Patna High Court
Lalan Kumar vs The State Of Bihar on 15 July, 2026
Author: Sandeep Kumar
Bench: Sandeep Kumar
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.17389 of 2024
======================================================
Lalan Kumar, son of late Mahendra Rai, Resident of Chitarchak, P.O. -
Pahleja Badka, P.S.- Sonepur, District - Saran.
... ... Petitioner
Versus
1. The State of Bihar through the Principal Secretary, Mines and Geology
Department, Government of Bihar, Vikas Bhawan, Bailey Road, Patna.
2. The Principal Secretary Cum Mines Commissioner, Mines and Geology
Department, Government of Bihar, Vikas Bhawan, Bailey Road, Patna.
3. The Director, Mines and Geology Department, Government of Bihar, Vikas
Bhawan, Bailey Road, Patna.
4. The District Magistrate Cum Collector, Patna.
5. The District Mining Officer, Patna.
... ... Respondents
======================================================
Appearance :
For the Petitioner : Mr. Suraj Samdarshi, Advocate
Mr. Avinash Shekhar, Advocate
Ms. Simran Kumari, Advocate
Ms. Abhilasha Jha, Advocate
For the State : Mr. Surya Deo Yadav, AAG-9
For the Mines Department: Mr. Naresh Dikshit, Spl. P.P.
Mr. Brij Bihari Tiwari, Advocate
Ms. Shruti Singh, Advocate
======================================================
CORAM: HONOURABLE MR. JUSTICE SANDEEP KUMAR
C.A.V. JUDGMENT
Date : 15-07-2026
By way of this writ petition, the petitioner has
prayed for the following reliefs:-
"i. To issue an appropriate writ, order or
direction in the nature of mandamus
commanding the Respondents to refund
the proportionate royalty amount for a
period of 77 days during which the
petitioner was precluded from conducting
mining activity at Sand ghat No.06, Patna
Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
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on account of restriction imposed by the
Respondent on generation of e-transit
challans and also on account of
restriction imposed by SEIAA contrary to
the terms of the NIT and Agreement or to
alternatively extend the settlement period
by 77 days.
ii. This Hon'ble Court may adjudicate and
hold that the action of the Respondent
Authorities in not granting proportionate
remission in royalty for the period during
which the petitioner was restrained /
prohibited from conducting mining
activity for absolutely no fault on its part,
is completely illegal, arbitrary and non-
est in the eyes of law.
iii. This Hon'ble Court may further adjudicate
and hold that according to Rule 51(4) of
Bihar Minerals (Concession, Prevention
of Illegal Mining, Transportation and
Storage) Rules, 2019, a settlee is
obligated to pay royalty only for mineral
"extracted" and "removed" by it.
iv. This Hon'ble Court may further
adjudicate and hold that the action of the
Respondents in obtaining the entire
amount of royalty and not allowing the
petitioner to conduct mining activity
amounts to unjust enrichment.
(v) To grant any other relief or reliefs which
the Petitioner may be found entitled to in
the facts and circumstances of the case."
Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
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2. The brief facts of this case are that in the
year 2022, the respondents floated an N.I.T. for settlement of
sand ghats within the district of Patna for a period of five years.
The petitioner participated in the auction which was held on
17.10.2022
and emerged as the highest bidder for Sand Ghat
No.06 after quoting Rs.35,40,67,200/-. The reserve price of the
aforesaid sand ghat was Rs.11,06,46,000/- and the earnest
money deposit (EMD) was Rs.2,76,61,500/-. The petitioner paid
the differential security deposit of Rs.6,08,55,300/- on
20.10.2022 and thereafter an in-principal work order was issued
in favour of the petitioner vide letter dated 08.11.2022.
Thereafter, the petitioner applied for grant of environmental
clearance, which was granted by the State Environment Impact
Assessment Authority, Bihar (SEIAA) on 20.10.2023 and
consequent thereto, an agreement was entered into between the
petitioner and the Mining Department. The Collector vide letter
dated 29.11.2023 permitted the petitioner to commence mining
at the said sand ghat.
3. It is the case of the petitioner that in
February, 2024 a condition was imposed by the officials of the
mining department to the effect that a settlee could not generate
e-transit challans for more than 150-160 vehicles per day and
Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
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this restriction was irrespective of the quantum of sand being
transported on the said vehicles, rather the restriction was
imposed on the number of vehicles itself.
