M/s. Tata Steel Ltd., Mumbai v. Narbheram Power & Steel

Judgment

20th April, 2026 ---------------------------------------------------------------------------------- HARISH TANDON, CJ.

1. Being aggrieved by the Demand Notice bearing Letter No.2288/Mines dated 3rd October, 2025 issued by the Deputy Director of Mines, Jajpur, Odisha, this writ petition has been filed by the petitioners under Articles 226 and 227 of the Constitution of India with the following prayer(s): therefore, prays ―The Petitioner, that your Lordships would be graciously pleased to admit this Writ Petition, call for records and after hearing the parties allow the same, issue Writ and Writs in the nature of Certiorari/Mandamus further and/or Writ/direction, and:- a) b) Quash/set aside Demand Notice bearing Letter No.2288/Mines dated 03.10.2025 issued by the Deputy Director Mines, Jajpur, Odisha (Opposite Party No.4) (Annexure-61). A declaration that Rule 12A of the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016 is ultra vires the MMDR Act, 1957 and the Constitution of India. W.P.(C) No.31035 of 2025 & Batch c) Any other order/order(s) as may deem fit and proper to this Hon‘ble Court. And for which act of kindness, the Petitioner shall remain duty bound as ever pray.‖ Facts:

2. In anticipation of expiry of the existing non- captive mining leases on 31st March, 2020 under Section 8A(6) of the Mines and Minerals (Development and Regulation) Act, 1957 (for short ―MMDR Act‖), the Government of Odisha initiated the process for auction of the Sukinda Chromite Block, by issuing a Notice Inviting Tender dated 22nd January, 2020, which is reproduced hereunder:- ―Directorate of Mines Steel & Mines Department Government of Odisha Email:directormines1@orissaminerals.gov.in Date: January 22, 2020 Notice Inviting Tender ―Invitation of bids for grant of Mining Lease for Iron Ore and Chromite Minerals‖ In exercise of the powers conferred by Section 10(B) of the Mines and Minerals (Development and Regulation) Act, 1957 and in accordance with the Mineral (Auction) Rules, 2015 as amended from time to time notified thereunder, the Government of Odisha has identified 2(two) Minerals Blocks as under for electronic auction and hereby invites tenders for the purpose of grant of Mining Lease: a) b) 1 (one) mineral block of Iron Ore 1 (one) mineral block of Chromite W.P.(C) No.31035 of 2025 & Batch Accordingly, financial bids are invited in digital format only and technical bids are invited both in digital and physical format from eligible bidders. Eligibility conditions, date and time for participating in the electronic auction are provided in the Tender Document. Detailed Tender Documents along with timelines, notifications, updates and other details for the e-auction process for the mineral blocks are available in electronic form only and can be downloaded from the website of MSTC Limited: (https://www.mstcecommerce.com/auctionhome/ mlcl/index.jsp) Interested and eligible bidders can register themselves on the above website. On successful registration, eligible bidders will obtain login ID and password necessary for participation in the e-auction process. Model Tender Document and Mineral Block Summary are available free of cost on the website of MSTC Limited. Last date for purchase of Tender Document after payment of a tender fee on website of e-auction platform provider is Saturday, February 15, 2020 and the last date for submission of the bid is Thursday, February 20, 2020 on or before 12:00 noon (Indian Standard Time). The price of Tender Document for each mineral block is Rs.5,00,000/- (Rupees Five Lakh). List of Mineral Blocks for Auction S. No. Block Name Mineral 1 2 Guali Iron Ore Block Sukinda Chromite Block Iron Ore Chromite Concession Type Mining Lease Mining Lease‖

3. Pursuant to the aforesaid auction process, the Petitioner No.1 (originally incorporated as TS Alloys Ltd.; later renamed Tata Steel Mining Ltd. on 19th May,2020) emerged as the highest bidder for the Sukinda Chromite W.P.(C) No.31035 of 2025 & Batch Block on 17th March, 2020, quoting a final price offer of

93.75% of the value of dispatched mineral. The Petitioner No.1 was thereafter declared the ―Preferred Bidder‖ vide letter dated 6th April, 2020. Relevant portion of the said letter reads as thus:- xxxxxx ―xxxxx In inviting a reference to the subject mentioned above, I am to say that Govt. of Odisha has accepted the highest bid of 93.75% offered by your company in the e-auction held on dated 17.03.2020 for a grant of mining lease over Sukinda Chromite Block of Jajpur District and you have been declared as preferred bidder. You are, therefore, requested to deposit the 1st instalment of the upfront payment of Rs.35,46,45,603/- (Rupees Thirty Five Crores Forty Six Lakhs Forty Five Thousand Six Hundred Three) only through treasury Challan under the Heads of Account-“0853-Non-ferrous Mining and Metallurgical Industries-102-Mineral Concession Fees, Rents and Royalties‖ within 7 days of issue of this letter as per the time line notified in the Tender Document and in pursuance to the provision of Rule 10(1) of the Mineral (Auction) Rules, 2015 and submit the copy of the same in original for further action on the matter.‖

4. On 29th June, 2020, the State Government issued a Letter of Intent in favour of the Petitioner No.1 for grant of a mining lease over an area exceeding 406 hectares for a period of 50 years. On the same date, an initial vesting order was issued under Section 8B of the MMDR Act [as it stood prior to its amendment by Act 16 of 2021], thereby enabling the Petitioners to utilize all W.P.(C) No.31035 of 2025 & Batch valid approvals and clearances of the previous lessee. The said vesting order dated 29th June, 2020 reads as thus:- ―Whereas a mining lease of the following description, which was held by M/s. Tata Steel Ltd. (hereinafter referred to as the previous lessee) with validity period upto 31.03.2020 has been auctioned and M/s. T.S. Alloys Ltd. (subsequently renamed as Tata Steel Mining Limited), has been declared as the preferred bidder of the said mine. Description of the Mining Block - Name of Mineral(s) – Chromite - Name of Mining lease – Sukinda Chromite Block – Village of mining - Address/location Kalarangiatta, Kaliapani, Mahulkhal & Forest Block No.27 under Sukinda Tahasil of Jajpur Dist. - Area of lease – 406.00 ha (As per DGPS) / 406.00 ha (As per ROR). And whereas, a Letter of Intent bearing no.5543 dated 29.06.2020 has been issued in favour of the preferred bidder for grant of mining lease for the above mentioned mining block; And whereas, in terms of section 8B(2) of the MMDR Act, 1957 read with rule 9A(4) of the Mineral (Other than Atomic and Hydrocarbon Energy Minerals) Concession Rules, 2016 [hereinafter called the Rules, 2016], the holder of the letter of intent for the said mining block shall be deemed to have acquired all valid rights, approvals, clearances, licenses and the like vested with the previous lessee. Now therefore, the undersigned being the Nodal Officer for the State of Odisha having been nominated under rule 9A(1) of the Mineral (Other than Atomic and Hydrocarbon Energy Minerals) Concession Rules, 2016 [hereinafter called the Rules, 2016], do hereby, pursuant to the provisions contained in rule 9A(2) of the Rules, 2016 order the valid rights, approvals, clearances, licenses and the like vested in the previous lessee in respect of the aforementioned mining block are that all W.P.(C) No.31035 of 2025 & Batch deemed to have vested in favour of the holder of the letter of intent on the same terms and conditions of every rights, approvals, clearances, licenses, and the like which vested with previous lessee. Without prejudice to the generality of the provisions of section 8B(2) of the MMDR Act, 1957, the details of the valid rights, approvals, clearances, licenses, and the like held by the previous lessee and vested in favour of the holder of the Letter of Intent are given in the Annexure-1 to this order. This vesting order is valid for a period of two years from the date of execution of lease deed or till the date of getting fresh approvals, clearances, licenses, permits, and the like, whichever is earlier.‖

5. The Petitioner No.1 was formally declared the ―Successful Bidder‖ on 17th July, 2020 by the Director of Mines, Odisha vide Letter No.MXIII(b)-58/20/4986/DM. dated 17th July, 2020, relevant portion of which is quoted below:- ―Enclosed please find herewith the copy of the letter No.6216 dt. 17.07.2020 of Steel & Mines Department, wherein you have been declared successful bidder for in Jajpur district. Sukinda Chromite mining the Mine to sign Accordingly you are requested Development and Production Agreement (MDPA) with District Collector, Jajpur and get it duly registered. The copy of the format of MDPA is enclosed for your ready reference. The details of production achieved during 2018-19 and 2019-20 in the said mining lease are as below. Year 2018-19 2019-20 Production achieved in Million metric tonne 1.605 1,796 Further, you are also requested to make the payment of 3rd instalment of upfront payment for an amount of W.P.(C) No.31035 of 2025 & Batch Rs.2,83,71,64,821/- consideration of grant order of the mining lease in your favour.‖ compliance report

6. Thereafter, the Petitioners executed the Mine Development and Production Agreement with the State Government on 22nd July, 2020 (―MDPA‖, for brevity). Specifically, the MDPA follows an annual cycle from 23rd July to 22nd July of the following year. Under Schedule ‗D‘ of the MDPA, it is noted that the production achieved in the years 2018–19 and 2019–20 was 1.605 and 1.796 million metric tonnes respectively. The MDPA only prescribed the production quantities for the first two years and does not provide any separate data to quantify the figure for the third year of the lease and onwards.

7. Pursuant to the mining lease executed on 23rd July, 2020, vesting order dated 1st September, 2020 confirmed the transfer of statutory clearances for a period of two years or until fresh approval to be obtained.

8. On 10th September, 2020, the Indian Bureau of Mines (IBM) approved the mining plan, wherein the maximum annual production for the financial years 2021 to 2025 was prescribed as follows:- W.P.(C) No.31035 of 2025 & Batch Year 2020-21 2021-22 2022-23 2023-24 2024-25 Production Target (MT)

0.803

1.364

0.905

0.834

1.300

9. On 4th August, 2021, the Deputy Director of Mines, Jajpur issued a demand notice alleging shortfall in despatch during the first year of the mining lease (23rd July, 2020 to 22nd July, 2021), raising a demand of Rs.613.57 crore. The said demand was challenged by the Petitioner before this Court in W.P.(C) No. 23847 of 2021. In the said petition, the Petitioners have also assailed the validity of Rule 12A of the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016 (for short ―MCR, 2016‖).

10. While urging applicability of provisions of Rule 12A of the MCR to all mining leases since 2021, the Petitioners have consistently been raising concerns about the feasibility of achieving the prescribed production and despatch targets. By communication dated 22nd December, 2021, the Petitioners highlighted geological W.P.(C) No.31035 of 2025 & Batch and technical constraints associated with the Sukinda Chromite Block. It was specifically pointed out that, due to geo-technical challenges involved in the Sukinda valley, open-cast method would not be feasible beyond two to three years and it would be necessary to switch to underground mining in the hard strata lying 300m below the ground level. It was also pointed out that the open- cast mineral reserves were only to the tune of about 3.9 million tonnes and thus, future MDPA targets would need to be substantially revised.

11. In the correspondence made to the Ministry of Mines on 28th December, 2021, these concerns were demonstrated by the Petitioner and made further communication dated 14th February, 2022, seeking intervention of the State authorities. Pertinently, in the said correspondence/ representations, the Petitioner highlighted that the available open-cast reserves were limited and that continuation of mining at the MDPA- prescribed levels would be neither technically feasible nor safe. Relevant portion of the said representation is revealed as follows:- W.P.(C) No.31035 of 2025 & Batch ―xxxx Therefore, change in the MDPA in lines with the ones proposed for the new virgin mines should be considered especially for cases like Sukinda where there is a change in mining method which is akin to opening of a new mine and hence deserves the transition period. 2 years relaxation from the minimum dispatch requirement for mine development and then a period of at least 4 years to achieve the higher levels with respect to Approved Mine Plan lessee‘s production should be considered in the interest of Sustainable development of the mine. instead of earlier in mind Further, keeping the overall scientific development, sustainable development of Chrome ore requires mining, Mineral Conservation, matter overarching legitimate change in rule of law to view minerals separately based on the merit of the case. Geographical challenges, change in circumstances, on ground reality etc. cannot be overlooked and are important factors to be kept in mind while fixing targets under MDPA to ensure continuity of operations and sustainable mining. Therefore, the current situation calls for a round of strong concerted recommendation from State Govt on reasonable classification across minerals on Rule 12A(1) & (2) as blanket application of the aforesaid Rule is detrimental to the interest of the industry and cripple the mining sector, especially the miners producing minerals like chromite which is already reeling under the stress of the pandemic situation and also calls for suitable revision in targets set out under MDPA dated 22.07.2020 in relation to the Sukinda Block for the reasons mentioned above.‖

12. Subsequently, the Directorate General of Mines Safety, Bhubaneswar Region, by letters dated 10th December, 2020 and 24th January, 2022, portrayed safety concerns regarding the slope failures of the mine in the W.P.(C) No.31035 of 2025 & Batch case of opencast mining. Relevant portion of the letter dated 9th/10th December, 2020 revealed as follows:- ―xxxx Please refer to the inspection made on 28.11.2020 by the officers of this Directorate of Sukinda Chromite Mine of M/s. Tata Steel Mining Limited. During course of inspection, following contravention was observed: Condition no.2.1 (a) of permission letter No.BJA/CH-7/P- 106(2)(b)/2013/994 dated 22.05.2013 read with renewal letter No.BBR-JA/CH-7/P-106(2)(b)/2018/2144 dated 15.10.2018: Height of 80mRL benches (about 20m) on hanging wall side of NB-IV quarry was more than the digging height (11m) of hydraulic excavator (EC 750 DL of make VOLVO) On Northern hanging wall side of North Band IV quarry, height of the bottommost bench (12th bench from surface) was about 25m and its width was less than height of the bench at many places. A high wall was formed in waste rock for a length of about 590m on Northern hanging wall side between points (3934E, 2515N), (3983E, 2520N), (3987E, 2512N), and (3948E, 2505N) as shown on the plan no.SCB/DGMS/2020/02 dated 01.10.2020. On the eastern side of North Band IV quarry, the height of 1st bench, 4th bench 5th bench, 6th bench and 7th bench from surface were about 30m, 20m, 20m, 20m, 13m and 18m respectively. Height of the benches was more than the digging height (11m) of excavation machine (EC 750 DL of make VOLVO) engaged in the mine. A high wall was formed in waste rock for a length of about 107m on east side between points (3934E, 2515N), (3983E, 2520N), (3987E, 2512N), and (3948E, 2505N) as shown on the plan no.SCB/DGMS/2020/02 dated 01.10.2020. (3983E, 2520N), (3987E, 2512N), and (3948E, 2505N) as shown on the plan no.SCB/DGMS/2020/02 dated 01.10.2020. One was being extracted at the toe of the above high wall(s) by deploying heavy earth moving machineries. W.P.(C) No.31035 of 2025 & Batch rock was Waste Loose friable boulders/materials were found on the sides of benches which required proper dressing. and weak. I, therefore, by virtue of powers conferred upon by the Chief Inspector of Mines (also designated as Director General of Mines Safety) under Section 22A(1) of Mines Act, 1952, and by virtue of authorization granted to me under Section 6(1) of Mines Act, 1952, hereby five you notice to rectify the above mentioned contravention within a period of 120 days from the date of issue of this letter. You are requested to submit report of compliance by registered post in duplicate before the expiry of the period of said notice failing which further action as per statute may be initiated without any further reference.

You are also requested to display a copy of this notice on the mine‘s notice board for a period of at least three weeks from the date of its receipt and confirm in writing that the same has been done.‖ Relevant portion of the letter dated 24th January, 2022 revealed as follows:- ―xxxx Please refer to the inspection made by the undersigned of Sukinda Chromite Mine on 13.01.2022, when following contravention was observed:

1.0. Regulation 106 of the Metalliferous Mines Regulations, 1961 read with of this Directorate‘s letter no.8202, dated 24.03.2021: Condition No.3.2: Access road in MB-2 southern side approaching to 60 mRL was damaged between 3400E & 3600E and at 2150N. Just above the haul road, there was a slight failure in upeer benches due to heavy rain. Agent and manager have agreed to block the access road in Mid-band-II approaching to 60m RL between 3400E & 3600E and at 2150N till rectifications are made in the upper benches and haul road is suitably widened. the Metalliferous Mines 2.0. Regulation 148(2) of Regulations, 1961 read with DGMS (Legis) Circular No.3/2017, dated 06.11.2017: Adequate lighting arrangement at Dump-3 and OB-II quarry was not provided. Illumination plan indicating location, places, W.P.(C) No.31035 of 2025 & Batch type of illumination devices, fixtures, lamps, supports, any other devices for illumination and showing required as well as measured value of light at various places to be illuminated was not brought upto-date based on the monthly illumination survey and considering the current status of workings. The detailed written illumination scheme was not formulated including therewith duties & responsibilities of key officials for better implementation of illumination standards.

3.0. Regulation 106 of the Metalliferous Mines Regulations, 1961 read with of this Directorate‘s letter no.8202, dated 24.03.2021 read with DGMS (Tech) Circular No.2/2020, dated 09.01.2020; Condition No.5.4. Suitable slope monitoring system in the old dump between 1200N to 1800N was not deployed for ensuring timely withdrawal of men & machinery working near the present workings likely to be affected by an impending slope failure. Suitable monitoring system in the upper benches in the Mid-band- II was also not deployed.

