Madhya Pradesh High Court
G.R. Infraprojects Ltd. Lead Partner Of ... vs The State Of Madhya Pradesh on 13 June, 2022
Author: Rohit Arya
Bench: Rohit Arya, Milind Ramesh Phadke
(1)
IN THE HIGH COURT OF MADHYA PRADESH,
AT GWALIOR
BEFORE
HON'BLE SHRI JUSTICE ROHIT ARYA
&
HON'BLE SHRI JUSTICE MILIND RAMESH PHADKE
WRIT PETITION NO. 26525 OF 2019
BETWEEN :-
1. G.R.INFRAPROJECTS LTD.;
LEAD PARTNER OF GRIL-
COBRA-KIEL(JV)" HAVING ITS
REGISTERED OFFICE AT
REVENUE BLOCK NO.-223, OLD
SURVEY NO. 384/1, 384/2 PAIKI
AND 384/3, KHATA NO.464,
KOCHARIYA, AHMEDABAD,
GUJARAT - 382220
AND HAVING ITS CORPORATE
OFFICE AT :
PLOT NO.18TH, SECTOR 18,
NOVUS TOWER, SECOND
FLOOR, GURUGRAM (HR) -
122015 THROUGH ITS
AUTHORIZED SIGNATORY MR.
NEERAJ KUMAR BANSAL
.....PETITIONER
(BY SHRI GAURAV BANERJEE AND SHRI K.N. GUPTA -
SENIOR ADVOCATES WITH SHRI PRAVEEN NEWASKAR
ADN SHRI RAJAN RAJ- ADVOCATES)
AND
(2)
1. STATE OF MADHYA PRADESH
THROUGH PRINCIPAL
SECRETARY, DEPARTMENT OF
MINERAL RESOURCES
DEPARTMENT, GOVERNMENT
OF MADHYA PRADESH, AT
MANTRALAYA, VALLABH
BHAWAN, BHOPAL (MADHYA
PRADESH)
2. THE COLLECTOR (MINERALS
DIVISION), DISTRICT
GWALIOR, MADHYA PRADESH
3. THE COLLECTOR (MINERALS
DIVISION), DISTRICT MORENA,
MADHYA PRADESH
.....RESPONDENTS
(BY SHRI ANKUR MODY -ADDITIONAL ADVOCATE
GENERAL)
-------------------------------------------------------------------------------
Reserved on : 04/05 /2022
Delivered on : 13/6/2022
This petition coming on for hearing this day, Hon'ble Shri
Justice Rohit Arya passed the following:
ORDER
Petitioner, a Corporate entity, registered under the Companies Act, 1956, is said to have entered into a joint venture (3) ("JV" for short) with other Corporate entities, as described in paragraph 5.5 of the writ petition and, as a lead partner of the JV, it is said to be authorised to represent the JV for all intents and purposes including dealing with Rail Vikas Nigam Ltd. (for brevity "RVNL") with regard to execution of concerned projects.
2. The RVNL appears to have invited tenders/bids on 19/10/2016 for various nature of construction works including construction of Third Line (Railway Track) between Dhaulpur to Aantri, as described in paragraphs 5.6 and 5.7 of the writ petition. The contract was awarded vide contract agreement dated 21/3/2018 entered into between RVNL and JV under the name and title of "GRIL - COBRA- KIEL (JV)". .
As construction work in question also included earth work, the petitioner had applied for temporary permit on 25/2/2019 in the Office of Collector (Minerals), District Gwalior for excavating 68000 cu.m. of ordinary clay required in relation to laying down of third line from Dhaulpur to Antri from private land falling in Survey No.1421 admeasuring 3.553 hectares at Village Antri, Tahsil Chinaur, District Gwalior.
