Holding

A mining lease is deemed subsisting unless a State Government order declares it lapsed, and leaseholders with valid original or renewed leases as of 12 January 2015 are entitled to the extensions and benefits under Section 8A of the amended MMDR Act.

Summary

The Supreme Court examined whether mining leaseholders, whose operations were suspended for lack of environmental clearances, retained a subsisting right to mine. It held that a lease remains subsisting unless a State Government order declares it lapsed, and that the lease period may be deemed extended under Rule 24A(6) and the 2015 amendment. Leaseholders with original or renewed leases in force on 12 January 2015 are entitled to the benefits of Section 8A, including extensions up to 31 March 2030/2020 for captive and non‑captive mines respectively. First‑renewal applications pending as of 18 July 2014 extend the lease by two years, whereas second or subsequent renewals require an express order. The Court rejected the contention that a lease lapses automatically after two years of non‑operation and clarified that lapse occurs only after a governmental order. Consequently, the petition seeking blanket revocation of the suspension order was dismissed, with relief granted only to those leaseholders meeting the subsistence criteria.

Issues considered

Whether a mining leaseholder has a subsisting right to carry on mining operations despite suspension orders.
Interpretation of Section 8, Section 8A of the MMDR Act and Rule 24A(6) of the Mineral Concession Rules regarding lease renewal and deemed extensions.
Whether a lease lapses automatically under Section 4A(4) of the MMDR Act or requires a State Government order.
Effect of the Mines and Minerals (Development and Regulation) Amendment Act, 2015 on existing mining leases and renewals.
Whether Section 8A(9) excludes the benefit of the amendment for leaseholders whose lease expired before 12 January 2015.

Legislation cited

Forest (Conservation) Act, 1980
Mineral Concession Rules, 1960s. Rule 24A, s. Rule 28
Mines and Minerals (Development and Regulation) Act, 1957s. 4A(4), s. 8
Mines and Minerals (Development and Regulation) Amendment Act, 2015s. 8A

Subjects

mining leasesubsisting leaselease renewalsuspension orderSection 8ARule 24Alease lapseenvironmental clearanceSupreme Court

Judgment

[2016] 2 S.C.R. 243

COMMON CAUSE A
v.
UNION OF INDIA AND OTHERS
(Writ Petition (C) No. 114 OF 2014)
APRIL 04, 2016 B

[JAGDISH SINGH KHEHAR AND C. NAGAPPAN, JJ.]
Mines and Minerals (Development and Regulation) Act, 1957
- s. 8, 4A(4) - Mines and Minerals (Development and Regulation)
Amendment Act, 2015 - s. 8A - Mineral Concession Rules, 1960 - . C
rr. 24A, 24A(6)(as amended) - Suspension of mining operations to
mining leaseholders since not in possession of clearances/approvals/
consent, required for carrying on the mining operations by order
of this Court - However, permitted to modify the said order as and .
when clearances/approvals/consent were obtained - Applications
by the mining companies seeking revocation of the suspension order D
- Whether leaseholders have subsisting right to carry on mining
operation - Held: Unless an order is passed by the State Government
declaring, that a mining lease has lapsed, the mining lease would
be deemed to be subsisting, upto the date of expiry of the lease
period provided by the lease document - Vital vested rights in a E
leaseholder, cannot be curtailed without affording him an
opportunity - In situations wherein an application has been filed
by a leaseholder, mining operations were not carried out for a
continuous period of two years, the lease period will not be deemed
to have lapsed, till an order is passed by the State Government on .
such application - Where no order has been passed, the lease shall F
be deemed to have been extended beyond the original lease period,
for a further period of two years - Leaseholder would have a
subsisting mining lease, if the period of the original grant was still
in currency on 12.1.2015 - Leaseholder whose original lease has
since expired, would still have a subsisting lease, if the original G
lease having been renewed, the renewal period was still in currency
on 12.1.2015 - Leaseholder who had not moved an application for
renewal of a mining lease at least twelve months before the existing
lease was due to expire, under the provisions of the unamended
MMDR Act and the Rules, will be considered as not a valid/subsisting
leaseholder, after the expiry of the lease period - Leaseholder who H
243
244 SUPREME COURT REPORTS [2016] 2 S.C.R.

A has moved an application for renewal (original/first or subsequent
renewal), at least twelve months before the existing /ease was due
to expire, and if such an application has been rejected, it would not
be a valid/subsisting leaseholder and in case application is moved
for first renewal and the same has not been rejected, it will be
B considered as valid/subsisting leaseholder having right to carry on
mining operations, till the expiry of two years after 18. 7.2014, i.e.,
up to 17. 7.2016 - Leaseholder who had moved a second (third or
subsequent) renewal application uls. 8(3) of the unamended MMDR
Act, at least twelve months before the renewed lease was due to
expire, and whose application is rejected (though not entitled to
C any benefit under the unamended s.8A and the amended r. 24A(6)
up to 12.1.2015, would still have the benefit of s. 8A(5) and (6) of
the amended MMDR Act.
Common Cause v. Union of India (2014) 14 SCC
155:2014 (7) SCR 561 - referred to.
D Case Law Reference
2014 (7) SCR 561 referred to. Paral
CIVIL ORIGJNAL JURISDICTION : Writ Petition (Civil) No.
114 of2014
E UNDER ARTICLE 32 OF THE CONSTITUTION OF JNDIA]
WITH
W. P. (C) NO. 194 OF 2014
A.D.N. Rao, Ms. Aparajita Singh, Mr. Siddhartha Chowdhury,
F Amicus Curiaes.
Neeraj Kishan Kaul, Maninder Singh, ASGs, P.Chidambararn, Dr.
A. M. Singhvi, Gopal Jain,Ashok K. Parija, DushyantA. Dave, Nidhesh
Gupta, Krishnan Venugopal,Arvind P. Datar, Gopal Subrarnanium, Ashok
Kumar Panda, A.K.Ganguly, Rakesh Dwivedi, Manas Ranjan
G Mahapatra, Sr. Advs. Prashant Bhushan, Pranav Sachdeva, Ms.Neha
Rathi, Nischal Kumar Neeraj, Samar Singh Kachwaha, Ms.Meenakshi
Grover, Neeraj Kumar Shanna, Vibhu Shankar Mishra, Sudhir Aggarwal,
Sunil Kumar Jain, Pawan Shree.Agrawal, Kaushik Choudhary, Jagmohan
Sharma, K.P.S. Chani, Ajay Bhargava, Ms.Vanita Bhargava, Jeevn
B.Panda, Kubrat Dev, Raj at Jariwal, Akash Bajaj, Sanjeev K. Kapoor,
H (for Mis. Khaitan & Co.), Gaurav Kejriwal, Keshav Mohan, Sujit Keshri,
COMMON CAUSE v. UNION OF INDIA 245

