Andhra Pradesh High Court – Amravati
M/S. Anjani Stone Crusher vs The State Of Andhra Pradesh And Others on 29 July, 2026
IN THE HIGH COURT OF ANDHRA PRADESH Bench
APHC010026122021 Sr.Nos:-
AT AMARAVATI 123 - 133
[3581]
W.P.No.1839 of 2021 along with
W.A.Nos.164, 171 & 238 of 2021; W.A.Nos.1058,
1061, 1062, 1063, 1064, 1065 & 1066 of 2022
(1) W.P.No.1839 of 2021:
M/s. Anjani Stone Crusher ... Petitioner
Vs.
The State of Andhra Pradesh and others ... Respondents
(2) W.A.No.164 of 2021:
The State of Andhra Pradesh and others ... Appellants
Vs.
M/s. JMB Rocks ... Respondent
(3) W.A.No.171 of 2021:
The State of Andhra Pradesh and others ... Appellants
Vs.
M/s. Sri Durga Bhavani Granites ... Respondent
(4) W.A.No.238 of 2021:
The State of Andhra Pradesh and others ... Appellants
Vs.
M/s. Salasr Granites ... Respondent
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W.P.No.1839 of 2021 & batch
(5) W.A.No.1058 of 2022:
The State of Andhra Pradesh and others ... Appellants
Vs.
M/s. Soma Patel ASI JV ... Respondent
(6) W.A.Nos.1061 & (8) 1063 of 2022:
The State of Andhra Pradesh and others ... Appellants
Vs.
M/s. GSR Stone Crushers ... Respondent
(7) W.A.Nos.1062 & (10) 1065 of 2022:
The State of Andhra Pradesh and others ... Appellants
Vs.
Mr. P. Venkateswara Rao ... Respondent
(9) W.A.Nos.1064 & (11) 1066 of 2022:
The State of Andhra Pradesh and others ... Appellants
Vs.
M/s. VVR Crushers and Constructions ... Respondent
**********
Reserved for orders on : 10.07.2026
Pronounced on : 29.07.2026
Whether only operative part : Full
of the judgment is pronounced
or whether full judgment is
pronounced
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W.P.No.1839 of 2021 & batch
CORAM : THE CHIEF JUSTICE LISA GILL
SRI JUSTICE RAVI CHEEMALAPATI
Present:
Advocates for Appellants : Mr. D. Srinivas, Advocate General, A.P.
GP for Mines and Geology
Advocates for Respondents : Mr. Hari Sreedhar for sole respondent in
W.A.Nos.1058, 1061, 1062, 1063, 1064,
1065 & 1066 of 2022; and
petitioner in W.P.No.1839 of 2021
Mr. K. S. Naveen for sole respondent in
W.A.Nos.164, 171 & 238 of 2021
Mr. P. Veera Reddy, Sr. Counsel, for
Intervener in W.A.No.1063 of 2022
LISA GILL, CJ.
Above said Writ Petition and all Writ Appeals were taken up together for
hearing and adjudication, at request and with consent of learned counsel for
parties because all matters primarily revolve around interpretation of Rule
26(3)(ii) and Rule 34(1) of the Andhra Pradesh Minor Mineral Concession
Rules, 1966 (for short „APMMC Rules‟).
2. W.P.No.1839 of 2021 has been filed for setting aside
amendments made to APMMC Rules, particularly Rule 26, by
G.O.Ms.No.35, dated 01.07.2020 on the ground of being contrary to
Section 21(2) and Section 22 of the Mines and Minerals (Development and
Regulation) Act, 1957, (for short „MMDR Act‟).
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W.P.No.1839 of 2021 & batch
3. W.A.Nos.164, 171 & 238 of 2021 arise out of common order
dated 06.10.2020, passed in W.P.Nos.8356, 8361 & 8366 of 2020, whereas
W.A.Nos.1058, 1061, 1062, 1063, 1064, 1065 & 1066 of 2022 arise out of
common order dated 30.09.2022, passed in W.P.Nos.8390 of 2018; 12334,
27815, 27952, 27903, 28372 & 12950 of 2021.
4. The questions which arise for consideration before this Court in
W.P.No.1839 of 2021 and as would be impacting the decision in all the other
writ appeals are:
(i) Whether punitive action under Rules 26 and 34 of
APMMC Rules, 1966, for illegal mining, transportation and
storage of minor minerals can be taken by authorized officer,
being an executive authority under the APMMC Rules, 1966, or
whether such action can be taken solely by a Court of
competent jurisdiction under Sections 21, 22 and 23A of MMDR
Act?
(ii) Whether amendments to Rule 26 and Rule 34 of
APMMC Rules, 1966, through G.O.Ms.No.35, dated
01.07.2020, are ultra vires the parent Act/provisions, hence,
liable to be set aside?
5. Brief facts necessary for adjudication of this matter are that
W.A.Nos.164, 171 and 238 of 2021 arise from W.P.No.8356 of 2020 (M/s.
JMB Rocks Vs. The State of Andhra Pradesh & others), W.P.No.8361 of 2020
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W.P.No.1839 of 2021 & batch
(M/s. Sri Durga Bhavani Granites Vs. The State of Andhra Pradesh & others)
and W.P.No.8366 of 2020 (M/s. Salasr Granites Vs. The State of Andhra
Pradesh & others) respectively. Writ petitioners therein, all challenged show
cause notices of even date i.e. 15.04.2020, whereby action was sought to be
taken against them for realization of normal seigniorage fee, market value and
penalty, the amounts of which were detailed in said notices in terms of Rule
26(3)(ii) of APMMC Rules for violations as committed by them. Issue raised in
these writ petitions was that, as per Rule 26(3) of APMMC Rules as amended
in 2016, unaccounted consumption or possession of minerals without proof of
payment of revenue was made a penal offense, thus, this sort of levy/ penalty
cannot be imposed by an officer of the department but only by a Court of
competent jurisdiction after proper trial. It was further urged that show cause
notice issued on the basis of estimation found on electricity consumption
charges was an unscientific method of assessing alleged quality of minor
minerals for which fee was allegedly not deposited. Vires of the Rules was not
under challenge as such, while ground raised was that such action is without
jurisdiction.
6. Learned Single Judge on considering the facts and
circumstances concluded on 06.10.2020 that Rule 26(3)(ii) as amended in
2016 also provided for imprisonment for a term which may extend to two years
or with fine which may extend to Rupees Five Lakhs along with market value
of the mineral and seigniorage fee, or both, therefore, such punishment can
only and solely be imposed by a Court of competent jurisdiction.
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W.P.No.1839 of 2021 & batch
7. It was observed that unamended Rule did not provide for
imprisonment, therefore, officials may earlier have been authorized to
levy penalty, but with amendment in the rule in 2016 which also prescribed for
punishment of imprisonment upto two years or fine etc.; such penal provisions
have to be strictly construed and that power to impose such punishment of
imprisonment along with other penalties is exercisable solely by a Court of
competent jurisdiction.
8. In respect to estimation of amounts in question based on
electricity consumption charge was concerned, it was held that a proper
method should be evolved by authorities to meet emerging situations. Such a
method should have a scientific rational basis along with statutory backing.
