Top Constructions (T. Oommen Panicker) & Addl. Petitioner Oommen Thomas Panicker v. The Government of Kerala & Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE MOHAMMED NIAS C.P.** **MONDAY, THE 20[TH] DAY OF MARCH 2023 / 29TH PHALGUNA, 1944** ## **WP(C) NO. 27608 OF 2013** ## **PETITIONER:** 1 T.OOMMEN PANICKER (*DIED) TOP CONSTRUCTIONS, TOP'S MANOR, PANAVELI P.O., KOTTARAKKARA, KOLLAM DISTRICT. OOMMEN THOMAS PANICKER TOPS MANOR, VETTIKAVALA, PANAVELI 691 544 (ADDL. PETITIONR IS IMPLEADED AS ORDERED BY THIS COURT ON 1.2.2023 IN IA NO.1 OF 2023 IN WP(C)27608/13) BY ADV SRI.S.ABDUL RAZZAK - *ADDL.P2. OOMMEN THOMAS PANICKER ## **RESPONDENTS:** 1 THE GOVERNMENT OF KERALA REPRESENTED BY ITS SECRETARY, INDUSTRIES (A) DEPARTMENT, GOVT.SECRETARIAT,THIRUVANANTHAPURAM. 2 THE GEOLOGIST MINING AND GEOLOGY DEPARTMENT, REGIONAL OFFICE,KANNUR - 670 002. 3 THE DIRECTOR OF MINING AND GEOLOGY OFFICE OF THE DIRECTOR OF MINING AND GEOLOGY,THIRUVANANTHAPURAM. BY SRI.ARAVIND V.MATHEW, GOVERNMENT PLEADER **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 13.02.2023, THE COURT ON 20.03.2023 DELIVERED THE FOLLOWING:** WP(C) No.27608 of 2013 2 ## **MOHAMMED NIAS. C.P.,J** **==> picture [97 x 5] intentionally omitted <==** ## **WP(C) No.27608 of 2013** **- - - - - - - - - - - - - - - - - -** Dated this the 20[th] day of March, 2023 ## **JUDGMENT** Petitioner was the Managing Partner of Top Constructions, a firm engaged for the construction of Azheekal Cargo Harbour, a public works project of the Harbour Engineering Department. For the said construction, during the period 1995-2000, rubble required for the construction was quarried from the petitioner's land comprised in Survey No.129/1 of Shivapuram Village in Thalassery Taluk and from the land comprised in Resurvey No.170/1A Ramanthali Village, Thaliparamba Taluk, Kannur District. In response to an application dated 31.05.1995, the Geologist, Kannur, issued permit under the Kerala Minor Mineral Concession Rules (KMMC Rules) to transport rubble from the quarry to Azheekal Cargo Harbour work site. Royalty was demanded and the petitioner conceded to all such demands to avoid delay in the execution of the work. It is stated that during the period from 11.10.1995 to 10.02.1999 quarrying permits were issued, collecting a total of WP(C) No.27608 of 2013 3 Rs.1,40,000/- towards royalty. Aggrieved by the collection of royalty for the rubble quarried as above, he preferred an appeal before the Director of Mining and Geology, who by order dated 6.7.1995 ordered for a grant of quarrying lease on payment of royalty and subject to the conditions stipulated, and thus, a mining lease was executed in the prescribed form on 16.8.1995 which was also registered. 2. The Geologist, without hearing the petitioner issued orders on 28.01.2000 stating that the petitioner is liable for royalty for the rubble extracted from the Shivapuram quarry as the contractor employed by the Government and imposed a liability of Rs.16,35,656/- towards cost, royalty, and penalty denying the exemption under Rule 57 of the KMMC Rules. Aggrieved by the same, the petitioner preferred an appeal before the Director of Mining and Geology regarding the rubble quarried from the petitioner's land in Ramanthali Village as also the Geologist issued an order dated 27.8.2005 demanding Rs.4,15,412/- towards royalty and dead rent for the rubble quarried. This was also challenged in a separate appeal before the Government, and by order dated 16.5.2006, the Government rejected the appeal and confirmed the order passed by the Geologist. Thereafter revenue recovery WP(C) No.27608 of 2013 4 proceeding were initiated against the petitioner, and the same was challenged in WP(C)No.37300 of 2010, contending that the petitioner is entitled to the royalty exemption as provided under Rule 57 of the KMMC Rules for the rubble quarried from his own property. The petitioner had directed to submit a representation for exemption, and this Court directed the same to be considered. Considering the said representation Ext.P9 was passed, rejecting the claim of exemption made by the petitioner and also finding that the petitioner had quarried and removed granite in excess of the permit granted to him as per the lease deed. Accordingly an amount of Rs.16,35,656/- being the price, royalty and fine was levied. It was the basis of the orders seems to be that though the land was owned by the petitioner, the Government was the owner of the minerals, and therefore the claim for exemption made by the petitioner was rejected. Challenging Ext.P9 and also for a declaration that no royalty is payable by the petitioner as he is the owner of the land with whom vested right for minor mineral available on the surface of sub-soil and a further declaration that he is eligible for exemption under Section 57 of the KMMC Rules, this writ petitioner is filed. 