The court reaffirmed the authority of state governments to impose penalties under minor mineral concession rules, emphasizing that such penalties are lawful per Sections 14, 15, and 21 of the MMDR Act.

ORDER :

1. This Court vide order dated 14.11.2023 allowed this Writ Petition. However, upon Review Application (I.A.No. 1 of 2024) being filed by respondents, vide order dated 31.01.2025, this Court allowed the same and recalled the order dated 14.11.2023 with a direction to respondents to file counter affidavit in the Writ Petition. After filing counter by the State and reply by petitioner, this Court has taken up the present Writ Petition for final disposal with the consent of both the parties.

2. The case of petitioner is that pursuant to the Application made for grant of quarry lease for building stone & road metal over an extent of 1.00 Hectares in Sy.No.85 of Regulachelaka Village, Raghunadhapalem Mandal, Khammam District, quarry lease was granted in their favour for 15 years by the 3rd respondent on 26.11.2004. Accordingly, work orders were issued by the 4th respondent on 03.12.2004 and the lease was in force till 2.12.2019. Petitioner applied for renewal of Quarry lease on 17.04.2018 as per the provisions of the Telangana Minor Mineral Concession Rules, 1966 (for short ‘the Rules’) and it is under consideration with the 3rd respondent. They being the Class-I contractor, is in need of mineral building stone and metal for laying roads and construction of buildings; for the effective operation of the quarry lease and for optimum utilization of the extracted mineral, petitioner had also established Stone Crusher unit for captive purpose which is being operated under the name and style of "M/s. Kisan Stone Crusher" in the nearby locality in the patta land in Sy.Nos.179,102 of Mallimadugu Village, Khammam District with unit capacity 200 TPH and it is in running condition. While things stood thus, petitioner was served with show cause notice dated 16.09.2020 under Rules 34 and 26(2) of 1966 Rules by the 4th respondent. It is alleged that petitioner indulged in illegal extraction of mineral to the quantity of about 1,14,398 M3 of stone & metal. Petitioner gave reply notice dated 29.09.2020, however, without considering the same, the impugned notice was issued wherein the Petitioner is asked to pay an amount of Rs.9,43,79,164/- including Normal Seigniorage fee of Rs.85,79,924/- along with 10 times penalty of Rs.8,57,99,240/- for the alleged mineral extracted outside the lease area for excavated quantity of 1,14,398 M3 of building stone and road metal.

Challenging the impugned demand notice, petitioner preferred Revision before the 1^st respondent on 06.11.2020. Seigniorage fee was deducted by the Government (Engineering Department) from the bills of contractor for the mineral consumed for Government works as per G.O.Ms.No.23, 1 & CAD Department, dated 05.03.1999. Though the said fact was brought to the notice of the revision authority along with the documentary evidence, without considering the same, they disposed of the revision in routine manner asking petitioner to pay normal Seigniorage fee along with one time penalty. It is further directed that the 4th respondent should consider the Application for regularizing the unauthorized occupation as per rules.

It is contended by petitioner that the impugned revision order dated 30.08.2022 issued by the 1^st respondent and the consequential letter dated 05.09.2022 issued by the 4^th respondent ar