M/S GEM GRANITES v. STATE OF KERALA (WP(C).No. 27413 of 2005 (L))

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR. JUSTICE P.D.RAJAN** ## **MONDAY, THE 11TH DAY OF AUGUST 2014/20TH SRAVANA, 1936** ## **WP(C).No. 27413 of 2005 (L)** **----------------------------** **PETITIONER :** **M/S.GEM GRANITES, 78, CATHEDRAL ROAD, CHENNAI-600086 REPRESENTED BY ITS GENERAL MANAGER, R.VEDANTHAM.** **BY ADVS.SRI.JOSEPH KODIANTHARA** **SRI.MITHUN MARKOS** **RESPONDENTS :** - **----------------------** **1. STATE OF KERALA, REPRESENTED BY THE SECRETARY, MINING DEPARTMENT, TRIVANDRUM.** **2. DIRECTOR OF MINING & GEOLOGY, TRIVANDRUM.** **3. SENIOR GEOLOGIST, DEPARTMENT OF MINING & GEOLOGY MALAPPURAM DISTRICT OFFICE, MANJERI-676 121.** **4. STATE OF KERALA, REPRESENTED BY THE CHIEF SECRETARY, GOVERNMENT SECRETARIAT, TRIVANDRUM.** **BY GOVERNMENT PLEADER SRI. SOJAN THOMAS** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 11-08-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **BP** ## **WP(C).No. 27413 of 2005 (L)** ## **APPENDIX** ## **PETITIONER'S EXHIBITS :** - **P1: COPY OF PROCEEDINGS DT 10/6/1991 OF THE R2.** - **P2: COPY OF LEASE DEED DT 9/3/1992 EXECUTED BY THE PETITIONER.** - **P3: COPY OF LETTER DT 29/7/2005 ISSUED TO THE PETITIONER BY THE R3 ALONG WITH CALCULATION TABLE.** - **P4: COPY OF ORDER DT 9/7/2003 OF THE KERALA HIGH COURT IN WA NO. 303/2003.** - **P5: COPY OF ORDER DT 25/1/2005 OF THE KERALA HIGH COURT IN WPC NO.2710/2005** ## **RESPONDENT'S EXHIBITS :** **EXT.R1(a): COPY OF THE ORDER OF THE SUPREME COURT.** **EXT.R1(b): COPY OF THE JUDGMENT IN WA 148/03.** **//TRUE COPY//** **P.A. TO JUDGE** **BP** ## **P.D. RAJAN, J.** ------------------------------------------W.P (C) No.27413 of 2005 ---------------------------------------------Dated this the 11[th] day of August, 2014 ## **JUDGMENT** This writ petition is filed under Article 226 of the Constitution of India to quash Ext.P3 demand letter dated 29.7.2005 and to declare that the demand made by the 3[rd] respondent is illegal, arbitrary and violative of Article 14 of the Constitution of India. The petitioner is a partnership firm carrying on the business of quarrying and exporting granite. For the purpose of their business firm, the petitioner had purchased 1.2141 hectares of land in Survey No.1040 of Chokkad Village, Ernad Taluk, Malappuram District. The quarrying lease was granted by the 2[nd] respondent by virtue of proceedings on 10.6.1991 for a period of 12 years as per Kerala Minor Minerals Concessions Rules W.P.(C)No.27413/05 2 1967 (hereinafter referred to as the 'Rule' for short). But, the 3[rd] respondent claimed dead rent or royalty as per Section 29(c) of the Rule in respect of the minor minerals quarried and moved out of the quarry, which will be subjected to the revision on the basis of any amendment. Hence, the petitioner approached this Court with this petition. 2. In the counter affidavits filed by respondents 1 and 4 it is admitted that the quarrying licence was issued to the petitioner by the Director of Mining and Geology for a period of 12 years as stated in the petition. The terms and conditions of the quarrying lease reveals that the lessee is liable to pay the dead rent as per the revision from time to time. The rates of loyalty of Dimension Stone is revised to Rs..4000/- per cubic meter and Dead Rent Rs..60,000/- per hectare/Year vide GO(P) 63/97/ID W.P.(C)No.27413/05 3 dated to 10-4-1997 of the State Government. Since the Dead Rent to be realized is subject to revision from time to time by Government, the rate before 10-4-1997 is revised as Rs.60,000/- hectare/year as per the corresponding revisions in Schedule II of Kerala Minor Mineral Concession Rules, 1967. It is further stated in the counter affidavit that the State Government is empowered to fix and revise the Dead Rent as mandated in Section 15 (3) in Mines and Minerals (Development & Regulation) Act 1957 and the rules made thereunder. The extraction, regulation and transportation of minor mineral throughout the State is regulated by the Kerala Minor Mineral Concession Rules, 1967. Sub rule (2) of Rule 17 of the said Rules provides the power of the Government to enhance or reduce the rate at which, royalty shall be payable in respect of any mineral. In view of the directions issued W.P.(C)No.27413/05 4 by this Court and Apex Court the petitioner is liable to pay dead rent in the absence of any exemption. 3. The quarrying lease is granted in favour of the petitioner on 10.6.1991 as per Ext.P1 by the 2[nd] respondent to quarry black granite for a period of 12 years from the date of execution of the quarrying lease deed under the Kerala Minor Minerals Concession Rules, 1967. It was also directed to issue survey note by the Tahsildar concerned and the lease was granted according to six conditions insisted in Ext.P1. As per Ext.P1, Ext.P2 was executed by the petitioner and the 3[rd] respondent for and on behalf of the 1[st] respondent. Subsequently, the 3[rd] respondent issued Ext.P3 demanding dead rent as follows: “A quarrying lease was granted vide referred first in favour of you to extract Black Granite from an area of 1.2141 Hectares of land comprised in Sy. No.1040 part of Chokkad Village, Ernad Taluk (Now Nilambur Taluk) Malappuram District for a period of twelve years from the date of execution W.P.