MINERAL CONCESSION RULES, 1960

CHAPTER IV

Grant of mining leases in respect of land in which the minerals vest in the Government

22. Application for grant of mining leases. – (1) An application for the grant of a mining lease in respect of land in which the minerals vest in the Government shall be made to the State Government in Form I through such officer or authority as the State Government may specify in this behalf .

(2) Omitted

(3) (i) Every application for the grant of renewal of a mining lease shall be accompanied by-

(a) a non-refundable fee of two thousand and five hundred rupees ;

(b) Omitted

(d) a valid clearance certificate, in the form prescribed by the State Government, of payment of mining dues, such as royalty or dead rent or surface rent payable under the Act or the rules made thereunder, from that Government or any officer or authority authorised by that Government in this behalf ;

Provided that in case the applicant is a partnership firm or a private limited company, such certificates shall be furnished by all partners of the partnership firm or, as the case may be, all members of the private limited company ;

[Provided that where any injunction has been issued by court of law or any other competent authority staying the recovery of any such mining dues or income tax non payment thereof shall not be treated as a disqualification for the purpose of granting or renewing the said mining lease:

Provided that where a person has furnished an affidavit to the satisfaction of the State Government stating that he does not hold and has not held a mining lease, it shall not be necessary for him to produce the said valid clearance certificate:

Provided that a properly sworn affidavit stating that no dues are outstanding shall suffice subject to the condition that the certificate required as above shall be furnished within ninety days of the date of application and the application shall become invalid if the party fails to file the certificate within the said ninety days:

Provided further that the grant of clearance certificate under sub-clause(d) shall not discharge the holder of such certificate from the liability to pay the mining dues which may subsequently be found to be payable by him under the Act or rules made thereunder.];

(e) Omitted

(f) an affidavit stating that the applicant has -

(i) filed up-to-date income-tax returns ;

(ii) paid the income-tax assessed on him ; and

(iii) paid the income-tax on the basis of self-assessment as provided in the Income Tax Act, 1961;

(g) an affidavit showing particulars of area mineral-wise in [the] state, which the applicant or any person jointly with him -

(i) already holds under a mining lease ;

(ii) has already applied for but not granted ;

(iii) being applied for simultaneously ;

(h) a statement in writing that the applicant has, where the land is not owned by him, obtained surface rights over the area or has obtained the consent of the owner for starting mining operations :

Provided that no such statement shall be necessary where the land is owned by the Government :

Provided further that the consent of the owner for starting mining operations in the area or part thereof may be furnished after execution of the lease deed but before entry into the said area ;

Provided also that no further consent would be required in the case of renewal where consent has already been obtained during grant of the lease.

[ ]

(i a) The State Government may, for reasons to be recorded in writing, relax the provision of sub-clause (d) of clause (I).

(ii) Every application for the grant of a mining lease shall in addition to those specified in clause (I) be accompanied by a deposit of one thousand rupees for meeting the preliminary expenses in connection with the grant of the mining lease :

Provided that the applicant shall deposit such further deposit as may be asked for by the State Government, within one month from the date of demand of such deposit.

(4) On receipt of the application for the grant of a mining lease the State Government shall take decision to grant precise area for the said purpose and communicate such decision to the applicant. On receipt of communication from the State Government of the precise area to be granted, the applicant shall submit a mining plan, within a period of six months of such other period as may be allowed by the State Government, to the Central Government for its approval. The applicant shall submit the mining plan, duly approved by the Central Government or by an officer duly authorised by the Central Government, to the State Government to grant mining lease over that area.

[(4A) Notwithstanding anything contained in sub-rule(4), the State Government shall be competent to approve mining plan of open cast mines (mines other than the underground mines) in respect of the following non-metallic or industrial minerals in their respective territorial jurisdiction, namely:-

(i) Agate

(ii) Ball Clay

(iii) Barytes

(iv) Calcareous Sand

(v) Calcite

(vi) Chalk

(vii) Clay(Others)

(viii) Corundum

(ix) Diaspore

(x) Dolomite

(xi) Dunite/pyroxenite

(xii) Felsite

(xiii) Felspar

(xiv) Fireclay

(xv) Fusch.Quartzite

(xvi) Gypsum

(xvii) Jasper

(xviii) Kaolin

(xix) Laterite

(xx) Limekankar

(xxi) Ochre

(xxii) Pyrophyllite

(xxiii) Quartz

(xxiv) Quartzite

(xxv) Sand (Others)

(xxvi) Shale

(xxvii) Silica Sand

(xxviii) Slate

(xxix) Steatite/Talc/Soapstone

Provided that the State Government shall exercise the power of approval of mining plan through an officer or officers who shall possess the following qualification, experience and post or pay scale, namely:-

