CHANDRA BHAN SINGHversusSTATE OF UTTAR PRADESH & OTHERS

                  [2025] 7 S.C.R. 94 : 2025 INSC 763

                         Chandra Bhan Singh
                                    v.
                    State of Uttar Pradesh & Others
                      (Civil Appeal No. 12314 of 2024)
                                 23 May 2025
           [Abhay S. Oka and Augustine George Masih,* JJ.]


                            Issue for Consideration
       Challenge to the Demand Notices issued to the Appellants
       demanding 10% of the total bid amount to be deposited with the
       concerned District Mineral Foundation(s) (DMF).

                                   Headnotes†
       Mines and Minerals (Development and Regulation) Act, 1957 –
       ss.9B, 14, 15, 15A – Uttar Pradesh Minor Minerals (Concession)
       Rules, 1963 – rr.21, 23(3), 54, 68 – District Mineral Foundation
       Trust Rules, 2017 – r.10(2) – Appellant was a successful bidder
       for mining of minor mineral i.e., sand and was allotted a
       tender – Demand Notice was issued calling upon the Appellant
       to deposit 10% amount of the deposited title amount with the
       DMF – Appellant challenged the Demand Notice before the
       High Court contending that the amount claimed was contrary
       to s.9B, 1957 Act – Challenge rejected – Sustainability:
       Held: s.9B, 1957 Act would not be applicable in the light of s.14
       thereof – s.14 makes it clear that ss.5 to 13 of the 1957 Act
       would not be applicable to the present case as the mineral which
       is sought to be mined is a minor mineral i.e., sand – Plea of the
       Appellant based on s.9B(5) is misplaced – State Government has
       been empowered u/s.15A to determine and fix the amount – The
       empowerment being there under the Statute conferred on the
       State to determine the amount and the fixation thereof for minor
       minerals cannot be faulted with – Demand Notice issued to the
       Appellant requiring him to deposit 10% of the title amount i.e. the
       total amount payable for the minor minerals to be extracted was
       under and in accordance with the statutory Rules i.e., r.10(2), 2017
       Rules – Demand Notice and the impugned judgment passed by
       the High Court is upheld, implying liability of the Appellant towards
       the DMF Trust. [Paras 17, 18, 20, 21, 24, 26]

* Author
[2025] 7 S.C.R.                                                            95

        Chandra Bhan Singh v. State of Uttar Pradesh & Others


     Mines and Minerals (Development and Regulation) Act,
     1957 – Uttar Pradesh Minor Minerals (Concession) Rules,
     1963 – rr.68, 21, 23(3), 54 – District Mineral Foundation Trust
     Rules, 2017 – Appellant was a successful bidder for mining
     of minor minerals i.e., sand and was allotted a tender – In
     pursuance to the tender allotted and in consonance with the
     requirements of the Policy decision dated 22.04.2017, Demand
     Notice was issued calling upon the Appellant to deposit 10%
     amount of the deposited title amount with the DMF – Plea of
     the appellant that the Policy decision itself is not sustainable
     as the due process for issuance thereof as provided for in
     r.68, 1963 Rules was not adhered to:
     Held: There was a reasoned decision at the end of the State
     for exercising its powers u/s.68, 1963 Rules which fulfills the
     requirement of the Rule – Further, an Order was also passed by
     the Lucknow Bench of the High Court in a PIL which had permitted
     and required the exercise of powers u/r.68, 1963 Rules by the
     State – This was because of the peculiar situation which was
     being faced by the State for the total ban on mining activity having
     been imposed leading to the stopping and delaying of construction
     and other development works, both in the Government sector
     as well as the private sector – Exercise of such power when the
     vital projects were being adversely affected would fall within the
     purview of r.68 empowering the State to proceed to frame such a
     Policy – Therefore, no fault in the whole process and procedure
     adopted by the State. [Para 15]

                                List of Acts
     Mines and Minerals (Development and Regulation) Act, 1957;
     Uttar Pradesh Minor Minerals (Concession) Rules, 1963; District
     Mineral Foundation Trust Rules, 2017.

