# M/S Balaji And Sons Construction Company & Anr v. State of U.P. & Ors. 866 INDIAN LAW REPORTS ALLAHABAD SERIES - **Citation:** (2016) 4 ILRA 865 - **Court:** High Court of Judicature at Allahabad - **Decided:** 2016-03-09 - **Bench:** Huluvadi G. Ramesh, Shamsher Bahadur Singh - **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-balaji-and-sons-construction-company-anr-v-state-of-u-p-ors-866-indian-law-43695 - **Pages:** 5 ## Headnote Mining royalty - Public Works contracts - Liability of contractor - Government Order dated 15.10.2015 - Requirement of Form MM-11 - Deduction of royalty with penalty - U.P. Minor Minerals (Concession) Rules, 1963, Rule 70 - Transport of minerals - Writ jurisdiction - Locus of contractor to challenge Government Order - Held, contractor purchasing minerals must ensure royalty paid by lease holder and possession of valid MM11 form - No illegality in Government Orders. (A) The petitioners, being registered A-grade contractors of the Public Works Department, are engaged in construction of roads and procure materials such as sand, moram and stone from suppliers, the price of which includes royalty and transportation charges. (Paras 3, 4, 5) (B) The petitioners are not mining lease holders and claim that under the statutory scheme, royalty is payable by the lease holder and not by the purchaser of minerals, placing reliance on earlier Division Bench judgment. (C) The Government Order dated 15.10.2015 directs authorities to ensure payment of royalty in respect of minor minerals used in Public Works Department projects and mandates production of valid Form MM-11 before release of payment to contractors. (D) Rule 70 of the U.P. Minor Minerals (Concession) Rules, 1963 regulates transportation of minor minerals and requires possession of a valid transit pass (Form MM-11) issued by the mining lease holder or authorized person. (E) Executive Engineers are justified in withholding payments and deducting royalty along with penalty where valid Form MM-11 is not produced, as such measures are in furtherance of statutory compliance and Government directions. Held: Paras (13-15) In view of the aforesaid, w do not find any illegality in the Government orders. The petitioners do not have any right to challenge the Government orders for such an act which cannot be said to be illegal. It is also the responsibility on the part of the contractors through out to ensure the execution of the Government order for the construction of the road to purchase the material like sand, stone etc through authorised mining lease holder/supplier having paid royalty. This petition is disposed of with a direction to the petitioners that hereafterwards to ensure that the royalty had been paid by the mining lease holder/supplier to serve copy of Form No.MM-11 at the time of receiving the raw materials i.e. stone and sand etc.They should also provide the copy of Form MM-11, and stored goods for the purpose of construction of the road, failing which they will have to pay the penalty. The petitioners have no locus to challenge the Government Orders. With the above direction, the writ petition is disposed of. Case Law discussed M/s Om Contractors v. State of U.P. & Others, 2008 (2) ALJ 438 (Paras 6) ## Text 4 All. M/S Balaji And Sons Construction Company & Anr. Vs State Of U.P. & Ors. 865 11. In these circumstances, in terms of the Government Order directing all the Principal Secretary/Chief Secretary, U.P. Government as well as Commissioner/District Magistrate in the State of U.P. to ensure the payment of royalty in respect of the minor mineral used in all the Public Works Department for compliance of the directions issued by the Chief Secretary, U.P. Government, Lucknow vide Government Order dated 15.10.2015. 12. There are directions given in the Government Order that all the Executive Engineers of the concerned Division, Public Works Department, Jhansi shall not make any payment to the contractor before checking the valid Form-MM-11. In absence of the same, directions were given to curtail the royalty along with a penalty of five times from the bills of the contractor. 13. Rule 70 of the U.P. Minor Minerals Rules, 1963 provides the holder of mining lease or permit or a person authorized by him in this behalf to issue a pass in Form MM-11 to every person carrying a consignment of mines and mineral by a vehicle or any other mode of transport. 14. In view of the aforesaid, we do not find any illegality in the Government Orders. The petitioners do not have any right to challenge the Government Orders for such an act which cannot be said to be illegal. It is also the responsibility on the part of the contractors throughout to ensure the execution of the Government Order for the construction of the road to purchase the material like sand, stone etc. through authorised mining lease holder/supplier having paid royalty. 15. This petition is disposed of with a direction to the petitioners that here-afterwards to ensure that the royalty had been paid by the mining lease holder/supplier to serve copy of Form No. MM-11 at the time of receiving the raw materials i.e. stone and sand etc. They should also provide the copy of Form MM-11 and stored goods for the purpose of construction of the road, failing which they will have to pay the penalty. 16. The petitioners have no locus to challenge the Government Orders. With the above direction, the writ petition is disposed of. --------- ORIGINAL JURISDICTION CIVIL SIDE DATED: ALLAHABAD 09.03.2016 BEFORE THE HON'BLE HULUVADI G. RAMESH, J. THE HON'BLE SHAMSHER BAHADUR SINGH, J. Writ C No.