DHARMENDRA KUMAR SINGH versus THE STATE OF UTTAR PRADESH & ORS. on 28 October 2020

[2020] 12 S.C.R. 557

DHARMENDRA KUMAR SINGH

v.

THE STATE OF UTTAR PRADESH & ORS.

(Civil Appeal No. 12202 of 2018 etc.)

OCTOBER 28, 2020

[SANJAY KISHAN KAUL AND HRISHIKESH ROY, JJ.]

Uttar Pradesh Mining Minerals (Concession) Rules, 1963:

Rules 68 and 40(h) – Mining lease – Extension of – Soughtby the lease-holders – For the obstructed period of lease, due tojudicial pronouncements – Held: The proposition that interdictsposed by a competent Court should not put a party at a disadvantage,cannot be a blanket proposition – The court has to consider thecontext in which the interdict was passed, in the present case it is topreserve the forest area – The right to extension of lease either flowfrom the statutory provisions or from the terms of the lease – Theobstructed period by reason of judicial interdict, by itself will notgive window to extend the lease – Extension of lease cannot begranted in exercise of Rule 68 as the same is worded in restrictivemanner – The new mining policy of the State also has no provisionfor grant of extension of time for the obstructed period – Terms ofthe lease too do not provide for any such consequences – OnlyRule 40(h) provides for the consequences of disruption – Therefore,the appropriate course would be not to extend the lease for theobstructed period, but to refund the security deposit and the amountdeposited by lease-holders as advance royalties, in terms of Rule40(h) – Since the monies have remained blocked and the miningwas prevented for no fault of the lease-holders, in order to docomplete justice, in exercise of power u/Art. 142 of the Constitution,the monies are directed to be refunded with simple interest @ 9%p.a.

Disposing of the appeals, the Court

HELD : 1. The right to extension of lease either flow froma statutory provision or from the terms of the lease between theconcerned parties. If there has been an obstructed period byreason of a judicial interdict, that itself will not give window to

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Aextend the lease by not following the statutory provisions,especially when the terms of the lease do not provide for anyconsequences thereof. [Para 36][578-D-E]

Vijay Kumar Dwivedi v. State of Uttar Pradesh (2016)4 All LJ 690 – approved.

B2.1 The statutory provision of Rule 68 of the Uttar Pradesh MiningMinerals (Concession) Rules, 1963 is in the nature of a relaxationrule in special cases and has to be read with the Rules whichprovide the manner in which the exploitation of minerals shouldtake place. The statute was worded in a restrictive mannerCdeliberately giving only a restricted window and this legislativeintent ought not to be defeated by supplanting it with any otherinterpretation. [Para 35][577-F-G; 578-A-B]

Sukhan Singh v. State of UP & Ors. (2015) 2 All LJ619 – approved.DMohammad Yunus Hasan v. State of UP & Ors. (2016)4 All LJ 4 – referred to.

2.2 It is a well settled principle of interpretation that whenthe words of a statute are clear and unambigous, recourse todifferent principles of interpretation, other than the rule of literalEconstruction, cannot be resorted to. If a fresh grant or extensionhas to be made under the Mining Rules, it must be in accordancewith Chapter II, and the provision for auction of leases in ChapterIV is in furtherance of a transparent procedure. [Para 35][578-B-C]

FDelhi Transport Corporation v. Balwan Singh and Ors.2019 SCC Online SC 276 – relied on.

3. The State of UP had issued a New Mining Policy on12.6.2017 and this policy has no provision for grant of extensionof time for obstructed period of mining lease and all mining leasesGwere to be permitted by e-tendering or e-auction alone. If themining lease is extended for the obstructed period, it wouldamount to violation of this New Mining Policy and since theextension would have to be granted now, it cannot be acceptedthat this should relate back to the date of the lease and not as ondate. [Para 39][579-B-D]H

4. Rule 40(h) of the Mining Rules provides for theconsequences of the disruption of mining operations in a leasearea owing to any special circumstances and requires the DM,with the prior approval of the State Government, to adjust theamount equivalent to the installments payable during thedisrupted period against forthcoming installments. Thus,monetary adjustment is all that has been provided for by thestatute making the legislative intent obvious, i.e., that if someamounts have been paid as installments under the mining leasefor the period when the beneficiary is not able to operate themining area, only that amount is liable to be refunded. The Stateof UP is only liable to refund (i) any security deposit; or (ii) advanceroyalties paid to them, for this obstructed period – something towhich the State of UP has already consented before this Court.[Para 40][579-D-G]

5. The proposition that interdicts posed by a competentcourt should not put a party at a disadvantage, cannot be a blanketproposition. The Court will have to consider the context in whichthe interdict was passed, i.e., to preserve the forest area. It is adifferent matter that some leases were ultimately found as withinthe restricted area and some outside (as is the case of theappellants). Even if the notification of the State of UP dated31.7.2014 is taken into account, and the authorisation of the DMsto extend the lease where no third party interest was createdand the leases were prevented from operation for no faultattributable to the leaseholders, the subsequent transparentpolicy of 2017 would weigh in favour of not exercising thejurisdiction to extend the leases for the obstructed period. [Para41][580-C-F]

6.1 Therefore, the appropriate course of action to beadopted in the present case cannot be to extend the lease for theobstructed period but to direct that the security deposit, if notalready refunded, should be refunded and the amount depositedby the appellants/leaseholders as advance royalties to therespondent/State be also paid back to them along with somethingmore. [Para 42][580-F-G]

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A6.2 The appellants’ monies have remained blocked andmining was prevented for no fault of theirs, despite success inearlier legal proceedings, and this aspect has to be balanced withthe statutory provision or for that matter, even the contractualprovisions not providing for extension of leases. Therefore, byexercising jurisdiction under Article 142 of the Constitution ofBIndia to do complete justice inter se the parties, it is directed thatthe monies have remained blocked, the monies should carrysimple interest @ 9% per annum. [Para 43][580-G; 581-A-B]

