No Mining Activity, No Relief: Madhya Pradesh High Court Upholds Lease Cancellation

The Madhya Pradesh High Court has dismissed a writ petition filed by a partnership firm engaged in quarry operations challenging the cancellation of its quarry lease, holding that the firm failed to commence mining activities within the stipulated period and also did not invoke the statutory mechanism available for seeking extension of the lease.

The division bench of Justice Vivek Rusia and Justice Pradeep Mittal refused to interfere with orders passed by the Collector, the Director of Geology and Mining and the State Government, which had successively upheld the cancellation of the lease granted to M/s Golden Stones. The court observed that once the leaseholder failed to commence operations and also did not apply for extension under the applicable rules, no relief could be granted in writ jurisdiction.

The petition challenged orders dated February 24, 2018 passed by the Collector, Chhatarpur cancelling the quarry lease, July 31, 2018 passed by the Director, Directorate of Geology and Mining dismissing the first appeal, and January 24, 2020 passed by the State Government rejecting the second appeal.

According to the record, the petitioner firm had been granted a quarry lease over four hectares of land in Chhatarpur district in March 2011 for extraction of stone used for making gitti through mechanical crushing, following which a lease agreement was executed for a period of ten years. The firm, however, contended that possession of the leased land was never handed over to it and therefore mining activities could not commence. It also claimed environmental clearance was pending before authorities for years together thereafter.

The State authorities, on the other hand, argued that the petitioner had failed to comply with mandatory conditions of the lease under the Madhya Pradesh Minor Mineral Rules, 1996. It was submitted that the firm neither commenced quarry operations within one year of execution of the lease agreement nor submitted the approved mining plan or installed the necessary infrastructure.

A show cause notice issued in March 2014 detailed alleged breaches including non-payment of dead rent, royalty, and failure to submit statutory returns. The authorities eventually cancelled the lease in February 2018 after finding the petitioner’s explanation unsatisfactory. The firm maintained that since possession was not delivered, these obligations could not arise. It also alleged violation of natural justice and challenged the appellate orders as cryptic and non-speaking orders.

The High court, however, found no merit in the challenge. Examining the statutory framework governing quarry leases, the Bench noted that the Rules clearly provide a mechanism where a lessee unable to commence mining within one year for reasons beyond its control may approach the sanctioning authority seeking extension.

Referring to the provisions, the court noted that the rules permit such relief where delay occurs due to factors such as acquisition of surface rights or delay in obtaining possession. However, the bench found that the petitioner had not invoked this statutory remedy within the prescribed time. The court further observed that the original lease period of ten years had already expired. The court also remarked “the petitioner did not apply under these Rules to the Sanctioning Authority” the order records.

The bench also noted that the petitioner had not commenced mining activities from the date of execution of the lease in March 2011 until the cancellation order was passed in February 2018. In such circumstances, the court held that the authorities were justified in invoking the provisions of the Madhya Pradesh Minor Mineral Rules, 1996.

The court emphasised that writ jurisdiction cannot be exercised to revive contractual or statutory rights that have already lapsed due to inaction on the part of the lessee. Consequently, finding no illegality in the orders of the Collector or the appellate authorities, the High court dismissed the writ petition.

Case Title: M/S Golden Stones v. The State of Madhya Pradesh and Others

Date of Order: March 6, 2026

Bench: Justice Vivek Rusia and Justice Pradeep Mittal