Case Note & Summary
The litigation arose out of a mining lease granted in 1966 to the respondent for a period of 20 years to extract limestone in a forest area in the State of Madhya Pradesh. The Forest (Conservation) Act, 1980 came into force on 25.10.1980. Section 2 of the Act mandated that any grant or renewal of a lease in forest areas after the Act's commencement could be made only with the prior approval of the Central Government, if the State Government decided to grant or renew. The object of the Act was to maintain ecology and preserve forests, and Section 3 aimed at regenerating forests by planting trees and promoting forest growth. In 1986, after expiry of the original lease, the respondent approached the State Government for renewal. On 7th February 1986, the State Government passed an order granting renewal for a further period of 20 years on the original terms. However, the Forest Department objected, and the order was consequently cancelled before it came into effect by registration. The respondent then filed Miscellaneous Petition No. 2758 of 1989 before the High Court. The Division Bench, by its order dated 18.8.1989, following the decision in State of Bihar v. Banshi Ram Modi, directed grant of renewal on the ground that part of the leased area had already been broken and therefore renewal should be granted. Under contempt proceedings, the lease deed was directed to be registered and was accordingly registered. The State of Madhya Pradesh appealed to the Supreme Court. The appellant State contended that this Court in Rural Litigation and Entitlement Kendra v. State of U.P. and Ambica Quarry Works v. State of Gujarat had held that even renewal of a lease cannot be granted without the prior concurrence of the Central Government. The respondent relied on the High Court's reasoning that part of the area had been broken, and that the High Court correctly followed Banshi Ram Modi. The Supreme Court found force in the appellant's contention. It held that grant or renewal is a fresh grant and must be made consistent with law. Section 2 of the Forest (Conservation) Act, 1980 prohibits grant or renewal, and if the State Government decides to grant fresh lease or renewal, it is mandatory to obtain prior approval of the Central Government. Admittedly, no such prior approval had been obtained under Section 2. The State Government had realised the mistake and cancelled the order before it came into effect by registration, which was proper. The High Court was not right in directing renewal of the lease. The Court also noted that under contempt proceedings the lease deed had been registered; it declared that registration illegal and invalid. Accordingly, the appeal was allowed, and no costs were awarded.
Headnote
A) Forest Law - Mining Lease Renewal - Prior Approval Mandatory - Forest (Conservation) Act, 1980, Section 2 - The respondent was initially granted a mining lease in 1966 for 20 years to extract limestone in a forest area. After the Act came into force on 25.10.1980, the State Government passed an order on 7.2.1986 for renewal without prior Central approval. The Court held that grant or renewal is a fresh grant and must be made consistent with law; Section 2 prohibits grant or renewal unless prior approval of the Central Government is obtained. High Court erred in directing renewal relying on State of Bihar v. Banshi Ram Modi, as this Court in Rural Litigation and Entitlement Kendra and Ambica Quarry Works held even renewal requires prior Central concurrence. Held prior approval mandatory; appeal allowed. (Para 1) B) Administrative Law - Cancellation of Renewal Order - Validity Before Registration - Forest (Conservation) Act, 1980, Section 2 - The State Government had objected to renewal via Forest Department and cancelled the order before it came into effect by registration. The Court held cancellation was proper because the original renewal order was passed without mandatory Central approval. Further, registration of lease deed under contempt proceedings was declared illegal and invalid. Held High Court's direction to grant renewal set aside. (Para 1)
Issue of Consideration
Whether renewal of a mining lease in a forest area after commencement of Forest (Conservation) Act, 1980 requires prior approval of the Central Government under Section 2, and whether the High Court order directing renewal without such approval is sustainable.
Final Decision
Appeal allowed; High Court order directing grant of renewal set aside; order of cancellation of renewal was proper; registration of lease deed under contempt proceedings declared illegal and invalid; no costs.
Law Points
- Grant or renewal is a fresh grant and must be made consistent with law
- Section 2 of Forest (Conservation) Act
- 1980 prohibits grant or renewal without prior approval of Central Government
- Renewal of mining lease in forest area requires prior approval of Central Government
- Cancellation of renewal order passed without prior approval and before registration is valid
- Registration of lease deed under contempt proceedings without prior approval is illegal and invalid
- High Court cannot direct renewal contrary to mandatory provision
