Jharkhand High Court

M/S. Standard Mercantile Company ... vs State Of Jharkhand Through Its ... on 16 September, 2025

Author: Sujit Narayan Prasad

Bench: Sujit Narayan Prasad

                                                    2025:JHHC:28597-DB




          IN THE HIGH COURT OF JHARKHAND AT RANCHI

                        W.P.(C) No.2573 of 2021

M/s. Standard Mercantile Company (Mining Division) Pvt. Ltd., a
Company incorporated under the Companies Act, having its registered
office at Rai Bazar, Rajmahal, P.O. & P.S. Rajmahal, District Sahibganj
through its Director, Abhishek Agarwal, aged about 44 years, son of Sri
Dilip Agarwal, resident of 11A, 'Kalptaru', Kidwaipuri, P.O. - Kidwaipuri,
P.S. -Kotwali, District - Patna, Bihar, PIN-800001      ....... Petitioner
                           Versus
1. State of Jharkhand through its Secretary, Department of Mines &
   Geology, Nepal House, P.O. & P.S. Doranda, District - Ranchi.
2. Joint Secretary, Department of Mines & Geology, Nepal House, P.O. &
   P.S. Doranda, District Ranchi.
3. District Mining Officer, Sahibganj, P.O. & P.S. & District - Sahibganj.
                                                   ............ Respondents
                                  -------
 CORAM: HON'BLE MR. JUSTICE SUJIT NARAYAN PRASAD
            HON'BLE MR. JUSTICE ARUN KUMAR RAI
                                  -------
 For the Petitioner              : Mr. Anoop Kumar Mehta, Advocate
 For the Resp-State of Jharkhand : Mr. Rajiv Ranjan, Advocate General
                                   Mr. Mrinal Kanti Roy, GA-I
                                     ------

 C.A.V on 21.08.2025                 Pronounced on 16/09/2025
 Per Sujit Narayan Prasad, J.

1. The present writ petition has been filed under Article 226 of the

Constitution of India for the following reliefs:

(i) To issue an appropriate writ for declaration declaring that a mining lessee is liable to pay Dead Rent and Surface Rent only for the period of subsistence of a mining lease and not otherwise AND consequently to issue an appropriate writ in the nature of certiorari or any other appropriate writ to quash the action of the Respondent No. 3 as contained in his letter bearing Memo No. 26/M dated 6.1.2021 (Annexure-10); whereby the said respondent has illegally and wrongfully demanded Dead Rent and 2025:JHHC:28597-DB

Surface Rent for the period 1.4.2020 to 30.9.2020, during which the mining lease was neither extended nor the petitioner was allowed to carry out any mining activity;

(ii) For issuance of an appropriate writ in the nature or of Mandamus any other appropriate writ to refund the illegal and wrongful collection of Dead Rent and Surface Rent amounting to Rs. 32,46,202.00 for the period 1.4.2020 to 30.9.2020 during which the Petitioner was not allowed to work the mine as the Mining Lease had lapsed on 31.03.2020;

(iii) To issue an appropriate writ in the nature of certiorari or any other appropriate writ for quashing that part Notification dated of the Gazette 19.9.2019 of the Department of Mines & Geology (Annexure-5) by which rate of Dead Rent has been enhanced arbitrarily by 40 times from Rs. 800.00 per Acre (Rs 2,000.00 per Ha.) to Rs. 40,000.00 per Acre per annum;"

Factual Matrix

2. The brief facts of the case as per the pleadings made in the writ

petition needs to refer herein which reads as under:

(i) The grievance of the writ petitioner as per the pleadings made in

the writ petition is that the petitioner-company was granted a

mining lease for China Clay, Kaolinised Sand and Silica Sand by

the State Government in respect of land covering an area of

161.11 Acres equivalent to 65.197 Ha in Mauza Rai Bazar, P.S.

Rajmahal under Sub Division - Rajmahal at Sahibganj in the

District of the Santhal Parganas.

(ii) It is pleaded that the Central Government declared 31 Major

Minerals including China Clay, Silica Sand to be Minor Minerals

2025:JHHC:28597-DB

while vide notification of the Ministry of Mines dated 10.2.2015

published in Gazette of India dated 10.02.2015.

(iii) It is further pleaded that the Department of Industries, Mines &

Geology, Government of Jharkhand notified the 31 minerals to

be Minor Minerals including China Clay, Kaolin and Silica Sand

and, accordingly, these minerals were henceforth covered by the

provisions contained in the Jharkhand Minor Mineral

Concession Rules, 2004.

(iv) It is further pleaded that since the period of mining lease granted

to the petitioner was going to expire, a supplementary mining

lease was executed by the State Government in favour of the

petitioner on 28.12.2017 for the period up to 31.3.2020.

(v) Further, the Department of Industry, Mines & Geology,

Government of Jharkhand issued a notification dated 22.2.2017

published in Jharkhand Gazette (Extra Ordinary) dated 2.3.2017

exercising powers conferred upon state u/s 15 of the MMDR Act,

1957 amending the provisions of the JMMC Rules, 2004 by

introducing the Jharkhand Minor Mineral Concession

(Amendment) Rules, 2017.

(vi) By these Amended Rules the State Government declared that

Dead Rent on Minor Minerals would be payable at the rates

prescribed in Schedule-I(Ka). As per the amended rules the State

Government fixed Dead Rent @ Rs. 2,000.00 per Hectare in

respect of mining lease that has remained working for over five

years. Thus, Dead Rent in respect to minerals China Clay was

fixed @ Rs. 2,000.00 per Hectare per Annum.

