on account of alleged short payment of royalty for the period April 2010 to February 2011 along with interest thereon assessed at Rs. 1,33,02,966/-.
(xxxvii) In pursuant to receipt of the aforesaid letter dated 21.04.2011, the petitioner, vide a letter under Ref. No. PANEM/DMO/2011/90 dated 28.04.2011 made a detailed representation before the Assistant Mining Officer, Pakur referring to the order dated 31.03.2011 passed by this Hon'ble Court in W.P.(C) No.1474 of 2011, requested the Assistant Mining Officer to keep the matter in abeyance and not to take any precipitate action till the matter comes to finality.
(xxxviii) The petitioner filed the instant Writ Petition being WPC No. 736 of 2012 laying a challenge to the demand notice as contained in letter no. 1226/ M dated 21st April 2011. 12
2026:JHHC:15205-DB (xxxix) This writ petition was taken up on 15.02.2012 and this Hon'ble Court passed the following order:
"As prayed for, four weeks' time is allowed to learned counsel for the respondents to seek instruction and file counter affidavit. In the meanwhile, if the petitioner deposits 50% amount pursuant to Annexure-21, no coercive action shall be taken against the petitioner until further order."
(xl) Later on, on the basis of the impugned demand notice dated 21.04.2011, a requisition was made by the AMO Pakur to the Certificate Officer, Dumka, who consequently issued a notice under section 7 of the PDR Act against the petitioner for recovering the amount of ₹14,87,35,277 along with interest assessed at 1,33,02,966/-. The Certificate Case stands marked as CC No. 32/2011-12 and is still pending.
(xli) In terms of the interim order dated 15.02.2012 passed by the learned single judge of this Court in the present writ petition the petitioner deposited an amount equivalent to 50% of the demand through a Demand Draft dated 17.03.2012, which fact was acknowledged by the Certificate Office by issuing a certificate dated 30.08.2012. (xlii) It requires to refer herein that during pendency of the instant writ petition the WPC No. 1474 of 2011 was disposed of by the learned Single Judge of this Court by an order dated 01 April 2022, relegating the petitioner to raise objections before the certificate officer. The delay in filing the objections and a section 9 was ordered to be condoned in view of section 14 of the Limitation Act.
3. It is evident from record that the present matter was heard by the learned Single Judge of this Court on the first day of hearing on 15.02.2012 as per roster and has called upon the State to file an affidavit 13 2026:JHHC:15205-DB subject to payment of 50% of amount and the order for no coercive action was passed.
4. The certificate proceeding has been instituted being C.C No.32 of 2011-12 raising demand of Rs.14,87,35,277/- along with interest assessed as Rs.1,33,02,966/- and while issuing notice under section 7 of the Bihar and Orissa Public Demand Recovery Act, 1914 (in short, Act of 1914) as per the requirement as provided under Act of 1914 the objection was to be filed.
5. In the instant writ petition, the writ petitioner has filed one interlocutory application being I.A No.15812 of 2025 for impleadment of Punjab State Power Corporation Limited-respondent no.5 (in short, PSPCL) as party-respondent in the proceeding on the ground that the liability to make payment of differential amount is upon PSPCL. The said interlocutory application has been allowed by this Court and PSPCL has been impleaded as party-respondent vide order dated 18.12.2025.
6. The appearance has been made on behalf of PSPCL by filing a detailed counter-affidavit denying its liability.
7. The State has also filed a counter affidavit and contested the case that the PSPCL is the actual beneficiary of the coal and being not expert in the mining operation it has entered into an agreement with Eastern Minerals and Trading Agency, (in short-EMTA) and for the purpose of extraction of the coal from the mineral area the joint venture has been created in the name and style of PANEM Coal Mines Limited, the writ petitioner herein.
8. The contention of the State is that the writ petitioner is the creator by virtue of the joint venture of the PSPCL and EMTA and all the functionaries, in the PANEM, is either operative of the PSPCL or EMTA. 14
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9. The state has mentioned in the counter affidavit that concerned coal mine was allocated to Punjab State Electricity Board (PSEB) and respondent No. 5 PSPCL has brought on record the mining lease deed (Annexure-R5/K) and in the said mining lease deed at point no.7 in Part III, it is categorically mentioned that the lease is being granted in favour of PANEM.
10. It has further been stated that an amount of Rs.14,87,35,277/- with interest assessed at Rs. 1,33,02,966/- has been found to be the liability upon the writ petitioner-PANEM and when not paid, then a decision was taken by the executing authority fasten liability of Rs Rs.14,87,35,277/- with interest assessed at Rs. 1,33,02,966/- upon the PANEM which is forwarded before the Certificate Officer for initiation of a Certificate Proceeding. The said requisition has been converted into a Certificate Proceeding being Certificate Case No.32 of 2011-12 in which notice under section 7 of the Act of 1914 has been issued to the writ petitioner. The writ petitioner is required to file an objection under section 9 of Bihar and Orissa Public Demand Recovery Act, 1914 which has not yet been filed.
11. The learned counsel for the State has submitted that so far as the newly impleaded respondent, i.e., PSPCL is concerned, the coal is being utilized by PSPCL and, as such, it is the liability of the PSPCL for making payment of the differential amount which has been assessed by the State.
12. The case of the PSPCL who is the respondent no.5 herein is that it is not the responsibility of PSPCL to make payment of differential amount of the royalty, rather the entire amount is to be borne by the PANEM being the signatory to the contract in the capacity of lessee and as such the differential amount of the royalty as being demanded, subject 15 2026:JHHC:15205-DB matter of the proceeding, is to be paid by the PANEM and not by the PSPCL.
