Jharkhand High Court
M/S. Mishra Wine vs The State Of Jharkhand on 4 March, 2024
Author: Rongon Mukhopadhyay
Bench: Rongon Mukhopadhyay, Deepak Roshan
1
IN THE HIGH COURT OF JHARKHAND AT RANCHI
(CIVIL WRIT JURISDICTION)
W.P(C) No. 3103 of 2022
with
W.P(C) No. 3111 of 2022
With
W.P(C) No. 3113 of 2022
......
M/s. MISHRA WINE, (a Partnership Firm), having its office at Mihijam,
P.O. and P.S. Mihijam, District Jamtara, Jharkhand, through its Partner,
namely, Prantosh Mishra, aged about 50 years, son of Bhawani Prasad
Mishra, resident of Dangal Para, Hizla Road, Sonwadangal, P.O. and P.S.
Sonwadangal, District Dumka, Jharkhand, PIN-814101.
........ Petitioner (in W.P.(C) No.3103 of 2022)
DHANBAD WINE, (a Partnership firm), having its office at Flat No. 402, 4th
Floor, Kausiki Radha Regency Apartment, P.O. Jharudih, P.S. Jharudih,
District Dhanbad (Jharkhand), PIN 826001; through its Partner, namely,
Shankar Singh, aged about 52 years, son of Naresh Singh, resident of 67/03,
Krishna Nagar, Mihijam, P.O. and P.S. Mihijam, District Jamtara
(Jharkhand), PIN 815354. ........ Petitioner (in W.P(C) No. 3111 of 2022)
And
BASUKINATH TRADERS, (a Partnership firm), having its office at Near
Hero Honda Showroom, Dudhani, Dumka, P.O. and P.S. Dumka, District
Dumka (Jharkhand), PIN 814101, through its Partner, namely, Bimal
Mandal, aged about 36 years, son of Guru Pad Mandal, resident of Muffasil,
Parisimla, Dumka, P.O. Paharudih, P.S. Dumka, District Dumka
(Jharkhand), PIN 814144. ........ Petitioner (in W.P.(C)No. 3113 of 2022)
Versus
1. The State of Jharkhand, through its Secretary, Department of Industries,
Mines and Geology, having its office at Yojna Bhawan, P.O. and P.S.
Doranda, District Ranchi (Jharkhand), PIN 834 002.
2. Deputy Commissioner, Deoghar, having its office at District Collectorate,
Deoghar, P.O. and P.S. Deoghar, District Deoghar (Jharkhand).
3. District Mining Officer, Deoghar, having its office at District Collectorate,
Deoghar, P.O. and P.S. Deoghar, District Deoghar (Jharkhand).
.... Respondents
(in all above-mentioned three writ petitions)
CORAM: Hon'ble Mr. Justice Rongon Mukhopadhyay,
Hon'ble Mr. Justice Deepak Roshan
......
For Petitioners : Mr. Sumeet Gadodia, Advocate
Mrs. Shilpi Sandil Gadodia, Advocate
Mr. Prakhar Harsit.
For Respondents : Mr. Mohan Dubey, AC to AG
9/Dated: 04th March, 2024
Per: Deepak Roshan J.
1. Since all these writ applications involve common question of facts
and issues and with the consent of the parties were heard together and
accordingly all are being disposed of by this common judgment. Prayers
made in respective writ petitions are enumerated herein-under:-
(i) For issuance of an appropriate writ/order/direction for
quashing/setting aside Letter No. 689/M dated 30.05.2022
(Annexure-7) issued by Respondent No. 3-District Mining Officer,
Deoghar, wherein without granting any opportunity of hearing to
the Petitioner and in utter contravention of the provisions of
Jharkhand Minor Mineral Concession Rules, 2004 and/or
Jharkhand Minerals (Prevention of illegal mining, transportation
and storage) Rules 2017, the Petitioner has been directed to deposit
an amount of Rs. 1,10,180/- being the amount towards penalty
equivalent to twice the value of sand allegedly found less in the
stockyard of the Petitioner.
(ii) For issuance of further appropriate writ/order/direction, declaring
that the action of the Respondent-authorities in demanding twice the
value of mineral i.e. sand towards penalty from the Petitioner is
beyond the scope of Jharkhand Minor Mineral Concession Rules,
2004 read with The Jharkhand Minerals (Prevention of illegal
mining, transportation and storage) Rules, 2017.
