2019 (4) TMI 944 - HC - Companies Law

Imposition of penalty - excavation of minor mineral, i.e., ordinary earth, without obtaining requite permission - Held that - Evidently, the ordinary earth is not specifically defined as 'minor mineral'. However, the Central Government is empowered to declare any other mineral as a minor mineral. In pursuance of such power, the Central Government issued the Notification on 3rd February 2000 and thereby declared ordinary earth as a 'minor mineral'. The Supreme Court in the case of Promoters and Builders Association of Pune Vs. State of Maharashtra Ors. 2014 (12) TMI 1342 - SUPREME COURT OF INDIA , after analysing the provisions, contained in Section 48(7) of the Code of 1966 and the Notification dated 3rd February 2000 whereby the ordinary earth was declared as a minor mineral, observed in unequivocal terms that, ordinary earth used for filing or levelling purposes in construction of embankments, roads, railways, buildings to be a minor mineral in addition to the minerals already declared as minor minerals. The ordinary earth does not fall within the meaning of the definition, minor mineral , as declared by the Notification, as it cannot be said to be for the purposes of filling or levelling in construction of embankments, roads, railways and buildings. The authorities, it seems, have proceeded on the premise that the very excavation of the ordinary earth was subject to levy of royalty de hors the use for which it was put to - In view of the plain language of the provisions especially the definition of minor minerals the action of the authorities cannot be sustained. Petition allowed.

Issues Involved:
1. Legality of the penalty notice issued for excavation of minor minerals without requisite permission.
2. Applicability of the Mines and Minerals (Development and Regulation) Act, 1957 and the Maharashtra Minor Mineral Extraction (Development and Regulation) Rules, 2013.
3. Determination of liability to pay royalty under the Maharashtra Land Revenue Code, 1966.
4. Interpretation of the term "minor mineral" and its application to the excavation of ordinary earth.

Detailed Analysis:

1. Legality of the Penalty Notice:
The main challenge in this petition is against a notice dated December 4, 2017, issued by the Tehsildar, Dahanu, proposing a penalty of ?34,80,744 for the excavation of ordinary earth without obtaining requisite permission. The petitioners argued that the action of the respondents is arbitrary, illegal, and unsustainable.

2. Applicability of the Mines and Minerals (Development and Regulation) Act, 1957, and the Maharashtra Minor Mineral Extraction (Development and Regulation) Rules, 2013:
The petitioners contended that the action of the respondents contravenes the provisions of the Mines and Minerals (Development and Regulation) Act, 1957, and the Maharashtra Minor Mineral Extraction (Development and Regulation) Rules, 2013. The respondents, however, argued that the excavation of ordinary earth falls within the ambit of the said Act, 1957, and thus the petitioners are liable to pay the royalty.

3. Determination of Liability to Pay Royalty:
The petitioners argued that mere extraction of earth does not invite the levy of royalty. The use of the ordinary earth for the purposes expressly mentioned in the Notification issued under the said Act, 1957, is determinative. The Supreme Court in Promoters and Builders Association of Pune Vs. The State of Maharashtra & Ors. (2015) 12 SCC 736 held that the mere extraction of earth does not constitute a mining activity unless it is used for purposes specified in the Notification.

4. Interpretation of "Minor Mineral":
The term "minor mineral" includes ordinary earth used for filling and levelling purposes in construction activities as per the Notification issued by the Central Government on February 3, 2000. The Supreme Court clarified that excavation of ordinary earth for uses not contemplated in the Notification does not amount to a mining activity. The liability under Section 48(7) of the Maharashtra Land Revenue Code, 1966, depends on the end use of the excavated earth.

Conclusion:
The High Court quashed the impugned notice and actions initiated by the Tehsildar, Dahanu, as the excavation of ordinary earth by the petitioners did not fall within the purposes specified in the Notification. The court emphasized that the mere fact of excavation does not justify a blanket determination of liability; the end use of the excavated earth is crucial. The petition was allowed, and the notice dated December 4, 2017, was set aside with no order as to costs. Rule was made absolute in the aforesaid terms.

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