1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE19H DAY OF MARCH, 2020 PRESENT THE HON’BLE MR.ABHAY S. OKA, CHIEF JUSTICE AND THE HON’BLE MR.JUSTICE ASHOK S. KINAGI WRIT PETITION No.50456 OF2019(GM-MM-S) AND WRIT PETITION No.52477 OF2019(GM-MM-S) IN W.P. No.50456 OF2019BETWEEN M/S SRI SANTHIPRIYA MINERALS PVT LTD A COMPANY REGISTERED UNDER THE PROVISIONS OF COMPANIES ACT, 1956 REP. BY ITS POWER OF ATTORNEY MR SUDHIR Y WAKHALE RESIDENT OF PONDA, GOA ...PETITIONER (BY SHRI D.L.N.RAO, SENIOR COUNSEL FOR SHRI ANIRUDH ANAND, ADVOCATE) AND1 STATE OF KARNATAKA REP. BY ITS SECRETARY DEPARTMENT OF COMMERCE AND INDUSTRIES (MSME, MINES AND TEXTILE) VIKASA SOUDHA DR AMBEDKAR VEEDHI BANGALORE56000 2. THE DIRECTOR DEPARTMENT OF MINES AND GEOLOGY, KHANIJA BHAVAN, RACE COURSE ROAD BANGALORE56000 2 3. THE DEPUTY DIRECTOR DEPARTMENT OF MINES AND GEOLOGY HOSPET-583201 4. THE PRINCIPAL CHIEF CONSERVATOR OF FORESTS STATE OF KARNATAKA ‘ARANYA BHAVAN’, 4TH FLOOR18H CROSS, MALLESWARAM, BANGALORE56000 5. THE ADDITIONAL CHIEF SECRETARY DEPARTMENT OF FORESTS ECOLOGY AND ENVIRONMENT M S BUILDING, BANGALORE56000 … RESPONDENTS (BY SHRI DHYAN CHINAPPA, ADDITIONAL ADVOCATE GENERAL AND SHRI V.G.BHANUPRAKASH, ADDL. GOVERNMENT ADVOCATE) --- THIS WRIT PETITION ARE FILED UNDER ARTICLES226AND227OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE A WRIT OF MANDAMUS OR SUCH OTHER APPROPRIATE WRIT OR
ORDEROR DIRECTION DIRECTING THE RESPONDENTS TO EXECUTE SUPPLEMENTARY LEASE DEED IN TERMS OF THE
ORDEROF THIS COURT DATED34.2017 IN W.P.2833/2017 VIDE ANNEURE-V, AND ETC. IN W.P. No.52477/2019 BETWEEN GADIGI MINERAL MINING COMPANY GADIGI PALACE, CAR STREET, BELLARY-583101, REPRESENTED BY ITS MANAGING PARTNER, ALLAM BASVARAJ, S/O LATE ALLUM KARIBASAPPA, AGED ABOUT70YEARS. ...PETITIONER (BY SHRI BIPIN HEGDE AND Ms. ANUPARNA BORDOLOI, ADVOCATES) 3 AND1 STATE OF KARNATAKA REP. BY THE SECRETARY, COMMERCE AND INDUSTRIES DEPARTMENT, VIKASASOUDHA, BANGALORE-560001 2. DIRECTOR, DEPARTMENT OF MINES AND GEOLOGY NO.49, KHANIJA BHAVAN. RACE COURSE ROAD, BENGALURU-560001 3. PRINCIPAL SECRETARY DEPARTMENT OF FOREST, ECOLOGY AND ENVIRONMENT M.S.BUILDING, BANGALORE-560001 4. PRINCIPAL CHIEF CONSERVATOR OF FOREST DEPARTMENT OF FOREST, GOVERNMENT OF KARNATAKA, ARNYA BHAVAN, BANGALORE-560001 5. UNION OF INDIA MINISTRY OF MINES, THROUGH ITS SECRETARY, SHASHTRI BHAVAN, NEW DELHI-110001 …RESPONDENTS (BY SHRI V.G.BHANUPRAKASH, AGA) THIS WRIT PETITION ARE FILED UNDER ARTICLES226AND227OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE A WRIT OF MANDAMUS OR SUCH OTHER APPROPRIATE WRIT DECLARING THAT THE ACTION OF THE RESPONDENT IN NOT EXTENDING THE FOREST AGREEMENT DATED65.1998 IS HIGHLY ARBITRARY, ILLEGAL AND WITHOUT THE AUTHORITY OF LAW (ANNEXURE-B), AND ETC. THESE PETITIONS COMING ON FOR DICTATING
JUDGMENT, THIS DAY, CHIEF JUSTICE MADE THE FOLLOWING:
4.
ORDERAs common questions of law and fact arise in these two petitions, they are taken up together for final disposal. FACTUAL ASPECTS2 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 OF20193. 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 5 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 6 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 7 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 submitted. 3.6 Against this communication dated 21st September, 2016, the petitioner filed W.P. No.2833 of 2017 which was allowed by an order dated 3rd April, 2017 by directing that a supplementary lease deed shall be executed by the authorities within a period of three weeks from the date of 8 the order, peremptorily. This Court directed that the authorities shall not insist upon any forest and environment clearance in view of the communication/Circular dated 1st April, 2015 issued by the Ministry of Environment, Forest and Climate Change, Forest Conservation Division, Government of India. 3.7 On 28th March, 2017, the Secretary to the Government of Karnataka, Department of Commerce and Industries, issued an order directing the Director of Mines and Geology to execute the supplementary lease deed in favour of the petitioner. 3.8 The present petition, i.e. W.P. No.50456 of 2019 is filed on 30th October, 2019 after giving notice to the State Government on 28th September, 2019. The first prayer in the petition is for directing the execution of a supplementary lease deed in terms of the order dated 3rd April, 2017. The second prayer is regarding extension of the forest clearance. Both the prayers do not survive with the passage of time. A supplementary lease deed 12th February 2020 has been executed in favour of the 9 petitioner and the forest clearance has been granted during the pendency of the petition. The prayer which survives for consideration is the third prayer for a writ of mandamus which reads thus: “PRAYER” “1. … 2. … 3. Issue a writ of mandamus or such other appropriate writ or order or direction, directing the respondents to effect extension of the mining lease period for the lost period being the time commencing from the coming into force of the Amendment act or ion the alternative 04.03.2016 wherein this Hon’ble Court first directed the respondents to execute deemed extension of the lease of the petitioner until execution of the same to be added to the time after 31.03.2020 in terms of the representation dated 28.09.2019 vide Annexure-Z.
