IN THE HIGH COURT OF MADHYA PRADESH

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AT JABALPUR

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BEFORE

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HON'BLE SHRI JUSTICE VIVEK RUSIA

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&

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HON'BLE SHRI JUSTICE PRADEEP MITTAL

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WRIT PETITION No. 15821 of 2020

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M/S GOLDEN STONES

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Versus

THE STATE OF MADHYA PRADESH AND OTHERS

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Appearance:

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Shri Anshuman Singh - Advocate for the petitioner.

Shri Abhijeet Awasthi - Dy. Advocate General for the

respondents/State.

RESERVED ON: 19.02.2026

PRONOUNCED ON: 06.03.2026

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ORDER

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Per

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: Justice Vivek Rusia

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The present writ petition has been filed under Article 226 of the

Constitution of India challenging the orders dated 24.01.2020 passed by the

respondent No.1/the State of Madhya Pradesh, 31.07.2018 passed by the

respondent No.2/The Director, Directorate of Geology & Mining; and

24.02.2018 passed by the respondent No.3/Collector, District Chhatarpur,

whereby quarry lease granted has been cancelled and the appeals preferred

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by the petitioner have been dismissed.

Facts of the case, in short, are as follows:-

2. The petitioner, M/s Golden Stones, is a registered Partnership Firm

engaged in quarry operations. The petitioner was granted a quarry lease over

land admeasuring 4.00 Hectares situated at Khasra No.1348, Gram Prakash

Bamhauri, Tehsil Gaurihar, District Chhatarpur, M.P., for the extraction of

“Stone for making Gitti by Mechanical Crushing” by order dated

09.03.2011. Pursuant thereto, a lease agreement was executed on 23.03.2011

for a period of ten years.

3. It is the case of the petitioner that despite execution of the lease

agreement, possession of the leased area was never handed over to it by the

respondent No.3. The petitioner made representations seeking delivery of

possession, but no action was taken by the authorities. After execution of the

aforesaid agreement, environmental clearance from the State Environmental

Impact Assessment Authority (SEIAA) became mandatory pursuant to

directions issued by the Hon’ble Supreme Court in Deepak Kumar vs. State

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of Haryana & Ors.,

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(2012) 4 SCC 629

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.

4. The petitioner applied for environmental clearance on 14.12.2012

and informed the respondent authorities accordingly. While the petitioner

was waiting for possession and environmental clearance, the respondent

No.3 issued a show-cause notice dated 12.03.2014 alleging non-payment of

dead rent, royalty and surface rent, non-submission of statutory returns, non-

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erection of boundary marks, and other alleged violations of the M.P. Minor

Mineral Rules, 1996. The petitioner submitted a detailed reply on 22.04.2014

stating that since no mining activity had commenced as possession of the

leased land had not been delivered, and therefore the alleged violations were

not attracted. Thereafter, no immediate action was taken by the respondents.

5. After a lapse of nearly four years, the respondent No.3 passed an

order dated 24.02.2018 cancelling the lease under Rule 30(26) of the M.P.

Minor Mineral Rules, 1996. The petitioner contends that the cancellation

order refers to a show-cause notice dated 29.11.2012, which was never

issued, and that the grounds mentioned in the impugned order are different

from those contained in the show-cause notice dated 12.03.2014. Aggrieved

by the order dated 24.02.2018, the petitioner preferred an appeal under Rule

57(2) of the Rules, 1996 before the respondent No.2. The said appeal was

dismissed by order dated 31.07.2018. Thereafter, a second appeal under Rule

57(3) was preferred before the respondent No.1, which was also dismissed by

order dated 24.01.2020.

6. The petitioner submits that the impugned orders are arbitrary,

violative of principles of natural justice and contrary to the provisions of the

M.P. Minor Mineral Rules, 1996. It is further contended that possession of

the leased area was never delivered and therefore, statutory obligations could

not have arisen in the absence thereof. The petitioner had earlier approached

this Hon’ble Court by filing W.P. No.8957 of 2020. The said petition was

dismissed on 30.09.2020 with liberty to file a fresh petition. Hence, the

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present writ petition.

SUBMISSIONS ON BEHALF OF THE PETITIONER:

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7. Learned counsel for the petitioner argued that the impugned order

dated 24.02.2018 passed by the respondent No.3, cancelling the lease, is

wholly arbitrary, illegal and in gross violation of the provisions of the M.P.