With reference to the above application, the impugned (4) demand letter dated 3/5/2019 (Annexure P/1) has been issued calling upon the petitioner to deposit royalty at the rate of Rs.100/- per cu. m. for excavating 68000 cu.m. of ordinary clay; minor mineral from the area of 3.553 hectares of private land falling in Survey No.1421 at Village Antri, Tahsil Chinaur, District Gwalior in advance in terms of the provisions contained in Rule 68(3) of the Madhya Pradesh Minor Mineral Rules, 1996 (hereinafter referred to as the "Rules of 1996") so that the application could be further processed.
It appears that the petitioner has also applied for temporary permit for excavating 1,36,000 cu. m. area out of 28.480 hectares falling in Survey Nos. 86, 87, 88 and 90 at Village Naikpura, District Morena. Vide second impugned communication dated 28/01/2020 (Annexure P/10) issued in reference to official communication dated 24/10/2019, petitioner has been called upon to pay royalty of Rs.68,00,000/- (Rupees sixty eight lacs) at the rate of 50/- per cu.m. in terms of the revised rates notified vide gazette notification no. 01/F/19-5/2019/12/1 Bhopal, dated 1/1/2020 (Annexure R/3-5).
Besides, as the petitioner had already started mining (5) operations in the area described in the second impugned communication dated 28/1/2020 without depositing the amount of royalty in advance as contemplated under Rule 68(3) of the Rules of 1996, a notice was issued by the Collector, Morena on 12/02/2020 (Annexure P/11) to show-cause as to why penalty of Rs. 61,20,000/- which is thirty times the amount of royalty i.e. Rs.2,04,000/- be not imposed upon the petitioner for excavating 4080 cu.m. of ordinary earth and the reply was directed to be filed by 2/3/2020. Subsequently, another show-cause notice dated 02.06.2020 (Annexure P/12) has been issued to the petitioner similar to the previous one extending the time to file reply upto 15/6/2020.
As such demand letter dated 3/5/2019 (Annexure P/1), demand letter dated 28/1/2020 (Annexure P/10), show-cause notice dated 12/2/2020 (Annexure P/11) and show-cause notice dated 2/6/2020 (Annexure P/12) are under challenge in this writ petition.
3. The impugned demand letters (Annexures P/1 and P/10) have been challenged primarily on the premise that proviso appended to Rule 68(3) of the Rules of 1996 inserted vide (6) notification no. F-19-3-2011-XII-1 dated 6/9/2013 and reads as under:
"provided that the royalty on ordinary clay and murram shall not be payable for all construction works carried out or to be carried out under the public sector, authority, board, local body of the State Government or Government department of the State";
if read conjointly with Rule 68(1)(i) of the Rules of 1996, shall lead to the conclusion that the last words i.e. "or Government department of the State" shall mean department of the State Government, as well as, Central Government, as according to the learned Senior Counsel, the word "State" is a generic term and has to be literally interpreted applying the principles of contextual interpretation in widest possible manner.
Further, the impugned show-cause notices (Annexures P/11 and P/12) have also been challenged on the same basis inter alia contending that since petitioner is entitled to exemption from payment of royalty under the aforesaid proviso appended to Rule 68(3), the impugned show-cause notices are without authority or justification, therefore, bad in law. To buttress his submissions, (7) learned Senior Counsel has placed reliance on various judgments of the Apex Court.
4. Per contra, respondents/State Government has filed detailed reply along with enclosures, with the submission that the afore-quoted proviso appended to Rule 68(3) of the Rules of 1996 is as clear as noon in the day and if read carefully and dispassionately, the words "or Government department of the State" cannot be given meaning other than Government department of the State of Madhya Pradesh. It cannot be said to include Government Department of Central Government. That apart, after having entered into agreement with the RVNL on 21/3/2018, the petitioner itself had applied for grant of temporary permit in the Office of Collector (Minerals), Gwalior on 25/2/2019 for excavating 68000 cu.m. of ordinary clay/earth from private land falling in Survey No.1421 admeasuring 3.553 hectares at Village Antri, Tahsil Chinaur, District Gwalior required for laying down third rail line from Dhaulpur to Antari. In response thereto, a demand notice dated 3/5/2019 (Annexure P/1) has been issued to the petitioner for payment of royalty calculated therein in advance as mandated under Rule 68(3) of the (8) Rules of 1996. Under such circumstances, the mutually contradictory plea has been raised by the petitioner; as on one hand it is stated that petitioner is not liable to pay royalty in view of exemption under proviso to Rule 68(3) of the Rules of 1996 and on the other hand petitioner has applied for temporary permit for excavation of ordinary clay/earth but has taken a somersault alleging that the royalty is not chargeable on ordinary clay/earth. Such pleas cannot be countenanced as petitioner cannot be allowed to blow hot and cold in the same breath.
