[Cites 12, Cited by 0]
Bombay High Court
Dogus - Soma Joint Venture vs The State Of Maharashtra And 2 Ors. on 12 March, 2026
Author: Bharati Dangre
Bench: Bharati Dangre
2026:BHC-OS:6882-DB
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 4583 OF 2022
DOGUS - SOMA Joint Venture, a Joint .. Petitioner
Venture having its office at Recreation
Garden, Plot No.1895, Sane Guruji
Marg, Agripada, Mumbai-400011.
Versus
1. State of Maharashtra, through the ..
Government Pleader, High Court,
Mumbai.
2. The Revenue and Forest Department
of the State of Maharashtra thru the Respondents
Collector of Bombay having office at
Old Custom House, Fort, Mumbai.
3. The Additional Collector (R/B),
Old Custom House, Shahid Bhagat
Singh Marg, Fort, Mumbai 400001.
...
Mr. Sriram Sridharan with Mr.Shanmuga Dev and Ms.Aditi Jain
for the petitioner.
Ms.Jyoti Chavan, AGP for the State.
CORAM : BHARATI DANGRE &
MANJUSHA DESHPANDE, JJ
DATED : 12th MARCH, 2026.
JUDGMENT (Per Bharati Dangre, J.)
1 The petitioner, a Joint Venture of Dogus Insaat Ve
Ticaret A.S. and Soma Enterprise Ltd, participated in the
bidding process when the Mumbai Metro Rail Corporation
Limited (hereinafter referred to as 'MMRCL') invited bids for
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design and construction of underground sections including five
underground stations at Mumbai Central, Mahalaxmi, Science
Museum, Acharya Atre Chowk and Worli and associated
tunnels. The petitioner's bid was accepted on 1/7/2016 which
was followed by a contract being awarded to the petitioner.
Under the contract, the petitioner was responsible
for excavation and construction of underground tunnels and
underground Metro Stations, and for undertaking the aforesaid
activity, it was expected to conduct a detailed geological
investigation of the areas at which these tunnels and metro
stations were to be constructed.
The Contract stipulated specific conditions as
regards excavation of the material as a part of execution of the
project and instructions for deposit of the excess material at
muck-disposal site.
2 We will be referring to the relevant clauses in the
course of our deliberation, but at this stage, we take note of the
contention of the petitioner that it followed the terms and
conditions of the contract, relating to the disposal of the
excavated and excess material and it is the case of the
petitioner that he utilised the services of the sub-contractors
who dumped the excavated ordinary earth at the dumping site
at Dapode, and the petitioner did not commercially utilise the
same nor did it earn any revenue therefrom. It is the case of
the petitioner that it duly complied with all necessary
formalities and obtained requisite permissions, licences etc from
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the Traffic Police Department, Municipal Corporation of Greater
Mumbai, Brihan Mumbai Electric Supply and Transport
Undertaking. The petitioner also secured necessary permission
from the Additional Collector for excavation and disposal of the
excavated material for the design and construction of
underground sections at the underground stations in the course
of execution of the work allotted to it.
3 The petitioner, in undertaking the aforesaid
exercise, carried an impression that the excavations being
carried out in the execution of the project are not liable to the
levy of royalty under the provisions of the Mines and Minerals
(Development and Regulation Act), 1957 (for short, MMDR
Act) or the Mineral Concession Rules, 1960 or even the
Maharashtra Minor Mineral Extraction (Development and
Regulation) Rules, 2013. However, as the petitioner wanted to
avoid any practical difficulties as stoppage of his trucks which
would cause delay in execution of the project, without
prejudice to its rights and liabilities, the petitioner made
payment of royalty on the material excavated by it in the course
of construction in the underground sections and metro stations
and the petition is filed claiming its refund.
4 The learned counsel Mr. Sriram Sridharan
appearing for the petitioner urged before us that the case of the
petitioner is strictly governed by the decision of the Apex Court
in case of Promoters and Builders Association of Pune Vs. State
of Maharashtra and ors,1 but it is his submission that though no
1 2015(12) SCC 736
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demand of royalty was raised, the petitioner paid royalty @
Rs.400/- on the excavated material, at different sites with
reference to the material excavated by it in the course of
execution of the work and deposited the same through different
challans. The petitioner paid a sum of Rs. 8,20,02,000/- by
way of royalty and also paid a sum of Rs.1,45,000/- by way of
application fees till September 2019.
The petition is accompanied with the copies of the
challans under which the payment was made under protest.
