IN THE GAUHATI HIGH COURT

Transcription

1 IN THE GAUHATI HIGH COURT (High Court of Assam, Nagaland, Mizoram and Arunachal Pradesh) Writ Appeal No.312 of The State of Assam, Represented by the Principal Chief Conservator of Forest, Assam Rehabari, Guwahati The Divisional Forest Officer, Kamrup. 3. Range Officer, Rani Range, Kamrup, Assam.... Appellants - Versus 1. M/s G.H. Vijapura & Co. (A Registered Partnership Firm having its Registered office at Hotel Bombay International 704, 7 th Floor, 233/234. Jurisdiction of Maulana Azad Road & Bellasis Road Patel Apartment, Mumbai ) and Site Office At LGBI Airport, Guwahati-15. District- Kamrup, Assam. 2. Zahidabhai Hussainbhai Vijapura (Partner), Son of Hussainbhai Manjibhai Vijapura, Resident of Orchid Complex, Mumbai Central, Mumbai Respondents 3. Airports Authority of India, Represented by Senior Manager Engg (c) II, Runaway Extension Project, Rajiv Gandhi Bhawan, Safdarjung Airport, New Delhi.... Proforma Respondents Advocates for the appellants: Mr. D. Saikia, Sr. Addl. A.G. Advocates for the respondents: Mr. N. Dutta, Sr. Adv Mr. R. Dubey, SC, AAI Page 1 of 15

2 Writ Appeal SL.No The State of Assam, Represented by the Principal Chief Conservator of Forest, Assam Rehabari, Guwahati The Divisional Forest Officer, Dibrugarh. 3. The Forest Range Officer, Khowang Range, Moran.... Appellants - Versus 1. M/s Bharatia Associates Private Limited, A Company incorporated under the Companies Act, 1956, having its registered Office at 302, Akashdeep Building, Lakhtokia Guwahati-1 and its camp office at Bogibeel, Dibrugarh, (Represented in the instant case by its attorney Sri Ghanshyam Mishra). 2. Union of India Represented by Ministry of Railway, Government of India, New Delhi. 3. Chief Engineer/Construction/III, N.f. Railway, Maligaon, Guwahati, Kamrup, Assam.... Respondents... Proforma Respondents Advocates for the appellants: Mr. D. Saikia, Sr. Addl. A.G Advocates for the respondents : None had appeared. Writ Appeal SL.No The State of Assam, Represented by the Principal Chief Conservator of Forest, Assam Rehabari, Guwahati The Chief Conservator of Forest (T), Assam, Rehabari, Guwahati-08. Page 2 of 15

3 3. The Divisional Forest Officer, Dhemaji Division, Dhemaji. - Versus... Appellants 1. M/s Brahmaputra Consortium Limited, 2 nd Floor, Hemran Bora Market Complex, Ulubari, G.S Road, Guwahati Represented by Pradip Jalan, Manager. 2. Sri Pradip Jalan, Manager, M/s Brahmaputra Consortium Limited, Son of Sri Pusraj Jallan Resident of ABC, Tarun Nagar, Guwahati-5, District-Kamrup, Assam. 3. Union of India Represented by General Manager, N.F. Railway, Maligaon 4. The Chief Engineer (Con), N.F. Railway, Maligaon, Guwahati 5. The Deputy Chief Engineer (Con) N.F. Railway, Silapathar 6. The Executive Engineer, N.F. Railway, Silapathar 7. The Assistant Executive Engineer, N.F Railway, Silapathar... Respondents Advocates for the appellants: Mr. D. Saikia, Sr. Addl. A.G. Advocates for the respondents : Mr. N. Dutta, Sr. Adv Writ Appeal SL.No The State of Assam, Represented by the Principal Chief Conservator of Forest, Assam Rehabari, Guwahati The Divisional Forest Officer, Kamrup.... Appellants Page 3 of 15

