This document summarizes the cascading effects of maladministration and misapplication of mining regulations in India. It discusses how poor governance and oversight by the state led courts to misapply laws related to mining. This resulted in hurried changes to regulations that were not scientifically sound. The collective impact of these actions included the destruction of a predictable mining system, elimination of many existing mining operations with huge economic costs, environmental damage from destroyed mining ecosystems, concentration of mineral wealth among few groups, foreign exchange losses, and reduced employment. The document warns that rule 12(10) of mining regulations could be misused to terminate leases without properly addressing underlying arithmetic issues around compensation in a just and predictable manner.

1. CASCADING EFFECT OF MAL-ADMINISTRATION AND MIS-APPLICATION OF
MINING REGULATION IN INDIA
Rule 12(10) of MC Rules, 2016 is a new toy to swoop on concessioners.
By:
Shri Biswajit Das, Advocate, Supreme Court of India,
Managing Partner, Juris & Juris
Biswajit@jurisnjuris.con, Mobile No.-9911226607
B-4/115, Safdarjung Enclave, New Delhi-110029.
This is now an old story, “Mining boom came in a jiffy propelled through China boom, took in its
sweep the entire Mining Sector in India in one stroke”. What happened later is a story of
mayhem, a regulatory blood bath.
Keeping in view the nature of unpredictability about the science of Mining, State always coaxed
and cajoled the concessioners to undertake a legal and regulated Mining activity. Accordingly,
Laws were made to support that Mining science. But off late, different and disproportionate
parameters were cited and used to evaluate the concept of Mining, Mining administration and
regulation.
When the State mal-governed and mal-administered, public administration took shelter of the
Courts. In the absence of adequate and just information and expertise, Court instead mis-
applied the Law. While mal-governance and mal-administration did inflict damages to the
mining sector, the misapplication of the regulation by Courts did no better.
Unfortunately however a condemned administration, which was terribly lacking public trust
and faith, giving in to the Court’s misapplication by hurriedly making changes to the existing
Law, which by no means are scientific and compatible to the deserving and just mineral
regulation.
The effect of these exercises, triggered through mal-governance and mis-administration, is that
every actor in the process contributes to the following collective damage to the sector with
having unprecedented cascading effect,
a) Destruction of predictable mining regulation,
b) Weeding out of the existing mining sector causing unprecedented adverse economic
impact,
c) Destruction of the existing mining ecosystem has a huge environmental cost,
d) Concentration of mineral economic power within few,
e) Domination and control over market price by the aforesaid few,
f) Foreign exchange outlay despite owning mineral reserve as an ideal resource,
g) Huge adverse impact on employment.

2. One more kid in the block, ready to use the mining sector as its punching bag, is Rule 12(10) of
MC Rules, 2016. The State Government of Odisha is out there to wield its power once more
through Rule 12(10), this time threatening to terminate the mining lease for non-payment of
compensation amount demanded u/S 21(5) of MMDR Act, 1957. As long as the demand u/S
21(5) stands, the State Government is within its right to trigger termination of mining lease.
This power is also contained under clause 2 of the part IX of the form K (mining lease deed),
which is reiterated for the first time through Rule 12(10).
The problem is not the power of the State Govt., which in any case preexisted even before the
commencement of Rule 12(10), but it is the way our country’s regulation is being administered.
Having partnered in the mineral concession exploitation wherein the State took share therein in
the form of royalty and different nature of revenue amounting to about 40-50% in whole, State
is asking for compensation covering the aforesaid 40-50% amount which it has already
pocketed. It is now unleashing the Rule 12(10) to terminate the mining leases for non-payment
thereof.
The journey leading to this situation reminds us a spectacular failure of our ability to tackle such
a simple issue. It is only we, who are to be blamed for not being able to innovate to
demonstrate a simple arithmetic issue through legal articulation to secure a just and
predictable outcome. Sooner we learn the art of honing up our skill and avoid cribbing, better it
is for all for our very public discourse that we are so proud of is hanging in balance.
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