Such extreme plea that ordinary clay is not a minor mineral, therefore, royalty is not chargeable thereupon, is more of frustration than of substance and based on totally incorrect factual premise. It is submitted that Rule 2(xxi) defines "Minor Minerals"
as minerals specified in Schedule I appended to these Rules and any other Mineral that Government of India, may by notification in official gazette, declare to be a minor mineral under section 3(e) of the Act. Ordinary clay/soil is specifically mentioned in the said section. Hence, royalty is chargeable thereupon as per the rates specified in Schedule III appended to the Rules of 1996.
That apart, other Companies like the petitioner which are (9) also engaged in similar nature of work and require to excavate ordinary clay/earth;minor mineral defined under Rule 2(xxi) of the Rules of 1996, had applied for grant of temporary permit from answering respondent nos. 2 and 3 for the same nature of work as that of RVNL but for different location i.e. between Village Ladvaya Tahsil Chinor District Gwalior and Village Rairu, District Mornea to Sumawali at Morena). Such Companies have after payment of royalty undertaken excavation work. As such, petitioner cannot claim exception to the demand notice as neither any department of the Central Government nor contractors of Central Government nor RVNL, at any point of time, have been exempted from depositing the advance royalty amount for excavating ordinary clay/earth in absence of authority and jurisdiction.
In fact, the State Government has issued various clarifications from time to time to avoid misinterpretation of the provisions of the Act or the Rules of 1996. On 20/6/2019 (Annexure R3/1), a detailed clarification was issued by the State Government regarding the issue involved in the present petition which clarifies that ;(10)
"Bsdk vuqca/k ds dk;ksZa esa [kfut dk mi;ksx fd;k tkuk Bsdsnkj dk O;kolkf;d nkf;Ro @ vko';drk gksus ds dkj.k mWaph vkSj xgjh Hkwfe dk leryhdj.k] jsYos ykbZu fcNkus gsrq Hkjko dk dk;Z fd;s tkus esa xkS.k [kfut dk mi;ksx O;kolkf;d iz;kstu dh Js.kh esa vk,xk ,oa fu;ekuqlkj jkW;YVh ns; gksxh A"
It is further submitted that due to non payment of advance royalty as required under Rule 68(3) of the Rules of 1996 and non-cooperation of petitioner even after issuance of notices, various applications filed by the petitioner for different locations are pending before the competent Authority, as detailed in paragraph 20 of the additional reply filed on behalf of the respondents.
It is indeed submitted that the State Government vide its notification dated 20/9/2019 has further inserted proviso in Rule 68(3) of the Rules of 1996 excerising powers under sub-section (1) of S.15 of the Mines and Minerals (Development and Regulation) Act, 1957 (for short "the Act") and the same reads as under:-
"Provided that, in addition to the above, the State Government may also grant exemption from royalty on ordinary clay and murrum used in road or other construction works in the State to any department or organization/undertaking of the Central Government by issuing an order. This exemption shall apply to tenders issued after the date of issue of such an order."
(Emphasis supplied) (11) It is submitted that after incorporation of the said proviso, on case to case basis the State Government is empowered to grant exemption from payment of royalty of ordinary clay and murram. For instance, the State Government has passed an order dated 24/09/2019 granting exemption to National Highway Authority of India (NHAI); a subsidiary of Central Government from paying royalty over ordinary clay and murum used on construction of roads and other works in the State.
