M/S Harris & Company represented by its Proprietor, Mr. N.J. Harris v The Cochin Port Trust and others

## **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.** 2 W.P.(C) No.260 of 2021 - **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** 3 W.P.(C) No.260 of 2021 * **ADDL. 8 UNION OF INDIA REPRESENTED BY ITS SECRETARY MINISTRY OF MINES AND MINERALS DEPARTMENT OF MINES NEW DELHI** **ADDL.R8 IS IMPLEADED SUO MOTU AS PR ORDER DATED 15.02.2021 IN W.P.(C) NO.260 OF 2021.** **BY ADVS. SRI.M.GOPIKRISHNAN NAMBIAR SRI.K.JOHN MATHAI SRI.JOSON MANAVALAN SRI.KURYAN THOMAS SRI.PAULOSE C. ABRAHAM SRI.RAJA KANNAN** **SRI.RENJITH THAMPAN, ADDL.AG. SRI.S. KANNAN, SPL GP. SMT.KRISHNA, CGC** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 03-03-2021, THE COURT ON 17-03-2021 DELIVERED THE FOLLOWING:** 4 W.P.(C) No.260 of 2021 ## **C.R.** ## **P.B.SURESH KUMAR, J.** ## **-------------------------------------------** ## **W.P.(C) No.260 of 2021** ## **-----------------------------------------------** ## **Dated this the 17[th] day of March, 2021.** ## **J U D G M E N T** 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 W.P.(C) No.260 of 2021 5 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 6 W.P.(C) No.260 of 2021 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 W.P.(C) No.260 of 2021 7 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 8 W.P.(C) No.260 of 2021 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 9 W.P.(C) No.260 of 2021 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 10 W.P.(C) No.260 of 2021 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 11 W.P.(C) No.260 of 2021 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 12 W.P.(C) No.260 of 2021 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 13 W.P.(C) No.260 of 2021 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 14 W.P.(C) No.260 of 2021 ## 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 15 W.P.(C) No.260 of 2021 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 16 W.P.(C) No.260 of 2021 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[an][ 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 17 W.P.(C) No.260 of 2021 ## **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.** 18 W.P.(C) No.260 of 2021 **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.**