K.T.Varghese vs State Of Kerala

Bechu Kurian Thomas , J.

The quarrying operations carried on by the 7th respondent were challenged by the appellants. The learned Single Judge rejected the challenge,

against which this appeal is preferred.

Challenges raised in the writ petition were under three heads. They were (i) the lease had lapsed on account of the failure of the lessee to operate

the quarry within the time prescribed under the Rules, (ii) the conduct of quarrying operations without an environmental clearance certificate was

impermissible, and (iii) written permission from the Kerala Water Authority, had not been obtained. As mentioned above, by the impugned judgment,

the learned Single Judge rejected all the aforesaid contentions, resulting in this appeal.

It was pleaded in the writ petition as well as in this appeal that the 3rd appellant is an association formed to consolidate and strengthen the agitation

against illegal mining and that the individual appellants are locals who are affected by the mining activities. It was stated that a lease was issued in

favour of one Sri.Joemon Joseph in the year 2011 by ignoring the objections and objectionable structures within the vicinity. After the death of the

original lessee, his wife - the 7th respondent obtained transfer of the lease into her name and thereafter obtained other licenses to conduct quarrying

operations. It was also alleged that, albeit the presence of many residential houses, an irrigation canal, and a huge water tank of the Kerala Water

Authority, located near the land, the quarrying lease was issued to the 7th respondent, illegally.

The counter affidavit of the 4th respondent-Geologist, pointed out that a movement permit was issued to the original lessee Sri.Jomon Joseph on 1-

08-2013 for removing 20,000 metric tonnes of granite building stones and that the said person had operated the quarry in 2013. It was further stated

that since the lease was issued in 2011, environmental clearance was required only at the stage of renewal. It was affirmed that all statutory distance

criteria contemplated under the Rules were satisfied and that the water tank was also beyond the stipulated distance from the quarrying area. It was

also mentioned that the mining plan submitted by the 7th respondent was approved on 06-03-2019, and that the movement permit was issued to the 7th

respondent on 09-09-2020.

The 7th respondent in her counter-affidavit stated that originally the lease was issued to her husband on 22-12-2011 which was valid for 12 years

and the same having been issued prior to 18-05-2012, environmental clearance certificate was not required. It was pleaded that the said issue was

considered earlier by this Court in Ext.R7(a) judgment and it was thereafter that directions were given to consider the application for grant of license

without insisting on the environmental clearance, pursuant to which license was issued. It was also pointed out that the mining operations had

commenced in 2013 itself and hence the lease had not lapsed.

We heard Adv. Abdul Jawad K. for the appellants. We also heard the learned Government Pleader Adv. Surin George Ipe for respondents 1 to 5,

Adv. Gopinadhan, the learned Standing Counsel for the 6th respondent and Adv. Babu S. Nair, for the 7th respondent. The contentions raised in the

writ petition were repeated by the learned counsel for the appellant with added vigour and we shall deal with each of them, one by one.

 (i) Lapse of lease:

The primary contention of the learned counsel for the appellants was that the lease had lapsed under section 4A(4) of the Mines and Minerals

(Development and Regulation) Act, 1957, read with Rule 29(1)(g) of the Kerala Minor Mineral Concession Rules, 1967, due to the failure to

commence mining operations within the time prescribed and that it had also lapsed due to discontinuance of mining operations for two years.