Ms.Nandini Gore, Ms.Tahira Karanjawala, Ms. Khushboo Bari, A
Ms.Devina Sehgal, Ms.Neha Khandelwal, (For Mis. Karanjawala &
Co.), Naveen Kumar, Sudeep Dey, Arnav Dash, Raj Kumar Mehta,
Abhishek Upadhyay, Ramendra Mohan Patnaik, Dhananjaya Mishra,
Anand V., Arnav Dash, Satyabrata Panda, Manoranjan Paikaray, Tejaswi'
Kumar Pradhan, Ms.Sangeeta Manda!, Ms.Swati Sinha, Arindam Guha,
Shantanu Bansal, Arijit Mazumdar, (For Mis Fox Manda! & Co.), Mrs. B
Kirti Renu Mishra, Anish Agarwal, Ramesh Singh, Shiv Man gal Sharma,
Lalitendu Mahapatra, NishitAgrawal, (For Mis Aura& Co.), Sunil Dogra,
Vivek Vishnoi, Abhishek Sharma, Suchit Mohanty, Anupam Lal Das,
Balaji Srinivasan, E. C. Agrawala, Himinder Lal, Mukul Kumar, Satyendra
Kumar, Tayenjam Moma Singh, Ms. Ruchi Kohli, S.N. Terdal, Advs., C
with them for the appearing parties.
The Judgment of the Court was delivered by
JAGDISH SINGH KHEHAR, J. 1. This Court by its order
dated 16.5.2014, in Common Cause v. Union of India, (2014) 14 SCC
155, restrained 102 mining leaseholders from carrying on any mining D
operations. The above order was passed on account of the fact, that
none of these leaseholders were in possession of clearances/approvals/
consent, required for carrying on the mining operations. The above
order dated 16.5.2014, granted liberty to the leaseholders whose
operations were suspended, to move this Court after obtaining the requisite E
clearances/approvals/consent, whereupon this Court would, on being
satisfied, revoke the suspension order.
2. A number of applications came to be filed before this Court
seeking revocation of the above order of suspension, wherein the
concerned applicants asserted, that they had obtained all clearances/ F
approvals/consent, and further that, they were now legally eligible to
recommence mining operations. During the course of such consideration
at our hands, Mr. A.D.N. Rao, learned amicus curiae pointed out, that
the question of granting permission to the leaseholders to recommence
mining operations would arise, only ifthe leaseholders have a subsisting
mining lease. It was therefore submitted, that before determining the G
·legitimacy of the claim raised by the applicants, this Court should first
examine, whether the applicants have a subsisting right to carry on mining
operation, under a valid lease.
3. This submission advanced at the hands of the learned amicus
J._.._ curiae, was strongly contested by learned counsel representing the H
246 SUPREME COURT REPORTS [2016] 2 S. C.R.

A applicants. They invited our attention to paragraph 4 of the order dated
16.5.2014, passed in the Common Cause case, so as to contend, thatthis
Court had not postulated such a precondition, and therefore, the submission
advanced atthe hands of the learned amicus curiae, should be rejected.
Paragraph 4 aforementioned, is extracted hereunder:
B "4. We have considered the report dated 25.4.2014 of the CEC,
and the submissions made by learned Counsel appearing for
different parties, and we find that 102 mining leases do not have
requisite environmental clearances, approvals under the Forest
(Conservation) Act, 1980, approved Mining Plan and/or Consent
to Operate. A list of these 102 mining leases is annexed to the
c report of the CEC as Annexure R-2. The CEC has, however,
stated in the report that mining operations in these 102 miaj_vg-
leases have been suspended and these I 02 mining l.,aseS&ave .
been classified as non-working leases. We direct that mining
operations in these 102 mining leases listed in Annexure R-2 of
D the report of the CEC shall remain suspended, but it will be open
to such lessees to move the concerned authorities for
environmental clearances, approval under the Forest
(Conservation)Act, 1980, approval of Mining Plan or Consent to
Operate and as and when the mining lessees are able to obtain all
the clearances/approval/consent, they may move this Court for
E modification of this interim order in relation to their cases."
(highlighting - as per emphasis of learned counsel)
4. Having perused the position expressed by this Court, while
suspending mining operations with reference to I 02 mining leases, it is
F apparent, that the said direction was issued for the sole consideration,
that the concerned leaseholders were not in possession of all clearances/
approvals/consent. And as such; they were permitted to move
applications before this Court, for modification of the order of suspension,
as and when all clearances/approvals/consent were obtained. It is
however relevant to notice, that such clearances, approvals and consent
G can be meaningful to the applicants, only if they are with reference to
subsisting mining lease(s). In case a leaseholder does not have a
subsisting mining lease, he is precluded under the provisions of the Mines
and Minerals (Development and Regulation) Act, 1957 (hereinafter
refen-ed to as, the MMDRAct), from can-ying on any mining operations.
H It is therefore, that we accept the submission advanced by Mr. A.D.N.
...
COMMON CAUSE v. UNION OF INDIA 247
[JAGDISH SINGH KHEHAR, J.]

Rao. And it is also for the above reason, that we required learned counsel A
' representing the mining leaseholders, desirous oflifting the suspension
order dated 16.5.2014, to substantiate whether or not, they were
possessed of a subsisting mining lease.
5. To commence with, we were of the view, that a decision/
conclusion in this behalf, would emerge from the actual document by B
which the mining lease had been granted (or renewed). During the
course of hearing it emerged, that the deduction as to whether the
applicant-leaseholders were possessed of subsisting mining lease(s), was
a complicated question of fact and law. Since the same has to be resolved,
before the claim of the applicants for revoking the suspension order (-
dated 16.5.2014) can be accepted, we would endeavour to lay down C
parameters for such determination.
6. A leaseholder would have a subsisting mining lease, ifthe period
of the original grant is in currency. Additionally, a leaseholder whose
original lease has since expired, would have a subsisting lease, if the
original lease having been renewed, the renewal period is in currency. D
7. It is also essential to notice, that to start with, renewal could be
granted to a mining leaseholder, any number of times; under the
unamended Section 8 of the MMDR Act. The duration of the original
grant (of the mining lease), as also, the duration of renewals, and the
number of permissible renewals, that a leaseholder can seek, have E
undergone a change. We shall dwell upon the instant aspect of the
matter in the instant order, as it has a vital bearing on the issue, whether
or not the applicant-leaseholders are possessed of subsisting mining
leases. For this, in the first instance, reference may be made to the
provision regulating the grant of a mining lease, as also, renewal of a F
mining lease, namely, Section 8 of the MMDRAct. The instant provision,
in the manner it came to be structured after being amended in 1994
(which position remained unamended till 18.7.2014), is extracted
hereunder:
"8. Periods for which mining leases may be granted or renewed.- G
(1) The maximum period for which a mining lease may be granted
shall not exceed thirty years:
Provided that the minimum period for which any such mining lease
may be granted shall not be less than twenty years;

H
248 SUPREME COURT REPORTS [2016] 2 S.C.R.

A (2) A mining lease may be renewed for a period not exceeding
twenty years.
(3) Notwithstanding anything contained in sub-section (2), if the
State Government is of opinion that in the interests of mineral
development it is necessary so to do, it may, for reasons to be
recorded, authorise the renewal of a mining lease in respect of
B
minerals not specified in Part-A and Part-B of the First Schedule
for a further period or periods not exceeding twenty years in each
case.
(4) Notwithstanding anything contained in sub-section (2) and sub-
section (3 ), no mining lease granted in respect of mineral specified
c in Part-A or Part-B of the First Schedule shall be renewed except
with the previous approval of the Central Government."
(emphasis is ours)
A perusal of Section 8(1) extracted above reveals, that the maximum
period for which a mining lease could be granted, would not exceed
D thirty years. Afterthe expiry of the original grant, the mining lease could
be renewed in the first instance for a further period not exceeding twenty
years, under Section 8(2). For all intents and purposes, the renewal
contemplated under Section 8(2), shall be referred to as the "first
renewal''. The "first renewal", required a clearance of the State
Government, and the approval of the Central Government. Further
E renewals, after the expiry of first renewal granted under Section 8(2),
were also permissible, and were provided for under Section 8(3) of the
MMDRAct. The renewal(s) postulated under Section 8(3), for all intents
and purposes, shall be described hereinafter, as the "second (or third, or
fourth ... ) renewal". The renewal(s) under Section 8(3) could be granted
F only if the State Government expressed its satisfaction, that the grant of
the second or subsequent renewal, would be in the interest of mineral
development. Furthermore, the "second renewal" or still further
renewal(s), had to also have the approval of the Central Government.
Even though the period of subsequent renewals, is of no significance,
insofar as the present controversy is concerned, it may be mentioned,
G that all subsequent renewals including the second, third or further
renewals, could individually extend to a period not exceeding twenty
years.
8. The interpretation placed by us, on Section 8 of the MMDR
Act (as it existed in 1994), finds support from Rule 24A of the Mineral
H Concession Rules, 1960 (hereinafter referred to as, the Mineral
COMMON CAUSE v. UNION OF INDIA 249
[JAGDISH SINGH KHEHAR, J.]