However, it is submitted that the aforesaid amendment shall be of no assistance to the petitioner as admittedly the contract has been awarded to the petitioner vide agreement dated 21/3/2018 pursuant to the tenders invited on 19/10/2016.
With the aforesaid submissions, learned counsel has prayed for dismissal of the writ petition.
5. Heard.
6. Section 3(e) of the Act defines "Minor Minerals". The definition is inclusive in nature. It includes ordinary clay amongst others and any other mineral which the Central Government may, by notification in official gazette, declare to be a minor mineral. S.15 of the Act empowers the State (12) Governments to make rules in respect of minor minerals. Madhya Pradesh Minor Minral Rules, 1996 have been framed by the State Government in exercise of powers conferred by S.15 of the Act. Schedule I and II appended to the Rules of 1996 provide for specified and other minerals. Schedule III provides for rate of royalty payable on such minerals.
Rule 68 of the Rules of 1996 provides for permission for removal of minor minearals for Central and State Governments and their undertakings. Sub-rule (1) thereof provides that on furnishing proof of award of contract, the concerned Collector/Additional Collector shall grant permission of extraction/removal and transportation of any minor mineral from any specified quarry or land which may be required for the works of any department and undertaking of the Central Government or the State Government. Sub-rule (2) provides that such permission shall not exceed the quantity of minerals required for construction work and the period shall not exceed the period of construction work. Sub-rule (3) further provides that such permission shall only be granted on payment in advance of royalty calculated at the rates specified in Schedule III and only thereafter the transit (13) pass in Form IX shall be issued.
7. Vide notification no. F-19-3-2011-XII-1 dated 6/9/2013, proviso was inserted in Rule 68(3) of the Rules of 1996 and the same reads as under:-
"provided that the royalty on ordinary clay and murram shall not be payable for all construction works carried out or to be carried out under the public sector, authority, board, local body of the State Government or Government department of the State";
Thereafter, recently vide notification No. F-19-7-2010-XII-1 dated 20/9/2019 another proviso has been inserted in sub-rule (3) of Rule 68 which reads thus:-
"Provided that, in addition to the above, the State Government may also grant exemption from royalty on ordinary clay and murrum used in road or other construction works in the State to any department or organization/undertaking of the Central Government by issuing an order. This exemption shall apply to tenders issued after the date of issue of such an order."
8. There cannot be any dispute that ordinary clay is a minor mineral as defined in S.3(e) of the Act and Murum is also a minor mineral as notified by the Central Government falling with the (14) definition of S.3(e) of the Act. The State Government, in exercise of the powers under S.15 of the Act, has made amendment in Schedule III referable to Rule 29 of the Rules of 1996 and rate of royalty for Muram has been fixed at Rs.50/-. Since no specific rate was fixed for ordinary clay, the same fell within the residual clause of "other minor minerals" at the rate of Rs.100/- per cu.m. However, vide subsequent notification dated 1/1/2020 the rate of royalty has been revised for ordinary clay as Rs.50/- per cu.m.
9. Petitioner, a joint venture company, has been awarded contract for laying of third line railway track from Dhaulpur to Antari vide agreement dated 21/3/2018 by the RVNL. Petitioner itself had applied for temporary permit from the Office of Collector (Minerals), District Gwalior for excavating 68000 cu.m. of ordinary clay from land falling in Khasra No. 1421 at Village Antari,Tahsil Chinnor, District Gwalior. In the said application, petitioner itself sought permission to deposit royalty (Annexure P/3). After processing of the application and on availability of requisite NOC from various Authorities, the demand notice as per provisio of Rule 68(3) of the Rules of 1996 was issued as determined amount royalty is required to be deposited in advance (15) before issuance of transit pass in Form IX under sub-rule (3) of Rule 68.