6.3 Insofar as the security deposit is concerned, if it hasalready been refunded, it would naturally not carry any interestCand if not, then it will carry interest from the date it ought to havebeen refunded after the expiry of the lease till it is actually refundedin case of expired leases. On the other hand, so far as the advanceroyalties for the obstructed period are concerned, the saidamounts will carry interest @ 9% per annum from the date theDobstruction occurred, i.e., 29.8.2018 and 5.2.2019, as applicableto the respective appellants, till the date of payment. [Para44][581-B-D]

Nar Narain Mishra v. The State of UP and Ors. 2013SCC Online All 13919 ; Sulekhan Sing & CompanyEand Ors. v. State of Uttar Pradesh & Ors. (2016) 4 SCC663 : [2016] 1 SCR 91; Deepak Kumar and Ors. v.State of Haryana and Ors. (2012) 4 SCC 629: [2012]4 SCR 819 – relied on.

Banwasi Seva Ashram v. State of U.P & Ors. (1986) 4FSCC 753: [1987] 1 SCR 336; Jagdish Prasad Nishadv. State of UP & Ors. (2015) 128 RD 150; Beg RajSingh v. State of UP & Ors. (2003) 1 SCC 726: [2002]5 Suppl. SCR 530 – referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 12202of 2018.

From the Judgment and Order dated 13.07.2018 of the NationalGreen Tribunal, Principal Bench, New Delhi in O.A. No. 429 Of 2016.

With

Civil Appeal No. 11368 of 2018, Civil Appeal No. 5257, 5093 AND7002 of 2019.

N. Venkatraman, ASG, Raghvendra Singh,Sr.Adv./AG, MukulRohatgi, Ranjit Kumar, S.P. Singh, V.Shekhar, Sr. Advs, Utkarsh Sharma,Sharad Chauhan, Rounak Parekh, Ms. Mrinal Gopal Elker, Mrs. RachnaGupta, Rajeev Kumar Dubey, Ashiwan Mishra, Ms. Sheetal Rajput,Kamlendra Mishra, Gurmeet Singh Makker, Rajan Kr.Chourasia, NisheshSharma, Suhasini Sen, V.Chandrashekara Bharathi, Dr. Nishesh Sharma,Rajan Kumar Chaurasia, T. N. Singh, Vikas K.Singh, Pranaya KumarMohapatra, Advs. for the appearing parties.

The Judgment of the Court was delivered by SANJAY KISHAN KAUL, J.

1. An ideological battle often rages between preservation ofenvironment and economic development. Mining activity and the mannerin which it is carried on has had its proponents and opponents. Its necessityas an input for economic development is recognised but mining activitythroughout our country for minerals or sands has had a troubled historyon account of large-scale violations. This has also resulted in a ban onmining activity in certain areas at certain times – not the ideal method,but leaving little option open because of the rampant misuse of the licencesto mine. The present litigation, in a sense, flows from the concern toregulate mining activity in eco-sensitive areas.

The Factual Development:

2. The fact flow of the present case shows that what we arefaced with today has its seeds in prior litigation and orders passed in thepast in the interest of ecology, yet some persons who had succeeded inthe initial battle to carry out mining activity are faced with theconsequences of orders passed in other litigations. It is this conundrum,which would have to be resolved by this Court.

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A3. Mining leases granted to projects in the mineral rich district ofSonbhadra, carved out of the district Mirzapur in the State of UttarPradesh (for short ‘State of UP’) in 1989 is the starting point. The AllIndia Kaimur People’s Front (for short ‘AIKPF’) filed an applicationbefore the National Green Tribunal, New Delhi (for short ‘NGT’), beingO.A. No.429/2016, inter alia seeking directions for immediate prohibitionBof alleged illegal mining in the vicinity of Kaimur Wildlife Sanctuary locatedin Village Billi Markundi in Sonbhadra District. The area being ecologicallysensitive and preservation of wildlife being the objective, the NGT issuednotices in the matter.

4. In pursuance of this initial development, a Notification datedC20.3.2017 was issued by the Ministry of Environment, Forest and ClimateChange (for short ‘MoEFCC’) declaring the “area in question” as anEco-Sensitive Zone (for short ‘ESZ’) under sub-section (1) and clauses(v) and (xiv) of sub-section(2) and (3) of the Environment (Protection)Act, 1986 (hereinafter referred to as the ‘EPA’).D5. The State of UP set out the factual position about the grant ofleases before the NGT in an affidavit filed in this behalf. Thirty-threeleases were stated to be operational outside ESZ. The NGT called uponthe State of UP to explain the position of these leases in view of theorder it had passed on 4.5.2016 in T.N. Godavarman Thirumalpad v.EUnion of India and Ors.[1] by way of which the NGT had directed theState of UP to cancel all mining leases and all other non-forestry activitieson the areas notified under Section 4 of the Indian Forest Act, 1927(hereinafter referred to as the ‘Forest Act’). In order to appreciate theramifications, Section 4 of the Forest Act is extracted hereinunder:

F“4. Notification by State Government.—(1) Whenever it hasbeen decided to constitute any land a reserved forest, the StateGovernment shall issue a notification in the Official Gazette—

(a) declaring that it has been decided to constitute such land areserved forest;G(b) specifying, as nearly as possible, the situation and limits ofsuch land; and

(c) appointing an officer (hereinafter called “the Forest Settlement-officer”) to inquire into and determine the existence, nature and extent of any rights alleged to exist in favour of any person in orover any land comprised within such limits or in or over any forest-produce, and to deal with the same as provided in this Chapter.

Explanation.—For the purpose of clause (b), it shall be sufficientto describe the limits of the forest by roads, rivers, ridges or otherwell-known or readily intelligible boundaries.

