PRABIR GHOSE vs STATE OF ODISHA
- Court
- Odisha High Court
WP(C)/25566/2023
ODHC010621542023
2026:OHC:287-DB
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No. 25566 of 2023
CNR No.ODHC010621542023
Prabir Ghose …. Petitioner
-versus-
State of Odisha and others Opposite Parties
….
Advocates appeared in this case:
For Petitioner : Ms. Pami Rath, Senior Advocate
Mr. P. Mohanty, Advocate
For Opp. Parties : Mr. Debashis Tripathy
Additional Govt. Advocate
CORAM:
HON’BLE THE CHIEF JUSTICE
AND
HON’BLE MR JUSTICE CHITTARANJAN DASH
J U D G M E N T
--------------------------------------------------------------------------------
th
Date of Hearing : 18 August, 2026
th
Date of Judgment : 10 November, 2026
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HARISH TANDON, CJ.
1. This is virtually a third round of litigation before this Court
at the instance of the petitioner challenging the order dated
13.07.2023 whereunder an application for extension of the lease
W.P.(C) No.25566 of 2023 Page 1 of 17
under Section 8-A(5) of the Mines and Minerals (Development and
Regulation) Act, 1957 (MMDR Act) was rejected.
2. The genesis of the litigation is required to be succinctly
recapitulated to determine the points raised in the instant writ
petition. It is not disputed that the father of the petitioner was
granted a mining lease for China Clay upon execution of the mining
lease dated 15.09.1966 for a period of 20 years in respect of a mines
situated in the village of Jhankarpalli in the district of Sambalpur.
Upon expiration of the tenure reserved in the said mining lease, an
application for renewal thereof was made and the same was renewed
for a further period of 10 years with effect from 14.09.1986. As the
original lessee died, the petitioner applied for second renewal for a
period of 20 years with clear stipulation that the China Clay mines
from the said minerals shall be used in a beneficiation plant. Though
a considerable period of time was consumed to take a decision for
second renewal, as the same was granted on 13.03.2003, but with
effect from 15.09.1996. It is a specific case of the petitioner that the
beneficiation plant was commissioned since April, 2004 and the ores
mined from the said lease are used in the said beneficiation plant,
which would be evident from the observation of the Director of
W.P.(C) No.25566 of 2023 Page 2 of 17
Mines while processing the prospective license application. In 2008,
the petitioner constructed a second beneficiation plant within the
leased area and thus, contended that the entire ores, i.e., China Clay
is used for its captive purposes.
3. Subsequently, the Government amended the MMDR Act on
12.01.2015 inserting Section 8-A therein. Sub-section (5) of Section
8A of the said Act postulates that all the mining leases granted for
captive use, shall be extended upto 31.03.2030; on the other hand,
under sub-section (6) of Section 8-A of the Act, the mining leases
which were not granted for captive use upto 31.03.2020. The
petitioner contends that by virtue of a deeming provision and the fact
that the mineral is used for his own captive purpose, the lease is
required to be extended upto 31.03.2030 whereas the authorities
extended the same upto 31.03.2020 as the mining lease was not for
captive purposes. Since the authorities were not taking any steps for
renewal, the petitioner consistently approached the authorities in this
th
regard and ultimately in the 6 meeting of the Internal Verification
Committee, a decision was taken that the petitioner is entitled to an
extension of the validity period of lease upto 31.03.2020, as the
original lease was not for captive purposes.
W.P.(C) No.25566 of 2023 Page 3 of 17
4. The decision of the Internal Verification Committee was
communicated to the petitioner vide letter dated 04.10.2016 calling
upon him to execute a supplementary deed within the stipulated
time. Though the petitioner submitted the supplementary lease deed
for its due execution but raised a protest that it ought to be upto
31.03.2030 and not 31.03.2020. The supplementary lease deed was
executed on 07.12.2016, the duration whereof was upto 31.03.2020.
