Jharkhand High Court
Uranium Corporation Of India Limited vs State Of Jharkhand on 8 January, 2024
Author: R. Mukhopadhyay
Bench: Rongon Mukhopadhyay, Deepak Roshan
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P.(C) No.7020 of 2006
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Uranium Corporation of India Limited,
Jadugoda Mines, Singhbhum East. ----- Petitioner
Versus
1. State of Jharkhand
2. Secretary, Mines & Geology Department, Government of
Jharkhand, Ranchi.
3. Deputy Commissioner, East Singhbhum, Jamshedpur.
----- Respondents
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PRESENT
HON'BLE MR. JUSTICE RONGON MUKHOPADHYAY
HON'BLE MR. JUSTICE DEEPAK ROSHAN
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For the Petitioner : Mr. Sudarshan Shrivastava, Adv.
For the Respondents : Mr. Sachin Kumar, A.A.G.-II
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JUDGMENT
Per R. Mukhopadhyay, J.
16/08.01.2024 Heard Mr. Sudarshan Shrivastava, learned counsel
appearing for the petitioner and Mr. Sachin Kumar, learned
A.A.G.-II appearing for the respondents.
2. In this writ application, the petitioner has made the following
prayers :-
"For issuance of appropriate writ(s)/order(s) and / or
direction(s) for quashing the demand made under the
signature of respondent no.3 as contained in office letter
no.1167/Mining dated 28.03.2006 (Annexure-10 series),
whereby and whereunder on account of royalty in
relation to magnetite along with interest thereon has
been raised against the petitioner, demand as contained
in letter no.2200 dated 02.09.2006 (Annexure-15), order
as contained in memo no.548 dated 04.03.2006
(Annexure-10 series), raised under the signature of
Deputy Secretary, Mines & Geology, State of Jharkhand
and the demand as contained in letter no. 2572 dated
14.10.2006 (Annexure-17) issued under the signature of
Deputy Commissioner, East Singhbhum.
AND
For issuance of further writ(s)/order(s) and / or
direction(s) stating that the petitioner is only entitled to
make payment of royalty in relation to the magnetite,
which is being raised with the mining and processing of
uranium ore under one of the Lease Deed dated
21.12.1990 with respect to Turamdih Mines of the
petitioner (Annexure-1)
AND
For a further issuance of writ/order/direction restraining
the respondents from acting pursuant to and in
furtherance of the impugned demands till the final
decision of this Hon'ble Court and not to take any
coercive steps against the petitioner.
AND/OR
For issuance of any other appropriate writ/order and/or
direction as Your Lordship may deem fit and proper for
doing conscionable justice to the petitioner.
3. The factual aspects of the case reveal that the petitioner
is engaged in uranium mining and processing at Jaduguda Mines,
Bhatin, Narwapahar and Turamdih Mines. The main product of
the petitioner company is Magnesium Die Uranate (M.D.U.) which
is compulsorily acquired by the Government of India, Department
of Atomic Energy for the use in the Nuclear Programme of the
country. The petitioner in terms of mining lease has been doing
mining operation of extraction and raising of uranium ore from
leasehold area of Jaduguda Mines, Bhatin Mines, Narwapahar
and Turamdih mines. The petitioner has been making payment of
royalty upon the magnetite on percentage basis as indicated in
the lease deed from time to time. The rate as given in the lease
deed is as per terms of Section 9 (1) of the Mines & Minerals
(Development and Regulation) Act, 1957 and as given in serial
no.24 of the Second Schedule. The petitioner is making payment
of royalty on magnetite from 14.10.2004 as per the rate specified
in the notification dated 24.10.2004 and the respondents have
been accepting the same without any dispute. It has been stated
that vide letter no. 956 dated 23.09.2004 the Assistant Mining
Officer, Jamshedpur had asked the petitioner to make payment
of royalty in relation to magnetite @ 10% of the sale price of it and
had requested to furnish the various details of the same. The
petitioner accordingly had submitted the desired information
before the Assistant Mining Officer, Jamshedpur vide letter dated
09.11.2004. The Deputy Commissioner, East Singhbhum by
issuance of letter no.1797/Mining dated 18.08.2005 directed the
petitioner company to do the computation of the royalty of
magnetite on the basis of detailed production and sale under the
provisions of Rule 64(c) of the Mineral Concession Rules, 1960.
