Karnataka Rare Earth & Anr vs The Sr.Gelt.,Dep.Of Mines And Geology & ...

The Supreme Court addressed the validity of quarry leases granted under the Karnataka Minor Mineral Concession Rules, specifically Rule 3A, which prohibits such grants. The Court held that the appellants, who operated under interim orders allowing transport permits and had paid the requisite royalty, acted lawfully despite the leases being invalidated by the High Court. The Court ruled that the demand for payment of the price of granite blocks exported by the appellants constituted a penalty and was therefore unsustainable, allowing the appeals.