1. The Deputy Conservator of Forests, Vijayanagar Division, Hospet, by communication dated 8th April 2024 conveyed to the petitioner that the petitioner was permitted to carry out mining in the forest land in question for maximum period of two years from the date of commencement of the new lease as per the guidelines dated 31st March 2020, or till Stage II Approval under the provisions of Forest (Conservation) Act, 1980 is obtained or till the date the State Government or Government of India so decide, whichever is earlier, that the Lease Deed is executed on 18th April 2022 in favour of the petitioner, and since two years’ period has expired, the mining lease operations were required to be stopped.
1.1 The stoppage notice was indicative that the petitioner was required to obtain Forest Clearance in absence of which, it was not entitled to continue with mining activity.
2. It is the aforesaid decision which is sought to be challenged by the petitioner M/s. Minera Steel and Power Pvt. Ltd., by filing the present petitioner under Article 226 of the Constitution. While the petitioner has prayed to set aside the stoppage notice dated 8th April 2024, a further prayer is advanced to direct the respondent authorities to expedite the process of transfer of the Forest Clearance and other applicable approvals in favour of the petitioner, which were possessed by the erstwhile lessee-mine holder-M/s. Auro Minerals.
2.1 From the aforementioned stoppage communication dated 8th April 2024, it could be seen that it dealt with the transfer of forest clearance from previous lessee to the present lessee-the petitioner. It had have the references namely (i) Letter-guidelines dated 31st March 2020 of the Assistant Inspector General of Forest, New Delhi; (ii) The mining lease executed on 18th April 2022, registered on 28th April 2022, by Director, Mines and Geology Department, Bengaluru; (iii) The Forest Lease Agreement signed on 18th August 2022; and (iv) Working permission letter dated 24th August 2022 from the office of the Deputy Conservator of Forest, Ballari Division, Ballari.
3. The case of the petitioner may be noticed. The mining block identified as Mining Lease (ML) No.2584 to the extent of 32.05 hectares of land in Kalahalli, NEB Range Forest, Hospet Taluka, Ballari District, Karnataka was with one M/s. Auro Minerals Iron Ore Mine on lease basis. The block was subjected to e-auction on 21st January 2022 by the respondent- mining authorities for grant of Iron Ore. The petitioner was declared as preferred bidder in accordance with Rule 9(9)(iii) of the Mineral (Auction) Rules, 2015. Letter of Intent was issued in favour of the petitioner on 8th February 2022.
3.1 The guidelines were issued by the Ministry of Environment, Forest and Climate Change (Forest Conservation Division) dated 31st March 2020. It inter alia provided that the validity of Forest Clearance under the Forest Conservation Act, 1980 shall extend in favour of new lessee for a period of two years in respect of auction blocks whose lease expired under Section 8A(5) and 8A(6) of the Mines and Minerals (Development and Regulation) Act, 1957 (hereinafter referred to as ‘MMDR Act’), subject to realization of lumpsum amount at the rate of Rs.7.50 lakhs per hectare for total forest area within the mining lease. The said guidelines also provided that if the approval letter under the Forest Conservation Act is not obtained within two years by the new lessee from the commencement of the new lease, the mining operations will be stopped unless such approval is obtained.
3.2 The petitioner stated that before the petitioner became successful bidder in the auction to acquire legal rights, Parliament enacted the Mineral Law (Amendment) Act, 2020 which came into effect from 10th January 2020. Before looking at the mandate Section 8B, the relevant part of sub-section (5) and sub-section (6) of Section 8A may be extracted. Secdtion 8A deals with period of grant of a mining lease or minerals other than coal, ignite and atomic minerals,
“8A. Period of grant of a mining lease for minerals other than coal, lignite and atomic minerals
(1) ……
(2) ……
(3) ……
(4) …… Provided….
(5) Notwithstanding anything contained in sub-sections (2), (3) and sub-section (4), the period of lease granted before the date of commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015, where mineral is used for captive purpose, shall be extended and be deemed to have been extended upto a period ending on 31st March, 2030 with effect from the date of expiry of the period of renewal last made or till the completion of renewal period, if any, or a period of fifty years from the date of grant of such lease, whichever is later, subject to the condition that all the terms and conditions of the lease have been complied with.
(6) Notwithstanding anything contained in sub-sections (2), (3) and sub-section (4), the period of lease granted before the date of commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015, where mineral is used for other than captive purpose, shall be extended and be deemed to have been extended upto a period ending on 31st March, 2020 with effect from the date of expiry of the period of renewal last made or till the completion of renewal period, if any, or a period of fifty years from the date of grant of such lease, whichever is later, subject to the condition that all the terms and conditions of the lease have been complied with.
(7) …..
(7A)…..
(8) …..
(9) …..”
3.3 Section 8B came to be inserted after Section 8A in the Act. Section 8B of the Act as amended in 2020 is as under,
"8B. (1) The provisions of this section shall apply to minerals, other than the minerals specified in Part A and Part B of the First Schedule.
(2) Notwithstanding anything contained in this Act or any other law for the time being in force, the successful bidder of mining leases expiring under the provisions of sub-sections (5) and (6) of section 8A and selected through auction as per the procedure provided under this Act and the rules made thereunder, shall be deemed to have acquired all valid rights, approvals, clearances, licences and the like vested with the previous lessee for a period of two years:
Provided that subject to such conditions as may be prescribed, such new lessee shall apply and obtain all necessary rights, approvals, clearances, licences and the like within a period of two years from the date of grant of new lease.
(3) Notwithstanding anything contained in any other law for the time being in force, it shall be lawful for the new lessee to continue mining operations on the land, in which mining operations were being carried out by the previous lessee, for a period of two years from the date of commencement of the new lease.".
