# M/s Dilip Singh Contractor, Mainpuri v. State of U.P. & Ors

- **Citation:** (2020) 12 ILRA 453
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2020-10-15
- **Case number:** Writ - C No. 14553 of 2020
- **Bench:** Munishwar Nath Bhandari, Piyush Agrawal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-dilip-singh-contractor-mainpuri-v-state-of-u-p-ors-45614
- **Pages:** 7

## Headnote

(A) Civil law- Mines & Minerals (Development
& Regulation) Act, 1957 - section 21(5) -
Uttar Pradesh Minor Minerals (Concession)
Rules, 1963 - Rules 57 & 58 - deduction, to
the extent of five times of the royalty amount
- It is taken to be price of the mineral used
without payment of royalty. (Para -16)

Challenged the Government Order and the order
of the Engineer-in-Chief (Development & Head of
Department),
Public
Works
Department
-
Petitioner is "A" class Contractor - executing work
of Public Works Department - using the minerals
for execution of contract work - deduction of
royalty six times to the amount of royalty pursuant
to the Government Order - direction given to
deduct the amount of royalty to the extent of five
times to the royalty amount in case it is found that
the mineral has been used without a valid transit
pass on Form MM-11 - deduction amount to be
from the bills of the Contractor. (Para - 2)

Held: - This Court may not cause interference
in the impugned circular and otherwise, the
petitioner is one who has come with premature
writ petition having not suffered any deduction,
till date. Thus, it seems to be a writ petition in
anticipation to evade the royalty and to
safeguard the consequences. (Para - 9)

Writ Petition dismissed. (E-7)

List of Cases cited: -

## Text

12 All. M/s Dilip Singh Contractor, Mainpuri Vs. State of U.P. & Ors.
453
Mithilesh Garg and other Vs. Union of
India and others (1992) 1 SCC 168.

9. We are not inclined to exercise our
discretionary jurisdiction where the claim
of the petitioner is essentially aimed at
eliminating healthy competition and for
perpetuating his monopoly in the area.

10. For all the reasons aforestated, the
writ petition is dismissed on the ground
that petitioner has no locus standi to
maintain the writ petition.
----------
(2020)12ILR A453
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 15.10.2020

BEFORE

THE HON'BLE MUNISHWAR NATH BHANDARI, J.
THE HON'BLE PIYUSH AGRAWAL, J.

Writ - C No. 14553 of 2020

M/s Dilip Singh Contractor, Mainpuri
 ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Siddharth Khare, Sri Ashok Khare

Counsel for the Respondents:
C.S.C.

(A) Civil law- Mines & Minerals (Development
& Regulation) Act, 1957 - section 21(5) -
Uttar Pradesh Minor Minerals (Concession)
Rules, 1963 - Rules 57 & 58 - deduction, to
the extent of five times of the royalty amount
- It is taken to be price of the mineral used
without payment of royalty. (Para -16)

Challenged the Government Order and the order
of the Engineer-in-Chief (Development & Head of
Department),
Public
Works
Department
-
Petitioner is "A" class Contractor - executing work
of Public Works Department - using the minerals
for execution of contract work - deduction of
royalty six times to the amount of royalty pursuant
to the Government Order - direction given to
deduct the amount of royalty to the extent of five
times to the royalty amount in case it is found that
the mineral has been used without a valid transit
pass on Form MM-11 - deduction amount to be
from the bills of the Contractor. (Para - 2)

Held: - This Court may not cause interference
in the impugned circular and otherwise, the
petitioner is one who has come with premature
writ petition having not suffered any deduction,
till date. Thus, it seems to be a writ petition in
anticipation to evade the royalty and to
safeguard the consequences. (Para - 9)

Writ Petition dismissed. (E-7)

List of Cases cited: -

1. Ayodhya Prasad Mishra Vs St. of U.P. & ors. ,
2016 (11) ADJ 607 (DB)

2. St. of Raj. & anr. Vs Deep Jyoti Company &
anr. , (2016) 6 SCC 120

3. Abhimanyu Singh & 12 ors. Vs St. of U.P. & 9
ors. , Writ C No. 1510 of 2016

(Delivered by Hon'ble Munishwar Nath
Bhandari, J. & Hon'ble Piyush Agrawal, J.)

1. We have heard Shri Ashok Khare,
learned Senior Counsel assisted by Shri
Siddharth Khare, counsel appearing for the
petitioner;
and
Shri
Pradeep
Kumar
Tripathi,
learned
Standing
Counsel
appearing for the State - respondents.

