STATE OF RAJASTHAN & ORS. versus M/S. DEV GANGA ENTERPRISES

Citation: [2009] 16 S.C.R. 269 · Decided: 08-12-2009 · Supreme Court of India · Bench: R.V. RAVEENDRAN · Disposal: Appeal(s) allowed

Judgment (excerpt)

[2009) 16 (ADDL.) S.C.R. 269 
STATE OF RAJASTHAN & ORS. 
v. 
MIS. DEV GANGA ENTERPRISES 
(Civil Appeal No. 8152 of 2009) 
DECEMBER 08, 2009 
[R.V. RAVEENDRAN AND K.S. RADHAKRISHNAN, JJ.] 
Mines and Minerals: 
A 
B 
Rajasthan Minor Mineral Concession Rules, 1986 - r. 
3(xxi), (xiii-a), 32, 35(g)(iii), 37 and 61 - Excess Royalty c 
Collection Contract between State Government and contractor 
- Delayed payment of instalments by contractor - Demand 
of interest by State Government - Entitlement to interest free 
grace period of 15 days from the date when amount becomes 
due u/r. 61 to contractor- Held: r. 61 refers to dues in regard 0 
to dead rent, royalty, quarry licence fee and royalty collection 
\ 
contract amounts - Excess Royalty Collection Contract 
'· 
Amount, which relate to contracts given to contractors to 
collect royalty in excess of annual dead rent on behalf of 
Government from holders of mining leases, are not covered 
E 
by r.61 - Thus, contractor not entitled to grace period of 15 
days u/r.61 - Demand for interest for delayed payment of 
instalments without applying grace period of 15 days ulr. 61 
justified. 
'Excess Royalty Collection Contract' and 'Royalty 
F 
Collection Contract' - Difference between - Explained. 
Respondents-contractor entered into an 'Excess 
Royalty Collection Contract' with the appellants-State 
Government. Respondents were to pay annual fixed 
amount in instalments, the first instalment on or before G 
the signing of the agreement and the balance in advance 
upto the 10th day of the month. They delayed in paying 
the instalments. Appellant raised a dem::.nd for interest for 
delay in payment of instalments. Respondent paid said 
269 
H 
270 SUPREME COURT REPORTS (2009] 16 (ADDL.) S.C.R. 
A amount under protest and filed a suit for setting aside the 
> 
said demand and sought adjustment of the amounl Trial 
court dismissed the suit. High Court allowed the appeal 
holding that respondent was entitled to a grace period of 
15 days u/r. 61 of Rajasthan Minor Mineral Concession 
B Rules, 1986, after 10th day of month when amount fell 
due. Hence, the present appeal. 
Allowing the appeal, the Court 
HELD: 1.1. The procedures for auction/tender in 
c regard to Royalty Collection Contracts and Excess 
Royalty Collection Contracts are the same. The form of 
contract for both types of contracts is the same. Under 
both types of contract, the government gives contracts 
to collect royalty i!'! regard to particular areas in 
0 consideration of payment of a fixed amount annually. But 
these factors do not lead to an inference that the Royalty 
Collection Contracts arP same as Excess Royalty 
Collection Contract. It is clear from their definitions in 
clauses (xxi) and (xiii-a) of Rule 3 of the Rajasthan Minor 
E Mineral Concession Rules, 1986 that they are 
conceptually different Royalty Collection Contracts refer 
to contracts given to the contractors to collect royalty on 
behalf of the Government from quarry licensees and short 
term licence holders who excavate minor minerals. On the 
other hand, Excess Royalty Collection Contracts refer to 
F contracts given to contractors to collect royalty in excess 
of annual dead rent on behalf of the Government from the 
holders of mining leases. Therefore, an Excess Royalty 
Collection Contract ca~not be equated with a Royalty 
Collection Contract. Rule 61 clearly sets out the nature 
G of dues in regard to which it will apply. It specifically 
refers to dues in regard to "dead rent, royalty, quarry 
licence fee and royalty collection contract amounts". 
'Excess Royalty Collection Contract Amount' is neither 
a dead rent, nor royalty nor quarry licence fee nor a 
H royalty collection contract amount. 'Royalty Collection 
·" 
' 
( 
-· 
·--
STATE OF RAJASTHAN & ORS. v. DEV GANGA 
271 
ENTERPRISES 
Contract' was a concept that was conceived and A 
contemplated in the Rules as originally framed. [Para 8] 
[276-F-H; 277-A-C] 
1.2. 'Excess Royalty Collection Contract' was a new 
concept introduced by amendment dated 12.8.1994 by 
8 
inserting a new definition under clause (xiii-a) of Rule 3. 
After the said amendment in 1994 introducing the 
concept of 'Excess Royalty Collection Contract', Rules 
32, 34, 35 and 37 were amended by inserting 'Excess 
Royalty Collection Contract' wherever the words 'Royalty 
Collection Contract' occurred by amendment dated C 
27 .3.2003, thereby emphasising that the two were 
different. But significantly such an inserti

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