State hasn't suffered setback in mining lease, says govt

Tushar Giri Nath, Secretary, Commerce and Industries (MSME, Mines and Textiles), has issued the following rejoinder to the news report carried on April 12, with the headline ‘State has to auction 8 renewed mining leases’.The rejoinder is as follows:

The Facts:

1) Karnataka Government has not issued any renewal orders or fresh grant on or after 12.01.2015, the date of Ordinance through which the MMDR Act was amended. Hence, the Government of Karnataka issue cannot be clubbed with other States like Goa where the orders of renewal (notification of grant) under the old Act were passed even on 12.01.2015.

2) The Government of Karnataka had given in-principle approval letters for 05 mines towards their renewal on 12.01.2015 and for 03 mines on 19.01.2015 without mentioning the period of renewal and had not issued any renewal notifications / orders.

3) As per the amended Act, the lease periods of existing leases were to be deemed extended and in light of the Government of India letter dated: 05.02.2015 written to all the States, it was found that statutory clearances are not a pre-requisite for deemed extension. Hence a clarification letter was issued to the Director, Department of Mines & Geology on 09.02.2015 informing that all the in-principle approvals with respect to 08 mines do not survive and they are not valid consequent to the amendment. The same was intimated to the concerned lessees.

This position was also reviewed by the Law Department and the action taken by the Secretary (Mines) vide letter dated: 09.02.2015 to invalidate the approvals was found correct.

4) Since the MMDR Act has come into force, all the running mines as well as those mines whose renewal period was over and they had applied for renewal as per law and are pending with the Government has to be dealt under section 8(A)(5) and 8(A)(6) of the MMDR Act. All such mines will be dealt accordingly including these 08 mines.
Operation of Section 8(A)(6):

Since your article has some misunderstanding on the Section 8(A)(6) it is explained as under:

I. A mining lease which has not completed 50 years from the date of grant, will be extended upto 50 years.

II. For deemed extension of any existing leases except which are rejected, lapsed or determined by the State Government the following 03 parameters has to be looked into and later amongst them shall be considered as the deemed extension date;
a) Date of 50 years from the original grant.

b) Date of validity of renewal made, if any.
c) 31.03.2020 for non-captive use mining lease or 31.03.2030 for captive use mining lease.

III. Irrespective of the period of mining lease, if a lease has been renewed then it will be deemed extended till the end of the renewal but if the extended period is getting over before 31.03.2020 then it will be extend upto 31.03.2020 for non-captive mines.

IV. The mining leases where renewal period had expired but the application for renewal were made for renewal in time and they were pending with the Government and the leases were for non-captive purpose then the deemed extension is till 31.03.2020. Please note the wordings in the section ‘.....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.’

It is very clear that the deemed extension has to be given if the lessee had complied with the prescribed terms and conditions of the lease and had applied for the renewal in time.
V. The Section 8(A)(9) talks about those leases, where renewal had been either rejected, determined or lapsed and they would not be coming under deemed extension. The lapsing happens when the lessee does not apply for renewal one year before the expiry of the renewal period.

Hence legally the Government cannot go for auction of any existing mines till the deemed extension period gets over as they are covered under section 8(A)(6) and after the deemed extension, auction is the only route for disposing of these mines.

In the light of the above it is made clear that as the Government of Karnataka had not issued any renewal orders and has also issued a letter on 09.02.2015 indicating that all in-principle approvals given are not valid and it would be applying section 8(A)(6) read with section 8A(9) of the amended MMDR Act for the existing mining leases including which were pending for renewals, there is no question of violating the MMDR Act or the Government ‘suffering a set back’ as claimed by you when the Government has taken a stand in line with the amended Act. There is no need for the Government of Karnataka to send the files to the Government of India with respect to renewals, similarly there may not be any need for Government of India to give directions to the State Government in this regard.

The State Government has already taken all steps to implement the Act in its letter and spirit.