SRI T v. RAMANA RAO

Counsel for the Petitioner: SRI T. V. RAMANA RAO Counsel for the Respondents: GP FOR MINES AND GEOLOGY The Court made the following: ORDER 1 THE HON'BLE SRI JUSTICE T. VINOD KUMAR W.P.No -34535 of2024 ORDER: Heard learned counsel for the petitioner' learned Government Pleader for Mines & Geolory appearing for respondent Nos' 1 to 4' and perused the record.

2. By the present Writ Petition, the petitioners assail the action of the l.t respondent in dismissing the revision filed by the petitioner under Rule 35A of the Telangana Minor Minerai Concession Rules' 1966 (for short 'APMMC Rules'), uide order, dt'16'1'O'2024' as being iliegal' arbitrary, and without jurisdiction and violative of provisions of the Mines and Minerals (Development and Regutation) Act' 1957 (for short 'the Act, 1957).

3. Briefly stated the case of the petitioner is that it was granted quarry lease for buitding stones and road metals in an extent of O'50 Hectors in survey No.10/ 148 of Babuldoor ViLlage' Ichoda Mandal' Adilabad District, for a period of 15 years tv'e'f' 23'12'2006 to 22'12'2021; th,.at the petitioner had sought for renewal of the quarry lease for a period of 2 2o years by makirg an application on 06.06.20-12r; that the aforesaid application is pcnding consideration.

4. It is the fi,rrther czrse of the petitioner rhar v,,hile the application filed b-v it for rene*,at of the quarry lease is pen<i r.,g consideration, the technical staff ol the respondents along with em o,rneiled agency ha'e conducted ETS surve,v on 09.03.2023; that bzr:;e d on the aJoresaid surve-\'. the '1th respondcnt-authority has issuecl :r sho'r,-c:ruse notice, dt.o4.o3.2024, claiming that while the petitioner l ad obtained dispatch permit for 77,391-52 MT of minerar excavated frorr Lhe pit falling rvithin the lease area, but dispatched the excavated mincr.r of s1,252.o38 MT u'ithin the lease ,r.a and hence, the remaining qu .rtitv of 33,B2o.s1rB MT is treated as illegal excavation; that the respor cients lurther alieged that the petitionr:r had excavated and transportecl nrineral from outside the lease area; a, cl thus, the petitioner violated Rul: 26(2) of the ApMMC Rules (Tela.gana Adoption Rules) r966; that as per Flure 3a(r) of APMMC Rules, no minererl shalr be dispatched from any rease area rvithout varid permit issued by the concerned authorities on beha f of Director of Mines & Geolog,; that since, the petitioner had extracted t rr: mrnor mineral and transportea the same beyond the qua_rry lease are)i r $,itl_rout payment of .., 3 seigniorage fee, the said quantity of minor mineral transported without obtarning permission shall be liabie to payment of norma'l seigniorage fee in addition to penalty in terms of Section 26(3\(21 and Rule 26(2\ ot APMMC Rules, and ca-lled upon the petitioner to submit an explanation within (07) days from the date of receipt of the said notice'

5. Petitioner contends that on being served with the aforesaid notice' ithadsubmittedadetailedexplanationuidertsreply'dt'20'032004'and that the 4th respondent-authority without considering the aJore said explarration had issued a demand notice'dt 30'o3'2o24' claiming that the petitioner is liable to pay normal seigniorage fee in a sum of Rs.21,98,365/ in respect of the quantity of minor and mineral to an extent of 33,821 MT excavated within the quarry iease area and a sum of Rs.97,25,040/ in respect of the quantity of minor mineral of 1'49'616 MT excavated outside the quarry lease area' in all totaling to Rs.1,19,23,405/- and also levied penalty in a sum of Rs'1'09'91'825 l- being 5 times penalty payable in respect of the quantity of 33'82 1 MT of minor mineral quarried within the quarry lease area and Rs.9,72,50,400/- being the 10 times penalty payable in respect of quantity of 1,49,616 MT of minor mineral quarried outside the qua-rry 4 lease irrea, totalling an amount of Rs.1O,82,42,2|1i; I tou,ards penalty, and the cumulati'e total of norma-l seigniorage I'ee and penaltv of Rs. 12,01,65,630/ 6 On behalf of the petitioner it is contended that the 4th respondent while issuing the aforesaid dema,d notice did not consider the explanation, dt.2o-o3.2024, submitted by the pe:rtioner to the shor,", cause notice, dL.o4-o2.2o24, and had merelv co rirmed the propos;rl made in the shou,-cause notice

