M/S B.S.C.P.L Infrastructure LTD. vs. The State Of Bihar

Held

The Court held that the actions of the respondent authorities, particularly the Collector and the Director, were arbitrary and constituted a colorable exercise of power, leading to the petitioner suffering losses and hindering the road construction project. The Court found that the Collector, who has the exclusive authority under the Bihar Minor Mineral Concession Rules, 1972, to grant or refuse mining leases, had acted inconsistently by first permitting removal and then prohibiting it without assigning reasons, and that the Director had no authority to interfere with the Collector's decision. The Court relied on Supreme Court precedents establishing that arbitrary actions, those without jurisdiction, in excess of authority, or involving abuse of power, are subject to judicial review under Article 226. The Court directed the respondent authorities to allow the petitioner to remove all quantified broken stone material within two months. If fresh determination was needed, it was to be conducted within one week in the petitioner's presence. The Court also clarified that the petitioner must pay any due royalty and GST within the two-month period. The Court urged vigilance from the authorities in the future.

Facts

M/s B.S.C.P.L Infrastructure Ltd. (the petitioner) was allocated mining blocks in Nawada district, Bihar, for road construction projects. The lease for Block No. 3 expired on December 30, 2020, and for Block No. 6 on January 14, 2021. Due to COVID-19 restrictions, the petitioner faced delays. Inspections on June 2, 2021, and August 4, 2021, quantified the remaining broken stone chips. The Assistant Director initially permitted removal, followed by the Collector granting time until February 19, 2022. However, the Collector later issued a letter on August 31, 2021, restricting removal, and the Director, Mines, directed forfeiture of property left on site after six months of lease determination. The petitioner sought permission to remove the excavated materials, arguing the actions were arbitrary and caused them loss.

Key Issues

1. Whether the actions of the Mines and Geology Department authorities, particularly the Director and Collector, in prohibiting the removal of excavated broken stone chips after granting permission and subsequently directing forfeiture, were arbitrary, without jurisdiction, or constituted a misuse of power, thereby violating Article 14 of the Constitution of India? Petitioner's arguments: The petitioner contended that the authorities acted arbitrarily and with mala fide intentions. They relied on the initial permissions granted by the Assistant Director and the Collector, highlighting that the subsequent prohibition and forfeiture orders were issued without proper justification and before the expiry of the granted period. They cited Supreme Court judgments on arbitrary exercise of power and abuse of authority. Revenue/State's arguments: The respondents, through their counsel, indicated surprise at the Collector's letter dated August 31, 2021, which contradicted earlier permissions. They admitted that the Assistant Director had acted on the oral direction of the Collector. The respondents also highlighted the petitioner's alleged inaction in removing machinery and infrastructure even after extensions.