Court’s Decision
The Bombay High Court dismissed the writ petition filed under Article 226 of the Constitution challenging the lapsing of a mining lease. The Court held that the petitioner failed to satisfy the mandatory statutory conditions under Section 10A(2)(c) of the Mines and Minerals (Development and Regulation) Act, 1957 (“MMDR Act”), and that “the legislative mandate is for the grant of mining lease within two years from the date of commencement of the Mines Amendment Act, 2015 i.e. on or before 11 January 2017 and nothing beyond that.” The Court further held that the lease executed on 6 April 2017 was void ab initio and that no relief can be granted under the amended Section 4A(4) of the MMDR Act as the lease was already non est in the eyes of law.
Facts
The petitioner had initially applied on 15 September 2003 for the grant of a mining lease for bauxite over 62.77 hectares in Ratnagiri, Maharashtra. On 3 July 2009, the Central Government issued a prior approval under Section 5(1) of the MMDR Act, subject to mandatory compliance with environmental and mining regulations. The State Government issued a corresponding Letter of Intent (LOI) on 12 August 2009, reiterating that necessary approvals, particularly the Environmental Clearance (EC), must be obtained. While the mining plan was approved on 26 December 2011 and a modified plan issued in 2015, both were on a “without prejudice” basis, requiring compliance with environmental norms. The petitioner failed to secure the EC before 11 January 2017—the cut-off date stipulated by the amended Section 10A(2)(c) of the MMDR Act. Despite this, a mining lease was executed on 6 April 2017. This lease was later declared lapsed by the authorities on 16 June 2021 under the amended Section 4A(4), which was introduced on 28 March 2021. Though the lapse was conditionally revoked by the State Government through orders dated 24 March 2023 and 9 February 2024, the Indian Bureau of Mines denied the issuance of a mine code, asserting that the lease was void due to non-compliance with statutory requirements. The petitioner thus approached the High Court under Article 226.
Issues
- Whether Section 4A(4) of the MMDR Act, as amended in 2021, can be applied retrospectively to leases executed before its enactment?
- Whether the mining lease executed on 6 April 2017 is valid in law, despite being post the statutory deadline under Section 10A(2)(c)?
- Whether Rule 8(4) of the Mineral Concession Rules, 2016 is ultra vires the parent Act?
- Whether delay by authorities in granting approvals can be excluded from the limitation period under Section 4A(4)?
Petitioner’s Arguments
The petitioner argued that the 2021 amendment to Section 4A(4) was prospective and should not be applied retrospectively to leases already executed. It was contended that the petitioner had acquired a vested right to mine bauxite under the lease executed on 6 April 2017 and had diligently taken steps to initiate mining operations, including submitting applications for EC and Terms of Reference (TOR). The petitioner asserted that the lapse in compliance arose primarily due to procedural delays on the part of governmental agencies. It was also urged that time consumed in litigation and during pendency of revival/extension orders should be excluded from the limitation period under Section 4A(4). The petitioner further argued that Rule 8(4) of the Mineral Concession Rules, 2016—which requires execution and registration of a mining lease to complete “grant”—was ultra vires Section 10A(2)(c), as the parent statute uses only the term “granted.” The amendment substituting the term “mining operations” with “production and dispatch” in Section 4A(4) was said to be prospective and should not invalidate leases executed prior to the amendment. Lastly, the petitioner invoked fundamental rights under Articles 14, 19(1)(g), and 21, arguing that retrospective application of the amendment and denial of the mine code violated these rights.
Respondents’ Arguments
The respondents argued that the lease executed by the petitioner on 6 April 2017 was itself void ab initio, as it was executed after the statutory cut-off of 11 January 2017 stipulated in Section 10A(2)(c). It was submitted that failure to comply with the preconditions laid out in the Central Government’s prior approval and the LOI—including securing EC—rendered the petitioner ineligible. The respondents emphasized that Section 10A(2)(d) mandates such areas be put up for auction after the lapse of the two-year window. They denied that Rule 8(4) was ultra vires, asserting that it merely clarified the statutory requirement for a valid grant. The respondents also invoked Article 31B, noting that the MMDR Act is part of the Ninth Schedule and thus immune from challenges under Articles 14 and 19. It was further submitted that the petitioner’s arguments regarding delay were irrelevant since the statutory framework admits no exceptions. The State’s counsel argued that Rule 20 of the Mineral Concession Rules had also been violated and that the petitioner’s lease had lapsed automatically by operation of law. The respondents concluded that no vested right exists to hold or renew a lease beyond statutory timelines and that permitting such relief would defeat the auction-based policy introduced by the 2015 Amendment.
Analysis of the Law
Section 5(1) of the MMDR Act makes prior approval of the Central Government mandatory for the grant of mining leases in respect of specified minerals. Section 10A(2)(c), introduced by the 2015 Amendment, required that the conditions laid out in such prior approvals or LOIs be fulfilled by 11 January 2017. The Court interpreted the phrase “mining lease shall be granted” to mean not just approval but also execution and registration. Rule 8(4) of the Mineral Concession Rules, 2016 was upheld as consistent with the statutory scheme, as it merely implemented the statutory mandate. The non-obtaining of EC and other compliance failures rendered the lease execution invalid in law. The amendment to Section 4A(4), substituting “mining operation” with “production and dispatch,” was held irrelevant since the lease was never valid to begin with.
Precedent Analysis
The Court relied on settled principles that statutory directions must be followed strictly and that procedures laid down by law are binding. Notably, the following cases were cited:
- Larsen & Toubro Ltd. v. Union of India – To affirm the binding nature of statutory cut-off dates and the legislative mandate.
- Savita Rawat v. State of Madhya Pradesh – To emphasize that eligibility lapses automatically if compliance with statutory conditions is not made within stipulated timelines.
Court’s Reasoning
The Court noted that the prior approval and LOI granted to the petitioner were conditional and required fulfillment of all statutory obligations, particularly obtaining an EC, which the petitioner failed to secure. It emphasized that:
“The legislative intent for the purpose of granting mining lease is clear as crystal.”
It held that non-compliance with statutory conditions by the cut-off date of 11 January 2017 was fatal. The attempt to revive or extend the lease post facto was impermissible under the statute. The Court rejected the challenge to Rule 8(4) and held that the phrase “shall be granted” under Section 10A(2)(c) must be interpreted in conjunction with execution and registration.
Conclusion
The Court concluded:
“We are of the clear opinion that the writ petition is devoid of merit and is accordingly dismissed.”
No relief was granted and the lease was held to have lapsed by operation of law.
Implications
- Reinforces the sanctity of statutory timelines under the MMDR Act.
- Affirms that mining leases granted or executed after the cut-off date of 11 January 2017 are void.
- Upholds the validity of Rule 8(4) of the Mineral Concession Rules, 2016.
- Clarifies that delay by governmental authorities cannot override statutory requirements.
- Strengthens the policy shift from discretionary grants to auction-based allocation.
Also Read: Kerala High Court Sets Aside Conviction in Forgery Case Against Clerk
