MANBHAR DEVI AGARWAL versus THE STATE OF RAJASTHAN & ORS.

Citation: [2016] 11 S.C.R. 739 · Decided: 25-11-2016 · Supreme Court of India · Bench: PINAKI CHANDRA GHOSE · Disposal: Disposed off

Judgment (excerpt)

[2016] ll S.C.R. 739 
MANBHAR DEVI AGARWAL 
v. 
THE STATE OF RAJASTHAN & ORS. 
(Civil Appeal No.11259of2016) 
NOVEMBER25, 2016 
[PINAKI CHANDRA GHOSE AND ASHOK BHUSHAN, JJ.) 
Rajasthan Mines and Minerals Concession Rules, 1986: 
rr. 3(2)(xx),18,48 - Government circulars providing for 
payment of 'royalty' on minerals used by contractors in construction 
work - Appellant, a contractor carried out construction work using 
minerals purchased from open market - Royalty deducted from 
appellants bills - Plea of appellant that payment of royalty is to be 
made by lessee or licensee granted right of excavation of minerals, 
appellant being a contractor, not carrying out any mining operation 
cannot be saddled with payment of royalty- Respondent contended 
that though royalty is to be paid by lessee/licensee to whom mining 
lease is granted however, in order to stop use of illegally mined 
minerals in construction works, contractors only need to show that 
minerals procured by themfrom open market is legally mined mineral 
on which royalty has been paid and on such proof thereto, no royalty 
would be payable subsequently by the contractor - High Court, 
relying on its decision in R.S Shekhawat's case, directed appellant 
to approach mining department for.~~fund of the amount deducted 
from appellants bill on successfully proving that minerals used were 
legally mined on which royalty was already paid - On appeal, held: 
Circulars issued by government required payment of royalty with 
regard to only those minerals used by contractors for which no 
royalty was paid - They did not require payment of royalty for 
minerals used on which royalty was already paid once - Object of 
these circulars was to ensure that contractors do not use minerals 
which are not royalty paid - High Courts direction to appellant, 
relying on R.S Shekhawat's case, to approach the mining department 
amply protects its interest- However, appellant also given liberty to 
approach respondent no.2-Mining Engineer showing proof to 
739 
A 
B 
c 
D 
E 
F 
G 
H 
740 
SUPREME COURT REPORTS 
f2016111 S.C.R. 
A 
establish that on minerals used by it royalty was paid as per rules -
Mines and Minerals (Development and Regulation) Act, 1957 -ss.2, 
3(e), 9(2), 15, 23C - Mines and Minerals. 
Government circulars providing for payment of royalty on 
minerals used by contractors in construction work - Letter issued 
B 
by Government requesting City Municipal Corporation to ensure 
compliance of said circulars - Writ petition by appellant seeking 
quashing of this letter, without challenging the said circulars - High 
Court decided the writ petition - Propriety of - Held: High Court 
ought to have decided the writ petition only after deciding upon the 
C 
said letter - However, this letter only sought compliance of 
government circulars imposing royalty and since these circulars were 
not challenged by appellant, no fault can be found with the s_aid 
letter only seeking compliance of circulars - There being no 
challenge to the circulars, the State had no opportunity to defend 
D 
its policy - Not appropriate for Supreme Court to embark upon the 
adjudication of the Government Scheme. 
E 
Disposing of the appeal, the Court 
HELD: 1.1 The letter dated 26.03.2002 issued by the State 
Government impressed upon Commissioner of Jaipur Municipal 
Corporation to ensure compliance of Government Circulars 
seeking realization of the royalty from the contractors for use of 
the minerals. The appellant in writ petition had only challenged 
the letter dated 26.03.2002 but had not challenged the 
Government Circulars issued earlier which were sought to be 
F complied by the said letter. [Para 35] [751-A-B] 
1.2 There being no challenge to the said circulars in the 
writ petition, the State had no opportunity to defend its above 
policy of seeking realization of the royalty from the contractors 
G for use of the minerals. Thus, it is not appropriate for this Court 
to embark upon the adjudication of above Government Scheme. 
The letter dated 26.03.2002 being only a letter to ensure 
compliance of Circulars by which royalty was sought to be 
recovered, no fault can be found in the said letter. [Para 36] [751-
D-E] 
H 
MANBHAR DEVI AGARWAL v. THE STATE OF RAJASTHAN 
741 
2. The circulars issued by the State Government have to 
A 
be interpreted to mean that they require payment of royalty with 
regard to only those minerals which have been used by the 
contractor for which no royalty 

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