The petitioner had filed a rejoinder to the said claim vide its letter
no.UCIL/DT/63-65 dated 26/31.08.2005 specifically contending
that while processing of uranium ore, small quantity of magnetite
is recovered which is basically known as a lode stone, magnetite
iron ore, iron oxide mineral Fe204 or Fe304. It was also contended
that so far as Rule 64(c) of the Mineral Concession Rule, 1960 is
concerned, the said provision does not have any application for
payment of royalty on magnetite and Rule 64(c) is only applicable
in relation to payment of royalty on tailings and rejects so dumped
for use for sale or consumption. It was also contended by the
petitioner that the reference of 10% of sale price in respect of "All
other minerals not herein before specified" as referred by the
Assistant Mining Officer in his letter dated 27.05.2005 has no
application as magnetite is an iron oxide mineral and included in
the Second Schedule itself at serial no.23. It has been stated that
the Deputy Commissioner by issuance of an office order no.1167/
Mining dated 28.03.2006 asked the petitioner to make payment
of Rs.1,18,71,457/- towards royalty on magnetite @ 10% of sale
price for the period from 2001 to October 2005 and further
imposed an interest @ 24% of the sum for the period from the year
2001 to October 2005 and demanded from the petitioner a sum
of Rs.59,19,686.11 towards the interest. The total demand
against the petitioner was therefore Rs. 1,64,91,062.11. The
petitioner had put an objection with respect to the calculation of
payment of royalty on magnetite by stating that the same is not
in conformity and against the rate fixed by the State itself in the
lease deed dated 21.12.1990. It has been stated by the petitioner
that the petitioner was regularly paying royalty on magnetite at
the rate specified as per the lease deed and was therefore not
liable for payment as per the entry of serial no.51 in the Second
Schedule of the Act, 1957. The representation submitted by the
petitioner did not yield any result and ultimately the petitioner
had preferred the present writ application.
4. It has been submitted by Mr. S. Shrivastava, learned counsel
appearing for the petitioner that the petitioner has paid the entire
amount of royalty on magnetite in terms of the rate specified in
mining sanction orders and mining leases. It has further been
submitted that the notification dated 14.10.2004 by virtue of
which the petitioner was saddled with a liability of 10% of sale
price of magnetite as royalty was prospective in nature, though
the respondents have charged the royalty by treating the
notification of having a retrospective effect. Mr. Shrivastava has
submitted that the petitioner has deposited a total amount of
Rs.1,65,63,062/- under protest against the demand raised by the
Deputy Commissioner, East Singhbhum, Jamshedpur against an
amount of Rs.1,64,91,062.11. Mr. Shrivastava has drawn the
attention of the Court to the notification dated 14.10.2004 while
submitting that serial no.51 which demarcates 10% of sale price
on ad-velorum basis is contrary to the payment of royalty to be
made as per the lease deed.
5. Mr. Sachin Kumar, learned A.A.G.-II has submitted that the lease
deed itself specifies that the royalty shall depend upon the rates
notified by the Central Government in terms of the provisions of
the Mines and Minerals (Development and Regulation) Act, 1957
as well as the Mineral Concession Rules, 1960 and in such
circumstances therefore, the petitioner is liable to pay royalty in
terms of the rate as specified in serial 51 of the notification dated
14.10.2004.
6. We have heard the learned counsel for the respective parties and
have also perused the records.
7. Mr. S. Shrivastava, learned counsel for the petitioner has
primarily addressed us on two points : (a) the notification dated
14.10.2004 cannot have a retrospective effect and (b) the
petitioner is liable to pay royalty only in terms of the lease deed
executed between the parties.
8. In this context Section 9 of the MMDR Act reads as follows :-
"9. Royalties in respect of mining leases.-- (1) The holder
of a mining lease granted before the commencement of this
Act shall notwithstanding anything contained in the
instrument lease or in any law in force at such
commencement pay royalty in respect of any mineral
removed or consumed by him or by his agent manager
employee contractor or sub-lessee from the leased area after
such commencement at the rate for the time being specified
in the Second Schedule in respect of that mineral.