(i) a degree in Mining Engineering or post-graduate degree in Geology from a University established or incorporated by or under a Central Act, a Provincial Act or a State Act, including any institution recognized by the University Grants Commission established under section 4 of the University Grants Commission Act, 1956 ( 3 of 1956) or any equivalent qualification granted by any University or Institution outside India;

(ii) professional experience of twelve years in case of a Mining Engineer in the field of mining engineering and professional experience of eighteen years in case of a Geologist in the field of geological survey after obtaining the qualification as specified in clause (i) in each case; and

(iii) in the post of Director or Additional Director or Joint Director of the concerned State Government or in the pay scale, the maximum of which shall not be less than Rs.15,850/- (Rupees fifteen thousand eight hundred and fifty only) per month:

Provided further that the list of the officers fulfilling the qualification, experience and post or pay-scale specified in the first proviso shall be sent to the Controller General, Indian Bureau of Mines by the State Governments from time to time for the purposes of that proviso;

Provided also where any State Government does not have such officer as having the requisite qualifications and experience, the power of approval of mining plan, as aforesaid, in respect of that State shall be exercise by the Central Government:

Provided also that in the event of the State Government having officer or officers with requisite qualifications and experience from any date in future the State Government shall report the matter to the Controller General, Indian Bureau of Mines and the State Government shall exercise the power of approval of mining plan, as aforesaid, thereafter without any reference to the Central Government

(4B) The Central Government or the State Government shall dispose of the application for approval of the mining plan within a period of ninety days from the date of receiving of such application:

Provided that the aforesaid period of ninety days shall be applicable only if the mining plan is complete in all respects and in case of any modifications subsequently suggested by the Central Government or the State Government, as the case may be, after the initial submission of the mining plan for approval, the said period shall be applicable from the date on which such modifications are carried out and submitted afresh to the Central Government or the State Government, as the case may be.

(5) The mining plan shall incorporate –

[(i) the plan of the lease hold area showing the nature and extent of the mineral body, spot or spots where the mining operations are proposed to be based on the prospecting data gathered by the applicant or any other person];

(ii) details of the geology and lithology of the area including mineral reserves of the area ;

(iii) the extent of manual mining or mining by the use of machinery and mechanical devices ;

(iv) the plan of the area showing natural water courses, limits of reserves and other forest areas and density of trees, if any, assessment of impact of mining activity on forest, land surface and environment including air and water pollution; details of scheme of restoration of the area by afforestation, land reclamation, use of pollution control devices and such other measures as may be directed by the Central Government or the State Government from time to time.

[(v) a tentative scheme of mining and annual programme and plan for excavation from year to year for five years ;

(va) a progressive mine closure plan as defined in clause (00) of rule 3 of the Mineral Conservation and Development Rules, 1988; and

(vi) any other matter which the Central Government may require the applicant to provide in the mining plan.

[(6) The mining plan once approved shall be valid for the entire duration of the lease:

Provided that any modification or modifications of the mining plan shall be approved by the competent authority and such approval of the modified mining plan shall remain valid for the balance duration of the mining lease.]

22A. Mining operations to be in accordance with Mining Plans. – (1) Mining operations shall be undertaken in accordance with the duly approved mining plan.

(2) Modification of the approved mining plan during the operation of a mining lease also requires prior approval.

22B. Mining plan to be prepared by recognized persons. – (1) No mining plan shall be approved unless it is prepared by a qualified person recognized in this behalf by the Central Government, or duly authorised officer.

(2) No person shall be recognized by the Central Government for purposes of sub-rule (1) unless he holds -

(i) a degree in mining engineering or a post-graduate degree in Geology granted by a University established or incorporated by or under a Central Act, a Provincial Act or a State Act, including any institutions recognized by the University Grants Commission established under section 4 of the University Grants Commission Act, 1956 or any equivalent qualification granted by any University or institution outside India ; and

(ii) Professional experience of five years of working in a supervisory capacity in the field of mining after obtaining a degree.

(3) A person recognized to prepare a mining plan may also carry out modification of the existing mining plan.

22BB. Procedure for approval of mining plans. – [(1) Notwithstanding the provisions of rule 63 the mining plan shall be submitted for approval through authority notified by the Controller General of the Indian Bureau of Mines or by the State Government, as the case may be, in this behalf except for minerals specified in Part A and B of the First Schedule to the Act.

(1a) Every mining plan submitted for approval under sub-rule (1) shall be accompanied with a non-refundable fee of one thousand rupees for every square kilometer or part thereof of mining area covered under the mining lease.

