Patna High Court Stresses 'Sustainable Development' in Mining Lease Case, Upholds Cancellation Due to Delays and Environmental Violations

Patna High Court Dismisses Plea, Emphasizes Importance of Compliance with Environmental Regulations and Timely Execution of Leases - The Patna High Court has dismissed a writ petition challenging the cancellation of a mining lease. The judgment, delivered by Justice Purnendu Singh, reaffirms the decision of the Collector of Nawada and the Mines Commissioner to cancel the lease granted to Katyayni Contractor Private Limited due to non-compliance with lease conditions and environmental regulations.

Katyayni Contractor Private Limited, represented by its Director Randhir Kumar, was granted an "In Principal Sanction Order" for a mining lease on March 17, 2015, for a 13.62-acre stone mining block in Nawada district. Despite being the highest bidder and depositing substantial earnest money, the petitioner delayed obtaining necessary environmental clearances and failed to execute the lease deed within the stipulated period. This led to multiple notices and eventual cancellation of the lease on September 9, 2019. The petitioner sought to quash this cancellation and obtain relief through a revision petition, which was also rejected on April 30, 2022.

Compliance with Environmental Regulations: The court underscored the importance of adhering to environmental regulations and the stipulations outlined in the Notice Inviting Tender (NIT). The petitioner was required to obtain environmental clearance and execute the lease deed within 120 days, which was not fulfilled. "Sustainable development and adherence to environmental norms are non-negotiable in mining operations," noted Justice Singh.

Delay in Execution: Addressing the petitioner's delay in obtaining environmental clearance and executing the lease, the court found that the petitioner took nearly two years to fulfill these obligations. This significant delay violated the Bihar Mineral Concession Rules, 1972, and the terms of the NIT. The court stated, "The petitioner's failure to comply with the prescribed timeline for executing the lease deed and depositing the full installment amount justifies the cancellation of the 'In Principal Sanction Order'."

Impact of Illegal Mining: The court acknowledged the petitioner's claim that illegal mining activities had occurred within the leased area, impacting the feasibility of their operations. However, it emphasized that the petitioner had a responsibility to report and prevent such activities promptly. The court highlighted that other adjacent blocks were mined properly, further questioning the petitioner's diligence.

The court extensively discussed the principles governing the execution of mining leases and the consequences of non-compliance. It reiterated that the earnest money and initial installment are forfeited when the lessee fails to adhere to the conditions of the lease. The judgment also referenced the Bihar Minerals (Concession, Prevention of Illegal Mining, Transportation & Storage) Rules, 2019, which mandate the forfeiture of security deposits in case of default by the successful bidder.

Justice Singh remarked, "The failure to execute the lease deed within the prescribed period and the subsequent non-compliance with environmental regulations cannot be condoned. The stringent measures taken by the mining authorities are in line with the legal provisions aimed at ensuring sustainable mining practices."

The Patna High Court's dismissal of the writ petition reinforces the necessity for strict adherence to environmental clearances and timely execution of mining leases. The judgment not only upholds the cancellation of the petitioner's lease but also directs the state government to enhance monitoring mechanisms to prevent illegal mining activities. This decision serves as a significant reminder of the legal and environmental obligations associated with mining operations.

Date of Decision: May 17, 2024