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“ Reportable”

IN THE SUPREME COURT OF INDIA

CIVIL ORIGINAL JURISDICTION

WRIT PETITION (CIVIL) NO. 114 OF 2014

Common Cause … Petitioner

versus

Union of India and others … Respondents

With

WRIT PETITION (CIVIL) NO. 194 OF 2014

Prafulla Samantra and another … Petitioners

versus

Union of India and others … Respondents

J U D G M E N T

Jagdish Singh Khehar, J.

1. This Court by its order dated 16.5.2014, in Common Cause v.

Union of India, (2014) 14 SCC 155, restrained 102 mining leaseholders

from carrying on any mining operations. The above order was passed on

account of the fact, that none of these leaseholders were in possession of

clearances/approvals/consent, required for carrying on the mining

operations. The above order dated 16.5.2014, granted liberty to the

leaseholders whose operations were suspended, to move this Court after

obtaining the requisite clearances/approvals/consent, whereupon this

Court would, on being satisfied, revoke the suspension order.

2. A number of applications came to be filed before this Court

seeking revocation of the above order of suspension, wherein the

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concerned applicants asserted, that they had obtained all

clearances/approvals/consent, and further that, they were now legally

eligible to recommence mining operations. During the course of such

consideration at our hands, Mr. A.D.N. Rao, learned amicus curiae

pointed out, that the question of granting permission to the leaseholders

to recommence mining operations would arise, only if the leaseholders

have a subsisting mining lease. It was therefore submitted, that before

determining the legitimacy of the claim raised by the applicants, this

Court should first examine, whether the applicants have a subsisting

right to carry on mining operation, under a valid lease.

3. This submission advanced at the hands of the learned amicus

curiae, was strongly contested by learned counsel representing the

applicants. They invited our attention to paragraph 4 of the order dated

16.5.2014, passed in the Common Cause case, so as to contend, that this

Court had not postulated such a precondition, and therefore, the

submission advanced at the hands of the learned amicus curiae, should

be rejected. Paragraph 4 aforementioned, is extracted hereunder:

“4. We have considered the report dated 25.4.2014 of the CEC, and the

submissions made by learned Counsel appearing for different parties,

and we find that 102 mining leases do not have requisite

environmental clearances, approvals under the Forest (Conservation)

Act, 1980, approved Mining Plan and/or Consent to Operate. A list of

these 102 mining leases is annexed to the report of the CEC as

Annexure R-2. The CEC has, however, stated in the report that mining

operations in these 102 mining leases have been suspended and these

102 mining leases have been classified as non-working leases. We

direct that mining operations in these 102 mining leases listed in

Annexure R-2 of the report of the CEC shall remain suspended, but it

will be open to such lessees to move the concerned authorities for

environmental clearances, approval under the Forest (Conservation)

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Act, 1980, approval of Mining Plan or Consent to Operate and as and

when the mining lessees are able to obtain all the

clearances/approval/consent, they may move this Court for

modification of this interim order in relation to their cases.”

(highlighting – as per emphasis of learned counsel)

4. Having perused the position expressed by this Court, while

suspending mining operations with reference to 102 mining leases, it is

apparent, that the said direction was issued for the sole consideration,

that the concerned leaseholders were not in possession of all

clearances/approvals/consent. And as such, they were permitted to

move applications before this Court, for modification of the order of

suspension, as and when all clearances/approvals/consent were

obtained. It is however relevant to notice, that such clearances,

approvals and consent can be meaningful to the applicants, only if they

are with reference to subsisting mining lease(s). In case a leaseholder

does not have a subsisting mining lease, he is precluded under the

provisions of the Mines and Minerals (Development and Regulation) Act,

1957 (hereinafter referred to as, the MMDR Act), from carrying on any

mining operations. It is therefore, that we accept the submission

advanced by Mr. A.D.N. Rao. And it is also for the above reason, that we

required learned counsel representing the mining leaseholders, desirous

of lifting the suspension order dated 16.5.2014, to substantiate whether

or not, they were possessed of a subsisting mining lease.

5. To commence with, we were of the view, that a

decision/conclusion in this behalf, would emerge from the actual

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document by which the mining lease had been granted (or renewed).

During the course of hearing it emerged, that the deduction as to

whether the applicant-leaseholders were possessed of subsisting mining

lease(s), was a complicated question of fact and law. Since the same has

to be resolved, before the claim of the applicants for revoking the

suspension order (– dated 16.5.2014) can be accepted, we would

endeavour to lay down parameters for such determination.

6. A leaseholder would have a subsisting mining lease, if the period

of the original grant is in currency. Additionally, a leaseholder whose

original lease has since expired, would have a subsisting lease, if the

original lease having been renewed, the renewal period is in currency.

7. It is also essential to notice, that to start with, renewal could be

granted to a mining leaseholder, any number of times, under the

unamended Section 8 of the MMDR Act. The duration of the original

grant (of the mining lease), as also, the duration of renewals, and the

number of permissible renewals, that a leaseholder can seek, have

undergone a change. We shall dwell upon the instant aspect of the

matter in the instant order, as it has a vital bearing on the issue, whether

or not the applicant-leaseholders are possessed of subsisting mining

leases. For this, in the first instance, reference may be made to the

provision regulating the grant of a mining lease, as also, renewal of a

mining lease, namely, Section 8 of the MMDR Act. The instant provision,

in the manner it came to be structured after being amended in 1994

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(which position remained unamended till 18.7.2014), is extracted

hereunder:

“8. Periods for which mining leases may be granted or renewed.—

(1) The maximum period for which a mining lease may be granted

shall not exceed thirty years:

Provided that the minimum period for which any such mining lease

may be granted shall not be less than twenty years;

(2) A mining lease may be renewed for a period not exceeding twenty

years.

(3) Notwithstanding anything contained in sub-section (2), if the State

Government is of opinion that in the interests of mineral development

it is necessary so to do, it may, for reasons to be recorded, authorise

the renewal of a mining lease in respect of minerals not specified in

Part-A and Part-B of the First Schedule for a further period or periods

not exceeding twenty years in each case.

(4) Notwithstanding anything contained in sub-section (2) and sub-

section (3), no mining lease granted in respect of mineral specified in

Part-A or Part-B of the First Schedule shall be renewed except with the

previous approval of the Central Government.”