(2) Notwithstanding the provisions of the rule 54, any person aggrieved by any order made or direction issued in respect of mining plan by an officer of the Central Government competent to approve mining plans other than the Chief Controller of Mines, Indian Bureau of Mines for minerals other than those listed in Part A and B of the First Schedule to the Act, may within thirty days of the communication of such order or direction, apply to the authority to whom the said officer is immediately subordinate, for the revision of the order or direction:

Provided that any such application may be entertained after the said period of thirty days if the applicant satisfies the authority that he had sufficient cause for not making the application within time;

(3) On receipt of any application for revision under sub-rule(1), the authority after giving a reasonable opportunity of being heard to the aggrieved person, may confirm, modify or set aside the order made or direction issued by any officer subordinate to him.

(4) Any person aggrieved by an order made or direction issued by the Chief Controller of Mines, Indian Bureau of Mines, concerning approval of mining plan may within thirty days of the communication of such order or direction, apply to the Controller General, Indian Bureau of Mines for a revision of such order or direction and his decision thereon shall be final:

Provided that any such application may be entertained after the said period of 30 days, if the applicant satisfies the Controller General, Indian Bureau of Mines that he had sufficient cause for not making the application in time;

(5) On receipt of any such application under sub-rule (4), the Controller General, Indian Bureau of Mines may confirm, modify or set aside the order or direction issued by the Chief Controller of Mines, Indian Bureau of Mines.

(6) (a) Notwithstanding anything contained in the above sub-rules, any person aggrieved by any order or direction issued in respect of a mining plan by an authorised officer of the State Government, may within thirty days of the communication of such order or direction, apply to the Controller General, Indian Bureau of Mines for revision of the order or direction and his decision thereon shall be final;

(b) The procedure enumerated in the preceding sub-rules shall, mutatis mutandis, be followed in the disposal of such an application.

(7) The powers under sub-rules (1) and (2) in regard to approval of mining plans shall be exercised by Director, Atomic Minerals Directorate for Exploration and Research, Hyderabad, and in regard to revision under sub-rules (3) to (5) shall be exercised by Secretary, Department of Atomic Energy, Mumbai, insofar as they relate to atomic minerals specified in Part B of the First Schedule to the Act.

(8) The powers under sub-rules (1) to (5) in regard to approval of mining plan and revision shall be exercised by authorities designated in this behalf by notification by the Department of Coal insofar as they relate to coal and lignite specified in Part A of the First Schedule to the Act.]

22C. Grant of recognition by Central Government. – (1) Any person possessing the qualification and experience referred to in sub-rule (2) of rule 22B may apply for being recognized as a recognized person to the competent authority appointed for the purpose by the Central Government.

(2) The competent authority, after making such enquiry as it deems fit, may grant or refuse to grant recognition and where recognition is refused, the competent authority shall record reasons in writing and communicate the same to the applicant.

[(3) A recognition shall be granted for an initial period of ten years and may be renewed for a period(s) not exceeding ten years at a time:

Provided that the competent authority may refuse to renew recognition for reasons to be recorded in writing after giving an opportunity of hearing to the person concerned];

[(4) An appeal shall lie to the Controller General, Indian Bureau of Mines, against the order of the competent authority refusing to grant or renew an application for recognition and his order thereon shall be final].

[Explanation.- For the purpose of this rule, Chief Controller of Mines, Controller of Mines and the Regional Controller of Mines, shall be deemed to be competent authority.]

22D. Minimum size of the mining lease:- Minimum area for grant of mining lease shall not be less than-

(a) One hectare, in respect of small deposits (not fragmented portions of larger ones), shallow in nature, isolated and not exceeding more than 200 metres in strike length. These deposits are small by virtue of either origin or mode of emplacement or dislocation due to geological disturbances.

Small deposits shall also include float deposits (transported) formed due to mechanical weathering and deposition, alluvial or eluvial placers (buried or otherwise), which generally have peculiar configurations excepting beach sands or placers;

(b) Two hectares, in respect of beach sands or placers.

Beach sands or placers are mono or multi mineral concentrations, including the dunes occurring on and off the coastal shore line.

These deposits are the products of ebb and flow of tides, waves and inshore currents, and at places semi-consolidated to consolidated in nature;

23. Acknowledgement of application. – (1) Where an application for the grant or renewal of mining lease is delivered personally, its receipt shall be acknowledged forthwith.

(2) Where such application is received by registered post, its receipt shall be acknowledged on the same day.

(3) In any other case, the receipt of such application shall be acknowledged within three days of the receipt.

(4) The receipt of every such application shall be acknowledged in Form D.

23A. Omitted.

24. Disposal of application for mining lease. – (1) Omitted.

(2) Omitted.

(3) Omitted.

(4) Where an application for a mining lease for a mineral or minerals not specified in the existing mining lease or mining leases is made for the whole or part of the area held under mining lease by a person other than the lessee, the State Government shall notify this fact by registered post/ Acknowledgement Due to the person who already holds mining leases for another mineral in the land applied for .