9. Objection of the State to maintainability of writ petition challenging
a mere show cause notice was negated on the premise that show cause
notice was issued by an official who did not have jurisdiction to issue the
same. W.P.Nos.8356, 8361 & 8366 of 2020 were accordingly allowed by
learned Single Judge vide order dated 06.10.2020.
10. As noted earlier, W.A.Nos.1058, 1061, 1062, 1063, 1064, 1065 &
1066 of 2022 arise out of common order dated 30.09.2022, passed in
W.P.Nos.8390 of 2018; 12334, 27815, 27952, 27903, 28372 & 12950 of 2021.
In some of these petitions, challenge was to notices issued under Rule 26 as
amended vide G.O.Ms.No.35, dated 01.07.2020, whereby provision for
imposition of imprisonment was removed therefrom, and in other, petitioners
7
W.P.No.1839 of 2021 & batch
challenged the demand notices, confirmed by competent authority; upheld by
appellate authority.
11. Learned Single Bench vide impugned order dated 30.09.2022,
while referring to earlier order dated 06.10.2020, passed in W.P.Nos.8356,
8361 & 8366 of 2020, allowed W.P.Nos.8390 of 2018; 12334, 27815, 27952,
27903, 28372 & 12950 of 2021 on the same analogy while further adding that
the Rules cannot go beyond the principal Act or be inconsistent with principal
Act; MMDR Act contemplates levy of penalty, under the Act and APMMC
Rules, to be decided by Court, while APMMC Rules name Assistant Director
of Mines as authority for this purpose. It was concluded that there was a clear
contradiction and inconsistence between MMDR Act and APMMC Rules,
therefore, Rule 26 has to give way. Objection by the State, that such a
conclusion should not have been arrived at, in view of no challenge to Rule
26, was negated.
12. W.A.No.1058 of 2022 arises out of W.P.No.12950 of 2021
(M/s. Soma Patel ASI (JV) Vs. The State of Andhra Pradesh & others),
whereby petitioner challenges demand notice dated 03.05.2021.
13. W.A.Nos.1061 & 1063 of 2022 arise out of W.P.Nos.12334 of
2021; 8390 of 2018 (both titled M/s. GSR Stone Crushers Vs. The State of
Andhra Pradesh & others) respectively. Lessee/ writ petitioner in both these
writ petitions is the same as is the subject matter of Lease.
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W.P.No.1839 of 2021 & batch
14. W.P.No.8390 of 2018 (subject matter of W.A.No.1063 of 2022)
was filed by writ petitioner therein challenging show cause notice dated
20.01.2018 issued by Assistant Director of Mines, Srikakulam. Subsequent to
reply filed by said petitioner, demand notice dated 19.02.2018 was issued
which was challenged by petitioner by way of W.P.No.8390 of 2018. During
pendency of said writ petition, action was again initiated against petitioner on
basis of information furnished by Vigilance and Enforcement Department;
another show cause notice dated 09.04.2021 and demand notice dated
22.04.2021 issued by Assistant Director of Mines, Srikakulam, were then
challenged by same petitioner vide W.P.No.12334 of 2021 (subject matter of
W.A.No.1061 of 2022).
15. W.A.Nos.1062 and 1065 of 2022 arise out of W.P.Nos.27952 &
27815 of 2021 (both titled Mr. P. Venkateswara Rao Vs. The State of Andhra
Pradesh & others) respectively. Lessee in both these writ petitions is the
same and challenge is to demand notices of even date i.e. 10.11.2020.
16. W.P.Nos.27815 of 2021 and 27952 of 2021 (subject matter of
W.A.Nos.1065 and 1062 of 2022) were filed by same petitioner, who earlier
filed W.P.No.15863 of 2020 challenging demand notice dated 07.08.2020
under Rule 26(3)(ii). This Court in W.P.No.15863 of 2020 remanded the
matter to Assistant Director of Mines, Vishakhapatnam, to re-conduct entire
exercise after affording complete information to petitioner. Subsequently,
demand notice was again issued which was subjected to challenge by said
9
W.P.No.1839 of 2021 & batch
petitioner by way of W.P.No.25176 of 2020, which was dismissed on the
ground that petitioner had an efficacious alternate remedy of appeal.
W.A.No.64 of 2021 challenging said decision was dismissed. Petitioner
therein then filed an appeal before authorities, which was dismissed on
21.09.2021, which was then challenged vide W.P.No.27952 of 2021. Said
petitioner, in W.P.No.27815 of 2021, had earlier challenged show cause
notice dated 14.07.2020 issued on the basis of an inspection report submitted
by Vigilance and Enforcement Department by way of W.P.No.15888 of 2020,
wherein matter was remanded to Assistant Director of Mines, to furnish
complete documents, pursuant to which a demand notice was again issued on
10.11.2020, the same being challenged by way of W.P.No.25190 of 2020,
which was dismissed on basis of availability of efficacious alternate remedy.
W.A.No.70 of 2021 filed against this order was dismissed and petitioner
ultimately filed an appeal before Assistant Director of Mines and Geology
against said demand notice, which was dismissed on 21.09.2021, leading to
filing of W.P.No.27815 of 2021.
17. W.A.Nos.1064 & 1066 of 2022 arise out of W.P.Nos.28372 &
27903 of 2021 (both titled M/s. VVR Crushers and Constructions Vs. The
State of Andhra Pradesh & others) respectively, challenging demand notice
of even date i.e. 10.11.2020.
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W.P.No.1839 of 2021 & batch
18. Details of all writ appeals as mentioned above are reproduced
in the tabular form as under:
Demand Notice/ Rule under
S.No. Writ Appeals Writ Petitions
Show Cause which Notice
Notice was issued
W.P.No.8356 of 2020
W.A.No.164 (M/s. JMB Rocks
1. Vs.The State of
of 2021
Andhra Pradesh &
others)
W.P.No.8361 of 2020
W.A.No.171 (M/s. Sri Durga
2. Show Cause Notice
Bhavani Granites Vs. -
of 2021 dated 15.04.2020
The State of Andhra
Pradesh & others)
W.P.No.8366 of 2020
W.A.No.238 (M/s. Salasr Granites
3. Vs. The State of
of 2021
Andhra Pradesh &
others)
Impugned
demand notice
W.P.No.12950 of 2021 was issued as per
W.A.No.1058 (M/s. Soma Patel ASI Amended Rule
4. (JV) Vs. The State of Demand Notice 26(1) & 34(1) of
of 2022
Andhra Pradesh & dated 03.05.2021 APMMC Rules,
another) 1966, vide
G.O.Ms.No.35,
dated 01.07.2020
Impugned
demand notice
dated 22.04.2021
was issued as per
W.P.Nos.12334 of Amended Rule
2021; and 8390 of 26(1) and 34(1) of
W.A.Nos.1061 Demand Notices APMMC Rules,
2018
. & 1063 of (M/s. GSR Stone dated 22.04.2021 1966, vide
Crushers Vs. The and 19.02.2018 G.O.Ms.No.35,
2022 respectively dated 01.07.2020
State of Andhra
and
Pradesh & another) Impugned
demand notice
dated 19.02.2018
was issued as per
Amended Rule
11
W.P.No.1839 of 2021 & batch
26(3) of APMMC
Rules, 1966
Impugned
W.P.Nos.27952 & demand notices
27815 of 2021 were issued as
W.A.Nos.1062 (Mr. P. Venkateswara per Amended
6. Demand Notices
& 1065 of Rao Vs. The State of Rule 26 r/w 34(1)
dated 10.11.2020
2022 of APMMC Rules,
Andhra Pradesh &
1966, vide
others) G.O.Ms.No.35,
dated 01.07.2020
Impugned
demand notices
were issued as
per Amended
W.P.Nos.28372 &
W.A.Nos.1064 Rule 34(1) of
27903 of 2021
APMMC Rules,
7. & 1066 of (M/s. VVR Crushers Demand Notices
1966, vide
and Constructions Vs. dated 10.11.2020
2022 G.O.Ms.No.37,
The State of Andhra
dated 14.03.2016
Pradesh & others)
and
G.O.Ms.No.35,
dated 01.07.2020
respectively
19. W.P.No.1839 of 2021 has been filed for declaring amendments
made to APMMC Rules, 1966, by way of G.O.Ms.No.35, dated 01.07.2020,
to the extent of providing punitive measures in excess of what has been
stated in Sections 21 & 27 and contrary to Section 22 of MMDR Act, as
ultra vires.