4.0. Rule 40(2)(b) of Mines Rules 1955 read with DGMS Circular No.14/1962, Proper splint and bandages were not applied for first aid during transporting of injured person from mine bench to hospital. In view of the above, you are requested to rectify the above contraventions at the earliest and submit a point- wise compliance to this Directorate within a period of 21 days from the date of issue of this letter.‖

13. In response to the representations, the Director of Mines, by communication dated 2nd March, 2022, called upon the Petitioners to make a presentation. Relevant portion of the said letter revealed as follows:- ―xxxx In inviting a reference to your letter dt.22.12.2021 addressed to the Principal Secretary to Govt. Deptt. of Steel & Mines, Odisha on the subject mentioned above, it is requested to make a presentation on the matter held W.P.(C) No.31035 of 2025 & Batch on 04.03.2022 at 4.30 p.m. through VC. Necessary link will be provided well before the meeting‖

14. Pursuant to the aforesaid letter, a meeting was held on 4th March, 2022. In the said meeting, the Petitioners highlighted that the Sukinda Chromite Block had only 52 lakh tonnes (5.2 MT) of open-cast reserves out of which 27.2 lakh tonnes (2.72 MT) had been exhausted in the first 2 MDPA years, and resultantly, only

24.8 lakh tonnes (2.48 MT) of opencast reserves are remaining from the 3rd Year onwards. Therefore, the MDPA target of 17 lakh tonnes (1.7MT) would not be feasible. In view of the same, the Director of Mines, Government of Odisha advised the Petitioner No.1 to submit a modified mining plan. The minutes of the meeting/proceeding dated 4th March, 2022 revealed as follows:- ―xxxx A meeting was held on 04.03.2022 under Chairmanship of the Director of Mines, Odisha for a presentation by M/s. TATA Steel Mining Limited in response to their request vide letter dated 22.12.2021 & 14.02.2022 on the issue of challenges of minerable reserves in open cast mining and to meet MDPA targets. The following officers were present during the meeting on the above presentation by M/s. TATA Steel Mining Ltd. W.P.(C) No.31035 of 2025 & Batch

1. Director of Mines, Odisha, Bhubaneswar 2. Dr. U.C. Jena, Addl. Director of Mines, Bhubaneswar

3. Mr. Pankaj Satija, MD, TSML 4. Mr. Sushant Kumar Mishra, Sr. GM, TSML 5. Mr. Rajiv Mohanty, Head (NRD) 6. Mr. Aswini Kumar Mohanty, Resident Executive Mr. Pankaj Satija, MD, TSML presented the unique case of limited opencast mine life of Sukinda Chromite Mine and the technical challenges involved in meeting the MDPA targets on a sustained basis till the underground project reaches its full capacity. The following points were highlighted.  Sukinda Chromite Mine had only 52 Lakh Tons of chrome ore minable reserves, through opencast mining methods, as per approved mine plan by IBM in 2020. After meeting the targets of 13.6 Lakh Tons / Year for two MDPA years, the remaining reserves through opencast mining, by beginning of 3rd MDPA year (23rd July 2022 onwards) would be 24.8 Lakh Tons. Considering the MDPA targets @17 Lakh Tons per year from 3rd year onwards for Sukinda mine, the opencast reserves, would exhaust within 1.5 years from July 2022 (by Dec 2023).  The depleting opencast reserves of chrome ore has necessitated initiation of the Underground mining project as per approved mine plan by IBM. There is a delay in starting the underground project by more than one year against approved mine plan, considering the pandemic and complexities in the project.  Director of Mines advised TSL to come with approved revised Mining Plan with timeline and production plan for underground mines in two-month time for consideration.‖

15. Upon submission of application for modification of mining plan on 7th June, 2022, it was approved on 22nd July, 2022, whereby maximum production target for the years 2023-24 and 2024-25 were revised to 0.6 MTPA. W.P.(C) No.31035 of 2025 & Batch The relevant portion of the Modified Mining Plan reads as thus:- ―xxxx In exercise of the powers conferred by clause (b) of sub- section (2) of section 5 of the Mines & Minerals (Development & Regulation) Act, 1957 and clause (3) of Rule 16 & Rule 17 of the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016 read with Government of India Order No.S.O. 1857(E) dated 18th May, 2016, I hereby Approve the Modification of Mining Plan of Sukinda Chromite Mine along with Progressive Mine Closure Plan (PMCP), over an area of 406.42 ha (As per DGPS)/ 406.00 ha (As per RoR) in Jajpur district of Odisha State, submitted by M/s. Tata Steel Mining Ltd. This approval is subject to the following conditions: I. The Modification of Mining Plan is approved without prejudice to any other law applicable to the mine area from time to time whether made by the Central Government, State Government or any other authority and without prejudice to any order or direction from any court of competent jurisdiction. II. The proposals shown on the plates and/or given in the document is based on the lease map / sketch submitted by the applicant / applicable from the date of approval. lessee and III. It is clarified that the approval of aforesaid Modification of Mining Plan does not in any way imply the approval of the Government in terms of any other provision of Mines & Minerals (Development & Regulation) Act, 1957, or the Mineral Concession Rules, 2016 and any other laws including Forest (Conservation) Act, 1980, Environment (Protection) Act, 1986 or the rules made thereunder, the Occupational Safety, Health and Working Conditions Code, 2020 and Rule & Regulation made thereunder. IV. Indian Bureau of Mines has not undertaken verification of the mining lease boundary on the ground and does not undertake any responsibility regarding correctness of the boundaries of the W.P.(C) No.31035 of 2025 & Batch leasehold shown on the ground with reference to lease map & other plans applicant/lessee. furnished by V. At any stage, if it is observed that the information furnished, data incorporated in the document are incorrect or misrepresent facts, the approval of the document shall be revoked with immediate effect. VI. This approval has been given for mining proposal for the year 2022-23 to 2024-25 and are subject to the validity of lease period. VII. If this approval conflicts with any other law or court order/ Direction under any statute, it shall be revoked immediately. VIII. The report considered pre-feasibility reserve/resource estimation as per UNFC submitted by the preferred bidder / lessee which is prepared based on the current data as reported and it may not establishes the future economic viability of mining project, which may be affected by the market dynamics and other related factors. IX. It shall be mandatory for the project proponent, abstracting ground water, to obtain ―No Objection Certificate‖ from Central Ground Water Authority or, the concerned State/Union Territory Ground Water Authority, as the case may be.‖

16. The aforesaid Modified Mining Plan being brought to the notice of the Government of Odisha by the Petitioners on 25th July, 2022, a meeting was scheduled on 8th August, 2022, wherein the Petitioners were requested to make a presentation on the matter. In connection thereto, the Petitioners, vide letter dated 10th August, 2022, addressed to Director of Mines and Geology, Odisha, Bhubaneswar highlighted that it was W.P.(C) No.31035 of 2025 & Batch imperative to revise the MDPA Production to bring it in alignment with the approved Mine Plan of the SCM.

17. On 14th September, 2022, the State Government indicated that modification of the MDPA was not within its competence and advised the Petitioners to approach the Ministry of Mines. This position was reiterated by the Director of Mines on 1st October, 2022. The relevant portion of the letter dated 14th September, 2022 revealed as follows:- ―xxxx I am directed to invite a reference to the letter and subject amendment/modification of MDPA at this level, as requested for by the lessee i.e., M/s. Tata Steel Mining Ltd. the State the proposed amendment Government. Further, /modification is also not in conformity with Rule 12A(2) of M.C. Rules, 2016. the competency of is not within It is, therefore, requested to advise the lessee M/s. TATA Steel Mining Ltd. to approach the Government of India in Ministry of Mines for the purpose.‖

18. Accordingly, Petitioners submitted representations to the Ministry of Mines on 13th October, 2022 as well as the State Government on 25th October,

2022. The State Government, in turn, by communication dated 15th November, 2022, forwarded the Petitioners‘ W.P.(C) No.31035 of 2025 & Batch request to the Ministry of Mines for consideration. The relevant portion of the letter dated 15th November, 2022 is extracted hereunder:- ―xxxx I am directed to invite a reference to the letter and subject cited above and to say that, M/s. TATA Steel Mining Ltd. has requested for modification of target of production of minerals set out under MDPA executed on 22.07.2020 in relation to the Sukinda Chromite Block indicating that they have to switch over to underground mining as the available deposit in the approved open cast mining would be exhausted within 2-3 years. The copy of the letter dated 25.10.2022 of M/s. Tata Steel Mining Ltd. is enclosed for reference. It is to indicate here that the amendment/modification of MDPA at this level as requested by the lessee is not within the competency of the State Government and also the proposed amendment/modification in the MDPA is not in conformity with Rule 12A(2) of MC Rules, 2016. M/s. TATA Steel Mining Ltd. has further requested to consider revision of MDPA on the grounds that in Sukinda Chromite Mine, they must have to produce 17 lakh tonnes from 3rd year onwards and the initial mineable opencast reserve of 52 lakh tonnes as on 01.07.2020 has now been depleted to 39 lakh tonnes by 22.07.2022 (second year of MDPA), which would be exhausted within 2-3 years, i.e. by December, 2024. For full-fledged underground mining on account of depleting of the Chromite deposit available under open cast mine, they have got the revised mining plan approved by the Indian Bureau of Mines (IBM) through discreet site visit by IBM officials. The modified mining plan has been approved by No.BBSUJP/CR/2172/MPM/2022-23 22.07.2022. The copy of the relevant portion of the said mining plan is enclosed for ready reference. IBM In view of the above, the proposal of M/s. TATA Steel Mining Ltd. may kindly be considered appropriately and the State Government may kindly be accordingly W.P.(C) No.31035 of 2025 & Batch allowed to modify the target of annual production / dispatch under the MDPA of Sukinda Chromite Block of Tata Steel Mining Ltd.‖

19. Following a set of representations and discussions, including meetings held in July, 2023, the Ministry of Mines, by communication dated 26th July, 2023, declined the request for reduction of MDPA targets. It was further indicated therein that, in the event compliance with the applicable requirements was not feasible, the Petitioners could surrender the lease, whereupon the block could be re-auctioned. Relevant portion of the letter/communication dated 26th July, 2023 revealed as follows:- ―xxxx Subject- Request of M/s. Tata Steel Mining Ltd. for modification of target of production of minerals set out under MDPA in respect of their Sukinda chromite block granted through auction. Sir, (copy I am directed to refer to letter no.10761/SM dated 15.11.2022 enclosed) Government of Odisha on the above mentioned subject and to say that the matter has been examined in consultation with the Indian Bureau of Mines and it is observed that M/s. Tata Steel Mining Ltd. was also the lessee of the Sukinda Chromite mine prior to its auction. received

2. Being the previous lessee of the Sukinda mine, M/s. Tata Steel Mining Ltd. was well aware of the production trend of this mine as well as the future requirement of shifting the operations to underground W.P.(C) No.31035 of 2025 & Batch mining. Further, as per the letter under reference, the MDPA for the Sukinda mine was signed on 22.07.2020 i.e. well after M(OAHCEM)CR, 2016 on 20.03.2020. insertion of Rule 12A

3. Hence, lessee has executed the MDPA having complete knowledge of the past production, future requirement of production as per Rule 12A of M(OAHCEM)CR, 2016 and future change in mining situation. If the relaxation of rules is considered in this case now, then it would amount to change of conditions of the MDPA which the lessee himself has agreed upon.

4. It is informed that if maintaining production level as per Rule 12A(2) is not feasible for the lessee of the Sukinda mine and the lessee surrenders the lease to the State Government, the State Government could re- auction the said mine after obtaining relaxation of the provisions of Rule 12A prior to the auction of this mining lease under Section 31 of MMDR Act. In such a case, the issue of post-award change of MDPA conditions would not arise. This issues with the approval of the competent

5. authority.‖

20. Subsequently, IBM, by letter/communication dated 4th December, 2023, informed the Petitioners that the Modified Mining Plan approved on 22nd July, 2022 had lost its relevance in view of the decision of the Ministry of Mines and accordingly directed to submit a revised mining plan in conformity with MDPA targets, relevant portion of the said letter dated 4th December, 2023 is extracted hereunder:- W.P.(C) No.31035 of 2025 & Batch ―xxxx Sub: Modification of Mining Plan in respect of Sukinda Chromite Mine as per the Mine Development and Production Agreement (MDPA) production target … Reg. Sir, This has reference to the subject cited above. In this connection, the Modification of Mining Plan of Sukinda Chromite Mine was approved on 22.07.2022 with production proposal less than the MDPA target. The proposal for reduction of MDPA target was sent to the Ministry of Mines by State Government for consideration. However, the same has been denied by Ministry of Mines vide their letter No.16/67/2022-MinesVI dated 26.07.2023. In view of the above, the Modification of Mining Plan approved on 22.07.2022 has currently no relevance. You are therefore directed to submit draft modification of mining plan with production proposal as per MDPA within 1(one) month from issue of this letter.‖

21. In response the aforesaid letter, Petitioners vide communication/letter dated 3rd January, 2024, indicated that, given the prevailing condition of the opencast mine, achieving a production level of 1.7 MTPA could no longer be feasible owing to the prevailing factors such as unsafe working conditions which had been flagged by statutory authorities such as the IBM and the Directorate General of Mines Safety. The mining operations at Sukinda, thus, should continue accordance with the production limits set forth in the W.P.(C) No.31035 of 2025 & Batch modified Mining Plan approved by IBM on 22nd July,

22. On 13th March, 2024, IBM issued a show-cause notice proposing revocation of the modified mining plan, calling upon the Petitioners to submit its response by 20th March, 2024. The relevant portion of the said show-cause notice dated 13th March, 2024 issued by the IBM is reproduced hereunder:- ―xxxx This has reference to the above referred letters on the subject mention above. In this connection, it is pertinent to mention here that the modification of Mining Plan for the mining lease under reference was approved vide this office letter dated 22.07.2022 as per the proceedings of the meeting dated 14.03.2022 which was held on 04.03.2022 under the Chairmanship of Director of Mines, Odisha. (Copy enclosed as Annexure-I).

02. Meanwhile, Ministry of Mines, New Delhi vide letter No.16/67/2022-Mines VI dated 26.07.2023 had conveyed their decision in this regard to the Principal Secretary, Department of Steel & Mines, Govt. of Odisha, copy of which is enclosed as Annexure-II, wherein the proposal made thereunder has been denied by the ministry.

03. Keeping in view of the decision of Ministry of Mines, this office vide letter dated 04.12.2023 (Enclosed as the draft Annexure-III) had directed modification of Mining Plan with production proposal as per MDPA within one month from the issue of this letter. But, your reply vide letter dated 03.01.2024 to this office in this regard has been duly examined and found unsatisfactory. to submit W.P.(C) No.31035 of 2025 & Batch

04. Under above circumstances, the modification, as approved vide letter dated 22.07.2022 are no more enabled/relevant and required to be withdrawn. It is therefore directed to show cause on or before 20.03.2024, as to ―why the modification of mining plan approved vide this office letter dated 22.07.2022 shall not be revoked.‖

05. Please note that no further communication will be made in this regard and subsequent action thereon will be initiated as per statute.‖

23. In the interregnum, and in view of depletion of mineable reserves and safety concerns, the Petitioners proceeded to initiate closure steps as per the procedure prescribed. On 30th March, 2024, the Petitioners submitted a Final Mine Closure Plan (FMCP) citing depletion of reserves and safety concerns. Thereafter, in response to the show-cause notice dated 13th March, 2024 issued by the IBM, the Petitioners by way of its reply requested IBM to close any further action on the show- cause notice.

24. Pursuant to the submission of FMCP to IBM, the Petitioners also issued another letter dated 17th May, 2024 to Department of Steel & Mines, Government of Odisha for surrender of the Sukinda Chromite Mine. The aforesaid letter followed reminder W.P.(C) No.31035 of 2025 & Batch communications/letters dated 17th July, 2024, 27th August, 2024 and 20th January, 2025.

