Bengaluru, 12 September

The Karnataka High Court has quashed a ₹482.69 crore penalty against the Adani group’s cement company, ACC Limited, for limestone mining operations in Kalaburagi. 

A Bench of Chief Justice Vibhu Bakhru and Justice KS Hemalekha quashed the penalty imposed by the Karnataka Department of Mines and Geology (DMG) against the firm, Bar and Bench reported. 

ACC extracts limestone from mines in Ingalgi and Ravoor villages for captive use in its cement plant. The State imposed the penalty after treating mining after 2023 as illegal and sought royalty based on a notional consumption formula.

But the bench said ACC’s lease, granted in 1963, was statutorily extended under Section 8A(5) of the MMDR Act up to 31 March, 2030. Failure to execute a supplementary lease deed, as was the case here, did not deprive ACC of its right to continue mining, the bench remarked. 

The State had not granted the supplementary lease deed on the basis that ACC had not cleared arrears on royalty payable to the State on the extraction of limestone. It contended that since ACC carried on mining activities after the expiration of the lease, it would compute royalty, Bar and Bench reported.

The court upheld the that royalty must be based on limestone consumed.