2. By this writ petition, a challenge has
been made to the Government Order dated
15.10.2015 and the order of the Engineer-inChief (Development & Head of Department),
Public Works Department dated 26.08.2019.

3. It is stated that the petitioner is "A"
class Contractor, executing work of Public
454 INDIAN LAW REPORTS ALLAHABAD SERIES
Works Department, apart from others. He
is using the minerals for execution of
contract work. It is after compliance of the
provisions of Uttar Pradesh Minor Minerals
(Concession)
Rules,
1963
(hereinafter
referred to as, 'the Rules of 1963'). He may
be subjected to deduction of royalty six
times to the amount of royalty pursuant to
the Government Order of 15.10.2015. The
direction has been given therein to deduct
the amount of royalty to the extent of five
times to the royalty amount in case it is
found that the mineral has been used
without a valid transit pass on Form MM11. The deduction amount to be from the
bills of the Contractor.

4. The counsel for the petitioner states
that in case a Contractor fails to produce
required documents to prove payment of
royalty, it cannot suffer with payment of
royalty apart from an amount five times to
the royalty in absence of any provision
under the Rules. Thus, the order dated
15.10.2015 and the consequential order of
Engineer-in-Chief are illegal, thus deserve
to be set aside.

5. The writ petition has been
contested by the side opposite. It is
submitted that the issue raised in this writ
petition is not open for debate having been
decided by this Court in the case of
Ayodhya Prasad Mishra Vs. State of U.P.
& Others [reported in 2016 (11) ADJ 607
(DB)]. Therein, the same circular was
challenged. The writ petition, therein, was
dismissed,
though
with
certain
clarifications. A reference of the judgement
of the Apex Court in the case of State of
Rajasthan & Another Vs. Deep Jyoti
Company & Another [(2016) 6 SCC 120]
has also been given to show that similar
circulars were not interfered by the Apex
Court.

6. Clarifying the fact, it is submitted
that anyone using the mineral is under an
obligation to see that it is royalty paid. The
obligation for payment of royalty is on the
lease-holder and whenever mineral is
transported, it should be under the valid
transit permit on the required form and
thereupon only, the mineral can be used by
the Contractor. In case of default in making
the payment of royalty and thereby, valid
transit pass could not obtain by the
transporter yet mineral is used by the
Contractor, he is made liable to payment of
royalty to the extent of five times by way of
deduction in the bills. The five times to the
royalty is nothing but the value of the
mineral used without the payment of
royalty amount. The deduction, to the
extent of five times, is only to recover the
value of mineral used without the payment
of royalty amount, as it is the property of
the Government, but can be used, subject to
payment of royalty.

7. The basis of five times royalty is in
reference to section 21(5) of the Mines &
Minerals (Development & Regulation) Act,
1957, has been given and for ready
reference, the said provision is quoted
hereunder:-

"Section 21. Penalties:-

(5) Whenever any person raises,
without any lawful authority, any mineral
from any land, the State Government may
recover from such person the mineral so
raised, or, where such mineral has already
been disposed of, the price thereof, and
may also recover from such person, rent,
royalty or tax, as the case may be, for the
period during which the land was occupied
by such person without any lawful
authority.] 6[(6) Notwithstanding anything
contained in the Code of Criminal
12 All. M/s Dilip Singh Contractor, Mainpuri Vs. State of U.P. & Ors.
455
Procedure, 1973 (2 of 1974), an offence
under sub-section (1) shall be cognizable."

8. The Government has taken five
times to the royalty to be the price of the
mineral.

9. In view of the above, this Court
may not cause interference in the impugned
circular and otherwise, the petitioner is one
who has come with premature writ petition
having not suffered any deduction, till date.
Thus, it seems to be a writ petition in
anticipation to evade the royalty and to
safeguard the consequences. The prayer is,
accordingly, to dismiss it with appropriate
clarifications.

10. We have considered the rival
submissions of the parties and perused the
record.

11. A challenge to Government Order
dated 15.10.2015 has been made and it is
more specifically to no. 3 of the said order.
It is quoted hereunder for a ready
reference:-

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tk;A

12. The para aforesaid is applicable
only when a Contractor fails to show use of
mineral after its transportation through
transit pass under Form MM-11, and not
otherwise. The para, quoted above, has no
application in those cases where required
documents to prove payment of royalty and
valid transportation thereupon has been
shown.