(emphasis is ours)

A perusal of Section 8(1) extracted above reveals, that the maximum

period for which a mining lease could be granted, would not exceed thirty

years. After the expiry of the original grant, the mining lease could be

renewed in the first instance for a further period not exceeding twenty

years, under Section 8(2). For all intents and purposes, the renewal

contemplated under Section 8(2), shall be referred to as the “first

renewal”. The “first renewal”, required a clearance of the State

Government, and the approval of the Central Government. Further

renewals, after the expiry of first renewal granted under Section 8(2),

were also permissible, and were provided for under Section 8(3) of the

MMDR Act. The renewal(s) postulated under Section 8(3), for all intents

and purposes, shall be described hereinafter, as the “second (or third, or

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fourth …) renewal”. The renewal(s) under Section 8(3) could be granted

only if the State Government expressed its satisfaction, that the grant of

the second or subsequent renewal, would be in the interest of mineral

development. Furthermore, the “second renewal” or still further

renewal(s), had to also have the approval of the Central Government.

Even though the period of subsequent renewals, is of no significance,

insofar as the present controversy is concerned, it may be mentioned,

that all subsequent renewals including the second, third or further

renewals, could individually extend to a period not exceeding twenty

years.

8. The interpretation placed by us, on Section 8 of the MMDR Act

(as it existed in 1994), finds support from Rule 24A of the Mineral

Concession Rules, 1960 (hereinafter referred to as, the Mineral

Concession Rules) – as the rule existed prior to 18.7.2014. Rule 24A in

the manner in which it was then structured, is extracted below:

“24A. Renewal of mining lease. —(1) An application for the renewal of

a mining lease shall be made to the State Government in Form J, at

least twelve months before the date on which the lease is due to

expire, through such officer or authority as the State Government may

specify in this behalf.

(2) The renewal or renewals of a mining lease granted in respect of a

mineral specified in Part A and Part B of the First Schedule to the Act

may be granted by the State Government with the previous approval

of the Central Government.

(3) The renewal or renewals of a mining lease granted in respect of a

mineral not specified in Part A and Part B of the First Schedule to the

Act may be granted by the State Government:

Provided that before granting approval for second or subsequent

renewal of a mining lease, the State Government shall seek a report

from the Controller General, Indian Bureau of Mines, as to whether it

would be in the interest of mineral development to grant the renewal

of the mining lease.

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Provided further that in case a report is not received from Controller

General, Indian Bureau of Mines in a period of three months of receipt

of the communication from the State Government, it would be deemed

that the Indian Bureau of Mines has no adverse comments to offer

regarding the grant of the renewal of mining lease.

(4) An application for the renewal of a mining lease shall be disposed of

within a period of six months from the date of its receipt.

(5) If an application is not disposed of within the period specified in

sub-rule (4) it shall be deemed to have been refused.

(6) If an application for renewal of a mining lease made within the time

referred to in sub-rule (1) is not disposed of by the State Government

before the date of expiry of the lease, the period of that lease shall be

deemed to have been extended by a further period till the State

Government passes order thereon.

xxx xxx xxx”

(emphasis is ours)

A perusal of sub-rule (1) of Rule 24A reveals, that an application for

renewal of a mining lease, had to be made at least twelve months before

the date of expiry of the existing mining lease. It is therefore essential for

us to record, that unless such an application had been made at least

twelve months before the date of expiry of an existing mining lease under

Rule 24A of the Mineral Concession Rules, the same could not have been

entertained. And also that, the term of the mining lease held by the

leaseholder would be deemed to have come to an end, on the expiry of

the period depicted in the lease document, if such an application had not

been preferred.

9. The next relevant provision is sub-rule (4) of Rule 24A of the

Mineral Concession Rules. The instant sub-rule required, that an

application for renewal, would be disposed of within six months, from the

date of receipt of such application. We have extracted hereinabove, sub-

rule (5) of Rule 24A, wherein it was mandated, that an application for

renewal, which had not been disposed of within the period of six months,

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as provided for under Rule 24A(4) of the Mineral Concession Rules, would

be deemed to have been refused. It is however relevant to notice, that the

aforementioned sub-rule (5) came to be omitted by an amendment, with

effect from 7.1.1993. It is significant to record, that sub-rule (6) came to

be substituted by an amendment, with effect from 27.9.1994. Sub-rule

(6) of Rule 24A of the Mineral Concession Rules, is of extreme importance

for the determination, whether the applicant-leaseholder is possessed of

subsisting mining lease because a large number of applicants rely on the

instant rule in support of their claim for being possessed of a subsisting

mining lease. Sub-rule (6) aforementioned postulated, that if an

application for renewal of a mining lease (made within twelve months,

before the date on which the existing lease was to expire), had not been

disposed of by the competent authority, the period of lease would be

deemed to have been extended, by a further period till the State

Government passed an order disposing of the renewal application. It is

therefore, that the right to continue mining operations would seemingly

continue ad infinitum, for the simple reason that the State Government

which was the competent authority, had not passed any order(s) on most

of the pending applications seeking renewal.

10. An extremely significant event pertaining to the statutory regime

of mining leases under the MMDR Act, and the Mineral Concession

Rules, took place on 21.4.2014, when this Court passed an order in Goa

Foundation v. Union of India, (2014) 6 SCC 590, and held as under:

“27. Sub-section (1) of Section 8 of the MMDR Act, which provides the

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maximum and minimum periods for which a mining lease may be

granted will not apply to deemed mining leases in Goa because sub-

section (1) of Section 5 of the Abolition Act provides that the period of

such deemed mining leases will extend upto six months from the date

of assent notwithstanding anything contained in the MMDR Act. In

other words, notwithstanding anything contained in sub-section (1) of

Section 8 of the MMDR Act, the period of a deemed mining lease in

Goa was to expire on 22.11.1987 (six months from the date of assent).

Under sub-section (2) of Section 8 of the MMDR Act, a mining lease

may be renewed for a period not exceeding twenty years. Sub-section

(3) of Section 8 , however, provides that notwithstanding anything

contained in sub-section (2), if the State Government is of the opinion

that in the interest of mineral development, it is necessary so to do, it

may for reasons to be recorded, authorise the renewal of a mining

lease in respect of minerals not specified in Part A and Part B of the

First Schedule for a further period or periods not exceeding twenty

years in each case. Thus, renewal beyond the first renewal for a

period of twenty years is conditional upon the State Government

forming an opinion that in the interest of mineral development, it is

necessary to do so and also conditional upon the State Government

recording reasons for such renewal of a mining lease in respect of iron

ore which is not specified in Part A and Part B of the First Schedule.

In TISCO Ltd. v. Union of India (1996) 9 SCC 709, this Court has held

that the language of sub-section (3) of Section 8 is quite clear that

ordinarily a lease is not to be granted beyond the time specified in

sub-section (2) and only if the Government is of the view that it would

be in the interest of mineral development, it is empowered to renew

lease of a lessee for a further period after recording sound reasons for

doing so. This Court has further held in the aforesaid case that this

measure has been incorporated in the legislative scheme as a

safeguard against arbitrariness and the letter and spirit of the law

must be adhered to in a strict manner.

