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Jharkhand High Court

Hindalco Industries Limited vs The State Of Jharkhand Through Its Chief ... on 20 December, 2025

Author: Sujit Narayan Prasad

Bench: Sujit Narayan Prasad

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 IN THE HIGH COURT OF JHARKHAND AT RANCHI
           W.P.(C) No.7532 of 2025
                                   ------
Hindalco Industries Limited, a Company Incorporated under the
Companies Act, 1956, having its registered office 23rd Floor, Tower 4,
One Unity Center, Senapati Bapat Marg, Prabhadevi, Mumbai 400
013 and having its Project Office at Vasundhara Mega Mart, 2nd
Floor, Near Argora Chowk, PO and PS. Argora, District Ranchi,
Jharkhand through its authorized Signatory, Samta Sinha, W/O Amit
Kumar aged about 40 years, resident of Jagarnath Garden, Pundag
P.O & P.S Pundag, District-Ranchi .... ....                Petitioner
                             Versus
1. The State of Jharkhand through its Chief Secretary, having its
   office at Project Bhawan, Dhurwa, P.O. and P.S. Dhurwa, District-
   Ranchi, Jharkhand.
2. The Deputy Commissioner-cum-District Magistrate, P.O. & P.S.
   Palamu, District Palamu, Jharkhand.
3. The District Sub-Registrar, P.O. & P.S. Palamu, District Palamu,
   Jharkhand.
4. The District Mining Officer, P.O. & P.S. Palamu, District Palamu,
   Jharkhand.
                                ..... ....       Respondents

CORAM : HON'BLE MR. JUSTICE SUJIT NARAYAN PRASAD
        HON'BLE MR. JUSTICE ARUN KUMAR RAI
                         ------
       For the Petitioner          : Mr. Indrajit Sinha, Advocate
                                     Mr. Ankit Vishal, Advocate
       For the State               : Mr. Shray Mishra, AC to AG
                                ------
05/Dated: 20.12.2025

Per Sujit Narayan Prasad, J.

1. The instant writ petition has been filed under Article 226 of the

Constitution of India seeking therein for the following reliefs: -

(i) For issuance of an appropriate writ(s)/

order/s direction(s) particularly a writ in the

nature of certiorari for quashing and setting

aside of the order dated 24.05.2025 passed

by the Deputy Commissioner cum District

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Magistrate, Palamu in Case No.02/24-25

(Annexure-8) thereby directing the Petitioner

to pay an amount of INR [comprising of

deficient stamp duty to the tune of INR

28,34,59,008/- and deficient registration fee

to the tune of INR 21,25,94,256/-].

(ii) For issuance of an appropriate

writ(s)/order(s)/direction(s) particularly a writ

in the nature of certiorari for quashing and

setting aside of the Letter No.1723 dated

20/6/25 issued by the District Mining Officer,

District Palamu (Annexure-9) directing the

petitioner to deposit an amount of INR

49,60,53,264/- pursuant to order dated

24/5/25 passed by the District

Commissioner, Palamu in Case No.02/24-

25.

(iii) For issuance of such other writ, order

or direction as Your Lordship may deem fit

and proper for doing conscionable justice to

the Petitioner.

2. The brief facts of the case, as per the pleading made in the writ

petition, required to be enumerated, which read as under: -

(i) It is the case of the writ petitioner that the petitioner is a

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company registered under the Companies Act, 1956. The

petitioner is engaged in the business of manufacturing

aluminum and requires continues power supply to run its

aluminum plants. The petitioner therefore operates

thermal power plants in order to provide continuous

power supply to its aluminum plants, for which, engages

in the development and operation of coal mines.

(ii) The petitioner has participated in the bidding process and

upon placing the highest Final Price Offer, was declared

the Successful Bidder for the Kathautia Coal Mine. The

petitioner thereafter entered into the Coal Mines

Development and Production Agreement with the

Nominated Authority. The Govt. of India through the

Office of the Nominated Authority, Ministry of Coal, issued

a vesting order bearing no.104/3/2015/NA dated

23.03.2015 in terms of Section 8(4) of the CMSP Act

read with Rule 7(2)(b) and Rule 13(1) of the CMSP

Rules, in favour of the petitioner and by virtue of which

the Kathautia Coal Mine along with the coal bearing

areas contained therein were vested upon the petitioner.