Minor Mineral Rules, 1996. It is submitted that though the lease agreement

was executed on 23.03.2011, possession of the leased area was never handed

over to the petitioner. In the absence of delivery of possession, no mining

activity could commence, and consequently, no statutory obligations arising

under Rule 30 of the Rules, 1996 could be fastened upon the petitioner.

8. Learned counsel further submitted that the show-cause notice dated

12.03.2014 was issued on grounds, such as non-payment of dead rent,

royalty, non-submission of returns and non-erection of boundary marks. It is

contended that these obligations arise only after the lessee enters into

possession and commences quarry operations. Since possession was never

granted, the very basis of issuance of the show-cause notice was

misconceived.

9. It is further submitted that the petitioner submitted a detailed reply

on 22.04.2014 explaining that no breach had occurred in view of the non-

delivery of possession. Thereafter, the authorities remained silent for nearly

four years and even proceeded with correspondence in 2017 for obtaining

environmental clearance in favour of the petitioner. This conduct, according

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to learned counsel, clearly demonstrates that the reply of the petitioner stood

accepted.

10. Learned counsel submitted that the impugned order dated

24.02.2018 is liable to be set aside on the ground of violation of principles of

natural justice. The order refers to a show-cause notice dated 29.11.2012,

which was never issued to the petitioner. Even otherwise, the grounds

mentioned in the impugned order are different from those contained in the

show-cause notice dated 12.03.2014.

11. It is contended that an order travelling beyond the scope of the

show-cause notice is unsustainable in law. It is also argued that the impugned

order does not assign any reasons for rejecting the petitioner’s reply dated

22.04.2014. Learned counsel submits that the recording of reasons is an

essential facet of natural justice, and the absence thereof renders the order

arbitrary and makes it liable to be quashed.

12. Learned counsel further submitted that under Rule 27 of the M.P.

Minor Mineral Rules, 1996, it is the responsibility of the Mining

Officer/Assistant Mining Officer to make arrangements for the preparation

of the mining plan. However, the respondents failed to discharge their

statutory duty and, on the contrary, attributed the non-submission of the

mining plan as a ground for cancellation of the lease. It is submitted that

environmental clearance became mandatory only after the judgment of the

Hon’ble Supreme Court in Deepak Kumar (Supra).

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13. The petitioner had duly applied for environmental clearance and

continuously pursued the matter. The delay in the grant of clearance cannot

be attributed to the petitioner. Learned counsel contends that the impugned

order dated 24.02.2018 was not duly communicated to the petitioner and

came to its knowledge subsequently. On this ground alone, the order

deserves to be set aside.

14. It is further submitted that the appellate order dated 31.07.2018,

passed by the respondent No.2 and the second appellate order dated

24.01.2020, passed by the respondent No.1, are cryptic and non-speaking

orders. The Appellate Authority failed to consider the grounds raised by the

petitioner and dismissed the appeals without assigning cogent reasons.

Learned counsel submits that the action of the respondents amounts to an

arbitrary exercise of power and is violative of Article 19(1)(g) of the

Constitution of India.

15. The petitioner has been deprived of its valuable contractual and

statutory rights without due process of law. It is lastly submitted by learned

counsel that the respondents are now contemplating the grant of the same

leased area in favour of the respondent No.5. If such action is permitted, the

petitioner would suffer irreparable loss and injury. On the aforesaid grounds,

learned counsel prays that the impugned orders dated 24.02.2018,

31.07.2018 and 24.01.2020 be set aside and appropriate directions be issued

for the grant of possession of the leased area to the petitioner.

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SUBMISSIONS ON BEHALF OF THE RESPONDENTS:

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16. Per contra, learned Government Advocate appearing for the

respondents submits that the writ petition is devoid of merit and deserves to

be dismissed.

17. It is submitted by the learned Government Advocate that the

petitioner was granted a quarry lease pursuant to an agreement dated

23.03.2011 and therefore, it was under a statutory obligation to comply with

the conditions stipulated under the M.P. Minor Mineral Rules, 1996,

including payment of dead rent, submission of returns, preparation of mining

plan and commencement of operations within the prescribed time. Learned

counsel submits that the petitioner failed to comply with the mandatory

conditions of the lease and did not commence quarry operations within a year

from the date of execution of the agreement. The petitioner also failed to

submit the approved mining plan and establish necessary infrastructure,

including the installation of a crusher, despite sufficient opportunity.

