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Judgment
This intra court appeal is directed against the judgment dated 3rd May, 2016 passed by learned Single Judge in Writ Petition bearing WP(C)
No. 18 of 2016 whereby the writ petition was dismissed as the petitioner failed to make out a case of infringement of legally enforceable right.
Succinctly stated the appellant (writ petitioner) had filed a writ petition on the allegations that pursuant to the advertisement dated 10th
December, 2015 issued by the Secretary to the Executive Committee of the Khasi Hills Autonomous District Council (herein referred to as ""the
KHADC"") for appointment of an agent for setting up, establishment, running and functioning of KHADC mineral transport challan
checkpoints/royalty checkpoints at all the exit points at the Council Borders and merging road within the Council''s territory, the petitioner moved
an application. The petitioner deposited the security amount and he was appointed as an ""Agent"" by the KHADC vide letter dated 15th January,
2016. The Deputy Commissioner, West Khasi Hills District, Nongstoin did not cooperate and the petitioner vide letter dated 22nd January, 2016
requested the Chief Secretary to immediately intervene and instruct the Deputy Commissioner not to interfere with the functioning of the royalty
challan checkpoints managed by the appellant for and on behalf of the KHADC. But the Deputy Commissioner continued to interfere and the
appellant had submitted a representation dated 29th January, 2016 to the Chief Secretary. It is averred by the appellant that he was duly
appointed Agent of the KHADC and the interference by the Deputy Commissioner had affected the fundamental right of the petitioner.
The appellant relied upon paragraph 9 of the Sixth Schedule to the Constitution of India which governs the grant of licenses and leases for the
purpose of prospecting for, or extracting of, minerals. According to the appellant the royalty between the Government and the KHADC was
initially in the ratio of 60:40 and the same is at present 75:25 from the royalty collected within the jurisdiction of KHADC. The case of appellant
was that the Comptroller and Auditor General of India (CAG) in its report dated 31st March, 2013 pointed out that the State Government had
failed to set up a mechanism to determine the mineral extracted and as a result, between the years 2008-09 and 2012-13, there was huge loses,
including short realization of revenue to the tune of Rs. 81.40 crores, due to the failure of the Director of Mineral Resources to periodically assess
the performance of the check gates that led to leakage of revenue at many checkpoints and weigh bridges. The CAG had recommended to the
State Government for improvement and overall restructuring of the management of the check gates. In view of the massive leakage of
royalty/revenue coupled with illegal transportation of extracted coal without payment of royalty as well as diversion of royalty to the Jaintia Hills
District and Garo Hills District by the vehicles carrying the extracted coal from their jurisdiction, the KHADC being one of the key beneficiary of
the collection of royalty under paragraph 9 of the Sixth Schedule to the Constitution, the aforesaid public notice dated 10th December, 2015 for
inviting the applications for appointment of its Agents was issued. The appellant was appointed and had set up the checkpoints but the Deputy
Commissioner, West Khasi Hills District, Nongstoin had been interfering with his work. Despite the representations made by the petitioner dated
22nd January, 2016 and 29th January, 2016, the Deputy Commissioner continued to interfere with his work. Hence, the appellant filed the writ
petition.
The petition was contested by the respondents by filing affidavit-in-opposition and challenged the very authority of the KHADC to appoint and
install any such Agent like the petitioner. According to the respondents, the order dated 15th January, 2015 issued by the Secretary to the
Executive Committee of the KHADC, appointing the petitioner as the Council''s Agent for checking of mineral transport challan/royalty challan
from all mineral laden vehicle originating from Council''s territory and allowing him to collect verification fees of Rs. 100/- (Rupees One Hundred
only) from Single Axle Laden vehicle and Rs. 200/- (Rupees Two Hundred only) from Double Axle Laden vehicle was confiscatory in nature and
without any legal authority and was further not sanctioned by the provision of Sixth Schedule to the Constitution of India.
The writ petition was dismissed by learned Single Judge vide impugned order essentially on the ground that the appellant/writ petitioner failed to
make out a case of infringement of legally enforceable right.
Being aggrieved by the said order, the petitioner has preferred the present appeal.
Learned senior counsel for the appellant laid much emphasis on paragraph 8 and 9 of the Sixth Schedule to the Constitution and contended that
the KHADC is well within its competence to appoint an Agent for the purpose of verifying the royalty challans. The counsel for the appellant also
contended the CAG in its report had indicated that there is rampant leakage in payment of royalty.