3.4 The Parliament brought out another Mines and Minerals (Development and Regulation) Amendment Act, 2021 with effect from 28th March 2021 whereby Section 8B of the MMDR Act was substituted, to be as under,
“8B. Provisions for period and transfer of statutory clearances
(1) Notwithstanding anything contained in this Act or any other law for the time being in force, all valid rights, approvals, clearances, licences and the like granted to a lessee in respect of a mine (other than those granted under the provisions of the Atomic Energy Act, 1962 (33 of 1962) and the rules made thereunder) shall continue to be valid even after expiry or termination of lease and such rights, approvals, clearances, licences and the like shall be transferred to, and vested; subject to the conditions provided under such laws; in the successful bidder of the mining lease selected through auction under this Act:
Provided that where on the expiry of such lease period, mining lease has not been executed pursuant to an auction under provisions of sub- section (4) of section 8A, or lease executed pursuant to such auction has been terminated within a period of one year from such auction, the state government may, with the previous approval of the Central Government, grant lease to a Government company or corporation for a period not exceeding ten years or till selection of new lessee through auction, whichever is earlier and such Government company or corporation shall be deemed to have acquired all valid rights, approvals, clearances, licences and the like vested with the previous lessee:
Provided further that the provisions of sub- section (1) of section 6 shall not apply where such mining lease is granted to a government company or corporation under the first proviso:
Provided also that in case of atomic minerals having grade equal to or above the threshold value, all valid rights, approvals, clearances, licences and the like in respect of expired or terminated mining leases shall be deemed to have been transferred to, and vested in the Government company or corporation that has been subsequently granted the mining lease for the said mine.
(2) Notwithstanding anything contained in any other law for the time being in force, it shall be lawful for the new lessee to continue mining operations on the land till expiry or termination of mining lease granted to it, in which mining operations were being carried out by the previous lessee.”
3.4.1 In view of the Amendment of 2020 in the MMDR Act, the Rules called The Minerals (Other than Atomic and Hydro Carbon Energy Minerals) Concession Rules, 2016 were amended to insert Rule 9A, of which sub-section (4) provided as under,
“(4) The vesting order issued under this rule shall be valid for a period of two years from the date of execution of new lease deed or till the date of getting all fresh approvals, clearances, licenses, permits, and the like, whichever is earlier.”
3.4.2 Sub-rule (4) of Rule 9A was again amended on 2nd November 2021 to be as under,
“(4) In case the new lessee proposes any change in the conditions attached to the approvals, clearances, licenses, permits, and the like, transferred under the vesting order, the lessee will obtain the approval of the same, under the laws for the time being in force.”
3.4.3 Sub-rule (5) of Rule 9A was amended pursuant to Amendment of 2020 was thus,
“(5) It shall be lawful for the new lessee to commence and continue mining operations on the land in which mining operations were being carried out by the previous lessee, after the execution of the lease deed for a period of two years as provided in Section 8-B of the Act:”
3.4.4 It was further amended as under,
“(5) It shall be lawful for the new lessee to commence and continue mining operations on the land in which mining operations were being carried out by the previous lessee, after the execution of the lease deed till expiry of termination of mining lease granted:”
3.4.5 It is also relevant to note Section 2 of the Forest Conservation Act, 1980 which deals with the de-reservation of the forests or use of forest land for non-forest purpose,
“2. Restriction on the de-reservation of forests or use of forest land for non-forest purpose-
Notwithstanding anything contained in any other law for the time being in force in a State, no State Government or other authority shall make, except with the prior approval of the central Government, any order directing,-
(i) …
(ii) that any forest land or any portion thereof may be used for any non-forest purpose;
(iii) …
(iv) … Explanation.- …
(a) …
(b) …”
3.5 A vesting order dated 25th March 2022 came to be issued by the Nodal Officer-respondent No.1, providing that all valid rights, approvals, clearances, licences and like which were with previous lessee-M/s. Auro Minerals in respect of ML No.2584 would deem to have vested in favour of the petitioner. In that view, different departments and agencies submitted various approvals to respondent No.1 through respondent No.2 which included, among other documents and approvals, Forest Clearance No.FEE 30 FFM 2020, Bengaluru dated 19th June 2020 in respect of land to the extent of 30 hectares.
3.5.1 The petitioner thereafter stated that in compliance of conditions of the tender document, the petitioner made payment towards upfront amount, first instalment amount, towards expenses incurred by the State Government, and thereafter also deposited the second and third installments of upfront payment, by paying the total of Rs.8,76,07,425/- and also the stamp duty amount. It was stated that new mining lease bearing ML No.0019 came to be executed on 18th April 2022 in favour of the petitioner for Iron Ore and Manganese Ore for a period of 50 years.
3.5.2 It was stated that the forest lease agreement was entered into on 18th August 2022, that the petitioner made payment of Rs.2,32,50,000/-, and that the State Level Environment Impact Assessment Authority, Karnataka issued environmental clearance and the environmental clearance granted to the erstwhile lessee which was transferred in favour of the petitioner in 26th July 2022. A consent of operation came to be extended by the Karnataka State Pollution Control Board which was dated 3rd November 2008 in favour of the erstwhile M/s. Auro Minerals, which was extended on 3rd February 2024. The working permission was granted to the petitioner on 24th August 2022.
3.6 It is the case of the petitioner that it was to its shock and surprise that the impugned show cause notice dated 8th April 2024 was received from respondent No.5-Deputy Conservator of Forest, notwithstanding. It is the grievance of the petitioner there was no question of ordering cessation of mining activity and it could not have been viewed that the period had expired for permission in view of clause (a) of the guidelines dated 31st March 2020, and that fresh guidelines were issued by Ministry of Environment and Forest on 7th July 2021, however, the authority placed reliance on the guidelines dated 31st March 2020 and the vesting order to suggest that the approvals including the validity of Forest Clearance had expired on 17th April 2024, with completion of two years.
3.7 The petitioner rested and erected its case on the Amendments brought about in the MMDR Act in the year 2020 and the year 2021, whereby Section 8B was respectively inserted and substituted in the statute book. It is the case that deeming provision was inserted by 2020 Amendment Act, whereby the successful bidder would acquire all valid rights, approvals, clearances, etc. for a period of two years. It was then submitted that as per the substituted Section 8B in the year 2021, it was contemplated that all valid rights, approvals, clearances, etc. granted in respect of the mine shall continue to be valid even after expiry or termination of lease and that they shall stand vested in the successful bidder of the mining lease selected in auction, subject to the conditions provided under the laws.
