Karnataka High Court
Balakrishnan Karuppa Pillai vs State Of Karnataka on 17 March, 2025
Author: M.Nagaprasanna
Bench: M.Nagaprasanna
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NC: 2025:KHC:10985
WP No. 7249 of 2025
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 17TH DAY OF MARCH, 2025
BEFORE
THE HON'BLE MR JUSTICE M.NAGAPRASANNA
WRIT PETITION NO. 7249 OF 2025 (GM-RES)
BETWEEN:
BALAKRISHNAN KARUPPA PILLAI,
S/O KARUPPA PILLAI, AGE 59 YEARS,
OCCU- CLASS 1 CONTRACTOR,
M.D.M/S.G.V.R. INFRA PROJECT. LTD.,
PRESENTLY RESIDING AT
HONEY DEW APATMENT G-1,
VENKATARI LAYOUT, 4TH CROSS,
BANNERGHATTA ROAD,
J.P.NAGAR, BENGALURU - 560 076.
...PETITIONER
(BY SRI. BASAVARAJAIAH, ADVOCATE)
AND:
Digitally signed
by NAGAVENI
Location: High 1. STATE OF KARNATAKA,
Court of DEPARTMENT OF MAJOR IRRIGATION,
Karnataka
REPRESEBTED BY ITS PRINCIPAL SECRETARY,
VIKAS SOUDHA, BENGALURU - 560 001.
2. THE MANAGING DIRECTOR,
KARNATAKA NEERAVARI NIGAMA LTD.,
COFFEE BOARD, 4TH FLOOR,
AMBEDKAR VEEDHI,
BENGALURU - 560 001.
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NC: 2025:KHC:10985
WP No. 7249 of 2025
3. EXECUTIVE ENGINEER,
KARNATAKA NEERAVARI NIGAMA LTD.,
GRBCC.DIVISION, NO.2, HIDKAL DAM,
AT. PO.HIDKAL, TALUK HUKKERI,
DIST: BELAGAVI - 591 107.
...RESPONDENTS
(BY SRI. MOHAMMED JAFFAR AHAH, AGA FOR R1)
THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF
THE CONSTITUTION OF INDIA PRAYING TO DIRECT THE
RESPONDENTS NOT TO DEDUCT FIVE TIMES OF PENALTY ON
THE ROYALTY AMOUNT FROM THE BILLS OF THE PETITIONER
AS PER ANNX-E AND ETC.,
THIS PETITION, COMING ON FOR PRELIMINARY
HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR JUSTICE M.NAGAPRASANNA
ORAL ORDER
Heard Shri Basavarajaiah, learned counsel appearing for
the petitioner and Shri Mohammed Jaffar Shah, learned AGA
appearing for respondent No.1.
2. The petitioner is before this Court, seeking for the
following prayer:
"i). To issue the writ in the nature of Mandamus
directing the respondents not to deduct five times
of penalty on the royalty amount, from the bills of
the petitioner as per Anne-E.
ii) To issue any other writ orders or directions as this
Hon'ble court deems fit in the circumstances of
this case in the interest of justice.
NC: 2025:KHC:10985
iii) To grant the cost of these petitions in the interest
of justice.
3. The learned counsel appearing for the petitioner
would submit that the issue in the lis stands covered by the
judgment rendered by the Co-ordinate Bench in the case of
G.O.RAJU & Others Vs. THE STATE OF KARNATAKA &
Others1, the Co-ordinate Bench has held as follows:
"Petitioners are Class-I Contractors of PWD
Departments.
2. Shri. Basavarajaiah, learned Advocate for
petitioners submitted that in the tenders notified by the
Government in the Karnataka Public Procurement portal,
it is stated in Clause 20 thereof, that the royalty charges
shall be deducted as per the prevailing Government
Order. He submitted that petitioners have agreed to this
term.
3. He further submitted that as per the original
contract, PWD Department can deduct the amount
equivalent to the royalty payable on the material used by
the Contractors and the primary onus is upon the person
who extracts minerals, to pay the royalty. In order to
complete the Civil works, petitioners have purchased
granite, jellies and other materials which attract royalty.
They have no objection for deduction of applicable
royalty. However, petitioners cannot be loaded with
penalty because petitioners are not lease holders under
the Karnataka Minor Mineral Concession Rules, 1994
('KMMC Rules' for short).
W.P.No.38068/2015 disposed on 09.09.2015
NC: 2025:KHC:10985
4. Smt. Niloufer Akbar, learned AGA argued
opposing the petition and contended that imposition of
penalty is based on the Circulars issued from time to
time and the communication dated 17.07.2020 issued by
the Director of Mines, Minor Irrigation Department.
5. I have carefully considered rival contentions
and perused the records.
6. It is not in dispute that the mineral can be
extracted by such lease holders who enter into a lease
agreement under the KMMC Rules. Petitioners have
purchased different quantities of such mineral for
construction and Civil works. The agreement which the
PWD Department, as a wing of the Government, has
entered with the Contractors stipulates that the
Department shall deduct the amount equivalent to
royalty payable on the mineral. One Department of the
State having entered into contract containing certain
covenants binding the parties inter se, it would be
incongruous for the other Department of the Government
namely Mineral Department to issue such Circulars over-
riding the terms agreed between the Government and
the private parties.
7. It is argued on behalf of the State that
whenever mineral is extracted, the lessee is liable to pay
the royalty and collect 'Mineral Dispatch Permit'. If
'Mineral Dispatch Permits' are not produced, State
Government will have the power to impose penalty.
There is no quarrel with this proposition. But at the same
time, it is to be noted that State is equipped with all
paraphernalia to check illegal quarrying, if any. The
clause to collect the amount equivalent to royalty
appears to have been incorporated keeping in view the
ground reality. In the circumstances, the Contractors
who enter into agreements with the State Government
Departments cannot be subsequently saddled with
penalties under the Minor Mineral Concession Rules
because they are not lessees.
NC: 2025:KHC:10985
8. Learned Advocate for petitioner has filed a
Memo dated 01.10.2020 annexing a communication
dated 29.09.2020 by the Assistant Engineer of Minor
Irrigation and Ground Water Development Department,
Davangere to produce 'Mineral Dispatch Permits' and if
the Contractors were to fail to produce the same, royalty
equivalent to five times shall be deducted.
9. In the circumstances, this writ petition merits
consideration. Hence, the following:
ORDER
(a) PWD Department is granted liberty to deduct
the royalty amount as agreed in Clause 20 of the
Agreement
vide Annexure-A.
(b) It is made clear that any deduction in excess is
impermissible in law.
Petition is accordingly disposed of."
4. In the light of the issue standing covered by
judgment rendered by the Co-ordinate Bench and the facts
being undisputed, the petition stands disposed on the same
terms.
Sd/-
(M.NAGAPRASANNA)
JUDGE
JY