4. There is a statement of objections dated 27th February, 2020 filed by the State Government. It records that on 1st February, 2020, the Forest Department has extended the validity of the forest clearance co-terminus with the mining lease period ending on 31st March, 2020. There is a rejoinder filed by the petitioner to the objections filed by the State Government. 10 WP No.52477 OF20195. In W.P. No.52477 of 2019, the prayers are more or less similar. The petition was filed on 9th December 2019. The first three prayers pertain to the extension of forest clearance. In this case, supplementary mining lease has been executed on 5th March 2020. The fourth prayer is regarding further extension for a period of five years beyond the statutory extension of the lease period ending on 31st March, 2020. 5.1 In this case, a mining lease was granted to the predecessor of the petitioner in the year 1945. The lease was renewed on two occasions. Lastly, it was renewed on 25th May, 1995 which was to be valid till 25th May, 2015. On 6th February, 1998, a forest clearance was granted to the petitioner under Section 2 of the Forest (Conservation) Act, 1980, (for short, “the said Act of 1980”) for a period of twenty years. In fact, there is an agreement entered into by and between the petitioner and the Forest Department, Government of Karnataka, in respect of the mining area measuring 39.63 hectares which is co-terminus with the period of mining lease. 11
5.2 On 4th March, 2014, the petitioner applied for renewal of the mining lease. Thereafter on 12th January, 2015, the Amendment Act came into force under which the petitioner became entitled to deemed extension of the lease period ending with 31st March, 2020 in view of sub- section (6) of Section 8A of the said Act of 1957 as amended by the Amendment Act. 5.3 On 27th March, 2015, the petitioner applied to the Deputy Commissioner for grant of forest clearance in respect of 39.63 hectares of forest land and 11.35 hectares for the purpose of an approach road. The petitioner has relied upon the correspondence made thereafter. It is pointed out that the extension of forest clearance was granted on 23rd April, 2019 to the extent of 38.94 hectares of land subject to certain conditions. 5.4 On 12th September, 2019, the Additional Principal Chief Conservator of Forests issued a letter to the Additional Chief Secretary to the Government of Karnataka informing that the lessee has not corresponded for grant of forest clearance renewal prior to the guidelines dated 1st 12 April, 2019. The petitioner replied by pointing out that he had applied for the forest clearance renewal right from 14th March, 2014. SUBMISSIONS OF THE LEARNED COUNSEL6 The learned senior counsel appearing for the petitioner in W.P. No.50456 of 2019 firstly submitted that there is no dispute that the petitioner was entitled to the deemed extension of lease till 31st March, 2020 in terms of sub-section (6) of Section 8A of the said Act of 1957 as amended by the Amendment Act. Secondly, he relied upon the Circular dated 1st April, 2015 issued by Government of India, Ministry of Environment, Forest and Climate Change addressed to the Principal Secretary (Forest) of all the States clarifying that in the cases of existing mining leases in respect of minerals specified in sub-section (1) of Section 8A of the said Act of 1957, the period of validity of the approvals accorded under Section 2 of the said Act of 1980 shall be extended and shall be deemed to have been extended up to the period co-terminus with the period of mining lease in accordance with the provisions of the said Act of 1957 as amended. The said clarification was subject 13 to the condition that the State Government shall, within a period of two years from the date of the said letter, realize from the user agency, the Net Present Value of the forest land for which the period of validity of approval under the said Act of 1980 was extended.
7. The learned senior counsel, by placing reliance upon the Circular dated 1st April, 2015 (Annexure-J in the petition) urged that the execution of lease on the basis of deeming fiction under sub-section (6) of Section 8A of the said Act of 1957 could not have been delayed as the said Circular clarifies that the forest clearance under Section 2 of the said Act of 1980 shall be extended and shall be deemed to have been extended up to the period co- terminus with the period of extended lease under the said Act of 1957 as amended from 12th January, 2015.
8. Inviting our attention to the order dated 4th March, 2016 in W.P. No.9411 of 2016 filed by the petitioner, he urged that based on the Circular dated 1st April, 2015, a direction was issued to the State Government to grant the mining lease up to the end of March, 2020 and to grant 14 forest clearance for diversion of 4.18 hectares of forest land for the construction of an approach road to make it co- terminus with the statutorily extended period of lease.
