A mining lease lapses mandatorily after two years of non-operation under Rule 20.

The petitioner held a limestone mining lease over 1.808 hectares in Village Piparahat, District Satna. The lease, originally granted in 1997 and transferred to him in 2010, was extended until 23 September 2047.

In May 2020, the State issued a show-cause notice alleging that mining had not been carried out for more than two years. The petitioner cited, among other matters, pending DGPS approval and environmental clearance; he also deposited ₹1,00,000 under Rule 20(5) in January 2021.

Although the Directorate later directed reconsideration of the lapse proposal, the State declared the lease lapsed on 15 May 2026 under Rule 20(1) read with Rule 20(2) of the 2016 Rules.

The petitioner challenged that order, raising, among other grounds, non-application of mind, delay, lack of a further hearing, and the effect of later amendments to the law.

1. Whether the petitioner’s failure to undertake mining operations for the requisite period justified declaring the lease lapsed under Rule 20 of the 2016 Rules.

2. Whether the petitioner’s procedural and other objections—including alleged non-consideration of his response, delay, and payment of lease dues—warranted interference with the lapse order.

Rule 20(1) of the Minerals (Other than Atomic and Hydrocarbon Energy Minerals) Concession Rules, 2016 provides that a mining lease lapses if operations are not commenced within two years of execution or, after commencement, are discontinued for a continuous period of two years, subject to the rule’s conditions.

Rule 20(2) requires the lapse to be recorded by an order of the State Government and communicated to the lessee.

The Court treated the word “shall” in Rule 20(1) as making lapse mandatory where the specified period of non-operation is established.

The Court held that it was undisputed that the petitioner had not undertaken mining operations for the requisite period. It therefore considered the competent authority justified in examining lapse under Rule 20 and treated the statutory consequence as mandatory.

It further held that later payment of statutory dues or other amounts did not, by itself, satisfy the substantive requirement to operate the mine.

The Court rejected the challenge without separately analysing the petitioner’s objections concerning the amendments, delay, or hearing before the Committee.

The order dated 15 May 2026 declaring the lease lapsed was left undisturbed.