Learned senior counsel for the appellant further submitted that the KHADC/District Council was empowered to appoint Agent in view of Rule
30 of the Assam Meghalaya Autonomous Districts (Constitution of District Councils) Rules, 1951. He has relied upon the judgment in the case of
Evanlangki-E-Rymbai v. Jaintia Hills District Council and Others, (2006) 4 SCC 748.
Learned senior counsel for the appellant also submitted that the KHADC is empowered to appoint any Agent in terms of Rule 12 of the Assam
and Meghalaya Autonomous Districts (Constitution of District Councils) Rules, 1951.
On the other hand, learned counsel for the State Government urged that the KHADC has no authority to appoint an Agent for checking of
mineral transport challan/royalty challan and the appointment of the petitioner as an Agent is illegal and against the provision of Sixth Schedule to
the Constitution of India.
Learned counsel for KHADC submitted that being the Autonomous District Council, the KHADC is entitled to the share of royalties occurring
from the licenses and leases granted by the government of the State for the purpose of prospecting for, or extracting of, minerals in respect of an
area falling in its jurisdiction. The counsel for KHADC also submitted that the District Council being entitled to share of royalty is well within its
power to appoint an Agent and the petitioner was rightly appointed as an Agent.
It may be mentioned that the respondent No. 6 namely, the Khasi Hills Autonomous District Council challenged the impugned judgment dated
3rd May, 2016 by filing Special Leave to Appeal (C) No. 14173/2016 before the Hon''ble Supreme Court. The said petition came up for hearing
on 12.05.2016 and after some arguments, learned senior counsel appearing for the petitioner, sought permission to withdraw the petition.
Therefore, the special leave petition was dismissed as withdrawn.
In view of the above, we may observe at the outset that the impugned judgment dated 3rd May, 2016 has already been examined by the
Hon''ble Supreme Court and the Supreme Court has not interfered with the same. Therefore, as a matter of judicial discipline we need not
interfere. However, in view of the fact that SLP was dismissed as withdrawn, we have examined the contentions on behalf of the parties in this
appeal.
Before considering the rival submissions made on behalf of both the parties, it is relevant to consider the brief background in which the
Autonomous District Council was created. On coming into force of the Constitution of India, the United Khasi Jaintia Hills district was formed as
one of the tribal areas of Assam by merging the Khasi States with the other areas of the Khasi-Jaintia Hills, boundaries whereof were defined by
para 20 (2) of the Sixth Schedule to the Constitution of India. The State of Meghalaya was, initially, formed as an Autonomous State by virtue of
Section 3 of the Assam Re-organisation (Meghalaya) Act, 1969, which came into force w.e.f. 2nd April, 1970. The Autonomous State of
Meghalaya was created within the State of Assam and the said Autonomous State of Meghalaya comprised of the Autonomous Garo Hills district,
Autonomous District of Khasi Hills and Autonomous District of Jaintia Hills. Thereafter, North Eastern Areas (Re-Organisations) Act, 1971 was
enacted which came into force w.e.f. 21st January, 1972 and by virtue of the same, the State of Meghalaya came into existence and it comprised
the territories contained in the said Autonomous State of Meghalaya, the Cantonment and the Municipality Areas of Shillong. It is worthwhile to
note here that prior to the enactment of the North Eastern Areas (Re-Organisations) Act, 1971, the areas contained in the Cantonment and the
Municipality of Shillong (known as Normal Areas) did form part of the Autonomous State of Meghalaya.
The entire state of Meghalaya, save and except the Cantonment Area and the Normal Area, including Shillong Municipal Area, form the tribal
areas and the same are administered under the Sixth Schedule to the Constitution.
Any legislative or administrative scheme for the administration of justice has to conform to, and abide by, the scheme of administration of
justice as envisaged by the Constitution of India. It is pertinent to mention here that the constitutional scheme with regards to administration of
justice, in the tribal areas, that is, areas falling under the Autonomous District and Autonomous Regions is envisaged in clause (2) of Article 244,
contained in Para X of the Constitution of India, wherein it is made amply clear that the provisions of the Sixth Schedule shall apply to the
administration of tribal areas, amongst others in the State of Meghalaya.