28. The MC Rules have been made under Section 13 of the MMDR Act

by the Central Government and obviously could not have been made

in a manner inconsistent with the provisions of the Act. Sub-rule (6)

of Rule 24A of the MC Rules provides that:

“24-A.(6) If an application for the renewal of a mining lease made

within the time referred to in sub-rule (1) is not disposed of by the

State Government before the date of expiry of the lease, the period

of that lease shall be deemed to have been extended by a further

period till the State Government passes order thereon.”

This sub-rule cannot apply to a renewal under sub-section (3) of

Section 8 of the MMDR Act because the renewal under this provision

cannot be made without express orders of the State Government

recording reasons for renewal in the interest of mineral development.

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In other words, so long as there is a right of renewal in the lessee

which in the case of a mining lease is for a maximum period of twenty

years, the provision regarding deemed extension of a lease can

operate, but if the right of renewal of a mining lease is dependent upon

the State Government forming an opinion that in the interest of

mineral development it is necessary to do so and the State

Government recording reasons therefor, a provision regarding deemed

extension till orders are passed by the State Government on the

application of renewal cannot apply. We are, therefore, of the opinion

that sub-rule (6) of Rule 24A of the MC Rules will apply to a case of

first renewal under sub-section (2) of Section 8 of the MMDR Act other

than a case covered under sub-rule (9) of Rule 24A of the MC Rules,

but will not apply to renewal under sub-section (3) of Section 8 of the

MMDR Act. In our view, the deemed mining leases of the lessees in

Goa expired on 22.11.1987 under sub-section (1) of Section 5 of the

Abolition Act and the maximum of 20 years renewal period of the

deemed mining leases in Goa as provided in sub-section (2) of

Section 8 of the MMDR Act read with sub-rules (8) and (9) of Rule 24A

of the MC Rules expired on 22.11.2007.”

(emphasis is ours)

11. At this juncture, it would be necessary to notice, that prior to the

decision in the Goa Foundation case, the State Government while

interpreting sub-rule (6) of Rule 24A, had been allowing leaseholders to

continue mining operations without any outer limit. In view of the

conclusions drawn in the Goa Foundation case, it came to be rightfully

understood, that such operations could go on (within the mandate of Rule

24A(6), under which such application was made) till the expiry of the

maximum period postulated for the first renewal, i.e., for a period of

twenty years. The second and subsequent renewal(s) were held to be not

automatic. Because the second and subsequent renewals required the

satisfaction of the State Government, by way of recorded reasons, as

noticed hereinabove. Therefore, after the judgment in the Goa Foundation

case, it came to be understood, that in the absence of an express order of

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second or subsequent renewal(s), a mining lease would expire after

completion of the period of first renewal.

12. In order to give effect to the conclusions recorded by this Court

in the Goa Foundation case, Rule 24A(6) came to be amended on

18.7.2014. The above amendment is reproduced below:

“Rule 24-A

xxx xxx xxx

(6) If an application for first renewal of a mining lease made within the

time referred to in sub-rule (1) is not disposed of by the State

Government before the date of expiry of the lease, the period of that

lease shall be deemed to have been extended by a further period of two

years or till the State Government passes order thereon, whichever is

earlier:

Provided that the leases where applications for first renewal of mining

lease have been made to the State Government and which have not

been disposed of by the State Government before the date of expiry of

lease and are pending for disposal as on the date of the notification of

this amendment, shall be deemed to have been extended by a further

period of two years from the date of coming into force of this

amendment or till the State Government passes order thereon or the

date of expiry of the maximum period allowed for first renewal,

whichever is the earliest:

Provided further that the provisions of this sub-rule shall not apply to

renewal under sub-section (3) of Section 8 of the Mines and Minerals

(Development and Regulation) Act, 1957.”

(emphasis is ours)

The above amendment, has to be carefully understood. Undoubtedly, the

amendment of sub-rule (6) of Rule 24A of the Mineral Concession Rules

now provides, that the period of mining operations would be deemed to be

extended for a maximum period of two years, after the expiry of the

period of the original grant, unless of course, the State Government takes

a conscious decision on the application for renewal. We are of the view,

that the instant provision, has to be read in continuation of the

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erstwhile/previous Rule 24A (which subsisted till the instant amendment

came into effect on 18.7.2014). The unamended provision, postulated an

unlimited period of mining lease, in the absence of a determinative order,

on an application for renewal. Therefore, even if the original lease had

expired many years ago, but if a renewal application had been preferred

within the permissible time contemplated under Rule 24A(1), the same

would have continued to subsist, till the instant amendment took effect

on 18.7.2014. The importance of this conclusion is for the reason, that

the proviso to new Rule 24A(6) – amended on 18.7.2014, consciously

provided, that the lease period where applications had been filed seeking

“first renewal”, would be deemed to have been extended for a further

period of two years, from the date of coming into force of the amended

sub-rule (6). Accordingly, in all cases wherein the “first renewal” had

been sought, but not determined, the mining operations were extended,

by operation of law, till 18.7.2014.

13. The case of most of the applicants before this Court is, that they

had moved applications within the time permissible under Rule 24A(1),

and as such, on account of the unamended sub-rule (6) of Rule 24A, and

thereafter, on the basis of the amended sub-rule (6) of Rule 24A, their

right to continue mining operations, would be deemed to have been

extended up to 18.7.2016. We find that their claim is valid, and accept

the same, insofar as the legal position is concerned, but only with

reference to “first renewals”. We may hasten to explain, that the instant

determination emerges from an interpretation of the unamended and

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amended Rule 24A(6). Whether subsequent amendments would alter the

situation, is being determined hereinafter.

14. One clarification is imperative at this stage. After the passing of

the order on 21.4.2014, in the Goa Foundation case, subsisting “first

renewals” under Rule 24A, would expire on the completion of a further

period of twenty years, after the expiry of the period contemplated under

the original grant, or as interpreted above. There was no similar

automatic grant of “second renewals”, after the Goa Foundation case.

