Holding

The High Court order cannot be implemented because the lease has expired, third‑party rights have vested, and mining is prohibited by Supreme Court direction.

Summary

The State of Haryana granted a 20‑year mining lease for silica sand to Aravali Khanij Udyog, which expired on 17 February 2000. The respondent claimed that due to departmental delays it was unable to mine for 850 days and sought an extension of the lease, which the State rejected; the Punjab & Haryana High Court set aside the rejection and ordered the lease restored. After the lease expired, the extraction rights for minor minerals were auctioned to Dolphin Minerals in December 2001, creating third‑party rights, and the Supreme Court had earlier prohibited mining in the Gurgaon district forest areas. The Supreme Court held that, given the lease expiry, the vested rights of Dolphin Minerals and the continuing environmental prohibition, the High Court's order could not be implemented. The Court allowed the State's appeal, set aside the High Court order, and indicated that the respondent may seek damages in a suitable forum. No costs were awarded.

Issues considered

Whether the High Court order restoring the mining lease to the respondent can be executed despite the lease having expired.
Whether the respondent is entitled to an extension of the lease for the alleged 850‑day loss of mining opportunity.
Whether the creation of third‑party rights and the Supreme Court's prohibition on mining preclude granting relief to the respondent.

Legislation cited

Environment (Protection) Act, 1986s. 23, s. 3

Subjects

mining leaselease extensionthird‑party rightsenvironmental prohibitiondamage claimMetalliferous Mines RegulationEnvironment Protection Act

Judgment

.....
A STATEOF~YANAANDANR.
v.
ARAVALI KHANIJ UDYOG AND ANR.

OCTOBER 12, 2007
B
[TARUN CHATTERJEE AND P. SATHASIVAM,JJ.)
'r

Mines and Minerals: 1

c Metalliferrous Mines Regulation, 1961-Regulation 106-Mining
lease granted in favour of Respondent--Respondent submitted
representation seeking extension ofthe lease-Representation rejected
by State Government-By that time lease granted in favour of
Respondent had expired-High Court set aside order passed by State
Government and directed Respondent to be put into possession ofthe
D
lease-Direction of High Court granting relief in favour of
Respondent-Held: Cannot be implemented at this juncture in view -A.
of the subsequent developments- viz. a) creation ofthird party rights
,- ~
in respect of the site in question and b) orders of Supreme Court
prohibiting mining operation in the entire area-Respondent, however,
E
free to approach appropriate court for damages/compensation.
Lease of mining granted in favour of Respondent expired on
17-02-2000. However, it is the grievance of Respondent that because
of the conduct of the Mining Department, they were not in a position
F to mine for a period of 850 days, hence they are entitled to extension
of mining lease by 850 days for which they made a representation r
on 01-03-1999. The said representation was rejected by the State ;-

Government, which order was set aside by the High Court which is
a subject-matter of th~ present appeals.
G Disposing of the appeals, the Court
HELD:l.1. In view of the fact that the lease granted in favour
of the Respondent had expired long ago and in the light of the

180
H
STATE v. ARAVALI KHANIJUDYOG 181
/.
,,.
subsequent developments as well as orders of this Court, it is A
unnecessary to traverse the claim of both the parties in detail.
[Para 6] (183-G; 184-A]
1.2. Appellants by placing an affidavit of Shri S.K.Gupta,
Assistant Mining Engineer, Gurgaon, Department of Mines and
Geology, Haryana dated 11.10.2007 submitted that after expiry of B
lease period granted in favour of the respondent, the extraction rights
;/
for minor mineral from the site in question were auctioned on
~-
20.12.2001 and given to Mis Dolphin Minerals, Gurgaon who was
the highest bidder. He also submitted that the said auction was
challenged by the Respondent by filing C.W.P.19798 of2001 before c
the High Court of Punjab and Haryana and ultimately the High Court
dismissed the said writ petition on 12.09.2002. The said information
in the affidavit of the Mining Engineer is relevant.
(Para 7] [184-C, D, E]
D
1.3. In view of the above factual information and of the fact that
}
the third party rights having been created, no relief could be granted
in favour of the respondent at this juncture. [Para 8] [184-G]
~

1.4. In the same affidavit, the officer bas stated that the mineral
extraction of the said site, along with all other sites falling in Aravalis E
in Dist. Gurgaon has been stopped pursuant to the orders passed
by this Court in MC. Mehta and TN Godavarman Thirumalpad case.
In this regard, the appellants placed an order passed by this Court
on 16.12.2002 wherein this Court prohibited mining operation in
forest areas. As on date, the said direction is in force.
f
·-j
(Para 9] [184-H; 185-A, E]
'"i
1.5. In view of the same, the direction of the High Court
granting relief in favour of the respondent cannot be implemented
at this juncture. However, the respondent is free to approach the
appropriate court for damages/compe_nsation if the same are G
permissible in accordance with law. [Para 11] (185-G; 186-AJ
~-
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5874 of
2000.
From the Judgment and final Order dated 9.5.2000 of the High Court H
182 SUPREME COURT REPORTS [2007] 11 S.C.R.