- 69385 Of 2015 M/S Balaji And Sons Construction Company & Anr. ...Petitioners Versus State of U.P. & Ors. ...Respondents 866 INDIAN LAW REPORTS ALLAHABAD SERIES Counsel for the Petitioners: Lal Chandra Mishra Counsel for the Respondents: C.S.C. Mining royalty - Public Works contracts - Liability of contractor - Government Order dated 15.10.2015 - Requirement of Form MM-11 - Deduction of royalty with penalty - U.P. Minor Minerals (Concession) Rules, 1963, Rule 70 - Transport of minerals - Writ jurisdiction - Locus of contractor to challenge Government Order - Held, contractor purchasing minerals must ensure royalty paid by lease holder and possession of valid MM11 form - No illegality in Government Orders. (A) The petitioners, being registered A-grade contractors of the Public Works Department, are engaged in construction of roads and procure materials such as sand, moram and stone from suppliers, the price of which includes royalty and transportation charges. (Paras 3, 4, 5) (B) The petitioners are not mining lease holders and claim that under the statutory scheme, royalty is payable by the lease holder and not by the purchaser of minerals, placing reliance on earlier Division Bench judgment. (C) The Government Order dated 15.10.2015 directs authorities to ensure payment of royalty in respect of minor minerals used in Public Works Department projects and mandates production of valid Form MM-11 before release of payment to contractors. (D) Rule 70 of the U.P. Minor Minerals (Concession) Rules, 1963 regulates transportation of minor minerals and requires possession of a valid transit pass (Form MM-11) issued by the mining lease holder or authorized person. (E) Executive Engineers are justified in withholding payments and deducting royalty along with penalty where valid Form MM-11 is not produced, as such measures are in furtherance of statutory compliance and Government directions. Held: Paras (13-15) In view of the aforesaid, w do not find any illegality in the Government orders. The petitioners do not have any right to challenge the Government orders for such an act which cannot be said to be illegal. It is also the responsibility on the part of the contractors through out to ensure the execution of the Government order for the construction of the road to purchase the material like sand, stone etc through authorised mining lease holder/supplier having paid royalty. This petition is disposed of with a direction to the petitioners that hereafterwards to ensure that the royalty had been paid by the mining lease holder/supplier to serve copy of Form No.MM-11 at the time of receiving the raw materials i.e. stone and sand etc.They should also provide the copy of Form MM-11, and stored goods for the purpose of construction of the road, failing which they will have to pay the penalty. The petitioners have no locus to challenge the Government Orders. With the above direction, the writ petition is disposed of. Case Law discussed M/s Om Contractors v. State of U.P. & Others, 2008 (2) ALJ 438 (Paras 6) (Delivered by Hon'ble Huluvadi G. Ramesh, J. & Hon'ble Shamsher Bahadur Singh, J.) 1. Heard learned counsel for the parties and perused the record. 4 All. M/S Balaji And Sons Construction Company & Anr. Vs State Of U.P. & Ors. 867 2. This writ petition has been filed by the petitioners with a prayer to issue a writ, order or direction in the nature of certiorari quashing the impugned order dated 15.10.2015 passed by the respondent No.1 (Annexure No.5 to this writ petition) as well as the consequential order dated 30.10.2015 passed by the respondent No.2 (Annexure No.7 to this writ petition) in so far as the petitioners are concerned. Further prayer is to issue a writ, order or direction in the nature of mandamus restraining the respondents from taking any coercive steps for recovery of amount in pursuance of the Government Order dated 15.10.2015. 3. Learned counsel for the petitioners has submitted that the petitioners-Company M/s Balaji and Sons Construction Company 565 Nandanpura Vikas Colony Jhansi is a partnership of registered A grade contractor and construction of Roads under the U.P. Public work Department in District Jhansi. The registration of the petitioners is renewed from time to time and presently is valid upto on 30.6.2016. 4. The contention of the petitioners is that the petitioners company is carrying out the construction of roads under the U.P.Public Works Department in District Jhansi for which the department used to issue tender notices inviting tenders from its registered contractors like the petitioners. He further submitted that for the purpose of construction of roads, the petitioners' company requires ordinary clay, sand, moram and stone grits. The supplier of sand (moram) and stone grits delivered the aforesaid material at working site of petitioners for which the petitioners paid the price of sand moram and stone grits to their suppliers and the said price includes the cost of material royalty payable on the said material as well as transportation charges upto the site of the petitioners. 5. Learned counsel for the petitioners has placed a reliance of the Division Bench of this Court rendered in the case of M/s. Om Contractors Vs. State of U.P. & Ors. reported in 2008 (2) ALJ 438 and has submitted that it is the lease holder who has to pay the royalty and not the petitioners. 6. Learned counsel for the petitioners has further submitted that the petitioners are not a lease holder of mines but they are only purchasing the mineral through Agent duly authorized by the State Government. He further stated that there is also no provision either in the Act or the Rules regarding payment of royalty by the purchaser of minerals from the lease holder of mines. It is for the lease holder to pay royalty to the Government and not the petitioners. 