2025:JHHC:28597-DB

(vii) It is further pleaded that the Department of Mines and Geology,

Government of Jharkhand vide their notification

dated 16.9.2019 since published in Jharkhand Gazette (Extra

Ordinary) dated 19.9.2019, the State Government in exercise of

powers conferred u/s 15 of the MMDR Act, 1957 amended the

provisions of JMMC Rules, 2004 by amending Rule 29(1), 29(5)

and Rule 30 as also Schedule-1, 2, 2A and 3, by which Dead Rent

fixed at Rs. 2,000.00/Ha (Rs. 800.00 Per Acre Per Annum) has

been enhanced to Rs. 40,000.00 Per Acre per Annum, which is

almost 40 times of the Dead Rent existing in 2017 when these

Minor Minerals namely China Clay, Silica Sand and Kaolin were

declassified from Major Minerals to Minor Minerals without

there being any justification/ valid reasons for sudden

enhancement of Dead Rent by 40 times.

(viii) It is further pleaded that for the 2nd Quarter i.e. Quarter

commencing from September, 2019 to December, 2019 for the

financial year 1.4.2019 to 31.3.2020, the petitioner has paid

royalty of about Rs. 17,50,000.00 while for the subsequent

Quarter commencing from January to March, 2020 royalty paid

by the petitioner has been Rs.24,52,000.00 which is more than

the Dead Rent.

(ix) It is further pleaded that on account of spread of COVID-19 and

the Lockdown imposed by Government of India w.e.f.

24.03.2020, entire mining activities had come to a grinding halt

on that day and everything remained under Lockdown.

2025:JHHC:28597-DB

(x) It is further pleaded that on 06.07.2020 petitioner submitted an

application before the Respondent No.3, the District Mining

Officer, Sahibganj for allowing the petitioner to sell and dispatch

the stock of minerals existing as on 31.03.2020.

(xi) It is further pleaded that petitioner thereafter submitted reminder

before the respondent no.3 requesting him for physical

verification of the minerals and to allow it to make dispatches.

(xii) It is further pleaded that the Department of Mines and Geology,

Government of Jharkhand vide its Notification dated 28.09.2020

published in Jharkhand Gazette (Extra Ordinary) dated

30.09.2020, extended the period of mining lease upto 31.03.2022

in terms of the provisions contained in Rule 9(10) of the JMMC

Rules, 2004 in respect to minerals covered by Schedule-2(Ka).

(xiii) It is further pleaded that the petitioner applied for Consent to

Operate (CTO) under the Air and Water Act and also for mining

plan, which are essential for working in the leasehold subsequent

area to grant/extension of mining lease. It is only after CTO and

Mining Plan is submitted and made available to the Respondent

No. 3; no application can be submitted for extension of mining

lease.

(xiv) It is further pleaded that the petitioner was granted a valid CTO

order and upon submission of Mining Plan, receipt of renewal

fee vide GRN No. 2002743520 dated 11.11.2020, receipt of

mining plan approval fee etc., the petitioner applied for extension

of mining lease before the Respondent No. 3 in Form-'J' upon

deposit of application fee of Rs. 5,000.00.

2025:JHHC:28597-DB

(xv) It is further pleaded that the Respondent No. 3 vide his letter

contained in Memo No. 86/M dated 6.1.2021 called upon the

petitioner to deposit Dead Rent and Surface Rent for the period

1.4.2020 to 30th September, 2020, totaling Rs. 32,46,202.00,

even though there was no subsisting mining lease for the said

period and the petitioner was also not allowed to operate the said

mine.

(xvi) It is further pleaded that thereafter the petitioner immediately met

the Respondent No. 3 and requested him not to make any demand

towards Dead Rent and Surface Rent for the period 1.04.2020 to

30.09.2020 as there was no subsisting mining lease and the

petitioner was also not allowed to work during the relevant

period.

(xvii) The petitioner referring to his earlier application dated

06.07.2020 and 21.9.2020 (Annexure-6 and 7 respectively)

requested him not to insist for collecting the said amount as the

petitioner has suffered huge loss and had to make payment of

salary etc. to the workers, but the Respondent No. 3 did not give

any heed to the said request and informed the

petitioner that unless and until the amount demanded towards

Dead Rent and Surface Rent is not paid, the petitioner would not

be allowed to operate the mine.

(xviii) It is further pleaded that the petitioner was compelled to make

payment of Rs. 32,46,202.00 through e-Challan and only

thereafter Royalty Clearance Certificate was issued by the

2025:JHHC:28597-DB

Respondent No. 3 vide his Certificate contained in Memo No. 34

dated 07.01.2020.

(xix) It is further pleaded that only after the petitioner made deposits

of Dead Rent and Surface Rent under protest, the Respondent

No. 3 vide his letter contained in Memo No. 51 dated 15.01.2021

granted extension of mining lease upto the period 31.03.2022

which is contrary to law.

3. Being aggrieved, the petitioner has approached this Court for

redressal of its grievance by filing the instant writ petition.

Submission on behalf of the writ petitioner:

4. Mr. Anoop Kumar Mehta, the learned counsel appearing for the

petitioner has taken the following grounds in assailing the impugned order:

(i) The petitioner is not liable to make payment of any Dead Rent

due to mining operation in the leasehold area due to expiry of the

validity of period of lease from 01.04.2020 to 30.09.2020.

(ii) It has been contended that subsequent to the said period,

i.e., after 30.09.2020 the lease has been extended upto

31.03.2022 but there was no lease in between from 01.04.2020

to 30.09.2020, hence, the petitioner is not liable to make payment

of any Dead Rent for the aforesaid period from 01.04.2020 to

30.09.2020 and, therefore, the demand raised against the

petitioner by the impugned order is per se illegal.

