M/S Venus Mining And Minerals Thr ... vs The State Of Madhya Pradesh
2021 Latest Caselaw 5506 MP

                                 1                WP.16894.2021

              The High Court of Madhya Pradesh
                         WP.16894.2021
               M/s Venus Mining and Minerals,
                Through its Partner Ravi Goyal
                                 Vs.
              State of Madhya Pradesh & Others
Gwalior dated 16.09.2021

      Shri N.K. Gupta, learned Senior Counsel assisted by Shri

S.D. Singh Bhadoriya, learned counsel for petitioner.

      Shri MPS Raghuvanshi, learned Additional Advocate

General for respondents/State.

Shri Arun Dudawat, learned counsel for respondent No.2.

Learned counsel for the rival parties are heard.

1. This petition u/Art.226 of the Constitution assails the

legality and validity of the order dated 20.07.2021 passed by

Director, Geology & Mines, Bhopal by invoking provisions of

Section 15 of M.P. Sand [Mining, Transportation, Storage and

Trading] Rules, 2019 ["2019 Sand Rules" for brevity].

2. Pertinently, the impugned order dated 20.07.2021 is alleged

to be passed pursuant to a representation dated 31.05.2021

preferred by petitioner, Annexure P-17, by which benefit was

sought under Clause 41 [pertaining to Force Majeure] of the

mining agreement entered into between the State and petitioner

owing to lockdown due to second wave of Covid-19 pandemic.

3. It is contended by learned Senior Counsel Shri N.K. Gupta

along with Shri S.D. Singh Bhadoriya learned counsel for

petitioner that the benefit of said Force Majeure clause has not 2 WP.16894.2021

been extended to petitioner despite compelling circumstances

beyond the powers of petitioner leading to close down of mining

activities during lockdown arising from Covid-19 pandemic

second wave.

3.1 Learned Senior Counsel Shri Gupta has also raised the

ground of impropriety and disrespect of this Court by submitting

that the impugned order is passed without waiting for the outcome

of WP.10667/2021 in which this Court had expected of the

respondents not to precipitate the matter till this Court adjudicates

the said petition. It is submitted that WP.10667/2021 was decided

on 22.07.2021 whereas the impugned order was passed two days

prior to that on 20.07.2021.

4. Bare perusal of the pleadings contained in the petition

reveals that lot many disputed questions of fact are raised.

Moreso, this Court in Contempt Petition No.1614/2021 has

already held that though propriety demanded that when this court

expressed expectation from the official respondents not to

precipitate the matter till decision in WP.10667/2021, the

impugned order ought not to have been passed but this Court has

held that no contempt is made out and has merely sounded a word

of caution to the official respondents to be careful in future while

dealing with judicial orders.

5. Learned counsel for the State points out by referring to Rule

15(3) of 2019 Sand Rules that alternative remedy of preferring an

appeal to the State Government against the order of Director, 3 WP.16894.2021

Geology and Mines is available but has not been availed by

petitioner.

6. Learned Senior Counsel appearing for petitioner, however,

submits that in the absence of any power of grant of interim relief,

this alternative remedy of appeal is not efficacious.

7. Rule 15 of 2019 Sand Rules pertaining to appeal is

reproduced below for ready reference and convenience:

"15. Cancellation of the Contracts.-

(1) The Collector shall, issue show cause notice to the contractor, on violation of any of the term and condition of the agreement, non compliance of environmental rules, excavation out of the sanction area, excavation more than the permissible quantity or any other serious mistake. Collector, after examining the reply received from the contractor regarding violation, shall send proposal alongwith opinion, to the Director. The Director may either cancel the contract or duly take any other decision on the proposal received from the Collector. (2) No such order of cancellation of the contract shall be passed against any person interested without giving opportunity of being heard.

(3) The appeal, against the order passed by the Director, may be submitted to the State Government.

7.1 From the aforesaid, it is evident that appeal to the State

Government lies from an order passed by Director, Geology and

Mines u/R.15(3) of 2019 Sand Rules.

7.2 However, there is no express power u/R.15 of 2019 Sand

Rules with the State Government to grant interim relief during

pendency of appeal.

