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by sayum
11 April 2026 5:56 AM
“Registrar Does Not Adjudicate Title, But Must Act As Gatekeeper Of Public Lands Under Section 22-A”, Madras High Court delivered a significant ruling in SAIL Refractory Company Limited v. Sub-Registrar, Salem West & Others, setting aside a registration refusal but refusing to order registration of a transfer deed involving more than 1700 acres of Government land. While quashing the rejection order for want of proper enquiry, the Court issued a stern reminder that “any assignment of mining lease over Government land without the prior written consent of the State Government is void, unenforceable, and statutorily prohibited under Section 22-A and 22-B of the Registration Act.”
Justice Mohammed Shaffiq underscored the non-negotiable nature of legal safeguards over mineral resources, stating that “mining rights are not mere commercial interests, but public resources held by the State in trust for the people.”
“Lease Is The Instrument; Leasehold Is The Right — One Cannot Exist Without The Other”
Opening with a pointed critique of the registrar's blanket refusal, the Court clarified that the document in question — a Deed of Transfer dated 16.12.2011 — was executed as part of a BIFR-sanctioned rehabilitation scheme for the transfer of the Salem Refractory Unit from Burn Standard Company Ltd. (BSCL) to the petitioner, a wholly owned subsidiary of Steel Authority of India Ltd. (SAIL). The Deed included, inter alia, assignment of mining leasehold rights.
But despite payment of over ₹5.7 crore in stamp duty and registration charges, the registration was refused in April 2025 on grounds that the land belonged to the State Government and that no valid sanction had been obtained. The Registrar cited Section 22-A(1)(i) of the Registration Act, noting that the transfer involved “more than 1700 acres of Government leased land without any valid title of transfer.”
The petitioner’s primary argument was that what was transferred were “leasehold rights,” not the lease itself, and thus the embargo under Section 22-A would not apply. The Court called this a “fanciful and artificial distinction,” holding unequivocally that “lease is the instrument; leasehold rights are the interest conveyed. Without leasehold rights, there can be no lease. Assignment of leasehold rights is nothing but a transfer of the lease.”
Justice Shaffiq went further to clarify: “The expression ‘by way of’ in Section 22-A is illustrative and not exhaustive. It is meant to cover all forms of transfer involving immovable property belonging to the State — whether by lease, sub-lease, or assignment. Any contrary construction would render the provision meaningless.”
“Registrar’s Duty Is Not To Adjudicate Title, But To Prevent Illegality In Public Land Transfers”
The Court addressed the petitioner’s reliance on the Supreme Court’s decision in K. Gopi v. Sub-Registrar, where the apex court held that a registrar cannot decide title disputes and must register documents if formalities are met. But Justice Shaffiq distinguished K. Gopi, observing:
“That decision dealt with private property and Rule 55A of the Tamil Nadu Registration Rules — it did not concern Section 22-A or transfers of Government land. Where Government land is involved, the Registering Officer is under a statutory duty to verify compliance with Section 22-A. That includes an incidental but essential power to call for documents.”
Rejecting the suggestion that registration must be granted merely because stamp duty was paid, the Court clarified: “This is not an adjudication of title — it is a mandatory statutory verification to protect public land from being alienated unlawfully. The Registrar is not a post office.”
“Assignment Of Mining Lease Without Prior State Approval Is Void — Subsequent Ratification Not Permissible”
On the central issue — the requirement of prior consent — the Court engaged in a detailed analysis of Section 12-A and Section 19 of the Mines and Minerals (Development and Regulation) Act, Rule 37 of the 1960 Rules, and Clause 17 of the lease agreement between BSCL and the State.
The Court held in unambiguous terms: “Assignment of mining lease without the prior written consent of the State Government is impermissible in law and void. Requirement of previous consent cannot be ignored nor treated as a curable formality. Subsequent ratification is legally meaningless.”
Quoting the Supreme Court’s decision in State of Rajasthan v. Gotan Lime Stone Khanji Udyog Pvt. Ltd., the Court reminded: “Mining rights belong to the State and not to the lessee. A lessee cannot profiteer by trading such rights without permission. Minerals are public trust assets, and their transfer must be fair, transparent and for the public good.”
“BIFR Scheme Cannot Be A Device To Evade Mineral Regulation — Statutory Compliance Is Not Optional”
A striking argument raised by the petitioner was that the transfer was carried out pursuant to a BIFR-approved scheme and thus insulated from statutory scrutiny. The Court rejected this argument in strong terms:
“Nothing in the BIFR scheme expressly exempts the need for prior consent of the State under the MMDR Act and Rules. Courts cannot interpret such schemes as licences to violate law. Rehabilitation of sick industries cannot override the public trust doctrine or statutory protections for public resources.”
Justice Shaffiq warned that accepting such an argument would create a dangerous precedent: “If we were to hold that a BIFR scheme allows parties to sidestep the MMDR Act, it would open the door to the commodification of national resources under the pretext of restructuring. This Court cannot be party to such evasion of the rule of law.”
“State’s Acceptance Of Royalty Or Dead Rent Does Not Amount To Consent For Transfer”
Another contention raised by the petitioner was that the State had accepted over ₹54 crores in dead rent, royalty and environmental penalties — and this implied State assent to the transfer.
This too was rejected firmly: “Mere acceptance of rent is not indicative of assent. Something more is required. The State’s conduct must be viewed through the lens of statutory compliance, not contractual assumptions.”
Citing Sardarilal Vishwanath v. Pritam Singh, the Court explained: “Payment and acceptance of rent, without more, does not establish renewal or consent. There must be clear, express authorisation from the State.”
“Court Cannot Order Registration, But Registrar Must Reconsider In Light Of Law”
Although the Court found the Sub-Registrar’s refusal order flawed for failing to conduct any meaningful enquiry into statutory compliance, it refused to direct registration of the deed. Instead, the Court remanded the matter back for a proper decision after examining whether the transfer was backed by valid prior consent.
“While this Court does not suggest that the registration must be refused,” observed Justice Shaffiq, “it cannot be permitted that the process be reduced to a rubber stamp. The Sub-Registrar is directed to pass a fresh order, after making a detailed enquiry — including whether prior written consent of the State has been obtained.”
The Court also clarified its constitutional role as “sentinel on the qui vive”, stating: “If the Court does not perform its constitutional duty to scrutinise the legality of public land transfers, the result would be the imperilment of mineral resources, which are national assets and subject to intergenerational equity.”
Rule Of Law Cannot Be Traded For Rehabilitation Or Revenue
The ruling in SAIL Refractory Co. Ltd. v. Sub-Registrar is a powerful reaffirmation of the doctrine of public trust, statutory compliance, and the constitutional role of State authorities in guarding natural resources.
The message from the Madras High Court is clear: “Even in the context of industrial revival, compliance with mineral regulation is not optional. Rehabilitation cannot come at the cost of public interest.”
This judgment will likely serve as a crucial precedent in future cases involving transfer of mining leases, assignment of leasehold rights over Government land, and the limits of schemes sanctioned under now-repealed SICA or equivalent mechanisms.
Date of Decision: 09.01.2026
