Analysis of U.P. Minor Minerals (Concession) Rules, 1963

An Analytical Study of the Uttar Pradesh Minor Minerals (Concession) Rules, 1963: Legislative Framework, Key Provisions, and Judicial Scrutiny

Introduction

The Uttar Pradesh Minor Minerals (Concession) Rules, 1963 (hereinafter referred to as "UPMMC Rules, 1963" or "the Rules") constitute a cornerstone of the regulatory regime governing the extraction and management of minor minerals within the State of Uttar Pradesh. Framed under the authority vested in the State Government by Section 15 of the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act)[3, 4, 7], these Rules have undergone numerous amendments and have been the subject of extensive judicial interpretation. This article seeks to provide a comprehensive analysis of the UPMMC Rules, 1963, examining their legislative genesis, core regulatory provisions, operational aspects, and the evolving jurisprudence shaped by judicial pronouncements. The analysis draws significantly from the provided reference materials, which include key judgments from the Supreme Court of India and various High Courts, particularly the Allahabad High Court and Uttarakhand High Court, reflecting the practical application and challenges associated with these Rules. While some provided materials, such as U.P (Madhya) Ganna Beej Evam Vikas Nigam Ltd. And Others v. Prem Chandra Gupta And Others[1] concerning service law, and State Of U.P v. Sarjoo Devi And Others[2] dealing with land tenure under the U.P. Zamindari Abolition and Land Reforms Act, 1950, do not directly address minor mineral concessions, they form part of the broader legal landscape within which these specific rules operate and were considered in the context of overarching legal principles.

Legislative Genesis and Scope of the Rules

Authority under the Mines and Minerals (Development and Regulation) Act, 1957

The MMDR Act, 1957, a central legislation, empowers State Governments to make rules for regulating the grant of quarry leases, mining leases, or other mineral concessions in respect of minor minerals and for purposes connected therewith. Section 15 of the MMDR Act is the fountainhead of the UPMMC Rules, 1963[3, 4, 7]. This delegation of power allows states to tailor regulations to their specific geological and administrative contexts. The State of Uttar Pradesh exercised this power to enact the UPMMC Rules, 1963, thereby establishing a detailed procedural framework for mining operations related to minor minerals[5]. The proviso to Section 15(3) of the MMDR Act also places a restriction, stipulating that the State Government shall not enhance the rate of royalty or dead rent in respect of any minor mineral more than once during any period of three years[4].

Definition of 'Minor Minerals'

The term 'minor minerals' is crucial to the applicability of these Rules. Rule 2(7) of the UPMMC Rules, 1963 adopts the definition provided in clause (e) of Section 3 of the MMDR Act, 1957[4]. This definition typically includes materials like building stones, gravel, ordinary clay, ordinary sand (other than sand used for prescribed purposes), and any other mineral which the Central Government declares to be a minor mineral by notification in the Official Gazette[4]. The Supreme Court in Bhagwan Dass v. State Of U.P And Others affirmed that deposits such as sand, gravel, boulders, and bajris resulting from fluvial action are considered minor minerals, title to which vests in the State Government, even if deposited on privately owned land[11].

Applicability and Territorial Extension

The UPMMC Rules, 1963, primarily apply to the State of Uttar Pradesh. However, following the reorganisation of states and the creation of Uttaranchal (now Uttarakhand) from Uttar Pradesh in 2000, these rules, by virtue of Section 86 of the Uttar Pradesh Reorganisation Act, 2000, became applicable to the new state[13]. Subsequently, Uttarakhand adapted these rules, often referred to as the Uttaranchal Minor Minerals (Concession) Rules, 2001, with specific amendments. For instance, it was clarified that wherever the expression ‘Uttar Pradesh’ occurred in the 1963 Rules, it should be read as ‘Uttaranchal’[3]. Further amendments in Uttarakhand also clarified the State's right to conduct mining activities through government departments or corporations[3, 13].

Core Regulatory Framework: Grant and Management of Mineral Concessions

Prohibition on Unauthorised Mining (Rule 3)

Rule 3(1) of the UPMMC Rules, 1963, lays down a fundamental mandate: no person shall undertake any mining operations in any area within the State for any minor mineral to which the rules apply, except under and in accordance with the terms and conditions of a mining lease or mining permit granted under these Rules[3, 4]. Rule 3(2) further stipulates that no mining lease or permit shall be granted otherwise than in accordance with the provisions of the Rules[3]. This provision underscores the State's regulatory control over mineral extraction. However, amendments, particularly in the context of Uttarakhand's adaptation, have carved out exceptions, such as for mining activities conducted by government departments or corporations[3].