                             List of Keywords
     Section 9B of the Mines and Minerals (Development and Regulation)
     Act, 1957; Deposit of the amount as per the royalty fixed in Second
     Schedule of the Mines and Minerals 1957 Act; Rule 68 of the
     Uttar Pradesh Minor Minerals (Concession) Rules, 1963; District
     Mineral Foundation Trust Rules, 2017; Demand Notice; 10% of
     total bid amount; District Mineral Foundation(s) (DMF); Mining of
     minor minerals; Policy decision dated 22.04.2017.
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                           Case Arising From
      CIVIL APPELLATE JURISDICTION: Civil Appeal No. 12314 of 2024
      From the Judgment and Order dated 15.11.2017 of the High Court
      of Judicature at Allahabad in CMWP No. 54052 of 2017
      With
      Civil Appeal No(s). 12315 and 12316 of 2024

                        Appearances for Parties
      Advs. for the Appellant:
      Manish Singhvi, Rakesh Dwivedi, Mukesh Prasad, Sr. Advs.,
      Satish Kumar, Ms. Megha Karnwal, Lalit Rajput, Aditya Thorat,
      Ms. Awantika Manohar, Ms. Mayan Prasad, Ms. Parul Dhurvey
      (for M/s. AP & J Chambers).
      Advs. for the Respondents:
      Ms. Aishwarya Bhati, A.S.G., Vishnu Shankar Jain, Ms. Mani
      Munjal, Ms. Marbiang Khongwir.
      Advs. for the Intervenors:
      Vanshdeep Dalmia, Amit Upadhyay, Ms. Anisha Jain,
      Ms. Shambhavi Singh.

                Judgment / Order of the Supreme Court

                               Judgment

      Augustine George Masih, J.

1.    The instant batch of appeals challenge the respective Demand Notices
      issued by the District Magistrate/District Officer to the Appellants
      demanding 10% of the total bid amount to be deposited with the
      concerned District Mineral Foundation(s) (hereinafter, “DMF”).
2.    Since the issue involved in all these appeals is common, the facts
      are being taken from Civil Appeal No.12314 of 2024, which assails
      the Judgement dated 15.11.2017 passed by the High Court of
      Allahabad (hereinafter, “Impugned Judgment”) and has been taken
      as the lead case.
3.    The facts, as culled out from the said Civil Appeal are that Chandra
      Bhan Singh, who was a successful bidder for mining of minor minerals
[2025] 7 S.C.R.                                                           97

