Allowed

Thdc India Limited v. State Of Uttarakhand and Another

Uttarakhand HC26 May 2014WPMS/832/2013

Case brief

AI extract

What is this about?

The High Court of Uttarakhand held that digging earth for dam construction without intent to extract minerals does not constitute mining operations. Consequently, a mining lease was not required, and the State could not levy royalty or impose penalties under the Mines and Minerals Act.

What did the court decide?

Writ petitions allowed; impugned orders/ notices for imposition of penalty and recovery of royalty stand quashed.

Thdc India Limited Vs State Of Uttarakhand and Another — Corruption | Uttarakhand HC (2014)

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IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL

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Writ Petition No. 832 (MS) of 2013

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THDC India Ltd. ………Petitioner.

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Versus

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State of Uttarakhand and others. …..Respondent.

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With

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Writ Petition No. 1399 (MS) of 2008

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Tehri Hydro. ………Petitioner.

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Versus

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State of Uttarakhand and others. …..Respondent.

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With

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Writ Petition No. 826 (MS) of 2013

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THDC India Ltd. ………Petitioner.

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Versus

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State of Uttarakhand and others. …..Respondent.

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Present:

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Mr. Rakesh Tiku, Sr. Advocate assisted by Mr. Neeraj Malhotra and Mr. Shobhit Saharia, Advocates for the petitioner.

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Mr. Anil Kumar Joshi, Addl. CSC for the State of Uttarakhand / respondents.

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Hon’ble Alok Singh, J (Oral).

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Learned counsel for the petitioners submits that he does not want to press CLMA Nos. 4954/ 2014, 5305/2014, 4966/2014 and 4967 2014, therefore, same are dismissed as not pressed.

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In all the writ petitions identical questions of law and fact are involved, therefore, with the consent of learned counsel for the parties, all the writ petitions were heard together and are being disposed of by this common judgment.

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About 6 decades ago, Tehri Dam for the purpose of generating electricity was dreamed of. After different surveys,

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the site was finalized and lands of different habitants were acquired for the purpose of construction of Tehri Dam. Land so acquired was handed over to Tehri Dam Project. Earlier, entire project was going on under the supervision and management of Irrigation Department of Uttar Pradesh. Initial construction work was done by the Irrigation Department of U.P., however, in the month of July, 1988, the Tehri Hydro Development Corporation was constituted / incorporated. THDC, Government of India and Government of Uttar Pradesh, agreed that 12% of the generated electricity shall be supplied to the State of U.P. free of cost. For the purpose of construction of Tehri Dam, huge chunk of land was dug and ultimately, Tehri Dam, as dreamed of, came into existence. The State Government decided to recover the royalty and penalty from the petitioners saying petitioners were involved in illegal mining of minerals within Tehri Dam and Koteshwar Dam areas without taking mining lease / license, as required under Section 4 of the Mines and Minerals (Development and Regulation) Act, 1957, therefore, were liable to pay royalty and penalty under Section 21 (5) of the Act. Feeling aggrieved, petitioners have approached this Court by way of filing present writ petitions.

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The short question involved in all the petitions is, as to whether digging of the land for the purpose of underground construction or for the purpose of construction of dam would amount to “mining operations”?

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Section 3 (d), 4 and 21 of the Act, 1957 are being reproduced hereunder:

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“3 (d) "mining operations" means any operations undertaken for the purpose of winning any mineral;

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Section 4 - Prospecting or mining operations to be under licence or lease

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(1) [No person shall undertake any reconnaissance, prospecting or mining operations in any area, except under and in accordance with the terms and conditions of a reconnaissance permit or of a prospecting licence or, as the case may be, of a mining lease, granted under this Act and the rules made thereunder]:

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Provided that nothing in this sub-section shall or affect any prospecting mining operations undertaken in any area in accordance with the terms and conditions of a prospecting licence or mining lease granted before the commencement of this Act which is in force at such commencement:

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[Provided further that nothing in this subsection shall apply to any prospecting operations undertaken by the Geological Survey of India, the Indian Bureau of Mines, [the Atomic Minerals Directorate for Exploration and Research] of the Department of Atomic Energy of the Central Government, the Directorates of Mining and Geology of any State Government (by whatever name called), and the Mineral Exploration Corporation Limited, a Government company within the meaning of section 617 of the Companies Act, 1956:]

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[Provided also that nothing in this sub-section shall apply to any mining lease (whether called mining lease, mining concession or by any other name) in force immediately before the commencement of this Act in the Union Territory of Goa, Daman and Diu.]

