Jharkhand High Court
Hindalco Industries Limited vs The State Of Jharkhand on 8 July, 2025
Author: Rajesh Shankar
Bench: Rajesh Shankar
2025:JHHC:18180-DB
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P.(C) No.2604 of 2021
With
I.A. No.4384 of 2021
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Hindalco Industries Limited, A Company incorporated under the
Companies Act, having its office at Vashundhra Mega Mart, Argora,
P.O. Argora, P.S. Argora, District Ranchi, through its authorized
signatory-Dusyant Kumar Dushkar, aged about 38 years, son of Sri
Basuki Nath Singh, residing at Flat No.2E, Block No.D2, SAIL City,
New Pundag, P.O. Jagannathpur, P.S. Jagannathpur, District
Ranchi.
..........Petitioner.
-Versus-
1. The State of Jharkhand.
2. Secretary, Department of Mines & Geology, Government of
Jharkhand, Ranchi, having office at Nepal House, P.O. Doranda, P.S.
Doranda, District-Ranchi.
3. Deputy Commissioner Palamau.
4. District Mining Officer, Palamau.
........... Respondents.
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CORAM : HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE RAJESH SHANKAR
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For the Petitioners : Mr. Indrajit Sinha, Advocate
Mr. Ankit Vishal, Advocate
For the Respondents: Mr. Rajiv Ranjan, A.G.
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Reserved on 01.07.2025 Pronounced On 08.07.2025
Per: Rajesh Shankar, J.
1. The present writ petition has been filed for quashing letter no.775/M dated 15.07.2021 issued by the respondent no.4-District Mining Officer, Palamau to the petitioner, whereby it has been directed to deposit a penalty of Rs. 60,21,98,792/- within two days from the date of receipt of the aforesaid letter, failing which realization of the same would be done through certificate proceeding.
2. Learned counsel for the petitioner submits that vide letter no.482/M dated 22.06.2021 the respondent no. 4 issued a show cause notice to the petitioner alleging that it had transported the coal mineral for the period from 06.04.2020 to 15.06.2021 from Rajhara Railway 1 2025:JHHC:18180-DB Siding, Padwa, Palamau without valid transport challan and without any dealer registration/license. The said show cause was duly replied by the petitioner on 02.07.2021 denying all the allegations. The petitioner challenged the applicability of obtaining a Dealer Licence to it under Jharkhand Minerals (Prevention of Illegal Mining Transportation and Storage) Rules, 2017, however the respondent no.4 vide letter no. 775/M dated 15.07.2021 imposed a penalty of Rs. 60,21,98,792/- upon it and further directed it to deposit the abovementioned amount within two days failing which certificate proceeding would be initiated for realization of the same.
3. It is further submitted that as per rule 13 of the Jharkhand Minerals (Prevention of Illegal Mining, Transportation and Storage) Rules, 2017, any person who contravenes any of the provisions of said Rules or buys or sells or stores minerals except under and in accordance with the terms and conditions of the dealers registration or who transports the minerals except as mentioned in the transport challan or transport minerals without transport challan shall be punishable as per provision made under Jharkhand Minor Mineral Concession Rules, 2004 (hereinafter to be referred as 'the Rules, 2004') as amended from time to time.
4. It is contended that the respondent no. 4 has no jurisdiction to issue the impugned letter in exercise of powers conferred under Rule 54 (5) of the Rules, 2004 inasmuch as the said rule only empowers a competent Court of criminal jurisdiction to impose punishment which may be in the nature of imprisonment or fine or both. 2
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5. It is also argued that the transportation of minerals has to be done in accordance with the provisions of the Mines and Minerals (Development & Regulation) Act, 1957 and the Rules made thereunder. The term 'dealer' has been defined in Rule 2(i)(f) of the Rules, 2017, according to which 'dealer' means any person who is engaged in purchase, storage sale, transportation and processing of mineral (s) anywhere in the State for commercial gain through mineral-based activity and also includes a person carrying out export/import of mineral(s). However, the purchaser utilizing the mineral for personal consumption has been exempted.