9. He submitted that notwithstanding the said order, the lease was not extended on the ground that the forest clearance was not extended. He also pointed out from the correspondence that the forest clearance was not extended on the ground that the mining lease period was not extended. He invited our attention to the order dated 3rd April, 2017 passed by this Court in W.P. No.2833 of 2017 filed by the petitioner in which a direction was issued to execute a supplementary lease deed within a period of 3 weeks without insisting upon any fresh forest clearance or environment clearance, in view of the Circular dated 1st April, 2015. He submitted that there is absolutely no justification for not granting the benefit of the deeming fiction under sub-section (6) of section 8A of the said Act of 1957. He submitted that in fact, the petitioner became entitled to deemed extension up to 31st March, 2020 on the date of commencement of the Amendment Act, which is 12th January, 2015. He submitted that for no reason, the 15 extension of the lease was denied to the petitioner and therefore, the petitioner is entitled to the extension of lease for the corresponding period after 31st March, 2020. He pointed out that if not from the coming into force of the Amendment Act, at least from 4th March, 2016, the petitioner was entitled to the benefit of deemed extension of the lease. He relied upon a decision of the Apex Court in the case of BEGRAJ SINGH .v. STATE OF UTTAR PRADESH AND OTHERS1. He also relied upon a judgment of the learned Single Judge dated 10th March, 1989 in W.P. No.10772 of 1985 for persuading this Court to issue a direction for extension of the mining lease. He relied upon a decision of a Division Bench of the Madras High Court dated 30th August, 2017 in the case of DISTRICT COLLECTOR, KRISHNAGIRI DISTRICT, KRISHNAGIRI .v. M. VENKATARAMAN2.
10. The learned senior counsel also invited our attention to the judgment and order dated 11th April, 2011 in W.P. No.14132 of 2007 wherein this Court exercised the power 1 (2003) 1 SCC7262 W.A. No.983/2017 & CMP. No.13762/2017 16 under Article 226 of the Constitution of India to extend the mining lease period in favour of the petitioner therein. He submitted that once this Court is satisfied that the deemed extension under the statute was unlawfully denied to the petitioner, by exercising the power under Article 226 of the Constitution of India, this Court can always extend the period of mining lease to ensure that there is no loss caused to the petitioner due to the denial of a statutory right of deemed extension.
11. The learned counsel appearing for the petitioner in W.P. No.52477 of 2019 invited the attention of the Court to the letter dated 16th/23rd April, 2019 (Annexure-AF to the petition) which records that the petitioner was entitled to an automatic extension of forest approval co-terminus with the period of extended mining lease. He submitted that there was no legal or factual impediment in granting the benefit of deemed extension to the petitioner and therefore, the petitioner is entitled to the corresponding extension of lease beyond 31st March 2020. He placed reliance on the Dictionary meaning of the word ‘restitution.’ He relied on a decision of the Apex Court in the case of SOUTH17EASTERN COALFIELDS LIMITED .v. STATE OF M.P. AND OTHERS3 and relied on the principles of ‘restitution’ as elaborated by the Apex Court in the said decision. He submitted that the basic principle of ‘restitution’ is that a person must be compensated for what he has lost. He submitted that the principles analogous to Section 144 of the Code of Civil Procedure, 1908, will apply. He submitted that it is an established proposition that while dealing with a prayer for ‘restitution,’ the Court will have to take into consideration not only the loss suffered by the party seeking ‘restitution’, but also the gain made by the other party who is obliged to make the ‘restitution.’ He submitted that the State is supposed to act fairly.
12. The learned counsel relied upon a decision dated 11th April, 2011 passed in W.P. No.14132 of 2007. Relying upon a decision of the Apex Court in the case of STATE OF TAMIL NADU AND ANOTHER .v. P. KRISHNAMURTHY AND OTHERS4, he submitted that the Court is not powerless to grant extension of the lease 3 (2003) 8 SCC6484 (2006) 4 SCC51718 period. Referring to another decision of the Apex Court in the case of COMMON CAUSE .v. UNION OF INDIA AND OTHERS5, he submitted that the provisions of the Amendment Act are also for the benefit of the lease holders as the same provide for automatic extension of the lease period, notwithstanding the auction regime brought into force by the Amendment Act. He submitted that the Objects and Reasons of the Amendment Act make it clear that the insertion of Section 8A under the said Act of 1957 was with a view to address the hardships faced by leaseholders. When the State commits a breach of such provision which is incorporated to address the hardship faced by the leaseholders, they should be granted the extension of the lease period.
13. The learned Additional Advocate General for the State urged that the decisions of the Apex Court relied upon by the petitioners in support of their prayer for grant of extension of the lease have been rendered in the exercise of powers under Article 142 of the Constitution of India. He submitted that so far as the decisions of this Court granting 5 (2016) 11 SCC45519 extension of the lease are concerned, the same are held to be per incuriam by a Division Bench of this Court in the case of P.V. BALAKRISHNA REDDY .v. THE DIRECTOR OF MINES AND GEOLOGY6. He submitted that even assuming that there was a default on the part of the State Government in granting deemed extension, in view of the scheme of the amended provisions of the said Act of 1957, introducing the auction regime and in the light of sub- section (4) of Section 8A of the said Act of 1957, there is no power vested in the authorities to extend the lease beyond what is specified in Section 8A of the said Act of 1957. By referring to the relevant provisions of the Karnataka Minor Mineral Concession Rules, 1994, he submitted that as in case of the said Rules of 1994, wherever the Legislature intended, there is a provision made for grant of extension of the lease. He submitted that unless there is a provision made for grant of extension of the lease in the statute or the statutory rules, a Writ Court cannot issue a writ of mandamus in exercise of the powers under Article 226 directing extension of the lease period. He would, therefore, 6 ILR1990KAR185820 submit that there is absolutely no reason to go into the question whether there was any default on the part of the State Government.
14. The learned senior counsel appearing for the petitioner in W.P. No.50456 of 2019 submitted that the decision of the Division Bench in the case of P.V. BALAKRISHNA REDDY (supra) is not applicable to the facts of this case as the said decision arises out of termination of a lease. He would submit that the decisions of the Apex Court relied upon are squarely applicable to the facts of this case. CONSIDERATION OF SUBMISSIONS ON THE ENTITLEMENT TO DEEMED EXTENSION15 We have carefully considered the submissions. It is not in dispute that in the case of both the petitioners, now supplementary lease deeds have been executed extending the period of lease up to 31st March, 2020.
