- 1 - HC-KAR NC: 2025:KHC:43632-DB WP No. 32386 of 2025 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, CHITRADURGA-577501, …PETITIONER (BY SRI. L.M. CHIDANANDAYYA, ADVOCATE) AND: 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 Digitally signed by NIRMALA DEVI Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:43632-DB WP No. 32386 of 2025 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 - 3 - HC-KAR NC: 2025:KHC:43632-DB WP No. 32386 of 2025 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 - 4 - HC-KAR NC: 2025:KHC:43632-DB WP No. 32386 of 2025 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 1 (2024 6 SCC 281 2 (2015) 6 SCC 193 - 5 - HC-KAR NC: 2025:KHC:43632-DB WP No. 32386 of 2025 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. - 6 - HC-KAR NC: 2025:KHC:43632-DB WP No. 32386 of 2025 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 BS - List No.: 1 Sl No.: 11