25. On 20th September, 2024, the modified mining plan dated 22nd July, 2022 was revoked by Regional Controller of Mines, IBM. In response to the same, the Petitioners requested that the aforesaid revocation order may be withdrawn vide communication/letter dated 25th September, 2024 and also approached the Chief Controller of Mines on 17th October, 2024 under Rule 61(1) of MCDR 2017 for revision of the revocation order dated 20th September, 2024 issued by the RCOM. Thereafter, on 1st October, 2024, IBM intimated to the Petitioner No. 1 that after inspection of the area and examination of the FMCP, few shortcomings were observed which were required to be attended to, and thereafter to re-submit the FMCP. The relevant portion of the revocation letter dated 20th September, 2024 issued by the Regional Controller of Mines, IBM is reproduced hereunder:- W.P.(C) No.31035 of 2025 & Batch ―xxxx In exercise of the powers conferred by clause (b) of sub- section (2) of section 5 of the Mines & Minerals (Development & Regulation) Act, 1957 and clause (3) of Rule 17 of the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016 read with Rule 10(1) of the Mineral Conservation and Development Rules, 2017 and Government of India Order No.S.O. 1857(E) dated 18th May, 2016; I hereby revoke the Modification of Mining Plan along with Progressive Mine Closure Plan (PMCP) in respect of Sukinda Chromite Mine over an area of 406.42 Ha in Jajpur District of Odisha state approved vide this office letter dated 22.07.2022 for the following reasons:- In the reference 1 read above, Mining Plan of Sukinda Chromite Mine over an area of 406.42 Ha in Jajpur district of Odisha State was approved as per the provisions of Rule 16 of MCR 2016. The lease deed was executed in favour of M/s. TSML (presently M/s. Tata Steel Ltd.) on 23.07.2020 and MDPA was executed on 22.07.2020 between the State Government and M/s. TSML (presently M/s. Tata Steel Ltd.) as per the provisions of extant rules. In the reference 2 read above, proceedings of the meeting held on 04.03.2022 on presentation by M/s. TSML regarding challenges of mineable reserves in open cast mining and to meet the MDPA targets chaired by the Directorate of Mines, Govt. of Odisha wherein Director of Mines, Govt. of Odisha advised M/s. TSML (presently M/s. Tata Steel Ltd.) to come with approved revised Mining Plan with timeline and production plan for underground mines in two-month time for consideration. In the reference 3 read above, Regional Office, IBM, Bhubaneswar accorded approval of the Modifications in the Approved Mining Plan as per the advice of the State Government. In the reference 4 read above, M/s. TSML (presently M/s. Tata Steel Ltd.) requested Director of Mines, Govt. of Odisha to revise MDPA targets for Sukinda Chromite Mine after approval of the Modifications in the Approved Mining Plan. In the reference 5 & 6 read above, Government of Odisha, Steel & Mines Department and Directorate of W.P.(C) No.31035 of 2025 & Batch Mines, Govt. of Odisha stated that the Amendment/ Modification in MDPA is not within the competency of the State Govt. and further the proposed amendment/ modification is also not in conformity with Rule 12A(2) of MC Rules, 2016. Thus, M/s. TSML (presently M/s. Tata Steel Ltd.) may approach Govt. of India, Ministry of Mines for the purpose. In the reference 7 read above, Government of Odisha, Steel & Mines Department sent letter dated 25.10.2022 to the Government of India, Ministry of Mines requesting therewith to consider the proposal of M/s. TSML (presently M/s. Tata Steel Ltd.) appropriately and accordingly allow State Govt. to modify the target of annual production/despatch under MDPA of Sukinda Chromite Block. In the reference 8th cited above, after examination of the matter, Govt. of India, Ministry of Mines stated that lessee has executed the MDPA having complete knowledge of the past production, future requirement of production and future change in mining situation as M/s. TSML (presently M/s. Tata Steel Ltd.) was also the lessee of the Sukinda Chromite Mine prior to its auction. Thus, the lessee was well aware of the production trend of this mine as well as the requirement of shifting operations to underground. Any change in MDPA or relaxation would amount to change in the conditions of MDPA. Thus, if maintaining production level as per rule 12A(2) is not feasible for the lessee and the lessee surrenders the lease to the State Govt., the State Govt. could re-auction the said mine after obtaining relaxation of the provisions of Rule 12A prior to the auction. In the reference 9 read above, Government of Odisha, Steel & Mines Department requested RCOM, IBM, Bhubaneswar Regional Office applicability of revised mining plan and inform the annual production feasible to be followed from FY 2024 onwards as Ministry of Mines, Government of India vide letter dated 26.07.2023 has not agreed to the proposal of M/s. TSML (presently M/s. Tata Steel Ltd.). indicate In the reference 10 & 11 read above, accordingly this office vide letter dated 04.12.2023 has directed to submit the draft modification of Mining Plan with production proposal as per MDPA within one month from the issuance of this letter, wherein it was also conveyed to M/s. TSML that Ministry of Mines, New Delhi has W.P.(C) No.31035 of 2025 & Batch denied the aforesaid proposal, but M/s. TSML (presently M/s. Tata Steel Ltd.) failed to comply as per reply dated 03.01.2024 communicated to this office. In the reference 12 & 13 read above, further (sic) opportunity was given by issuing a show cause notice vide this office letter dated 13.03.2024 for compliance. However the reply dated 19.04.2024 in this regard was also examined in this office and found unsatisfactory for compliance.‖

26. In the meanwhile, on 8th October, 2024, the IBM approved the Final Mine Closure Plan under Rule 24(2) of the MCDR, 2017. Pertinently, as per the aforesaid approved FMCP, the Time Schedule for Closure of Mines was provided under Clause 5.1.15 thereof. Clause 5.1.15 stipulated that ―Decommissioning & Demolition‖ activities would commence from Q-3 (2024-25) and all activities, including rehabilitation and reclamation works, would be completed by Q-4 (2024-2025). Relevant portion of the letter dated 8th October, 2024 reads as thus:- ―xxxx In exercise of the power delegated to me vide Gazette Notification No.T-43010/CGBM/2017 dated 17.09.2021 published in Govt. of India Gazette on 14.10.2021 under Rule 24(2) of Mineral Conservation and Development Rules, 2017, I hereby APPROVE the above said Final Mine Closure Plan in respect of your Sukinda Chromite Mine (11ORI19028) over an area of 406.00 ha (ROR)/406.420 ha (DGPA) Village- Kalarangitta, District- Jajpur, Odisha State. This approval is subject to the following conditions: W.P.(C) No.31035 of 2025 & Batch

1. This Final Mine Closure Plan is approved without prejudice to any other laws applicable to the mine from time to time whether made by the Central Government, State Government, or any other authority. in any way That this approval of the Final Mine Closure Plan 2. does not imply the approval of the Government in terms of any other provision of Mines & Minerals (Development & Regulation) Act, 1957, or the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016 and any other laws including Forest (Conservation) Act, 1980, Environment (Protection) Act, 1986, or the rules made thereunder.

3. That this Final Mine Closure Plan is approved without prejudice to any order or direction from any court of competent jurisdiction.

4. That the Regional Office, Indian Bureau of Mines, Bhubaneswar shall be informed after completion of activities of final mine closure as per proposal of the Final Mine Closure Plan.

5. Yearly report as require under Rule 26(2) of MCDR, 2017 setting the extent of protection and rehabilitation works carried out as envisaged in the approved final mine closure plan shall be submitted to the Regional Controller of Mines, Indian Bureau of Mines, Bhubaneswar.

6. As per the Hon‘ble Supreme Court of India in Writ Petition No.114/2014 dated 08.01.2020, the mining lease holders shall, after ceasing mining operations, undertake re-grassing the mining area and any other area which may have been disturbed due to their mining activities and restore the land to a condition which is fit for growth of fodder, flora, fauna etc. The mine lease is granted through Auction and 7. provisions of Rule 12(2) of the Mineral (Auction) Rules, 2015 & Rule 21 of the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016 are applicable.

8. Since Mine Development and Production Agreement (MDPA) is in place between the lessee and the State Government, and performance security has been provided, the State Government may pursue appropriate W.P.(C) No.31035 of 2025 & Batch actions consistent with regulations. relevant rules and

9. The Final Mine Closure Plan is approved without any prejudice or without affecting the Mine Development and Production Agreement (MDPA) signed between the State Government and the Lessee or any further decision taken by the State Government in this regard.

10. The Lessee shall submit a report on status of implementation of proposals given in the Final Mine Closure Plan on half-yearly basis.

11. The lessee shall submit an updated Geological Report before obtaining Final certificate.‖

27. Thereafter, immediately after receipt of FMCP approval, on 14th October, 2024, the Petitioners requested Additional Chief Secretary, Department of Steel & Mines, Odisha to accept the application for surrender of the mining lease and a copy of approved FMCP was also enclosed by the Petitioner No.1 communication.

28. On 13th November, 2024, the Petitioners informed the Government of Odisha that since the FMCP had been approved on 8th October, 2024, it intended to discontinue production at Sukinda Chromite Block with effect from 1st December, 2024 in order to implement the provisions of approved Final Mine Closure Plan. W.P.(C) No.31035 of 2025 & Batch

29. On and from 1st December, 2024, the petitioner had stopped its mining operations towards implementation of the FMCP and relied on the monthly returns [in Form F1 under Rule 45(5)(b)(i) of the MCDR, 2017 and in Form A & A1 in the online i3MS system maintained by the State of Odisha] to substantiate that that the production and mineral processing has been ceased w.e.f. 1st December, 2024. It is also stated that the said returns have been duly verified by the State authorities.

30. On 14th December, 2024, the Chief Controller of Mines, IBM, passed an order after hearing the parties in exercise of his revisional jurisdiction under Rule 61 of the MCDR, 2017 and passed an order concluding that the revocation of the Modified Mining Plan on 20th September, 2024 was not in alignment with the relevant rules. Therefore, the CCOM referred the matter back to the RCOM for further action in terms of the applicable Rules. The observation and conclusion portion of the Order dated 14th December, 2024 of the Chief Controller of Mines, IBM reveal as follows:- W.P.(C) No.31035 of 2025 & Batch ―xxxx In light of the content of application and submissions made during the hearing, it is to mention that: It is noted that the modifications in mining plan i. approved vide letter dated 22.7.2022 were done, as per the expression of interest by the State Government in writing, recorded in the minutes of a meeting held in this regard. ii. Subsequent to approval of modification State could not modify the MDPA, as per the communication received by it from Ministry of Mines vide letter dated 26.7.2023. iii. It is observed that while issuing Show Cause Notice and subsequent order of revocation, Regional Controller of Mine, Bhubaneswar referred the letter of Ministry of Mines dated 26.7.2023 addressed the State Government. iv. It is pertinent to note that not a word has been mentioned in the said letter about the modifications in the Mining Plan approved by the Regional Controller of Mines, Bhubaneswar. Yet the reason cited for revocation is this very letter of Ministry of Mines. v. No rule has been cited, while issuing show cause notice or revocation where, it is stated that the minimum production, as per the MDPA has to be specified or flow from the proposals of the 5 year production of concurrent approved mining plan, necessitating such an action post communication received by State Government. vi. At the same time Rule 17(3) of Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016 gives right to the lease operator for modifications in mine plan, as specified therein. vii. It is understood that, the minimum production requirement is specified by the State Government and not mandated by any rule to be linked with the Mining Plan. Conclusion & Order As mentioned above, it is clear that the reason cited for revocation of modified mining plan is not supported by the rule position, as a cause of revocation. Therefore, the matter is remanded back to the Regional Controller of W.P.(C) No.31035 of 2025 & Batch Mines, Bhubaneswar for reconsideration and to take further action, as considered prudent & just, as per the extant Statute, in the instant matter.‖

31. Pursuant to the aforesaid order, the Regional Controller of Mines, IBM vide Order/Letter dated 8th October, 2025 withdrawn the order of revocation of the modification of the Modified Mining Plan dated 20th September, 2024. As a corollary, the Modified Mining Plan was restored to be valid for the tenure of its operation. The relevant portion of the order/letter dated 8th January, 2025 reads as thus:- ―xxxx Sub:- Application for revision under Rule-61(1) of MCDR revocation order of approved 2017 against Modification of Mining Plan of Sukinda Chromite Mine along with Progressive Mine Closure Plan (PMCP) of Tata Steel Limited submitted under Rule 17(3) of MCR, 2016. Sir, In reference to the above, and in accordance with Rule 61(3) of the Mineral Conservation and Development Rules, 2017, the hearing on the revision application was conducted via Video Conferencing on 27.11.2024 at the office of the Chief Controller of Mines, Indian Bureau of Mines, Nagpur. After reviewing the case, the Chief Controller of Mines (IBM) and Revisionary Authority, in his order No.O- 11011(8)/5/2024-CCOM-MDR-IBM_HQ 1/45151/2024 dated 14-12-2024, concluded that the revocation of the modified mining plan was not in alignment with the relevant rules. As such, the matter was referred back to the undersigned for reconsideration and further action in accordance with the applicable statutes. W.P.(C) No.31035 of 2025 & Batch In light of the facts and observations provided by the Revisionary Authority, the revocation of the mining plan, as communicated in the undersigned‘s letter dated 20/09/2024 (which had been approved via letter dated 22/07/2022), is hereby withdrawn with immediate effect.‖

32. Thereafter, on 16th January, 2025, IBM issued a certificate confirming completion of mine closure activities in terms of the approved FMCP, which was communicated to the State Government on 20th January, 2025, by the petitioner reiterating its request acceptance of surrender.

33. On 7th January, 2025, the Deputy Director of Mines issued a demand notice raising a demand of Rs.1563.75 crores for the fourth year of the mining lease (23rd July, 2023 to 22nd July, 2024), alleging shortfall in dispatch. Relevant portion of the said demand notice reads as thus:- ―xxxx Sub:- Assessment of shortfall in dispatch of chromite in respect of Sukinda Chromite Block of M/s. Tata Steel Ltd. for the period of 23.07.2023 to 22.07.2024 Ref:- Govt. of Odisha, Deptt. of Steel & Mines Letter No.5336/SM, Dt. 16.07.2021. Sir, W.P.(C) No.31035 of 2025 & Batch In inviting a reference to the above noted subject, I am to say that the Govt. of Odisha, Deptt of Steel & Mines letter under reference (copy enclosed) has communicated regarding assessment of shortfall in dispatch vis-(cid:224)-vis the minimum dispatch required under sub-rule-1 & 1(A) of 12(A) of M.C. Rules-2016 and amendment Rule 2021 with reference to Rule 13 of Mineral Auction Rule-2015. Accordingly the assessment in respect of your Sukinda Chromite Block for the period of 4th year of lease execution i.e. w.e.f Dt. 23rd July 2023 to 22nd July 2024 has been made over 7,60,251.500 MT chromite as shortfall quantity based upon which a penalty of off- Rs.1563,75,95,980.92/- Rs.1563,75,95,981) is due for payment as per the assessment sheet at Annexure-I. A calculation sheet of penalty in details for the period from Dt.23.07.2023 to 22.07.2024 of said mines is enclosed herewith at Annexure-II for reference. (round You are therefore requested to make deposit the said amount of Rs.1563,75,95,981/- (Rupees one thousand five hundred sixty three crore seventy five ninetyfive thousand nine hundred eighty one) only at earliest for further course of action at this end.‖

34. On receipt of the aforesaid demand notice, the Petitioners submitted a detailed representation dated 28th January, 2025 disputing the demand on factual and legal grounds. On 3rd July, 2025, a revised demand notice was issued enhancing the demand to Rs. 1902.72 crore (from Rs.1563.75 crore) on account of Differential Royalty, District Mineral Fund charges and National Mineral Exploration Trust charges, among other charges, for alleged shortfall in dispatch of chromite and appropriation of performance security for 4th MDPA Year i.e. from 23rd W.P.(C) No.31035 of 2025 & Batch July, 2023 to 22nd July, 2024. The relevant extract of the revised demand notice is extracted hereunder:- ―xxxx Sub:- Revised Assessment of Shortfall under Rule 12A of Mineral (Other than Atomic and Hydrocarbon Energy Minerals) Concession Rules, 2016 in respect of Sukinda Chromite Block of M/s. Tata Steel Ltd for 4th MDPA Year. (Dt. 23.07.2023 to 22.07.2024) and appropriation of performance security. Ref:- Govt. of Odisha, Deptt. of Steel & Mines Letter No.7495/SM, Bhubaneswar Dt. 02.08.2022 & Director of Mines, Odisha, Bhubaneswar Letter No.7477/DM, Dt. 05.09.2022. Sir, With reference to the above cited letter on the subject and on supersession of this office assessment letter No.65/Mines, Dt.07.01.2025, this is to inform you that in pursuance to the declaration of Average Sale Price (ASP) by IBM and the provisions of Rule 12(A) of Mineral (Other than Atomic and Hydrocarbon Energy Minerals) Concession Rules, 2016 & Directorate of Mines letter under reference the revised assessment of shortfall in dispatch and appropriation of performance security for the 4th MDPA Year (Dt.23.07.2023 TO 22.07.2024) has been calculated of Rs.19027253760/- (Rupees One thousand Nine hundred Two Crores Seventy two lakhs Fifty three thousand Seven hundred Sixty only) along with TCS as applicable at the earliest for further course of action at this end.‖

35. The aforesaid revised demand notice dated 3rd July, 2025 was assailed by the Petitioners before this Court in W.P.(C) No. 22431 of 2025. The validity of Rule 12A of the MCR, 2016 has also impugned in the said writ petition. By order dated 14th August, 2025, this Court, W.P.(C) No.31035 of 2025 & Batch while issuing notice, has granted interim protection by staying the operation of the said demand notice dated 3rd July, 2025. The interim order dated 14th August, 2025 passed by this Court in W.P.(C) No.22431 of 2025 reads as thus:- ―1. The petitioner has filed the instant writ petition challenging the action of the authority in issuing the demand notice dated 3rd July, 2025 by invoking the provisions contained under Rule 12A of the Minerals (Other than Atomic and Hydro Carbons Energy Mineral) Concession Rules, 2016. the petitioner, Rule 12A was 2. According introduced in the said Rules, 2016, bringing not only the minimum production for the first two years of the lease and in sub-rule (2) thereof, the quantification was done for the third year. At the advent of its introduction into the statutory book, there was no concept of minimum ’dispatch’ at the time of the initial incorporation of the said provision but by virtue of a subsequent amendment inserted with effect from 10th June, 2021, sub-rule (1A) was introduced which imbibed within itself the concept of a "minimum dispatch" to be assessed on a quarterly basis in addition to other conditions and the criteria required under the said provisions. (1A) that at the time of

3. Sub-rule (1B) thereof further postulates that in the event the lessee does not maintain the minimum dispatch, the State Government may terminate such bids after giving a reasonable opportunity of hearing. We notice from sub-rule incorporation, the annual production and the minimum dispatch was also contemplated therein without any quantification but, subsequently, the quantification was done by virtue of ScheduleD of the Mine Development and Production Agreement (MDPA) where the average annual production of the preceding two years should be 1.70 Metric Tons Per Annum (MTPA) whereas the minimum production target, i.e., 80% of the same should be 1.36 MTPA. W.P.(C) No.31035 of 2025 & Batch indicated above, subsequent

4. As the said introduction of Rule 12A, the petitioner was facing inconvenience for undertaking open cast mining for which the approach was made to the authorities and also to competent authority for modifying the mining plan as the mining activities cannot be undertaken without conformity with the same.

5. It appears that the Indian Bureau of Mines (IBM) approved the modified mining plan for the periods from 2022-23 to 2024-25 reducing the production from 1.36 MTPA to 0.6 MTPA for the year 2023-24 and 2024-25 which was subsequently withdrawn on 8th January, 2025.

6. The demand notice is issued upon the petitioner which is a subject matter of challenge in the instant writ petition. The challenge is made on multiple counts including the violation of principles of natural justice. There is no symmetry between the "production" and the "dispatch" in terms of the aforesaid provisions and such disparity have rendered the performance impossible. Rule 12A is alleged as not only violative of the provisions of the parent Act, but also is unconstitutional. Therefore, the petitioner seeks it to be declared ultra vires. It is also assailed that the demand notice is without jurisdiction as it propagates the double levy of the applicable amount/premium. The record would reveal that after the first notice was issued in the month of January, the petitioner responded to the same, but without adverting to the issues raised therein, the impugned demand notice is issued by the authorities without dealing with the stand taken by the petitioner and is bereft of any such reasons having provided therein.