It is urged on behalf of the petitioner that the
amount of royalty paid was under protest, so as to avoid any
practical hindrance in the execution of the project and after its
payment, the petitioner sought appropriate legal advise and
expressed to respondent no.3 that the royalty was not leviable
on the activities carried out by the petitioner and sought its
refund.
The first communication addressed by the petitioner
to the Additional Collector is dated 5/8/2017, seeking refund of
the amount by submitting that the excavation carried out do
not attract royalty. The objection raised was very specific that
the MMDR Act is enacted by the Parliament by invoking Entry
No.54 of List-1 of Seventh Schedule of the Constitution, and
since the said statute govern mines and mineral development,
the State legislature is not empowered to legislate on the
subject and if the MMDR Act levies royalty on extraction of
material, the State cannot levy royalty on the same extraction.
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Submitting that Section 9 of the MMDR Act provide
for levy of royalty by the holders of a mining lease and Section
9-A thereof provide for payment of dead rent, the field
according to the petitioner, is occupied and the State is
automatically precluded from legislating on the same.
Apart from this, it was also urged that the activities
carried out by the Joint Venture was in relation to the involved
excavation for the purpose of constructing tunnels and metro
stations and is not covered by the phrase "filling and levelling
purposes" and the ordinary earth excavated by the petitioner is
not covered by notification dated 3/2/2000 issued by the
Central Government, notifying 'ordinary earth' used for
levelling purposes in construction of embankments, roads,
railways, buildings to be a minor mineral. Thus, contending
that the excavated material was not 'minor mineral', it was
urged that no royalty can be imposed.
Yet, another point which was canvassed by placing
reliance upon the decision of the Apex Court in Promoters and
Builders Association of Pune (supra), it was urged that it is
only ordinary earth used for the purposes of filling or levelling
in construction of embankments, roads, railways and buildings
which is a minor mineral and excavation of ordinary earth for
uses not contemplated in the aforesaid notification, would not
amount to a mining activity so as to attract the wrath of
provisions of the Code of 1957 Act.
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In these circumstances, it was urged that when the
Additional Collector had granted permission for carrying out
excavation at different sites, and the payment on such
excavated material was done by the petitioner (Joint Venture)
without prejudice to its rights and contentions, the amount is
liable to be refunded as payment of royalty was not a pre-
condition for grant of the permissions.
Thereafter, with reference to different payments
made towards royalty, refund letters were addressed to the
Additional Collector and when the amount is not refunded, the
petitioner has chosen to approach this Court by seeking a
declaration that the material excavated by the petitioner for the
purposes of constructing Mumbai Metro underground station is
not minor mineral as per notification No. GSR 95-E dated
3/2/2000 read with Section 3(e) of the Mines and Minerals
(Development and Regulation) Act, 1957 and the activity do
not amount to mining operation and thus, it is entitled for
refund of Rs.8,20,02,000/- paid under protest.
5 Learned counsel for the petitioner has urged before
us that the royalty or dead rent can be only levied under the
provisions of MMDR Act an enactment of the Parliament and
the corresponding entries in the State list for regulation of
Mines and Regulation of Mineral Development is entry no.53
and 50 of List-2 which are subject to the provisions of List-1.
In exercise of Section 15 of the MMDR Act, the
State has enacted Maharashtra Minor Mineral Extraction
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(Development and Regulation) Rules 2013, which has levied
royalty on extraction of minor minerals. By invoking Rule 46, it
is the submission of the learned counsel that the lessee in terms
of the said provision is liable to pay royalty on minor minerals
removed from leased area at the rate specified by the
Government from time to time on the date of grant of lease. It
is his contention that pursuant to the decision of the Apex Court
in Promoters and Builder's case, Rule 46 is amended by
notification of 11/5/1950, which since then read as below :-
"46 Every quarry lease shall be subjected to conditions :-
(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 may be revised only 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
utilised on the very same plot for land levelling or any work in the
process of development of such plot."
6 On behalf of the petitioner, on relying upon the
aforesaid notification, it is contended that by, it is contended
that a person who is involved in excavation activities would
either be liable to royalty under section 9 of the MMDR Act,
1957, if minerals are being extracted or shall be liable to
royalty under Rule 46 of the Mining Rules, if minor minerals
are being extracted, subject to the proviso stipulated therein.