3.7.1 It was stated by the petitioner that it was entitled to the benefit of aforesaid Amendments in the provision, therefore, all approvals and clearances including the forest clearance stood automatically extended to continue uninterrupted till the expiry of lease period. It was stated that petitioner took steps to write to respondent No.5 to expedite the process of transfer of forest clearance, and that the petitioner submitted necessary report of the conditions mentioned in the guidelines dated 7th July 2021.
3.8 The crux of the case of the petitioner, thus, appears to be that by virtue of the latest amendment in Section 8B of the Act, all the approvals and clearances including Forest Clearance shall get transferred to the holder of the letter of intent to continue to hold good even after expiry and that the cap of two years’ period contemplated was lifted and the same would not operate.
4. Assailing the impugned stoppage order, learned Senior Advocate Mr. D.L.N. Rao assisted by learned Advocate for the petitioner, raised the following submissions,
"(i) The petitioner was declared as preferred bidder and a letter of intent was issued in its favour on 08.02.2022. By amendments, deeming provision was inserted, whereby it was provided that successful bidder would acquire all valid rights, approvals, clearances etc which were vested with the previous lessee, for a period of two years.
(ii) Consequentially, Forest Clearance under the Forest Conservation Act, 1980 (hereinafter referred to as the ‘Forest Act’) also stood extended in favour of the petitioner for a period of two years in respect of the auctioned blocks whose lease expired under Section 8A(5) and 8A(6) of the 1957 Act automatically.
(iii) No intervention of law was required as the provision would automatically operate and the petitioner would get benefit thereof.
(iv) The petitioner paid Rs.1,90,30,826/- towards first installment on 29.01.2022 of the upfront payment; amount of Rs.18,52,600/- was paid towards expenses incurred by the State; second and third installments towards upfront payment to the extent of Rs.1,90,30,826/- and Rs.5,70,92,477/- were deposited on 09.02.2022 and 06.04.2022 respectively. The petitioner also paid the stamp duty.
(v) The vesting order dated 25.03.2022 provided that all valid rights, approvals, clearances etc which were available with the previous lessee M/s. Auro Minerals would vest with the petitioner.
(vi) By virtue of the amendment in 2021, Section 8B of 1957 Act, provided that all valid rights, approvals etc which were vested shall automatically continue to be valid even after expiry of termination of lease. As a result of this amendment, two years period stood obliterated and the valid consents and clearances were transferred to the holder of the Letter of Intent to continue to hold good even after its expiry. Section 8B as it stood prior to 2021 amendment ceased to exist, therefore, limitation of two years stood lifted to remain valid.
(vii) The statement of objects and reasons accompanying the 2021 amendment was highlighted to state that the changes brought to Section 8B was to maintain continuity in mining operations after change of lessee.
(viii) The impugned stoppage notice stands in contravention of the statutory provisions contained in Section 8B of the 1957 Act brought about by 2021 amendment.
(ix) The stoppage notice came to be mechanically issued without considering the fresh guidelines issued by the Ministry of Environment, Forests and Climate Change on 07.07.2021.
(x) Section 8B(2) as amended in 2021 operates in favour of the petitioner to provide that it shall be lawful for the new lessee to continue mining operations on the land till expiry or termination of mining lease granted to it.
(xi) In the impugned notice issued, the Deputy Conservator of Forests - respondent No.5 by wrongly relied on the previous guidelines dated 31.03.2020 issued by the Ministry of Environment, and erroneously concluded that period of two years for vesting of all consents and approvals expired on 17.04.2024.
(xii) Learned Senior Advocate relied on the decision of the Supreme Court in Mohinder Singh Gill vs. The Chief Election Commissioner [AIR 1978 1 SCC 405], to highlight the principle that order of the statutory authority when based on particular set of grounds, the ground cannot be improved upon or supplemented by way of affidavit."
4.1 Learned Additional Government Advocate Smt. Niloufer Akbar for respondent-State raised her submissions on the basis of a detailed statement of objections-cum-reply affidavit filed on behalf of the respondents. After highlighting the factual details, it was contended that the requirement of obtaining Forest Clearance, though corresponding, but was an independent requirement. It was submitted that, the Forest Clearance which was given by the Ministry of Environment in favour of the previous lessee lasted till 2019 and subsequently because of deeming extension until 22nd May 2021 and thereafter finally expired on 17th April 2024 upon completion of two years period calculated from the date of grant of lease to the petitioner. It was submitted that this extension was due to deeming fiction, however remained upto two years.
4.2 Learned Additional Government Advocate took the Court through Section 8B as amended by Amendment of 2020 and further amended as per Amendment Act of 2021 to submit that the outer limit of two years was never done away with. It was submitted that the guidelines dated 31st March 2020 read with guidelines dated 7th July 2021 of the Ministry of Environment and Forest were applied to the petitioner which made in incumbent for the petitioner to obtain fresh Forest Clearance after 2 years.
4.3 It was emphatically submitted that in Section 8B of the MMDR Act as amended in 2020 and 2021, contained the words ‘valid’ and ‘subject to the conditions provided under such laws.’ It was contended on one hand, the Forest Clearance of the erstwhile lease holder was not valid for several defects, and at the end of two years, it was the onus in law on the petitioner to get it removed, for, the forest clearance was
vested and was transferred in its favour accordingly only. It was highlighted that Working Permission mentioned that two years period was the validity period for the Forest Clearance. She relied on Section 2(ii) of the Forest Conservation Act which prohibits the use of any forest land or portion thereof for non-forest purpose, without prior approval of the Central Government.
5. Having noticed the controversy and the contentions, it will be useful, before proceeding further, to trace and highlight the basic undisputed facts available from the pleadings and the record. Initially, in respect of North-East range block of Kalahalli, mining lease deed was made in favour of one Shri Krishnadeva Raya for a period of 20 years on 24th July 1956 which was in Survey No.1 admeasuring 464 acres of the village Kalahalli. The first renewal was effected in favour of one Smt. Rani Lalkumari for 5 years as per deed dated 24th March 1977. The second renewal was also in favour of same party by virtue of Deed dated 22nd May 1981 for 20 years with effect from 24th July 1981. Thus, the lease was made valid upto 23rd July 2001.