A of Punjab and Haryana at Chandigarh in CWP No. 3007 of2000.
WITH
Civil Appeal No. 4855 of 2007.
Manjit Singh, AAG., Anup G. Chaudhary and June Chaudhari,
B Harikesh Singh, Devendra Kumar Singh, T.V. George and KB. Rohtagi
for ~e appearing Parties.
The Judgment of the Court was delivered by ,
~ I
P. SATHASIVAM, J.
c CIVIL APPEAL NO. 5874 OF 2000.
(1) Secretary to Government, Mines and Geology Department,
Haryana and Director of Mines and Geology, Government ofHaryana
aggrieved by the order of the Punjab and Haryana High Court dated
09.05.2000 made in C.W.P. No. 3007of2000 have filed the above
D appeal.
BRIEF FACTS:
(2) On 18.02.1980, lease of mining silica sand was granted to the
respondent - Mis Aravali Khanij Udyog .in respect of 139 hectares of
E land in certain areas of village Chelaka and sand in Tehsil Nuh, Dist.
Gurgaon, Haryana for a period of20 years by the appellants. Silica sand
is a major mineral and is found underneath the ordinary sand, a minor
mineral. In order to exploit the silica, every lessee is required to remove
the overlaying ordinary sand in the interest of sale, systematic and scientific
F mining. As both ordinary and silica sand occur one above the other, the
State Government took a policy decision in August, 1984 to grant the
mining lease of ordinary sand also to the lessee of silica sand for the
purpose of systematic and harmonious mining in accordance with the
Regulation No. 106 of Metalliferrous Mines Regulation, 1961.
G (3) As per the said decision, on 27.09.1984, the respondent-herein
was advised to apply for the mining lease of ordinary sand. According to
the Department, in spite of four reminders, no steps were taken by the
respondent to apply for the mining lease for the ordinary sand. A notice
dated 12.07.1985 was also served upon them. Finally, the mining lease
H was prematurely terminated on 06.05.1986. Aggrieved by the said order,
STATE v. ARAVALIKHANIJUDYOG 183
[P. SATHASIVAM,J .]
the respondent filed a revision before the Central Government. On the . A
basis of the undertaking of the lessee, the Central Government, vide its
order dated 28.03 .1998, while restoring the mining lease of the respondent
also directed them to apply for the mining lease of ordinary sand within
30 days of the order. Subsequent to the order of restoration, the
respondent applied for the grant of mining lease of ordinary sand which B
was granted to them for a period corresponding with the mining lease
..J., period of silica sand i.e. up to 17.02.2000. Since the period of mining
lease was to expire on 17.02.2000, the respondent submitted a
~
representation on 01.03.1999 to the State Government requesting for
extension of the mining lease by 850 days on the ground that for 850 c
days his mining lease remained terminated in past. Since no decision was
taken by the State Government on the request of the respondent, the
respondent filed a writ petition No. 602of2000 in the Punjab and Haryana
High Court, which, by order dated 16.02.2000, directed the State to tqke
a decision on the representation of the respondent within a period of one D
month. Pursuant to the said direction and after hearing the counsel for
~ the respondent herein, by order dated 03.03.2000, the Financial
Commissioner and Secretary to Government of Haryana, Mines and
,/ Geology Department rejected the representation for extension of the
mining lease period.
E
(4) Questioning the rejection order of the Financial CommissionC;!r,
the respondent herein filed C.W.P. No. 3007 of2000 in the Punjab atid
Haryana High Court for quashing the same. Though serious objection was
raised by the State through their reply statement, the Division Bench of
the High Court, by order dated 09.05.2000, allowed the writ petition arid F
-I
directed that the writ-petitioner shall be put into possession of the lease
-+ by 01.06.2000. Challenging the said order, the State ofHaryana filed the
above appeal.
(5) We heard Mr. Anoop G. Chaudhari, Mrs. June Chaudhari,
G
learned senior counsel and Mr. Manjeet Singh, AAG for the appellants
and Mr. KB. Rohtagi, learned counsel for the respondents.
(6) In view of the fact that the lease granted in favour of the
respondent had expired long ago and in the light of the subsequent
developments as well as orders of this Court, it is unnecessary to traverse H
184 SUPREME COURT REPORTS [2007] 11 S.C.R.

