AP High Court Orders Release Of Vehicle Seized For Mineral Transport Violations Upon Payment Of Penalty, Says Rules Don't Mandate Indefinite Detention

"Nowhere the Rule postulates that the vehicle cannot be released, unless the [penalty and seigniorage fee] is paid, " Andhra Pradesh High Court, in a significant ruling, held that vehicles seized for transporting minor minerals without a valid permit must be released upon the payment of the prescribed penalty and verification of ownership documents.

A bench of Justice Maheswara Rao Kuncheam observed that the statutory rules governing mineral concessions do not contemplate the indefinite detention of vehicles once the penalty procedure is initiated.

The court was dealing with a writ petition filed by a vehicle owner whose Tipper Lorry was seized by the Thulluru Police. The petitioner contended that the seizure was conducted without following the due procedure established under the Andhra Pradesh Minor Mineral Concession Rules, 1966, and the Mines and Minerals (Development and Regulation) Act, 1957.

The petitioner, Gurram Madhusudhana Rao, approached the High Court after his vehicle was seized by the respondent authorities for alleged violations of mineral transport regulations. He argued that the seizure was arbitrary and violated his fundamental rights under Articles 14, 19(1)(g), and 300-A of the Constitution of India. The petitioner sought a Writ of Mandamus to declare the seizure illegal and requested the immediate release of the vehicle.

The primary question before the court was whether the authorities could continue the detention of a vehicle seized under the A.P. Minor Mineral Concession Rules, 1966, until the conclusion of all proceedings. The court was also called upon to determine the scope of Rule 26(3)(iii) regarding the imposition of penalties and the subsequent release of seized property.

Interpretation of Rule 26(3)(iii) of the AP Minor Mineral Concession Rules

The Court focused its analysis on Sub-Rule (3)(iii) of Rule 26 of the Andhra Pradesh Minor Mineral Concession Rules, 1966. This specific provision dictates that if a driver or owner fails to produce a valid transit permit, the officer in charge may require the payment of five times the normal seigniorage fee as a penalty, in addition to other statutory dues like DMF and MERIT amounts.

The bench noted that while the rule provides for a heavy financial penalty for the lack of a transit permit, it does not expressly authorize the state to keep the vehicle in custody indefinitely. The court emphasized that the objective of the rule is the recovery of state revenue and the penalization of unauthorized transport, rather than the permanent deprivation of property.

Reliance on Judicial Precedents Regarding Vehicle Seizure

Court Cites Division Bench Ruling On Vehicle Release

The Court placed heavy reliance on the Division Bench judgment in Naganath Vs. State of A.P. (WA No. 4 of 2021). In that case, the bench had categorically held that there is nothing in Rule 26 to indicate that a vehicle cannot be released unless the penalty is paid immediately at the spot. The court reiterated that the rule allows for the order of payment at the time of interception, but it does not mandate continued detention.

Justice Kuncheam observed that the legal position is well-settled regarding the custody of seized vehicles. The bench noted that keeping vehicles in open spaces at police stations or other government offices leads to the gradual deterioration of the machines, which serves no fruitful purpose for the state or the owner.

"Nowhere the Rule postulates that the vehicle cannot be released, unless the same is paid."

Application of Supreme Court Guidelines in Sunderbhai Ambalal Desai Case

Detention Of Vehicles Serves No Fruitful Purpose

The Court further invoked the principles laid down by the Supreme Court in Sunderbhai Ambalal Desai Vs. State of Gujarat. In that landmark decision, the apex court had expressed that keeping seized vehicles in police custody for long periods is unnecessary and that they should be released to the rightful owners subject to certain conditions to ensure they are produced if required during the trial.

The bench found that the issue in the present writ petition was squarely covered by these earlier decisions. Since the Assistant Government Pleader for Mines and Geology did not refute that the legal issue was settled by precedents, the Court moved to provide a structured mechanism for the release of the petitioner’s Tipper Lorry.

Court Outlines Procedure For Release Of Tipper Lorry

The High Court disposed of the petition at the admission stage with specific directions. It ordered the District Mines and Geology Officer to pass appropriate orders in terms of Rule 26(3)(iii) and calculate the due seigniorage fee and penalty as per the law. This ensures that the state's revenue interests are protected while the petitioner's right to property is respected.

Once the penalty is levied and the petitioner pays the amount, they are required to produce the payment receipt and ownership documents to the Station House Officer of the Thulluru Police Station. The Court directed that upon such satisfaction, the 3rd respondent must release the seized Tipper Lorry bearing No. AP 39 TJ 5859 to the petitioner immediately.

The ruling reinforces the principle that statutory penalties should not be used as a tool for the indefinite detention of private property without clear legislative backing. By directing the release of the vehicle upon payment of the penalty, the Court balanced the state's regulatory power over minerals with the constitutional protections afforded to vehicle owners.

Date of Decision: 04 May 2026