4 WP.16894.2021

7.3 The very fact that the remedy of appeal has been expressly

provided by the statute 2019 Sand Rules, the same inherently

carries with it the power to pass all interim and interlocutory

orders related to the merits of the appeal. Merely because the

statute has not expressly provided for the power to grant stay

during pendency of appeal to the appellate authority, does not

mean that the appellate authority is denuded of this power. The

said power of grant or refusal of interim relief during pendency of

appeal is inherent in the provision prescribing the remedy of

appeal. Without such a power of grant or refusal to grant interim

relief during pendency of appeal, the very existence of remedy of

appeal would become non-efficacious. Thus, such a power of

grant or refusal to grant interim relief can be exercised even if the

statute expressly does not provide for the same subject to the

remedy of appeal being expressly available. This view of this

Court is supported by the ratio laid down by the Apex Court in the

case of "Income Tax Officer, Cannanore Vs. M.K. Mohammed

Kunhi [AIR 1969 SC 430]", relevant extract of which is

reproduced below for ready reference and convenience:

"4. There can be no manner of doubt that by the provisions of the Act or the Income-tax Appellate Tribunal Rules 1963 powers have not been expressly conferred upon the Appellate Tribunal to stay proceedings relating to the recovery of penalty or tax due from an assessee. At the same time it is significant that under Section 220 (6) the power of stay by treating the assessee as not being in default during the pendency 5 WP.16894.2021

of an appeal has been given to the Income-tax Officer only when an appeal has been presented under Section 246 which will be to the Appellate Assistant Commissioner and not to the Appellate Tribunal. There is no provision in Section 220 under which the Income-

tax Officer or any of his superior departmental officers can be moved for granting stay in the recovery of penalty or tax. It may be that under Section 225 notwithstanding that a certificate has been issued to the Tax Recovery Officer for the recovery of any tax (the position will be the same with regard to penalty) the Income tax Officer may grant time for the payment of the tax. In this manner he can probably keep on granting extensions until the disposal of the appeal by the Tribunal. It may also be that as a matter of practice prevailing in the department the Commissioner or the Inspecting Assistant Commissioner in exercise of administrative powers can give the necessary relief of staying recovery to the assessee but that can hardly be put at par with a statutory power as is contained in Section 220(6) which is confined only to the stage of pendency of an appeal before the Appellate Assistant Commissioner. The argument advanced on behalf of the appellant before us that in the absence of any express provisions in Sections 254 and 255 of the Act relating to stay of recovery during the pendency of an appeal it must be held that no such power can be exercised by the tribunal, suffers from a fundamental infirmity inasmuch as it assumes and proceeds on the premise that the statute confers such a power on the Income-tax Officer who can give the necessary relief to an assessee. The right of appeal is a substantive right and the questions of fact and law are at large and are open to review by the appellate tribunal. Indeed the tribunal has been given very wide powers 6 WP.16894.2021

under Section 254(1) for it may pass such orders as it thinks fit after giving full hearing to both the parties to the appeal. If the Income-tax Officer and the Appellate Assistant Commissioner have made assessments or imposed penalties raising very large demands and if the appellate tribunal is entirely helpless in the matter of stay of recovery the entire purpose of the appeal can be defeated if ultimately the orders of the departmental authorities are set aside. It is difficult to conceive that the legislature should have left the entire matter to the administrative authorities to make such orders as they choose to pass in exercise of unfettered discretion. The assessee, as has been pointed out before, has no right to even move an application when an appeal is pending before the appellate tribunal under Section 220 (6 ) and it is only at the earlier stage of appeal before the Appellate Assistant Commissioner that the statute provides for such a matter being dealt with by the Income-tax Officer. It is a firmly established rule that an express grant of statutory power carries with it by necessary implication the authority to use all reasonable means to make such grant effective (Sutherland Statutory Construction, Third Edition, Articles 5401 and 5402). The powers which have been conferred by Section 254 on the Appellate Tribunal with widest possible amplitude must carry with them by necessary implication all powers and duties incidental and necessary to make the exercise of those powers fully effective. In Domat's Civil Law, Cushing's Edition, Vol. 1 at page 88, it has been stated:

"It is the duty of the Judges to apply the laws, not only to what appears to be regulated by their express dispositions but to all the cases where a just application of them may be made, 7 WP.16894.2021

and which appear to be comprehended either within the consequences that may be gathered from it."

Maxwell on Interpretation of Statutes, Eleventh Edition contains a statement at p. 350 that "where an Act confers a jurisdiction, it impliedly also grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution. Cui jurisdictio data est, ea quoqe concessa esse vindentur, sine quibus jurisdictio explicari non potuit." An instance is given based on Ex Parte, Martin, (1879) 4 QBD 212 at p.491 that "where an inferior court is empowered to grant an injunction, the power of punishing disobedience to it by commitment is impliedly conveyed by the enactment, for the power would be useless if it could not be enforced."