7. The Government Order was issued by the respondent No.1, dated 15.10.2015 directing all the Principal Secretary,U.P.Government as well as Commissioner/ District Magistrate to ensure the payment of royalty in respect of the mine minerals used in Public Work Department. It is stated by the learned counsel for the petitioners that it is the duty of the mining lease holder to make the payment of royalty in respect of mining lease and the petitioners cannot be held liable for payment of any royalty. 868 INDIAN LAW REPORTS ALLAHABAD SERIES 8. In reply to the contention made by the learned counsel for the petitioners, it is submitted by the learned counsel for the State that the impugned order dated 15.10.2015 passed by respondent No.1 as well as the consequential order dated 30.10.2015 passed by the respondent No.2 are wholly justified and there is no illegality in the Government Order. 9. Section 70 of the U.P. Minor Minerals (Concession) Rules, 1963 put restrictions on the transport of Minerals. For ready reference Section 70 of the above Act is quoted below:- " 70 Restrictions of transport of minerals (1) The holder of mining lease or permit or a person authorized by him in this behalf may issue a pass in Form 11 to every person carrying a consignment of minor mineral by a vehicle, animal or any other mode of transport. The State Government may, through the District Officer, make arrangements for the supply of printed MM-11 Form books on payment basis; 2. No person shall carry, within the State, a minor mineral by a vehicle or any other mode of transport, excepting railway, without carrying a pass in Form MM-11 issued by sub-rule (1); 3. Every person carrying any minor mineral shall, on demand by any officer authorized under Rule 66 or such officer as may be authorized by the State Government in this behalf, show the said pass to such officer and allow him to verify the correctness of the particulars of the pass with reference to quantity of the minor mineral; 4. The State Government may establish a check post for any area included in any mining lease or permit, and when a check post is so established public notice shall be given of this fact by publication in the Gazette and in such other manner as may be considered suitable by the State Government; 5. No person shall transport a minor mineral for which these rules apply from such area without first presenting the mineral at the check post established for that area for verification of the weight or measurement of the mineral ; 6. Any person found to have contravened any provision of this rule shall, on convictions, be punishable with imprisonment of either description for a term which may extend to six months or with fine which may extend to one thousand rupees or with both. 10. In these circumstances, in term of the Government Order directing all the Principal Secretary/Chief Secretary, U.P. Government as well as Commissioner/District Magistrate in the State of U.P. to ensure the payment of royalty in respect of the minor mineral used in all the Public Works Department for compliance of the directions issued by the Chief Secretary, U.P. Government, Lucknow, vide Government Order dated 15.10.2015.There are directions given in the Government Order that all the Executive Engineers of the concerned Division, Public Work 4 All. Deepak Kumar Gupta Vs Amrit Abhijat, District Magistrate, Allahabad 869 Department, Jhansi shall not make any payment to the contractor before checking the valid Form- MM-11. In absence of the same, directions were given to curtail the royalty along with a penalty of 5 times from the bills of the contractor, which is illegal. 11. Rule-70 of the U.P. Mines Mineral Rules, 1963 provides the holder of mining lease or permit or a person authorized by him in this behalf to issue a pass in Form MM-11 to every person carrying a consignment of mines and mineral by a vehicle or any other mode of transport.The State Government may, through the District Officer, make arrangements for the supply of printed MM11 Form books on payment basis. 12. In view of the aforesaid, w do not find any illegality in the Government orders. The petitioners do not have any right to challenge the Government orders for such an act which cannot be said to be illegal. It is also the responsibility on the part of the contractors through out to ensure the execution of the Government order for the construction of the road to purchase the material like sand, stone etc through authorised mining lease holder/supplier having paid royalty. 13. This petition is disposed of with a direction to the petitioners that here-afterwards to ensure that the royalty had been paid by the mining lease holder/supplier to serve copy of Form No.MM-11 at the time of receiving the raw materials i.e. stone and sand etc.They should also provide the copy of Form MM-11, and stored goods for the purpose of construction of the road, failing which they will have to pay the penalty. The petitioners have no locus to challenge the Government Orders. 14. With the above direction, the writ petition is disposed of. ---------- ORIGINAL JURISDICTION CRIMINAL SIDE DATED: ALLAHABAD 29.02.2016 BEFORE THE HON'BLE ARUN TANDON, J. THE HON'BLE SHASHI KANT, J. Contempt Application (Criminal) No.- 5 Of 2006 Deepak Kumar Gupta ...Applicant Versus Amrit Abhijat, District Magistrate, Allahabad ...Opposite Party Counsel for Applicant: Deepak Kumar Gupta, In Person Counsel for Opposite Party: