JSW Steel Limited v. Union of India, Through its Secretary, Ministry of Mines, Shastri Bhawan, Dr. Rajendra Prasad Road, New Delhi
2025-10-10
Sachin Singh Rajput, Sanjay K Agrawal
body2025
DailyLaw.ai
ORDER : Sanjay K. Agrawal, J. 1. Since common question of law and fact is involved in both the writ petitions, they have been clubbed together, heard together and are being disposed of by this common order. 2. The petitioner herein has filed these writ petitions under Article 226/227 of the Constitution of India seeking relief that the notice dated 20-9-2022 (Annexure P-16) issued by respondent No.3 be quashed and further sought appropriate writ or direction declaring that the consequence of lapsing provision under Section 4A(4) of the Mines and Minerals (Development and Regulation) Act, 1957 (for short, ‘the MMDR Act’) would not be applicable to them where the non- commencement or discontinuance of mining operations is for reasons beyond the control of the lessee including circumstances where the non- commencement or discontinuance is on account of pendency of grant of statutory clearances, and also sought relief to issue an appropriate writ, order or direction declaring that in respect of mining leases executed pursuant to the Mines and Minerals (Development and Regulation) Removal of Difficulties Order, 2017 (for short, ‘the Order of 2017’), the period of two years prescribed under Section 4A(4) of the MMDR Act would commence only after receipt of Environmental Clearance (EC). Further, the petitioner has also sought relief that Rule 20(3) of the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016 (for short, ‘the Rules of 2016’), as it stood prior to its substitution with effect from 1-11-2021, be declared as ultra vires to Section 4A(4) of the MMDR Act and alternatively, the period of 3 months stipulated in the pre- substituted Rule 20(3) be declared as directory and not mandatory in nature. 3. The aforesaid reliefs have been sought on the following factual backdrop: (Lead Case WPC 4817/2022) 4. The petitioner’s predecessor-in-interest M/s. Monnet Ispat and Energy Limited, on 22-1-2007, made an application for grant of mining lease for limestone at Villages Gaitra, Pausri, Bharsela & Bharseli, Tehsil Balodabazaar, District Raipur. Accordingly, the State of Chhattisgarh, on 3-11- 2009 vide Annexure P-1, issued a letter of intent (LOI) for mining limestone for captive use (cement plant) in favour of M/s. Monnet Ispat and Energy Limited for a period of 30 years and as per clause 4 of the LOI, mining operations were to be carried out only after obtaining EC.
Accordingly, the State of Chhattisgarh, on 3-11- 2009 vide Annexure P-1, issued a letter of intent (LOI) for mining limestone for captive use (cement plant) in favour of M/s. Monnet Ispat and Energy Limited for a period of 30 years and as per clause 4 of the LOI, mining operations were to be carried out only after obtaining EC. On 12-1-2015, the Parliament has amended the MMDR Act vide the MMDR Amendment Act, 2015 inter alia introducing addition of Section 10A(2)(c) protecting rights of the leaseholders. Section 24 of the MMDR Amendment Act, 2015 provides power of the Central Government to remove difficulties arising in giving effect to the provisions of the MMDR Amendment Act, 2015. Accordingly, on 18-8-2015, an application seeking EC was made by M/s. Monnet Ispat and Energy Limited under the terms of EIA (Environmental Impact Assessment) Notification dated 14-9-2006 under the Environment (Protection) Act, 1986. The Central Government on 4-1-2017 issued the Order of 2017 clarifying that if all conditions specified in the LOI apart from grant of EC, have been complied with by the applicant on or before 11-1-2017, the application shall be considered for grant of mining lease. In terms of the Order of 2017, on 9-1-2017, the State Government executed and registered a mining lease deed in favour of M/s. Monnet Ispat and Energy Limited. Clause 5.18 of the said lease deed provides that no mining operations shall be allowed before grant of EC and supplementary lease deed would be executed after grant of EC. 5. The predecessor-in-interest of the petitioner – M/s. Monnet Ispat and Energy Limited was subjected to insolvency proceedings under Section 7 of the Insolvency and Bankruptcy Code, 2016 and in terms of a Resolution Plan approved by the National Company Law Tribunal (NCLT), Mumbai Bench, on 24- 7-2018, the present petitioner took over the management of the erstwhile M/s. Monnet Ispat and Energy Limited and all its assets on 31-8-2018. Immediately after taking over the management, the petitioner herein vide its letter dated 15-12-2018 (Annexure P-6) addressed to the Secretary, Mining Department, Government of Chhattisgarh, without prejudice and out of abundant caution, requested that its mining lease be kept subsisting so as to enable it to obtain EC.