Similar procedure has been followed in the case of another company M/s Kalptaru Power Transmission Ltd. which had also applied for temporary permit from respondent no.2 for the same nature of construction work but for different location between Village Ladvaya Tahsil Chinnor, District Gwalior. Similar demand notice was issued on 14/8/2019 to M/s Kalptaru Power Transmssion Ltd. and such Company has already deposited the the royalty amount for ordinary clay and murram. Neither exemption was claimed nor granted in the matter of advance payment of royalty either to any of the contractors of Central Government or RVNL prior to insertion of new proviso to Rule 68(3) of the Rules of 1996 vide notification dated 20/9/2019.
10. Bearing in mind the aforesaid provisions of the Act, the Rules of 1996 quoted above and factual backdrop, sustainability of the submission for exemption from payment of royalty in view of first proviso appended to Rule 68(3) vide notification no. F- 19-3-2011-XII-1 dated 6/9/2013 is required to be examined.
According to learned Senior Counsel, words "or (16) Government department of the State" are to be understood as Government department of Central Government, as well as, State Government. It is submitted that since Railways is also one of the departments of Central Government, therefore, the Railways, as well as, RVNL, a development wing (corporate entity) of Railways and contractors engaged by it are also covered under departments of central Government. The contention appears to be far fetched and misdirected. If contention, so advanced, is accepted, the same shall not only tantamount to doing violence with the provisions of the Rules of 1996, but shall also render S.68 otiose. Besides, such an interpretation would be contrary to the settled principles of statutory interpretation.
It is a settled principle of law that words used in a statute are first to be understood in their natural, original or popular sense. Likewise, phrases and sentences used therein are also to be construed according to their grammatical meaning, unless of course such recourse leads to some absurdity or inconsistency or unless there is something in the context, or in the object of the statute to suggest the contrary. This is the golden rule of interpretation. In this regard, the Hon'ble Supreme Court in the (17) case of Maulavi Hussein Haji Abraham Umarji Vs. State of Gujarat and another ((2004)6 SCC 672) has held as under:-
"23. The golden rule for construing wills, statutes, and, in fact, all written instruments has been thus stated:
"The grammatical and ordinary sense of the words is to be adhered to unless that would lead to some absurdity or some repugnance or inconsistency with the rest of the instrument, in which case the grammatical and ordinary sense of the words may be modified, so as to avoid that absurdity and inconsistency but no further" (See Grey v. Pearson, (1857)6 H.L. Cas 61).
The latter part of this "golden rule" must, however, be applied with much caution. "If', remarked Jervis, C.J., "the precise words used are plain and unambiguous in our judgment, we are bound to construe them in their ordinary sense, even though it lead, in our view of the case, to an absurdity or manifest injustice. Words may be modified or varied, where their import is doubtful or obscure. But we assume the functions of legislators when we depart from the ordinary meaning of the precise words used, merely because we see, or fancy we see, an absurdity or manifest injustice from an adherence to their literal meaning" (See Abley v. Dale, (1851)11 C.B. 378).
11. Indeed, in exercise of powers under sub-section 1A(d) and
(g) of S.15 of the Act, Rules of 1996 have been framed, where inter alia Rule 68 provides for permission for removal of minor (18) minerals for Central Government and State Governments and their undertakings. Sub-rule (1) thereof clearly suggests that the Collector or Additional Collector shall grant permission for extraction, removal and transportation of any minor mineral from any specified quarry or land which may be required for the works of any department and undertaking of the Central Government or the State Government. However, the permission shall only be granted to either the concerned departmental authority or its authorised contractor on furnishing proof of award of contract. Sub-rule (3) provides that such permission shall only be granted on payment of advance of royalty calculated at the rates specified in schedule III and transit pass shall be issued only thereafter in Form IX with the conditions stipulated in sub-rule (4).