On 09.12.2016 the petitioner entered into a partnership agreement
with an another person having 50% share in another beneficiation
plant and subsequently, communicated the same and invited the
attention of the authorities that though the supplementary lease deed
is executed but the same was under the protest and renewed the
prayer for extension upto 31.03.2030 as the entire mineral is used for
a beneficiation plant and therefore, the lease should be treated as for
captive purposes. The said representation was being considered at
the different level including the opinion sought from the Director of
Mines and it would appear that the observation was made to the
effect that the China Clay raised by the petitioner is used by its own
beneficiation and washing plant. Ultimately, after great persuasion
that the direction was passed to place the representations claiming
W.P.(C) No.25566 of 2023 Page 4 of 17
the extension upto 31.03.2030 before the Internal Verification
Committee, where the meeting was held on 12.02.2020, wherein it
was specifically observed that the petitioner is using the minerals
produced from the mines for captive in their beneficiation plants
since 2004 and the matter was referred to the Government for taking
a decision in this regard.
5. The Department of Steel and Mines directed the Director of
Mines to examine and furnish the details regarding nature of the
captive use by the petitioner in terms of the raw material used into
the plant and the final product produced in the said plant. In
pursuance of the said direction, the Director of Mines communicated
to the Government on 07.07.2020 observing that the lessee was
consuming all the raised minerals from the said mines for captive
use in its own beneficiation plant and also submitted the monthly
returns in respect of the mines regularly. Yet the Government
rejected the stand taken by the petitioner on the premise that the
extension of the validity of the mining lease under Section 8-A(5) of
the MMDR Act is inadmissible. Since there was no reason assigned
in the said order, the petitioner challenged the same in W.P.(C)
No.35636 of 2020 which was quashed and set aside as it is a cryptic
W.P.(C) No.25566 of 2023 Page 5 of 17
order without assigning any reasons in support of the final decision.
The authorities were further directed to take a fresh decision by
providing proper reasons. Pursuant to order dated 08.03.2022 passed
in the said writ petition, the claim of the petitioner was further
rejected on 17.08.2022 holding that the original lease was a
merchant mining lease and not captive mining lease and, therefore,
the recourse under Section 8-A(5) of the Act is impermissible.
6. The petitioner challenged the said order by filing a second
writ petition being W.P.(C) No.26200 of 2022 which was again
quashed and set aside on 20.03.2023 on the ground that since no
opportunity was given to the petitioner, it violates the principles of
natural justice with consequential direction upon the authorities to
take a fresh decision after affording an opportunity of hearing to the
petitioner. The authorities thereafter passed the impugned order
dated 13.07.2023 reiterating the stand that since the original lease
was a merchant mining lease and not a captive mining lease, the
renewal under Section 8-A(5) of the MMDR Act is not permissible.
It is further observed that mere use of the minerals in all plants or
establishment does not qualify the same as captive use as the said
word is not used in the original lease granted to the petitioner.
W.P.(C) No.25566 of 2023 Page 6 of 17
7. On the other hand, the Government took a stand in the
counter affidavit that sub-section (5) of Section 8-A of the MMDR
Act is applicable to a captive mining lease and since the original
lease does not contain any such expression, there is no infirmity on
the part of the authority in rejecting the claim of the petitioner and
treating the same under sub-section (6) of Section 8-A of the said
MMDR Act.
8. Both the counsel appearing for the respective parties made
extensive submissions particularly on the ascertainment to the
meaning derived from the original lease in pursuit of calling up the
nature of the mining lease originally granted to the petitioner, it
would simply make the judgment bulky in recording the respective
stands of the counsel, as we find that the entire consideration is
founded upon the applicability of the aforesaid sub-sections
appearing under Section 8-A of the MMDR Act in juxtaposition with
the nature of the mining lease originally granted to the predecessor
of the petitioner. Both the parties have relied upon clause 8 of the
th
Mining Lease deed dated 15 September, 1966 which contains thus:
“8. Liberty and power to enter upon and use a
sufficient part of the said lands to beneficiate any
ore produced from the said lands and to carry away
such beneficiated ore.”