4 - Versus 1. M/s DRA Brahmaputra Consortium Ltd, Site Office, LGBI Airport, Guwahati-15 Registered office at Agarwal Complex Near Lion s Hall, Disa (Gujrat) Branch Office at LGBI Airport, Gwahati-15, District- Kamrup, Assam. 2. Airports Authority of India, Represented by Senior Manager Engg (Civil) Runway Extension Project.... Respondents Advocates for the appellants: Mr. D. Saikia, Sr. Addl. A.G. Advocates for the respondents : Mr. N. Dutta, Sr. Adv Writ Appeal SL.No The State of Assam, Represented by the Principal Chief Conservator of Forest, Assam Rehabari, Guwahati The Chief Conservator of Forest (T), Assam, Rehabari, Guwahati The Conservator of Forest, Central Assam Circle, Guwahati. 4. The Divisional Forest Officer, Kamrup East Division, Basistha 5. The Divisional Forest Officer, Kamrup East Division, Bamunigaon 6. The Divisional Forest Officer, N.K. Division, Rangia... Appellants - Versus 1. M/s Brahmaputra Consortium Limited, 2 nd Floor, Hemran Bora Market Complex, Ulubari, G.S Road, Guwahati Page 4 of 15

5 2. M/s Dinesh Chandra R. Agarwal Infracon Pvt Ltd Agarwal Complex, Near Lions Hall Disa , Gujrat. 3. M/s Banowarilal Agarwalla Pvt Ltd AFMC Fortuna, 3 rd Floor, Unit A-7, 234/3A, AJC Bora Road Kolkata Respondents 4. Union of India Represented by General Manager (EW-I) National Highway Authority of India G-5 & ^, Sector 10, Dwarka, New Delhi National Highway Authority of India, Ministry of Road, Transport and Highway Government of India, New Delhi.... Proforma Respondents Advocates for the appellants: Mr. D. Saikia, Sr. Addl. A.G. Advocates for the respondents :Mr. N. Dutta, Sr. Adv BEFORE HON BLE THE CHIEF JUSTICE MR. AJIT SINGH HON BLE MR. JUSTICE ACHINTYA MALLA BUJOR BARUA Date of hearing : Date of Judgment : JUDGMENT & ORDER (CAV) (A.M. Bujor Barua, J) Heard Mr. D. Saikia, learned Senior Additional Advocate General, Assam appearing on behalf of the appellants. Also heard Mr. N. Dutta, learned senior counsel appearing on behalf of the respondents/writ petitioners in Writ Appeal No.312/2014, Writ Appeal SL No [I.A(Civil) No.1512/2017], Writ Appeal SL No [I.A.(Civil) No.1514/2017] and Writ Appeal SL No [I.A.(Civil) No.1515/2017] and Mr. R. Dubey, learned counsel for the respondent Page 5 of 15

6 Airport Authority of India appearing in Writ Appeal No.312/2014. None had appeared for the respondents/writ petitioners in Writ Appeal SL No [I.A.(Civil) No.1511/2017]. 2. In all the writ appeals, a common question for determination before this Court is as to whether the respective contractors, for filling up the land sites for the Airport Authority of India, National Highway Authority of India as well as the Northeast Frontier Railways are required to pay royalty in respect of the earth extracted by them from private Patta lands of the different land owners and used for the purpose of filling up the land. As the common determination would meet the requirement of all the writ appeals, it is deemed appropriate that the facts pertaining to one of the writ appeal be taken into consideration. Accordingly, this adjudication is made on the basis of the facts involved in Writ Appeal No.312/ The respondent No.1 contractor was issued a work order dated by the respondent No.3 Airport Authority of India (AAI) for filling up of the low lying areas and development of internal drainage system in the newly acquired land for the extension of the runway at the LGBI, Airport, Guwahati. As per the said work order, the respondent No.1 was required to enter a contract agreement with the respondent No.3. Accordingly, the respondent No.1 entered the agreement dated Thereafter, the respondent No.1 had entered a deed of agreement dated with one Bhothoram Boro, wherein it was provided that the said Bhothoram Boro is the absolute owner of the plot of land mentioned in the schedule to the agreement and that he agrees to hand over the land to the respondent No.1 for cutting and extracting earth from the said land. The agreement also provided that the said Bhothoram Boro will pay upto Rs.40,000/- for the required permission for earth cutting and the respondent No.1, shall pay any further amount that may be required to be paid beyond Rs.40,000/-. One Pradip Boro being the son of Bhothoram Boro had also sworn an affidavit stating that his father Bhothoram Boro wants to handover the plot of land measuring 7 bigha 1 katha 10 lechas of Dag No.599 of Patta No.71 of village Moirapur in the Kamrup district to the respondent No.1 for earth cutting for the purpose of filling of the low lying areas and development of internal drainage system of the newly acquired land for extension of the runway in the Page 6 of 15

