Searching Case Laws & Precedent on Legal Query.....!
Analysing the retrieved Case Laws
Scanned Judgements…!
Searching Case Laws & Precedent on Legal Query.....!
Analysing the retrieved Case Laws
Scanned Judgements…!
Main Points and Insights
Definition and Scope: The force majeure clause generally covers acts beyond control, such as natural calamities, war, riots, or other supervening impossibilities. For instance, it includes act of God, War, insurrection, riot, civil commotion, earthquake, flood, fire, actions of the river, natural calamities ["Kishanlal and Another v. State - Allahabad"]. The clause's scope often depends on the specific language used in the contract, and courts tend to interpret it narrowly, considering the nature of the event and contract terms ["JDL Lime Stone And Dolomite Mines VS State of Odisha - Orissa"].
Legal Effect and Consequences:
Non-viability of invoking in illegal or prohibited activities: Courts have held that the force majeure clause cannot be invoked where illegal mining or violations are involved, as seen in cases where the mining was found to be illegal or where the lessee was listed among illegal operators ["Lakshminarayanan Mining Company, Bangalore VS Chairman, Chennai Port Trust, Chennai - Madras"], ["M/S. LAKSHMINARAYANAN MINING vs THE CHAIRMAN - Madras"].
Procedural and Interpretative Aspects:
Limitations and Exclusions: The applicability of force majeure is restricted to events explicitly listed or reasonably understood within the contract context. For example, strikes or administrative bans may or may not qualify depending on the clause's wording ["MD. SERAJUDDIN VS STATE OF ORISSA - Orissa"].
Impact on Mining Operations:
Analysis and Conclusion
The force majeure clause in mining lease agreements serves as a protective mechanism allowing parties to suspend or extend obligations during extraordinary events beyond their control. Its primary effect is to provide relief from penalties, obligations, or termination rights temporarily, and sometimes to extend the lease period. However, its invocation is subject to strict interpretation, often requiring specific notice, proof of event, and compliance with contractual procedures. Importantly, the clause cannot be invoked to justify illegal activities or violations, and courts scrutinize the nature of the event and the contractual language closely. In the context of mining operations, such clauses are crucial during unforeseen disruptions like natural calamities or pandemics but are limited by the specific terms of the agreement and applicable law ["JDL Lime Stone And Dolomite Mines VS State of Odisha - Orissa"], ["DILIP MONDAL vs STATE OF WEST BENGAL AND ORS. - Calcutta"], ["Kishanlal and Another v. State - Allahabad"].
References:
In the high-stakes world of mining operations, unforeseen events like natural disasters, pandemics, or civil unrest can grind activities to a halt. What happens to lease agreements when such extraordinary circumstances strike? Specifically, what is the effect of a force majeure clause in a lease agreement with respect to mining operations? This question is critical for mining companies, landowners, and legal professionals navigating volatile industries.
Force majeure clauses serve as contractual safety nets, allocating risk when performance becomes impossible due to events beyond the parties' control. This article explores their typical effects, drawing from legal precedents and lease provisions, while highlighting limitations and practical recommendations. Note: This is general information, not specific legal advice—consult a qualified attorney for your situation.