To appreciate the afore contentions, it is necessary to have a glance at the relevant provisions of law. Section 4A(4) of the Mines and Minerals

(Development and Regulation) Act, 1957 (for short 'MMDR Act') read with Rule 29(1)(g) of the Kerala Minor Mineral Concession Rules, 1967 (for

short '1967 Rules') and Rule 40(1)(g) of the Kerala Minor Mineral Concession Rules, 2015 (for short '2015 Rules') deals with lapse of a mining lease

or discontinuance of a mining lease. It is relevant to note that the 1967 Rules have been now replaced by the 2015 Rules. The above-referred

provisions of law are extracted below:-

Section 4A(4) of the MMDR Act reads as follows:

“4A. Termination of prospecting licences or mining leases:

(4) When the holder of a mining lease fails to undertake mining operations for a period of two years after the date of execution of the lease or having commenced

mining operations, has discontinued the same for a period of two years, the lease shall lapse on the expiry of the period of two years from the date of execution of the

lease or as the case may be, discontinuance of the mining operations:

Provided that the State Government may, on an application made by the holder of such lease before its expiry under this sub-section and on being satisfied that it will

not be possible for the holder of the lease to undertake mining operations or to continue such operations for reasons beyond his control, make an order, subject to

such conditions, as may be prescribed, to the effect that such lease shall not lapse.

Provided further that the State Government, may on an application by the holder of a lease submitted within a period of six months from the date of its lapse and on

being satisfied that such non commencement or discontinuance was due to reasons beyond the control of the holder of the lease, revive the lease from such

prospective or retrospective date as it thinks fit but not earlier than the date of lapse of the lease.

Provided also that no lease shall be revived under the second proviso for more than twice during the entire period of the lease.â€​

Rule 29(1)(g) of 1967 Rules reads as follows:

“29. Conditions of quarrying lease:- (1) Every quarrying lease shall be subject to the following conditions, and such conditions shall be incorporated in every

quarrying lease deed.

(g) Unless the State Government or the competent authority for sufficient cause permit or permits otherwise the lessee shall commence mining operations within three

months from the date of execution of the lease and shall thereafter conduct such operations in a proper, skilful and workman like manner.

Explanation:- For the purpose of this clause mining operations shall include the erection of machinery, laying of a tramway or construction of a road in connection

with the working of the mine.â€​

Rule 40(1)(g) of 2015 Rules reads as follows:

“40. Conditions of quarrying lease.-(1) Every quarrying lease shall be subject to the following conditions and/or any other conditions that may be imposed by the

competent authority and such conditions shall be incorporated in every quarrying lease deed.

(g) the lessee shall commence quarrying operations within two years from the date of execution of the lease and shall thereafter conduct such operations in a proper,

skillful and workman-like manner. Otherwise the lease shall lapse on the expiry date of the period of two years from the date of execution of the lease:

Provided that the competent authority may, on an application made by the holder of such lease within three years from the date of execution of the lease and, on

being satisfied that it will not be possible for the lessee to undertake mining operations or to continue such operations for reasons beyond his control, make an order,

subject to such conditions as may be prescribed, to the effect that such lease shall not lapse.

Explanation:- For the purpose of this clause, mining operations shall include the erection of machinery, laying of a tramway or construction of a road in connection

with the working of the mine.â€​

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Section 4A of the MMDR Act contemplates two situations when a mining lease can lapse. The first is when, after execution of the lease, the

lessee fails to undertake mining operations for two years, while the second is, when the lessee discontinues mining operations for a period of two years

after commencement of mining operations. In both these situations, the statute prescribes that the lease shall lapse, of course, subject to extensions

that can be granted as prescribed therein.

At this juncture, we notice certain incongruities between the MMDR Act and the 1967 Rules as well as the 2015 Rules. The second situation

mentioned in the preceding paragraph i.e; lapse of lease due to discontinuance for two years, is contemplated only in the MMDR Act and not under

the 1967 Rules or the 2015 Rules. Similarly, when the Act contemplates commencement of mining operations within two years of execution of the

lease, the 1967 Rules contemplated commencement of mining operations within three months of the execution of the lease. Further, the word

‘mining operations’ though defined under the Act in wide terms, the Rules provide an explanation to the word mining operations. From the

nature of issues raised in this appeal, it is necessary for us to appreciate the manner in which these seeming incongruities will have to be reconciled.

