Right To Extension Of Lease Either Flows From Statutory Provision Or From Terms Of Lease Between Parties: Allahabad High Court Reiterates

The Allahabad High Court has held that right to extension of lease can either be derived from a statutory provision or from the terms of lease deed entered into by the parties. No extension can be granted because judicial order prevented petitioner from carrying out mining activities.

The bench comprising of Justices Siddhartha Varma and Manoj Bajaj relied on Dharmendra Kumar Singh Vs. State of U.P. and others wherein the Supreme Court had held

“that the right to extension of lease either flows from a statutory provision or from the terms of the lease between the parties concerned. If there has been an obstructed period of by reason of a judicial interdict, that itself will not give window to extend the lease by not following the statutory provisions, especially when the terms of the lease do not provide for any consequences thereof.”

The Court held that pursuant to the aforesaid judgment, permit of mining cannot be extended.

Petitioner applied for license/permit under an advertisement by which E- tenders were invited under Rule 23(2)(a) of the Uttar Pradesh Minor Minerals (Concession) Rules, 1963. Petitioner's tender was accepted and permit was granted to him for six months expect that during monsoon season for the months of July, August and September no mining would be done.

One Dileep Singh approached the National Green Tribunal alleging that petitioner did not have proper environmental clearance certificate. NGT granted an interim stay on mining activities by the petitioner on the disputed land. Subsequently, while disposing of the original application by Dileep Singh, NGT directed the State Environmental Impact Assessment Authority, Uttar Pradesh (SEIAA) to revisit the environmental clearance issued to the petitioner within a period of two months and in the meanwhile, the interim order would continue to operate.

Once the environmental clearance was given to the petitioner, the District Magistrate ordered that the petitioner be permitted to work for the remaining five months and 21 days, in lieu of the orders passed by the NGT. However, the said order was withdrawn later relying upon the order of the High Court passed in Vijay Kumar Dwivedi vs. State of U.P. and 3 Ors.

Relying on the decisions of Supreme Court in Beg Raj Singh Vs. State of U.P. & Ors. and Chowgule and Company Private Limited Vs. Goa Foundation and others, counsel for petitioner contended that if due to litigation, the petitioner is not able to carry out mining activities during subsistence of the license period, then period of time of mining must be extended.

Per Contra, Counsel for respondent relied on Dharmendra Kumar Singh to argue that if work of the petitioner was hindered because of an intervening litigation during the period of lease, and the period expired, then the lease/license/permit could only be extended if there was a statutory provision for extension or if there was any condition in the lease deed to extend the period which had been wasted because of the intervening litigation.

Accordingly, though the Court acknowledged that the work of the petitioner was hampered due to interim judicial orders, the petitioner had the remedy of refund under Rule 41(h) of the Uttar Pradesh Minor Minerals (Concession) Rules, 2021.

While partly allowing the writ petition, the Court directed that the petitioner be refunded the royalty for the period he did not work for.

Case Title: M/S Manali Vintrade Private Limited v. State Of U.P. And 3 Others [WRIT - C No. - 26588 of 2023]

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