Force majeure clauses generally exempt parties from liability or obligations during extraordinary events, such as acts of God, war, insurrection, riots, civil commotion, earthquakes, floods, storms, or terrorist attacks. These are explicitly defined in leases to protect both lessors and lessees from circumstances preventing contractual performance. Sarawjeet Singh VS Asian Hotels (North) Limited - 2023 0 Supreme(Del) 3385Isherdas Sahni & Bros. VS Impresario Entertainment And Hospitality Pvt. Ltd. - 2024 0 Supreme(Del) 560
The core purpose? To suspend or excuse obligations like rent payments or ongoing mining operations temporarily. As one lease clause illustrates: if the premises or any part thereof and/or the Said Building, etc., be destroyed or damaged or discontinued or become suspended by acts of God, ... then the Lease Rental or proportionate part thereof, according to the damage sustained, shall cease to be payable from the time of such destruction or damage. Sarawjeet Singh VS Asian Hotels (North) Limited - 2023 0 Supreme(Del) 3385
Key characteristics include:- Beyond control: The event must not result from negligence or misconduct. Sarawjeet Singh VS Asian Hotels (North) Limited - 2023 0 Supreme(Del) 3385Isherdas Sahni & Bros. VS Impresario Entertainment And Hospitality Pvt. Ltd. - 2024 0 Supreme(Del) 560- Temporary relief: Rent and operations are suspended or proportionally reduced. Sarawjeet Singh VS Asian Hotels (North) Limited - 2023 0 Supreme(Del) 3385Isherdas Sahni & Bros. VS Impresario Entertainment And Hospitality Pvt. Ltd. - 2024 0 Supreme(Del) 560- Duration limits: Prolonged events (e.g., beyond 90 days) may allow termination. Sarawjeet Singh VS Asian Hotels (North) Limited - 2023 0 Supreme(Del) 3385Isherdas Sahni & Bros. VS Impresario Entertainment And Hospitality Pvt. Ltd. - 2024 0 Supreme(Del) 560
In mining leases, force majeure directly impacts operational duties. Lessees are typically relieved from conducting mining activities during the event, with rent abated proportionally based on the affected area or downtime. For instance, another provision states that rent shall cease to be payable during the period of destruction or damage caused by force majeure, and the lease term may be extended accordingly. Isherdas Sahni & Bros. VS Impresario Entertainment And Hospitality Pvt. Ltd. - 2024 0 Supreme(Del) 560
This suspension balances interests:- Lessee benefits: Avoids penalties for non-performance and reduced financial burden.- Lessor protection: Lease may extend post-event, and termination options exist for extended disruptions.
Courts uphold these clauses when clearly drafted, recognizing they allocate risk for extraordinary events. Obligations like rent are excused during the period, aligning with contractual intent. Sarawjeet Singh VS Asian Hotels (North) Limited - 2023 0 Supreme(Del) 3385Isherdas Sahni & Bros. VS Impresario Entertainment And Hospitality Pvt. Ltd. - 2024 0 Supreme(Del) 560
Indian courts interpret force majeure strictly, emphasizing clause language and compliance. In mining contexts, invocation fails if operations involve illegality. For example, in a case involving illegal mining, the court ruled: 'Force Majeure Clause' cannot be invoked in view of the illegal mining traced out. M/S. LAKSHMINARAYANAN MINING vs THE CHAIRMAN - 2021 Supreme(Online)(MAD) 47348
Similarly, under Bihar Minor Mineral Concession Rules, 1972, no force majeure excused defaults where unauthorized mining on forest land occurred: There is no evidence of any Force Majeure or any default on the part of the Department... mining operations have to commence within three months. Surajdev Singh @ Suraj Baba S/o Shri Mahendra Singh VS State of Bihar, through its Principal Secretary, Mines and Geology - 2019 Supreme(Pat) 473Surajdev Singh @ Suraj Baba Vs The State Of Bihar and Ors
Pandemic-related claims highlight notice requirements. In a user fee collection contract, timely invocation was key: In accordance with clause 25(b)... we are hereby declaring the occurrence of aforesaid event as a Force Majeure Event. Courts directed remedies per contract law when extensions were disputed. PSL Infratech Private Limited VS National Highways Authority of India - 2023 Supreme(Del) 2093
Lease disputes during COVID also underscore limits. One arbitration case noted: Clause-15.2 of the Lease agreement contains the force majeure clause, leading to arbitrator appointment under the Arbitration Act. Greesh Kumar Bansal And Another VS Asian Hotels (north) Limited - 2022 Supreme(Del) 1346
In toll collection agreements, courts modified orders recognizing pandemic force majeure but stressed timely notices: An event of force majeure may be relied upon by a party only to the extent that it continues to directly affect the performance. Mep Infrastructure Developers Ltd VS South Delhi Municipal Corporation - 2020 Supreme(Del) 643
These cases reinforce that force majeure applies only to qualifying events with proper procedure.
