Compliance with mining lease terms is essential for valid surrender; failure to pay dues justifies lease termination and forfeiture of security deposit.

JUDGMENT :

(Hon’ble Jayant Banerji, J.)

1. Under challenge in the present petition are: a notice dated 30.6.2023 issued by the District Magistrate to the petitioner directing him to deposit all the dues relating to the surrender of the lease, failing which, the lease granted to the petitioner would be cancelled; the order dated 4.8.2023 passed by the District Magistrate, Deoria, whereby while cancelling the mining lease granted to the petitioner, the earnest money deposited by the petitioner has been directed to be forfeited; and the consequential order dated 7.8.2023 whereby an amount of Rs. 39,54,600/- payable towards the 6th and 7th instalments in respect of mining lease has been directed to be recovered from the petitioner.

2. The case of the petitioner is that the State-respondent decided to allot sand mining rights through e-tendering/e-auction pertaining to a sand mining site near Ghaghra river over plot no. 396/1, area 11.7 hectares situated in Tehsil Salempur, District Deoria, for mining 1,17,000 cubic meters per year of sand. The petitioner deposited earnest money of Rs. 19,01,250/-. The petitioner was the highest bidder, his bid being Rs. 169/- per cubic meter, and a letter of intent was issued to him by the District Magistrate on 24.9.2021. Accordingly, for the first year, the annual value of the mining site was Rs. 1,97,73,000/-, twenty five percent of which was to be deposited under the head of security amount along with twenty percent of the annual value which would be the first instalment amounting to Rs. 39,54,600/- as advance payment and as such the total amount to be deposited was Rs. 88,97,850/-. By adjusting the amount of earnest money, the amount to be actually paid was Rs. 69,96,600/- which was deposited by the petitioner on 30.9.2021.

3. The lease deed dated 16.12.2022 was executed in favour of the petitioner which granted mining rights for excavating sand over the mining site for a period of 5 years starting from 16.12.2022, fixing nine instalments for each of the five years of lease, with no instalments payable for the three monsoon months of July, August and September in each year.

4. It is stated that the road to the excavating site was too dilapidated and it was impossible to transport the minerals from the mining site which resulted in losses and therefore, the petitioner decided to surrender the mining lease and thus stopped excavating work from 1.5.2023. On receipt of a letter of 9.5.2023 from the District Magistrate regarding default of partial deposit of the 5th deposit and not depositing the 6th instalment, certain deposits were made by the petitioner on different dates and he made complete payment of the 5th instalment. It is stated that other than the 5th instalment, no further instalments under the mining lease terms were required to be paid by the petitioner in view of the fact that the petitioner submitted an application dated 18.5.2023 before the District Magistrate to surrender the mining lease.

5. A letter dated 22.5.2023 was issued by the Mining Officer requiring to submit a ‘no objection’ for transferring the Environmental Clearance Certificate obtained by the petitioner, and a no dues certificate. It is stated that pursuant to a letter of 26.5.2023 written by the petitioner in respect of surrender of the mining lease, a note sheet was prepared by the respondents in which it was reflected that there was sufficient amount available as security money that was previously deposited by the petitioner and as such, given the requirement of the provisions of surrender of mining lease, twenty five percent of the annual value pertaining to the mining site can be adjusted from the security amount and the mining site should be declared vacant.

6. It is stated that noting on the note-sheet were approved by all the concerned officers including the District Magistrate. Thereafter, the impugned notice dated 30.6.2023 was issued by the District Magistrate, Deoria demanding the royalty for the month of