Therefore, for all intents and purposes, the conclusion recorded

hereinabove, should be deemed to be relevant only with reference to the

grant of “first renewals”. It is necessary to reiterate, that in the Goa

Foundation case, this Court had held, that second renewals would be

subject to an order passed by the State Government recording reasons

that it was in the interest of mineral development to do so. Needless to

mention, that a second or subsequent renewal also required, the

previous approval of the Central Government – as provided for under

Section 8(4) of the MMDR Act. The amendment to Rule 24A made on

18.7.2014, more particularly, the second proviso to sub-rule (6), leaves

no room for any doubt, that the automatic extension postulated with

reference to the first renewal, would not apply to the second or

subsequent renewals. It is therefore necessary to further conclude, that

in cases of second and subsequent renewals, the amended Rule 24A(6)

would not extend the lease period for a further period of two years, from

the date of amendment. Therefore, for all intents and purposes, in

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relation to renewal sought under Section 8(3) of the MMDR Act (read with

Rule 24A(6) of the Mineral Concession Rules – amended on 18.7.2014),

all second renewals which were assumed to be subsisting by State

Governments, would expire with effect from the date of the judgment in

the Goa Foundation case, i.e., 21.4.2014, and expressly, with effect from

18.7.2014, when the second proviso to Rule 24A(6) provided accordingly.

Unless of course, the Government had passed an express order in

writing, as mandated under Section 8(3) of the MMDR Act, extending the

subsisting mining lease by a second or subsequent renewal.

15. On 16.5.2014, this Court (in the Common Cause case), passed

an order requiring the State Government to dispose of pending

applications for second and subsequent renewals, within six months.

The operative part of the above order is being extracted below:

“10. After considering the report of the CEC as well as the

submissions on behalf of the parties, we direct as an interim measure

that these 26 leases operating as second and subsequent renewals

without any express orders of renewal passed by the State

Government will not be allowed to operate by the State Government

until express orders are passed in terms of Section 8(3) of the Mines

and Minerals (Development and Regulation) Act, 1957 and we also

direct that all renewal applications under Section 8(3) of the Mines

and Minerals (Development and Regulation) Act, 1957 will be

considered and disposed of by the State Government within six

months from today. We further direct that the State Government will

consider first the renewal applications in respect of leases which were

granted for captive mining for providing iron or manganese ore as raw

material for industries and only thereafter consider the renewal

applications in respect of the other leases. In any case, the State

Government will ensure that the entire process of consideration and

disposal of renewal applications under Section 8(3) of the Act is

completed within six months from today. With the aforesaid interim

directions, the interim matter stand disposed of.”

(emphasis is ours)

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It seems, that the above direction was breached, as the State

Governments, seemingly had no facility or potential, to comply with it.

Resultantly, a further order came to be passed in IA No.21 of 2014, which

had been filed, for extension of time. The order granting further time of

three months, dated 16.5.2014, is extracted hereunder:

“I.A. No.21 of 2014

After hearing Shri L. Nageswara Rao, learned senior counsel appearing

for the State of Orissa, we deem it appropriate to grant them another

three months' time from today to comply with the order dated

16.05.2014.

We reserve liberty to all the private respondents to object to the orders

that may be passed by the State Government while complying with this

Court's order dated 16.05.2014.

I.A. No.21 of 2014 is disposed of accordingly.”

(emphasis is ours)

16. The Parliament was alive to the predicament of the State

Governments. It was also felt, that the regime of grant of mining leases

and their renewal(s) needed to be changed, by introducing uniformity in

the process. It is therefore, that Section 8A was amended. The instant

amendment was inserted in the MMDR Act with effect from 12.1.2015.

Section 8A introduced through the above amendment, is being extracted

hereunder:

“8A. Period of grant of a mining lease for minerals other than coal,

lignite and atomic minerals. — (1) The provisions of this section shall

apply to minerals other than those specified in Part A and Part B of the

First Schedule.

(2) On and from the date of the commencement of the Mines and

Minerals (Development and Regulation) Amendment Act, 2015, all

mining leases shall be granted for the period of fifty years.

(3) All mining leases granted before the commencement of the Mines

and Minerals (Development and Regulation) Amendment Act, 2015

shall be deemed to have been granted for a period of fifty years.

(4) On the expiry of the lease period, the lease shall be put up for

auction as per the procedure specified in this Act.

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(5) Notwithstanding anything contained in sub-sections (2), (3) and

sub-section (4), the period of lease granted before the date of

commencement of the Mines and Minerals (Development and

Regulation) Amendment Act, 2015, where mineral is used for captive

purpose, shall be extended and be deemed to have been extended up

to a period ending on the 31st March, 2030 with effect from the date of

expiry of the period of renewal last made or till the completion of

renewal period, if any, or a period of fifty years from the date of grant

of such lease, whichever is later, subject to the condition that all the

terms and conditions of the lease have been complied with.

(6) Notwithstanding anything contained in sub-sections (2), (3) and

sub-section (4), the period of lease granted before the date of

commencement of the Mines and Minerals (Development and

Regulation) Amendment Act, 2015, where mineral is used for other

than captive purpose, shall be extended and be deemed to have been

extended up to a period ending on the 31st March, 2020 with effect

from the date of expiry of the period of renewal last made or till the

completion of renewal period, if any, or a period of fifty years from the

date of grant of such lease, whichever is later, subject to the condition

that all the terms and conditions of the lease have been complied with.

(7) Any holder of a lease granted, where mineral is used for captive

purpose, shall have the right of first refusal at the time of auction held

for such lease after the expiry of the lease period.

(8) Notwithstanding anything contained in this section, the period of

mining leases, including existing mining leases, of Government

companies or corporations shall be such as may be prescribed by the

Central Government.

(9) The provisions of this section, notwithstanding anything contained

therein, shall not apply to a mining lease granted before the date of

commencement of the Mines and Minerals (Development and

Regulation) Amendment Act, 2015, for which renewal has been

rejected, or which has been determined, or lapsed.”

17. In terms of Section 8A(2) of the amended MMDR Act, all future

mining grants, would be for a uniform period of fifty years. Section 8A(3)

envisages, that all original mining lease grants, made prior to the

insertion of Section 8A, in the MMDR Act (with effect from 12.1.2015)

would also be deemed to have been made for a period of fifty years.

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18. Section 8A(5) pertains to mining leases granted for captive

purposes, and is principally aimed at leaseholders operating under a

renewal. Section 8A(5) postulates three different contingencies.

Firstly, the period of all mining leases granted before 12.1.2015 “…shall

be extended and be deemed to have been extended…” up to 31.3.2030,

“…with effect from the date of expiry of the period of renewal last

made…”. It is apparent, that the question of an “extension” will

ordinarily arise only after an “expiry”. Since both the terms – “extension”

and “expiry” find place in sub-section (5), we are of the view, that Section

8A(5) is attracted even after the expiry of a renewal. The instant

inference emerges from the use of the words “expiry of the renewal last

made”, in sub-section (5). The issue whether, Section 8A would be

applicable to a subsisting lease as on 12.1.2015 (when the amended

MMDR Act was notified), as was the contention of the non-applicant

petitioner, will be examined in further detail immediately hereinafter. The

first contingency, therefore, extends to renewed mining leases, which

were scheduled to expire before 31.3.2030.