20. Principal question that has been raised in the writ petition and
writ appeals by writ petitioners therein (respondents in writ appeals) is
that jurisdiction to levy penalty for unauthorized mining or other violations of
the Act cannot be conferred upon an executive authority as has been done
under the APMMC Rules and such action can be taken solely by a Court of
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W.P.No.1839 of 2021 & batch
competent jurisdiction. Vires of Rules 26 & 34 to that extent has been
challenged in W.P.No.1839 of 2021 while proceedings under said Rules
(amended on 01.07.2020 and under the unamended Rules as well) were
under challenge in the writ petitions leading to writ appeals in question
without vires of Rules being called in question.
Submissions on behalf of writ petitioner in W.P.No.1839 of 2021 and
respondents in writ appeals/ writ petitioners before learned Single
Bench:
21. As vires of the Rules as above are under challenge, arguments
on behalf of writ petitioner in W.P.No.1839 of 2021 and respondents in writ
appeals i.e. writ petitioners before learned Single Bench are being noted
first. The latter are referred to as writ petitioners/respondents. It was
vehemently argued that provision of imposition of penalty and
imprisonment, by officials of the department, as was the case vide
amendment carried out in March 2016, is not permissible in terms of
Section 21 of MMDR Act. Whenever any penalty has to be imposed under
the Rules, it can be imposed only on conviction by Court of competent
jurisdiction, upon a complaint filed by a person authorized in that
behalf, either by the Central or State Government.
22. It was urged that first and foremost respondent State does not
have any power to provide penalty beyond what is provided under Section
21 of MMDR Act, and moreover, procedure contrary to provisions of
the parent Act cannot be promulgated under the Rules. The rules, it is
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W.P.No.1839 of 2021 & batch
submitted, cannot travel beyond the enabling statute or be inconsistent
therewith.
23. It was further submitted that use of the word „offence‟ in proviso
to Rule 34 is indicative of criminal nature of penalty, therefore, even if the
provision of imposition of imprisonment, as was present after the
amendment carried out in March 2016, has been subsequently done away
with vide amendment carried out on 01.07.2020, it is clearly penal in
nature and thus cannot be imposed without a proper trial before a Court of
competent jurisdiction. In case of any violation, State, it was contended,
can only impose a seigniorage fee, which cannot be by way of penalty or of
such an amount that it becomes penal in nature. State, at best, can recover
the price of mineral illegally removed/transported.
24. It was further argued that once there is a clear-cut conflict
between the substantive Act and Rules, the former has to prevail,
therefore, the offending rule should be struck down. The State, it was
submitted, has no power to impose penalties as have been prescribed in
Rule 26(1) and Rule 34 of APMMC Rules, 1966, to be exacted by officials
of the Department, as the same is beyond permissible statutory limits.
25. Reliance was placed upon judgments of Hon‟ble the Supreme
Court in Mineral Area Development Authority and another Vs. Steel
Authority of India and another, (2024) 10 SCC 1; State of Meghalaya
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W.P.No.1839 of 2021 & batch
Vs. All Dimasa Students Union and others, (2019) 8 SCC 177; and
Naresh Chandra Agarwal Vs. Institute of Chartered Accountants of
India and others, 2024 SCC OnLine SC 114. Learned counsel for writ
petitioners before learned Single Bench, while supporting the said
arguments, urged that learned Single Bench has correctly passed
impugned orders dated 06.10.2020 & 30.09.2022 as notices issued to writ
petitioners are beyond jurisdiction of the issuing authority. Thus, their writ
petitions were correctly entertained and allowed. No argument was
addressed on the individual facts of any particular case.
26. It was thus prayed that W.P.No.1839 of 2021 be allowed and
W.A.Nos.164, 171 & 238 of 2021; 1058, 1061, 1062, 1063, 1064, 1065 &
1066 of 2022 filed by the State be dismissed.
Submissions on behalf of the State/Department of Mines and Geology
i.e. respondents in writ petitions and appellants in all writ appeals:
27. Learned Advocate General representing the State in
W.P.No.1839 of 2021 and appellants in above mentioned writ appeals, with
equal vehemence argued that impugned orders dated 06.10.2020 and
30.09.2022 passed by learned Single Bench should be set aside, thereby
allowing all the writ appeals, and that W.P.No.1839 of 2021 be dismissed
being devoid of any merit.
28. It is submitted that the State is well within its power to
promulgate the Rules as are challenged before this Court. It was
15
W.P.No.1839 of 2021 & batch
contended that provisions of the Act i.e. Section 15, Section 21 and Section
23C clearly confer power upon the State to promulgate the Rules as has
been done. It was denied that penalty cannot be imposed or recovered by
officials of the department and that such action could be taken only by a
Court of competent jurisdiction. It was argued that said provisions are a
deterrent measure and have thus to be understood in said context.
29. Learned Advocate General further submitted that learned
Single Bench while passing orders dated 06.10.2020 and 30.09.2022 has
not considered the controversy in its correct perspective and has wrongly
and incorrectly allowed the writ petitions. It was contended that validity of
Rules in question had not even been challenged by writ petitioners therein.
Therefore, there is a fundamental flaw in the impugned orders.
30. Learned Single Bench in impugned order dated 30.09.2022
has in fact recorded that writ petitioners are not disputing power of the
State to levy fines and penalties, but had contended that such levy of
penalty can be carried out only by a Court of competent criminal
jurisdiction. Reliance was placed upon judgments of Hon‟ble the Supreme
Court in Karnataka Rare Earth Vs. Senior Geologists, Department of
Mines, (2004) 2 SCC 783; State of U.P. Vs. Sukhpal Singh Bal, (2005) 7
SCC 615; and a Full Bench of this High Court in L. Venkateswara Rao
and others Vs. M/s. Singareni Collieries Company Ltd, 1993 SCC
OnLine AP 451.
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W.P.No.1839 of 2021 & batch
31. In respect to impugned order dated 06.10.2020 in
W.A.Nos.164, 171 & 238 of 2021, learned Advocate General submitted that
as per Rule 26(3)(ii) as amended on 14.03.2016, the aspect of penalty can
be clearly distinguished from the imposition of imprisonment. Insofar as
penalty, seigniorage fee etc. is concerned, the same can be levied and
exacted by officials of the department. It was only imposition of
imprisonment which would fall in the domain of Courts exercising criminal
jurisdiction.
