मुंसिफ मिज़ाज शख्स अगर हुक्मरां न हो
इन्साफ ख़ाक होगा सबूतों दलील से
उससे नवाज़िशों की तवक़्क़ो फ़िज़ूल है
हक़ भी न मिल रहा हो जहाँ जिस ज़लील से
-मख्मूर काकोरवी
In The State of Bihar through the Principal Secretary, Mines and Geology Department, Government of Bihar & Ors. vs. Arena Food and Agro Industries Private Limited (2025), Patna High Court's Division Bench of Acting Chief Justice Ashustosh Kumar and Justice Partha Sarthy passed a 13-page long judgement dated July 11, 2025 wherein, it concluded: "23. We, therefore, set aside the judgment impugned in the present appeal and remit it to the learned Single Judge to pass a fresh judgment, not based on the concession made by the lawyer for the Department. 24. We further clarify that we have not opined on the merit of the judgment in any manner whatsoever. 25. Till the time the writ petition is decided afresh, the status quo, as on date, shall be maintained."
In Arena Food and Agro Industries Private Limited vs. The State of Bihar through the Principal Secretary, Mines and Geology Department, Government of Bihar & Ors. (2025) Justice Alok Kumar Sinha had passed a 25-page long judgement dated May 5, 2025 appreciating the counsels of the Mining Department "for taking a pragmatic decision in the commercial interest of the Mining Department/State." Justice Sinha had concluded "29. To give effect to the above terms agreed between the parties under which the present writ application is being disposed of, the Letter No. 2005 dated 02.04.2025 issued by Respondent-Additional Secretary (Annexure-P/25 to the writ application) is hereby quashed and also the process for auctioning of the mineral lying at the site initiated through notice bearing PR No. 000159 (Mines) 2025-26 published in Dainik Bhaskar newspaper on 04.04.2025 (Annexure-P/26 to the writ application) through which notice for auction of 32,20,180.39 cft. mineral lying at Mauja Mathokar Surdaspur, Circle Sheikhpura, P.O Sheikhpura, Khata 272, and 132 Plot 1030 (P) and 32 (P) Block 04, is also quashed." The other respondents were: Principal Secretary, Mines and Geology Department, Bihar, Additional Secretary, Mines and Geology Department, Bihar, Director, Mines and Geology Department, Bihar, District Magistrate cum Collector, Sheikhpura and Mineral Development Officer, Sheikhpura.
Before Justice Sinha bench, the petitioner had prayed for issuance of an appropriate writ, order or direction in the nature of certiorari for quashing 02.04.2025 issued by Respondent Additional Secretary whereby petitioner's representation dated February 6, 2025 had been rejected. It sought issuance of an appropriate writ, order or direction in the nature of certiorari for quashing notice bearing no. PR No. 000159 (Mines) 2025-26 published in Dainik Bhaskar newspaper on April 4, 2025 whereby the respondents had published a notice for auction of 32,20,180.39 CFT mineral lying at Mauja Mathokar Surdaspur, Circle Sheikhpura, P.O Sheikhpura, Khata 272, and 132 Plot 1030 (P) and 32 (P) Block 04. The petitioner issuance of an appropriate writ, order or direction to the Respondents to permit the petitioner to pay remainder of the additional royalty in installments and remove the mineral lying at the mining site. It prayed to the Court to adjudicate and hold that the action of the Respondents in not permitting the petitioner to pay the remainder of the additional royalty amount and trying to auction the mineral as much less consideration is completely unjustified and arbitrary. It prayed to the Court to adjudicate and comply with the earlier order of the Mines Commissioner contained in memo no. 5577 dated November 24, 2023 was solely attributable to the Respondents and the petitioner cannot be penalised for the same.