It is apposite to bear in mind that the MMDR Act was enacted in exercise of powers under Entry 54 of List I of the VII Schedule to the

Constitution of India. Section 14 of the MMDR Act specifies that the provisions of section 5 to 13 of the Act shall not apply to quarry leases in

respect of minor minerals. Initially, the inapplicability of MMDR Act to minor minerals was in respect of sections 4 to 13, however, by the

Amendment Act of 1986, section 4A was introduced and the inapplicability was confined to sections 5 to 13. Thus undoubtedly, section 4A applies to

minor minerals also. The MMDR Act conferred power upon the State Governments, as per section 15, to make rules relating to minor minerals. It is

in exercise of the power conferred under section 15 of the MMDR Act, that the Kerala Government enacted the Kerala Minor Mineral Concession

Rules, 1967, which has now been replaced by the Kerala Minor Mineral Concession Rules, 2015.

In this context, it is fruitful to refer to the decision in Crystal Granite Ltd v. State of Kerala (2019 (1) KLT 562), where this court has in paragraph

21 held, though in a different context, that, “It is in exercise of the powers conferred by section 15 that the KMMC rules have been framed.

Rule 29 of the said rules provide for payments to be made under the said rules. Rule 29 lays down the conditions subject to which quarrying

leases are to be granted.†It was further held in paragraph 26 that “As per section 15, the power to frame rules “for regulating the

quarry leases, mining leases or other mineral concessions in respect of minor minerals and for purposes connected therewith†has been

conferred on the State. The resultant position therefore, is that though the Centre had by the MMDR Act taken upon itself the power to

regulate mining and mineral development, insofar as the minor minerals are concerned, the said power has been given back to the State. In

other words, power of the Centre in respect of minor minerals including stone quarries has come to be invested in the State, without being

eclipsed by the other provisions of the MMDR Actâ€​.

Based on the above discussion and the proposition of law laid down as mentioned in Crystal Granites Case (supra), it has to be held that the

KMMC Rules supplement the MMDR Act, and neither the Act nor the Rules can be read in isolation of the other. Both the Act and the Rules are to

be construed harmoniously, except section 5 to section 13 of the MMDR Act, which sections do not apply to minor minerals.

The 1967 Rules provide for a period of three months to commence mining operation after execution of the lease. Section 4A(4) of the MMDR

Act, when brought into the statute book in 1987 by Act 37 of 1986, prescribed a period of one year from the date of execution of the lease to

undertake mining operations. By an amendment of 1994, the said period of one year in section 4A(4) was substituted with “two yearsâ€. Since

section 4A applies to minor minerals and the rules cannot contradict the Act, the period stipulated in the MMDR Act will prevail. Thus, from 1994

onwards, for a lease to lapse on failure to commence mining operations, the period to be reckoned is two years from the date of execution of the

lease. it is to be noted that this incongruity is no longer in existence as far as the 2015 Rules are concerned, as the period stipulated in the 2015 Rules

and the MMDR Act are now the same.

Similarly, even though the 1967 Rules and the 2015 Rules do not contemplate discontinuance of lease for two years as a ground to declare the

lease as lapsed, in view of the prescription in section 4A(4) of the MMDR Act, a lease of a minor mineral can lapse if there is discontinuance of the

mining operations for two years as prescribed under the Act.

The word mining operations is defined under the MMDR Act in section 3(d) as meaning “any operations undertaken for the purpose of

winning any mineralâ€​. By using the term “anyâ€​ in section 3(d) of the MMDR Act, the Parliament intended a very wide definition to be given to

the word 'mining operations’. As mentioned earlier, as long as the provisions of the 1967 Rules or the 2015 Rules, as the case may be, do not

contradict the MMDR Act, the provisions of the Act and the Rules must be read harmoniously and as supplementing each other in relation to minor

minerals. Viewed, in the above perspective, it can be seen that the explanation given under the 1967 Rules do not contradict but only explain the scope

of the word mining operations. The explanation to Rule 29(1)(g) of the 1967 Rules, as extracted earlier, makes it lucid that, mining operations will

