It validated the Karnataka government’s decision to deduct an additional 5% royalty from the security deposit of BMM Ispat, linking the rate of payment to the date of movement of the minerals.
A bench comprising Justices Sanjay Karol and N.K. Singh said that if the date of the movement is after the enhancement in royalty on account of change in law, a contract made before the statutory change cannot be limiting its impact, the apex court said.
It set aside the Karnataka High Court’s order that ruled otherwise.
According to the SC, it was entirely open to BMM Ispat which operates an approximately 1 MTPA integrated steel facility in Karnataka, to remove the iron ore from the site at one go or at any date prior to the amendment, which the company chose not to do.
It is BMM Ispat “who either adopted the piecemeal approach in moving the mineral or moved the entire quantity after the date of the amendment,” the judges said, adding that the company cannot escape payment of enhanced royalty.
The Central Government, by amendment to the Second Schedule appended to the Mines and Minerals (Development and Regulation) Act, 1957 dated September 1, 2014, revised the rates of royalty for iron ore to 15% w.e.f. the very same date, as opposed to 10% applicable on July 20, 2014, the date of the tender between the Karnataka government and BMM Ispat. However, the contract was signed prior to the amendment coming into force.