Submission of the learned counsel for the writ petitioner:
13. The learned counsel appearing for the writ petitioner- PANEM has submitted that petitioner in the present petition confines it submission on the legality and validity of the impugned demand notice dated 21.04.2011.
14. It has been submitted that on an application made by the petitioner - Certificate Debtor, in the certificate proceedings Punjab State Power Corporation Limited (PSPCL, earlier PSEB) was impleaded as certificate debtor in the said proceedings in exercise of powers under section 11 of the PDR Act and a notice under section 7 was issued to Punjab State Power Corporation Limited (PSPCL) on 09.09.2025. An application for impleadment of PSPCL was also filed in the present petition on 25.11.2025, which was allowed in terms of the order dated 18.12.2025.
15. The learned counsel has submitted that there is no law in force for the time being which regulates or governs the fixation of price by a mining lessee and thus, the petitioner cannot be faulted for agreeing to sell the coal to Punjab State Electricity Board at a discounted rate, which is not unreasonably low.
16. The learned counsel has submitted that the concerned respondents failed to appreciate that the allocation of coal block in favour of the petitioner has been made for a specified purpose, which also involves public interest, any additional liability which is not provided for by the law would be detrimental to the entire project. 16
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17. The learned counsel has submitted that chargeability of royalty has to be strictly done in terms of the provisions of the MMDR Act and the second schedule thereof.
18. The learned counsel appearing for the writ petitioner- PANEM has agitated the ground that in such a situation of the complex factual aspect the same cannot be adjudicated and decided by the Certificate Officer since the Certificate Officer will only be said to be an executing authority of the demand which has already been assessed and based upon that the requisition has been made declaring the amount to be public demand as per the reference made in the schedule to the Act of 1914 in pursuance to section 3 thereof.
19. The learned counsel has submitted that such complex situation can only be decided in this writ petition and, as such, the present writ petition has been filed.
20. The learned counsel, therefore, has insisted upon this Court to decide the issue in such a complex situation on the denial of liability.
21. The learned counsel has submitted that the petitioner has got no other alternative or equally efficacious remedy and the reliefs sought for herein only are complete, speedy, economical, adequate and efficacious. Submission on behalf of the learned counsel for the State and the respondent no.5-PSPCL:
22. The learned counsel appearing for the State, while on the other hand, has submitted that it is incorrect on the part of the writ petitioner to submit that the authority, who is quasi-judicial functionary has issued notice under section 7 of the Act of 1914, is not competent enough to decide the issue of liability, rather if the provision of sections 9 and 10 17 2026:JHHC:15205-DB will be read together, then it would be evident that the Certificate Officer is competent enough to decide the issue.
23. It has further been submitted that during the subsistence of the Coal Mining Lease of Pachhwara (Central) coal mine M/s PANEM made payment of royalty to the State Government in totality and therefore M/s PANEM being the Mining Lessee during the relevant period is liable to pay the short payment of royalty so demanded by the Assistant Mining Officer, Pakur in the instant proceedings.
24. The learned counsel appearing for the respondent no.5-PSPCL has equally submitted by supporting the stand taken on behalf of the learned counsel for the State. He, in addition thereto, has submitted that if the matter will be relegated before the Certificate Officer, then liberty may also be given to PSPCL to make an objection therein in view of the fact that now the writ petitioner is fastening its liability upon it and for the aforesaid purpose the PSPCL has also been impleaded as party-respondent to the proceeding.
25. It has further been submitted that a Division Bench of this Hon'ble Court, in the case of M/SCCL v. State of Jharkhand& Ors., LPA No. 255 of 2001 &analogous cases disposed of by order dated 23.07.2025, while dealing with similar writ petitions/Appeals challenging demands of royalty upon mining lessees and certificate proceedings in relation thereto, specifically in relation to LPA No. 77 of 2005, at paragraphs 19 to 21 observed that since disputed questions of fact are involved, remanded the matters back to the Certificate Officer, granting 18 2026:JHHC:15205-DB liberty to the Petitioners / Appellants therein to file their objections under Section 9 of the PDR Act.
26. The learned counsel appearing for the State has also raised a preliminary objection to the maintainability of the present writ petition in a situation of contentious disputed question of fact as per the argument advanced referred hereinabove.
Analysis:
27. This Court has heard the learned counsel appearing for the parties.
28. It appears that the liability is sought to be shifted by the petitioner upon PSPCL on the one hand, while PSPCL, on the other hand, seeks to shift the same upon the petitioner.
29. In this situation, the question which requires consideration is whether such a contentious issue is fit to be adjudicated by this Court in exercise of the powers conferred under Article 226 of the Constitution of India.
30. In order to consider the aforesaid issue, it is necessary to observe that the jurisdiction conferred upon this Court under Article 226 of the Constitution of India is not hedged in by any statutory barrier so as to preclude the entertainment of a writ petition on any ground whatsoever. The limitation, if any, is only in the nature of self-imposed restrictions evolved by the writ Court in the exercise of its discretionary jurisdiction.
31. It is the settled position of law that even where an alternative remedy is available, a writ petition may nonetheless be entertained, provided the requisite conditions are satisfied. Such conditions include, inter alia, the violation of principles of natural justice or the exercise of jurisdiction in excess of authority.