Secondly, the use of the phrase – “renewal last made”, leaves no room for

any doubt, that the instant second contingency presupposes an existing

(first, second or subsequent) renewal, in favour of the leaseholder. The

difference between the first and the second contingency is, the date when

the renewal of the mining lease was scheduled to expire. The first

contingency, applies to renewed mining leases, which would expire before

31.3.2030. The instant – the second contingency, applies to renewed

Page 18 18

mining leases, which would expire after 31.3.2030. A perusal of Section

8A of the amended MMDR Act reveals, that the second contingency is

aimed at extending the existing lease period, and not reducing it.

Therefore, if the period of the existing renewal would extend beyond

31.3.2030, the period contemplated by the renewal itself, has been

mandated to be preserved.

Thirdly, the regime sought to be introduced also has a reference to an

original grant. The scheme/course sought to be introduced under

Section 8A(3) of the amended MMDR Act, is intended to be preserved

even in situations where a mining leaseholder, is (or has been) carrying

on mining operation under a renewal. Since the original lease period of

fifty years has been adopted as the overarching rule, the third

contingency, aims at allowing the leaseholder, the benefit of treating the

original lease period as of fifty years. Therefore, even during the renewal

period, if the period of mining lease would get extended (beyond the

renewal period), by treating the original lease as of fifty years, the

leaseholder would be entitled to the said benefit under the third

contingency.

For the leases governed by Section 8A(5), out of the above three

contingencies, the contingency as would extend the lease period farthest,

would be applicable.

19. A similar contingency has been provided for under Section 8A(6)

with reference to mining leases used for non-captive purposes. Herein

also, the same three contingencies are contemplated. Firstly, the period

Page 19 19

of all renewals expiring before 31.3.2020 “…shall be extended and be

deemed to have been extended…” up to 31.3.2020, “…with effect from the

date of expiry of the period of renewal last made…”. Secondly, if the

renewal period in any case would have actually stretched beyond

31.3.2020 – then till the completion of the postulated renewal period.

Thirdly, for extending the original lease to fifty years, from the date of

grant of the original lease. For leases governed by Section 8A(6) the

contingency, as would expire last of all, would be applicable to the

leaseholder. No further discussion is being recorded herein, because the

discussion in the preceding paragraph, is fully applicable for the

interpretation of Section 8A(6) of the amended MMDR Act, except for the

substitution of the date 31.3.2020 (as under Section 8A(6) of the MMDR

Act) in place of 31.3.2030 (as under Section 8A(5) of the MMDR Act).

20. There is a serious dispute between the rival parties with

reference to the interpretation of Sections 8A(3), 8A(5) and 8A(6) of the

MMDR Act. Whilst the contention of learned counsel appearing for the

petitioner-Common Cause is, that the benefit of sub-sections (3), (5) and

(6) of Section 8A, will extend only to such mining leases as were

subsisting on the date of introduction of the amendment – 12.1.2015; it

is the contention of learned counsel representing the leaseholders, that

the above postulation, at the hands of learned counsel for the non-

applicants, is wholly misconceived, and would result in a misreading of

the amended Section 8A of the MMDR Act.

Page 20 20

21. Insofar as the disputed interpretation of Section 8A of the MMDR

Act is concerned, the first contention advanced by learned counsel for the

petitioner, was founded on sub-section (9) of Section 8A. It was urged,

that it was absolutely clear, that the benefit of Section 8A of the MMDR

Act, would not extend to such cases where “renewal had been rejected”,

or where the mining lease had been “determined”, or where the mining

lease had “lapsed”. It was asserted, that the expiry of the original grant

or renewal, should be understood to mean, that the lease howsoever

granted (original, or renewal) had “lapsed”. And therefore, it was crystal

clear, according to learned counsel, that sub-sections (3), (5) and (6) of

Section 8A, would be applicable only to leaseholders having a subsisting

mining lease on 12.1.2015.

22. The contention advanced on behalf of the petitioners, noticed in

the foregoing paragraph, has been vehemently opposed by learned

counsel for the leaseholders. It was contended on behalf of the

leaseholders, that the terms “rejection”, “determination” and “lapse” were

terms of art, used to express different contingencies/situations.

According to learned counsel, these terms are contemplated for different

exigencies, under the MMDR Act (and the Rules framed thereunder). And

that, the said terms cannot be extended to situations beyond those, for

which the same are expressly used. It was therefore asserted, that the

expiry of the original grant or renewal, would per se not exclude the

applicability of Section 8A.

Page 21 21

23. Insofar as the words “renewal had been rejected” (used in Section

8A(9) of the MMDR Act are concerned, it was submitted, that it was clear

from the words deployed, that the contemplated contingency applied only

to a situation where an application for renewal had been rejected.

Namely, that a renewal of a mining lease had been applied for under sub-

section (2) or (3) of Section 8 of the MMDR Act, read with Rule 24A of the

Mineral Concession Rules, and thereupon, the request for renewal had

been rejected. For the term “determination”, reliance was placed on Rules

27(4), 27(5), 29, 37(3) and Part IX Clause 2, Form K of the Mineral

Concession Rules. It was contended, that the term “determination” had

been deployed for situations where the lease period could be brought to

an end, on account of a default having been committed by a leaseholder.

For instance, default in the payment of royalty or in the payment of dead

rent. The default could also be of violating the lease conditions envisaged

under Rule 27(1) or (2) or (3) of the Mineral Concession Rules. A mining

lease can also be determined, if the leaseholder had transferred any right,

title or interest in a mining lease, in violation of the Mineral Concession

Rules. And for a few other defined exigencies. Insofar as the term “lapse”

used in Section 8A(9) is concerned, the same according to learned

counsel for the leaseholders, pertains to exigencies contemplated under

Section 4A(4) of the MMDR Act, and Rules 28 and 28A of the Mineral

Concession Rules. The term “lapse” has been used only where the

leaseholder(s) has/have committed default of not being in position to

carry on (or for not carrying on) mining operations, for a continuous

Page 22 22

period of two years. On account of either of the above exigencies, a

mining lease under the provisions referred to above, would lapse.