        Chandra Bhan Singh v. State of Uttar Pradesh & Others


     i.e., sand (hereinafter, “Appellant”) was allotted a tender. In pursuance
     to this tender and in consonance with the requirements as has been
     laid down by the Policy decision dated 22.04.2017, the Appellant
     had been called upon to deposit an amount of ₹54,12,960/- being
     10% amount of the deposited title amount of ₹5,41,29,600/- in favour
     of the District Mineral Foundation Trust, Kanpur (hereinafter, “DMF
     Trust”) apart from 2% stamp fee on the same vide Demand Notice
     dated 25.10.2017. It needs mention here that as per the terms for
     allotment and the Mining Permit dated 16.10.2017, the Appellant as
     required, had deposited the amount payable for the approved mining
     quantity at the rate of ₹630/- per cubic meter of sand as per his bid
     totalling ₹5,41,29,600/-.
4.   This Demand Notice dated 25.10.2017 had been challenged by the
     Appellant before the High Court through a writ petition asserting
     that the said amount as has been claimed would be contrary to the
     provisions of Section 9B of the Mines and Minerals (Development
     and Regulation) Act, 1957 (hereinafter, “1957 Act”), which required
     deposit of the amount as per the royalty fixed in Second Schedule
     of the 1957 Act. The said challenge before the High Court failed
     vide the Impugned Judgment dated 15.11.2017 leading to the filing
     of the present appeal.
5.   The learned Senior Counsel for the Appellant has asserted that the
     Policy decision dated 22.04.2017 itself is not sustainable as the
     due process for issuance thereof as provided for in Rule 68 of the
     Uttar Pradesh Minor Minerals (Concession) Rules, 1963 (hereinafter,
     “1963 Rules”) have not been adhered to. Going by and referring to
     the said Rule, it has been submitted that it enables relaxation of the
     Rules whereas by way of the impugned Policy in fact the amount
     which has been claimed is much more than the one which has been
     fixed in First Schedule, as appended along with the 1963 Rules. He,
     therefore, asserts that the Policy as well as the Demand Notice is
     unsustainable.
6.   Referring to Section 9B of the 1957 Act, it has been contended that
     the DMF, as has been formulated and conceptualized, provides for
     charging and deposit of amount in addition to the royalty equivalent
     to such percentage of the royalty paid in terms of the Second
     Schedule of the 1957 Act which would not be exceeding one-third
     of such royalty, as may be prescribed by the Central Government.
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      He asserts that going by the said Schedule, when rate has been
      fixed by the State at 10% of the royalty, the amount payable would
      be limited to that extent and the demand on the bid amount as a
      whole is unsustainable. Apart from that, reference has also been
      made to Section 15 of the 1957 Act, which confers powers on the
      State Government to make Rules in respect of minor minerals. He
      on the basis of sub-Section (4) thereof asserts that Section 9B
      would be applicable for all intents and purposes and not merely for
      constitution, composition and functioning of the DMF, which includes
      the amount in addition to the royalty required to be deposited with it.
      State cannot claim an amount which is contrary to the rate as has
      been fixed by the Central Act.
7.    The learned Senior Counsel for the Appellant has made reference
      to Rule 54 which deals with deposit of royalty for the total quantity
      of the mineral allowed to be extracted under the Permit. It is further
      submitted that under Rule 21 of the 1963 Rules, royalty had to be paid
      at the rates specified in First Schedule of the 1963 Rules. Counsel
      on this basis has asserted that the High Court erred in coming to a
      conclusion that Rule 21 and Rule 54 would not be applicable. On
      the above grounds, prayer has been made for setting aside the
      Impugned Judgment and allowing the appeal.
8.    On the other hand, learned Additional Solicitor General for the
      Respondent-State has defended the Impugned Judgment by asserting
      that the provisions of Sections 9 and 9B of the 1957 Act would not
      be applicable to the case in hand in light of Section 14 of the said
      Act, which provides that Sections 5 to 13 would not apply to minor
      minerals. She, on this basis submits that reliance on Section 9B by the
      Appellant is misplaced. That apart, with reference to Section 15 of the
      1957 Act, it is asserted that the State Government, by Notification in
      the Official Gazette, stands empowered to make Rules for regulating
      the grant of quarry leases, mining leases or other mineral concessions
      in respect of minor minerals and for purposes connected therewith.
      Under sub-Section (4) of Section 15, Government without prejudice
      to sub-Sections (1), (2) and (3), by Notification could make Rules
      for regulating the provisions of the Act, which includes the manner
      in which the DMF Trust shall work for the interest and benefit of
      the persons and affected areas as provided in sub-Section (2) of
      Section 9B. Similarly, for composition and functions of the DMF Trust,
      reference has been made to sub-Section (3) of Section 9B. She, on
[2025] 7 S.C.R.                                                           99

