- 1 - HC-KAR NC: 2025:KHC:25281 WP No. 12984 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9TH DAY OF JULY, 2025 BEFORE THE HON'BLE MR. JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 12984 OF 2025 (GM-RES) BETWEEN: 1. BANAVALLI MATH JAGADEESHWARA SWAMY S/O.NANJAIAH B.M. AGE 57 YEARS CLASS 1 CONTRACTOR. R/O. 1922/91, 4TH MAIN SWAMY VIVEKANANDA BADAVANE DAVANAGERE AT. PO. DIST-DAVANAGERE - 577 004. … PETITIONER (BY SRI. BASAVARAJAIAH N., ADVOCATE) AND: 1. STATE OF KARNATAKA DEPARTMENT OF MAJOR IRRIGATION REP. 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. Digitally signed by PRAKASH N Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:25281 WP No. 12984 of 2025 3. EXECUTIVE ENGINEER KARNATAKA NEERAVARI NIGAMA LTD. DRP.DIVISION SHIKARIPURA NEAR BUS STAND AT. PO. SHIKARIPURA DIST: SHIVAMOGGA-577 427. … RESPONDENTS (BY SRI. SHAMANTH NAIK, HCGP FOR R1; SRI B.R. PRASHANTH., ADVOCATE FOR R2 & R3) 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 ANNEXURE-D AND ETC. THIS PETITION COMING ON FOR PRELIMINARY HEARING THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S SUNIL DUTT YADAV ORAL ORDER Petitioner has sought for issuance of writ in the nature of mandamus to direct the respondents not to deduct five times of penalty on the royalty amount from the bills of the petitioner. 2. It is the case of the petitioner that the respondents do not have jurisdiction to deduct any amount apart from royalty amount. Reliance is placed on the order - 3 - HC-KAR NC: 2025:KHC:25281 WP No. 12984 of 2025 passed by the Co-ordinate Bench in W.P.No.10331/2020 dated 12.11.2020. 3. Perused the order passed in W.P.No.10331/2020. Para Nos. 6 and 7 of the said order reads as follows: "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 - 4 - HC-KAR NC: 2025:KHC:25281 WP No. 12984 of 2025 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." 4. In light of the same, it is clear that the Government Departments cannot saddle the petitioner with penalties while they are at liberty to deduct royalty amount as agreed. 5. Respondents to consider payment of bills without insisting on five times of penalty on the royalty amount. Such direction is passed in light of assertion of the petitioner that respondents are withholding bills only on the ground that petitioner is not ready to pay five times of penalty on the royalty amount. - 5 - HC-KAR NC: 2025:KHC:25281 WP No. 12984 of 2025 6. Accordingly, the petition is disposed off. Sd/- (S SUNIL DUTT YADAV) JUDGE VP