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[(1A) No person shall transport or store or cause to be transported or stored any mineral otherwise than in accordance with the provisions of this Act and the rules made thereunder.]

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(2) [No reconnaissance permit, prospecting licence or mining lease] shall be granted otherwise than in accordance with the provisions of this Act and the rules made thereunder.

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[(3) Any State Government may, after prior consultation with the Central Government and in accordance with the rules made under section 18, [undertake reconnaissance, prospecting or mining operations with respect to any mineral specified in the First Schedule in any area within that State which is not already held under any reconnaissance permit, prospecting licence or mining lease].]

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Section 21 - Penalties

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[(1) Whoever contravenes the provisions of subsection (1) or subsection (1A) of section 4 shall be punished with imprisonment for a term which may extend to two years, or with fine which may extend to twenty-five thousand rupees, or with both.]

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(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 one year, or with fine which may extend to five thousand rupees], or with both, and in the case of a continuing contravention, with an additional fine which may extend to [five hundered rupees] for every day during which such contravention continues after conviction for the first such contravention.

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(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 authorised in this behalf by that Government and the State Government or such authorised authority may, if necessary, obtain the help of the police to evict the trespasser from the land.

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[(4) Whenever any person raises, transports or causes to be raised or transported, without any lawful authority, any mineral from any land, and, for 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.

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(4A) Any mineral, tool, equipment, vehicle or any other thing seized under subsection (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.]

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(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.

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[(6) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), an offence under sub-section (1) shall be cognizable.]”

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As per Section 3 (d) of the Act, “mining operations” means any operation undertaken for the purpose of winning of any mineral. As per Section 4 of the Act, if someone wants to undertake mining operations, he is required to obtain mining lease, as mandated by Section 4 of the Act. However, as per Section 21 (5) of the Act, if any person raises any mineral from any land without there being any mining lease or in contravention with the provisions of the Act, then State Government shall be at liberty to recover price of the mineral so raised, rent, royalty or tax as the case may be, from the violator.

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The simple meaning of “mining operations” as defined under Section 3 (d) of the Act is that there should be excavation for the purpose of taking out any mineral.

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The meaning of word “mine”, as defined in Law Lexicon, is an excavation made in the earth for the purpose of digging metallic ores or coal, salt, precious stones etc. “Mine”,

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properly speaking, is the pit or excavation in the earth from which the mineral is taken out.

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As per English Dictionary, “mine” means an excavation in the earth from which some useful product is extracted. As per Bouvier’s Dictionary, “mine” means an excavation made for obtaining minerals from the bowels of the earth. As per Oxford English Dictionary, “mine” means an excavation in the earth for extracting coal or other minerals.

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From the perusal of the meaning of “mine”, as given in different dictionaries, “mine” means excavation of earth for the purpose of digging minerals therefrom.

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Even language of Sub Section (5) of Section 21 demonstrates that in the event of raising minerals from the land, State Government may recover cost thereof as well as royalty and tax as the case may be. Raising (taking out) mineral from the earth is sine qua non to attract Section 21 (5) of the Act.

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Undisputedly, earlier Irrigation Department of Uttar Pradesh and thereafter, THDC was involved in digging the earth with the sole purpose of construction of Tehri Dam without there being any mense rea to take out any mineral therefrom. Sand taken out after the digging of the site was used then and there for the purpose of raising different levels of the Dam.

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To my mind, to understand, as to whether a person is involved in mining activities, mense rea plays an important role. If digging is made solely for the purpose of construction or raising underground construction without there being any intention to take out minerals therefrom, then it would not

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amount to excavation of minerals from earth, therefore, shall not fall within the definition of mining operation.

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Mr. Anil Kumar Joshi, Addl. CSC for the State of Uttarakhand, vehemently argued that sand, mines and minerals taken out, after digging of the site, were admittedly utilized for the construction of dam, therefore, it would amount to mining operation; since, no lease / license was obtained by the petitioners, as required under Section 4 of the Act, therefore, State Government is well within its jurisdiction to recover cost of the minerals, royalty and tax under Section 21 (5) of the Act.