include the erection of machinery, laying of a tramway, construction of a road in connection with the working of the mine. The explanation offered in

the 1967 Rules for the word mining operations cannot be thus lost sight of or ignored. As far as the State of Kerala is concerned, the word mining

operations appearing in section 4A of the MMDR Act will have to be construed in tune with the explanation given in Rule 29(1) (g) of the 1967 Rules

or Rule 40(1)(g) of the 2015 Rules as the case may be. In such circumstances, We are of the considered view that even the erection of machinery or

construction of a road inside the quarry to work the mine would constitute mining operations under section 4A, of the MMDR Act.

It is seen from the counter affidavit of the 4th respondent that a movement permit was issued by the Geologist in favour of the leaseholder in 2013.

The lease was issued on 22-12-2011 and the movement permit was issued only on 01-08-2013, i.e; within 20 months of the execution of the lease. As

we have observed earlier, the MMDR Act and the Rules complement each other and the period to commence mining operations after execution of

the lease will have to be reckoned as two years. Viewed in the above perspective, the respondent’s predecessor, having extracted and removed

the granite at least on 01-08-2013, can be said to have commenced mining operations within two years. We are also mindful of the contention of the

lessee and as found on facts by the learned Single Judge that the lessee had, even prior to 2013, commenced quarrying operations. Thus the lease

issued to the 7th respondent or her predecessor cannot under any circumstances whatsoever, be held to have lapsed.

The second limb of the argument of Adv. Abdul Jawad is on the lapse of lease due to discontinuance of operations for two years. It is an

allegation made by appellants as local residents. No Official of the Department of Mining and Geology nor the Competent Authority under the Rules

had raised an issue on discontinuance of the lease. No orders have been passed by the Geologist or the State Government that the lease had been

discontinued. No notice of any nature had been issued to the 7th respondent by the Geologist or the Mining and Geology Department alleging

discontinuance. Discontinuance of mining operations under a lease is a question of fact. This Court under Article 226 of the Constitution of India

cannot adjudicate such a disputed question of fact, more so when the term 'mining operations' is given a very wide meaning as per the MMDR Act.

Further, once the lease is issued and the operations under the lease commences, it confers vested rights upon the lessee. These vested rights of

the leaseholder cannot be taken away by mere assumptions or surmises. A quarrying lease is primarily a contract between the State Government and

the lessee. Rights flow from the contract upon the contracting parties. The lease being a statutory contract, none of the authorities appointed under the

statute and vested with the power to declare the lease as lapsed have raised an issue about discontinuance of the lease. They have not issued any

notice nor have they ever formed an opinion that the lease had lapsed. As mentioned earlier, no notice of any nature has ever been issued to the 7th

respondent or her predecessor alleging lapse of lease due to discontinuance as mentioned in section 4A of the MMDR Act.

It is relevant in this context, to refer to the decision reported in Common Cause v. Union of India and Others, [(2016) 11 SCC 455], where the

Supreme Court held that “vital vested rights in a lease holder cannot be curtailed without affording him an opportunity to repudiate the

impressions of the competent authority, namely that the leaseholder could not have (or had actually not) carried out mining operations for a

continuous period of 2 yearsâ€​.

Though the above-referred decision placed reliance upon Rule 28 of the Mineral Concession Rules, 1960, according to us, the said principle must

apply with equal vigour to the case of minor minerals also. Thus, once the lease has been granted and mining operations commenced, to declare the

lease as lapsed, it is not sufficient that an allegation is raised by a stranger who is not privy to the contract. Lapse of lease due to discontinuance is a

matter which has to be initiated, considered, and decided by the competent authority constituted under the Act. The impression of lapse of a lease is a

matter within the realm of the competent authority to consider and decide. A person who is a stranger to the contract, can, at the most, bring it to the

notice of the competent authority and nothing more. Thereafter, it is for the competent authority to decide on the question of discontinuance of the

lease after granting an opportunity of being heard to the lessee. In that process, the competent authority would even be appreciating various factors

including legal interdictions to continue mining operations, permissible contractual exclusions like force majeure, if available, etc. In the absence of any

decision by the competent authority alleging discontinuance of the lease issued to the 7th respondent, this Court cannot declare the lease as lapsed, as

alleged.