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32. It requires to refer herein the settled position of law that in exercise of the power vested in it under Article 226 of the Constitution, the High Court can entertain a writ petition against any order passed by or action taken by the State and/or its agency/instrumentality or any public authority or order passed by a quasi-judicial body/authority, and it is an altogether different thing to say that each and every petition filed under Article 226 of the Constitution must be entertained by the High Court as a matter of course ignoring the fact that the aggrieved person has an effective alternative remedy. Rather, it is settled law that when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation, reference in this regard be made to the judgment rendered by the Hon'ble Apex Cour in the case of Nivedita Sharma vs. Cellular Operators Association of India and Others, reported in (2011) 14 SCC 337. For ready reference the relevant paragraphs of the aforesaid order are being quoted as under:
"12. In Thansingh Nathmal v. Supdt. of Taxes [AIR 1964 SC 1419] this Court adverted to the rule of self-imposed restraint that the writ petition will not be entertained if an effective remedy is available to the aggrieved person and observed: (AIR p. 1423, para 7) "7.... The High Court does not therefore act as a court of appeal against the decision of a court or tribunal, to correct errors of fact, and does not by assuming jurisdiction under Article 226 trench upon an alternative remedy provided by statute for obtaining relief. Where it is open to the aggrieved petitioner to move another tribunal, or even itself in another jurisdiction for obtaining redress in the manner provided by a statute, the High Court normally will not permit by entertaining a petition under Article 226 of the Constitution the machinery created under the statute to be bypassed, and will leave the party applying to it to seek resort to the machinery so set up."
13. In Titaghur Paper Mills Co. Ltd. v. State of Orissa [(1983) 2 SCC 433 : 1983 SCC (Tax) 131] this Court observed: (SCC pp. 440-41, para
11) "11.... It is now well recognised that where a right or liability is created by a statute which gives a special remedy for enforcing it, the 20 2026:JHHC:15205-DB remedy provided by that statute only must be availed of. This rule was stated with great clarity by Willes, J. In Wolverhampton New Waterworks Co.v. Hawkesford [(1859) 6 CBNS 336 : 141 ER 486] in the following passage: (ER p. 495) '... There are three classes of cases in which a liability may be established founded upon a statute. ... But there is a third class viz. where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for enforcing it. ... The remedy provided by the statute must be followed, and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to.' The rule laid down in this passage was approved by the House of Lords in Neville v. London Express Newspapers Ltd. [1919 AC 368 : (1918-19) All ER Rep 61 (HL)] and has been reaffirmed by the Privy Council in Attorney General of Trinidad and Tobago v. Gordon Grant and Co. Ltd. [1935 AC 532 (PC)] and Secy. of State v. Mask and Co. [(1939-40) 67 IA 222 : AIR 1940 PC 105] It has also been held to be equally applicable to enforcement of rights, and has been followed by this Court throughout. The High Court was therefore justified in dismissing the writ petitions in limine."
14. In Mafatlal Industries Ltd. v. Union of India [(1997) 5 SCC 536] B.P. Jeevan Reddy, J. (speaking for the majority of the larger Bench) observed: (SCC p. 607, para 77) "77. ... So far as the jurisdiction of the High Court under Article 226-- or for that matter, the jurisdiction of this Court under Article 32--is concerned, it is obvious that the provisions of the Act cannot bar and curtail these remedies. It is, however, equally obvious that while exercising the power under Article 226/Article 32, the Court would certainly take note of the legislative intent manifested in the provisions of the Act and would exercise their jurisdiction consistent with the provisions of the enactment."
15. In the judgments relied upon by Shri Vaidyanathan, which, by and large, reiterate the proposition laid down in Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad [AIR 1969 SC 556], it has been held that an alternative remedy is not a bar to the entertaining of writ petition filed for the enforcement of any of the fundamental rights or where there has been a violation of the principles of natural justice or where the order under challenge is wholly without jurisdiction or the vires of the statute is under challenge.
16. It can, thus, be said that this Court has recognised some exceptions to the rule of alternative remedy. However, the proposition laid down in Thansingh Nathmal v. Supt. of Taxes [AIR 1964 SC 1419] and other 21 2026:JHHC:15205-DB similar judgments that the High Court will not entertain a petition under Article 226 of the Constitution if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has been taken itself contains a mechanism for redressal of grievance still holds the field."
(Emphasis Supplied)"
33. Similarly in the case of Radha Krishan Industries vs. State of Himachal Pradesh and Others, reported in (2021) 6 SCC 771, the Hon'ble Apex Court has held as under:
"25. In this background, it becomes necessary for this Court, to dwell on the "rule of alternate remedy" and its judicial exposition. In Whirlpool Corpn. v. Registrar of Trade Marks [Whirlpool Corpn. v. Registrar of Trade Marks, (1998) 8 SCC 1] , a two-Judge Bench of this Court after reviewing the case law on this point, noted : (SCC pp. 9-10, paras 14-15) "14. The power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provision of the Constitution. This power can be exercised by the High Court not only for issuing writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari for the enforcement of any of the Fundamental Rights contained in Part III of the Constitution but also for "any other purpose". 15. Under Article 226 of the Constitution, the High Court, having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. But the High Court has imposed upon itself certain restrictions one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by this Court not to operate as a bar in at least three contingencies, namely, where the writ petition has been filed for the enforcement of any of the Fundamental Rights or where there has been a violation of the principle of natural justice or where the order or proceedings are wholly without jurisdiction or the vires of an Act is challenged. There is a plethora of case-law on this point but to cut down this circle of forensic whirlpool, we would rely on some old decisions of the evolutionary era of the constitutional law as they still hold the field." (emphasis supplied)
26. Following the dictum of this Court in Whirlpool [Whirlpool Corpn. v. Registrar of Trade Marks, (1998) 8 SCC 1], in Harbanslal Sahnia v. Indian Oil Corpn. Ltd. [Harbanslal Sahnia v. Indian Oil Corpn. Ltd., (2003) 2 SCC 107] , this Court noted that : (Harbanslal Sahnia case 22 2026:JHHC:15205-DB [Harbanslal Sahnia v. Indian Oil Corpn. Ltd., (2003) 2 SCC 107] , SCC p. 110, para 7) "7. So far as the view taken by the High Court that the remedy by way of recourse to arbitration clause was available to the appellants and therefore the writ petition filed by the appellants was liable to be dismissed is concerned, suffice it to observe that the rule of exclusion of writ jurisdiction by availability of an alternative remedy is a rule of discretion and not one of compulsion. In an appropriate case, in spite of availability of the alternative remedy, the High Court may still exercise its writ jurisdiction in at least three contingencies : (i) where the writ petition seeks enforcement of any of the fundamental rights; (ii) where there is failure of principles of natural justice; or (iii) where the orders or proceedings are wholly without jurisdiction or the vires of an Act is challenged. (See Whirlpool Corpn.v. Registrar of Trade Marks [Whirlpool Corpn. v. Registrar of Trade Marks, (1998) 8 SCC 1] .) The present case attracts applicability of the first two contingencies.