(5) (a) If on receipt of the information referred to in sub-rule (4), from the State Government, the lessee applies either for prospecting licence or mining lease for newly discovered mineral or minerals within six months from the date of communication of the information by the State Government, the lessee shall be preferred in respect of such grant.

(b) If the lessee fails to apply for prospecting licence or mining lease within six months, then this fact will be intimated to the applicant by the State Government and the State Government will consider the original application in accordance with the rules.

(6) Omitted.

24A Renewal of mining lease. – (1) An application for the renewal of a mining lease shall be made to the State Government in Form J, at least twelve months before the date on which the lease is due to expire, through such officer or authority as the State Government may specify in this behalf.

[(2) The renewal or renewals of a mining lease granted in respect of a mineral specified in Part ‘A’ and Part ‘B’ of the First Schedule to the Act may be granted by the State Government with the previous approval of the Central Government.];

[(3) The renewal or renewals of a mining lease granted in respect of a mineral not specified in Part ‘A’ and Part ‘B’ of the First Schedule to the Act may be granted by the State Government.];

Provided that before granting approval for second or subsequent renewal of a mining lease, the State Government shall seek a report from the Controller General, Indian Bureau of Mines, as to whether it would be in the interest of mineral development to grant the renewal of the mining lease.

Provided further that in case a report is not received from Controller General, Indian Bureau of Mines in a period of three months of receipt of the communication from the State Government, it would be deemed that the Indian Bureau of Mines has no adverse comments to offer regarding the grant of the renewal of mining lease.

(4) Omitted.

(5) Omitted.

(6) If an application for the renewal of a mining lease made within the time referred to in sub-rule (1) is not disposed of by the State Government before the date of expiry of the lease, the period of the lease shall be deemed to have been extended by a further period till the State Government passes order thereon.

(7) [ ]

(8) Notwithstanding anything contained in sub-rule (1) and sub-rule (6), an application for the first renewal of a mining lease, so declared under the provisions of section 4 of the Goa, Daman and Diu Mining Concession (Abolition and Declaration as Mining Lease ) Act,1987, shall be made to the State Government in Form J before the expiry of the period of mining lease in terms of sub-section (1) of section 5 of the said Act, through such office or authority as the State Government may specify in this behalf:

Provided that the State Government may, for reasons to be recorded in writing and subject to such conditions as it may think fit, allow extension of time for making of such application up to a total period not exceeding one year.

(9) If an application for first renewal made within the time referred to in sub-rule (8) or within the time allowed by the State Government under the proviso to sub-rule (8), the period of that lease shall be deemed to have been extended by a further period till the State Government passes orders thereon.

[(10) The State Government may condone delay in an application for renewal of mining lease made after the time limit prescribed in sub-rule (1) provided the application has been made before the expiry of the lease].

24B. Renewal of a mining lease in favour of a person using the mineral in his own industry. – Every person who is holding mining lease for a mineral which in used in his own industry shall be entitled for the renewal of his mining lease for a period not exceeding twenty years unless he applies for a lesser period.

Explanation : "Own industry" means an industry of which the lessee is the owner or in which he holds not less than fifty percent of controlling interest.

25. Refund and forfeiture, etc. – [ ]

25A. Status of the grant on death of applicant for mining lease. – (1) Where an applicant for grant or renewal of mining lease dies before the order granting him a mining lease or its renewal is passed, the application for the grant or renewal of a mining lease shall be deemed to have been made by his legal representative.

(2) In the case of an applicant in respect of whom an order granting or renewing a mining lease is passed, but who dies before the deed referred to in sub-rule (1) of rule 31 is executed, the order shall be deemed to have been passed in the name of the legal representative of the deceased.

26. Refusal of the applicant for grant and renewal of mining lease. – (1) The State Government may, after giving an opportunity of being heard and for reasons to be recorded in writing and communicated to the applicant, refuse to grant or renew a mining lease over the whole or part of the area applied for.

(2) An application for the grant or renewal of a mining lease made under rule 22 or rule 24A, as the case may be, shall not be refused by the State Government only on the ground that Form I or Form J, as the case may be, is not complete in all material particulars, or is not accompanied by the documents referred to in sub-clauses (d),(e),(f),(g) and (h) of clause (i) of sub-rule 3 of rule 22.

(3) Where it appears that the application is not complete in all material particulars or is not accompanied by the required documents, the State Government shall, by notice, require the applicant to supply the omission or, as the case may be, furnish the documents, without delay and in any case not later than thirty days from the date of receipt of the said notice by the applicant.

