India: Mining Leases - Subsistence, Renewal And Deemed Extension

The much awaited and anticipated judgment in the tagged matters of Common Cause v Union of India & Ors. [Writ Petition (Civil) No 114 of 2014] and Prafulla Samantra & Anr v Union of India & Ors [Writ Petition (Civil) No 194 of 2014] regarding the mining of iron ore in the State of Orissa, was pronounced by the Hon'ble Supreme Court of India (Court) on 4 April 2016 (Judgment).

The Court in this Judgment has exhaustively addressed the issue of legitimacy of claims raised by the mining leaseholders to recommence mining operations, in furtherance of the order dated 16 May 2014, whereby the Court, on account of absence of clearances/approvals/consent from concerned authorities, had restrained 102 mining leaseholders from carrying on any mining operations. The intricate question to be considered by the Court, was whether the applicants, seeking revocation of the above-mentioned order of restraint/suspension, retain a valid mining lease (ML) and a consequent subsisting right to carry on mining operations under the amended Mines and Minerals (Development and Regulation) Amendment Act, 2015 (MMDR Act) read with the amended Mineral Concession Rules, 1960 (MCR).

The broad issues pertaining to the changed mining regime of the grant, subsistence and extension of mining leases, that have been decided by the Court are:

  1. When will a ML be considered as valid and subsisting, as per Section 8A (providing for period of grant of a ML for minerals other than coal, lignite and atomic minerals) of MMDR Act and Rule 24 of MCR and the consequent entitlement of benefit under Section 8A of the MMDR Act;
  2. Whether Section 4A (4) (providing for termination of prospecting licenses and MLs) of the MMDR Act triggers automatically after the leaseholder fails to commence or carryout (as the case maybe) mining operations for a continuous period of 2 years.

The key highlights of the Judgment are set out herein below:

  • Leaseholders would have a subsisting ML and a resultant benefit of Section 8A of the MMDR Act, if:

    1. The original grant period of the ML was in currency on 12 January 2015;
    2. The original grant period of the ML had been renewed subsequent to its expiry and the renewal period was still in currency on 12 January 2015.
  • Leaseholders would not have a subsisting ML and a resultant benefit of Section 8A of the MMDR Act, if:

    1. No application for renewal of ML, due to expire before 12 January 2015, had been made at least 12 months before expiry of the existing lease period (under the un-amended MMDR Act and MCR);
    2. An application for renewal (original/first or subsequent renewal) of ML has been made, at least 12 months before its expiry, and has subsequently, on consideration, been rejected due to its express exclusion under Section 8A(9) of the MMDR Act.
  • Leaseholders would have a subsisting ML and a resultant benefit of Sections 8A (5) and (6) of the MMDR Act and Rule 24A of the MCR, if:

    1. An application for "first renewal" of the original ML has been made, at least 12 months before its expiry and has not been rejected. Such a ML would be valid till the expiry of 2 years after 18 July 2014, i.e., up to 17 July 2016 (under the amended as well as un-amended Rule 24A of the MCR);
    2. An application for "second (third/subsequent) renewal" has been made under Section 8(3) of the un-amended MMDR, at least 12 months before expiry of the renewed lease, and has not been considered and rejected up to 12 January 2015. However, such a leaseholder would not be entitled to any benefit under the un-amended Section 8A of MMDR Act and the amended Rule 24A (6) of the MCR.
  • In addition to the above, the Judgment seeks to interpret and summarise Section 4A (4) of the MMDR Act along-with Rule 28 of the MCR, in the following manner:

    1. Mining leases would be deemed to be subsisting up to the date of expiry of the lease period (as provided by the lease document), unless an order is passed by the State Government declaring lapse of the same;
    2. In cases, wherein an application has been filed by a leaseholder, while not being in a position to, or for not carrying on mining operations, for a continuous period of 2 years, the lease period will not be deemed to have lapsed, until an order is passed by the State Government on such an application. However, where no order is passed, the lease shall be deemed to have been extended beyond the original lease period, for a further period of 2 years;
    3. Pursuant to suffering a lapse, a leaseholder is disentitled to any benefit under the amended MMDR Act, due to the express exclusion contemplated under Section 8A (9) of the amended MMDR Act.
  • The Court has also clarified, in unambiguous terms, the contingencies stipulated under Section 8A (5) and (6) of the MMDR Act, whereby the renewed lease period is to be determined and the subsequent benefits are accordingly relished by the leaseholder for such period.


The Judgment is a welcome move and has finally put an end to the ambiguities surrounding the amended MMDR Act. What was merely believed to be a follow up of the order dated 16 May 2014 for recommencement of iron ore mining operations in the State of Orissa, has turned out to be a pivotal judgment in mining law in India due to the amendment introduced in the MMDR Act in the interregnum. The Judgment is extremely crucial in determining the issue of subsistence of mining leases under the amended provisions of the MMDR Act, as the same has been adjudicated upon by the Court for the first time. The conclusions arrived at by the Court appear to be in consonance with the intention behind the amended provisions and provide a glimpse of hope to the otherwise anguished mining industry.

The content of this document do not necessarily reflect the views/position of Khaitan & Co but remain solely those of the author(s). For any further queries or follow up please contact Khaitan & Co at

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