ConcessionRules)-astheruleexistedpriorto 18.7.2014. Rule24Ain A
the manner in which it was then structured, is extracted below:
"24A. Renewal of mining lease. -( 1) An application for the
renewal of a mining lease shall be made to the State Government
in Form J, at least twelve months before the date on which the
lease is due to expire, through such officer or authority as the B
State Government may specify in this behalf
(2) The renewal or renewals of a mining lease granted in respect
of a mineral specified in Part A and Part B of the First Schedule
to the Act may be granted by the State Government with the
previous approval of the Central Government.
(3) The ren~wal or renewals of a· mining lease granted in respect
c
ofa mineral not specified in Part A and PartB of the First Schedule
to the Act may be granted by the State Government:
Provided th~t before granting approval for second or subsequent
renewal of a mining lease, the State Government shall seek a
report from the Controller General, Indian Bureau ofMines, as to D
whether it would be in the interest of mineral development to
grant the renewal of the mining lease.
Provided further that in case a report is not received from Controller
General, Indian Bureau of Mines in a period of three months of
receipt ofthe communication from the State Government, it would E
be deemed that the Indian Bureau of Mines has no adverse
comments to offer regarding the grant of the renewal of mining
lease.
(4) An application for the renewal of a mining lease shall be
disposed of within a period of six months from the date of its
F
receipt.
( 5) If an application is not disposed of within the period specified
in sub-rule (4) it shall be deemed to have been refused.
(6) If an application for renewal of a mining lease made within
the time referred to in sub-rule(!) is not disposed of by the State G
Government before the date of expiry of the lease, the period of
that lease shall be deemed to have been extended by a further
....• period till the State Goyernment passes order thereon .
J xxx xxx xxx"
(emphasis is ours)
H
250 SUPREME COURT REPORTS [2016] 2 S.C.R.

A A perusal of sub-rule ( 1) of Ru le 24A reveals, that an application for
renewal of a mining lease, had to be made at least twelve months before
the date of expiry of the existing mining lease. It is therefore essential
for us to record, that unless such an application had been made at least
twelve months before the date of expiry of an existing mining lease
under Rule 24A of the Mineral Concession Rules, the same could not
B
have been entertained. And also that, the term of the mining lease held
by the leaseholder would be deemed to have come to an end, on the
expiry of the period depicted in the lease document, if such an application
had not been preferred.
9. The next relevant provision is sub-rule (4) of Rule 24A of the
c Mineral Concession Rules. The instant sub-rule required, that an
application for renewal, would be disposed of within six months, from
the date of receipt of such application. We have extracted hereinabove,
sub-rule (5) of Rule 24A, wherein it was mandated, that an application
for renewal, which had not been disposed of within the period of six
D months, as provided for under Rule 24A(4) of the Mineral Concession
Rules, would be deemed to have been refused. It is however relevant to
notice, that the aforementioned sub-rule (5) came to be omitted by an
amendment, with effect from 7.1.1993. It is significant to record, that
sub-rule ( 6) came to be substituted by an amendment, with effect from
27 .9 .1994. Sub-rule ( 6) of Rule 24A of the Mineral Concession Rules,
E is of extreme importance for the determination, whether the applicant-
leaseholder is possessed of subsisting mining lease because a large
number of applicants rely on the instant rule in support of their claim for
being possessed of a subsisting mining lease. Sub-rule (6) aforementioned
postulated, that if an application for renewal of a mining lease (made
F within twelve months, before the date on which the existing lease was to
expire), had not been disposed of by the competent authority, the period
oflease would be deemed to have been extended, by a further period till
the State Government passed an order disposing of the renewal
application. It is therefore, that the right to continue mining operations
would seemingly continue ad infinitum, for the simple reason that the
G State Government which was the competent authority, had not passed
any order(s) on most of the pending applications seeking renewal.
10. An extremely significant event pertaining to the statutory
regime of mining leases under the MMDR Act, and the Mineral
Concession Rules, took place on 21.4.2014, when this Court passed an
H
COMMON CAUSE v. UNION OF INDIA 251
[JAGDISH SINGH KHEHAR, J.]

order in Goa Foundation v. Union oflndia, (2014) 6 SCC 590, and held A
as under:
"27. Sub-section (I) of Section~ of the MMDR Act, which
provides the maximum and minimum periods for which a mining
lease may be granted will not apply to deemed mining leases in
Goa because sub-section (I) of Section ~ of the Abolition Act B
provides that the period of such deemed mining leases will extend
upto six months from the date of assent notwithstanding anything
contained in the MMDR Act. In other words, notwithstanding
anything contained in sub-section (1) of Section_!! of the MMDR
Act, the period ofa deemed mining lease in Goa was to expire on
22.11. I 987 (six months from the date ofassent). Under sub-section
c
(2) of Section 8 ofthe MM DR Act, a mining lease mav be renewed
for a period not exceeding twentv years. Sub-section (3) of
Section 8, however, provides that notwithstanding anything
contained in sub-section (2), if the State Government is of the
opinion that in the interest of mineral development, it is necessary D
so to do, it may for reasons to be recorded, authorise the renewal
ofa mining lease in respect of minerals not specified in Part A
and Part B of the First Schedule for a further period or periods
not exce-eding twenty years in each case-. Thus, renevJal beyond
the first renewal for a period of twenty years is conditional upon
the State Government forming an opinion that in the interest of E
mineral development, it is necessary to do so and also conditional
upon the State Government recording reasons for such renewal
of a mining lease in respect ofiron ore which is not specified in
Part A and Part B of the First Schedule. In TISCO Ltd. v. Union
oflndia {1996) 9 SCC 709, this Court has held that the language F
of sub-section (3) of Section 8 is quite clear that ordinarily a lease
is not to be granted beyond the time specified in sub-section (2)
and ollly if the Government is of the view that it would be in the
interest of mineral development, it is emp"owered to renew lease
of a lessee for a ftirther period after recording sound reasons for
doing so. This Court has further held in the aforesaid case that G
this measure has been incorporated in the legislative scheme as a
safeguard against arbitrariness and the letter and spirit of the law
• must be aclliered to in a strict manner.
' 28. The MC Rules have been made under Section l1 of the
MMDR Act by the Central Government and obviously could not H
252 SUPREME COURT REPORTS [2016] 2 S.C.R.

A have been made in a manner inconsistent with the provisions of
the Act. Sub-rule (6) of Rule 24A of the MC Rules provides that:
"24-A.(6) If an application for the renewal of a mining lease
made within the time referred to in sub-rule (1) is not disposed
of by the State Government before the date of expiry of the
B lease, the period of that lease shall be deemed to have been
extended by a further period till the State Go~rnment passes
order thereon."