4. It is further the case of the petitioner that
under Rules 39 and 43 of the Bihar Mineral (Concession,
Prevention of Illegal Mining, Transportation and Storage) Rules,
2019, transportation of sand is permissible only through valid e-
transit challans. As the petitioner was allowed to generate only
150-160 challans per day, it was effectively prevented from
transporting and selling sand beyond that limit and therefore, it
is the case of the petitioner that, the said restriction caused
substantial financial loss to the petitioner. Accordingly, the
petitioner, vide representation dated 01.04.2024, requested the
Director, Mines and Geology, to increase the daily limit of e-
transit challans but no action was taken upon the representation
of the petitioner. Therefore, the petitioner submitted a
representation dated 18.04.2024 to the Collector, Patna for
increasing the slot limit of the petitioner but no steps were taken
and therefore, the petitioner continued to suffer monetary loss
on a daily basis. Finally, the petitioner vide letter dated
04.05.2024, surrendered the settlement of the sand ghat
indicating the reasons to be the slotting system introduced by
Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
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the mining department.
5. It is further the case of the petitioner that
because the NIT and Agreement contemplated suspension of
mining only during July, August and September, the subsequent
condition imposed by SEIAA extending the suspension from
mid-June to mid-October, as communicated by the Director,
Mines vide Memo No. 2374 dated 14.06.2024, curtailed the
mining period of the petitioner by an additional period of one
month. Further, the restriction on generation of mining challans
continued till 15.06.2024, after which excavation was
completely stopped. It is further the case of the petitioner that
since the sand could only be sold from the secondary loading
area, the delay in providing the requisite ID and password till
05.07.2024 on the part of the respondents, prevented the
petitioner from selling sand from 16.06.2024 to 04.07.2024.
Besides this, generation of e-transit challans was also
intermittently stopped/restricted by the Mining Department,
causing further disruption. It is also the case of the petitioner
that he had filed several representations before the respondent
authorities but all of which have remained unanswered and no
substantial steps were taken in this regard.
6. Learned counsel for the petitioner, at the
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outset, submits that the petitioner was precluded from carrying
out mining activity for 77 days for no fault of his own and
therefore he deserves to be refunded the proportionate royalty
amount for the aforesaid period of 77 days during which he
could not carry out the mining activity. The learned counsel for
the petitioner has drawn strength from the decisions of the
Hon’ble Supreme Court in the case of Jai Durga Finvest (P)
Ltd. vs. State of Haryana & Ors. reported as (2004) 3 SCC 381
and the observations of the Hon’ble Supreme Court in the case
of Chitra v. State of Kerala, reported as (2016) 1 SCC 685.
7. Learned counsel for the petitioner further
submits that the action of the respondent in imposing the
restriction on the generation of e-challans mid-way of the sand
ghat lease settlement is arbitrary and the petitioner could not be
saddled with the loses on account of such arbitrary policy. The
petitioner had paid more than three times the reserve price for
the settlement of the sand ghat, however, against 15.49 Lakh
M.T. of sand the petitioner could only excavate about 9.49 Lakh
M.T. of sand, therefore, the petitioner was precluded from
excavating about 6 Lakh M.T. of un-utilized sand capping. It is
further submitted that at the cost of approximately Rs.288.57
per M.T. the petitioner, has therefore, suffered a substantial loss
Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
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for no fault of his own.
8. Lastly, it has been submitted by learned
counsel for the petitioner that the action of the respondents in
precluding the petitioner from operating his sand ghat and
thereby, preventing him from excavating and removing the sand
from his allotted sand ghat is illegal and arbitrary and the
petitioner cannot be made to suffer monetary loss on account of
inaction on the part of the respondents.
9. Per contra, learned counsel for the
answering respondents, at the outset, has submitted that the
present writ petition is wholly misconceived and not
maintainable since the relief claimed are flowing from a
contractual relationship between the petitioner and the
respondents and therefore, cannot be agitated in writ
proceeding. It is emphasized that the petitioner after having
emerged successful in the bidding process, voluntarily and
willingly entered into the agreement after having accepted all
the terms and the clauses and as such, cannot now turn around
to seek remedies which are not contemplated under such terms
and conditions.