24. We do not consider the necessity of extracting the particular

provisions relied upon by learned counsel for the leaseholders. We are

satisfied in accepting the contention, that the terms “renewal has been

rejected”, “determination” and “lapse” are terms used for different

contingencies/situations/exigencies under the MMDR Act, and the

Mineral Concession Rules. It is also our view, that these terms are not

used under the MMDR Act, or under the Mineral Concession Rules, with

reference to expiry of the original grant period, or with reference to the

expiry of the renewal period. It is therefore not possible for us to accept

the contention of learned counsel for the petitioner, that Section 8A(9)

can be the legitimate basis for excluding the applicability of Section 8A,

the claims of leaseholders, where the period of lease or renewal had

expired prior to 12.1.2015.

25. The conclusion drawn by us in the foregoing paragraph, also

emerges from the “Objects and Reasons” of the amended MMDR Act. The

purpose for which the instant amendment came to be made by the

Parliament, whereby the amended Section 8A was inserted into the

MMDR Act reveals, that past litigation resulting in different

interpretations of the provisions of the MMDR Act, and the alleged

hardship caused to the mining industry, due to second and subsequent

renewals remaining pending with the State Government without any

decision, had occasioned the passing of the instant amendment. The

Page 23 23

above position emerges from the following excerpts of the statement of

“Objects and Reasons”:

“3. The mining sector has been subjected to numerous litigations in

the past few years. Important judgments related to the mining sector

have been pronounced by the Supreme Court, besides judgments on

the issue of allocation of natural resources which have direct relevance

to the grant of mineral concessions.

4. The present legal framework of MMDR Act, 1957, does not permit

the auctioning of mineral concessions. Auctioning of mineral

concessions would improve transparency in allocation. Government

would also get an increased share of the value of mineral resources.

Some provisions of the law relating to renewals of mineral concessions

have also been found to be wanting in enabling quick decisions .

Consequently, there has been a slowdown in the grant of new

concessions and the renewal of existing ones. As a result, the mining

sector started registering a decline in production affecting the

manufacturing sector which largely depends on the raw material

provided by mining sector. The Government has therefore felt it

necessary to address the immediate requirements of the mining sector

and also to remedy the basic structural defects that underlie the

current impasse.

5. In view of the urgent need to address these problems, the Mines and

Minerals (Development and Regulation) Amendment Ordinance, 2015

was promulgated on 12th January, 2015. The present Bill is to replace

this Ordinance. This bill is designed to put in place mechanism for:

(i) Eliminating discretion;

(ii) Improving transparency in the allocation of mineral resources;

(iii) Simplifying procedures;

(iv) Eliminating delay in administration, so as to enable expeditious

and optimum development of the mineral resources of the country;

(v) Obtaining for the government an enhanced share of the value of the

mineral resources of the country; and

(vi) Attracting private investment and the latest technology;

6. The salient features of MMDR Amendment Bill, 2015 are as follows:

(i) Removal of discretion: auction to be sole method of allotment: The

amendment seeks to bring in utmost transparency by introducing

auction mechanism for the grant of mineral concessions. The tenure of

mineral leases has been increased from the existing 30 years to 50

years. There is no provision for renewal of leases.

(ii) Impetus to the mining sector: The mining industry has been

aggrieved due to the second and subsequent renewals remaining

pending. In fact, this has led to closure of a large number of mines.

The Bill addresses this issue also. The Bill provides that mining leases

would be deemed to be extended from the date of their last renewal to

31st March, 2030 (in the case of captive mines) and till 31st March,

Page 24 24

2020 (for the merchant miners) or till the completion of the renewal

already granted, if any, or a period of fifty years from the date of grant

of such leave, whichever is later.”

(emphasis is ours)

From a perusal of the extract reproduced above, it is apparent, that the

insertion of Section 8A into the MMDR Act, was to address the hardship

faced by leaseholders, besides other reasons, due to the second and

subsequent applications for renewal, remaining unattended at the hands

of the State Government. The instant amendment to the MMDR Act,

introduced a uniform original grant period of fifty years, for all mining

leaseholders. It also excluded renewal(s), after the expiry of the original

lease period. Accordingly, no renewal application can now be filed (after

12.1.2015). Under sub-sections (5) and (6) of Section 8A, in our view,

such leaseholders who had moved applications for renewal of

captive/non-captive mines, would be entitled to continue up to

31.3.2030/31.3.2020. The “Objects and Reasons” for the amendment to

the MMDR Act aim at remedying the position which emerged upon the

interpretation of the provisions of the MMDR Act, as they existed hitherto

before. The instant amendment was also directed at remedying the

grievances of the mining industry due to “second and subsequent

renewals” remaining pending. And also, because the provisions of law

relating to renewals had been found to be wanting. The above view is also

endorsed by the fact, that Section 8A(9) deals with a situation wherein “…

renewal has been rejected...”. It is therefore apparent, that sub-sections

(5) and (6) of Section 8A of the amended MMDR Act are aimed at

Page 25 25

situations, wherein an application for renewal (validly made) has

remained unattended. Therefore, for no fault of the leaseholder, he would

be subjected to an arbitrary prejudice. It needs to be clarified, that since

an application for renewal cannot be filed after 12.1.2015, an application

for renewal as would be treated as having been validly made, ought to

have been made before 12.1.2015. We are of the view, that out of the

three contingencies contemplated under sub-sections 8A(5) and 8A(6),

referred to above, the first of the contingencies positively, pertains to a

situation, wherein applications validly made for renewal, were pending

without any final decision at the hands of the State Government.

Because in the absence of a renewal application, the leaseholder can be

taken to have already expressed his disinterest, to continue mining

operations. Therefore logically, the words “… with effect from the date of

expiry of the period of renewal last made …”, should relate to an expired

lease prior to 12.1.2015, in relation to which a valid application for

renewal had already been made.

26. We also feel persuaded in accepting the contention advanced at

the hands of learned counsel representing the leaseholders, that the

words “… with effect from the date of expiry of the period of renewal last

made ...” cannot be overlooked. In our considered view, there is no

ambiguity in the aforesaid words. The plain reading of the quoted words,

can lead to one and only one inference, namely, that the situation

contemplated under sub-sections (5) and (6) of Section 8A of the

amended MMDR Act (wherein both the above words have been used),

Page 26 26

includes a situation when the lease period contemplated by a renewal, is

scheduled to expire before 31.3.2030/31.3.2020. We are satisfied in

clarifying, that the situation contemplated by the use of the aforesaid

words, would extend to a leaseholder who had moved a valid application

for renewal to the State Government, which was yet to be considered and

disposed of, prior to 12.1.2015. The instant situation, is not excluded by

the contingencies contemplated under Section 8A(9) of the amended

MMDR Act. For the reasons recorded in the instant paragraph, as also,

in the preceding paragraphs (wherein Section 8A of the amended MMDR

Act, has been considered and interpreted), we are satisfied to hold, that

the applicability of Section 8A of the amended MMDR Act need not only

extend to leaseholders whose original lease/renewal lease period had not

expired, but would also extend to leaseholders whose term of

lease/renewal had expired prior to 12.1.2015 and the concerned

leaseholder(s) had moved a valid application for renewal, at least twelve

months before the leaseholder’s existing lease (original, first, second or

subsequent) was due to expire, and whose application has not been

considered and rejected.