(i) For issuance of an appropriate writ/order/direction for
quashing/setting aside Letter No. 690/M dated 30.05.2022
(Annexure-7) issued by Respondent No. 3 - District Mining Officer,
Deoghar, wherein without granting any opportunity of hearing to
the Petitioner and in utter contravention of the provisions of
Jharkhand Minor Minerals Concession Rules, 2004 and/or the
Jharkhand Minerals (Prevention of illegal mining, transportation
and storage) Rules, 2017, the Petitioner has been directed to deposit
an amount of Rs. 11,47,446/- being the amount towards penalty
equivalent to twice the value of sand allegedly found less in the
stockyard of the Petitioner.
(ii) For issuance of further appropriate writ/order/direction, including
Writ of Declaration, declaring that the action of the Respondent-
authorities in demanding twice the value of mineral i.e. sand
towards penalty from the Petitioner due to alleged shortage of stock
of sand in the stockyard of the Petitioner is beyond the scope of
Jharkhand Minor Minerals Concession Rules, 2004 read with The
Jharkhand Minerals (Prevention of illegal mining, transportation
and storage) Rules, 2017.
(i) For issuance of an appropriate writ/order/direction for
quashing/setting aside Letter No. 688/M dated 30.05.2022
(Annexure-6) issued by Respondent No. 3 - District Mining Officer,
Deoghar, wherein without granting any opportunity of hearing to
the Petitioner and in utter contravention of the provisions of
Jharkhand Minor Minerals Concession Rules, 2004 and/or the
Jharkhand Minerals (Prevention of illegal mining, transportation
and storage) Rules, 2017, the Petitioner has been directed to deposit
an amount of Rs. 12,43,460/- being the amount towards penalty
equivalent to twice the value of sand allegedly found less in the
stockyard of the Petitioner.
(ii) For issuance of further appropriate writ/order/direction, including
Writ of Declaration, declaring that the action of the Respondent-
authorities in demanding twice the value of mineral i.e. sand
towards penalty from the Petitioner due to alleged shortage of stock
of sand in the stockyard of the Petitioner is beyond the scope of
Jharkhand Minor Minerals Concession Rules, 2004 read with The
Jharkhand Minerals (Prevention of illegal mining, transportation
and storage) Rules, 2017.]
2. Since the facts involved in the above three writ petitions are
identical, for the sake of brevity, facts pertaining to W.P.(C) No. 3103 of
2022 (M/s. Mishra Wine Vs. State of Jharkhand & Ors.) are noted in this
Judgment.
3. It is an admitted fact that Petitioner was granted registration as a
'Dealer' in terms of The Jharkhand Minerals (Prevention of illegal mining,
transportation and storage) Rules, 2017 and Petitioner was registered as a
Stockyard Dealer and, under its Dealership Certificate, was entitled to
procure minerals i.e. sand from valid and legal sources and, further,
Petitioner was also entitled to sell the sand stored at its stockyard.
4. In terms of the Jharkhand Minor Mineral Concession Rules, 2004,
particularly Rule 29 thereof, incidence of payment of royalty is on removal
of mineral from mining lease area and, admittedly, Petitioner is not a 'mining
lessee' and is only having stockyard wherein where it stores sand for its
onward sale after purchasing the said sand from mining lessees on discharge
of due amount of royalty.
5. Petitioner procured sand through legal and valid process and, in the
month of November, 2020, Petitioner was having stock of 40,500 cubic feet
of sand which was duly reflected in its return.
6. It is the case of the Petitioner that from November, 2020,
Respondents have arbitrarily not issued transport challan to the Petitioner due
to which, it could not sell the aforesaid quantity of sand of 40,500 cubic feet.