        Chandra Bhan Singh v. State of Uttar Pradesh & Others


     this basis, asserts that applicability of Section 9B is restricted to and
     for the purposes as have been specified in Section 15 and nothing
     beyond that. This, in any case, has to be regulated on the basis of
     the Rules to be framed by the State Government. Reference has
     further been made to Clause (c) of sub-Section (4) of Section 15
     which empowers the State Government to fix and regulate the amount
     of payment to be made to the DMF Trust by the mining concession
     holders of minor minerals as provided in Section 15A which, in turn,
     empowers the State to prescribe the payment to be made of the
     amount to the DMF Trust. On this basis, it is asserted that the rate
     of 10% of the amount as has been fixed by the State to be deposited
     with the DMF Trust, cannot be faulted with.
9.   Reference has also been made to sub-Rule (2) of Rule 10 of District
     Mineral Foundation Trust Rules, 2017 (hereinafter, “2017 Rules”) as
     have been framed by the State Government, where in addition to
     the royalty every Permit holder is required to deposit with the DMF
     Trust, an amount which is equivalent to the 10% of the royalty or
     as may be prescribed by the State Government from time to time.
     On this basis, it is asserted by her that 10% of the royalty amount
     would be payable in case no other amount is prescribed by the State
     Government. In situations where amount or rate has been prescribed
     other than 10% of the royalty, the said amount or rate shall prevail.
     In the present case, what has been fixed and prescribed is 10% of
     the total amount deposited by the bidder.
10. As regards the challenge to the Policy decision dated 22.04.2017,
    the learned ASG has asserted that the said Policy had not been
    challenged before the High Court and thus, the same cannot be
    challenged before this Court now. Furthermore, it is under this Policy
    which is now sought to be questioned that the e-tender was floated in
    which the Appellant had participated and succeeded. The Appellant,
    therefore, cannot be permitted to turn around and challenge the very
    Policy under which he had sought benefit and had actually availed as
    well. The terms and conditions were clear from the very beginning,
    with there being no ambiguity. On the above referred basis, prayer
    has been made for dismissal of the appeals.
11. We have considered the submissions as have been made by the
    Counsel for the parties and with their assistance have gone through
    the pleadings and records.
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12. For the sake of brevity, the facts are not being reiterated, as they
    are not in dispute.
13. Broadly speaking the challenge in the present appeal to the Demand
    Notice is based upon the Policy decision dated 22.04.2017 as issued
    by the Respondent-State under which the e-tender process was
    initiated leading to the Appellant participating therein and succeeding
    followed by the allotment of the tender and issuance of the Mining
    Permit. The ground pressed into service is of non-compliance/violation
    of the procedure as required to be followed under Rule 68 of the
    1963 Rules which enabled the State Government to, in relaxation
    of the 1963 Rules, grant mining lease.
14. In pursuance of the order passed by this Court on 24.09.2024, the
    original records relating to the process of finalising the decision
    resulting in the issuance of the communication dated 22.04.2017 with
    reference to Rule 68 of the 1963 Rules were produced before the
    Court on 15.10.2024 which was perused and a copy of the original
    file was retained on record.
15. On considering the records as produced, the process which has been
    followed while considering, evaluating and deliberating the factors
    which weighed while assigning reasons for coming to the conclusion
    have been perused by us. The same finds reflected, projected and
    mentioned in the letter dated 22.04.2017 after due consideration at
    different levels upto the highest competent authority leading to a
    reasoned decision at the end of the State for exercising its powers
    under Rule 68 of the 1963 Rules which is found to be fulfilling the
    requirement of the Rule. It would not be out of way to mention here
    that an Order dated 18.04.2017 was passed by the Lucknow Bench
    of the High Court in a Public Interest Litigation which had permitted
    and required the exercise of powers under Rule 68 of 1963 Rules
    by the State. This was because of the peculiar situation which was
    being faced by the State for the total ban on mining activity having
    been imposed leading to the stopping and delaying of construction
    and other development works, both in the Government sector as well
    as the private sector. Exercise of such power in those circumstances
    when the vital projects were being adversely affected would fall within
    the purview of Rule 68 empowering the State to proceed to frame
    such a Policy and therefore, we find no fault in the whole process
    and procedure adopted by the State.
[2025] 7 S.C.R.                                                           101

        Chandra Bhan Singh v. State of Uttar Pradesh & Others


16. The challenge, thus, is limited to the extent of the amount required
    to be deposited at the end of the Appellant in the DMF Trust. The
    Appellant asserts that the amount payable would be 10% of the
    amount of royalty as have been laid down in Second Schedule of
    the 1957 Act with reference to Section 9B(5) or under sub-Rule (2) of
    Rule 10 of the 2017 Rules as framed by the State of Uttar Pradesh.
    On this basis, it is being sought to be asserted that nothing beyond
    10% of the royalty amount as provided under the Schedule referred
    to above could be called upon to be deposited in the DMF Trust.
    Demand Notice dated 25.10.2017 requiring the Appellant to deposit
    10% of the amount of the title amount would be much beyond the
    liability of the Appellant as per the Statute. Demand cannot be in
    excess of the one which is prescribed under the Statute or the Rules.
17. This contention of the Appellant is unsustainable firstly on the ground
    that Section 9B of the 1957 Act would not be applicable in the light
    of Section 14 of the said Act, which reads as follows:-
           “14. Sections 5 to 13 not to apply to minor minerals –
           The provisions of sections 5 to 13 inclusive shall not
           apply to quarry leases, mining leases or other mineral
           concessions in respect of minor minerals.”
18. A perusal of Section 14 would make it clear that Sections 5 to 13
    of the 1957 Act would not be applicable to the present case as the
    mineral which is sought to be mined is a minor mineral i.e., sand. The
    plea therefore of the Appellant based on Section 9B(5) is misplaced
    and thus, unacceptable.
19. The applicability and the effect of Section 9B (2) and (3) is limited
    to the extent as has been mentioned in Clause (a) and (b) of sub-
    Section (4) of Section 15 of the 1957 Act, which reads as follows:-
           “15. Power of State Government to make rules in
                respect of minor minerals –
                 …
           (4)   Without prejudice to sub-sections (1), (2) and sub-
                 section (3), the State Government may, by notification,
                 make rules for regulating the provisions of this Act
                 for the following, namely:-
           (a)   the manner in which the District Mineral Foundation
                 shall work for the interest and benefit of persons
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                and areas affected by mining under sub-section (2)
                of section 9B;
          (b)   the composition and functions of the District Mineral
                Foundation under sub-section (3) of section 9B; and
          (c)   the amount of payment to be made to the District
                Mineral Foundation by concession holders of minor
                minerals under section 15A.”
20. A perusal of the above would itself make it clear that Clauses (a)
    and (b) are to operate within the domain for which they have been
    incorporated and permitted to function. The said sub-Clauses do
    not deal with the amount to be charged or deposited in the DMF.
    This aspect has been dealt with and provided for under Clause (c)
    of sub-Section (4) of Section 15, which refers to amount of payment
    to be made by the concession holder in the DMF under Section
    15A. Meaning thereby, the State Government has been empowered
    under Section 15A to determine and fix the amount. Section 15A
    reads as follows:-
          “15A. Power of State Government to collect funds for
          District Mineral Foundation in case of minor minerals. -
          The State Government may prescribe the payment by
          all holders of concessions related to minor minerals of
          amounts to the District Mineral Foundation of the district
          in which the mining operations are caried on.”
21. The empowerment being there under the Statute conferred on the
    State to determine the amount and the fixation thereof for minor
    minerals cannot be faulted with. The impugned Demand Notice thus
    being in consonance with the Statutory provisions cannot be said to
    be illegal or unsustainable.
22. Reference with regard to sub-Rule (2) of the Rule 10 of 2017 Rules
    would also not come to the rescue of the Appellant. The same reads
    as follows:-
          “10. Contribution to the Trust Fund.
          …
          (2) In case of minor minerals-
          The holder of every mineral concession/permit shall in
          addition to the royalty, pay to the Trust of the district in which
[2025] 7 S.C.R.                                                          103