Moreover, as noted, the appellants' dealership, which is their bread and butter, came to be terminated for an irrelevant and non-existent cause. In such circumstances, we feel that the appellants should have been allowed relief by the High Court itself instead of driving them to the need of initiating arbitration proceedings."
(emphasis supplied)
27. The principles of law which emerge are that:
27.1. The power under Article 226 of the Constitution to issue writs can be exercised not only for the enforcement of fundamental rights, but for any other purpose as well.
27.2. The High Court has the discretion not to entertain a writ petition.
One of the restrictions placed on the power of the High Court is where an effective alternate remedy is available to the aggrieved person. 27.3. Exceptions to the rule of alternate remedy arise where :
(a) the writ petition has been filed for the enforcement of a fundamental right protected by Part III of the Constitution;
(b) there has been a violation of the principles of natural justice;
(c) the order or proceedings are wholly without jurisdiction; or
(d) the vires of a legislation is challenged.
27.4. An alternate remedy by itself does not divest the High Court of its powers under Article 226 of the Constitution in an appropriate case though ordinarily, a writ petition should not be entertained when an efficacious alternate remedy is provided by law. 27.5. When a right is created by a statute, which itself prescribes the remedy or procedure for enforcing the right or liability, resort must be had to that particular statutory remedy before invoking the 23 2026:JHHC:15205-DB discretionary remedy under Article 226 of the Constitution. This rule of exhaustion of statutory remedies is a rule of policy, convenience and discretion.
27.6. In cases where there are disputed questions of fact, the High Court may decide to decline jurisdiction in a writ petition. However, if the High Court is objectively of the view that the nature of the controversy requires the exercise of its writ jurisdiction, such a view would not readily be interfered with.
28. These principles have been consistently upheld by this Court in Chand Ratan v. Durga Prasad [Chand Ratan v. Durga Prasad, (2003) 5 SCC 399] , Babubhai Muljibhai Patel v. Nandlal Khodidas Barot [Babubhai Muljibhai Patel v. Nandlal Khodidas Barot, (1974) 2 SCC 706] and Rajasthan SEB v. Union of India [Rajasthan SEB v. Union of India, (2008) 5 SCC 632] among other decisions."
34. Further, in case of availability of alternative forum under the statute, there is no embargo for the High Court not to exercise the power conferred under Article 226 of the Constitution of India, rather, the High Court can exercise the power conferred under Article 226 of the Constitution of India since the High Court is having the self-imposed restriction and depending upon the situation or availability of the conditions, the High Court can exercise the jurisdiction conferred under Article 226 of the Constitution of India as has been dealt with by the Hon'ble Apex Court in the case of Maharashtra Chess Association v. Union of India and Others reported in (2020) 13 SCC 285, wherein, as under paragraphs 19, 20 and 22, has held as under:-
"19. This argument of the second respondent is misconceived. The existence of an alternate remedy, whether adequate or not, does not alter the fundamentally discretionary nature of the High Court's writ jurisdiction and therefore does not create an absolute legal bar on the exercise of the writ jurisdiction by a High Court. The decision whether or not to entertain an action under its writ jurisdiction remains a decision to be taken by the High Court on an examination of the facts and circumstances of a particular case.24
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20. This understanding has been laid down in several decisions of this Court. In U.P. State Spg. Co. Ltd. v. R.S. Pandey [U.P. State Spg. Co. Ltd. v. R.S. Pandey, (2005) 8 SCC 264] this Court held : (SCC p. 270, para11) "11. Except for a period when Article 226 was amended by the Constitution (Forty-Second Amendment) Act, 1976, the power relating to alternative remedy has been considered to be a rule of self- imposed limitation. It is essentially a rule of policy, convenience and discretion and never a rule of law. Despite the existence of an alternative remedy it is within the jurisdiction or discretion of the High Court to grant relief under Article 226 of the Constitution. At the same time, it cannot be lost sight of that though the matter relating to an alternative remedy has nothing to do with the jurisdiction of the case, normally the High Court should not interfere if there is an adequate efficacious alternative remedy."
22. The mere existence of alternate forums where the aggrieved party may secure relief does not create a legal bar on a High Court to exercise its writ jurisdiction. It is a factor to be taken into consideration by the High Court amongst several factors."