13. The question for our consideration
is as to whether such a condition can be
imposed by the Public Works Department
when, according to the petitioner, not
provided under the Rules, and for that,
Rules 57 & 58 of the Rules of 1963 have
been referred. The aforesaid issue needs to
be decided in reference to the earlier
judgement of this Court as well as the Apex
Court. The Government Order dated
15.10.2015 was subject matter of the writ
petition in the case of Ayodhya Prasad
Mishra (supra). Paragraphs 26 to 29 make
a discussion on the issue and for ready
reference, they are quoted hereunder:-

"26. The purpose of issuance of
impugned Government Order is just and
valid and has been issued in public interest.
The Government Order has been issued to
ensure that royalty is paid and that the
royalty
paid
material
is
used
for
construction work in the government
department. Such intention is laudable. The
requirement of Form MM-11/Form-C is a
proof that royalty has been paid and the
material is purchased from an authorized
source either from a holder of a mining
lease or from a licence storage holder. The
Government
Order
imposing
such
conditions is required only for the purpose
of undertaking of that work, which is
awarded by the Government and its
department,
for
which
purpose,
the
conditions imposed in the Government
Order is fair and reasonable and is not
arbitrary. The purpose is to ensure that no
mineral is excavated/transported and used
without payment of royalty. The purpose of
456 INDIAN LAW REPORTS ALLAHABAD SERIES
providing Form MM-11/Form-C is to
ensure that the material and minerals etc.
used by the contractors in the construction
works, are royalty paid. It only indicates
that such material, which is purchased by
the contractors, is legally mined on which
royalty has been paid. The object behind
the issuance of the Government Order is to
see that illegally mined material is not
purchased by the contractors and used in
the construction works, which is awarded
by the Government and its department.
This, in our view, is a laudable object and
such a stipulation contained in the
Government Order is to check the illegal
mining. Consequently, the Government
Order dated 15th of October 2015
directing further that if mineral is not
purchased from a valid source and without
production of From MM-11, the cost of
material to the extent of five times royalty
would become payable by the contractors.
This imposition is in terms of Section 21 (5)
of the Act of 1957. The said provision
clearly indicates that where any person
raise without any lawful authority, any
mineral from any land, then such person
would be liable to pay not only the royalty
but also the price thereof. The word 'raise'
means 'move' and therefore, if any person
moves any mineral without a valid Form
MM-11 or Form-C in which case the
person would not only be liable to pay
royalty but would also be liable to pay the
price of the material. In the instant case, by
the Government Order, the price of the
material is equivalent to five times the
royalty, which is not arbitrary.

27. The submission of the learned
counsel for the petitioners that they are
purchasing raw-material from the stone
crushers, who are purchasing the same
from the holders of a mining lease/mining
permit through From MM-11 and that
these stone crushers cannot further issue
any Form MM-11 to the petitioners is
misconceived inasmuch as the stone
crushers are liable to take a licence for
storage of minerals under the Rules of
2002. Once the stone crushers obtain a
licence for storage of minerals, they would
be obliged to issue Form-C under Rule 5 of
the Rules of 2002 after obtaining necessary
book of transit pass from the appropriate
authority under Rule 4.

28. We find that a similar circular
was issued by the State of Rajsthan for
deduction of royalty from the bills of
contractors, who were using minerals without
submitting proof of the fact that royalty was
paid on such minerals. The said circular was
held to be a valid circular issued in public
interest by the Supreme Court in State of
Rajsthan and another Vs. Deep Jyoti
Company and another reported in (2016) 6
SCC 120. In paragraph 11, the Supreme
Court held as under:-

"11. The minor minerals removed
from the quarries, admittedly are the
property of the Government and the same
cannot be removed and used without
payment of royalty. It is, therefore, the duty
of the Government to ensure that only
royalty paid minerals are used in the work
and the purpose of issuing such Circular
was to avoid pilferage/leakage of revenue
because royalty can be very conveniently
evaded by the contractors either by not
purchasing the material from the mining
leaseholders
or
obtaining
it
from
unauthorised excavators. In case, if the
contractor purchases the material from
unauthorised person who has not paid
royalty, there would be loss to the public
exchequer and the circular was issued to
check evasion or loss to the public
exchequer. Such condition cannot be said
to be unreasonable and arbitrary and
therefore, no prejudice could be said to
have been caused to the contractors."
12 All. M/s Dilip Singh Contractor, Mainpuri Vs. State of U.P. & Ors.
457