(2) The officer appointed under clause (c) of sub-section (1) shallordinarily be a person not holding any forest-office except that ofForest Settlement-officer.

(3) Nothing in this section shall prevent the State Governmentfrom appointing any number of officers not exceeding three, notmore than one of whom shall be a person holding any forest-office except as aforesaid, to perform the duties of a ForestSettlement-officer under this Act.”

The purport of the Notification is, thus, to specify as to what lieswithin the limits of reserved forest area.

6. The NGT in the said proceedings noted the admission of theState of UP that some active leases still remained in force on landswhich were covered under the Notification issued under Section 4 ofthe Forest Act for which the corresponding notification under Section 20of the Forest Act had still not been issued. Section 20 of the Forest Actreads as under:

“20. Notification declaring forest reserved.—(1) When thefollowing events have occurred, namely:—

(a) the period fixed under section 6 for preferring claims haveelapsed and all claims (if any) made under that section or section9 have been disposed of by the Forest Settlement-officer; (b) if any such claims have been made, the period limited by section17 for appealing from the orders passed on such claims haselapsed, and all appeals (if any) presented within such period havebeen disposed of by the appellate officer or Court; and

(c) all lands (if any) to be included in the proposed forest, whichthe Forest Settlement-officer has, under section 11, elected toacquire under the Land Acquisition Act, 1894 (1 of 1894), havebecome vested in the Government under section 16 of that Act, A

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Athe State Government shall publish a notification in the OfficialGazette, specifying definitely, according to boundary-marks erectedor otherwise, the limits of the forest which is to be reserved, anddeclaring the same to be reserved from a date fixed by thenotification.

B(2) From the date so fixed such forest shall be deemed to be areserved forest.”

Thus, what had not been done was that the consequences of thearea falling in the reserved forest area in terms of Section 4 Notificationdid not follow a Notification under Section 20 of the Forest Act. TheCNGT, thus, directed vide order dated 13.7.2018 that all leases underSection 4 area be prohibited by the State of UP forthwith. The reviewfiled by the State of UP came to be dismissed vide order dated 29.8.2018.We may note at this stage that what is impugned is the aforesaid orderdated 13.7.2018 by the appellants before us, except for appellants inC.A. No. 5093/2019 where order dated 25.3.2019 of the NGT has beenDimpugned. However, this order was also decided in terms of the mainimpugned order dated 13.7.2018

7. The fallacy, in our view, which occurred in the proceedingsbefore the NGT was that leaseholders of the leases were not madeparties, not even in a representative capacity, yet, they suffered theEconsequences of the aforesaid order inasmuch as the District Magistrate(for short ‘DM’), Sonbhadra, issued administrative orders (on 29.8.2018and 5.2.2019) in pursuance of the aforesaid order of the NGT prohibitingmining and transportation of gettis/boulders till the next order. Thiseffectively stopped the mining activity. The appellants naturally beingFaggrieved filed appeals before this Court as being the affected partiesunder Section 22 of the National Green Tribunal Act, 2010 (hereinafterreferred to as the ‘NGT Act’) arraying the State of UP, its concerneddepartments and officers, MoEFCC, as well as AIKPF (the originalpetitioners before the NGT) as respondents. The appeals, inter alia,are predicated on the respective lands and corresponding leases beingGactually excluded from the purview of the Notification issued underSection 4 of the Forest Act, the lands in question being ‘pahadh lands’,i.e., uncultivable waste lands belonging to the Revenue Department.Since there are different appeals and different dates involved, for clarityof facts, we are setting forth below the particulars of the lease detailsHand the suspension orders of the respective appellants as under:

565ABCDEFGH

566SUPREME COURT REPORTS

APrior Litigations:

8. In order to appreciate the contention of the appellants, it wouldbe apposite to trace out two lines of legal developments, which havearisen since the issuance of Notification under Section 4 of the ForestAct wherein lies the genesis of the dispute. The first line of legalBdevelopment arose from Notification No. 3723/14-b-4(67)69 dated5.11.1969 issued by the State of UP under Section 4 of the Forest Act.The Notification included in its compass large tracts of land in VillageBilli Markundi declaring that it has been decided to constitute such landas reserved forest. The corresponding Notification under Section 20 ofthe Forest Act was to be issued. However, the 1969 Notification cameCunder scrutiny of this Court upon a letter being received from the BanwasiSeva Ashram operating in Sonbhadra District highlighting the plight ofthe Adivasis living in the area and their related rights with respect to theland. The adjudication resulted in a judgment being pronounced on20.11.1986 in Banwasi Seva Ashram v. State of U.P & Ors.[2] whereinDa slew of directions were passed relating, inter alia to the land whichhad been notified under Section 4 of the Forest Act but where nosubsequent notification had been issued under Section 20 of that Act. Itwas directed that the Forest Settlement Officer (for short ‘FSO’) shallscrutinize all claims and thereafter the matter be placed before theAdditional District Judge (for short ‘ADJ’) as a suo moto appeal. TheEState Government was required to give effect reserving such lands underSection 20 of the Forest Act which were found to be covered underSection 4 of the Forest Act. Claims were filed before the FSO (includingthose of the predecessors of the appellants herein) to be excluded fromSection 4 Notification and they succeeded in the same. A decision wasFto be taken by the ADJ as the appellate authority and the order passedby the said authority on 30.9.1994 confirmed the findings of the FSO.The Forest Department thereafter filed a large number of review petitionsagainst that order, which came to be allowed, albeit after a period ofeight (8) years, in terms of the order dated 31.5.2003. Thus, the appellants/

predecessors of appellants before us (who were affected parties in thoseGproceedings) approached the High Court by way of different writ petitionsand all these petitions came to be allowed in terms of the order in WritPetition No.29546/2003 titled Ved Prakash Garg & Ors. v. AdditionalDistrict Judge, which itself was deciding the grievance of a large number

of claimants similarly placed as the appellants herein against the orderdated 31.5.2003. The view adopted was predicated on the stand of theState of UP itself having taken a decision that the land in question betreated as land belonging to the Revenue Department of the State andon which the mining operations should be permitted. A direction wasissued that the application for renewal of mining leases be consideredand the order dated 31.5.2003 was set aside. An SLP against this ordercame to be dismissed by this Court on 22.11.2018, in SLP (C) (Diary)No. 33675 of 2018. The proceedings in respect of exclusion of thesubject land in question from the purview of Section 4 of the Forest Act,thus, attained finality.