The petitioner company had participated in the auction for obtaining the mining lease for stone with respect to land situated at Mauja Mathokar Surdaspur, Circle-Sheikhpura, PO-Sheikhpura and Khata-272 and 132 Plot 1030 (P) and 32(P) Block-04, admeasuring 12.50 crores (the said land). Pursuant to participating in the auction, the petitioner company emerged as the highest bidder at Rs. 29,00,00,000/- (Rupees Twenty-Nine crores) and was granted the mining lease with respect to the said land for a period of five years (March 30, 2017 to March, 2022). Thereafter, the petitioner company had deposited a security amount of Rs, 2,90,00,000/- (Rs.Two crores and Ninety lakhs) and entered into a lease agreement
with the State of Bihar on March 30, 2017 to the writ application). According to Part-V of the said agreement, the petitioner company was supposed to deposit the entire auctioned amount of Rs. 29,00,00,000/- (Twenty-Nine crores) in 5 equal early installments of Rs. 5,80,00,000/- ( Rs. Five crores and 80 lakhs).
The petitioner's counsel had submitted that Schedule-II of the Bihar Mining Mineral Concession Rules, 1972 (which was in force at the time of the execution of agreement) contemplated that in case settlement is made through auction, the royalty under Rule 26(1)(b) would be the auction amount. The same provision has been incorporated in Schedule-III (A) of the 2019 Rules. The counsel contended that since the settlement was through auction, the auctioned amount was the royalty which the petitioner was liable to pay. The counsel for the petitioner contended to have deposited the entire royalty amount of Rs. 29 crores along with applicable interest for delayed payment as well. It was submitted that Arena Food and Agro Industries Private Limited, the petitioner had also obtained environment clearance from State Environment Impact Assessment Authority, Bihar, which was contained in Reference No. 428 dated December 19, 2016. According to the environment clearance granted to the petitioner, the proposed capacity of production was kept at 11,41,250 tons per annum. Thus, the petitioner was entitled to extract 11,41,250 tons per annum from the mines, consequently for the entire period of five years, the petitioner was entitled to extract 57,06,250 tons of mineral which corresponds to 14,26,56,250 cft. of minerals. The agreement of the petitioner is stated to have expired on March 29, 2022. 5. It was also stated that during the entire period of five years, the petitioner had produced only 12,02,59,361.7 cft. mineral which comes to 48,10,374 mt. Insofar as dispatch is concerned, the total mineral dispatched was 11,54,47,915.6 cft. which comes to 46,17,916.624 mt.
After expiry of the settlement, approximately 1,92,457.376 mt. of boulder/stone was lying at the mining site, which was corroborated by the monthly return filed by the petitioner for the month of March 2022 on 21-04-2022 (Annexure-P/4 to the writ application). Since the total quantity of dispatched mineral was only 11,54,47,915.6 cft. which is less than 14,26,56,250 cft., the counsel for the petitioner contended that the petitioner was not liable to make payment of any additional royalty. The counsel submitted that under wrong advice and under the pressure of the District Mining Office, had paid additional royalty of Rs. 1,18,23,487/- initially.
The counsel for the petitioner also contended that the Mineral Development Officer, Sheikhpura vide Letter No. 722 dated July 4, 2022 directed the petitioner to deposit Rs.6,25,34,581/- as additional royalty because it was alleged that the petitioner had dispatched mineral worth Rs. 36,43,58,068.00/- during the settlement term till 29-03-2022 and had deposited only Rs.30,18,23,487.00/-, therefore, the petitioner was held liable to pay additional royalty of Rs. 6,25, 34,581/-. Learned counsel for the petitioner submits that vide letter dated July 5, 2022, the petitioner replied to the demand letter but the reply of the petitioner was rejectedvide Letter No. 731 dated July 6, 2022 and the petitioner was directed to deposit additional royalty of Rs. 6,25,34,581/- along with Income Tax and District Mineral Foundation Amount.