7. It is the further contention of the petitioner that zrggrieved by the aforesaid arbitrary action of the respondents-autl- oriti.s in demanding seigniorage fee ar-r d also imposing penaity, it hacl rrvailecl the remedy .f Revisi.r-r as provided under Rule 35-A of thr TSMMC Rules by approaching the 1sr respoltden t-Government. I i ! I i j I

8. Petitioner further contends that the 1"t resp.rrrlent while disposing of the aforesaid Revision by order of dismissal has rrerc$ reiterated the contents of the sho,r,-cause notice a,d the deman<l notice, whereby the proposals made in the show cause notice wer e afhrmed, withor_Lt assigning .41n3, reasons and u,ithout consideri ng the explanation 5 submitted by the petitioner thereto, and thus, the order passed in the Revision preferred by the petitioner, is a-lso vitiated

9. On behalf of the petitioner it is also contended that though the respondents-authorities claim of the petitioner having undertaken excavation outside the leased area, the petitioner in its reply had categorically stated that even before the lease was granted in favour of the petitioner, there existed a minor lease in the adjacent area, and as such, it cannot be alleged that the petitioner having undertaken excavaLion activity outside the lease area for it to be liable to pay the seigniorage fee as well as penalty.

10. Petitioner further contends that the revisional authority, u'ho is discharging quasi judicial functions without appreciating the aforesaid aspects has summarily dismissed the revision application submitted by the petitioner, by merely recording that the revision petitioner i.e., the petitioner herein, had failed to submit the registered copy of the agreement, it had entered into with one Mohammed Mumtaz, a Special Class Civil Contractor, whereby he had stated that he had entered into an agreement with the petitioner herein for the authorities to consider the claim of the petitioner of it having transported the road meta-1 and -:I 1 l I i I I () building matcrial stones for a qualtity of 30,a42 crrlric meters to the sairl contractor, for being utilized in government works 1 1 . It is the further contention of the petitioner th at not only' the order of the 4tt respondent is bereft of reasons, the revir;ion order passed by the lsr respondent authority confirming the orcie - passed by the 4,r., respondent is also did not supply any reasons, ar c as such, both the orders of the revisional authority as well as the original authority, calnot be sustained.

12. It is the contention of the pctitioner that the tower to lev-v penalty is not vested with the authorities as per the ApMMC Rules, a.d the said power is only vested w'ith the Courts, ar.ld thus, _tre zLction of the 4rn respondent in imposing penalty of 5 times for the m ror rnineral quarried within the qua-rr, lease area a,d 1o times for quar.r.i ng .utside the iease area, is clearly without jurisdiction.

13. In support of [he aforesaid contention relianct: has been placed o, the decision of the High court of Andhra pradeslL in M/s GSR stone Ctt,'shers o. The Sto.te of Andhra pradesh an,i anotherr and the 1 Common order-drtO.O9.2022, 1n W.p.Nos.839O of 20l8 & batch 7 decision of a Coordinate Bench of this Court in M/s Kisan Stone Cntsher a. The State of Telangana & Ors'2' to contend that it is only the Court of competent jurisdiction' vi'hich can go into the question of as to vvhether there is any illegal excavation and to direct for payment of seigniorage fee and impose penalty'

