Anandeshwar Agro Foods Private Ltd Vs State Of Up And 3 Others (Allahabad High Court)
Where no adequate replenishment of mineral, no mining activity is permitted nor installments payable. Direction for preparation of DSR issued.: Allahabad High Court
A dispute over a sand mining lease in Kanpur Dehat has reached the Allahabad High Court, with the lessee challenging the cancellation of their lease and demands for installment payments despite claims of submerged mining area and lack of adequate mineral replenishment. The case, M/s Anandeshwar Agro Foods Private Ltd vs. State Of Up And 3 Others, highlights the complexities of mining operations, environmental regulations, and the contractual obligations of leaseholders.
Anandeshwar Agro Foods Private Ltd was granted a five-year lease on a plot measuring 08.275 hectares in Village-Bilaspur Kachhar, Kanpur Dehat, following an e-tender cum e-auction in 2018. The lease, executed on March 12, 2021, permitted the extraction of 1,10,057 cubic meters of sand/morrum per annum, with a predetermined annual installment schedule. The petitioner deposited a significant security amount and paid installments up to June 30, 2023.
The core of the dispute arose concerning the period starting from October 2023. The petitioner contended that the leased area became completely submerged post-monsoon, rendering mining operations impossible. Despite conducting a pre-monsoon replenishment study in June 2023, a post-monsoon survey was delayed due to the submergence. When the post-monsoon survey was finally conducted in October 2023 and a combined report submitted, it reportedly showed limited mineral replenishment (16,380 cubic meters as per a later report on January 8, 2024).
Citing the inability to conduct mining due to submergence and lack of mineral, the petitioner requested the District Magistrate to waive the monthly installments from October 1, 2023, and to re-evaluate future installments based on the actual replenished quantity. These requests were rejected by the District Magistrate, who insisted on the petitioner’s responsibility to pay the installments as per the lease deed.
Demand notices were issued by the Mines Officer on November 25, 2023, and December 4, 2023, for the October and November installments. The District Magistrate further rejected the petitioner’s applications on December 21, 2023, and issued a demand notice/order on February 19, 2024, demanding installments for October, November, December 2023, and January and February 2024. Subsequently, the District Magistrate cancelled the mining lease on February 27, 2024, an order received by the petitioner on February 29, 2024. The petitioner’s revision petition against these orders was dismissed by the Special Secretary, Geology and Mining, U.P. on April 18, 2024.
Before the High Court, the petitioner argued that the cancellation and demand notices were illegal and against statutory provisions. They contended that the District Officer is mandated to evaluate the mineral quantity of a leased area for fixing minimum bids and that replenishment studies are required as per National Green Tribunal (NGT) orders. The petitioner asserted that the State Government is obligated to ensure the availability of the auctioned mineral quantity, and the lessee is entitled to refund or remission if the government fails to provide it. A procedural challenge was also raised, arguing that notices under Rule 59 of the U.P. Minor Mineral (Concession) Rules, 2021, should be issued by the District Magistrate, not the Mines Officer, and that the cancellation violated the notice period requirement under this rule.
The petitioner cited several judicial precedents to support their claims, including the Supreme Court judgments in Dharmendra Kumar Singh vs. State of Uttar Pradesh and M/s. Planet Steel Pvt. Ltd. vs. The State of Haryana & Ors., and Allahabad High Court decisions in Vipul Tyagi vs. State of U.P. & 6 Ors. and Ranjana Singh vs. State of U.P. & Ors. These judgments were presented to underscore the importance of mineral availability for the lessee’s obligation to pay royalty or installments and the adherence to proper procedure in issuing notices and cancelling leases. The reference to Vipul Tyagi’s case, in particular, suggests a line of argument that if no mining activity could take place due to lack of material, no demand for royalty should be made.
In response, the state respondents filed a counter affidavit stating that the lease deed clearly specified the annual excavatable quantity and the installment schedule. They argued that material facts were concealed by the petitioner, including the pendency of a previous writ petition (Writ-C No. 9186 of 2022 before the Lucknow Bench) seeking similar reliefs for an earlier period of non-mining activity due to submergence.
The respondents maintained that the petitioner had sufficient time (nine months of the year) to excavate the annual quantity and that unexcavated quantities could be carried forward on the departmental portal upon payment of royalty. They pointed to production data from January to June 2023 showing the petitioner had extracted in excess of the monthly pro rata quantity during that period. The counter affidavit also questioned the reliability of the replenishment study reports submitted by the petitioner, noting their contradictory nature. It was further stated that the petitioner had not filed a surrender application under Rule 30 of the Rules 2021 and had not brought on record an inspection report from February 2023. Allegations of illegal mining and an imposed penalty of Rs. 5 lacs in February 2023, which the petitioner had not replied to, were also raised.
The case underscores the ongoing tension between the state’s revenue interests from mining leases and the practical challenges faced by leaseholders due to environmental factors like monsoonal submergence and the dynamic nature of mineral replenishment in riverbeds. The court’s consideration will likely involve interpreting the terms of the lease deed in light of the U.P. Minor Mineral (Concession) Rules, 1963 and 2021, the Sustainable Sand Mining Management Guidelines, and the judicial precedents emphasizing the link between mineral availability and the lessee’s liability for payments. The validity of the notices issued and the adherence to cancellation procedures are also key legal points under scrutiny.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
