Case Note & Summary
The petitioner, M/s. JSW Steel Limited, is an integrated steel plant that was allotted 629.92 acres of land by the Karnataka Industrial Area Development Board for creation of an impounding reservoir. The lease was executed on 10th April 2015 for 99 years. The petitioner sought permission to excavate ordinary earth from the same land to construct an earthen dyke for the reservoir. The Deputy Commissioner, by letter dated 20th June 2017, granted permission subject to certain conditions, including Condition No.1 which required payment of royalty on the excavated earth as per the Karnataka Minor Mineral Concession Rules, 1994. The petitioner challenged this condition in a writ petition under Article 226 of the Constitution of India. The court considered whether excavation of earth for construction of a dyke within the leased land constitutes 'mining' under the Mines and Minerals (Development and Regulation) Act, 1957. The court held that the excavation was not for commercial exploitation but for improvement of the land for the reservoir project. It distinguished between quarrying for sale and excavation for construction purposes. The court quashed Condition No.1 in the Government Order dated 04.10.2017, directing that no royalty be levied on the excavation of ordinary earth for the construction of the earthen dyke. The petition was allowed.
Headnote
A) Mining Law - Levy of Royalty - Excavation for Construction - Mines and Minerals (Development and Regulation) Act, 1957, Section 15 - Karnataka Minor Mineral Concession Rules, 1994, Rule 72 - The petitioner, a steel plant, was allotted land for a water reservoir and sought permission to excavate earth for constructing an earthen dyke. The Government Order imposed a condition levying royalty on such excavation. The court held that excavation of ordinary earth for construction of a dyke within the same land does not amount to 'mining' and is not subject to royalty, as it is not for commercial exploitation but for improvement of the land. (Paras 3-8) B) Mining Law - Quarrying vs. Mining - Distinction - Mines and Minerals (Development and Regulation) Act, 1957 - The court distinguished between 'quarrying' for commercial purposes and excavation for construction purposes. The latter, being incidental to the development of the land, does not attract royalty under the Act. (Para 7) C) Administrative Law - Government Order - Quashing of Condition - The court quashed Condition No.1 in the Government Order dated 04.10.2017 which levied royalty on excavation of earth for the reservoir project, as it was beyond the scope of the MMDR Act. (Para 8)
Issue of Consideration
Whether excavation of ordinary earth for construction of an earthen dyke/reservoir within leased land amounts to 'mining' attracting royalty under the Mines and Minerals (Development and Regulation) Act, 1957 and the Karnataka Minor Mineral Concession Rules, 1994.
Final Decision
Writ petition allowed. Condition No.1 in Government Order dated 04.10.2017 quashed. No royalty to be levied on excavation of ordinary earth for construction of earthen dyke.
Law Points
- Interpretation of 'mining' under Mines and Minerals (Development and Regulation) Act
- 1957
- Levy of royalty on excavation of ordinary earth for non-mining purposes
- Distinction between mining and excavation for construction
- Applicability of Section 15 of MMDR Act and Rule 72 of Karnataka Minor Mineral Concession Rules
- 1994
