IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 26TH DAY OF APRIL 2019 PRESENT THE HON’BLE MR.L.NARAYANA SWAMY ACTING CHIEF JUSTICE AND THE HON’BLE MR. JUSTICE P.S.DINESH KUMAR WRIT PETITION No.46010/2018 (GM-MM-S) BETWEEN:
SMT. SAVITHA K. HEGDE W/O LATE KARUNAKAR HEGDE AGED ABOUT 59 YEARS R/O MOLAHALLI VILLAGE & POST KUNDAPURA TALUKA-572 101 PROP. OF SRI.DURGA PARAMESHWARI SAND GRADING & PACKAGING INDUSTRY ... PETITIONER (BY SHRI. R.G. KOLLE, ADVOCATE) AND:
1. STATE OF KARNATAKA REP. BY ITS CHIEF SECRETARY VIDHANA SOUDHA BENGALURU-560 001 2. THE SECRETARY TO THE GOVT. DEPARTMENT OF COMMERCE & INDUSTRIES VIKASA SOUDHA BENGALURU-560 001 3. THE DIRECTOR & COMMISSIONER DEPARTMENT OF MINES & GEOLOGY KHANIJA BHAVAN, RACE COURSE ROAD BENGALURU-560 001 4. THE SENIOR GEOLOGIST & COMPETENT AUTHORITY, DEPARTMENT OF MINES & GEOLOGY, UDUPI DISTRICT RAJATADRI, MANIPAL, UDUPI-576 104 5. THE CHAIRMAN & DEPUTY COMMISSIONER DISTRICT SAND MONITORING COMMITTEE UDUPI DISTRICT, RAJATADRI, MANIPAL UDUPI-576 104 6. THE CHAIRMAN & ASST. COMMISSIONER TALUKA SAND MONITORING COMMITTEE KUNDAPUR SUB-DIVISION KUNDAPURA-572 101 ... RESPONDENTS (BY SHRI. V.G.BHANUPRAKASH, AGA) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH OR SET ASIDE, (I) PROCEEDING DATED 30.08.2018 PASSED BY R-6 ASST. COMMISSIONER PRODUCED AT ANNEXURE-A BY ORDERING TO SEIZE/CONFISCATE ROYALTY SUFFERED 10,430MT SAND ACCOMPANIED BY MINERAL DISPATCH PERMITS, AT THE PROCESSING & PACKAGING UNIT, OWNED BY THIS PETITIONER AT SY.NO.150/1A OF MOLAHALLI VILLAGE IN KUNDAPUR TALUKA & (II) SEVEN MEMBER COMMITTEE PROCEEDING DATED 22.03.2018, PASSED R-5 DEPUTY COMMISSIONER, BASED ON UNENFORCEABLE, STALE & REDUNDANT MOFF GUIDELINES PRODUCED AT ANNEXURE-B AS WELL AS (III) WITHDRAWAL/CANCELLATION ORDER DATED 14.08.2018 PASSED BY R-3 DIRECTOR PURSUANT TO END USER REGISTRATION CERTIFICATE DTD 10.04.2015 PRODUCED AT ANNEXURE-C AND/OR ETC., THIS WRIT PETITION, HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 02.04.2019, COMING ON FOR PRONOUNCEMENT OF ORDERS, THIS DAY, P.S.DINESH KUMAR J, PRONOUNCED THE FOLLOWING:-
ORDER Petitioner has presented this writ petition with following prayers:
(1) for a writ of certiorari and to quash proceedings dated 30.08.2018 by the Assistant Commissioner rejecting to release sand seized from the petitioner (Annexure –A);
(2) for a writ of certiorari and to quash proceedings of Seven Member Committee dated 22.03.2018 (Annexure-B);
(3) for a writ of certiorari and to quash cancellation order dated 14.08.2018 cancelling petitioner’s registration for sand grading and packaging; and (4) a direction to restore the registration dated 10.04.2015.
