Kerala High Court
M/S.Harris & Company vs The Cochin Port Trust on 17 March, 2021
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR
WEDNESDAY, THE 17TH DAY OF MARCH 2021 / 26TH PHALGUNA,
1942
WP(C).No.260 OF 2021(F)
PETITIONER:
M/S.HARRIS & COMPANY
REPRESENTED BY ITS PROPRIETOR, MR.N.J.HARRIS,
S/O.JALAAL, AGED 50, DOOR NO.2/607,
KUNNUMPURAM, FORT KOCHI-682001.
BY ADVS.
SRI.S.SREEKUMAR (SR.)
SRI.P.MARTIN JOSE
SRI.P.PRIJITH
SRI.THOMAS P.KURUVILLA
SRI.R.GITHESH
SRI.AJAY BEN JOSE
SRI.MANJUNATH MENON
SRI.SACHIN JACOB AMBAT
SHRI.HARIKRISHNAN S.
RESPONDENTS:
1 THE COCHIN PORT TRUST
REPRESENTED BY ITS SECRETARY,
WILLINGTON ISLAND,
COCHIN-682009.
W.P.(C) No.260 of 2021 2
2 THE CHIEF ENGINEER,
CHIEF ENGINEERS OFFICE,
COCHIN PORT TRUST,
COCHIN-682009.
3 THE EXECUTIVE ENGINEER,
CHIEF ENGINEERS OFFICE,
COCHIN PORT TRUST,
COCHIN-682009.
4 THE DEPUTY CHIEF ENGINEER,
CHIEF ENGINEERS OFFICE,
COCHIN PORT TRUST,
COCHIN-682009.
5 THE GEOLOGIST,
DEPARTMENT OF MINING AND GEOLOGY,
CIVIL STATION,
KAKKANAD,
ERNAKULAM-682030.
6 THE STATE OF KERALA
REPRESENTED BY ITS CHIEF SECRETARY,
GOVERNMENT SECRETARIAT,
THIRUVANANTHAPURAM-695001
7 THE DIRECTOR OF MINING AND GEOLOGY
OFFICE OF THE DIRECTORATE AND MINING AND
GEOLOGY,
KESAVADASAPURAM PATTOM PALACE P.O.,
TRIVANDRUM - 695004
BY ADVS.
SRI.M.GOPIKRISHNAN NAMBIAR
SRI.K.JOHN MATHAI
SRI.JOSON MANAVALAN
SRI.KURYAN THOMAS
W.P.(C) No.260 of 2021 3
SRI.PAULOSE C. ABRAHAM
SRI.RAJA KANNAN
SRI.RENJITH THAMPAN, ADDL.AG.
SRI.S. KANNAN, SPL GP.
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 03-03-2021, THE COURT ON 17-03-2021 DELIVERED THE
FOLLOWING:
W.P.(C) No.260 of 2021 4
C.R.
P.B.SURESH KUMAR, J.
-------------------------------------------
W.P.(C) No.260 of 2021
-----------------------------------------------
Dated this the 17th day of March, 2021.
JUDGMENT
Pursuant to an invitation made by the first respondent,
the Cochin Port Trust, the petitioner submitted tender for purchase of
25000 cubic meters of sand dredged by the first respondent from
the foreshore of the port. The tender submitted by the petitioner was
accepted by the first respondent and they were issued Ext.P1 work
order for removal of the dredged sand sold to them. As per the
terms of Ext.P1 work order, the petitioner had to remove the
dredged sand from the premises of the Cochin Port Trust on or
before 02.01.2021. While the petitioner was removing the dredged
sand, the fifth respondent insisted that the first respondent should
pay royalty to the State Government for the dredged sand sold by
them to the petitioner, in terms of the Kerala Minor Mineral
Concession Rules, 2015 (the KMMC Rules) and also issue mineral
transit passes for its movement in terms of the Kerala Minerals
(Prevention of Illegal Mining, Storage and Transportation) Rules, 2015
(the Transportation Rules). It is stated by the petitioner that the said
issue could not be tackled by the first respondent with the fifth
respondent and consequently, the petitioner could not remove the
entire quantity of dredged sand within the time stipulated. The writ
petition was instituted in the circumstances seeking directions to
the fifth respondent to receive royalty of the dredged sand from the
petitioner and issue mineral transit passes for removal of the sand
from the premises of the first respondent. The petitioner also sought
a direction to the first respondent to extend the time prescribed for
removal of the dredged sand.
