- Court upholds statutory lease extension through Mar’30
- Royalty calculation to rely on actual enlightenment records
The Karnataka High Court has quashed an INR 482.7 crore penalty imposed on ACC over limestone mining operations in Kalaburagi district. The court held that ACC’s mining lease was statutorily extended until 31 March 2030 under Section 8A(5) of the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act).
Statutory lease extension upheld
The Department of Mines and Geology (DMG) had argued that ACC’s mining after 18 February 2023 was unauthorised because a supplementary lease deed had not been executed. The court rejected this position, holding that the statutory extension remained effective even without the supplementary deed. It also directed the State to execute the supplementary lease deed without insisting on a no-dues certificate.
Royalty linked to actual weighment
The court also upheld the decision rejecting royalty calculations based on the State’s notional 1:1.42 limestone-to-clinker consumption ratio. ACC had installed a beltometer and maintained weighment records, while no material was presented to establish that the equipment was inaccurate.
The court therefore found insufficient basis to replace actual weighment data with a notional formula for calculating royalty.
Implications for limestone availability
The ruling removes the INR 482.7-crore penalty and supports continuity of ACC’s captive limestone mining operations in Karnataka. The court also directed restoration of full access to the Integrated Lease Management System (ILMS) portal and refund of INR 125 crore deposited by ACC under an interim court order.
Outlook
The ruling could support greater certainty around ACC’s limestone supply for its Karnataka operations through March 2030. The operational benefit will depend on execution of the supplementary lease deed and continuation of mining activity under the extended lease.
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