This sub-rule cannot apply to a renewal under sub-section (3) of
Section 8 of the MMDR Act because the renewal under this
C provision cannot be made without express orders of the State
yovernment recording reasons for renewal in the interest of
mineral development. In other words, so long as there is a right of
renewal in the lessee which in the case of a mining lease is for a
maximum period of twenty years, the12rovision regarding deemed
extension of a lease can operate, but if the right of renewal of a
D mining lease is dependent upon the State Government forming an
opinion that in the interest of mineral development it is necessaty
to do so and th!l_State Government recording reasons therefor. a
provision regarding deemed extension till orders are passed by
the State Government on the application of renewal cannot apply.
E We are, therefore, of the opinion that sub-rule (6) of Rule 24A of
the MC Rules will apply to a case of first renewal under sub-
section (2) of Section 8 of the MMDR Act other than a case
covered under sub-rule (9) of Rule 24A of the MC Rules, but will
not apply to renewal under subcsection (3) of Section 8 of the
MMDRAct. Jn our view, the deemed mining leases of the lessees
F in Goa expired on 22.11.1987 under sub-section ( 1) of Section~ of
the Abolition Act and the maximum of20 years renewal period of
the deemed mining leases in Goa as provided in sub-section (2) of
Section ]! of the MMDR Act read with sub-rules (8) and (9) of
Rule 24A of the MC Rules expired on 22.11.2007."
G (emphasis is ours)
11. At this juncture, it would be necessary to notice, that prior to
the decision in the Goa Foundation case, the State Government while
interpreting sub-rule (6) of Ru le 24A, had been allowing leaseholders to
continue mining operations without any outer limit. In view of the
H conclusions drawn in the Goa Foundation case, it came to be rightfully
COMMON CAUSE v. UNION OF INDIA 253
[JAGDISH SINGH KHEHAR, J.]

understood, that such operations could go on (within the mandate of A
Rule 24A(6), under which such application was made) till the expiry of
the maximum period postulated forthe first renewal, i.e., for a period of
twenty years. The second and subsequent renewal( s) were held to be
not automatic. Because the second and subsequent renewals required·
the satisfaction of the State Government, by way of recorded reasons, B
as noticed hereinabove. Therefore, after the judgment in the Goa
Foundation case, it came to be understood, that in the absence of an
express order of second or subsequent renewal(s), a mining lease would
expire after completion of the period of first renewal.
12. In ord~r to give effect to the conclusions recorded by this
Court in the Goa Foundation case, Rule 24A( 6) came to be amended on C
18. 7.2014. The above amendment is reproduced below:
"Rule 24-A ·
xxx xxx xxx
(6) If an application for first renewal of a mining lease made
within the time referred to in sub-rule (1) is not disposed ofby the D
State Government before the date of expiry of the lease, the period
of that lease shall be deemed to have been extended by a further
period of two years or till the State Government passes order
thereon, whichever is earlier:
Provided that the leases where applications for first renewal of E
mining lease have been made to the State Government and which
have not been disposed of by the State Government before the
date of expiry oflease and are pending for disposal as on the date
of the notification of this amendment. shall be deemed to have
been extended by a further period of two years from the date of
coming into force of this amendment or till the State Government F
passes order thereon or the date of expiry of the maximum period
allowed for first renewal, whichever is the earliest:
Provided·further that the provisions of this sub-rule shall not apply
to renewaf"under sub-section (3) of Section 8 of the Mines and
Minerals (Development and Regulation)Act, 1957." G
(emphasis is ours)
The above amendment, has to be carefully understood. Undoubtedly,.
the amendment of sub-rule (6) of Rule 24A of the Mineral Concession
Rules now provides, that the period of mining operations would be deemed
to be extended for a maximum period of two years, after the expiry of
H
254 SUPREME COURT REPORTS [2016] 2 S.C.R.

A the period of the original grant, unless of course, the State Government
takes a conscious decision on the application for renewal. We are of the
view, that the instant provision, has to be read in continuation of the
erstwhile/previous Rule 24A (which subsisted till the instant amendment
came into effect on 18.7.2014). The unamended provision, postulated
an unlimited period of mining lease, in the absence of a determinative
B
order, on an application for renewal. Therefore, eveJ1 if the original
lease had expired many years ago, but if a renewal apph::ation had been
preferred within the permissible time contemplated under Rule 24A( 1),
the same would have continued to subsist, till the instant amendment
took effect on 18.7.2014. The importance of this conclusion is for the
c reason, that the proviso to new Rule 24A(6)- amended on 18.7.2014,
consciously provided, that the lease period where applications had been
filed seeking "first renewal", would be deemed to have been extended
for a further period of two years, from the date of coming into force of
the amended sub-rule (6). Accordingly, in all cases wherein the "first
renewal" had been sought, but not determined, the mining operations
D
were extended, by operation of law, till 18. 7.2014.
13. The case of most of the applicants before this Court is, that
they had moved applications within the time permissible under Rule
24A(l ), and as such, on account of the unamended sub-rule (6) of Rule
24A, and thereafter, on the basis of the amended sub-rule (6) of Rule
E 24A, their right to continue mining operations, would be deemed to have
been extended up to 18.7.2016. We find that their claim is valid, and
accept the same, insofar as the legal position is concerned, but only with
reference to "first renewals". We may hasten to explain, that the instant
determination emerges from an interpretation of the unamended and
F amended Rule 24A(6). Whether subsequent amendments would alter
the situation, is being determined hereinafter.
14. One clarification is imperative at this stage. After the passing
of the order on 21.4.2014, in the Goa Foundation case, subsisting "first
renewals" under Rule 24A, would expire on the completion ofa further
G period of twenty years, after the expiry of the period contemplated under
the original grant, or as interpreted above. There was no similar automatic
grant of"second renewals", after the Goa Foundation case. Therefore,
for all intents and purposes, the conclusion recorded hereinabove, should
be deemed to be relevant only with reference to the grant of "first
renewals". It is necessary to reiterate, that in the Goa Foundation case,
H this Court had held, that second renewals would be subject to an order
COMMON CAUSE v. UNION OF INDIA 255
[JAGDISH SINGH KHEHAR, J.]

passed by the State Government recording reasons that it was in the A
interest of mineral development to do so. Needless to mention, that a
second or subsequent renewal also required, the previous approval of
the Central Government - as provided for under Section 8( 4) of the .
MMDRAct. The amendment to Rule 24A made on 18.7.2014, more
particularly, the second proviso to sub-rule ( 6), leaves no room for any B
doubt, that the automatic extension postulated with reference to the first
renewal, would not apply to the second or subsequent renewals. It is
therefore necessary to further conclude, that in cases of second and
subsequent renewals, the amended Rule 24A( 6) would not extend the
lease period fo_r a further period of two years, from the date of
amendment. Therefore, for all intents and purposes, in relation to renewal C
sought under Section 8(3) of the MMDRAct (read with Rule 24A(6) of
the Mineral Concession Rules - amended on 18.7.2014), all second
renewals which were assumed to be subsisting by State Governments,
would expire with effect from the date of the judgment in the Goa
Foundation case, i.e., 2 I .4.20 I 4, and expressly, with effect from I 8. 7.20 I 4, D
when the second proviso to Rule 24A(6) provided accordingly. Unless
of course, the Government had passed an express order in writing, as
mandated under Section 8(3) oftheMMDRAct, extending the subsisting
mining lease by a second or subsequent renewal.
15. On 16.5.2014, thisCourt(in the Common Cause case),passed
an order requiring the State Government to dispose ofpending applications E
for second and subsequent renewals, within six months. The operative
part of the above order is being extracted below:
"IO. After considering the report of the CEC as well as the
submissions on behalf of the parties. we direct as an interim
measure that these 26 leases operating as second and subsequent F
renewals without any express orders of renewal passed by the
State Government will not be allowed to operate by the State
Government until express orders are passed in terms of Section
8(3) of the Mines and Minerals (Development and Regulation)
Act, 1957 and we also direct that all renewal applications under G
Section 8(3) of the Mines and Minerals (Development and
Regulation) Act, I 957 will be considered and disposed of by the
State Government within six months from today. We further direct
that the State Government will consider first the renewal
applications in respect ofleases which were granted for captive
mining for providing iron or manganese ore as raw material for H
256 SUPREME COURT REPORTS (2016] 2 S.C.R.