Grant of Mining Leases (Chapter II & IV)

The Rules prescribe distinct procedures for granting mining leases, primarily detailed in Chapters II and IV.

Application and Procedure

Chapter II generally outlines the standard procedure for applying for and granting mining leases. The process involves applications to the District Officer or a committee, scrutiny, and eventual grant. The case of Shiv Charan v. Union of India (as cited in M/S Nishant Traders[9]) emphasized that mining leases can only be granted in accordance with the procedure in Chapter II or IV, and not by relaxing terms and conditions under Rule 68 (which deals with relaxation of rules by the government in special cases).

Auction and Tender Mechanisms (Rule 23, 27)

Chapter IV of the Rules, particularly Rule 23, allows the State Government to declare certain areas for the grant of mining leases through auction or tender, or a combination thereof. When an area is so declared, the provisions of Chapters II, III, and VI may become inapplicable[12]. Rule 27 specifically provides the procedure for the grant of leases by auction[3]. The interplay between these chapters and the conditions for shifting areas between them has been a subject of litigation, as seen in A-One Granites v. State Of U.P And Others[12], where an area previously under auction (Chapter IV) was reverted to be governed by Chapter II procedures.

Preferential Rights (Rule 9-A)

Rule 9-A introduces a provision for preferential rights in the grant of mining leases for specific minor minerals like sand or morrum found exclusively in riverbeds. This preference is accorded to certain categories of persons or groups, such as those belonging to socially and educationally backward classes engaged in the traditional occupation of excavating these minerals and residing in the same district, or those who have established or intend to establish mineral-based industries in the State[3, 8]. The constitutional validity and application of Rule 9-A have been challenged, as noted in Maiyadeen v. State Of U.P And Another[8].

Re-grant of Leases (Rule 72)

Rule 72, introduced by the 20th amendment in 1994 and subsequently amended, outlines the procedure for notifying the availability of an area for re-grant of a mining lease if it was previously held under a lease (under Chapter II) or reserved under Section 17-A of the MMDR Act[3, 12]. This rule requires the District Officer to issue a notice inviting applications, specifying a date. The interpretation of Rule 72, especially whether it applies to leases originally granted under Chapter IV (auction) or only to those under Chapter II, was a key issue in A-One Granites[12], where the Supreme Court clarified its scope. The applicability of Rule 72 has also been debated in the context of mining on private lands in Uttarakhand[7].

Mining Permits (Chapter VI, Rule 55)

Chapter VI of the Rules deals with mining permits. Rule 55 specifically addresses the issuance of mining permits[4]. These permits are typically for a shorter duration or for a specified quantity of mineral. As held in Sunil Kumar Mishra v. Union Of India[15], a mining permit is valid until the expiry of its specified period or until the permitted quantity of mineral is removed, whichever is earlier. The Allahabad High Court, in this case, noted the absence of a provision under the Rules for extending the term of a mining permit due to an obstructed period, even if the obstruction was not the fault of the permit holder[15].

Financial Obligations: Royalty and Other Dues (Rule 21, 54, 58)

The UPMMC Rules, 1963, impose financial obligations on leaseholders. Rule 21 mandates the payment of royalty by the holder of a mining lease, empowering the State Government to fix and revise these rates, subject to the constraints of the MMDR Act[4]. Rule 54 specifies the manner in which royalty has to be deposited[4]. Non-payment of royalty, rent, or other dues can lead to consequences as stipulated in Rule 58[4]. Rule 64 deals with the mode of payment of fees and deposits[4].

Operational and Environmental Governance

Landowner Rights and Mining Operations (Rule 67)

Rule 67 clarifies the position regarding mining operations on land where the surface rights belong to a private individual. It provides that the landowner cannot place restrictions on mining operations, but is entitled to demand compensation from the lessee for the use of the surface area and any damage caused[4]. This principle is consistent with the Supreme Court's ruling in Bhagwan Dass[11], which established that the State owns the minor minerals even if they are on private land, and the landowner's primary right is to compensation for surface use or damage.

