Case Note & Summary
The Supreme Court dismissed appeals challenging demand notices requiring successful bidders for minor mineral mining to deposit 10% of the total bid amount with the District Mineral Foundation (DMF). The appellant, Chandra Bhan Singh, was a successful bidder for sand mining in Uttar Pradesh and was issued a demand notice for ₹54,12,960 as 10% of the bid amount of ₹5,41,29,600. He challenged the notice before the Allahabad High Court, which was dismissed. The Supreme Court held that Section 9B of the Mines and Minerals (Development and Regulation) Act, 1957, which provides for DMF contributions based on royalty, does not apply to minor minerals due to Section 14 of the Act. Instead, Section 15 empowers the State Government to make rules for minor minerals, including fixing contributions to DMF. The Court found that the Policy decision dated 22.04.2017 was validly issued under Rule 68 of the U.P. Minor Minerals (Concession) Rules, 1963, after due process, and the appellant could not challenge it after participating in the tender. The appeals were dismissed, upholding the demand notices.
Headnote
A) Mining Law - Minor Minerals - DMF Contribution - Sections 9B, 14, 15, 15A of Mines and Minerals (Development and Regulation) Act, 1957 - Section 9B does not apply to minor minerals by virtue of Section 14; State Government has power under Section 15 to fix contribution to DMF for minor minerals, including 10% of bid amount - Held that the demand is valid (Paras 13-18). B) Mining Law - Relaxation of Rules - Rule 68 of U.P. Minor Minerals (Concession) Rules, 1963 - State Government can relax rules in public interest; process followed was due and valid - Held that the Policy decision dated 22.04.2017 was validly issued (Paras 14-15). C) Contract Law - Estoppel - Challenge to Policy after participation - Appellant cannot challenge the Policy under which he participated and succeeded in tender - Held that the challenge is not maintainable (Para 10).
Issue of Consideration
Whether the demand for 10% of the total bid amount as contribution to District Mineral Foundation (DMF) for minor minerals is valid under the Mines and Minerals (Development and Regulation) Act, 1957 and the U.P. Minor Minerals (Concession) Rules, 1963
Final Decision
Appeals dismissed; demand notices for 10% of bid amount as DMF contribution upheld; impugned High Court judgment affirmed
Law Points
- Section 9B of MMDR Act not applicable to minor minerals
- Section 15 empowers State to fix DMF contribution
- Rule 68 of U.P. Minor Minerals Rules validly invoked
- Policy decision not challengeable after participation in tender