9. The second line of litigation pertains to events of 1992 whenthe Uttar Pradesh State Cement Corporation (for short ‘UPSCCL’)became a sick industry and was put to auction where M/s JayprakashAssociates Limited (for short ‘JAL’) emerged as the highest bidders.The significance of this event is that it culminated in the order in theT.N. Godavarman case dated 4.5.2016, on which considerable reliancehas been placed in the impugned order before us.[3] The assets purchasedby JAL included a mining lease of 2168 hectares of area of which someportions were included within Section 4 Notification area. Claims wereinitiated by JAL praying for exclusion of the said lands from Section 4Notification. This matter came up to this Court, when in 2010 it wastransferred to the NGT. The NGT passed a detailed judgment in thisvery matter on 4.5.2016 with directions, inter alia to the State of UP tocancel all mining leases whether fresh or renewed and all other non-forestry activities on the Section 4 lands and to issue a notification underSection 20 immediately. The effect of these directions was that thefinality of the settlement proceedings concluded in terms of BanwasiSeva Ashram[4 ]case was reiterated and urgency to carry out the processunder Section 4 and Section 20 of the Forest Act was emphasised.

10. The significance of the aforesaid two rounds of litigationassumes importance in view of the reliance placed on them in theimpugned order but also by the appellants to buttress their claim that theprocedure with regard to the leases in their favour came to be settled interms thereof.

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AThe Current Litigation:

11. We now turn to the present civil appeals in which noticeswere issued and the matters were clubbed. In the counter affidavitdated 23.4.2019 filed by the State of UP the factual progression discussedaforesaid in respect of the land excluded from the purview of Section 4Bwas set out. The State of UP also sought permission of the Court withrespect to issuance of the notification under Section 20 for those lands,which did come under Section 4 of the Forest Act. The question wascrystallised in the counter affidavit as that if the notification under Section20 had not been issued and certain parts of the lands covered under thenotification under Section 4 had been deleted by the competent authoritiesC(i.e., the FSO, thereafter ADJ, and finally the High Court) whether suchdeleted lands shall be treated as non-forest lands without issuance ofnotification under Section 20 of the Forest Act. As is the normal working,a series of orders had to be passed by this Court due to delay on behalfof the State of UP and it is only on 15.7.2020 that this Court noted thatDthe Section 20 notification had finally been issued on 15.6.2020. Thus, itwas noted by this Court on that date that the only question now remainingto be determined was with regard to the extension of leases for theperiod for which the mining leases of the appellants were not permittedto operate and sought the assistance/view of the State of UP on thisaspect.E

12. The State respondents filed an additional affidavit dated6.8.2020 setting forth its stand. It was contended by the State of UPthat no permission for mining can be granted for the obstructed periodas there does not exist any provision for grant of such permission formining in case of disruption of mining operations under the Uttar PradeshFMining Minerals (Concession) Rules, 1963 (hereinafter referred to asthe ‘Mining Rules’).[5] On 10.8.2020 while noticing the aforesaid andupon a query from the Court, the State of UP conceded that it waswilling to refund the proportionate amount of the lease money, for whichperiod the leases have not been permitted to operate. This was objectedGto by the appellants. Thus, the Court crystallised the issue to bedetermined and the only aspect to be examined by this Court, as whetherin view of judicial pronouncements the appropriate order to pass wouldbe for refund of the lease amount for the period it was not permitted to 5 Framed under Section 15 of the Mines and Mineral (Development and Regulation)HAct, 1957

operate, or whether the leases are liable to be renewed for the period ofobstructed time. It is within the contours of the aforesaid propositionthat learned counsel for the parties have taken their stand, both in termsof the written synopses and by making submissions in the Court.

The Stand of the State of UP:

13. The State of UP crystallised the factual issue by setting outthat the total number of permitted operational mining leases prior to theimpugned order in the district in question were 82 – 64 leases in VillageBilli Markundi and only 29 of such leases were covered by the impugnedorder. The impugned order resulted in 41 leases ceasing to exist/beingbanned and 29 leases out of them have been covered by Section 20notification. The notification had resulted in 5 out of 29 leases fallingwithin the radices of 100 metres of the forest land and out of the remaining24 leases, 12 have expired and 12 subsist. We are concerned with thelatter. The consequence of the impugned order and the order of the DMwas that the mining operations had been obstructed pursuant to impugnedorder dated 13.7.2018 till the issuance of the notification under Section20 of the Forest Act. The State of UP contended that it had only compliedwith the impugned order and if these mining leases are now extendedthere would be consequences flowing to the State of UP, on account ofjudicial orders. We may notice that some of the leases expired duringthe obstructed period while other leases have continued and thus in thelatter cases the issue would only be to further extend the lease for theobstructed period while in case of the earlier situation permission wouldhave to be given to mine for an extended period relatable to the obstructedperiod. The delay on the part of the State of UP in issuance of theSection 20 notification has been placed at the door of an apprehensionthat it should not be construed as violative of the orders passed in BanwasiSeva Ashram[6]case.