15. Section 8A of the said Act of 1957 is relevant and it reads thus:
21. “8A. Period of grant of a mining lease for minerals other than coal, lignite and atomic minerals:― (1) The provisions of this section shall apply to minerals other than those specified in Part A and Part B of the First Schedule. (2) On and from the date of the commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015, all mining leases shall be granted for the period of fifty years. (3) All mining leases granted before the commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015 shall be deemed to have been granted for a period of fifty years. (4) On the expiry of the lease period, the lease shall be put up for auction as per the procedure specified in this Act. (5) Notwithstanding anything contained in sub-sections (2), (3) and sub-section (4), the period of lease granted before the date of commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015, where mineral is used for captive purpose, shall be extended and be deemed to have been extended up to a period ending on the 31st March, 2030 with effect from the date of expiry of the period of renewal last made or till the completion of renewal period, if any, or a period of fifty years from the date of grant of such lease, whichever is later, subject to the condition that all the terms and conditions of the lease have been complied with. (6) Notwithstanding anything contained in sub-sections (2), (3) and sub-section (4), the period of lease granted before the date of commencement of the Mines and Minerals 22 (Development and Regulation) Amendment Act, 2015, where mineral is used for other than captive purpose, shall be extended and be deemed to have been extended up to a period ending on the 31st March, 2020 with effect from the date of expiry of the period of renewal last made or till the completion of renewal period, if any, or a period of fifty years from the date of grant of such lease, whichever is later, subject to the condition that all the terms and conditions of the lease have been complied with. (7) Any holder of a lease granted, where mineral is used for captive purpose, shall have the right of first refusal at the time of auction held for such lease after the expiry of the lease period. (8) Notwithstanding anything contained in this section, the period of mining leases, including existing mining leases, of Government companies or corporations shall be such as may be prescribed by the Central Government. (9) The provisions of this section, notwithstanding anything contained therein, shall not apply to a mining lease granted before the date of commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015, for which renewal has been rejected, or which has been determined, or lapsed.”´ As noted earlier, the said provision was brought on the statute book by the Amendment Act with effect from 12th January, 2015. There is no dispute that the provisions Section 8A are applicable to the facts of the case in both the petitions. Sub-section (3) of Section 8A of the said Act 23 of 1957 creates a legal fiction by which all the mining leases granted before the commencement of the Amendment Act shall be deemed to have been granted for a period of fifty years. In the present case, the minerals subject matter of these two petitions were being used for the purposes other than the captive purpose. Therefore, sub-section (6) of Section 8A is applicable which provides that notwithstanding anything contained in sub-sections (2) to (4), the period of lease granted before the commencement of the Amendment Act shall be extended and shall be deemed to have been extended up to a period ending on 31st March, 2020 with effect from the date of the expiry of the period of renewal last made or till the completion of the renewal period, if any, or for a period of fifty years from the date of grant of such lease, whichever is later. In both the cases in hand, the period of fifty years from the date of grant of lease expired prior to 31st March, 2020. Even the period of renewal made earlier expired before 31st March, 2020. That is how the petitioners are entitled to the benefit of deemed extension of lease up to the period ending 31st March, 2020. Therefore, by the legal 24 fiction under sub-section (6) of Section 8A of the said Act of 1957, in these two cases, leases stood extended up to 31st March, 2020. Wherever sub-section (5) or sub-section (6) of Section 8A of the said Act of 1957 is applicable, there is an automatic extension of the lease as on 12th January, 2015, up to the periods specified in sub-sections (5) or (6), as the case may be. The phraseology used in both the Sections is “shall be extended and be deemed to have been extended…..” Therefore, the deemed extension of lease takes place automatically on 12th January, 2015 when Section 8A was brought on the statute book and no event can stop the deemed extension.
16. In both the cases, it is not the case made out by the State Government that there was a breach of the terms and conditions by the petitioners of the earlier lease, and that is how in both the cases, sub-section (6) of Section 8A of the said Act of 1957 operated automatically on 12th January, 2015 by virtue of the Amendment Act and there was a deemed extension of the lease granted to both the petitioners up to 31st March, 2020. 25
17. There is some controversy about the extension of forest clearance under Section 2 of the said Act of 1980. In fact, the controversy regarding extension of forest clearance under the said provision is really a non-issue in view of the Circular dated 1st April, 2015 issued by the Government of India, Ministry of Environment, Forest and Climate Change addressed to the Principal Secretary of Forest Department of all the States. The Circular notes that the approval under the said Act of 1980 for diversion of forest land for grant/renewal of the mining lease shall normally be granted for a period co-terminus with a period of mining lease proposed to be granted under the said Act of 1957, but not exceeding thirty years in consonance with the provisions of Section 8 of the said Act of 1957 as it stood prior to 12th January, 2015. Section 8 of the said Act of 1957 provided for an embargo on maximum period of mining lease. It provided that the maximum period of mining lease shall be thirty years which shall be extended for a period not exceeding twenty years.