18. It is contended that a show-cause notice dated 12.03.2014 was

issued to the petitioner detailing the breaches committed. The petitioner

submitted a reply; however, the same was found unsatisfactory. After

granting the opportunity of hearing, the respondent No.3 passed the order

dated 24.02.2018 in accordance with Rule 30(26) of the 1996 Rules.

19. Learned counsel submits that obtaining environmental clearance

was the responsibility of the lessee. The respondents cannot be held liable for

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the petitioner’s failure to secure necessary approvals within the stipulated

period. It is further submitted that the Appellate Authority, as well as the

Revisional Authority, considered the matter and found no illegality in the

order of cancellation. The appellate orders dated 31.07.2018 and 24.01.2020

were passed after due consideration of the record.

20. Learned counsel contends that the petitioner cannot take advantage

of its own inaction and seek extension of the lease period without having

complied with the statutory requirements. The cancellation has been effected

strictly in accordance with the provisions of the M.P. Minor Mineral Rules,

1996. On the aforesaid grounds, it is prayed that the writ petition be

dismissed.

APPRECIATIONS AND CONCLUSIONS:-

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21. The petitioner was granted a lease for a period of ten years on

09.03.2011 and did not commence the mining activities till passing of the

impugned order dated 24.02.2018. The sole justification offered by the

petitioner is that the said authorities failed in their duty of preparation of the

mining plan under Rule 27 of the Rules, 1996 by the Mining Officer.

Secondly, the possession of the land after execution of the agreement was

not delivered to the petitioner for quarrying. Thirdly, the petitioner applied

for a grant of environmental clearance, but no action was taken for a long

time. Therefore, the petitioner cannot be held responsible for the non-

commencement of the mining operation.

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22. Rules 6 to 10 of the Rules, 1996 deal with the situation where the

mining operation has not been commenced within a period of one year. Rules

6-10 are reproduced below:-

(6) Subject to the other conditions of these rules, where mining

operations have not commenced within a period of one year from

the date of execution of the lease or discontinued for a cumulative

period of six months during any calendar year after

commencement of such operation, the Sanctioning Authority may,

by an order, declare the quarry lease as lapsed and communicate

the declaration to the lessee.

(7) Where the lessee is unable to commence mining operation for a

period exceeding one year or unable to continue mining after

commencement for the reasons beyond his control, he may submit

an application to Sanctioning Authority explaining the reasons at

least ninety days before the expiry of such period.

(8) There shall be paid, in respect of every application under sub-

rule (7), a fee of Rs. 200/- (Rupees Two Hundred). The amount of

fee shall be deposited in the Government treasury under the

receipt head prescribed in sub-rule (3) of Rule 10.

(9) The Sanctioning Authority of the lease may, on receipt of an

application made under sub-rule (7) and on being satisfied about

the adequacy and genuineness of the reason 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 Sanctioning Authority on receipt of

application under sub-rule (7) does not pass any order before the

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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 concerned authority or for a period of one

year whichever is earlier.

(10) Where non-commencement of the mining operation within a

period of one year from the date of execution of the lease deed is

on account of delay in-

i. acquisition of surface rights, or

ii. getting the possession of the leased area, or

iii. supply or installation of machinery, or

iv. getting financial assistance from banks or any financial

institution.

and if the lessee is able to furnish documentary evidence supported

by a duly swom-in-affidavit that there are sufficient reasons and/or

reasons beyond their control for non-commencement of mining

operations, the Sanctioning Authority may revoke the

declaration/order through which the lease has lapsed.

23. As per sub rule (7), where the lessee is unable to commence

mining operation for a period exceeding one year or unable to continue

mining after commencement for reasons beyond his control, he may submit

an application to the Sanctioning Authority explaining the reasons at least

ninety days before the expiry of such period. Upon receiving such an

application, the Sanctioning Authority may pass an order to extend or refuse

to extend the period of the lease. There is a provision of revocation of the

lease under sub-rule (10). Therefore, in this case, the petitioner did not apply

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(VIVEK RUSIA)

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JUDGE

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(PRADEEP MITTAL)

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JUDGE

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under these Rules, 1996, to the Sanctioning Authority. Even otherwise, the

original period of lease has expired.

24. In view of the aforesaid, no relief can be granted, and accordingly,

the writ petition stands dismissed.

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Shruti

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