Paragraph numbers below are the court’s original numbering, recovered from the source text.
10. As regards the challenge to the Policy decision dated 22.04.2017, the learned ASG has asserted that the said Policy had not been challenged before the High Court and thus, the same cannot be challenged before this Court now. Furthermore, it is under this Policy which is now sought to be questioned that the e-tender was floated in which the Appellant had participated and succeeded. The Appellant, therefore, cannot be permitted to turn around and challenge the very Policy under which he had sought benefit and had actually availed as well. The terms and conditions were clear from the very beginning, with there being no ambiguity. On the above referred basis, prayer has been made for dismissal of the appeals.
11. We have considered the submissions as have been made by the Counsel for the parties and with their assistance have gone through the pleadings and records. 100
12. For the sake of brevity, the facts are not being reiterated, as they are not in dispute.
13. Broadly speaking the challenge in the present appeal to the Demand Notice is based upon the Policy decision dated 22.04.2017 as issued by the Respondent-State under which the e-tender process was initiated leading to the Appellant participating therein and succeeding followed by the allotment of the tender and issuance of the Mining Permit. The ground pressed into service is of non-compliance/violation of the procedure as required to be followed under Rule 68 of the 1963 Rules which enabled the State Government to, in relaxation of the 1963 Rules, grant mining lease.
14. In pursuance of the order passed by this Court on 24.09.2024, the original records relating to the process of finalising the decision resulting in the issuance of the communication dated 22.04.2017 with reference to Rule 68 of the 1963 Rules were produced before the Court on 15.10.2024 which was perused and a copy of the original file was retained on record.
15. On considering the records as produced, the process which has been followed while considering, evaluating and deliberating the factors which weighed while assigning reasons for coming to the conclusion have been perused by us. The same finds reflected, projected and mentioned in the letter dated 22.04.2017 after due consideration at different levels upto the highest competent authority leading to a reasoned decision at the end of the State for exercising its powers under Rule 68 of the 1963 Rules which is found to be fulfilling the requirement of the Rule. It would not be out of way to mention here that an Order dated 18.04.2017 was passed by the Lucknow Bench of the High Court in a Public Interest Litigation which had permitted and required the exercise of powers under Rule 68 of 1963 Rules by the State. This was because of the peculiar situation which was being faced by the State for the total ban on mining activity having been imposed leading to the stopping and delaying of construction and other development works, both in the Government sector as well as the private sector. Exercise of such power in those circumstances when the vital projects were being adversely affected would fall within the purview of Rule 68 empowering the State to proceed to frame such a Policy and therefore, we find no fault in the whole process and procedure adopted by the State. [2025] 7 S.C.R. Chandra Bhan Singh v. State of Uttar Pradesh & Others
16. The challenge, thus, is limited to the extent of the amount required to be deposited at the end of the Appellant in the DMF Trust. The Appellant asserts that the amount payable would be 10% of the amount of royalty as have been laid down in Second Schedule of the 1957 Act with reference to Section 9B(5) or under sub-Rule (2) of Rule 10 of the 2017 Rules as framed by the State of Uttar Pradesh. On this basis, it is being sought to be asserted that nothing beyond 10% of the royalty amount as provided under the Schedule referred to above could be called upon to be deposited in the DMF Trust. Demand Notice dated 25.10.2017 requiring the Appellant to deposit 10% of the amount of the title amount would be much beyond the liability of the Appellant as per the Statute. Demand cannot be in excess of the one which is prescribed under the Statute or the Rules.
17. This contention of the Appellant is unsustainable firstly on the ground that Section 9B of the 1957 Act would not be applicable in the light of Section 14 of the said Act, which reads as follows:- “14. Sections 5 to 13 not to apply to minor minerals – The provisions of sections 5 to 13 inclusive shall not apply to quarry leases, mining leases or other mineral concessions in respect of minor minerals.”
18. A perusal of Section 14 would make it clear that Sections 5 to 13 of the 1957 Act would not be applicable to the present case as the mineral which is sought to be mined is a minor mineral i.e., sand. The plea therefore of the Appellant based on Section 9B(5) is misplaced and thus, unacceptable.