27. Irrespective of the position noticed herein above, it is imperative

for us to clarify, that the benefit of extension of the lease period

postulated under Section 8A of the MMDR Act is available, subject to a

further overriding condition, namely, “… that all the terms and conditions

of the lease have been complied with”. A leaseholder who does not satisfy

any of the required conditions of the lease, as for instance, the postulated

Page 27 27

clearances/approvals/consent, would not be entitled to the benefits

extended under sub-section (5) or (6) of Section 8A of the amended

MMDR Act.

28. Having addressed the issue with reference to the subsistence of

a mining lease, on the basis of an interpretation of Sections 8 and 8A of

the MMDR Act, we have substantially covered the area needed to be

traversed. It is however important to notice, that one further aspect

needs to be dealt with. The same emerges from a collective reading of

Section 4A(4) of the MMDR Act and Rules 28, and 28A of the Mineral

Concession Rules. Section 4A(4) was substituted for the earlier Section

4A with effect from 10.2.1987, as under:

“4-A. Termination of prospecting licences or mining leases.—

xxx xxx xxx

(4) Where the holder of a mining lease fails to undertake mining

operations for a period of two years after the date of execution of the

lease or having commenced mining operations, has discontinued the

same for a period of two years, the lease shall lapse on the expiry of

the period of two years from the date of execution of the lease or, as

the case may be, discontinuance of the mining operations:

Provided that the State Government may, on an application made by

the holder of such lease before its expiry under this sub-section and

on being satisfied that it will not be possible for the holder of the lease

to undertake mining operations or to continue such operations for

reasons beyond his control, make an order, subject to such conditions

as may be prescribed, to the effect that such lease shall not lapse:

Provided further that the State Government, may on an application by

the holder of a lease submitted within a period of six months from the

date of its lapse and on being satisfied that such non-commencement

or discontinuance was due to reasons beyond the control of the holder

of the lease, revive the lease from such prospective or retrospective

date as it thinks fit but not earlier than the date of lapse of the lease:

Provided also that no lease shall be revived under the second proviso

for more than twice during the entire period of the lease.”

(emphasis is ours)

Page 28 28

A perusal of the aforesaid provision reveals, that where a holder of mining

lease, does not carry out mining operations for a continuous period of

two years, his mining lease would lapse. It was the contention of learned

counsel for the petitioner – Common Cause, as also, that of the learned

Additional Solicitor General, that the operation of Section 4A(4) is

automatic, and requires no order to be passed. It was submitted, that as

soon as the leaseholder has committed the default of not being in a

position to carrying on (or for not having actually carried on) mining

operations, for a continuous period of two years, the lease would lapse.

The above two exigencies will be referred to as the first, and the second

contingency respectively, hereinafter.

29. According to learned counsel, the only remedy available to such a

leaseholder, to prevent the lease from lapsing is, to move an application,

either prior to the expiry of the period of two years (of non-mining

operations), or thereafter. The State Government on being satisfied, that

mining operations were not discontinued as expressed above, for the

reasons beyond the control of the leaseholder, could make an order, in

the first contingency, that the lease would not lapse. And in the second

contingency, that the lease would rematerialize.

30. It is not possible for us to accept, that vital vested rights in a

leaseholder, can be curtailed without affording him an opportunity to

repudiate the impression(s) of the competent authority, namely, that the

leaseholder could not have (or had actually not) carried out mining

operations, for a continuous period of two years. Our instant

Page 29 29

contemplation, stands affirmed through Rule 28 of the Mineral

Concession Rules. The same is reproduced below:

“28. Lapsing of leases – (1) Subject to the other conditions of this rule

where mining operations are not commenced within a period of one

year (sic. two years) from the date of execution of the lease, or is

discontinued for a continuous period of one year (sic. two years) after

commencement of such operations, the State Government shall, by an

order, declare the mining lease as lapsed and communicate the

declaration to the lessee.

(2) Where a lessee is unable to commence the mining operation within

a period of one year (sic. two years) from the date of execution of the

mining lease, or discontinues mining operations for a period exceeding

one year (sic. two years) for reasons beyond his control, he may

submit an application to the State Government, explaining the

reasons for the same, at least three months before the expiry of such

period.

(3) Every application under sub-rule (2) shall be accompanied by a fee

of Rs.200.

(4) The State Government may on receipt of an application made under

sub-rule (2) and on being satisfied about the adequacy and

genuineness of the reasons for the non-commencement of mining

operations or discontinuance thereof, pass an order before the date on

which the lease would have otherwise lapsed, extending or refusing to

extend the period of the lease:

Provided that where the State Government on receipt of an application

under sub-rule (2) does not pass an order before the expiry of the date

on which the lease would have otherwise lapsed, the lease shall be

deemed to have been extended until the order is passed by the State

Government or until a period of two years, whichever is earlier.

Explanation 1. - Where the non-commencement of the mining

operations within a period of two years from the date of execution of

mining lease is on account of –

(a) delay in acquisition of surface rights; or

(b) delay in getting the possession of the leased area; or

(c) delay in supply or installation of machinery; or

(d) delay in getting financial assistance from banks, or any financial

institutions; or

(e) ensuring supply of the mineral in an industry of which the lessee is

the owner or in which he holds not less than 50% of the controlling

interest,

and the lessee is able to furnish documentary evidence supported by a

duly sworn affidavit, the State Government may consider if there are

sufficient reasons for non-commencement of operations for a

continuous period of more than one year (sic. two years).

Explanation 2. - Where the discontinuance of mining operations for a

Page 30 30

continuous period of two years after the commencement of such

operations is on account of –

(a) orders passed by any statutory or judicial authority; or

(b) operations becoming highly uneconomical; or

(c) strike or lock out,

and the lessee is able to furnish documentary evidence supported by a

duly sworn affidavit, the State Government may consider if there are

sufficient reasons for discontinuance of operations for a continuous

period of more than one year (sic. two years).

Explanation 3. - In case of mining lessee who has undertaken

reconnaissance operations or in case of mining lessee whose capital

investment in mine development is planned to be in excess of Rs. 200

crores and where the mine development is likely to take more than two

years, the State Government shall consider it to be sufficient reason for

non-commencement of mining operations for a continuous period of

more than two years.”