7. We notice a distinguishing fact in the instant case where the competent authority modified the mining plan much before the period for which the demand is levied and in the event the "production" is reduced, whether the "dispatch" which is much higher than the production can act adversely to the interest of the miner and, therefore, we feel that the provisions which are challenged in the instant writ petition require deep consideration.

8. We have been given to understand that the spate of litigations have come up before this Court which are still pending flagging and raising similar and identical issues and are fixed for hearing on 2nd September, 2025. Let W.P.(C) No.31035 of 2025 & Batch this matter be also tagged with W.P.(C) No.5215 of 2025 and be heard analogously.

9. It appears from the stand taken before us that a prima facie case has been made out for the reason that if the competent authority has modified the mining plan and reduced the statutory amount of the production, whether in absence of any modification and/or clarification in quantifying the dispatch, the same can withstand. We, therefore, restrain the opposite party-authorities from taking any coercive step till the next date of hearing. The opposite party-authorities are directed to file counter affidavit in opposition if they so like within the said period.‖

36. During the subsistence of the aforesaid interim protection, the Deputy Director of Mines issued yet another demand notice dated 3rd October, 2025 raising a demand of Rs. 2410,89,66,881/- for the fifth year of the mining lease period, i.e., 23rd July, 2024 to 22nd July, 2025, again alleging shortfall in dispatch. The said demand has been purportedly raised under Rule 12A of the MCR, 2016 towards differential royalty, bid premium, District Mineral Foundation contribution and National Mineral Exploration Trust contribution, among other statutory levies, for the alleged shortfall in dispatch for the fifth MDPA year. Pertinently, this period coincided with a certain period when the modified mining plan continued to remain in force and further, the Final Mine Closure Plan had already been approved with cessation of W.P.(C) No.31035 of 2025 & Batch mining operations with effect from 1st December, 2024 in terms of such approved FMCP. The relevant portion of the demand notice dated 3rd October, 2025 reveals as follows:- ―xxxx Sub:- Assessment for 5th MDPA year for the period from 23rd July-2024 to 22nd July-2025 towards shortfall in dispatch of Chrome Ore in respect of your Sukinda Chromite Block. Sir, Take a notice that a sum of Rs.2410,89,66,881 (Two Thousand Four Hundred Ten Crore Eighty-Nine Lakh Sixty-Six Thousand Eight Hundred Eight-One Only) towards shortfall in dispatch of 13,05,987.090 MT of Chrome Ore in respect of your Sukinda Chromite Block as per 5th MDPA year assessment for the period from 23rd July-2024 to 22nd July-2025 is payable by you (Copy of the calculation sheet enclosed). Hence you are hereby directed to deposit the above amount along with TCS as applicable at the earliest for further course of action at this end.‖

37. Being aggrieved by the aforesaid demand notice dated 3rd October, 2025, the Petitioners have filed the present writ petition questioning constitutional validity of Rule 12A of the MCR, 2016. Counter affidavit filed by the opposite parties:

38. Opposite party nos.1, 3 and 4 in their counter affidavit while challenging the maintainability of the writ petition, stated that the impugned demand notice was W.P.(C) No.31035 of 2025 & Batch issued in consonance with the provisions of Rule 12A of the MCR, 2016 read with the terms of the MDPA.

39. By virtue of Act 2 of 2020, Section 4B was inserted into the MMDR Act empowering the Central Government to prescribe conditions for sustained production and dispatch, pursuant to which Rule 12A was inserted into the MCR, 2016 vide G.S.R. 191(E) dated 20th March, 2020 and duly incorporated in the MDPA. By virtue of Rule 9A of the MCR, 2016 read with Section 8B of the MMDR Act, all statutory clearances of the previous lessee stood vested in the petitioners to enable immediate and sustained mining operations so as to enable the new lessee for continuance of ming operation in public interest and prevent any disruption of supply of raw material (minerals) to the Industries.

40. Rule 12A(1) of the MCR, 2016 clearly stipulates that the lessee during the first two years from the date of execution of new lease, shall maintain such level of production as to ensure minimum dispatch of eighty percent of the average of the annual production of two W.P.(C) No.31035 of 2025 & Batch immediately preceding years on a pro rata basis. The proviso to Rule 12A(2) inserted by G.S.R. 397(E) dated

10.06.2021 and effective from 01.07.2021 caste obligation on the new lessee to ensure annual production beyond two years form date of execution of new lease that at least eighty percent of such annual production is dispatched in the said year. Submission by Dr. A.M. Singhvi, Senior Counsel on behalf of the petitioners:

41. Heeding the submission of Dr. A.M. Singhvi, learned Senior Advocate appearing for the petitioners in W.P.(C) No.22431 of 2025 and W.P.(C) No.31035 of 2025.

42. There has been a paradigm shift from an earlier regime of allotting the mines on the basis of an application of the intending miners to an auction regime introduced by the MMDR Amendment Act, 2015, which creates a distinction between the mines, which were operational, but have to be re-allotted under such auction regime, which can be termed as brownfield leases and a mine which is to be operationalized for the first time and takes a characteristics of a greenfield mines. W.P.(C) No.31035 of 2025 & Batch

43. By virtue of Section 8A(5) all the existing captive mine leases were extended till 31st March, 2030. On the other hand, sub-Section (6) whereof extended the non-captive mine leases till 31st March, 2020.

44. Further amendment was brought by way of Mineral Laws (Amendment) Act, 2020, which came into effect from 13th March, 2020 introducing Section 4B and Section 8B applicable to the category of non-captive leases, which were extended till 31st March, 2020 providing an exhaustive provision relating to sustained production of the minerals in the country and prescribing the conditions for commencement and continuance of the production by the holders of the mining leases, who acquired rights, approvals and clearance under Section 8B.

45. Section 8B is relatable to the transfer of statutory clearances and acquiring all valid rights, approvals, clearances, licenses and the like, which were vested with the previous lessee to be vested for a period of two years into a new lessee subject to the conditions that W.P.(C) No.31035 of 2025 & Batch the new lessee shall apply and obtain all necessary rights, approvals, clearances, licenses and the like within the said period of two years from the date of the grant of new lease.

46. Section 13(2)(aa) of the said Act empowers the Central Government to make rules by imposing the conditions as may be necessary for commencement and continuance of the production by the holder of the mining lease under Section 4B.

47. Apropos the power to make Rules, the Central Government amended the existing MMDR Rules and introduced Rule 12A to operate from 20th March, 2020, which was further amended by inserting Rule 12A(1-A), Rule 12A (1-B), Rule 12A (1-C) and the proviso to Rule 12A(2) to take effect from 1st July, 2021 thereby imposing an imperative condition of compulsory dispatch of the ores winned and/or extracted by the said lessee, which is contrary to the spirit and purport of Sections 4B, 8B and 13(2)(aa) of the MMDR Act, which concerns production and not dispatch. W.P.(C) No.31035 of 2025 & Batch

48. By such amendment under Rule 12A, the imposition of notional compulsory dispatch/removal would attract the civil consequences by imposing penalty of royalty, DMF, NMET, bid premium irrespective of fact whether the same is dispatched or not.

49. Section 9 of the Act encompasses the incidence of imposition of royalty in respect of any mineral removed or consumed from the leased area at a rate specified in the Second Schedule to the said Act whereas Section 9B and 9C postulates the payment to the District Mineral Foundation and the National Mineral Exploration Trust respectively.

50. It is a cardinal principle of law that the delegated legislation cannot alter the core fabric of the parent Sections nor can underpin the same.

51. It is well settled that the subordinate legislation cannot create substantive rights, obligations and disabilities not provided in the parent statute as held by the apex Court in Kunj Behari Lal Butail v. State of H.P.: (2000) 3 SCC 40 and Global Energy Limited v. W.P.(C) No.31035 of 2025 & Batch Central Electricity Regulatory Commission: (2009) 15 SCC 570.

52. In the event the subordinate legislation transgress the boundaries of the substantive provisions contained in the parent Act, it would be regarded as ultra vires in view of the judgment rendered by the apex Court in case of Indian Express Newspapers (Bombay) Private Ltd. v. Union of India : (1985) 1 SCC 641 and State of Tamil Nadu v. P. Krishnamurthy and others : (2006) 4 SCC 517.

53. The doctrine of ultra vires envisages the strict adherence of rule making power as such power derives from the parent statute and susceptible to be declared as ultra vires, if it crosses the boundaries thereof and placed reliance upon a recent judgment of this Court in Naresh Chandra Agrawal v. Institute of Chartered Accountants of India : (2024) 13 SCC 241.

54. The Section as mentioned above does not mandate the compulsory or the notional dispatch, but the introduction of Rule 12A (2) of the said Rules compels the W.P.(C) No.31035 of 2025 & Batch removal and/or dispatch which is beyond the rule making power and, therefore, is ultra vires in that sense.

55. The conjoint meaningful reading of Sections 4B and 8B would exposit that Rule 12A (1) has its limited applicability to the initial two years, but the introduction of Rule 12A (2) altogether abandons the anchor of two years and purports to provide an open-ended and uncircumscribed regime without any guidelines for the 3rd year to the 50th year of the lease.

56. The intention of legislation can be envisioned by incorporating the Rules relatable to the first two years being in tune with the aforementioned Sections, but incorporating the provisions to operate beyond two years is in complete departure from the spirit of the provisions contained in the parent Act and, therefore, could be declared as ultra vires.

57. To buttress the contention and in order to ascertain the purport and the intention of bringing a cap of two years can be rationally visualized taking aid of a judgment of the apex Court in Re: Special Reference W.P.(C) No.31035 of 2025 & Batch No.1 of 2012: (2012) 10 SCC 1 and Manohar Lal Sharma v. Principal Secretary and others : (2014) 9 SCC 614 proposing to alter the regime of grant of mineral leases by auction.

58. The rationale behind the introduction of the auction regime primarily aims to achieve two goals; firstly, by resetting and syncing button to get all the old lease existing and legacy/ brownfield leases to restart on a common date and secondly, to ensure certain transition from the existing regime to new regime in relation to non- captive mines, which was to start after five years from the amendment having brought in 2015 so that it may not invite the huge national wide disruption of minerals.

59. In the backdrop of the above, the introduction of Rule 12A(2) to operate beyond the period from 3rd to 50th year offends the statutory scheme and beyond the purview thereof.

60. The importance of a primacy and mandatory efficacy of a mining plan specifying the phased and planned manner of mineral production on a year-wise W.P.(C) No.31035 of 2025 & Batch basis is a vital lynchpin/foundational document of all the mining regimes under the said parent Act and the Rules framed thereunder.

61. Mining plan becomes operatives only after the approval by the apex scientific, technical and statutory Central Government regulator i.e. the Indian Bureau of Mines, the existence whereof can be traced from Section 5(2)(b) and Rule 10 of the MCDR Rules, 2017.

62. Even though the sizable number of functions and the activities in the realm of mining is delegated to the State Government, but an important exception is created conferring power upon the Central Government to play an important and significant role in approving the mining plan through the regulatory organ i.e. IBM.

63. The mining plan is basically approved by the said regulatory body upon much analysis and scrutiny by way of specification of the production limits in every year to ensure scientific, systematic, non-exploitative and phased sequence of extraction keeping a paramount W.P.(C) No.31035 of 2025 & Batch consideration of environmental, ecological and safety in mind.

64. It is axiomatic that there cannot be any removal or compulsory dispatch without winning or extracting the mines and no sync can be conceptualized where the mining plan approved by the IBM specifying the production figures for different years and superimposition of compulsory dispatch under Rule 12A of the said Rules. In this regard, the same can be said to be ultra vires for undermining the superior hierarchy of the statutory mining plan.

65. Section 5 of the Act encompasses restriction on grant of prospecting license or mining leases and the importance of having a mining plan duly approved by the Central Government or the State Government is highlighted for the development of the mineral deposits in the area concerns.

66. Section 18 of the Act also contains the exhaustive provisions relating to mineral development, not only in relation to opening of new mines and the W.P.(C) No.31035 of 2025 & Batch regulation of the mining operations, but also excavation or collection of the minerals from any mines.

67. Precisely for such provisions in the parent Act, Rule 13 (2) of the MCR 2016 prohibits any mining operations de hors the mining plan approved by any officer of the IBM. Though Rule 13 of the MCR, 2016 postulates the tentative scheme of mining and annual programme and plan for excavation from year to year for five years, yet Rule 17 ordains the review and updatation of the said mining plan at an interval of every five years. The power is also conferred upon the holder of a mining lease to seek modification in the approved plan keeping in mind the business environment or facilitating increase in production capacity or in the interest of safe and scientific mining, conservation of minerals, for protection of environment or for any other reasons specified in writing. Even Rule 29 of the said Rules makes imperative by imposing the conditions which includes operation of the mine in accordance with the mining plan. W.P.(C) No.31035 of 2025 & Batch

68. Even Rules 10, 11 and 35 of the MCDR, 2017 recognize the supremacy, the primacy and the importance of a mining plan having a statutory flavour and, therefore, any mining operation de hors the mining plan, is not permissible and may attracts several civil consequences.

69. The language or the expressions used in Rule 12A conveys a laudable intention on its applicability to one class of leases i.e. brownfield leases, which was previously held by a lessee and allotted to a new lessee. The same is governed by Section 4B and Section 8B read with Section 13(2)(aa) of the MMDR Act, 1957 providing the benefit of automatic vesting of statutory clearances held by the previous lessee to ensure the immediate sustainable operation of the mines for a period of two years, but by incorporation of Rule 12A (2), it creates an oppressive regime for such leases from 3rd year to 50th year and, thus, treating unequal as equal. The stark disparity between the greenfield or the virgin leases and the brownfield leases can be reasonably gathered that there is no obligation imposed under the Rule in case of greenfield to compulsorily dispatch minerals for the W.P.(C) No.31035 of 2025 & Batch entirety of fifty years whereas the same is sought to be introduced for the entire period of a lease under Rule 12A(2). Such unequal treatment is violative of traditional anti-discrimination facet of Article 14 of the Constitution of India and, therefore, cannot be sustained in law.

70. Dr. Singhvi, learned Senior Advocate arduously submits that there has been a significant shift in the evolution of applicability of the equality clause emanating from Article 14 of the Constitution of India. He fervently submits that in the formative years till mid-1970s, it encapsulated only the anti-discrimination concept prohibiting unequals to be treated equally and equals unequally. Except the reasonable classification having nexus to object sought to be achieved and relied upon a judgment of the apex Court in Charanjit Lal Chowdhuri v. Union of India: (1950) SCC 833 and Shri Ram Krishna Dalmia v. Shri Justice S.R. Tendolkar: (1959) SCR 279.

71. Subsequently, an evolution has taken place in introducing the anti-arbitrariness facet in the judgment W.P.(C) No.31035 of 2025 & Batch delivered in case of E. P. Royappa v. State of Tamil Nadu: (1974) 4 SCC 3 where Article 14 was held both as a sword and a shield in any form of arbitrariness.

72. The anti-arbitrariness principles gained momentum encompassing variety forms of arbitrariness in diverse judgment viz. Maneka Gandhi v. Union of India: (1978) 1 SCC 248; Ajay Hasia v. Khalid Mujib Sehravardi: (1981) 1 SCC 722 and Ramana Dayaram Shetty v. International Airport Authority of India: (1979) 3 SCC 489.

73. According to Dr. Singhvi, there was a considerable deliberation and/or discourse amongst members of the constituent assembly on incorporation of ―substantive due process‖ Indian system/laws, but in Maneka Gandhi (supra), it was projected as ―procedural due process‖, but a conscious decision was taken to introduce the expression ―except according to procedure established by law‖ which was considered in the abovementioned constitution Bench decision as procedural due process. W.P.(C) No.31035 of 2025 & Batch

74. Subsequently, in the era of late 1990‘s and early 2000, there continues a divergence in the expanded horizon of Article 14. In embracing the traditional procedural due process doctrine to a substantive due process doctrine where the apex Court in State of Tamil Nadu v. Ananthi Ammal: (1995) 1 SCC 519 and Dr. K.R. Lakshmanan v. State of Tamil Nadu: (1996) 2 SCC 226 held that every plenary legislation could be invalidated on the ground of arbitrariness which is further reiterated and restated in a decision rendered in State of Andhra Pradesh v. McDowell & Co.: (1996) 3 SCC 709 and Khoday Distilleries Ltd. v. State of Karnataka: (1996) 10 SCC 304.

75. Till the last decade, the invalidation of a substantive legislation under Article 14 of Constitution of India continued to be the consistent view appearing in Malpe Vishwanath Acharya v. State of Maharashtra: (1998) 2 SCC 1 and Mardia Chemicals Ltd. v. Union of India: (2004) 4 SCC 311. Yet a significant departure on the touchstone of the evolution is significantly made in the constitution Bench judgments W.P.(C) No.31035 of 2025 & Batch rendered in Shayara Bano v. Union of India: (2017) 9 SCC 1; Navtej Singh Johar v. Union of India: (2018) 10 SCC 1 and Joseph Shine v. Union of India: (2019) 3 SCC 39 by giving a go-bye to the fig leaf and the fiction of mere procedural due process and introducing the substantive due process in no unequivocal term that even a plenary legislation could be invalidated on the ground of a non-arbitrariness.

76. Dr. Singhvi succinctly argues that the genesis, the prelude and the evolution received by Article 14 have been articulately summarized in a recent decision of the Supreme Court in Association for Democratic Reforms (Electoral Bond Scheme) v. Union of India: (2024) 5 SCC 1.

