Madhya Pradesh High Court
Tomar Construction Company vs State Of Madhya Pradesh And Ors. on 25 September, 2007
Equivalent citations: 2008(1)MPHT164
Author: Rajendra Menon
Bench: Rajendra Menon
ORDER Rajendra Menon, J.
1. Challenging the action of the State Government/respondent-Corporation in insisting upon producing no dues certificate from the Collector or showing proof for payment of royalty for the minerals consumed by the petitioners in execution of the contract in question, petitioners have filed this petition.
2. Petitioners have executed the contract in question and for the purpose of doing the work awarded by the contract certain minerals are to be used as raw material. According to the petitioners the minerals and other raw materials are purchased from the open market from various authorized and licensed dealers. After the contract is executed now when the bills are to be settled, grievance of the petitioners are that respondents are insisting upon producing royalty payment receipts or no due certificate with regard to payment of royalty for the mineral consumed before clearing the bills of the petitioners for payment.
3. Petitioners contended that in view of the principles laid down by a Division Bench of this Court in the case of M.P. Contractors Sangh, Indore and Ors. v. State of M.P. and Ors. 1987 JLJ 743 followed by a Single Bench of this Court in the case of Prestige G.S. Sole v. M.P. Rural Development 2004 (4) MPLJ 175 and a recent judgment rendered by a Division Bench of this Court in the case of Keti Construction Limited v. State of M.P. and Ors. 2007 (3) M.P.H.T. 433, respondents cannot withhold payment of bills on the ground of non-production of certificate or document for payment of royalty. It is the contention of the petitioners that in view of the principles laid down by this Court in the judgments referred to hereinabove, respondents cannot withhold clearance of the bills submitted by the petitioners on the grounds as indicated hereinabove. Accordingly, seeking interference and directions to the respondents to clear the bills of the petitioners without insisting upon no dues certificate or other documents with regard to payment of royalty, petitioners have approached this Court for necessary directions.
4. Refuting the aforesaid contentions, Smt. Ami Prabal, learned Deputy Advocate General and learned Counsel representing the Corporations submit that with a view of check illegal mining operation of minor minerals, the aforesaid step is taken by the State Government. It is emphasised that in the light of M.P. Minor Mineral Rules, 1996 and M.P. Minerals (Prevention of Illegal Mining, Transportation and Storage) Rules, 2006 (hereinafter referred to as 'the Rules, 1996' and 'the Rules, 2006'), the State Governments entitled to seek production of no dues certificate or other documents.
5. It is argued by the respondents that in the cases relied upon by the petitioner as the Rules, 2006 is not taken into consideration, the judgments in the earlier cases will have no application. Referring to Sub-rule (14) of Rule 50 of Rules, 1996 and Rule 3(1) of the Rules, 2006 so also the definition of 'carrier' as indicated in the Rules, 2006, Smt. Ami Prabal submits that petitioner cannot be permitted to transport the minerals without a valid transit pass and in insisting upon a royalty clearance certificate, respondents have not committed any error. Accordingly, she submits that action of the respondents is proper and no interference can be made in this petition.
6. As an alternative, it was pointed out by learned Counsel for respondents/State that the State Government is not insisting upon the documents pertaining to payment of royalty, the intention of the State Government is only to stop illegal mining operation and for doing so the State Government is only insisting upon production of bills or any other documents with regard to purchase of minerals so that illegal extraction of minerals can be discouraged. It is stated by learned Deputy Advocate General that petitioners are misconstruing the direction issued by the State Government and have approached this Court under misapprehension. It is stated by her that in fact the State Government only wants to verify as to whether minerals which are used for execution of the contract are duly purchased and are not obtained by illegal mining operation and for verification of the same documents are directed to be produced. It is argued by learned Deputy Advocate General that same is proper.
