TMI Blog2004 (1) TMI 686X X X X Extracts X X X X X X X X Extracts X X X X ..... st the prohibition contained in Rule 3A and were rightly held by the High Court to be invalid. The appellants before us were holding two quarry leases and were amongst the appellants in this Court in the appeals by special leave referred to hereinabove. On 19.11.1993, by an interim order, the Court directed that the renewals or existing grants in favour of the appellants would continue till the next date of hearing. On 21.11.1993, the Court modified the previous order by extending its operation 'to continue till further orders of the Court'. The appellants brought to the notice of the Court that in spite of the previous interim order the appellants were not issued transport permits with the result that the renewal or grant of leases was of no avail to them as they were not able to remove the minerals quarried by them. In the opinion of the Court such action of the respondents resulted in frustrating the interim orders. It was clarified that the appellants in whose favour interim orders were granted, should be granted transport permits also by the appropriate authority on payment of royalty and complying with the rules. On 18.1.1996, the appeals came to be dismissed as al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Regulation) Act 1957 (hereinafter 'MMDR Act', for short) reads as under:- 21. Penalties.__ (1) Whoever contravenes the provisions of sub-section (1) or sub-section (1A) of section 4 shall be punished with imprisonment for a term which may extend to two years, or with fine which may extend to twenty-five thousand rupees, or with both. (2) Any rule made under any provision of this Act may provide that any contravention thereof shall be punishable with imprisonment for a term which may extend to one year, or with fine which may extend to five thousand rupees, or with both, and in the case of a continuing contravention, with an additional fine which may extend to five hundred rupees for every day during which such contravention continues after conviction for the first such contravention. (3) Where any person trespasses into any land in contravention of the provisions of sub- section (1) of section 4, such trespasser may be served with an order of eviction by the State Government or any authority authorised in this behalf by that Government and the State Government or such authorised authority may, if necessary, obtain the help of the police to evict the trespasser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and also empowers the State Government to recover the price thereof where such mineral has already been disposed of inasmuch as the same would not be available for seizure and confiscation. The provision as to recovery of price is in the nature of recovering the compensation and not penalty so also the power of the State Government to recover rent, royalty or tax in respect of any mineral raised without any lawful authority can also not be called a penal action. The underlying principle of sub-Section (5) is that a person acting without any lawful authority must not find himself placed in a position more advantageous than a person raising minerals with lawful authority. The correct principles of law applicable to the facts of the present case emanating from equity, and statutorily embodied in sub- Section (5) of Section 21 abovesaid, are to be found dealt with extensively in a recent decision of this Court in South Eastern Coalfields Ltd. Vs. State of M.P. Ors. (2003) 8 SCC 648. It is true that by the interim orders passed by this Court the appellants were allowed during the pendency of the earlier appeals to operate under the mining leases, whether freshly granted or rene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent which it would not have suffered but for the order of the Court and the act of such party, then the successful party finally held entitled to a relief, assessable in terms of money at the end of the litigation, is entitled to be compensated in the same manner in which the parties would have been if the interim order of the Court would not have been passed. The successful party can demand (a) the delivery of benefit earned by the opposite party under the interim order of the Court, or (b) to make restitution for what it has lost. In the facts of this case, in spite of the judgment of the High Court, if the appellants would not have persuaded this Court to pass the interim orders, they would not have been entitled to operate the mining leases and to raise and remove and dispose of the minerals extracted. But for the interim orders passed by this Court, there is no difference between the appellants and any person raising, without any lawful authority, any mineral from any land, attracting applicability of sub-Section (5) of Section 21. As the appellants have lost from the Court they cannot be allowed to retain the benefit earned by them under the interim orders of the Court. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te is a poor guide to the scope of a section for it can do no more than indicate the main subject with which the section deals and Lord Upjohn opined that a side note being a brief pricis of the section forms a most unsure guide to the construction of the enacting section and very rarely it might throw some light on the intentions of Parliament just as a punctuation mark. We are clearly of the opinion that the marginal note 'penalties' cannot be pressed into service for giving such colour to the meaning of sub-Section (5) as it cannot have in law. The recovery of price of the mineral is intended to compensate the State for the loss of the mineral owned by it and caused by a person who has been held to be not entitled in law to raise the same. There is no element of penalty involved and the recovery of price is not a penal action. It is just compensatory. The Court while dismissing the appeals filed by the appellants in the year 1996, which dismissal vacated the interim orders, could have also relieved the appellants of the consequences logically and necessarily flowing from the dismissal of the appeals by taking into consideration the equity of relieving against hards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he court was dealing with Section 42(1) of Karnataka Agricultural Income Tax Act, 1957. A default by assessee in making payment of tax attracted a penalty equivalent to one and a one-half percent of the tax remaining unpaid for the first three months and two and one-half percent of such tax for each month subsequent thereto. There was also a provision for payment of interest on delayed payment of tax. This Court held that interest is compensatory while penalty is penal, i.e. punishing in character. Where delay in payment of tax was attributable to the order of stay passed by the Court, it was held that the order of stay placed the demand for the tax in abeyance and, therefore, during the period of stay the assessee cannot be said to be in default and hence no penalty can be imposed on the assessee on the stay being vacated. However, still the Court held that a late payment surcharge/interest is necessarily compensatory in character and a penalty is a punishment. At the end, the learned counsel for the appellants submitted that the appellants may be allowed the liberty of making a representation to the State Government for some relief at least in the calculation of the amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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