The State Government exercising powers under S.15 of the Act, has inserted proviso to Rule 68(3) above vide notification no. F-19-3-2011-XII-1 dated 6/9/2013. The proviso exempts payment of royalty on ordinary clay and murrum for all construction works carried out or to be carried out under the public sector, authority, board, local body of the State Government or Government department of State of M.P. (19) Grammatical and ordinary sense of the words used in the proviso unequivocally suggests that the word "State" has to be understood as State of Madhya Pradesh and not as State including Central Government,Indian Railways, RVNL or its contractors/agencies, as suggested by learned Senior Counsel. A bare reading of the entire proviso suggests that exemption has been granted for all construction activities by any entity described therein of the State Government or Government department of the State of Madhya Pradesh. In fact, an exception is carved out to Rule 68 in relation to entities or Government departments of State of M.P. This legislative act through subordinate legislation neither can be said to be in excess of powers conferred under S.15 of the Act in any manner nor affront to Article 14 of the Constitution, as the State Government is well within its competence to decide for exemption from payment of royalty by class of entities described in the proviso. Albeit, there is no challenge to the constitutional validity of the aforesaid provision in this petition. Instead, it is asserted that if the word "State" is not understood to include Central Government or its contractors etc., the same would be violative of Article 14 of the Constitution. This Court is in agreement with the counsel for the State Government that the (20) words "or Government department of the State" are to be understood as Government department of State of Madhya Pradesh. Even otherwise, literal, grammatical meaning of the word "State" as defined in the General Clauses Act, 1897 has been explained under S.3(58) in the following terms:-
"58. State -
(a) as respects any period before the commencement of the Constitution (Seventh Amendment) Act, 1956, shall mean a Part A State, a Part B State or a Part C State; and
(b) as respects any period after such commencement, shall mean a State specified in the First Schedule to the Constitution and shall include a Union territory;"
(Emphasis supplied) Hence, the contention of learned Senior Counsel is found to be devoid of substance and hence rejected.
Moreover, subsequent insertion of proviso to Rule 68 vide notification dated 20/9/2019, whereunder the State Government has reserved its right to grant exemption on case to case basis from payment of royalty for excavating ordinary clay and murram used in road or other construction works in the State to any department or organization or undertaking of the Central Government by issuing a specific order with further clarification that such exemption shall only apply to tenders issued after the (21) date of issuance of such order, reflects the legislative intent. Incorporation of such proviso is another reason to reject the contention of learned Senior Counsel that words "Government department of the State" should also include Central Government. At the cost of repetition, it may be stated that in the instant case, the contract was awarded on 21/3/2018, whereas the second proviso came into existence by virtue of notification dated 20/9/2019. Therefore, the same is also of no assistance to the petitioner.
In view of the foregoing discussion, the challenge to demand letters (Ex.P/1 and Ex.P/10) is devoid of substance and,therefore, rejected.
12. Now, we turn to reliefs pertaining to show-cause notices (Ex.P/11 and Ex.P/12). The said notices have been issued in exercise of powers conferred under Rule 53 of the Rules of 1996 which provide for penalty for un-authorised extraction and transportation. Admittedly, petitioner has not deposited the determined amount of royalty in terms of Rule 68(3) of the Rules of 1996. Therefore, no transit pass could be issued to the petitioner in Form IX. As such, indulgence in excavation activity (22) and thereafter, was wholly illegal warranting action as per rules. Therefore, no illegality can be attached to the said notices. The challenge thereto is, therefore, hereby rejected.
13. The principles of law laid down in the judgments cited by learned counsel for the petitioner are beyond any cavil of doubt, nevertheless none of the judgments has any bearing upon the controversy sought to be raised in this petition.
14. The upshot of the aforesaid discussion leads to dismissal of the writ petiton and the same is, accordingly, dismissed.
However, before parting with the case, it is considered appropriate to observe that in the event royalty amount is paid in full, the competent Authority in proceedings initiated pursuant to show-cause notices (Annexures P/11 and P/12) shall judiciously exercise discretion in the matter of imposing penalty in the obtaining facts and circumstances of the case and may consider reduction in proposed penalty.
(ROHIT ARYA) (MILIND RAMESH PHADKE)
JUDGE JUDGE
(and)
ANAND
SHRIVASTAV
A
2022.06.13
16:43:27
+05'30'