Not all disruptions qualify—economic hardship or inconvenience typically do not. Key exceptions include:- No negligence: Events caused by party fault are excluded. Sarawjeet Singh VS Asian Hotels (North) Limited - 2023 0 Supreme(Del) 3385Isherdas Sahni & Bros. VS Impresario Entertainment And Hospitality Pvt. Ltd. - 2024 0 Supreme(Del) 560- Prompt notice: Failure to notify voids claims, as in a sale of goods arbitration: There is no material on record to show that such intimation was sent and served within 21 days. Bharat Lakhotya VS Bharat Sanchar Nigam Ltd. - 2012 Supreme(Bom) 2332- Illegal activities: Cannot shield unlawful mining. M/S. LAKSHMINARAYANAN MINING vs THE CHAIRMAN - 2021 Supreme(Online)(MAD) 47348- Temporary only: Indefinite relief is rare; prolonged events trigger termination options after 90 days. Sarawjeet Singh VS Asian Hotels (North) Limited - 2023 0 Supreme(Del) 3385Isherdas Sahni & Bros. VS Impresario Entertainment And Hospitality Pvt. Ltd. - 2024 0 Supreme(Del) 560
Statutory overlays, like the Mines and Minerals (Development and Regulation) Act, may interact, but clauses govern private leases unless overridden. STATE OF U. P. VS RANI RAJENDRI KUMARI - 2016 Supreme(All) 1214
To leverage force majeure effectively:- Draft clearly: Define events, notice timelines (e.g., 7-21 days), and duration thresholds.- Document diligently: Promptly notify and evidence impacts, especially in pandemics or disasters.- Negotiate extensions: For prolonged events, seek mutual modifications before termination.- Seek arbitration: Use dispute clauses early, as courts appoint arbitrators per Section 11(6) of the Arbitration Act. Greesh Kumar Bansal And Another VS Asian Hotels (north) Limited - 2022 Supreme(Del) 1346
Lessees should monitor regulatory compliance to avoid invalidation, per rules like Kerala Minor Mineral Concession Rules. TMT Granites (Pvt. ) Ltd. VS Commissioner, State GST Department - 2018 Supreme(Ker) 780
Force majeure clauses in mining lease agreements typically suspend operations and abate rent during specified extraordinary events, offering temporary relief. However, strict conditions—beyond-control events, no fault, timely notice—must be met, or courts deny invocation, especially amid illegality or non-compliance. Prolonged disruptions may end the lease, providing balance.
By understanding these dynamics, parties can mitigate risks in India's mining sector. Always tailor clauses to specific operations and consult experts for bespoke advice.
References:- Sarawjeet Singh VS Asian Hotels (North) Limited - 2023 0 Supreme(Del) 3385: Scope and effects of force majeure in leases.- Isherdas Sahni & Bros. VS Impresario Entertainment And Hospitality Pvt. Ltd. - 2024 0 Supreme(Del) 560: Suspension, abatement, and termination provisions.- Additional cases: M/S. LAKSHMINARAYANAN MINING vs THE CHAIRMAN - 2021 Supreme(Online)(MAD) 47348, Surajdev Singh @ Suraj Baba S/o Shri Mahendra Singh VS State of Bihar, through its Principal Secretary, Mines and Geology - 2019 Supreme(Pat) 473, PSL Infratech Private Limited VS National Highways Authority of India - 2023 Supreme(Del) 2093, etc.
#ForceMajeure, #MiningLease, #LegalInsights
majeure under Clause 4 of Part-IX of the lease agreement read with Rule 12(1)(ff) of the Rules of 2016. ... The force majeure clause (Clause 4 of Part-F) of the lease agreement read with Rule 12 (1)(ff) of the Minerals (Other than Atomic and Hydro Carbons Energy Mineral) Concession Rules, 2016 (in short, 'Rules of 2016') is the substratum of the petitioners' claim. 4. ... applying force ....
Whereas Rule 21 operates within the ambit of declaring a mining lease lapsed, the force majeure clause in the mining lease deed provides for an opportunity and a second chance for the time lost in mining operations to be added to the period of the lease. ... We derive the said meaning from Clause 5 i.e. the force majeure clause in the #HL_START....
far as such failure arises from force majeure and if through force majeure the lessee suffers damages or losses or the lessee could not do mining operations for a certain period on the plots leased out, the same shall be met out by the State Government by deductions in the payments or royalty by the ... In this clause the expression "force majeure" means an act of God, War, insurrection, riot civil commotion, strike, earthquake, tid....
