Nafr High Court
Case Details
1 2025:CGHC:47657 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPC No. 3573 of 2023 1 - M/s ACB (India) Ltd. Through Its Authorized Signatory, A Company Duly Registered Under The Provisions Of The Companies Act 1956, Having Its Washery At Village Chakabuda, Tehsil Katghora, District Korba, Chhattisgarh ... Petitioner(s) versus 1 - State Of Chhattisgarh Through Its Secretary, Department Of Mineral Resources, Mantralaya, Mahanadi Bhawan, Nava Raipur, Atal Nagar, District Raipur, Chhattisgarh 2 - Collector-Cum-District Magistrate, Korba Collectorate Korba, District Korba, Chhattisgarh 3 - Mining Officer Office Of Collector (Mining Branch), Korba, District Korba, Chhattisgarh 4 - Rajasthan Rajya Vidyut Utpadan Nigam Ltd. Through Its Chief Engineer (Fuel), Room No. 201, 2nd Floor, Dreamax Plaza, Sahakar Marg, Jaipur, Rajasthan WPC No. 3683 of 2023 1 - M/s ACB(India) Ltd., Through Its Authorized Signatory, A Company Duly Registered Under The Provisions Of The Companies Act 1956, 2 Having Its Plant At Village Ratija, Tehsil- Pali, District - Korba, Chhattisgarh. ---Petitioner(s) Versus 1 - State Of Chhattisgarh Through Its Secretary, Department Of Mineral Resources, Mantralaya, Mahanadi Bhawan, Nava Raipur, Atal Nagar, District - Raipur, Chhattisgarh. 2 - Collector -Cum- District Magistrate, Korba, Collectorate Korba, District - Korba, Chhattisgarh. 3 - Mining Officer, Office Of Collector (Mining Branch), Korba, District - Korba, Chhattisgarh. --- Respondent(s) WPC No. 3684 of 2023 1 - M/s ACB (India) Ltd. Through Its Authorized Signatory, A Company Duly Registered Under The Provisions Of The Companies Act 1956, Having Its Washery At Village Dipka Tehsil Katghora, District Korba, Chhattisgarh ---Petitioner(s) Versus 1 - State Of Chhattisgarh Through Its Secretary, Department Of Mineral Resources, Mantralaya, Mahanadi Bhawan, Nava Raipur, Atal Nagar, District Raipur, Chhattisgarh 2 - Collector-Cum-District Magistrate Korba, Collectorate Korba, District Korba, Chhattisgarh 3 3 - Mining Officer Office Of Collector (Mining Branch) Korba, District Korba, Chhattisgarh 4 - Rajasthan Rajya Vidyut Utpadan Nigam Ltd. Through Its Chief Engineer (Fuel), Room No. 201, 2nd Floor, Dremax Paza, Sahakar Marg, Jaipur, Rajasthan --- Respondent(s) WPC No. 3679 of 2023 1 - M/s Maruti Clean Coal Ltd. Through It Authorised Signatory, A Company Duly Registered Under The Provisions Of The Companies Act 1956, Having Its Washery At Village Ratija, Tehsil Hardi Bazar, District Korba, Chhattisgarh ---Petitioner(s) Versus 1 - State Of Chhattisgarh Through Its Secretary, Department Of Mineral Resources, Mantralaya, Mahanadi Bhawan, Nava Raipur, Atal Nagar, District Raipur, Chhattisgarh 2 - Collector-Cum-District Magistrate Korba, Collectoate Korba, District Korba, Chhattisgarh 3 - Mining Officer Office Of Collector (Mining Branch), Korba, District Korba, Chhattisgarh --- Respondent(s) WPC No. 3677 of 2023 1 - M/s ACb (India) Ltd., Through Its Authorized Signatory, A Company Duly Registered Under The Provisions Of The Companies Act 1956, 4 Having Its Washery At Village Ratija, Tehsil Hardi Bazar, District : Korba, Chhattisgarh ---Petitioner(s) Versus 1 - State Of Chhattisgarh Through Secretary, Department Of Mineral Resources, Mantralaya, Mahanadi Bhawan, Nava Raipur, Atal Nagar, District : Raipur, Chhattisgarh 2 - Collector - Cum - District Magistrate, Korba, Collectorate Korba, District : Korba, Chhattisgarh 3 - Mining Officer, Office Of Collector (Mining Branch), Korba, District : Korba, Chhattisgarh 4 - Rajasthan Rajya Vidyut Utpadan Nigam Ltd., Through Its Chief Engineer (Fuel), Room No. 201, Iind Floor, Dreamax Paza, Sahakar Marg, Jaipur, Rajasthan. --- Respondent(s) WPC No. 3688 of 2023 1 - M/s Acb (India) Ltd. Through Its Authorised Signatory, A Company Duly Registered Under The Provisions Of The Companies Act 1956, Having Its Washery At Village Beltikri, Tehsil Katghora, District : Korba, Chhattisgarh ---Petitioner(s) Versus 1 - State Of Chhattisgarh Through Its Secretary, Department Of Mineral Resources, Mantralaya, Mahanadi Bhawan, Nava Raipur, Atal Nagar, District : Raipur, Chhattisgarh 5 2 - Collector-Cum-District Magistrate Korba, Collectorate Korba, District : Korba, Chhattisgarh 3 - Mining Officer Office Of Collector (Mining Branch), Korba, District : Korba, Chhattisgarh 4 - Rajasthan Rajya Vidyut Utpadan Nigam Ltd. Through Its Chief Engineer (Fuel), Room No. 201, I I Nd Floor, Dreamax Paza, Sahakar Marg, Jairpur, Rajasthan. --- Respondent(s) WPC No. 3676 of 2023 1 - M/s Acb (India) Ltd., Through Its Authorized Signatory, A Company Duly Registered Under The Provisions Of The Companies Act 1956, Having It Washery At Village Ranki, Tehsil Katghora, District Korba Chhattisgarh. ---Petitioner(s) Versus 1 - State Of Chhattisgarh Through Secretary, Department Of Mineral Resources, Mantralaya, Mahanadi Bhawan, Nava Raipur, Atal Nagar, District Raipur, Chhattisgarh. 2 - Collectro -Cum-District Magistrate, Korba, Collectroate Korba, District Korba, Chhattisgarh. 3 - Mining Officer, Officer Of Collector (Mining Branch), Korba, District Korba, Chhattisgarh. --- Respondent(s) 6 WPC No. 3580 of 2023 1 - M/s Maruti Clean Coal And Power Ltd. Through Its Authorised Signatory, A Company Duly Registered Under The Provisions Of The Companies Act 1956, Having Its Power Plant At Village Bandhakhar, Tehsil Pali, District Korba Chhattisgarh. ---Petitioner(s) Versus 1 - State Of Chhattisgarh Through Its Secretary Department Of Mineral Pesources, Mantralaya, Mahanadi, Bhawan, Nava Raipur, Atal Nagar, District Raipur, Chhattisgarh. 2 - Collector -Cum-District Magistrate, Korba, Collectorate Korba, District Korba, Chhattisgarh. 3 - Minig Officer, Office Of Collector (Mining Branch), Korba, District Korba, Chhattisgarh. --- Respondent(s) For Petitioner(s)