(iii) It has been contended that the petitioner has made payment

of royalty in terms of the provision of section 21(5) of the

MMDR Act, 1957 after the extension of the lease, hence, the

petitioner cannot be said to be at default rather the petitioner has

2025:JHHC:28597-DB

paid royalty for the period during which it has carried out the

mining operation.

(iv) It has been contended that the period during which the

mining operation has not been carried out due to expiry of period

of lease no demand can be raised by the respondents by way of

Dead Rent.

(v) In support of his contention, the learned counsel appearing

for the petitioner has relied upon the judgment passed by a

Division Bench of Patna High Court rendered in the case of "The

State of Bihar and Ors. Vs. Md. Sikandar Alam" passed in

Letters Patent Appeal No. 1984 of 2015.

5. The learned counsel for the petitioner based upon the aforesaid

ground has submitted that the impugned order therefore, needs

interference by this Court.

Submission on behalf of the Respondents:

6. Per contra, Mr. Rajiv Ranjan, the learned Advocate General

appearing for the respondent-State to defend the impugned order has raised

the following grounds:

(i) It has been contended that the petitioner is liable to make payment

of Dead Rent after the period of lease which has been extended till

31.03.2022 which is the admitted case of the writ petitioner.

(ii) The contention has been raised that the moment the period of lease

has been extended the implied meaning of the same would be that

the said extension would relate back to the original date of issuance

of lease and all the intervening period in which the lease was not

valid will be considered to be in continuation and thereby the

2025:JHHC:28597-DB

petitioner in view of the provision of section 9A of the MMDR Act,

1957 read with Rule 28(3) of the JMMC Rules, 2004 is liable to

make payment of Dead Rent.

7. The learned Advocate General has relied upon the judgment

rendered by the Hon'ble Apex Court in the case of "King Pal Singh Vrs.

State of UP & Ors." reported in (1996) 11 SCC 571 and "Provash

Chandra Dauli and Another Vs. Bishwanath Banerjee and Another"

reported in 1989 Supp (1) SCC 487 in order to substantiate his argument

that the extension of lease would mean the period under which the lease

was not there will also be deemed to be in continuity. Moreover, as per the

provision of Rule 28(3) of the JMMC Rules, 2004 the specific provision

has been made to deal with such situation and in that view of the matter,

the petitioner is liable to make payment of Dead Rent and, hence, the said

demand has been issued which, therefore, needs no interference and the

present writ petition is fit to be dismissed.

Analysis:

8. We have heard the learned counsel appearing for the parties and

gone through the pleadings made in the writ petition and the counter-

affidavit as also the rejoinder.

9. At the outset it needs to refer herein that vide order dated

31.01.2024 passed by the Co-ordinate Bench of this Court it is evident that

the learned counsel for the petitioner has submitted that so far as the prayer

no. 1 (iii) is concerned wherein quashing was sought for the part of

Notification dated 19.9.2019 of the Department of Mines and Geology

(Annexure-5) by which rate of Dead Rent has been enhanced from Rs.

800.00 per Acre (Rs 2,000.00 per Ha) to Rs. 40,000.00

2025:JHHC:28597-DB

per Acre per annum, has already been settled by virtue of order of this

Court passed in W.P.(C) No. 7285 of 2019 and its analogous cases vide

judgment dated 29.06.2022, and now the prayer nos. 1 and 2 are subsisting

prayer only. For ready reference the order dated 31.01.2024 is being

quoted herein which reads as under:

It has been submitted by Mr. A. K. Mehta, learned counsel for the petitioner that so far as the prayer no. 3 is concerned, the same has already been settled by virtue of order of this court passed in W.P.(C) No. 7285 of 2019 and its analogous cases vide judgment dated 29.06.2022. However, so far as the prayer nos. 1 and 2 are concerned, the same are still subsisting, but since an adjournment has been sought for by the learned counsel for the petitioner, list this case next week

10. In the light of aforesaid submission, the adjudication of the

instant petition by this Court is limited for prayer no.1(i) and (ii) only.

11. The admitted fact herein is that the lease over the land in question

which is owned by the petitioner, had been granted for a period upto

31.03.2020. During currency of the said lease, the petitioner has made an

application in Form 'J' for extension of the lease which was extended by

virtue of the order passed by the competent authority upto 31.03.2022. The

lease was not in operation from the period form from 01.04.2020 to

30.09.2020.

12. The petitioner although has made payment of royalty as required

to be paid under section 21(5) of the MMDR Act, 1957 and other allied

provision applicable for the period of which the mining operation was

carried out but the petitioner has not fulfilled its part of the liability in form

of Dead Rent and surface rent for the period from 01.04.2020 to

30.09.2020 which according to the writ petitioner, it is not liable to make

2025:JHHC:28597-DB

payment of anything to the State since during the said period lease was not

in operation.

13. The question, therefore, requires consideration herein is whether

inoperative period of the lease i.e. from 01.04.2020 to 30.09.2020, the

petitioner is liable to make payment of Dead Rent if the lease period has

been extended and the petitioner, on its acceptance, has carried out the

mining operation as also paid royalty for the period during which the

mining operation having been carried out.

14. This Court before considering the said issue, the object and

enactment of the Act 1957 need to discuss herein.

15. The Act of 1957 has been enacted to provide for the development

and regulation of mines and minerals under the control of the Union. The

main object of the Act, 1957 to develop the mines and minerals with the

requirement to grant State largesse through a transparent and fair manner.

16. Further, extraction of the minerals is governed in this country by

the provisions of the Mines and Minerals (Development and Regulation)

Act, 1957 which requires a licence to be acquired by any person interested

in carrying on the mining activity. Such a licence is granted under the said

Act, subject to various rules and regulations and including a requirement

of payment of royalty on the part of the licensee as the mineral essentially

belongs to the State, reference in this regard be made to the judgment

rendered by the Hon'ble Apex Court in the case of "K. Thippanna v.

