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TMI Blog2016 (4) TMI 1362X X X X Extracts X X X X X X X X Extracts X X X X ..... nded 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 - 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. 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 - 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 (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: Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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: A. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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: -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. 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 record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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: A. 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 pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etermined, 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. 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 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll 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 l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 peri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons. 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; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons (5) and (6) of Section 8A of the amended MMDR Act are aimed at 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 persuade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing 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: -A. Termination of prospecting licences or mining leases.- 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 operatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irmed 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 ₹ 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-comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sal 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, 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 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) thereo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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