As against the Letter No. 731 dated July 6, 2022 issued by the Mineral Development Officer, Sheikhpura, the petitioner is said to have preferred an appeal under the Rule 67 of 2019 Rules before the Collector, Sheikhpura bearing Appeal Case No. 96 of 2022. In the meanwhile, the Senior Additional Collector-Cum-Mineral Development Officer Sheikhpura lodged Sheikhpura P.S. Case no. 396 of 2022 on July 8, 2022 against the petitioner under section 406, 419 and 420 of Indian Penal Code; Section 4 of Mines and Mineral ( Development and Regulation) Act 1957; Rule 11, 43 and 56 of Bihar Minerals ( Concession, Prevention of Illegal Mining, Transportation And Storage) Rules, 2019 alleging that the petitioner had not paid the additional royalty amounting to Rs. 6,25,34,581/- and had stopped 52,07,192 cft. and 5,39,280.75 cft. minerals at its K-license site and upon inspection carried out on July 8, 2022, the stock at the storage point was found to be nil. Thus, it was alleged that the stock had been sold off illegally.
The Director of the petitioner company namely, Radhe Sharma filed anticipatory bail application before the Court which was rejected and Radhe Sharma approached the High Court vide Criminal Misc. No. 53870 of 2022 seeking anticipatory bail, which was allowed vide order dated February 6, 2023 upon the submission that the petitioner was ready to deposit Rs. 50 lakhs per month for six months, subject to the outcome of Civil Proceeding, if the Mining Department would allow the petitioner to lift the minerals already and lying at the mineral site.
The counsel for the petitioner further submitted that in light of the above order, vide representations dated February 18, 2023 and February 22, 2023, the petitioner had requested th authorities to permit the petitioner to remove the minerals already lying at the mineral site. However, the petitioner was not permitted to lift the same. It is stated that Appeal Case No. 96 of 2022 was dismissed vide order dated March 28, 2023 contained in Memo No. 362 dated April 3, 2023 and the petitioner was directed to deposit an amount of Rs. 8,67,12,590/- [Rs. 6,25,34,581.00/- as additional royalty and Rs. 96,34,471.00/- as interest on delayed payment of additional royalty +Rs. 15,31,777/- as Income Tax amount Rs. 14,87,162 as DMF (District Mineral Foundation) amount Rs.1,01,50,905.00/- as interest on delayed payment of installment + Rs. 13,73,694/- as interest on DMF amount] along with interest from the date of institution of certificate case. Sheikhpura/30/2022 respectively. The said case is said to have been disposed of vide order dated August 22, 2022 with direction to file a representation before the Mines Commissioner, which was done and it was numbered as Misc. Case No. 08 of 2023.
Being aggrieved by the order dated March 28, 2023 passed by the Collector in Appeal Case No. 96 of 2022, the petitioner is said to have filed CWJC No. 13532 of 2023 which was disposed of vide order dated October 12, 2023.
The High Court was said to have granted liberty to the petitioner to file revision and also granted permission to the petitioner to lift the already excavated minerals from the mining site subject to the condition that the petitioner shall pay the additional royalty of Rs.6,25,34,581/- in six equal monthly installments.
In light of the liberty granted to the petitioner vide order dated October 12, 2023, the petitioner preferred Revision Case No. 2 of 2023 against the order dated March 28, 2023 passed by the Collector in Appeal Case No. 96 of 2022. The counsel for the petitioner also stated that the petitioner had also filed CWJC No. 14879 of 2022 seeking permission to allow the petitioner to carry out mining activity for 317 days as the petitioner was precluded from conducting mineral activity due to various reasons. The said writ application is said to have been disposed of vide order dated November 2, 2022 with a direction to the Principal Secretary, Mines and Geology Department, Government of Bihar, Patna to positively take a decision on the petitioner’s request dated September 3, 2022 and the petitioner was also given the liberty to raise the issue of lifting of material lying at the mining lease area.