14. In what manner should such cases be dealt with, judicial opinionsexpressed in this behalf have been sought to be referred to as a consistentview of the Allahabad High Court in this behalf, being the local courtdealing with the aspect of mining leases in the cases:

a. Sukhan Singh v. State of UP & Ors.[7] an opinion was renderedthat the mere filing of an application either for the grant of a lease 6 (supra)

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Aor for the renewal of a lease does not confer a vested right for thegrant or renewal of a lease and, an application has to be disposedof on the basis of the rules as they stand on the date of the disposalof the application. This was in the context of the applicability ofG.O. dated 31.05.2012 to pending applications seeking a freshlease or for renewal of a lease under Chapter II of the MiningBRules as decided in Nar Narain Mishra v. The State of UP andOrs.[8] (This view received the imprimatur of the Supreme Courtin Sulekhan Singh & Company and Ors. V. State of UttarPradesh & Ors.[9]).

b. In Mohammad Yunus Hasan v. State of UP & Ors.[10] Rule68 of the Mining Rules dealing with the relaxation of applicabilityof the Mining Rules by the State Government was interpreted todetermine the contours of the power which could be exercised interms of the said Rule. Rule 68 reads as under:

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“68. Relaxation of rules in special cases.- The State GovernmentDmay, if it is of opinion that in the interest of mineral developmentit is necessary so to do, by order in writing and for reasons tobe recorded authorised in any case the grant of any mininglease or the working of any mine for, the purpose of winningany minerals on terms and conditions different from those laidEdown in these rules.”

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The aspect of ‘interests of mineral development’ was emphasisedand it was opined that the Rule does not confer a power on the State toextend a lease beyond the contracted period without adhering to theprocedure under Chapter II[11] and IV[12] of the Mining Rules. Theconclusion reached was that this Rule 68 could not be an aid to extendFthe term of an expired lease to compensate any loss caused to suchleaseholder, if their lease has been terminated or curtailed during thesubsistence period due to an order of the competent authority. Moreover,the right to an extension of lease must either flow from a statutory provisionor from the terms of the lease between the concerned parties.

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8 2013 SCCOnline All 13919

9 (2016) 4 SCC 663

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11 Grant of Mining LeaseH12 Auction Lease DHARMENDRA KUMAR SINGH v. THE STATE OF UTTARPRADESH & ORS. [SANJAY KISHAN KAUL, J.]

c. In Vijay Kumar Dwivedi v. State of Uttar Pradesh[13] thevalidity of permission granted by the State Government toleaseholders to continue with the excavation for the period duringwhich they were obstructed/restrained from carrying out suchactivities during the subsistence of their leases due to orders ofthe High Court or of competent authorities was examined. Relyingupon the observations in Mohammad Yunus Hasan[14] case, theAllahabad High Court directed that no person shall be permittedto excavate minor minerals on the basis of lease deeds orpermission granted subsequent to G.O. dated 31.5.2012 under thegarb of renewal of an expired lease, extension of lease, grant of afresh lease, or permission to excavate during the obstructed period.Additionally, no Form MM-11 shall be issued in favour of anyperson with an expired lease or an order be granted subsequentto 31.5.2012 in their favour for excavation of minor minerals inthe name of renewal of lease, extension of term of expired lease,or permission for the obstructed period on the plea that a validlease was granted but excavation could not be carried for somedays during the subsistence period due to orders of the High Court/competent authorities. This was so as the G.O. dated 31.5.2012recorded a decision, which had been taken in the interests oftransparency and fair competition, to grant leases through the E-tendering system by inviting tenders under Chapter IV of theMining Rules.

15. In the conspectus of the aforesaid facts and judicialpronouncements, the developments which have taken place post thissituation were set out. The State of UP issued a New Mining Policy on12.6.2017. In terms of this policy there is no provision for grant ofextension of time for obstructed period of mining lease and all miningleases were to be permitted by e-tendering or e-auction alone.

16. It is also contended before us on behalf of the State of UP bylearned senior counsel, Mr. V. Shekhar that there was no legal provision/rule or any provision in the respective lease deeds to pay damages incase of disruption of mining leases and the consequences of suchdisruption are set out in Rule 40(h) of the Mining Rules, which reads asunder:

13 (2006) 4 All LJ 690

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A“40. Liberties, powers and privileges.— (h) In the event ofdisruption of mining operation in the lease area owing to any specialcircumstances, the District Magistrate with the prior approval ofthe State Government shall adjust the amount equivalent to theinstallment payable during the disrupted period, online against theforthcoming installment.”B

Thus, in the event of disruption of mining operations in the leasedareas owing to any special circumstances, the DM, with the prior approvalof the State Government shall adjust the amount equivalent to theinstallment payable during the disrupted period against the forthcominginstallment. Thus, it was contended that the State of UP is only liable toCrefund (i) any security deposit, or (ii) advance royalties paid to it.

17. It was emphasised that in view of the judicial pronouncementin Vijay Kumar Dwivedi[15] case it is clear that after 31.5.2012, nopermission for mining can be granted to excavate during the obstructedperiod. In the absence of any provision under the Mining Rules forDgrant of extension of expired mining lease or renewal of the same forthe obstructed period in case of disruption to mining operation, anyextension of lease was contended to be unsustainable in law.

18. The sequitur to G.O. dated 31.5.2012 was pleaded to havebeen explained in the Nar Narain Mishra case[16] where the AllahabadEHigh Court observed that any submission that ‘imarti patthar or buildingstone’ is not covered by the G.O. dated 31.5.2012 cannot be accepted.This was predicated on the reasoning that the G.O. did not confine itselfto the word ‘boulder’ found in riverbeds as the same can be used forminerals found in riverbeds as well as those found in ‘in situ rock deposit’.FThis was also stated to be evident from Schedule I and II of the MiningRules which make it clear that the word ‘boulder’ is included in theheading of ‘building stone’ as well as found in a mixed form in theriverbed. Item 5 of Schedule I and Item 4 of Schedule II both use theword ‘boulder’ as building stones as well as when found in a mixed formin riverbeds.G

19. The High Court, thus, passed directions rejecting the prayersmade for consideration of applications for renewal of mining leases whichwere pending on 31.5.2012 and applications for grant of fresh leases 15 (supra)H16 (supra)

under Chapter II of the Mining Rules which were also pending on thesame day. An SLP preferred against this judgment was dismissed on4.3.2016. Not only that, it was emphasized that the Supreme Courtitself in the Sulekhan Singh[17] case approved of the decision in NarNarain Mishra[18] case.