7 Learned counsel for the petitioner would submit
that u/s.3(a) of the MMDR Act, minerals include all minerals
except mineral oils and Section 3 has defined 'minor minerals'
as building stones, gravel, ordinary clay, ordinary sand other
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than the sand used for prescribed purposes, and any other
mineral which the Central Government may notify and declare
to be a minor mineral. Relying upon the said provision in the
MMDR Act read with Rule 70 of the Central Mining Rules and
various notifications issued from time to time, it is the
contention of the petitioner that the material being excavated
by the petitioner is nothing other than ordinary earth and
therefore, do not fall within the category of 'minor mineral'.
The Central Government on 3/2/2000, vide
notification No.GSR 95-E, notify 'ordinary earth used for filling
or levelling purposes in construction of embankments, roads,
railways, buildings' to be minor mineral. It is therefore the
contention advanced on behalf of the petitioner that ordinary
earth extracted and utilised for prescribed purposes alone shall
amount to minor mineral and if it is not utilised for prescribed
purpose, then, it will not amount to minor mineral, and
therefore, only if ordinary earth is used for filling or levelling, it
would be falling within the legislative purview of State
Legislature, as if ordinary earth is used for purposes other than
the one specified in the notification of 3/2/2000, then it is not
a minor mineral and would be outside the ambit of State
Legislature. It is therefore, the contention of the petitioner that
the earth excavated is not used for filling or levelling purposes
in construction of embankments, roads, railways and buildings,
but the activity in which the petitioner was involved was of
construction of tunnels for metro stations, and since it is not for
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the purpose of filling or levelling purpose and when the
ordinary earth excavated is carried away from the excavated
site and dumped at specified locations and not used for re-
filling or levelling, then it is not covered by notification of
3/2/2000 and therefore, the State is not empowered to
regulate the excavated ordinary earth.
8 Strong reliance is placed upon the decision of
Promoters and Builders Association of Pune (supra) where it is
held that ordinary earth not used for the purposes specified in
notification of 3/2/2000 is not minor mineral, and the
imposition of penalty under Section 48(7) of the Maharashtra
Land Revenue Code, 1966 for non-payment of royalty upon
builders who were digging earth for the purpose of laying
foundation of building, was held to be outside the purview of
the State.
It is also the contention of the petitioner that the
petitioner did not engage itself in any reconnaissance of
prospecting activity and strictly speaking, the petitioner is not
carrying out any mining operation as defined in Section 3(d) of
the MMDR Act, 1957 as any operations undertaken for the
purpose of 'winning of any mineral".
Thus, according to the learned counsel, if the
purpose of the activity of excavation is other than recovery of
the said material, then the activity is not mining operation and
since the petitioner has not commercially exploited the
excavated material and it is not engaged in the mining activity
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and no royalty can be imposed upon the excavated material, as
the operation of the petitioner was restricted to construction of
underground tunnels and metro stations. Since the royalty paid
by the petitioner was under a wrong premise that the royalty is
payable and immediately after the payment, the petitioner
sought its refund, according to the learned counsel, the refund
shall be granted to the petitioner.
9 The relief prayed in the petition are strongly
opposed by the Additional Government Advocate Ms.Jyoti
Chavan and she would place reliance upon the affidavit filed by
Dr. Mansi Marlewar, Tahsildar, Collector Office, Mumbai City,
where a specific stand is adopted to the following effect :-
"3. At the outset I submit that the above Writ Petition is not
maintainable as there is alternate efficacious remedy available to
the Petitioner under the provisions of Maharashtra Land Revenue
Code and Maharashtra Minor Minerals Extraction (Development
and Regulations) Rules 2013.
4 I say that the Petitioner has categorically admitted in
paragraph no.6 of the Writ Petition that the Petitioner were solely
entitled to use the soil excavated and remove the said soil from the
plot hence the judgment of Hon'ble Apex Court reported in 2015 12
SCC 736 is not applicable in the present case. Furthermore the
Petitioner has admitted that upon excavation of soil he becomes the
owner and hence under the provisions of Maharashtra Land
Revenue Code read with Maharashtra Minor Minerals Extraction
(Development and Regulations) Rules 2013, the Petitioner is liable
to pay royalty.
5 I say that the other ground raised by the Petitioner that the
Petitioner has paid royalty under protest is an after thought as the
applications made by the petitioner to the Collector seeking
permission does not mention that the petitioner has made royalty
under protest."