35. Recently, a three-Judge Bench of the Hon'ble Apex Court in PHR Invent Educational Society vs. UCO Bank and Others, reported in (2024) 6 SCC 579, has held as under:
"37. It could thus clearly be seen that the Court has carved out certain exceptions when a petition under Article 226 of the Constitution could be entertained in spite of availability of an alternative remedy. Some of them are thus: (i) where the statutory authority has not acted in accordance with the provisions of the enactment in question; (ii) it has acted in defiance of the fundamental principles of judicial procedure;
(iii) it has resorted to invoke the provisions which are repealed; and
(iv) when an order has been passed in total violation of the principles of natural justice.
38. It has however been clarified that the High Court will not entertain a petition under Article 226 of the Constitution if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has been taken itself contains a mechanism for redressal of grievance."
36. Thus, from the aforesaid it is evident that a writ petition under Article 226 may still be maintainable notwithstanding the existence of such an alternative remedy in exceptional circumstances, including the 25 2026:JHHC:15205-DB enforcement of fundamental rights guaranteed under Part III of the Constitution; instances of ultra vires or illegal exercise of power by a statutory authority; violation of the principles of natural justice; or where the vires of the parent legislation itself is under challenge.
37. It is pertinent to observe that the writ Court, being a forum of summary jurisdiction, is ordinarily not suited to undertake a fact-finding exercise by appreciating documentary evidence, particularly when proceedings have already been initiated before the competent forum in accordance with the statutory mandate under the Bihar and Orissa Public Demand Recovery Act, 1914.
38. The argument has been advanced that it would not be possible for the Certificate Officer to decide the issue of liability as to whether it is upon the writ petitioner-PANEM or upon the PSPCL, i.e., newly impleaded respondent no.5.
39. This Court in order to delve upon the aforesaid rival contention is deemed it fit and proper to refer the underlying provision as provided under the Act of 1914.
40. Relevant is from section 3 which inter alia provides the definition of Public Demand and the public demand is being considered in the eyes of law as per reference made in Schedule, for ready reference section 3 of the Act of 1914 along with its Schedule is being referred hereunder as:
Definitions.
In this Act, unless there is anything repugnant in the subject or context - :
1."certificate debtor" means the person named as debtor in a certificate filed under this Act and includes any person whose name is substituted or added as debtor by the Certificate Officer;
(2)"Certificate Holder" means the Government or person in whose favour a certificate has been filed under this Act, and includes any person whose name is substituted or added as creditor by the Certificate Officer; 26
2026:JHHC:15205-DB (3)"Certificate-Officer" means a Collector, a Sub-Divisional Officer, and any officer appointed by a Collector, with the sanction of the Commissioner, to perform the functions of a Certificate Officer; (4)"Movable Property" includes growing crops; (5)"Prescribed" means prescribed by Rules;
(6)"Public Demand" means any arrear or money mentioned or referred to in Schedule I, and includes any interest which may by law, be chargeable thereon upto the date on which a certificate is signed under Part II; and (7)"Rules" means Rules and forms contained in Schedule II or made under Section 48."
41. The procedure has been laid down under the Act of 1914 that if any liability is being considered upon any individual, then the first requirement is to assess and come out with declaration under section 3 of the Act of 1914 and only then the requisition is to be made by the requisitioning authority for the purpose of recovery of the said amount.
42. It is evident from the provision of section 3 that the assessment of the liability upon one or the another is a unilateral process as per the provision contained therein. Therefore, when the requisition is being made to the Certificate Officer for recovery of the amount from one or the another referred as Certificate Debtor, then a notice under section 7 of the Act of 1914 is required to be given, the content of section 7 is being referred hereunder as:
Section 7: Service of notice and copy of certificate on certificate debtor. - When a certificate has been filled in the office of a certificate officer under section 4 or section 6, he shall cause to be served upon the certificate-debtor, in the prescribed manner, a notice in the prescribed manner, a notice in the prescribed form and a copy of the certificate.
43. It is evident from provision of section 7 that the requisition is to be made under section 5 where it has been provided that when any public demand payable to any person other than the Collector is due such person 27 2026:JHHC:15205-DB may send to the Certificate Officer a written requisition in the prescribed form, for ready reference Section 5 of the Act of 1914 is being quoted hereunder as:
"Section 5:(1)When any public demand payable to any person other than the Collector is due such person may send to the Certificate Officer a written requisition in the prescribed form:
Provided that in the case of an order framed by a liquidator under the Cooperative Societies Act, 1912 [2 of 1912] [See now Bihar Co- operative Societies Act, 1935.] the written requisition shall be sent by the Registrar of Co-operative Societies, Bihar and Orissa. (2)Every such requisition shall be signed and verified in the prescribed manner, and except in such cases as may be prescribed, shall be chargeable with a fee of the amount which would be payable under the Court-fees Act, 1870 (VII of 1870) in respect of a plaint for the recovery of a sum of money equal to that stated in the requisition as being due.
Note 1. - Damages under Section 68 of the Bengal Tenancy Act, or Section 175 of the Chota Nagpur Tenancy Act cannot be included in certificates for arrears of rent.
[Note 2. - Requisitions made in respect of public demands payable to Government shall not be chargeable with any Court-fee (Board's Notification No. 4-4169, dated the 15th July, 1970)]. Note 3. - Government are pleased to exempt the Encumbered estates in Chota Nagpur and all Court of Wards estates in Bengal having properties in this province from pre-payment of ad valorem and process fees in certificate cases on the understanding that no question of remission of the fees will be considered, however insolvent the estates will be.
Government are also pleased to extend the concession to the Wards estates in Bihar which have difficulty in finding the money for purchase of stamps in advance on the aforesaid condition and also on the condition that estate should be exempted from pre-payment of fee for a given period.