W.P.(C) No.25566 of 2023 Page 7 of 17
9. According to the petitioner, once the minerals are
beneficiated in the own plant with further right to carry away such
beneficiated ore, it is deemed that the same was used for captive
purposes; on the other hand, the counsel for the State submits that
since the words “ captive use ” is not reflected in the said clause, it
cannot be construed for captive purposes. Such being the point
involved in the instant writ petition, it would be apposite to trace the
amendments having brought in the said MMDR Act in the year
2015. It is an admitted position that the expression captive use is not
defined in the MMDR Act nor in the Odisha Minor Minerals
Concession Rules, 2004. The said word received definition in the
Orissa Minor Minerals Concession Rules, 2016 in the following:
“2 . Definition. xxxxx
(d). “Captive use” means use of the entire quantity
of mineral(s) extracted from the mining lease in a
mineral processing unit or mineral beneficiation unit
owned by the lessee excluding the mineral of
substandard quality or mineral rejects”
10. Section 8-A was inserted by virtue of an Amendment Act
10 of 2015 with effect from 12.01.2015 encompassing the deemed
extension of the various leases relating to major minerals, the said
section is quoted as under:
W.P.(C) No.25566 of 2023 Page 8 of 17
8-A. Period of grant of a mining lease for
“
minerals other than coal, lignite and atomic
minerals. (1) The provisions of this section shall
apply to minerals other than those specified in Part
A and Part B of the First Schedule.
(2) On and from the date of the commencement of
the Mines and Minerals (Development and
Regulation) Amendment Act, 2015, all mining
leases shall be granted for the period of fifty years.
(3) All mining leases granted before the
commencement of the Mines and Minerals
(Development and Regulation) Amendment Act,
2015 shall be deemed to have been granted for a
period of fifty years.
(4) On the expiry of the lease period, the lease shall
be put up for auction as per the procedure specified
in this Act.
(5) Notwithstanding anything contained in sub-
sections (2), (3) and sub-section (4), the period of
lease granted before the date of commencement of
the Mines and Minerals (Development and
Regulation) Amendment Act, 2015, where mineral
is used for captive purpose, shall be extended and be
deemed to have been extended up to a period ending
on the 31st March, 2030 with effect from the date of
W.P.(C) No.25566 of 2023 Page 9 of 17
expiry of the period of renewal last made or till the
completion of renewal period, if any, or a period of
fifty years from the date of grant of such lease,
whichever is later, subject to the condition that all
the terms and conditions of the lease have been
complied with.
(6) Notwithstanding anything contained in sub-
sections (2), (3) and sub-section (4), the period of
lease granted before the date of commencement of
the Mines and Minerals (Development and
Regulation) Amendment Act, 2015, where mineral
is used for other than captive purpose, shall be
extended and be deemed to have been extended up
to a period ending on the 31st March, 2020 with
effect from the date of expiry of the period of
renewal last made or till the completion of renewal
period, if any, or a period of fifty years from the date
of grant of such lease, whichever is later, subject to
the condition that all the terms and conditions of the
lease have been complied with.
(7) Any holder of a lease granted, where mineral is
used for captive purpose, shall have the right of first
refusal at the time of auction held for such lease
after the expiry of the lease period.
(7-A) Any lessee may, where mineral is used for
captive purpose, sell mineral up to fifty per cent. of
W.P.(C) No.25566 of 2023 Page 10 of 17
the total mineral produced in a year after meeting
the requirement of the end use plant linked with the
mine in such manner as may be prescribed by the
Central Government and on payment of such
additional amount as specified in the Sixth
Schedule:
Provided that the Central Government may, by
notification in the Official Gazette and for the
reasons to be recorded in writing, increase the said
percentage of mineral that may be sold by a
Government company or corporation:
Provided further that the Central Government may,
by notification in the Official Gazette and for
reasons to be recorded in writing, amend the Sixth
Schedule so as to modify the entries mentioned
therein with effect from such date as may be
specified in the said notification.