Para 1 of the Sixth Schedule provides for the formation of an autonomous district. Under sub paragraph (2) of Para 1 of the Sixth Schedule it
is clearly mentioned that if more than one Schedule Tribe inhabits in any one of those Autonomous Districts referred to in sub paragraph (1) of
Para 1, the Governor may, by public notification, divide the area or areas inhabited by different Schedule Tribes into Autonomous Regions.
Paragraph (2) of the Sixth Schedule envisages that there shall be a District Council for each Autonomous District and under sub paragraph (2) it is
provided that there shall be a separate Regional Council for each area constituted to be an Autonomous Region mentioned under sub paragraph
(2) of Para 1 of the Sixth Schedule. Sub paragraph (3) declares that each of the District or Regional Councils shall be a body corporate with
perpetual succession and a common seal. The composition of such autonomous bodies and the manner of choosing persons for being members of
such Autonomous District Councils is also specified. Sub paragraph (4) of Para 2 provides that the administration of each of these Autonomous
Districts or Regions shall vest in those bodies corporate respectively to the exclusion of each other. Sub paragraph (5) deals with the distribution of
powers between the Regional and District Councils. Sub paragraph (6) of Para 2 empowers the Governor to make rules for the first constitution of
District Councils and Regional Councils in consultation with existing Tribal Councils or other representative tribal organisations within the
autonomous districts and the regions. Para 3 to 17 deal with the administration of Autonomous Districts and Autonomous Regions.
In exercise of the powers conferred upon him by sub paragraph (6) of Para 2, the Governor framed rules called as ""the Assam Autonomous
Districts (Constitution of District Councils) Rules, 1951"". The rules, inter alia, provides for the constitution of an Executive Committee consisting of
the Chief Executive Members as the head and two other members to exercise the executive functions of the District Council.
Paras 8 and 9 contained in the Sixth Schedule to the Constitution are pertinent for the purpose of determining the controversy at hand. The
relevant provisions of Paras 8 and 9 read as under:
Powers to assess and collect land revenue and to impose taxes.-(1) The Regional Council for an autonomous region in respect of
all lands within such region and the District Council for an autonomous district in respect of all lands within the district except those
which are in the areas under the authority of Regional Councils, if any, within the district, shall have the power to assess and collect
revenue in respect of such lands in accordance with the principles for the time being followed by the Government of the State in
assessing lands for the purpose of land revenue in the State generally.
(2) The Regional Council for an autonomous region in respect of areas within such region and the District Council for an autonomous
district in respect of all areas in the district except those which are under the authority of Regional Councils, if any, within the persons,
resident within such areas.
(3) The District Council for an autonomous district shall have the power to levy and collect all or any of the following taxes within
such district, that is to say-
(a) taxes on professions, trades, callings and employments;
(b) taxes on animals, vehicles and boats;
(c) taxes on the entry of goods into a market for sale therein, and tolls on passengers and goods carried in ferries; and
(d) taxes for the maintenance of schools, dispensaries or roads.
(4) A Regional Council or District Council, as the case may be, may make regulations to provide for the levy and collection of any of
the taxes specified in sub-paragraph (2) and (3) of this paragraph and every such regulation shall be submitted forthwith to the
Governor and, until assented to by him, shall have no effect.
Licenses or leases for the purpose of prospecting for, or extracting of, minerals.-
(1) Such share of the royalties accruing each year from licences or leases for the purpose of prospecting for, or the extraction of,
minerals granted by the Government of the State in respect of any area within an autonomous district as may be agreed upon between
the Government of the State and the District Council of such district shall be made over to that District Council.
(2) If any dispute arises as to the share of such royalties to be made over to a District Council, it shall be referred to the Governor for
determination and the amount determined by the Governor in his discretion shall be deemed to be the amount payable under sub-
paragraph (1) of this paragraph to the District Council and the decision of the Governor shall be final.
A bare reading of Para 9 of the Sixth Schedule to the Constitution of India makes it clear that the District Council only has a right to the share
of royalties. It cannot impose or collect royalty, nor can it impose any fee in the name of checking of vehicles carrying minerals. Sub paragraph (2)
provides that any dispute regarding share of royalties may be referred to the Governor and the Governor can determine the amount payable to the
District Council.
At this juncture, it is relevant to refer to the order dated 15th January, 2016 appointing the petitioner as Council''s Agent, which reads as
under:
OFFICE OF THE EXECUTIVE COMMITTEE
KHASI HILLS AUTONOMOUS DISTRICT COUNCIL
SHILLONG
No. DC.RBF/XXII(T)/408-3/2015 Dated Shillong, the 15th January, 2016
To,
Mr. Sdangyoo L. Dkhar,
Upper Nongrim Hills,
Shillong.
