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Supreme Court directs Odisha mining firm to reply on Centre’s impleadment application

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The Supreme Court has directed Sarda Mines Private Limited to file its reply on an impleadment application filed by the Centre/Ministry of Mines in a matter between Sarda Mines Private Limited Vs the State of Odisha. 

Sarda Mines Private Limited had moved the Supreme Court against the Orissa High Court order which had rejected its plea against State Government order revising the commencement date of renewal of the mining lease from August 14, 2021 to August 1, 1964, a date 37 years earlier, alleging it’s totally illegal, absurd and a colourable exercise of power by the State violating petitioner’s rights under Articles 14 and 19 of the Constitution of India. 

Solicitor General Tushar Mehta, who appeared for the Ministry of Mines today, mentioned application before the three-judge bench of Chief Justice of India N.V. Ramana, and Justices Krishna Murari & Hima Kohli. 

SG Mehta said,

“I don’t have any background of the matter. Kindly allow me to place. It’s a matter of fact that they should have impleaded me. Allow me a audience on the subject matter. There is a mine.” 

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CJI Ramana showed reluctance and asked, “Mr Mehta, tomorrow somebody else will come and say, I want to implead, do we agree?” 

SG replied, “Impleadment of a Central government is not somebody.” 

“It may have pan-India application. There is a mine operating since pre-Independence,” he said. 

CJI said, “You argued the same thing in Karnataka mining matter.” 

SG replied, “Milord, I am a Central Govt and I am not “somebody”!” 

Lis between Sarda Mines & State, not the Central Government; Senior Advocate Kapil Sibal records his objection. 

Senior Advocate Kapil Sibal, appearing for petitioners Sarda Mines, strongly objected, “You cannot say things like this. This is a lis between me and state, not the Central government.” 

CJI observed, “We have to be little careful in this matter. We are seeing something in this matter. I will write all this in my order.” 

The bench thus ordered; Ministry of Mines filed impleadment application in this matter. The State government expressed no objection. We direct petitioner to file an affidavit. After one week. 

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The present appeal challenges the order dated 10.01.2022, by the Orissa High Court, whereby the writ petitions filed by Sarda Mines was rejected. The mine company had sought directions to the Respondents i.e. Department of Mines, State of Odisha (DSM) to execute a lease deed in its favour “for the remaining bifurcated period of 10 years of the 30 years period” in terms of the directions passed by the Court earlier. 

The High Court had said, “It is trite that this Court cannot possibly issue a writ of mandamus to the State to renew a mining lease contrary to the prevailing statutory provisions,” while upholding the order dated 20th May, 2021, passed by Odisha, rejecting the petitioner’s prayer for renewal of mining lease beyond August 13, 2021 & dismissed their plea. 

By a lease deed dated August 1, 1934, the Raja of Keonjhar granted two mining leases (Block-A and Block-B) over 2590.4 acres and 2340.2 acres respectively in Murgabeda and Soyabali villages of Thakurani Iron Ores Mines in Keonjhar District to late Babu Hiralal Sarda.

The leases were originally granted for 30 years from August 1, 1934 to July 31, 1964. The lease deed had a clause providing for renewal for another 30-year period. Hiralal Sarda died in 1947, whereafter his son Baijnath Sarda carried on the mining operation. On September 4, 1956, the Mining Lease (Modification of Terms) Rules, 1956 (‘1956 Rules’) 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). 

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Baijnath Sarda died on July 28, 1974. The lease came to be operated by his son Kanheya Lal Sarda. On December 13, 1984, the State Government decided to reserve the area for exploitation by PSUs of the State Government under Section 17A (2) of the MMDR Act and a notification to this effect was issued. 

Aggrieved by the notification, K.L. Sarda, the successor-in-interest to Baijnath Sarda, filed OJC Nos.2567 of 1984, 1368/1985 and 1369 of 1985. On account of the death of K.L Sarda during pendency of the said petitions, he was substituted by one of his sons Mohan Lal Sarda as petitioner by an order dated March 20, 1987.

By an order dated June 28, 1991, the Orissa High Court allowed the said petitions and directed the State Government to carry out the orders of December 17, 1968 passed by the Central Government and further to grant renewal of the mining lease for 30 years.

On July 21, 1998, M.L. Sarda and S.L. Sarda, as legal heirs of the erstwhile lessee, submitted an application before the State Government for renewal of the mining lease for period of 30 years in respect of Block-B of Thakurani Iron Ore mines over an area 2340.20 acres.

On July 22, 1999, the Collector, Keonjhar sought a clarification from the State Government as to how a renewal could be for a period of 30 years in view of the restriction under Section 8 (2) of the MMDR Act, 1957 which stipulated that no renewal can be granted for period of more than 20 years.

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The relevant portion of Section 8 of the MMDR Act as of 1999 read as under: “8. Periods for which mining leases may be granted or renewed. 

(1) The maximum period for which a mining lease may be granted shall not exceed thirty years: Provided that the minimum period for which any such mining lease may be granted shall not be less than twenty years.

(2) A mining lease may be renewed for a period not exceeding twenty years.

(3) Notwithstanding anything contained in subsection (2), if the State Government is of opinion that in the interests of mineral development it is necessary so to do, it may, for reasons to be recorded, authorise the renewal of a mining lease in respect of minerals not specified in Part A and Part B of the First Schedule for a further period or periods not exceeding twenty years in each case. 

(4) Notwithstanding anything contained in subsection (2) and sub-sections (3), no mining lease granted in respect of mineral specified in Part A or Part B of the First Schedule shall be renewed except with the previous approval of the Central Government.”

Case Name- Sarda Mines Private Limited Vs State of Odisha 

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