[Memo No. 11198 R-l W-64, dated the 26th October, 1934, of the Government of Bihar and Orissa, Revenue Department.] Note 4. - Government have exempted from pre-payment of ad valorem Court-fee, certificates issued under the Bihar and Orissa Co-operative Societies Act, 1935, on condition that the Court-fee will be the first charge on any sum realised in cash.
28
2026:JHHC:15205-DB The Court-fee payable on a requisition for a certificate under a liquidator's order under Section 44 or an award under Section 48 of the Bihar and Orissa Cooperative Societies Act, 1935, is a Court-fee of [75 paise and not an ad-valorem Court-fee] [Substituted for twelve annas]."
44. Section 6 provides that on receipt of any such requisition of the Certificate Officer, if he satisfies that the demand is recoverable and that recovery by suit is not barred by law, may sign a certificate, in the prescribed form, stating that the demand is due and shall include in the certificate the fee if any paid under Section 5, sub-section (2); and shall cause the certificate to be filed in his office.
45. When the certificate has been filed under section 4 or section 6, the Certificate Officer, shall cause to be served upon the certificate debtor, in the prescribed manner, a notice in the prescribed form and the copy of the certificate.
46. Section 9 contains the provision that the Certificate Debtor may within 30 days from the service of the notice required by section 7, or where the notice has not been duly served then within 30 days from the execution of any process for enforcing the certificate, present to the Certificate Officer in whose office the certificate is filed or to the Certificate Officer who is executing the certificate, a petition, in the prescribed form signed and verified in the prescribed manner, denying his liability, in whole or in part, for ready reference section 9 of the Act of 1914 is quoted hereunder as:
"Section 9: (1)The certificate debtor may within thirty days from the service of the notice required by Section 7, or where the notice has not been duly served then within thirty days from the execution of any process for enforcing the certificate, present to the Certificate Officer in whose office the certificate is filed or to the Certificate Officer who is executing the certificate, a petition, in the prescribed form, signed and 29 2026:JHHC:15205-DB verified in the prescribed manner, denying his liability, in whole or in part.
(2) If any such petition is presented to a Certificate Officer other than the Certificate Officer in whose office the original certificate is filed, it shall be sent to the latter officer for disposal."
47. Section 9 enables the certificate-debtor to file objection within the stipulated period denying his liability in whole or in part.
48. Section 10 provides that the Certificate Officer in whose office the original certificate is filed shall hear the petition, take evidence (if necessary) and determine whether the certificate-debtor is liable for the whole or any part of the amount for which the certificate was signed; and may set aside, modify or vary the certificate accordingly, for ready reference section 10 is being quoted hereunder as:
"Section 10: Hearing and determining of such petition- The Certificate Officer in whose office the original certificate is filed shall hear the petition, take evidence (if necessary) and determine whether the certificate-debtor is liable for the whole or any part of the amount for which the certificate was signed; and may set aside, modify or vary the certificate accordingly:
Provided that if the Certificate Officer is not the Collector, and considers that the petition involves a bonafide claim of right to property, he shall refer the petition to the Collector for orders, and the Collector, if he is satisfied that a bonafide claim or right of property is involved, shall make an order cancelling the certificate."
49. It is, thus, evident that section 10 cast statutory obligation upon the Certificate Officer to hear the petition, take evidence (if necessary) and determine whether the certificate-debtor is liable for the whole or any part of the amount for which the certificate was signed; and may set aside, modify or vary the certificate accordingly.
50. Then, under Part-3 a provision has been provided for execution of the certificate which is after the adjudication which is required to be made under section 9 read with section 10 of the Act of 1914. 30
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51. It is, thus, evident that the very purpose of insertion of provision of section 9 of the Act of 1914 is to have the effective opportunity to be utilized by the certificate-debtor and depending upon the fact even the Certificate Officer has been conferred with the power to set aside the demand and for the aforesaid purpose even the evidence can be taken in view of the provision of section 10 of the Act 1914.
52. The execution of the demand is only after adjudication as per section 12 of the Act of 1914 and, as such, what has been argued by the learned counsel for the writ petitioner that the certificate proceeding is by way of execution proceeding is contrary to the statutory mandate, rather the execution proceeding only begun after the objection, if filed, by the certificate-debtor under section 9 of the Act of 1914 after consideration of objection in view of the provision as conferred under section 10 wherein the power has been conferred to even take evidence.
53. What is being argued on behalf of the petitioner that section 9 of the Act of 1914 is only to question the quantum of the amount, the same is incorrect notion and if the argument of the petitioner will be accepted then the whole purpose of the mandate of provision of section 9 read with section 10 of the Act of 1914 will become redundant.
54. The very purpose of Section 9 read with Section 10 of the Bihar & Orissa Public Demands Recovery (PDR) Act, 1914, is to provide a statutory mechanism for ensuring natural justice, allowing a certificate- debtor to dispute their liability and ensuring that public demands are not recovered arbitrarily. While the Act provides a speedy summary procedure for recovering public dues (bypassing a full civil suit), Sections 9 and 10 act as a safeguard against injustice or incorrect computation and that is the reason the consideration of objection if any has been taken care of in 31 2026:JHHC:15205-DB section 10 wherein the Certificate Officer has been conferred with the power to even take evidence, if necessary, meaning thereby the certificate officer can go for the purpose of adjudication of the issue even by leading evidence and it is only thereafter the execution part is to be begun.
