2014 (8) TMI 1171 - HC - Indian Laws

Renewal of mining leases - execution of second renewal lease deeds - principles of promissory estoppel - Section 8(2) read with the provisions of Section 24A(3) of MC Rules - Held that - The 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 Tata Iron and Steel Co. Ltd. v. Union of India and Anr. (supra) 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. 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 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 the 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. 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. Admittedly there is no challenge to Section 8(3) of the MMDR Act and it can hardly be suggested that this provision is impliedly struck off by the Supreme Court. In the case in hand admittedly all the petitioners have made applications for second renewal within the time limit i.e. before expiry of the term of first renewal of the mining leases. The mining plans for the second renewal thereafter came to be approved by the IBM. The IBM also recorded its subjective satisfaction that the same is in the interest of mineral development. Thus there is enough material on record to show that the Government agreed to grant the second renewal of mining leases under Section 8(3) of the MMDR Act and thereafter amended the Stamp Act and directed some of the petitioners to pay the stamp duty and even accepted the same. Thus the Government gave promise that the mining leases would be executed under Section 8(3) and pursuant to the promise the petitioners altered their position by depositing the huge stamp duty - the principle of promissory estoppel is squarely applicable to the facts of the present case. The Respondent-State of Goa is directed to execute the lease deeds under Section 8(3) of the MMDR Act in favour of the petitioners/lease holders who/which have already paid the stamp duty pursuant to the orders of the Government in accordance with the Goa Mineral Policy 2013 - So far as the petitioners/lease holders who/which have not paid the stamp duty are concerned the Respondent-State of Goa is directed to decide their renewal applications under Section 8(3) as expeditiously as possible and preferably within a period of three months from the date of receipt of copy of this order. Petition disposed off.

Summary

Issues Involved:
1. Renewal of mining leases.
2. Validity of the Goa Mineral Policy, 2013.
3. Application of the doctrine of promissory estoppel/legitimate expectation.
4. Interpretation of the Supreme Court judgment in Writ Petition (C) No. 435/2012.

Detailed Analysis:

1. Renewal of Mining Leases:
The petitioners sought directions for the renewal of mining leases initially filed in 2007. The applications for second renewal were processed under the MMDR Act and the MC Rules. The State Government framed the Goa Mineral Policy, 2013, which agreed in principle to renew 28 leases. These leases were categorized based on the status of their renewal applications and payment of stamp duty.

2. Validity of the Goa Mineral Policy, 2013:
The Goa Mineral Policy, 2013, was placed on record before the Supreme Court in Writ Petition (C) No. 435/2012. The policy stated that 28 renewal applications had been decided and pending applications would be decided within three months. The Supreme Court did not raise any doubt or set aside the policy in its judgment, affirming the State Government's power to renew leases under Section 8(3) of the MMDR Act.

3. Application of the Doctrine of Promissory Estoppel/Legitimate Expectation:
The petitioners argued that the doctrine of promissory estoppel/legitimate expectation applies as the State Government promised to grant second renewal of mining leases, and the petitioners paid substantial stamp duty based on this promise. The court held that the government is estopped from resiling from its promise as the petitioners altered their position based on the government's promise. The principle of promissory estoppel was deemed applicable, and the petitioners legitimately expected the execution of the second renewal lease deeds.

4. Interpretation of the Supreme Court Judgment in Writ Petition (C) No. 435/2012:
The Supreme Court held that mining operations beyond 2007 were illegal based on deemed extension clauses. However, it reaffirmed the State Government's obligation to consider renewal applications under Section 8(3) of the MMDR Act. The court clarified that the Supreme Court judgment did not invalidate Section 8(3) or impede the execution of second renewal lease deeds. The expression "fresh leases" in the Supreme Court judgment affirmed the settled law that renewal grants are also fresh grants.

Conclusion:
The High Court directed the State of Goa to execute lease deeds under Section 8(3) of the MMDR Act for petitioners who paid stamp duty, in accordance with the Goa Mineral Policy, 2013, and the Supreme Court's conditions. For those who had not paid stamp duty, the State was directed to decide their renewal applications expeditiously. The court upheld the application of promissory estoppel and legitimate expectation, ensuring the petitioners' rights based on the government's promises and actions.