Immediately after taking over the management, the petitioner herein vide its letter dated 15-12-2018 (Annexure P-6) addressed to the Secretary, Mining Department, Government of Chhattisgarh, without prejudice and out of abundant caution, requested that its mining lease be kept subsisting so as to enable it to obtain EC. On 23-8-2019 vide Annexure P-7, the Government of Chhattisgarh issued a notice inter alia stating that the petitioner’s application dated 15-12-2018 (received on 19-12-2018) was delayed in terms of Rule 20(3) of the Rules of 2016 and as per the notice, the application ought to have been filed three months prior to expiry of the two years period stipulated in Section 4A(4) of the MMDR Act i.e. by 10-1-2018. The petitioner, on 24-9-2019 vide Annexure P-8, submitted its response to the notice dated 23-8-2019 as under: - a)Section 4A(4) of the MMDR Act does not mandate that an application must be filed three months before the expiry of the two-year period. b)The proviso to Section 4A(4) merely requires that the application be filed “before the expiry” of the two-year period. c)The three-month period prescribed under Rule 20(3) of the Rules of 2016 is at best directory in nature. d)In any event, in the case of a conflict between the statutory provision {Section 4A(4)} and the rule {Rule 20(3)}, the statutory provision would prevail. Thereafter, on 19-4-2022 vide Annexure P-14, the Joint Director of Geology and Mining, Chhattisgarh, intimated the petitioner that the State Government was seeking an opinion whether the petitioner’s limestone mining lease should be declared as lapsed under Rule 20 of the Rules of 2016 and sought the petitioner’s response to which the petitioner on 1-6-2022 vide Annexure P-15, submitted detailed reply elaborating on the extensive steps undertaken by them to obtain EC stating that since the lease deed itself prohibited mining operations without EC, the lapsing provision under Section 4A(4) of the MMDR Act could only be invoked if the petitioner fails to commence mining operations for two years after obtaining the EC and it was further submitted that the question of lease in question having lapsed does not arise.
Thereafter, on 20-9-2022, the State Government issued the impugned notice to the petitioner inter alia stating again that the petitioner’s application dated 15/19-12-2018 was delayed in terms of Rule 20(3) of the Rules of 2016 and fit to be declared as lapsed leading to filing of writ petitions on 14-11-2022 before this Court questioning the notice dated 20-9-2022 and seeking further reliefs as catalogued in the opening paragraph of this order stating inter alia that mining operations can be carried out only under and in accordance with the terms and conditions of the mining lease granted under the Act as per Section 4(1) of the MMDR Act and since the statutory condition precedent for exercise of power under Section 4A(4) is a mining lease which permits commencement of mining operations, exercise of power by the State Government in the absence of the aforesaid statutory condition precedent is without jurisdiction and without authority of law and deserves to be quashed. It has further been pleaded that there is no concept of deemed or automatic lapsing under Section 4A(4) of the MMDR Act, the show cause notice dated 20-9- 2022/present proceeding has been initiated in premeditated manner, as the State Government had already made-up its mind to declare the proceeding lapsed and since there is legislative injunction as well as statutory injunction by the Order of 2017 and mining lease deed itself provides that mining operations will be carried out only under and in accordance with the terms and conditions of the mining lease, no party can be held responsible for failing to meet an obligation when faced with a legislative/statutory injunction and as such, the writ petitions be allowed and the reliefs claimed in paragraph 10 of the writ petitions be granted in favour of the petitioner. 6. Union of India/respondent No.1 has filed return stating inter alia that the petitions are premature, as merely on the issuance of impugned notice dated 20-9-2022 by the State Government, the petitioner has approached the High Court invoking the writ jurisdiction, the petitioner ought to have replied the notice dated 20-9-2022 and then the State Government will take appropriate decision in this regard, as such, the question of invocation of writ jurisdiction of this Court does not meet out and issuance of notice dated 20-9-2022 by the State Government does not infringe the right(s) of the petitioner.
It has been further stated that writ petition is not maintainable against show-cause notice and the application for EC is pending since 2015 before the Ministry of Environment, Forest and Climate Change (MoEF&CC), Government of India and as such, the MoEF&CC, Government of India is necessary party. Thus, the writ petitions are not maintainable against show-cause notice, as the petitioner has alternative remedy of filing reply before the State Government. As such, the writ petitions are bereft of any merit and deserve to be dismissed. 7. The State of Chhattisgarh/respondents No.2 to 5 has filed its reply stating inter alia that the LOI was issued to the petitioner on 3-11-2009, but the petitioner kept silent for about 6 years and made application for grant of EC on 18-8-2015. The conditions of the LOI were within the knowledge of the petitioner since inception but for reasons best known to it, the application for EC was made after 6 years from the date of issuance of LOI and the petitioner has failed to demonstrate what steps were taken by it for grant of EC and wake up from deep sleep only after amendment in the MMDR Act, whereby Section 10A was introduced in the MMDR Act. It has been further stated that in light of the Order of 2017, on 7-1- 2017, mining lease deed was executed between the petitioner and the State of Chhattisgarh and therefore the petitioner was under obligation to commence the mining activities on or before 8-1- 2019. It has also been pleaded that sub-rule (3) of Rule 20 of the Rules of 2016 prescribes that prescribes that where mining lease holder could not execute mining lease for the reason beyond his control, the lease holder will make an application to the State Government explaining the reasons for the same 3 months before expiry of 2 years. In the present case, the petitioner ought to have made application on or before 6-10-2018, but the petitioner has filed application for extension of period of mining lease on 15-12-2018 after lapse of mining lease. As such, as per the proviso to sub-rule (3) of Rule 20 of the Rules of 2016, if the lessee has failed to make an application within the time stipulated, the lease shall lapse after expiry of 2 years.