7 LGBI Airport and that the said Pradip Boro also has another plot of land measuring 7bigha 3 katha 1 lecha of Dag No.602 of Patta No.38 and he also intends to hand over his plot of land to the respondent No.1 for earth cutting. 4. The Divisional Forest Officer, Kamrup East Division had forwarded a joint verification report of the Forest and Revenue Officials for ascertaining the feasibility of the land for extraction of the minor forest produce and requested the District Magistrate Kamrup to consider the issuance of necessary permission for extractions of earth from the land. Accordingly the Additional District Magistrate Kamrup, Guwahati by order dated , had granted the permission for earth cutting from the 7 bighas 3 kathas and 1 lecha land of Dag No.602 of Patta No.38 of village Moirapur. 5. In the meantime, by a letter dated , the Range Officer of Rani Range, had informed the Senior Manager of the respondent No.3, AAI that the respondent No.1, who is engaging in earth filling work at the LGBI Airport, had obtained the earth from illegal sources without any authority and, accordingly, requested the AAI not to pay the bills of the said firm. The letter of of the Range Officer was forwarded by the Senior Manager, Engineering (Civil) of AAI to the respondent No.1, by the letter dated By another letter dated , the Range Forest Officer, Rani had informed the Senior Manager, Engineering (Civil) of AAI that as per the enquiry held on , the respondent No.1 had been collecting hill earth/river silt, whose total value was found to be Rs.75,10,000/-. Consequently the Senior Manager of AAI by referring to the letter dated , of the Range Officer, Rani had asked the respondent No.1 to submit all documents pertaining to payment of royalty to the Government or else it was stated that the amount of Rs.75,10,000/-, would be withheld from the next running bill. 6. The respondent No.1 accordingly submitted reply dated , stating that the royalty can be levied only when the earth is extracted from a forest area and that the respondent No.1 had been paying royalty to the Government from time to time as regards the Brahmaputra Fine Sand/Silt and as such the demand of the Range Officer for the amount of Rs.75,10,000/- is not maintainable. The respondent No.1 also refers to the agreement with the private land holder and the affidavit allowing them to extract the earth. Page 7 of 15

8 7. The aforesaid letter dated of the Senior Manager, Engineering (Civil) AAI, informing the respondent No.1 that an amount of Rs.75,10,000/- will be withheld from the next running bill was assailed in the writ petition being WP(C)No.1832/2009, with a further prayer for a direction to the State respondents therein not to impose/levy royalty on the respondent No.1 for extracting earth from the private patta land which are situated in non-forest areas, and, also to refund the amount of Rs.28,37,101/-, which had been withheld by the respondent No The respondent No.1 assailed the levy of royalty on the earth on the ground that for extraction of earth from private patta land payment of royalty is not required under law. Further, Section 3(e) of the Mines and Minerals Development Act, 1957, in short Act of 1957, and also the Notification dated clearly stipulates that only the items mentioned therein are minor minerals and earth is not included as a minor mineral. Respondent No.1 further alluded that Section 3(4) of the Assam Forest Regulation, 1891 defines forest produce to include certain elements and according to the said definition, earth when collected from non-forest areas would not be a forest produce and as such the provisions of Assam Forest Regulation, 1891 are not applicable to earth, which are extracted from patta land and/or non-forest areas. Accordingly, it was the case of the respondent No.1 that the amount of Rs.75,10,000/-, which was levied upon him as royalty for the earth extracted and used for filling up of the contract work is unauthorized under the law. The respondent No.1, further raised a contention that the rate at which the royalty is to be levied having not been provided under the law, the levy of Rs.75,10,000/-, is unauthorized and without any basis. 9. In the affidavit-in-opposition, the Divisional Forest Officer, Kamrup East Division took a stand that earth being a minor mineral, as per the Assam Minor Mineral Concession Rules, 1994, (for short, 1994 Rules) the Principal Chief Conservator of Forest is the competent authority for control of the minor minerals listed in Schedule Y of the Rules and under the said Rules, the respondent No.1 is liable to pay royalty on each and every truck load of earth, which must be supported by a challan issued by the Forest Department after realization of royalty. It was also contended that under the 1994 Rules, the Page 8 of 15