5.1 Subsequently, the lease was transferred in favour of M/s. Auro Minerals who was a lessee predecessor to the petitioner, who got the lease from Smt. Rani on 7th January 1986. The third renewal was in favour of M/s. Auro for a period of 20 years with effect from 23rd May 2021 for which the lease deed was executed. The period of this lease in favour of M/s. Auro expired on 22nd May 2021. As stated above, it is a lease for 31 hectares of land. The Ministry of Environment and Forest, Government of India accorded approval on 13th May 1999 for Forest Clearance under Section 2 of the Forest Conservation Act, 1980 for the said land which was made coterminus with the period of mining lease. This Forest Clearance expired on 12th May 2019. On 19th June 2020, approval was accorded for extension upto 22nd May 2021.
5.1.1. The present petitioner became successful bidder on 21st January 2022 and as already stated above, Letter of Intent was issued. The approval including the Forest Clearance which stood in favour of M/s. Auro Minerals-the previous lessee, as given and extended as above, was transferred and allotted to the petitioner. It expired, to be stated at the cost of repetition, on 22nd May 2001. The guidelines of the Ministry dated 31st March 2020 permitted the Forest Clearance to operate for two years. The forest lease agreement dated 18th August 2022, the vesting order and other documents reflected expressly the condition about validity of Forest Clearance for 2 years. Working permission dated 24th August 2022 given to the petitioner also clearly mentioned the same in its stipulation. These documents are highlighted for their effect in the succeeding stages of discussion.
5.1.2 The Central Government promulgated the 2020 Amendment providing in Section 8B of the Act inter alia that successful bidderof the leases, which expired under sub- Section (5) and sub-Section (6) of Section 8A of Amendment Act, 2015 shall be deemed to have acquired all ‘valid’ rights, approvals, clearances, etc. The new Act of 2020 provided that it will be permissible for new lessee to continue the mining operations carried out by the previous lessee, for a period of two years from the date of commencement of new lease. It is to be noticed that the erstwhile lessee-M/s. Auro Minerals had the lease period of 20 years with effect from 23.05.2001 under the MMDR Act, 1957 and this period of 20 years got over on 22.05.2021. It is to be further noted that the Forest Clearance accorded to the said erstwhile lessee, which was under Section 2 of the Forest Conservation Act, 1980, was co-extensive with the lease period to last until 22.05.2021 which was the date of expiry of the ‘validity’ of the Clearance.
5.1.3 It may be true that by virtue of deeming provision in Section 8B inserted as per the Mineral Law (Amendment) 2020, the said Forest Clearance which expired on 22.05.2021 was treated as continuous, however, only for two years, within which or whereafter the petitioner was obliged to seek the renewal. When the auction was ended in favour of the petitioner, the said Forest Clearance standing in the name of erstwhile lessee-M/s. Auro, subsisted. However, on the date of execution of the lease agreement, though it had expired for its validity, by virtue of the deeming fiction, it was treated as valid to vest with the petitioner to continue for two years. It ceased to remain valid after two years.
5.2 The obligation for the petitioner to get Forest Clearance renewed after two years, in addition to operation of law, arises from the following considerations.
5.2.1 The guidelines dated 31st March 2020 issued by the Ministry of Environment and Forest in light of the Mineral Laws (Amendment) Act, 2020 read with the guidelines dated 7th July 2021 issued by the Ministry which was pursuant to the Mines and Minerals (Development and Regulation) Act, 2021, operated to bind the petitioner in the above regard.
5.2.2 The above guidelines dated 31st March 2020 as contained in the letter of the Principal Secretary, Forest, addressed to all State and Union Territories, are reproduced hereunder,
"Government of India
Ministry of Environment, Forest and Climate Change
(Forest Conservation Division)
To,
Indira Paryavaran Bhawan, Aliganj, Jorbagh Road, New Delhi-110003 Dated: 31st March, 2020
The Principal Secretary (Forests), All State/UT Governments
Sub: Guidelines under Forest (Conservation) Act, 1980, in pursuance of the "The Mineral Laws (Amendment) Act, 2020" - regarding.
Sir,
The Central Government has
promulgated 'The Mineral Laws (Amendment) Act, 2020', on 13th March, 2020, which inter-alia provides that successful bidder (i.e. the new lessees) of the mining leases expiring under the provisions of sub-section (5) and (6) of Section 8A of Mines and Minerals (Development & Regulation) Amendment Act, 2015, shall be deemed to have acquired all valid rights, approvals, clearances, licenses and like vested with the previous lessee for a period of two years. The said new Act also
provides that it will be lawful for the new lessee to continue mining operations on the land, in which mining operations were carried out by the previous lessee, for a period of two years from the date of commencement of new lease.
Therefore, in the light of promulgation of the above said Act, the matter related to the validity of the approvals granted under Forest (Conservation) Act, 1980 (FCA-1980) was examined in the Ministry. After careful consideration of the issue with a view to align the provisions of relevant guidelines under the Forest (Conservation) Act 1980 in pursuance of the concerned provisions under 'The Mineral Laws (Amendment) Act, 2020', para 7.3(vi), as given under, is inserted in Chapter-7 of the Handbook of Forest (Conservation) Act, 1980:
a. A new lessee of the mining leases expiring under the provisions of sub-section (5) and (6) of Section 8A of Mines and Minerals (Development & Regulation) Amendment Act, 2015, shall be deemed to have acquired all valid rights, approvals, clearances, licenses and like vested with the previous lessee for a period of two years. The new lessee shall continue mining operations on the land, in which mining operations were carried out by the previous lessee, for a maximum period of two years from the date of commencement of new lease on the same terms and conditions which was stipulated in the approval under FCA-1980, obtained by the previous lessee.
b. The new lessee, after obtaining Letter of Intent (Lol), shall obtain approval under the FCA-1980 following due procedure, for non- forestry use of forest land falling in such mining lease for continuing mining operation beyond two years during which it has deemed to have acquired rights to undertake mining operation. In case, approval under the FCA-1980 is not obtained within the stipulated time of two years of commencement of lease by the new lessee, the mining operation shall be stopped till such approval has been obtained.
c. While obtaining approval under the provisions of FCA-1980 as per clause (b) above, the new lessee shall pay the Net Present Value (NPV) for the total forest area located within the mining lease, along with any other amount due as per guidelines issued by Government of India from time to time. However, on the date of issuance of Lol, the state government shall realize a lump sum amount at the rate of Rs 7.50 lakh per ha (for the total forest area within the mining lease) from the new Lol holder. This amount shall be deposited into the account of CAMPA, which will be adjusted against actual compensatory levies payable on the forest land, at the time of approval as per clause (b) above.