Varalakshmi", (2012) 3 SCC 576.

17. The object of MMDR Act, 1957 has been taken note by the

Hon'ble Apex Court in the case of "Common Cause v. Union of India",

(2017) 9 SCC 499 wherein it has been observed as under:

2025:JHHC:28597-DB

"84. Briefly therefore, the overall purpose and objective of the MMDR Act as well as the Rules framed thereunder is to ensure that mining operations are carried out in a scientific manner with a high degree of responsibility including responsibility in protecting and preserving the environment and the flora of the area. Through this process, the holder of a mining lease is obliged to adhere to the standards laid down under the Environment (Protection) Act, 1986 or the EPA as well as the laws pertaining to air and water pollution and also by necessary implication, the provisions of the Forest (Conservation) Act, 1980 (for short "the FC Act").

Exploitation of the natural resources is ruled out. If the holder of a mining lease does not adhere to the provisions of the statutes or the rules or the terms and conditions of the mining lease, that person is liable to incur penalties under Section 21 of the MMDR Act. In addition, thereto, Section 4-A of the MMDR Act which provides for the termination of a mining lease is applicable. This provides that where the Central Government, after consultation with the State Government is of the opinion that it is expedient in the interest of regulation of mines and mineral development, preservation of natural environment, prevention of pollution, etc. then the Central Government may request the State Government to prematurely terminate a mining lease."

18. The purpose of making payment of royalty has been enshrined in

the provision, i.e., section 9 of the MMDR Act, 1957 which reads as under:

"Royalties in respect of mining leases:

9. (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. (2A) The holder of a mining lease, whether granted before or after the commencement of Mines and Minerals (Regulation and Development) Amendment Act, 1972, shall not be liable to pay any

2025:JHHC:28597-DB

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."

19. Section 9 of the MMDR Act, 1957 deals with royalties in respect

of mining leases. Section 9(1) of the Act of 1957 provides that the holder

of a mining lease granted before the commencement of the Act shall,

notwithstanding anything contained in the instrument of lease or in any

law in force at the commencement of the statute, 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 rates of royalties prescribed under the Second

Schedule. The non obstante clause is only applicable to mining leases

granted before the commencement of the MMDR Act, 1957.

20. The Hon'ble Apex Court in the case of "Mineral Area

Development Authority v. SAIL", (2024) 10 SCC 1 has categorically

observed that Section 9 of the MMDR Act, 1957 statutorily regulates the

right of a lessor to receive consideration in the form of royalty from the

lessee for removing or carrying away minerals from the leased area. Prior

to the enactment of the MMDR Act, 1957 such a condition was treated as

part of a mining lease. The object of empowering the Central Government

to specify rates of royalty for major minerals was to ensure a certain level

of uniformity in mineral prices in view of the domestic and international

market.

2025:JHHC:28597-DB

21. Further, the State has also taken care of that what would happen

if the mining operation is not being carried out by the lease holder for

which a provision has been inserted under section 9A of the MMDR Act,

1957 which speaks about the payment of Dead/Surface Rent, for ready

reference the same is being quoted hereunder as:

"Dead rent to be paid by the lessee.

9A. (1) The holder of a mining lease, whether granted before or after the commencement of the Mines and Minerals (Regulation and Development) Amendment Act, 1972, shall notwithstanding anything contained in the instrument of lease or in any other law for the time being in force, pay to the State Government, every year, dead rent at such rate as may be specified, for the time being, in the Third Schedule, for all the areas included in the instrument of lease:

Provided that where the holder of such mining lease becomes liable, under section 9, to pay royalty for any mineral removed or consumed by him or by his agent, manager, employee, contractor or sub-lessee from the leased area, he shall be liable to pay either such royalty, or the dead rent in respect of that area, whichever is greater. (2) The Central Government may, by notification in the Official Gazette, amend the Third Schedule so as to enhance or reduce the rate at which the dead rent shall be payable in respect of any area covered by a mining lease and such enhancement or reduction shall take effect from such date as may be specified in the notification:

Provided that the Central Government shall not enhance the rate of the dead rent in respect of any such area more than once during any period of three years."

22. Section 9A was inserted in the Act of 1957 by the Amendment

Act of 1972 and it was enacted with a two-fold purpose. It cast a liability

upon the holder of a mining lease whether granted before or after the

commencement of the 1972 Act, that is, either before or after September

12, 1972, to pay to the State Government Dead Rent at the rates specified

for the time being in the Third Schedule to the 1957 Act "notwithstanding

anything contained in the instrument of lease or in any other law for the

time being in force".

2025:JHHC:28597-DB

23. The purpose of inserting Section 9A in the 1957 Act, as stated in

the Statement of Objects and Reasons to Legislative Bill 83 of 1972, was

to make a "provision of a statutory basis for calculation of Dead Rent".

Section 9-A also provides that the liability of the lessee would be to pay

either royalty or Dead Rent whichever is greater, thus embodying in the

Act what was contained in the proviso to clause (c) of Rule 27 of the Minor

Mineral Concession Rules, 1960.

24. Section 9A of the Act of 1957 deals with payment of Dead Rent

by the lessee. It provides that the holder of a mining lease shall pay to the

State Government Dead Rent at such rate as may be prescribed in the Third

Schedule. However, where the holder of the mining lease also becomes

liable to pay royalty under Section 9, such person shall be liable to pay

either royalty or Dead Rent, whichever is higher. The Dead Rent is

calculated on a rate per hectare basis as specified under the Third Schedule.

