Bombay High Court
Tata Projects Limited vs The State Of Maharashtra, Through ... on 8 November, 2017
Bench: Anoop V. Mohta
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 10845 OF 2017
Tata Projects Limited,
a Company registered under the
Companies Act, 1956 having its
registered office at
1-7-80 to 87, Prenderghast Road,
Secunderabad-500003. ....Petitioner.
Vs.
1 The State of Maharashtra
through the Government Pleader
High Court, Mumbai.
2 The Revenue and Forest Department
of the State of Maharashtra through the
Collector of Bombay having his
Office at Old Custom House,
Shaheed Bhagat Singh Marg,
Fort, Mumbai-400001.
3 The Additional Collector (R/B)
Old Custom House, Shaheed Bhagat
Singh Marg, Fort, Mumbai-400001. ....Respondents.
Mr. V. Shridharan, Senior Advocate a/w Mr. Prakash Shah and Jus
Sanghavi i/by PDS Legal for the Petitioner.
Mr. A.I. Patel, Additional G.P. a/w Ms. Jyoti P. Jadhav, AGP for the
Respondents.
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CORAM : ANOOP V. MOHTA AND
MANISH PITALE, JJ.
DATE : 8 NOVEMBER 2017.
ORAL JUDGMENT (PER ANOOP V. MOHTA, J.):-
Rule. Rule is made returnable forthwith.
2 By consent, heard finally the learned Senior counsel
appearing for the Petitioner and the learned AGP for the Respondents.
3 The Petitioner has invoked Article 226 of the Constitution
of India by referring to the provisions of the Mines and Minerals
(Development and Regulation) Act, 1957 (for short, "the Act") read
with the Maharashtra Minor Mineral Extraction (Development and
Regulation) Rules, 2013 and thereby prayed for declaration that the
materials excavated by the Petitioner for the purposes of constructing
the Mumbai Metro Underground Project ("the metro project") are not
"minor minerals" contemplated as per Notification dated 3 February
2000, ("the notification"); and that the Petitioner is not liable to pay
any "royalty" on such excavated earth. Therefore, prayed for the
refund of the amount already paid, under protest.
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4 The Petitioner is one of the members of a Consortium
namely CEC-ITD CEM-TPL Joint Venture with M/s. ITD Cementation
India Limited and M/s. Continental Engineering Corporation. For the
metro project, they have to excavate the earth from many areas and
underground tunnels regularly. In view of the provisions of the Act
and the Rules, they have applied accordingly from time to time.
There was demand of royalty for such excavated earth, the Petitioner
has been depositing the amount, under protest. The Petitioner has
moved the applications with the details along with the orders of the
Supreme Court and the provisions of law. The Petitioner has
requested the Respondents to consider their grievances before
granting the conditional permission of penalty for excavation and
prayed for the refund. Those pending representations are part of the
record.
5 The law is settled that the demand of any such "royalty"
by the Competent Authority, and/or agency must be within the
framework of law. The minor minerals are the property of the
Government and the same cannot be removed and used without
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payment of royalty. The whole purpose of monitoring such excavation
is to ensure that no minerals will be excavated and used without
payment of royalty. However, the Respondent-Authority are
authorized to claim royalty based upon the provisions of the Act and
the Circulars so issued from time to time. The contractor/builder is
liable to pay the royalty based upon the actual use in the work and
subject to fulfillment of the conditions so provided.
6 The Apex Court in Promoters and Builders Association of
Pune Vs. State of Maharashtra & Ors. 1, has dealt with the very aspect
by referring to the provisions of Act and Rules as under:-
"14. Though Section 2(j) of the Mines Act, 1952
which defines 'mine' and the expression "mining
operations" appearing in Section 3(d) of the 1957
Act may contemplate a somewhat elaborate process
of extraction of a mineral, in view of the Notification
dated 3-2-2000, insofar as ordinary earth is
concerned, a simple process of excavation may also
amount to a mining operation in any given
situation. However, as seen, the operation of the
said notification has an inbuilt restriction. It is
ordinary earth used only for the purposes
enumerated therein, namely, filling or levelling
purposes in construction of an embankment, roads,
railways and buildings which alone is a minor
mineral. Excavation of ordinary earth for uses not
contemplated in the aforesaid notification, therefore,
1 2015 (12) SCC 736
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would not amount to a mining activity so as to
attract the wrath of the provisions of either the Code
or the 1957 Act.