A industries and only thereafter consider the renewal applications in
respect of the other leases. In any case. the State Government
will ensure that the entire process of consideration and disposal
gfrenewal applications under Section S(3) of the Act is completed
within six months from today. With the aforesaid interim directions,
the interim matter stand disposed of."
B
(emphasis is ours)
It seems, that the above ·direction was breached, as the State
Governments, seemingly had no facility or potential, to comply with it.
Resultantly, a further order came to be passed in IA No.21 of 2014,
c which had been filed, for extension of time. The order granting further
time of three months, dated 16.5.2014, is extracted hereunder:
"I.A. No.21 of2014
After hearing Shri L. Nageswara Rao, learned senior. counsel
appearing for the State of Orissa, we deem it appropriate to grant
D them another three months' time from today to comply with the
order dated 16.05.2014.
We reserve liberty to all the private respondents to object to the
orders that may be passed by the State Government while
complying with this Court's order dated 16.05.2014.
I.A. No.21 of2014 is disposed of accordingly." •
E
(emphasis is ours)
16. The Parliament was alive to the predicament of the State
Governments. It was also felt, that the regime of grant of mining leases
and their renewal(s) needed to be changed, by introducing uniformity in
F the process. It is therefore, that Section SA was amen~.d. The instant
amendment was inserted in the MMDRAct with effect from 12.1.2015.
Section SA introduced through the above amendment, is being extracted
hereunder:
"SA. Period of grant of a mining lease for minerals other than
G 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.
H
COMMON CAUSE v. UNION OF INDIA 257
[JAGDISH SINGH KHEHAR, J.]

(3) All mining leases granted before the commencement of the A
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. B
(5) Notwithstanding anything contained in sub-sections (2), (3)
and sub-section ( 4), the period oflease granted before the date of
commencement of the Mines and Minerals (Development and
Regulatioll) Amendment Act, 2015, where mineral is used for
captive purpose, shall be extended and be deemed to have been c
extended up to a period ending on the 3 lst 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. D
(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 (Development and
Regulation)AmendmentAct, 2015, where mineratis used for other
than captive purpose, shall be extended and be deemed to have E
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 ofrenewal period, ifany, 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 F
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 G
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 H
258 SUPREME COURT REPORTS [2016) 2 S.C.R.

A 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."
17. In terms of Section 8A(2) of the amended MMDR Act, all
B future mining grants, would be for a uniform period of fifty years. Section
8A(3) envisages, that all original mining lease grants, made prior to the
insertion of Section 8A, in the MMDRAct (with effect from 12.1.2015)
would also be deemed to have been made for a period of fifty years.
18. Section 8A(5) pertains to mining leases granted for captive
c purposes, and is principally aimed at leaseholders operating under a
renewal. Section 8A(5) postulates three different contingencies.
Firstly, the period ofall mining leases granted before 12.1.2015 " ... shall
be extended and be deemed to have been extended ... " up to 31.3 .2030,
" ... with effect from the date of expiry of the period of renewal last
D made ... ". It is apparent, that the que;tion ofan "extension" will ordinarily
arise only after an "expiry". Since both the terms - "extension" and
"expiry" find place in sub-section (5), we are of the view, that Section
8A(5) is attracted even after the expiry of a renewal. The instant inference
emerges from the use of the words "expiry of the renewal last made", in
sub-section (5). The issue whether, Section SA would be applicable to a
E subsisting lease as on 12.1.2015 (when the amended MMDRAct was
notified), as was the contention of the non-applicant petitioner, will be
examined in further detail immediately hereinafter. The first contingency,
therefore, extends to renewed mining leases, which were scheduled to
expire before 31.3 .2030.
F Secondly, the use of the phrase - "renewal last made;'; leaves no room
for any doubt, that the instant second contingency presupposes an existing
(first, second or subsequent) renewal, in favour of the leaseholder. The
difference between the first and the second contingency is, the date
when the renewal of the mining lease was scheduled to expire. The
G first contingency, applies to renewed mining leases, which would expire
before 31.3 .2030. The instant - the second contingency, applies to
renewed mining leases, which would expire after 31.3.2030. A perusal
of Section 8A of the amended MMDR Act reveals, that the second
contingency is aimed at extending the existing lease period, and not
reducing it. Therefore, if the period of the existing renewal would extend
H beyond 31.3.2030, the period contemplated by the renewal itself, has
COMMON CAUSE v. UNION OF INDIA 259
[JAGDISH SINGH KHEHAR, J.]

been mandated to be pre.serve~. A
Thirdly, the regime sought to be introduced also has a reference to an
original grant. The scheme/course sought to be introduced under Section
8A(3) of the amended MMDR Act, is intended to be preserved even in
situations where a mining leaseholder, is (or has been) carrying on mining
operation under a renewal. Since the original lease period of fifty years B
has been adopted as the overarching rule, the third contingency, aims at
allowing the leaseholder, the benefit of treating the original lease period
as of fifty years. Therefore, even during the renewal period, if the
period of mining lease would get extended (beyond the renewal period),
by treating the original lease as of fifty years, the leaseholder would be
entitled to the said benefit under the third contingency. C
For the leases governed by Section 8A(5), out of the above three
·contingencies, the contingency as would extend the lease period farthest,
would be applicable.
19. A similar contingency. has been provided for under Section 0
8A(6) with reference to mining leases used for non-captive purposes.
Herein also, the same three contingencies are contemplated. Firstly, the
peiiod of al I ren~wals expiring before 3 I .3 .2020 " ... sh al I be extended )
and be deemed to have been extended ... " up to 31.3.2020, " ... with
effect from the 'date of expiry of the period of renewal last made ... ".
Secondly, ifthe renewal period in any case would have actually stretched E
beyond 31.3.2020 - then till the completion of the postulated renewal
period. Thirdly, for extending the original lease to fifty years, from the
date of grant of the original lease. For leases governed by Section 8A( 6)
the contingency, as would expire last of all, would be applicable to the
leaseholder. No further discussion is being recorded h~ein, because F
the discussion in the preceding paragraph, is fully applicable for the
interpretation of Section 8A(6) of the amended MMDRAct, except for
the substitution of the date 31.3 .2020 (as under Section 8A( 6) of the
MMDRAct) in place of3 I .3.2030 (as under Section 8A(5) of the MMDR
Act).
G
20. There is a serious dispute between the rival parties with
•reference to the interpretation of Sections 8A(3), 8A(5) and 8A(6) of
the MMDR Act. Whilst the contention oflearned counsel appearing for
the petitioner-Common Cause is, that the benefit of sub-sections (3 ), (5)
and (6) of Section 8A, will extend-0nly to such mining leases as were
subsisting on the date of introduction ofthe amendment- 12.1.2015; it is H
260 SUPREME COURT REPORTS (2016] 2 S.C.R.