As such, as per the proviso to sub-rule (3) of Rule 20 of the Rules of 2016, if the lessee has failed to make an application within the time stipulated, the lease shall lapse after expiry of 2 years. As per sub-section (4) of Section 4A of the MMDR Act read with sub-rule (3) of Rule 20 of the Rules of 2016, the application was to be made at least 3 months before expiry of 2 years and at the relevant point of time, when the application was made by the petitioner, there is no power vested with the State Government to condone the delay in making application. Once the petitioner made application on 15-12-2018, the Government of Chhattisgarh, Department of Mineral Resources vide its letter dated 4-1-2019 has directed the Collector, District Balodabazaar-Bhatapara to provide clear opinion in accordance with law and accordingly, the Collector (Mining), District Balodabazaar- Bhatapara has informed that as per Section 4A(4) of the MMDR Act read with Rule 20 of the Rules of 2016, the mining lease for the land admeasuring 278.144 hectares of Villages Gaitra, Pausri, Bharsela & Bharseli under Tahsil Balodabazaar for the period 9-1-2017 to 10-1-2067 falls under lapse, therefore, the case of the petitioner has been sent to the State Government for further action vide Annexure R-1 and the State Government vide letter dated 23-8-2019 (Annexure R-2) communicated to the petitioner Company directing to appear for hearing in the Office of the Special Secretary, Government of Chhattisgarh, Department of Mineral Resources on 16-9-2019 at 12 noon. It has also been submitted that the petitions filed by the petitioner are premature, as no final decision has been taken by the respondents and if the petitioner participates in the said proceeding then appropriate order in accordance with law after giving an opportunity of hearing would be passed and as such, the writ petitions being premature are liable to be dismissed. 8. Rejoinder has been filed on behalf of the petitioner opposing the reply filed by the respondents. 9. Mr. Ashok K. Parija, learned Senior Counsel appearing on behalf of the petitioner, would submit as under: - 1.
8. Rejoinder has been filed on behalf of the petitioner opposing the reply filed by the respondents. 9. Mr. Ashok K. Parija, learned Senior Counsel appearing on behalf of the petitioner, would submit as under: - 1. The lapsing proceeding initiated vide impugned memo/order dated 20-9-2022 is absolutely without jurisdiction and without authority of law, as pursuant to the grant of mining lease, mining activities could not be commenced, as mining operations can be carried out only under and in accordance with the terms and conditions of the mining lease granted under the Act as per Section 4(1) of the MMDR Act and he would rely upon the decisions of the Supreme Court in the matters of State of Assam and others v. Om Prakash Mehta and others , (1973) 1 SCC 584 , Goa Foundation v. Union of India and others , (2014) 6 SCC 590 , Common Cause v. Union of India and others , (2016) 11 SCC 455 and Common Cause v. Union of India and others , (2017) 9 SCC 499 to buttress his submission. 2. The statutory condition precedent for exercise of power under Section 4A(4) of the MMDR Act is a mining lease which permits commencement of mining operations and exercise of power by the State Government in absence of the aforesaid statutory condition precedent is without jurisdiction. Since the mining lease deed and the Order of 2017 clearly direct that until the EC is granted, no mining operations can be carried out, there was a statutory/legislative injunction not to carry out the mining operations, therefore, the entire proceeding is without jurisdiction and without authority of law. Reliance has been placed upon the decision of the Supreme Court in the matter of Calcutta Discount Co. Ltd. v. Income Tax Officer, Companies District I Calcutta and another , 1960 SCC OnLine SC 10 in support of this contention. 3. There is no concept of deemed or automatic lapsing under Section 4A(4) of the MMDR Act relying upon the decision of the Supreme Court in Common Cause (supra) (2016 case). 4. Where a show cause notice/proceeding has been initiated in premeditated manner, as the State Government by memo dated 20-9-2022 had already prejudged the issue and already formed an opinion to declare the mining lease as lapsed, writ petition would be maintainable.
4. Where a show cause notice/proceeding has been initiated in premeditated manner, as the State Government by memo dated 20-9-2022 had already prejudged the issue and already formed an opinion to declare the mining lease as lapsed, writ petition would be maintainable. He would rely upon the decision of the Supreme Court in the matter of Siemens Ltd. v. State of Maharashtra and others , (2006) 12 SCC 33 to buttress his submission. 5. In case of inconsistency between statutory provision i.e. Section 4A(4) of the MMDR Act and the Rule i.e. Rule 20(3) of the Rules of 2016, the statutory provision would prevail and relied upon the decision of the Supreme Court in the matter of Babaji Kondaji Garad v. Nasik Merchants Co-operative Bank Ltd., Nasik and others , (1984) 2 SCC 50 and in alternative, it is submitted that Rule 20(3) of the Rules of 2016 be struck down being in violation of Section 4A(4) of the MMDR Act. 6. Both the writ petitions are arising out of same facts and thus, they are one and same, the only objection raised by the Union of India in W.P. (C)No.4819/2022 that no forest clearance is granted, is not based on record, as by order dated 6-1-2017 filed on behalf of the petitioner as Annexure D-1 along with affidavit, on 18-3- 2025, it is crystal clear that forest clearance has already been granted to the petitioner by the Central Government/Union of India through the Ministry of Environment, Forests and Climate Change. 7. As such, the notice dated 20-9-2022 be set aside and the petitions be allowed by granting the reliefs claimed in favour of the petitioner. 10.Mr. Tushar Dhar Diwan, learned Central Government Counsel appearing on behalf of the Union of India/ respondent No.1, would submit that the present proceeding has been initiated by issuing show- cause notice dated 20-9-2022 against which writ petitions are premature, as the petitioner has the remedy of approaching the State Government by replying the said notice, as such, the present writ petitions against show-cause notice are not maintainable. He would rely upon the decision of the Supreme Court in the matter of Union of India and another v. Kunisetty Satyanarayana , (2006) 12 SCC 28 to buttress his submission. Therefore, the writ petitions are liable to be dismissed. 11.Mr.