In light of the order dated November 2, 2022, the petitioner was said to have filed representation dated November 10, 2022, requesting that the petitioner be granted six months time to remove 192457.376 mt. of mineral already lying at the mining side. The counsel for the petitioner that Misc. Case No. 08 of 2023 and Revision Case No. 02 of 2023 were heard simultaneously and disposed of vide order dated November 23, 2023 contained in Memo No. 5577 dated November 24, 2023 with a direction to the petitioner to deposit Rs.1,99,65,771/- every month for six months and in lieu of the same the petitioner would be entitled to lift 801907.03 cft. mineral every month.
In compliance of the order dated November 23, 2023, the petitioner deposited the first installment of Rs. 1,99,65,771/- on November 28, 2023. However, it was contended that the petitioner was not immediately allowed to sell minerals from the lease hold area. It was submitted that the petitioner was given capping only on January 2, 2024 after a delay of 34 days, as a result of which huge amount of Rs. 1,99,65,771/- got stuck for more than a month.
Thereafter, the petitioner deposited the second installment on February 20, 2024. Even this time the capping was not allotted in a timely manner and the Mining Department provided the capping on January 9, 2024 after a delay of 48 days, resulting in huge financial loss on account of large amount of money getting blocked. It was also submitted that the capping given for the second month was valid till May 8, 2024. However, thereafter, some delay was caused in depositing the third installment on account of some technical issue in the current account of the petitioner and this fact was communicated to the Assistant Director vide letter dated May 6, 2024. Meanwhile, the Assistant Director vide Memo No. 585 dated June 29, 2024 recalled the order of lifting of minerals from the lease area and seized the remainder of 3207628.14 cft. minerals from the site. The petitioner was also directed to remove all its machines etc. from the lease site. The petitioner vide representation dated September 23, 2024 requested the Additional Chief to extend the time period to deposit the royalty and reduce the monthly installment to Rs.1,00,00,000/.
Finally, vide order contained in Memo No. 4526 dated October 24, 2024 issued by the Director Mines, the representation of the petitioner was rejected purportedly in light of order contained in order dated November 23, 2023 contained in Memo No. 5577 dated November 24, 2023 and Memo No. 585 dated June 29, 2024 issued by the Assistant Director. It is stated that on the very same day, the Director Mines vide Memo No. 4525 dated October 24, 2024, directed the Collector, Sheikhpura to seize all the minerals lying within the lease area and auction the same in accordance with the Rules. A copy of the said letter was provided to the petitioner from the District Mining Office.
It was submitted by the petitioner company that the Assistant Director, failed to consider that the delay caused in depositing the third installment of the royalty was not only on account of the petitioner but also on account of the delay caused by the Mining Department in providing the capping to the petitioner. Being aggrieved by Memo No. 4525 dated October 24, 2024, the petitioner is said to have preferred a Revision Application before the Mines Commissioner bearing Revision Case No. 05 of 2024. The said case was dismissed vide order dated January 14, 2025 contained in Memo No. 302 dated January 16, 2025 on the ground that no revision was maintainable against order passed by the Director Mines. However, the petitioner was given liberty to file a representation before the Mines Commissioner with respect to its claim. The petitioner, therefore, filed a representation before the Principal Secretary Mines and Geology Department vide letter dated February 6, 2025 requesting that it be allowed to extend the time period to deposit the royalty. Since nothing was communicated to the petitioner for some time, the petitioner vide letter dated February 28, 2025 submitted a reminder letter to the Director Mines. Consequent thereto, the Director Mines vide Letter No. 2005 dated April 2, 2025 intimated the petitioner that vide earlier Letter No. 4526 dated October 24, 2024 the petitioner had been intimated that its request had been rejected. The learned counsel for the petitioner therefore submits that no fresh order was passed upon the letter dated 06.02.2025. Rather relying on earlier Letter No. 4526 dated 24.10.2024 issued by the Director Mines, the request made to the Principal Secretary was rejected. Consequent thereto, the Mines Department has now floated an auction notice contained in PR No. 000159 (Mines-2025-26) published in Dainik Bhaskar newspaper on 04.04.2025 whereby 3220180.39 cft minerals lying at the mining site of the petitioner has been put up for auction and the date of the auction has been fixed for 21.05.2025. The tender notice has been brought on record.