Section 9-A was inserted by an amendment in 1972 with a two-fold

purpose, namely, to: (i) provide a statutory basis for calculation of Dead

Rent; and (ii) prohibit the Central Government from enhancing the rate of

Dead Rent more than once during any period of three years.

25. It is evident from the aforesaid provision that the concept of Dead

Rent has been brought into the Statute Book so that there may not be any

revenue loss to the State in case the mining operation is not being carried

out due to which the royalty is not being paid and in order to deal with

such situation the State has been empowered to raise demand by way of

Dead Rent in case of mining lease is having not in operation so that the

State may not put to loss due to non-mining operation in the leasehold area.

2025:JHHC:28597-DB

26. It is evident from the discussions made hereinabove that the

extraction of natural resources the mining operators in whose favour the

lease has been granted by the State Government /Central Government or

the competent authority, is required to make payment of royalty.

27. The State has also formulated rule under the provision of section

15 of the MMDR Act, 1957 by way of JMMC Rules, 2004 which carries

the provision under Rule 28, relevant herein is the sub-rule 3 thereof which

is being quoted hereunder as:

"28. पट्टा का निष्पादि

(1)...............

(2)............

(3) खिि पट्टा के िवीकरण के मामले में खिि प‌ट्टा प्रारं भ होिे की तारीख

वह तारीख होगी जब इसके पूवव का पट्टा समाप्त होगा तथा प‌ट्टाधारी

लगाि/स्वानमस्व आनद भुगताि उसी नदि से करिे के नलए उतरदायी होगा।"

28. It is evident from the provision of Rule 28(3) of Rule, 2004,

referred hereinabove, that in a case of renewal of the mining lease the same

will be relate back to the date when the said mining lease have ended and

the leaseholders will be accountable to make payment of rent or the royalty

from the date of the end of the lease in effect of the renewal of the said

lease.

29. Adverting to the factual aspect of the present case, it is admitted

case of the writ petitioner that the lease has expired on 31.03.2020.

30. The application under Form 'J' has been made. The period of

lease has been extended upto 31.03.2022, i.e., in view of the force of the

Statute by incorporating amendment under 9(1) (च) and 9(1) (छ) whereby

2025:JHHC:28597-DB

and whereunder the validity of the lease already in operation had been

extended from 31.03.2020 to 31.03.2022.

31. This Court, therefore, is dealing with the situation of effect of

extension/renewal and if the extension will mean the extension/renewal,

the same as per the provision of Rule 28(3) since will relate back to the

date when the lease has expired, herein, 31.03.2020, hence, by virtue of

the effect of the provision of Rule 28(3) Rule 2004, the lease would be

continued to be in operation from 31.03.2020 upon 31.03.2022.

32. The reference of a judgment passed by the Hon'ble Apex Court

in the similar fact of the present case rendered in the case of "King Pal

Singh Vrs. State of UP & Ors." reported in (1996) 11 SCC 571. The

factual aspect in the light of the U.P. Zamindari Abolition and Land

Reforms Act, 1950 (1 of 1951) provision by which under Section 4 of the

Act all the estates stood transferred to and vested in the State free from all

encumbrances, the Collector, Agra issued notices to the appellants stating

that they should stop mining as they have lost all rights in the mines and

minerals. The appellants challenged the actions of the Collector by moving

the High Court.

33. The High Court by an order dated 18.03.1955 held that the

appellants were entitled to take advantage of the provisions of Chapter VI

of the Act and consequently a direction was given to the State Government

and the Collector, Agra, for considering the applications of the appellants

for grant of lease under Sections 106-108 of the Act,1950.

34. Pursuant to the said judgment of the High Court, the Collector,

Agra, sent letters dated 8.01.1964 offering the terms and conditions of the

proposed leases to the appellants. Along with those letters drafts of mining

2025:JHHC:28597-DB

lease containing the details of terms and conditions were also enclosed.

Inter alia, the lease was offered for a period of 15 years and the terms and

conditions proposed were in the light of U.P. Minor Minerals (Concession)

Rules, 1963 (hereinafter called "the Rules") as well as the rules framed

under the Mines and Minerals (Regulation and Development) Act, 1957

(hereinafter called "the Central Act").

35. The appellants raised objections regarding certain terms and

conditions contained in the proposed leases. Initially, the aggrieved parties

moved the High Court by filing writ petitions and the High Court while

dismissing the same on 09.02.1965 directed the parties to come to a

settlement regarding the terms and conditions on which the leases have to

be given to the appellants and in case they could not settle the terms, the

differences can be referred to the Mines Tribunal to be appointed under

Section 110 of the Act. As the parties could not come to a settlement, the

Collector on 12.10.1966 filed an application under Section 107(2) of the

Act for settlement of the terms of the leases.

36. The Mines Tribunal, after considering elaborately the arguments

and the materials placed before it negatived all the claims of the appellants

holding that the leases could not be perpetual and permanent, that the

appellants are bound to pay royalty/ Dead Rent as the case may be and that

the leases will necessarily be from the date of vesting of the estate in the

State. However, the Mines Tribunal fixed the period of leases from

1.07.1952 to 23.11.1987 being 10 years from the date of its order.

37. Aggrieved by the order of the Mines Tribunal, the appellants

moved the High Court reiterating the same arguments before the High

Court. The High Court confirmed the views expressed by the Mines

2025:JHHC:28597-DB

Tribunal and, consequently, dismissed the writ petitions. Against the

dismissal of the writ petitions, appeals by special leave has been preferred

before the Hon'ble Apex Court.