(emphasis is ours)

It is apparent from a perusal of sub-rule (1) extracted above, that the

State Government is mandated to pass an order, and thereby, declare

that a mining lease had lapsed. It is also the mandate of sub-rule (1)

aforesaid, that such an order passed by the State Government, must be

communicated to the leaseholder. On a conjoint reading of Section 4A(4)

and Rule 28(1), we are satisfied to hold, that a mining lease under Section

4A(4) would not be deemed to have lapsed, till the State Government

passes an order, declaring the mining lease to have lapsed, and further

communicates the same to the leaseholder.

31. Rule 28(4) of the Mineral Concession Rules, caters to a situation

wherein a leaseholder has moved an application, that his lease be

permitted to continue even though mining operations could not be carried

on (or had actually not been carried on) for a continuous period of two

years. The proviso under Rule 28(4) is clear and categoric to the effect,

that in cases where the State Government, on receipt of such application,

Page 31 31

does not pass an order, the lease would be deemed to have been

extended, until an order was actually passed by the State Government.

This further affirms, that lapse of a mining lease is not automatic.

Despite non-operation of a mining lease under Rule 28(2), in case the

leaseholder has moved an application for extension, on account of non-

commencement of mining operations, or on account of discontinuation of

mining operations, the lease period shall be deemed to have continued till

the date of passing the order, or for a period of two years beyond the

contemplated lease period (in case such an order is not passed). The

above conclusions, rule out the submissions advanced on behalf of the

non-applicant – petitioner and the Union of India, that lapse

(contemplated under Section 4A(4) of the MMDR Act) is automatic, and

that, for a lease to lapse, no express order needs to be passed.

32. Based on the considerations recorded above, we summarise our

conclusions as under:

(i) A leaseholder would have a subsisting mining lease, if the period

of the original grant was still in currency on 12.1.2015.

Additionally, a leaseholder whose original lease has since

expired, would still have a subsisting lease, if the original lease

having been renewed, the renewal period was still in currency on

12.1.2015. Such a leaseholder, would be entitled to the benefit

of Section 8A of the amended MMDR Act.

(ii) A leaseholder who had not moved an application for renewal of a

mining lease (which was due to expire, prior to 12.1.2015), at

Page 32 32

least twelve months before the existing lease was due to expire,

under the provisions of the unamended MMDR Act and the

Mineral Concession Rules, will be considered as not a

valid/subsisting leaseholder, after the expiry of the lease period.

The provisions of the amended MMDR Act will therefore not

enure to the benefit of such leaseholder.

(iii)A leaseholder who has moved an application for renewal (of the

original/first or subsequent renewal) of a mining lease, at least

twelve months before the existing lease was due to expire, and on

consideration, such an application has been rejected, will be

considered as not a valid/subsisting leaseholder. The provisions

of the amended Section 8A of the MMDR Act will not enure to the

benefit of such leaseholder, because of the express exclusion

contemplated for the above exigency, under Section 8A(9) of the

amended MMDR Act.

(iv) A leaseholder who has moved an application for “first renewal” of

the original mining lease, at least twelve months before the

original lease was due to expire, and such application has not

been rejected, will be considered to be a valid leaseholder having

a subsisting right to carry on mining operations, till the expiry of

two years after 18.7.2014, i.e., up to 17.7.2016, as is apparent

from a conjoint reading of the unamended and amended Rule

24A of the Mineral Concession Rules. Such leaseholder would

Page 33 33

have the benefit of sub-sections (5) and (6) of Section 8A of the

amended MMDR Act.

(v) A leaseholder who had moved a second (third or subsequent)

renewal application under Section 8(3) of the unamended MMDR

Act, at least twelve months before the renewed lease was due to

expire, and whose application had not been considered and

rejected (though not entitled to any benefit under the

unamended Section 8A of the MMDR Act and the amended Rule

24A(6) of the Mineral Concession Rules) up to 12.1.2015, would

still have the benefit of sub-sections (5) and (6) of Section 8A of

the amended MMDR Act, in view of the situation sought to be

remedied by the Mines and Minerals (Development and

Regulation) Amendment Act, 2015.

(vi) Consequent upon the amendment of Section 8A of the MMDR

Act, the regime introduced through sub-sections (5) and (6)

thereof, provides for three contingencies where benefits have

been extended to leaseholders whose lease period had earlier

been extended by a renewal. Firstly, for a leaseholder whose

renewal period had expired before 12.1.2015, and the

leaseholder had moved an application for renewal at least twelve

months before the leaseholder’s existing lease was due to expire,

and whose application has not been considered and rejected, the

lease period would stand extended up to 31.3.2030/31.3.2020

(in the case of captive/non-captive mines, respectively).

Page 34 34

Additionally, a leaseholder whose period of renewal would expire

after 12.1.2015, but before 31.3.2030/31.3.2020, the lease

period would stand extended up to 31.3.2030/31.3.2020 (in the

case of captive/non-captive mines, respectively). Secondly, where

the renewal of the mining lease already extends to a period

beyond 31.3.2030/31.3.2020 (in the case of captive/non-captive

mines, respectively), the lease period of such leaseholders, would

continue up to the actual period contemplated by the renewal

order. Thirdly, a leaseholder would have the benefit of treating

the original lease period as of fifty years. Accordingly, even

during the renewal period, if the period of the mining lease

would get extended (beyond the renewal period) by treating the

original lease as of fifty years, the leaseholder would be entitled

to such benefit.

Out of the above three contingencies provided under sub-sections

(5) and (6) of Section 8A, the contingency as would extend the

lease period farthest, would enure to the benefit of the

leaseholder.

(vii) Based on the interpretation placed by us on Section 4A(4) of the

MMDR Act, and Rule 28 of the Mineral Concession Rules, we can

draw the following conclusions. Firstly, unless an order is

passed by the State Government declaring, that a mining lease

has lapsed, the mining lease would be deemed to be subsisting,

Page 35 35

up to the date of expiry of the lease period provided by the lease

document. Secondly, in situations wherein an application has

been filed by a leaseholder, when he is not in a position to (or for

actually not) carrying on mining operations, for a continuous

period of two years, the lease period will not be deemed to have

lapsed, till an order is passed by the State Government on such

application. Where no order has been passed, the lease shall be

deemed to have been extended beyond the original lease period,

for a further period of two years. Thirdly, a leaseholder having

suffered a lapse, is disentitled to any benefit of the amended

MMDR Act, because of the express exclusion contemplated

under Section 8A(9) of the amended MMDR Act.

……………………………J.

(Jagdish Singh Khehar)

……………………………J.

(C. Nagappan)

New Delhi;

April 04, 2016.

Page 36 36