OMMC Rules | Cancellation Of Lease Not Illegal Merely Because Order Was Issued By 'In-Charge' Mining Officer: Orissa High Court

The Orissa High Court has held cancellation of a lease under the Odisha Minor Mineral Concession Rules, 2016 ('the OMMC Rules') cannot be deemed to be illegal merely because the cancellation order was passed by the Mining Officer (In-charge), while the Mining Officer was the 'competent authority' under such Rules.

A Division Bench of Chief Justice Harish Tandon and Justice Murahari Sri Raman was of the opinion that an administrative post cannot be allowed to go into a hibernation only because the original post-holder remains absent due to certain eventualities, whose duties are to be performed by a competent person by interim conferment of powers. Thus, it observed–

“The moment the Mining Officer is included within the definition of a “Competent Authority”, a power is vested upon him to take a decision in relation to any of the provisions contained in the said Rules, which confers the power upon the “Competent Authority”…Once the post is vacant, the duties, responsibilities and the functioning of such post are to be ensured through a competent person upon conferment of the powers in the interregnum and if such powers are exercised, it cannot invite illegality.”

Pursuant to a notice inviting tender from the intending bidders for an auction of the sairat sources, the petitioner was adjudged as the highest bidder. An agreement was entered into by the petitioner with the Government on December 28, 2020 for a period of five years. He paid the royalty and other charges for the financial year 2020-2021, but defaulted in deposit of the statutory amount for the rest of the financial years.

A demand notice was issued followed by a reminder from the office of the Deputy Director of Mines, Khordha Circle, Khordha, but in vain. Two show-cause notices were subsequently issued by the Mining Officer (In-charge), Khordha, which all remained non-responsive. As there was a violation of the statutory provision under the OMMC Rules, the lease executed in favour of the petitioner was cancelled and the security money deposited was forfeited invoking Rule 27(14) of the Rules.

The petitioner challenged the cancellation order mainly on the ground that the cancellation of a lease is within the powers of the “Competent Authority” as defined in Rule 2(1)(f) of the OMMC Rules and, therefore, the Mining Officer (In-charge) was not empowered to take a decision under the aforesaid provision. It was therefore argued that the same is liable to be set aside.

The Court noted that Rule 51(7) of the OMMC Rules provides for cancellation of a lease and/or levy of the penalty not exceeding rupees fifty thousand, in the event, the “Competent Authority” after giving a notice of requisite time held that the lessee has committed a breach of any or more conditions of the lease deed.

The “Competent Authority” as defined under Rule 2(1)(f) of the OMMC Rules means an officer mentioned in column (4) of Schedule-IV appended to the said Rules. The said schedule provides that in case of minor minerals other than specified minor minerals in relation to a quarry lease or a quarry permit when occurring within the village boundaries, the “Competent Authority” is the 'Mining Officer' of the respective jurisdiction under the Steel and Mines Department.

Since breach of the agreement was palpable, the only question which remained to be answered that whether Mining Officer (In-charge) was incompetent to cancel the lease when Mining Officer was the de jure 'Competent Authority'. The Court held the following while answering the question in negative.

“In an administrative field, the functioning of the different departments depends upon the conglomeration of the officers and separation of the powers conferred upon them in relation to a particular or a specified work. There cannot be a vacuum in functioning of the department, if the same is created either by way of demitting the office, being transferred or getting promotion as the powers entrusted to a particular officer is to be discharged through another officer. The functioning of the department through a particular officer cannot be kept in limbo and no decision could be taken thereupon, which is not recognized in an administrative jurisprudence.”

Consequently, it was held that the Mining Officer (In-charge) was competent to cancel the lease in the absence of the de jure competent authority, i.e. the Mining Officer. Accordingly, the writ petition was dismissed.

Case Title: Narendra Nath Singh v. State of Odisha & Ors.

Case No: W.P.(C) No. 2610 of 2026

Date of Order: February 17, 2026

Counsel for the Petitioner: Mr. Sailaza Nandan Das, Advocate

Counsel for the Opposite Parties: Mr. Biswabara Dash, Addl. Standing Counsel

Citation: 2026 LiveLaw (Ori) 29

Click Here To Read/Download Order