14. Further, in support of the aforesaid contentions reliance is also placed on the decision of this Court in Perkart Jagasree v' The State of Telanganc3, a Division Bench of this Court in SPM Wires and Cables Private Limited v' The Assistant Commissioner of State Taxes & Ors.a and the decision of the Apex Court in Karnataka Rare Earth and Another a, senior Geologist, Department of Mines & Geologg and' Anothers 1 5. Per contra, Iearned Government Pleader for Mines & Geologr appearing for respondents rvould contend that though the petitioner by the present Writ Petition claims of ETS survey stated to have been 2 Ordcr dt.14 1 1-2023 in WP No 258l4 of 2O23 3 Order, dt-O7 06'2C24 in W P No 6651 of 2023 4 Ord'et dt.22 03 -2024 in W P-No 7606 of 2024 5 \2OO4) 2 SuPreme Court Cases 783 , i i i: I I I I I E I I I I i I I ! : 8 conducted on 09-03.2023, has not been conducrt.c in his presence, a perusal of the shou'-cause notice clearly indicates o' the technical staff ol the respondents authorities along with empalclled agency having conducted ETS Survev in the presence of the les:ree, and as such the petitioner carnot be allori,ed to claim that the sairl su^,ey having been conducted behind his back.

16. on behalf of the respondents it is further cor Ltend.d that the said plea of ETS surve,v not being conducted in the pres:nce of the petitioner is being taken for the first time, as the said plea r,.zrs not taken by the petitioner in its re'ision application filed under Rr- k: 35-of the ApMMC Rules before tho I "r respondent and as such, r rc,r,r plea cannot bc permitted to be rzLised in a writ petition for the first time. 17 . Learned Government pleadcr rurther submir s that aI the peas taken by the petitioner in the rer.ision applicatio r have been dul1, considered and drscussed by the r sr respondent-aut rr,ritv in para Nos. 6 \ to 8 of thqimpugned order, and as such, the craim ,r'the petitioner of the impugrred order being bereft of reasons, cannot be ar ceptcd. I

18. On behaif of the respondents it is also contended that though the petitioner claims to have submitted a reply, dt.2o.O3.2O24, to the notice, dt.O4.O3.2O24, the petitioner by the said reply filed only dealt with the quarrying activity being within the leased area and did not deal with the allegation relating to excavation made outside the lease area arld thus, it is contended that the petitioner having remained silent while submitting his explanation to the shovt-cause notice, has only invented the said ground now for the purpose of filing the present Writ Petition and thus, should not be permitted to raise such a plea

19. On behalf of the respondents it is further contended that though the petitioner had claimed that the excess quantity of minerai rnined by it has been supplied to one Mohammed Mumtaz, for being used in government works, namely roads alrd buildings projects, and in respect of the said supplies, the seigniorage fee being liable to be deducted by the Government at the time of making payment, and as such there is no leakage or loss of payment of seigniorage fee, no material is filed to establish the fact of the petitioner having supplied excess quartity of minor minera,l i.e., 33,820.5118 MT to a contractor, who had utilized the 1 10 said excess quantity only in government \trorks, r1t treb] the seigniorage fee would stald deducted

20. On behalf of the respondents it is a,lso co rt.ended that in the absence of aly material to show that the said V.ohammed Mumtaz having purchased the entire road and building s tones oniy from the petitioner and using the same in government rvorks, the claim of the petitioner would be a self serving statement al,l hence, calnot be considered. 21 . Thus, it is contended on behalf of the respondents that the impugned order is a well reasoned order passed b ,' considering all the pleas taten by the petitioner, arrd as such, cannot tre said to be either illegal, arbitrary or contrary to the provisions ol t he Act and APMMC Rules or being in violation of principles of natural jur;tice.

22. Contending as above, learned Government pleader seeks for dismissal of the Writ Petition. o2 I have taken note of the respective contentions urged. 1l

24. Though an effort is made on behalf of the petitioner to take this court into the details by contending that both the show-cause notice issued and the order passed by the 4ti' respondent to be without jurisdiction, and thus, the entire action being vitiated, and the petitioner being entitled to question the proceedings of the 4th respondent, dt.30.03.2024, it is to be noted that the petitioner having availed the remedy of Revision provided under the APMMC rules, and having suffered aI adverse order therein, cannot be permitted to assail the said original proceedings as being without jurisdiction.

