Deemed Extension Cannot Enure to a Void Lease: Karnataka High Court Declines Mining Lease Extension Granted in Violation of Minimum Area Norms

"Deemed extension under Section 8A(3) presupposes a valid lease — A lease void ab initio cannot be revived by legal fiction", In a significant ruling with far-reaching implications for the mining sector, the High Court of Karnataka dismissed a writ petition filed by M/s Shri Venkateshwara Minerals, challenging the rejection of its application for deemed extension of a mining lease under Section 8A(3) of the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act). The Court categorically held that “the benefit of deemed extension cannot enure to a lease which was void ab initio for being granted in contravention of statutory rules”.

Deciding Writ Petition No. 23583 of 2024 (GM-MM-S), a Division Bench comprising Chief Justice Vibhu Bakhru and Justice C.M. Poonacha upheld the State Government’s decision rejecting the deemed extension of the lease on the ground that it was originally granted in violation of Rule 22-D of the Mineral Concession Rules, 1960, which prescribes the minimum lease area.

Lease Granted Over Area Below Statutory Minimum

The dispute arose from a mining lease granted in 2006 to one Sri Ninganagouda Appanagouda Patil over an extent of 6 acres (2.43 hectares) in Thimmapura Village, Mudhol Taluk, Bagalkot District, for mining limestone. The lease was subsequently amended in 2011 to include dolomite, and upon the death of the original lessee in 2018, the lease was transferred to his legal heir, who in turn transferred it to the petitioner.

After the 2015 amendment to the MMDR Act, which inserted Section 8A(3) providing that mining leases granted before the amendment shall be deemed to be valid for 50 years, the petitioner applied for deemed extension. However, the State Government rejected the application on the ground that the original lease was granted in violation of Rule 22-D(c) of the 1960 Rules, which requires a minimum lease area of four hectares for minerals such as dolomite.

Can a Statutorily Void Lease be Deemed Extended?

The principal legal issue before the Court was whether a lease, which was void ab initio due to being granted in contravention of the minimum area requirement under Rule 22-D(c), could be deemed to have been validly extended to 50 years under Section 8A(3) of the MMDR Act.

Answering in the negative, the Court held: "Section 8A(3) provides for a deemed extension of validly granted leases. This presupposes the existence of a lease that was valid at its inception. A lease granted in violation of statutory rules cannot be resurrected by deeming fiction." [Para 14]

The Court concluded that since the lease was granted in 2006, well after the insertion of Rule 22-D on 10.04.2003, and its proviso (inserted on 28.01.2005) which excludes only pre-existing leases, the lease in question was clearly in contravention of the minimum area requirement, rendering it void.

"There is little doubt that the grant of the mining lease in question was in violation of Rule 22-D of the MCR, 1960, which was in force at the relevant point of time." [Para 18]

“A Lease Granted in Violation of the Act or Rules is Void and of No Effect”: Section 19 Applied

The Court emphasized the mandatory nature of Section 19 of the MMDR Act, which states:

"Any mineral concession granted, renewed or acquired in contravention of the provisions of this Act or any rules made thereunder shall be void and of no effect."

Placing reliance on the Supreme Court’s ruling in Muneer Enterprises v. Ramgad Minerals & Mining Ltd., (2015) 5 SCC 366, the Bench reaffirmed that any lease granted contrary to statutory provisions cannot be deemed valid, irrespective of the time elapsed or subsequent statutory amendments.

“Section 19 makes the position clear that any mining lease granted originally or renewed subsequently in contravention of the provisions of the MMDR Act or any rules or orders made thereunder is void and of no effect.” [Para 22, quoting Muneer Enterprises]

Negative Equality under Article 14 Rejected: No Right to Parity in Illegality

Responding to the petitioner’s argument that similarly situated lessees were granted deemed extensions despite holding lease areas below the statutory minimum, the Court categorically rejected the claim of parity.

“Article 14 does not envisage negative equality. Erroneous or illegal benefits conferred on others cannot form the basis for claiming similar relief. Illegality cannot be perpetuated on grounds of parity.” [Para 25]

The Court followed the well-established principle laid down in Basavaraj & Ors. v. Special Land Acquisition Officer, (2013) 14 SCC 81, where the Supreme Court had held that "if a wrong is committed in an earlier case, it cannot be perpetuated."

Transferee Cannot Claim Higher Right Than Original Lessee

The petitioner, being a transferee of the lease, had argued that the original application was for 15 acres, and that the authorities had wrongfully restricted the grant to 6 acres. However, the Court noted that the original lessee had never objected to the reduced lease area, and hence, the transferee could not now challenge the validity of the grant.

"The petitioner is a transferee of the mining lease. Thus, we cannot readily accept that the petitioner could raise a challenge as to the grant of the lease itself." [Para 29]

Further, the Court held that the principle of "no one can benefit from his own wrong" (ex injuria sua nemo habere debet) was inapplicable to the facts of the case.

2016 Rules Cannot Cure Past Illegality

The petitioner’s reliance on Rule 12(5)(b) of the Minerals (Other than Atomic and Hydro Carbon Energy Minerals) Concession Rules, 2016, which reduced the minimum lease area for limestone to 2 hectares, was also rejected.

The Court clarified that the 2016 Rules were not applicable to leases granted prior to their enactment. The governing rules at the time of the lease were the Mineral Concession Rules, 1960, and the illegality at inception could not be cured by a subsequent change in law.

"The rules at the applicable time were Mineral Concession Rules, 1960 and it is apparent that the grant of lease falls foul of Rule 22-D of the said Rules." [Para 30]

Lease Void, Deemed Extension Denied

Upholding the Government’s rejection order dated 04.02.2023, the High Court held that since the lease was originally granted in violation of Rule 22-D of the 1960 Rules, it was void under Section 19 of the MMDR Act and could not benefit from deemed extension under Section 8A(3).

The petition was dismissed, sealing the fate of the lease.

Date of Decision: 19 January 2026