1. The defendant in O.S.No.82/2006 on the file of the Prl.Civil Judge (Jr.Dn) and JMFC, Hospet, aggrieved by the Judgment and decree dt. 8.2.2008 allowing the suit, preferred RA 19/2009 whence the Addl. Civil Judge (Sr.Dn), Hospet reversed the Judgment and decree and dismissed the suit by Judgment and decree dt. 29.6.2009. Hence this second appeal by the plaintiff.

2. Parties, hereinafter, are referred to as described in the plaint.

3. The panorama of factual position as set out in the pleadings of the parties is:

I. PLAINT ASSERTIONS:

i) The plaintiff is a limited company incorporated under the Companies Act, 1956 engaged in the business of mining and marketing all minerals including iron ore. One K.Narayanaiah was grantee of a lease by the then Government of Madras to mine iron ore for a period of 10 years in portions of land in Sy.Nos.1, 4, 5 and 6 of Vyasanakere village, Hospet taluk together measuring 858 acres, said to be transferred to the plaintiff during the year 1962 by the erstwhile State of Mysore and renewed from time to time for block periods of 20 years each, the latest during June 2003 w.e.f. 14.11.2002, followed by the execution of the lease deed of M.L.No.2416 in Form No.K under The Mineral concession Rules, 1960, for short ‘MC Rules’ framed under The Mines and Minerals (Development & Regulation) Act, 1957, for short ‘MMRD Act of 1957’.

ii) One B.N.Shankar Singh was granted a lease to mine iron ore in 200 acres in Sy.No.1 of Vyasanakere village, for 29 years, in M.L.2068 under lease deed 13.10.1958. That area, allegedly is the northern portion of land in Sy.No.1 while the grant of land in favour of Sri.K.Narayanaiah, is in the Southern portion.

iii) It is the allegation of the plaintiff that the said grantee encroached upon the plaintiff’s mining area during the year 1976 and transferred the lease to the defendant-a Partnership Firm, which too continued to occupy the encroached area. The illegal act of the defendant, it is asserted, time and again was brought to the notice of the authorities of the Department of Mines in the State.

iv) Defendant’s lease having come up for renewal during the year 1997, the State of Karnataka permitted the renewal subject to compliance with certain terms and conditions, one of which was, verification, after actual survey and demarcation of the area, under Rule 33 of the ‘MC Rules’ before execution of the lease deed, since in law, it is held that every renewal is a fresh grant.

v) It is asserted that a common boundary between the two leasehold areas, was fixed after notice to both the parties and in their presence, whence the defendant’s encroachment into the plaintiff’s leased land was noticed and recorded in the Survey report dt. 3/17.07.1999, following which the Director of Mines and Geology by letter dt. 10.8.1999 directed it to stop illegal activity outside the mining area and show cause as to why the lease should not be cancelled.

vi) The Department of Mines and Geology, State of Karnataka, it is said, addressed a letter dt. 15.9.1999 to the plaintiff over the alleged encroachment by the defendant and directed it to maintain the boundary marks and pillars and carry on mining operations in M.L.1801 including the area encroached upon. According to the plaintiff, the Senior Geologist submitted a report dt. 9.9.1999 indicating that the plaintiff was in possession of the encroached area, after evicting the defendant therefrom.

vii) It is alleged that on the instructions of the Minister for Mines and Geology, the Senior Geologist addressed a letter dt. 14.10.1999 proposing re-survey of M.L.2068 the area leased to the defendant, pursuant thereto in a re-survey conducted on 3.11.1999 to 5.11.1999 and 16.11.1999 to 24.11.1999, after notice to all parties, it was observed that the defendant was mining outside its area and in the leased area in M.L.1801 of the plaintiff as recorded in the three reports and combined sketches.

viii) Petitioner filed W.P.3759/2000 an