27. Conditions. – (1) Every mining lease shall be subject to the following conditions :

(a) the lessee shall report to the State Government the discovery in the leased area of any mineral not specified in the lease, within sixty days of such discovery;

(b) if any mineral not specified in the lease is discovered in the leased area, the lessee shall not win and dispose of such mineral unless such mineral is included in the lease or a separate lease is obtained therefor ;

(c) the lessee shall pay, for every year, except the first year of the lease, such yearly dead rent at the rate specified in the Third Schedule of the Act and if the lease permits the working of more than one mineral in the same area the State Government shall not charge separate dead rent in respect of each mineral:

Provided that the lessee shall be liable to pay the dead rent or royalty in respect of each mineral whichever be higher in amount but not both ;

(d) the lessee shall also pay, for the surface area used by him for the purposes of mining operations, surface rent and water rate at such rate, not exceeding the land revenue, water and cesses assessable on the land, as may be specified by the State Government in the lease ;

(e) Omitted

(f) the lessee shall commence mining operations within one year from the date of execution of the lease and shall thereafter conduct such operations in a proper, skillful and workman-like manner

Explanation.- For the purpose of this clause, mining operations shall include the erection of machinery, laying of a tramway or construction of a road in connection with the working of the mine ;

(g) the lessee shall at his own expenses erect and at all times maintain and keep in good repair boundary marks and pillars necessary to indicate the demarcation shown in the plan annexed to the lease ;

(h) the lessee shall not carry on, or allow to be carried on, any mining operations at any point within a distance of fifty metres from any railway line, except under and in accordance with the written permission of the railway administration concerned or under or beneath any ropeway or ropeway trestle or station, except under and in accordance with the written permission of the authority owning the ropeway or from any reservoir, canal or other public works, or buildings, except under and in accordance with the previous permission of the State Government ;

(i) the lessee shall keep [accurate and faithful] accounts showing the quantity and other particulars of all minerals obtained and dispatched from the mine, the number and nationality of the persons employed therein, and complete plans of the mine, and shall allow any officer authorized by the Central Government or the State Government in this behalf to examine at any time any accounts, plans and records maintained by him and shall furnish the Central or the State Government with such information and returns as it or any officer authorized by it in this behalf may require ;

(j) the lessee shall keep accurate records of all trenches, pits and drillings made by him in the course of mining operations carried on by him under the lease, and shall allow any officer authorised by the Central or the State Government to inspect the same. Such reports shall contain the following particulars, namely :-

(a) the subsoil and strata through which such trenches, pits or drillings pass ;

(b) any mineral encountered ;

(k) the lessee shall strengthen and support, to the satisfaction of the railway administration concerned or the State Government, as the case may be, any part of the mine which in its opinion requires such strengthening or support for the safety of any railway, reservoir, canal, roads or any other public works or buildings ;

(l) the lessee shall allow any officer authorized by the Central or the State Government to enter upon any building, excavation or land comprised in the lease for the purpose of inspecting the same ;

(m) the State Government shall at all times have the right of pre-emption of the minerals won from the land in respect of which the lease has been granted ;

Provided that the fair market price prevailing at the time of pre-emption shall be paid to the lessee for all such minerals.

(n) The lessee shall store properly the unutilized or non-saleable sub-grade ores or minerals for future beneficiation;

(o) in respect of any mineral which in relation to its use for certain purposes is classified as a major mineral and in relation to its use for other purposes as a minor mineral, the lessee who holds a lease for extraction of such mineral under these rules whether or not it is specified as a major mineral in the lease deed, shall not use or sell the mineral or deal with it in whatsoever manner or knowingly allow anyone to use or sell the mineral or deal with it in whatsoever manner as a minor mineral :

Provided that if on an application made to it in this behalf by the lessee, the State Government is satisfied that having regard to the inferior quality of such mineral, it cannot be used for any of the purposes by reason of which use it can be called a major mineral or that there is no market for such mineral as a major mineral, the State Government may by order permit the lessee to dispose of the mineral in such quantity and in such manner as may be specified therein as a minor mineral.

(p) the lessee shall, in the matter of employment, give preference to the tribals and to the persons who become displaced because of the taking up of mining operations ;

(q) the lessee shall not pay a wage less than the minimum wage prescribed by the Central or State Government from time to time under the Minimum Wages Act, 1948 ;

(r) the lessee shall observe the provisions of the Mines Act, 1952 [(35 of 1952) and of the Atomic Energy Act, 1962 (33 of 1962) insofar as they relate to atomic minerals included in Part B of the First Schedule to the Act];

(s) the lessee shall –

(i) take immediate measures for planting in the same area or any other area selected by the Central or State Government not less than twice the number of trees destroyed by reasons of any mining operations ;

(ii) look after them during the subsistence of the lease after which these trees shall be handed over to the State Forest Department or any other authority nominated by the Central or State Government ;

(iii) restore, to the extent possible other flora destroyed by the mining operations .