29. In the light of the aforesaid,
reliance placed by the petitioners of the
decision of the Division Bench of this Court in
Abhimanyu Singh and 12 others (supra) is
misconceived. The contention that the Division
Bench held that the payment of royalty to the
extent of five times is illegal, is misconceived.
The Division Bench had only noted the
submission of the petitioner and held that there
was no illegality in the Government Order and
that it would be the responsibility on the part of
the contractors to ensure that minerals are
purchased through the authorized mining lease
holder/suppliers on which royalty has been
paid. The Division Bench also held that the
petitioner of that writ petition should ensure
that the royalty has been paid and copy of the
Form MM-11 should be provided, failing
which, they would have to pay the penalty. The
Government Order dated 15th October 2015
only provides for obtaining Form MM-11. We
are of the opinion that if a contractor purchases
royalty paid minor minerals from a licence
holder for storage of minerals against Form-C,
the same should be accepted by the authority as
an evidence showing the payment of royalty."

14. In the paras quoted above, the
Division Bench did not accept the same
issue, as raised herein. It in reference to the
same Government Order and the grounds.
A reference of the judgement of the
Division Bench of this Court in the case of
Abhimanyu Singh & 12 Others Vs. State
of U.P. & 9 Others (Writ C No. 1510 of
2016, decided on 14.03.2016) has also been
given. The circular under challenge was
taken to be in public interest and basically,
to ensure that royalty paid mineral is used
by the Contractor.

15. In view of the above, we are not
convinced with the argument in reference
to the Rules of 1963. The condition
imposed by the respondents is in public
interest, thus we do not find any illegality
therein. The similar condition regarding
recovery of the amount from the bills
imposed by the State of Rajasthan was held
to be valid by the Apex Court in the case of
Deep Jyoti Company & Another (supra).
Therein, challenge to the order for
deduction of amount was accepted by the
High Court, but on an appeal, the
judgement of the High Court was reversed
by the Apex Court. The relevant paras 8 to
12 are quoted hereunder for a ready
reference:-

"8. The circular dated 06.10.2008
came to be issued by the State Government
which provides the procedure for payment
of royalty by the contractors who have been
given the works contract by department of
government. According to the appellants,
the said circular was issued in order to
ensure the payment of royalty and that the
royalty paid mineral is used for construction
work. As noticed earlier, clause (2) of the
circular provides that before starting the
work, the contractor was to obtain short term
permit and rawanna book and contractor was
also required to submit an affidavit to that
effect that he had obtained the short term
permit for mining the required mineral and
rawanna book. Clause (3) of the said circular
provides that if the contractor fails to produce
copy of the short term permit, the works
department will withhold the payment of
bills. Clause (3) of the said circular further
provided that in case, the government
department which allots the work to the
contractor makes the payment of contract
bills without obtaining the copy of short
term permit and rawanna book, then the
works department shall be liable to deposit
the cost of the mineral. Thus in terms of
clauses (2) and (3), it is incumbent upon the
works contractor to obtain short term
permit before starting the work.
458 INDIAN LAW REPORTS ALLAHABAD SERIES

9. Some of the fundamental
aspects, while dealing with the validity of
the aforesaid circular dated 06.10.2008,
need to be kept in mind. The said circular
which mandates the contractors to obtain
short- term permit fess is meant for those
contractors who are registered as ''A' class
contractors with various departments of
Government of Rajasthan. Such registration
qualifies them to bid for and obtain
Government
contracts,
which
are
construction contracts. The circular dated
06.10.2008 imposing the conditions, thus,
is required only for the purpose of
undertaking that work which is awarded by
the Government/Government Departments
etc.
Otherwise,
there
is
no
such
requirement or obligation on the part of
contractors while doing any other private
work. It is trite that for awarding
Government work, it can impose and
stipulate conditions, eligibility criteria as
well as terms and conditions on which the
contract would be executed. If any person
wants to bid for or undertake the work,
such persons has to fulfill those conditions.
The only limitation is that conditions so
imposed should meet the test of fairness
and reasonableness and such conditions
should not be arbitrary or contrary to any
law. The question, therefore, is as to
whether imposition of the condition to
obtain short-term permit as provided in
circular dated 06.10.2008 is reasonable and
not arbitrary.