7. Section Having heard, learned Counsel for parties and on consideration of the facts and circumstances of the case, this Court is of the view that a Division Bench of this Court in the case of M.P. Contractors Sangh, Indore (supra), and in the case of Keti Construction Limited (supra), have clearly laid down the principles and the principles followed in the case of Prestige G.S. Sole (supra) is approved. From the complete reading of the three judgments, it is clear that bills of the contractors cannot be withheld by the State Government on the ground of non-submission of no dues certificate with regard to payment of royalty from the Collector. Insisting upon such a no dues certificate and proof with regard to payment of royalty from the contractors who is not a mine owner and a lease holder, is held to be improper by this Court and it is held that the State Government or the respondents/Corporation cannot insist upon producing the no dues certificate with regard to payment of royalty or any other documents showing proof of payment of royalty. Once the law in this regard is settled, action of the respondents in insisting upon the same, is clearly unsustainable and to that extent the petitioners are entitled to the relief from this Court.
8. Even though the provisions of Rules, 2006 is not considered in the earlier cases but on taking note of definition of 'carrier' as contained in Rule 2(c) so also the conditions of 'licence' as contained in Rule 17 of the aforesaid rules, it is clear that these provisions apply only to those persons who are raising the minerals or who are transporting the minerals from the place of raising or from one place to another place and in the absence of a transit pass being produced, action can be taken against the persons who are found to be transporting the minerals without proper and valid transit pass. In the facts that have came before this Court in this petition, it is not case of the State Government that the petitioner is transporting the minerals without proper transit pass and therefore action is being taken for violating the Rules, 2006. The Rules, 2006 only prohibits transportation of minerals from place of raising or from one place to another without a valid transit pass. In this petition respondents have not come out with a case that they are taking action against the petitioner for transportation of minerals without valid transit pass. The said rules nowhere provides for recovery of royalty from any one who is found illegally transporting the mineral. That being so, even the Rules, 2006 will have no effect on the present case as the present case pertains to recovery of royalty from the petitioner even though petitioners are not shown to be mine or quarry lease holders liable to pay royalty.
9. The question raised by the respondents in this petition is already considered by this Court in the case of Prestige G.S. Sole (supra), and the Division Bench while considering this question in the case of Keti Construction Limited (supra), has considered the same. In this regard reference may be made to Paras 5, 9, 10, 11 and 13 of the judgment rendered by the Division Bench in the Keti Constructions Limited (supra), wherein all these questions are considered. Nothing in the Rules, 2006 provides for production of certificate or document for payment of royalty from a contractor and therefore, the Rules, 2006 does not make any difference with regard to principles already laid down by this Court in the judgment referred to hereinabove. Therefore, it has to be held that State Government cannot insist upon production of royalty clearance certificate or no dues certificate for finalizing the bills of the contractors. The State Government can insist upon proof with regard to payment of royalty and production of no dues certificate showing payment of royalty only in case of such contractors who have been granted mining lease or quarry lease and who have used the minerals from such quarry or mines as raw material for execution of the work granted by the contract agreement.
10. However, the State Government is entitled to make an enquiry from the contractor with regard to place from where the raw material used for execution of the work is purchased and for the said purpose can insist upon production of documents from the contractor with regard to purchase of these raw material, i.e., the bills pertaining to purchase of raw material and in case the contractor is unable to produce the bills because of passage of time, the contractor can file affidavit indicating to the State Government the source or place from where purchase of the raw material is made and manner in which purchase was made. On the basis of such a affidavit, the State Government shall clear the bill of the petitioners after due verification.
11. Accordingly, keeping in view of the totality of the facts and circumstances of the case, this petition is allowed arid disposed of with the following directions:
(i) The State Government shall clear the bills of the petitioner submitted in connection with execution of the contract in question without insisting upon producing no dues certificate from the Collector or any other Authority with regard to payment of royalty for the minerals consumed. However, the State Government can insist upon production of bills with regard to purchase of mineral and in case the bill is not available, an affidavit indicating the manner in which and the place or source from where the mineral is purchased. This affidavit can be used by the State Government for verification and for taking further action for clearing the bills.
(ii) Amount of royalty, if any, recovered from the bills of the petitioner, shall be refunded to the petitioner on the petitioner filing the bill or the affidavit as indicated hereinabove. In case petitioner is unable to produce the bill or the affidavit as indicated hereinabove, liberty is granted to the petitioner to represent the matter before the State Government pointing out the inability in producing the bills or the affidavit and it would be for the State Government to consider the representation and take such steps as may be permissible or proper for clearing the bills in the given set of circumstances as may be indicated by the petitioners.
12. Petitions stand allowed and disposed of with the aforesaid without any order so as to costs.
Certified copy as per rules.