Case: M/S Muneer Enterprises Mine Owners By Partner Vs. M/S Ramgad Min.&amp; Mining P.Ltd.&amp; Ors

5. Having regard to the chequered history of this case, the detailed facts pertaining to the grant of mining lease with reference to M.L.No.2010 over an extent of 331.50 hectares (819.20 acres) of forest area in Jaisinghpur village, R.M.Block, Sandur Taluk, Bellary District has to be necessarily stated. The said mining lease was originally granted in favour of M/s. Dalmia on 25.11.1953. The said lease expired on 24.11.1983. Based on the application of M/s.Dalmia Cements, the mining lease was renewed for 20 years with retrospective effect from 25.11.1983 by an order dated 07.03.1986. It is required to be noted that though Forest (Conservation) Act, 1980, hereinafter calledcame into force w.e.f. from 25.10.1980, the requirement of prior approval of the Central Government as prescribed in Section 2 of the said Act was not taken at the time of first renewal.6. Be that as it may, the effect of non-compliance of approval under Section 2 of the Forest Act, 1980 was the subject matter of consideration of this Court in the decision reported in T.N. Godavarman Thirumulkpad v. Union of India & Ors.- (1997) 2 SCC 267 (Godavarman I). By virtue of the said judgment, the Director of Mines and Geology, the third respondent herein directed M/s.Dalmia to stop all mining activities by its order dated 25.01.1997. M/s.Dalmia stopped its mining activities from January 1997. Based on the subsequent judgment of this Court in T.N. Godavarman Thirumulkpad v. Union of India & Ors. - (1997) 3 SCC 312 (Godavarman II), the Ministry of Environment and Forest (MOEF) granted conditional in-principle (Stage-I) approval for renewal of M/s.mining lease over 201.50 hectares of forest land out of 331.50 hectares by an order dated 24.12.1997.7. By its letter dated 16.04.1999, M/s. Dalmia surrendered 196.58 hectares of land out of the leased area of 331.50 hectares to the Forest Department of the State Government. Subsequently, M/s. Dalmia in its letter dated 27.03.2001, expressed its desire to surrender the remaining area held by it indicating that such notice being given for determination of the lease as required under the terms of the mining lease deed and that the lease would expire after 12 months notice period from 01.04.2001 or any time earlier if permitted by the State Government. In response toletter dated 27.03.2001 by letter dated 25.05.2001, the office of the Director of Mines while communicating to one of its officers marked a copy of its letter dated 25.05.2001 calling upon M/s.Dalmia to surrender its lease deed book and mining plan. By letter dated 16.06.2001 M/s.Dalmia surrendered the lease deed book and informed that its mining plan was missing.8. Subsequently, one M.S.P.L. Limited, through its Executive Director Mr. Rahul Baldota applied for grant of mining lease of the area held by M/s.Dalmia through its application dated 21.07.2001. It is necessary to be noted that the said Rahul Baldota is the husband of Mrs. Lavine R. Baldota the Executive Director of the first respondent herein. In the application of M/s M.S.P.L. limited dated 21.07.2001 it was noted by the Director of Mines and Geology, namely, one Dr.Reddy on 25.08.2001, stating among other things that grant of mining lease of surrendered lands can only be considered as specified in Rule 59(1) of the Mineral Concession Rules.9. Pursuant to such steps taken by M/s.Dalmia in its letter dated 27.03.2001, the suit bearing O.S.No.53 of 1993 filed against the appellant herein relating to boundary dispute of the mines held by it was dismissed for non-prosecution on 26.09.2001. By letter dated 09.01.2002, the Director of Mines and Geology directed its Deputy Director, Hospet to survey and demark the area covered by lease deed of the appellant specifically pointing out the dismissal of O.S.No.53 of 1993 by M/s.Dalmia.10. On 30.01.2002, M/s.Dalmia made a payment of Rs.22,332/- stated to be the arrears in respect of mining lease held by it in M.L.No.2010. On 31.01.2002, the Director of Mines and Geology issued a no due certificate to M/s.Dalmia confirming the receipt of a sum of Rs.22,332/- by way of Demand Draft from M/s.Dalmia. However on 04.02.2002, M/s.Dalmia applied to the State Government for permission to transfer its mining lease M.L.No.2010 of 2010 including the 196.58 hectares said to have been surrendered by it in 1999 to the first respondent herein. On 06.02.2002 the Director of Mines and Geology viz. Dr.Reddy who in his earlier communication dated 25.08.2001 to M/s.M.S.P.L. Limited informed that Rule 59(1) of Mineral Concession Rules would apply for grant of licence in M.L.No.1020, this time recommended for the transfer of licence from M/s.Dalmia to the first respondent