He would rely upon the decision of the Supreme Court in the matter of Union of India and another v. Kunisetty Satyanarayana , (2006) 12 SCC 28 to buttress his submission. Therefore, the writ petitions are liable to be dismissed. 11.Mr. Ranbir Singh Marhas, learned Additional Advocate General appearing on behalf of respondents No.2 to 5/State of Chhattisgarh, would submit that the petitions are premature and the petitioner has the remedy of submitting reply to the show-cause notice impugned, as writ petition against show-cause notice is not maintainable. The present show-cause notice is well within the jurisdiction and therefore it is not at all maintainable. He would further submit that the petitioner was under bounden duty to make application as per Section 4A(4) of the MMDR Act read with Rule 20(3) of the Rules of 2016 seeking extension of time and the situation has arisen on account of laxity been shown on the part of the petitioner in not moving the application within the specified time and at the relevant point of time, the State Government had no power to condone the delay in filing the application. He would also submit that notices were issued to the petitioner for personal hearing on 23-8-2019, 20- 9-2022 and 2-12-2022, however, without participating in the same, the instant petitions were filed. He would contend that the petitioner having participated in the proceedings cannot turn back and question the present proceeding as without jurisdiction and without authority of law. He would further contend that the provisions of Section 4A(4) of the MMDR Act and Rule 20(3) of the Rules of 2016 are crystal clear leaving no scope for ambiguity. It clearly provides that where the holder of a mining lease fails to undertake production and dispatch for a period of 2 years after the date of execution of lease, the lease shall lapse on expiry of the period of 2 years from the date of execution of lease. The expression used in this statute is clearly ‘execution of mining lease’ and not ‘completion of mining lease’.
The expression used in this statute is clearly ‘execution of mining lease’ and not ‘completion of mining lease’. He would further submit that the provision contained in Section 4A(4) of the MMDR Act being clear leaves no scope for interpretation and aid to interpretation is resorted to only when there is some ambiguity in words of expression used in the statute as held by the Supreme Court in the matter of State (NCT of Delhi) v. Union of India and another, (2018) 8 SCC 501 . He would also contend that the petitioner itself has directly made application on 19-12-2018 (Annexure P-6) upon which the show cause notice was issued subsequently. He would lastly contend that the present petitions against merely a notice for personal hearing deserve to be dismissed and the petitioner may be directed to appear before the authority and put forth its case before the authority. As such, both the writ petitions are liable to be dismissed. 12.We have heard learned counsel for the parties and considered their rival submissions made herein- above and also gone through the record thoroughly and meticulously as well. 13.The questions for consideration would be, 1. Whether the proceeding initiated by the impugned notice dated 20-9-2022 (Annexure P- 16/P-17) is without jurisdiction and without authority of law? 2. Whether writ petitions seeking quashment of notice dated 20-9-2022 are maintainable? 3. Whether Rule 20(3) of the Rules of 2016 deserves to be declared ultra vires to Section 4A(4) of the MMDR Act? 4. Whether the petitioner is entitled for the reliefs claimed aforesaid? Answer to Question Nos.1 & 2 14.Since both the questions are interlinked with each other, they are being decided together. 15.The MMDR Act was enacted to provide for the regulation of mines and the development of minerals under the control of the Union. Section 3(ac) of the MMDR Act defines “leased area”, whereas Section 3(c) defines “mining lease”. As such, “leased area” means the area specified in the mining lease within which the mining operations can be undertaken and “mining lease” means a lease granted for the purpose of undertaking mining operations. “Mining operations”, as defined under Section 3(d) of the MMDR Act, means any operations undertaken for the purpose of winning any mineral. 16.Chapter II of the MMDR Act deals with General Restrictions on Undertaking Prospecting and Mining Operations.
“Mining operations”, as defined under Section 3(d) of the MMDR Act, means any operations undertaken for the purpose of winning any mineral. 16.Chapter II of the MMDR Act deals with General Restrictions on Undertaking Prospecting and Mining Operations. Section 4 of the MMDR Act provides for Prospecting or mining operations to be under licence or lease. It provides for requirement of mining lease for operations. Sub-section (1) of Section 4 of the MMDR Act states as under: - “ 4. Prospecting or mining operations to be under licence or lease .—(1) No person shall undertake any reconnaissance, prospecting or mining operations in any area, except under and in accordance with the terms and conditions of a reconnaissance permit or of a prospecting licence or of a exploration licence or, as the case may be, of a mining lease, granted under this Act and the rules made thereunder;” 17.A careful perusal of Section 4(1) of the MMDR Act would show that no person shall undertake any prospecting or mining operations in any area, except under and in accordance with the terms and conditions of a mining lease granted under the Act and the rules made thereunder. Consequently, any person conducting mining operations without a mining lease or in violation of its terms and conditions would be engaging in illegal and unlawful mining. As such, mining operations can only be undertaken under and in accordance with the terms and conditions of a mining lease granted under the Act, as per Section 4(1) of the MMDR Act which has also been held by their Lordships of the Supreme Court in Om Prakash Mehta’s case (supra) and Common Cause (supra) (2017 case). 18.Section 4A of the MMDR Act provides for termination of prospecting licences, exploration licences or mining leases. Sub-section (4) of Section 4A, along with the First proviso appended to it as it stood before substitution by Act 16 of 2021 i.e. prior to its amendment, states as under:- “ 4A.