2. We have heard Shri.R.G.Kolle for the petitioner and Shri. V.G.Bhanuprakash learned AGA for respondents.
3. Briefly stated the facts of the case are, petitioner is Proprietor of M/s.Durga Parameshwari Sand Grading and Packaging Industry, registered under Rule 5(3) of Chapter IV of the Karnataka (Prevention of Illegal Mining, Transportation and Storage of Minerals) Rules, 2011 (‘Rules’ for short). Petitioner was purchasing sand, processing the same and selling. He was filing monthly returns before the Senior Geologist, Udupi.
4. On May 17, 2018, 10,430 metric tons of sand was seized and a notice was issued to the petitioner. Petitioner challenged the said action in writ petition No.22521/2018. This Court granted liberty to the petitioner to submit a reply to the notice and appear before the Assistant Commissioner/President of Taluk Sand Monitoring Committee on August 20, 2018. The Authority was directed to take a final decision in the matter after hearing the petitioner. It was further directed that till the Authority took further action, status-quo be maintained with regard to the sand in question. Thereafter proceedings have been drawn on August 30, 2018 which is impugned in this writ petition.
5. Shri.R.G.Kolle, learned Advocate for the petitioner made following submissions:
that the Director of Mines has issued the Registration Certificate for sand grading and packaging under Rule 5(3) of the Rules on April 10, 2015. Petitioner has been carrying on lawful business ever since the date of obtaining the registration. She has been regularly filing monthly returns under Rule 5(4) in Form-14 with the Senior Geologist, Department of Mines and Geology;
that the Assistant Commissioner took possession of 10,430 metric tons of sand without any authority of law;
that after disposal of writ petition No.22521/2018, without waiting for the outcome of hearing, the Assistant Commissioner by order dated August 14, 2018 cancelled the petitioner’s registration. Subsequently, on August 30, 2018 the Assistant Commissioner has rejected petitioner’s request to release the sand on the ground that Government had decided to confiscate the same;
that petitioner had stored sand purchased from legitimate source. The Assistant Commissioner seized the sand on May 17, 2018 but the Geologist of Mines and Geology Department, Kundapura has filed private complaint under Section 200 Cr.P.C. on May 18, 2018. Hence, seizure has been made without initiating criminal proceedings;
that ordinary sand is a minor mineral. However, sand used for a specific purpose falls under the category of a major mineral. Petitioner enhances the mineral grade by grading. Therefore it has to be clarified as ‘beneficiated material’ under the Rules.
6. In substance, Shri Kolle argued that petitioner was granted with a registration for grading and packaging sand. The Assistant Commissioner seized sand without authority of law. Therefore, seizure is bad in law.
7. Shri.Bhanuprakash, learned AGA opposing the writ petition contended that sand is a minor mineral.
Petitioner had stocked illegally mined sand under Rule 43-A of Karnataka Minor Mineral Concession Rules, 1994 (for short ‘1994 Rules’) and hence, the Authorized Officer is empowered to seize the mineral. The proceedings are pending before the learned Magistrate. Therefore, petitioner may be relegated to the learned Magistrate to seek release of seized material.
8. We have given our careful consideration to the rival contentions and perused the records.
9. Indisputable facts of the case are, the Director of Mines has registered petitioner’s firm under Rule 5(3) of the Rules on April 10, 2015. The Senior Geologist has accepted returns submitted by the petitioner. This Court disposed of writ petition No.22521/2018 on August 10, 2018 and directed the petitioner to appear before the Assistant Commissioner on August 20, 2018. Without waiting for the outcome of hearing, the Assistant Commissioner by order dated August 14, 2018 cancelled the registration for sand grading and packaging. Subsequently, in proceedings held on August 30, 2018 the Assistant Commissioner has rejected petitioner’s request to release the sand on the premise that Government had decided to confiscate the seized sand.
