MATHUR, J. - (1.) THIS group of Special Appeals is directed against the judgment of the learned Single Judge dismissing the challenge to the Government Notifications dated 22. 9. 94 and 8. 11. 1996 issued by the Department of Mines, Government of Rajasthan, directing all the departments like Public Works, Irrigation, Public Health Engineering and other Central Government Departments/organisations etc. to deduct 2% of the contract amount from the running bills of the contractors by way of royalty on provisional basis of assumed exploitation of minerals, if any, on the ground of it being a contractual matter, which cannot be decided in writ jurisdiction in view of the judgment of the Apex Court reported in AIR 1989 S. C. 1076 and AIR 1996 SC 3515. The appellants-writ petitioners have been relegated to the remedy of civil suit.
(2.) THE appellant-writ petitioners are the contractors carrying out the constructions awarded to them by different departments from time to time. THEir say is that they are not indulged in the excavation of any mineral in any area nor they are the holders of quarry licence nor any sort of mining lease is possessed by them temporarily or permanently or casually under the provisions of Rajasthan Minor Mineral Concession Rules, hereinater referred-to as "the MMCR", for excavation of minerals. It is also averred that none of the appellant-writ petitioners are liable for assessment under Rule 38 of the MMCR and none of them is submitting or is required to submit annual monthly return for assessment of royalty in Form No. 11 or monthly statutory return in Form No. 11a. It is also submitted that for the purpose of execution of works contract, building stones, grit and bajri are being purchased by them from the open market and while purchasing these materials, they also obtain invoices and revenue receipts from those lease holders/dealers. It is further submitted that building stones, ballast/grits and bajri, which is used for construction by the contractors, are being purchased from the mining areas and those areas are surrounded by royalty check posts established by the Mining Departments of the Government of Rajasthan and without paying royalty either by the dealer or concerned truck owner or any consumer, no such minerals are being allowed to pass through those royalty check posts. It is also submitted that these royalty check posts have bene given on contract to various contractors for recovery of royalty by the State Government. It is, thus, submitted that without paying royalty, no mineral can pass through the said check posts established by the Mining Departments. It is also submitted that these minerals are directly supplied by the lease holders after paying the royalty. Thus, according to the petitioners, they are nowhere concerned with the excavation of minerals or sale of minerals. In most of the writ petitions, no reply has been filed by the respondents. In some of the writ petitions, reply has been filed by the Departments, which have given contract to the writ petitioners. The stand of such departments is that they have no answer to the challenge to the impugned notifications on the ground that the same is to be replied by the State Government or by the second respondent i. e. Department of Mines. It would be convenient to extract the stand taken by them in their replies, which reads thus: ". . . . . as far as the illegality and its validity of this Circular dated 22. 9. 94 i. e. Annex. R/1 is concerned, is to be replied by the State Government or the respondent No. 2. As far as the answering respondent is concerned, he has to obey the order issued by the State Government or other appropriate authority empowered to declare validity of this circular. " It is further stated that- "in reply to paras 8 & 9, it is respectfully submitted that the contents of these paras does not relate to the answering respondents because the royalty is imposed by the State Government and the answering respondent is collecting agency as per the orders issued by the State Govt. by which the answering respondent is bound. " In one of the writ petitions viz; S. B. Civil Writ Petition No. 379/1998- "udaipur Contractors Association vs. State of Rajasthan, reply to the writ petition has been filed by respondents No. 1 and 2 supported by the affidavit of Shri H. M. Gupta, Mining Engineer (Writs), Mines & Geological Department. The Department raised a preliminary objection to the effect that as the relief sought, arises from the contract between the individual contractor and the respondent, the writ petition under Art. 226 of the Constitution of India is not maintainable. It is averred that the individual writ petitioner-contractors while performing the work of contract with the concerned department are using building stones, ballast, grits and bajri for execution of the contract. It is also averred that individual contractor is required to take short term permit under Rule 63 of the MMCR. For taking away the minerals, they are required to pay the royalty on the minerals excavated by them. It is also submitted that since there was difficulty in collection of royalty on the basis of short term permit, on the representation of the contractors, a system was evolved for collection of levy at source from the running bills. It is pointed out that the initial order of making deduction of royalty amount at the rate of 1% was issued on 23. 