32. It was thus prayed that W.P.No.1839 of 2021 be dismissed and
abovementioned writ appeals be allowed, thereby setting aside impugned
orders dated 06.10.2020 and 30.09.2022, consequently dismissing writ
petitions throughout.
Analysis & Conclusion:
33. We heard learned counsel for parties at length and have
perused the files with their able assistance.
34. At the outset, it is necessary to refer to some of the provisions
of MMDR Act, 1957. Section 4 of MMDR Act provides that prospecting or
mining operations cannot be undertaken except under a license or lease.
Section 4 reads as under:
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W.P.No.1839 of 2021 & batch
“4. Prospecting or mining operations to be under license or lease –
(1) No person shall undertake any reconnaissance, prospecting or
mining operations in any area, except under and in accordance with the
terms and conditions of a reconnaissance permit or of a prospecting
licence or of a exploration licence or, as the case may be, of a mining
lease, granted under this Act and the rules made thereunder:
Provided that nothing in this sub-section shall affect any prospecting
or mining operations undertaken in any area in accordance with terms and
conditions of a prospecting licence or of a exploration licence, mining lease
granted before the commencement of this Act which is in force at such
commencement:
Provided further that nothing in this sub-section shall apply to any
prospecting operations undertaken by the Geological Survey of India, the
Indian Bureau of Mines, the Atomic Minerals Directorate for Exploration
and Research of the Department of Atomic Energy of the Central
Government, the Directorates of Mining and Geology of any State
Government (by whatever name called), and the Mineral Exploration
Corporation Limited., a Government company within the meaning of clause
(45) of section 2 of the Companies Act, 2013, and any other entities
including private entities that may be notified for this purpose, subject to
such conditions as may be specified by the Central Government.
Provided also that nothing in this sub-section shall apply to any
mining lease (whether called mining lease mining concession or by any
other name) in force immediately before the commencement of this Act in
the Union territory of Goa, Daman and Diu.
(1A) 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.
(2) No mineral concession shall be granted otherwise than in
accordance with the provisions of this Act and the rules made thereunder.
(3) Any State Government may, after prior consultation with the
Central Government and in accordance with the rule made under section
18, undertake reconnaissance, prospecting or mining operations with
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W.P.No.1839 of 2021 & batch
respect to any mineral specified in the First Schedule in any area within
that State which is not already held under any mineral concession.‖
35. Section 13 of MMDR Act deals with power of Central
Government to make rules in respect of minerals and for purposes
connected therewith; and Section 13A deals with power of Central
Government to make rules for grant of prospecting licences or mining
leases in respect of territorial waters or continental shelf of India.
36. Section 14 of MMDR Act provides that Sections 5 to 13 shall
not apply to quarry leases, mining leases or other mineral concessions in
respect of minor minerals, and reads as under:
―14. Sections 5 to 13 not to apply to minor minerals –
The provisions of sections 5 to 13 (inclusive) shall not apply
to quarry leases, mining leases or other mineral concessions in respect of
minor minerals.‖
37. Section 15 of the Act, which provides power of State
Governments to make rules in respect of minor minerals, reads as under:
―15. Power of State Governments to make rules in respect of
minor minerals –
(1) The State Government may, by notification in the Official
Gazette, make rules for regulating the grant of 3 quarry leases, mining
leases or other mineral concessions in respect of minor minerals and for
purposes connected therewith.
(1A) 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:―
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W.P.No.1839 of 2021 & batch
(a) the person by whom and the manner in which, applications for
quarry leases, mining leases or other mineral concessions may be made
and the fees to be paid therefor;
(b) the time within which, and the form in which, acknowledgement
of the receipt of any such applications may be sent;
(c) the matters which may be considered where applications in
respect of the same land are received within the same day;
(d) the terms on which, and the conditions subject to which and the
authority by which quarry leases, mining leases or other mineral
concessions may be granted or renewed;
(e) the procedure for obtaining quarry leases, mining leases or other
mineral concessions;
(f) the facilities to be afforded by holders of quarry leases, mining
leases or other mineral concessions to persons deputed by the
Government for the purpose of undertaking research or training in matters
relating to mining operations;
(g) the fixing and collection of rent, royalty, fees, dead rent, fines or
other charges and the time within which and the manner in which these
shall be payable;
(h) the manner in which rights of third parties may be protected
(whether by way of payment of compensation or otherwise) in cases where
any such party is prejudicially affected by reason of any prospecting or
mining operations;
(i) the manner in which rehabilitation of flora and other vegetation
such as trees, shrubs and the like destroyed by reason of any quarrying or
mining operations shall be made in the same area or in any other area
selected by the State Government (whether by way of reimbursement of
the cost of rehabilitation or otherwise) by the person holding the quarrying
or mining lease;
(j) the manner in which and the conditions subject to which, a quarry
lease, mining lease or other mineral concession may be transferred;
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W.P.No.1839 of 2021 & batch
(k) the construction, maintenance and use of roads, power
transmission lines, tramways, railways, serial ropeways, pipelines and the
making of passage for water for mining purposes on any land comprised in
a quarry or mining lease or other mineral concession;
(l) the form of registers to be maintained under this Act;
(m) the reports and statements to be submitted by holders of quarry
or mining leases or other mineral concessions and the authority to which
such reports and statements shall be submitted;
(n) the period within which and the manner in which and the
authority to which applications for revision of any order passed by any
authority under these rules may be made, the fees to be paid therefore,
and the powers of the revisional authority; and
(o) any other matter which is to be, or may be, prescribed.
(2) Until rules are made under sub-section (1), any rules made by a
State Government regulating the grant of quarry leases, mining leases or
other mineral concessions in respect of minor minerals which are in force
immediately before the commencement of this Act shall continue in force.
(3) The holder of a mining lease or any other mineral concession
granted under any rule made under sub-section (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 sub-
lessee at the rate prescribed for the time being in the rules framed by the
State Government in respect of minor minerals:
Provided that the State Government shall not enhance the rate of
royalty or dead rent in respect of any minor mineral for more than once
during any period of three years.
(4) Without prejudice to sub-sections (1), (2) and sub-section (3),
the State Government may, by notification, make rules for regulating the
provisions of this Act for the following, namely:―
(a) the manner in which the District Mineral Foundation shall work
for the interest and benefit of persons and areas affected by mining under
sub-section (2) of section 9B;
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(b) the composition and functions of the District Mineral Foundation
under sub-section (3) of section 9B; and
(c) the amount of payment to be made to the District Mineral
Foundation by concession holders of minor minerals under section 15A.‖
38. Section 21 of MMDR Act provides for penalties for violation of
Section 4(1) and Section 4(1A) and reads as under:
“21. Penalties –
(1) Whoever contravenes the provisions of sub-section (1) or sub-
section (1A) of section 4 shall be punishable with imprisonment for a term
which may extend to five years and with fine which may extend to five lakh
rupees per hectare of the area.
(2) Any rule made under any provision of this Act may provide that
any contravention thereof shall be punishable with imprisonment for a term
which may extend to two years or with fine which may extend to five lakh
rupees, or with both, and in the case of a continuing contravention, with
additional fine which may extend to fifty thousand rupees for every day
during which such contravention continues after conviction for the first such
contravention.