18. Thereafter, the said Circular refers to the Ordinance of 2015 which was replaced by the Amendment Act. It 26 notes that the Ordinance provided that leases granted prior to the promulgation of the Ordinance would have a tenure of not less than fifty years and therefore, the Ministry of Mines had requested the Ministry of Environment, Forest and Climate Change to consider of extending the period of validity of approvals accorded under the said Act of 1980 co-extensive to the existing mining leases. Paragraph 3 of the said Circular is relevant which reads thus: “3. After careful examination of the matter, I am directed to say that in case of existing mining leases in respect of minerals specified in sub-section (1) of section 8A of the MMDR Act, 1957, as inserted by the Mines and Mineral (Development and Regulation) Amendment Ordinance, 2015, period of validity of approvals accorded under Section-2 of the FC Act shall be extended, and shall be deemed to have been extended upto a period co-terminus with the period of mining lease in accordance with the provisions of the MMDR Act, 1957, as amended, subject to the following conditions: (i) The State Government shall, within a period of two years from the date of issue of this letter, realize from the user agency, Net Present Value (NPV) of the forest land for which period of validity of approval under the FC Act has been extended, in case the same has not already been realized, and transfer the same to the ad-hoc Compensatory Afforestation Fund Management and Planning Authority (CAMPA). (ii) In case NPV of forest land for which period of validity of approval under the FC Act has been extended by this letter has not already been realised and the State Government fails 27 to realize the same from the user agency within a period of two years from the date of issue of this letter, approval accorded under the FC Act for such forest land shall be kept in abeyance, and shall be deemed to have been kept in abeyance, till such time, the NPV of such forest land is realized by the State Government. (iii) Provisions of this letter, notwithstanding anything contained therein, shall not apply to forest and falling in a mining lease for which renewal has been rejected, or which has been determined or lapsed before the issue of this letter.’’ Thus, the Ministry of Environment, Government of India, categorically stated in the Circular that the period of validity of approvals granted under the said Act of 1980 shall be extended and shall be deemed to have been extended up to the period co-terminus with the period of mining lease in accordance with the provisions of the said Act of 1957 as amended from 12th January, 2016. Thus, in the cases to which the deeming fiction under Section 8A of the said Act of 1957 and in particular, under sub-sections (5) and (6) thereof is applicable, there is an automatic extension of the period of validity of the approvals earlier accorded under Section 2 of the said Act of 1980 co-terminus with the period of extended mining lease. 28
19. The correspondence on the record of both the petitions indicate that as there was no formal order of extension of the approvals under Section 2 of the Act of 1980, the deemed extension of the mining leases under sub-section (6) of Section 8A of the said Act of 1957 was not granted. The stand of the Forest Department of State of Karnataka was that as there was no order granting deemed extension, a formal order of extension of forest clearance cannot be issued. The net effect of this was that for no reason, the supplementary lease deeds were not executed.
20. In fact, in the earlier W.P. No.9411 of filed by the petitioner in W.P No.50456 of 2019, there is an order passed on 4th March, 2016. Paragraph 3 of the said order reads thus: “We, therefore, dispose of the writ petition by directing the Director of Mines and Geology and the Principal Chief Conservator of Forests, Government of Karnataka, to grant mining lease upto March 2020, to the writ petitioner provided the writ petitioner satisfies all the requirements mentioned in the circular dated April 1, 2015, and to grant extension of the forest clearance for diversion of 4.18 hectares of forest land for construction of 29 approach road to make it co-terminus with the statutorily extended lease period.” Though directions were issued both to the Director of Mines and Geology and the Principal Chief Conservator of Forests, the said order was not complied with. In fact, the letter dated 28th March, 2016 addressed by the Principal Chief Conservator of Forests to the Additional Chief Secretary of the concerned Department shows that forest clearance was not extended on a flimsy ground that the order of extension of mining lease was not produced. The Additional Chief Secretary, by the letter dated 21st September, 2016 addressed to the Principal Chief Conservator of Forests stated that as the letter of extension of mining lease was not issued by the Commerce and Industries Department of the Government of Karnataka, the proposal for extension of forest clearance cannot be considered. Therefore, the petitioner in W.P No.50456 of 2019 was again forced to approach this Court by filing a writ petition, being W.P. No.2833 of 2017. By an order dated 3rd April, 2017, this Court disposed of the petition. 30 Paragraphs 2 to 5 of the said order are relevant which read thus: “2. We feel that, as agreed by the authorities, the supplementary deed of lease should be executed by the authorities within a period of three weeks from today, peremptorily.
3. However, the authorities are directed to inform the writ petitioner by one week, the net present value, so that the writ petitioner can deposit that amount immediately.
4. Moreover, the authorities shall not insist upon any fresh forest and environment clearances in view of the communication dated April 1, 2015, issued by the Ministry of Environment, Forests and Climate Change (Forest Conservation Division), Government of India, indicating that in case of deemed extension of the lease, such clearances should be deemed to have been extended upto a period co- terminus with the period of the lease.
5. Consequently, the endorsement dated September 21, 2016, issued by the Additional Chief Secretary to Government, Forest, Environment and Ecology Department, Bengaluru, stands set aside.”
(Emphasis added)21. Notwithstanding the binding orders of this Court and notwithstanding the letter dated 28th March, 2016 issued by the Additional Chief Secretary to the State Government, 31 addressed to the Director of Mines and Geology directing him to extend the lease, it was not extended.
22. Even in W.P. No.52477 of 2019, notwithstanding the Circular dated 1st April, 2015 which provided for an automatic extension of forest clearance for a period co- terminus with the period of extended mining lease, deemed extension was not granted to the petitioner. In fact, in the letter dated 16th/23rd April, 2019 (Annexure-AF to the said petition), the Principal Chief Conservator of Forests informed the Additional Chief Secretary of the Department of Forest, Ecology and Environment that by a letter dated 25th April, 2015, the Government of Karnataka, Commerce and Industries Department communicated the deemed extension of mining lease as per the Amendment Act. As per the said communication, the mining lease granted to the petitioner was extended up to 31st March, 2020.
23. Thus the sum and substance of our conclusion is that in both the cases, there was absolutely no justification for not granting the benefit of deemed extension under sub section (6) of Section 8-A of the said Act of 1957. The 32 benefit was granted during the pendency of these petitions. After the circular dated 1st April 2015, there was no impediment in the way of granting deemed extension. CONSIDERATION OF THE PRAYERS FOR EXTENTION OF LEASE24 Now the question is, ‘whether the prayer for extension beyond 31st March 2020 by way of compensation for the lost period can be acceded to by the Court while exercising jurisdiction under Article 226 of the Constitution of India?..