25. Further, though it is contended on behalf of the petitioner that under the provisions of the APMMC Rules, it rs only the Court, which is empowered to determine as to whether there is aI1y illegal excavation and to impose pena-lty by placing relialce on the decision of the High Court of Andhra Pradesh in M/s GSR Stone Crushers's case(1 supra), which has been followed by a Coordinate Bench of this Court in M/s Kisan Stone Cntshefs case (2 supra), it is to be noted that the said order on which heary reliance is placed by the counsel appearing on behalf of the petitioner has been recalled in a Review Petition by a coordinate Bench of tlris cowrt uide order dt.31.01.2025 in Revieq, IA.No.1 of 2024 in Writ 1 t2 Petition.No.258 1.1 of 2023, wherein it rvas note.l that the provisions considered by the Hrgh Court Andhra Pradesh are iLt variance n,ith the rules applicable in the State of Telangana.

26. Since, the Coordinate Bench of this Court hr d revieu,ed the order in M/s Kisan Stone Crrusher's case (2 supra), the r r:liance placed on the aforesaid decision ald also the decision of the l liflh Court of Andhra Pradesh, rvhich has a persuasive value are of ;r little assistance to advance the case of the petitioner. 27 . It is to be noted that this Court in M/s Murali l,irtshna Minerals u. State oJ Telanganaa while dealing with a similar r:ontention had held that Sub-Rule(S) of Rule 21 of the Act confers po\'cr ,)n tl're autl-rorities to ler'y penaities, arld thus, the contention of the p rl,itioner that the 4,t, respondent-authority had lacked jurisdiction to 1c'..r, penalty is u,ithout any merit and accordingly rejected the said contentlr):1.

28. Insofar as the claim of the petitioner that the ETS survey.. was conducted behind his back, as no opportunity was liven to the petitioner to pa-rticipate in the ETS survey, is concerned, a 1;,_-r-usal of the grouncis 6 dt.29.O4.2025 in Wp. No.93 of 2O2S 13 of revision filed by the petitioner before the l"t respondent under Ruie 35-A of the APMMC Rules does not show the petitioner having taken the said plea at the hrst instance.

29. Further, it is pertinent to note that the copy of the ETS report filed by the respondents a_long with the counter affidavit clearly records that the lease holder i.e., the petitioner herein having attended the said survey. Thus, the claim of the petitioner in the present writ Petition of the ETS survey having been conducted behind the back of the petitioner cannot be accepted as true and correct'

30.Thepetitionerbeingaggrievedbythedemar-rdnotice,dt.30.o3.2024 issued by the 4h respondent having availed the remedy of t'evision providedunderRule35.AoftheAPMMCRulesbyfilingarevisiontothe l"t respondent on 24.06.2O24, wherein he had taken various pleas with regard to his non-liability to pay additional seigniorage fee on the excess quantity and also not being liable to pay penalty, the l't respondent by theimpug.rredorderdidnotdealwiththecontentionsofthepetitioneras to how the said contentions cannot be accepted' I t4

31. The 1"t respondent bt' the impugned order h,.r; merely extracted the rule position in the order and claiming that a pers,rrral hearing rnas held on 27.O9.2O24, horvever, did not deal with anv of I e contentions of the petitior-rer as raised in its grounds of revision.

32. The 1"t respondent authority by the impugnerl <>rd.r has onr-v statcd that the petitioner having submitted one letter l,,rm one Mohammr:d Mumtaz informing that he had entered int. a;r egreement u,ith the revision petitioner for tralsportation of road rneta i ancl building stonos for a quantity of 30,842 cubic meters for being Lrtilizir-rg the sarne in government works, failed to submit a copy of the rcgistered agreement, had clismissed the revision solely on the said grou.rl, tht:reb'confirmirrg the demand notice issued by the 3.d respondent on lio.Oll.2024, u,hereby the 4th respondent had in addition to demand of r,rm.r seigniorage fr:e lor the extent quantity of mineral excavated had als,r 1e'ied penartl, at 5 times for the mineral excavated within the quar.r, rease area and r o times in respect of mineral excavated outside the qr arry lease area. -.4