10 Ms.Chavan would place reliance upon the decision
of this Court in Ikea India Private Limited Vs. State of
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Maharashtra through Revenue and Forest Department (Writ
Petition No.494 of 2024 decided on 10/04/2024), and it is her
contention that if any person without lawful authority extracts,
removes, collects, replaces, picks up or disposes of any mineral
from working or derelict mines, quarries, wherever situated, the
right to which vests in, and has not been assigned by the State
Government, shall be liable to pay penalty as contemplated
under Section 48(7) of the MLR Code. According to her, when
the petitioner, IKEA India, in the course of developing leasehold
land to set up a large "IKEA Store" for retail of furniture and
home furnishing, faced an auction of penalty for unauthorised
excavation, the Division Bench considered the grievance of the
petitioner in the background that the Tahsildar, Thane, on
account of the unauthorised excavation of earth from the
subject land where the development activity was to take place,
and it invited payment of royalty, imposed the penalty at
maximum level i.e. five times of the market value of excavated
earth.
Recording that for payment of royalty towards
extraction of "minor minerals" under Section 48(7) of MLRC, it
was noted that the earth extracted must be intended to be put
to use, as contemplated in the notification issued by the
Government of India on 3/2/2000 and the notification clearly
stipulated that the earth excavated towards filling and levelling
purposes in construction of embankments, roads, railways,
buildings, would constitute minor minerals.
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With reference to the decision of the Apex Court in
case of Promoters and Builders Association of Pune (supra),
when the amendment was effected in Rule 46(1) of the
Extraction Rules of the State Government, the Bench held that
where the earth extracted while developing a plot of land is
utilised on the same plot of land for levelling or any work in the
process of development, no royalty shall be payable.
Referring to the pronouncements of the same Bench
in AIGP Developers (Pune) Private Limited Vs. State of
Maharashtra,2 the following conclusion is drawn :-
"19. Such an analysis flies in the face of the law declared
inPromoters and Builders and AIGP Developers. The excavation of
earth in the course of development would not automatically
attract royalty. To the extent that such earth is redeployed in
development of the very same plot of land, no royalty whatsoever
would be attracted. Therefore, there is no question of there being
any scope for alleging the need for a permit to extract earth.
Consequently, there is no question of imposing penalty for non-
payment of royalty. However, any quantum of excavated earth that
is in excess of the redeployed earth that is required to be removed
from that plot of land i.e. gets disposed in the market, would
attract royalty under the MLRC.
20. A party developing a plot of land would have to estimate
and reassess the quantum that may be required for redeployment
and the quantum required to be removed. For the quantum
redeployed, no royalty, and therefore, no authorisation would be
required. For the quantum removed, royalty would be payable and
permission for removal would be required. The explanation
provided by Petitioner No.1 in response to the Second Show Cause
Notice (which is reproduced in the December 2022 Order), sets
out the sequence of such estimation and determination of the
quantum of earth for which permissions and royalty became
necessary. It is apparent that Petitioner No. 1 sought approvals
from time to time in conformity with its intended removal of
excavated earth. In line with the law declared in Promoters and
Builders, and indeed in the evidently-consequential amendment to
Rule 46(i) of the Extraction Rules, Petitioner No. 1 did not seek
any permission for that quantum of excavated earth that was
redeployed on the same plot of land."
2 2024 SCC Online 762
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11 Apart from this, while quashing the impugned order,
we must take note of paragraph no.25 of the observations
which read thus :-
"25 In fact, by reason of Rule 46(1) of the Extraction Rules,
the State ought to have dealt with the vital element of
quantum of redeployment in order to assess what the charge
of royalty should be. Abandoning this due process,
Respondent No.3 has simply indulged in a mathematical
computation of the difference between the Circle Officer's
report and the permissions for removal obtained until the
date of the report, rejecting approval for removal after that
date. The State ought to have considered whether there was
even a plausible rationale to any developer holding on to
excavated earth in the course of development of land until
the project nears completion so that the developer can finally
decide what quantum of excavated earth would need to be
removed, and therefore, what quantum of removal should be
visited with royalty, and permission for removal. None of
such factual analysis having been done, the Impugned Order
cannot be sustained and deserves to be quashed and set
aside."
12 Ms.Chavan would assertively submit before us that
what is most important is the conditions of the contract
executed with the petitioner, as ordinary earth which was
excavated as part of the execution of the project was required
to be disposed of in the manner set out and in any case, it is her
vehement submission that this contract was executed between
the petitioner and the Metro Railway, but since the petitioner
sought permission to excavate from the Additional Collector
and it has in fact excavated, in accordance with the said
permission, it is liable for payment of royalty.