(3) Where any person trespasses into any land in contravention of
the provisions of sub-section (1) of section 4, such trespasser may be
served with an order of eviction by the State Government or any authority
authorised in this behalf by that Government and the State Government or
such authorised authority may, if necessary, obtain the help of the police to
evict the trespasser from the land.
(4) Whenever any person raises, transports or causes to be raised
or transported, without any lawful authority, any mineral from any land, and,
for that purpose, uses any tool, equipment, vehicle or any other thing, such
mineral tool, equipment, vehicle or any other thing shall be liable to be
seized by an officer or authority specially empowered in this behalf.
(4A) Any mineral, tool, equipment, vehicle or any other thing seized
under sub-section (4), shall be liable to be confiscated by an order of the
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W.P.No.1839 of 2021 & batch
court competent to take cognizance of the offence under sub-section (1)
and shall be disposed of in accordance with the directions of such court.
(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) Notwithstanding anything contained in the Code of Criminal
Procedure, 1973, an offence under sub-section (1) shall be cognizable.
Explanation — On and from the date of commencement of the
Mines and Minerals (Development and Regulation) Amendment Act, 2021
(16 of 2021), the expression ―raising, transporting or causing to raise or
transport any mineral without any lawful authority‖ occurring in this section,
shall mean raising, transporting or causing to raise or transport any mineral
by a person without prospecting licence, mining lease or composite licence,
exploration licence or in contravention of the rules made under section
23C.‖
39. Section 23C of MMDR Act which confers power upon State
Government to make rules for preventing illegal mining, transportation and
storage of minerals, reads as under:
“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:―
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W.P.No.1839 of 2021 & batch
(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 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).
40. In exercise of power under Sections 15 and 23C of MMDR Act,
respondent State promulgated the Andhra Pradesh Minor Mineral
Concession Rules, 1966. Said Rules provide for penalty, seigniorage fee
etc. for violation of conditions of licence or any other violation under the
Act. It is to be noted that various amendments had been carried out in Rule
26, the relevant in present case being the amendments made vide
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W.P.No.1839 of 2021 & batch
G.O.Ms.No.37, dated 14.03.2016 and subsequently vide G.O.Ms.No.35,
dated 01.07.2020.
41. A comparative table of Rule 26 as it stood before amendment
carried out on 14.03.2016; after amendment carried out vide
G.O.Ms.No.37, dated 14.03.2016 and after the amendment vide
G.O.Ms.No.35, dated 01.07.2020 is reproduced as hereunder:
Provisions before Provisions after amendment Provisions after amendment
S.No. amendment dated vide G.O.Ms.No.37, vide G.O.Ms.No.35,
14.03.2016 dt. 14.03.2016 dt. 01.07.2020
1. 26. Penalty for unauthorized 26. Penalty for unauthorized 26. Penalty for unauthorized
quarrying: quarrying: quarrying:
(1): If any person carries on (1): If any person carries on (1): If any holder of mineral
quarrying operations or quarrying operations or concession carries on
transports minor minerals in transports minor minerals in quarrying operations and
contravention of these rules, contravention of these rules, transports minor minerals by
he shall be liable to pay as he shall be punishable with going beyond or encroaching
penalty, such enhanced imprisonment for a term outside the leased area or in
seigniorage fee together with which may extend to two any area without holding a
assessments as may be years or with fine which may mineral concession in
imposed by an Officer extend to Rs. Five Lakhs contravention of these rules,
nominated by the Director of along with the Market Value the holder of such mineral
Mines & Geology. of the mineral and concession shall be liable to
Seigniorage Fee prevalent at pay ten times of Normal
that time or both and the Seigniorage fee as penalty in
lease or permit if any already addition to the normal
granted may, at the discretion Seigniorage fee along with
of the officer authorized in this DMF and MERIT amounts on
behalf, be liable to be the assessed quantities by the
terminated or cancelled. Asst. Director of Mines &
Geology or the officer
authorized in this behalf by the
Director of Mines & Geology.
The Asst. Director of Mines &
Geology concerned may issue
order for suspension of
quarrying operations till
realization of the penalty in
addition to the normal
Seigniorage fee along with
DMF and MERIT amounts on
the assessed quantities. Any
repeated offence, shall result
in termination of the lease after
being given a reasonable
opportunity to submit an
explanation to the holder of
mineral concession.
2 Rule 26 (2): Whenever any Rule 26 (2): Whenever any Rule 26 (2): Whenever any
person raises or transports person raises or transports person raises, transports or
minor minerals without any minor minerals without any causes to be raised or
25
W.P.No.1839 of 2021 & batch
lawful authority, any minor lawful authority, such minerals transported without any lawful
minerals from any area not may be seized by an officer authority, any minor minerals
granted under a mineral nominated by the Director of from any area not granted
concession and for that Mines & Geology in this behalf under a mineral concession
purpose, use any tool in addition that he shall be and for that purpose, use any
equipment, vehicle or any punishable with tool, equipment, vehicle or any
other thing, such mineral, tool, imprisonment for a term other thing, such mineral, tool,
equipment, vehicle or any which may extend to two equipment, vehicle or any
other thing shall be liable to be years or with fine which may other thing shall be liable to be
seized by an Officer extend to Rs. Five Lakhs seized by the Asst. Director of
nominated by the Director of along with double the Market Mines & Geology or the officer
Mines & Geology in this behalf Value of the mineral or both. authorized in this behalf by the
in addition to the imposition of In case of continuous offence, Director of Mines & Geology
the penalty under sub-rule(1): an additional fine of Rs.5000/- and the person involved in
per day till the offence is such illegal quarrying and
Provided that in no rectified. transportation of such mineral
case, the penalty shall exceed shall be liable to pay ten
ten times the normal times of Normal Seigniorage
seigniorage fee and the lease fee as penalty in addition to the
or permit already granted may, normal Seigniorage fee along
at the discretion of Deputy with DMF and MERIT amounts
Director, be liable to be on the assessed quantities by
terminated or cancelled. the Asst. Director of Mines &
Geology or the officer
authorized in this behalf by the
Director of Mines & Geology.
On realization of the above
said penalty in addition to the
normal Seigniorage fee along
with DMF and MERIT
amounts, Asst. Director of
Mines & Geology concerned
may release the quantity of
mineral, tool, equipment,
vehicle or any other thing
seized.
Any failure to pay the
demanded amount within the
stipulated time, the authorised
officer shall:
a. dispose the mineral in
open auction by following due
procedure;
b. confiscate the machinery,
tool, equipment, vehicle or any
other thing by following due
procedure and seek
permission to dispose such
confiscated things against the
demanded amount.