(t) the lessee shall pay to the occupier of the surface of the land such compensation as may become payable under these rules ;

(u) the lessee shall comply with the Mineral Conservation and Development Rules framed under section 18.

(2) A mining lease may contain such other conditions as the State Government may deem necessary in regard of the following, namely :-

(a) the time-limit, mode and place of payment of rents and royalties ;

(b) the compensation for damage to the land covered by the lease;

(d) the restrictions of surface operations in any area prohibited by any authority ;

(e) the notice by lessee for surface occupation ;

(f) the provision for proper weighing machines ;

(g) the facilities to be given by the lessee for working other minerals in the leased area or adjacent area ;

(h) the entering or working in a reserved or protected forest ;

(i) the securing of pits and shafts ;

(j) the reporting of accidents ;

(k) the indemnity to Government against claims of third parties;

(l) the delivery of possession of land and mines on the surrender, expiration or determination of the lease ;

[(la) the time limit for removal of mineral, ore, plant, machinery and other properties from the lease hold area after expiration, or sooner determination or surrender or abandonment of the mining lease];

(m) the forfeiture of property left after determination of lease ;

(n) the power to take possession of plant, machinery, premises and mines in the event of war or emergency ;

(o) filing of civil suits or petitions relating to disputes arising out of the area under lease.

[(3) The State Government may, either with the previous approval of the Central Government or at the instance of the Central Government, impose such further conditions as may be necessary in the interests of mineral development, including development of atomic minerals.]

(4) If the lessee does not allow entry or inspection under clause (i),(j) of (l) of sub-rule (1), the State Government shall give notice in writing to the lessee requiring him to show cause within such time as may be specified in the notice why the lease should not be determined and his security deposit forfeited; and if the lessee fails to show cause within the aforesaid time to the satisfaction of the State Government, the State Government may determine the lease and forfeit the whole or part of the security deposit.

(5) If the lessee makes any default in the payment of royalty as required under section 9 or payment of dead rent as required under Section 9A or commits a breach of any of the conditions specified in sub-rules (1),(2) and (3), except the condition referred to in clause (f) of sub-rule (1), the State Government shall give notice to the lessee requiring him to pay the royalty or dead rent or remedy the breach, as the case may be, within sixty days from the date of the receipt of the notice and if the royalty or dead rent is not paid or the breach is not remedied within the said period, the State Government may without prejudice to any other proceedings that may be taken against him, determine the lease and forfeit the whole or part of the security deposit.

28. Lapsing of leases. – (1) Subject to other conditions of this rule where mining operations are not commenced within a period of two years from the date of execution of the lease, or is discontinued for a continuous period of two years after commencement of such operations, the State Government shall, by an order , declare the mining lease as lapsed and communicate the declaration to the lessee.

(2) Where a lessee is unable to commence the mining operation within a period of two years from the date of execution of the mining lease, or discontinues mining operations for a period exceeding two years for reasons beyond his control, he may submit an application to the State Government, explaining the reasons for the same, at least three months before the expiry of such period.

(3) Every application under sub-rule (2) shall be accompanied by a fee of Rs.200/-.

(4) The State Government may on receipt of an application made under sub-rule (2) and on being satisfied about the adequacy and genuineness of the reasons for the non-commencement of mining operations or discontinuance thereof, pass an order before the date on which the lease would have otherwise lapsed, extending or refusing to extend the period of the lease :

Provided that where the State Government on receipt of an application under sub-rule (2) does not pass an order before the expiry of the date on which the lease would have otherwise lapsed, the lease shall be deemed to have been extended until the order is passed by the State Government or until a period of two years, whichever is earlier.

Explanation 1: Where the non-commencement of the mining operations within a period of two years from the date of execution of mining lease is on account of -

(a) delay in acquisition of surface rights ; or

(b) delay in getting the possession of the leased area ; or

(d) delay in getting financial assistance from the banks, or any financial institutions ; or

(e) ensuring supply of the mineral in an industry of which the lessee is the owner or in which he holds not less than 50% of the controlling interest ;

and the lessee is able to furnish documentary evidence supported by a duly sworn affidavit, the State Government may consider if there are sufficient reasons for non-commencement of operations for a continuous period of more than two years.

Explanation 2: Where the discontinuance of mining operations for a continuous period of two years after the commencement of such operations is an account of -

(a) orders passed by any statutory or judicial authority ; or

(b) operations becoming highly uneconomical ; or

and the lessee is able to furnish documentary evidence supported by a duly sworn affidavit, the State Government may consider if there are sufficient reasons for discontinuance of operations for a continuous period of more than one year.

[Explanation 3.- In case of mining lessee who has undertaken reconnaissance perations or in case of mining lessee whose capital investment in mine development is planned to be in excess of Rs.200 crores and where the mine development is likely to take more than two years, the State Government shall consider it to be sufficient reason for non-commencement of mining operations for a continuous period of more than two years.]