(8) Notwithstanding anything contained in this
section, the period of mining leases, including
existing mining leases, of Government companies or
corporations shall be such as may be prescribed by
the Central Government.
Provided that the period of mining leases, other than
the mining leases granted through auction, shall be
W.P.(C) No.25566 of 2023 Page 11 of 17
extended on payment of such additional amount as
specified in the Fifth Schedule:
Provided further that the Central Government may,
by notification in the Official Gazette and for
reasons to be recorded in writing, amend the Fifth
Schedule so as to modify the entries mentioned
therein with effect from such date as may be
specified in the said notification.
Explanation.- For the removal of doubts, it is hereby
clarified that all such Government companies or
corporations whose mining lease has been extended
after the commencement of the Mines and Minerals
(Development and Regulation) Amendment Act,
2015, shall also pay such additional amount as
specified in the Fifth Schedule for the mineral
produced after the commencement of the Mines and
Minerals (Development and Regulation)
Amendment Act, 2021.
(9) The provisions of this section, notwithstanding
anything contained therein, shall not apply to a
mining lease granted before the date of
commencement of the Mines and Minerals
(Development and Regulation) Amendment Act,
2015, for which renewal has been rejected, or which
has been determined, or lapsed.]
W.P.(C) No.25566 of 2023 Page 12 of 17
11. It is pertinent to note that by virtue of Section 14 of the said
MMDR Act, the applicability of the said section is excluded in relation
to any minor minerals. Section 14 is quoted as under:
[Sections 5 to 13] not to apply to minor minerals
“14. .-
The provisions of [sections 5 to 13] (inclusive) shall not
apply to [quarry leases, mining leases or other mineral
concessions] in respect of minor minerals. ”
12. We hasten to add that the China Clay before such amendment was
included as a major mineral but subsequently, have been included in the
list of a minor mineral and, precisely, for such reason, the State has taken
the stand that if the applicability of Section 8-A of the MMDR Act is
excluded from the purview of the minor mineral, no benefit under the
said provision can be resorted to. Such stand does not appear to be
correct for the reason that the State Government while promulgating the
OMMC Rules, 2016 makes the said Section 8-A applicable to the
minerals which were major before the said Amendment Act but becomes
minors subsequently in Rule 66 thereof, which is reproduced hereunder:
“ 66. Transitory provisions: — ( 1) Notwithstanding
anything contained in these rules, the existing lessees of
such of the specified minor minerals which were major
minerals on the date of coming into force of the Mines and
Minerals (Development and Regulation) Amendment Act,
2015 (11 of 2015) shall be eligible for extension of the
validity period of lease for such period and subject to such
conditions as provided in Section 8A of the Mines and
Minerals (Development and Regulation) Act, 1957.
W.P.(C) No.25566 of 2023 Page 13 of 17
(2) Notwithstanding anything to the contrary contained in
these rules, the applicants for mineral concessions in
respect of such of the specified minor minerals, which
were major minerals on the date of coming into force of
the Mines and Minerals (Development and Regulation) 55
Amendment Act, 2015 (11 of 2015), and whose
applications have remained eligible under the provisions of
the sub-section (2) of Section 10A of the Act, shall remain
eligible for grant of mineral concession for such period as
prescribed under rule 8 of these rules subject to satisfaction
of conditions prescribed in sub-rule (13) of rule 4 of these
rules.
(3) Notwithstanding anything to the contrary contained in
the amended provisions, till the new system is put in place,
the existing arrangement would continue. The State
Government may take necessary steps for effective
transition of minor minerals from Revenue & DM
Department to Steel and Mines Department.”