It was submitted by the petitioner that the Letter No. 2005 dated 02.04.2025 issued by the Director Mines is bad in the eyes of law. Since the representation dated 06.02.2025 was submitted to the Respondent-Principal Secretary in light of the order dated 14.01.2025 passed in Revision Case No. 05 of 2024, as per the petitioner, it was imperative that the Principal Secretary should have passed an order in this regard but the petitioner’s representation has been rejected by the Director Mines, that too by referring to earlier Memo No. 4525 dated 24.10.2024. The counsel for the petitioner further submits that the respondents have failed to consider that the delay of 34 and 48 days in depositing the royalty was caused by the Mining Department itself in providing the capping to the petitioner after it had deposited the first and second installment respectively. The petitioner submits that it was always willing and ready to comply with the order passed by the Mines Commissioner but its inability to comply was solely attributable to the Mining Department.
The petitioner unequivocally submitted that the petitioner is ready to deposit the remainder of the royalty to the Mining Department, which as per the petitioner comes to Rs. 7,98,63,083/- (Rupees Seven Crores Ninety-Eight Lakhs Sixty-Three Thousand Eighty Three Only) in lieu of lifting of mineral lying at the mining site. On the contrary, as per the counsel for the petitioner, the Department is ready and willing to auction the same at a very low minimum price of Rs. 1,36,65,767 (Rupees One Crore Thirty-Six Lakhs Sixty-Five Thousand Seven Hundred Sixty Seven Only). The petitioner's counsel submits that the action of the respondents is highly arbitrary in the eyes of law and there cannot be any justification for respondents to accept lower amount for the minerals when the petitioner is ready to pay much more i.e., Rs.7,98,63,083/. The petitioner's counsel for the petitioner emphasizes the fact that it would not be in the commercial interest of the Mining Department to accept a lower amount when the petitioner is ready and willing to pay approximately Rupees Eight crores.
The counsel appearing for the Mines Department had submitted that vide judgment and order dated October 12, 2023 passed in CWJC No. 13532 of 2023, the High Court had disposed of the writ application and had allowed the petitioner to pay the additional royalty of Rs. 6,25,34,581/- as per following strict terms and conditions contained in paragraph nos. 6 and 7 of the said judgment which reads as under:-“6. Considering the submissions made on behalf of the parties and taking note of the bonafide undertaking of the petitioner that he is ready to deposit the additional royalty amount within a period of six months, this Court deems it apt and proper to allow the petitioner to pay the amount in six equal instalments on monthly basis. Justice Sinha observed: "it is needless to observe that the permission to lift the boulder/stones shall be issued only after payment of first installment, before 10th of November, 2023. It is also made clear that within six months i.e., upto 10.04.2023 the entire payment of additional royalty of Rs. 6,25,34,581/ must be made within six equal monthly installments.Failure of any installment in any month would lead to cancellation of the order, giving liberty to respondents to take appropriate action. Further, this order will not prevent the Mines Department to make any settlement with any lessee in connection with the site, in question, but during this period of six months, the site, in question, will not be handed over to the successful bidder.”
The Mines Department's counsel, therefore, submitted that it was very clearly stipulated by the High Court that upon failure of payment of any installment the same would lead to cancellation of the order, giving liberty to the respondents to take appropriate action. It was also stipulated by the Court that in such a situation, the Mines Department would be free to make any settlement with any lessee in connection with the minerals lying at the site through auction. He, therefore, had submitted that the present action of the Mines Department of canceling the order of the petitioner because of his default in payment of the installment is absolutely proper and also the action of the Department to initiate the process of auctioning of the minerals lying at the site is also proper and in accordance with the order dated October 12, 2023 passed in CWJC No. 13532 of 2023. Hence, as per the counsel for the Mines Department, the present writ application does not have any merit and is fit to be dismissed.