Sub: Appointment as Council''s Agent.
You are hereby informed that the Council is pleased to appoint you as the Council''s Agent for Checking of Mineral Transport
Challan/Royalty Challan from all mineral laden vehicles originating from Council''s territory.
You are allowed to collect a Verification fee of Rs. 100.00 (Rupees One Hundred) Only from every Single Axle Mineral Laden
Vehicle and Rs. 200.00 (Rupees Two Hundred) Only from every Double Axle Mineral Laden Vehicle.
Sd/-
Secretary to the Executive Committee
Khasi Hills Autonomous District Council
Shillong.
A perusal of the aforesaid appointment letter makes it clear that the petitioner was appointed for the purpose of checking the vehicles and also
to collect verification fees. As already noticed, the KHADC cannot recover the verification fee as the same is not permissible by the Sixth
Schedule to the Constitution. Moreover, no time period for appointment of the petitioner as Agent is mentioned in the appointment letter.
A Division Bench of Gauhati High Court in ''Ewanlangki-E-Rymbai''s case (supra) considered the scope of Sixth Schedule to the Constitution
of India and inter alia, observed that any law/regulation/rule or action taken by any other State in the domicile of India should be in consonance
with the fundamental rights guaranteed to the citizens of India and on the same analogy, District Council being like a State has to act within the
parameters of Part-III of the Constitution. Thus, it is clear that the District Council has to act within the parameters of the principles forming part of
the basic structure of the Constitution including the Fundamental Rights contained in Part-III of the Constitution of India. The relevant para 23 of
the said judgment reads as under:
Having considered the spread of Sixth Schedule and decision of the Supreme Court reported in the case of Edwingson Bareh
(Supra) and in the case of T. Cajee -Vs- U Jormanik Syiem (Supra) we feel that there cannot be any manner of doubt that the Sixth
Schedule is a Constitution within the Constitution and is a self contained code for administrative as well as legislative governance of
the tribal areas, but we cannot go to the extent of saying that any laws/regulations/rules/notifications made or actions taken under the
Sixth Schedule by the District Council or the Executive Committee formed by the District Council can overlook the fundamental rights
guaranteed under Part-III of the Constitution. Clause-3 (1)(g) of the Sixth Schedule authorizes the District Councils and Regional
Councils to make laws for appointment or succession of Chiefs and Headmen. Thus, under this power, laws can be made by the
District Council for appointment of Dolloi of Elaka Jowai and this power can also be exercised by the District Council by exercising
the executive powers, in absence of any law made therefor. But it cannot be said that any law so made or the executive action taken
by the District Council would not be and should not be within the parameters of Part-III of the Constitution of India. The position of
the District Council is like that of a State with authority to make laws, to do administration of justice in autonomous districts and
autonomous regions; to establish primary schools; to assess and collect land revenue and to impose taxes as permissible under Clause
8; to give licenses or leases for the purpose of prospecting for, or extraction of, minerals as per the agreement arrived at between the
District Council and the Government of the State. The District Council has powers to regulate and control money-lending trade by
non-tribals and can make laws under Clause-3 of the Sixth Schedule but those powers which are to be exercised by the District
Council or the Regional Council would be the powers like the State. Any law/regulation/rule or action taken by any other State in the
domicile of India should be in consonance with the Fundamental Rights guaranteed to the citizens of India and on the same analogy,
District Council being like a State has to act within the parameters of Part-III of the Constitution. We find support in our view in the
judgment delivered by the Apex Court in the matter of Hari Chand Sarda -Vs- Mizo District Council and another, reported in AIR
1967 SC 829. In that case the appellant who was a non-tribal started trading at Mizo District under a temporary license, issued on
depositing the requisite fees. The temporary license was extended by renewal of the same from time to time upto May 31, 1960. The
appellant applied for a further renewal whereupon the Executive Committee of the District refused to renew the same and directed
the appellant to remove his properties from the District. The appellant challenged the action of the Executive Committee and
contended that the reasons given for non-renewal of the license was mala fide and that Section 3 of the Lushai Hills District (Trading
by non-tribals) Regulation, 2 of 1953 were invalid being violative of Article 19(1)(e) and (g) of the Constitution. While dealing with
the provision of Section 3 of the Lushai Hills District (Trading by non-Tribals) Regulation, 2 of 1953 it is said by the Apex Court that
the appellant being a citizen of India and the Mizo District being part of the Union Territory, he has undoubtedly a fundamental right
under Article 19(1)(g) to carry on the trade in any part of the country including the Mizo District. Any restrictions infringing such a
right can only be sustained if it is a reasonable restriction imposed in the interest of the general public as envisaged by Art.19(6). The
provisions of Section 3 of the Regulation has been declared to be a unreasonable restriction on the fundamental rights guaranteed
under Article 19(1)(g) and, therefore, declared void.