(iii) On 27.07.2015, the Joint Secretary, Govt. of Jharkhand

issued an order for grant of mining lease in respect of

Kathautia Coal Mine to the petitioner. On 07.10.2016, the

mining lease in respect of the Kathautia Coal Mine for an

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area of 687.92 Ha was executed as per the provisions of

Mines and Minerals Development and Regulation Act,

1957 and Mineral Concession Rules, 1960 and

registered on the same date in favour of the petitioner

after payment of applicable stamp duty and registration

fee as determined by the registering authority. The mining

lease was for a period of 30 years.

(iv) Accordingly, the royalty to be paid under the mining lease

was calculated to the tune of INR 1,68,00,62,000/- upon

which, stamp duty to the tune of INR 6,72,02,480/- was

calculated by the registering authority. The same was

duly paid by the petitioner.

(v) All of a sudden on 01.06.2023, the office of the Principal

Accountant General (Audit) Jharkhand vide its audit

observation reference : #2 (OBS-708271) observed that

there had been an under assessment of consideration

amount, in respect of the mining lease due to exclusion

of amounts paid by the petitioner towards final price

officer and contributed towards DMF. It was further

observed that the purported under assessment resulted

in loss to the State exchequer in the form of stamp duty

and registration fees.

(vi) Thereafter, the respondent no.2 registered case

no.02/24-25 initiated by the respondent no.3 and

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respondent no.4 and issued a show cause notice dated

01.10.2024 to the petitioner under Section 47A of the

ISA, 1899 as applicable to the State of Jharkhand stating

that as per the Principal Accountant General (Audit) there

had been an under assessment of the consideration

amount of the registered mining lease for the Kathautia

Coal mine due to exclusion of amount paid towards Final

Price Offer and contributed towards DMF and calling

upon the petitioner to show cause by 08.10.2024 as to

why the petitioner should not pay the deficient stamp duty

and registration fee.

(vii) Thereafter, the petitioner filed a detailed reply dated

07.10.2024 to show cause notice dated 01.10.2024 in

Case No.02/24-25 inter alia stating that stamp duty is

charged on the instrument and not on the transaction and

in the present case the instrument chargeable to stamp

duty was the mining lease upon which the stamp duty

had been paid based on the anticipated royalty for the

demised land under Section 26 of the ISA, 1899 read

with Entry 35(a)(v) of Schedule IA of ISA, 1899 as

applicable to the State of Jharkhand.

(viii) On 25.02.2025, the petitioner has attended hearing

before the respondent no.2 in Case No.-2/24-25. In

March, 2025, the petitioner filed Additional Reply to Show

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Cause Notice dated 01.10.2024 in Case No.02/24-25

pursuant to the hearing on 31st March, 2025.

(ix) On 24.05.2025, the respondent no.2 disposed of Case

No.02/24-25 and directed the petitioner to pay an amount

of INR 49,60,53,264/- [comprising of purported deficient

stamp duty to the tune of INR 28,34,59,008/- and

purported deficient registration fees to the tune of INR

21,25,94,256/-] within 15 days, which is the subject

matter of the instant writ petition.

3. It has been contended by the learned counsel for the petitioner

that the instant matter relates to purported miscalculation and the

consequent deficit in the payment of stamp duty and registration

charges.

4. It has also been contended that 8 years after calculation of

registration fee and stamp duty on the mining lease for the

Kathautia Coal Mine by the registering authority, the respondent

no.2 registered case no.-2/24-25 initiated by the respondent nos.3

and 4 and issued show cause notice dated 01.10.2024.

5. Learned counsel for the petitioner has submitted that the authority

concerned while passing the order impugned has not appreciated

the fact in right perspective.

6. Lastly, it has been submitted that the similar issue has already

been decided by this Court in W.P.(C) No.3773 of 2025 (M/s

Araanya Mines Private Limited Vrs. The State of Jharkhand &

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Ors.) and analogous cases, vide judgment dated 16.10.2025,

therefore, the present writ petition may be disposed of in terms of

the said judgment.

7. Mr. Shray Mishra, learned AC to AG appearing for the respondent-

State has also submitted that the similar issue has already been

decided by this Court in W.P.(C) No.3773 of 2025 (M/s Araanya

Mines Private Limited Vrs. The State of Jharkhand & Ors.)

and analogous cases, vide judgment dated 16.10.2025.

8. Therefore, submission has been made by the respondent-State

that the present writ petition may be disposed of in terms of the

aforesaid judgment passed by this Court.

9. We have considered the arguments advanced on behalf of the

parties and perused the judgment dated 16.10.2025 passed by

this Court in W.P.(C) No.3773 of 2025 (M/s Araanya Mines

Private Limited Vrs. The State of Jharkhand & Ors.) and

analogous cases.