26. The contention of the parties have been noted with a view to highlight the complexities of this case and the lis involved therein. However, when the High Court was just about starting to adjudicate the present case on merit, the counsel for the petitioner made an offer/proposal in Court whereby he submitted that the petitioner is ready to pay/deposit the entire balance/remaining amount of additional royalty of Rs. 7,98,63,083/- in six equal monthly installments, with each installment being of Rs. 1,33,10,514/- subject to the condition that after deposit of each installment the petitioner would be allowed to lift mineral lying at the site proportionate to the installment paid. The learned counsel for the petitioner further proposed that the petitioner would be willing to do this without prejudice to his right of pursuing with the case by which he has challenged the imposition of the additional royalty. This offer/proposal as per the petitioner, would not only be in the interest of the petitioner but also in the interest of the Respondent-State/Mining Department because, as per the petitioner, a very low minimum price of Rs. 1,36,65,767/- had been fixed for auctioning the mineral lying at the site which may end up in fetching less revenue than what is being offered to be paid by the petitioner and hence the petitioner implored the Respondent-State/Mining Department to accept its offer/proposal.
The counsel appearing for the Respondent/Mining Department initially was not willing to accept the offer/proposal given by the learned counsel for the petitioner but on a deeper understanding of the offer and taking into account the possibility of the successful highest bidder in the auction offering much less than what the petitioner is offering to pay as on today which would bring less revenue to the Department, the counsel for the Respondent/Mining Department principally agreed to the offer/proposal made by the counsel for the petitioner subject to that if this time the petitioner failed to deposit any installment in any month, for any reason whatsoever, then the Mining Department would not only cancel the order but also immediately proceed for fresh auction, grievance and further that the petitioner must undertake that in case of failure to deposit any installment within time, the petitioner would not seek any remedy against Respondent/Mining Department’s decision to cancel the order and to go for fresh auction. In nutshell, if under any circumstance the petitioner failed to pay any installment then thereafter he would have no grievance against any action taken by the Respondent/Mining Department as a consequence thereof. The learned counsel for the Respondent/Mining Department also objected to petitioner being allowed to pay the remaining amount of additional royalty in six installments and insisted that the entire amount should be cleared in four equal monthly installments.
Considering the offer/proposal made by the petitioner's counsel and also the acceptance on part of the Respondent/Mining Department with certain reservations, both the parties ultimately agreed to the following terms under which the present writ application is being disposed of:-
(I) The petitioner will deposit the remaining amount of additional royalty of Rs. 7,98,63,083/- in five equal monthly installments starting from 25.05.2025, with each installment being of Rs. 1,59,72,617/-. All the five installments, therefore, must be paid by 25.10.2025. To clarify, the installments must be paid as under:-
(a) First installment of Rs. 1,59,72,617/- should be paid by 25.06.2025.
(b) Second installment of Rs. 1,59,72,617/- should be paid by 25.07.2025.
(c) Third installment of Rs. 1,59,72,617/- should be paid by 25.08.2025.
(d) Fourth installment of Rs. 1,59,72,617/- should be paid by 25.09.2025.
(e) Fifth installment of Rs. 1,59,72,617/- should be paid by 25.10.2025.
(II) After deposit of each installment by the petitioner, the petitioner will be allowed to lift mineral lying at the site proportionate to the installment paid within ten days of the payment of the installment.
(III) The aforesaid payment by the petitioner will be without prejudice to the petitioner’s right of pursuing with the case by which the petitioner has challenged the very imposition of additional royalty.
(IV) Failure to pay any installment by the petitioner will lead to cancellation of the order giving liberty to Respondent/Mining Department to take all appropriate action as deemed fit which will include the Mining Department’s right to initiate fresh auction for settlement with any lessee in connection with minerals lying at the site.
(V) If the petitioner fails to pay any installment of any month, the petitioner, based on his undertaking given in open Court will not challenge the decision of the Respondent/Mining Department to cancel the order as well as the decision taken to proceed for fresh auction.
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