herein. On 16.03.2002, the State Government passed orders allowing the application for transfer of mining lease as applied for by M/s Dalmia in favour of the first respondent.11. It was in the above stated background at the instance of the appellant, the order dated 16.03.2002, of the State Government was challenged in W.P.No.31690 of 2003 in the High Court of Karnataka. The learned Single Judge of the Karnataka High Court allowed the said writ petition, by order dated 10.11.2004. Challenging the same, the first respondent preferred writ appeal in W.A.No.5377 of 2004. By the order impugned in this petition, the Division Bench having set aside the order of the learned Single Judge and restored the order of transfer dated 16.03.2002, the appellant has come forward with this appeal.12. When the writ appeal was pending, based on the oral application of the first respondent herein, the Division Bench directed the State Government and the Director of Mines and Geology to process its application for transfer of the renewal of the lease in favour of the first respondent under the Forest Act, 1980 within two months and forward its report to the Central Government with a further direction to the Central Government to decide the same within three months. The appellant challenged the said order dated 19.04.2006 in S.L.P.No.11508 of 2006. By an order dated 26.10.2007, this Court directed the Division Bench of Karnataka High Court to dispose of Writ Appeal No.5377 of 2004 and that the order of the Central Government dated 13.09.2006 granting its inprinciple (Stage I) ex post facto approval granted in favour of the first respondent would not create right/equity in favour of the first respondent. By the impugned order dated 26.08.2009, the Division Bench held that renewal of mining lease without obtaining prior approval under Section 2 of the Forest Act, 1980 would not render such renewal void ab initio and any such illegality can be cured or regularized by the Central Government by passing an order under Section 2 of the Forest Act, 1980 ex post facto.13. When this Special Leave Petition was entertained, by an order dated 16.12.2009, it was directed that processing of Stage II clearance be continued with a further direction to maintain status quo as regards the mining activities. By order dated 09.09.2010, Stage II clearance has also been granted in favour of the first respondent and by subsequent order dated 23.09.2010, this Court has directed that the status quo should remain operative pending the Special Leave Petition.

Reasoning: 49. In order to consider the first question as to whether M/s. Dalmia surrendered the mining lease M.L. No.2010 and whether such surrender has become final and conclusive, we have to recapitulate certain basic facts relating to the said lease. The said lease M.L. No.2010 was granted on 25.11.1953 for 30 years and the extent of land was 331.50 hectares covering 819.20 acres of forest land in Jaisinghpur village R.N. Block, Sandur Taluk, Bellary District. The said initial lease period expired on 24.11.1983 and by order dated 07.03.1986 the lease was renewed for another 20 years retrospectively from 25.11.1983, which was to expire by 24.11.2003. The relevant fact to be noted is that by the time the lease expired on 24.11.1983, the Forest Act 1980 had come into force and under Section 2 of the Forest Act in order to carry on any further mining activity in the entirety of the 331.50 hectares of land covered by M.L.No. 2010, the prior approval of the Central Government was necessary and required. It is not in dispute that when the mining lease was renewed by order dated 07.03.1986 by the Department of Mines of the State Government, Section 2 of the Forest Act of 1980 was not complied with. It remained unnoticed till the issue came to be considered by this Court in the judgment concerned in Godavarman-I. By virtue of the direction issued by this Court all the mines, which did not comply with the requirement of Section 2 of the Forest Act were directed to stop all their mining activities. Consequently by order dated 25.01.1997 the second respondent herein namely Director of Mines and Geology called upon M/s. Dalmia to stop all mining activities pertaining to M.L. No.2010 and the mining activities were stopped by M/s. Dalmia. Thereafter, by the Godavarman-II judgment, which is reported in (1997) 3 SCC 312 , the MOEF was directed to consider those applications for ex post facto approval. Pursuant to the said direction of this Court, by order dated 24.12.1997, MOEF granted conditional in-principle stage-I approval for the renewal of M/s.mining lease for an extent of 201.50 hectares of forest land. The said stage-I approval was subject to fulfillment of specific conditions within six months from the date of