We are further fortified in the above view on account of Rules 72, 73 and Rule 74 of the 2015 Rules. As per the said provisions, when there is an

abandonment of a quarry or when there is a temporary discontinuance of work in a quarry for a period exceeding one month, the owner of the lease

or his manager must intimate the competent authority, by a notice about such discontinuance. If there is a failure on the part of the leaseholder or such

other person to intimate discontinuance of a lease for more than one month, then certainly it is upon the competent authority to issue a notice calling

upon the leaseholder to submit an explanation as to why the lease should not be declared as lapsed. This reasonable opportunity of defending the

allegation of lapse of a lease due to discontinuance of operations must be afforded before a vested right, is taken away.

Having considered the present case on merits, as discussed above, we find that the competent authority under the statute has not issued any notice

calling upon the leaseholder to explain any alleged discontinuance nor has any order been passed by the competent authority under the Act declaring

the lease issued to the 7th respondent as having lapsed. The admitted continuance of mining operations at present also stares against the contention of

the appellants. In such circumstances, we are of the firm opinion that the lease issued to the 7th respondent or her predecessor cannot be declared as

having lapsed.

(ii) Absence of Environmental Clearance Certificate.

The second contention urged by Adv. Abdul Jawad was that the quarrying operations could have continued only after obtaining environmental

clearance, especially after the decision in Deepak Kumar etc. v. State of Haryana and Others [(2012) 4 SCC 629].

Ext.P5 is the quarrying lease issued to the 7th respondent's husband. The said lease is dated 22-12-2011. The schedule to Ext.P5 specifies the

area as 3.0915 hectares. The lease was undoubtedly issued before the decision in Deepak Kumar, etc v. State of Haryana and Others reported in

[(2012) 4 SCC 629]. The environmental regime relating to mining, prevalent till the aforesaid decision can be summarised as follows: In 1994, a

notification (dtd. 27-01-1994) was issued by the Central Government, stipulating that expansion or modernization or setting up of mining projects of

major minerals covered by leases issued for more than 5 hectares cannot be carried out without obtaining an environmental clearance from the

Central Government. Minor minerals were not included in the 1994 notification. Subsequently, the 1994 notification was superseded by another

notification dated 14-09-2006, which categorized mining leases based on their extent, into A and B. Mining of minerals from an area more than 5

hectares and less than 50 hectares were categorized as falling under category B. A significant departure from the 1994 notification was that

environmental clearance was made necessary even for minor minerals whose area exceeded 5 hectares. In other words, from 2006 onwards, the

distinction between minor minerals and major minerals, where the lease area exceeded 5 hectares, was removed and both types of such leases

required environmental clearance.

However, by the decision in Deepak Kumar's case, the Supreme Court directed that “leases of minor minerals including their renewal for an

area of less than five hectares be granted only after getting environmental clearance from the MoEFâ€. Pursuant to the said direction and in

compliance thereof, the Government of India issued a notification dated 18-05-2012, including leases for minor minerals less than 5 hectares also, as

falling into category B.

While so, questions arose as to whether all existing leases, i.e; those leases issued prior to Deepak Kumar's case or the date of notification 18-05-

2012, must require an environmental clearance certificate to continue their operations. This Court by the decision, in All Kerala River Protection

Council v. State of Kerala, reported in (2015 (2) KLT 78) held that the existing leases i.e; those in existence prior to 18-05-2012 do not require an

environmental clearance certificate during the period of their validity. In clauses (i) and (iv) of the concluding paragraph of the said judgment, it was

stated as follows:

“82. In view of the foregoing discussion, we come to the following conclusions.