10. We, after going through the prayer and pleadings made in the

writ petition, as also, the judgment dated 16.10.2025 passed in

W.P.(C) No.3773 of 2025 (M/s Araanya Mines Private Limited

Vrs. The State of Jharkhand & Ors.) and analogous cases, have

found that the issue, which is the subject matter of the present writ

petition, has already been decided by this Court in the aforesaid

judgment, for ready reference, the relevant paragraphs of the said

judgment are being referred as under: -

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"145. The core question is as to whether the subject matter is indeterminate and even if it is indeterminate can the stamp duty is to be paid on the basis of royalty only, even if provision of Section 26 of the Act will be taken into consideration and why not on the basis of share/premium said to be consideration amount.

146. Further this Court has already observed that the meaning of lease in both the statutory provisions i.e., the Transfer of Property Act 1882 and the Indian Stamp Act are same and hence, by virtue of have the right over the immovable property if any instrument is being created i.e., only on the basis of Transfer of Property Act, 1882 is in terms of provision as referred under Section 105 thereof.

147. At this juncture, it would be apt to go through the terms and conditions of the Coal Mines Production and Development Agreement [CDPDA] between the writ petitioners and State wherein the 'Final Price Offer' has been mentioned.

148. The question of stamp duty to be paid on the basis of royalty or on the basis of share or premium in a case subject matter if indeterminate is concerned, this Court has adverted to the terms and conditions of the agreement along with the final offer price as per the clause in the said agreement i.e. [CMPDA].

149. 'Final Price Offer' under Clause 1.1.27 of the Coal Mines Production and Development Agreement [CMPDA] is Rs. 1,512 per Tonne of coal in respect of W.P.(C) No. 6572 of 2024. Further, 'Final Offer' under clause 1.1.28 of the CMPDA is 23.00% share of revenue payable to the Government per Ton of Coal in respect of W.P.(C) No. 272 of 2025.

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150. Further at this juncture it would be purposeful to appreciate the element of Para 35 (c) of schedule 1A of the Act 1899 prevalent in the State of the Jharkhand. The said "Para 35 (c) of schedule 1A of the Act 1899 has been annexed by the respondent as Annexure-A in the Counter affidavit wherein it has been stipulated that where the lease is granted for a fine or premium or for money advanced, in addition to rent reserved, stamp duty will be charged as a conveyance (no.23) for a consideration (or market value) equal to the amount value of such fine or premium, or advance as set forth in the lease, in addition to the duty which would have been payable on such lease if no fine or premium or advance had been paid or delivered.

151. It requires to refer herein that the lease, as has been defined under the Transfer of Property Act, could have been said to be lease, if the MMDR Act would not have been brought into effect but the Indian Stamp Act is the sole Act under which the stamp duty is to be paid and that is the context also regarding the quantum but there is no contest of the applicability of the Stamp Duty Act, 1899 rather it has been argued that Section 26 of the Indian Stamp Act particularly its proviso speaks that stamp duty is to be paid on the basis of royalty.

152. The said argument could have been accepted if under proviso to Section 26 of the Indian Stamp Act, the term royalty only would have been there. But the word 'share' is also there. Then what is the meaning of share. The 'share' as provided under Section 26 to its proviso and taking it along with Section 26(a), it is

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being clarified that the stamp duty can be paid on the basis of 'royalty' or 'share' to the government under the lease.

153. Herein, share has not been defined but it will be said to be share of the government due to effect of transfer of the right for the time being and thereby it is considered view of this Court that Section 26 does not say exclusively that the stamp duty will only be on the basis of royalty rather the word 'share' is also there.

154. Further, the "Final Price Offer" has been agreed by the writ petitioners and based upon the same the entire amount has been assessed for fresh computation of the Stamp Duty. The said assessment is based upon the extraction of minerals even though having no authentic estimate of the extraction of the mineral as to whether the minerals products will be extracted to the extent of the amount as is being agreed in between the parties. Hence, even the amount which has been agreed by the writ petitioners, as per the agreement, is indeterminate in absence of knowledge of the actual extraction of the mineral from the lease hold area.

155. Therefore, the applicability of proviso to Section 26 of the Indian Stamp Act 1899 is there but in the facts and circumstances of the present writ petitions whether it will be on the basis of amount of royalty or share is to be determined.

