This writ petition is filed with a prayer to quash an order dated November 2, 2016 passed by the Director, Department of Mines and Geology, calling upon the petitioner to pay a sum of Rs. 215.75 Crores, on the premise that the petitioner had raised iron-ore mineral unlawfully.

2. We have heard Mr.Uday Holla, learned senior advocate for the petitioner and Mr. A.S. Ponnanna, learned Additional Advocate General for the respondents.

3. Briefly stated the facts of the case are, on July 6, 1954, a mining lease No.236 was granted in favour of Mysore Stoneware and Potteries Limited (MSPPL) in respect of 640 acres of land in Chikkanayakanahalli Taluk, for extracting manganese ore and kaolin. The said lease was transferred in favour of Deepchand Kishenlal, the petitioner, under a Deed of Transfer and Assignment dated March 21, 1961. The State Government issued a Notification dated June 20, 1962, permitting the petitioner to extract iron ore from the said land.

4. On June 26, 1962, a registered lease deed was executed by the Governor of Mysore in favour of the petitioner leasing the aforementioned land till July 5, 1974.

5. Before the expiry of lease, the petitioner on July 2, 1973 applied for renewal of the said mining lease in respect of reduced area of 310 acres out of 640 acres. As renewal was not considered by the State Government, a revision was filed by the petitioner before the Central Government and as per order dated August 18, 1979, the Central Government directed renewal of the lease.

6. Despite the order passed by the revisional authority, the State Government did not renew the lease for a long time. Later, on April 11, 2002, a survey and demarcation of the land was undertaken and a report was submitted to the Office of the Director of Mines and Geology. It is only, thereafter, that a registered lease deed dated April 1, 2004, came to be executed granting lease of 310 acres of land in favour of the petitioner. The lease deed states that the property is leased for a term of 20 years commencing from April 27, 2002.

7. After execution of the renewed mining lease, the petitioner continued his mining operations. He has paid royalty on the mineral extracted by him as seen from the audit reports and ‘inspection and verification reports’ for different years from 2001-02 ending with report dated September 29, 2010 for the year 2009-10, of the Deputy Director of Mines and Geology.

8. During 2007, the State Government referred various issues concerning illegal mining in Karnataka to the Lokayukta. On July 27, 2011, the Lokayukta submitted a report to the State Government. The said report, indicted the petitioner of illegal mining operation and recommended recovery of Rs. 215.75 crores towards the value of the iron-ore extracted between the period 2003 to 2008. The report did not indicate as to what has been the basis on which the amount of Rs. 1500/- per MT was arrived at for computing the alleged loss. The Director of Mines and Geology, however, issued a show cause notice dated June 22, 2012, to the petitioner to show cause as to why an amount of Rs. 215.75 crores be not recovered from the petitioner. A reply was sent by the petitioner to this notice denying its liability.

9. In the meanwhile, on April 18, 2013, Writ Petition (Civil) No. 562 of 2009 filed before the Supreme Court of India by Samaja Parivarthana Samudaya, came to be allowed and all mining leases which fell under ‘C’ category were directed to be cancelled. Pursuant thereto, the State Government by their Notification dated September 12, 2013, have cancelled various leases including the lease granted in favour of the petitioner.

10. Mr. Uday Holla, learned senior advocate contended that, in W.P. No. 562 of 2009, an application-I.A. No. 140 of 2013 was filed by Samaja Parivarthana Samudaya to direct the State Government to assess the quantum of loss caused to the exchequer on account of mining carried out by Category A, B, C lease holders. The Supreme Court of India while pa