This issues with the approval of competent authority.
Yours faithfully,
Sd/- (Sandeep Sharma)
Assistant Inspector General of Forests”
5.2.3 In the context of the above guidelines, it is to be noted that when the petitioner was allotted lease and the lease deed was executed in his favour on 18th April 2022, the guidelines applied for their conditions. It was provided in the aforesaid guidelines inter alia that new lessee shall continue the mining operations on the land in which such operations were carried out by the previous lessee, for maximum period of two years from the date of commencement of new lease on the same terms and conditions which were stipulated in the approval under the Forest Conservation Act, 1980, as obtained by the previous lessee.
5.2.4 The conditions further contemplated that the new lessee after obtaining the Letter of Intent shall obtain approval under the Forest Act for the non-forest use of the forest land falling in such mining lease, if the mining operations are to be continued beyond two years. The petitioner as an auction purchaser, deemed to have acquired the mining rights for the period of two years. The guidelines further stipulated in clear terms that if the approval under the Forest Act is not obtained within two years, the mining operations would be liable to be stopped and discontinued till such approval is obtained.
5.2.5 In other words, the guidelines dated 31st March 2020 required the petitioner to obtain Forest Clearance approval within two years from the date was granted the mining lease by executing the lease deed upon becoming a successful auction bidder. It is to be recollected that the mining lease was executed on 18th April 2022 and the two years period expired on 17th April 2024. The petitioner was enjoined to obtain the Forest Clearance afresh. Within two years such clearance was not obtained. The provisions of Amendment of 2020 and the aforesaid guidelines issued in light of the amendment in the Section 8B of the Act stand in harmony to bind the petitioner with regard to condition of two years’ validity for the Forest Clearance.
5.3 It was the contention canvassed in vain by the petitioner that the above position was lifted when new guidelines were issued on 7th July 2021 pursuant to amendment of 2021 in the Mines and Minerals (Development and Regulation) Act, 1957. It could be seen from the contents of the new guidelines also that the conditions which operated erstwhile, were made to continue to apply.
5.3.1 In order to appreciate the above, the relevant part of the guidelines dated 7th July 2021 is extracted hereinbelow,
"In light of the above provisions of the MMDR Amendment Act 2021, the matter related to the validity of the approvals granted under Forest (Conservation) Act, 1980 (FCA- 1980) was examined in the Ministry, and with a view to align the provisions under the two Acts, it has been decided that transfer of approval under FCA-1980 in such mining leases may be considered subject to the following conditions:
i. Complete compliance of such terms and conditions as stipulated in the approval granted previously under the FCA-1980, and rules and guidelines framed thereunder in respect of the concerned mining lease has been made. The non-compliance of conditions, if any, stipulated in the approval granted to the erstwhile agency under FCA-1980, which were required to be complied before handing over the forest land to such agency, shall be transferred as liabilities to the new allocattee, and in such case, complete compliance of such conditions shall be made prior to handing over of forest land to the new allocattee. For the remaining conditions, the new allocattee will make an undertaking to comply with, before handing over of the forest land. It is clarified that in case of violation of any of the conditions which was done during the period of previous allocattee and which constitutes an offence under the FCA-1980, the penal clauses will be invoked against the previous allocattee only and not against the new allocattee.
ii. Approval under FCA-1980 was valid on the date of expiry of previous lease.
iii. Mining operations will be restricted to the forest area for which approval under Section 2 (ii) of the FC Act, 1980 has been obtained by the erstwhile user agency. No non- forest use of such forest lands falling within the lease shall be allowed, for which approval under Section 2(ii) has not been obtained by the State Government. Mining in such areas may be allowed only after obtaining prior approval of the Central Government under Section 2 (ii) of the FCA-1980.
iv. The State Government shall ensure that the amount of Net Present Value, Safety Zone Plantation and Compensatory Afforestation (CA), if not deposited earlier, has been deposited prior to handing over of the
forest land to the new allocattee. Also, in case the CA land has not been made available previously, the forest land shall be handed over to the new allocattee only after the corresponding CA land has been accepted by the competent authority as per the extant procedures for acceptance of CA lands for a new proposal.
v. Mining operations and other activities shall be carried out as per the land-use allowed in the approval under the FCA-1980. Any change in the land use on account of any valid reason shall be effected with the prior approval of the Central Government.
vi. Reclamation of the mined out forest area in the whole lease area as per the approved Mining Plan shall be an obligatory condition for the new allocattee.
vii. Transfer fee, as prescribed in the relevant guidelines incorporated in the Handbook of Forest (Conservation) Act, 1980 shall be realized from the new allocattee and deposited into the account of CAMPA of the State concerned.
viii. Transfer of approvals to new agency may be accorded by the concerned State Government/UT Administration subject to fulfilment of conditions/ provisions stipulated in the relevant guidelines of the Ministry.
This issues with the approval of the competent authority in the Ministry.
Yours faithfully,
Sd/- (Sandeep Sharma)
Assistant Inspector General of Forests”
5.3.2 As could be seen from the above quoted condition (i) in the guidelines dated 7th July 2021, it provides for compliance of such terms and conditions provided for in the previously granted approval under the Forest Conservation Act, 1980, and the rules and guidelines thereunder. It states that the non- compliance of such conditions on the basis of which the approval was granted to the erstwhile agency under the Forest Act would be required to be complied with. The forest approval has to be valid on the date of expiry on the previous lease, as stated in condition No.(ii). As per condition No.(iii) above, it is stipulated that though the non-forest use of forest lands falling within the lease may be allowed, the mining in such area will be permissible only after obtaining prior approval of the Central Government under Section 2(ii) of the Forest Conservation Act, 1980. It could not be said, therefore, by any stretch of logic, that the two years condition stood omitted or obliterated.