28A.(1)Where a lessee is unable to commence the mining operations within a period of two years from the date of execution of the mining lease, or discontinues mining operations for a period of exceeding two years for reasons beyond his control, he may submit an application to the State Government explaining the reasons for the same at least within six months from the date of its lapse :

Provided that the lease has not been revived under this provision for more than twice during the entire period of the lease .

(2) Every application under sub-rule (1) shall be accompanied by a fee of Rs 500/-;

(3) The State Government on receipt of an application made under sub-rule (1) and on being satisfied about the adequacy and genuineness of the reasons for non-commencement of mining operations or discontinuance thereof taking into consideration the matters specified in the Explanation to rule 28, pass an order reviving the lease.

29. Restriction on determination of lease. – (1) The lessee shall not determine the lease except after notice in writing of not less than twelve calendar months to the State Government or to such officer, or authority as the State Government may specify in this behalf :

Provided that where a lessee holding a mining lease for a group of minerals applies for the surrender of any mineral from the lease on the ground that deposits of that mineral have since exhausted or depleted to such an extent that it is no longer economical to work the mineral, the State Government may permit the lessee to surrender that mineral, subject to the following conditions , namely:-

(a) the lessee applies for such surrender of mineral at least six months before the intended date of surrender ; and

(b) the lessee gives an undertaking that he will not cause any hindrance in the working of the mineral so surrendered by any other person who is subsequently granted a mining lease in respect of that mineral :

Provided further that where a lessee applies for the surrender of the whole or a part of lease-hold area on the ground that such area is barren or the deposits of minerals have since exhausted or depleted to such an extent that it is no longer economical to work such area, the State Government shall permit the lessee, from the date of receipt of the application, to surrender that area if the following conditions are satisfied, namely :-

(a) the lease hold area to be surrendered has been properly surveyed and is contiguous ,

(b) the lessee has paid all the dues payable to the Government under the lease up to the date of application, and

Provided also that surrender of the lease area by the lessee shall be permitted only thrice during the period of the lease on fulfilling the conditions :-

(i) that at least a period of five years has elapsed since the last surrender; and

(ii) that the provisions of the mining plan including the environment management plan thereof have been complied with .

(2) Every application for the surrender of a part of lease-hold area in accordance with the provisions of sub-rule (1), shall be accompanied by a deposit of two hundred rupees for meeting the expenditure for the purpose of survey and demarcation of the area to be surrendered :

Provided that the lessee shall deposit such further amount, not exceeding two hundred rupees, as may be demanded by the State Government for meeting any additional expenditure for the said purpose within one month from the date of demand of such deposit :

Provided further that where the whole or any part of the amount deposited has not been expended, it shall be refunded to the lessee within two months from the date of completion of the work of survey and demarcation of the area to be surrendered .

(3) Upon the issuance of the order by the Regional Controller of Mines or the officer authorized by the State Government in this behalf, as the case may be, under sub-rule (6) of rule 23F of Mineral Conservation and Development Rules, 1988, for forfeiting the sum assured, on non-performance of the measures contained in the approved mine closure plan referred to in sub-rule (1) of rule 23A of Mineral Conservation and Development Rules, 1988 by the lessee, it shall be the responsibility of State Government to realize any letter of credit or bond or any other surety, guarantee provided or obtained as financial assurance for the purpose of performance of protective, reclamation and rehabilitation measures as contained in the approved mine closure plan and shall carry out such measures either by itself, or appoint an agent to do so.

29A. Provision for closure-(1) The lessee shall not determine the lease or part thereof unless a final mine closure plan duly approved by the Regional Controller or the officer authorized by the State Government in this behalf, as the case may be, is implemented as per the approval.

(2) For the purposes of sub-rule (1), the lessee shall be required to obtain a certificate from the Regional Controller of Mines or officer authorized by the State Government in this behalf, as the case may be, to the effect that protective, reclamation and rehabilitation work in accordance with the approved mine closure plan or with such modifications as approved by the competent authority have been carried out by the lessee.

30. Rights of lessee. – Subject to the condition mentioned in rule 27, the lessee with respect to the land leased to him shall have the right for the purpose of mining operations on the land -

(a) to work the mines ;

(b) to sink pits and shafts and construct buildings and roads ;

(d) to quarry and obtain building and road materials and make bricks ;

(e) to use water and take timber ;

(f) to use land for stacking purpose ;

(g) to do any other thing specified in the lease.

31. Lease to be executed within six months. – (1) Where, on an application for the grant of a mining lease, an order has been made for the grant of such lease, a lease deed in Form K or in a form as near thereto as circumstances of each case may require, shall be executed within six months of the order or within such further period as the State Government may allow in this behalf, and if no such lease deed is executed within the said period due to any default on the part of the applicant, the State Government may revoke the order granting the lease and in that event the application fee shall be forfeited to the State Government.

