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2021 DIGILAW 726 (KAR)

R. K. INDUSTRIES A PROPRIETARY CONCERN REPRESENTED BY ITS PROPRIETOR SRI. M. R. PADMANABHA SON OF LATE M. S. RAGHAVENDRA RAO v. STATE OF KARNATAKA

2021-06-30

ABHAY S.OKA, SURAJ GOVINDARAJ

body2021
ORDER : We have heard learned counsel appearing for the petitioner and the learned Additional Government Advocate for the respondents. 2. With a view to appreciate the controversy involved in the case, a brief reference to the facts of the case will be necessary. On 22nd February 1975 on the basis of an application made by the petitioner under the provisions of Mines and Minerals (Development & Regulation) Act, 1957 (for short 'the said Act of 1957), a mining lease was granted to the petitioner for quartz mineral. An order was passed on 27th January 1993 by the State of Karnataka, by which, the mining lease granted to the petitioner was cancelled on the ground of non payment of dues as mentioned in the said order. A writ petition was filed by the petitioner being Writ Petition No.31821 of 1993 for challenging the order of cancellation. On 6th September 1993, an interim order was passed in the said writ petition staying the operation of the order dated 27th January 1993 and prohibiting the respondent from awarding mining lease in respect of the land subject matter of the lease granted to the petitioner. The writ petition was disposed of by the order dated 10th February 1998. While disposing of the writ petition, this Court observed that the lease was valid upto 21st February 1995 and therefore, the petition has become infructuous. The petition was dismissed as infructuous. However, this Court did not disturb the order of cancellation of the lease. 3. According to the case of the petitioner, on 4th January 1995, an application was made by the petitioner seeking renewal of mining lease for a period of twenty years and also an application was filed seeking condonation of delay of 317 days in filing the application for renewal of lease by invoking sub-rule 10 of Rule 24A of the Mineral Concession Rules, 1960 (for short 'the said Rules of 1960'). The case made out by the petitioner is that by the order dated 25th March 2013, the delay of 317 days in filing the application was condoned. The petitioner has sought a writ of mandamus directing the respondents to grant deemed extension of lease as provided under sub-section (3) of Section 8A of the said Act of 1957, which was brought on the statute book with effect from 12th January 2015. 4. The petitioner has sought a writ of mandamus directing the respondents to grant deemed extension of lease as provided under sub-section (3) of Section 8A of the said Act of 1957, which was brought on the statute book with effect from 12th January 2015. 4. A statement of objections has been filed by the State Government. The contention raised in the statement of objections is that the lease was cancelled and the said order was not disturbed in the writ petition filed by the petitioner. Therefore, the petitioner is not entitled to deemed extension. In the statement of objections, reliance is placed on Writ Petition No.56826 of 2013 filed by the petitioner seeking a writ of mandamus against the third respondent therein (Director of Mines and Geology) to issue No Objection Certificate enabling the petitioner to carry out mining activities. The said writ petition was permitted to be withdrawn with liberty to adopt another remedy. 5. The submission of the learned counsel appearing for the petitioner is that as per Sub Section (3) of Section 8A of the said Act of 1957, the mining lease granted to the petitioner on 22nd February, 1975 shall be deemed to have been granted for a period of 50 years from the date of the grant of lease. His submission is that sub-section (9) of Section 8A of the said Act of 1957 will not apply in view of the order of stay. It is urged that the order for determination of lease was not operative when the term of the lease ended. The submission is that, as till the date of the expiry of lease, the order of cancellation had not taken effect, the petitioner is entitled to a deemed extension of the lease under sub-section (3) of Section 8A of the said Act of 1957. 6. The opposition of the State Government is basically on the ground that sub-section (9) of Section 8A which carves out an exception to sub-section (3) of Section 8A of the said Act of 1957, will squarely apply as the lease stood determined before 12th January 2015. 7. We have carefully considered the submissions. Section 8A of the said Act of 1957, as inserted by the Act 10 of 2015 with effect from 12th January 2015, reads thus: "8A. Period of grant of a mining lease for minerals other than coal, lignite and atomic minerals.? 