3. Rule 26 (3): Rule 26 (3): Rule 26 (3):
(i) For the purpose of (i) For the purpose of (i) For the purpose of
ascertaining the position of ascertaining the position of ascertaining the position of
payment of Mineral Revenue payment of Mineral Revenue payment of Mineral Revenue
due to the Government or for due to the Government or for due to the Government or for
any other purpose under these any other purpose under these any other purpose under these
rules, the person authorized rules, the person authorised rules, the person authorised
under sub-rule(2) may- under sub-rule (2) may- under sub-rule (2) may-
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W.P.No.1839 of 2021 & batch
(a) enter and inspect any (a) enter and inspect any (a) enter and inspect any
mineral; premises, premises,
(b) survey and take (b) survey and take (b) survey and take
measurements; measurements; measurements;
(c) weigh, measure or take (c) weigh, measure or take (c) weigh, measure or take
measurements of stocks of measurements of stocks of measurements of stocks of
minerals; minerals; minerals;
(d) examine any document, (d) examine any document, (d) examine any document,
book, register or record in the book, register or record in the book, register or record in the
possession or power of any possession or power of any possession or power of any
person having the control of, person having the control of, person having the control of, or
or connected with any mineral or connected with any mineral connected with any mineral
including the processed including the processed including the processed
mineral and place marks of mineral and place marks of mineral and place marks of
identification thereon and take identification thereon and take identification thereon and take
extracts from, or make copies extracts from, or make copies extracts from, or make copies
of such document, book, of such document, book, of such document, book,
register or record; and register or record; and register or record; and
(e) order the production of (e) order the production of (e) order the production of
any such document, book, any such document, book, any such document, book,
register, record as is referred register, record as is referred register, record as is referred
in Clause (d). in Clause (d). in Clause (d).
(ii) If no documentary proof is (ii) If no documentary proof is (ii) If no documentary proof is
produced in token of having produced in token of having produced in token of having
paid the mineral revenue due paid the mineral revenue due paid the mineral revenue due
to the Government by any to the Govt., by any person to the Govt., by any person
person who used or consumed who used or consumed or in who used or consumed or in
or in possession of any possession of any mineral possession of any mineral
mineral, including the including the processed including the processed
processed mineral, he shall mineral, he shall be mineral, such person shall be
notwithstanding anything punishable with liable to pay five times of
contained in sub-rule (1) be imprisonment for a term Normal Seigniorage as penalty
liable to pay one time of which may extend to two in addition to the normal
normal seigniorage fee as years or with fine which may Seigniorage fee along with
penalty in addition to normal extend to Rs. Five lakhs DMF and MERIT amounts for
seigniorage fee leviable under along with the Market Value the said quantity.
``````rules. of the mineral and
Seigniorage Fee prevalent at (iii) If the Driver or owner of the
that time or both and the vehicle fails to produce a valid
lease or permit if any already e-transit permit issued by the
granted may, at the discretion concerned Asst. Director of
of the officer authorized in this Mines & Geology or an officer
behalf, be liable to be authorized by the Director of
terminated or cancelled. Mines & Geology, the officer in
charge of the check post or
(iii) if the Driver or person in- barrier or during the
charge of the vehicle fails to interception of the movement
produce a valid permit issued of the vehicle, may require the
by the concerned Asst. Driver or the owner of the
Director of Mines & Geology or vehicle to pay Five times of the
an officer authorized by the normal Seigniorage fee as
Director of Mines & Geology, penalty in addition to the
the officer in-charge of the Normal Seigniorage fee along
check post or barrier or during with DMF and MERIT amounts
the interception of the for the quantity not covered
movement of the vehicle, may under the e-transit permit.
require the Driver or the owner
or person in-charge of the
vehicle to pay penalty equal to
Market Value of the Mineral
along with Seigniorage Fee
prevalent at that time.
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4. Rule 26 (4): The applicant/ -- --
applicant company convicted
for an offence relating to
unauthorized mining/ quarrying
of minor minerals shall be
debarred/ disqualified for
getting new Quarry Lease or
renewal of the existing Quarry
Lease for a period of ten
years.
42. A comparative table of Rule 34, as it stood prior to amendment
vide G.O.Ms.No.35 dated 01.07.2020, and thereafter, is reproduced as
under:
Provisions prior to amendment vide Provisions after amendment vide G.O.Ms.No.35
G.O.Ms.No.35 dated 01.07.2020 dated 01.07.2020Rule 34 (1): Rule 34 (1):
No minor mineral shall be dispatched from any of No minor mineral shall be dispatched from any
the leased areas without a valid permit issued by the of the leased areas or area granted under a
Asst. Director of Mines & Geology concerned or any mineral concession without a valid e-transit permit
officer authorized in this behalf by the Director of issued by the Asst. Director of Mines & Geology
Mines & Geology. concerned or any officer authorized in this behalf
by the Director of Mines & Geology.
Provided that any misuse of the transit forms
without paying Seigniorage Fee and not The lessee shall furnish the details of quantity
accompanied by the transit forms used by the Asst. of minor minerals except Granite, Marble and 31
Director of Mines & Geology, concerned or an officer minor minerals mentioned at Sl. Nos. 18 to 48 in
authorised in this behalf by the Director of Mines & the Schedule-l of rule 10 dispatched and place of
Geology and any other contravention, the lessee consignment to the Asst. Director of Mines &
shall be punished with imprisonment for a term which Geology concerned immediately after the dispatch
may extend to two years or with a fine equal to of material. However, the lessee is required to
Market Value of the mineral and Seigniorage Fee obtain the e-transit forms in advance for
prevalent at that time or both. In case of continuous transportation of minor minerals and shall render
offence, an additional fine of Rs.500/- per day shall the account to the Asst. Director concerned once
be levied till the offence is rectified and the lease or in a month. No second consignment of e-transit
permit if any already granted may, at the discretion of forms shall be issued unless the lessee has
the officer authorized in this behalf, be liable to be submitted the previous account of consignment of
terminated or cancelled and the Security Deposit e-transit forms;
paid by the lessee will be forfeited.
Provided that any misuse of e-transit forms,
dispatch and transportation of any minor mineral
except Granite, Marble and 31 minor minerals
mentioned at Sl.Nos.18 to 48 in the Schedule-l of
rule 10 without paying Seigniorage fee and any
other contravention, shall result in levy of five
times of the normal Seigniorage fee as penalty for
the first time offence and ten times of normal
Seigniorage fee as penalty for the second time
offence in addition to the Normal Seigniorage fee
along with DMF and MERIT amounts for the
evaded quantity by the Asst. Director of Mines &
Geology or the officer authorized in this behalf by
the Director of Mines & Geology. Any subsequent
offence shall result in termination of the lease after
the holder of mineral concession submits an
explanation.
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W.P.No.1839 of 2021 & batch
43. It is thus apparent that Section 4 of MMDR Act provides that
excavation and transportation of minerals has to be carried out strictly in
accordance with terms of lease and permits granted by the Centre/
State and any infraction in this regard is visited with penalties as are
provided under Section 21 of the Act and Rules as may be framed
thereunder. In respect to minor minerals, the State is empowered to frame
necessary rules.
44. It was argued by learned counsel for writ petitioner that Entry 54
of List I i.e. Union List (VII Schedule) of Constitution of India provides for
regulation of mines and mineral development to the extent such regulation
and development under control of the Union is declared by Parliament by law
to be expedient in the public interest; and as per Entry 23 in List II, regulation
of mines and mineral development can be carried out by the State subject to
provisions of List I, thus, any rules promulgated by the State have to be in
consonance with the main statute.
