Mining Lease Applications For First Schedule Minerals Deemed 'Disposed Of' Once Recommended & Approved Prior To 2015: Supreme Court

"Formal non-communication of the grant order for execution of mining lease does not therefore diminish the accrued and vested right of the concession holder," Supreme Court, in a significant ruling, held that applications for mining leases concerning minerals listed in the First Schedule of the MMDR Act are considered "disposed of" once the State Government recommends the grant and the Central Government provides prior approval.

A bench of Justice Prashant Kumar Mishra and Justice Atul S. Chandurkar observed that such cases fall outside the restrictive "auction-only" regime introduced by the 2015 and 2021 amendments to the Mines and Minerals (Development and Regulation) Act, 1957.

The Karanartham Viramah Foundation filed a Public Interest Litigation (PIL) challenging an order dated January 14, 2026, issued by the State of Maharashtra. This order communicated the grant of an iron ore mining lease in Gadchiroli to Respondent No. 2 based on an application filed in 2010. The petitioner contended that since the formal lease was not executed before the 2015 and 2021 legal amendments, the rights had lapsed, and the mineral area should have been put to auction.

The primary question before the court was whether a mining lease application is considered "pending" or "disposed of" if the State recommendation and Central approval were obtained prior to the 2015 amendment. The court was also called upon to determine if the lack of formal communication of a grant order before 2015 renders a preferential right holder ineligible under the amended Section 10A of the MMDR Act.

Interpretation Of 'Disposal' Under Rule 63A Of Mineral Concession Rules

The Court analyzed the second proviso to Rule 63A of the Mineral Concession Rules (MCR), 1960, which provides a specific definition for the "disposal" of applications. The bench noted that for minerals listed in the First Schedule to the Act, such as Iron Ore, disposal by the State Government means either a recommendation to the Central Government for the grant of the concession or a refusal to grant the same.

Recommendation To Central Govt Constitutes Disposal For Scheduled Minerals

The bench observed that since Iron Ore is a First Schedule mineral, the recommendation made by the State Government to the Central Government in 2011 constituted a "disposal" of the 2010 application. The court emphasized that the requirement of "intimation regarding grant of precise area" is only applicable to minerals not listed in the First Schedule. Therefore, the application filed by the respondent was not "pending" as of the 2015 amendment.

Vested Rights Accrued Prior To 2015 Statutory Amendments

The Court found that Respondent No. 2 enjoyed "preferential rights" under Section 11(1) of the MMDR Act due to their prior prospecting license and the submission of a prospecting report in 2010. It was noted that the State had recommended the grant on June 30, 2011, and the Central Government granted prior approval under Section 5(1) on May 18, 2012. Consequently, vested rights had already accrued in favor of the applicant long before the transition to the auction regime.

Distinction Between 'Decision To Grant' And 'Communication Of Decision'

The Court highlighted Rule 22(4) of the MCR, 1960, which distinguishes between the act of taking a "decision to grant" and the subsequent "communication of such decision." The bench held that once a decision is reached and prior approval is obtained, the mere absence of a formal communication does not diminish the rights of the concession holder.

"Formal non-communication of the grant order for execution of mining lease does not therefore diminish the accrued and vested right of the concession holder."

Inapplicability Of Section 10A Auction Regime To Decided Cases

Addressing the petitioner’s reliance on Section 10A, the Court clarified that this provision was introduced in 2015 specifically to render "pending" applications ineligible, subject to certain exceptions. However, the bench ruled that Section 10A does not apply to applications that were already decided or disposed of prior to January 12, 2015. Since the recommendation and approval were completed by 2012, the case was outside the purview of the 2015 transitionary provisions.

Court Relies On Karnataka High Court Precedent In Aane Mines Case

The bench expressed agreement with the ratio in Aane Mines & Minerals vs State of Karnataka (2019), which held that Section 10A(1) does not make an application ineligible if it was already decided. The Court reiterated that there is no occasion to invoke the auction-related provisions of Section 10A(2) when the application has crossed the stage of recommendation and prior approval before the 2015 cut-off date.

Notion Of Public Interest In Mandatory Auctions Held Misplaced

Regarding the petitioner's argument that public interest requires an auction under Section 10(4), the Court held this notion to be "misplaced" in the present context. It observed that the delay in formal intimation or execution by the State does not change the legal position of a party whose rights have already vested through the statutory process of recommendation and Central approval.

"The notion of public interest in not resorting to 'auction' is misplaced. There is no illegality in the impugned Order."

The Supreme Court dismissed the PIL, affirming that the grant of the mining lease was legally sound as the application process had effectively concluded before the 2015 amendments. The Court directed that while the lease grant is upheld, no mining operations shall commence until the respondent obtains all necessary statutory approvals, including mining plans, environmental clearances, and forest clearances, which the authorities must consider on their own merits.

Date of Decision: 09 June 2026