Inviting our attention to one such application which
the petitioner itself has annexed to the petition at Exhibit D-1,
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she would submit that the petitioner informed the Collector,
Mumbai City that it was awarded the contract for design and
construction of underground sections, including five
underground stations and associated Bored tunnels, and since it
was planning to excavate the station box, they are intending to
get royalty permission for 10000 brass in initial stage. Further,
request was also made to the Collector, Mumbai City for
issuance of royalty passes for the transportation of the
excavated material with specific validity period. It is in the
light of the aforesaid correspondence with the Collector,
Mumbai it is her contention that the petitioner has rightly paid
the royalty and it need not be refunded.
In alternative, it is her submission that no royalty
was demanded by the respondents i.e. Additional Collector of
State Government, but the petitioner had tendered it on its own
and therefore, now he should not be allowed to back-up.
13 With the consent of the respective counsel, we have
taken up the petition for final hearing at the stage of admission
and hence, we issue Rule which is made returnable forthwith.
With the able assistance of the respective counsel,
we have perused the Writ Petition along with its annexures. We
have noted that the petition has not impleaded the Metro Rail
as a respondent and when we queried with the counsel for the
petitioner, he would submit that the petitioner do not desire to
seek any relief against the Corporation and in fact, the
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Corporation expressed no complaint of any nature whatsoever,
as regards the work allotted to the petitioner.
14 It is not in dispute that the petitioner, a Joint
Venture was awarded the contract of design and construction of
underground stations and associated tunnels for UGC - 03 of
Mumbai Metro Line - 3.
Since the alignment of the Metro Line-3 Corridor
UGC 03 was running through inner urban area with high
building density, the contractor (JV) appointed a design
consultant to carry out design work of permanent structures
and permanent/temporary earth retaining structure for
underground section, including five underground stations and
the associated tunnels. The Geo-technical investigation was
carried out which helped in the assessment of boreholes, soil
and rock conditions and potential problems which may be
encountered during the excavation. In addition, the field and
laboratory works was also carried out by an expert, and after
in-depth study of the geology of the City being presented
through the geotechnical investigation report, providing details
of the configuration/ disposition of soil and lithological
valuation and/or weathering grade and the geotechnical
characteristics at various points and analysis of the data
collated and tested by co-relations and usual geotechnical
methodology, the contract was awarded in favour of the
petitioner.
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15 As we are only concerned with the limited aspect of
the various stipulations and terms, which form part of the
contract, and this included the specific clause in relation to
'disposal of excavated material' (muck) spoil from tunnel and
station excavation, we would only refer to the said relevant
portion of the contract.
16 We have noted the following clauses which
according to us, deserve a reproduction as the bone of
contention between the parties revolve around the said
clauses :-
"23. The surplus excavated material (that cannot be used in the
Works), shall be treated as Contractor's property. The Contractor
shall be free to take away and make use of this surplus spoil
(including rock spoil) in the manner he wishes to. However, the
method of handling, transportation, place of storage, any
processing/reprocessing at a plant (including its location) and its end
use shall comply with all the rules and regulations in force including
that pertaining to Occupational Health, Safety & Environment
(OHS&E) etc and as approved by the Employer/Engineer. The
Contractor shall submit a detailed proposal to the Engineer for
seeking the Employer's/Engineer's approval for the same.
24. The muck/spoil that is acceptable and can be used at a later
stage in the Works, shall be temporarily stockpiled in a dumpsite as
proposed by the Contractor and agreed by the Engineer and the
concerned regulating authorities with no extra cost to the Employer.
No extra land shall be provided by the Employer for such stockpiling.
25. The surplus muck/spoil (soil/spoil/material/building debris),
which is not acceptable or cannot be accommodated for use in the
Works or cannot be made use of by the Contractor for his own
purpose, shall be disposed of at the approved dumping area(s) only
duly fulfilling all the Contract stipulations including compaction to
the desired levels to the satisfaction of the Engineer.
26. The Employer has identified a muck disposal site located at
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Dhapode (Padghe-Thane) with a disposal volume capacity adequate
to dispose of the spoil/muck generated on this Contract package.
This site can be utilized by the Contractor for disposing of surplus
muck/spoil.
27. The designated muck-disposal site at Dhapode is only an
indicative site and the Contractor can use this site only for the
purpose of surplus spoil/muck disposal, if he so decides. However,
the Contractor shall also be allowed to propose any other alternative
site for disposing of the spoil/muck, in which case he shall be
required to obtain all the requisite clearances from the concerned
authorities and the consent of site's owner and Engineer's Notice of
No Objection.
28. For disposing of the spoil/muck at a muck-disposal site, the
Contractor shall take, but not be limited to, the following measures
to ensure proper muck/spoil disposal and adequate site
rehabilitation:
The muck disposal site shall be ecologically restored to the
maximum extent possible duly ensuring that the water quality, air
quality and the soils and vegetation of surrounding areas are not
contaminated.