A the contention of learned counsel representing the leaseholders, that the
above postulation, at the hands oflearned counsel for the non-applicants,
is wholly misconceived, and would result in a misreading of the amended
Section 8A of the MMDR Act.
21. Insofar as the disputed interpretation of Section 8A of the
B MMDR Act is concerned, the first contention advanced by learned
counsel for the petitioner, was founded on sub-section (9) of Section
8A. It was urged, that it was absolutely clear, that the benefit of Section
8A of the MMDR Act, w.ould not extend to such cases where "renewal
had been rejected", or where the mining lease had been "determined'',
or where the mining lease had "lapsed". It was asserted, that the expiry
c of the original grant or renewal, should be understood to mean, that the
lease howsoever granted (original, or renewal) had "lapsed". And
therefore, it was crystal clear, according to learned counsel, that sub-
sections (3), (5) and (6) of Section 8A, would be applicable only to
leaseholders having a subsisting mining lease on 12.1.2015.
D 22. The contention advanced on behalfofthe petitioners, noticed
in the foregoing paragraph, has been vehemently opposed by learned
counsel for the leaseholders. It was contended on behalf of the
leaseholders, that the terms "rejection", "detern1ination"and "lapse" were
terms ofart, used to express different contingencies/situations. According
E to learned counsel, these terms are contemplated for different exigencies,
under the MMDR Act (and the Rules framed thereunder). And that,
the said terms cannot be extended to situations beyond those, for which
the same are expressly used. [twas therefore asserted, that the expiry

• F
of the original grant or renewal, would per se not exclude the applicability
of Section 8A.
23. Insofar as the words "renewal had been rejected" (used in
Section 8A(9) of the MMDR Act are concerned, it was submitted, that
it was clear from the words deployed, that the contemplated contingency
applied only to a situation where an application for renewal had been
rejected. Namely, that a renewal of a mining lease had been applied for
G under sub-section (2) or (3) of Section 8 of the MMDR Act, read with
Rule 24A of the Mineral Concession Rules, and thereupon, the request
for renewal had been rejected. For the term "determination", reliance
was placed on Rules 27(4), 27(5), 29, 37(3) and Part IX Clause 2, Form
K of the Mineral Concession Rules. It was contended, that the term
H "determination" had been deployed for situations where the lease period
COMMON CAUSE v. UNION OF INDIA 261
[JAGDISH SINGH KHEHAR, J.]

could be brought to an end, on accountofa default having been committed A
by a leaseholder. For instance, default in the payment of royalty or in
the payment of dead rent. The default could also be of violating the
lease conditions envisaged under Rule 27(1) or (2) or (3) of the Mineral
Concession Rules. A mining lease can also be determined, if the
.leaseholder had transferred any right, title or interest in a mining lease, in
B
violation of the Mineral.Concession Rules. And for a few other defined
exigencies. Insofar as the term "lapse" used in Section 8A(9) is
concerned, the same according to learned counsel for the leaseholders,
pertains to exigencies contemplated under Section 4A(4) of the MMDR
Act, and Rules 28 and 28A of the Mineral Concession Rules. The term
"lapse" has been used only where the leaseholder(s) has/have committed c
default of not being in position to carry on (or for not carrying on) mining
operations, for a continuous period of two years. On account of either
of the above exigencies, a mining lease under the provisions referred to
above, would lapse.
24. We do not consider the necessity of extracting the particular D
provisions relied upon by learned counsel for the leaseholders. We are
satisfied in accepting the contention, that the terms "renewal has been
rejected", "determination" and "lapse" are terms used for different
contingencies/situations/exigencies under the MMDR Act, and the
Mineral Concession Rules. It is also our view, that these terms are not
used under the MMDR Act, or under the Mineral Concession Rules, E
with reference to expiry of the original grant period, or with reference to
the expiry of the renewal period. It is therefore not possible for us to
accept the contention of learned counsel for the petitioner, that Section
8A(9) can be the legitimate basis for excluding the applicability of Section
8A, the claims ofleaseholders, where the period oflease or renewal had F
expired prior to 12.1.2015.
25. The conclusion drawn by us in the foregoing paragraph, also
emerges from the "Objects and Reasons" of the amended MMDR Act.
The purpose for which the instant amendment came to be made by the
Parliament, whereby the amended Section 8A was inserted into the G
MM DR Act reveals, that past litigation resulting in different interpretations
of the provisions of the MM DR Act, and the alleged hardship caused to
the mining industry, due to second and subsequent renewals remaining
pending with the State Government without any decision, had occasioned ·
the passing of the instant amendment. T.he above position emerges
from the following excerpts of the statement of"Objects and Reasons": H
262 SUPREME COURT REPORTS [2016] 2 S.C.R.

A "3. The mining sector has been subjected to numerous litigations
in the past few years. Important judgments related to the milling
sector have been pronounced by the Supreme Court. besides
judgments on the issue of allocation of natural resources which
have direct relevance to the grant of mineral concessions.
B 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
c quick decisions. Consequently, there has been a 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
D therefore felt it necessary to address the immediate requirements
of the mining sector and also to remedy the basic structural defects
that underlie the current impasse.
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
E present Bill is to replace this Ordinance. This bill is designed to
put in place mechanism for:
(i) Eliminating discretion;
(ii) Improving transparency in the allocation of mineral resources;
(iii) Simplifying procedures;
F
(iv) Eliminating delay in administration. so as to enable expeditious
and optimum development of the mineral resources of the country;
(v) Obtaining for the government an enhanced share of the value
of the mineral resources of the country; and

G (vi) Attracting private investment and the latest technology;
6. The salient features ofMMDR 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
H introducing auction mechanism for the grant of mineral
COMMON CAUSE v. UNION OF INDIA 263
(JAGDISH SINGH KHEHAR, J.]

concessions. The tenure of mineral leases has been increased A
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 ofa large number of mines. B
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 tlie completion
of the renewal already granted, if any, or a period of fifty years
from the date of grant of such leave, whichever is later.'' c
(emphasis is ours)
From a perusal of the extract reproduced above, it is apparent, that the
insertion of Section 8Ainto the MMDRAct, was to.address the hardship
faced by leaseholders, besides other reasons, due to the second and D
subsequent applications for renewal, remaining unattended at the hands
of the State Government. The instant amendment to the MMDR Act,
introduced a uniform original grant period of fifty years, for all mining
leaseholders. It also excluded renewal(s), afterthe expiry of the original
lease period. Accordingly, no renewal application can now be filed (after
12.1.2015). Under sub-sections (5) and (6) of Section 8A, in our view, E
such leaseholders who had moved applications for renewal ofcaptive/
non-captive mines, would be entitled to continue Op to 31.3.2030/
31.3 .2020. The "Objects and Reasons" for the amendment to the MMDR
Act aim at remedying the position which emei:ged upon the interpretation
of the provisions of the MMDR Act, as they existed hitherto before. F
The instant amendment was also directed at remedying the grievances
of the mining indusfry due to "second and subsequent renewals"
remaining pending. And also, because the provisions oflaw relating to
renewals had been found to be wanting. The above view is also endorsed
by the fact, that Section 8A(9) deals with a situation wherein" ... renewal
has been rejected ...". It is therefore apparent, that sub-sections (5) and G
(6) of Section 8A of the amended MMDR Act are aimed at situations,
wherein an application for renewal (validly made) has remained
unattended. Therefore, for no fault of the leaseholder, he would be
subjected to an arbitrary prejudice. It needs to be clarified, that since an
application for renewal cannot be filed after 12.1.2015, an application H
264 SUPREME COURT REPORTS [2016] 2 S.C.R.