18.Section 4A of the MMDR Act provides for termination of prospecting licences, exploration licences or mining leases. Sub-section (4) of Section 4A, along with the First proviso appended to it as it stood before substitution by Act 16 of 2021 i.e. prior to its amendment, states as under:- “ 4A. Termination of prospecting licences, exploration licences or mining leases (1) to (3) xxx xxx xxx (4) Where the holder of a mining lease fails to undertake production and dispatch for a period of two years after the date of execution of the lease or having commenced production and dispatch, has discontinued the same for a period of two years, the lease shall lapse on the expiry of the period of two years from the date of execution of the lease or, as the case may be, discontinuance of the production and dispatch: Provided that the State Government may, on an application made by the holder of such lease before it lapses and on being satisfied that it will not be possible for the holder of the lease to undertake mining operations or to continue such operations for reasons beyond his control, make an order, within a period of three months from the date of receiving of such application, subject to such conditions as may be prescribed, to the effect that such lease not lapse:” 19.Section 4A(4) of the MMDR Act governs the lapsing of mining leases and provides for lapsing of the lease if the holder fails to commence production within two years of execution or, after having commenced production, discontinues operations for two years. As such, Section 4A(4) of the MMDR Act would be attracted only if the mining lease, in terms of Section 4(1), permits the leaseholder to carry on mining operations and Section 4A(4) would not be attracted where the leaseholder is injuncted from carrying on mining operations by the lease deed itself. In other words, the condition precedent for exercise of power under Section 4A(4) of the MMDR Act would be applicable to a mining lease which permits the leaseholder to carry on mining operations. 20.The consequences of illegal or unlawful mining are both penal and civil. Section 21 of the MMDR Act deals with penalties applicable for different contraventions under the Act. Section 21(1) deals with penal consequences, whereas Section 21(5) provides for civil consequences including financial liabilities.
20.The consequences of illegal or unlawful mining are both penal and civil. Section 21 of the MMDR Act deals with penalties applicable for different contraventions under the Act. Section 21(1) deals with penal consequences, whereas Section 21(5) provides for civil consequences including financial liabilities. Sub-sections (1) and (5) of Section 21 state as under: - “ 21. Penalties .—(1) Whoever contravenes the provisions of sub-section (1) or sub-section (1A) of section 4 shall be punishable with imprisonment for a term which may extend to five years and with fine which may extend to five lakh rupees per hectare of the area. (2) to (4) xxx xxx xxx (5) Whenever any person raises, without any lawful authority, any mineral from any land, the State Government may recover from such person the mineral so raised, or, where such mineral has already been disposed of, the price thereof, and may also recover from such person, rent, royalty or tax, as the case may be, for the period during which the land was occupied by such person without any lawful authority.” 21. As such, Section 21(1) of the MMDR Act provides that whoever contravenes the provisions of sub-section (1) or sub-section (1A) of Section 4 shall be punishable with imprisonment for a term which may extend to five years and with fine which may extend to five lakh rupees per hectare of area, whereas, Section 21(5) provides for civil consequences including financial liabilities. 22. The Parliament has amended the MMDR Act vide the Mines and Minerals (Development and Regulation) Amendment Act, 2015 inter alia introducing Section 10A with effect from 12-1-2015 which deals with rights of existing concession-holders and applicants. Sub-section (1) of Section 10A provides that all applications received prior to the date of commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015, shall become ineligible. Section 10A(2)(c) states as under: - “ 10A.
Sub-section (1) of Section 10A provides that all applications received prior to the date of commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015, shall become ineligible. Section 10A(2)(c) states as under: - “ 10A. Rights of existing concession-holders and applicants .—(1) xxx xxx xxx (2) Without prejudice to sub-section (1), the following shall remain eligible on and from the date of commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015— (a) and (b) xxx xxx xxx (c) where the Central Government has communicated previous approval as required under sub-section (1) of section 5 for grant of a mining lease, or if a letter of intent (by whatever name called) has been issued by the State Government to grant a mining lease, before the commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015, the mining lease shall be granted subject to fulfilment of the conditions of the previous approval or of the letter of intent within a period of two years from the date of commencement of the said Act: Provided that in respect of any mineral specified in the First Schedule, no prospecting licence or mining lease shall be granted under clause (b) of this sub- section except with the previous approval of the Central Government. (d) xxx xxx xxx” 23. Section 10A(2)(c) of the MMDR Act thus safeguards the rights of concession-holders whose leases were pending execution at the time of coming into force of the MMDR Amendment Act, 2015, which came into force with effect from 12-1-2015. It ensures that where a prior approval or a letter of intent was granted before the amendment, the leaseholder has a two-year period to meet the requisite conditions of the prior approval or the letter of intent, as the case may be. This provision is relevant in cases where delays are attributable to external factors, such as procedural requirements imposed by regulatory authorities. 24. The MMDR Amendment Act, 2015 also introduced Section 24(1), which provided for the removal of difficulties in the following terms:- “24.