The adequate precautionary measures shall be implemented by the
Contractor at disposal site to ensure that there is no possibility of
soil erosion and other impacts of loose soils on the local water
bodies.,
The Contractor shall ensure that the muck disposal site will be free
from active landslides or creeps and will not have a possibility of
toe erosion related slope failure.
The Contractor shall ensure that disposal of muck/spoil at muck
dumping site shall not lead to flooding being caused in the
surroundings.
The dumped muck shall be mechanically compacted in layers and
properly levelled with suitable safe slopes duly ensuring that proper
drainage is provided for to eliminate problems being caused due to
lack of or improper drainage. In this respect the Contractor shall
submit a detailed method statement to the Engineer for obtaining a
Notice of No Objection.
To protect the dump from getting disturbing by human and
domestic animals activities fencing shall be provided at the
perimeter of the muck/spoil disposal site. The Contractor shall also
establish temporary wind barrier around the dump areas to
eliminate air pollution being caused due to wind blowing over the
dumping site.
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In addition to the measures as stipulated in the Contract
elsewhere, the following measures shall also be taken by the
Contractor for lorry movement/operations carrying muck/spoil to
and from the muck disposal site:
➤ All dumpers and trucks shall be well maintained and
equipped with tarpaulin sheets and hooks for covering of the
loose spoil properly during its transportation.
➤ The vehicle speeds on unpaved roads shall be restricted to 25
Kmph.
➤ The Contractor shall maintain valid PUC -Pollution under
Control certificates and maintain proper maintenance records
for their fleet;
➤ Wheel wash system shall be installed and operated at the exit
of the muck/spoil disposal, so that the muck on the tyres of the
trucks is cleaned properly before they move on the roads to
prevent dirtying of the public roads.
➤ To control fugitive dust emissions arising during material
handling, the heights from which muck/spoil is dropped shall be
reduced to a practical minimum height.
➤ Dumping shall be avoided during the high speed wind, so
that suspended particulate matters (SPM) level could be
maintained to the acceptable level.
29. The Contractor shall note that the muck disposal site location
designated for this Contract package falls in the semi urban area
with reasonable road access. However, if good motorable conditions
lack either within the disposal site or its approaches during the
course of muck-disposal, any attention needed to these roads to
make them worthy of Lorries' movement shall be the Contractor's
responsibility.
30. The Contractor is responsible for obtaining the requisite
approvals from the concerned local authorities for his Lorries'
movement plan and their operation.
31. In case the Contractor chooses to recycle the spoil(including
the rock spoil) for his own purpose, the temporary storage and
processing facilities shall have to be taken care of by the Contractor
at his own cost.
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32. Any Octroi, Royalty, statutory payments/levies or any other
charges etc. payable on the spoil/muck for its disposal or recycling
(for Contractor's own purpose) shall have to be borne by the
Contractor."
17 The petition is accompanied with the work order
issued in favour of the petitioner with the description
"Earthwork in Excavation in all types of Soils and up to
Weathered Rock including drilling and blasting in Hard Rock (if
required) for Mumbai Central Station".
With the specific description of the work which
included lifting of excavated muck by bucket and Crane
deployed by the Sub-contractor. For this purpose, the petitioner
entered into sub-contract agreement with various sub-
contractors in continuation of the work order in its favour by
the MMRCL i.e. the work of design and construction of
underground sections, including five underground stations and
associated tunnels being referred to as "Project" and the sub-
contract involved adequate and experience man power,
machinery, tools and tackles including all materials and
consumables etc. for carrying out the work of "earth work in
excavation in all type of soils and upto weathered rock
including drilling and blasting in hard rock for Mumbai Central
Station. Another sub-contractor engaged by the petitioner was
assigned the work of transportation of muck, as a product of
excavation of Station Box including loading and unloading etc,
as per the directions of Engineer in charge. The sub-contract
work order, highlighted the scope of work as transportation of
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muck obtained by earth work excavation of station box, as per
drawings and specifications, and the sub-contractor was under
an obligation to provide adequate and experience manpower,
machinery and tools and tackles for carrying out the subject
work. The said contract included a specific clause for 'disposal
of muck' and clause 4.3 of the Contract clearly specified as
below :-
"Contractor will use the designated dumping yard only to
dispose the generated muck. Designated Dumping Yard for
Mumbai Metro Line-3, Package UGC-03 is in Thane. Address is
as follows :-
Village: Dapode, Tehsil: Bhiwandi, District: Thane,
Maharashtra.
