MMDR Act - Supreme Court Explains Exceptions To Sec 10A(1) Which Makes Mining Lease Applications Received Before 12.01.2015 Ineligible

The Supreme Court has elucidated the exceptions applicable to Section 10-A (1) of the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act), which provides that all applications received for grant of mining lease prior to 12.01.2015, shall become ineligible. The court remarked that the object and purpose of the Mines and Minerals (Development and Regulation) Amendment Act, 2015 is to ensure that allocation of mineral resources is done through auctioning. This is the reason why sub-section (1) to Section 10-A, which is inserted by the 2015 Amendment Act, mandates that all applications received prior to 12.01.2015 shall become ineligible, the court remarked.The court held that where a prospecting licence has been granted to the permit holder or the licensee has the right to obtain a prospecting licence followed by a mining lease, and the State Government is satisfied that the permit holder or the licensee has complied with the requirements specified in Section 10-A (2)(b) of the MMDR Act, the bar of Section 10-A (1) shall not be applicable.“The reason for protecting this class of cases is on account of the fact that they had altered their position by spending money on reconnaissance operations or prospecting operations. Accordingly, the principle of legitimate expectation is applied,” the bench of Justices Sanjiv Khanna and Aravind Kumar said.Another exception, the court said, was when the Central Government had already communicated their previous approval or the State Government had issued a ‘Letter of Intent’ for grant of mining lease before coming into force of the 2015 Amendment Act. The court observed that, this is because certain rights had already accrued to the applicants before the cut-off date, as all necessary procedures and formalities had been complied with, and only the formal lease remained to be executed.The top court was dealing with the case of an applicant who was issued a Grant Order dated 16.07.2015, for mining of Dolomite, which was notified as a ‘minor’ mineral with effect from 10.02.2015. The Supreme Court was considering whether the applicant’s case was covered by the exception provided under the proviso to Rule 61 of the Concession Rules, 2016. As per Rule 61 of the Concession Rules, all applications for mining lease of minor minerals, received prior to enforcement of the Concession Rules, 2016, shall become ineligible. However, the proviso to the said Rule carved an exception, stipulating that if an applicant who had made an application prior to 29.07.2016, had been issued a Grant Order or a Letter of Intent, or any other order requiring alteration of the applicant’s position, his application for mining lease may be considered after due compliance of all necessary conditions.Facts of the case:The Calcutta High Court, vide order dated 10.09.2014, had directed the Joint Secretary, Commerce and Industries Department (West Bengal), to grant a long-term lease to the respondent-applicant, M/s Chiranjilal (Mineral) Industries of Bagandih, for extraction of Dolomite, after its application for grant of mining lease was rejected by the Joint Secretary.Subsequently, on 10.02.2015, vide notification No. S.O. 423 (E), Dolomite was notified as a minor mineral, falling under the legislative and administrative jurisdiction of the State Government. Thereafter, Grant Order dated 16.07.2015 was issued by the Deputy Secretary for Dolomite mining in favour of the applicant, subject to certain conditions. It was stipulated in the Grant Order that execution of the lease deed was subject to the No Objection Certificate to be obtained from the Central Government since Dolomite was a major mineral at the time of the order dated 10.09.2014 passed by the High Court.Challenging the conditions imposed on the mining lease, the respondent-applicant filed a writ petition before the Calcutta High Court. Allowing the writ petition, the High Court held that Dolomite had become a minor mineral with effect from 10.02.2015 and thus, prior approval of the Central Government was not required under Section 5(1) of the MMDR Act, 1957. The appeal filed by the State of West Bengal against the said decision was dismissed by the Division Bench of the High Court.Supreme Court’s Analysis:In the appeal filed before the Supreme Court, the top court was considering whether the applicant’s case was covered by the exception provided under the proviso to Rule 61 of the Concession Rules, 2016.The Apex Court noted that the Division Bench was of the view that the 2016 Rules would not be applicable as the applicant had made the application in March 1998, and the Joint Secretary had passed the order to grant mining lease in 13.10.2006, which was, however, later revoked/cancelled. The writ petition filed by the applicant against the said revocation was allowed by the High Court, who had directed the Joint Secretary to grant a long-term lease to the applicant in respect of 76 acres of land, the top court observed.The court...

MMDR Act - Supreme Court Explains Exceptions To Sec 10A(1) Which Makes Mining Lease Applications Received Before 12.01.2015 Ineligible

Parina Katyal

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