This provision is relevant in cases where delays are attributable to external factors, such as procedural requirements imposed by regulatory authorities. 24. The MMDR Amendment Act, 2015 also introduced Section 24(1), which provided for the removal of difficulties in the following terms:- “24. (1) If any difficulty arises in giving effect to the provisions of the Mines and Minerals (Development and Regulation) Amendment Act, 20125, the Central Government may, by order, published in the Official Gazette, make such provisions not inconsistent with the provisions of the said Act, as appear to it to be necessary or expedient for removing the difficulty: Provided that no such order shall be made under this section after the expiry of a period of two years from the commencement of the said Act.” 25. The legislative intent of Section 24(1) of the MMDR Amendment Act, 2015 was to empower the Central Government to address situations where, due to reasons beyond the control of an applicant whose rights had been preserved under Section 10A(2) of the MMDR Act, the grant of a mining lease was delayed. This provision ensured that such rights would not lapse solely due to procedural delays. 26. Pursuant to the aforesaid powers, the Government of India, on 4-1-2017 i.e. 7 days prior to the expiry of the two-year period laid down in Section 24(1) of the MMDR Amendment Act, 2015, passed an order i.e. the Mines and Minerals (Development and Regulation) Removal of Difficulties Order, 2017 under Section 24(1) of the MMDR Amendment Act, 2015, inter alia providing as under: - MINISTRY OF MINES ORDER New Delhi, the 4 th January, 2017 S.O. 27(E). —Whereas difficulties have arisen in giving effect to the provisions of clause (c) sub-section (2) of Section 10A of the Mines and Minerals (Development and Regulation) Amendment Act, 2015 (10 of 2015), in so far as it relates to fulfilment of conditions laid in the letter of intent (by whatever name called) issued by the State Governments within a period of two years from the date of commencement of the said Act. xxx xxx xxx xxx xxx xxx xxx xxx xxx 2. Environmental Clearance.
xxx xxx xxx xxx xxx xxx xxx xxx xxx 2. Environmental Clearance. Notwithstanding anything contained in clause (c) of sub-section (2) of Section 10A of the Mines and Minerals (Development and Regulation) Amendment Act, 2015 (19 of 2015), it is clarified that where the condition of obtaining environmental clearance has not been complied with by the applicant on or before 11 th January, 2017, but all other conditions specified in previous approval or the letter of intent have been fulfilled, the applications shall be considered under that section and mining lease shall be granted by the concerned State Governments in accordance with the notifications issued under the Environment (Protection) Act, 1986 (29 of 1986): Provided that no mining activity shall commence unless and until the applicant obtains environmental clearance as laid down under the Environment (Protection) Act, 1986 and the rules made there under. [F. No. 7/1/2016-M. IV (Part-I)] SUBHASH CHANDRA, Jt. Secy. 27. As such, by virtue of clause 2 of the Order of 2017, it has been made clear that where the condition of obtaining environmental clearance has not been complied with by the applicant on or before 11 th January, 2017, but all other conditions specified in previous approval or the letter of intent have been fulfilled, the applications shall be considered under that section and mining lease shall be granted by the concerned State Governments in accordance with the notifications issued under the Environment (Protection) Act, 1986. However, the proviso appended to clause 2 of the Order of 2017 also provides that no mining activity shall commence unless and until the applicant obtains environmental clearance as laid down under the Environment (Protection) Act, 1986 and the rules made thereunder. 28.In the instant case, the petitioner was issued letter of intent on 3-11-2009, prior to commencement of the MMDR Amendment Act, 2015 on 12-1-2015 and one of the conditions under clause 4 of the LOI expressly provided that the petitioner has to obtain, inter alia, an EC under the Environment (Protection) Act, 1986 before commencing mining operations. The petitioner’s rights under Section 10A(2)(c) of the MMDR Act, which were set to lapse on 11-1-2017, were preserved by virtue of the Order of 2017 issued on 4-1-2017. Consequently, mining lease deed was executed between the State Government and the petitioner on 7-1-2017.
The petitioner’s rights under Section 10A(2)(c) of the MMDR Act, which were set to lapse on 11-1-2017, were preserved by virtue of the Order of 2017 issued on 4-1-2017. Consequently, mining lease deed was executed between the State Government and the petitioner on 7-1-2017. Clause 5.18 of the mining lease deed provides as under: - 5-18 ¼14-18½ [kfuiV~Vk/kkjh dks Hkkjr ljdkj i;kZoj.k] ou ,oa tyok;q ifjorZu ea=ky; }kjk i;kZoj.k laj{k.k vf/kfu;e] 1986 ds rgr vf/kjksfir 'krksZ dk ikyu lqfuf’pr fd;k tkuk gksxk ,oa mDr 'krksZa dk [kfuiV~Vk vuqca/k i= esa 'kkfey fd;s tkus gsrq iwjd vuqca/k djk;k tkuk gksxkA rn~mijkar gh i;kZoj.k laj{k.k vf/kfu;e] 1986 ds vUrxZr tkjh ,Uok;jesaV bEiSDV uksfVfQds’ku fnukad 14-09-2006 ds rgr l{ke izkf/kdkjh ls fu;ekuqlkj vU; vko’;d vuqefr izkIr djus ds mijkar gh [kfuiV~Vk {ks= ij dk;Z izkjaHk dh vuqefr gksxh A 29. A careful perusal of clause 5.18 of the mining lease deed would reveal that the petitioner/lessee would not carry mining operations till such time it gets the EC, as required under the Environment (Protection) Act, 1986 and that will be incorporated in the supplementary agreement. As such, clause 5.18 has also prohibited the petitioner from commencing mining operations without obtaining requisite EC. Thus, from the aforesaid discussion, it is quite apparent that, 1. There was a legislative/statutory injunction under Section 4(1) of the MMDR Act to commence mining operations and the terms and conditions of the mining lease deed also prohibited the petitioner from commencing mining operations, as any violation of such a legislative/ statutory injunction would entail criminal proceedings under Section 21(1) and civil consequences under Section 21(5) of the MMDR Act. In this regard, the decision of the Supreme Court in the matter of MD, Army Welfare Housing Organisation v. Sumangal Services (P) Ltd., (2004) 9 SCC 619 may be noticed herein in which their Lordships have held that no party would be held responsible for failing to meet its contractual obligation when it was faced with a statutory/ legislative injunction, and observed as under:- “ 110. Impossibility to fulfil the contractual obligation may arise in different fact situations. 111. Statutory injunction by a statutory authority may be one of such causes. A building bye-law must be scrupulously followed. Violation of Section 204 of the West Bengal Municipal Act, 1993 attracts penal provisions contained in Section 440. It is, therefore, mandatory in nature.