2. After the initial hearing, the petitioner amended
the writ petition and sought a declaration that the KMMC Rules and
the Transportation Rules framed under the Mines and Minerals
(Development and Regulation) Act, 1957 (the MMDR Act) do not
apply to the dredged sand sold by the first respondent to the
petitioner and the petitioner is not liable to pay royalty for the same
to the State Government.
3. Heard the learned Senior Counsel for the
petitioner, the learned Additional Advocate General for the State, the
learned Central Government Counsel for the Union as also the
learned Senior Counsel for the first respondent.
4. The learned Senior Counsel for the petitioner
contended that the minerals underlying the seabed belong to the
Union in terms of Article 297 of the Constitution and therefore, the
KMMC Rules, in terms of which royalty is claimed by the State, and
the Transportation Rules, in terms of which the movement of the
dredged sand is sought to be regulated by the State, cannot have
any application over the sand dredged by the first respondent from
the seabed.
5. Per contra, the learned Additional Advocate
General submitted that insofar as the State Government is
empowered to regulate the transportation and storage of minor
minerals in terms of Section 4(1A) of the MMDR Act, the
Transportation Rules framed by the State Government under the
MMDR Act would certainly govern the transportation and storage of
the sand dredged by the first respondent from the seabed.
6. The learned Central Government Counsel pointed
out that mining of minerals from the territorial waters, continental
shelf, exclusive economic zone and other maritime zones of India is
governed by the Offshore Areas Mineral (Development and
Regulation) Act, 2002 (the Offshore Act) and the Offshore Areas
Mineral Concession Rules, 2006 (the Offshore Rules) framed under
the said Act, and the MMDR Act and the Rules made thereunder
cannot have any application over the sand dredged by the first
respondent from the seabed. It was, however, conceded by the
learned Central Government Counsel that the Offshore Act and the
Offshore Rules do not contain any provision dealing with the
transportation and storage of of minerals in the land surface of the
country.
7. The learned Senior Counsel for the first respondent
supported the stand of the petitioner that the KMMC Rules as also
the Transportation Rules cannot have any application over the sand
dredged by the first respondent from the seabed, for, dredging
activity is one undertaken by the first respondent in exercise of its
powers under Section 35 of the Major Port Trusts Act, 1963.
8. The fact that the sand dredged by the first
respondent from the seabed includes minor minerals in terms of the
provisions of the MMDR Act is not disputed by anyone. As such, the
questions arising for consideration in the matter are (1) whether the
State Government is justified in demanding payment of royalty for
the sand dredged by the first respondent and (2) whether the State
Government is justified in insisting compliance of the Transportation
Rules for movement of the dredged sand.
9. In the context of mining, it is now settled that
royalty is the consideration payable by the person extracting
minerals to the owner of minerals in proportion to the quantity of the
minerals extracted [See D.K. Trivedi & Sons v. State of Gujarat,
1986 Supp SCC 20]. The KMMC Rules therefore provide for payment
and realisation of royalty payable to the State by quarrying permit
holders and quarrying leaseholders. In the case on hand, insofar as
the minerals in the sand dredged by the first respondent belong to
the Union in terms of Article 297 of the Constitution, royalty could be
claimed only by the Union. Needless to say, the provisions in the
KMMC Rules, insofar as they relate to realisation of royalty by the
State cannot have any application to the minerals removed by the
first respondent, and the State Government cannot therefore
demand royalty in respect of the sand dredged by the first
respondent.
10. The MMDR Act is a statute providing for
development and regulation of mines and minerals under the control
of the Union. No doubt, the said statute was one covering not only
with mines and minerals in the land surface of India, but also the
mines and minerals in the territorial waters and the continental shelf
of India. Section 13A of the MMDR Act is indicative of the said fact. It
was while so, the Offshore Act was introduced providing for
development and regulation of mineral resources in the territorial
waters, continental shelf, exclusive economic zones and other
maritime zones of India. The provisions of the Offshore Act indicate
beyond doubt that the said Act is a special enactment intended for
the development and regulation of mineral resources in the
territorial waters, continental shelf, exclusive economic zones and
other maritime zones of India. It is now trite that when a special
statute is made in respect of a subject covered by a general statute,
the operation of the special statute will have the effect of repealing
the general statute to the extent the same deals with the subject
covered by the special statute. It is relevant in this context to refer
to the passage in Craies on Statute Law (Seventh Edition, page 373).