7. We have carefully considered the submissions. Section 8A of the said Act of 1957, as inserted by the Act 10 of 2015 with effect from 12th January 2015, reads thus: "8A. Period of grant of a mining lease for minerals other than coal, lignite and atomic minerals.? (1) The provisions of this section shall apply to minerals other than those specified in Part A and Part B of the First Schedule. (2) On and from the date of the commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015, all mining leases shall be granted for the period of fifty years. (3) All mining leases granted before the commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015 shall be deemed to have been granted for a period of fifty years. (4) On the expiry of the lease period, the lease shall be put up for auction as per the procedure specified in this Act. (5) Notwithstanding anything contained in subsections (2), (3) and sub-section (4), the period of lease granted before the date of commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015, where mineral is used for captive purpose, shall be extended and be deemed to have been extended up to a period ending on the 31st March, 2030 with effect from 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. (6) Notwithstanding anything contained in sub-sections (2), (3) and sub-section (4), the period of lease granted before the date of commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015, where mineral is used for other than captive purpose, shall be extended and be deemed to have been extended up to a period ending on the 31st March, 2020 with effect from 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 renewals been rejected, or which has been determined, or lapsed." (underlines supplied) 8. It is true that sub-section (3) of Section 8A of the said Act of 1957 provides that all mining leases granted before the commencement of the Act 10 of 2015 shall be deemed to have been granted for a period of fifty years. The Act 10 of 2015 came into force on 12th January 2015. Sub-section (9) of Section 8A carves out an exception to the deeming fiction introduced by earlier sub-sections and in particular, subsection (3) of Section 8A. It clearly lays down that in case of a mining lease granted before 12th January 2015, if an application for renewal of a mining lease has been rejected or if the mining lease has been determined or the mining lease has lapsed, the provisions of sub-section (3) of Section 8A will have no application. Sub-section (9) of Section 8A is applicable in the said three contingencies. One of the three contingencies is that the lease must have been determined prior to 12th January 2015. 9. We have perused the order dated 27th January 1993 of cancellation of the lease granted to the petitioner passed by the State Government which has been produced along with a memo dated 29th June 2021. In the preamble thereof, it is recorded that by a letter dated 29th January 1992, the petitioner was called upon to pay the arrears of dues amounting to Rs.18,082/-failing which, he was informed that the lease will be cancelled and the Security Deposit will be forfeited. It is further recorded that the petitioner has not taken any steps to settle the arrears notwithstanding the repeated reminders and therefore, it is a clearly an order of cancellation of the lease. It is further recorded that the petitioner has not taken any steps to settle the arrears notwithstanding the repeated reminders and therefore, it is a clearly an order of cancellation of the lease. Obviously, there is no difference between 'cancellation of lease' or 'determination of lease'. Thus, by the order dated 27th January 1993, the lease was determined. 10. As stated earlier, in W.P.No.31821/1993 filed by the petitioner, an interim order of stay was passed. The said order reads thus: "that the operation of the order Dt.27.01.93 in No. CIB/MMN/92 issued by the first Respondent be and the same is hereby stayed and further Respondents are prohibited from awarding to any other mining lease in respect of the lands leased to the Petitioner under this mining lease No.1228." 11. We may note here that the order of determination of lease is of 27th January 1993. Thus, when the interim order was passed by this Court on 6th September 1993, the lease already stood determined. There is no mandatory order passed by this Court permitting continuation of the mining operations. In fact, there is a direction issued not to award mining lease in respect of the areas subject matter of the lease. 