Legal Reasoning
: Shri Amrito Das, Advocate For Respondent/State(s) : Shri Praveen Das, Dy. Adv. General (Hon’ble Shri Justice Arvind Kumar Verma) Order on Board 12/08/2025 Petitioners has preferred the present petitions assailing the illegality, validity and propriety of the order dated 08.05.2023 and 3.11.2022 passed by the respondent No.3 whereby penalty has been imposed upon the petitioners under Sections 21(1) and 21(4) of the 7 Act,1957. The petitioners by way of the above batch of petitions therefore, have claimed for the following reliefs: 10.1. This Hon’ble Court may kindly be pleased to call the entire record pertaining to issuance of the order dated 08.05.2023 and3.11.2022 passed by the respondent for its kind perusal. 10.2 This Hon’ble Court may kindly be pleased to pass an appropriate writ quashing and setting aside the order dated 08.05.2023 passed by respondent No.3. 10.3. This Hon’ble Court may kindly be pleased to pass an appropriate writ quashing and setting aside the order dated 3.11.2022 passed by respondent No.3. 10.4. That this Hon’ble Court may kindly be pleased to pass an appropriate order/writ directing the respondents No.1 to 3 to make payment of adequate compensation to the petitioner for the loss suffered on account of th eillegal seizure and illegal restrain of coal at the plant/washery of the petitioner. 10.5. Cost of the petition.” 2. Facts of the case in brief are that the petitioners in the following petitions are having washeries and power plant at different places which are mentioned as under: Sl. No. 1. 2. 3. 4. Case No. Situated at WPC No. 3573 of 2023 Village Chakabuda, Tehsil Katghora, District Korba WPC No. 3684 of 2023 Village Dipka, Tehsil Katghora, District Korba WPC No. 3688 of 2023 Village Beltikri, Tehsil Katghora, District Korba WPC No. 3677 of 2023 Village Ratija, Tehsil Hardi Bazar, 8 District Korba 5. 6. 7. 8. WPC No.3676 of 2023 Village Ranki, Tehsil Katghora, District Korba WPC No. 3679 of 2023 Village Ratija, Tehsil Hardi Bazar, District Korba WPC No. 3683 of 2023 Village Ratija, Tehsil Pali, District Korba WPC No. 3580 of 2023 Village Bandhakhar, Tahsil Pali, District Korba The petitioners are having their washeries situated at different places in District Korba and they are being operated after due compliance with all the statutory norms. Suddenly, on 06.07.2022 a team comprising of government officials entered the premises of the petitioners’ washeries, sealed and seized their official records. The washeries were brought to a stand still and the Collector, Korba issued notices on 20.07.2022. The petitioners submitted their reply on 02.08.2022 furnishing entire details concerning the coal availability on their lands. Thereafter again on 18.11.2022 respondent No.3 issued show cause notice as to why the proceedings under Section 21(1) and 21(4) of the Mines and Mineral (Regulation and Development) Act, 1957 and Chhattisgarh Minerals (Mining, Transportation and Storage) Rules, 2009 be not drawn against the petitioners. Petitioners, therefore sought for an independent measurement/assessment of the coal available in their washery premises. However, without considering the material on record, respondent No.3 passed the order dated 3.11.2022 imposing penalty of Rs 80,00,000/- upon the petitioners in WPC Nos. 3573 of 2023 & 3684 of 2023, 3888 of 2023 and Rs. 40,00,000/- upon the petitioner in WPC No. 3677 of 2023, Rs. 3,58,773/- upon the petitioner 9 in WPC No. 3676 of 2023, Rs. 12,00,000/- upon the petitioner in WPC No. 3679 of 2023, and Rs. 1,60,19,969/- upon the petitioner in WPC No. 3683 of 2023. Hence the petitioners have approached this Court by filing these petitions. 3. Contention of the counsel for the petitioners is that in WPC Nos. 3573/2023, 3684/2023,3688/2023 and 3677/2023, the petitioners are companies having established their washeries at different villages of District Korba CG. The impugned order dated 08.05.2023 has been passed by the respondent No.3 in a most arbitrary and illegal manner without jurisdiction. The respondent No.3 has passed the order imposing penalty upon the petitioners under Section 21(1) and 21(4) of the Act, 1957. He submits that Section 21(1) of the Act, 1957 clearly provides that the fine amount cannot exceed Rs. 5,00,000/- per hectare of the area where the violation is alleged. The fact clearly shows that while imposing penalty the respondent authorities have virtually lost sight of the provisions of law and therefore the order impugned suffers from non- application of mind and is arbitrary. He further submits that Rule 14 of the Rules, 2009 does not enable the respondent