"Fraudulent, Cheating the Government and the People": Madras High Court Upholds Quarry Lease Cancellation and Orders Criminal Prosecution
Safiya Malik
The High Court of Madras Single Bench of Justice D. Bharatha Chakravarthy upheld the Government Order cancelling a quarry lease for large-scale violations of mining regulations and environmental laws. The Court held that the previous order permitting the continuation of operations was “fraudulent” and constituted a “cheating of the Government and the people.” It directed the jurisdictional Sub Collector to initiate criminal prosecution under Section 21 of the Mines and Minerals (Development and Regulation) Act, 1957. The Court further instructed the State Government to issue show cause proceedings for lease termination and recovery of mineral value and penalty within a prescribed timeframe.
The petitioner had been granted a mining lease over 3.58.9 hectares in Kodangipalayam Village, Palladam Taluk, Tirupur District, effective from 02.12.2021 to 01.12.2026. The lease was backed by the necessary environmental clearance issued on 30.10.2021. A lease agreement was executed and registered, and quarry operations commenced. The petitioner had earlier operated a different quarry on adjacent patta land.
Complaints were subsequently received from local individuals, including the 4th and 5th respondents, alleging environmental violations and damage caused by unauthorized blasting and excavation. A Task Force Committee constituted by the District Collector inspected the quarry and found that safety distances were not maintained and that the petitioner had failed to establish a green belt. This led to a suspension of quarry operations on 07.09.2022.
The petitioner appealed to the Commissioner of Geology and Mining. The Commissioner constituted an inspection team, which found that significant quantities of rough stone and topsoil were extracted without permits in both the active and expired lease areas. Two reports were submitted:
- For the current lease, an excess of 3,21,811 cubic metres of rough stone and 39,405 cubic metres of topsoil were found to have been removed without permits.
- For the expired lease, 16,94,952 cubic metres of rough stone and 76,003 cubic metres of topsoil were identified as illegally extracted.
Based on these findings, the Commissioner levied a penalty of ₹1.72 crores for the current lease and ₹8.67 crores for the expired lease, totalling ₹10.40 crores. An order dated 26.09.2022 allowed the petitioner to remit ₹30 lakhs immediately and the balance in instalments during the lease period.
Following this, the petitioner submitted a revised mining plan, approved on 12.02.2024, allowing the use of heavy earthmoving machinery. The Department of Geology and Mining revoked the earlier suspension, and quarrying operations resumed. However, subsequent complaints led to renewed scrutiny.
Responding to a hunger strike by the 4th respondent and fresh complaints, the Government of Tamil Nadu invoked its revisional powers under Rule 40 of the Tamil Nadu Minor Mineral Concession Rules, 1959. The impugned Government Order G.O.(D).No.106, dated 06.12.2024, reversed the Commissioner's previous order.
The petitioner challenged this order through the present writ petition, claiming violation of natural justice and alleging that statements from departmental officers were considered without the petitioner's knowledge.
The State contended that the petitioner had repeatedly violated environmental norms and had transported large quantities of minerals without valid permits. The 4th and 5th respondents supported this position, citing environmental degradation and damage to residential structures and agriculture. The State asserted that the original order was legally unsustainable, and the revision was necessary to uphold statutory mandates and environmental safeguards.
The Court recorded that the petitioner had committed large-scale violations of the mining plan and extracted minerals vastly in excess of what was permitted. “The violations noticed and accepted are not minimal; rather, they are manifold, mammoth, and significant.”
It was found that the petitioner had removed 3,21,811 cubic metres of rough stone from the current lease area and 16,94,952 cubic metres from the expired lease area, all without valid permits. Regarding the topsoil and weathered rock, 39,405 cubic metres and 76,003 cubic metres were removed respectively without authorisation.
“Any reasonable officer knowing the very purpose of insertion of Rule 41 of the Rules... would only order for cancellation of the quarry licence and ensure forthwith winding up of the operations.”
The Court reviewed the earlier order passed by the Commissioner on 26.09.2022 and found that the order had failed to initiate prosecution under Section 21 of the MMDR Act, which mandates imprisonment and penalties for such offences. It held that the statutory requirement to recover the full value of illegally extracted minerals had also been ignored.
“Fraudulent representation is made and agreed upon with the motive to deceive the huge sum of money due to the Government. An act of fraud vitiates every solemn act.”
Referring to the Supreme Court’s decision in Common Cause v. Union of India, the Court stated: “There can be no compromise on the quantum of compensation that should be recovered from any defaulting lessee — it should be 100%.”
The Court described the earlier order allowing continued quarrying as “fraudulent” and “unfathomable,” noting: “While the barest minimum amount is levied, what is shocking is that even this minimum penalty is not collected, and, quite generously, for a grave polluter, instalments were allowed, with a mere payment of ₹30 lakhs.”
The Court observed that the revised mining plan was granted despite proven violations: “When the licensee had gone twice the depth in the former quarry... revised mining plan is directed and the concerned authority also grants the same.”
On the issue of natural justice, the Court held that the petitioner was given an opportunity to respond and that internal communications between officials did not violate procedural fairness.
The Court upheld the Government Order in G.O.(D).No.106, dated 06.12.2024, and dismissed the writ petition.
It directed that the jurisdictional Sub Collector of Tirupur, or such other officer, shall file a private complaint initiating prosecution against the accused persons for the offences committed, as determined by the inspecting team.
The Court instructed the first respondent to issue a show cause notice to the petitioner regarding the premature termination of the existing lease and for recovery of the value of minerals and appropriate penalty for seigniorage fee. The show cause notice is to be issued within two weeks from the date of receipt of the court’s uploaded order.
The petitioner is entitled to submit an explanation, which shall be duly considered. Supplementary orders to the impugned Government Order shall be issued within twelve weeks thereafter.
The appropriate authorities shall consider mitigation measures at the site.
The Court appreciated the first respondent’s action and urged a full review of the episode, with disciplinary action against erring officials if warranted.
The conduct of Mr. Vinith, I.A.S., District Collector of Tirupur, was noted with approval for initiating inspection and uncovering violations.
There was no order as to costs, and the miscellaneous petitions were closed.
Advocates Representing the Parties
For the Petitioner: Mr. Srinath Sridevan, Senior Counsel for Mr. P.S. Prabhu
For Respondents: Mr. Stalin Abimanyu, Additional Government Pleader, Mr. K. S. Karthikraja, Mr. N. D. Shivakumaran
Case Title: R. Ramakrishnan v. The Secretary to Government of Tamil Nadu & Ors.
Neutral Citation: 2025:MHC:1200
Case Number: W.P.No.39146 of 2024
Bench: Justice D. Bharatha Chakravarthy
[Read/Download order]