12. By the order dated 10th February 1998, W.P.No.31821/1993 was dismissed as infructuous. The said order reads thus: "Heard. The Petitioner has in this petition sought for quashing of the Govt. Order Dt.27.01.1993 Annexure-E and to issue a writ in the nature of mandamus to treat the Petitioner's mining lease as to be continuing without being determined. The case of the Petitioner is that the mining lease has been granted in favour of the Petitioner as per Annexure-A and it is Dt.22.02.1975 and is valid for a period of 20 years i.e., upto 21.02.1995. By the impugned order Annexure-E, the Govt. has cancelled the mining lease issued in favour of the Petitioner. This Court issued rule and granted interim order as prayed for on 06.09.1993. Interim order prayed for by the Petitioner was to stay the operation of Annexure-E and it was stayed. Now the lease in favour of the Petitioner i.e., Annexure-A has expired and thus the petition has become infructuous since Annexure-E does not survive for quashing. Accordingly, the petition is dismissed as having become infructuous." 13. Thus, while disposing of the said writ petition, this Court did not disturb the order of cancellation of lease. Now the lease in favour of the Petitioner i.e., Annexure-A has expired and thus the petition has become infructuous since Annexure-E does not survive for quashing. Accordingly, the petition is dismissed as having become infructuous." 13. Thus, while disposing of the said writ petition, this Court did not disturb the order of cancellation of lease. There is a serious doubt whether by virtue of the interim order dated 6th September 1993, the mining lease which was determined on 27th January 1993 was revived. Even assuming that the said interim order enabled the petitioner to continue mining activity, in any case, this Court did not set aside the order dated 27th January 1993 by which the mining lease granted to the petitioner was determined. Thus, before 12th January 2015, the mining lease granted to the petitioner was determined and therefore, the exception carved out by subsection (9) of Section 8A of the said Act of 1957 would squarely apply. Therefore, it is not necessary for us to go into the question whether there was a lapse of lease or not. 14. We may, however, mention here that in paragraph 8 of the rejoinder, the petitioner has mentioned that the Director of Mines and Geology had granted working permission authorising the petitioner to conduct the mining operation. It is further stated that after the conduct of mining operations, the petitioner made applications requesting the Director of Mines and Geology to issue Mineral Dispatch Permits. Accordingly, Mineral Dispatch Permits were issued from time-to-time which are at Annexures-L to L30 to the rejoinder. The first Permit has been issued on 3rd August 2004 and the last one on 29th July 2009. As stated earlier, the lease granted to the petitioner was for a period of twenty years right from 22nd February 1975. It was not renewed after 21st February 1995. As pointed out earlier, the interim order passed in the earlier petition filed by the petitioner did not permit the petitioner to continue the mining activities. In any event, the petitioner could not have continued the mining activities after 21st February 1995. However, from the averments made in the rejoinder, it is apparent that even after expiry of the lease, the petitioner continued to carry on the mining operations. In any event, the petitioner could not have continued the mining activities after 21st February 1995. However, from the averments made in the rejoinder, it is apparent that even after expiry of the lease, the petitioner continued to carry on the mining operations. It appears to us that prima facie, the mining operations were continued after expiry of the lease and Mineral Dispatch Permits were issued to the petitioner from 2004 to 2009. Therefore, it is necessary for the State Government to hold an inquiry whether the petitioner continued to carry on the mining activities after the expiry of mining lease. 15. It is suffice to say that as the lease granted to the petitioner was determined on 27th January 1993 and the said order was not interfered with by this Court, this is a case where the mining lease was determined before 12th January 2015. Hence, the exception carved out by sub-section (9) of Section 8A of the said Act of 1957 will squarely apply in this case. Therefore, the petitioner is not entitled to deemed extension as provided in sub-section (3) of Section 8A of the said Act of 1957. 16. Hence, we pass the following order: (i) The writ petition is rejected; (ii) We direct the State Government to ensure that an inquiry is made into the question whether the petitioner has carried on any mining activities after 21st February 1995 and more particularly, after 10th February 1998; (iii) A copy of the report shall be placed on record within a period of three months from today; (iv) Though the petition is disposed of, for considering the report which may be filed by the State Government, the petition shall be listed on 18th October 2021.