Karnataka High Court
V Madhava Das vs The State Of Karnataka on 16 May, 2013
Bench: Anand Byrareddy, Ravi Malimath
1
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 16th DAY OF MAY 2013
PRESENT
THE HON'BLE MR.JUSTICE ANAND BYRAREDDY
AND
THE HON'BLE MR.JUSTICE RAVI MALIMATH
WRIT PETITION NOs.20035-20036/2013(GM-MM-S)
BETWEEN:
V.Madhava Das s/o Indrapal
Aged about 52 years,
Occ: Class-1 contractor,
r/o "Chaithanya", SBH colony,
Raichur-584101.
...PETITIONER
(By Sri.G.G.Chagashetti, Adv - absent)
AND:
1) The State of Karnataka
Represented by its Secretary,
Department of Mines & Geology,
M.S.Building,
Bangalore-560 001.
2) The Registrar
Gulbarga University,
Gulbarga-585105.
3) Resident Engineer
Gulbarga University,
Gulbarga-585105.
...RESPONDENTS
(By Sri.Veeresh B.Patil, Adv. for R2 & R3,
Sri. N.B.Vishwanath, AGA for R1)
2
These W.Ps. are filed under Articles 226 & 227 of
the Constitution of India praying to direct the
respondents not to deduct royalty from the bills of the
petitioner and not to insist the petitioner to produce the
royalty paid receipts by their vendors.
These W.Ps. coming on for preliminary hearing
this day, ANAND BYRAREDDY J, made the following:
ORDER
These petitions coming on for preliminary hearing, is considered for final disposal.
2. The Government Pleader to take notice for respondent No.1. Notice to the respondent Nos. 2 and 3 is dispensed with.
3. The petitioner is a registered civil contractor carrying on civil works. For the purpose of execution of the said works, the necessary materials such as sand and clay murrum etc., were being purchased from licensed private quarry owners. The petitioner does not extract any minerals from Government land and no such work is entrusted by the Government either. 3 Therefore, he was always purchasing raw materials in the open market from vendors. It is the case of the petitioner that the respondents were also aware of the same. The petitioner having executed the works on behalf of the Government, insofar as the payment of the bills are concerned, the State Government has chosen to deduct royalty from the bills and it is this, which is sought to be questioned.
4. The learned counsel for the petitioner has placed reliance on the Division Bench judgment of this Court in W.P.No.80817/2009 dated 02.09.2009 wherein, following an earlier decision of this Court in G.V.Kumar and others vs. State of Karnataka and others in W.P.Nos.31384-31266/1994 dated 31.10.1994, this Court has laid down the principles relating to payment of royalty by contractors and the same is extracted hereunder:-
(a) Where providing the material (subjected to royalty) is the responsibility of the contractor and the Department provides the contractor with specified borrow areas, for extraction of the required 4 construction material, the contractor will be liable to pay royalty charges for the material (minor mineral) extracted from such areas, irrespective of whether the contract is a item rate contract or a lump sum contract. Hence deduction of royalty charges in such cases will be legal. For this purpose non-execution of mining lease is not relevant, as the liability to pay royalty arises on account of the contractor extracting material from a Government land, for use in the work.
(b) Where under the contract the responsibility to supply the material (minor minerals) is that of the Department/employer and the contractor is required to provide only the labour and service for execution of any work involving use of such material, and the unit rate does not include the cost of material, there is no liability on the contractor to pay any royalty. This will be the position even if the contractor is required to transport the material from outside the work site, so long as the unit rate is only for labour or service and does not include the cost of material.5
(c) Where the contractor uses material purchased in open market, that is material purchased from private sources like quarry lease holders or private quarry owners, there is no liability on the contractor to pay any royalty charges.
(d) In cases covered by paras (b) and (c) the Department cannot recover or deduct any royalty from the bills of the contractor and if so deducted, the Department will be bound to refund any amount so deducted or collected to the contractor.
(e) Subject to the above, collection of royalty by the Department or refund thereof by the Department will be governed by the terms of contract.
(f) Nothing stated above shall be construed as a direction for refund in regard to any particular contract. The Department or authority concerned shall decided in each case, whether royalty is to be deducted or if any royalty is already deducted, whether it should be refunded, keeping in view the above principles and terms of the contract".6
5. Having regard to the above and the same having been upheld by a Division Bench judgment of this Court in the case of Office of the Director of Department of Mines and Geology v. M.Mohammed Hajee in W.A.No.830/2006 disposed of on 25.09.2006, the present petitions are allowed in terms as above and on the principles stated hereinabove as prayed for. The respondents are directed not to deduct royalty from the bills of the petitioner if the petitioner has not quarried any Government land for the purpose of raw materials used in the works executed by him. In the event of any deductions made, the same shall be refunded.
Sd/-
JUDGE Sd/-
JUDGE Srl.