38. It is evident from the factual aspect that the Collector, Agra sent

letters dated 08.01.1964 offering the terms and conditions of the proposed

leases to the appellants. Along with those letters drafts of mining lease

containing the details of the terms and conditions were also enclosed. Inter

alia, the lease was offered for a period of 15 years and the terms and

conditions of proposed were in the light of Minor Mineral (Concession)

Rules, 1963 as well as the Rules framed under the MMDR Act, 1957.

39. The appellants raised objections with respect to certain terms and

conditions on which the lease has to be given to the appellants. As the

parties could not come for settlement, the Collector had filed an

application under section 107(2) of the Act for settlement of the terms for

lease. The Mines Tribunal has passed an order holding that the leases could

not be perpetual and permanent, that the appellants were bound to pay

royalty/Dead Rent as the case may be and that the leases will necessarily

be from the date of vesting of the date of estate in the State. However, the

Mines Tribunal fixed the period from 01.07.1952 to 23.11.1987 being

10 years from the date of its order.

40. The view taken by the Mines Tribunal have been upheld as

would be evident from paragraph no.22 of the said judgment wherein it

has been observed by taking aid of the judgment rendered in the case of

"D.K. Trivedi Vs. State of Gujarat" reported in 1986 Supp SCC 20 that

in a mining lease the consideration usually moving from the lessee to the

lessor is the rent for the area leased (often called Surface Rent), Dead Rent

2025:JHHC:28597-DB

and Royalty. Since the mining lease confers upon the lessee the right not

merely to enjoy the property as under ordinary lease but also to extract

minerals from the land and to appropriate them for his own use of benefit

in addition to the usual rent for the area demised, the lessee requires to pay

certain amount in respect of the minerals extracted proportionate to the

quantity so extracted. Such payment is called Royalty.

41. It has further been observed that the mine is not worked properly

so as not to yield enough return to the lessor in the shape of royalty in order

to ensure for the lessor a regular income, whether the mine is worked or

not, a fixed amount is provided to be paid to him by the lessee. This is

called 'Dead Rent'. "Dead Rent' is quantity of minerals extracted or

removed. Thus, while Dead Rent is a fixed return to the lessor, royalty is

a return which varies with the quantity of minerals extracted or removed,

for ready reference, the relevant paragraph of the said judgment is being

quoted hereunder as:

16. In this connection, we need only to refer to the judgment of this Court rendered under the very same provisions with which we are concerned. In Bhagwan Dass v. State of U.P. [(1976) 3 SCC 784 : AIR 1976 SC 1393] , this Court observed as follows:

"The right of the former Zamindars to mines and minerals was extinguished by the Act of 1951 and became vested in the State Government. So long as the proprietary right to the lands was vested in the Zamindar, he was entitled to mines and minerals. With the abolition of Zamindari by the 1951 Act, that right has passed on not to the appellant but to the State Government. The appellant's writ petition filed to restrain the State Government from auctioning the right to undertake mining operations must therefore fail."

20. So far as the second contention is concerned, it was equally without substance. The terms and conditions which were required to be determined could not be only for the future. Necessarily they had to be for the whole period for which the lease was to be granted. As the legislature has conferred a right on the intermediaries, who were

2025:JHHC:28597-DB

operating the mines on the date of vesting it had further created the Mines Tribunal for settling the terms. Therefore, it is logical to hold that the terms to be laid down by the Tribunal would be in respect of the past as well as the future. Nobody could imagine that the Tribunal would be created the day on which the rights were abolished and that it would determine the right without loss of any time. In this context in which these words find a place, it must be construed that the phrase "for the time being in force" should be given a meaning that fulfils the object of the provision, the purpose being that at the time of settling the terms the Mines Tribunal would take into account the provisions of the Central Act. This was the view taken by the High Court and rightly too. Therefore, we do not find any substance in the argument of the learned Senior Counsel on the second point.

21. On the third point concerning the dead rent, it is seen that in spite of opportunities given, the appellants have not taken steps to produce the records regarding the quality or quantity of the minerals removed by them during the period in question. Necessarily, therefore, the authorities have to levy the dead rent at the maximum rate. This is what the Tribunal observed:

"Regarding royalty or dead rent, since there is no record of the amount of mineral taken out by the lessee, and the opposite parties have not given the required information through the interrogatories it would not be possible to calculate the royalty of the mineral extracted, therefore the Government intends to charge dead rent, because the dead rent, as per Schedule 2 of Rule 22 is chargeable at prescribed rates on per acre basis irrespective of the quality or quantity of the mineral removed by the lessee."

22. It is not correct to contend that dead rent is payable with regard to the quantity of mineral won over. Dead rent has a different connotation. In D.K. Trivedi v. State of Gujarat [1986 Supp SCC 20] it was observed as follows: (SCC p. 54, para 39)

"In a mining lease the consideration usually moving from the lessee to the lessor is the rent for the area leased (often called surface rent), dead rent and royalty. Since the mining lease confers upon the lessee the right not merely to enjoy the property as under an ordinary lease but also to extract minerals from the land and to appropriate them for his own use or benefit, in addition to the usual rent for the area demised, the lessee is required to pay a certain amount in respect of

2025:JHHC:28597-DB

the minerals extracted proportionate to the quantity so extracted. Such payment is called 'royalty'. It may, however, be that the mine is not worked properly so as not to yield enough return to the lessor in the shape of royalty. In order to ensure for the lessor a regular income, whether the mine is worked or not, a fixed amount is provided to be paid to him by the lessee. This is called 'dead rent'. 'Dead rent' is calculated on the basis of the area leased while royalty is calculated on the quantity of minerals extracted or removed. Thus, while dead rent is a fixed return to the lessor, royalty is a return which varies with the quantity of minerals extracted or removed. Since dead rent and royalty are both a return to the lessor in respect of the area leased, looked at from one point of view dead rent can be described as the minimum guaranteed amount of royalty payable to the lessor but calculated on the basis of the area leased and not on the quantity of minerals extracted or removed. In fact, clause (ix) of Rule 3 of the Rajasthan Minor Mineral Concession Rules, 1977, defines 'dead rent' as meaning 'the minimum guaranteed amount of royalty per year payable as per rules or agreement under a mining lease'. Stipulations providing for the lessee's liability to pay surface rent, dead rent and royalty to the lessor are the usual covenants to be found in a mining lease."