Impossibility to fulfil the contractual obligation may arise in different fact situations. 111. Statutory injunction by a statutory authority may be one of such causes. A building bye-law must be scrupulously followed. Violation of Section 204 of the West Bengal Municipal Act, 1993 attracts penal provisions contained in Section 440. It is, therefore, mandatory in nature. The correspondences between AWHO and the Municipality clearly show that even infrastructural works were not permitted to be carried out. Sumangal, therefore, cannot be said to have committed any illegality in complying with the stop-work notice. To what extent it committed breach of the terms of the contract, assuming that it could have carried out some job as pointed out by AWHO would depend upon the commercial viability as a large number of workmen were to be engaged although it cannot carry out the major construction work, which was a relevant factor for determining the quantum of damages. Sumangal might have been partially liable but it cannot be faulted when it refused to carry out any constructional work in violation of the stop-work notice which would attract the penal provisions of Section 440 of the West Bengal Municipal Act, 1993.” 2. Clause 5.18 of the mining lease deed (Annexure P-2) unequivocally restrains the petitioner from starting mining operations without obtaining environmental clearance. 3. Similarly, proviso to clause 2 of the Order of 2017 also prohibited the petitioner from commencing mining operations stating that no mining activity shall commence unless and until the applicant/petitioner obtains environmental clearance as laid down under the Environment (Protection) Act, 1986 and the rules made thereunder. 30.A conjoint reading of Sections 4(1), 4A(4), 21(1) and 21(5) of the MMDR Act along with the proviso appended to clause 2 of the Order of 2017 and clause 5.18 of the mining lease deed (Annexure P- 2) would clearly demonstrate that though the petitioner was granted mining lease by the respondent herein, but immediate commencement of mining operation was not contemplated unless and until it obtains environmental clearance as laid down under the Environment (Protection) Act, 1986 and the rules made thereunder.
Therefore, the statutory period of two years has not begun to run and the fundamental pre-conditions for invoking Section 4A(4) of the MMDR Act are wholly absent/ missing, as the petitioner has expressly been injuncted by Section 4A(4), clause 5.18 of the mining lease deed and proviso to clause 2 of the Order of 2017 to carry out mining operations unless and until it obtains environmental clearance as laid down under the Environment (Protection) Act, 1986 and the rules made thereunder. In other words, the statutory prohibition under the Order of 2017 dated 4-1-2017 as well as the explicit terms of the lease deed prevented the petitioner from carrying out mining operations until the EC is obtained and in the event the petitioner had commenced mining operations without obtaining EC, it would have been in direct violation of the Order of 2017 as well as clause 5.18 of the mining lease deed as also the statutory bar under Section 4(1) of the MMDR Act and such a violation would have subjected the petitioner to both criminal prosecution under Section 21(1) and civil liabilities under Section 21(5) of the MMDR Act. 31.Section 4A(4) of the MMDR Act would be applicable only in cases where a lessee, despite being legally permitted to do so, fails to commence mining operations within two years of the grant of the lease. In the present case, as held in the earlier paragraphs, the petitioner was expressly prohibited from carrying out mining operations until EC is obtained. Since the statutory condition precedent for exercise of power under Section 4A(4) of the MMDR Act is a mining lease which permits commencement of mining operations and in absence of which the proceeding under Section 4A(4) of the MMDR Act could not have been initiated against the petitioner. In this regard, the decision of the Supreme Court in Calcutta Discount Co. Ltd. (supra) may be noticed herein profitably in which it has been held as under: - “ 6. To confer jurisdiction under this section to issue notice in respect of assessments beyond the period of four years, but within a period of eight years, from the end of the relevant year two conditions have therefore to be satisfied. The first is that the Income Tax Officer must have reason to believe that income, profits or gains chargeable to income tax have been under- assessed.