(C)No.27413/05 5 of quarrying lease. The lease was executed 9.3.1992 and got registered 4.12.1992 as 5322 of 1992 at Sub Registrar Office Wandoor. As per records of this office the quarry was not working from 22.4.1993. As per para 22 of the quarrying lease your have to pay Dead Rent from 22.4.1993. Dead rent from 22.4.1993 to 8.3.2004 is Rs.6,48,329/- (calculation table is enclosed) I request you to remit the amount at the treasury by using chalan enclosed and forward the original chalan receipt to this office within 59 day from the receipt of this letter, failing which penal interest 24% per annum will accrue.” The petitioner challenges the above order. The provision for payment of dead rent was discussed by the Division Bench of this Court in **George Mathew** v. **State of Kerala** ## [2006(2) KLT 899], in which, it is held as follows: “8. The above mentioned decisions rendered by this court would enable the Government to demand dead rent on minerals irrespective of its ownership. Ownership of the land or surface rights does not in any way suggest ownership of minerals lying underneath or sub surface rights. Owner of the land is bound to pay the dead rent. Land owner is never called upon to remit any amount simply because the land in his possession contained mineral deposit. Demand is made only when a person holds a quarrying lease as per the rules to W.P.(C)No.27413/05 6 extract the minor minerals which is vested in the State. 9. S.9A of the Mines and Minerals (Regulation and Development) Act, 1957 deals with dead rent to be paid by the lessee. S.15 empowers the Government to make rules in respect of minor minerals. S.15(3) is extracted below. (3) The holder of a mining lease or any other mineral concession granted under any rule made under sub-s.(1) shall pay royalty or dead rent, whichever is more in respect of minor minerals removed or consumed by him or by his agent, manager, employee, contractor or sublessee at the rate prescribed for the time being in the rules framed by the State Government in respect of minor minerals. R.29 (1) (d) fixes the liability for payment of dead rent on a lease holder which is extracted below for easy reference. “(d) The lessee shall pay the State Government for every year except the first year of lease such yearly dead rent within the limits specified in Schedule II, as may be fixed from time to time by the State Government. Where the lease permits the working of any mineral, the lessee shall be liable to pay dead rent or royalty in respect of that mineral, whichever be higher in amount but not both: provided that where the lease permits the working of more than one mineral in the same area, the lessee shall be laibel to pay dead rent or royalty in respect of each mineral subject to the restriction mentioned above in respect of any mineral. Provided further that where the quarrying of W.P.(C)No.27413/05 7 one mineral involves the quarrying of any other mineral or minerals and lease permits the working of such other mineral or minerals also the lessee shall be liable to pay dead rent for only one mineral the highest dead rent being payable for this purpose in lieu of the combined royalty, if the latter is less than the former. Petitioner, as we have already indicated, was served with demand notice under R.29(1)(d) of the Rules, since the petitioner has obtained a competent quarrying lease in respect of the land in survey numbers 122/1 and 122/2 of Vandanmedu village, Udumbanchola taluk and the owner of the surface of the land as per the revenue register is Sri. Thirumalai Varadarajan and M/s.Indus Granites had transferred the lease to the petitioner. Land owner was never called upon to the pay the amount simply because the land in his possession contained mineral deposit. Demand was made only when the petitioner had held the quarrying lease as per rules to extract the minor mineral which is vested in the State. We have already found that grounds raised by the petitioner against the demand for dead rent are not sustainable. We hold that the Government have got the power to demand “dead rent” as per R.29(1)(d) of the Rules for the period during which the mining lase is kept idle. In such circumstances, we are inclined to dismiss all the appeals and Writ Petitions. We find no reason to grant the reliefs prayed for in the appeals and Writ Petitions.” 8 W.P.(C)No.27413/05 Therefore, no grounds are highlighted by the petitioner before this Court for getting any exemption to the petitioner. In the circumstances, the writ petition lacks merit and liable to be dismissed. Hence, this writ petition is dismissed accordingly. **P.D. RAJAN, JUDGE.** acd