MMDR Act | Mining Leases Granted In Violation Of Rule 22-D Are Void Ab Initio; No Deemed Extension Under Section 8A(3): Karnataka High Court
Safiya Malik
The High Court of Karnataka Division Bench of Chief Justice Vibhu Bakhru and Justice C.M. Poonacha dismissed a writ petition challenging a State order dated 04.02.2023 that had declined the petitioner’s request for a deemed extension of a mining lease. The dispute arose from a lease granted over about six acres, which fell below the minimum area prescribed under Rule 22-D of the Mineral Concession Rules, 1960 for the mineral category involved. The Bench held that a mining lease granted contrary to this minimum-area requirement is void under Section 19 of the Mines and Minerals (Development and Regulation) Act, 1957, and therefore cannot be treated as eligible for a deemed extension under Section 8A(3) of the Act.
The writ petition concerned a challenge to an order rejecting an application for deemed extension of an existing mining lease under the Mines and Minerals (Development and Regulation) Act, 1957. The petitioner claimed a deemed extension of a mining lease over six acres of land situated in Thimmapura Village, Mudhol Taluk, Bagalkot District. The original application for grant of a limestone mining lease had been made in 2002 for a larger extent of land, but the competent authority recommended and granted the lease only for six acres in 2006 for a period of twenty years.
During the subsistence of the lease, approval was granted for inclusion of dolomite mineral, co-terminus with the original lease period. Following the death of the original lessee, his legal heir was recognised, and subsequently the mining lease was transferred to the petitioner.
After the 2015 amendment to the MMDR Act inserting provisions for deemed extension of mining leases, an application was forwarded recommending extension subject to statutory compliance. However, scrutiny by the authorities indicated that the original lease was granted for an area below the minimum threshold prescribed under the Mineral Concession Rules, 1960. On that basis, the application for deemed extension was rejected. The petitioner contested this rejection, relying on statutory amendments, past grants to other lessees, and subsequent rule changes.
The Court examined whether the petitioner was entitled to a deemed extension of the mining lease under the MMDR Act. It observed that “Rule 8A(3) expressly provides that all mining leases granted before the commencement of the Mines and Minerals (Development & Regulation) Amendment Act, would be deemed to have been granted for a period of 50 years.”
The Court noted that “the application to recognize the same has been rejected in terms of the impugned order” and that the rejection was based on Rule 22-D of the Mineral Concession Rules, 1960. After reproducing Rule 22-D, the Court recorded that “a plain reading of clause (c) of Rule 22-D of MCR, 1960 clearly indicates that the minimum area for grant of mining lease… is four hectares.”
The Bench stated that “there is little doubt that the grant of the mining lease in question was in violation of Rule 22-D of the MCR, 1960, which was in force at the relevant point of time.” Addressing the proviso to Rule 22-D, it recorded that “the lease in question had been granted after 10.04.2003, that is after Rule 22-D had been inserted.”
The Court further referred to Section 19 of the MMDR Act and noted that “any mineral concession granted… in contravention of the provisions of this Act or any rules or orders made thereunder shall be void and of no effect.” Relying on precedent, it recorded that “Section 19 makes the position clear that any mining lease granted… in contravention of the provisions of the MMDR Act or Rules… should be treated to be void and inoperative.”
On the argument of parity with other lessees, the Court stated that “Article 14 of the Constitution of India does not envisage any negative equality.” It also recorded that “the petitioner is a transferee of the mining lease” and had not challenged the original grant. The reliance on the 2016 Rules was rejected, with the Court stating that “the said rule is inapplicable to the lease in question.”
The Court recorded that “there is merit in the contention that the said lease having been granted contrary to Rule 22-D of the MCR 1960, which was in force at the material time, required to be considered as void in view of Section 19 of the MMDR Act.”
“We are unable to accept that the petitioner would get any right to insist of deemed extension of the lease which is in violation of the relevant rule, solely because another person has been wittingly or unwittingly accorded that benefit. In view of the above, the present petition is dismissed.”
Advocates Representing the Parties
For the Petitioner: Sri D.L.N. Rao, Senior Advocate, along with Sri Anirudh Anand, Advocate
For the Respondents: Sri Kiran V. Ron, Additional Advocate General, along with Smt. Niloufer Akbar, Additional Government Advocate
Case Title: M/s. Shri Venkateshwara Minerals v. State of Karnataka
Case Number: Writ Petition No. 23583 of 2024
Bench: Chief Justice Vibhu Bakhru, Justice C.M. Poonacha