8. Section 255(5) of the Act does empower the Appellate Tribunal to regulate its own procedure, but it is very doubtful if the power of stay can be spelt out from that provision. In our opinion the Appellate Tribunal must be held to have the power to grant stay as incidental or ancillary to its appellate jurisdiction. This is particularly so when Section 220(6) deals expressly with a situation when an appeal is pending before the Appellate Assistant Commissioner but the Act is silent in that behalf when an appeal is pending before the Appellate Tribunal. It could well be said that when Section 254 confers appellate jurisdiction, it impliedly grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution and that the statutory power carries with it the duty in proper cases to make such orders for staying proceedings as will prevent the appeal if successful from being rendered nugatory.

9. A certain apprehension may legitimately arise in 8 WP.16894.2021

the minds of the authorities administering the Act that if the Appellate Tribunals proceed to stay recovery of taxes or penalties payable by or imposed on the assessees as a matter of course the revenue will be put to great loss because of the inordinate delay in the disposal of appeals by the Appellate Tribunals. It is needless to point out that the power of stay by the Tribunal is not likely to be exercised in a routine way or as a matter of course in view of the special nature of taxation and revenue laws. It wilt only be when a strong prima facie case is made out that the tribunal will consider whether to stay the recovery proceedings and on what conditions and the stay will be granted in most deserving and appropriate cases where the tribunal is satisfied that the entire purpose of the appeal will be frustrated or rendered nugatory by allowing the recovery proceedings to continue during the pendency of the appeal."

7.4 The Apex Court has further relied and clarified M.K.

Mohammed Kunhi (supra) in "Super Cassettes Industries

Limited Vs. Music Broadcast Private Limited reported in

[(2012) 5 SCC 488]", relevant extract of which is reproduced

below for ready reference and convenience:

"69. It is no doubt true, that tribunals discharging quasi-judicial functions and having the trappings of a court, are generally considered to be vested with incidental and ancillary powers to discharge their functions, but that cannot surely mean that in the absence of any provision to the contrary, such tribunal would have the power to grant at the interim stage the final relief which it could grant. As also indicated hereinbefore, such incidental powers could at best be said to exist in order to preserve the status quo, but not 9 WP.16894.2021

to alter the same, as will no doubt happen, if an interim compulsory licence is granted. If the legislature had intended that the Copyright Board should have powers to grant mandatory injunction at the interim stage, it would have vested the Board with such authority. The submission made that there is no bar to grant such interim relief in Section 31 has to be rejected since the presence of a power cannot be inferred from the absence thereof in the statute itself.

75. The considerations relevant for ascertaining whether there is an implied grant of such powers, as can be culled out from the various judgments relied upon by the learned counsel appearing in these matters, which have been taken note of by my learned Brother Kabir, J. appear to be:

(1) need to preserve status quo with respect to the subject-matter of the dispute in order to enable the party, which eventually succeeds in the litigation, to enjoy the fruits of the success; and (2) need to preserve the parties themselves, a consideration which weighed heavily with this Court in implying such powers in favour of the Magistrates while exercising the jurisdiction under Section 125 of the Code of Criminal Procedure."

8. In view of the aforesaid discussion, this Court is of the

considered view that it cannot be said that the State while

considering appeals against orders of cancellation of contract

u/R.15(3) of 2019 Sand Rules is bereft of the power of grant of

interim relief.

8.1 Admittedly, the impugned order herein is an order of 10 WP.16894.2021

cancellation of mining contract and therefore an appeal against

such an order squarely lies u/Rule 15(3) of 2019 Sand Rules.

9. Consequent upon the aforesaid discussion, this Court

declines interference on merits and disposes of this petition with

liberty to petitioner to avail the remedy of appeal u/R.15(3) of

2019 Sand Rules, which if availed within a period of 15 days from

today along with copy of this order shall be entertained and

decided by the State on merits without being dismissed on

limitation alone.

10. Needless to emphasize that if a prayer is made for grant of

interim relief by preferring an appropriate application the same

can be considered by the State.

11. This Court hastens to add that no comments on the merits of

the matter are made by this Court and the State Government is

free to pass orders on appeal and as well as on the interim relief

application, if filed, either way.

                                                  (Sheel Nagu)                        (Deepak Kumar Agarwal)
                                                     Judge                                    Judge
                                                  16.09.2021                                16.09.2021


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        Date: 2021.09.18 15:14:33 +05'30'