10. In so far as the contention that
in terms of the circular there is compulsion
to obtain short term permit, in our view, as
such there is no such compulsion. It is only
to ensure that no mineral is excavated and
used without payment of royalty. The
purpose of short-term permit is to ensure
that the material and minerals etc. used by
the contractor in the construction work are
royalty paid. It only means that such
material is purchased by the contractor
from the market which is legally mined and
on which due royalty is paid. In other
words, the objective is to see that illegally
mined mineral/material is not purchased by
the contractor and used in the construction
work which is awarded by the Government.
Not only it is a laudable object, such a
stipulation is inserted in order to check
illegal mining which unfortunately has
assumed serious proportions in the recent
past. Otherwise, the respondents herein do
not stand to loose anything inasmuch as the
moment evidence is produced to the effect
that royalty was paid on the minerals by the
leaseholder
which was
used
in
the
construction, the construction contractor
like the respondents would be refunded the
royalty so paid by it in terms of circular
dated 06.10.2008. In terms of clauses (5)
and (7) of the said circular, the contractor
has to pay royalty at the rates specified in
the circular depending upon the nature of
work and on production of bills showing
payment of royalty, the contractor can get
refund of royalty. There is, thus, no
financial burden on the respondents of any
nature. The purpose which is sought to be
achieved, viz., non-royalty paid mineral
(which would naturally be illegally mined
mineral) is not used in the execution of the
Government work and it cannot be treated
as unreasonable or arbitrary. In our view,
there is a complete justification for
providing such a provision.

11. The minor minerals removed
from the quarries, admittedly are the
property of the government and the same
cannot be removed and used without
payment of royalty. It is therefore the duty
of the government to ensure that only
royalty paid minerals are used in the work
and the purpose of issuing such circular
was to avoid pilferage/leakage of revenue
because royalty can be very conveniently
12 All. Ram Bhajan Singh Vs. State of U.P. & Ors.
459
evaded by the contractors either by not
purchasing the material from the mining
leaseholders
or
obtaining
it
from
unauthorized excavators. In case, if the
contractor purchases the material from
unauthorized person who has not paid
royalty, there would be loss to the public
exchequer and the circular was issued to
check evasion or loss to the public
exchequer. Such condition cannot be said
to be unreasonable and arbitrary and
therefore no prejudice could be said to have
been caused to the contractors.

12.
Learned
counsel
for
the
respondents contended that the royalty can be
levied in respect of the mineral removed or
consumed from lease areas at the rates
prescribed
in
Mines
and
Mineral
(Development and Regulation) Act 1957 and
any such levy can only be by a legislation and
not by any circular and the impugned circular
dated 06.10.2008 which is in the nature of levy
of royalty was rightly quashed by the High
Court and the impugned orders warrant no
interference. The clauses stipulating deduction
of royalty payable to the mineral department at
the rates stipulated in the circular cannot be
said to be a levy. As noticed earlier, the
circular stipulates that the royalty is deducted
at the rates prescribed in the circular, on
production of bills by the contractor to the
mining department showing that they had
purchased the royalty paid mineral from the
leaseholder and thus it only provides the
procedure for collection of royalty. The
circular only provides the procedure for
payment of royalty for the minerals used by
the contractors who have been given the works
contract by the government department. The
High Court did not keep in view the object of
the circular and erred in quashing the
impugned circular. "

16. Learned counsel for the side
opposite has, otherwise, made it clear as to
why deduction, to the extent of five times
of the royalty amount, has been made. It is
taken to be price of the mineral used
without payment of royalty. The circular
has been issued for justifiable purposes and
otherwise, petitioner could not show
reasons to justify delay in challenge to the
order issued in the year 2015, as for that,
petition has been filed in the year 2020. It
more so, when the petitioner is an "A" class
Contractor undertaking the work of the
Department regularly.

17. For all the reasons given above,
the writ petition fails and is dismissed.
----------
(2020)12ILR A459
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 14.10.2020

BEFORE

THE HON'BLE ABHINAVA UPADHYA, J.
THE HON'BLE PRAKASH PADIA, J.

Writ - C No. 15691 of 2020

Ram Bhajan Singh ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Prabhat Kumar Singh, Sri Anil Kumar
Tiwari

Counsel for the Respondents:
C.S.C., Sri Brijesh Kumar Mishra

(A) Civil law - Uttar Pradesh Parks, Playgrounds and Open Spaces (Preservation and
Regulation) Act, 1975 - Section 2, Section 3,
Sections 5 - Variation or revocation of list,
Section 6 - Prohibition of the use of parks,
play grounds and open spaces in certain
cases, Section 7 - Maintenance of parks,
playground and open spaces and Section 8 -
Prohibition of construction of buildings, etc -
The Uttar Pradesh Parks, Playgrounds and