45. It was argued that Section 21(2) of MMDR Act indicates intention
of the Parliament inasmuch as Section 21(2) takes within its fold the Rules
made by State Government under Sections 15 and 23C. Source of power
derived by the State Government in making amendments to Rules 26 and 34,
even as per G.O.Ms.No.35 dated 01.07.2020 is stated to be Sections
15(1), 21(2), 22, 23C of MMDR Act. Violation of Section 4(1) and 4(1A) of
MMDR Act i.e. raising and transportation of mineral without obtaining any
29
W.P.No.1839 of 2021 & batch
permit or license or lease attracts criminal liability under Section 21(1) and civil
liability under Section 21(5). It is to be noted that, at the outset, a feeble
attempt was made on behalf of writ petitioners in respect to legislative
incompetence of the State to promulgate the Rule, the argument was then
modulated to the effect that the State cannot promulgate rules which are
opposed to or not in consonance with the parent statute.
46. In our considered opinion, there is no merit in the arguments
raised on behalf of writ petitioners. There is no quarrel with the submission
that rules promulgated under a statute have to be in consonance with
provision thereof. Section 15 of MMDR Act confers power upon State
Governments to make rules in respect of minor minerals; Section 23C
specifically confers power upon State Governments to promulgate rules for
preventing illegal mining, transportation and storage of minerals and for
purposes connected therewith; Section 23C(g) specifically states that rules
can be promulgated by the State for any other purpose, which is required to
be or may be prescribed for the purpose of illegal mining, transportation and
storage of minerals; Section 23C(3) specifically provides that notwithstanding
anything contained in Section 30, Central Government shall have no power to
revise any order passed by a State Government or any of its authorized
officers or any authority under the Rules made under sub-sections (1) and (2)
thereof.
47. It is undeniable that Rule 26 is a deterrent measure aimed
at preventing illegal mining, transportation and storage of minerals. Mere use
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W.P.No.1839 of 2021 & batch
of the word „Penalty‟ in Rule 26 by itself is not indicative of the mode through
which such penalty should be imposed i.e. only by process of a Criminal Court
as is urged by writ petitioners. Hon‟ble the Supreme Court in the case
of Karnataka Rare Earth has held that marginal note of Section 21 of MMDR
Act i.e. „Penalties‟ creates a wrong impression. It was held as under:
―7. …. A reading of Section 21 shows that it deals with a variety of
situations. Sub-Sections (1), (2), (4), (4A) and (6) are in the realm of criminal
law. Sub-Section (3) empowers the State Government or any authority
authorized in this behalf to summarily evict a trespasser. Sub-Section (5)
empowers the State Government to recover rent, royalty or tax from the
person who has raised the mineral from any land without any lawful authority
and also empowers the State Government to recover the price thereof where
such mineral has already been disposed of inasmuch as the same would not
be available for seizure and confiscation. The provision as to recovery of price
is in the nature of recovering the compensation and not penalty so also the
power of the State Government to recover rent, royalty or tax in respect of any
mineral raised without any lawful authority can also not be called a penal
action. The underlying principle of sub-Section (5) is that a person acting
without any lawful authority must not find himself placed in a position more
advantageous than a person raising minerals with lawful authority.
8. The correct principles of law applicable to the facts of the
present case emanating from equity, and statutorily embodied in sub-Section
(5) of Section 21 abovesaid, are to be found dealt with extensively in a recent
decision of this Court in South Eastern Coalfields Ltd. Vs. State of M.P. & Ors.
(2003) 8 SCC 648.‖
48. At this stage, gainful reference can be made to
judgment rendered by a Full Bench of this Court in the case of L.
Venkateshwara Rao and others, wherein prayer was for striking down Rule
26(3) of APMMC Rules as introduced by G.O.Ms.No.243 dated 08.05.1986
being ultra vires of Section 15(1) and 24(1) of MMDR Act besides being
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W.P.No.1839 of 2021 & batch
violative of Article 14, 19, 21, 254, 256, 265 and 300A of Constitution of India.
It was held in said case as under:
―54. We do not see any force in the contention of the learned Counsel.
Under the provisions of the Act and the Rules, unauthorised mining of
minerals whether they be minor minerals or other minerals, is strictly
prohibited. The object is to check illicit quarrying of minor minerals. To achieve
that object, the State Government made rules providing for the levy and
collection of penalty in addition to the normal seigniorage fee in respect of
minor minerals unauthorisedly raised. It is not correct that the provisions of the
Act and the Mineral Concession Rules, 1960 contemplate levy on and
collection of royalty from only the lessees or licence holders. As is evident
from Sub-section (5) of Section 21, royalty can be recovered from any person
who unauthorisedly carries on mining operations apart from recovering the
mineral raised by such person or where such mineral has already been
disposed of, the price thereof. There can be no doubt that the State
Government has the competence to make rules fixing the seigniorage fee in
respect minor minerals, levying fines and providing for their collection.
Seigniorage fee is the fee chargeable on the minor minerals despatched or
consumed from any land. Rule 26 (3) (ii) of the rules prescribes the method
and manner of the levy of normal seigniorage fee and its collection from the
user or consumer together with penalty in case such user or consumer fails to
produce documentary proof in token of having paid the seigniorage fee in
respect of the minor minerals used or consumed.‖
49. It was further held by Full Bench that it is not impermissible for
the legislature to leave it to the Executive to determine details of levy and
collection of fees and penalty. Relevant para is reproduced as under:
―56. In case the user or consumer fails to produce proof of payment of
seigniorage fee in respect of minor minerals used or consumed by him, Rule
26(3)(ii) authorises the levy of penalty on such consumer or user. This
provision is intended to check illicit quarrying of minor minerals and to prevent
evasion of mineral revenue due to the Government. The learned counsel for
the respondent company has drawn our attention to Rule 209-A of the Central
32
W.P.No.1839 of 2021 & batchExcise Rules which authorises levy of penalty in addition to the excise duty on
any person who acquires possession of goods, to submit that the excise duty
and penalty can be levied on and recovered from any person other than the
producer or manufacturer. It is not impermissible for the legislature to leave it
to the executive to determine the details of levy and collection of fees and
penalty including the selection of persons on whom it can be levied and the
rates at which it can be charged, as observed by the Supreme Court in
Gwalior Rayon Mills v. Assistant Commissioner of Sales Tax. The Legislature
can confer power upon another authority to make subordinate or ancillary
legislation. In view of the provisions of Section 15 of the Act, it is within the
competence of the State Government to make a rule providing for the levy and
collection of penalty from an user or consumer of minor minerals in case he
fails to produce documentary proof in token of having paid the mineral
revenue due to the Government in respect of such mineral used or
consumed.‖
50. It was categorically held that Rule 26 is within limits of statutory
power conferred upon State Government.
51. Reference was made by learned counsel for writ petitioner to
judgment of Hon‟ble the Supreme Court in Mineral Area
Development Authority to buttress the argument that as long as lessee was
holding a valid license permit/ lease, such penal measures cannot be imposed
upon them. Such argument is clearly devoid of any merit. The said judgment
does not, in any manner, come to aid of writ petitioner on this aspect. In fact,
in said judgment as per majority view, it has been held that List II Entry 50
does not constitute an exception to the position of law laid down in M.P.V.