3. After the filing of the writ petition, the Managing Partner expired, and his legal heir is on record as the additional petitioner. WP(C) No.27608 of 2013 5 4. Government has filed a counter affidavit stating that though the petitioner was granted a lease, valid from 16.8.1995 to 15.8.2000, on an inspection, it was found that without remitting royalty, an excess quantity of 22648 MT of Granite building stone was extracted and removed. Therefore it was decided to levy an amount of Rs.16,35,656/- towards royalty, price and fine for the unauthorized excess quantity of mineral extracted from the land of the petitioner. It is also the argument that the application for a quarrying lease was granted under Rule 18 of the KMMC Rules, 1967, he had an obligation to pay royalty since royalty is payable to the Government as per Rule 29(1)(c) of the KMMC Rules, 1967, in respect of the minor mineral quarried and transported. Since a lease deed was executed the petitioner was bound by the conditions therein; he cannot claim exemption from payment of royalty. After getting the quarrying permit and execution of the lease deed, the petitioner cannot claim exemption, is the further contention. Ext.P9 was passed after considering all the contentions of the petitioner, and it calls for no interference. It is also alleged by the Government that the petitioner has charged the price for the material from the department and that disclosed his business interest. WP(C) No.27608 of 2013 6 5. The learned counsel for the petitioner cited the following judgments in support of his contentions: **Thressiamma Jacob and others v. Geologist, Department of Mining and Geology and others** [(2013) 9 SCC 725] and **Dalmia Cement (Bharat) Ltd. v. State of Tamil Nadu** [2014 (1) LT 552 (SC)]. 6. The learned Government Pleader has cited the following judgments:- **Joby.P.D. v. The District Collector, Palakkad and others** [2017 (1) KLT 183], **Sirajuddin v. District Collector** [2017 (1) KLT 756] and **Chandramohan v. State of Kerala** [2018 (4) KLT 627]. 6. Heard Sri.S.A.Razzak, the learned counsel for the petitioner and Sri.Aravind V. Mathew, the learned Government Pleader. 7. The learned counsel for the petitioner reiterated the contention that the petitioner is entitled to get an exemption from payment of royalty under Rule 57 of the KMMC Rules, for the rubble quarried from his private property for the construction of the Azheekal Cargo Harbour. Rule 57 (2) (a) of the KMMC Rules is extracted hereunder : WP(C) No.27608 of 2013 7 ## “2. **Quarrying for public purposes** : (a)'Quarrying of minor mineral from Government owned lands including Porambokes, by Panchayats and Municipalities, for bona fide public purposes, as long as the work is done under direct supervision shall be exempt from the obligation of obtaining a quarrying permit or quarrying lease. But they shall pay royalty for all minor minerals extracted by them at the rates prescribed in Schedule I except minerals falling under item 2 of that schedule. The royalty shall be paid to such remittance head as the Government may by special order prescribe in this regard and shall be paid before the 10[th] of the succeeding month to which the royalty relates. ## xxxxxx” 8. A reading of the above rule clearly shows that it pertains to the quarrying of minor minerals from Government owned lands, including Purambokes, by Panchayats and Municipalities, for bona fide public purposes. In the instant case, the work was not carried out by any Panchayat or Municipality, and the quarrying was not done from the Government owned land or a Puramboke. On a plain reading of the above rule, in no uncertain terms it excludes the applicability of exemption in the instant case. The finding in that regard in Ext.P9 is only to be upheld and I do so. 9. The second contention of the learned counsel for the petitioner is that the ownership of the minerals vested with him and not with the State Government. The judgment of this Court reported in [2002 (2) KLT 162] was reversed by the Supreme Court in the judgment reported in [(2013) 9 SCC 725]. The Full Bench of this WP(C) No.27608 of 2013 8 Court held that the minerals belong to the Government and, therefore, royalty has to be paid to the Government for quarrying lease. The Supreme Court, in appeal, reversed the judgment of this Court and held that the State recognized the legal right of the land holder to the sub-soil metals and minerals, whatever names such right is called - propriety or otherwise and pertaining to the lands held over a Ryotwari Patta or in Jenmam lands in Malabar. The specific argument of the State that in view of the scheme of the Mines and Minerals (Development and Regulation) Act, 1957, which