The relevant portion of the passage reads thus:
"From this rule it follows that if one statute enacts
something in general terms, and afterwards another statute is
passed on the same subject, which, although expressed in
affirmative language, introduces special conditions and
restrictions, the subsequent statute will usually be considered as
repealing by implication the former, for "affirmative statutes
introductive of a new law do imply a negative."
In other words, when the Offshore Act was introduced, the provisions
in the MMDR Act, insofar as they relate to matters covered by the
Offshore Act, would stand repealed.
11. As pointed out by the learned Central Government
Counsel, the Offshore Act and the Offshore Rules do not contain any
provision dealing with the transportation and storage of minerals. In
other words, the provisions of the MMDR Act insofar as they relate to
transportation and storage of minerals would apply to the minerals
covered by the Offshore Act as well. The relevant statutory
provisions in the MMDR Act are Section 4(1A) and Section 23C.
Section 4(1A) of the said Act reads thus:
"No person shall transport or store or cause to be transported or
stored any mineral otherwise than in accordance with the
provisions of this Act and the rules made thereunder."
Section 23C of the MMDR Act reads thus:
"23C. Power of State Government to make rules for
preventing illegal mining, transportation and storage of
minerals.―(1) The State Government may, by notification in the
Official Gazette, make rules for preventing illegal mining,
transportation and storage of minerals and for the purposes
connected therewith.
(2) In particular and without prejudice to the generality of the
foregoing power, such rules may provide for all or any of the
following matters, namely:―
(a) establishment of check-posts for checking of minerals
under transit;
(b) establishment of weigh-bridges to measure the quantity
of mineral being transported;
(c) regulation of mineral being transported from the area
granted under a prospecting licence or a mining lease or a
quarrying licence or a permit, in whatever name the
permission to excavate minerals, has been given;
(d) inspection, checking and search of minerals at the place
of excavation or storage or during transit;
(e) maintenance of registers and forms for the purposes of
these rules;
(f) the period within which and the authority to which
applications for revision of any order passed by any
authority be preferred under any rule made under this
section and the fees to be paid therefor and powers of such
authority for disposing of such applications; and
(g) any other matter which is required to be, or may be,
prescribed for the purpose of prevention of illegal mining,
transportation and storage of minerals.
(3) Notwithstanding anything contained in section 30, the
Central Government shall have no power to revise any order
passed by a State Government or any of its authorised officers
or any authority under the rules made under sub-sections (1)
and (2)."
Admittedly, the Central Government has not so far framed rules for
regulating the transportation and storage of minor minerals in the
land surface of the country. Of course, State Government has framed
the Transportation Rules in exercise of the power under Section 23C
of the MMDR Act. The subsisting question is as to whether the
Transportation Rules would govern the transportation and storage of
the sand dredged by the first respondent from the seabed.
12. Section 35 of the Major Port Trusts Act, 1963
confers power on the first respondent to carry on dredging for
cleaning, deepening and improving any portion of the port or port
approaches or the foreshore of the port or port approaches. It is in
exercise of the said power that the sand which is the subject matter
of this proceedings has been dredged by the first respondent from
the seabed. As revealed from Section 23C of the MMDR Act, the
Transportation Rules is one framed by the State Government for
preventing illegal mining, transportation and storage of minerals and
for the purposes connected therewith. A perusal of Section 23C of
the MMDR Act and the Transportation Rules would indicate that the
said Rules are framed to regulate the transportation and storage of
minerals excavated from the land surface of the State, for it
contemplates and provides for movement of minerals only from the
premises of the producer and dealer. In terms of the Transportation
Rules, mineral transit passes are to be issued either by the producer
or dealer for transportation of the minerals. The word "producer" is
defined in the Transportation Rules thus:
"Producer" means any person carrying on the business of
extraction and/or production or collection of minerals or mineral
products in accordance with the provisions of the Act or Rules
made thereunder and includes a person who has a Registered
Metal Crusher Unit under the Kerala Minor Mineral Concession
Rules, 2015 and a person who produces mineral for his own use
and transports it or causes to transport it from the place of
extraction;
The word "dealer" is defined in the Transportation Rules thus:
"Dealer" means any person carrying on the business of stocking
and selling of minerals and/or their products and does not
include persons carrying on the business of jewels;
The first respondent would not come under the definition of either
'producer' or 'dealer' in terms of the Transportation Rules. Insofar as
the Transportation Rules do not provide for transportation and
storage of the minerals won or extracted from the seabed, it cannot
be said that the transportation and storage of minerals removed by
the first respondent from the seabed are governed by the
Transportation Rules.