77. Dr. Singhvi would submit that Rule 12A (2) of the said Rules have to be analyzed and scrutinized on the comprehensive evolution of applicability of Article 14 as developed in an Indian judicial parlance and it would evince therefrom that sub-Rule (2) of Rule 12A is not only contrary to sub-Rule (1) thereof, but also Section 4B and W.P.(C) No.31035 of 2025 & Batch 8B of the said Act. As there was no two year restriction imposed therein nor contains any specific provision relating to the period commencing from 3rd year to 50th year. He further submits that though Rule 12A(1) contains the expression ―average of annual production of two immediately preceding years‖, but it is conspicuously absent in sub-Rule (2) thereof, more particularly, in relation to 3rd year to 50th year, which could further be seen from the expressions ―annual production by the previous lessee‖. The distinct and different expression used in the aforesaid sub-Rules creates a confusion and anomaly into its applicability as to whether the expression ―annual production of previous lessee‖ would mean the annual production of the entire period of previous lease or any specific period thereof.

78. There appears to be a disparity in working and construction of the words and expressions used in sub- Rule (2) of Rule 12A of the said Rules which at one place creates an obligation to subsequently work out and implement an annual production plan to ensure the full exploitation of the mineral resources during the period of W.P.(C) No.31035 of 2025 & Batch the lease and simultaneously contains the expression ―annual production of previous lessee‖. Such anomaly is further aggravated by introducing the proviso which stipulates 80% of such annual production to be dispatched which apparently does not contain any severe and/or adverse consequences unlike sub-Rule (1) of Rule 12A of the said Rules. Such disparity was further perceived by the regulatory authority i.e. IBM in a letter dated 26th September, 2022 issued to the Central Government and a letter dated 2nd April, 2024 issued by the State Government to the Central Government which would further corroborate the stand of the petitioners that there is vagueness ambiguity in its workability and, therefore, the Court may take into such aspect under the principle of contemporanea expositio i.e. interpreting a statue or any other document by reference to the exposition it has received from contemporary authority. The said principles have been recognized in a judgment rendered in Desh Bandhu Gupta and Co. v. Delhi Stock Exchange Association Limited: (1979) 4 SCC 565. W.P.(C) No.31035 of 2025 & Batch

79. Dr. Singhvi further submits that if the provision appears to be vague and violative of the Constitution of India, there is no fetter on the part of the Court to apply the doctrine of severability to strike down the said provision and places reliance upon the judgment of the apex Court rendered in case of State of Bombay v. F.N. Balsara: (1951) SCC 860; State of Madhya Pradesh v. Baldeo Prasad: (1961) 1 SCR 970; Delhi Transport Corporation v. DTC Mazdoor Congress: (1991) Suppl. (1) SCC 600; Cellular Operators Association of India v. Telecom Regulatory Authority of India; (2016) 7 SCC 703; Hiralal P. Harsora v. Kusum Narottamdas Harsora: (2016) 10 SCC 165 and R.M.D. Chamarbaugwalla v. Union of India, (1957) SCR 930.

80. Dr. Singhvi succinctly submits that the vice of disproportionality is the another facet of Article 14 of the Constitution of India which can be noticeably seen from the judgment rendered in Coimbatore District Central Cooperative Bank v. Coimbatore District Central Cooperative Bank Employees Association: (2007) 4 W.P.(C) No.31035 of 2025 & Batch SCC 669 and Sheel Kumar Roy v. Secretary, Ministry of Defence: (2007) 12 SCC 462.

81. Though the vice of disproportionality considered in relation to a substantive legislation, yet it expanded its applicability to a subordinate legislation as well. In Index Medical College, Hospital and Research Centre v. State of Madhya Pradesh: (2023) 11 SCC 570 and Kerala State Beverages (M and M) Corporation Limited v. P.P. Suresh: (2019) 9 SCC 710.

82. According to Dr. Singvi, the doctrine of disproportionality or proportionality test has balancing factors i.e. a balancing test and the necessity test, which can be seen from the judgment in Coimbatore District Central Cooperative Bank (supra).

83. On the merit of the instant writ petition, Dr. Singhvi submits that the manner in which the authorities have construed Rule 12A of the said Rules and raised the demand, is not only contrary to the purport of the said provisions, but also brings an absurdity in its application which can be visualized from the fact that the moment the W.P.(C) No.31035 of 2025 & Batch mining plan indicated the specified quantity of the ores to be produced, the lessee cannot be compelled to dispatch more than the said quantity.

84. He succinctly submits that in the present case, the petitioner was permitted to produce only 0.6 MTPA and in the event, the 80% of the said production is mandatorily required to be dispatched, the obligation in this regard is 0.48 MTPA. On the other hand, the State Government is compelling the petitioner to dispatch 1.36 MTPA which is more than the permitted production. He, thus, submits law cannot compel performance of an obligation which is impossible or which, in effect, violates the statutory provisions as fortified in the judgment rendered in Chandra Kishore Jha v. Mahavir Prasad: (1999) 8 SCC 266; Mohammed Gazi v. State of Madhya Pradesh:(2000) 4 SCC 342 and Managing Director, Army Welfare Housing Organization v. Sumangal Services (P) Ltd.: (2004) 9 SCC 619. W.P.(C) No.31035 of 2025 & Batch

85. Apart from the same, the impugned demand notice is invalid and bad in law having violative principle of natural justice as it was not proceeded with any show cause notice nor an opportunity of personal hearing was afforded to the petitioners.

86. Dr. Singhvi submits that denial of an opportunity to respond to the show cause notice is a violation of principles of natural justice as held in Canara Bank v. Debasis Das: (2003) 4 SCC 557; Raghunath Thakur v. State of Bihar: (1989) 1 SCC 229 and State of Orissa v. Dr. (Miss) Binapani Dei;(1967) 2 SCR 625.

87. It is further submitted that if a notice is issued with a premeditation and invites idle formality, it would also come within the contour of violation of principles of natural justice and placed reliance upon a judgment of the Supreme Court in Oryx Fisheries Private Limited. v. Union of India: (2010) 13 SCC 427 and Siemens Ltd. v. State of Maharashtra: (2006) 12 SCC 33.

88. Dr. Singhvi, thus, concludes that not only Rule 12A(1) has its restricted applicability to the first two years W.P.(C) No.31035 of 2025 & Batch from the date of lease in respect of a brownfield leases, but cannot be extended to a situation contemplated under Rule 12A(2) of the said Rules, which applies in a different situation.

89. Dr. Singhvi, thus, submits that not only Rule 12A is ultra vires to the Constitution provision as well as the provisions contained in the parent Act, but also on the ground of principles of proportionality and its workability in a given situation. Submissions by Mr. Gopal Subramanium, Senior Counsel on behalf of the petitioners

90. Mr. Gopal Subramanium, learned Senior Counsel appearing on behalf of the petitioner in W.P.(C) No.5215 of 2025, at the very outset, submits that the submissions advanced by Dr. Abhishek Manu Singhvi, learned Senior Counsel on the issues relating to the validity of Rule-12A of the Mineral (Other than Atomic and Hydrocarbons Energy Minerals) Concession Rules, 2016 are also adopted by him and proceeded to make further submissions on such aspects from different angles as well. W.P.(C) No.31035 of 2025 & Batch

91. In his fairness, he submits that the case concerning the present petitioner would stand on the stronger footing on the facts and the applicability of the provisions without touching the vires of Rule-12A of the said Rules yet in alternative, the petitioner seeks to challenge the validity of the said provision.

92. Mr. Subramanium arduously submits that before proceeding to address the issue on the vires of Rule-12A of the said Rules, the prelude to the genesis of various amendments having brought is required to be recapitulated, which would clearly demonstrate that the incorporation of the word ―dispatch‖ in Rule-12A of the said Rules not only in excess of rule making powers but also violates the core fabric of a substantive provision brought by way of an amendment in the parent Act.

93. Mr. Subramanium fervently submits the objects and reasons for bringing an amendment by virtue of the Mineral Laws (Amendment) Act, 2020 which was enacted on 13th March, 2020 would evince that the primary object in bringing the amendments into the legislation is to W.P.(C) No.31035 of 2025 & Batch remove the hurdles created by obtaining several clearances from the different Government organs causing inordinate delay in commencing the mining operation and subsequent productions in the minerals.

94. To overcome such difficulties, Section-8B of the parent Act was inserted to facilitate and streamline the uninterrupted and continuous production of the minerals by the new lessee on the basis of an approval granted to the earlier lessee for a period of two years. Mr. Subramanium, learned Senior Counsel further submits that a further amendment was made simultaneously by inserting Section-4B of the Act with a broad head ―Conditions for efficiency in Production‖ with an intent to maintain the sustained production of the minerals by the holder of the mining leases having acquired the rights approvals and clearances under Section-8B of the said Act.

95. The rule making power was also inserted through introduction of Section-13(2)(aa) of the Act empowering the Central Government to prescribe the W.P.(C) No.31035 of 2025 & Batch conditions for commencement and the continuation of the production by the holders of the mining leases under Section-4B of the said Act. According to Mr. Subramanium, the conjoint reading of the Statement of Objects and Reasons and the newly inserted sections like Sections-4B, 8B and 13(2)(aa) would exposit that the intention was to ensure immediate commencement of the production as well as the continued and sustained production by the new lessee without any disruption, which has no relation to an obligation of dispatch.

96. Rule-12A of the said Rules was inserted in exercise of powers contained under Section-13(2)(aa) on 20th March, 2020 in pursuance of Section-4B which not only postulates the maintenance of similar and identical level of production on the basis of the average of annual production of two (02) immediately preceding years on a pro-rata basis but also to ensure minimum dispatch of 80% of the minimum dispatch. Mr. Subramanium submits that once the words ―production‖ and ―dispatch‖ are distinctly defined in the Act, it has to be assigned the W.P.(C) No.31035 of 2025 & Batch same meaning and intended to be used as words having different and distinctive meaning.

97. According to Mr. Subramanimum, Sections-4A and 4B were introduced simultaneously by way of such amendment Act wherein, the word ―dispatch‖ was introduced in Section-4A, which was conspicuously absent in Section-4B would lead to an inescapable inference that the legislators were conscious of their operations in a definite and defined fields and the conscious omission of the word ―dispatch‖ and retaining the word ―production‖ in Section-4B excludes the mandate of dispatch and restricts its operation to production only. In support of the contention that if the words defined in the statute distinctly and differently, it cannot be used interchangeably, the reliance is placed upon a judgment of the apex Court in case of Indore Development Authority v. Manoharlal and others; reported in (2020) 8 SCC 129.

98. Mr. Subramanium would further submit that the subordinate/delegated legislation, if travelled beyond W.P.(C) No.31035 of 2025 & Batch the purview of the parent Act or any of its provisions, the same can be declared invalid and/or ultra vires in view of the judgments of the apex Court rendered in Kerala SEB v. Thomas Joseph; reported in (2023) 11 SCC 700 and Naresh Chandra Agrawal v. ICAI; reported in (2024) 13 SCC 241. It further submitted subordinate/delegated legislation can be rendered invalid and/or ultra vires not only on the sole ground of being violative of the provisions contained in the parent Act but also on manifest arbitrariness and/or unreasonableness and placed reliance upon a judgment of the Supreme Court rendered in case of State of Tamil Nadu v. P. Krishnamurthy; reported in (2006) 4 SCC 517.

99. Mr. Subramanium, learned Senior Counsel fervently submits that several provisions of the Rules are also required to be seen which encompasses several facets of the production and the dispatch and the rights of the State or the Central Government in charging the amount can be visualized to further the primary object of the said legislation. According to him, Rules-38 and 42 of the said Rules relate to the determination of a sale value from the W.P.(C) No.31035 of 2025 & Batch sale invoice and the computation of the average sale price on the basis of which such revenue be determined by the State. It further mandates the furnishing of a monthly return in a prescribed form by reporting the dispatches by giving the details of the purchasers along with the sale value in order to ensure such sale having affected with the genuine purchasers and right of pre-emption is also provided under Rule-12(1)(i) of the said Rules upon the Government.

100. It is just submitted that Rule-12A of the said Rules is introduced by implementing the provisions contained under Section-4B of the said Act in exercise of the rule making power enshrined under Section-13(2)(aa) and, therefore, introduction of any concept of dispatch is de hors the said parent section. It not only contrary to the said provision but also have no nexus to the object sought to be achieved and comes within the ambit of arbitrariness and/or unreasonableness.

101. On the aspect of merit of the instant writ petition, Mr. Subramanium submits that the impugned W.P.(C) No.31035 of 2025 & Batch notice is not only invalid and/or bad in law but also violative of the Rules contained in the said Rules. According to him, neither sub-Rule (1) of Rule-12A nor the Mine Development and/or Production Agreement (MDPA) contains any provision of imposing any penalty for short fall in minimum dispatch requirement, as the same is primarily intended to apply to minimum production requirement. Even, the Letter of Intent (LoI) dated 18th March, 2020 issued in favour of the petitioner contains a specific clause relating to minimum production requirement equals to 80% of average of last two years‘ production of previous lessee without any reference to any minimum dispatch requirement.

102. Mr. Subramanium vehemently submits that the minimum dispatch requirement was introduced for the first time by bringing an amendment on 10th June, 2021 and, therefore, at best, it can be made applicable prospectively and not retrospectively. According to him, the lease was entered into on 29th June, 2020 and if the first year is to be counted for which the demand is raised, it expires well before the insertion of the amended W.P.(C) No.31035 of 2025 & Batch provisions and, therefore, the interpretation and/or construction of the said provision at the behest of the State is ex facie illegal and the demand cannot be sustained. He further submits that there has been a considerable delay at the behest of the State instrumentalities in issuing the permission and/or license and cannot be permitted to take advantage of his own wrong and/or lapses by raising a demand on the notion of minimum dispatch requirement and relied upon a judgment of the Supreme Court in case of Municipal Committee Katra v. Ashwani Kumar; reported in (2024) SCC OnLine SC 840.

103. Lastly, he submits that the penalty or tax cannot be imposed on a deemed notional basis when there is no evidence of any taxable event and, therefore, the demand is liable to be quashed and set aside. Submissions by Mr. Rakesh Dwivedi, Senior Counsel on behalf of the petitioners:

104. Mr. Rakesh Dwivedi, learned Senior Counsel adopts and reiterates the submissions made by Dr. Singhvi, learned Senior Counsel as well as Mr. Gopal W.P.(C) No.31035 of 2025 & Batch Subramaniam, learned Senior Counsel constitutional validity of Rule 12A of the said Rules but advanced the arguments in contending applicability in the event, the same is found to be valid in law, is in a defined sphere and not in the manner contemplated by the State Government in issuing a demand notice.

105. He fervently submits that the several provisions of the Act and the Rules framed in exercise of rule-making power provided under Section 13 thereof are required to be harmoniously construed to subserve the rights and liabilities of both the State and the lessee, which has been crystallized under the mining lease and the Mine Development and Production Agreement (MDPA) to operate in tandem.

106. Mr. Dwivedi would further submit that while inserting Section 8A in the said Act, all mining leases were intended to be granted for fifty (50) years including the leases which would expire as per the procedure specified in the Act. He, therefore, submits that once the auction is W.P.(C) No.31035 of 2025 & Batch the basis for grant of the mining lease and the terms being resettled, it is a mining lease which is put in auction and, thus, the financial terms cannot be altered to surge the liability upon the lessee or imposed new financial penal terms.

107. The moment the bidder participated in the tender and upon being declared successful has entered into a mining lease and the MDPA creating bundle of rights and liabilities of the contracting parties, the entire mining operation is to be conducted under such concluded contract and the terms relating to a fiscal aspect cannot be changed unilaterally.

108. The introduction of Rules 12A (1-A), 12A (2) and the proviso inserted thereto are unconstitutional if it extended its horizon of applicability to the third years onward, as it creates imposition of a huge financial liability, which is expropriatory and confiscatory resulting into a deprivation of property without any authority of law, which is interdicted by Article 300 A of the Constitution of India. Even the Rules subsequently W.P.(C) No.31035 of 2025 & Batch amended and/or enacted cannot impact the existing concluded contract unilaterally by giving retrospective operation is contrary to the judgment of the Supreme Court rendered in case of Commissioner of Income Tax-1, New Delhi v. Vatika Township Pvt. Ltd.; reported in (2015) 1 SCC 1.

109. He fervently submits that the word "property" appearing in Article 300 A of the Constitution of India engulfed within itself all kinds of properties including of monetary nature and placed reliance upon judgments of the apex Court in K.T. Plantation Private Limited and another v. State of Karnataka; reported in (2011) 9 SCC 1; Mohanlal Nanbhai Choksi v. State of Gujarat; reported in (2010) 12 SCC 726, Laxman Lal v. State of Rajasthan; reported in (2013) 3 SCC 764 and N. Padmamma v. S. Rama Krishna Reddy, reported in (2008) 15 SCC 517.

110. Mr. Dwivedi strongly submits by placing reliance upon GSR 397 (E) dated 7th June, 2021 to contend that Rule 12A came into existence by insertion W.P.(C) No.31035 of 2025 & Batch thereunder and at such relevant point of time Sub-Rules (1-A), (1-B) and (1-C), and the proviso to Rule 12A (2) were not part of it. According to him, the Mineral Laws (Amendment) Act, 2020 which came into effect from 10th January, 2020 which was notified in the Official Gazette on 13th March, 2020 clearly stipulates that the said amended Act shall come into force from the date of the assent by the President and shall remain in force for a period of sixty days therefrom and shall be deemed to have been repealed after the expiry of the said period.

111. As per Mr. Dwivedi, Sections 4B and 8B were inserted by way of such Amendment Act of 2020, which has a self-life of sixty days and gets automatically repealed on the expiry thereof, which would be evident from the fact that by virtue of the Amendment Act, 2021 Section 8B was reintroduced but Section 4B was not resurrected. As a corollary, the rule-making power under Section 13 in relation to Section 4B cannot be resorted to in carrying out an amendment in Rule 12A, nor will enable the Central Government to make the said Rule applicable to the past concluded contracts. He further W.P.(C) No.31035 of 2025 & Batch submits that even it is assumed for the sake of an argument that Section 4B continues to exist, it does not support the insertion of Sub-Rules (1-A), (1-B) and (1-C) in Rule 12A of the said Rules, 2016.