to pass the impugned order imposing penalty in an arbitrary manner. It envisages that the Authorized officer shall grant an opportunity to rectify the alleged breach and it is only in a case given that the breach is not rectified within 15 days then the authorized officer can impose the penalty provided for under Rule 14. But the petitioners were not afforded any opportunity to cure the alleged defects and the impugned order has been passed in contravention of the statutory mandate imposing fine which is wholly arbitrary. Rule 2009 has been framed under Section 23C of the Act, 10 1957 in exercise of delegated legislation. Once the Act of 1957 prescribed the maximum fine which can be imposed, the delegated legislation cannot be read in any manner which can authorize the officer to impose a fine beyond the maximum limit. Fine prescribed under Rule 14 of the Rules 2009 has an inherent basic restriction beyond which the fine cannot be imposed. Rule 14 have to be read in conjunction with ‘ Section 21(1) failing which Rule 14 would become repugnant to the provisions contained under the parent legislation/Act. He therefore submits that the order dated 3.11.2022 is bad and arbitrary. 4. Contention of the counsel for the petitioners is that under the provisions of Section 21(4) of the Mines and Mineral (Development and Regulation) Act, 1957 the authority prescribed is only having authorization to seize the coal if found in excess and has no authority to impose penalty. For the authority to impose penalty or punishment, it has to file complaint before the court of competent jurisdiction that is special court constituted under Section 30-B of the Act of 1957. It is submitted by learned counsel for the petitioner that there has been gross illegality in issuance of the impugned order sine the alleged quantity of coal was not based upon any scientific assessment nor was it based upon proper methodological analysis. He therefore submits that without adverting to the contents of the reply or considering the request for independent assessment, respondent No.3 mechanically proceeded to impose an exorbitant penalty as mentioned above by the impugned order dated 3.11.2022 which is violative of the principles of natural justice and suffers from non-application of mind. 11 5. So far as the petitioners in WPC Nos. 3676/2023, 3679/2023 and 3683/2023 are concerned, it is submitted that the Companies of the petitioner established washeries at different places in District Korba ie Ranki & Ratiza. With respect to WPC No. 3580/2023, it is submitted by the counsel for the petitioner that the petitioner is a company having established a power plant at District Korba. He submits that the petitioner’s power plant is the end user of coal for electricity generation, the Chhattisgarh Minerals (Mining, Transportation and Storage) Rules, 2009 including Rule 3 (iii) do not apply as the restriction on storage without permit is only for purposes other than the final destination. On 06.07.2022 the washeries were inspected by the government officials and sealed the premises as well as the records of the petitioners companies and were not permitted either to remove or use the coal. The petitioners were summoned on 20.07.2022 alleging the violation of the violation of provisions of Chhattisgarh Minerals (Mining & Transportation Storage) Rule, 2009 and it was alleged that around 1600 MT, 22,727 MT and 38000 MT of coal respectively, was placed in the washeries of the above petitioners however, the petitioners failed to produce any valid document to substantiate the lawful authority under which the coal was retained in the premises. On 02.08.2022, the petitioners submitted their reply disputing the arbitrary action of the authorities contending that they were unable to produce the relevant documents for consideration as the washeries were sealed and documents were seized by the authorities. Another notice was summoned on 18.11.2022 to the petitioners alleging the illegal storage of coal in the washery. The measurement of coal as alleged in the notices were based on speculation without there being 12 any scientific methodology adopted by the inspection team for making proper measurement at the site. He submits that 7 units of the petitioners’ companies were sealed. 6. The State government had constituted a State Level High Power Committee comprising of senior officers from the Mining Department, SECL to conduct a re-inspection/re-verification of the coal stock as alleged by the respondents being placed in the premises of the petitioners’ washeries. The High Power Committee report establishes that the quantities cited in the notices were speculative as no scientific measurement/assessment of the stored coal was undertaken. The alleged quantity of coal is speculative and exaggerated as no scientific assessment was carried out and thus, cannot be relied upon for adverse action against the petitioners. Contention of the counsel for the petitioners is that since no scientific measurement of coal was
Decision