Transportation of Minerals (Rule 70)

To curb illegal mining and regulate the movement of extracted minerals, Rule 70 imposes restrictions on the transport of minerals. It mandates that every person carrying a minor mineral by vehicle, animal, or any mode of transport (excepting railway) must carry a valid pass in Form MM-11[4]. Contravention of this provision is punishable with imprisonment or fine, or both[4]. Cases like Suneel Kumar Dubey And Another v. State of U.P. and Another[18] highlight criminal proceedings initiated for violations including Rule 70.

Inspection, Enforcement, and Penalties (Rule 66, other provisions)

The Rules empower authorities to ensure compliance. Rule 66 allows authorized officers to enter and inspect any mine[4]. Various provisions, including Rule 70, prescribe penalties for contraventions. Criminal proceedings can be initiated under specific rules (e.g., Rules 3, 57, 70) and relevant sections of the MMDR Act (e.g., Section 4/21) for violations[18]. (Rule 57, though not detailed in the provided extracts, is indicated as a penal provision in Suneel Kumar Dubey[18]).

Environmental Clearances and Sustainable Mining (Post-Deepak Kumar jurisprudence)

The Supreme Court's judgment in Deepak Kumar v. State of Haryana ((2012) 4 SCC 629) has profoundly impacted mining regulations across India, including the UPMMC Rules, 1963. This judgment emphasized the necessity of environmental clearance for mining leases, irrespective of their size, to ensure sustainable development. Consequently, the UPMMC Rules, 1963, underwent significant amendments (e.g., 35th, 36th, and 37th Amendments) to incorporate these environmental safeguards[10, 14]. Cases like Sanjay Singh Petitioner v. State Of U.P.[14] and Munni Lal v. State Of U.P[10] illustrate that post-Deepak Kumar, renewal and fresh grant of leases are contingent upon compliance with these stricter environmental norms, including obtaining environmental clearance certificates, which under the amended Rule 34 is the responsibility of the project proponent or end-user agency[10]. Challenges to lease renewals often cite non-compliance with these environmental mandates and the directives in Deepak Kumar[17].

Adjudicatory Mechanisms and State's Overriding Powers

Appeals and Revisions (Rule 77, 78)

The UPMMC Rules, 1963, provide for a hierarchical system of appeals and revisions against orders passed by authorities. Rule 77 allows for an appeal before the Divisional Commissioner against orders of the District Officer's Committee[3]. Subsequently, Rule 78 provides for a revision to be filed before the State Government[3]. The availability of these remedies is crucial for aggrieved parties, as seen in Anvar Ali v. State Of U.P. And 4 Others, where the petitioner sought timely disposal of an appeal filed under Rule 77[16].

State Government's Role and Policy Directives

The State Government retains significant powers under the Rules, not only in framing them but also in their administration and in issuing policy directives. This includes the power to reserve areas for exploitation by public sector undertakings or government corporations[3, 13]. The mineral policy of a state, as discussed in the context of Uttaranchal in Doiwala Sehkari Shram Samvida Samiti Ltd.[13], can dictate preferences for scientific mining, environmental preservation, and the role of state agencies like the Forest Development Corporation in mining operations, especially in forest areas.

Delegation of Powers

The issue of delegation of powers vested in specific authorities under the Rules can arise. In Shiv Pujan Sahani v. State Of U.P& Ors.[20], the authority of an Additional District Magistrate to pass an order, when the power was seemingly vested in the District Magistrate, was questioned. The court considered arguments based on the principle that if a power is given to be exercised in a certain way by a certain authority, it must be done so, drawing parallels with the definition of "Collector" under the U.P. Land Revenue Act, 1901, which can include empowered Assistant Collectors[20]. This highlights the importance of ensuring that actions under the Rules are taken by duly authorized officials.

Judicial Scrutiny and Evolving Jurisprudence

Interpretation of Key Rules and Amendments

The judiciary has played a vital role in interpreting ambiguous provisions of the UPMMC Rules, 1963, and in assessing the validity and impact of its numerous amendments. For example, the 50th amendment, substituting Rule 23(2)(a), was challenged but upheld in M/S Nishant Traders v. State Of U.P. And 2 Others[9]. Courts have scrutinized whether amendments align with the parent MMDR Act and constitutional principles. The interpretation of Rule 72 regarding re-grant of leases in A-One Granites[12] is a prime example of judicial clarification shaping the application of the Rules.