112. According to him, the Amendment Act of 2021 does not contain any automatic expiry period, unlike the Amendment Act of 2020 and such a distinction is critical in understanding the exercise of legislative power in bringing amendment subordinate/delegated legislation. By Amendment Act of 2021, separate definitions of "dispatch and production" were given and in Section 4A the expression "Mining Operation" were substituted by the expressions "production and dispatch" which are conspicuously absent in Section 4B and Section 8B (2) of the said Act.

113. Mr. Dwivedi would submit that when the legislation does not incorporate the word "dispatch" in Section 4B and restrict its operation to production, it does not lend any support in making Sub-Rules (1-A), (1-B) and (1-C) in Rule 12A of Rules, 2016. W.P.(C) No.31035 of 2025 & Batch

114. It is further submitted that even Rule 12A(1A) has no correlation to the expectation of the State to earn extra sum of money in the form of installment of bid amount, which is dependent upon the production and dispatch of the minerals. In absence of any production and/or dispatch of the minerals, the recovery under the several heads like royalty, DMF, NMET, Performance Security and Bid Premium taking aid of Rule 12A(1A) is misplaced and would uphold the intent and purpose of the Act and would tantamount to the recovery of the double payment of the royalty and under the different heads by virtue of several sections subsequently inserted by way of an amendment. Mr. Dwivedi submits that the purported demand notices issued against the petitioner in the above writ petition pertains to a 3rd and 4th year respectively which is invalid and not sustainable in law by invoking Rule 12A, which only enables to the State Government to take appropriate action in accordance with the MDPA. It is further submitted that at best it permits an initiation of the proceeding, which in common parlance mandates an opportunity of hearing to be given to the W.P.(C) No.31035 of 2025 & Batch lessee and the decision must be supported by reasons, which in the instant proceeding has not been followed. He further submits that Rule 12A(2) of the said Rules is relatable to ensuring the production equal to or more than the annual production of the previous lessee and thereafter the auction is given to the lessee to work out and implement an annual production plan, to ensure the full expectation of the mineral resources during the period of lease, which in fact has been resorted to by the petitioners. He adversely submits that the mining lease was granted for hematite iron ore containing equivalent and/or more than 45% Fe, which if it is carried out would exhaust the entire mineral resources within 8 to 9 years. Subsequently, it was detected that there are considerable quantity of a magnetite iron ore, which can only be used after beneficiation and an application was made so as to expand the life of the mines to 34 years and if the stand of the State as manifested from the demand notice, is held valid, it would impact the exchequer in depriving the State of the bid amount for the rest of the periods. The contention of the State that, the writ petitioner has not W.P.(C) No.31035 of 2025 & Batch willfully dispatched the iron ore having a grade of more than 45% Fe but selectively sought permission to dispatch less than 45% Fe grade ore is incorrect and not sustainable.

115. The Indian Bureau of Mines (IBM) on the basis of a letter issued by the petitioner has accepted the low marketability of an iron ore pertaining 15-55 % Fe grade in its letter dated 01.12.2023 while granting approval, it can only be sold in the market after beneficiation. Thus, it is evident that the construction of the provisions requires the exploration of the minerals during the entire life span of the lease despite of its exhaustion within a short span and, therefore, the action of the State is not sustainable. Mr. Dwivedi, learned Senior Counsel would further submit that the imposition of an absolute no fault liability within Rule 12A (1A) of the Rules 2016 cannot be imported as there being a variety of circumstances beyond the control of the lessee in securing the dispatch and therefore, any such interpretation, which runs contrary to the spirit and purpose of the Act is to be eschewed. In support of his contention that in absence of any reasons behind the W.P.(C) No.31035 of 2025 & Batch imposition of absolute no fault fiscal penalty on account of a shortfall in dispatch, he relies upon the judgments of the Supreme Court in Citizenship Act, 1955 Section 6- A, In Re reported in (2024) 16 SCC 105; Shayara Bano Vs. Union of India, reported in (2017) 9 SCC 1; Joseph Shine Vs. Union of India, reported in (2019) 3 SCC 39 and Cellular Operators Association of India Vs. TRAI, reported in (2016) 7 SCC 703. The stand of the State on a concept of hoarding in failing to dispatch the required quantity of minerals, a distinction must be drawn between the lessees, who are resorting to hoarding and a lessee defaulted in dispatching the required quantity of mineral, there is no reason for treating unequals equally, which appears to have been done in the instant case and learned Senior Counsel places reliance upon the judgment of the apex Court in Kunnathat Thatehunni Moopil Nair Vs. State of Kerala, reported in AIR 1961 SC 552 and Rustom Cavasjee Cooper (Banks Nationalisation) Vs. Union of India, reported in (1970) 1 SCC 248. According to Mr. Dwivedi, learned Senior Counsel, Rule 12A(1A) to (1C) does not vest any discretion in the mining authority W.P.(C) No.31035 of 2025 & Batch to determine whether the non-dispatch due to hoarding for the reasons beyond the control of the lessee and, therefore, is manifestly arbitrary. He thus, submits that in the event, there is no reasonable nexus to create a classification within the class, such classification is arbitrary and, therefore, required to be interfered with. He further submits that there is an apparent and manifest distinction between sub-rule (1A) and sub-rule (2) of Rule 12A and have its applicability in a different scenario and creating any broadness in its operation by issuing a demand notice is impermissible. He further submits that the mining plan is a foundational document to regulate the mining operation upon approval by the IBM under Rule 13(1) of the MCR, 2016. Such being the creature of an Act, any violation would attract the consequences as provided in the relevant provisions and, therefore, controls and governs the working of the lease. Mr. Dwivedi further took a plea that the moment the production and dispatch are differently defined, it has to be given such meaning and in the event the language in the definition is plain/simple and does not lead to any absurdity, the W.P.(C) No.31035 of 2025 & Batch literal interpretation should be adopted. According to Mr. Dwivedi, the marginal note of Section 4B clearly spelt out the purpose of its insertion in expressive words ―condition for efficiency in production‖ and, therefore, applicability is restricted to a production and not dispatch, which appears to have been resorted to by the State, while issuing the demand notice.

116. Mr. Dwivedi, learned Senior Counsel submits that the facts discerned from the record would reveal that the petitioner has acted strictly within the purview of the law in approaching the IBM in securing the sustainable production to live up with the life span of the lease and, therefore, the demand is per se illegal, arbitrary and not sustainable in law. Submission of learned Attorney General of India

117. Learned Attorney General of India, at the very outset, concededly submits that since the vires of Rule 12A of the Rules, 2016 framed by the Central Government in exercise of rule making power emanating from the MMDR Act is challenged in the batch of the instant writ W.P.(C) No.31035 of 2025 & Batch petitions wherein the demand notices issued by the State Government are also assailed, he would be restricting his arguments on the validity, legality and competence of the Central Government to incorporate the said Rules as the learned Advocate General of the State will be arguing on the merit of the said demand notices. He fervently submits the Court must borne in mind that the legislation is made by the Parliament for a greater public interest aiming to achieve the avowed purpose ensuring the development and regulating the mines in the public interest as the mineral wealth is a wealth of a nation creating a larger impact on a social and economic development.

118. According to him, mere extracting or winning the minerals alone cannot achieve the public interest occurring in Entry 54 of List -I and Section 2 of the said Act, if the dispatch and the sale of the minerals are segregated therefrom. He, thus, submits that in the event the public purpose is pitted against the individual gain, the economic activities is intended to serve the former, which is further fortified by the judgments of the apex W.P.(C) No.31035 of 2025 & Batch Court in State of Tamil Nadu v. Hind Stone: (1981) 2 SCC 205 and State of Gujarat v. Mirzapur Moti Kureshi: (2005) 8 SCC 534. Even Article 39(b) of the Constitution obligated the State to distribute its resources the manmade and natural to sub-serve the common good and there is no fetter on the part of the Government to legislate by making a regulation, which is one of the facets of a distribution. The entire scheme of the MMDR Act and the amendments having brought from time to time to meet the changing demands in the economic realities having two primary objectives i.e., sustainable development of minerals to ensure intergenerational equity and sustained development of minerals without any disruption to downstream industries, whose development and growth is dependent on these minerals.

119. Learned Attorney General further submits that the Mineral Laws (Amendment) Act, 2020 was passed by the Parliament keeping such broad aspect and inserted Sections 4B, 8B and 13(2)(aa) into the said MMDR Act to ensure the continuity in supply and not mere extraction which is hoarded or stockpiled. W.P.(C) No.31035 of 2025 & Batch

120. He arduously submits that the contention of the petitioners isolating the aforesaid inserted provision, more particularly, Section 13(2)(aa) to be restricted to commencement and continuance production is misplaced and should be read conjointly and purposively with the phrase ―maintaining sustained production of minerals in the country‖ appearing in Section 4B of the Act. Any attempt to interpret the expressions in isolation to the others, more particularly, the production requirement only would be opposed to the legislative intent of prescribing dispatch, which is a necessary incident of continuation for production. According to him, by a subsequent amendment Act, 2021, the words ‗production‘ and ‗dispatch‘ were introduced where the production is not restricted to an activity of winning minerals, but also removal from the leased area. He, thus, arduously submits that the word ‗production‘ is to be read and understood in the context and the legislative purpose by using the tool of the purposive and functional interpretation. Sub-Rule (1) of Rule 12A of the Rules, 2016 imposes an obligation upon the lessee to W.P.(C) No.31035 of 2025 & Batch maintain the minimum level of production and to make dispatch of 80% of the average of the annual production of two immediately preceding years and the contention in this regard that there is a possibility of lack of requisite demand is misplaced and not acceptable.

121. Learned Attorney General relies upon empirical data relating to iron ore production between the year 2000-01 and 2024-25, which would reveal that State of Odisha contributes more than half of the total production and plays a vital and important role in growth potential in creating an infrastructure.

122. Learned Attorney General arduously submits that the expressions ―mining operations‖ appearing in Section 4B of the Act and ―production and dispatch‖ appearing in Section 4A of the said Act may be a technical expressions per se to achieve the primary object of sustained mineral development and, therefore, carries penumbral meaning of making available minerals from several end uses as a mere winning of the mineral i.e. the production alone is purposeless unless the both are used W.P.(C) No.31035 of 2025 & Batch complementing each other and synonyms under the penumbra doctrine. As per the learned Attorney General, it is not a legislatively required to use the expressed words of the expression related to the set of activities, but may be construed so within the penumbra of mining operations which engulfed both the production and dispatch.

123. The doctrine of penumbra and/or applying the penumbral tool while ascribing the meaning of the expressions or the words, Schlesinger v. Wisconsin: 270 US 230 (1926) advocated the applicability of a penumbra in interpreting and construing the provision of the law in going beyond the outline of its object to secure the same. The same further reiterated and restated in a subsequent decision rendered in Olmstead v. United States: 277 US 438 (1928) and Commissioner of Internal Revenue v. Ickelheimer: 132 F.2d 660 (2nd Circuit 1943). Learned Attorney General, thus, submits that both the production and the dispatch cannot be segregated from the hub of a sustained mining operation and, therefore, are interlinked to each other. The W.P.(C) No.31035 of 2025 & Batch argument advanced by the respective petitioners in segregating the incident of production with the dispatch is conceptually and logically unacceptable and shall invite the hoarding of the mineral wealth at once whin for self- determined profit ends. He, thus, submits that Section 4A, 4B and Rule 12A are intricately connected to achieve the common purpose of sustained mining operation and any attempt to dissect their operation will frustrate the very object and the purpose of its incorporation.

124. The contention of the petitioners that Rule 12A (1) invites a double payment of the royalty and the other components is not correct as the amount so charged is not on an actual, but a penalty under Section 4B read with Section 13(2)(aa) and 13(2)(i) of the MCR, 2016. Section 4B and 8B are not limited to two years after the amendment Act, 2021 as it provides for vesting of all clearances approval of the previous lessee into new lessee for entire period of 50 years to maintain a sustained production of minerals in the country, which can further be seen from Section 5(2)(b) mandating a duly approved mining plan before grant of mining lease. The harmonious W.P.(C) No.31035 of 2025 & Batch and cumulative effect of a conjoint reading of Section 4B and Section 5 mandates the lessee to prepare the mining in such a manner that it would made the requirement of Section 4B i.e. sustained production of mineral. Similarly, Rule 12A (2) postulates requirements the new lessee i.e., the annual production by the new lessee should be equal or more than the annual production by the previous lessee and working out to implement an annual production plan so that the mineral resources are fully exploited during the period of lease.

125. Learned Attorney General submits that Rule 12A does not create any substantive obligation beyond those prescribed in Section 4B and 8B of the MMDR Act, and, therefore, cannot be rendered ultra vires to the provisions of the parent Act. According to him, the expression ―sustained production of minerals‖ engulfed all those activities and operations that may fall within its penumbra that those integrally connected activities serve the public interest of the country. The said Rule is enacted to secure a guarantee the sustained production of W.P.(C) No.31035 of 2025 & Batch the minerals in the manner and method by which the purpose of Section 4B can be fully realized. Thus, the said Rule is enacted to ensure that within the duration of the lease when adequate annual production plan shall be put in a position which would imbibe well organized production and dispatch in the effective manner towards maintaining sustained production of minerals and precisely for such reasons, the MDPA is an important instrument of law necessary in a contractual framework and securing conformity with Section 4B and Rule 12A.

126. Learned Attorney General dispels contention of the respective petitioners that the mining plan is a vital statutory document having its impact on governance of the legal relationship between the lessee and the Government. It is submitted that the mining plan is only a matter of technical and all operational related guidelines.

127. According to learned Attorney General, the mining plan is a condition precedent for execution of a mining lease and, therefore, cannot override amend or W.P.(C) No.31035 of 2025 & Batch prevail over the binding terms and conditions of the Mineral Development and Production Agreement (MDPA) executed under the Act. The MDPA is a statutory agreement flowing from the different provisions of the Act and the Rules and, thus, after its execution, it becomes a primary source of rights and obligations governing the parties. Apart from the same, the mining plan is susceptible to be reviewed and/or modified and/or revised under Rule 17 of the MCDR, 2017 and, therefore, does not create a financial or the performance obligations. It is only the MDPA which is recognized as a statutory contract and, therefore, should be complied with in letter and spirit. The moment the MDPA is executed, it requires the compliance of the mining plan as well as the several provisions of the Rules and, therefore, after entering into an agreement, the challenge to the vires of Rule 12A of the Rules, 2016 is not sustainable. In the event, Rule 12A of the Rules, 2016 is declared ultra vires to the parent Act, it would not only invite an anomalous situation, but shall have a larger impact in the mining sector and, therefore, W.P.(C) No.31035 of 2025 & Batch the Court should show a circumspect in declaring the said provision ultra vires.

128. The contention of Mr. Dwivedi that the Mineral Laws (Amendment) Act, 2020 was a temporary legislation having duration of 60 days and, therefore, after expiration of the said period, the provisions sought to be inserted through such amendment Act cease to exist unacceptable. According to learned Attorney General, once the amendment is carried out in the parent Act, the purpose of the amendment Act is achieved and there is no need for retention of the said amending Act in the statute book and placed reliance upon a judgment of the Calcutta High Court in Khuda Bux v. Manager: AIR 1954 Cal 484 and a judgment of the apex Court in Jethanand Betab v. State of Delhi: AIR 1960 SC 89. In this regard, Section 6A of the General Clauses Act can also be pressed in action and to be read in this context and, therefore, the contention of the petitioners that all such amendments sought to be brought through a temporary amended legislation is legally not sustainable. W.P.(C) No.31035 of 2025 & Batch

129. Learned Attorney General lastly submits that there is no disparity and/or incongruity in Rule 12A of the said Rules, which is in tune with the provisions of the parent Act, and, therefore, cannot be declared ultra vires. Submission of learned Advocate General

130. Learned Advocate General while adopting the arguments advanced by learned Attorney General, submits that in order to ascertain the legality, validity and constitutionality of any provision in the substantive law, the source of power in this regard is required to be recapitulated by taking reference to the judgment rendered by the apex Court in Jacob M. Puthuparambil v. Kerala Water Authority, reported in (1991) 1 SCC 28, wherein it is held that Directive Principles are not enforceable by Court, but they are nevertheless the fundamental principles in the governance of the country.