25. Now, we turn to the decisions relied upon by the petitioners. Firstly, we refer to the decision of the Apex Court in the case of BEGRAJ SINGH (supra). This was a case where a lease was granted to the appellant for a period of one year by the Collector. Before the expiry of the lease, renewal was sought for a period of two years. Extension for a period of two years was granted on the ground the original lease ought to have been granted for a period of three years. At the instance of a competitor, a revision application was filed in which the State 33 Government interfered and proceeded to set aside the order of the Collector granting extension by two years.
26. The said decision was rendered on the ground that a decision was taken to hold an auction of the mining rights which would have resulted in the State Government gaining additional revenue. A writ petition was filed by the appellant in which the High Court refused to grant the relief to the appellant. Being aggrieved, Special Leave Petition was filed by the appellant. In paragraphs 7 and 8, the Apex Court held thus: “7. Having heard the learned counsel for the petitioner, as also the learned counsel for the State and the private respondent, we are satisfied that the petition deserves to be allowed. The ordinary rule of litigation is that the rights of the parties stand crystallized on the date of commencement of litigation and the right to relief should be decided by reference to the date on which the petitioner entered the portals of the court. A petitioner, though entitled to relief in law, may yet be denied relief in equity because of subsequent or intervening events i.e. the events between the commencement of litigation and the date of decision. The relief to which the petitioner is held entitled may have been rendered redundant by lapse of time or may have been rendered incapable of being granted by change in law. There may be other circumstances which render it inequitable to grant the petitioner any relief over the respondents because of the balance tilting 34 against the petitioner on weighing inequities pitted against equities on the date of judgment. Third-party interests may have been created or allowing relief to the claimant may result in unjust enrichment on account of events happening in-between. Else the relief may not be denied solely on account of time lost in prosecuting proceedings in judicial or quasi- judicial forum and for no fault of the petitioner. A plaintiff or petitioner having been found entitled to a right to relief, the court would as an ordinary rule try to place the successful party in the same position in which he would have been if the wrong complained against would not have been done to him. The present one is such a case. The delay in final decision cannot, in any manner, be attributed to the appellant. No auction has taken place. No third-party interest has been created. The sand mine has remained unoperated for the period for which the period of operation falls short of three years. The operation had to be stopped because of the order of the State Government intervening which order has been found unsustainable in accordance with stipulations contained in the mining lease consistently with GO issued by the State of Uttar Pradesh. Merely because a little higher revenue can be earned by the State Government that cannot be a ground for not enforcing the obligation of the State Government which it has incurred in accordance with its own policy decision.
8. For the foregoing reasons, the petition is allowed with costs. The impugned order of the High Court, dismissing the petition filed by the petitioner, is set aside. Instead, it is directed that the petitioner shall be allowed to operate the mine for a full period of three years subject to adjustment for the period for which he has already operated. The petitioner shall remain liable to pay royalty and make other payments to the State Government in accordance with the terms of the lease. The petition stand disposed of in the abovesaid terms.”
(Emphasis added)35 27. Though, ultimately, the Apex Court allowed the appellant to operate the mine for a full period of three years, the law laid down in paragraph 7 is relevant. What the Apex Court has held is that the petitioner though entitled to relief in law, may be denied relief in equity because of subsequent or intervening events i.e. the events between the commencement of the litigation and the date of the decision. The Apex Court also held there may be a case where the relief to which the petitioner is entitled to may have been rendered incapable of being granted due to change in law. Moreover, relief can be denied on equitable grounds as well.
28. In the facts of the case, the Apex Court observed that the delay in filing the petition cannot be attributed to the appellant and no auction has taken place and therefore, no third party interest was created. It is in the light of the facts of the case, the Apex Court exercised jurisdiction and granted the relief. In the peculiar facts of the case, the Apex Court issued a direction for allowing the appellant to do mining for the extended period of three years. However, while doing so, the Apex Court has laid down on the 36 grounds on which a petitioner, who may be normally entitled to the relief, can be denied relief.
29. The second decision relied upon by the learned Senior Counsel is in the case of H.G.BALAKRISHNA .v. THE STATE OF KARNATAKA AND ANOTHER7 W.P.No.10772/1988 dated 10th March 1989. This was again a case where the extension of lease was sought for as the petitioner was prevented from resuming mining activities on account of no fault of his. A writ of mandamus was issued to extend the lease period to the extent to which he was deprived of mining the minerals.
30. The decision of the Madras High Court in the case of The District Collector vs. M.Venkataraman (W.A.No.983/2017 and C.M.P.13762 of 2017 dated 30.08.2017) has only a persuasive value.
31. Before we deal with the decision of this Court rendered on 11th April 2011 in Writ Petition No.14132/2007, it is necessary to refer to another decision of a Division Bench of this Court in the case of P.V.BALAKRISHNA7W.P. No.10772/1988 dated 10th March, 1989 37 REDDY (supra). We must note here that this was a case where the petitioner was granted quarrying lease for a period of five years. The lease was terminated on the ground that the petitioner failed to pay Royalty. The said order was set aside in the writ petition. The petitioner operated the quarry up to the expiry of the lease period and thereafter, he filed a writ petition before the learned Single Judge for the relief of extension of the lease period which was lost due to illegal termination of the lease.
