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2020 Supreme(Kar) 173
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
Abhay S. Oka, Ashok S. Kinagi, JJ.
M/S Sri Santhipriya Minerals Pvt. Ltd. - Petitioner
Versus
State of Karnataka - Respondents
Writ Petition No. 50456 of 2019 (Gm-Mm-S) And Writ Petition No.52477 of 2019 (GM-MM-S)
Decided On : 19-03-2020
For the Petitioner:Shri. D.L.N.Rao, Senior Counsel For Shri. Anirudh Anand, Advocate
For the Respondent:Shri. Dhyan Chinappa, Additional Advocate General And Shri. V.G. Bhanuprakash, Addl. Government Advocate
The provisions of Section 8A of the Mines and Minerals (Development and Regulation) Act, 1957, as amended by the Mines and Minerals (Development and Regulation) Amendment Act, 2015, provide for a deemed extension of lease period up to 31st March 2020 for certain categories of mining leases. The State Government is not justified in delaying the grant of the extension.
Headnote:
MINES AND MINERALS (DEVELOPMENT AND REGULATION) ACT, 1957 - SECTION 8A - DEEMED EXTENSION OF LEASE PERIOD - CIRCULAR DATED 1ST APRIL 2015 ISSUED BY MINISTRY OF ENVIRONMENT, FOREST AND CLIMATE CHANGE - EXTENSION OF FOREST CLEARANCE - WRIT OF MANDAMUS - EXTENSION OF LEASE PERIOD BEYOND 31ST MARCH 2020 - EQUITABLE CONSIDERATIONS - AUCTION AS SOLE METHOD OF ALLOTMENT OF MINERAL CONCESSIONS.
Fact of the Case:
The petitioners were granted mining leases for manganese ore and limestone. The leases were renewed from time to time. On 12th January 2015, the Mines and Minerals (Development and Regulation) Amendment Act, 2015 (Amendment Act) came into force. The Amendment Act introduced Section 8A to the Mines and Minerals (Development and Regulation) Act, 1957 (Act of 1957), which provided for a deemed extension of lease period up to 31st March 2020 for certain categories of mining leases. The petitioners applied for the deemed extension of their leases, but the State Government delayed the grant of the extension. The petitioners filed writ petitions in the High Court seeking a direction to the State Government to grant the deemed extension and to extend the lease period beyond 31st March 2020.
Finding of the Court:
The High Court held that the petitioners were entitled to the deemed extension of lease period up to 31st March 2020 under Section 8A of the Act of 1957. The Court also held that the State Government was not justified in delaying the grant of the extension. However, the Court declined to grant the relief of extension of the lease period beyond 31st March 2020. The Court held that the petitioners could seek compensation for the loss caused to them due to the delay in grant of the extension by filing a suit for damages.
Issues: 1. Whether the petitioners were entitled to the deemed extension of lease period up to 31st March 2020 under Section 8A of the Act of 1957? 2. Whether the State Government was justified in delaying the grant of the extension? 3. Whether the petitioners were entitled to extension of the lease period beyond 31st March 2020?
Ratio Decidendi: 1. The Court held that the petitioners were entitled to the deemed extension of lease period up to 31st March 2020 under Section 8A of the Act of 1957. The Court relied on the provisions of Section 8A and the Circular dated 1st April 2015 issued by the Ministry of Environment, Forest and Climate Change, which clarified that the period of validity of approvals granted under the Forest (Conservation) Act, 1980 for diversion of forest land for grant/renewal of mining leases shall be extended and shall be deemed to have been extended up to a period co-terminus with the period of mining lease in accordance with the provisions of the Act of 1957 as amended. 2. The Court held that the State Government was not justified in delaying the grant of the extension. The Court noted that the petitioners had applied for the extension in a timely manner and that there was no valid reason for the delay. 3. The Court declined to grant the relief of extension of the lease period beyond 31st March 2020. The Court held that the petitioners could seek compensation for the loss caused to them due to the delay in grant of the extension by filing a suit for damages. The Court also noted that the Amendment Act introduced auction as the sole method of allotment of mineral concessions and that extending the lease period beyond 31st March 2020 would defeat the object of the Amendment Act.