11. 1989. Thereafter the royalty amount was raised to 2%. Thus, according to the respondents, the collection of 2% on the running bills is not a fresh levy but only a mode of collection. We have heard Mr. Sohan Lal Jain, B. M. Agrawal, K. N. Joshi, learned counsel for the appellant writ petitioner-contractors and Mr. R. L. Jangid, Additional Advocate General, D. C. Sharma, M. R. Singhvi, K. K. Bissa, G. L. Chaudhary, S. G. Ojha and V. Gupta for the departments. It is contended by the learned counsel for the appellants that the learned Single Judge has committed error in not examining the real controversy involved and dismissing the writ petitions on the ground that no writ petition lies in contractual matters. It is submitted that the departments with whom the writ petitioners have entered into contract, have admitted in their reply that they have nothing to do with the challenge pertaining to collection of 2% of contract amount from the running bills as the same has been levied by the State Government. Their stand is that they are simply complying with the directions of the State Government and the Mining Department. It is also submitted that both the judgments of the Apex Court referred to by the learned Single Judge have no application to the facts of the case. It is further submitted that the impugned notification does not arise from the contract between the writ petitioner-contractors and the department giving the contract. It is submitted that under Article 265 of the Constitution of India a tax, fee or royalty in whatever name, can be imposed only under the authority of law and law means valid law. It is also submitted that a tax, fee or royalty cannot be charged under an administrative order. It is also submitted that existence of a mining lease temporary or permanent is a sine qua non for collection of royalty. It is also submitted that it is well settled law that a breach of Art. 265 of the Constitution can be enforced by a citizen by way of remedy under Art. 226 of the Constitution of India.
(3.) ON the other hand, it is submitted by Mr. Jangid learned Additional Advocate General, that the contract between the writ petitioner-contractors and the concerned departments is a private contract and not a statutory contract. As per the contract, royalty on minerals is payable by the contractors. We have considered the rival contentions. We are of the view that these Special Appeals deserve to be allowed for the simple reason that the impugned notification directing the concerned departments to compulsorily deduction of 2% from the running bills of the contractors by way of royalty on provisional basis of assumed exploitation of minerals, is not part of the contract between the writ petitioner-contractors and the departments giving the contract. The departments and local authorities which have given the contract and deducting 2% royalty compulsorily at source have not defended the impugned notification on the ground that they have nothing to do with the said notification and they are simply acting as a "collecting agency". The State has chosen not to defend the writ petitions and appeals seriously. Inspite of opportunities given, neither effective reply has been submitted nor requisite informations have been furnished. The allegations of indiscriminate recovery have not been denied. The scheme of refund in a case where the contractor is not liable to pay royalty has not been produced. Thus, the State has shown its arbitrariness and malafides in the matter of compulsory collection of royalty by its conduct. There are series of cases of the Apex Court dealing with the scope of interference of High Court while exercising its writ jurisdiction under Article 226 of the Constitution of India in contractual matters. One line of decisions is that if the contract entered between the State and the person aggrieved is non-statutory and purely contractual and the rights are governed only by the terms of the contract, no writ or order can be issued under Art. 226 of the Constitution of India, so as to compel the authorities to remedy a breach of contract pure and simple. Such cases may be referred as 1977 SC 1469 (1 ). Premji Parmar vs. Delhi Development Authority (2), Divisional Forest Officer vs. Bishwanath T. Company Ltd. (3), and Food Corporation of India vs. Jagannath Dutta (4) The another line of cases of the Apex Court are that the Court will entertain petition in the area of contractual rights on showing arbitrariness, absence of fair play and breach of natural justice. Reference be made to Mahabir Auto Stores vs. Indian Oil Corporation (5), E. P. Royappa vs. State of Tamil Nadu (6), Mrs. Maneka Gandhi vs. Union of India (7), Ajai Hasia vs. Khalid Mujib Sehravardi (8), Ramana Dayaram Shetty vs. International Airport Authority of India (9), M/s Dwarka Das Marfatia & Sons vs. Board of Trustees of the Port of Bombay (10), State of Gujarat vs. Meghji Pethraj Shah Charitable Trust ;