6. It is further submitted that as per second part of rule 4 of Rules, 2017, if a person is holding a valid mining lease granted under the Mineral Concession Rules, 1960 or 2016 or JMMC Rules, 2004, as amended time to time, framed under the Act, 1957, it has been exempted from registering as a dealer for the same lease and mineral. Since the petitioner is engaged in the mining activity of coal having valid mining lease, it is not required to obtain a dealer registration in terms of Rule 4 of the Rules, 2017, who transports the mineral (coal) from its Kathautia Coal Mines to Rajhara Railway Siding for rake loading in order to further transportation of the same to its captive power plant situated within the premises of Mahan Aluminium Plant, at Bargawan, Madhya Pradesh.
7. It is also contended that there is no provision in the Rules, 2017 which would require the petitioner to get dealer license.
8. Learned counsel for the petitioner also emphasizes that the respondent no.4 has not assigned any reason for not accepting 3 2025:JHHC:18180-DB the stand taken by the petitioner and, therefore, the impugned letter cannot be sustained in the eye of law.
9. According to the learned counsel for the petitioner, the primary purpose of framing of the Rules, 2017 in terms with Section 23C of the MMDR act, 1957 is to ensure that illegal mining is not carried out and consequently transported or stored. In the instant case, there is no allegation far less any material which would indicate that the coal mineral was illegally mined. Assuming though not admitting that the petitioner has violated the provisions of the Rules 2017 by not transporting the minerals under a valid transport challan, it cannot be said that the transport is per se illegal and thereby making the extraction and transport of the mineral subject matter of imposition of penalty to the extent of the entire value of the minerals. Such action is confiscatory in nature and therefore must be founded on a statutory provision lest such action would be ultra vires and is liable to be declared so by this Court.
10. It is further submitted that the imposition of penalty to the tune of the entire value of mineral is also grossly disproportionate apart from being wholly without jurisdiction. In fact, under the scheme of the statutory regime as embodied in the Act, 1957, a State Government in exercise of its rule making power cannot prescribe a penalty/fine/punishment more than the limits set by section 21 (2) of the Act, 1957. It is well settled that a rule being a subordinate legislation cannot travel beyond the parent Act and any provision of a subordinate legislation which is expressly contrary to the plenary 4 2025:JHHC:18180-DB legislation is liable to be ignored and the constitutional courts would not enforce such nonest rules.
11. On the contrary, learned Advocate General appearing for the respondents submits that coal mineral produced from Kathautia Coal Mine is dumped or stored at Rajhara Railway Siding, Pandwa of Palamau district i.e. outside the leased area and further the said mineral is transported to its destination through railway. Thus, as per provisions of the Rules, 2017, mineral dealer registration is mandatory to store any mineral at a particular place outside the leased area and as such a demand of Rs.60,21,98,792/- was raised against the petitioner as per rule for the quantity of minerals dispatched without transporting challan.
12. It is further submitted that the respondent no. 4 has the jurisdiction to impose penalty as has been provided under Rule 54(5) of Rules, 2004 as amended in 2017. Moreover, the quantity of mineral coal dispatched from 06.04.2020 to 15.06.2021 without obtaining transport challan is illegal as per rule 9(i) of the Rules, 2017 and in view of rule 13 of the Rules, 2017, penalty as per provision made under the Rules, 2004 is to be imposed for quantity of mineral dispatched without transport challan. It is also submitted that as per rule 54(5) of the Rules, 2004, penalty is to be paid double the price of mineral dispatched without transport challan.
13. Heard learned counsel for the parties and perused the materials available on record.
14. The learned counsel for the petitioner has primarily argued that the respondent no. 4 has no jurisdiction to impose penalty exercising 5 2025:JHHC:18180-DB power under Rule 54(5) of the Rules, 2004. It is contended that only a competent criminal court has jurisdiction to take cognizance of the cases under section 54(5) of the Rules, 2004 and to impose penalty against erring person.
15. To appreciate the said contention of the learned counsel for the petitioner, we have perused section 4(1-A) of the Act, 1957 which provides that no person shall transport or store or cause to be transported or stored any mineral otherwise than in accordance with the provisions of this Act and the rules made thereunder.
16. Section 21 of the Act, 1957 provides for the penalties to be imposed upon the person who contravenes the provisions of sub-section (1) or sub-section (1-A) of section 4. In view of section 21(6) of the said Act, the offence has been made cognizable.
