Quarry leases cannot be aggregated under Rule 15 solely because their holders are brothers.

On 8 March 2019, the Department of Mines and Geology granted M/s. Shakthi Enterprises a quarry lease over 10 acres and M/s. Prabha Earth Movers a lease over 8 acres 22 guntas for building stone; the lease deeds were executed on 27 July 2022 for 20 years

After discovering grey granite within the leased areas, the petitioners applied under Rule 3-E of the Karnataka Minor Mineral Concession Rules, 1994 (KMMC Rules), seeking its inclusion in their existing leases.

The Senior Geologist recommended approval on 21 March 2023, and this Court later directed the Director to decide the recommendation

Following a complaint that the proprietors were members of the same family and together exceeded the 10-acre ceiling, the Department issued show-cause notices and cancelled both leases on 22 November 2024

Departmental enquiry reports had recorded that, despite being brothers, the proprietors belonged to separate nuclear families following a partition

1. Whether the quarry leases could be cancelled by aggregating the petitioners’ holdings under Rule 15 of the KMMC Rules on the basis that their proprietors were brothers and members of the same HUF

2. Whether the Director was required to decide the petitioners’ pending Rule 3-E applications for inclusion of grey granite in the existing leases

Rule 15(1) of the KMMC Rules prescribes the maximum area for which a person may hold quarry leases, including a 10-acre ceiling for purposes other than mineral-based industries; Rule 15(3) requires specified interests held through a company, firm, HUF, cooperative society, or other listed capacity to be considered along with the person’s individual holdings when determining whether the ceiling is exceeded

The Court stated that aggregation under Rule 15(3) turns on whether the leases fall within the circumstances specified by that provision, not merely on the relationship between the leaseholders

Rule 3-E provides the mechanism invoked by the petitioners to seek inclusion of a newly discovered mineral in existing leases

Section 19 of the Mines and Minerals (Development and Regulation) Act, 1957 was cited in the cancellation orders as rendering an allegedly excess grant void, but the Court set those orders aside on the record before it

The cancellation orders treated the proprietors’ brotherhood as establishing that they belonged to the same HUF and aggregated their lease areas accordingly

However, the Department’s own enquiry reports recorded that the brothers’ joint family had been divided and that they belonged to separate nuclear families

The petitioners’ explanation concerning the partition and those reports had not been duly considered, and the orders proceeded on a contrary premise despite that material

The Court therefore found the cancellation unsustainable.

It also noted that the Rule 3-E applications concerned a mineral discovered within the existing leased areas, not an additional extent of land, and remained for decision in light of the Senior Geologist’s recommendation and the earlier court direction

It directed the Director, Department of Mines and Geology, to decide the pending Rule 3-E applications within six weeks, having regard to the Senior Geologist’s recommendation, the earlier order in W.P. No. 22321/2023, and the enquiry reports dated 3 October 2023 and 2 January 2024