55. If the Certificate Officer, upon consideration of the documents supported by evidence, finds that the proceeding is not proper, the certificate proceeding may also be set aside.
56. Further, the purpose of insertion of section 9 read with section 10 of the Act of 1914 is that the assessment/declaration of the public demand within the meaning of section 3 and based upon that the requisition is being made under section 5 of the Act of 1914, the unilateral proceeding by raising a demand against the party concerned and that is the reason an opportunity is to be given to such party before the Forum having the quasi-judicial domain to decide.
57. The requisitioning authority cannot decide the same otherwise will be quoted to be judge of his own cause and that is the reason the argument/mechanism has been made in the Act of 1914 that the first requisitioning authority is to forward the requisition raising the demand in the due format and the notice thereafter will be issued by the Certificate Officer under section 7 of the Act for the purpose of inviting objection under section 9 and for its deliberation by taking aid of section 10 where the evidence can also be taken, if found to be necessary.
58. The appellate Forum is also there as provided under section 60 of the Act of 1914 which provides that an appeal of any original order made under this Act will lie (a) if the order was made by an Assistant Collector or a Deputy Collector, or by a Certificate officer not being the Collector, to the Collector; or (b) if the order was made by the Collector, 32 2026:JHHC:15205-DB to the Commissioner - Provided that no appeal shall lie from any order setting aside a sale on an application made under section 28.
59. Thereafter, the provision of revision is there under section 62 of the Act of 1914 conferring power to the revisional authority, i.e., the Collector who may revise any order passed by Certificate Officer, Assistant Collector or Deputy collector under the Act of 1914, thereafter to the Commissioner who may revise any order passed by a Collector under the Act of 1914 and thereafter the Board of Revenue may revise any order passed by a Commissioner under the Act of 1914.
60. It is, thus, evident that full hierarchical ladder is there in the Forum under the Act of 1914.
61. The issue which has been raised on behalf of the petitioner that they do not owe the liability as has been casted upon due to the various reasons which are as follows:
(i) Since the petitioner company supplies coal solely to Punjab State Electricity Board for its captive consumption, for which a coal purchase agreement between the Punjab State Electricity Board and the petitioner company was executed on 30.08.2006 wherein it was agreed that the Punjab State Electricity Board shall purchase the entire quantity of specified coal supplied to it at a contract price calculated in terms of a formula given therein. Article 6 of the Coal Purchase Agreement dated 30.08.2006 provides for the contract price of coal. The contract price, inter alia, includes the royalty on coal.
(ii) The basic pit head price on run of mine coal has been fixed by the petitioner in terms of Article 6 of the Coal Purchase Agreement dated 30.08.2006. The invoices for sale of coal are raised by the petitioner on the basis of the contract price arrived at by applying 33 2026:JHHC:15205-DB the formula provided by Article 6 of the Coal Purchase Agreement dated 30.08.2006.
(iii) In view of the agreement, the notified price of BCCL is subject to a discount factor and only thereafter the basic pit head price is arrived at and the same is reflected in the invoices raised by the petitioner in favour of its sole purchaser Punjab State Electricity Board.
(iv) The ad-valorem royalty is calculated and paid by the petitioner in terms of the price reflected in the invoices which has been fixed as per the Coal Purchase Agreement dated 30.08.2006.
(v) the Panchwara Central Coal Block is a captive coal mine of the Punjab State Electricity Board and therefore, royalty cannot be determined on the basis of the price charged by Coal India Limited or its subsidiaries (in the command area). It was further mentioned that the base price, though fixed on the basis of BCCL's notified price, is subject to a discount factor as per the Coal Purchase Agreement dated 30.08.2006.
62. While on the other hand, the newly impleaded respondent, i.e , the respondent no.5-PSPCL also disputed the liability on the following grounds:
(i) PANEM was permitted to undertake mining operations by way of Gazette Notification dated 22.02.2002 issued by the Ministry of Coal under Section 3(3)(a)(iii) - Item (4) of the Coal Mines (Nationalisation) Act, 1973 ("CMN Act") notifying mining of coal by PANEM as a permitted end-use for mining coal, provided that the coal is for exclusive use in the thermal power plants of Punjab State Electricity Board (now PSPCL), and on the condition that PSPCL holds 26% shares in PANEM.34
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(ii) Subsequent to the issuance of the Gazette Notification, in terms of Section 3(3)(c) of the CMN Act, which provides that a mining lease for coal may only be granted to a company that is permitted to mine coal in terms of Section 3(3)(a)(iii) of CMN Act, mining leases dated 25.11.2004 (non-forest land) and 06.11.2007 (forest land)
(iii) As holder of the mining lease and in terms of Section 9 of the Mines and Minerals (Development and Regulation) Act, 1957 ("MMDR Act") and Part V of the mining lease, PANEM was liable for, and has been paying royalty to the State of Jharkhand for the period during which it was the holder of the mining lease.
(iv) For the period when PANEM was the holder of the mining lease, PSPCL was not liable to pay royalty; nor has it received any Demands for payment of royalty from the State of Jharkhand. PSPCL only received certain Notices dated 09.09.2025 under the PDR Act.
(v) These notices were bereft of any details whatsoever as to the nature of the underlying demand or the basis of their issuance upon PSPCL. In fact, the notices were not even accompanied by any Certificate. On 27.10.2025, PSPCL responded to the said notices accordingly. No further communication has been received thereafter, by PSPCL from any authority.
(vi) These notices were issued upon PSPCL on PANEM's Application filed before the Certificate Officer for impleadment of PSPCL made after 14 years. It is PSPCL's position that PANEM's application for impleading PSPCL is wholly misconceived and PSPCL is not liable to make any payments towards royalty /short payment of royalty.