[(2) The date of the commencement of the period for which a mining lease is granted shall be the date on which a duly executed deed under sub-rule (1) is registered.]

32. Security deposit. – An applicant for a mining lease, shall before the deed referred to in rule 31 is executed, deposit as security for the due observance of the terms and conditions of the lease [ten thousand rupees].

33. Survey of the area leased. – When a mining lease is granted by the State Government, arrangements shall be made by the State Government at the expense of the lessee for the survey and demarcation of the area granted under the lease .

34. Manner of exercise of preferential rights for mining lease. – A mining lease to any person who has a preferential right thereto under sub-section (1) of section 11, may at his option, be granted to him either for the whole of the area for which he holds the prospecting licence or such part or parts thereof as he may select but the State Government may for any reasons to be recorded in writing reduce the area or exclude a portion therefrom .

[35. Preferential rights of certain persons. – Where two or more persons have applied for a reconnaissance permit or a prospecting licence or a mining lease in respect of the same land, the State Government shall, for the purpose of sub-section(2) of Section 11, consider, besides the matters mentioned in clauses (a) to (d) of sub-section(3) of Section 11, the end use of the mineral by the applicant.]

36. Boundaries below the surface. – The boundary of the area covered by a mining lease shall run vertically downwards below the surface towards the centre of the earth.

37. Transfer of lease. – (1) The lessee shall not, without the previous consent in writing of the State Government and in the case of mining lease in respect of any mineral specified in [Part ‘A’ and Part ‘B’ of] the First Schedule to the Act, without the previous approval of the Central Government :-

(a) assign, sublet, mortgage, or in any other manner, transfer the mining lease, or any right, title or interest therein, or

(b) enter into or make any [bonafide] arrangement, contract, or understanding whereby the lessee will or may be directly or indirectly financed to a substantial extent by, or under which the lessee's operations or undertakings will or may be substantially controlled by, any person or body of persons other than the lessee:

Provided further that where the mortgagee is an institution or a Bank or a Corporation specified in Schedule V, it shall not be necessary for the lessee to obtain any such consent of the State Government .

(1A) The State Government shall not give its consent to transfer of mining lease unless the transferee has accepted all the conditions and liabilities which the transferor was having in respect of such mining lease.

(2) Without prejudice to the provisions of sub-rule (1) the lessee may, transfer his lease or any right, title or interest therein to a person who has filed an affidavit stating that he has filed an up-to-date income-tax returns, paid the income tax assessed on him and paid the income tax on the basis of self-assessment as provided in the Income Tax Act, 1961( 43 of 1961), on payment of a fee of five hundred rupees to the State Government :

Provided that the lessee shall make available to the transferee the original or certified copies of all plans of abandoned workings in the area and in a belt 65 metres wide surrounding it ;

Provided further that where the mortgagee is an institution or a Bank or a Corporation specified in Schedule V, it shall not be necessary for any such institution or Bank or Corporation to meet with the requirement relating to income tax ;

Provided further that the lessee shall not charge or accept from the transferee any premium in addition to the sum spent by him, in obtaining the lease, and for conducting all or any of the operations referred to in rule 30 in or over the land leased to him ;

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(3) The State Government may, by order in writing determine any lease at any time if the lessee has, in the opinion of the State Government, committed a breach of any of the provisions of sub-rule (1) or sub-rule (1A) or has transferred any lease or any right, title or interest therein otherwise than in accordance with sub-rule (2) ;

Provided that no such order shall be made without giving the lessee a reasonable opportunity of stating his case.

37A. Transfer of lease to be executed within three months. – Where on an application for transfer of mining lease under rule 37, the State Government have given consent for transfer of such lease, a transfer lease deed in Form O or a form as near thereto, as possible, shall be executed within three months of the date of the consent, or within such further period as the State Government may allow in this behalf.

[38. Amalgamation of leases. – The State Government may, in the interest of mineral development and with reasons to be recorded in writing, permit amalgamation of two or more adjoining leases held by a lessee:

Provided that the period of amalgamated leases shall be co-terminus with the lease whose period will expire first:

Provided further that prior approval of the Central Government shall be required for such amalgamation in respect of leases for minerals specified in Part ‘A’ and Part ‘B’ of the First Schedule to the Act.].

[39. Pending applications for transfer and amalgamation. – An application for the transfer of a mining lease or the amalgamation of mining leases pending at the commencement of these rules shall be disposed of in accordance with these rules.].

40. Registers. – (1) A register of applications for mining leases shall be maintained by the State Government in Form L.

(2) A register of mining leases shall be maintained by the State Government in Form-M.