(2) The holder of a mining ease granted on or after the
commencement of this Act shall pay royalty in respect of any
1[mineral removed or consumed by him or by his agent
manager employee contractor or sub-lessee] form the leased
area at the rate for the time being specified in the Second
Schedule in respect of that mineral.
(2A) The holder of a mining lease whether granted before or
after the commencement of the Mines and Mineral
(Regulation and Development) Amendment Act, 1972, shall
not be liable to pay any royalty in respect of any coal
consumed by a workman engaged in a colliery provided that
such consumption by the workman does not exceed one-third
of a tone per month.
(3) The Central Government may by notification in the Official
Gazette amend the Second Schedule so as to enhance or
reduce the rate at which royalty shall be payable in respect
of any mineral with effect from such date as may be specified
in the notification:
Provided that the Central Government shall not
enhance the rate of royalty in respect of any mineral more
than once during any period of three years."
9. A perusal of Section 9 reveals that the holder of a mining lease
shall pay royalty in respect of any mineral removed or consumed
by him from the leased area at the rate for the time being specified
in the Second Schedule in respect of that mineral. This provision
has been interpreted by Mr. Shrivastava, learned counsel for the
petitioner to mean that any notification making an alteration in
the rate of royalty shall have a prospective effect. He has also
submitted that as per Section 9(3) of the MMDR Act, 1957 the rate
of which royalty shall be payable in respect of any mineral, shall
be with effect from such date as may be specified in the
notification. The notification dated 14.10.2004 does not specify
any date and in view of the provisions of Section 9 of the MMDR
Act, 1957 rate in consonance with the notification dated
14.10.2004 would clearly indicate that the said notification does
not have any retrospectivity and shall be treated to be having a
prospective effect.
10. The petitioner was making payment of royalty in terms of the
lease deed which also specified that the payment of royalty which
has been enumerated in the lease deed shall be subject to the
change in rate of royalty as made by the Central Government from
time to time in terms of the provisions of the Mines and Minerals
(Development and Regulation) Act, 1957 and the Mineral
Concession Rules, 1960. It would therefore mean that though the
notification dated 14.10.2004 has a prospective effect, but the
petitioner cannot escape the liability of making payment of royalty
at the rate which has been specified at serial no.51 of the
notification dated 14.10.2004 from the date of the notification
itself. The royalty which has been charged and deposited by the
petitioner is for the period from 2001 to October 2005 and interest
@ 24% of the sum for the period from 2001 to October 2005. The
petitioner would be liable to make payment of royalty till the
issuance of the notification dated 14.10.2004 as per the rate
which was prevalent and which has been mentioned in the lease
deed. However, after coming into effect of the notification the
petitioner has to make payment in terms of the rate of royalty
specified in serial no.51 of the said notification.
11. In such circumstances therefore, the impugned letter
no.1167/Mining dated 28.03.2006, letter no.2200 dated
02.09.2006, order as contained in memo no. 548 dated
04.03.2006 and the demand as contained in letter no.2572 dated
14.10.2006 are hereby quashed and set aside to the extent that
the petitioner shall be charged royalty till 14.10.2004 on the basis
of the rate of royalty which was prevalent and which has been
enumerated in the lease deed executed by the petitioner and from
14.10.2004 onwards the petitioner is liable to pay royalty at the
rate which has been specified at serial no.51 of the said
notification. The interest on the said amount shall accordingly be
calculated upon the amount of royalty for the periods in question
and which has been enumerated herein above.
12. Since it has been submitted by Mr. S. Shrivastava, learned
counsel for the petitioner that the rate of royalty paid by the
petitioner in terms of the lease deed includes the period during
which the demand notice was issued for making payment of
royalty and interest at the enhanced rate in terms of serial no.51
of the notification dated 14.10.2004, the concerned respondents
are directed to re-calculate the payment of royalty for the period
in question as well as the interest thereupon and refund the
excess amount which has been paid by the petitioner company to
the respondents within a period of 12 weeks from the date of
receipt/production of a copy of this order.
13. This writ application stands disposed of with the
aforementioned observations and directions.
(Rongon Mukhopadhyay, J.)
(Deepak Roshan, J.)
Shamim/-
