TMI Blog2016 (4) TMI 1362X X X X Extracts X X X X X X X X Extracts X X X X ..... lder, 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 enure to the benefit of the leaseholder. Unless an order is passed by the State Government dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 (which position remained unamended till 18.7.2014), is extracted hereunder: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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: 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipt 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, 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 St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecified 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: -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 pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning 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 (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wals . We may hasten to explain, that the instant determination emerges from an interpretation of the unamended and 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 provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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) 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 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 of all renewals expiring before 31.3.2020 ...shall be extended and be deemed to have been extended... up t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endment 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (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 provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ( 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 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 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). 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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