SC explains Object and Purpose of inclusion of Sec. 10-A of MMDR Act by MMDR Amendment Act, 2015

Supreme Court: In a civil appeal against the Judgment of Calcutta High Court, whereby an intra-appeal preferred by the State of West Bengal (‘appellant’) was dismissed and the authorised officer was directed to execute a mining lease in favour of the sole proprietor of the Chiranjilal (Mineral) Industries of Bagandih (‘respondent’), the Division Bench of Sanjiv Khanna and Aravind Kumar, JJ. partly allowed the appeal. The Court directed the appellant to execute a mining lease of the 20.87 acres of land in favour of the respondent. The Court discussed the amendment around the Mines and Minerals (Development and Regulation) Act, 1957 (‘MMDR Act’).

Factual Matrix

On 07-08-1985, West Bengal Mineral Development and Trading Corporation Limited (‘WBMDTCL’) had filed an application for grant of long-term mining lease for Dolomite, Limestone and Quartzite at the plots in Mouza – Khariduara, Kumari and Boch. An application was also filed by WBMDTCL for grant of long-term mining lease for Iron Ore, Manganese and Fireclay at the plots in Mouza – Khariduara, Kumari, Boch and Kangametya. On 10-02-2015, Dolomite was notified as a minor mineral, and accordingly henceforth, fell under the legislative and administrative jurisdiction of the State Government.

A Grant Order dated 16-07-2015 was issued by the Deputy Secretary, Commerce and Industries Department for Dolomite mining in favour of respondent in respect of 76 acres of land, subject to certain conditions, including the requirement to submit consent letters of owners of the land in question (Raiyats) before the execution of the lease deed. Another condition was imposed for permission under Section 14-Y of the West Bengal Land Reforms Act, 1955 (‘WBLR Act’).

The respondent preferred a writ petition before the High Court, challenging the stipulations, the High Court observed that Dolomite had become a minor mineral with effect from 10-02-2015 and hence prior approval of the Central Government was not required under Section 5(1) of the MMDR Act. On the question of requirements under Section 14-Y and 4-C of the WBLR Act, it was observed that the land in question was recorded as ‘Dungri’ and that the land classified as ‘Dungri’ is only used for the purpose of mining lease and thus, there was no need for a conversion certificate under Section 4-C of the WBLR Act. The State challenged the said decision of the High Court in an intra-appeal, which was subsequently dismissed vide the impugned judgment and held that the provisions of the West Bengal Minor Minerals Concession Rules, 2016 (‘Concession Rules’) will not be applicable to the respondent.

Analysis and Decision

The Court perused Rule 61 of the Concession Rules which provides for ‘declaration of ineligibility of the pending minor mineral applications for mining lease including the applications of reclassified major minerals’, and Section 10-A of the MMDR Act which provides for ‘rights of existing concession holders and applicants’, inserted by Mines and Minerals (Development and Regulation) Amendment Act, 2015 (‘Amendment Act, 2015’). The Court noted that the question was whether the respondent’s case was covered by the exception provided in proviso to Rule 61 of the Concession Rules, which stipulates that ‘if an applicant, who had made an application prior to 29-07-2016, had been issued a Grant Order or a Letter of Intent, or any other order requiring alteration of the applicant’s position, his application for mining lease may be considered after due compliance of all necessary conditions’.

The Court discussed the object and purpose of the Amendment Act, 2015, which is to ensure that allocation of mineral resources is done through auctioning and for this same reason, the Section 10-A(1) of the MMDR Act, 1957 mandates that all applications received prior to 12-01-2015 shall become ineligible. The Court explained that the exceptions or the saving clause applies to three kinds of situations specified in Section 10-A(2) of the MMDR Act. 1957:

1. Where an application has been received under Section 11-A of the MMDR Act,1957.

2. Where a reconnaissance permit or a prospecting licence has been granted to the permit holder or the licensee has the right to obtain a prospecting licence followed by a mining lease and the State Government is satisfied that the permit holder or the licensee has complied with the requirements specified in sub-clauses (i) to (iv) of clause (b) of Section 10-A(2) of the MMDR Act, 1957;

3. Where the Central Government had already communicated their previous approval, or the State Government had issue Letter of Intent for grant of mining lease before coming into force of the Amendment Act 2015.

The Court referred to dictionary meaning of the term ‘Letter of Intent’ as a preliminary understanding between the parties who intend to make a contract or join together for further action.

The Court noted that in the present case, Dolomite was notified as a minor mineral and hence, the approval of the Central Government was not required for the reason that the Grant Order dated 16-07-2015 was hedged with pre-conditions, including the requirement to submit consent letters of the owners of the land in question ‘Raiyats’ before the execution of the lease deed. Therefore, the Court opined that the Grant Order was provisional, and was subject to fulfilment of the conditions therein.

The Court explained that the rights of ‘Raiyat’ in respect of the land in terms of Section 4(2A) of the WBLR Act, 1955 does not permit any other person to quarry sand from his holding, dig or use, or permit any person to dig or use, earth or clay of his holding for the manufacture of bricks or tiles except with previous permission in writing of the State Government. If the said condition is breached, the prescribed authority may, after giving notice and opportunity to a ‘Raiyat’ to show cause, can levy a monetary penalty. The Court also said that Section 4-B of the WBLR Act, 1955 stipulates that every ‘Raiyat’ holding any land shall maintain and preserve such land in a manner that there is no change, or the area is not diminished.

Further, the Court noted that the appellants are the owners of 20.87 acres of the land in question and to this extent, they have no difficulty in executing the mining lease, hence the Court said that there should be no difficulty in granting of mining lease for the said area to the Respondent. Thus, the Court partly allowed the appeal and set aside the impugned judgment. The Court directed the appellants to execute a mining lease of the land in question in favour of the respondent.

[State of W.B. v. Chiranjilal (Mineral) Industries of Bagandih, 2023 SCC OnLine SC 1149, Decided on 15-09-2023]

*Deeksha Dabas, Editorial Assistant has reported this brief.