42. The reference also needs to be made of the judgment rendered in

the case of "Provash Chandra Dalui & Anr. V. Biswanath Banerjee &

Anr." (supra) wherein the reference of paragraph no.14 needs to be made

wherein the distinction has been carved out in between extension and

renewal.

43. It has been observed that in a case of renewal, a new lease is

required while in the case of extension the same lease shall continue for

the period of extension by the performance of the stipulated Act. In other

word, the word 'extension' when used in its proper and usual sense in

connection with a lease means a prolongation of the lease. Construction of

this stipulation in the lease in the above manner will also be consistent

2025:JHHC:28597-DB

when the lease is taken as a whole, for ready reference the paragraph no.14

is being quoted hereunder as:

14. It is pertinent to note that the word used is "extension" and not "renewal". To extend means to enlarge, expand, lengthen, prolong to carry out further than its original limit. Extension, according to Black's Law Dictionary, means enlargement of the main body addition of something smaller than that to which it is attached; to lengthen or prolong. Thus extension ordinarily implies the continued existence of something to be extended. The distinction between "extension" and "renewal" is chiefly that in the case of renewal, a new lease is required, while in the case of extension the same lease continues in force during additional period by the performance of the stipulate act. In other words, the word "extension" when used in its proper and usual sense in connection with a lease means a prolongation of the lease. Construction of this stipulation in the lease in the above manner will also be consistent when the lease is taken as a whole. The purposes of the lease were not expected to last for only 10 years and as Mr A.K. Sen rightly pointed out the schedule specifically mentioned the lease as "for a stipulated period of 20 years". As these words are very clear, there is very little for the court to do about it.

44. It requires to refer herein that order dated 12.01.2021 have been

passed by Deputy Commissioner extending the validity of the lease of the

petitioner with effect from 01.04.2020 to 31.03.2022 and the petitioner

accepted the condition as mentioned in the order dated 12.01.2021 of

Deputy Commissioner which would be evident from memo No. 51 issued

by District Mining Officer dated 15.01.2021 which is also part of

supplementary lease deed.

45. Since the petitioner has voluntarily accepted the supplementary

lease deed, therefore, as per the settled position of law the terms and

conditions of the supplementary lease deed is binding upon the parties who

are mutually agreed upon the same.

2025:JHHC:28597-DB

46. It is settled position of law that terms and condition of the

contract is strictly to be adhered to and any condition contained therein, if

allowed to be flouted, the same to be contrary to the terms and conditions

and will amount to re-writing the terms and conditions of the contract.

47. The aforesaid preposition will be said to be contrary to the settled

position of law, as has been held by the Hon'ble Apex Court in the case

of "Union Territory of Pondicherry and Ors Vs. P.V. Suresh and Ors.",

(1994) 2 SCC 70 at paragraph 11 wherein it was held that the Court has no

jurisdiction to alter the terms or re-write the contract between the parties.

48. Further, it requires to refer herein the settled position of law that

once the parties have accepted the terms and conditions of lease or any

agreement, it binds the parties and there cannot be any breach of terms and

conditions. Reference in this regard be made to the judgment rendered by

Hon'ble Apex Court in the case of "Tamil Nadu Electricity Board and

Another v. N. Raju Reddiar and Another", (1996) 4 SCC 551 wherein at

paragraph 7 it has been held as under :-

"7. At the outset it must be borne in mind that the agreement between the parties was a written agreement and therefore the parties are bound by the terms and conditions of the agreement. Once a contract is reduced to writing, by operation of Section 91 of the Evidence Act, 1872 it is not open to any of the parties to seek to prove the terms of the contract with reference to some oral or other documentary evidence to find out the intention of the parties. ... ... ... ... ..."

49. Further, the law is well settled that once the terms and conditions

of the agreement have been accepted by the parties, it is not available

to them to assail the same, reference in this regard be made to the

judgment rendered by Hon'ble Apex Court in the case of "Panna Lal

and Others v. State of Rajasthan and Others" reported in (1975) 2

SCC 633 wherein at paragraph-21 it has been held that the licensee

2025:JHHC:28597-DB

having voluntarily accepted the contract and after having fully

exploited to its advantage the contract to the exclusion of other, cannot

resile from the contract and cannot challenge the terms either on the

ground of inconvenient. For ready reference, paragraph-21 of the

aforesaid judgment is quoted hereunder as:

"21. The licenses in the present case are contracts between the parties. The licensees voluntarily accepted the contracts. "They fully exploited to their advantage the contracts to the exclusion of others. The High Court rightly said that it was not open to the appellants to resile from the contracts on the ground that the terms of payment were onerous. The reasons given by the High Court were that the licensees accepted the license by excluding their competitors and it would not be open to the licensees to challenge the terms either on the ground of inconvenient consequence of terms or of harshness of terms.

50. Thus, herein, in the given facts of the present case the lease was

extended by virtue of supplementary lease deed so it is not a case of

extension by creating the new document, i.e., fresh lease rather it is

construed to be renewal in view of supplementary lease deed not by fresh

lease deed.

51. Further, it needs to refer herein the observation as made by the

Hon'ble Apex Court in the judgment rendered in the case of "Provash

Chandra Dalui" (supra) paragraph no-14 thereof has been referred

hereinabove, the distinction between renewal and extension has been

carved out wherein the case of renewal a new lease is required while in the

case of extension the same lease continues.

