Gauhati High Court Declares Mining Leases Void for Non-Compliance with MMDR Act — “No Vested Right Without Prior Mining Plan Approval”: IBM Justified in Revoking Plans, Applications Deemed Lapsed After 2021 Amendment

1. Court’s Decision

The court ruled that the mining leases granted on 29.01.2021 were void and without effect, as they failed to comply with statutory requirements. It further held that the applications for mining leases had lapsed under the first proviso to Section 10A(2)(b) of the MMDR Act after its amendment in 2021. As a result, the Indian Bureau of Mines (IBM) was justified in revoking the mining plans on 07.01.2022. The court dismissed the petitions and vacated all interim reliefs granted earlier.

2. Facts

• The petitioners obtained Prospecting Licenses (PL) for graphite mining in Arunachal Pradesh.
• The licenses were initially granted for three years and later renewed for two years.
• The petitioners applied for mining leases before the expiration of the PL, claiming protection under Section 10A(2)(b) of the MMDR Act.
• The State Government granted mining leases on 29.01.2021, and lease deeds were executed the same day.
• The IBM revoked approvals of the mining plans on 07.01.2022, citing non-compliance with statutory requirements.
• The petitioners filed writ petitions challenging the revocation orders.

3. Issues Considered by the Court

1. Were the mining leases granted on 29.01.2021 valid and enforceable?
2. Did the petitioners’ applications lapse under the first proviso to Section 10A(2)(b) of the MMDR Act after the 2021 amendment?
3. Did IBM have the jurisdiction to revoke mining plan approvals?
4. Was the revocation of the mining plans done in violation of natural justice (i.e., without prior notice)?
5. Should the court intervene and overturn the revocation orders?

4. Petitioners’ Arguments

The petitioners made the following points:

1. Validity of Mining Lease
   • They argued that their mining leases were granted before the 2021 amendment and should remain valid.
   • They distinguished between the granting and execution of a mining lease, asserting that their leases were granted before the law changed.
2. IBM’s Lack of Jurisdiction
   • They contended that IBM had no authority to revoke mining plans, as the State Government had not canceled the mining leases.
3. Violation of Natural Justice
   • The revocation orders were issued without prior notice or a hearing, violating their right to due process.
4. Applications Did Not Lapse
   • They claimed that only applications pending as of 28.03.2021 would lapse, whereas their leases had already been granted.
5. Reliance on Previous Court Precedents
   • They cited judgments distinguishing between the “grant” and “execution” of mining leases, arguing that their leases were validly granted.

5. Respondents’ Arguments

The Indian Bureau of Mines (IBM) and the State Government countered with the following:

1. Leases Were Void Ab Initio
   • The mining leases were granted in violation of Section 5(2)(b) of the MMDR Act, which requires prior approval of a mining plan before granting a lease.
   • Since this condition was not met, the leases were automatically void.
2. IBM Had the Authority to Revoke Mining Plans
   • IBM’s role under the law includes regulating mining plans to ensure compliance.
   • The approved mining plans conflicted with the MMDR Act, justifying their revocation.
3. Applications Lapsed After 2021 Amendment
   • The 2021 amendment to the MMDR Act invalidated all pending mining lease applications unless a lease had been fully granted and executed before the cutoff date.
   • Since the petitioners’ leases did not comply, their applications lapsed.
4. No Violation of Natural Justice
   • The outcome would have been the same even if the petitioners were given a hearing.
   • The leases were statutorily void, and giving notice would not have changed the decision.

6. Analysis of the Law

• Section 10A(2)(b) of the MMDR Act was amended in 2021, stating that mining lease applications not fully granted and executed before 28.03.2021 would lapse.
• Section 5(2)(b) requires prior approval of a mining plan before a mining lease is granted.
• Section 19 states that any mining lease granted in violation of the Act is void ab initio.

The court found that the petitioners’ leases did not meet these conditions, making them legally unenforceable.

7. Precedent Analysis

The court relied on the following judgments:

• Gujarat Pottery Works v. B.P. Sood (1967)
  • “Grant” and “execution” of mining leases are distinct legal steps.
  • Approval (grant) is separate from formal lease execution.
• M/S Aane Mines and Minerals v. State of Karnataka (2019)
  • Mining leases not fully granted before statutory cut-off dates become void.
• Dharampal Satyapal Ltd. v. Deputy Commissioner of Central Excise (2015)
  • Not all cases require prior notice if the outcome is legally inevitable.

Based on these rulings, the court determined that the leases were invalid, and revocation was justified.

8. Court’s Reasoning

1. Applications Lapsed Under the Amended Law
   • The mining lease applications were not validly granted before the 2021 amendment.
2. IBM Acted Within Jurisdiction
   • IBM had the authority to regulate mining plans and revoke them if they conflicted with the law.
3. No Violation of Natural Justice
   • Even if notice had been given, the outcome would not have changed.
4. The Petitioners Had No Vested Right
   • A mining lease must comply with statutory conditions, which the petitioners failed to do.

9. Conclusion

• The court dismissed the petitions.
• The mining leases were declared void.
• IBM’s revocation of mining plans was upheld.
• All interim orders were vacated.

10. Implications

1. Mining Leases Must Comply with Statutory Requirements
   • Future applicants must ensure all legal conditions are met before claiming vested rights.
2. Regulatory Oversight Strengthened
   • IBM’s authority to regulate mining plans is upheld.
3. No Automatic Right to Mining Leases
   • Applications for leases will lapse if statutory conditions are not met.
4. Judicial Clarity on Lease Granting vs. Execution
   • The case reinforces the legal difference between “granting” and “executing” leases.

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