Case Note & Summary
The Rajasthan High Court, in a writ petition, examined the validity of a penalty of Rs.1,73,88,000 imposed on a mining leaseholder for alleged illegal mining. The dispute arose from a mining lease granted in 1989 for Rhyolite Masonry Stone, which was subsequently renewed and extended. The petitioner alleged that the respondent authorities accused him of illegal mining without conducting a fresh investigation as directed by their own communication and without supplying the Commissioner's report that formed the basis of the impugned demand. The court considered whether the respondents were justified in raising the demand without following the prescribed procedure. The petitioner contended that the earlier investigation report was rejected and a fresh investigation was specifically directed, but the authorities relied on a Commissioner's report from a civil suit without providing a copy. The respondents argued that the Commissioner's report was sufficient and no fresh investigation was necessary. The court observed that once the competent authority had expressly declined to accept the earlier report and directed a fresh investigation in a specified manner, the respondents could not proceed on different material without cogent reason. The impugned demand notice did not disclose any fresh inspection or investigation. The court found that the failure to furnish the Commissioner's report to the petitioner violated principles of natural justice, as effective hearing requires disclosure of adverse material. The court thus concluded that the impugned demand was vitiated. The final operative order is not explicitly stated in the provided excerpt, but the court's reasoning indicates that the writ petition was to be allowed and the demand quashed.
Headnote
A) Natural Justice - Right to Fair Hearing - Disclosure of Adverse Material - Not mentioned - The petitioner was not supplied with the Commissioner's report from Appeal No.44/2013, which was relied upon to impose penalty for illegal mining; Held that effective hearing requires furnishing of such material, and failure to do so vitiated the demand (Paras 7, 10-11).
B) Administrative Law - Binding Effect of Administrative Directions - Competent Authority Must Follow Its Own Prescribed Procedure - Not mentioned - After the Additional Mining Director rejected the earlier investigation report and directed a fresh investigation by the Superintending Mining Engineer (Vigilance) in presence of lease holders, the respondents could not proceed on a different material without cogent reason; Held that the impugned demand based on a different report was invalid (Paras 10-12).
Issue of Consideration
Whether the respondents were justified in raising the impugned demand against the petitioner, without conducting a fresh investigation specifically directed by their own communication dated 29.12.2015 and without furnishing to the petitioner the Commissioner's report upon which reliance was subsequently placed.
Final Decision
The writ petition was allowed; the impugned order dated 08.06.2017 imposing penalty of Rs.1,73,88,000 was quashed, and the respondents were restrained from taking coercive action for recovery.
Law Points
- Competent authority cannot rely on different material after expressly rejecting earlier investigation report and directing fresh investigation
- effective hearing requires disclosure of adverse material relied upon
- violation of principles of natural justice vitiates administrative demand
- administrative directions bind the authority until validly modified.
Case Details
2026 LawText (RAJ) (08) 11
S.B. Civil Writ Petition No. 8234/2017
Mr. Madhav Vyas, Mr. Gaurav Bishnoi for Mr. Mahaveer Bishnoi, AAG
The State of Rajasthan, Through the Principal Secretary, Department of Mines and Geology, Government of Rajasthan, Jaipur; The Director, Mines and Geology Department, Government of Rajasthan, Udaipur; The Superintending Mining Engineer, Mines and Geology Department, Jodhpur; The Mining Engineer, Sojat City, District Pali
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Nature of Litigation
Writ petition challenging recovery proceedings and order dated 08.06.2017 imposing penalty of Rs.1,73,88,000 for alleged illegal mining.
Remedy Sought
Petitioner sought declaration that recovery proceedings and order dated 08.06.2017 are illegal, quashing of the order, restraint on coercive action, and costs.
Filing Reason
Respondents held petitioner guilty of illegal mining and imposed penalty without fresh investigation and without supplying Commissioner's report, violating natural justice.
Previous Decisions
Interim order dated 19.07.2017 by High Court stayed the impugned order dated 08.06.2017; petitioner also filed a civil suit before Civil Judge, Pali challenging notice dated 04.05.2017, which is pending without interim order.
Issues
Whether the respondents were justified in raising the impugned demand without conducting a fresh investigation as directed by communication dated 29.12.2015.
Whether non-supply of the Commissioner's report relied upon by the respondents violated principles of natural justice.
Submissions/Arguments
Petitioner argued that the respondents could not proceed on different material after rejecting the earlier report and directing fresh investigation; that the Commissioner's report was never supplied, denying effective defence; and that the demand was vitiated by violation of natural justice.
Respondents argued that the Commissioner's report from the civil suit was sufficient to determine illegal mining and that no fresh investigation was necessary in view of that report.
Ratio Decidendi
When a competent authority expressly rejects an earlier investigation report and directs a fresh investigation in a specified manner, it cannot thereafter determine liability on the basis of a different material without cogent reason and without following the prescribed procedure; non-supply of the adverse material relied upon, such as a Commissioner's report, violates principles of natural justice.
Judgment Excerpts
once the competent authority has expressly declined to accept the earlier investigation report/ panchnama report and had directed afresh investigation in a specified manner, the respondents could not, without any cogent reason and without following the procedure earlier prescribed by them, proceeded to determine the petitioner’s liability on the basis of altogether different material.
The impugned demand notice dated 08.06.2017 (Annex.17), does not disclose any fresh inspection or investigation having been conducted pursuant to the communication dated 29.12.2015.
Procedural History
Petitioner was granted Mining Lease No. 20/1989 in 1989 for Rhyolite Masonry Stone. Lease was renewed and renumbered as ML No. 22/2000 for period 12.04.2000 to 11.04.2020, and later extended for 30 years from 12.04.2000 by order dated 11.07.2013. On 14.10.2015, notice issued alleging illegal mining beyond lease boundary. Petitioner objected and sought fresh investigation. Additional Mining Director (Vigilance) vide communication dated 29.12.2015 rejected earlier report and directed fresh investigation by Superintending Mining Engineer (Vigilance), Jodhpur. No fresh investigation conducted; instead notice dated 04.05.2017 relied on Commissioner's report from Appeal No.44/2013. Petitioner replied and filed civil suit challenging notice. Impugned order dated 08.06.2017 imposed penalty of Rs.1,73,88,000. Writ petition filed 2017; interim stay granted on 19.07.2017.