A for renewal as would be treated as having been validly made, ought to
have been made before 12.1.2015. We are of the view, that out of the
three contingencies contemplated under sub-sections SA(5) and SA(6),
referred to above, the first of the contingencies positively, pertains to a
situation, wherein applications validly made for renewal, were pending
without any final decision at the hands of the State Government. Because
B
in the absence ofa renewal application, the leaseholder can be taken to
have already expressed his disinterest, to continue mining operations.
Therefore logically, the words" ... with effect from the date of expiry of
the period of renewal last made ... ", should relate to an expired lease
prior to 12.1.2015, in relation to which a valid application for renewal
c had already been made.
26. We also feel persuaded in accepting the contention advanced
at the hands of learned counsel representing the leaseholders, that the
words" ... with effect from the date of expiry of the period ofrenewal
last made ... " cannot be overlooked. In our considered view, there is no
D ambiguity in the aforesaid words. The plain reading of the quoted words,
can lead to one and only one inference, namely, that the situation
contemplated under sub-sections (5) and (6) of Section SA of the amended
MMDRAct (wherein both the above words have been used), includes a
situation when the lease period contemplated by a renewal, is scheduled
to expire before 31.3.2030/31.3.2020. We are satisfied in clarifying,
E that the situation contemplated by the use of the aforesaid words, would
extend to a leaseholder who had moved a valid application for renewal
to the State Government, which was yet to be considered and disposed
of, prior to 12.1.2015. The instant situation, is not excluded by the
contingencies contemplated under Section SA(9) of the amended MMDR
F Act. For the reasons recorded in the instant paragraph, as also, in the
preceding paragraphs (wherein Section SA of the amended MMDRAct,
has been considered and interpreted), we are satisfied to hold, that the
applicability of Section SA of the amended MMDRAct need not only
extend to leaseholders whose original lease/renewal lease period had
not expired, but would also extend to leaseholders whose term oflease/
G renewal had expired prior to 12.1.2015 and the concerned leaseholder(s)
had moved a valid application for renewal, at least twelve months before
the leaseholder's existing lease (original, first, second or subsequent)
was due to expire, and whose application has not been considered and
rejected.
H
COMMON CAUSE v. UNION OF INDIA 265
[JAGDISH SINGH KHEHAR, J.)

27. Irrespective of the position noticed herein above, it is imperative A
for us to clarify, that the benefit ofextension of the lease period postulated
under Section 8A of the MMDR Act is available, subject to a further
overriding condition, namely," ... that all the tem1s and conditions of the
lease have been complied with". A leaseholder who does not satisfy
any of the required conditions of the lease, as for instance, the postulated
B
clearances/approvals/consent, would not be entitled to the benefits
extended under sub-section (5) or (6) of Section 8A of the amended
MMDR Act.
28. Having addressed the issue with reference to the subsistence
ofa mining lease, on the basis ofan interpretation of Sections 8 and SA
of the MMDRAct, we have substantially covered the area needed to be c
traversed. It is however important to notice, that one further aspect
needs to be dealt with. The same emerges from a collective reading of
Section 4A(4) of the MMDRAct and Rules 28, and 28A of the Mineral
Concession Rules. Section 4A( 4) was substituted for the earlier Section
4A with effect from I 0.2.1987, as under: D
"4-A. Termination of prospecting licences or mining leases.-
xxx xxx

(4) Where the holder of a mining lease fails to undertake mining
operations for a period of two years after the date of execution of E
the lease or having commenced mining operations, 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 mining
operations:
F
Provided that the State Government may, on an application made
by the holder of such lease before its expiry under th is sub-section
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, subject
to such conditions as may be prescribed, to the effect that such G
lease shall not lapse:
Provided further that the State Government, may on an application
by the holder of a lease submitted within a period of six months
from the date of its lapse and on being satisfied that such non-
commencement or discontinuance was due to reasons beyond
H
266 SUPREME COURT REPORTS [2016] 2 S.C.R.

A the control of the holder of the lease, revive the lease from such
prospective or retrospective date as it thinks fit but not earlier
than the date of lapse of the lease:
Provided also that no lease shall be revived under the second
proviso for more than twice during the entire period of the lease."
B (emphasis is ours)
A perusal of the aforesaid provision reveals, that where a holder of
mining lease, does not carry out mining operations for a continuous period
of two years, his mining lease would lapse. Lt was the contention of
learned counsel for the petitioner- Common Cause, as also, that of the
c learned Additional Solicitor General, thatthe operation of Section 4A(4) ·
is automatic, and requires no order to be passed. It was submitted, that
as soon as the leaseholder has committed the default of not being in a
position to carrying on (or for not having actually carried on) mining
operations, for a continuous period of two years, the lease would lapse.
The above two exigencies will be referred to as the first, and the second
D contingency respectively, hereinafter.
29. According to learned counsel, the only remedy available to
such a leaseholder, to prevent the lease from lapsing is, to move an
application, either prior to the expiry of the period of two years (ofnon-
mining operations), or thereafter. The State Government on being
E satisfied, that mining operations were not discontinued as expressed above,
for the reasons beyond the control of the leaseholder, could make an
order, in the first contingency, that the lease would not lapse. And in the
second contingency, that the lease wou Id rematerial ize.
30. It is not possible for us to accept, that vital vested rights in a
F leaseholder, can be curtailed without affording him an opportunity to
repudiate the impression(s)·ofthe competent authority, namely, that the
leaseholder could not have (or had .actually not) carried'Out mining
operations, for a continuous period of two years. Our instant
contemplation, stands affirmed through Rule 28 of the Mineral Concession
G Rules. The same is reproduced below:
"28. Lapsing ofleases-(1) Subject to the other conditions of this
rule where mining operations are not commenced within a period
of one year (sic. two years) from the date of execution of the
lease, or is discontinued for a conti'nuous period of one year (sic.
two years) after commencement of such operations, the State
H

'
COMMON CAUSE v. UNION OF INDIA . 267
[JAGDISH SINGH KHEHAR, J.]

Government shall, by an order, declare the mining lease as lapsed A
and communicate the declaration to the lessee.
(2) Where a lessee is unable to commence the mining operation
within a period of one year (sic. two years) from the date of
execution of the mining lease, or discontinues mining operations
for a period exceeding one year (sic. two years) for reasons B
beyond his controi, he may submit an application to the State
Government, explaining the reasons for the same, at least three
months before the expiry of such period.
(3) Every application under sub-rule (2) shall be accompanied by
a fee of R:s.200. C
(4) The State Government may on receipt of an application made
under sub-rule (2) and on being satisfied about the adequacy and
genuineness of the reasons forthe non-commencement of mining
operations or discontinuance thereof, pass an order before the
date on which the lease would have otherwise lapsed, extending D
or refusing-to extend the period of the lease:
Provided that where the State Government on receipt of an
application under sub-rule (2) does not pass an order before the
expiry of the date on which the lease would have otherwise lapsed,
the lease shall be deemed to have been extended until the order is E
passed by the State Government or until a period of two years,
whichever is earlier.
Explanation 1. - Where the non-commencement of the mining
operations within a period of two years from the date of execution
of mining lease is on account of-
F
(a) delay in acquisition of surface rights; or,
(b) delay in getting the possession of the leased area; or
(c) delay in supply or installation of machinery; or
(d) delay in getting financial assistance from banks, or any financial G
. . .
mstltut1ons; or
~

(e) ensuring supply of the mineral in an industry of which the
lessee is the owner or in which he holds not less than 50% of the
controlling interest,
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268 SUPREME COURT REPORTS [2016] 2 S.C.R.

