2007 Supreme(Kar) 212

2008 (4) KLO 375 AC 335
IN THE HIGH COURT OF KARNATAKA
Jawad Rahim, J.
W.P. No. 19519 of 2004
Deepchand Kishanlal - Petitioner
Vs.
State of Karnataka and Others - Respondents
Decided on 27-3-2007

Result: Petition allowed.

Headnote:(A) Mining Consumption Rules, 1960 - Rule 2 - Dead rent - Demand for - Sustainability - Licencee applying for renewal of licence - Renewal of licence from date of expiration after elongated pursuasion - Licencee seeking transport permit - Authority demanding dead rent from date of expiry of original licence - Held, not justifiable.

       Held: Though MMRD Act, 1957 and M.C. Rules, 1960 make the lessee liable to pay deed rent or royalty, levying of such dead rent or royalty is dependent uponthe actual lease granted to the lessee. It is noticed that the renewal of lease granted to the petitioner vide notification dated 17-12-1992 and the deed of lease executed on 10-4-1995 renewing the lease for twenty years is with retrospective effect, i.e., from the date of expiry of original lease. Such renewal of lease retrospectively is under the then existing provisions so as to keep continuity of the lease. It is just a legal fiction. But that does not justify levying of either dead rent or royalty. It is not in dispute that the royalty is charged only on the basis of quantity of the mineral removed and transported. That means, the amount of royalty payable is to be determined by the Government on the basis of quantity of the mineral mined from the site by the lessee, annually. That is to say the lessee becomes liable to pay royalty in respect of the financial benefit the lessee derives from the quantity of mineral mined by him during the year. But dead rent is leviable only on the basis of the leased minind area and in physical possession of the lessee, available for mining operation during the relevant period. Thus, for levying dead rent, the lessee should be shown to be in possession of the mining area under the mining lease and its availability for mining therefore, depends upon the valid grant of mining lease. Only then the lessee will be liable to pay dead rent.

       (B) Mines and Minerals (Regulation and Development) Act, 1957 - Section 15 - Dead rent - Demand for - Legality. See, Mining Corporation Rules, 1960