32. The learned Single Judge denied the relief of extension of the lease. The Division Bench considered the terms and conditions incorporated in the lease. The decision dated 10th March 1989 in the case of H.G.BALAKRISHNA relied upon by the petitioners in this case was also relied upon before the Division Bench as well as the order of the Division Bench confirming the decision in the case of H.G.BALAKRISHNA. For the reasons which were recorded, the Division Bench held that the decision in the case of H.G.BALAKRISHNA was per incuriam. The reasons assigned by the Division Bench in 38 paragraph 9 for coming to the said conclusion are very relevant. The said reasons read thus: “It appears to us that the aforesaid decisions either of the learned Single Judge or of the Division Bench cannot be held to constitute a binding precedent as the same are given per-incuriam. The attention of the Court had not been drawn to the relevant law having a bearing on the subject. A decision of the Court is not a binding precedent if given per incuriam i.e.. without the Court's attention having been drawn to the relevant authorities or statutes. As per the provisions contained in he Specific Relief Act, where the loss is assessable the damages is the only remedy. Further, the subsequent development in law as to preserving the black granite for State exploitation only had not been noticed. Any decision rendered without taking into consideration the relevant law cannot constitute as an authority for the legal principle embodied in it. Therefore. we are of the view that aforesaid decisions cannot be held to lay down the law so as to constitute a binding precedent. After the lease is executed the parties are governed by the terms of .the lease and the provisions of the Act and the Rules governing the lease. If any breach of the conditions of the lease takes place or the lease is terminated unless the Act or Rules specifically provide to meet such a situation the matter will be governed by the common law. As in the instant case there is no provision either in the Act or in the Rules enabling the lessee and directing the Iessor to extend the lease in a case where the lessee is prevented from operating the quarry by reason of termination of the lease which is subsequently found to be wrong. Further it is a case in which It cannot be held that the loss is not assessable. Therefore it squarely falls under the provisions of the Specific Relief Act. As such claiming of 39 damages is the only remedy in a case like this.”
(Emphasis added)33. The submission of the petitioners is that the facts of the case before the Division Bench were different. The grievance before the Division Bench was that the period from the date on which the lease was illegally terminated till the date of setting aside the order of termination of lease was lost by the petitioner and therefore, to that extent, the lease period should be extended. The Division Bench held that as the loss caused by illegally preventing the lessee from doing mining activity can be assessed in terms of damages, filing a claim for damages was the only remedy. Thus, in short the view taken by the Division Bench is that even if for a certain period, the lessee is illegally prevented from carrying on mining activity, he cannot seek extension of the lease period and making a claim for the damages is the only remedy available to him. The grievance in substance in these petitions is the same that the petitioners were prevented from carrying on mining for certain period by reason of inordinate delay on the part of the State Government in granting deemed extension of lease. 40
34. Now, coming to the decision dated 11th April 2011 in W.P.No.14132/2007, where the Division Bench granted the relief of extension of the period of lease on the ground that for the period mentioned therein, the petitioner was prevented from carrying out quarrying operations. The Division Bench relied upon the decision in the case of BEGRAJ SINGH (supra) which we have extensively discussed earlier. Apart from the fact that attention of the Division Bench was not invited to the decision in the case of P.V.BALAKRISHNA REDDY (supra) rendered by a coordinate Division Bench, the said decision is based only on the view taken in the case of BEGRAJ SINGH. We have referred to what is held by the Apex Court in paragraph 7 of the said decision. As noted earlier, even in a case where the petitioner is entitled to grant of relief, the Apex Court has laid down that for equitable considerations, in certain cases, the relief can be denied to the petitioner.
35. Another decision relied upon by the petitioners is in the case of STATE OF TAMILNADU AND ANOTHER wherein the Apex Court granted the relief of extension of 41 lease for a period of six months. This decision is obviously rendered in exercise of power of the Apex Court under Article 142 of the Constitution of India. All the decisions relied upon by the petitioners of granting extension of lease period, have been rendered prior to 12th January 2015 when a major change was brought about in relation to the mining laws. The Amendment Act brought about the changes. It will be necessary to refer to the statement of objects and reasons of the Amendment Act. Paragraphs 4 to 6 of the objections reasons are relevant which read thus: “STATEMENT OF OBJECTS AND REASONS:
4. The present legal framework of MMDR Act, 1957, does not permit the auctioning of mineral concessions. Auctioning of mineral concessions would improve transparency in allocation. Government would also get an increased share of the value of mineral resources. Some provisions of the law relating to renewals of mineral concessions have also been found to be wanting in enabling quick decisions. Consequently, there has been slowdown in the grant of new concessions and the renewal of existing ones. As a result, the mining sector started registering a decline in production affecting the manufacturing sector which largely depends on the raw material provided by mining sector. The Government has therefore felt it necessary to address the immediate requirements of the mining sector and also to remedy the basic structural defects that underline the current impasse. 42
5. In view of the urgent need to address these problems, the Mines and Minerals (Development and Regulation) Amendment Ordinance. 2015 was promulgated on 12th January, 2015. The present Bill is to replace this Ordinance. This bill is designed to put in place mechanism for: (i) Eliminating discretion; (ii) (iii) Improving transparency in the allocation of mineral resources; (iv) (v) Simplifying procedures; (vi) (vii) Eliminating delay in administration, so as to enable expeditious and optimum development of the mineral resources of the country; and (viii) (ix) Attracting private investment and the latest technology; 6. the salient features of MMDR Amendment Bill, 2015 are as follows: (i) Removal of discretion: auction to be sole method of allotment: The amendment seeks to bring in utmost transparency by introducing auction mechanism for the grant of mineral concessions. The tenure of mineral leases has been increased from the existing 30 years to 50 years. There is no provision for renewal of leases. (ii) Impetus to the mining sector: The mining industry has been aggrieved due to the second and subsequent renewals remaining pending. In fact, this has led to closure of a large number of mines. The Bill addresses this issue also. The Bill provides that mining leases would be deemed to be extended from the date of their last renewal to 31st March 2030. (in the case of captive mines) and till 31st March 2020 (for the merchant miners) or till the completion of the renewal already granted, if any, or a period of 43 fifty years from the date of grant of such leave, whichever is later. (iii) Safeguarding interest of affected persons: There is provision to establish District Mineral Foundation in the districts affected by mining related activities. (iv) Encouraging exploration and investment: The Bill proposes to set up a National Mineral Exploration Trust created out of contributions from the mining lease holders, in order to have dedicated fund for encouraging exploration in the country. Transfer of mineral concessions granted through auction will be permitted in order to encourage private investors. (v) Simplification of procedures and removal of delay: The amendment removes the need for “previous approval” from the Central Government for grant of mineral concessions in case of important minerals like iron ore, bauxite, manganese etc, thereby making the process quicker and simpler. Similarly, the State Governments will devise a system for filling of a mining plan obviating the need for prior approval of the Mining Plans by the Central Government. The Central Government will have revision powers in case State Governments fail to decide issues within the prescribed time. (vi) Stronger provisions for checking illegal mining; in order to address the serious problem of illegal mining, the penal provisions have been made further stringent by prescribing higher penalties upto 5 lakh rupees per hectare and imprisonment upto 5 years. State Government will now be able to set up Special Courts for trial of offenses under the Act.”
