ANDHRA PRADESH GRANITE (MIDWEST) PRIVATE LIMITED Vs. THE GOVERNMENT OF ANDHRA PRADESH AND A.P. MINERAL DEVELOPMENT CORPORATION LIMITED

JUDGEMENT

(1.) THE subject -matter of these two writ petitions is similar, if not, identical. Hence, they are disposed of through a common judgment. R.L. Puram Village in Chimakurthy Mandal of Prakasam District is known for the deposits of World Class Galaxy Black Granite. Hectic activity of mining takes place in that area and there is huge competition for that rare mineral. The A.P. Mineral Development Corporation Limited (for short 'the Corporation'), the 2nd respondent in both the writ petitions, has been allotted substantial extent of land containing deposits of the mineral in R.L. Puram. The Government of Andhra Pradesh issued G.O.Ms. No. 173, dated 13.06.2005, enabling the 2nd respondent to take up its activities upon the lands allotted to it as joint ventures, with intending and competent private agencies. Through the same G.O., invitation was extended for Global Expression of Interest, in joint venture with the 2nd respondent.

(2.) M /s. Midwest Granite Private Limited and A.P. Black Galaxy Granites Private Limited, along with certain others, expressed their interest and in the process, both of them came to be selected, as agencies for joint venture with the Corporation for two separate blocks. The new agencies in the name and style of the petitioners came into existence as joint ventures, under separate and detailed agreements dated 04.06.2007. The agreements provide for various details for the working of the joint ventures. They also define certain important expressions that have a bearing on the working of the mines.

(3.) TWO expressions defined in the agreement are the 'minimum assured production' and 'minimum assured amount'. Depending on their size, blocks of granite are divided into four categories, in the context of levy of seignorage fee. The agreement defines the minimum assured production, as 500 cubic metres, per hectare, per annum. The expression 'minimum assured amount' was defined, as to mean, the amount payable at 1 1/2 times the seignorage fee, payable to the State Government on the minimum of 500 Cu.M of black galaxy granite per hectare per annum, taking the average rate of the four categories. The Corporation wanted that the average of block within each category and of all the four categories be taken (calling it as weighted average) and that concession, if any, given in the seignorage be not taken into account while working at 1 1/2 times of it.