17. Further, section 22 of the Act, 1957 provides that the court shall take cognizance of the offence punishable under the Act, 1957 or any rules made thereunder upon complaint in writing made by a person authorized in this behalf by the Central Government or State Government.
18. The word 'Court' has not been defined in the Act, 1957, however the word "Special Court" has been defined in Section 3(hc) of the said Act as a Court of Session designated as Special Court under sub-section (1) of section 30-B. Section 30-B of the Act, 1957 provides for constitution of Special Courts for the purposes of providing speedy trial of offences for contravention of the provisions of sub-section (1) or sub-section (1-A) of section 4 of the said Act. 6
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19. Rules, 2004 has been framed in exercise of the power conferred under section 15 of the Act, 1957. Rule 54(5) of the Rules, 2004 provides that if any driver of a vehicle while transporting minor mineral fails to produce the transportation challan in Form 'M' or Form 'D' prescribed under Rules, 2004 before the competent officer or Director of Mines or Additional Director of Mines or Deputy Director of Mines or District/Assistant Mining Officer or Collector or any officer authorized by the Collector/State Government or refuses to get inspected it, then he shall be punishable with imprisonment of either description for a term which may extend to one year or with fine equal to twice the value of mineral or both. In case of failure to produce a valid transportation challan for the second or third time, the additional penalty shall be Rs. 50,000/- to 1,00,000/- respectively. It is further provided that if the investigating officer finds illegal transportation, the vehicle will be seized along with the minerals and will be kept safe in any government establishment or in the local police station premises. The vehicle can be released along with minerals after the illegal transporter submits the penalty fee and a bond paper to the effect that he will appear when the court issues a notice, but this information will be given to the concerned judicial Magistrate for taking action against the illegal transporter as per rules.
20. Thus, rule 54(5) of the Rules, 2004 is the penal provision which provides for imposition of punishment of one year or with fine equal to twice the value of mineral or both when it is found that minor 7 2025:JHHC:18180-DB mineral is being transported without any transportation challan in Form 'M' or Form 'D' prescribed under the Rules, 2004.
21. The Act, 1957 is the parent Act whereas the Rules, 2004 is a delegated legislation. Delegated legislation should be interpreted and applied harmoniously with its parent Act. Delegated legislation, which is created under the authority of the parent Act, should not contradict or exceed the scope of that parent Act. It is a principle of legal interpretation and constitutional law to ensure that a delegated legislation remains within the boundaries set by the legislature.
22. On conjoint perusal of the aforesaid provisions of the Act, 1957 as well as the Rules, 2004, we are of the view that the respondent no.4 was required to make complaint before the concerned Judicial Magistrate or before the Special Court, if any, constituted under section 30-B of the Act, 1957 who is empowered to take cognizance in the matter for imposing penalty under rule 54(5) of the Rules, 2004.
23. In the present case, the respondent no.4 has issued show cause to the petitioner alleging that it had transported the coal without transport challan and without any dealer license and on receiving reply to the show cause of the petitioner, the respondent no. 4 has himself decided the said allegation against the petitioner by passing the impugned order vide letter no. 775/M dated 15.07.2021 imposing penalty of Rs.60,21,98,792/-.
24. We find substance in the submission of learned counsel for the petitioner that the impugned order has been passed by the respondent no. 4 without jurisdiction. It is a well settled legal 8 2025:JHHC:18180-DB doctrine that when a statute or authority grants a power to perform a specific act in a designated manner, the act must be executed strictly in that prescribed manner or not at all. Any deviation from the specified method renders the act invalid or unlawful.
25. For the reasons aforesaid and without going into other aspects raised in this case, the impugned letter no.775/M dated 15.07.2021 is set aside for want of jurisdiction of the respondent no.4 to issue the same.
26. So far as the allegation levelled against the petitioner is concerned, the respondents will be at liberty to take appropriate steps against it in accordance with law.
27. The writ petition is, accordingly, disposed of with the aforesaid liberty and direction.
28. I.A. No.4384 of 2021 is also disposed of.
(M.S. Ramachandra Rao, C.J.) (Rajesh Shankar, J.) N.A.F.R. Sanjay/ 9