Court Sets Aside Recovery of Certain Installments Due to Delay in Lease Determination, Upholds Blacklisting Despite Expired Period
In a significant judgment, the Allahabad High Court has partially allowed the writ petition filed by Jai Shakti Realcon against the State of Uttar Pradesh, offering relief by setting aside the recovery of installments due on July 1, 2019, and October 1, 2019. The court criticized the delay by state authorities in determining the mining lease under Rule 58 of the U.P. Minor Minerals (Concession) Rules, 1963, calling it arbitrary and against the spirit of the rules.
The bench, comprising Justices Saral Srivastava and Sudhanshu Chauhan, heard the petition challenging the recovery notices and the determination of the mining lease, along with the blacklisting of Jai Shakti Realcon’s firm for two years. The court found that while the petitioner had mined significant quantities of minerals until May 2019, the state authorities failed to promptly invoke the power of lease determination after the petitioner defaulted on installment payments due on January 1, 2019, and April 1, 2019.
The judgment highlighted the arbitrary nature of the delay, stating that the respondents did not provide valid reasons for not acting promptly to determine the lease. The court emphasized that the inaction led to an unjust escalation of the petitioner’s liabilities, which could have been avoided if the lease had been terminated in a timely manner.
Despite the relief granted concerning the recovery of certain installments, the court upheld the determination of the lease, finding no grounds to quash the order. Additionally, the court acknowledged that the period of blacklisting had expired, rendering the punishment insignificant. It clarified that if the petitioner meets eligibility criteria in the future, the past blacklisting should not hinder participation in upcoming auctions.
The court’s decision underscores the importance of timely and fair administrative actions, especially when one party is a state authority, to prevent unjust financial burdens on private entities.
Bottom line:-
Mining lease agreements under U.P. Minor Minerals (Concession) Rules, 1963 - Lessee is liable to pay royalty as per lease terms, irrespective of actual excavation of minerals - Delay by authorities in invoking power to determine lease under Rule 58 may be arbitrary if reasons are not disclosed.
Statutory provision(s): U.P. Minor Minerals (Concession) Rules, 1963 Rule 58, Constitution of India, 1950 Article 14
Jai Shakti Realcon v. State of U.P., (Allahabad)(DB) : Law Finder Doc id # 2895142
