Sun Industries vs The State of Tamil Nadu

P.K. Misra, J.—The facts giving rise to the present writ petition are as follows :-

The petitioner was initially granted mining lease for quarrying Limestone over an extent of 5.29 acres in S. No. 270/2B in Pandapuli Village,

Sankarankoil Taluk in Tirunelveli District for a period of three years. The lease deed was executed on 18.8.1983 and the period of lease was to

expire on 17.8.1986. Subsequently, the petitioner applied for grant of renewal of the said lease for a period of 20 years. The District Collector and

the Director of Geology and Mines recommended for grant of renewal for a period of 10 years. Considering the recommendation, the Government

granted extension over the said area for a period of 10 years with effect from 18.8.1986. Thereafter the petitioner filed further application for

renewal for further period of 10 years. However, such application for renewal was kept pending on some ground or the other and ultimately it was

rejected under the impugned order dated 5.3.2004 mainly on the ground that the area in question has been kept reserved for exploitation by the

Government through Tamil Nadu Cements Corporation Limited by G.O.Ms. No. 672 Industries (MMD.2) dated 31.8.1999. Such order is being

challenged in the present writ petition.

The main contention raised by the learned counsel appearing for the petitioner is to the effect that the basic reason for rejection of the renewal

application is untenable as G.O.Ms. No. 672 dated 31.8.19 99 itself indicates that such reservation in favour of Tamil Nadu Cements Corporation

Limited would not be applicable to the area already held under the prospecting licence or mining lease. It is further submitted in this connection that

without first deciding about the extension of lease in favour of the petitioner, such land should not have been reserved for exploitation by Tamil

Nadu Cements Corporation Limited. Learned counsel appearing for the petitioner has pointed out that as per the provisions contained in Rule 24-

B of the Mineral Concession Rules, the person is entitled for the period claimed by him not exceeding 20 years.

In the counter affidavit it is contended that even though the lease could have been extended for a maximum period of 20 years, the Government

in its discretion extended lease for a period of 10 years and such lease must be taken to have been expired on expiry of 10 years from 1986 and

therefore it cannot be said that the said area was not covered under the notification dated 31.8.1999, reserving the area for exploitation by the

Tamil Nadu Cements Corporation Limited.

Rule 24-B of the Mineral Concession Rules, being relevant is quoted hereunder:-

24-B. Renewal of mining lease in favour of a person using the mineral in his own industry.- Every person who is holding a mining lease for a mineral

which is used in his own industry shall be entitled for the renewal of his mining lease for a period not exceeding 20 years unless he applies for a

lesser period.

The first renewal was granted on 29.8.1990 for a period of 10 years with effect from 18.8.1986. From such order it is apparent that the

petitioner had applied for renewal for a period of 20 years and not for a lesser period. A fair reading of Rule 24-B makes it clear that a right of

renewal is vested with the lessee if he is using the mineral for his own industry. However, such renewal cannot exceed for more than 20 years. The

expression unless he applies for a lesser period in conjunction with the expression that such person shall be entitled for renewal of his mining lease

for a period not exceeding 20 years makes it clear that the right of renewal is for a period applied for by the lessee, but no discretion is with the

Government to renew it for a period lesser than the period applied for. The only embargo, however, is that the person cannot apply for extension

for a period not exceeding 20 years.

It is true that renewal was granted only for a period of 10 years and at that stage the petitioner did not complain. The fact that the petitioner did

not complain does not mean the petitioner has given up his right for renewal for a period of 20 years. It cannot be said that there was a conscious

waiver of right or acquiescence, particularly keeping in view the fact that a person while faced with situation with a State authority would always

prefer to avoid the path of confrontation. Therefore, merely because the petitioner had kept silent at that stage and did not seek for immediate

clarification that the renewal should be for a period of 20 years, it cannot be construed to mean that the petitioner had given up his right of renewal

for the period permissible. Since the petitioner had prayed for renewal for 20 years, the renewal should have been for a period of 20 years.

Thereafter the petitioner had filed an application for renewal for a period of 20 years well before the expiry of 10 years. This should have been

held to be in continuation of the earlier lease. At that stage, the only defect which is pointed out related to the nature of the land and it was

indicated as if a part of the land was Odai. However, at the time of initial grant and first renewal, it was accepted by the authorities that the land

was not a perennial source of water, but only water was collected during rainy season. If there was no objection at the time of initial grant or at the

time of first renewal, such reasoning cannot be used to defeat the right of the petitioner for renewal for the maximum period permissible.

The notification reserving the land in favour of Tamil Nadu Cements Corporation Limited itself envisages that such reservation would not be

applicable in case of areas already held under any prospecting licence or mining lease. The present application for renewal has been rejected only

on the ground that such area has been reserved in favour of Tamil Nadu Cements Corporation Limited. Since the original period of renewal must

be taken to be for a period of 20 years, it must be held that notification would not be applicable to this land.

For the aforesaid reasons, the present writ petition is allowed and the order passed by the Government is quashed. It is not known whether the

petitioner has been permitted to carry on the mining during the interregnum period. If he has been allowed to carry on the mining, lease shall

continue till the period of expiry of 20 years from 18.8.1986. However, if the petitioner has not been permitted to carry on the mining, he shall be

permitted to have a further renewal of 10 years from the date of fresh issuance of the order passed by the appropriate authority. This direction

should be given effect to within a period of two months from the date of receipt of the order.