It is further argued that according to Clause 11.3 in case of Force Majeure situation persisted after 60 days, the defendant was required to give a Notice to this effect after which the parties were to meet and negotiate of the modification or termination of the Agreement. ... The defendant had no reason to presume that Force Majeure was indefinite. Rather, the Order of Ministry of Home Affairs dated 30.05.2020 rendered the Force Majeure#HL....
Mining Operations. ... The learned Additional Solicitor General of India relying on the judgment in the civil suit on the same issue instituted by the another Mining Operator, said that this Court in clear terms formed an opinion that 'Force Majeure Clause' cannot be invoked in view of the illegal mining traced out in respect ... Clause 2 states that the Licensee shall produce a copy of the valid Mining L....
Mining Operations. ... The learned Additional Solicitor General of India relying on the judgment in the civil suit on the same issue instituted by the another Mining Operator, said that this Court in clear terms formed an opinion that 'Force Majeure Clause' cannot be invoked in view of the illegal mining traced out in respect ... Clause 2 states that the Licensee shall produce a copy of the valid Mining L....
There is no evidence of any Force Majeure or any default on the part of the Department in not identifying the land under the terms of the agreement. ... According to the terms of the agreement and the lease coupled with the provisions of the 1972 Rules, the mining operations have to commence within three months from the date of the execution of the lease, which is evident from Clause 3 of Part-VII of the terms of the agree....
There is no evidence of any Force Majeure or any default on the part of the Department in not identifying the land under the terms of the agreement. ... According to the terms of the agreement and the lease coupled with the provisions of the 1972 Rules, the mining operations have to commence within three months from the date of the execution of the lease, which is evident from Clause 3 of of the parties, namely, ....
On the other hand, Rule 61 of the 2016 Rules contemplates a situation where the application for mining lease of minor minerals itself is pending when the 2016 Rules came into force. ... It is submitted that the mining lease is renewable as per the proviso to Clause 3 of Part-VII of the lease deed, under which the State Government may refuse to renew the same. Thus, the renewal clause does not confer any absolute right of having the lease#....
majeure in terms of the agreement between the parties. ... In accordance with clause 25(b) of above referred agreement, we are hereby declaring the occurrence of aforesaid event as a Force Majeure Event which excuses us of our performance while the effects of this event are continuing. ... The Petitioner invoked the force majeure clause in the contract and raised various claims by issuing notices to the National Highways Authority ....
3. Petitioners have claimed that in terms of Clause 12.2 of the Lease agreement stipulates that the agreement cannot be terminated during subsistence of lock-in period i.e. for seven years and thereafter too, upon furnishing of a six months advance to the lessor. Clause-15.2 of the Lease agreement contains the force majeure clause and Clause-15.4 contains the Dispute Resolution Clause.
(Note: Clause 15 of the agreement deals with Force Majeure. 19.03.2020 MEP writes a letter to SDMC claiming for the first time force majeure without any specific reference to the Department of Expenditures OM dated 19.02.2020. An event of force majeure may be relied upon by a party only to the extent that it continues to directly affect the performance or observance of the agreement by that party and the party shall resume performance and observance of the agreement immediately after abatement of the event of force maj....
Under Clause (c) of S.3, “mining lease”, among other things, means “a lease granted for the purpose of undertaking mining operations”. To analyse this contention, it notes that sub-section (3) of S.15 speaks of a “mining lease or any other mineral concession”, while sub-section (1) of S.15 speaks of “quarry leases, mining leases or other mineral concessions”. Under Clause (d) of S.3, the expression “mining operations” means “any operations undertaken for the purpose of winning any mineral”. “Quarry”, we have already seen, is to excavate stone for building, etc. by cutting, ....
However, this lease had to conform with the provisions of any Central Act for the time being in force, regulating mining operations. We answer Question (iii) accordingly holding that lease-deed dated 16.4.1947 which was a “contractual lease” ceased to be in operation as such on and after 1.7.1952 and thereafter there came into existence a new “statutory lease”, though terms and conditions of said lease would continue to be same as were under contractual lease dated 16.4.1947, unless and until alterations are made.
In view of this clause, it is necessary for the Petitioner to give intimation/notice of happening of the events, in the present case the strike/labour problem. What remains is the issue of “Force Majeure” as provided in clause 21 of the Agreement. There is no material on record to show that such intimation was sent and served within 21 days from the date of occurrence.
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