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In view of the definition of “mine”, in my considered opinion, requirement to obtain mining lease is necessitated only when excavation is purported to be done for the purpose of digging out minerals, however, if simple digging is being carried out for the purpose of raising underground construction, then it would not amount to excavation for the purpose of taking out (raising) minerals, therefore, mining lease / license was not required to be obtained under Section 4 of the Act and Section 21 (5) of the Act has no application in the matter.

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There is another aspect of the matter. Hon’ble Apex Court in the case of Thressiamma Jacob and others Vs. Geologist, Department of Mininig and Geology and others reported in 2013 (9) SCC 725 in paragraphs 55 to 58 as held as under:

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“55. The Mines and Minerals Act is an enactment made by the Parliament to regulate the mining activities in this country. The said Act does not in any way purport to declare the proprietary rights of

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the State in the mineral wealth nor does it contain any provision divesting any owner of a mine of his proprietary rights. On the other hand, various enactments made by the Parliament such as Coking Coal Mines (Nationalisation) Act, 1972 and Coal Bearing Areas (Acquisition and Development) Act, 1957 make express declarations under Section 4 and 7 respectively providing for acquisition of the mines and rights in or over the land from which coal is obtainable. If the understanding of the State of Kerala that in view of the provisions of the Mines and Minerals Development (Regulation) Act, 1957, the proprietary rights in mines stand transferred and vest in the State, it would be wholly an unnecessary exercise on the part of the Parliament to make laws such as the ones mentioned above dealing with the nationalisation of mines.

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56. Even with regard to the minerals which are greatly important and highly sensitive in the context of the national security and also the security of humanity like uranium - the Atomic Energy Act, 1962 only provides under Section 5 for prohibition or Regulation of mining activity in such mineral. Under Section 10 of the Act, it is provided that the Government of India may provide for compulsory vesting in the Central Government of exclusive rights to work those minerals. The said Act does not in any way declare the proprietary right of the State.

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57. Similarly, the Oilfields (Regulation and Development) Act, 1948 deals with the oilfields containing crude oil, petroleum etc. Which are the

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most important minerals in the modern world. The Act does not anywhere declare the proprietary right of the State.

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58. For the above-mentioned reasons, we are of the opinion that there is nothing in the law which declares that all mineral wealth sub-soil rights vest in the State, on the other hand, the ownership of sub-soil/mineral wealth should normally follow the ownership of the land, unless the owner of the land is deprived of the same by some valid process. In the instant appeals, no such deprivation is brought to our notice and therefore we hold that the Appellants are the proprietors of the minerals obtaining in their lands. We make it clear that we are not making any declaration regarding their liability to pay royalty to the State as that issue stands referred to a larger Bench.”

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As per dictum of Hon’ble Apex Court, the Mines and Minerals Act, does not in any way purport to declare the proprietary rights of the State in the mineral wealth nor does it contain any provision divesting any owner of a mine of his proprietary rights. In other words, there is no law, which declares that all the mineral wealth/ subsoil rights vest in the State, on the other hand, the ownership of subsoil /mineral wealth should normally follow the ownership of the land, unless the owner of the land is deprived of the same by some valid process.

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In the case in hand, admittedly, land of entire area of Tehri Dam and Koteshwar Dam was either acquired or made available by the State Government for the purpose of construction of Tehri Dam and Koteshwar Dam and later on,

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was given / transferred under the ownership, management and control of THDC, therefore, as per dictum of Hon’ble Apex Court, any mineral / subsoil under the earth belong to the owner of the land i.e. THDC. Moreover, no digging was carried out for the purpose of collection of minerals rather same was carried out for the sole purpose of raising underground constructions for the purpose of Dam, therefore, no lease was required to be obtained by THDC before digging its own land for the purpose of construction of Tehri Dam.

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In view of the discussion made hereinbefore, all the other points raised in the writ petitions need not to be examined and are left open to be decided in future, if need be.

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In view of the above discussion, all the writ petition succeed and are hereby allowed. It is held that State Government is not competent to levy or recover any royalty and penalty from the petitioners for digging of site of Dams for the purpose of construction of Tehri Dam and Koteshwar Dam, therefore, all the impugned orders/ notices issued for the purpose of imposition of penalty and recovery of royalty stand quashed.

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All the applications stand disposed of.

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Let copy of this judgment be placed in each connected petition.

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26.05.2014

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SKS

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Thdc India Limited v. State Of Uttarakhand and Another

Case brief

What is this about?

What did the court decide?

Thdc India Limited v. State Of Uttarakhand and Another

Case brief

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