Locus Standi in Mining Disputes

The question of locus standi, or the right to bring an action, often arises in mining-related litigation, particularly in Public Interest Litigations (PILs). In Munni Lal v. State Of U.P[10], the Allahabad High Court emphasized that a petitioner in a PIL must act bona fide and have a sufficient interest, demonstrating a legal injury or genuine infraction of statutory provisions. The court expressed doubt about a prospective bidder's locus standi merely based on an academic possibility of future interest[10].

Challenges of Illegal Mining and Supply Management

Illegal mining poses a significant challenge, and the State Government's efforts to curb it have been noted by the courts. However, as highlighted in Gulab Chandra Mishra v. State Of U.P.[6], while halting illegal mining is crucial, the State also has a responsibility to ensure the availability of legally excavated minor minerals for construction activities at reasonable costs. The court observed situations where a lack of fresh leases led to a halt in construction, underscoring the need for a balanced approach and timely grant of legal concessions[6].

Conclusion

The Uttar Pradesh Minor Minerals (Concession) Rules, 1963, represent a complex and dynamic legal framework essential for the regulation of minor minerals in one of India's largest states. Enacted under the MMDR Act, 1957, these Rules detail the procedures for granting leases and permits, financial obligations, operational controls, and dispute resolution mechanisms. Over the decades, the Rules have been shaped significantly by numerous amendments, often driven by evolving policy considerations and critical judicial interventions, most notably the Supreme Court's directives on environmental protection in the Deepak Kumar case. The provided reference materials illuminate the practical challenges in implementing these Rules, including issues related to preferential rights, auction processes, re-grant of leases, landowner rights, transportation controls, and the powers of various state authorities. The judiciary has consistently played a crucial role in interpreting these provisions, ensuring adherence to statutory mandates, and balancing developmental needs with environmental sustainability and public interest. The ongoing dialogue between legislative intent, administrative action, and judicial review continues to refine the application of the UPMMC Rules, 1963, striving for a more efficient, equitable, and environmentally sound management of minor mineral resources in Uttar Pradesh.

References

  1. U.P (Madhya) Ganna Beej Evam Vikas Nigam Ltd. And Others v. Prem Chandra Gupta And Others (1999 SCC L&S 623, Supreme Court Of India, 1998)
  2. State Of U.P v. Sarjoo Devi And Others (1977 SCC 4 2, Supreme Court Of India, 1977)
  3. Doiwala Sehkari Shram Samvida Samiti Ltd. v. State Of Uttaranchal And Others (Supreme Court Of India, 2006)
  4. M/S. J.K Construction Engineers And Contractor & Ors. v. Union Of India & Ors. (Allahabad High Court, 2006)
  5. Yashwant Stone Works v. State Of Uttar Pradesh And Others (Allahabad High Court, 1987)
  6. Gulab Chandra Mishra v. State Of U.P. (Allahabad High Court, 2017)
  7. Rakesh Kumar v. State Of Uttarakhand (Uttarakhand High Court, 2011)
  8. Maiyadeen v. State Of U.P And Another (Allahabad High Court, 1996)
  9. M/S Nishant Traders v. State Of U.P. And 2 Others (Allahabad High Court, 2021)
  10. Munni Lal v. State Of U.P Through Secretary Geology And Mining, Civil Secretariat, U.P, Lucknow And Others (Allahabad High Court, 2014)
  11. Bhagwan Dass v. State Of U.P And Others (1976 SCC 3 784, Supreme Court Of India, 1976)
  12. A-One Granites v. State Of U.P And Others (2001 SCC 3 537, Supreme Court Of India, 2001)
  13. Doiwala Sehkari Shram Samvida Samiti Ltd. v. State Of Uttaranchal And Others (2007 SCC 11 641, Supreme Court Of India, 2006)
  14. Sanjay Singh Petitioner v. State Of U.P. & 2 Others S (2015 SCC ONLINE ALL 3131, Allahabad High Court, 2015)
  15. Sunil Kumar Mishra v. Union Of India (2018 ALLLJ 2 298, Allahabad High Court, 2017)
  16. Anvar Ali v. State Of U.P. And 4 Others (Allahabad High Court, 2022)
  17. Om Prakash v. State of U.P. (Allahabad High Court, 2015)
  18. Suneel Kumar Dubey And Another v. State of U.P. and Another (Allahabad High Court, 2022)
  19. Sunrise Stone Crusher Pvt. Ltd . v. State Of U.P. And Others (Allahabad High Court, 2019)
  20. Shiv Pujan Sahani v. State Of U.P& Ors. (Allahabad High Court, 2009)