the order. It was also specifically mentioned that only after receipt of compliance report of the conditions stipulated in the stage-I approval, consideration for grant of final approval under Section 2 of the Forest Conservation Act would be made and issued. After the receipt of the order dated 24.12.1997 M/s. Dalmia surrendered 196.58 hectares of land out of 331.50 hectares to the forest department of the State Government through their letter dated 16.04.1999. By virtue of the said surrender made by M/s. Dalmia out of 331.50 hectares the M/s. Dalmia can be said to have retained only 134.92 hectares for its mining operations. Be that as it may, on 27.03.2001 M/s. Dalmia wrote to the Directors of Mines and Geology expressing its decision to determine the lease and surrender the remaining area and gave notice as required under the terms of the mining lease deed for determination of the lease. In the said letter M/s. Dalmia mentioned that such determination of lease would take effect upon expiry of 12 months notice period from 01.04.2001 or earlier if permitted by the State Government.The said stand of M/s. Dalmia which was the third respondent in that writ petition also disclosed that M/s. Dalmia categorically made it clear that it was not operating the mines covered by M.L.No. 2010. After the letter of M/s. Dalmia dated 27.03.2001 expressing its decision to surrender the lease and determine the same, the Director of Mines sent its communication dated 25.05.2001 pursuant to which M/s. Dalmia surrendered the lease deed book of M.L.No. 2010 along with its letter dated 16.06.2001. Thereafter, an application came to be filed at the instance of a company called ‘M.S.P.L.through its Executive Directed Mr. Rahul Baldota on 21.07.2001 for the grant of mining lease which was held by M/s. Dalmia and shown as government land in itsout of the remaining 201.50 hectares, according to M/s. Dalmia, 110 hectare was broken up for mining, 5.75 hectare was used for roads, dams, stores, office etc., 19.17 hectares was broken up but unusable virgin area used for roads and that it was non ore-bearing area and the remaining virgin area which was not yet broken and which was being surrendered was 66.58 hectares. It is also further stated therein that the management decided to surrender even the virgin area of 66.58 hectares and ultimately wanted to retain only 134.92 hectares.56. In fact this letter, dated 16.04.1999 apparently appeared to have been sent in response to the in-principle stage-I approval granted by the Government of India in its letter dated 24.12.1997 wherein certain conditions were imposed. While responding to the said order, M/s. Dalmia in its letter dated 16.04.1999 mentioned that as far as conditions (i) and (ii) of the Government of India dated 24.12.1997, no action need be taken since it decided to surrender nearly 196.58 hectares and what was to be retained was only 134.92 hectares. As regards condition No.(iii), namely, the cost of penal compensatory aforestation charges was concerned, while referring to the demand, twice the area of 201.50 hectares i.e. 403 hectares @ Rs.40,700/- per hectare, M/s. Dalmia pointed out that there cannot be a demand by Government of India to that extent and at best the demand can only be raised in respect of the broken up area of 134.92 hectares. It was further contended that since M/s. Dalmia was carrying mining operations even in that 134.92 hectares with the permission of the State Government Authorities from time to time, no penal compensatory aforestation charges can be claimed over that area.A cumulative consideration of the letter dated 16.4.1999 along with the ex post facto approval order dated 24.12.1997 and the letter dated 27.3.2001 of M/s. Dalmia, it transpires that as on 27.3.2001 M/s. Dalmia was in possession of only 134.92 hectares of the total area of 331.50 hectares covered by mining lease No.2010. As noted by us in the letter dated 27.3.2001, M/s. Dalmia wanted the Director of Mines and Geology to determine the lease even in respect of 134.92 hectares which was in its physical possession, either on expiry of the twelveperiod or any earlier date which the concerned authority may permit. To be more precise, M/s.Dalmia surrendered 130 hectares of land prior to 16.04.1999. Along with its letter dated 16.04.1999 surrender of 196.58 hectares was effected. The remaining 134.92 hectares was surrendered through its letter dated 27.03.2001.That apart, in the Writ Petition which was pending before the High Court of Karnataka in WP 6304 of 1998 as between the first respondent and the Director of Mines, as well as, Chief Conservator of Forest where M/s. Dalmia was also a party respondent, namely, third respondent, on its behalf its counsel represented before the High Court that