Karnataka

Govt. showed leniency to JSW Steel: HC

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It only sought royalty though company was involved in illegal mining, says court

The Karnataka High Court has said that the State government had shown leniency to JSW Steel Ltd., though the company had carried out mining of minor minerals without licence, by merely demanding payment of royalty for using excavated minerals.

A Division Bench comprising Chief Justice Abhay Shreeniwas Oka and Justice S.R. Krishna Kumar made these observations while rejecting the company’s petition challenging the government’s action of demanding payment of around ₹8 crore as royalty for using excavated minerals for construction of an impounding reservoir, which was meant for supplying water to the company’s integrated steel plant at Toranagallu in Ballari district.

The government, in 2014-15, gave 629.92 acres of land at Gonalu village of Hosapet taluk in Ballari district on a 99-year lease for constructing an impounding reservoir to utilise water allotted to the plant from Almatti and Narayanapura dams.

Soil re-use

The company had made a request to the government for permitting excavation and re-use of soil for construction of earthen dyke as construction was purely of earthen embankment and for using excavated mineral for laying the foundation of the reservoir.

The Department of Mines and Geology, considering it as a case of exception from obtaining licence for quarrying under Rule 3A of the Karnataka Minor Minerals Concession Rules, 1994, on October 4, 2017, allowed the company to use excavated minerals for construction of the reservoir on payment of royalty.

Self-consumption

However, the company, which initially paid ₹4 crore under protest, claimed that the government could not have levied royalty as minerals were for self-consumption.

The court said the rule that exempts obtaining of quarrying licence in case of digging of wells for water or desilting tanks or ponds or digging of earth for foundation of buildings is not available for exemption from obtaining licence as a reservoir cannot be equated to a well or a building.

“Thus, for carrying out excavation of minor minerals, the petitioner [company] was under obligation to obtain a licence.

Instead of taking action against the petitioner for carrying out excavation of minor minerals in contravention of Rule 3 of the KMMCR Rules, a demand was made for payment of royalty and other amounts in terms of Rule 36 by proceeding in the assumption that there was a lease or licence granted to the petitioner to excavate minor minerals,” the Bench said, while holding that there was no illegality in demanding royalty.

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Printable version | Dec 11, 2019 5:27:23 PM | https://www.thehindu.com/news/national/karnataka/govt-showed-leniency-to-jsw-steel-hc/article30064216.ece

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