9 Forest Department is the authority to control and collect the royalty and that the levy of the royalty is provided by the 1994 Rules and not under the Assam Forest Regulation, The Forest Department also filed an interlocutory application for modification of interim order dated The respondent AAI had filed a miscellaneous application for modification of the interim order dated passed by the learned Single Judge in the writ petition and the same was registered as Miscellaneous Case No.3318/2008. The said application was considered to be the affidavit-in-opposition of the respondent AAI, wherein, a stand had been taken that although it is the case of the respondent No.1 that the issue raised in the writ petition is covered by the decision of this Court rendered in Brihattar Dispur Matti Truck Malik Santha -Vs- the State of Meghalaya reported in 2003 (2) GLT 446, but even going by the ratio laid down in the said decision, then also earth is a minor mineral and as royalty is payable on earth as a minor mineral, the respondent No.1 cannot escape its liability to pay the royalty under the Mines and Minerals (Regulation and Development) Act It had also been stated by the respondent AAI that for execution of the contract the respondent No.1 could not satisfy that the earth that had been used, were supplied from private patta land. It was also stated that 5.25 lakhs Cu.M of earth had already been extracted and used and the respondent AAI had allotted a sum of Rs Crores to the respondent No.1 which included the royalty for almost 6 lakhs cum of earth. It was further stated that as per the notification dated of the appellants, the rates of royalty for earth had been raised from Rs.8/- per cum to Rs.15/- per cum and as per the said rates, the respondent No.1 is liable to pay a sum of Rs.80,00,000/- approximately to the appellant for the quantity of earth already extracted. It was also the stand of the respondent AAI that being the department which had awarded the contract to the respondent No.1, some obligation is also cast upon it to ensure that the contractor had made due payment of the royalty to the appellant and that as the contract was in the final stage, it would be difficult to realize the amount from the contractor if the required amount is not deducted from the bills. Page 9 of 15

10 12. In the aforesaid premises, the learned Single Judge in the judgment and order dated arrived at a conclusion that the 1994 Rules makes the mining lessees responsible for payment of the royalty for extraction of the minor minerals, including earth, and as such, under the rules the authorities cannot levy the royalty on the contractors. The learned Judge further concluded that under the terms of the contract, the contractor is required to pay royalty directly to the revenue authorities or the Government coffers, which was further clarified by the AAI in the pre-bid meeting by providing that the principal does not owe the responsibility to deposit the royalty to the Government and it is the duty of the contractor to do so and as such, the demand for royalty by the principal employer, who is neither the State Government nor the Central Government, cannot be sustained. Accordingly, by referring to the decision of this Court in State of Assam Vs- Muslim Ali reported in 2013 (2) GLR 505, which had declared that appropriation of money from the contractual dues is impermissible, unless supported by statutory provisions or by express provisions incorporated in the contract, the deduction from the contractual dues by the AAI on account of royalty cannot be justified in the absence of any such provision in the contract agreement. The learned Single Judge also took note of the fact the earth was included as entry 24 to the first schedule to the Assam Mineral Concession Rules, 2013 in short Rules 2013 and that although the rates for royalty had been prescribed for the other articles in the two schedules, no such rate was specified for ordinary earth under entry-24 and, accordingly, by following the judgment of the Hon ble Supreme Court in Consumer Online Foundation Vs- Union of India reported in (2011) 5 SCC 360, wherein, it is provided that a taxing statute in addition to the subject of compulsory levy must also prescribe the rate at which the levy is to be charged and unless all three components are specified the levy will be hit by Article 265 of the Constitution, arrived at a conclusion that the Government having not prescribed the rate, it must logically follow that the State has not authorized collection of royalty from ordinary earth, despite incorporation of entry-24 to the first schedule of the 2013 Rules. The learned Single Judge was also of the view that the question whether royalty is a tax had been referred by the Hon ble Supreme Court to a larger bench in view of the conflicting views expressed earlier in the India Cement s and Kesoram Industries cases. Page 10 of 15

