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IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 28"' my 0? MAY 2009
PRESENT
THE HON'BLE MR. P.D. DINAKARAN, CHIEF --:tf_i1s,T:I;cA;EE' A'
AND
THE HON'BLE MR.JusTIcE \i'.'(§.:'SA'VBHI5x!§{'I*f.V
WRIT PETITION N0s.13930--13.§5.Q of.V'2009_A(: '€_',1__l*V_V{'f;-_;-:I'\'4'l'i¥r'l-'L151
Between:
1.
. S/o.Sheik Ahamed,
Ibrahim Shareef,
Aged about 46 years,-._
PWD Class I Conitratjgtof, _ '
Thirthahaili, AIP. R_oa~d,I*_V_
Shimoga. ' ' . "
. o.s. Abdt£'i~_Rai4'harrI.'3-E.:%
S/0.Sheik AiI_amed,'=_ A
Aged about 40~.yevarVs,-._ V
PWD Class I Contractor, '
I Tp_n:rtha_na:.u;%,' Ba|ebyl'u,.. ..... .. »
I_Sh'im.oga. _
A (By Sri Nagaraja N Naidu, Advocate)
. Ab'd.u'%E<alamTAzad';v.--"'
S/o.'Sh'eik Ah'a5me:d,
A Aged a«bou.__t'32«--years,
_ 9WD Class 3 Contractor,
" " 'Th'ir.thahai'ii---- Balebylu,
_ Sjhimoga.
PETITIONERS
And:
1. The State of Karnataka
Represented by its Secretary
Department of Commerce and
Industries, M.S.Buiiding,
Bangaiore
2. The Executive Engineer
Department of P.W.D. Division
Shimoga.
3. The Executive Engineer
Department of P.W.D. Division,
Chikmagaiur.
4. The Executive Engineer,
Department of National Highway,
Mangaiore. .
5. The Executive. 'aiggnteer,
Department of Natie.r'iai HiQii*~..vv"a.'y,h
Chitradurga», . * "
6. The Exe'c'utive En»gineer,
" '.Depa._if:'inent of Pan'ci'iev.at Raj
Engineering Division
'Shi.m"oga;=_f ' --
The iexécutivé 'j_E.i71gineer
_Departme__nt of"P.M.G.S.Y
(Pradanamanthri Grama Sadak Yojane)
,. , '%' ' ggsmmoga
8. The Chief Officer,
Town Municipality,
Thirthahalli. .. RESPONDENTS
(by Sri Basavaraj Karreddy, GA for R.1)
. These writ petitions are filed under Articles ” 4_
the Constitution of India praying to direct the respon._’fi§ntsV’ not to –, ”
deduct royalty from the running work biVl.ls”of.the–‘_4petiti’o.ners…E, ”
These writ petitions coming up for’l’pre.l’ilniinaryyh-ea:infi”«this_
day, the Court delivered the fo|lowing__.:~
3uoGMsh;_
(Delivered
The petitioners__in the_se_A»opetitifon*s’~::.are_i..’registered civil
contractor carrying?__onA’:;:li»vi! worksof t_heVG’o’ve»rnment Department
and Local for the purpose of
execution are required to purchase
building materialslfrornip-vpéri’-ir_ate’~’ii’sources. It is further contended
t_h’at_the do”not..o’w’n any quarries and that is not liable
-any._:”‘ro’yaTlty to the respondents. However, the
‘Cut’uifespondelrits .are’j__V..deducting royalty from the bills of the
_l_C«i’_-«petitioners witfhout authority of law. Hence, these petitions
‘._’_’V’pr_ai,?i’I1AQ not to deduct the royalty from the bills of the petitioners
fgfir
ii/”WV
in respect of the materials procured by them from private
sources for execution of the civil contract works.
2. In similar matters, this Court in G.V.
omens v. STATE or KARNATAKA AND oTHe’Rs.faiVi£§”‘v.i}istié ‘
Petitions No. 31384-31266 of 1994 disposed. of it
1994 has laid down the principles rel.-:”a’tin£.=,§’_’_lto
\
royaity by the contractors. The samejare e>A<.tra__cteo1hjereitiedér:
(a) Where providing thematelrial'(subjected toroyalty)
is the responsibility a-of’-c_tlief cont_racto_r and the
Department provloiessthe contractor’ specified
borrow gar-3.a:s~, for gex~tra’ction_”-..of_7the required
cons’iruci:.’ionV’Aitiaterial; the”‘”con’tractor will be liable
to pay.royaltyi for the material (minor
mineraly) extracter.l’frorn”‘such areas, irrespective of
V_ yvhether VtheV’con’t_ractVis a item rate contract or a
lump sum”-Contract. Hence deduction of royalty
chargfe3_._in such cases will be legal. For this purpose
‘V –ri’cn4e}€ecution of mining lease is not relevant, as
the «–liabViilty to pay royalty arises on account of the
contractor extracting material from a Government
“land, for use in the work.
-_(‘i3–,l_ Where under the contract the responsibility to
‘ supply the material (minor minerals) is that of the
Department/employer and the contractor is
(C)
(d)
direction for refund in regard to any particular
‘A contract.
required to provide only the labour and service for
execution of any work involving use of such
material, and the unit rate does not include the””’–
cost of material, there is no liability on
contractor to pay any royalty. This will_.h:e.”th»ej–., -5
position even if the contractor is
transport the material from outside« the worksite,
so long as the unit rate is only”-foriiabourhbior’service’-…, Tr ‘
and does not include thecost ofbmaterial. A . V
Where the contractor uses”‘~rnaterial–‘purchased in
open marked, th’a~t,_ is .material:V’purchased ‘from
private sources like quarry or private
quarry owners, Atieerev. is rio”2″‘iiabiil’ty on the
contractor “to flay an y g royaltybbchiargeswff
In covered; ‘ paras’; (b) and (c) the
D_epartment”‘cannotrecover or deduct any royalty
from the bills’ of.the,__co1ntractor and if so deducted,
the ‘Department..Vb’wiilV be bound to refund any
amount so deducted or collected to the contractor.
SVul3ject”~–to the above, collection of royalty by the
or refund thereof by the Department
wiil,be?.s_governed by the terms of contract.
Nothing stated above shall be construed as a
The Department or authority concerned
shall decided in each case, whether royalty is to be
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deducted or if any royalty is already deducted,
whether it should be refunded, keeping in view the
above principles and terms of the contract.”
3. The said decision has been upheld by
Bench of this Court in the case of OFFICE OF
or DEPARTMENT OF MINES Aisiii%c,~eoewc;ytty,ti~nV%m.j.
MOHAMMED HAJEE in Writ Appee.E_N0. ssoa zoosd1lspos’éd”of*–i.i
on 25″‘ September, 2006.
4. Foilowing the judg.rr1ent_ rendered in Writ
Appeai N0.830 of 200.6 disposed ofon “.25&f””.$’e’ptember, 2006
these petitions are No order as to
C,t%;_§7_te£ Ezieitio-en
X .
V V ” — V .t ‘ 4: No