M/s. Dalmia was no longer interested in the working of the mines situated in the land adjoining the writ appellant, namely, the first respondent therein and, therefore, as on that date, no boundary dispute was existing as between them. The said stand of M/s. Dalmia was the main ground which weighed with the learned Single Judge for setting aside the order dated 16.11.1997 which was impugned before it in the said Writ Petition at the instance of the first respondent. The said stand of M/s. Dalmia was clearly reflected in the order of the Learned Single Judge dated 26.6.2001.66. Apart from the above facts, after the forwarding of the letters dated 16.4.1999, 27.3.2001 and 16.6.2001 by M/s. Dalmia whereby the surrender of the lands in its entirety, as well as, the mining lease itself, third parties were aspiring to get the mining lease in respect of the surrendered lands held by M/s. Dalmia. One such application was taken out by one M/s. M.S.P.L. Ltd. through its Executive Director, Mr. Rahul Baldota. The said application was made on 21.7.2001 for grant of mining lease in its favour.A cumulative consideration of all the above sequence of events disclose that right from 1999 in fact even prior to that date, M/s. Dalmia surrendered major part of the land covered by M.L. No.2010 and that by its letter dated 27.3.2001, it expressed its decision to determine the lease of the remaining area of 134.92 hectares and wanted the Director of Mines to accept such surrender either after the expiry of twelveperiod or even earlier. By 25.5.2001, the Director of Mines in response to M/s.desire to determine the lease, directed it to surrender the lease book of M.L. No.2010 as well as the mining plan, and that M/s. Dalmia surrendered the lease book while stating that mining plan was not available with it at that point of time. Closely followed by that, when third parties applied for grant of lease, the Director of Mines stated in no uncertain terms that those lands were surrendered by M/s. Dalmia but lease cannot be granted based on applications and that Rule 59 (1) of MCR Rules will have to be followed for grant of such lease. In fact, subsequent to the above development on 26.9.2001, the suit filed by M/s. Dalmia against first respondent relating to the boundary dispute was also dismissed for non-prosecution. Yet another factor to be borne in mind is that on 30.1.2002, M/s. Dalmia paid a sum of Rs.22,332/- towards the arrears in respect of its mining lease and claimed that no further amount was due and payable in respect of M.L. No.2010. By a letter dated 31.1.2002, the office of the Deputy Director, Department of Mines and Geology issued a no dues certificate to M/s. Dalmia by acknowledging the receipt of Rs.22,332/- based on the revised audit report and that no other amount was due in respect of the said mining lease.69. If we consider the above material evidence placed before us, it can be stated that as on 27.3.2001 M/s. Dalmia tacitly decided to surrender its mining lease M.L. No.2010 and that in pursuance of the said decision, it informed the Director of Mines and Geology to determine the lease either on expiry of twelve months or on any day earlier to that and in response to the said desire expressed by M/s. Dalmia, the Director of Mines and Geology also responded by directing M/s. Dalmia to surrender the lease book as well as the mining plan and then subsequently also collected whatever arrears which were due and payable by M/s. Dalmia as on 31.01.2002. It must, therefore, be held that in effect the leasehold rights of M/s. Dalmia had come to an end by 31.1.2002.70. Keeping the said factual scenario in mind, when we consider the contentions made on behalf of the respective parties according to the appellants, M/s. Dalmia had surrendered the entirety of the lands held by it under M.L.No. 2010 which surrender had come into effect pursuant to its letter dated 27.03.2001 accepted and acknowledged by the Department of Mines and Geology in their letter dated 31.01.2002. We have also noted the various factual aspects of the development that had taken place in regard to the said surrender of M/s. Dalmia and noted that a conscious decision was taken by M/s. Dalmia to surrender its mining lease in M.L.No. 2010 and factual surrender was also effected in writing to the Director of Mines and Geology and that the Office of Director of Mines and Geology also acknowledged such surrender. However, not to accept the plea of surrender as projected, on behalf of the appellants Mr. K.K.Venugopal and Mr.Krishnan Venugopal relied upon various statutory prescriptions and contended that in reality if the case of surrender pleaded by the appellants is to be accepted, the compliance of such statutory requirements have to be fulfilled.As against the