SOUTH EASTERN COALFIELDS LTD. versus STATE OF M.P. AND ORS.

SOUTH EASTERN COALFIELDS LTD. versus STATE OF M.P. AND ORS.

The appellant is contractually and statutorily bound to pay interest for delayed payment of royalties to the State at the rate prescribed by Rule 64A of the Mineral Concession Rules, 1960. The Rules are validly enacted under the Mines and Minerals (Regulation and Development) Act, 1957, and include authority for charging interest as 'other charges.' The Coalfields, having contracts including such terms, cannot avoid this liability. The Coalfields can recover such interest from consumers under Section 61 of the Sale of Goods Act, 1930, and on equitable principles, including periods where court orders stayed collection, by application of the doctrine of restitution. The facts and...

Parties
Appellant: South Eastern Coalfields Ltd.; Respondents: State of Madhya Pradesh and Others
Jurisdiction
India
Judgment Date
13 October 2003
Procedural Posture
Civil Appeal / Final Decision on Appeal From Madhya Pradesh High Court Judgment (w.p. No. 2033 of 1998) and Connected Matters
Outcome
Appeals dismissed.
Legal Topics
Interest on Delayed Payment, Delegated Legislation, Restitution, Sale of Goods, Effect of Interim Orders
Mining Law Administrative Law Contract Law Commercial Law Procedure Interest on Delayed Payment Delegated Legislation Restitution +2 more

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Parties

South Eastern Coalfields Ltd.

Appellant

State of Madhya Pradesh and Others

Respondents

Procedural Posture

Civil Appeal / Final Decision on Appeal From Madhya Pradesh High Court Judgment (w.p. No. 2033 of 1998) and Connected Matters

Legal Issues

  1. 1 Whether the appellant is liable to pay interest to the State as per mining lease and rules
  2. 2 Whether Rules framed under the Mines and Minerals (Regulation and Development) Act, 1957 can provide for interest on delayed payments
  3. 3 Whether the liability to pay interest can be passed by the Coalfields to the consumers

Ratio Decidendi

The appellant is contractually and statutorily bound to pay interest for delayed payment of royalties to the State at the rate prescribed by Rule 64A of the Mineral Concession Rules, 1960. The Rules are validly enacted under the Mines and Minerals (Regulation and Development) Act, 1957, and include authority for charging interest as 'other charges.' The Coalfields, having contracts including such terms, cannot avoid this liability. The Coalfields can recover such interest from consumers under Section 61 of the Sale of Goods Act, 1930, and on equitable principles, including periods where court orders stayed collection, by application of the doctrine of restitution. The facts and...

Court Disposition

Appeals dismissed.

Orders

  • Interest to be calculated for the period commencing from the sixtieth day of the expiry of the date fixed for royalty payment until actual payment, at 12% per annum if paid within six weeks, otherwise at 24% per annum.
  • No order as to costs.