Licensees are entitled to proportionate remission of royalty for periods where mining was precluded by State-imposed restrictions.

The Petitioner emerged as the highest bidder for Sand Ghat No. 06, Patna, in an auction held on October 17, 2022

Following the grant of environmental clearance and execution of an agreement, the Petitioner was permitted to commence mining on November 29, 2023

The Petitioner alleged that starting February 2024, the Mining Department imposed a daily restriction on e-transit challans (limiting them to 150–160 vehicles), preventing the transport of sand beyond that limit

Additionally, SEIAA extended the seasonal mining suspension period by one month beyond the terms of the NIT and Agreement

Claiming to have been precluded from mining for 77 days due to these administrative restrictions, the Petitioner sought a refund of proportionate royalty or an extension of the settlement period

The State contested the maintainability of the writ, arguing the dispute was purely contractual

1. Whether a settlee is entitled to a proportionate remission or refund of royalty for a period during which they were precluded from conducting mining activities due to restrictions not attributable to them.

2. Whether administrative restrictions on e-transit challans and changes in the mining calendar constitute a breach of statutory/contractual obligations justifying judicial intervention in a writ proceeding.

The court primarily applied the principle that a party cannot be prejudiced by acts of the State or Court if the inability to perform is not attributable to their own fault.

Jai Durga Finvest (P) Ltd. v. State of Haryana (2004) 3 SCC 381, which held that if a contractor is prevented from extracting minerals due to the State’s omission, the doctrine of frustration or remission must be considered

Chitra v. State of Kerala (2016) 1 SCC 685, establishing that a licensee is liable to pay only a proportionate fee if they are precluded from transacting business for reasons extraneous to them

Rule 51(4) of the Bihar Minerals Rules, 2019, regarding royalty obligations on minerals "extracted" and "removed"

The Court reasoned that while the relationship was contractual, the Petitioner was allegedly prevented from exercising his rights due to a "slotting system" and revised environmental timelines imposed midway by the respondents

Referring to Jai Durga Finvest, the Court noted that a party should not be bound to pay the full contract amount if acts of omission or commission by the State prevented the operation of the terms

The Court found that where non-utilization of a license is not attributable to the settlee, imposing a full financial burden is arbitrary and inequitable

It rejected the State’s absolute bar on writ maintainability, holding that adverse civil consequences arising from the State’s own restrictions necessitate a review of the proportionate royalty calculation

It directed the Petitioner to file a representation before the respondent authorities for the calculation of the proportionate royalty refund for the 77-day period

The respondents were ordered to pass a reasoned and speaking order within eight weeks, specifically considering the precedents in Jai Durga Finvest and Chitra