A and the lessee is able to furnish documentary evidence supported
by a duly sworn affidavit, the State Government may consider if
there are sufficient reasons for non-commencement of operations
for a continuous period of more than one year (sic. two years).
Explanation 2. - Where the discontinuance of mining operations
B for a continuous period of two years after the commencement of
such operations is on account of -
(a} orders passed by any statuto1y or judicial authority: or
(b) operations becoming highly uneconomical: or
(c} strike or lock out,
c and the lessee is able to furnish documentary evidence supported
by a duly sworn affidavit, the State Government may consider if
there are sufficient reasons for discontinuance of operations for a
continuous period of more than one year (sic. two years).
Explanation 3. - In case of mining lessee who has undertaken
D reconnaissance operations or in case of mining lessee whose capital
investment in mine development is planned to be in excess of Rs.
200 crores and where the mine development is likely to take more
than two years, the State Government shall consider it to be
sufficient reason for non-commencement of mining operations
for a continuous period of more than two years."
E
(emphasis is ours)
It is apparent from a perusal of sub-rule (I) 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(!)
aforesaid, that such an order passed by the State Government, must be
F communicated to the leaseholder. On a conjoint reading of Section 4A(4)
and Rule 28( I), we are satisfied to hold, that a mining lease under Section
4A(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.
G 31. Rule 28(4) of the Mineral Concession Rules, caters to a
situation wherein a leaseholder has moved an application, that his lease
be permitted to continue even though mining operations could not be
carried on (or had actually not been carried on) for a continuous period
of two years. The proviso under Ru le 28( 4) is clear and categoric to the
effect, that in cases where the State Government, on receipt of such
H
COMMON CAUSE v. UNION OF INDIA 269
[JAGDISH SINGH KHEHAR, J.]

application, does not pass an order, the lease would be deemed to have A
been extended, until an order was actually passed by the State
Government. This further affirms, that lapse of a mining lease is not ·
automatic. Despite non-operation of a mining lease under Rule 28(2), in
case the leaseholder has moved an application for extension, on account
of non-commencement of mining operations, or on account of B
discontinuation of mining operations, the lease period shall be deemed to
have continued till the date of passing the order, or for a period of two
years beyond the contemplated lease period (in case such an order is
not passed). The above conclusions, rule out the submissions advanced
on behalf of the non-applicant - petitioner and the Union of India, that
lapse (contemplated under Section 4A(4) of the MMDRAct) is automatic, C
and that, for a lease to lapse, no express order needs to be passed.
32. Based on the considerations recorded above, we summarise
our conclusions as under:
(i) A leaseholder would have a subsisting mining lease, ifthe
period of the original grant was still in currency on 12.1.2015. D
Additionally, a leaseholder whose original lease has since
expired, would still have a subsisting lease, if the original
lease having been renewed, the renewal period was still in
currency on 12.1.2015. Such a leaseholder, would be entitled
to the benefit of Section SA of the amended MMDR Act. E
(ii) A leaseholder who had not moved an application for renewal
of a mining lease (which was due to expire, prior to
12.1.20 I 5), at least twelve months before the existing lease
was due to expire, under the provisions of the unamended
MMDR Act and the Mineral Concession Rules, will be
F
considered as not a valid/subsisting leaseholder, after the
expiry of the lease period. The provisions of the amended
MMDR Act will therefore not enure to the benefit of such
leaseholder.
(iii) A leaseholder who has moved an application for renewal (of
the original/first or subsequent renewal) of a mining lease, at G
least twelve months before the existing lease was due to
expire, and on consideration, such an application has been
rejected, will be considered as not a valid/subsisting
leaseholder. The provisions of the amended Section SA of
the MMDR Act will not enure to the benefit of such
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270 SUPREME COURT REPORTS [2016] 2 S.C.R.

A leaseholder, because of the express exclusion contemplated
for the above exigency, under Section 8A(9) of the amended
MMDR Act.
(iv) A leaseholder who has moved an application for "first
renewal" of the original mining lease, at least twelve months
B before the'" original lease was due to expire, and such
application has not been rejected, will be considered to be a
valid leaseholder having a subsisting right to carry on mining
operations, till the expiry-of two years after 18.7.2014, i.e.,
up to 17. 7.2016, as is apparent from a conjoint reading of the
unamended and ame·nded Rule 24A of the Mineral
c Concession Rules. Such leaseholder would have the benefit
of sub-sections (5) and (6) of Section 8A of the amended
MMDR Act.
(v) A leaseholder who had moved a second (third or subsequent)
renewal application under Section 8(3) of the unamended
D MMDR Act, at least twelve months before the renewed lease
was due to expire, and whose application had not been
considered and rejected (though not entitled to any benefit
under the unamended Section 8A of the MMDR Act and the
amended Rule 24A(6) of the Mineral Concession Rules) up
to 12.1.2015, would still have the benefit of sub-sections (5)
E and (6) of Section 8A of the amended MMDR Act, in view
of the situation sought to be remedied by the Mines and
Minerals (Development and Regulation) Amendment Act,
2015.
(vi) Consequent upon the amendment of Section 8A of the
F MM DR Act, the regime introduced through sub-sections (5)
and (6) thereof, provides for three contingencies where
benefits have been extended to leaseholders whose lease
period had earlier been extended by a renewal. Firstly, for a
leaseholder whose renewal period had expired before
12.1.20 J 5, and the leaseholder had moved an application for
G
renewal at least iwelve months before the leaseholder's
existing lease was due to expire, and whose application has
not been considered and rejected, the lease period WGl!ld
stand extended up to 31.3.2030/31.3.2020 (in the case of
captive/non-captive mines, respectively). Additionally, a
H leaseholder whose period of renewal would expire after
COMMON CAUSE v. UNION OF INDIA 271
[JAGDISH SINGH KHEHAR, J.]

12.1.201 S, but before 31.3.2030/31.3.2020, the lease period A
would stand extended up to 31.3 .203 0/3 1.3 .2020 (in the case
of captive/non-captive mines, respectively). Secondly, where
the renewal of the mining lease already extends to a period
beyond 31:3.2030/31.3.2020 (in the case of captive/non-
captive mines, respectively), the lease period of such
B
leaseholders, would continue up to the actual period
contemplated by the renewal order. Thirdly, a leaseholder
would have the benefit of treating the original lease period
as of fifty years. Accordingly, even during the renewal period,
ifthe period ofthe mining lease would get extended (beyond
the renewal period) by treating the original lease as of fifty C
years, the leaseholder would be entitled to such benefit.
Out of the.above three contingencies provided under sub-
sections (S) and (6) of Section 8A, the contingency as would
extend the lease period farthest, would enure to the benefit
of the leaseholder. D
(vii) Based on the interpretation placed by us on Section 4A( 4)
of the MMDR Act, and Rule 28 of the Mineral Concession
Rules, we can draw the following conclusions. Firstly, unless
an order is passed by the State Government declaring, that a·-·
mining lease has lapsed, the mining lease would be deemed
to be subsisting, up to the date of expiry of the lease period E
provided by the lease document. Secondly, in situations
wherein an application has been filed. by a leaseholder, when
he is not in a position to (or for actually not) carrying on
mining operations, for a continuous period of two years, the
lease period will not be deemed to have lapsed, till an order F
is passed by the State Government on such application.
Where no order has been passed, the lease shall be deemed
to have been extended beyond the original lease period, for
a further period of two years. Thirdly, a leaseholder having
suffered a lapse, is disentitled to any benefit of the amended
MMDRAct, because of the express exclusion contemplated G
under Section 8A(9) of the amended MMDR Act.
NidhiJain