Approximate lead is 50 Kms.
However, the Sub-Contractor shall be free to identity the
suitable dumping yard time to time during the tenure of this
Agreement and can dispose the muck only after proper
submission of below mentioned documents and getting NOC
from DSJV Environmental Department:
a) Agreement Copy of Dumping Yard
b) Location Map and Layout of Dumping Yard
c) Route Map of Dumping Yard
d) NOC from local govt. body for dumping the material
e) NOC from MCGM to transport the Muck
The Sub-Contractor agrees to provide suitable rebate if the
generated muck is being used in upcoming Coastal Road
Projects in Mumbai.
The Sub-Contractor shall maintain the proper record of muck
disposal trips. The challans shall be maintained for disposal
muck with proper details i.e. registration number of dumper,
type of muck, quantity of muck, etc. or and as required by
DSJV Site in-charge, stamped and signed by the owner of the
respective dumping yard. Any penalty occurred due to delay in
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submission of the supportive documents shall be bear by the
Sub-Contractor and same shall be deducted from the Sub-
Contractor's RA Bills."
18 In light of the aforesaid sub-contracts awarded by
the petitioner in the execution of the work order issued in its
favour by MMRCL, it is to be noted that the petitioner earned
no revenue from the said material and no invoices were issued
by it in regard to the excavated earth (muck). The petition is
also accompanied with the communication addressed by Maple
consortium, General Consultant for Mumbai dated 21/3/2017
addressed to the petitioner J.V, with reference to the muck
disposal site which was fixed by City Survey Officer, requesting
the representative of the petitioner to demarcate the land to be
acquired for the said purpose.
This was accompanied with a communication from
the Chief Project Manager, MMRC addressed to Maple
Consortium, informing that the Collector, Thane had accorded
permission to use 22-92 H.A. land for muck disposal purposes
to the Corporation for Metro Line 3 purpose. Maple was
therefore, requested to conduct the survey of allotted land, fix
the boundaries and take up the land allotment process to the
contractors respectively at the earliest.
This document has a reference to the letter from the
Collector, Thane, addressed to Mumbai Metro Rail Corporation
dated 14/3/2017, demarcating the land within its jurisdiction
for deposit of earth, soil, murum, stones, while the project of
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Metro-3 was under implementation. It was also directed that
since the land was to be used for deposit of minor minerals,
Metro Rail Corporation shall be liable to pay such lease rent
which would be decided by the State Government and it shall
ensure that the said land and the Rail Corporation shall take
necessary precaution that after filling and levelling of the land
at Government Gur-Charan, there shall be no encroachment.
19 In light of these communications, we would refer to
the communication addressed by the petitioner to the Collector,
Mumbai City, seeking permission for excavation and
transportation of the materials at different sites, while it was
awarded the contract for design and construction of
underground sections at five underground stations. The
communications placed on record at Exhibit D-1 to D-5 sought
permission for excavation and transport of the material from
the project area, as the petitioner was to transport the
excavated material from Mumbai City to Thane district and
since it involved transportation of the excavated material to
another district, it was necessary to have the transit passes by
specifying the quantity of the excavated material and that is the
reason why the permissions are sought, but it is not the case of
the respondent no.3 that the excavated material was put to
commercial use by the petitioner, as the petitioner engaged the
sub-contractor for transportation of the muck/waste material,
which was the surplus excavated material which was not used
in the works and which was treated as the contractor's property
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and the contractor was free to take away and make use of the
surplus soil by ensuring the compliance of the rules and
regulations in force, including those pertaining to occupational
health, safety and environment. The contractor was duty
bound to submit a detail proposal to the Engineer for seeking
his approval.
The contract also contemplated that if the muck/soil
that is accepted and can be used at a later stage in the works,
shall be temporary stock-piled in a dump site as proposed by
the Contractor and agreed by the Engineer, but the one which is
not acceptable or cannot be accommodated for use in works or
cannot be made used by the Contractor for his own purpose,
shall be disposed of at the approved dumping area and in this
case, the MMRCL had identified a muck disposal site at
Dhapode with a disposal volume capacity adequate to dispose
of the spoil/muck generated on the contract package and this
site was permitted to be utilised by the Contractor for disposing
of surplus muck/soil.