11 13. Accordingly, the learned Single Judge arrived at the finding that as the demand for the royalty cannot be traced to a statutory enactment and as the contract condition too does not enable the principal employer to demand royalty from the contractor, the decision of the principal employer to deduct the royalty from the contractor s bill was found to be without any legal basis. 14. Mr. D. Saikia, learned Senior Additional Advocate General, Assam appearing on behalf of the appellants, by referring to Clause-5.1 of the special conditions of the contract, contends that even as per the terms of the contract itself, the contractors are required to pay the royalty. Again by referring to Clause-2 of the agreement between the contractors and the land owners, which provides that the contractors shall pay any further amount beyond the amount of `40,000/-, to be paid by the land owners, contends that the respondent No.1 was aware of its requirement to pay the royalty. 15. By referring to Rule-48 of the 1994 Rules, which provides that royalty is not required to be paid for such extractions not done for the purpose of sale, but for the bona-fide personal requirement of the land owner contends that in the instant case as the extracted earth was used for the purpose of sale for fulfilling the requirement of the contract, no exemption from payment of royalty is available under Rule Again by referring to Rule-46 of the 1994 Rules, which provides for payment of royalty or penalty for any illegal removal of minor mineral without valid lease/permit, contends that the requirement to pay the amount of `75,00,000/- in terms of the letters dated and are in the nature of imposition of royalty and penalty under Rule Further, by referring to Rules-31 and 32 of the 1994 Rules, which provides for a statutory requirement for obtaining a mining lease, which can be granted only on pre-payment of the royalty, the learned Senior Additional Advocate General contends that the requirement of payment of royalty is an inherent provision of the 1994 Rules. 18. It was also contended that the decision of this Court in Brihattar Dispur Matti Truck Malik Santha (Supra) was made upon a consideration whether under the Assam Forest Regulation, 1891, royalty can be imposed on earth Page 11 of 15

12 extracted from non-forest areas and therefore, the said decision is not applicable in the p resent case where the issue is as to whether royalty is required to be paid for extracting earth from non-forest areas under the 1994 Rules. The learned Senior Additional Advocate General also relies upon the decision of this Court in Rohit Newar and others versus- State of Assam and others, reported in 2004 (2) GLT 272 to contend that royalty can also be levied from mineral extracted from non-forest areas and also the decision of the Hon ble Supreme Court in Som Datt Builders Limited versus- Union of India and others, reported in (2010) 1 SCC 311 to contend that ordinary earth used for land filing has been declared to be a minor mineral by the Central Government and that the facts and circumstances of the present appeal is same as that of the facts and circumstances in the matter before the Hon ble Supreme Court in Somdat Builders Limited (Supra) and as such, the imposition of the royalty on the earth extracted from private land is justified. The further contention is that by the notification dated of the Power (Electric) Mines and Mineral Department of the Government of Assam and the notification dated of the Environment and Forest Department, the rate of royalty for earth had been prescribed at `15.10/ CU.M. 19. Per-contra, Mr. N. Dutta, learned senior counsel for the respondent No.1 company submits that it is not the case of the respondent No.1 company that the contractor is not liable to pay any royalty on the earth extracted from the patta land for the purpose of filing up of the land sites. The learned senior counsel on the other hand contends that the respondent No.1 is mainly aggrieved by the manner, in which the amount of `75,00,000/- had been deducted by the respondent No.3 upon being asked by the Range Officer of Rani Forest Range to do the same. It is the contention of the learned senior counsel that the appropriate authority under the 1994 Rules for levying such royalty would be the competent authority prescribed by the rules and under Rule 2(o), competent authority means, the Director of Geology and Mining, Assam, or the Principal Chief Conservator of Forest, or any other authority that may be prescribed. Accordingly, it is contended that in such view of the matter, the proposed deduction as ordered to be made by the letters dated and are without any authority of law. Learned senior counsel by referring to Rule-16(7) of the 1994 Rules, which provides that in the event the contractor Page 12 of 15