It is in this regard, Petitioner in the instant writ application has also filed
separate Interlocutory application being I.A. No. 5513 of 2023 for direction
upon the Respondents, particularly Respondent-District Mining Officer to
allow the Petitioner to generate transport challan through JIMMS Portal for
removal of royalty paid sand of 40,500 cubic feet. Similar Interlocutory
application has been filed in W.P.(C) No. 3111 of 2022, being I.A. No. 5511
of 2023 wherein Petitioner has prayed for direction upon the Respondents to
generate transport challan through JIMMS Portal for removal of royalty paid
sand of 1,50,900 cubic feet which is lying stored in its stockyard. In W.P.(C)
No. 3113 of 2022, Petitioner, vide I.A. No. 5512 of 2023, has prayed for
issuance of direction upon the Respondents to allow the Petitioner to
generate transport challan through JIMMS Portal for removal of 1,09,000
cubic feet of sand lying in its stockyard, as recorded in its monthly return.
7. It is the case of the Petitioner that despite the fact that it has
procured sand after due payment of royalty, an alleged inspection was carried
out on 13.12.2021 by the office of the District Mining Officer, Deoghar,
wherein it was alleged that during inspection, around 12,500 cubic feet of
sand was found to be less in the stockyard of the Petitioner and, vide letter
dated 17.01.2022, Petitioner was directed to file its reply.
8. Petitioner submitted its reply and objected to the inspection report
and vide its reply dated 14.02.2022, requested the Respondent-authority to
carry out inspection afresh and, thereafter, re-measurement exercise of sand
lying in the stockyard of the Petitioner was carried out by the office of
Respondent No.3 on 11.04.2022, wherein it was alleged that 7000 cubic feet
of sand was found short in the stockyard of the Petitioner. Copy of said
Inspection report was not supplied to the Petitioner and, straightaway, Order
contained in Letter No. 689/M dated 30.05.2022 was issued by Respondent
No.3, wherein it was alleged that 7000 cubic feet of sand was found short in
the stockyard of the Petitioner, and, by determining the value of sand @ Rs.
787/- per hundred cubic feet, penalty equivalent to twice the value of sand
allegedly found short was imposed upon the Petitioner and direction was
given to the Petitioner to deposit the said amount within a period of seven
days, failing which, it was indicated that storage license granted in favour of
the Petitioner would be cancelled by the Respondent. Being aggrieved by the
penalty order, Petitioner has approached this Hon'ble Court.
9. Mr. Sumeet Gadodia, learned counsel appearing for the Petitioners,
has assailed the penalty orders by primarily contending, inter alia, that
neither under the provisions of 'The Jharkhand Minerals (Prevention of
illegal mining, transportation and storage) Rules, 2017', nor under the
'Jharkhand Minor Mineral Concession Rules, 2004', there is any provision
for levying penalty upon stockyard dealer being twice the value of sand on
the ground of alleged shortage of sand found in the stockyard.
10. Learned counsel while referring to Rule 13 of the Rules of 2017,
submitted that said Rule provides for levy of penalty upon any person who
contravenes the provisions of the Rules or buys or sell or stores minerals and
indulges in transportation of minerals without transport challan. It has been
submitted that penalty imposable under Rule 13 is to be as per the provisions
made under the Jharkhand Minor Mineral Concession Rules 2004. Further,
reliance has been placed upon Rule 54(5) and Rule 54(8) of the JMMC
Rules, 2004 and it has been submitted that although aforesaid Rules provide
for levy of penalty being twice the value of mineral, but, bare perusal of the
aforesaid Rules would demonstrate that said Rules provide for levy of
penalty for illegal transportation of mineral and/or illegal mining of minerals
and no provision has been made for levy of penalty being twice the value of
the mineral on the alleged ground that certain stock of mineral was found
less in the stockyard of a dealer as compared to the mining return filed by it.
11. It has been specifically submitted that the Legislature, in its wisdom,
has deliberately not prescribed penalty for alleged shortage of sand in a
depot/stockyard, especially in view of the fact that sand which has been
stored in the stockyard is after due payment of royalty and payment of
mineral value to concerned mining lessee. Thus, if penalty equivalent to
twice the value of sand is imposed, the same would amount to recovering the
cost being three times of the value of sand from depot owner who has already
purchased the sand after payment of royalty and would be again saddled with
the liability of the value of sand, which was clearly not the intent while
framing the Rules. On this ground, Petitioner has prayed for quashing the
order imposing penalty and has further prayed for direction upon District
Mining Officer to immediately issue transport challan which has been
illegally withheld in respect of the sand which is stored in deport/stockyard
of the Petitioner after being purchased through legal and valid sources.