(i) In case where quarrying/mining/lease which were existing on the date of issuance of notification dated 14 9 2006 or on the date of issue of the order dated 18-

05-2012 by the Government of India, Ministry of Environment and Forests, with regard to area less than 5 hectares no environmental clearance with regard to

extraction of minor mineral is required. Notification dated 14-09-2006, contemplated obtaining environmental clearance only with regard to new projects/new

activities.

(iv) Judgment of the Apex court in Deepak Kumar's case (supra) did not contemplate environmental clearance for an area less than 5 hectares with regard to

existing mining lease/mining permits on the date of judgment. Paragraph 29 of the judgment clearly directed that leases of minor minerals, including their

renewal for an area of less than five hectares be granted by the State/Union Territories only after getting environmental clearance.

The aforesaid principle was reiterated by this court again in Najeeb M K v. Shoukath Ali and others (2015 (3) KLT 396), as well as in Nature

Lovers Forum and others v. State of Kerala and Others (2016 (1) KLT 75). In view of the above binding decisions, we have no hesitation to conclude

that the lease in question did not require an environmental clearance certificate, until its renewal thereof and there is no reason to interfere with the

finding of the learned single Judge.

(iii) NOC from the Kerala Water Authority.

The last contention put forth by Adv. Abdul Jawad related to the absence of permission under section 40(2) of the Kerala Irrigation and Water

Conservation Act, 2003, (for short 'the Irrigation Act') which according to the appellants must result in interdicting the quarrying operations of the 7th

respondent.

As per section 40(2) of the Irrigation Act, written permission is required from the Irrigation Officer, if a person conducts mining or quarrying

operations using explosives within a radius of 1 km from any bridge, dams, check dams or any other work, structure or construction owned, controlled

and maintained by the Government, a local authority or any other authority. In the decision in Sobin PK v. District Geologist, Ernakulam and Others,

(2020 (1) KLT 79), it was held that even a water tank belonging to the Kerala Water Authority would fall under the expression in the aforesaid

section.

The question as to whether a water tank belonging to the Kerala Water Authority would be covered under the Irrigation Act and whether the

decision in Sobin's Case (supra) requires reconsideration in view of the nature and object of the irrigation Act being solely for irrigation purposes apart

from the question as to the sanctity of the permission that can be granted by an irrigation officer when the tank is maintained by the water authority,

are all matters on which we need not vex our mind in the instant case, as those will only be academic in the present case. As rightly observed by the

learned Single Judge, in the instant case, there is a total lack of pleadings in respect of the distance or the existence of the water tank from the area of

lease.

Even though the learned counsel for the appellants invited our attention to paragraph 3 of the writ petition, as well as ground D, to impress upon

the availability of pleadings, we find that, except for bald and vague averments, the writ petition falls woefully short of the necessary pleadings to invite

a finding on the said question, especially under Article 226 of the Constitution of India. We also bear in mind at this juncture, that, at the time of grant

of the mining lease the Geologist had not directed the leaseholder to obtain written permission. The distance of the alleged water tank from the lease

area has not been specified and further no such objection has ever been raised by the Irrigation Officer also. In such circumstances, we agree with

the learned single Judge that the averments in the writ petition are vague and insufficient to justify consideration of the contentions raised by the

learned counsel based on section 40 of the Irrigation Act.

However, if the existence of a water tank as alleged, comes within the statutory prescription of section 40(2) of the Irrigation Act and the distance

prescribed therein, as the law now prevails, the leaseholders are bound to obtain appropriate permissions from the officer concerned. Since we affirm

the finding of the learned Single Judge on this issue solely on the ground of absence of pleadings, the question relating to the requirement to obtain

permission from the officer concerned is left open for consideration as and when the occasion arises in appropriate proceedings.

In view of the above, we find no merit in the above appeal, and the same is accordingly dismissed.