In Rare Move, Supreme Court Bench Lists Matter In Which Judgment Was Reserved For Fresh Hearing By Another Bench

In a rare development, a Supreme Court bench released a matter in which it had reserved judgment and directed it to be heard afresh by another bench, in view of the difference of opinon amongst the judges and the impending retirement of the presiding judge.

The Bench of Justices Sanjay Kishan Kaul, CT Ravikumar and Sudhanshu Dhulia was hearing the appeal titled Sarda Mines And Another Vs. State of Odisha (Civil Appeal No(s).8995 of 2022).

 However, given that tomorrow is the last working day of Justice Kaul and the Bench has a different view on the legal details of the case, the above direction was passed. For convenience, the order read as follows:

“We had reserved orders in this matter on 02.11.2023. We had some discussion, but there is some difference in perception on the legal nuances of this case. One of us is demitting office shortly. We, thus, consider it appropriate to direct that the matter be placed before Hon'ble the Chief Justice of India to be assigned to a completely different Bench, which may have an opportunity to afresh apply its mind to the case.”

The facts of the case revolve around two mining leases (Block-A and Block-B) over an area measuring 2590.4 acres and 2340.2 acres in Thakurani Iron Ores Mines, Keonjhar District, which were granted in favor of late Shri Babu Hiralal Sarda by the then Raja of Keonjhar by a lease deed dated 1st August 1934. The leases were originally granted for a period of 30 years commencing 1st August 1934 and expiring on 31st July, 1964. The lease deed had a clause providing for renewal for another period of thirty years.

On 4th September 1956, the Mining Lease (Modification of Terms) Rules, 1956, was issued. Under Rule 4 of the 1956 Rules, existing leases were required to be brought in conformity with the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act).

However, a compromise was entered between the state and the lease after a series of litigation concerning the lease renewal. As per the same, the claim for renewal of the mining lease in respect of Block-A was abandoned to enable the State of Orissa to deal with the said Block for consumption by others. However, for Block-B, the same was to be renewed for thirty years from the renewal date.

One of the issues was also whether, as per section 8(2) of the Act, a mining lease can be renewed for a period of up to 30 years. For convenience, the same reads: “A mining lease may be renewed for a period not exceeding twenty years.”

With respect to the same, clarification was sought by the collector from the state government. Following this, the State Government issued a fresh grant order to the effect that legal heirs of the lease would be allowed to execute the lease for a period of 20 years.

Now, the starting point for the present litigation was the lease deed executed on 14th August 2001. The same was between the State Government on the one hand and the heirs of Babu Hiralal Sarda on the other, under Rule 39 of the Mineral Concession Rules, 1960 (MC Rules). The document was titled "Renewal of mining lease," and the period is clearly specified as "14.08.2001, 13.08.2021". It clearly stated that the term 20 years was "next ensuing." Pertinently, in 2006, the mining lease was transferred in favor of Sarda Mines Pvt. Ltd. (SMPL) under Rule 37 of the MC Rules, 1960.

Against this backdrop, SMPL filed a writ petition before the High Court for a direction to the State of Odisha to execute a lease deed for the remaining period of 10 years out of the 30-year renewal. 

At the outset, the Court noticed that the changes brought about to the MMDR Act by the MMDR Amendment 2015 introduced a new regime in the context of mining leases in the country. Thereafter, the Court examined the significant features of the MMDR Amendment Bill and noted that after it became effective, the concept of renewal of mining leases was virtually non-existent.

Among other findings, the Court opined that the right of renewal would be subject to the provisions of the MMDR Act and the MC Rules in force at the renewal stage.

In the end, the Court also penned down certain pertinent findings with respect to the interpretation of Section 8 of the MMRD Act. The Court opined:

“The expression "till the completion of the renewal period if any" cannot be interpreted in this case as renewal up to 13th August, 2031. In the absence of an express clause in the lease deed that permits such renewal de hors the statutory provisions, the period of renewal cannot extend beyond 13th August, 2021. The expression "till the completion of the renewal period occurring Section 8A (6) of the MMDR Act can only be 13th August, 2021. Section 8A (6) read with Section 8(4) of MMDR Act as amended does not permit any automatic extension of the lease deed.”

Against this backdrop, the Court refused to entertain the prayer for renewal of the mining lease beyond 13th August 2021.

Click here to read the order