GOVERNMENT OF KARNATAKA No. C: 226 MMN 2006 ‘Kamataka Govemment Secretariat, Vikasa Soudha, Bangalore, éated:04-12-2007. "The Saverrmant in Commerce & Industries Deparment has issued detailed sr ruetions: egarténg deduction of royuity from bills of the contractors working for cut dujoutmeats of ths Government, vide circular No.CI 147 MMN 2007, dated 4 and amaay of the Hicads of the Departments have also issued the circulars cortro-tors duly fling wait petitions before the Hon’ ble High Court of Kamataka, While ‘ispocaig OF these Writ petitions, the Hon'ble High Court has quashed the above said icvulws one direcied to decide each case whether royalty is to be deducted or if any royalty is clready dducted, whether that should be refunded in accordance with law and in ligh of the judgement 0 tho Hon'ble Hiigh Court ef Kamataka in W.P. No.31264- i, M9, dtd 1-10-1994 i GV. Xemer od eer vie State oF Karnak & fh, ‘The ceders pronounced in G.V. Kumar's ease has been upheld by the Division encls ot How'ble High Cour of Karnataka in W.A. No.k30/2006 dated:25-09-2006, The Zaraataka Slum Clearance Bourd has prefered W.A. No.4892/2004 against the onder passed by the Hon'ble single Judge in. W.P. No.8737/2004 and 9181-82/04 on (03-09-2004, filed by Sri V.K. Bhat. The Hon’ble High Court of Kamataka has disposed Of the said Writ Appeal on 28-03-2007. The main points of the judgement is as follows;- 1) “The contractors are liable to pey royalty in terms of the contract and therefore, the demand of royalty from them Woukkl not be illegal. 2) The terms of the contract between the parties is rules of the Kamataka Mincr Mineral Concession Rules. ding despite statutory 3) —_ Minor minerals which were used by the comtractors were purchased from private sources like quarry Iease-holders or private quarry owners. If the documents are produced in this regard, then the contractor is not liable to pay ‘the ruyalty charges. Therefore, the contractor herein is required to produce the Se roey aems, Test cee ac et estos sa Seventy fit coe prams ane apes pry eo private quarry owners. If the coviractor proves ist aspect of te etter, then ey re wanes eer Ss yoo bem at Oo elo ee ee ee eaIn the light ofthe orders of the Hon'ble High Court.in W.A.830/06 on 25-9-2006 and in W.A. No.4892/04 dated:28-03-07, revised instructions as under sre issued in respect of deduction of royalty from the bills of the conlractors working for different departments of Govt. in supersession ofall other circular instructions issued in this regard earlier. Construction material, the contractor will be Table to pay royalty charges for the material (minor mineral) extracted from mach seas, irespective of ‘whether the contract is item rate contract or « lumpsum contract. Hence, dedvetion of royalty charges in such cases will be legal. For this purpose ‘non-execution of mining lease is not relevant, as the liability to pay royalty arises on sccount of the contractor extracting material fom « Goverment land, for use in the work. i) ‘Where under the contract, the responsibility to supply the material (minor minerals) is that of the Department work executing agency and the ‘contractor is required to provide only the labour and service for execution of any work involving use of such materiel, and the unit rate does not include the cost of material, there is no liability on the contractor to pay fany royalty. This will be the position even if be contractors required to transport the material from outside the work site, 30 long as the unit rate is only for labour or service and does not include the cost of meterial. fi) Where the contractor uses matzral purchased from quarry lease holders co private quarry owners, there is no lability an the contractor to pay any royalty charges. iv) In cases covered by paras (i) and (if) the Department! work executing agency cannot recover or deduct any royalty from the bills of the feontractor and if 30 deducted, the Department work executing agency will be bound to refund any amount so deducted or collected to the contractor.¥) Incase of minor minerals purchased fom private sourees Tike quarry ‘esse holders or private quarry owners, if the documents/MDPs are produced in tis regard, then the contractor not liable to pay the royalty Eharges. Therefore, the contractor is requized to produce the documents to prove thatthe minor minerals and construction materials, which were lused by him, were purchased either from private quarry leaseholders ot private quary lease ownen. Ifthe contractor proves that aspect of the Frtter, then the Departmentvork executing agency cannot recover or ‘deduct any royalty from the bills of the cantmactor and should refund, if ‘ary amount so deducted or collected to the rontactor. gokr (8S. PATTANASHETTI) Additional Scerstary to Government, Commerce & Industries Department. 1) Principal Secretary/ Secretaries to Government of all the Departments, Kamataks Goverument Secretariat, Banglore. 2) Disector, Department of Mines & Geology, No49, Khanija Bhavan, D. Devarajs Urs Road, Banglore. 3) Deputy Commissioners ofall Districts 14) Chief Engineer, Public Works Department (C & B) KR Circle, Banglore-D1- 5) Chief Engineer, Rural Development Engineering Department, Ananda Rao Circle, Banglore 6) Chief Engincer, Water Resources Department, Ananda Rao Circle, Benglore-01 7) Chief Exeoutive Orticers Zila Panchayats ofall Districts '8) Superintendenting Engincers Public Works Department ofall Districts. 9) Executive Engineers Public Works Department of all Districts. 10)Chicf Engincer, Engineering Division, Mahanagara Palike, Banglre, 11JExeeutive Member, Karnataka industrial Area Development Board, Nrupathungs Road, Bangalore. 12)Executive Engineers (National Highways) Public Works Department of all Districts, 13)Executive Engincer, National Highway, Special Division, Nirman Bhavan, Rajajinagar, I Block, Bangelore-55, 14) Managing Director, Cauvery Niravart NigamaNiyamith, * Floor, Coffee Board ‘Building, Dr. Ambedkar Veedhi, Bangalore. 15) Commissioner, Shimoga Urban Development Authority, Vincbanagar, Shimoga. 16) Managing Director, Kamaiaka State Construction Corporation Lid. P.O. "No. 109, Dr. Rajkumar Road, | Block, Rejajimgnr, Bangalore-10,at 17) Managing Director, Krishna Bhagya Jala Nigaraa Niyamitha, Dr. Ambedkar Veedhi, Bangalore. 18) Managing Director, KRDCL, 1°" Floor, 16/J, Miller Tankbund area, ‘Bangalore-52, 19) Commissioner, Karnataka Slum Clearance Board, No.55, Risalder Street, 20)Deputy Directors (MA) Plan/ GWS/ R&D/ Legal of thé Department of Mines & Geology, Kanakapura / Chamerajnagar/Ilkal / Haspet/ Banglore North/ Belgaum! (Chitradurga / Sedam / Karwar) Tumkur / Mangalere. 21)Senior Geologist (Mineral) of the Department of Mines & Geology, Banglore South / Mysore/ Bijapur/ Koppal / Gulbarga/ Kolar / Shimoga) Chickmagalur / Hassan / Dharwad’ Mandya.