131. Learned Advocate General refers to Article 38 of the Constitution, which mandates the State to promotes the welfare of the people by securing a social order in which, justice-social, economic and political-shall inform W.P.(C) No.31035 of 2025 & Batch all the institutions of the national life to minimize the inequalities in income, status, facilities and opportunities. Article 39 (b) of the Constitution makes imperative of the State to ensure that the ownership and control of the material resources are distributed to subserve the common good. He thus submitted that the public interest being paramount guiding factor in relation to exploration of the mineral resources, it engulf within itself the generation of revenue in the form or royalty, dead rent and other statutory reliefs to promote the social and economic welfare. The source of power to enact law in this regard emanates from Entry 54, List-I of the Seventh Schedule of the Constitution of India to legislate on the regulation of the mines and mineral development to subserve the larger public interest and MMDR Act, 1957 is to testament to not only the obligations imposed under the Directive Principles, but also by invocation of such power to make legislation from the Seventh Schedule. The public interest doctrine underpinning the said MMDR Act synonymies with the collective welfare of the people which would be evident from the observations made in the W.P.(C) No.31035 of 2025 & Batch judgment rendered by the Supreme Court in Mineral Area Development Authority reported in (2024) 10 SCC 1, relied on by the learned Advocate General. The said notion can be reasonably gathered from Section 2 of the MMDR Act declaring that the said Act is for the larger public interest and the Central Government assumes power to regulate the mines in pursuit of development of minerals and, therefore, cannot be perceived as a mere formality. The amendments were brought into the Act to strengthen and streamline the mining activities or operation for systematic constraints in the mineral production and avoidance of the hoarding or stockpiling. By virtue of Act 16 of 2021, which came into effect from

28.03.2021, the words ―production‖ and ―dispatch‖ have been succinctly and or explicitly defined and the language employed therein have to be read in juxtaposition with the other and not in isolation thereof. The definition of production encompasses the dispatch and, therefore, any attempt to segregate the ―dispatch‖ from the ―production‖ would undermine the primary object and purpose of the Act and, therefore, have to be read together. W.P.(C) No.31035 of 2025 & Batch

132. Section 4A of the Act introduced subsequently by way of an amendment substituted the expression ―Production and Dispatch‖ in place of ―Mining Operation‖, makes an imperative obligation not only to ensure production thereunder, but also the dispatch of the minerals for smooth and continuous availability of the natural resources in the relevant sector. Section 4B of the Act which was introduced simultaneously with Section 4A is a repository of putting conditions for efficiency in production encompassing the entire continuum from the stage of winning or extraction of minerals to an eventual dispatch. Taking the source of powers to make rules, Rule 12A of MCR, 2016 was inserted to stabilize the mineral development and conservation through optimum utilization of mineral resources and sustainable mining operation by ensuring supply of ores in the market. Any conservative and narrow interpretation given to the word ―production‖ in Section 4B of the Act and Rule 12A of the MCR Rules, 2016 would disturb the fabric of public interest. Section 8B of the Act which primarily deals with the transfer of statutory clearances was envisaged for a W.P.(C) No.31035 of 2025 & Batch deemed transfer of the existing lincences and the permits held by the previous lessees into the new lessees for uninterrupted supply of the minerals in the market and the continuous flow of the government revenue. Although Section 9 of the Act deals with the royalties required to be paid in respect of the minerals either removed or consumed, but if a narrow construction is given to the word ―production‖, it will have a larger cascading effect and, therefore, the dispatch becomes an integral part of the entire mining operation.

133. Learned Advocate General thus submits that the word ―production‖ has to be given a purposive meaning without isolating and/or segregating from the word ―dispatch‖ in relation to a context and the scheme of the Act and the object sought to be achieved. To buttress the aforesaid submission, reliance is placed to the judgment of the Supreme Court in case of Poppatlal Shah v. State of Madras, reported in (1953) 1 SCC 492 and S. Surjit Singh Kalra v. Union of India, reported in (1991) 1 SCC 87. W.P.(C) No.31035 of 2025 & Batch

134. He fervently submits that Mineral Concession Rules, 2016 was framed by the Central Government placing the source of power from Section 13 of MMDR Act and the subsequent amendment having brought by inserting Rule 12A is in tune with the spirit and the purport of the said rule making power and, therefore, cannot be said to be ultra vires to the provision of the parent Act. The said rule casts a statutory obligation on the new mining lessee to maintain such level of production so as to ensure the minimum dispatch of 80% of the average annual production of the two immediately preceding years on a pro-rata basis with further consequences the event any default has occasioned, appropriate action in accordance with MDPA shall be initiated. Sub-Rule (1-A) of Rule 12A, which was inserted with effect from 10.06.2021 concerns the non- achievement of the minimum production and dispatch requirement and in the event of shortfall in dispatch, the lessee is obligated not only to pay the amount in terms of Rule 13 of Mineral Auction Rules, 2015, but an additional amount as provided in the said sub Rule. Sub-Rule (1-B) W.P.(C) No.31035 of 2025 & Batch also confers power upon the State Government to terminate the lease after giving a reasonable opportunity of hearing. Sub-Rule (2) of Rule 12A of MCR, 2016 makes it imperative on the new lessee not only to workout and implement the annual production plan, but also maintain the same equal to or more than the annual production by the previous lessee. He thus submits that it is manifest from the said provision that the same is not restricted or dependent upon sub Rule 1 of Rule 12A, compliments the same and, therefore, the attempt to segregate the same is not desirable. He arduously submits that MDPA, which is defined in Rule 2 (c) of Mineral Auction Rules, 2015 is a statutory requirement in relation to commencement of mining operation and, therefore, the terms and conditions embodied at the time of floating the tender can be clearly discerned therefrom and after understood the import and the purport thereof, it is not open to the said lessee to lay any claim thereupon or to wriggle out from it. The said MDPA engulfs the entire statutory frame work governing the mining operation including the relevant laws and amendments having W.P.(C) No.31035 of 2025 & Batch brought from time to time and, therefore, the expression applicable law appearing therefrom has to be understood in such perspective.

135. On the plea of violation of the principle of natural justice in raising a demand, learned Advocate General submits that a show cause was issued indicating the shortfall in dispatch under sub Rule 1 of Rule 12A of MCR, 2016, which was duly replied to and an opportunity of hearing was afforded and, thereafter the final order was passed. According to him, the aforesaid exercise would indicate that there has been complete adherence to the principle of natural justice which cannot be put into a straightjacket formula as held by the Supreme Court in the case of Board of Directors, Himachal Pradesh Transport Corporation v. K.C. Rahi, reported in (2008) 11 SCC 502.

136. He thus submits that not only the challenge to the validity and/or legality of Rule 12A is unsustainable, but the demand notices issued by the State Government cannot be invalidated on the violation or misconstruction W.P.(C) No.31035 of 2025 & Batch of provisions of law or violation of the principle of natural justice. Discussion and Analysis

137. The other Senior Counsel appearing in the batch of writ petitions, which were heard analogously, replicated the submissions advanced by the learned Senior Counsel, as succinctly adumbrated hereinbefore and, therefore, recording of their separate submissions would simply augment the volume of the judgment and, therefore, to avoid the prolixity of repetition, we treat such arguments to have been advanced by them in determining the identical issues raised in the said respective writ petitions. The argument is advanced by the respective Senior Counsel to reach a common destination through different paths and, therefore, narration of the facts of each case unless necessary and inevitable are not jotted down with exactitude as the decision that would be taken, would govern their respective writ petitions and will touch upon the reliefs claimed thereunder. W.P.(C) No.31035 of 2025 & Batch

138. Prelude to the promulgation of the Act and the Rules framed thereunder and the object and purpose underlined the same needs recapitulation before embarking upon the nuances relation to a construction, applicability and above all legality under various recognized Indian Legal Jurisprudence.

139. It is no gain saying that the mineral is a national resource given by the mother earth and its responsible utilization for the mankind in a regulated manner, is a core obligation not only of the Government but each of the individual. The Government is the custodian as natural resources is the asset of the country and creates an obligation on the Government to make law for its regulation, management and utilization under the robust structure emanating under Entry 54 of the Union List (List I) and Entry 23 of the State List (List II) of the 7th Schedule of the Constitution of India. The natural resources in the form of minerals are primarily used as raw materials in different sectors and largely impact both the economic and other developments of the country and W.P.(C) No.31035 of 2025 & Batch while adopting a policy to ensure sustainable regulatory environment, the laws have to be made to regulate and control the exploration of such minerals. The Mines and Minerals (Development and Regulation) Act, 1957 is one of the major steps taken by the Central Government to control and regulate the mines and the development of the minerals in the public interest under Section 2 of the said Act. The public interest being the paramount consideration as the mineral is the wealth of the nation, should be understood in a larger perspective and should not be squeezed in a limited contour and in the event of any conflict between the individual interest and the public interest, the interpretative tools to be applied, must sub- serve the larger public interest over the individual interest. Such notions can be reasonably gathered from a declaration made under Section 2 of the said Act and, therefore, it is no gain-saying that while interpreting various provisions of the Act, the larger public interest must be kept in mind. In this regard, the reference can be made to a judgment of the Supreme Court in the case of Hind Stones(supra), wherein it is held: W.P.(C) No.31035 of 2025 & Batch ―6. Rivers, Forests, Minerals and such other resources constitute a nation’s natural wealth. These resources are not to be frittered away and exhausted by any one generation. Every generation owes a duty to all succeeding generations to develop and conserve the natural resources of the nation in the best possible way. It is in the interest of mankind. It is in the interest of the nation. It is recognised by Parliament. Parliament has declared that it is expedient in the public interest that the Union should take under its control the regulation of mines and the development of minerals. It has enacted the Mines and Minerals (Regulation and Development) Act, 1957. We have already referred to its salient provisions. Section 18, we have noticed, casts a special duty on the Central Government to take necessary steps for the conservation and development of minerals in India. Section 17 authorises the Central Government itself to undertake prospecting or mining operations in any area not already held under any prospecting licence lease. Section 4-A empowers the State or mining Government on the request of the Central Government, in the case of minerals other than minor minerals, to prematurely terminate existing mining leases and grant fresh leases in favour of a Government company or corporation owned or controlled by government, if it is expedient in the interest of regulation of mines and mineral development to do so. In the case of minor minerals, the State Government is similarly empowered, after consultation with the Central Government. The public interest which induced Parliament to make the declaration contained in Section 2 of the Mines and Minerals (Regulation and Development) Act, 1957, has naturally to be the paramount consideration in all matters concerning the regulation of mines and the development of minerals. Parliament’s policy is clearly discernible from the provisions of the Act. It is the conservation and the prudent and discriminating exploitation of minerals, with a view to secure maximum benefit to the community. There are clear signposts to lead and guide the subordinate legislating authority in the matter of the making of rules. Viewed in the light shed by the other provisions of the Act, particularly Sections 4-A, 17 and 18, it cannot be said that the rule- making authority under Section 15 has exceeded its powers in banning leases for quarrying black granite in favour of private parties and in stipulating that the State Government themselves may engage in quarrying black granite or grant leases for quarrying black granite in W.P.(C) No.31035 of 2025 & Batch favour of any corporation wholly owned by the State Government. To view such a rule made by subordinate legislating body as a rule made to benefit itself merely because the State Government happens to be the subordinate legislating body, is, but, to take too narrow a view of the functions of that body. The reasons that prompted the State Government to make Rule 8-C were explained at great length in the common counter- affidavit filed on behalf of the State Government before the High Court. We find no good reason for not accepting the statements made in the counter-affidavit. It was said there: ―I submit that the leases for black granite are governed by the Tamil Nadu Minor Mineral Concession Rules, 1959 under which originally there was scope for auctioning of quarries of minor minerals. In amendment issued in the GO dated December 6, 1972, under Rule 8-A it was indicated that the Collector may sanction leases in favour of applicants, who are having an industrial programme to utilise the minerals in their own industry. This provision is applicable to all minerals including black granites. However, it was found that there were several cases where lessees who obtained the black granite areas on lease by auction were not quarrying in a systematic and planned manner taking into consideration the welfare and safety measures of the workers as well as the conservation of minerals. Even after the introduction of the amendment under Rule 8- A in most cases, the industry set up was of a flimsy nature more to circumvent the rule than to really introduce industry including mechanised cutting and polishing. The lessees were also interested only in obtaining the maximum profit in the shortest period of time without taking into consideration the proper mining and development of the mineral. There was also considerable wastage of new materials due to wasteful mining. Therefore, Government issued a further amendment as Rule 8-B wherein competent authority to grant leases in respect of the quarrying black granite was transferred from the Collector to the State Government level. They also prescribed a standard form and an application fee to be paid with the application. The amendment states that the Director of Industries and Commerce shall technically scrutinise the industrial programme given by the applicant while forwarding the same to W.P.(C) No.31035 of 2025 & Batch lessees government. At the same time, in the GO issued along with amendment, it was stated that if any of the State Government organisations like Tamil Nadu Small Industries Corporation Limited, Tamil Nadu Small Industries Development Corporation Limited, Industrial Development Corporation Tamil Nadu Limited is interested to obtain a lease for black granite in a particular area, preference will be given to Government undertaking over other private entrepreneurs for granting the leases applied for by them. However, in spite of these amendments to regulate the grant of mining lease, there were a large (exceeding 140), who were number of engaged in mining without proper technical guidance or safety measures etc., for the workers. These lessees made a strong representation to the then Government in 1976 expressing that though they had given assurance to set up industries to use the granites, they were not able to do so for various reasons. They also represented that they should be allowed to export the raw blocks of black granites. Therefore, government had issued a Government Order dated February 15, 1977 relating to relaxation of the ban of export of raw blocks and provision for setting up a polishing or finishing unit was not made a prerequisite. They have also stated that the terms and conditions for the existing leases would remain force. However, on an examination of performance of the lessees over the past several years, it has been found that excepting in a very few cases, none of the lessees had set up proper industries or developed systematic mining of the quarries. The exports continue to be mainly on the raw block granite materials and not cut and polished slabs. A large number of the leases were not operating either due to speculation or lack of finance from the lessees. Therefore, government decided that there should be no further grant of lease to private entrepreneurs for black granite. This was mentioned in GOMs No. 1312 industries dated December 2, 1977.‖ We are satisfied that Rule 8-C was made in bona fide exercise of the State the rule-making power of Government and not in its misuse to advance its own self-interest. We however guard ourselves against being understood that we have accepted the position that making a rule which is perfectly in order is to be W.P.(C) No.31035 of 2025 & Batch considered a misuse of the rule-making power, if it advances the interest of a State, which really means the people of the State.‖

140. The larger public interest being the substratum of the exercise of legislative powers has an edge over the individual interests; and in the event of any conflict arises between the two, the Court must strike a balance without undermining the larger public interest as held Mirzapur Moti Kureshi’s judgment (supra) by the Supreme Court: court should guard “176. xxxx The zealously fundamental rights guaranteed to the citizens of the society, but at the same time strike a balance between the fundamental rights and the larger interests of the society. But when such right clashes with the larger interest of the country it must yield to the latter. Therefore, wherever any enactment advancement of directive principles and it runs counter to the fundamental rights an attempt should be made to harmonise the same if it promotes a larger public interest.‖ is made

141. Apart from the same, Article 39(B) of the Constitution of India ordains its scheme and philosophy the distribution of natural resources by the sovereign either manmade or natural, thus, making the regulatory framework through enactment in exercise of the legislative powers to sub-serve the common goal for W.P.(C) No.31035 of 2025 & Batch social and economic development becomes the primary aspect before the Court is entrusted with the task of considering any provisions of the substantive Act or the subordinate/delegated legislation framed thereunder to be declared ultra vires.

142. The major significant initiative taken by the Central Government in bringing an amendment in the said Act by introducing the Mines and Minerals (Development and Regulation) Bill, 2011, and extensive consultations preceded the finalization of the draft of the said Bill by the Standing Committee and a report was prepared in the month of May, 2013. However, the Bill could not be passed because of the dissolution of the 15thLokSabha and, thus, elapsed. The major paradigm shift envisioned in the said Bill was to introduce the auction regime instead of allotting the mines on the basis of an application, which lack transparency. The Bill further envisioned to enhance the share of the value of the mineral resources and the empirical data so collected revealed a sharp decline in production affecting the major sectors which depend upon the same and utilize as raw W.P.(C) No.31035 of 2025 & Batch materials. Ultimately, the Mines and Minerals (Development and Regulation) Amendment Act, 2015 was enacted after receiving the assent of the President of India on 26th March, 2015 and duly notified in the Gazette of India on 27th March, 2015 which came into force on and from 12th January, 2015.

143. Apart the other, Section 8A was introduced containing a clause that after expiry of the lease period, such lease shall be put in auction and sub- section (5) thereof, extended all captive mining leases till 31st March, 2030 whereas sub-section (6) of Section 8A extended other leases than the captive leases to be extended till 31st March, 2020. By introduction of Section 9B, the State was obligated to establish a trust to be called as the ―District Mineral Foundation Trust‖ which would be a non-profitable body and the Central Government to establish National Mineral Exploration Trust which every mining lease holder shall make contribution therein, which would utilize in terms of the purport and the scheme of the aforesaid provisions. W.P.(C) No.31035 of 2025 & Batch

144. Despite being a significant social reform in the mining sector having brought in introducing the auction regime by the amendment Act of 2015 and the incorporation of several Sections by virtue of an amendment Act of 2020, the Mines and Minerals (Development and Regulation) Amendment Bill, 2021 was drafted to eradicate the distinction between the captive and the merchant mines and allowing the existing captive mines including the captive coal mines to sell 50% of the minerals in order to increase in production and supply of the minerals.

145. It further aimed to introduce the payment of the additional amount to the State Government at the time of granting the mining lease to the Government companies to create a level playing field between the auctioned mines and the mines of Government companies apart from the utilization of the funds of the trust so created.

146. The Mines and Minerals (Development and Regulation) Act, 2021 after receiving the assent of the W.P.(C) No.31035 of 2025 & Batch President of India, was published in the Gazette of India on 28th March, 2021. The significance of the said amendment for the present purpose can be reasonably gathered, which in our opinion, is relevant in the present context, is the introduction of definition provisions defining the ―production‖ and ―dispatch‖ in Section 3 of the parent Act and removal of the expression ―Mining Operation‖ and the insertion of the words ―Production and Dispatch‖ in Section 4A of the said Act. The said amendment further introduced provisos in Section 4A of the Act in relation to an extension of period for production and dispatch and consequences of lapsing the mining lease in the event of failure to make production and dispatch within the time so specified.

147. Section 8B of the principle Act, which was earlier inserted, was substituted with an intent to continue all valid rights, approvals, clearances, licenses and the like to continue after the expiration or termination of the lease and automatic transfer of such rights into a successful bidder selected through auction. W.P.(C) No.31035 of 2025 & Batch

148. It would be noteworthy that by virtue of the amendment having brought in 2020 Section 13 (2) (aa) was introduced empowering the Central Government to make Rules by imposing conditions as may be necessary for commencement and continuation of the production by the holders of the mining leases under Section 4B of the said Act.

