India: Orissa High Court turns down Sarda's plea for another 10 years

The High Court of Orissa has dismissed Sarda Mines Private Ltd (SMPL) writ claiming its lease, which the state government declared lapsed on 21 September 2021, only lapses in 2031.

SMPL which had rights to the Thakurani B iron ore deposit until 13 August 2021 had moved court against Odisha government's decisions to "curtail" its lease and against a Rs 2045.51 crore claim on it for alleged excess mining. The mine produced around 6.7 mn t iron ore in FY'21 and served the adjacent pellet plant of Jindal Steel and Power Ltd. SMPL

The HC has dismissed its plea seeking another ten years but directed the state to hear the company on the issue of excess mining. SMPL's lawyer and Supreme Court advocate Naveen Kumar told SteelMint the company intends filing a SLP against this decision in the Supreme Court.

SMPL had claimed that its original grant was of 30 years and only been divided into a period of 20 years, with another ten years promised as a renewal, to comply with the changes in the mining law limiting lease terms to not more than two decades.

In court the Odisha government had pointed out that the 30-year grant in 1989 was promised to SL Sarda and ML Sarda family. The execution of a 20-year lease was however signed with a different corporate entity, SMPL. The HC on Monday saw merit in the state's argument that by accepting the lease deed in Form K, ML Sarda and SL Sarda waived their rights to seek a renewal for another 10 years.

The court also ruled that Section 8A (6) read with Section 8(4) of MMDR Act as amended does not permit any automatic extension of the lease deed. "In the absence of an express clause in the lease deed that permits such renewal de hors the statutory provisions, the period of renewal cannot extend beyond 13 August 2021," said the court.

On the issue of excess mining the state has been directed to hear SMPL again within four weeks, pass a reasoned order before 7 March 2022 and communicate it to the miner no later than 11 March 2022. "If the order is adverse to SMPL, it will not be given effect till 21 March 2022. In other words, till 21 March 2022 no coercive action shall be taken against SMPL," said the order.