Recovery Notice Issued By Mining Dept To Be Preceded With Demand Order: Rajasthan High Court

The Rajasthan High Court has set aside recovery notices issued by the Department of Mining and Geology, Government Secretariat, Jaipur, for recovering amount payable against Short Term Permit (“STP”) granted to the petitioner, without any preceding order of demand of such recovery.

Bench of Justice Avneesh Jhingan observed it was trite law that recovery notices have to be preceded with an order creating demand for such recovery.

The Court was hearing a petition filed by the petitioner who was granted STP for mining earth in 2006 and a security amount was deposited by him. However, in 2007, the petitioner filed an application for surrendering the STP which was dismissed by the Mining Engineer who issued a demand notice to the petitioner for recovering the amount payable in relation to the STP. On petitioner's failure to deposit the amount, the security amount was forfeited. A revision application was filed by the petitioner against the order that forfeited the security, and the revisional authority set aside the order, remanding back the matter to be decided afresh.

After remand, fresh notices were issued by the respondent for recovery, initiating recover proceedings against the petitioner. It was against these recovery notices that the petition was filed by the petitioner before the Court arguing that the recovery proceedings were initiated by the respondent without passing any order to that effect.

The Court agreed with the argument put forth by the counsel for the petitioner and observed that after the revisional authority had set aside the order creating demand for the recovery, no new order of demand was passed by the respondent. Hence, after the revision order, no demand order existed. The Court held that it was well settled law that recovery notices had to be preceded by an order creating that demand.

In the absence of any such order, the recovery notices were set aside by the Court allowing the petition.

Title: Damodar Lal Gupta v State of Rajasthan

Citation: 2024 LiveLaw (Raj) 181

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