149. Rule 12A of the Rules, 2016 being central to the issues involved in the instant writ petitions were introduced on 20th March, 2020 after the introduction of Section 4B in the parent Act which was further amended on 10th June, 2021 with addition of Sub-Rules (1-A), (1-B) and (1-C) and the proviso to Section 12A (2) to have its effect from 1st July, 2021.

150. To have clarity and in pursuit of determining the respective contentions raised in the instant writ petitions, the relevant provisions of the Act and the Rules are quoted as under: prospecting ―4A. Termination exploration licences or mining leases.― (1) Where the Central Government, after consultation with the State Government, is of opinion that it is licences, W.P.(C) No.31035 of 2025 & Batch preservation development, expedient in the interest of regulation of mines and mineral natural environment, control of floods, prevention of pollution, or to avoid danger to public health or communications or to ensure safety of buildings, monuments or other structures or for conservation of mineral resources or for maintaining safety in the mines or for such other purposes, as the Central Government may deem fit, it may request the State Government to make a premature termination of a prospecting licence or exploration licence or mining lease in respect of any mineral other than a minor mineral in any area or part thereof, and, on receipt of such request, the State Government shall make an order making a premature termination of such prospecting licence or exploration licence or mining lease with respect to the area or any part thereof. preservation development, (2) Where the State Government is of opinion that it is expedient in the interest of regulation of mines and mineral natural environment, control of floods, prevention of pollution or to avoid danger to public health or communications or to ensure safety of buildings, monuments or other structures or for such other purposes, as the State Government may deem fit, it may, by an order, in respect of any minor mineral, make premature termination of prospecting licence or mining lease with respect to the area or any part thereof covered by such licence or lease. (3) No order making a premature termination of a prospecting licence or exploration licence or mining lease shall be, made except after giving the holder of the licence or lease a reasonable opportunity of being heard. (4) Where the holder of a mining lease fails to undertake production and dispatch for a period of two years after the date of execution of the lease or, having commenced production and dispatch, has discontinued the same for a period of two years, the lease shall lapse on the expiry of the period of two years from the date of execution of the lease or, as the case may be, discontinuance of the production and dispatch: Provided that the State Government may, on an application made by the holder of such lease before it lapses and on being satisfied that it shall not be possible for the holder of the lease to undertake production and dispatch or to continue such production and dispatch for reasons beyond his control, make an order, within a period of three months from the date of receipt of such application, to extend the period of two years by a W.P.(C) No.31035 of 2025 & Batch further period not exceeding one year and such extension shall not be granted for more than once during the entire period of lease: Provided further that such lease shall lapse on failure to undertake production and dispatch or having commenced the production and dispatch fails to continue the same before the end of such extended period. 4B. Conditions for efficiency in production.— Notwithstanding anything contained in section 4A, the Central Government may, in the interest of maintaining sustained production of minerals the country, prescribe such conditions as may be necessary for commencement and continuation of production by the holders of mining leases who have acquired rights, approvals, clearances and the like under section 8B.

5. Restrictions on concession.― the grant of mineral (1) A State Government shall not grant a mineral concession to any person unless such person― (a) is an Indian national, or company as defined in clause (20) of section 2 of the Companies Act, 2013 (18 of 2013); and (b) satisfies such conditions as may be prescribed: Provided that in respect of any mineral specified in Part A and Part B of the First Schedule, no mineral concession shall be granted except with the previous approval of the Central Government. Provided further that the previous approval of the Central Government shall not be required for grant of mineral concession in respect of the minerals specified in Part A of the First Schedule, where,— (i) an allocation order has been issued by the Central Government under section 11A; or (ii) a notification of reservation of area has been issued by the Central Government or the State Government under sub-section (1A) or sub-section (2) of section 17A; (iii) a vesting order or an allotment order has been issued by the Central Government under the provisions of the Coal Mines (Special Provisions) Act, 2015 (11 of 2015). PROVIDED ALSO that the composite licence or mining lease shall not be granted for an area to any person other than the Government, Government company or W.P.(C) No.31035 of 2025 & Batch corporation, in respect of any minerals specified in Part B of the First Schedule where the grade of such mineral in such area is equal to or above such threshold value as may be notified by the Central Government. Explanation.―For the purposes of this sub-section, a person shall be deemed to be an Indian national,― (a) in the case of a firm or other association of individuals, only if all the members of the firm or members of the association are citizens of India; and (b) in the case of an individual, only if he is a citizen of India. (2) No mining lease shall be granted by the State Government unless it is satisfied that.― (a) there is evidence to show the existence of mineral contents in the area for which the application for a mining lease has been made in accordance with such parameters as may be prescribed for this purpose by the Central Government; (b) there is a mining plan duly approved by the Central Government, or by the State Government, in respect of such category of mines as may be specified by the Central Government, for the development of mineral deposits in the area concerned:] Provided that a mining lease may be granted upon the filing of a mining plan in accordance with a system established by the State Government for preparation, certification, and monitoring of such plan, with the approval of the Central Government. xxx xxx xxx 8B. Provisions for period and transfer of statutory clearances.― (1) Notwithstanding anything contained in this Act or any other law for the time being in force, all valid rights, approvals, clearances, licences and the like granted to a lessee in respect of a mine (other than those granted under the provisions of the Atomic Energy Act, 1962 (33 of 1962), and the rules made thereunder) shall continue to be valid even after expiry or termination of lease and such rights, approvals, clearances, licences and the like shall be transferred to, and vested; subject to the conditions provided under such laws; in the successful bidder of the mining lease selected through auction under this Act: W.P.(C) No.31035 of 2025 & Batch Provided that where on the expiry of such lease period, mining lease has not been executed pursuant to an auction under provisions of sub-section (4) of section 8A, or lease executed pursuant to such auction has been terminated within a period of one year from such auction, the State Government may, with the previous approval of the Central Government, grant lease to a Government company or corporation for a period not exceeding ten years or till selection of new lessee is earlier and such through auction, whichever Government company or corporation shall be deemed to have acquired all valid rights, approvals, clearances, licences and the like vested with the previous lessee: Provided further that the provisions of sub-section (1) of section 6 shall not apply where such mining lease is granted to a Government company or corporation under the first proviso: Provided also that in case of atomic minerals having grade equal to or above the threshold value, all valid rights, approvals, clearances, licences and the like in respect of expired or terminated mining leases shall be deemed to have been transferred to, and vested in the Government company or corporation that has been subsequently granted the mining lease for the said mine. (2) Notwithstanding anything contained in any other law for the time being in force, it shall be lawful for the new lessee to continue mining operations on the land till expiry or termination of mining lease granted to it, in which mining operations were being carried out by the previous lessee.

9. Royalties in respect of mining leases.― (1) The holder of a mining lease granted before the commencement of this Act shall, notwithstanding anything contained in the instrument of lease or in any law in force at such commencement, pay royalty in respect of any mineral removed or consumed by him or by his agent, manager, employee, contractor or sub- lessee from the leased area after such commencement, at the rate for the time being specified in the Second Schedule in respect of that mineral. (2) The holder of a mining lease granted on or after the commencement of this Act shall pay royalty in respect of any [mineral removed or consumed by him or by his agent, manager, employee, contractor or sub-lessee] from the leased area at the rate for the time being specified in the Second Schedule in respect of that mineral. W.P.(C) No.31035 of 2025 & Batch (2A) The holder of a mining lease, whether granted before or after the commencement of the Mines and Minerals (Regulation and Development) Amendment Act, 1972 (56 of 1972), shall not be liable to pay any royalty in respect of any coal consumed by a workman engaged in a colliery provided that such consumption by the workman does not exceed one-third of a tonne per month. (3) The Central Government may, by notification in the Official Gazette, amend the Second Schedule so as to enhance or reduce the rate at which royalty shall be payable in respect of any mineral with effect from such date as may be specified in the notification: PROVIDED that the Central Government shall not enhance the rate of royalty in respect of any mineral more than once during any period of three years. 9B. District Mineral Foundation.― (1) In any district affected by mining related operations, the State Government shall, by notification, establish a trust, as a non-profit body, to be called the District Mineral Foundation. (2) The object of the District Mineral Foundation shall be to work for the interest and benefit of persons, and areas affected by mining related operations in such manner as may be prescribed by the State Government. (3) The composition and functions of the District Mineral Foundation shall be such as may be prescribed by the State Government. Provided the Central Government may give directions regarding composition and utilisation of fund by the District Mineral Foundation. (4) The State Government while making rules under sub- sections (2) and (3) shall be guided by the provisions contained in article 244 read with Fifth and Sixth Schedules to the Constitution relating to administration of the Scheduled Areas and Tribal Areas and the Provisions of the Panchayats (Extension to the Scheduled Areas) Act, 1996 (40 of 1996), and the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 (2 of 2007). (5) The holder of a mining lease or a composite licence granted on or after the date of commencement of the (Development and Regulation) Mines and Minerals W.P.(C) No.31035 of 2025 & Batch Amendment Act, 2015 other than those covered under the provisions of sub-section (2) of section 10A, shall, in addition to the royalty, pay to the District Mineral Foundation of the district in which the mining operations are carried on, an amount which is equivalent to such percentage of the royalty paid in terms of the Second Schedule, not exceeding one-third of such royalty, as may be prescribed by the Central Government. commencement of (6) The holder of a mining lease granted before the date the Mines and Minerals (Development and Regulation) Amendment Act, 2015 [and those covered under the provisions of sub-section (2) of section 10A], shall, in addition to the royalty, pay to the District Mineral Foundation of the district in which the mining operations are carried on, an amount not exceeding the royalty paid in terms of the Second Schedule in such manner and subject categorisation of the mining leases and the amounts payable by the various categories of lease holders, as may be prescribed by the Central Government. 9C. National Mineral Exploration and Development Trust.― (1) The Central Government shall, by notification, establish a Trust, as a non-profit autonomous body, to be called the National Mineral Exploration and Development Trust. (2) The object of the Trust shall be to use the funds accrued to the Trust within India, including the offshore areas, and outside India for the purposes of regional and detailed exploration and development of mines and minerals in such manner as may be prescribed by the Central Government. (3) The composition and functions of the Trust shall be such as may be prescribed by the Central Government. (4) The holder of a mining lease or a composite licence shall pay to the Trust, a sum equivalent to [three per cent.] of the royalty paid in terms of the Second Schedule, in such manner as may be prescribed by the Central Government. (5) The entities specified and notified under sub-section (1) of section 4 shall be eligible for funding under the National Mineral Exploration and Development Trust. 13***(2)** W.P.(C) No.31035 of 2025 & Batch (aa) the conditions as may be necessary commencement and continuation of production by the holders of mining leases, under section 4B; Rule:-12A of MCR:- Additional conditions for commencement and continuation of production as per section 4B of the Act.–(1) Notwithstanding anything contained in these rules, during the first two years from the date of execution of new lease, the holder of mining lease, to whom the order of vesting of rights, approvals, clearances, licences and the like have been issued under section 8B of the Act, shall maintain such level of production so as to ensure minimum dispatch of eighty percent of the average of the annual production of two immediately preceding years on pro-rata basis, failing which appropriate actions in accordance with the Mine Development and Production Agreement shall be initiated. (1A) In case of shortfall in dispatch from the minimum dispatch required under sub-rule (1), which shall be assessed on a quarterly basis, the lessee shall, in addition to the amounts payable under rule 13 of the Mineral (Auction) Rules, 2015 (hereinafter referred to as the Auction Rules) for the actual dispatch, also pay to the State Government, an amount equal to the difference between the following, namely:— (a) the amounts payable under rule 13 of the Auction Rules for the quantity equal to the minimum dispatch required under sub-rule (1) in the said quarter on the basis of the weighted average of grade of minerals dispatched during the quarter; and (b) the amounts paid under rule 13 of the Auction Rules for the quantity actually dispatched in the said quarter: Provided that a reconciliation of the amounts paid under rule 13 of the Auction Rules shall be done at the end of the year and on such reconciliation, if it is found that the lessee has dispatched more than or equal to the minimum dispatch required under sub-rule (1) for that year as a whole, then any amount paid by lessee for the shortfall in dispatch in any quarter or quarters of that year shall be adjusted with the amounts to be paid for the last quarter of that year: Provided further that the amount payable under this sub-rule shall be in addition to any appropriation of performance security for non-compliance of any minimum production or dispatch requirement under the Mine Development and Production Agreement. W.P.(C) No.31035 of 2025 & Batch (1B) Where the lessee does not maintain minimum dispatch required under sub-rule (1) for the year as a whole, the State Government may terminate such lease after giving the lessee a reasonable opportunity of being heard. (1C) In cases where the mining lease is executed on or before the commencement of the Mineral (Other than Atomic and Hydro Carbons Energy Minerals) Concession (Third Amendment) Rules, 2021, the provisions of sub- rule (1A) and (1B) shall apply after a period on one year from the date of such execution of mining lease or the date of commencement of the Mineral (Other than Atomic and Hydro Carbons Energy Minerals) Concession (Third Amendment) Rules, 2021, whichever is later. (2) The new lessee shall ensure that the annual production beyond two years from date of execution of new lease is equal to or more than the annual production by the previous lessee and shall subsequently workout and implement an annual production plan to ensure that the mineral resources are fully exploited during the period of the lease, failing which appropriate actions in accordance with the Mine Development and Production Agreement shall be initiated. Provided that the new lessee shall also ensure that at least eighty percent of such annual production is dispatched in the said year.‖

151. Such being the prelude and the genesis of enacting legislation for development and regulation of the mines and the minerals, amendment have been brought from time to time. The main thrust put uniformly by all respective Senior Counsels as to whether Rule 12A is contrary to any provision of the parent Act or an inconsistent therewith and, therefore, exposed itself liable to be declared ultra vires. W.P.(C) No.31035 of 2025 & Batch

152. Before we proceed further nuances of law relating to the invalidation of a subordinate/delegated legislation is required to be recapitalized.

153. It admits no ambiguity fundamental principles that the promulgation of the Rules must eminent from the conferment of powers to make rules and the primary object is to carry out the purpose of the said Act within the contour of such rule making power.

154. The enlightening observation rendered in case of Kunj Bihari Lal Butail (supra) can be borne in mind wherein is held in unequivocal terms that the subordinate/delegated legislation cannot create a new right, obligation and/or disability, which is not contemplated in the parent Act in the following: ―13. It is very common for the legislature to provide for a general rule-making power to carry out the purpose of the Act. When such a power is given, it may be permissible to find out the object of the enactment and then see if the rules framed satisfy the test of having been so framed as to fall within the scope of such general power confirmed. If the rule-making power is not expressed in such a usual general form then it shall have to be seen if the rules made are protected by the limits prescribed by the parent act. (See: Sant Saran Lal v. Parsuram Sahu [AIR 1966 SC 1852 : (1966) 1 SCR 335] , AIR para 19.) From the provisions of the Act we cannot spell out any legislative intent delegating W.P.(C) No.31035 of 2025 & Batch expressly, or by necessary implication, the power to enact any prohibition on transfer of land. We are also in agreement with the submission of Shri Anil Divan that by placing complete prohibition on transfer of land subservient to tea estates no purpose sought to be achieved by the Act is advanced and so also such prohibition cannot be sustained. Land forming part of a tea estate including land subservient to a tea plantation have been placed beyond the ken of the Act. Such land is not to be taken in account either for calculating the area of surplus land or for calculating the area of land which a person may retain as falling within the ceiling limit. We fail to understand how a restriction on transfer of such land is going to carry out any purpose of the Act. We are fortified in taking such view by the Constitution Bench decision of this Court in Bhim Singhji v. Union of India [(1981) 1 SCC 166] whereby sub-section (1) of Section 27 of the Urban Land (Ceiling and Regulation) Act, 1976 was struck down as invalid insofar as it imposed a restriction on transfer of any urban or urbanisable land with a building or a portion only of such building which was within the ceiling area. The provision impugned therein imposed a restriction on transactions by way of sale, mortgage, gift or lease of vacant land or buildings for a period exceeding ten years, or otherwise for a period of ten years from the date of the commencement of the Act even though such vacant land, with or without a building thereon, fell within the ceiling limits. The Constitution Bench held (by majority) that such property will be transferable without the constraints mentioned in sub-section (1) of Section 27 of the said Act. Their Lordships opined that the right to carry on a business guaranteed under Article 19(1)(g) of the Constitution carried with it the right not to carry on business. It logically followed, as a necessary corollary, that the right to acquire, hold and dispose of property guaranteed to citizens under Article 19(1)(f) carried with it the right not to hold any property. It is difficult to appreciate how a citizen could be compelled to own property against his will though he wanted to alienate it and the land being within the ceiling limits was outside the purview of Section 3 of the Act and that being so the person owning the land was not governed by any of the provisions of the Act. Reverting back to the case at hand, the learned counsel for the State of Himachal Pradesh has not been able to satisfy us as to how such a prohibition as is imposed by the impugned amendment in the Rules helps in achieving the object of the Act.‖ W.P.(C) No.31035 of 2025 & Batch (emphasis supplied)

155. The principles of law as laid down in the above noted report is reiterated in a subsequent judgment rendered in Global Energy Limited and another (supra) in the following: ―25. It is now a well-settled principle of law that the rule-making power ―for carrying out the purpose of the Act‖ is a general delegation. Such a general delegation may not be held to be laying down any guidelines. Thus, by reason of such a provision alone, the regulation- making power cannot be exercised so as to bring into existence substantive rights or obligations or disabilities which are not contemplated in terms of the provisions of the said Act.

26. We may, in this connection refer to a decision of this Court in Kunj Behari Lal Butail v. State of H.P. [(2000) 3 SCC 40] wherein a three-Judge Bench of this Court held as under: (SCC p. 47, para 14) ―14. We are also of the opinion that a delegated power to legislate by making rules ‗for carrying out the purposes of the Act‘ is a general delegation without laying down any guidelines; it cannot be so exercised as to bring into existence substantive rights or obligations or disabilities not contemplated by the provisions of the Act itself.‖