12. Per contra, Mr. Mohan Dubey, AC to AG, appearing for
Respondent-State, submitted that, initially, an inspection was carried out in
sand depot of the Petitioner and certain quantity of sand was found to be less
as compared to the mining return filed by the Petitioner and Petitioner was
directed to show cause as to why appropriate action be not initiated against it.
Thereafter, Petitioner filed its reply and requested for re-measurement and,
thereupon, re-measurement exercise was even conducted by Respondent-
authorities and again certain quantity of sand was found short in the
stockyard of the Petitioner. It is under the said circumstances Respondent-
authority, in exercise of powers under Rule 13 of the Rules of 2017 read with
Rule 54(8) of JMMC Rules, 2004, imposed penalty upon the Petitioner being
twice the value of sand found short in the depot/stockyard of the Petitioner. It
has been submitted that since Petitioner has not made payment of penalty
amount, transport challan of the Petitioner has been withheld by Respondent-
authority.
13. We have considered rival submissions of the parties and has gone
through the pleadings made in all the three writ petitions.
14. It is an admitted fact that Petitioners are dealers having
stockyards/depots and are entitled to purchase and sale sand as per their
dealer's license. It is further an admitted fact that under Rule 29 of the
JMMC Rules, 2004, incidence for payment of royalty over sand is on
removal of minerals from the mines, and, the sand, which is procured by
Petitioners for the purpose of trading, is admittedly royalty paid.
15. Thus, the short question involved in the present writ applications is
'Whether any penalty being twice the value of sand can be imposed upon a
stockyard dealer merely because certain quantity of sand was allegedly found short
in its stockyard as compared to the mining return filed by the dealer in course of
inspection carried out by Respondent-authority?"
16. Respondent-State of Jharkhand, in exercise of powers under Section
15 of the Mines and Minerals (Development and Regulation) Act, 1957
framed Jharkhand Minor Mineral Concession Rules, 2004. Under the JMMC
Rules, 2004, provision for imposition of penalty has been prescribed under
Rule 54(5) and Rule 54(8) of the Rules. Said Rules 54(5) and 54(8) are
quoted herein-below for the sake of ready reference:-
¼1½ dksbZ Hkh O;fDr tks bu fu;eksa ds fo:) y?kq [kfutksa dk mR[kuu djrs gSa vFkok
mudh vksj ls ;fn fdlh ,ts.V, eSustj] fdlh deZpkjh vFkok fdlh Bsdsnkj }kjk
,slk mR[kuu vFkok ifjogu fd;k tkrk gS rks ,sls çR;sd O;fDr y?kq [kfut ds voS/k
fu"dklu ds Hkkxhnkj le>s tk;saxs rFkk **,slsO ;fä;ksa dks vf/kdre ,d o"kZ dh dSn
vFkok vf/kdre 50]000@& ¼ipkl gtkj #i;s½ tqekZuk vFkok nksuksa ltk,¡ nh
tkldsxhA
xxx xxx xxx
¼5½ ;fn fdlh okgu dks dksbZ pkyd y?kq [kfut dks ifjogu djrs le; l{ke
inkf/kdkjh vFkok funs'kd] [kku vFkok vijfuns'kd] [kku vFkok mifuns'kd [kku
vFkok ftyk@lgk;d [kuu inkf/kdkjh vFkok lekgrkZ ;k lekgrkZ ;k jkT; ljdkj
}kjk çkf/kd`r fdlh inkf/kdkjh dks çi= ^,e^ vFkok >kj[k.M [kfut leuqnku
fu;ekoyh] 2004 ds vUrxZr QkeZ ^Mh^ esa ifjogu pkyku fn[kkus esa vlQy jgrk gS
fd vFkok fujh{k.k ls budkj djrk gS] rks mls vf/kdre 01 o"kZ dh dSn vFkok
[kfut ewY; dh nksxquh jkf'k ds cjkcj n.M vFkok nksuksa ,d lkFk n.M fn;k tk