20 In the wake of the peculiar clauses in the contract
entered between the petitioner and MMRCL and the pleadings
in the petition, it is evident that the excavated material which
was not acceptable and was not accommodated for use in work
and could not have been used by the Contractor for his own
purpose, has been disposed of at a site allotted by the Collector,
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Thane i.e. Dhapode and this site was indicated by the employer
i.e. the MMRCL.
We fail to understand on what basis the respondent
no.3 can recover royalty on this excavated material as it is not
excavated by the petitioner/contractor for commercial
exploitation, but it is in due course of execution of work
allotted to it by the Metro Rail Corporation, the muck has been
excavated and dumped at a place indicated by the MMRCL.
The imposition of royalty under the Maharashtra Minor Mineral
(Extraction) Rules 2013, is for removal of minor mineral from
the leased area, and definitely, the petitioner is not the lessee
and has not excavated the material for commercial use.
Clause No.46 has been amended by adding a
proviso that no royalty shall be required to be paid on earth
which is extracted while developing a plot of land and utilise on
the very same plot for land levelling or any work in the process
of development of such plot.
The petitioner, in our considered opinion, do not fall
in either of the clauses or Rule 46 of the MLR Code as he has
not excavated minor mineral from the leased area and
therefore, is not duty bound to pay royalty and secondly, no
royalty is liable to be paid by him if some portion of the earth
excavated/extracted while developing the plot is utilised on the
very same plot for any work in the process of development.
The contract entered by the petitioner with the
Mumbai Metro Rail Corporation is very specific in regards to
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the disposal of the excavated material (muck/spoil) from
tunneling and station excavation site and since the petitioner
has acted in compliance with the conditions of the said
contract, and has disposed of the spoil/muck at the site
indicated by the MMRCL, we find no justification in the
petitioner being charged with royalty on the said material.
21 It is worth to note that it is not the respondent no.3
who ever raised a demand of payment of royalty, but petitioner
on its own, deposited the money through challans by
computing the royalty on the excavated material for different
quantity of excavated material and paid the royalty
proportionate to the quantity in brass that was excavated,
which according to us, was an unwarranted exercise and
merely because the petitioner sought permission for excavation
and transportation, in our considered view, the royalty cannot
be imposed upon the excavated material as the petitioner was
operating under a contract with the Metro Rail Corporation for
five underground stations and the contract is between MMRCL
and the petitioner and the Corporation has never made any
grievance about the non-performance of the obligations on its
part.
Merely because the petitioner has now deposited
the royalty, definitely, the State cannot enrich itself, unless and
until it is entitled to recover the amount of royalty.
In the case of Promoters and Builders Association of
Pune (supra), the Apex Court has clearly ruled that digging
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ordinary earth for laying foundation of buildings and its re-
deployment without any commercial usage or usage as
contemplated under notification of 3/2/2000, would not attract
Section 48(7) and penalty under the Maharashtra Land
Revenue Code, 1966.
In no uncertain terms, with reference to the
definition of the term 'minor minerals' as defined in Section
2(e) of the 1957 Act read with notification dated 3/2/2000
issued by the Government of India, the Apex Court has
concluded thus:-
"15 Though Section 2(j) of the Mines Act, 1952 which defines
'Mine' and the expression "mining operations" appearing in
Section 3(d) of the Act of 1957 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 soon, 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, road, railways and buildings which alone is a minor
mineral. Excavation of ordinary earth for uses not contemplated
in the aforesaid Notification, therefore, would not amount to a
mining activity so as to attract the wrath of the provisions of
either the Code or the Act of 1957."
22 In fact, the reliance on the decision in Ikea India
Private Limited (supra) is also unfounded, as it had applied the
principle in Promoters and Developers Association of Pune
(supra) and we have already reproduced the relevant
observation above.
23 In light of the aforesaid, since we do not find any
lawful justification on part of the respondent, in not refunding
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the amount towards royalty deposited by the petitioner through
various challans, under misconception that the excavated
material, arising out of its contract would entail imposition of
royalty, we direct the respondent State to refund the amount of
Rs.8,20,02,000/- within a period of 12(twelve weeks) from
today, as the State cannot enrich itself by retaining the amount
to which it was not entitled. Though a request is made to make
the refund with interest, we are not inclined to grant the said
request, as we find that without any demand being raised, the
petitioner on his own has deposited the amount and it is only
who has to take the blame, as the State never demanded the
amount of royalty.
However, we make it clear that if the amount of Rs.
8,20,02,000/- is not refunded within a period of 12 weeks, it
shall carry an interest @ 12% p.a.
Writ Petition is made absolute as above.
(MANJUSHA DESHPANDE,J) (BHARATI DANGRE, J.)
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