10. The learned counsel for the answering
respondents has next submitted that the tender conditions are
Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
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binding in nature and the petitioners after having participated in
the same, cannot be permitted to turn around and challenge the
same after having accepted and acted upon the terms and
conditions of the tender.
11. Relying upon the decisions of the Hon’ble
Supreme Court in the case of Rajasthan State Industrial
Development Corporation vs. Diamond & Gem Development
Corporation reported as (2013) 5 SCC 470 and Balaji Ventures
Pvt. Limited vs. Maharashtra State Power General Company
Limited & Anr. reported as 2022 SCC OnLine SC 1967, the
learned counsel for the answering respondents have submitted
that a party which has voluntarily entered into a contract with
full knowledge of its terms and conditions and accepted its
benefits by acting upon it, is estopped from later challenging the
contractual conditions itself or seeking to avoid its
consequences.
12. I have considered the rival contentions of the
parties and perused the material on record.
13. The nucleus of the present case revolves
around the fact that that the petitioner was precluded from
operating the sand ghat for the reasons, which according to the
petitioner, were not attributable to him.
Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
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14. The Hon’ble Supreme Court in the case of
Jai Durga Finvest (P) Ltd. v. State of Haryana & Ors.,
reported as (2004) 3 SCC 381 : 2004 SCC OnLine SC 40 has
held as under:-
“10. The question, thus, which was required to
be posed and answered was as to whether
clause 18-A of the agreement would remain
enforceable despite the fact that the
appellant allegedly could not extract any
sand by reasons of omission and
commission on the part of the respondents
concerned. The appellant herein has raised
a plea that the contract became impossible
to be performed as the landowners of the
area in question did not receive
compensation and despite request, the third
respondent did not enforce clause 27 of the
agreement.
11. It is not in dispute that the grant of mining
lease in favour of the appellant herein for
the extraction of mineral sand by the
respondents is governed by the provisions
of the Punjab Minor Mineral Concession
Rules, 1964. In terms of Rule 33 the bidder
is required to execute a deed in Form ‘L’.
Clause 27 of the agreement in Form ‘L’
obligates the respondents to comply with
the request made in terms thereof. The
Appellate Authority had not considered this
aspect of the matter. The High Court also
Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
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first question that arises is whether the
respondents complied with their statutory
obligations when the request was made by
the appellant. If not, the second question
would be the effect of non-compliance with
the statutory obligation of the respondents
which formed part of the contract insofar
as they did not comply with the appellant’s
request as aforementioned which had a
direct bearing on the right of the appellant
to raise sand. The High Court, as noticed
hereinbefore, has merely proceeded on the
basis that the appellant had entered into
the contract with his eyes wide open; but,
the same would not, in our opinion, mean
that they were bound to pay the contract
amount, get its security amount forfeited,
as also pay interest at the rate of 24 per
cent, although it could not, by reason of
acts of omission and commission on the
part of the respondents, carry out the
mining operation as per the terms of the
agreement.
12. Whether in such a situation the doctrine of
frustration will be invoked or not should
have been considered by the High Court.
[See M.D., Army Welfare Housing
Organisation v. Sumangal Services (P) Ltd.
[(2003) 8 Scale 424 (2)]”
15. Further, the Hon’ble Supreme Court in the
Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
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case of Chitra v. State of Kerala, reported as (2016) 1 SCC
685 : 2015 SCC OnLine SC 745 has held as under:-
“5. The facts are neither disputed nor are they
convoluted. The appellant had submitted
an application on 16-3-1990 for the grant
of an FL 3 licence in respect of her Hotel
Chanakya at Trivandrum, which had been
granted. However, it transpired that a third
party filed a suit in which the Munsif
Court, Trivandrum granted an interim
injunction restraining the Excise
Commissioner from issuing the said
licence to the appellant for user at her said
hotel. This suit, along with another suit
similar to it, was eventually dismissed on
29-9-1993. In an ensuing appeal, the
District Judge granted an ad interim
injunction on 15-4-1994, which came to be
vacated on 3-6-1994. On 23-11-1994, the
respondent rejected the appellant’s
application for the FL 3 licence due to an
amendment to the Foreign Liquor Rules
which had resulted in private parties being
ineligible for FL 3 licences. Consequently,
the appellant filed OP No. 18145 of 1994,
which was allowed by the Single Judge.
