The court ruled that additional conditions in mining lease agreements can be imposed without central government approval, as they pertain to third-party claims and do not conflict with the interests of mineral development.

ORDER :

1. By virtue of this petition, the petitioner is questioning the legality and propriety of the order dated 13.07.2020 passed by respondent No.1- Secretary, Department of Mineral Resources, State of Chhattisgarh and, the letter dated 31.07.2020 issued by the Collector, District Kanker, respondent No.3 herein and, also the demand notice, dated 20.09.2019 issued by the Divisional Forest Officer, East Bhanupratappur, Forest Division, Kanker, respondent No.5 herein, whereby, the petitioner-M/s Shri Bajrang Power and Ispat Limited, a Company duly incorporated under the Companies Act, 1956 (hereinafter referred to as ‘the petitioner-company’), was directed to deposit a sum of Rs.68,28,480/- (Rs. Sixty Eight Lacs Twenty Eight Thousand Four Hundred Eighty only) towards compensation on pro rata basis payable to the villagers in the name of grazing, collection of tendu leaves and other Non Timber Forest Produce (in short ‘NTFP’), presently accruing from forest land which was proposed for diversion for mining activities for the petitioner-company.

2. (i) According to the petitioner-company, an application dated 19.06.2006 for obtaining mining lease for iron-ore over an area of 75 hectares land in forest compartment No.641 and 642 (old No.364 and 365) near the village Hahaladdi, Durgkondal Forest Range and Bhanupratappur East, Forest Division, District Kanker, was made and, the respondent No.6- Union of India, granted prior approval for the said purpose vide its order dated 23.10.2007 (Annexure P-1) under Section 5 of the Mines and Minerals (Development and Regulation) Act, 1957 (hereinafter referred to as ‘the Act, 1957’) and thereafter, the respondent No.1 sought consent from the petitioner-company vide its letter, dated 18.02.2008 (Anenxure P-2) in order to incorporate certain terms and conditions as mentioned therein for the proposed mining lease and, the petitioner-company has given its consent vide its letter dated 19.02.2008 (Annexure P-3). After considering the terms and conditions, the respondent No.7- Union of India granted ‘in-principle’ approval vide its letter dated 03.05.2013 (Annexure P-4) for diversion of 76.5 hectares of forest land (75 hectares for lease while 1.5 hectare for approach road to the mining lease area) for iron-ore mining for the concerned area subject to fulfilling the terms and conditions mentioned therein.

(ii) It is pleaded by the petitioner-company that as per the condition No.30 mentioned in the said ‘in-principle’ approval granted by the Union of India, the final study report was submitted on 14.08.2013 (Annexure P-5), whereby, a sum of Rs.6,85,500/- (Rs.Six Lacs Eighty Five Thousand Five Hundred only) was assessed per year for all the times to come, if the said area would not be diverted for mining and that by applying the ‘faustmann formula’ for capitalization of forest reserve, the amount of compensation payable to the villagers was calculated to the tune of Rs.13,37,580/- (Rs. Thirteen Lacs Thirty Seven Thousand Five Hundred Eighty only) with regard to the assessment of benefits, such as grazing, collection of tendu leaves and other NTFP, accruing from the forest land proposed for diversion and the report, so submitted, was forwarded by the respondent No.5- The Divisional Forest Officer, East Bhanupratappur, Forest Division, District Kanker, on 02.12.2013 (Annexure P-6) to the Chief Conservator of Forest, Raipur, for its recommendation, who in turn, vide its letter, dated 19.03.2014 (Annexure P-8) has recommended the amount of compensation as determined by the petitioner-company in its final report to the Secr