above submissions, on behalf of the appellant Mr. Kapil Sibal, learned senior counsel contended that there was no lacunae in accepting the surrender offered by M/s. Dalmia, that such surrender had really taken place by virtue of the conduct of the parties, namely, M/s. Dalmia as well as the Department of Mines and Geology of the State Government and, therefore, it was too late in the day for the first respondent to contend that the surrender made by M/s. Dalmia had not taken place.75. Having considered the respective submissions on this question, there can be no two opinions that when the grant, operation and termination of mining lease is governed by the MMDR Act and the Mineral Concession Rules, anyone of those factors viz., either grant of lease, operation of the mines based on such grant and the termination of it either by way of surrender at the instance of the lessee or by way of termination at the instance of the State should be carried out strictly in accordance with the prescribed stipulations of the provisions of the above Act and the Rules.When we examine the contention made on behalf of the first respondent about the statutory requirement to be satisfied under Rule 29 read along with para 4 and 5 of Part VIII of the lease deed, it is clear that on behalf of the lessor, namely, the State Government, the signatory to the lease deed was the Director of Mines and Geology. Therefore, there can be no controversy as to who can validly represent the State Government with reference to the grant of lease, operation of it as well as its determination who is none other than the Director of Mines and Geology. When the Director of Mines and Geology was authorized to sign the lease deed on behalf of the Governor of the State of Karnataka, it must be taken to mean that he was the authority who was validly authorized by the State Government as stipulated in Rule 29(1) of the Rules for the purpose of the lessee to inform about its decision to determine the lease while giving 12notice. It must be stated that the very fact that the Director of Mines and Geology was authorized to sign the lease deed on behalf of the Governor of State of Karnataka, it was quite explicit that he was the only authority who was competent to authenticate the grant of the lease as well as for its determination. Unless there was any other Authority prescribed to carryout the said task as a statutory requirement.79. Once we steer clear of the said position as to who is the competent authority for the purpose of operating Rule 29(1), any amount of reliance placed upon the Notification No.CI3MMM95, Bangalore dated 27.05.1995 issued by the Commerce and Industries Department of the State of Karnataka will be of no avail. The said notification was relied upon to contend that while specific direction was issued to the effect that the powers exercisable by the State Government in relation to matters with reference to various provisions as conferred by sub-section (2) of Section 26 of the MMDR Act vested with the Director of Mines and Geology, Government of Karnataka, there was no reference to the powers exercisable by the State under Rule 29. When the State of Karnataka had authorized the Director of Mines and Geology to sign the very mining lease deed itself on behalf of the Governor of State as disclosed in the Xerox copy of the mining lease M.L.No. 2010, it is futile on the part of the first respondent to contend that for the purpose of determination of that very lease, a different Authority should be preferred. In fact, M/s. Dalmia itself having understood the prescribed Authority, sent its letter of determination of the lease dated 27.03.2001 only to the Director of Mines and Geology. The said Authority also responded to the letter of determination in its letter dated 25.05.2001 addressed to its subordinate officer marking a copy to M/s.Dalmia. Therefore, the said contention raised on behalf of the first respondent that the surrender of the lease not having been forwarded to the authorized officer of the State Government by M/s. Dalmia, the so-called letter of surrender dated 16.04.1999 and 27.03.2001 cannot be validly construed as the act of M/s. Dalmia to determine the lease is to be stated only to be rejected. We are afraid that it is too late in the day for the first respondent to come forward with such a contention when M/s. Dalmia having entered into lease deed with the State of Karnataka duly represented by the Director of Mines and Geology exercised its right to determine the lease by addressing its communication on 27.03.2001 to the very same Authority. It must be stated that such a decision taken and communicated by M/s. Dalmia to the Director of Mines and Geology was valid in law and was in consonance with the prescription contained