Acting in accordance with the Single
Judge’s directions, the Excise
Commissioner granted the licence and
raised a demand of only the proportionate
licence fee which was duly deposited; but
Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
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Bench in the subject appeal. As already
mentioned, it seems most likely that the
attention of the Division Bench which
passed the impugned judgment was not
brought to bear on the already existing
binding decisions in R. Vijayakumar [1994
Supp (2) SCC 47] as well as Jayadevan v.
Board of Revenue [1998 SCC OnLine Ker
209] wherein the Division Bench of the
High Court of Kerala has held that the
licensee is required to pay only the
proportionate licence fee if the delay in
granting the licence, or utilising it, as the
case may be, are for reasons not
attributable to the said licensee.
6. We are in agreement with the learned
Senior Counsel for the appellant that the
legal principle to the effect that no person
can be prejudiced because of an act of a
court is apposite and relevant in the
present case. We say this keeping in
perspective the position that although the
appellant had applied for the FL 3 licence
which would ordinarily run the course of
one financial year, due to interim orders
passed by the courts, the appellant could
only utilise it for a fraction of that period.
We hasten to clarify that the appellant’s
application was not made in the duration
of that year and was thus initially not for a
fraction of the financial year. This Court
Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
13/19has already held in R. Vijayakumar [1994
Supp (2) SCC 47], in the circumstances
prevailing in that case, that the
Department could not interfere with the
utilisation of the FL 3 licence, provided
that the licensee complied with all other
conditions as well as “payment of annual
rental proportionately”. It is, therefore,
clear that Rule 14 would not impede or
inhibit the charging of annual
proportionate fee so long as no failure is
placed on the licensee or it is blameworthy
itself. We must be quick to clarify that in
the event that a party applies for a period
which is obviously not effective for the
entire financial year, such as applying for
a licence midway that financial year, the
full fee for that year may be claimable or
chargeable and, therefore, would have to
be paid. In other words, had the appellant
applied for the licence even with the
knowledge that because of external factors
such as a pre-existing injunction order,
etc., she would not have been able to
exploit it for the entire year, she may not
have been liable to pay the licence fee for
the entire year. This is not the factual
matrix which obtains in the case at hand;
the licence could only be granted for the
period from 21-12-1999 to 31-3-2000 i.e.
till the close of that financial year, owing
to unforeseeable circumstances beyond the
Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
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We have already made a mention of the
Division Bench judgment delivered in
Jayadevan [1998 SCC OnLine Ker 209]
which in turn was referred to in another
Division Bench judgment in Rajagopalan
Nair v. Commr. of Excise [1989 SCC
OnLine Ker 387], wherein the Division
Bench directed that the licensee was
entitled to remission of payment of kisht
because of being disabled to conduct its
business on account of the interim orders
passed by the Court. We affirm the
conclusions arrived at in these decisions.
We hold that a party is entitled to seek a
remission in the payment of licence fee if
it is precluded from transacting business
on the strength of that licence because of
factors and reasons extraneous to it
and/or if it is granted the licence on the
direction of a court for only a portion of
the financial year.
7. The appeal is accordingly allowed. The
respondent State shall, within six weeks
from today, refund to the appellant the
balance amount of Rs.9,41,257 together
with interest thereon @ 6% p.a. with effect
from 11-8-2005. Failure to do so shall
render the respondent State liable to
refund the aforementioned sum of Rs
9,41,257/- together with interest @ 12%
p.a. calculated from 11-8-2005 till the date
Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
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payment of costs quantified at R.s 15,000
(Rupees fifteen thousand only).
Civil Appeal No. 4900 of 2006
8. The facts that arise in this appeal are
somewhat complex in comparison to
Chitra’s foregoing appeal. The appellant
had been granted an FL 3 licence for its
Hotel Hackoba at Ernakulam for the
period ending on 31-3-2001. Due to a
dispute with its landlord it had to vacate
its premises; and on locating to another, it
applied for the renewal of the licence on
26-2-2002. This was obviously for the
immediately succeeding year 1-4-2001 to
31-3-2002. The Excise Commissioner
rejected the application for renewal on
4-9-2002 on the ground that the licence
had become defunct; a decision which was
upheld by the State Government. In these
circumstances, the appellant successfully
approached the High Court of Kerala
which issued a direction to the State
Government to issue the licence within two
weeks. The Single Judge simultaneously
directed the appellant to pay the licence
fee for the years 2001-2002 and 2002-
2003 by his judgment dated 27-1-2003.