19. The applicability and the effect of Section 9B (2) and (3) is limited to the extent as has been mentioned in Clause (a) and (b) of sub- Section (4) of Section 15 of the 1957 Act, which reads as follows:- “15. Power of State Government to make rules in respect of minor minerals – (4) Without prejudice to sub-sections (1), (2) and sub- section (3), the State Government may, by notification, make rules for regulating the provisions of this Act for the following, namely:- (a) the manner in which the District Mineral Foundation shall work for the interest and benefit of persons 102 and areas affected by mining under sub-section (2) of section 9B; (b) the composition and functions of the District Mineral Foundation under sub-section (3) of section 9B; and (c) the amount of payment to be made to the District Mineral Foundation by concession holders of minor minerals under section 15A.”
20. A perusal of the above would itself make it clear that Clauses (a) and (b) are to operate within the domain for which they have been incorporated and permitted to function. The said sub-Clauses do not deal with the amount to be charged or deposited in the DMF. This aspect has been dealt with and provided for under Clause (c) of sub-Section (4) of Section 15, which refers to amount of payment to be made by the concession holder in the DMF under Section 15A. Meaning thereby, the State Government has been empowered under Section 15A to determine and fix the amount. Section 15A reads as follows:- “15A. Power of State Government to collect funds for District Mineral Foundation in case of minor minerals. – The State Government may prescribe the payment by all holders of concessions related to minor minerals of amounts to the District Mineral Foundation of the district in which the mining operations are caried on.”
21. The empowerment being there under the Statute conferred on the State to determine the amount and the fixation thereof for minor minerals cannot be faulted with. The impugned Demand Notice thus being in consonance with the Statutory provisions cannot be said to be illegal or unsustainable.
22. Reference with regard to sub-Rule (2) of the Rule 10 of 2017 Rules would also not come to the rescue of the Appellant. The same reads as follows:- “10. Contribution to the Trust Fund. (2) In case of minor minerals- The holder of every mineral concession/permit shall in addition to the royalty, pay to the Trust of the district in which [2025] 7 S.C.R. Chandra Bhan Singh v. State of Uttar Pradesh & Others the mining operations are carried on, an amount which is equivalent to 10% of royalty or as may be prescribed by the State Government from time to time.”
23. A perusal of above Rule 10(2) would show that apart from the royalty, an amount of 10% of the royalty is payable to the DMF Trust of the district in absence of any prescribed amount by the State Government. However, in case an amount is prescribed by the State Government then the said rate or amount would prevail and be payable at the end of the holder of the mineral concession or permit.
24. In the present case, the tender notice dated 11.05.2017, the Approval Letter (Letter of Intent) dated 01.06.2017 and the Mining Permit dated 16.10.2017, it was made amply clear with regard to the amount required to be deposited by the Appellant. The Demand Notice dated 25.10.2017 issued to the Appellant requiring him to deposit 10% of the title amount i.e. the total amount payable for the minor minerals to be extracted was under and in accordance with the statutory Rules i.e., Rule 10(2) of the 2017 Rules.
25. As regards the applicability of Rules 21 and 54 of the 1963 Rules, which have been sought to be pressed into service by the Appellant to support his claim, the same would not cut any ice in the light of Rule 23(3) of the 1963 Rules. For ready reference Rule 23(3) is reproduced hereinbelow:- “23. Declaration of area for auction/tender/auction- cum-tender lease (3) On the declaration of the area or areas under sub- rule (1) the provisions of chapters II, III and VI of these rules shall not apply to the area of areas in respect of which the declaration has been issued. Such area or areas may be leased out according to the procedure described in this Chapter.” A perusal of the above makes it clear that in case of e-tender process is being followed, Chapter II, III and VI of these Rules would not apply. Rule 21 falls in Chapter III whereas Rule 54 falls in Chapter VI and, therefore, the said Rules would not be operative, rather not available to be used. This argument, therefore, also fails. 104
26. In view of the above, we do not find any merit in the appeal and, therefore, the same is dismissed. The Impugned Judgment dated 15.11.2017 passed by the Division Bench of the High Court of Allahabad is upheld along with the Demand Notice dated 25.10.2017, implying liability of the Appellant as towards the DMF Trust.
27. In light of the decision in Civil Appeal No.12314 of 2024, the other two connected appeals, being Civil Appeal Nos.12315-16 of 2024 also stand dismissed.
28. There shall be no orders as to costs.
29. Pending application(s), if any, shall stand disposed of. Result of the case: Appeals dismissed. †Headnotes prepared by: Divya Pandey