ldrk gS rFkk nwljh ,o arhljh ckj oS/k ifjogu pkyku çLrqr ugh afd, tkus ij
mijksä n.M dh jkf'kØe'k% 50]000@& ¼ipkl gtkj½ #i;s ,oa 1]00]000@& ¼,d
yk[k½ #i;s gksxhA^ tk¡p djusokys inkf/kdkjh }kjk voS/k ifjogu djrs ik;s tkus ij
okgu dks [kfut lfgr tIr fd;k tk,xk rFk ftls fdlh ljdkjh çfr"Bku esa vFkok
LFkkfu; Fkkuk çkax.k esa lqjf[kr j[kk tk,xkA l{ke inkf/kdkjh }kjk voS/k
ifjogudrkZ ds mijksä n.M 'kqDy ,oa bl vk'k; dk ca/k i= (Bond Paper)
lefiZr fd, tkus ij fd U;k;ky; }kjk uksfVl fn, tkus ij mifLFkr gksaxs] okgu
dks [kfut lfgr NksM+k tk ldrk gS] ijUrq voS/k ifjogudrkZ ij fu;ekuqdwy
dkjZokbZ gsrq bldh lwpuk U;k;kf;d n.Mkf/kdkjk dks nhtk,xhA ca/k i= dk çi=
funs'kd] [kku }kjk vyx ls ifjpkfyr fd;k tk,xkA"
Rule 54(8)
"(8) dksbZ Hkh O;fDr ftlds ikl] oS/k [kuuiêk@vuqefr&i= ugha gS] ;fn og y?kq
[kfutksa dk fu"dklu djrk g SvFkok bu fu;eksa ds fo:) mldh vksj ls dksbZ
,ts.V] eSuts j ;k fdlh Bsdsnkj ds }kjk ,slk fu"dklu fd;k tkrk gS rks og y?kq
[kfutksa ds voS/k fu"dklu dk vkjksih gksxk rFkk mlls [kfutksa ds ewY; ds cjkcj
rd dk n.M olwyuh; gksxk lkFk gh ljdkj ,sl sO;fDr l stSlk fd ekeyk curk
gks] Hkwfe ij fcuk oS/k izkf/kdkjh dh vuqefr l sfd, x;s dCts dh vof/k dkyxku]
LokfeLo ;k dj dh olwyh fdlh vU; dkuwu ;k fu;e tks ml oDr ykxw gks] esa
mlds fo:) dh tku sokyh dkjZokbZ ds iwokZxzg ds fcuk dh tk ldsxhA"
17. The State of Jharkhand has further promulgated 'The Jharkhand
Minor Mineral (Prevention of Illegal Mining, Transportation and Storage)
Rules, 2017' in exercise of powers under Section 23-C (1) and 23-C (2) of
the Mines and Mineral (Development and Regulation) Act, 1957. Said Rules
of 2017 has been promulgated by State of Jharkhand primarily for regulating
transportation or otherwise removal of any mineral from any place in the
State of Jharkhand. Rule 7 of the said Rules of 2017 provides for prohibition
i.e. restricting purchase, storage, sale or any transaction of buying, selling,
processing of any mineral by any person without being registered as a
'Dealer'. Admittedly, Petitioners are registered as 'dealers' under the
aforesaid Rules and Dealership License was obtained by them for buying or
selling minor mineral i.e. sand. There is no dispute that sand, which was
purchased and stored by Petitioners in their stockyard, is duly purchased
from legal and valid source and is a royalty paid sand. Respondents, in their
Counter Affidavit, have not disputed the said stand taken by the Petitioners.
18. Further, Rule 13 of the said Rules of 2017, prescribes for penalty for
contravention of the rules and, for the sake of ready reference, Rule 13 of the
Rules of 2017 is quoted herein-under:-
"13. PENALTIES:
i) Any person, who contravenes any of the provision of these
rules, or buys or sells or store minerals except under and
in accordance with the terms and conditions of dealers
registration or who transports the minerals except as
mentioned in the transport challan or transport mineral
without transport challan shall be punishable as per
provision made under JMCC Rule, 2004 and as amended
from time to time.
ii) Whoever intentionally obstructs the competent officer or
any other officer in performing his duties under these
rules, shall be punishable with an imprisonment upto a
term of one year or fine which may extend to Rs. 25000/-
or with both."