Final Decision: The High Court disposed of the petitions by passing the following order: (1) We hold there was no justification for the State Government to delay the grant of benefit of deemed extension of leases till 31st March 2020 to both the petitioners as per the provisions of sub section (6) of Section 8A of the said Act of 1957; (2) For the reasons which we have recorded above, we decline to grant the relief of extension of the lease period. We however make it clear that the remedy of filing a suit seeking compensation /damages is available to the petitioners in both the petitions and that the said remedy is expressly kept open; (3) The petitions are disposed of in the above terms.
ORDER :
As common questions of law and fact arise in these two petitions, they are taken up together for final disposal.
FACTUAL ASPECTS
2. It is the case of the petitioners in both the petitions that the extended period of quarrying leases granted to them during the pendency of the present petitions will expire on 31st March, 2020. It is their case that they have paid large amounts to the State Government. It is their case that there is an urgency involved in the matter as there is a prayer made for extension of the lease period. Accordingly, with the consent of the learned Additional Government Advocate representing the respondents, we have heard these petitions on 16th and 17th March, 2020.
WP No. 50456 OF 2019
3. A brief reference to the factual aspects of both the cases will be necessary. In W.P. No.50456 of 2019, on 10th June, 1954, a mining lease was granted to one Shri K.C.Thimma Reddy in respect of the subject land for mining manganese ore. The lease was granted for a period of twenty years. As the lease was to expire on 9th June, 1974, an application for renewal was made by the original lessee. Accordingly, renewal was granted.
3.1 On 20th March, 1991, the mining lease was again renewed for a period of ten years from 10th June, 1984. We must note here that on the application made by the original lessee, the lease was transferred by way of a transfer deed dated 29th November, 1991 in favour of the petitioner. On 29th November, 2006, the mining lease was renewed for a period of twenty years from 10th June, 1994 till 9th June, 2014.
3.2 According to the case of the petitioner, on 28th February, 2013, an application was made for renewal of the lease.
3.3 During the pendency of the application dated 28th February, 2013, the Mines and Minerals (Development and Regulation) Act, 1957 (for short, “the said Act of 1957”) was amended by the Mines and Minerals (Development and Regulation) Amendment Act, 2015 (for short, “the Amendment Act”). The Amendment Act was brought into force with effect from 12th January, 2015. As per Section 8A of the said Act of 1957 and in particular, sub-section (6) thereof, the petitioner became entitled to a deemed extension of lease up to 31st March, 2020.
3.4 Prior to the filing of this petition (W.P. No.50456 of 2019), the petitioner had approached this Court on two occasions, firstly by filing W.P. No.9411 of 2016 which was decided on 4th March, 2016 and secondly, by filing W.P. No.2833 of 2017 which was decided on 3rd April, 2017. In W.P. No.9411 of 2016, a direction was issued to the Director, Department of Mines and Geology, Government of Karnataka, to grant the mining lease in favour of the petitioner up to the end of March 2020, provided it satisfies the requirements of the Circular dated 1st April, 2015. A direction was also issued to the Principal Chief Conservator of Forests, Government of Karnataka, to grant extension of the forest clearance for diversion of 4.18 hectares of forest land for construction of an approach road to make it co-terminus with the lease period.
3.5 On 28th May, 2016, the Principal Chief Conservator of Forests, Bengaluru, addressed a letter to the Additional Chief Secretary, Department of Forests, Ecology and Environment of the State Government stating that as the petitioner has not provided a copy of the letter issued by Government of Karnataka for extension of the lease period as per the Amendment Act, the Forest Department was unable to recommend the case for extension of the forest clearance co-terminus with the extended period of lease under the Amendment Act. By a communication dated 21st September, 2016, the Additional Chief Secretary, Department of Forests, Ecology and Environment, Government of Karnataka, informed the Principal Chief Conservator of Forests that the application made for extension of the forest clearance was rejected, as the letter of extension of the mining lease issued by the concerned Department (Department of Commerce and Industries) has not been