156. Herein since the land is owned by the State, then can it be said to be justified that only on the basis of amount of royalty the stamp duty is to be paid. The State is to share the land for the time being by entering into the lease by forgoing the rights for the time being

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by its transfer in favour of the lessee (petitioners herein). The lessee has agreed to enjoy the right over the property for the time being by entering into an agreement (CMPDA).

157. This Court is to consider in a case where the State has transferred its right for the time being in favour of writ petitioners, the lessee, by virtue of said agreement on the "final price offer", as referred in the agreement. The writ petitioners, in pursuance to the said right conferred by virtue of the said lease deed, has got right to extract minerals from the lease hold area.

158. At this juncture it requires to refer herein that the 'royalty', as has been defined under Section 9 of the MMDR Act, 1957, is the statutory amount which is to be paid to the State in lieu of the extraction of the minerals and once the said amount is of the State to be paid for carrying out the mining operation of the land belongs to the State then it cannot be said to be justified that only over the said amount the stamp duty is to be paid.

159. Further, the reference of word 'share, premium, lessor, lessee, premium and rent' along with the word 'transfer, transferee', has been referred in Section 105 of the Act 1882. The share and premium, as referred in Section 105 of the Act, 1882 is chargeable by the lessor to be paid by the lessee if the right to hold the land, immovable property, has been transferred for the time being in favour of the lessee. The word "share" is having bearing and if the word "share" and the proviso to Section 26 of the Stamp Act particularly its proviso

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will be taken into consideration, there also the reference of the word royalty or share has been made.

160. The reference of word royalty as provided under Section 26 of the Stamp Duty Act will relate to the charging of the stamp duty on the amount of royalty in a case when the lease has been granted by or on behalf of the Government, at such amount or value as the Collector may, having regard to all the circumstances of the case, have estimated as likely to be payable by way of "royalty" or "share" to the Government under the lease.

161. But when the land is owned by the private party and the State has granted lease to carry out mining operation in view of principle that the natural resources are having the absolute ownership of the State and even if the land belongs to the private party but the underlying natural resources i.e., mineral will not have the propriety right of the land owner. If the concerned land owner is seeking his right to carry out the mining operation then he has to have the permission of the State which will be granted by virtue of entering into lease deed and in such circumstances the stamp duty will be required to be charged on the basis of amount of royalty but in a case of land exclusively owned by the State having absolute title then Section 26 of the Stamp Act has taken care in the aforesaid circumstances as to what would be the stamp duty which is to be charged, therefore, the word "share" has been referred in the proviso to Section 26 of the Indian Stamp Act 1899.

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162. It is settled connotation of law that in the statute if the reference of any word has been given then each and every word has got its meaning and implication.

163. In the context of the present case, this Court has considered the reference of the word 'share' as stipulated under proviso to Section 26 of the Stamp Act, wherein the word 'royalty' and 'share' are there, which cannot be construed to be same rather "royalty" is to be treated differently to that of the "share".

164. In the aforesaid circumstances the question is that what is the meaning of word 'share'. The 'share' as per the provision of Section 105 of the T.P. Act, will be total consideration amount which the party has agreed on the date or creation of instrument under the Indian Registration Act giving/conferring right by one party in favour of another for the time being to have absolute right to carry out mining operation.

169. It also needs to refer herein that the 'Final Price Offer' forms part of consideration of grant of mining lease and the final price offer is a consideration in nature of premium/share of value for the mining lease executed. So, Para 35(c) of Schedule 1A of the Indian Stamp Act, 1899 as prevalent in Jharkhand, will also apply for the payment of Stamp Duty.

170. We are conscious that the State cannot act as a moneylender but in the matter of generation of revenue, the balance is to be maintained in between the government and the party concerned.

171. It needs to refer herein that under the new regime for allocation of the coal mines after the judgment rendered by Hon'ble Supreme Court in the case of Manohar Lal Sharma v. union of India, [(2014) 9

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SCC 516] all the coal block allocations were cancelled and there were fresh allocations on the basis of fresh auction under the Coal Mines (Special provisions) Act, 2015 and the Coal Auction Rules.

172. The basic reason by holding to allot the mining lease on the basis of auction is to generate the source of revenue to the State from the mineral which is to be extracted of any nature. Prior to Manohar Lal Sharma Judgment there was no concept of allotment through auction rather it was either on the basis of linkage system or renewal or extension.

173. Thereafter, the mines were allocated under the competitive bid where the bidder became successful after quoting a price i.e. consideration based on a total reserve of the coal and its annualized value. Thereafter, Coal Mines Production and Development Agreement [CMPDA] between the writ petitioners and State has been made.