20. The concluding argument was that the aforesaid position leavesno manner of doubt that the appellants were not entitled to any extensionor renewal of their old leases and at the most are entitled to refund oftheir respective lease amounts for the period for which the leases werenot permitted to operate, an aspect which has already been conceded onbehalf of the State Government in the proceedings dated 10.8.2020.Thus, the permission sought by the appellants for operating the expiredmining lease for the obstructed period was strongly opposed, leaving itfor the appellants to file an application under Rule 40(h) if the amount isto be refunded or adjusted.

21. We may note the supporting arguments of AIKPF qua theimpugned order of the NGT, which drew our attention to the prohibitionof mining in ESZ declared around the Kaimur National Park and that notbeing challenged by the appellants and hence the consequences of miningactivity for the obstructed period did not facilitate extension of leases.The aspect arising from the GO dated 31.5.2012 and the contentions ofthe State Government in that behalf was also sought to be supported bythe observations of the Supreme Court in Deepak Kumar and Ors. v.State of Haryana and Ors.[19 ]which in turn had extracted therecommendations of Ministry of Environment and Forest regarding thedefinition of the term ‘minor mineral’, which it said meant building stone,gravel, ordinary clay, ordinary sand other than sand used for prescribedpurposes and any other material which the Central Government may, bynotification declare to be a minor mineral.[20]

The Appellants’ Case:

22. The contentions of the appellants, on the other hand, led bylearned senior counsel, Mr. Mukul Rohatgi and Mr. S.P. Singh arepredicated on the settlement of the controversy in question in theaforementioned prior rounds of litigation which came up right to this 17 (supra)

18 (supra)

19 (2012) 4 SCC 629

20 Section 3(e) in The Mines and Minerals (Development and Regulation) Act, 1957

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ACourt and the appellants had succeeded in the same. The land for whichmining leases were granted to the appellants were excluded from thepurview of the Section 4 notification in pursuance of the settlementproceedings concluded as per directions in Banwasi SevaAshram[21]case. These settlement proceedings are pleaded to have beenignored while passing the impugned order and that too without notice toBthe appellants.

23. The appellants plead that suspension of the mining leases isnot on account of any factor attributable to them, i.e., there is no illegalmining or any such factor, which may weigh against the appellants. Thedelay in issuance of the Section 20 notification was solely because ofCthe delayed State action, and the issue was finalised only on 15.6.2020whereby the land categorised as revenue land was excluded from thepurview of forest land. The appellants alleged to have suffered for nofault of theirs but on account of the litigation initiated behind their backand the inaction of the State. This was, it was contended, a “third chapterDof litigation” on the very question of the consequences of Section 4notification – the first round in pursuance of the Banwasi SevaAshram[22]case right up to this Court and then the exclusion claim ofJAL which culminated in the order of the Tribunal dated 4.5.2016, whichit was contended, would have no bearing on their leases.

E24. The plea of the State of non-grant of extension of leases isstated to be contrary to record as that power has been exercised in thepast under Rule 68 of the Mining Rules. Illustratively, two judgmentshave been referred to where such extension of lease is recognised: J.P.Yadav v. Kanhaiya Singh & Ors.[23] and Jagdish Prasad Nishad v.State of UP & Ors.[24] In J.P. Yadav, the Apex Court observed thatFRule 68 confers upon the State the powers to extend lease for theobstructed period and subsequently in Jagdish Prasad Nishad, the HighCourt reiterated that any different view taken with respect to Rule 68and the powers it confers on the State would be in violation of theobservations of the Supreme Court in J.P. Yadav. Rule 68, it was urged,Gis comprehensive and complete in all respects and in the absence of anyspecific legislation recourse can be had to the said Rule.

21 (supra)22 (supra)23 CA No. 8621/2013 decided on 19.9.2013H24 (2015) 128 RD 150

25. On a linked aspect, keeping in mind the predicament that theappellants find themselves in on account of Court orders, learned counselrelied upon the observations in Beg Raj Singh v. State of UP & Ors.[25]for the proposition that the ordinary rule is that the Court should try toplace the successful party in the same position which they had been in,if the wrong complained against them would not have been done tothem. Moreover, it was argued that, it is a well-settled proposition of lawthat an act of the Court shall prejudice no one and the same is reflectedin the maxim, ‘Actus curiae neminem gravabit’. The factual matrixdealt with the same issue of extension of mining leases and in pursuanceof the judgment, the State of UP had issued a notification dated 31.7.2014to all DMs stating that the judgment makes it clear that wherever nothird party interest had been created, the area is vacant and it isestablished that the leaseholder has been prevented from operating itsmining lease for any period for no fault attributable to them, then theextension of mining lease for the corresponding period can be provided.The case of the appellants is submitted to squarely fall within the aforesaidcompass.

26. The appellants plead that the G.O. dated 31.5.2012 and forthat matter the New Mining Policy of 2017 will have no bearing as thataspect stands elucidated vis-à-vis the judgment in M/s. PeethambraGranite Pvt. Ltd. v. State of UP & Ors.[26] by the High Court Judicatureat Allahabad. In this case, the directions issued in Vijay Kumar Dwivedi[27]case have been held to have no application to granite building stone (insitu rock) as the mineral was not covered by the G.O. dated 31.5.2012.This aspect is stated to have been clarified by the subsequent G.O. dated26.2.2013 and the G.O. dated 22.10.2014, the latter, in fact, cancelledthe G.O. dated 31.5.2012 as also the G.O. dated 26.2.2013. Since31.5.2012 itself, a total of 35 mining leases are stated to have beengranted or renewed in District Sonbhadra.

