The Patna High Court recently dismissed a writ petition filed by a labourers’ cooperative society challenging the cancellation of its Silica Sand mining lease. The dispute centered around whether the lease granted for a major mineral could be deemed extended automatically under the amended provisions of the Mines and Minerals (Development and Regulation) Act, 1957 (as amended in 2015), even after the mineral was reclassified as a minor mineral by the Central Government.
The petitioner, a registered labour cooperative society, had been granted a 20-year lease in 1994 by the State of Bihar for mining Silica Sand. The mineral was initially classified as a major mineral and was intended for use in the manufacture of glass, ceramics, and other industrial products. The lease was valid until March 2014. In March 2013, a year before its expiry, the petitioner applied for renewal, depositing the required fee and documents.
However, in February 2015, the Central Government issued a Gazette Notification reclassifying Silica Sand as a minor mineral. This change transferred regulatory authority from the Centre to the State Government, bringing the mineral under the Bihar Minor Mineral Concession Rules, 1972. The petitioner contended that since the application for renewal was pending and the lease had not been officially terminated, the amended Act’s Section 8A(3), which provides a deemed extension of 50 years for existing leases, should apply.
The State Mines Department, however, rejected the renewal application in 2017, citing the petitioner’s failure to submit complete documentation, particularly the Environmental Clearance Certificate. The Department issued multiple reminders in 2014 and 2015, which went unanswered. Consequently, the lease was deemed to have lapsed, and the State proceeded with re-auctioning the area under the minor minerals regime.
The petitioner argued that the deemed extension under Section 8A(3) should be upheld as the renewal application had been timely filed and accepted without objection. It also pointed to similar administrative actions in other states like Rajasthan, where lease periods were extended following the 2015 amendment.
However, the High Court held that Section 8A(9) of the amended Act explicitly excludes leases where renewal has been rejected. The Court also emphasized that deemed extension is conditional upon full compliance with all lease conditions, including document submission. As the petitioner failed to submit the necessary environmental clearance and did not rectify the application deficiencies despite repeated opportunities, the renewal was lawfully rejected.
Thus, the High Court ruled that the lease expired in 2014 and, with Silica Sand now classified as a minor mineral, its allocation falls squarely within the State’s jurisdiction under the relevant rules.
Significance or Implication of the Judgment
This judgment underscores the importance of regulatory compliance in mining lease renewals. It clarifies that mere filing of a renewal application does not grant an automatic extension under the amended MMDR Act unless all procedural requirements are satisfied. The reclassification of Silica Sand as a minor mineral also signals a shift in governance from the Centre to States, emphasizing the latter’s authority in settlement and renewal of such leases. This ruling has broader implications for cooperative societies and other mining leaseholders relying on deemed extensions without fulfilling statutory conditions.
Legal Issue(s) Decided and the Court’s Decision
- Whether a mining lease for a major mineral (Silica Sand) could be deemed to continue for 50 years under Section 8A(3) of MMDR Act, 2015: No, if the lease renewal was rejected or the lease had lapsed.
- Whether the 2015 Gazette Notification reclassifying Silica Sand as a minor mineral applies to pre-existing leases: Yes, applicable prospectively.
- Whether failure to submit required documents affects the deemed renewal: Yes, non-compliance leads to rejection.
Case Title
M/s Dehri On Sone Labourers Cooperative Society Ltd. vs. Union of India & Ors.
Case Number
CWJC No. 16000 of 2016
Citation(s)
2020 (1) PLJR 55
Coram and Names of Judges
Hon’ble Mr. Justice Sanjay Priya
Names of Advocates and who they appeared for
- Mr. Dhananjay Kumar, Advocate – for the Petitioner
- Mr. Naresh Dikshit, Spl. P.P. Mines, with Mr. Sumit Shekhar Pandey – for the Mines Department
- Mr. Kaushal Kr. Jha, AAG-8 – for the State
Link to Judgment
https://patnahighcourt.gov.in/viewjudgment/MTUjMTYwMDAjMjAxNiMxI04=-Ws–ak1–bpD72KXI=
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