Supreme Court Refuses to Extend Lease to Miners for Obstructed Mining Period

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On October 28th, SC directed a refund of the security deposit and advance royalties to leasehold miners while refusing to extend the lease for the obstructed mining period. 

Background 

The present litigation flowed from the concern to regulate mining activity in eco-sensitive areas.

It arose on account of an endeavor to prevent alleged illegal mining in the vicinity of the Kaimur Wildlife Sanctuary located in Village Billi Markundi in Sonbhadra District. The Notification dated 20.3.2017 of the Ministry of Environment, Forest and Climate Change (MoEFCC) declared the ‘area in question’ as an Eco-Sensitive Zone (ESZ) under the provisions of the Environment (Protection) Act, 1986 (EPA). 

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Consequently, the NGT wanted to examine leases operational outside ESZ  for cancellation of all mining leases and all other non-forestry activities on areas notified under Section 4 of the Forest Act. The whole object was to find out as to what lay outside of the reserved limit of the forest area and it was found that there were some active leases still in force on the lands which were covered under the notification issued under Section 4 of the Forest Act. 

However, the leaseholders were not made parties, not even in a representative capacity. This is the reason that some aspects could not be examined with the assistance of the appellants by the NGT, and the mining activity was stopped resulting in the appeals before the SC. 

Issue 

Whether in view of judicial pronouncements, the appropriate order to pass would be for the refund of the lease amount for the period it was not permitted to operate, or whether the leases are liable to be renewed for the period of obstructed time. 

Court’s Observations

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A two-judge bench comprising Justices Sanjay Kishan Kaul and Hrishikesh Roy examined the matter and observed that the right to an extension of the lease either flows from a statutory provision or from the terms of the lease between the concerned parties. If there has been an obstructed period by reason of a judicial interdict, that itself will not give a window to extend the lease by not following the statutory provisions, especially when the terms of the lease do not provide for any consequences thereof.

The Court found the appropriate course of action to be adopted in the case cannot be to extend the lease for the obstructed period but to direct that the security deposit, if not already refunded, should be refunded and the amount deposited by the appellants/leaseholders as advance royalties to the respondent/State be also paid back to them.

Court’s Decision 

The Court directed that the security deposit and advance royalties be refunded with interest to the appellants within two months from the date of judgment. 

Case: Dharmendra Kumar Singh v. the State of Uttar Pradesh

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Coram: Sanjay Kishan Kaul & Hrishikesh Roy

Click here to read the judgment.

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