63. The learned counsel appearing for the State, therefore, has made serious objection that in this contentious disputed question of fact the writ petition may not be entertained.
64. This Court is of the view that the writ petitioner is having ample remedy under the Act of 1914, and what is being apprehended by the writ petitioner that the Certificate Officer is not competent enough to decide the issue of liability, this Court is of the view that since the Certificate 35 2026:JHHC:15205-DB Officer, being the quasi-judicial functionary, is having jurisdiction also to adjudicate the contentious issue by considering the evidence led by the parties therefore the said apprehension of the writ petitioner is not fit to be accepted .
65. The question of entertaining the present writ petition as we have already referred herein above that there is no absolute bar in entertaining the present writ petition then the question is that if the Forum is there, the parties are not remedy less, then why to exercise the extra ordinary jurisdiction as has been conferred to this Court under Article 226 of the Constitution of India.
66. One of the arguments as has been advanced that the impugned demand dated 21.04.2011 which has been annexed as Annexure-21 has already been assailed before this Court at the time when there is no notice issued under section 7 of the Act of 1914 and, as such, the writ petition may be entertained.
67. We are not disputing the fact that at the first instance when the writ petition was heard the order was passed calling upon the State to file an affidavit subject to payment of 50% of the amount of demand in question while passing the order for taking no coercive action during pendency of the writ petition.
68. It requires to refer herein that the respondent no.5 has been impleaded by the petitioner as party to the proceeding vide order dated 18.12.2025 passed in I.A No.15812 of 2025 by this Court, for ready reference the order dated 18.12.2025 is being referred hereunder as: " I.A. No.15812 of 2025
1. The instant interlocutory application has been filed for impleadment of Punjab State Electricity Board now known as Punjab State Power 36 2026:JHHC:15205-DB Corporation Limited (PSPCL) through its Director, having office at the Mall, Baradari, Patiala-147001, Punjab.
2. The one of the members of the joint venture is 'PSPCL', who is the original allottee of the coal mines and as such, PSPCL owes liability towards the State and otherwise also, under Section 11 of the P.D.R. Act, the notices have also been issued to the 'PSPCL', hence, the 'PSPCL' is a necessary party.
3. Mr. Sachin Kumar, learned AAG-II for the respondent-State has submitted by referring to statement made at paragraph-12 of the counter affidavit that the State is having concern with the payment of royalty and statutory dues and as such, the further statement has been given at paragraph- 14 of the counter affidavit that the respondent-State does not have any objection if the 'PSPCL' will be impleaded as party.
4. Considering the aforesaid fact, the present interlocutory application needs to be allowed.
5. Accordingly, I.A. No.15812 of 2025 stands allowed.
6. Office is directed to make necessary addition in the cause title of the respondents.W.P.(C) No.736 of 2012
7. Let the notice be issued upon the newly added respondent, to be served through the Deputy Commissioner, Pakur, as has been informed that the mining work is going on by the newly added respondent within the jurisdiction of the Deputy Commissioner, Pakur.
8. Notice is made returnable on 13.01.2026.
9. Office is to do needful by communicating the notice to the Deputy Commissioner, Pakur.
10. The requisites for the aforesaid purpose will be filed by the petitioner by Saturday, i.e., 20.12.2025.
11. Learned State Counsel, therefore, is to ensure the service of notice upon the newly impleaded respondent through the Deputy Commissioner, Pakur and file an affidavit to that effect on or before the next date of hearing.
12. Although, the reference of name of Md. M. Khan, learned A.S.G.I. is being reflected in the daily cause list but the name of Mr. Prashant Pallav, learned A.S.G.I., is not reflecting. Therefore, he submits that his name needs to be referred herein for convenience of his office.
13. Considering the aforesaid, let the name of Mr. Prashant Pallav, learned A.S.G.I., be reflected in the daily cause list.
14. Let the name of Mr. Sachin Kumar, learned A.A.G-II, be also reflected in the daily cause list."37
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69. Thus, it is evident that it is the writ petitioner who has made the claim contentious by impleading the respondent no.5 as party respondent and now the writ petitioner is claiming that such a contentious issue may adjudicate in the writ jurisdiction which is summary procedure.
70. Since now another party, i.e., respondent no.5 has been impleaded by the writ petitioner for the purpose of shifting its liability upon the respondent no.5, while on the other hand, the respondent no.5 is disowning such liability by taking the various ground which has been mentioned in the preceding paragraphs.
71. On the basis of the discussion made hereinabove this Court is of the view that it will not be proper for this Court to entertain the writ petition at this stage, rather than it would be proper to relegate the matter by directing the parties concerned to approach to the Certificate Officer by filing objection.
72. The writ petitioner is therefore being given liberty to file objection for its consideration in accordance with law.
73. The learned counsel appearing for the respondent no.5 has also submitted that since the impleadment of the parties is there as respondent no.5, and, as such, it may also be given liberty to make objection for its consideration.
74. Such liberty is also being granted to the respondent no.5.
75. If such objections will be filed on behalf of the parties concerned, the Certificate Officer is directed to hear the parties and take a final decision within a period of two months from the receipt/production of a copy of this order.
76. With the aforesaid observation and direction, the instant writ petition stands disposed of.
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77. Pending I.As, if any, stands disposed of.
(Sujit Narayan Prasad, J.) I Agree.
(Sanjay Prasad, J.) (Sanjay Prasad, J.) Sudhir Jharkhand High Court, Dated:15/05/2026 AFR Uploaded on 16/05/2026.
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