The first is that the Income Tax Officer must have reason to believe that income, profits or gains chargeable to income tax have been under- assessed. The second is that he must have also reason to believe that such “underassessment” has occurred by reason of either (i) omission or failure on the part of an assessee to make a return of his income under Section 22, or (ii) omission or failure on the part of an assessee to disclose fully and truly all material facts necessary for his assessment for that year. Both these conditions are conditions precedent to be satisfied before the Income Tax Officer could have jurisdiction to issue a notice for the assessment or reassessment beyond the period of four years but within the period of eight years, from the end of the year in question. 24. We are therefore bound to hold that the conditions precedent to the exercise of jurisdiction under Section 34 of the Income Tax Act did not exist and the Income Tax Officer had therefore no jurisdiction to issue the impugned notices under Section 34 in respect of the years 1942-43, 1943-44 and 1944-45 after the expiry of four years. 27. Mr Sastri mentioned more than once the fact that the Company would have sufficient opportunity to raise this question viz. whether the Income Tax Officer had reason to believe that underassessment had resulted from non-disclosure of material facts, before the Income Tax Officer himself in the assessment proceedings and if unsuccessful there before the appellate officer or the Appellate Tribunal or in the High Court under Section 66(2) of the Indian Income Tax Act. The existence of such alternative remedy is not however always a sufficient reason for refusing a party quick relief by a writ or order prohibiting an authority acting without jurisdiction from continuing such action. 28. In the present case the Company contends that the conditions precedent for the assumption of jurisdiction under Section 34 were not satisfied and come to the court at the earliest opportunity. There is nothing in its conduct which would justify the refusal of proper relief under Article 226. When the Constitution confers on the High Courts the power to give relief it becomes the duty of the courts to give such relief in fit cases and the courts would be failing to perform their duty if relief is refused without adequate reasons.
When the Constitution confers on the High Courts the power to give relief it becomes the duty of the courts to give such relief in fit cases and the courts would be failing to perform their duty if relief is refused without adequate reasons. In the present case we can find no reason for which relief should be refused.” 32.In view of the aforesaid discussion, it is evident that the petitioner herein was legally incompetent to commence mining operation in the leased area and, therefore, he could not commence the mining operation despite mining lease having been granted in its favour, as such, the entire proceedings initiated under Section 4A(4) of the Act of 1957 by memo dated 20-9-2022 was absolutely without jurisdiction and without authority of law and, as such, the memo dated 20-9-2022 (Annexure P-16/P- 17) as well as subsequent proceedings are liable to be quashed. In that view of the matter, the writ petitions seeking quashment of the impugned notice dated 20-9-2022 are held to be maintainable in light of the finding recorded by us herein- above and further, following the decision of the Supreme Court in Calcutta Discount Co. Ltd. (supra) and furthermore, in the matter of Whirlpool Corporation v. Registrar of Trade Marks, Mumbai and others , (1998) 8 SCC 1 (paragraph 15). 33.The next submission raised on behalf of the respondents is that Section 4A(4) of the MMDR Act is automatic and mandates the lapsing of a mining lease. In this regard the decision of the Supreme Court in Common Cause (supra) (2016 case) may be noticed herein profitably in which it has been held that a mining lease under Section 4A(4) of the MMDR Act would not be deemed to have lapsed till the State Government passes an order declaring the mining lease to have lapsed. It has been observed by their Lordships in paragraph 35 of the report as under: - “35. xxx xxx xxx It is apparent from a perusal of sub-rule (1) extracted above that the State Government is mandated to pass an order and thereby declare that a mining lease had lapsed. It is also the mandate of sub-rule (1) aforesaid that such an order passed by the State Government must be communicated to the leaseholder.
xxx xxx xxx It is apparent from a perusal of sub-rule (1) extracted above that the State Government is mandated to pass an order and thereby declare that a mining lease had lapsed. It is also the mandate of sub-rule (1) aforesaid that such an order passed by the State Government must be communicated to the leaseholder. On a conjoint reading of Section 4-A(4) and Rule 28(1), we are satisfied to hold that a mining lease under Section 4-A(4) would not be deemed to have lapsed till the State Government passes an order declaring the mining lease to have lapsed and further communicates the same to the leaseholder.” 34.In view of the above, it is held that mining lease granted in favour of the petitioner would not lapse automatically till the State Government passes an order declaring the mining lease to have lapsed. 35.The decisions of the Supreme Court in Kunisetty Satyanarayana’s case (supra) relied upon by the learned Central Government Counsel and State (NCT of Delhi) (supra) relied upon by the learned Additional Advocate General are clearly inapplicable to the facts of the present case in view of the finding reached herein-above by us. Answer to Question No.3 36.In view of the discussion made herein-above and the finding recorded that the impugned memo/notice dated 20-9-2022 (Annexure P-16/P-17) is without jurisdiction and without authority of law and the writ petitions are maintainable, we deem it inexpedient to decide the question of constitutional validity of Rule 20(3) of the Rules of 2016 and it is kept open to be decided in appropriate proceeding, if any. Answer to Question No.4 {Relief & cost(s)} 37.Thus, as an upshot of the aforesaid discussion, the period of two years under Section 4A(4) of the MMDR Act would commence after the grant of environmental clearance and consequently, the proceeding initiated against the petitioner by notice dated 20-9-2022 (Annexure P-16 in WPS No.4817/2022 and Annexure P-17 in WPS No.4819/2022) is held to be without jurisdiction and without authority of law. Accordingly, the impugned notice dated 20-9-2022 (Annexure P-16 in WPS No.4817/2022 and Annexure P-17 in WPS No.4819/2022) issued by respondent No.3 and the subsequent proceedings, if any, are hereby quashed. 38.The writ petitions are allowed to the extent indicated herein-above leaving the parties to bear their own cost(s).