10. It was argued on behalf of the State justifying seizure under Rule 43-A of the 1994 Rules and it reads as follows:
“43-A. Seizing of unlawful minor mineral, tool, equipment, vehicle etc.-(1) Whenever any person raises or causes to be raised, or stored without any lawful authority, any minor mineral from any land, and, for that purpose, uses any tool, equipment, vehicle or any other thing, such minor mineral, tool, equipment, vehicle or any other things shall be liable to be seized by an officer or authority specially empowered in this behalf.
(2) The procedure prescribed under sub-rules (6), (7), (8), (9), (10) and (11) of Rule 43 shall mutatis mutandis apply for seizure under sub-rule (1) of this rule and reference to officer or authority and items in the above sub-rules of Rule 43 shall have reference to officer or authority and items referred to in sub-rule (1) of this rule and shall be construed accordingly.”
As per Rule 43-A(2), the procedure prescribed under Sub-rule (6) to (11) of Rule 43 of 1994 Rules are applicable mutatis mutandis for seizure under Sub-rule (1) of Rule 43- A of the 1994 Rules.
11. Seizure under Sub-rule (1) of Rule 43-A of the 1994 Rules can be made by an Officer or Authority specially empowered in that behalf. The averment in paragraph No.2 of PCR No.175/2018 before Additional Civil Judge and JMFC, Kundapura shows that by a Notification dated January 21, 2014, the Geologist of Mines and Geology Department, Udupi was authorized to conduct raids and to register cases and also to conduct investigation.
12. In proceedings dated August 30, 2018, the Assistant Commissioner has rejected petitioner’s request to release the sand on the premise that it was decided to confiscate the sand. Confiscation of sand seized under Rule 43-A of the 1994 Rules can be made only by an order of the Competent Court to take cognizance of the offence as per Rule 43(9) of 1994 Rules. Therefore, Assistant Commissioner’s decision to confiscate sand is unsustainable in law.
13. As noticed above, petitioner’s firm was registered under Rule 5(3) of the Rules. Respondents have accepted returns filed by the petitioner from 2015 to 2018.
14. In the seizure order dated May 17, 2018, it is stated that the petitioner had violated the decision of Seven Member Committee which prohibited transporting of sand outside the District.
15. In the case of State of Gujarat and Others Etc. Vs Jayeshbhai Kanjibhai Kalathiya Etc.1 reported in the Hon’ble Supreme Court has held as follows:
“47. ….. However, once the appellant State permits sand to be excavated, neither can it legally restrict its movement within the territory of India nor is the same constitutionally permissible. Likewise, there is no restriction on the State importing sand from other states. If it is the case that the demand of any State is not being met, it may purchase sand from other states. In any event, the market will dictate trade in sand inasmuch as it may make no business sense for mining company to transport and sell its sand in a far away destination after incurring large costs on transportation.”
16. Therefore, the ground on which the seizure is made is unsustainable in law. Hence, the entire proceedings resulting in seizure of sand is vitiated.
17. This Court in writ petition No.22521/2018 had granted liberty to the petitioner to submit his reply and appear before the Assistant Commissioner on August 20, 1 2019 SCC OnLine SC 298 2018. Surprisingly, even before hearing, the Director of Mines who was party to the writ petition has cancelled petitioner’s registration. It is conceded at the Bar on behalf of the State that the cancellation order dated August 14, 2018 has been passed without notice to the petitioner. Hence, the same is bad in law for want of compliance of principles of natural justice.
18. In view of the above discussion, this petition merits consideration. Hence, following order:
(a) Writ petition is allowed.
(b) Proceedings dated August 30, 2018 (Annexure– A) passed by the Assistant Commissioner is quashed.
(c) Order dated August 14, 2018 (Annexure-C) is quashed.
(d) The third respondent is directed to consider petitioner’s request for restoration of ‘End User Registration Certificate’ in accordance with law.
No costs.
Sd/-
ACTING CHIEF JUSTICE Sd/-
JUDGE SPS