Karnataka High Court
M/S Vijaya Durga Devi Minerals vs State Of Karnataka on 31 October, 2025
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WP No. 32386 of 2025
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 31ST DAY OF OCTOBER, 2025
PRESENT
THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE
AND
THE HON'BLE MR. JUSTICE C.M. POONACHA
WRIT PETITION NO. 32386 OF 2025 (GM-MM_S)
BETWEEN:
M/S VIJAYA DURGA DEVI MINERALS
A PARTNERSHIP FIRM
REPRESENTED BY ITS MANAGING PARTNER,
MR.KANAKARAO YEDIDA
S/O VENKATARATNAM YEDIDA
AGED ABOUT 47 YEARS,
HAVING REGISTERED OFFICE AT
SY. NO. 20/1A
DINDADHAHALLI VILLAGE,
HIREGUNTANUR HOBLI,
Digitally CHITRADURGA-577501,
signed by ...PETITIONER
NIRMALA
DEVI (BY SRI. L.M. CHIDANANDAYYA, ADVOCATE)
Location:
HIGH COURT AND:
OF
KARNATAKA 1. STATE OF KARNATAKA
REPRESENTED BY SECRETARY
TO GOVERNMENT,
COMMERCE AND INDUSTRIES DEPT
(MINES, MSME AND SUGAR)
VIKASA SOUDHA,
BANGALORE 560 001.
2. THE DIRECTOR
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DEPARTMENT OF MINES AND GEOLOGY
KHANIJA BHAVAN, R.C.ROAD
BANGALORE 560 001.
3. DEPUTY DIRECTOR
DEPARTMENT OF MINES AND
GEOLOGY OPPOSITE TO
BASAPPA HOSPITAL
B.L.GOWDA LAYOUT
CHITRADURGA DISTRICT
CHITRADURGA-577501.
...RESPONDENTS
(BY SRI. K.S. HARISH, GA)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 &
227 OF THE CONSTITUTION OF INDIA PRAYING TO CALL FOR
THE RECORDS WHICH ULTIMATELY RESULTED IN ENACTING
THE IMPUGNED RULES AT ANNEXURE-A PERMITTING THE
LEVY THE DIFFERENCES OF ROYALTY CHARGES AT THE
PROCESSING PLANT IN PLACE OF MINE HEAD AT THE TIME
OF ISSUING THE MINERAL DISPATCH PERMITS FOR
TRANSPORTING THE BENEFICIATED ORE FROM THE PLANT
OF THE PETITIONER TO THE ULTIMATE CONSUMER AND
ETC.
THIS PETITION, COMING ON FOR PRELIMINARY
HEARING, THIS DAY, ORDER WAS MADE THEREIN AS
UNDER:
CORAM: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE
and
HON'BLE MR. JUSTICE C.M. POONACHA
ORAL ORDER
(PER: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE)
1. The petitioner has filed the present petition, inter alia, praying
that clause (b) Sub-rule 10 of Rule 4 of the Karnataka (Prevention
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of Illegal Mining and Storage of Minerals) Rules, 2011 [hereafter
Rules, 2011] be declared as unconstitutional.
2. The petitioner contends that once the royalty has been
collected at the mines before transportation, further royalty cannot
be collected at a subsequent stage after the mineral has been
beneficiated. He contends that the respondent-authorities are
seeking to collect royalty at the stage of beneficiation plant as a
condition to grant further permit to remove the same.
3. It is not necessary for this Court to once again examine the
challenge to Rule 4(10)(b) of the Rules, 2011 as the same has
been struck down as unconstitutional in terms of a judgment dated
21.04.2023 rendered in W.P No.19773/2018 c/w W.P.
Nos.8022/2022 and 8134/2022.
4. Learned AGA appearing for the State accepts that since the
aforementioned Rule has been struck down, royalty cannot be
collected by the respondents at a subsequent stage. He, however,
also points out that the State has filed a Special Leave Petition
(Civil) Diary No.51205/2023 impugning the order dated 21.04.2023
striking down the said Rule as unconstitutional. He submits that
notice has been issued in the said SLP and the same is pending
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consideration before the Hon'ble Supreme Court. The Supreme
Court has passed an interim order dated 05.02.2024, which reads
as under:
"Delay condoned.
Issue notice returnable in the week commencing
22.07.2024.
Notice will be served by all modes, including dasti.
Counter affidavit/reply will be filed within six weeks after
service/acceptance of notice. Rejoinder affidavit, if any, will be
filed within six weeks after service of counter affidavit/reply.
Learned Senior Advocate appearing for the State of
Karnataka has drawn our attention to the judgments of this
Court in National Mineral Development Corporation Ltd. vs.
State of M.P. & Anr.1 and Tata Steel Limited vs. Union of India
& Ors.22 to submit that iron ore is different from other minerals
and royalty is payable on the basis of the beneficiated
mineral.
Till the next date of hearing, there will be a stay of
operation of the impugned judgment to the extent that the
State of Karnataka will not be asked to refund the payments
received/collected. The respondent will maintain accounts
(2024 6 SCC 281
(2015) 6 SCC 193
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including quantity of the beneficiated mineral produced and
sold. The monthly statements will be submitted to the State of
Karnataka and will also be filed in this Court."
5. As is apparent from the above, as an interim measure, the
Hon'ble Supreme Court has directed that the respondents cannot
be called upon to refund the payments received or collected, till
further orders. It is apparent that although the respondents cannot
be asked to refund the payments already collected, there is no
interim order, which permits the respondents to collect further
royalty on the basis of beneficiated mineral. However, in order to
protect the respondents, the Hon'ble Supreme Court has also
directed the respondent in that case to maintain accounts including
quantity of the beneficiated mineral produced and sold. The Court
has also directed the respondent to submit such monthly
statement to the State of Karnataka and file in this Court.
6. In view of the said interim order, it is considered apposite to
direct the appellants to comply with the similar directions and file a
statement of accounts including the quantity of beneficiated mineral
produced and sold with the respondents on or before the 7th day of
each calendar month.
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7. The respondents are also at liberty to verify the statements
so furnished. However, no further royalty would be collected.
8. Needless to state that the parties would be bound to comply
with the outcome of SLP pending before the Supreme Court.
However, we clarify that if the State prevails in its appeal and
Rules, 2011, are upheld, the State would be entitled to recover the
amounts on the basis of accounts so furnished and verified by
them.
9. No further orders are required to be passed in this petition.
The same is accordingly disposed of.
Sd/-
(VIBHU BAKHRU)
CHIEF JUSTICE
Sd/-
(C.M. POONACHA)
JUDGE