13. The conjoint reading of the aforesaid provision leaves no
ambiguity in our mind that though Section 8-A of the MMDR Act is
applicable to a major mineral and by virtue of Section 14 of the said Act
does not have any manner of applicability to the minor mineral but by
virtue of Rule 66 of the said Rules, it becomes applicable and therefore,
the contention of the State that since the China Clay has now become a
minor mineral though it was a major mineral at one point of time,
Section 14 of the Act excludes the operation of Section 8-A, is
untenable.
14. Now the only question that arises in the instant case, whether the
mining lease executed in the year 1966 was, in fact, for captive use or
W.P.(C) No.25566 of 2023 Page 14 of 17
merchant mining lease. It is no gain saying that intention of the parties
entered into a contract or an agreement can be gathered from the
language and the expressions used therein. In the event, the intention is
laudable and not capable of multiple interpretation; such manifestation
would decide the nature and purpose of the lease. Undeniably, the words
“captive use” is not incorporated in the original lease and the clause 8
which is central to the core uses the word beneficiation. The expression
„ beneficiation ‟ in its ordinary and general meaning is known as any
process that improves the economic value of the ore by removing the
Gangue Minerals resulting in a higher grade product and waste free. In
other words, it is an integral part of mineral processing by separating the
valuable minerals from the Gangue minerals found in the ore by using
various techniques.
15. As indicated above, the captive use is not defined in the MMDR
Act of 1957 nor in the OMMC Rules of 2004 but was given a meaning
while promulgating the Rules of 2016 to mean the use of entire quantity
of the mineral extracted from the mining lease in a mineral processing
unit or mineral beneficiation unit owned by the lessee, excluding the
minerals substandard quality or mineral rejects. Thus, to ascertain the
meaning of clause 8 of the said mining lease, the original lessee was
W.P.(C) No.25566 of 2023 Page 15 of 17
given a power to beneficiate any ore produced from the said land and
carry away such beneficiated ore therefrom.
16. It is not in dispute that in 2004, the petitioner set up the
beneficiation plant and subsequently, set up another beneficiation plant
and was all along using the minor minerals so extracted therein. While
granting the first and the second renewal, the authorities were aware that
the petitioner is using the said minor mineral in his beneficiation plant,
which would further be corroborated by the observations and the
opinions given by the authorities. Even the recommendation was made
by the high ranking authority to the Government that the entire minor
mineral extracted by the petitioner are used in his beneficiation plant
and, therefore, an approval may be granted for extension of the lease
under sub-section (5) of Section 8-A of the said Act. In our opinion, the
authorities have misinterpreted and misplaced clause 8 of the original
lease in its construction and were attempting to find out the clear
expression, i.e. captive use. As indicated above, the captive use was
neither defined in the MMDR Act nor the OMMC Rules prevalent
before the Rules 2016 and, therefore, the intention has to be gathered
from clause 8 thereof. The definition assigned in 2016 Rules to the
captive use is explicit and clear that if the ores are used in a beneficiation
W.P.(C) No.25566 of 2023 Page 16 of 17
plant, it would be regarded as a captive use and therefore, the expression
beneficiation appearing in clause 8 should be read in such prospective.
Since the minor mineral is used by the petitioner in the beneficiation
plant, which satisfies the definition of the captive use given in the Rules
2016, the stand of the authority that the lease was never granted for
captive purposes but a merchant mining lease is unsustainable. The
impugned order is, thus, quashed. The authorities are directed to execute
a supplementary lease deed for the period enshrined under Section 8-
A(5) of the said MMDR Act within three weeks from the date of
communication of this judgment.
17. The writ petition is, thus, disposed of.
I agree.
(Chittaranjan Dash)
Judge
(Harish Tandon)
Chief Justice
SK Jena/Sr. Secy.
Signature Not Verified
Digitally Signed
Signed by: SANJAY KUMAR JENA
Designation: Asst. Registrar-cum-Sr. Secretary
Reason: Authentication
Location: High Court of Orissa, Cuttack.
Date: 11-Nov-2026 17:40:40
W.P.(C) No.25566 of 2023 Page 17 of 17