conducted the petitions may be disposed of with a direction to the State to form a High Power Committee with experts to re-assess the alleged quantity leaving the parties to avail remedies thereafter. The re- verification in other units of the petitioner’s group shows the impugned order is based on speculative estimates without scientific basis. Such arbitrary action causes grave civil and financial prejudice and cannot sustain. He therefore submits that it is evidence as to where a mineral is stored for self-consumption by the end user, the Rules of 2009 have no application. The object of the Rules is to prevent black marketing of minerals, requiring permits only where the mineral is put to transit for processing or beatification. Since the petitioner being a power plant, is the end use of the coal and either processes it for sale nor conducts any 13 beatification for transit, the Rules 2009 are inapplicable to the present petitions. 7. Per contra, learned counsel for the respondent No.1 to 3/State in his reply, has stated that the petitioners were found in possession of coal in excess of what was permissible under the governing statutes and rules. He submits that the petitioners have failed to understand the scope of the provisions provided under the Mines and Minerals (Development and Regulation) Act, 1957. The entire provisions of Section 21 and 22 of the Act, 1957 is as under: “(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 authorized in this behalf by that Government and the State Government or such authorized 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 14 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 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 (2 of 1974), an offence under sub-section (1) shall be cognizable. 22. Cognizance of offences. No court shall take cognizance of any offence punishable under this Act or any rules made thereunder except upon complaint in writing made by a person authorized in this behalf by the Central Government or the State Government.” 8. It is submitted that the provisions quoted under Section 21 comes under the heading of penalties and if sub-section (1)(2)(3)(4)(4-A) and (5) is read together, the inference which can be drawn is that the provisions contained under sub-section (5) of Section 21 is in the nature of compensation of price, rent royalty or tax to be recovered from the person who is raising and disposing of the mineral without any lawful authority. It is further submitted that the provisions contained in sub- 15 section (1)(2)(3) and (4) are different from the provisions contained in sub-section (5) of Section 21. He has relied upon the judgment of the Apex Court in the matter of Karnataka Rare Earth and another Vs. the Sr. Gelt. Department of Mines and Geology and Another reported in (2004) 2 SCC 783. He submits that the petitioners should be responsible for each and every quantity of material/minerals deposited or stored in its premises and it is mandatory duty of permit holder to record for each and every quantity and submit it before the authority on demand. In the present case, the petitioners have not maintained the records as stated above. The sub-clause (c) of sub-rule (ix) of Rule 14 provides for and mandates the permit holder in case of storage of coal shall keep necessary equipment at the storage/processing site for protection and make necessary arrangement for prevention of fire. The petitioners in the present case have not complied with and no such temporary site was found to be demarcated through fencing and wall. He submits that therefore the penalty has rightly been imposed under Section 21(1) and 21(4) of the Mines and Minerals (Development and Regulation) Act, 1957 read with Chhattisgarh Minerals (Mining, Transportation and Storage) Rules, 2009 and the impugned action has been taken in due exercise of statutory powers and does not warrant interference by this Court. 9. It is submitted that the petitioners were issued permit license for 2 lac metric tonnes of coal however at the time of inspection on 06.07.2022 at the site, the storage of coal which was shown is against the mandate of sub section (v) of Rule 14. Sub-rule (viii) of Rule 14 mandates the permit holder to display the description of the permit so 16 granted at the main place of temporary storage/process site, but, in the present case, the petitioner has not followed this mandatory conditions and when the inspection was made, the same condition was found to be not complied with. In the present case, the Director, Geology and Mining vide order dated 06.07.2022 has issued an order and constituted a committee of different officers for surprise check on each and every coal washery/coal depots as well as other coal related activities in different districts of Korba, Bilaspur, Janjgir-Champa as well as Raigarh. Apart from this, sub-rule (vii) of the Rule 14 of rule 2009 provides for powers of the authorized officer to enter and inspect the temporary storage site including the mineral processing unit, in any of its building, office or any relevant premises and also allows for stock inspection, weighing or measurement of the stocks of mineral/minerals and or its products lying at the temporary storage site and also allow to examine any documents and to collect the samples or any mineral or its products and exercising his powers and directions, inspection was made in the washeries of the