27. We may add that Mr. Ranjit Kumar, learned senior counsel,advanced the additional plea of G.O. dated 31.5.2012 not being applicableon account of the lease being granted prior to that date in 2012.

28. On the aspect on which a Court query was posed, i.e., if thisCourt is not agreeable to renew the leases, what could be the method of 25 (2003) 1 SCC 726

26 WRIT - C.No. - 30066 of 2017 decided on 18.2.2020

27 (supra)

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Agrant of compensation, calculations have been filed by the appellants.Losses are stated to include idling of machinery and other infrastructure,the payment of salaries, providing staff accommodation as also the costsof litigation as part of calculation of compensation.

29. We may note in the end that one of the pleas advanced wasBthat the State Government itself had not been satisfied with the impugnedorder and had preferred Civil Appeal Nos.8804-8805/2019. However,when this fact was pointed out to Mr. V. Shekhar, learned senior counsel,on instructions, sought to withdraw the appeal stating that whatever bethe grievance against the impugned order, the same did not survive andthat the State Government was not desirous of pursuing the appeal. TheCappeal was, thus, dismissed as withdrawn on 29.9.2020 and the judgmentwas reserved in these appeals.

The Path We Take:

30. We have given considerable thought to the issue at hand,Dkeeping in mind the past litigation, the statutory provisions and the narrowcompass in which we have to examine the issue at hand.

31. There is no doubt that the prior rounds of litigation resulted inorders favouring the appellants. The present round of litigation, however,arose on account of an endeavour to prevent alleged illegal mining in theEvicinity of the Kaimur Wildlife Sanctuary located in Village Billi Markundiin Sonbhadra District. The Notification dated 20.3.2017 of the MoEFCCdeclared the ‘area in question’ as an ESZ under the provisions of theEPA. The sequitur was that the State of UP placed before the NGT thefactual position relating to the grant of leases and according to them,there were stated to be 33 leases operational outside the ESZ. TheFNGT wanted to examine this on account of the orders passed on 4.5.2016in T.N. Godavarman Thirumalpad[28] case for cancellation of all miningleases and all other non-forestry activities on areas notified under Section4 of the Forest Act. The whole object was to find out as to what layoutside of the reserved limit of the forest area and it was found thatthere were some active leases still in force on the lands which wereGcovered under the notification issued under Section 4 of the Forest Act.But despite this, the notification under Section 20 of the Forest Act hadnot been issued. The directions which arose from the impugned orderof the NGT on 13.7.2018, were towards this objective.

H28 (supra)

32. We have already noted that the leaseholders were, however,not made parties, not even in a representative capacity. This is thereason that these aspects could not be examined with the assistance ofthe appellants by the NGT, and the mining activity was stopped resultingin the appeals before us. We, thus, called upon the State of UP toperform their statutory duty of issuance of the notification under Section20 of the Forest Act and after some delay, the same was issued only on15.6.2020. It is only at that stage that the leases which were not covered,as in the case of the appellants, had a final clarity and the issue, receiveda closure. However, this did prevent the mining activity till then, fromthe time it was banned by the NGT. In the mean time, there are leaseswhich have expired and there are other leases which are still in force asis apparent from the detailed chart which we have set out at the inceptionof our judgment.

33. Insofar as the question whether to adopt the course ofextending the leases for the obstructed period or in some waycompensating the appellants for the same, is what was debated and wehave already noted the rival contentions of the two parties.

34. We have, at the inception, stated that we are conscious of thestatutory provisions and, thus, would not like to infringe the same, apartfrom the fact that it may not be an appropriate course of action as it mayopen other floodgates as if these rounds are not enough!

35. The judicial opinions referred to by learned counsel for theState of UP no doubt lead to a more or less consistent view that a merefiling of an application either for the grant of a lease or for the renewalof a lease does not confer a vested right for either grant or renewal of alease (Sukhan Singh[29] case). The statutory provision of Rule 68 of theMining Rules, which has been strongly relied upon by learned counselfor the appellants, is in the nature of a relaxation rule in special casesand has to be read with the Rules which provide the manner in whichthe exploitation of minerals should take place (Mohammad YunusHasan[30]case). Thus, the expression used is “in the interest of mineraldevelopment it is necessary so to do…” The idea, thus, is that the 29 (supra)

30 (supra)

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Aobjective of exercising such power should be to aid the development ofminerals and such judicial view is of significance as there was always apossibility of the misuse of such power, considering the history of mineralexploitation in our country. The statute was worded in a restrictivemanner deliberately giving only a restricted window and this legislativeBintent ought not to be defeated by supplanting it with any otherinterpretation. It is a well settled principle of interpretation that when thewords of a statute are clear and unambigous, recourse to differentprinciples of interpretation, other than the rule of literal construction,cannot be resorted to.[31] If a fresh grant or extension has to be madeunder the Mining Rules, it must be in accordance with Chapter II, andCthe provision for auction of leases in Chapter IV is in furtherance of atransparent procedure.

36. We do find ourselves in agreement with the submission of thelearned counsel for the State that the right to extension of lease eitherflow from a statutory provision or from the terms of the lease betweenDthe concerned parties. If there has been an obstructed period by reasonof a judicial interdict, that itself will not give window to extend the leaseby not following the statutory provisions, especially when the terms ofthe lease do not provide for any consequences thereof.

E37. We may notice that this view has been adopted by theAllahabad High Court in Vijay Kumar Dwivedi[32] case where the samequestion was examined. The leaseholders were obstructed/restrainedfrom carrying out the mining activity during the subsistence of their leasesupon the orders of the High Court or of the competent authority. TheFHigh Court adopted the view that after the issuance of the G.O. dated31.5.2012 this could not be done.

