Smti Nanda Sarma vs. The State Of Assam And 6 Ors.

Held

The Court held that the provisions of Rule 5(3), Rule 8(6), and Rule 27(4) of the Assam Minor Minerals Concession Rules, 2013, as amended, are applicable only to projects and works undertaken by the Government, its agencies, or Urban Local Bodies, and the contractors engaged for such projects. The Court found that the incidence of royalty is on the mining and extraction of minor minerals, and the imposition is upon the Government, its agencies, Urban Local Bodies, or their contractors who take temporary mining leases. There is no charge stipulated upon a private person or entity who purchases minor minerals or ordinary clay/earth. Therefore, the communication dated 02.03.2023, extending these provisions to private agencies, was contrary to the Mines and Minerals (Development and Regulation) Act, 1957, and the Rules of 2013. Consequently, the impugned communication was set aside and quashed. The Court further declared that Urban Local Bodies cannot impose royalty on private persons/entities for private constructions or insist on royalty payment as a condition for issuing construction permits.

Facts

The petitioner, Smt. Nanda Sarma, proprietor of Pride Properties, engaged in real estate construction, applied for permission to construct a residential building from the Guwahati Municipal Corporation (GMC), respondent No. 7. While permission was granted, the GMC insisted on payment of 'forest royalty' at 2% of the project cost, as per the Third Schedule of the Assam Minor Minerals Concession (Amendment) Rules, 2021. This demand was based on a communication dated 02.03.2023 from the Joint Secretary, Mines and Minerals Department, Government of Assam, which extended the ambit of the 07.10.2021 notification to private agencies. The petitioner challenged this communication, arguing that the royalty demand was illegal and contrary to the relevant rules and the Mines and Minerals (Development and Regulation) Act, 1957.

Key Issues

1. Whether the Assam Minor Minerals Concession (Amendment) Rules, 2021, specifically Rule 5(3), Rule 8(6), and Rule 27(4), which stipulate the collection of royalty on minor minerals, are applicable to private construction projects undertaken by private entities, or if they are restricted to government projects, agencies, or urban local bodies? Petitioner's contention: The petitioner argued that the Rules of 2013, as amended, particularly Rule 5(3), Rule 8(6), and Rule 27(4), were intended for government departments, agencies, or contractors engaged in government projects. The communication dated 02.03.2023, extending these provisions to private agencies, was therefore illegal and contrary to the spirit and letter of the Act and Rules. They contended that the incidence of royalty is on the mining and extraction of minor minerals, and there is no charge upon a private person/entity who purchases these materials. Revenue's contention: The respondents, represented by the State and its departments, relied on the communication dated 02.03.2023, which extended the notification dated 07.10.2021 to private agencies, thereby justifying the demand for forest royalty on private construction projects.