petitioner on 06.02.2022 and found various irregularities which is contrary to the terms and conditions of the permit issued under Rule 14 as well as the terms and conditions of the agreement entered into between the department of mineral with the petitioner. Show cause notices under Rule 15 were served upon the petitioners affording them 15 days time as per the mandate for submitting the documents as well as to rectify and directed to remedy the breach within 15 days time as per mandated under Rule 15. Since the petitioners have not specifically stated about the excessive quantity of the coal found in their premises against the license of 2 lac MT therefore show cause notices dated 17 18.11.2022 were issued with regard to excessive quantity of coal found in the premises of the petitioners. Since the reply of the petitioners were not found to be satisfactory, the impugned order was passed on 08.05.2023 and recovery of Rs. 40,26,30,020.36 was imposed as per provisions of sub-section (5) of Section 21. It is submitted that the petitioners have failed to exhaust the efficacious alternative statutory remedy under the law and have directly approached this Court by filing the present petitions therefore the petition deserves to be dismissed at the threshold. 10. In compliance of the order dated 8th April 2024, passed by this Court, the State has constituted a team to verify and inspection of the coal stock and thereafter submitted a report of the State Level Technical Investigation Committee and upon re-measurement, verification of site records and examination of the objections dated 22.01.2024 submitted by the Company, the Committee has found the following: 1. Chakabudha Coal Washery-Cum-Power Plant Coal Washery Area : 24,584.45 MT, 2x30 MW Power plant, Storage : 45,000 MT, 2 x135 MW Power Plant Storage: 15,000 MT The above quantities represent the factual measured stock within the premises of M/s. ACB India Ltd. during inspection. 11. During the site verification in front of the mine, 5,000 tonnes of raw coal was recorded separately and a total of 89,584.45 MT was measured and handed over to the representative of M/s. ACB India Ltd. The company was instructed to ensure that statutory provisions relating to this Mineral delivery were complied with. In the objections submitted 18 by the company, reference was made to the method of calculation, conversion factor, moisture content, land label and date of survey. The company communicated these details vide its letter dated 26.07.2022 and objected the disparity between the mineral stock quantity recorded by the investigation team on 06.07.2022 and the figure contained in the show cause notice issued by the Collector, Korba on 18.11.2022.On review of coal testing and relevant records, the following observations were made: i. the stock verification forms prepared on 06.07.2022, 07,07,2022 and 08.07.2022 did not mention the methodology adopted for stock calculation. ii. the reply submitted by the company on 02.08.2022 to the Collector’s notice dated 20.07.2022 highlighted this issue and requested that joint physical verification with the licensee be undertaken. 12. Following continued disputes, a joint meeting was held on 15.08.2023 under the Chairmanship of the Sub divisional Officer, Revenue, Katghora in the presence of officials from the ACB India Ltd. and concerned authorities. At this joint verification, coal stock quantities at washery and linked power plant premises were re-examined impartially. During this process, stock figures for approx. 25,700 MT in washery areas and quantities in associated power plant units (including 2 x 136 MW units measuring approx. 43,500 MT and 15,500 MT in related storage yards) were recorded and reconciled. It is clear from the review of records and field findings that 19 1. the methodology of earlier surveys lacked transparency and documentation. 2. Subsequent objections raised by the company regrading conversion factor, moisture content and method of stock estimation carry merit. 3. Joint verification conducted under the SDO Revenue has partially reconciled differences but requires further ratification at the State level to ensure uniformity in method and accuracy in reported. 13. Upon re-measurement and calculation by the Committee, including experts, SECL representatives and officials from the Directorate of Geology and Mining, Chhattisgarh, the stock of seized coal was estimated at 95,345.74 MT, based on the conversion factor table issued by the SECL. Based on the re-measurement, recalculation and verification, the exercise undertaken at the coal washeries and power plants of M/s. ACB India Ltd. In District Korba and after cross-checking the company’s objections with office records, the following members were designated ie. the Joint Director (Geology), Regional Office, Bilaspur, Deputy Director (Mining Administration), District Bilaspur, Mining Officer District Bilaspur, Survey Officer, Directorate of Geology and Mining, Assistant Mining Officer, District Korba, Mining Inspector, District Korba, Regional office, Bilaspur and Survey Officers, SECL. 14. Pursuant to the directions contained in the order dated 8.04.2024 passed in WPC No. 3573 of 2023, the State Level Technical Investigation Committee duly constituted under the Directorate of 20 Geology and mining, Government of Chhattisgarh undertook a comprehensive exercise of re-measurement and re-calculation of the previously seized stock of mineral coal stored in various washeries and power plants of M/s. ACB India Ltd. District Korba. The said re- verification exercise was conducted transparently and in the presence of the company’s authorized representatives, officers of SECL and survey officials from the Directorate. The entire process was duly videographed and photographed to exclude any element of arbitrariness or procedural infirmity. 