        Chandra Bhan Singh v. State of Uttar Pradesh & Others


           the mining operations are carried on, an amount which is
           equivalent to 10% of royalty or as may be prescribed by
           the State Government from time to time.”
23. A perusal of above Rule 10(2) would show that apart from the royalty,
    an amount of 10% of the royalty is payable to the DMF Trust of the
    district in absence of any prescribed amount by the State Government.
    However, in case an amount is prescribed by the State Government
    then the said rate or amount would prevail and be payable at the
    end of the holder of the mineral concession or permit.
24. In the present case, the tender notice dated 11.05.2017, the Approval
    Letter (Letter of Intent) dated 01.06.2017 and the Mining Permit dated
    16.10.2017, it was made amply clear with regard to the amount
    required to be deposited by the Appellant. The Demand Notice dated
    25.10.2017 issued to the Appellant requiring him to deposit 10% of
    the title amount i.e. the total amount payable for the minor minerals
    to be extracted was under and in accordance with the statutory Rules
    i.e., Rule 10(2) of the 2017 Rules.
25. As regards the applicability of Rules 21 and 54 of the 1963 Rules,
    which have been sought to be pressed into service by the Appellant
    to support his claim, the same would not cut any ice in the light of
    Rule 23(3) of the 1963 Rules. For ready reference Rule 23(3) is
    reproduced hereinbelow:-
           “23. Declaration of area for auction/tender/auction-
           cum-tender lease
           …
           (3) On the declaration of the area or areas under sub-
           rule (1) the provisions of chapters II, III and VI of these
           rules shall not apply to the area of areas in respect of
           which the declaration has been issued. Such area or areas
           may be leased out according to the procedure described
           in this Chapter.”
     A perusal of the above makes it clear that in case of e-tender process
     is being followed, Chapter II, III and VI of these Rules would not apply.
     Rule 21 falls in Chapter III whereas Rule 54 falls in Chapter VI and,
     therefore, the said Rules would not be operative, rather not available
     to be used. This argument, therefore, also fails.
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26. In view of the above, we do not find any merit in the appeal and,
    therefore, the same is dismissed. The Impugned Judgment dated
    15.11.2017 passed by the Division Bench of the High Court of
    Allahabad is upheld along with the Demand Notice dated 25.10.2017,
    implying liability of the Appellant as towards the DMF Trust.
27. In light of the decision in Civil Appeal No.12314 of 2024, the other
    two connected appeals, being Civil Appeal Nos.12315-16 of 2024
    also stand dismissed.
28. There shall be no orders as to costs.
29. Pending application(s), if any, shall stand disposed of.

       Result of the case: Appeals dismissed.



       †
           Headnotes prepared by: Divya Pandey