13 makes any default in the payment of the royalty, the competent authority shall give notice to such contractor, requiring him to pay the royalty within 30 days from the date of receipt of the notice, contends that, even otherwise, if the appellant authorities intends to make the respondent No.1 to pay the royalty of the extracted earth, at least a notice is contemplated under the Rules. Accordingly, the deduction ordered by the letters dated and are in violation of Rule-16(7) of the 1994 Rules. It is further contended that even otherwise, compliance of the principles of natural justice also requires that the respondent No.1 company be issued a notice indicating the amount of royalty that has been assessed by the authorities, by stating the basis thereof and the respondent No.1 be given an opportunity to respond to the same. 20. In view of the aforesaid submission of the learned senior counsel for the respondent No.1 company, as well as the respondent No.3 being the contracting authority, the competent authority in the State respondent would issue a notice to the respondent No.1 company making a demand of the royalty to be paid for the extracted earth by stating details thereof. The respondent No.1 company on the other hand, if so advised, would file a response to the same if the demand or any part thereof is to be objected, again by stating the reasons for such objection and upon such objection being filed, or not filed, as the case may be, the competent authority of the appellants would pass the appropriate order requiring the respondent No.1 company to pay the required amount of royalty. It has been agreed upon that upon such procedure being followed, the requirement of Rule 16(7) of the 1994 Rules and as well as the requirement of the principles of natural justice would be duly complied with and the respondent No.1 company would also accordingly pay the required amount of royalty. 21. In view of the provision of Clause-5.1 of the agreement dated between the respondent No.3 and the respondent No.1 as well as in view of the provision of Rule-48 of the 1994 Rules, as well as Rule-46 of the said Rules and also Rules 31 and 32 of the aforesaid Rules, this Court is of the view that the conclusion of the learned Single Judge to the effect that no royalty is required to be paid for extracting earth from private Patta land as well as from non-forest areas, is hereby declared to be unsustainable and it is held that under the Page 13 of 15

14 relevant provisions of the 1994 Rules, more particularly, Rules-48, 46 and 31, earth being a minor mineral is subjected to payment of royalty on it being extracted even from private Patta land and other lands located in non-forest areas. It is also held that by appropriate notifications, the rate of royalty for earth has been prescribed. 22. Further, in view of the conclusion that it is the competent authority under the 1994 Rules, which alone can levy the royalty on minor minerals, the letters dated and of the Range Officer, Rani requiring the respondent No.3 to deduct an amount of `75,000/- from the running bills of the respondent No.1, is held to be unsustainable. Consequently, the deduction of the amount of `28,37,101/- by the respondent No.3 from the running bills of the respondent No.1 is also held to be unsustainable. 23. Accordingly, it is provided that the competent authority in the appellant State Government would issue a notice within a period of 07(seven) days to the respondent companies/contractors engaged in extracting earth from private Patta land and other non-forest land for the purpose of utilizing the same for filling land sites, by making a demand for the payment of royalty for the extracted earth by stating the basis of such demand and upon such notice being issued, the respective respondent contractors would submit their response within a period of 15(fifteen) days thereafter by indicating their objection to the demand, if any, and thereafter upon considering the objection, the competent authority would pass appropriate order requiring the respondent contractors to pay the royalty as may be assessed. The payment of the royalty shall be made within a period of one month from the date of the order of the competent authority assessing and requiring the respondent contractors to pay the royalty. 24. Further, it is provided that the amount of `28,37,101/-, which was deducted by the respondent No.3 from the running bills of the respondent No.1 in Writ Appeal No.312/2014, shall be adjusted against any such payment that the respondent No.1 would be required to pay the appellant State Government by way of royalty against the earth extracted by them for carrying out the contract of land filling. In respect of Writ Appeal SL.No , it is stated by the learned counsel for the contractor that an amount of rupees 1.8 crores being the bid guarantee, has been withheld. Accordingly, as agreed to by the parties, it is Page 14 of 15

15 provided that the contracting department shall refund the said amount of rupees 1.8 crores to the contractor, provided the same has not been withheld for any purpose, other than for the purpose of payment of royalty for the extracted earth. In terms of the above, all the writ petitions stand disposed of. JUDGE CHIEF JUSTICE Anamika/Alam Page 15 of 15