Court orders Karnataka to refund Rs 4000 crore collected as Forest Development Fund from mining companies

The High Court has dismissed the notification issued to collect Forest Development Fund (FDF) from mining companies. State Government to reimburse the complete amount collected as FDF fees from mining companies retrospective from 2008. The HCruled that the State Government’s act was unconstitutional and dismissed the notification. he State Government has appealed to the Supreme Court questioning the HC ruling and it is under investigation.

The High Court has dismissed the notification issued to collect Forest Development Fund (FDF) from mining companies that are engaged in mining in forests and has directed the State Government to reimburse the complete amount collected as FDF fees from mining companies retrospective from 2008, reported Kannada Prabha.

Over 40 mining companies had filed applications requesting cancelling of the notification. A HC bench headed by Chief Justice S K Mukherjee and Justice P S Dinesh Kumar admitted the applications and issued the order.

The State Government does not have the power to impose FDF.  The State Government’s act is outside the purview of Constitution and hence HC has dismissed the notification.  Now the State Government has to reimburse the FDF collected from 2008 amounting to about Rs 4000 to the mining companies.

On 2008 Aug 16 the State Government had passed an amendment to Karnataka Forests Amendment Act 2016, section 98(A), ordering mining companies engaged in mining in the forest areas to pay 12 per cent FDF.  Several mining companies had filed applications to court questioning the notification.

The HC division bench that heard the case and ruled that the State Government’s act was unconstitutional and dismissed the notification.

The State Government has appealed to the Supreme Court questioning the HC ruling and it is under investigation. Meanwhile the State Government had passed an amendment to the Act collecting the FDF. The HC ruling has served a big blow to the State Government.