prohibits, under Section 4, the carrying on of any mining activity in this country except in accordance with the permit , licence or mining lease as the case may be, granted under the Act, the owners cannot claim any propriety right in the sub-soil, was rejected. The said Act, according to the Supreme Court does not in any way purport to declare the propriety rights of the State in the minerals, nor does it contain any provision divesting any owner of a mine of his propriety rights. Thus, the Apex Court held that there was nothing in the law that declares that all minor worth/sub-soil rights vest in the State, on the contrary, the ownership of sub soil / mineral wealth should normally follow ownership of the land, unless the owner of the land is deprived the same by some valid process. In the instant case also no such deprivation is effected by any valid law and there is no WP(C) No.27608 of 2013 9 contention by the Government in that regard. However, the Supreme Court cautioned that they were not making any declaration regarding their liability to pay royalty to the State as that issue stands referred to a larger Bench. 10. The learned Government Pleader is right in submission that the judgment of the Supreme Court in **Thressiamma Jacob** (supra) did not hold that even royalty is not payable by the land owners. In the instant case by the orders impugned, State has attempted to collect amount towards royalty, price, and fine. Straight away, it has to be noticed that there was no question of collecting any price from the land owner in view of the authoritative pronouncement in **Thressiamma Jacob** (supra). That apart, in the instance case, the land owners/contractor had used the rubble quarried from his own land for the construction, and the Government had paid the price for it. Thus it is too late in the day to claim the same amount back from the land owner. The finding in the impugned order that makes the petitioner liable to pay the price of the minerals needs to be interfered and accordingly, that portion of the order is quashed. Regarding the payment of royalty as held by the Supreme Court, the said issue is referred and is being considered by a larger Bench. WP(C) No.27608 of 2013 10 11. The judgments cited on behalf of the learned Government Pleader essentially dealt with Kerala Minor Mineral Concession Rules, 2015, which does not apply to the case on hand. In the decision in **Joby P.D.** (supra), the learned single Judge, after noticing the judgment in **Thressiamma Jacob** (supra) held that the land owner is obliged under Chapter III of the KMMC Rules to grant a quarrying permit. However, the said case did not consider a case of petitioners excavating any mineral from their own land. It is also to be noticed that the rules considered in the decision in **Joby P.D.** (supra) were the Kerala Minor Mineral Concession Rules, 2015; the decision as such may not apply to the case on hand. At the most, the State will only be entitled to claim royalty for the excess quantity of granite building stone extracted and removed, not any other charges. It is also declared that in the facts of the case, Government will not be entitled to levy any fine from the petitioner. In the light of the above findings I quash Ext.P9 in so far as it directs collection of the price of the mineral and fine for the excess quantity of mineral extracted. Regarding royalty, the Government can raise the demand against the petitioner after giving him an opportunity of hearing and pass orders assessing the amount, but the same shall not be recovered till the decision in the referred matter on the question of WP(C) No.27608 of 2013 11 royalty is pronounced by the Supreme Court. The petitioner however will be free to pay the royalty amount under protest and provisionally, subject to the final outcome of the decision in the question of royalty, to ward off the liability to pay interest. The writ petition is partly allowed as above. **Sd/-MOHAMMED NIAS C.P., JUDGE** dlk/9.3.2023 WP(C) No.27608 of 2013 12 ## **APPENDIX OF WP(C) 27608/2013** ## **PETITIONER'S EXHIBITS** EXT.P-1: PHOTOCOPY OF BASIC TAX RECEIPT DATED 20.4.05 EXT.P-2: PHOTOCOPY OF R3'S ORDER NO.166/9596/5543/M4/95 DATED 6.7.1995 EXT.P-3: PHOTOCOPY OF PETITIONERS REPLY DATED 20.2.99 EXT.P-4: PHOTOCOPY OF PETITIONERS REPLY DATED 1.12.1999 EXT.P-5: PHOTOCOPY OF R2'S ORDER NO.50/99/2000/DOC/M214/99 DATED 28.1.2000 EXT.P-6: PHOTOCOPY OF THE INTERIM ORDER DATED 2.3.2000 IN O.P 5921/2000 EXT.P-7: PHOTOCOPY OF JUDGEMENT DATED 3.10.2005 IN O.P NO.5921 OF 2000 (E) EXT.P-8: PHOTOCOPY OF PETITIONERS REPRESENTATION TO R1 DATED 4.4.2013 EXT.P-9: PHOTOCOPY OF G.O(RT) NO.883/13/ID DT.6.7.2013 ## **RESPONDENTS EXHIBITS & ANNEXURES** EXT.R1A: PHOTOCOPY OF THE SHOW CAUSE NOTICE DATED 19.11.1999 ANENXURE A1: DEATH CERTIFICATE