Karnataka High Court
M/S Nagarjuna Constructions Co Ltd vs The State Of Karnataka on 1 July, 2010
Bench: V.G.Sabhahit, A.S.Bopanna
IN THE HIGH COURT OF KARNATAKA, BANGALORE DATED THIS THE 15 DAY OF JULY 2010 os PRESENT ve THE HON'BLE MR. JUSTICE V.G.SASHAHIT : ie anp es THE HON'BLE MR. JUSTICE A. s. BOPANNA i WRIT PETITION NO, 12536-125 546 OF 2010 (GM- -MM-S} BETWEEN: M/S. NAGARJUNA CONS! RUCTIONS CO. LID NO. 301, BATAVIA CHAMPERS, maa 8. KUMARAKRUPA ROALD. | KUMARA PARK EAST, BANGALORE ~ bo, . Me ITS REPTD. BY R4 AMALINGA ATU. ASST. GENERAL MANAGE z aad Be _ PETITIONER (By SRE NAGARAJA MN NAIDU, ADV. | AND: . ~ 10. THE STATE OF KARNATAKA, oe REPRESEN' TED BY ITS SECRETARY, 7 "DEPT. Or COMME RCE & INDUSTRHES [MINES] M, S. BUHL DING, BANGALORE - J, 2 THE CHIEF ENGINEER. : - KARNATAKA ROAD DEVELOPMENT CORPORATION ORYTD.. . 16/J, MILLAR TANK BED AREA. THIMMAIAH ROAD CROSS, BANGALORE -- 52. 6. ~~] 3. THE HOUSING COMMISSIONER, KARNATAKA HOUSING BOARD. BRD & 4M FLOOR, KAVERI BHAVAN, K.G. ROAD. BANGALORE. THE cen ENGINES DEPT. OF K.S.R. | C.E. DIVISION MYSORE RE GION). BANNIMANTAPPA | | MYSORE. THE CHIEF CIVIL ENGINEER. ~~ CIVIL ENGINEERING DIVISION, K.S.RT.C. TRANSPORT HOUSE, SHANTHINAG AR. a BANGALORE = THE EXEC sme DIRECTOR. ~ KBCDBCS _ DEVARAJ, URS BI TAVAN, GRP of POOR. MILLERS. TANK BED AREA, VASANT! INA SOAR. BANGALORE. THIe tr XE Cu TV a5 ENG INEER, fF er. Ob PWD TLASSAN DIVISION. iAgsi WN. THE, EXEC UTIVE ENGINEER "PWD, NO. t. BULL DING DIVISION. - BANGAL Or K 9. OL, THE COMM [ISSIONIEI. BANGALORE DEVELOPMENT AUTHORITY. BAN GALORE. THE EXECUTIVE ENGINEER CCE DEPT, BANGALORE. METROPOLITAN TRANSPORT CORPORATION LTD. Department and Local Bodies. It is commended that for. the purpose of execution of civil works, the petitioner, is. required to purchase building materials from the. private. sources. It is further contended that the petitioner. does. not own any quarries and that is Hot liable to pay "any royalty to the respondents. However, the respondents are
deducting royalty from he bills. of whe petitioner without authority of law. . Hence... these petitions praying not to deduct the royalty" from ihe bills of the petitioner in respect of the. miaierials procured by them from private sources lor execution ef the civil contract works. 2, In similar matters, this Court in G.V. KUMAR | "AN D OrHEE SV. STATE OF KARNATAKA ANID OTHERS in Writ Petition Nos. 31264-31266 of 1994 disposed of on | Sts October, 1994 has laid down the principles relating to . the payment of royalty by the contractors. The same are _extracted hereunder:
\3 ee ee raass
(a) Where providing the material (subjected to royally) is the responsibility of the contractor:
and the Department provides the contracter-. with specified borrow areas, for extraction' of - the required construction material, the.
contractor will be liable to pay royalty charges for the material {minor mineral) extracted from such areas. irrespective of whether t the contraet is a item rate eontract Gr a hap sum contract, Hence dedur clion -ol royalty charges in such cases will be ie gal. For this:
purpose non-execution of wi ning lease is not relevant, as the liability to pay: reyalty arises on account of the> contractor extracting material trom a Gover nment land. lOr-use in the work. - ° Where under the: t comtract tlie responsibility to supply the materia? (minor minerals) is that of the Department /employer and the contractor is required (©-provide only the labour and service for execution of any work involving use of such material. "and the unit rate docs not inchide ine 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 onty jor dabour or service and does rot inichide the cost of material.
Where the contractor -- uses material _purehased in open market, that is material purchased from private sources like quarry ease holders or private quarry owners. there \A is no jiability on the contractor to pay any royalty charges.
In cases covered by paras (b} and (c) the... department cannot recover or deduct any royalty from the bills of the contractor and it. so deducted. the Department wil be bound 16 - refund any amount so deducted or collected: : to the contractor.
Subject to the above, collec tion of rovally by ° ithe Department or refund hereat by Une Department will be governed iov the terns ot contract. ae Nothing stated above. shali be consti vie dasa direction . for crefund in -revard to any particular, contract. ~The 'Department oF authority conc ered shali decide in each case. wheter royalty is to be deducted or if any royalty is already de dric ted. whether it should be refunded. . kee pig ean view the above principles.and terms 'af the contract."
3. The said decision has beer upheld by the Division Bench of this Court in the case of OFFICE OF oo THE DIRECTOR OF DEPARTMENT OF MINES AND sBOLOGY v. M, MOHAMMED HAJEE in Writ Appeal No.830 of 2006 disposed of on 25'" Septe mber. 2006.
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