52. The same only speaks the issuance of fresh lease in a case of

renewal and in case of extension the same lease will be said to be extended.

Therefore, the difference in between these two, i.e., the renewal and

2025:JHHC:28597-DB

extension creation of a document having no effect so far as the payment of

Dead/Surface Rent is concerned, in view of the provision of Rule 28(3).

53. Herein, it is evident that during the currency of lease deed an

application has been moved by the petitioner in form 'J' for renewal of the

lease and, accordingly, in terms of notification dated 28.09.2020 published

on 30.09.2020 the lease of the petitioner been have extended to 31.03.2022

in terms of the provision contained in rule 9 (10) of the JMMC Rules, 2004

and, thereafter, supplementary lease deed dated 27.01.2021 have been

executed.

54. Thus, the lease of the petitioner has been extended by the

indenture dated 27.01.2021, the period of validity of the said lease has

been extended and deemed to have been extended upto 31.03.2022 subject

to compliance of all terms and conditions for the said lease and further

terms and conditions described in sanctioning part of the supplementary

lease deed, thus, it is evident that the supplementary lease deed is in

furtherance of the original lease deed and has been granted on the same

terms and conditions as described in the sanctioning order.

55. Further it requires to refer herein that the provision of Rule 28(3)

of Rules 2004 provides that in case of renewal of the lease the same since

relates back to the date when the validity of the earlier lease has ended.

56. Thus, the effect of such extension would be the continue period

of the lease and thereby under the mandate of section 9A of the Act 1957

read with Rule 28(3) of the JMMC Rules, 2004, the petitioner is liable to

make payment of Dead Rent.

2025:JHHC:28597-DB

57. The learned Counsel has put his reliance upon the judgment

rendered by the Division Bench of the Patna High Court in the case of

"The State of Bihar and Ors. Vs. Md. Sikandar Alam" (supra).

58. We are conscious that the judgment passed by another High

Court is having no binding affect upon this Court, but certainly the

persuasive value is there and it is also settled position of law that if a High

Court is not concurring with the view of the different High Courts or

another High Court, then a reason is required to be assigned by the

concerned High Court as to why the judgment rendered by the another

High Court is not having the persuasive value, reference in this regard may

be made to the judgment rendered by the Hon'ble Apex Court in the case

of "Pradip J.Mehta v. Commissioner of Income Tax, Ahmedabad",

(2008) 14 SCC 283, wherein, at paragraph- 23, it has been held which

reads as under:--

"23. Although, the judgments referred to above were cited at the Bar in the High Court, which were taken note of by the learned Judges of the Bench of the High Court, but without either recording its agreement or dissent, it answered the two questions referred to it in favour of the Revenue. Judicial decorum, propriety and discipline required that the High Court should, especially in the event of its contra view or dissent, have discussed the aforesaid judgments of the different High Courts and recorded its own reasons for its contra view. We quite see the fact that the judgments given by a High Court are not binding on the other High Court(s), but all the same, they have persuasive value. Another High Court would be within its right to differ with the view taken by the other High Courts but, in all fairness, the High Court should record its dissent with reasons therefor. The judgment of the other High Courts, though not binding, have persuasive value which should be taken note of and dissented from by recording its own reasons."

59. We have considered the judgment rendered by the Hon'ble

Division Bench of the Patna High Court in the case of "The State of Bihar

2025:JHHC:28597-DB

and Ors. Vs. Md. Sikandar Alam"(supra) and found that the Hon'ble

Division Bench after taking into consideration the stand of the Department

of Mines that the previous lease could not be renewed because a ban was

imposed by the State Government has observed that "if that be so, then the

previous lease came to an end and the next lease will be treated as a fresh

lease after the ban was lifted and that is why when the lease was executed

on 29.09.2008, it cannot be given retrospective effect as if it is an extension

or renewal of the previous lease after expiry on 04.12.2007".

60. Thus, from the aforesaid, it appears that fact of the said case is

different to that of the case in hand reason being that retrospectivity of

lease was issue therein for the purpose of royalty, but herein the lease of

the petitioner has been extended by the indenture dated 27.01.2021, the

period of validity of the said lease has been extended and deemed to have

been extended upto 31.03.2022, therefore the ratio of the said judgment

i.e. "The State of Bihar and Ors. Vs. Md. Sikandar Alam" (supra) will

not be applicable in the fact and circumstances of the instant case.

61. Further, the law is well settled that the applicability of the

judgment is to be tested on the basis of fact governing each case, as has

been held by Hon'ble Apex Court in the case of "Dr. Subramanian Swamy

vs. State of Tamil Nadu & Ors.", (2014) 5 SCC 75. For ready reference

the relevant paragraph of the aforesaid judgment is quoted as under:

"47. It is a settled legal proposition that the ratio of any decision must be understood in the background of the facts of that case and the case is only an authority for what it actually decides, and not what logically follows from it. The court should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed."

2025:JHHC:28597-DB

62. This Court, based upon the aforesaid discussion, as per the

mandate of section 9A of the Act 1957 read with Rule 28(3) of the JMMC

Rules, 2004, and further as per the law laid down by the Hon'ble Apex

Court in the case of "King Pal Singh Vrs. State of UP & Ors." (supra)

and "Provash Chandra Dauli and Another Vs. Bishwanath Banerjee

and Another" (supra) is of the view that the impugned order needs no

interference and, accordingly, the instant writ petition stands dismissed.

63. Pending I.As, if any, stands disposed of.

(Sujit Narayan Prasad, J.)

I Agree.

(Arun Kumar Rai, J.)