19. In the present case, Respondents have alleged that Petitioners have
contravened Rule 13 of the Rules of 2017 and, thus, are liable for penalty
under Rule 54(8) of the JMMC Rules, 2004 being twice the value of the
mineral. A bare perusal of Rule 13 would reveal that said Rule provides that
if any person contravenes provisions of said Rules or buys or sells or stores
mineral except in accordance with the terms and conditions of the dealer's
registration, shall be punishable as per provisions made under JMMC Rules,
2004. Thus, even if we presume that a dealer has contravened the rules
regarding storage of minerals, the question which is still to be decided is
"Whether Petitioners can be saddled with penalty being twice the value of the
mineral in terms of Rule 54(5) or 54(8) of the JMMC Rules, 2004?"
20. A careful perusal of Rule 54(5) of JMMC Rules, 2004, would reveal
that said rule is applicable where a person is engaged in transportation of
mineral and, at the time of transportation, in course of inspection, fails to
produce requisite Form-D i.e. transport challan, then, penalty would be
imposable upon such person being twice the value of the mineral being
transported by it.
21. Similarly, 54(8) of JMMC Rules, 2004 provides for levy of penalty
where any person, not having any valid mining lease, is engaged in
excavation of mineral. In the present cases, there is no allegations against the
Petitioners of transporting minerals without statutory Form-D or getting
involved in carrying out any illegal mining. Hence, aforesaid Rules 54(5) and
54(8), on the face of it, are not applicable in the case of the respective
Petitioners.
22. In fact, from the order imposing penalty, it would be evident that
although in the said order penalty being twice the value of the mineral has
been imposed upon the Petitioners, but while imposing such penalty, no
reference of any enabling rules which enable the concerned officer to impose
penalty being twice the value of the mineral for alleged storage of mineral in
the stockyard has been given.
23. We have carefully perused provision of JMMC Rules, 2004 and we
are unable to find out any rule which provides for imposition of penalty
merely because there were some discrepancies in stock of a stockyard dealer.
Respondent-State has also not been unable to point out any such provision
and only reliance placed by Respondent-State was upon Rule 54(8) of
JMMC Rules which, in our opinion, is not applicable in the facts and
circumstances of the case.
Even otherwise, as rightly pointed out by Mr. Gadodia; the
Petitioners have already purchased sand by paying full value of the sand
along with due royalty, and, if penalty being twice the value of the sand is
imposed upon the Petitioners only due to alleged deficiency of stock in the
stockyard, then said provision would become unduly harsh, as Petitioners
would be made liable to pay an amount being thrice the value of sand, which
is not contemplated under law.
24. In view of the above, we are of the opinion that orders imposing
penalty are not supported by any statutory provisions of law and hence
penalty orders are liable to be quashed and set aside.
25. It is further an admitted fact that Petitioners, namely Mishra Wine,
Dhanbad Wine and Basukinath Traders, are having a stock of 40,500-cubic
ft., 15,09,00 cubic ft. and 1,09,000 cubic ft. of sand respectively in their
stockyards. Said sand, which has been purchased by the respective
Petitioners from legal and valid sources, is not being allowed to be sold by
the Petitioners because of orders imposing penalty and also because
Respondents have stopped issuing transport challans to the Petitioners. In our
view, Petitioners cannot be stopped from selling the sand in question which
has been purchased by them after due payment of cost of sand including
payment of royalty to the State Government and, accordingly, Petitioners are
further entitled for issuance of transport challan for sale and transportation of
aforesaid sand.
26. Accordingly, instant writ applications are allowed and impugned
orders contained in Letter No. 689/M dated 30.05.2022 [Annexure-7 in
W.P.(C) No. 3103 of 2022], Letter No. 690/M dated 30.05.2022 [Annexure-7
in W.P.(C) No. 3111 of 2022] and Letter No. 688/M dated 30.05.2022
[Annexure-6 in W.P.(C) No. 3113 of 2022], imposing penalty against the
respective Petitioners are hereby quashed and set aside. Respondent-District
Mining Officer is further directed to immediately unblock JIMMS Portal of
the Petitioners and allow the Petitioners to undertake generation of transport
challan for selling and transportation of sand duly reflected in their mining
returns. Online Portal of the Petitioners should be opened within 15 days
from the date of receipt/production of copy of this order.
27. Accordingly, all writ applications are allowed. Pending I.As., if any,
also stand disposed of. However, in the facts and circumstances of the case,
there shall be no order as to costs.
(Rongon Mukhopadhyay, J)
(Deepak Roshan, J)
Amardeep/-
AFR
