UNION OF INDIA Vs. STATE

JUDGEMENT

(1.) Union of India through the two petitioners who are high ranking Engineers of South Eastern Railways challenge the liability of the Indian Railways and their contractors for payment of royalty and cess to the State Government, in respect of materials recovered from railway land and utilised in construction and laying down of railway lines.

(2.) For Morapur-Rayagada Railway line and Raipur-Vijayanagaram doubling railway line projects, certain lands were acquired by the State of Orissa and possession of the same was handed over to the Railways, who have also paid compensation as fixed under the Land Acquisition Act. After taking over possession, the railways took up the work of laying down railway lines and utilised materials namely the rock-cut spoils and earth recovered during excavation. In respect of such materials. the Tahasildars, Koraput, Rayagada and Patangi initiated proceedings for realisation of royalty and cess from the railways and its contractors. They and the higher revenue authorities have held that the railways are liable to pay royalty and cess in respect of above materials recovered from the land whose possession had been handed over to the railways after necessary acquisition. Meanwhile, the Government in Revenue Department by order dated 22-3-1991 have communicated their decision that royalty is to be paid on ordinary clay, silt, sand, brick, earth, morum and ordinary earth which are minor minerals as per Orissa Minor Minerals Concession Rules, 1990, such decision of the State Government is assailed in this proceeding.

(3.) The decision of the State Government is challenged on the following grounds. The railways recovered the materials through excavation from their own land for domestic consumption. The rock-cut spoils cannot be termed as 'minor minerals' under the Orissa Minor Mineral Concession Rules. The railways are not 'lease holders' and have not been granted any quarry permit nor are carrying any mining and quarry operations so as to make them liable to pay royalty under aforesaid rules. The materials obtained in the process of excavation are being utilised by way of domestic consumption mainly for the purpose, for which the land was acquired i.e. construction of the railway lines under the projects and therefore, no royalty is payable under the said rules, since such rules have been framed for regulating the grant of mining leases in respect of minor minerals.