15. On such re-examination, it was specifically observed that although there existed discrepancies in the quantities mentioned in earlier seizure memos, show cause notices and inspection reports prepared in 2022-2023, the seized stock found on-site demonstrated no evidence whatsoever of tampering, removal or destruction. Growth of green vegetation/weeds in certain heaps further affirmed that the stock had remained in situ and undisturbed over a considerable period of time. 16. Relying upon the conversion factor methodology prescribed by South Eastern Coalfields Ltd. (SECL) and after due reconciliation of records, the Committee estimated and reported the final verified stock of seized mineral coal as 95,345.74 MT for the Chakabudha premises along with corresponding verified quantities at Gevra, Dipka and Ratija washeries, the factual report of the State Level Technical Investigation Committee represents only reliable, transparent and scientifically verifiable assessment of seized coal stock. The objections raised by the 21 company as to discrepancies in the earlier reports stand substantially answered through the re-measurement exercise. 17. Having considered the rival submissions advanced on behalf of the parties and on perusal fo the record, this court finds considerable force in the contention urged by the petitioners. It is an admitted position that the petitioners had submitted a detailed reply to the notice dated 20.07.2022 and had further sought for an independent measurement/assessment of the coal stocked in its premises. The respondents, however, without undertaking such exercise and without proper evaluation of the petitioner’s reply, proceeded to impose penalty by the impugned order dated 3.11.2022. Such omission strikes at the very root of fair procedure and violates the principle of natural justice. 18. On the last date of hearing ie. 09.05.2024, this Court had passed the order as under: “Respondent No.4 is granted liberty to approach the State Government and in turn, the authority concerned is directed to consider the claim of respondent No.4 in accordance with law. It is made clear that pendency of these petitions shall not come into the way in disposal of representation so made by the respondent No.4. The petitioners would also be at liberty to make representation before the State authority raising their grievances and the State authority may consider the grievances so raised by the petitioners for releasing the undisputed quantity of coal.” 19. Thereafter, vide letter dated 18.06.2024 of the Collector (Mining Branch) District Korba wherein it has been stated that the State 22 Government had constituted a State Level High Power Committee for physical verification of the stock, quantity form, investigation report and the report of Sub Divisional Officer (R) Katghora with regard to the quantity of seized coal stored in the washery-cum-power plant of the company. The official records do not provide clarity regarding the methodology adopted for calculation of stock, the conversion factor applied and other relevant parameters. 20. During course of arguments, learned counsel for the parties produced the manual of Coal India, the Code for Uniform System of Maintenance, Control, verification of coal stock and measurement, verification of over burden removal in all mines of coal India limited (Yellow Book), (hereinafter referred as “manual”) in which Clause 19 (C) & (d) reads as under: 19. Action for variation in Coal and OB measurement (c) In case of coal stock measurement, variation shall be determined by comparison with book stock and measured quantity ---------------------. the permissible tolerance of variation in quantity for all coal stock measurements shall be (+/-) 5% of the book stock. (d) During the coal stock measurement, so long the variation is within the permissible limit (+/-) 5% of the book stock, the reported/derived book stock shall be considered as the closing stock for the month/quarter/half year/annual as the case may be, and no action is required to be taken.” 