Sundararamier and Co. and others Vs. The State of A.P. and another,
1958 SCC OnLine SC 22, and that though Parliament can impose
any limitations on the legislative field created by that Entry under a law relating
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W.P.No.1839 of 2021 & batch
to mineral development, no such limitation had been imposed as under the
MMDR Act. Hon‟ble the Supreme Court in the case of All Dimasa Students
Union was dealing with appeals which were filed challenging various orders
passed by National Green Tribunal, wherein several directions had been
issued with measures to be taken to check and combat unregulated coal
mining in tribal areas of State of Meghalaya. There is no quarrel that the Rules
promulgated under the statute cannot be beyond the parameters laid down in
the Act. However, in the present case, learned counsel for writ petitioner
was unable to point out any such infraction.
52. In our considered opinion, there is no merit whatsoever in the
argument that such penalties, Seigniorage fee, DMF and MERIT amounts
cannot be imposed by executive officers and can be levied only by a Court of
competent jurisdiction.
53. As noted in foregoing paras, object of these provisions is to check
illicit quarrying, transportation and storage of minor minerals. Section 15 of
MMDR Act empowers the State to promulgate rules in respect of minor
minerals as has been reproduced in foregoing paras. Section 23C especially
empowers State Government to make rules for preventing illegal mining,
transportation and storage of minerals. It is provided in Section 23(C)(2)(g)
that in particular and without prejudice to generality of the power, such rules
may provide for any other matter which is required to be or may be prescribed
for purpose of prevention of illegal mining, transportation and storage of
minerals.
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W.P.No.1839 of 2021 & batch
54. It is pertinent to note that illegal mining is a malaise, with which
Society has been plagued. Human greed, leading to rampant, unashamed and
unabashed environmental degradation, has led to disastrous results, which
now stare us in the face. Imposition of monetary penalty, seigniorage fee etc.,
as above by the authorized officer in the given factual matrix does not bring
the Rules in violation of or in excess of the parent statute.
55. Learned counsel for writ petitioners were unable to point out any
ground whatsoever, which would compel us to conclude that the said
provisions in Rules 26 and 34 of APMMC Rules are ultra vires the parent Act.
56. Thus, challenge to amendments made to Rules 26 and 34 of
APMMC Rules, 1966, through G.O.Ms.No.35 dated 01.07.2020 fails.
57. Thus, impugned order dated 30.09.2022 is also liable to be set
aside, keeping in view the discussion in foregoing paras upholding validity of
Rule 26 of APMMC Rules, 1966. There is no contradiction or inconsistency
between the MMDR Act, 1957, and APMMC Rules, 1966. Such conclusion
has been incorrectly arrived at by learned Single Bench. Such an
interpretation, in fact, places a premium upon the wrong doers who may be
able to get away with impunity despite violations as may have been committed
by them.
58. W.A.Nos.164, 171 and 238 of 2021, decided by impugned order
dated 06.10.2020, are the ones wherein learned Single Bench had set aside
demand notice(s) on the premise that the rule as amended on 14.03.2016
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W.P.No.1839 of 2021 & batch
also provided for imprisonment for a term which may extend to two years or
with fine which may extend to Rupees Five Lakhs along with market value of
mineral and seigniorage fee. Therefore, such penalty could not be imposed by
the departmental officials but was within the sole purview of a Court of
competent jurisdiction. Learned Single Bench in its order dated 06.10.2020
has in fact specifically observed that “the old rule may have authorized the
officials to levy penalty but in this Court’s opinion the new rule by prescribing
punishment of imprisonment upto two years or with fine and market value of
the mineral etc., or both has taken this power out of the purview of the 3rd
respondent and the like”.
59. It is a matter of record that, in all these three cases, proceedings
were initiated against the writ petitioners for realization of normal seigniorage
fee, market value of mineral and penalty. There is no move on the part of the
department by way of said proceedings to impose any imprisonment etc.
60. It is a settled position that unless and until a provision is made out
to be manifestly arbitrary or illegal, its validity shall be presumed. Moreover, in
the present case, it is essential to have a harmonious interpretation and
construction of this provision as it stood after the amendment in March
2016 till 01.07.2020. Power to impose penalty, seigniorage fee, market value
of the mineral is clearly within the purview of the departmental official as
specified. It is only the aspect of imposition of imprisonment if so stipulated by
the department that necessary steps would have to be taken for filing of the
complaint before a Court of competent jurisdiction for necessary action. It is a
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W.P.No.1839 of 2021 & batch
settled position that Court should attempt to harmonize the provision in a
given factual matrix by lending such interpretation that the provision itself does
not become a dead letter or a useless one, rather it upholds the legislative
intent to take necessary steps for prevention of illegal mining, transportation
and storage of minerals.
61. In all fairness, we note another argument raised by learned
counsel for writ petitioner, though only to be rejected, viz. that by way
of issuance of G.O.Ms.No.100 dated 26.06.2025, the existing heading of Rule
26 has been changed to “recovery of mineral for unauthorized
quarrying” which indicates that State itself was of the view that penalty cannot
be imposed and exacted by the Director of Mines or any other officer as may
be specified. Such substitution of heading does not, in any manner, come to
aid of the writ petitioner. This argument is accordingly rejected being devoid of
any merit.
62. Impugned order dated 06.10.2020 is also unsustainable in view of
discussion in foregoing paras.
63. Thus provision of imposition of monetary penalties, Seigniorage
fee, etc. for illegal mining, transportation and storage, etc., of minor minerals
and its imposition by the executive officers is valid. However, such imposition
has to be in strict accordance with provisions as laid down after providing
proper opportunity to stakeholder/affected person. It bears reiteration that no
arguments had been addressed on individual facts of any of the cases. No
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W.P.No.1839 of 2021 & batch
argument was raised that the penalties imposed as upheld by appellate
authorities are incorrect. Insofar as W.A.Nos.1058, 1061, 1062, 1063, 1064,
1065 & 1066 of 2022 are concerned, wherein it is only the demand notice(s)
which had been challenged, appeals, if any, are filed by said lessees within a
period of 15 days, be entertained by authorities in accordance with law.
64. Keeping in view facts and circumstances as above, amendment
of Rule 26(3) vide G.O.Ms.No.35 dated 01.07.2020 is upheld. W.P.No.1839 of
2021 is accordingly dismissed. Impugned orders dated 06.10.2020 and
30.09.2022 passed in W.P.Nos.8356, 8361 and 8366 of 2020; and
W.P.Nos.8390 of 2018, 12950, 12334, 27952, 28372, 27815 & 27903 of 2021
respectively are set aside and the writ petitions dismissed. W.A.Nos.164, 171
& 238 of 2021; 1058, 1061, 1062, 1063, 1064, 1065 & 1066 of 2022 are
accordingly allowed. No costs.
Consequently, connected miscellaneous applications, if any, shall stand
disposed of.
Photocopy of this order be placed on files of connected cases.
LISA GILL, CJ
Date: 29.07.2026 RAVI CHEEMALAPATI, J
kbs
Uploaded on : 29.07.2026
Whether the order is Speaking/Reasoned : Yes
Whether the order is Reportable : Yes
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65
HON'BLE MRS. JUSTICE LISA GILL, CHIEF JUSTICE
&
HON'BLE MR. JUSTICE RAVI CHEEMALAPATI
W.P.No.1839 of 2021 along with
W.A.Nos.164, 171 & 238 of 2021;
W.A.Nos.1058, 1061, 1062, 1063, 1064,
1065 & 1066 of 2022
Dt: 29.07.2026
kbs