38. We are conscious of the fact that the G.O. dated 31.5.2012also finds elucidation in certain other judicial pronouncements and thatthis aspect was clarified by the subsequent G.O. dated 26.2.2013 andGthen both the G.Os. were cancelled vide G.O. dated 22.10.2014, whichwould hold the field. In pursuance thereof, 35 mining leases are statedto have been issued but that itself would not make a difference because 31 Delhi Transport Corporation v. Balwan Singh and Ors., 2019 SCC OnLine SC 27632 (supra)H

we have to see what are the subsequent developments and what courseto adopt as on date. Even if we consider the interpretation sought to beput forth by learned senior counsel for the appellants of an expandedview of Rule 68, giving power to the State to extend the lease for theobstructed period, would it now be exercisable is the question.

39. The State of UP had issued a New Mining Policy on 12.6.2017and this policy has no provision for grant of extension of time forobstructed period of mining lease and all mining leases were to bepermitted by e-tendering or e-auction alone. If the mining lease isextended for the obstructed period, it would amount to violation of thisNew Mining Policy and since the extension would have to be grantednow, we are unable to accept the contention of the learned senior counselfor the appellants that this should relate back to the date of the lease andnot as on date.

40. We may also notice that the statutory rule, Rule 40(h) of theMining Rules, extracted in para 16 itself, provides for the consequencesof the disruption of mining operations in a lease area owing to any specialcircumstances and requires the DM, with the prior approval of the StateGovernment, to adjust the amount equivalent to the installments payableduring the disrupted period against forthcoming installments. Thus,monetary adjustment is all that has been provided for by the statutemaking the legislative intent obvious, i.e., that if some amounts havebeen paid as installments under the mining lease for the period when thebeneficiary is not able to operate the mining area, only that amount isliable to be refunded. This is what forms the basis of the submissionmade on behalf of the State of UP that they are only liable to refund (i)any security deposit; or (ii) advance royalties paid to them, for thisobstructed period – something to which the State of UP has alreadyconsented before us as recorded in our order dated 10.8.2020. Theview taken by the High Court in Nar Narain Mishra[33] case no doubtwas in the context of the applicability of the G.O. dated 31.5.2012 andreceived the imprimatur of the Supreme Court in Sulekhan Singh[34]

33 (supra)

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Acase. But we have also to note that the observations dealt with the issuealso on the submission advanced that ‘imarti patthar or building stone’is not covered by the G.O. dated 31.5.2012 and that contention was notaccepted. The word ‘boulder’ was held to be included in the heading of‘building stone’ as well as when found in a mixed form in riverbeds andBthe prayer of the leaseholder was not accepted.41. We are conscious of the fact, as already noticed, that theappellants have suffered in the second round and the plea advanced ontheir behalf that if there were interdicts posed by a competent court thatCshould not put a party at a disadvantage. This rule is ordinarily to beaccepted for placing a successful party in the same position, which theyhad been in, if the wrong complained against them would not have beendone to them.[35] However, this cannot be a blanket proposition and wehave to consider the context in which the interdict was passed, i.e., toDpreserve the forest area. It is a different matter that some leases wereultimately found as within the restricted area and some outside (as is thecase of the appellants). Even if we take the notification of the State ofUP dated 31.7.2014 into account, and the authorisation of the DMs toextend the lease where no third party interest was created and the leases Ewere prevented from operation for no fault attributable to the leaseholders,the subsequent transparent policy of 2017 would weigh in favour of notexercising the jurisdiction to extend the leases for the obstructed period.

42. We, thus, find that the appropriate course of action to beadopted in this case cannot be to extend the lease for the obstructedFperiod but to direct that the security deposit, if not already refunded,should be refunded and the amount deposited by the appellants/leaseholders as advance royalties to the respondent/State be also paidback to them along with something more.

G43. We now come to that something more and we are takingrecourse to that course of action by exercising our jurisdiction underArticle 142 of the Constitution of India to do complete justice inter se DHARMENDRA KUMAR SINGH v. THE STATE OF UTTARPRADESH & ORS. [SANJAY KISHAN KAUL, J.]

the parties. We do this, keeping in mind that the appellants’ monies haveremained blocked and mining prevented for no fault of theirs, despitesuccess in earlier legal proceedings, and this aspect has to be balancedwith the statutory provision or for that matter, even the contractualprovisions not providing for extension of leases. We are, thus, of theview that since these monies have remained blocked, the monies shouldcarry simple interest @ 9% per annum.

44. Insofar as the security deposit is concerned, if it has alreadybeen refunded, it would naturally not carry any interest and if not, then itwill carry interest from the date it ought to have been refunded after theexpiry of the lease till it is actually refunded in case of expired leases.On the other hand, so far as the advance royalties for the obstructedperiod are concerned, the said amounts will carry interest @ 9% perannum from the date the obstruction occurred, i.e., 29.8.2018 and5.2.2019, as applicable to the respective appellants, till the date ofpayment.

Conclusion:

45. The appeals are, thus, decided as aforesaid with the limiteddirections and to the extent the observations in the impugned order arein contradiction thereto are set aside. It is directed that the followingamounts be refunded to the appellants:

i. Security deposit, if not already refunded, with simple interest @9% per annum from the date it ought to have been refunded afterthe expiry of the lease till it is now actually refunded, in case ofexpired leases; and

ii.Advance royalties, if not already refunded, with simple interest@ 9% per annum from the date of the obstruction occurred, i.e.,29.8.2018 and 5.2.2019 as applicable to the respective appellants,till the date of payment.

iii. Both the aforementioned amounts be refunded within twomonths from today.

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[2020] 12 S.C.R.

A46. The appeals are disposed of in terms aforesaid, leaving theparties to bear their own costs. All pending applications also standdisposed of.

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Kalpana K. Tripathy

Appeals diposed of.

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