23 21. Upon examination, the State Level Technical Inspection Committee conducted fresh measurement and assessment of the seized mineral coal stored earlier in Chakabudha coal washery-cum- power plant complex as well as in Gevra, Dipka and Ratija Coal Washery complexes, the following position was found (WPS Nos.3573 of 2023, 3684 of 2023, 3677 of 2023 and 3688 of 2023): iwoZ esa Hk.Mkfjr tIr’kqnk [kfut dk;syk dh iqu% ekiu ,oa x.kuk mijkUr ek=k [kfut vkuykbu iksVZy vuqlkj fnukad 06-07-2022 dks [kfut dk;sykdh ek=k varj f[kfut dks;yk dh ek=k fjekdZ dz- Dksy ok’kjh@fo|qr l;a= dk uke 1 1 dks;yk fjtsDV 2 3 4 ;ksx 5 6 ikWoj zIykaV 9539.58 14775 24314.58 26682.88 (2x135) Dks;yk fjtsDV ;ksx Dks;yk fjtsDV 7 0 8 9 26682.88 10 (-) 2368.3 11 DkWye ua- 6 ,oa 7 esa nf’kZr ek=k ,u-ih-ih- rFkk lLFkku }kjk iznRr nLrkostksa ds vk/kkj ij [kfut dh ek=k yh xbZ gSA dk;syk ek=k fefJr ¼jkW dksy rFkk fjtsDV½ Js.kh dk gSA 2. ikWoj zIykaV (2x30) 0 45179.88 45179.88 0 44050.24 44050.24 0 (+) DkWye ua- 6 ,oa 7 1129.64 esa nf’kZr ek=k ,u-ih-ih- rFkk lLFkku }kjk iznRr nLrkostksa ds vk/kkj ij [kfut dh ek=k yh xbZ gSA 3. PkdkcqMk 25851.28 0 25851.28 26411.31 28.43 26439.74 (-) (-) DkWye ua- 6 ,oa 7 dksy ok’kjh 4. xsojk dksy o’kjh ifjlj 5. nhidk dksy ok’Wkjh ifjlj 6. Jfrtk dksy ok’kjh ifjlj 560.03 28.43 esa nf’kZr ek=k 223484.75 14640.40 238125.15 222021.17 13384.99 235406.1 (+) (+) 6 1463.58 1255.41 332454.68 11615.62 344070.30 332768.3 10815.17 343583.4 (-) (+) 7 313.62 800.45 [kfut vkWuykbu iksVZy ls izkIr tkudkjh] dEiuh ds iksVZy esa cSysal ijfeV ek=k rFkk ekfld fooj.kh ls feyku dj fd;k x;k gSA 136376.70 0 136376.70 137367.06 235.51 137602.5 (-) (+) daiuh }kjk [kfut 7 990.36 235.51 vkWuykbu iksVZy izkjEHk djus ds 24 i'pkr~ Hkh vkWuykbZu iksVZy izkjEHk dju ds i'pkr~ Hkh vkuykbZu ,oa vkWQykbZu ds ek/;e ls [kfut dk izs"k.k ds;k x;k gSA vr% ekfld i=d ds vk/kkj ij dkWye ua- 6 ,oa 7 esa ek=k nf’kZr dh xbZ gSA 22. Upon careful perusal of the relevant documents, it is unequivocally evident that the inspection and/or verification previously conducted was fundamentally flawed and cannot be relied upon for the purposes of the present proceedings which is clear from the abovementioned chart and therefore on that basis the petitions preferred by the petitioners and pursuant to the report of the State Level Technical Enquiry Committee submitted in compliance of the order passed earlier in these petitions, the quantity of mineral coal found undisputed upon re-examination as reflected in Table No.1, Column A-8, stands released in favor of the petitioners in WPC Nos. 3573/2023, 3684/2023, 3688/2023 and 3677/2023. The report clearly stated that the quantity of coal found in the premises of the petitioners’ unit against which the petitioner has produced valid documents,is also reflected in the mining portal. Based on the said measurement placed on record before this Court by the learned State counsel, the Collector, Korba by order dated 18.06.2024, directed the release of coal. Admittedly, learned state counsel has fairly conceded to the veracity of the scientific measurement conducted by the State level Technical Enquiry 25 Committee. The said report, having been accepted by the State, has thus attained finality. Even before this Court, the respondent/State has unequivocally acknowledged and accepted the said report, leaving no scope for doubt as to its authenticity. 23. On a conjoint reading of the report of the State level Technical Enquiry Committee, which is based on precise and scientific methodology, prima facie establishes that the quantities of coal referred to in the impugned orders dated 08.05.2023 and 3.11.2022 are grossly inflated and patently exaggerated. The allegations underlying the impugned orders rest not upon verified material but upon presumptive and conjectural assessment. Such an approach is wholly impermissible in law. 24. Learned State counsel fairly accepted the report and chart prepared by the Committee ie. document A dated 18.06.2024 and passed by the Collector (Mining Branch) Korba. It is trite that the Manual of Coal India specifically provides that, in cases of bulk measurement of coal, a permissible tolerance limit of (-/+) 5% is recognized. Thus, any variation within the said range is treated as acceptable and cannot form the foundation of punitive action. In the present case, the very basis of the penalty imposed against the petitioners is rendered unsustainable, as the alleged deviations fall within the tolerance band prescribed under the governing Manual. 25. In these circumstances, the impugned orders, which impose penalty upon the petitioners on the strength of presumptive and inflated 26 figures are manifestly arbitrary, legally untenable and in clear violation of settled principles of law. Accordingly, the orders impugned dated 08.05.2023 and 3.11.2022 are hereby quashed and set aside. 26. So far as WPC No. 3580/2023 is concerned, the petitioner’s company is a power plant and the coal is being retained in its premises for the purpose of generating electricity. The Chhattisgarh Minerals (Mining, Transportation and Storage) Rules 2009, contain provisions for storage permits primarily to regulate storage, processing, beutification and transportation of minerals to prevent black marketing and illegal transit. However, these rules differentiate the conditions under which the minerals are stored. The petitioner has lawfully established a power plant which is the ultimate and final end-user of the coal in its premises, the said coal being exclusively utilized for the generation of electricity. Rule 3 (iii) of the Chhattisgarh Minerals (Mining, Transportation and Storage) Rules 2009, unequivocal terms, prohibits storage of minerals for the purposes of processing, trading or for any use other than at the final consumption point, without a valid storage permit as it reads as under: “3. Prohibition : (iii) No person shall store for processing or any other purpose, or establish a plant for benefication/crushing of any mineral/ore and/or its beneficiated products outside the lease area, or other than the final destination, without obtaining a valid “storage permit” for the purpose of storage/beneficiation/crushing under these rules.” 