174. Final Price Offer' under Clause 1.1.27 of the Coal Mines Production and Development Agreement [CMPDA] is Rs. 1,512 per Tonne of coal in respect of W.P.(C) No. 6572 of 2024 and 'Final Offer' under clause 1.1.28 of the CMPDA is 23.00% share of revenue payable to the Government per Tonne of Coal in respect of W.P.(C) No. 272 of 2025, are provided herein.

175. The final price offer is the word having bearing which finds mention in the agreement as agreed in between the parties.

176. This Court, taking into consideration together with the reference of word 'share' in Section 105 of the Transfer of the Property Act as also the reference of

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the word "share" in the proviso to Section 26 of the Indian Stamp Act coupled with para 35 C of Schedule IA of Indian Stamp Act 1899, is of the view that the stamp duty is to be charged, in such circumstances i.e., if land is owned by the State and leased out in favour of the lease holder, on the basis of "Final Price Offer" which will be in nature of premium/share of the mineral lease executed.

177. We, after having discussed the aforesaid fact, have gone through the Audit Report dated 01.06.2023 submitted by the Principal Accountant General (Audit), Jharkhand wherein it was observed that the stamp duty must be computed on the total amount of royalty and final price offer, are of the view that whatever objection has been raised by the by the Principal Accountant General (Audit), Jharkhand appears to be correct based upon the discussions made hereinabove.

183. We have gone through the factual aspect of the said case wherein the petitioner No. 1/Company looking to the requirement of mineral for production of cement, had applied for grant of lease of limestone under the relevant provisions of the Mines and Minerals (Development and Regulation) Act, 1957 for an area of 56.27 Hectare and a fresh lease was granted to the petitioner No. 1/company in pursuance to the execution of an agreement and registration of mining lease in Form "K" vide letter dated 2-7-2004 and petitioner was directed to pay a stamp duty of Rs. 4,32,00,000/- (Rupees Four Crores Thirty-Two Lakhs) by considering the anticipated amount of royalty

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payable at the rate of Rs. 40/- per ton likely to be paid per annum in future by the prospective lessee.

184. After hearing both the parties the M.P. High Court has appreciated the issue i.e. the royalty and the dead rent are two different aspects. The dead rent cannot be charged only on the basis of royalty, as the dead rent is to be charged at the very initial stage at the time of executing leased documents, whereas, the royalty is to be charged on the basis of the mineral which has been extracted from the lease area.

185. The M.P. High Court, after appreciating the various provision of Act 1957, has observed that there is a distinction between royalty and the dead rent and proviso to section 26 of the Act of 1899 is clearly attracted in the case of mining lease.

186. In the aforesaid context there is no dispute about the application of Stamp Act particularly Section 26 but in the said case the word "share" has not been interpreted by the M.P. High court in the context of proviso to Section 26 of the Act 1899 which is the issue herein, as such the said judgment is also not applicable herein.

190. This Court from the aforesaid discussion is of the view that the re-calculation of stamp duty based upon the "final price offer" cannot be said to be baseless and in that view of the matter, the decision so taken by the authorities concerned needs no interference.

191. Accordingly, Issue No. II is decided against the petitioners.

192. The issues framed by this Court are answered accordingly.

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193. In view thereof, the petitioners are required to pay the deficit stamp duty and registration fees as per communication issued to them in the impugned orders so far writ petitions being W.P.(C) No. 3773 of 2025 and W.P.(C) No.6572 of 2024 are concerned and further there is no need to issue any direction upon the respondents to refund the amount of stamp duty and the registration fee in favour of petitioner so far W.P(C) No. 272 of 2025 is concerned.

194. With the aforesaid observations and directions, all the writ petitions stand dismissed."

11. This Court, after examining the factual aspect of the present

case, has found that the issues involved herein are identical to that of

the case, which has been decided in W.P.(C) No.3773 of 2025 (M/s

Araanya Mines Private Limited Vrs. The State of Jharkhand &

Ors.) and analogous cases, vide judgment dated 16.10.2025.

12. Accordingly, the instant writ petition stands disposed of, in terms

of the judgment dated 16.10.2025 passed in W.P.(C) No.3773 of 2025

(M/s Araanya Mines Private Limited Vrs. The State of Jharkhand

& Ors.) and analogous cases.

13. In consequence thereof, pending interlocutory application(s), if

any, also stands disposed of.