5.3.3 The Government of India, Ministry of Environment issued consolidated guidelines and clarifications under Van (Sanrakshan Evam Samvardhan) Adhiniyam, 1980 (renamed Forest Conservation Act) and Rules of 2023.
5.4 The stipulation that the forest land is extended for mining purpose under the Forest Act, 1980 for maximum period of two years is a condition which is applied and incorporated to bind the petitioner, as a common thread in all correspondence and documentations entered into with regard to the grant of lease.
5.5. Came to be issued in favour of the petitioner a vesting order dated 25th March 2022 by respondent No.1-Nodal Officer, which was under Section 8B of the MMDR Amendment Act, 2020 in respect of mining lease in question No.2584 which then stood in the favour of M/s. Auro Minerals and expired under Section 8A(6) of the MMDR Act, 1957. The copies of the valid approvals mentioned therein which were in favour of the previous lessee M/s. Auro included Forest Clearance dated 19th June 2020.
5.5.1 The aforestated vesting order/Government Order dated 25th March 2022 read as under,
“Pursuant to the Notification E – CI 31 MMM 2020 dated 02.04.2020 and in exercise of the powers conferred under Rule 9(A)(2) of the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession (Amendment) Rules, 2020 and 2021, I hereby order that all the valid rights, approvals, clearances, licenses and like vested with the previous lessee in respect of M/s. Auto
Minerals, M L No.2584 are deemed to have vested in favour of the Successful Bidder i.e., M/s. Minera Steel and Power Pvt. Ltd., on the same terms and conditions of every rights, approvals, clearances, licenses and like which vested with previous lessee with following conditions:
1. The Maximum Permissible Annual Production and Dispatch shall be strictly as per Mine Development Agreement and as approved by CEC time to time.
2. The Director, Mines and Geology shall execute Mine Development Agreement and Mining Lease Deed upon payment of statutory payments within 15 days from the receipt of this order.
3. The Forest Department shall ascertain the permission related to approach road and any other payments to the Forest Department at the time of handing over the land to new lessee, if any.”
5.5.2 It will be seen from the above that the vesting of all the clearances including Forest Clearance in favour of the successful bidder-the petitioner herein, was ‘on the same terms and conditions of every rights, approvals, clearances, licences and like which vested with previous lessee’. The Forest Clearance in favour of the previous lessee-M/s. Auro was coterminus with the period of lease granted to the said lessee. The Ministry of Environment and Forest by letter dated 13th May 1999 had granted the lease which was for 20 years, which ended in the year 2019. It vested in the petitioner accordingly to be valid upto period of deemed extension.
5.5.3 With the Amendments of 2020 and 2021, by virtue of deeming fiction, the said Forest Clearance stood extended for further two years for the petitioner. The extension was contemplated for the valid approval and was further subject to the compliance of the other laws. The petitioner remained liable in law to get it renewed after two years, and since the petitioner failed in that, it has been facing the impugned stoppage notice.
5.6 Forest lease agreement dated 18th August 2022 was executed in accordance with Section 2 of the Forest Conservation Act, 1980 read with Section 20 of the Karnataka Forest Act, 1980. In that, condition No.(viii) (page 30 in the statement of objection) was as under, which makes reference of guidelines dated 31st March 2020 and maximum period of two years period.
“(8). The forest land scheduled has been extended only for mining purpose under the Forest (Conservation) Act, 1980 for maximum period of two years from the date of commencement of new lease (as per clause No.(a) of the guidelines Dt. 31.03.2020) or till Stage-II Approval under the provisions of
Forest (Conservation) Act, 1980 is obtained or till a date that the State Government or Government of India so decide, whichever is earlier.”
5.6.1 Furthermore, following additional condition was incorporated,
“Whereas, in pursuance of the directions issued by the Government of Karnataka (vide letter No. APAJI 54 FFM 2022 Dt. 01.08.2022), the Principal Chief Conservator of Forests (Head of Forest Force), Karnataka Bangalore (vide letter No. KFD/HOFF/A5-1(MNG)/3/2022- FC Dt. 03.08.2022) and the Chief Conservator of Forests, Ballari Circle, Ballari (vide letter No M1/MNG/REW/CR-10/2003-04 Dt.11.08.2022) and in general consideration of various guidelines/orders/directions of the State Government or Government of India from time to time, following additional conditions are incorporated as part of this Agreement;
1. As specified by the Ministry of Environment, Forest & Climate Change (FC Division), Government of India (vide Guidelines issued in File No. 11-97/20178-FC Dt. 31.03.2020) the Lessee shall continue mining operations on the land, in which mining operations were carried out by the previous lessee for maximum period of two years from the date of commencement of new lease (as per clause No.(a) of the guidelines Dt.31.03.2020] or till Stage-II Approval under the provisions of Forest (Conservation) Act, 1980 is obtained or till a date that the State Government or Government of India so decide, whichever is earlier. If the Lessee does not obtain necessary approvals within the stipulated time, the mining operations shall be stopped till such approvals are obtained.“
5.7 Thereafter followed was Working Permission dated 24th August 2022 granted to the petitioner in respect of the lease auction in its favour. The relevant part of the Working Permission, imposing two years stipulation is extracted hereinbelow,
“M/s. Minera Steel & Power Private Limited (the Lessee/User Agency in respect of ML No. 0019), is hereby permitted to carry out mining in the 31.00 Ha of Forest Land in of forest land in Kallahalli Village, Hospet Taluk, Ballari Dist for maximum period of two years from the date of commencement of new lease [as per clause No.(a) of the guidelines Dt.31.03.2020) or till Stage-II Approval under the provisions of Forest (Conservation) Act, 1980 is obtained or till a date that the State Government or Government of India so decide, whichever is earlier, with all terms & conditions which are stipulated in the Forest Lease Agreement Dt. 18.08.2022. Further,
(1) As specified by the Ministry of Environment, Forest & Climate Change (FC Division), Government of India (vide Guidelines issued in File No.11- 97/20178-FC Dt. 31.03.2020) the Lessee shall continue mining operations on the land, in which mining operations were carried out by the previous lessee, for maximum period of two years from the date of commencement of new lease [as per clause No. (a) of the guidelines Dt.31.03.2020] or till Stage-II Approval under the provisions of Forest (Conservation) Act, 1980 is obtained or till a date that the State Government or Government of India so decide, whichever is earlier. If the Lessee does not obtain necessary approvals within the stipulated time, the mining operations shall be stopped till such approvals are obtained.