Learned Single Judge has taken note of the above and the scheme of the Constitution of India and has observed as follows:-
Even on the principles of the referred decisions, it is clear that when any Executive is sought to be exercised by the District Council
like the KHADC, it has to act within the parameters of the principles forming the basic structure of the Constitution including the
fundamental rights in Part-III of the Constitution. It is also a matter of little debate that the freedom of trade and business remains one
of the basic rights to freedom and any curtailment thereupon has to be backed by law. Yet further the prospecting and mining
operation and the matters related thereto are to be governed by law applicable for the purpose including the Mines and Minerals
(Development and Regulations) Act, 1957; and it is difficult to find a direct right with the Council to grant any licence or lease or to
prohibit the movement of the excavated minerals. Moreover, it remains trite that any exaction of money in terms of tax or fees could
only be under the specific authority of law.
Viewed from any angle, it is apparent that any attempt on the part of the KHADC to recover fees from the vehicles carrying minerals
and to subject them to any checking or verification is neither authorised by law nor is in conformity with the rights of citizen
guaranteed by the Constitution of India.
In our view, the learned Single Judge has rightly observed that in view of limited right given by sub clause (2) of para 9 of the Sixth Schedule
with respect to the share or royalties and disputes if arises, the District Council has not been acceded any right to set up a parallel check post and
to charge fees for the same. Therefore, the appointment of the appellant cannot be justified.
The argument of learned Senior counsel for the appellant that the KHADC can appoint the petitioner as an Agent in terms Rule 12 of Assam
and Meghalaya Districts (Constitution of District Councils) Rules, 1951 does not hold water. The relevant Rule 12 reads as under:
Officers and Staff:- The Executive Committee may appoint officers and staff as may be required for carrying out the purpose of
the Regulation and of these Rules and may empower any officer to perform any one or more of the duties required under the
Regulation and or these Rules.
A perusal of aforesaid Rule 12 clearly shows that the Executive Committee of the KHADC can appoint officers and staff for purpose of
regulation and the rules. It nowhere provides for appointment of an Agent and that too to recover the verification fees. The same is beyond the
purview of Rule 12 of Assam and Meghalaya Districts (Constitution of District Councils) Rules, 1951. It is manifestly clear that any attempt on the
part of the KHADC to recover fees from the vehicles carrying minerals and to subject them to any checking or verification is neither authorised by
law nor is it in-conformity with the rights of citizens guaranteed by the Constitution of India.
In our considered view, learned Single Judge has rightly observed that the KHADC could not appoint an Agent to set up a parallel check post
over the minerals carrying vehicles and charge verification fees.
We may take note of another aspect of the matter that so far the appellant is concerned, he is not having any other right over collection of
royalty or checking of vehicles except as an agent of KHADC. As already noticed, KHADC tried to challenge the impugned judgment dated 3rd
May, 2016 but Hon''ble Supreme Court did not interfere. The KHADC has not filed any writ appeal. Therefore, the impugned judgment has
become final against KHADC. The right of the appellant was limited one to act as an agent of KHADC. When KHADC cannot appoint any such
agent in respect of mineral laden vehicles, the appellant cannot claim any relief in this Court. Learned Single Judge was also justified in returning a
finding that the appellant had failed to make out a case of infringement of legally enforceable right. The impugned order does not call for any
interference.
However, the KHADC will be at liberty to make appropriate representation to the Hon''ble Governor in accordance with law in regard to the
right of share of royalty and to raise dispute, if any, as permissible by para 9(2) of the Sixth Schedule.
With the aforesaid observation, the appeal stands disposed of. No order as to costs.
MC(WA) No. 2 of 2017
The application is dismissed being infructuous.