15. As use can only follow extraction or excavation
it is the purpose of the excavation that has to be
seen. The liability under Section 48(7) for
excavation of ordinary earth would, therefore, truly
depend on a determination of the use/purpose for
which the excavated earth had been put to. An
excavation undertaken to lay the foundation of a
building would not, ordinarily, carry the intention to
use the excavated earth for the purpose of filling up
or levelling. A blanket determination of liability
merely because ordinary earth was dug up,
therefore, would not be justified; what would be
required is a more precise determination of the end
use of the excavated earth; a finding on the
correctness of the stand of the builders that the
extracted earth was not used commercially but was
redeployed in the building operations. If the
determination was to return a finding in favour of
the claim made by the builders, obviously, the
Notification dated 3-2-2000 would have no
application; the excavated earth would not be a
specie of minor mineral under Section 3(e) of the
1957 Act read with the Notification dated 3-2-2000.
16. Insofar as the appeal filed by the Nuclear
Power Corporation is concerned, the purpose of
excavation, ex facie, being relatable to the purpose of
the grant of the land to the Corporation by the State
Government, the extraction of ordinary earth was
clearly not for the purposes spelt out by the said
Notification dated 3-2-2000. The process undertaken
by the Corporation is to further the objects of the
grant in the course of which the excavation of earth
is but coincidental."
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7 The above observations required to be taken note of by the
Respondents before insisting for such royalty. The Respondents,
though requested by the Petitioner from time to time, to refund the
amount in view of the above observations and the position of law,
have unable to take any reasoned decision. On the contrary, they
have been regularly insisting for royalty for the excavation of the earth
for the development of the project. The judicial notice is required to
be taken in the matter of this nature, as until such project is
completed, such excavation of the earth will be the regular features
for all the concerned developers, builders, and the parties. The
Application for permission so required under the law is sine-qua-non
and therefore, everybody concerned need to apply for the same.
However, while granting the permission, the insistence of the royalty
in advance in view of above position of law, is required to be
adjudicated first to avoid the complications in the matter. There
should be finding, based upon the facts and the details of use and
utilization of excavated earth for the stated purpose. It is therefore,
desirable that the Respondents to take decision at the earliest on the
representations/applications so made by the Petitioner. The reasoned
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order ultimately can be the foundation for such claim/royalty in future
also.
8 The building/project operations undertaken by the
developer/contractor, based upon the permission/sanction, cannot be
treated as unlawful and illegal. The sanction/permission so required
for such extraction of earth/digging up of the land for filling or
leveling purpose, use of sand/minerals that itself cannot be treated as
commercial purpose, unless actually used for it. There is no finding
that the Petitioner has used the excavated earth for any commercial
purposes or such related purposes.
9 Strikingly, by notification dated 11 May 2015 there is
amendment to Rule 46. The relevant part is reproduced as under:-
"3. In rule 46 of the Principal Rules :-
(a) for the sub-rule (i), the following sub-rule shall
be substituted, namely :-
"(i) The lessee shall pay royalty on minor
minerals removed from the leased area at the rates
specified in Schedule I :
Provided that, such rates shall be revised once
in every three years :
Provided further that no royalty shall be
required to be paid on earth which is extracted while
developing a plot of land and utilized on the very
same plot for land levelling or any work in the process
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of development of such plot";
(b) in the sub-rule (v), for the words "as specified
by the Government, from time to time," the words "at
the rate specified in Schedule II" shall be substituted."
10 This amendment is after the Supreme Court Judgment
passed in Promoters and Builders Association (Supra). On the date of
impugned order/communication /action, the effect of this amendment
ought not to have been overlooked. The earth so extracted while
developing a plot of land and utilized on the very same plot of land in
levelling for the process of developing such plot, no royalty requires to
be paid/collected. Therefore, in view of clear position of law so
recorded above, unless there is a clear findings given by the Authority
after giving opportunity to the parties, that the said earth is used
and/or utilized for any commercial purpose and/or the earth so
extracted not used and utilized on the very same plot of land, there is
no question of imposing any royalty.
11 In the present case, we have noted that there was no such
finding and/or conclusion drawn even before issuing or raising such
demand of royalty. The Petitioner has paid the royalty under protest
inspite of above position of law and facts. We are of the view that the
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concerned Authority needs to decide their representation/Application
for refund, in accordance with law, at the earliest. The whole demand
of penalty is unjust, unsustainable, contrary to the provisions of the
Act and Rules and reflects non-application of mind to the position of
law and wrong exercise of discretion and the jurisdiction, therefore, it
is illegal.
12 Hence the following order:-
ORDER
a) By keeping all contentions open, Writ Petition is
disposed of by directing Respondent No.3 to decide
and to take an appropriate and reasoned decision
expeditiously on the representations/Application
filed by the Petitioner for refund of the amount and
for requisite permission, including the leviability of
any royalty, in accordance with law.
b) As suggested, the parties to appear on 17 November
2017 at 11.00 a.m. in the office of Respondent
No.3, at Mumbai.
c) Respondent No.3 to fix the schedule and dispose of
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the Applications, as early as possible, preferably
within period of six weeks thereafter.
d) If it is found that the Appellant is entitled to refund
of any amount, an appropriate consequential action
may be taken without delay.
e) Rule disposed of, accordingly.
f) No costs.
(MANISH PITALE, J.) (ANOOP V. MOHTA, J.)