13. The conclusions aforesaid do not mean that rules
cannot be framed by the Central Government or State Government
for regulation of the transportation of the minerals dredged by the
first respondent. Should the petitioner be permitted to transport the
minerals according to their whims, till rules are framed in this
regard, is the remaining question. According to me, it is only in the
interest of all concerned that some regulation is made for the
transportation of the minerals dredged by the first respondent.
Having regard to the facts and circumstances, I am of the view
that until rules are framed in this regard, the fifth respondent can be
directed to issue passes in the nature of mineral transit passes
provided for under the Transportation Rules to the first respondent
on their request, to be issued to the purchasers of dredged sand
from them for its convenient transportation from the premises of the
first respondent.
In the result, the writ petition is allowed, it is declared that
royalty in terms of the KMMC Rules cannot be realised in respect of
the dredged sand sold by the first respondent. It is also declared
that the Transportation Rules do not apply for the movement of the
dredged sand sold by the first respondent. It is directed that until
rules are framed in this regard, the fifth respondent shall issue
passes in the nature of mineral transit passes provided for under the
Transportation Rules to the first respondent on their request, to be
issued to the purchasers of dredged sand from them for its
convenient transportation from the premises of the first respondent.
Having regard to the peculiar facts of this case, there will also be a
direction to the first respondent to make a n assessment of the
quantity of the dredged sand remaining to be removed by the
petitioner and grant the petitioner reasonable time for removal of
the same.
Sd/-
P.B.SURESH KUMAR, JUDGE.
PV
APPENDIX
PETITIONER'S EXHIBITS:
EXHIBIT P1 TRUE COPY OF WORK ORDER DATED
16.10.2020.
EXHIBIT P2 TRUE COPY OF REPRESENTATION DATED
29.12.2020 SUBMITTED BY THE PETITIONER
BEFORE THE 2ND RESPONDENT.
EXHIBIT P3 TRUE COPY OF LETTER DATED 05.11.2020
ISSUED BY THE 4TH RESPONDENT WITH A
PROFORMA OF THE OUT PASS.
EXHIBIT P4 TRUE COPY OF REPRESENTATION DATED
25.11.2020 SUBMITTED BY THE PETITIONER
TO THE 4TH RESPONDENT THROUGH E-MAIL
AND THE REPLY OF THE 4TH RESPONDENT.
EXHIBIT P5 TRUE COPY OF REPRESENTATION DATED
04.12.2020 ISSUED TO THE 4TH
RESPONDENT THROUGH EMAIL.
EXHIBIT P6 TRUE COPY OF REPRESENTATION DATED
16.12.2020 SUBMITTED BY THE PETITIONER
BEFORE THE 5TH RESPONDENT.
EXHIBIT P7 TRUE COPY OF REPRESENTATION DATED
24.12.2020 SUBMITTED BY THE PETITIONER
BEFORE THE 2ND RESPONDENT.
EXHIBIT P8 TRUE COPY OF REPRESENTATION DATED
29.12.2020 SUBMITTED BY THE PETITIONER
BEFORE THE 5TH RESPONDENT.
EXHIBIT P9 TRUE COPY OF REPLY DATED 01.01.2021
ISSUED BY THE 2ND RESPONDENT TO
EXHIBIT P7 AND EXHIBIT P8.
EXHIBIT P10 TRUE COPY OF NOTIFICATION ISSUED BY
THE 1ST RESPONDENT INVITING E-TENDER
FOR ANOTHER QUANTITY OF 25000 CUBIC
METRES OF DREDGED SAND.