(Emphasis added)44 36. Thus, one of the basic objects of the Amendment Act was to make auction as only mode of grant of mining concession. The existing provisions of the said Act of 1957 did not permit auctioning of mineral concessions. Another object was to eliminate discretion and improve transparency in allocation of mineral resources. One of the salient features of the Amendment Act was removal of discretion and introduction of auction to be the sole method of allotment of mineral concessions. By the amendment, the tenure of mining leases was extended from 30 to 50 years.
37. In the case of BHUSHAN POWER STEEL AUTHORITY .v. ADDITIONAL SECRETARY8, the Apex Court referred to the statement of objects and reasons and observed that with the auction of mineral concession, transparency in allocation will improve. In paragraph 21, it is noted that the Amendment Act brought on the statute book, the auction as the sole method of allotment. 8 2017 2 SCC12545 38. As far as the changes brought about by the Amendment Act are concerned, this Court in paragraph 11 of its decision in the case of M/s.MSPL LIMITED .v. UNION OF INDIA, MINISTRY OF MINES AND ANOTHER9, held thus:
11. Mining leases are granted in respect of public properties vesting in the State. All minerals vest in the State. As can be seen from the statement of objects and reasons of the Amendment Act, the provisions of Section 11 regarding auction were introduced for eliminating discretion and for bringing in transparency and fairness in allocation of mineral resources. The object seems to be to ensure that mining leases are granted by adopting a fair and transparent process. Thus, after the amendment came into force, the applicants who apply for prospecting licences and mining leases will have to compete with others by participating in the process of auction, which certainly improves the transparency of the process of allocation of mineral resources. We do not see how the said provisions of Section 10A and Section 11 as amended by the Amendment Act are manifestly arbitrary. In fact, the amendments have brought about to reduce arbitrariness in the process and to make it more transparent. Moreover, in case of pending applications, restrictions have been imposed which are reasonable in as much as the applications covered by sub-Section (2) of Section 10A have been protected.”
(Emphasis added)9 ILR2019KAR285046 39. As observed by the Apex Court in the case of Common Cause (supra), to avoid any prejudice to the existing lease holders, that the provisions of Section 8A of the said Act of 1957 were incorporated providing for, firstly extending the period of mining leases granted before 12th January 2015 for a total period of 50 years and secondly, providing for deeming fiction under sub sections (5) and (6) of Section 8A of the Act of 1957 which granted relief to those lease holders in whose cases, the period of 50 years from the date of grant of the original lease had expired on 12th January 2015.
40. The intention of the legislature is reflected from sub section (4) of Section 8A of the said Act of 1957 which provides that on the expiry of the lease period, the lease shall be put up for auction as per the procedure specified in the said Act of 1957. Therefore, sub section (4) of Section 8A of the said Act of 1957 means that wherever extension of mining lease is granted under any of the provisions of Section 8A, on the expiry of the extended lease period, the lease has to be put up for auction. This provision is consistent with the objects and reasons and the legislative 47 intent of coming out with the Amendment Act to introduce auction as the only method of disposal of mineral concessions. Thus, extension beyond the period provided in sub-section (6) of Section 8A cannot be granted.
41. These are two cases where the petitioners were denied the benefit of deemed extension for no valid reason. The question is, whether the petitioners are entitled to the relief of extension of lease period beyond 31st March 2020.
42. Firstly, in these cases, the precise loss in terms of money which is caused to the petitioners due to the delay in grant of the benefit of deemed extension can always be quantified. The loss caused can be only a loss in terms of money. The petitioners can always approach Civil Court for grant of damages. Secondly, in view of the legislative intent which is reflected from the amendments brought about to the said Act of 1957 with effect from 12th January 2015 and in the light of sub section (4) of Section 8A of the said Act of 1957, it will be inequitable to grant the relief of extension of the lease period. In any case, in both the cases, the petitioners were entitled to deemed extension till 31st March 48 2020 by operation of Section 8A of the said Act of 1957 and in particular, sub section (6 ) thereof. Immediately after the expiry of extended period of lease, the auction regime will come into picture and leases will have to be put up for auction in terms of the provisions of the said Act of 1957 and in particular sub-section (4) of Section 8A. If a Writ Court grants relief of extension of lease, that will completely defeat the object of bringing about the amendment to the said Act of 1957 with effect from 12th January 2015 and the object of introducing auction as the only mode of granting of mineral concessions. The petitioners will not be prejudiced as the loss which is caused to them can always be compensated in terms of money. In fact, in one of the two petitions, reliance is placed on various decisions on the concept of restitution. The restitution can take place in the form of grant of damages. Writ Jurisdiction under Article 226 of the Constitution of India is always discretionary and equitable. In our view, for the reasons set out above, it will be inequitable to grant the relief of extension of lease.
43. Hence, we dispose of the petitions by passing the following order:- 49
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. Sd/- CHIEF JUSTICE Sd/- JUDGE vgh*/RS