(2) The Lessee shall carry out mining activities as per the conditions mentioned in the Agreement No 03/2022-23 (Registered Vide No. HSP-1-02454- 2022-23 Dt.18.08.2022) and as per the conditions stipulated by the Govt of India and Govt of Karnataka. This working permission shall be cancelled/ revoked in case any violations/deviations from the said conditions or violations/ deviations from any of the Orders/ Guidelines/Directives issued from the Government from time to time.
(3) The Lessee shall submit all such reports as specified under various provisions of Forest (Conservation) Act, 1980 from time to time.
(4) For general ecological considerations and in the interest of conservation of wildlife in the region, the Lessee shall not carry out any mining operations or related activities in the leased area from 6.00 PM to 6.00 AM.
(5) The Lesse shall not deface the forest boundaries, use any area for construction of road, sheds, etc. and shall not operate beyond the limit of the forest land assigned by the Government.
(6) The Lessee shall not cut trees without prior permission of the authorized Forest Officers and all such trees felled with the written permission issued from the competent authority should be handed over to the Forest Department under cover of receipt.
(7) The Lessee shall abide by all such conditions imposed by various authorities including the Maximum Permissible Annul Production (MPAP) limit.
(8) The lessee shall seek necessary approvals (as prescribed under the provisions of Forest (Conservation) Act, 1980) for use of Approach Road outside the leased forest land from competent authority. No additional forest land shall be allowed to be used by the lessee without such approvals.
(9) The Lessee shall take up necessary activities as per the approved Reclamation & Rehabilitation of the erstwhile Lessee till the new R&R plan is approved in favour of the Lessee.
(10) Failure on part of lessee to adhere to the undertaking given by the Lessee (including non compliance of conditions stipulated by the Govt of India & Govt of Karnataka) will leads to cancellation/ revoking of this work order.
(11) The Working Permission issued is subject to the directives/guidelines issued by the Ministry of Environment, Forest & Climate Change (FC Division), Government of India (vide File No. 11- 97/20178-FC Dt. 31.03.2020) and any other guidelines/orders/directions from the Govt of India, Govt of Karnataka or Principal Chief Conservator of Forests (Head of Forest Force) on the matter from time to time. Sd/- Deputy Conservator of Forests, Ballari Division, Ballari”
5.7.1 Thus the working permission also incorporated as part of conditions, what was stipulated in guidelines dated 31st March 2020 as also the condition mentioned in the Forest Lease Agreement dated 18th August 2022 to reiterate that the mining was permitted to be carried out for maximum period of two years from the date of commencement of new lease and that thereafter the approval under the Forest Conservation Act shall be required, in absence of which the mining operations shall be liable to be stopped.
5.8 Thus, the condition that the lessee shall continue mining operations in the previous lease which is granted to him, for maximum period of two years from the date of commencement of the lease as per the guidelines dated 31st March 2020 or till Stage II Approval under the provisions of the Forest Conservation Act, 1980 and that in absence of Forest Clearance afresh obtained within that time or thereafter, will lead to stoppage of mining operations, continued to figure in each of the relevant documents, making it part of mandatory conditions to be observed by the lessee. It is not permissible in law for the lessee to back out and contend that notwithstanding the stipulations agreed by it, they would not apply to it.
5.9 Not only that the above referred documents, and the conditions and covenants therein operate to bind the petitioner, requiring the petitioner to obtain a fresh Forest Clearance, even the petitioner understood in the same way, and was inclined to apply the said condition accordingly by obtaining the clearance again since the period of two years had expired.
5.9.1 The above becomes evident from the contents of letter dated 3rd June 2022 addressed by the petitioner to respondent No.1-the Principal Chief Conservator of Forests, the Nodal Officer (FC), which letter is reproduced herein below,
“Our Ref.No.: 32/22-23 Date: 03.06.2022
To
The Principal Chief Conservator of Forest, The Nodal Officer (FC),
Aranya Bhavan, 18th cross, Malleswaram,
Bangalore-560003 Dear Sir,
Sub: Requesting to give directions to DCF, Ballari to issue demand notice as per the MoEF&CC guidelines dated 31.03.2020 in respect to auctioned iron ore block ML No. 0019 granted to M/s. Minera Steel & Power Pvt Ltd. over an extent of 32.05 Ha in NEB Range, Kallahalli Village, Hospet Taluk, Ballari District- Reg.
Ref:
1. Government order no. CI 38 MMM 2022, Bengaluru dated: 25.03.2022. [Vesting order under section 8B of MMDR Amendment Act, 2021]
2. MoEF&CC, New Delhi File No. 11- 97/2018-FC, Dated 31st March 2020.
With reference to the above subject, we would like to bring to your kind notice that, we M/s. Minera Steel & Power Private Limited had participated in electronic auction conducted by the State Government for grant of a Mining Lease of the mine block M/s Auro Minerals in Ballari District over an extent of 32.05 Hectare Forest Land for mining of Iron Ore and became successful bidder. By way of vesting order (Ref-1) issued under Section 8B of MMDR Amendment Act 2021, the State Government has entered into MDPA and lease deed was executed on 18.04.2022.
As per the guidelines of MoEF&CC, New Delhi dated 31st March 2020 (Ref-2), provisions of this guidelines are reproduced below:
(a) "A new lessee of the mining leases expiring under the provisions of sub- section (5) and (6) of Section 8A of Mines and Minerals (Development & Regulation) Amendment Act, 2015, shall be deemed to have acquired all valid rights, approvals, clearances, licenses and like vested with the previous lessee for a period of two years. The new lessee shall continue mining operations on the land, in which mining operations were carried out by the previous lessee, for a maximum period of two years from the date of commencement of new lease on the same terms and conditions which was stipulated in the approval under
FCA-1980, obtained by the previous lessee."
(b) "The new lessee, after obtaining Letter of Intent (Lol), shall obtain approval under the FCA-1980 following due procedure, for non-forestry use of forest land falling in such mining lease for continuing mining operation beyond two years during which it has deemed to have acquired rights to undertake mining operation. In case, approval under the FCA-1980 is not obtained within the stipulated time of two years of commencement of lease by the new lessee, the mining operation shall be stopped till such approval has been obtained."