A the claim of both the parties in detail. It is not in dispute that the lease of
mining granted in favour of the respondent-herein expired on 17.02.2000.
However, it is the grievance of the respondent that because of the conduct
of the Mining Department, they were not in a position to mine for a period
of 850 days, hence they are entitled to extension of mining !_ease by 850
B days for which they made a representation on 01.03.1999. Though the
said representation was considered and rejected by the Financial
Commissioner and Secretary to Government of Haryana, Mines and
Geology Department, the said order was set aside by the Punjab &
Haryana High Court which is a subject-matter of the present appeal.
c (7) Learned senior counsel appearing for the appellants by placing
an affidavit of Shri S.K.Gupta, Assistant, Mining Engineer, Gurgaon,
Department of Mines and Geology, Haryana dated 11.10.2007 (copy of
which was supplied to counsel for the respondent) submitted that after
expiry of lease period granted in favotir of the respondent, the extraction
D rights for minor mineral from the site in question were auctioned on
20.12.2001 and given to Mis Dolphin Minerals, Gurgaon who was the
highest bidder. He also submitted that the said auction was challenged by
the respondent-herein by filing C.W.P. 19798 of2001 before the High
Court of Punjab and Haryana and ultimately the High Court dismissed
E the said writ petition on 12.09.2002. The following information in the
affidavit of the Mining Engineer is relevant which reads as under:-
"4 ......... Thereafter, the aforesaid bid (auction) was confirmed in
favour of Mis Dolphin Minerals, 182 Phase-IV, Udyog Vihar,
Gurgaon on 12.11.2002. Since then the aforesaid party i.e. Mis
F
Dolphin Minerals is the lawful lessee of the said site and the lease
period is still existing. Hence, third party rights have been created
and no effective order could be passed without hearing the said
third party i.e. Mis Dolphin Minerals."
G (8) In view of the above factual information, as rightly pointed out
by learned senior counsel for the appellants and in view of the third patty
rights having been created, no relief could be granted in favour of the
respondent-herein at this juncture. +

(9) In the same affidavit, the officer has stated that the mineral
H
STATEv. ARAVALIKHANIJUDYOG 185
[P. SATHASIVAM,J.]
l
extraction of the said site, along with all other sites falling in Aravalis in A
1

Dist. Gurgaon has been stopped pursuant to the orders passed by this
Court in M.C. Mehta and T.N. Godavarman Thirumalpad case. In this
regard, learned senior counsel for the appellants placed an order passed
by this Court on 16.12.2002 wherein this Court prohibited minip.g
operation in forest areas. Among the various directions, the direction B
relating to Haryana State reads thus:
....
"2. Under Notification dated 29th November, 1999 issued under
Section 23 of the Environment (Protection) Act for certain Districts
including Gurgaon District in the State of Haryana, the Ministry has
delegated power to grant approval for mining purposes to the State. c
The mining activities are being regulated under the Notificatipn
dated 7th May, 1992 issued by the Ministry of Environment and
Forest (Annexure A-1 in IA No. 833). We direct that, for the time
being, no mining shall be permitted within the areas of Gurgaon
District in the State of Haryana where mining is regulated under D
the Notification dated 7.5 .1992 issued under Section 3 of the
/- Environment (Protection) Act, pursuant to permission granted after
29th November, 1999."
~

As on date, the said direction is in force.
E
(10) From the above discussion, the following conclusion would
emerge:
(a) the mining lease granted on 18.02.1980 in favour of the
respondent-herein had expired even on 17.02.2000;
F
-"'I
(b) after expiry of the lease, the site in question was auctioned on
~
20.12.2001 and given to Mis Dolphin Minerals, Guragon, who
was the highest bidder. Though the Said order was challenged
by the respondent-herein, admittedly the writ petition was
dismissed by the Punjab and Haryana High Court. G
(c) As per the order of this Court dated 16.12.2002, the mining
operation in the entire area of Gurgaon Dist. is prohibited.
t
( 11) In view of the same, the direction of the High Court granting
relief in favour of the respondent-herein cannot be implemented at this H
i
186 SUPREME COURT REPORTS [2007] 11 S.C.R.

A juncture. However, the respondent is free to approach the appropriate
court for damages/compensation if the same are permissible in accordance
with law. >
(12) With the above observation, the appeal is allowed. However,
there shall be no order as to costs.
B
CIVIL APPEAL NO. OF 2007
(Arising out ofSLP (CJ No. 12611OF2001)
( 13) Leave granted.
c (14) The respondent-herein questioning the order of the very same
High Court dated 21.03.2001 passed in C.W.P. 14277of1999 against
cancellation of the lease filed the above appeal by way of special leave.
(15) In view of our conclusion in Civil Appeal No. 5874 of2000,
D the appeal filed by the respondent-herein- Mis Aravali Khanij Udyog is·
dismissed.
B.B.B. Appeals disposed of.