27 27. In the present case, the petitioner’s power plant itself constitutes the final destination and end-use consumption point, where the coal is directly utilized in the process of electricity generation. Hence, the statutory embargo contemplated under Rule 3(iii) has no manner of application to the petitioner’s operations, which are confined strictly to end-use consumption. 28. It stands excluded in the case of the petitioner as the said Rules are intended to regulate mining, commercial transportation and storage activities, and not the bona fide consumption of mineral resources at their final destination. Specifically, an “end use plant” is defined as the plant where the mineral is finally used. The rules require storage permits when minerals are temporarily stored or processed for further transit, processing, or sale. If a mineral such as coal, is retained purely for final consumption by an end user (such as a power plant), the storage permit requirements of the Rules 2009, do not apply. The exemption exists because the rules focus on controlling minerals that are in transit or subject to processing or beatification for onward sale or distribution not on minerals stored for direct final use by the end consumer. 29. In the case of petitioner’s power plant, which purchases coal for electricity generation (final use), the Rule 3(iii) of the Chhattisgarh Minerals (Mining, Transportation and Storage) Rules, 2009, would not apply because the coal is not stored for processing, beautification or resale. The object of the Rules is to prevent black marketing and unauthorized trade of minerals which is irrelevant when the mineral is 28 consumed directly by the end user. Hence, if the power plant of the petitioner is merely storing coal for own use and not conducting any processing or sale, the Chhattisgarh Minerals (Mining,Transportation and Storage) rules 2009 do not mandate a storage permit for such storage on the power plant premises. 30. The general object and scope of the rules are primarily aimed at regulating storage, transportation, benefication and black marketing of minerals. End users, like power plants retaining coal for final consumption and not transit or sale, fall outside the strict permit requirements a they are exempted from obtaining storage permits under these rules. These clauses explicitly provide for exempting or allowing end users to operate under a different permission scheme confirming that storage permits under rules 2009 do not generally apply to power plants or similar end users storing coal or minerals for final use. 31. So far as the petitioners in WPC Nos. 3679/2023, 3683/2023 and 3676/2023 are concerned, in all the aforesaid cases, the petitioners have sought permission from this Court to prefer a representation before the respondent authorities for re-measurement/re-inspection /reverification of the coal stored in the petitioner’s company/unit concerned by constituting State level Technical Enquiry Committee. 32. It is pertinent to mention that the said Committee report (in WPC Nos. 3573/2023, 3684/2023, 3688/2023 and 3677/2023) reveals that the earlier referred quantity of coal is not based on scientific measurement and the alleged quantity of coal is completed 29 inflated/exaggerated which is established from the chart of the said Committee report itself. 33. Learned State counsel submits that the petitioners may file fresh representation before the authority concerned and in the eventuality of filing such representations, the same may be decided in accordance with law. 34. Thus, the petitions (WPC Nos. 3679/2023, 3683/2023 and 3676/2023) are disposed of with liberty to the petitioners to prefer a detailed representations before the State Government seeking re- measurement/re-inspection/re-verification within 30 days from the date of receipt of certified copy of this order and in the eventuality of the petitioners’ filing any such representations within the said period, it is expected from the concerned authority to constitute a State level Technical Enquiry Committee to re-inspect/re-measure/re-verify the coal stored in the petitioners’ unit within 60 days from the date of receipt of the said representations, strictly in accordance with law. In case of any breach or violation of any statutory rule or excess coal, may pass fresh order in accordance with law after giving opportunity of hearing to the petitioner. Till then the order impugned dated 08.05.2023 and 3.11.2022 shall be kept in abeyance. 35. In view of the above, WPC Nos. 3573/2023, 3684/2023, 3688/2023 and 3677/2023 are allowed. WPC Nos. 3679/2023, 3683/2023 and 3676/2023 and 3580/2023 are disposed of. No order as to costs. SUGUNA DUBEY Digitally signed by SUGUNA DUBEY Date: 2025.09.16 18:35:05 +0530 Sd/- (Arvind Kumar Verma) Judge