The appellant preferred an appeal, and on
the first day of its hearing, the Division
Bench passed an ad interim order
directing the appellant to pay Rs 15 lakhs.
Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
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25-3-2003, the licence was renewed. The
Division Bench of the High Court of
Kerala noted Rule 14 of the Foreign
Liquor Rules as well as the fact that it had
not been challenged. The Division Bench
accepted the argument of the appellant
that for the reason that it could not utilise
the licence for the year 2001-2002 as its
application had been disallowed it was not
liable to pay any fee; viz. during this
period it was prevented by extraneous
elements and factors from utilising the
licence. However, the Division Bench held
that since the licence was renewed in
March 2003, even though the appellant
could conduct its business for less than a
fortnight in that licence year, nevertheless
the appellant was liable to pay the full fee
for the year 2002-2003. It is these
circumstances which have constrained the
appellant to file the present appeal before
us.
9. In order to eradicate any possibility of
misunderstanding our present judgment,
we hasten to clarify that had the
appellant’s application for renewal of the
FL 3 licence found approval instead of
rejection on 4-9-2002, the appellant would
have been liable to pay the entire fee for
the year 2001-2002. This is so for the
simple reason that there was no third-party
Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
17/19interference or intervention which led to
the non-utilisation of that licence for the
previous portion of that year; it may be
reiterated that the appellant had to locate
fresh premises. However, after 4-9-2002,
the appellant cannot be held responsible in
any way for the non-utilisation of the
licence up to the date it was eventually
renewed i.e. 25-3-2003.
10. On the predication of the legal analysis and
discussion in Civil Appeal No.2246 of
2006 (supra), we are of the opinion that
the appellant is only liable to pay the
proportionate licence fee for the period in
which it could avail of the licence, that is,
25-3-2003 to 31-3-2003. It would be fair to
cogitate upon whether the appellant
should have declined the licence for
virtually a week in that year, and since it
failed to exercise that option, whether it
should be burdened with the fee for the full
year. It seems to us that any person placed
in the position of the appellant would not
be in a position to decline to accept the
renewal of the licence even though it was
for less than a fortnight, since that would
have led to the licence being rendered
defunct; which may have then led to
consequence of disentitlement for grant or
renewal of the FL 3 licence in the future.”
16. At this juncture, this Court has noted that in
Patna High Court CWJC No.17389 of 2024 dt.15-07-2026
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C.W.J.C No.6991 of 2025, titled as ‘M/s Awanish Construction
vs State of Bihar & Ors‘ which was decided together with the
analogous cases, this Court had directed the respondent
authorities to consider the representation of the petitioners
therein and thereafter pass a reasoned and speaking order in
light of the decision of the Hon’ble Supreme Court in the case
of Jai Durga Finvest (P) Ltd. (supra) and the observations of
the Hon’ble Supreme Court in the case of Chitra (supra).
17. It is settled position of law that the petitioner
can not be subjected to adverse civil consequence where the
inability to exercise a statutory or contractual right is occasioned
by the action or omission of the respondent authorities
themselves. Consequently, where the non-utilisation of a licence
is not attributable to the petitioner, the imposition of the full
financial burden would be arbitrary and inequitable, and the
petitioner should be entitled to proportionate remission.
18. In these circumstances, the petitioner is
directed to approach the respondent authorities for appropriate
calculation of the refund of the proportional royalty amount for
the period during which he was precluded from the mining in
the sand ghat settled in his favour, for reasons not attributable to
him.
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19. If such a representation is filed, the same
shall be considered and decided by the respondent authorities
within a period of eight weeks from the date of filing of such a
representation by the petitioner and thereafter the respondent
authority shall pass a reasoned and speaking order in accordance
with law after affording an opportunity of hearing to the
petitioner. While deciding the aforesaid representation of the
petitioner, the respondent authority shall also consider the law
laid down by the Hon’ble Supreme Court in the case of Jai
Durga Finvest (P)Ltd. (supra).
20. This Writ petition is allowed in the aforesaid
terms.
21. Pending interlocutory applications, if any,
also stands disposed of.
(Sandeep Kumar, J)
pawan/-
AFR/NAFR N.A.F.R CAV DATE 18.03.2026 Uploading Date 20.07.2026 Transmission Date