33. The said approach on the part of the 1., respondent-authoriry without taking note of the fact that imposition cf peralt' has a cir il consequence, cannot be held as the said authorit!' lrrrving considerecr the 15 t I ! I pleas taken by the petitioner, would \ .'arrar-rt lery of pena-lty at the maximum rated prescribed under the rules by the 4th respondent while issuing demald notice is justified or not

34. It is also to be noted that the prescription of 'maximum penalty'in the rules does not automatically entail the authoritres to impose such maximum penalty as if no discretion is vested in the said authority.

35. The prescription of 'maximum penalty' under the APMMC rules would require the authority to examine in a given case as to w'hether the circumstances warrant imposing of such maximum penalty or there are any circumstalces, to consider as to whether levy of penalty is warranted at a-11 or any penalty which is lesser than the maximum prescribed can be levied, for which the authority is required to assign reasons justifying the circumstances leading to imposition of maximum penalty.

36. Neither the demand notice issued by the 4th respondent nor the impugned revisional order passed by the 1't respondent does not record reasons justifying imposition of maximum penalty prescribed under the Rules. Thus, the penalt5l imposed by the 4th respondent has been confirmed by the lst respondent authority in a mechanical manner, as if 16 the perralty at ma-ximum rate is prescribed under rhe Act q,ithout there being any discretion vested with the authority. 37 since, neither the dema.d notice nor the re.,isio.al order recorcrs reasons for the respondents-authorities to come t,) thc conclusion that that circunrstalces \.r,arrant imposition of m,t:<imlrm penaltl, as prescribed under rhe Rules, applying the principle laid clorvn by the Apex Court in Sant Lal Guptha & Ors. us. Mod.ern Cooperative Group Housing societgr and Raui yashwant Bhoir a. District corector, Rdigad, that reasons are the heartbeat of the order. this court rs of the vieu, that the impugned order the l"r respondeat, dt.l6.lO.2O24 tn confirming the Demald Notice, dt.3}.O4.2024, o1 the 4rh respondent, cannot be said as validly passed for it to be sustaine,d.

38. Accordingt],, the impugned order, dt. 16.10.2t24 passed by the 1", respondent is set aside and the matter is remr -ted back to the 1"1 respondent to pass a reasoned order arresh after g*urting an opportunity of hearing to the petitioner and communicate the same to the petitioner under due acknor.r,ledgement. 7 (2oto) 13 scc 336 I (2O t2) 4 SCC 4O7 l7 I I t I t I i Subject to the above directions, the Writ Petition is disposed of No order as to costs Consequently, miscellaneous petitions, if arry, pcnding sha1l stand closed //TRUE COPY// SD/. B. REKHA RANI ASSISTANT REGISTRAR 6- SECTION OFFICER

1. The Principal Secretary (Mines), lndustries and Commerce Department at Secretariat, The State of Telangana, Hyderabad 500004

2. The Director of l/ines and Geology, H.No. 5-9-22, Flat No. 203 and 2O4,2nd Floor, My Home Sarovar Plaza, Shapurwadi, Adarsh Nagar, Hyderabad 500029

3. The Deputy Director of lvlines and Geology, Nizamabad, Dist- Nizamabad 4. The Asst. Director of [vlines and Geology, Adilabad, Dist- Adilabad 5. One CC to Sri T. V. Ramana Rao, Advocate [OPUC] 6. Two CCs to GP for Mines And Geology, High Court for the State of Telangana, at Hyderabad [OUT] 7- Two CD Copies To, TJ GJP t HIGH COURT DATED:111A7i2025 ORDER WP.No.34535 of 2024 i"rHe sI 4 () ,J o l B N0l/ 20fi * \_ DISPOSING OF THE WRIT PETITION WITHOUT COSTS g u