SUMAN K SHRIVASTAVA
Ranchi, February 20: The Jharkhand High Court on Friday dismissed a 21-year-old petition filed by Bharat Coking Coal Limited (BCCL), upholding demand notices issued in 2004 for payment of surface rent along with statutory interest for sand mining leases in Dhanbad and Bokaro.
A Division Bench comprising Chief Justice M.S. Sonak and Justice Rajesh Shankar, in its judgment, rejected all grounds raised by the public sector undertaking and directed it to clear the dues with interest within six weeks.
Challenge to 2004 Demand Notices
BCCL had moved the Court seeking quashing of demand notices dated January 2 and January 29, 2004, issued by the District Mining Officers of Dhanbad and Bokaro. The notices required payment of surface rent under Rule 27(1)(d) of the Mineral Concession Rules, 1960, for use of government land in connection with sand mining leases over river beds and ghats.
The PSU argued that the notices were issued in violation of principles of natural justice, without any show-cause notice, and that the demand exceeded permissible “land revenue” limits under the Rules. It also contended that since it was already paying royalty on extracted sand, no additional surface rent was payable.
State Opposes, Cites Lease Terms
Advocate General Rajiv Ranjan opposed the petition, arguing that BCCL had raised new pleas during arguments that were not even part of the original pleadings filed in 2004. The State pointed out that several prior letters had been issued demanding payment of surface rent and that the company had neither responded nor paid.
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The State further produced lease deeds executed in Form “K” under the Mineral Concession Rules, 1960, showing that BCCL had expressly agreed to pay both royalty and surface rent for the leased area used for mining-related operations.
Court Rejects Natural Justice Argument
The Bench held that the plea of violation of natural justice was not pleaded in the writ petition and was raised only during oral arguments. The Court noted that records showed multiple communications were sent to BCCL before the impugned notices were issued.
The Court also observed that there was no requirement of a separate show-cause notice, as the obligation to pay surface rent was clearly stipulated in the lease deeds and statutory rules.
Royalty and Surface Rent Are Distinct
Rejecting the argument that royalty payments subsumed surface rent, the Court clarified that royalty is payable on extracted minerals, whereas surface rent is payable for use of the leased land area for mining operations such as transportation, storage and related activities.
The Bench described the plea as “frivolous” and unsupported by statutory provisions or lease terms.
Demand Held Consistent With Law
On the issue of land revenue limits, the Court held that the demand did not exceed the permissible rate under Rule 27(1)(d). It examined D.O. letters dated September 30, 1965 and October 5, 1962, which fixed annual rent for non-agricultural and mining lands at 1/50th of the salami, subject to a minimum of ₹30 per acre.
The Court found that the State had demanded only the minimum rate of ₹30 per acre — a rate fixed in 1962 — and that this could not be said to exceed land revenue. The Bench further held that the 2005 Government resolution enhancing rent rates, which had been struck down earlier, had no bearing on the 2004 demand notices.
The argument that agricultural land rates or fair rent under the Chota Nagpur Tenancy Act should apply was also rejected.
Court Criticises Conduct of PSU
The Bench expressed displeasure over BCCL’s conduct, noting that contradictory and unsupported pleas were raised over the years, including at one stage a claim that no lease deeds existed. The Court observed that such conduct was unbecoming of a public sector undertaking, invoking the Court’s equitable jurisdiction.
While the Court considered imposing exemplary costs, it refrained from doing so on the grounds that such costs would ultimately come from public funds.
Final Order
The writ petition has been dismissed. Interim protection, if any, stands vacated. BCCL has been directed to pay the demanded amount along with statutory interest within six weeks, unless protected by any further judicial order.