In light of the above said guidelines, it will be lawful for the new lessee to continue mining operations on the land (where mining operations were being carried out by the previous lessee up to 22.05.2021 (lease expired) with valid forest clearance) for a period of two years from the date of commencement of new lease. However, as per clause (c) of the above said guidelines as reproduced below;
(c) While obtaining approval under the provisions of FCA-1980 as per clause (b) above, the new lessee shall pay the Net Present Value (NPV) for the total forest area located within the mining lease, along with any other amount due as per guidelines issued by Government of India from time to time. However, on the date of issuance of Lol, the state goverrument shall realize a lump sum amount at the rate of Rs 7.50 lakh per ha (for the total forest area within the mining lease) from the new Lol holder. This amount shall be deposited into the account of CAMPA,
which will be adjusted against actual compensatory levies payable on the forest land, at the time of approval as per clause (b) above.
We will deposit a lump sum amount at the rate of Rs. 7.50 lakhs per Ha and request your good office to consider this matter and give directions to DCF, Ballari to issue Demand Notice as per the above said guidelines which shall be paid immediately which in turn will allow us to operate the mines and obtain the necessary clearances and approvals within two years as per the provisions.
Thanking you,
For Minera Steel & Power Pvt Ltd Sd/-
Authorized Signatory”
(Emphasis in bold supplied here)
5.9.2 The petitioner has acknowledged in its own aforesaid letter, the applicability of guidelines of the Ministry of Environment and Forest dated 31st March 2020. The emphasized portion of the letter goes to indicate that the petitioner was well aware that the lease period of the erstwhile lease auction purchased by him expired on 22nd May 2021 and the Forest Clearance was valid for further period of two years only from the date of commencement of new lease.
5.9.3 Once the petitioner has agreed as above and has understood the condition accordingly, as reflected above, it is not permissible for the petitioner to resile from the obligation to get the Forest Clearance at the expiry of two years period. In the facts of the case, it cannot be contended that the Forest Clearance stood automatically extended to cover the total lease period. The petitioner cannot approbate and reprobate.
6. The law to be culled out from the amended provisions of Section 8B and the language employed by the Legislature operate on the same lines and cast obligation for obtaining renewed Forest Clearance at the expiry of the period of two years. Sub-Section (2) of Section 8B as amended as per Mineral Law (Amendment) Act, 2020 provided in sub-Section (2) that the successful bidder ‘of the mining leases expiring under provisions of sub-Section (5) and sub-Section (6) of Section 8A and selected through auction’ shall be deemed to acquire rights, approvals, etc.
6.1 However, what is conspicuous to notice is that, the providence is that ‘shall be deemed to have acquired all valid rights, approvals, clearances, licences and like vested with the previous lessee for a period of two years’. The proviso to Section 8B as amended indicates that ‘subject to such conditions as may be prescribed, such new lessee shall apply and obtain all necessary rights, approvals, clearances, licences and the like within a period of two years from the date of grant of new lease’.
(Emphasis in bold supplied here)
6.1.1 Sub-Section (3) of Section 8B (Amendment Act, 2020) also clearly contemplated that ‘notwithstanding anything contained in any other law for the time being in force, it shall be lawful for the new lessee to continue mining operations on the land, in which mining operations were being carried out by the previous lessee, for a period of two years from the date of commencement of new lease’.
(Emphasis in bold supplied here)
6.1.2 It is to be noted that what is vested in the new lessee are ‘valid rights, clearances’, etc. The word ‘valid’ is significantly employed by the law making authority. The period of vesting of such valid rights and clearances is two years. As per the Proviso, the new lessee will have to apply and obtain all necessary rights, clearances ‘within two years’ ‘from the date of grant of new lease’. It is also the case of the respondent authorities that the Forest Clearance held by erstwhile M/s. Auro Minerals was not valid due to several defects.
6.1.3 Section 8B of the MMDR Act as substituted by virtue of Amendment of 2021 with effect from 28th March 2021 could not be said to operate to absolve the new lessee-the petitioner herein from complying with the requirement of obtaining fresh Clearance. The Forest Clearance/approvals were deemed to be valid for two years from the date of commencement of new lease and the requirement was that within that period or after that period, it has got to be renewed. The validity of Forest Clearance expired at the end of two years. Section 8B as amended in 2021 again emphasized and stipulated all ‘valid’ rights, approvals, clearances shall continue to be valid even after expiry of the termination of the lease.
6.1.4 The contention of the petitioner that 2021 Amendment in the provision permitted it to treat the clearance to be continued to enure, could hardly be countenanced. The Forest Clearance was coterminus with the period of previous lease which stood extended by deeming fiction for two years in view of Amendment of 2020 and it ceased to be valid, and became invalid after expiry of two years. The Amendment of 2021 also mentions a ‘valid’ approval or clearance, etc.
6.1.5 Not only that, sub-Section (1) of Section 8B (Amendment Act of 2021) expressly stated that the valid approvals or clearances, etc. shall continue to be valid after expiry of termination of lease, ‘subject to the conditions provided under such laws’. Thus, the vesting under the 2021 Amendment would be governed by the word ‘valid’, as also ‘subject to conditions provided in other laws’. Therefore, it is clear the petitioner has no escape but to comply with the requirement of obtaining fresh Forest Clearance, etc., in view of the governing provisions of Section 8B of the Act to operate as above, read with the covenants inserted in the documents which created the lessor-lessee relationship between the authorities-respondents and the petitioner.
6.1.6 The petitioner cannot be permitted to seek avoidance of the mandate of law, rules, guidelines and what is agreed and committed by it in the various terms, conditions and covenants.
6.1.7 The sequitur of the foregoing discussion is that, the petitioner is required to seek fresh Forest Clearance which was valid for two years from the date of execution of lease, and is required to be treated in law accordingly. For the reasons stated as above, the stoppage notice dated 8th April 2024 stands on a valid ground. The prayers and the petition cannot be granted.
7. No case is made out. The petition is meritless. It is hereby dismissed.
