Cos such as Essel Mining, Tata Steel and others get some relief as court says such leases would be deemed to be subsisting and extended by a period of two years
In a relief to several companies such as Aditya Birla’s Essel mining, Tata Steel and many other mine-owners of Odisha, the Supreme Court said on Monday that their leases would not stand automatically lapse in absence of specific orders by the state government to this effect.Such leases would be deemed to be subsisting said the apex court, in cases where applications have been filed and lease deed conditions have not been violated. These will be deemed to have been extended by two years, as per the then prevailing mining laws.

The order differs with the amicus curiae‘s view that “lapsing provision would be automatically triggered“ for mines, including those Sarda Mines, Essel Mining, DR Patnaik and Patnaik Mineral, where operations were discontinued for two continuous years.

The Odisha government had extended the leases of some of these 11 miners who had applied for permission to resume business. Even should be illegal as per the amicus curiae’s opinion. The mines ministry’s revision tribunal had taken a similar view while considering the case of lease of Essel Mining, an unlisted Aditya Birla group company , in February this year.

Miners’ lawyers had, however, argued that lapsing shouldn’t be automatic, and the state needed to have given such directions first. “Where no order has been passed, the lease shall be deemed to have been extended beyond original lease period, for a further two years. Thirdly , a leaseholder having suffered a lapse, is disentitled to any benefit of the amended MMDR Act, because of the express exclusion contemplated under Section 8A(9) of the amended MMDR Act, (which allowed their extension)“ said the order. “In other words, the Supreme Co urt has said that unless the state had passed lapsing orders, before the government’s January 2014 ordinance, leases could avail an extension to 2020 (if for non-captive use), or 2030 if mining was for captive use,“ advocate Ashok Parija said explaining the order.

The top court will now decide, with help from the amicus, which leases remain valid as per the Supreme Court order. Bhushan told the bench headed by Justice JS Khehar that illegalities committed by the concerned companies should also be taken into account while deciding these cases. The bench agreed to this.

In his submissions, the amicus had also, citing the central empowered committee’s 16 Oct 2014 re port, concluded that 20 mines including those of Tata Steel, OMC, KJS Ahluwalia and AMTC which had operated “illegally in forest land“ should remain suspended and didn’t qualify couldn’t for extensions from the state government, under the amended act.

Parija, whose clients include some of these companies, however argues, “lease deed conditions are what’s drafted in Form K of the deed or listed under Rule 27, (1&2) of the Mineral Concession Rules of 1960,“ and forest and environment violations don’t apply here.

Most mine owners had made the requisite application, twelve months before lapsing of their leases, to qualify for a renewal.

Earlier before the SC struck it down in 2013, mining rules twea ked by the central government had allowed mining operating on a “deemed basis“ while the state government took a call on renewal.

Pendency ran into decades. Inquiries such as the Shah Commission for illegal mining had found “deemed“ provision to be grossly abused, particularly in the state of Odisha, to facilitate mining to carry on without the necessary environment and forest clearances.

There was no obligation on the state to take stock of the lessees’ compliance, since renewal was perennially postponed. The top court had on May 16, 2014, restrained 102 mining leaseholders from carrying on any mining operations in the state. The order was passed as none of these leaseholders were in possession of clearances.