in sub-Rule (1) of Rulethe first place, even according to M/s. Dalmia in their letter dated 27.3.2001 M/s. Dalmia themselves while giving 12 months notice as required under para 4 of Part VIII of the mining lease deed also stated that it may be determined on any earlier date i.e. prior to 1.4.2001 if the Director of Mines and Geology so permit. When such a categorical stand was made on behalf of M/s. Dalmia, acting upon it, the office of Director of Mines and Geology in their letter dated 25.5.2001 addressed to the Senior Geologist while marking its copy to M/s. Dalmia directed it to surrender the lease deed book along with the mining plan immediately to enable its office to take further action. In fact, in the body of the letter addressed to Senior Geologist, the Director of Mines and Geology specifically mentioned that M/s. Dalmia wanted to surrender the lease M.L. No.2010 earlier than 12 months period. Apart from such specific instructions issued, M/s. Dalmia themselves in their reply dated 16.6.2001 to the Director of Mines and Geology surrendered the lease deed book of M.L. No.2010 and as regards the mining plan it stated that the same was not available with it. Thereafter, as was noticed earlier, on 30.1.2002, M/s. Dalmia paid a sum of Rs.22,332/- towards arrears in respect of the mining lease which was also acknowledged by the Director of Mines and Geology which was duly communicated to M/s. Dalmia by stating that by issuing such no due certificate, no further amount was due and payable in respect of said mining lease.The contention that only on expiry of the twelve months period, the surrender will come into effect does not stand to reason also. In fact, we do not see any sound basis in making such a contention on behalf of the first respondent. On the other hand, para 5 of the lease deed itself gives ample right to the lessor, namely the Director of Mines and Geology to refund the security deposit, if any, to make the determination of lease within the 12 months period of notice. The said clause provides clear indication for such earlier acceptance of the determination of the lease. We have noted extensively that long prior to 16.04.1999 as well as from 16.4.1999 onwards till M/s. Dalmia by its communication dated 27.3.2001 positively expressed its decision to determine the lease, M/s. Dalmia themselves were only referring to the mining operations to the extent of 130.4 hectares which remained with them as on 27.03.2001. Even in respect of the said extent of lands by virtue of the general directions issued by this Court in Godavarman I no mining operation was being carried on from January 1997. Subsequently, based on Godavarman II order of this Court, when the Ministry of Environment and Forest was directed to consider issuance of ex post facto approval, one such order was issued in favour of M/s. Dalmia on 24.12.1997 by way of in principle stage-I approval by imposing three conditions. Even as on 16.4.1999, M/s. Dalmia in writing categorically stated and took the stand that it need not comply with the conditions imposed in the order dated 24.12.1997. In effect M/s. Dalmia was not operating its right of carrying out any mining activity in respect of the entirety of 334.40 hectares after the first renewal effected in the year 1983. Ultimately, in its letter dated 27.03.2001, it made explicitly clear that it was not operating the mines and, therefore, it wanted to surrender either after expiry of twelve months period from the date of issuance of such notice or any day earlier that may be acceptable to the State Government.83. In the light of such a clear stand disclosed by M/s. Dalmia, we fail to understand as to for what reason the State Government should wait for the expiry of the twelve months period for the surrender to come into effect. On the other hand, the decision made by the Director of Mines and Geology in its communication dated 25.5.2001 addressed to the Senior Geologist with a copy marked to M/s. Dalmia to determine the lease earlier and for that purpose directed M/s. Dalmia to surrender mining lease book, namely, M.L. No.2010 along with the mining plan was a pointer to the effect that the surrender was decided to be accepted on behalf of the State Government instantaneously which was also not prohibited either under the Rules or under the terms of the lease deed or under any other statutory provision.The said well settled principle of law set down by this Court will have universal application. When such principle is applied to the case on hand, as rightly pointed out by Mr.Sibal, learned senior counsel when the State of Karnataka chose to accept the surrender made by M/s. Dalmia in its letter dated 27.03.2001, immediately thereafter by directing M/s. Dalmia to surrender the lease book of M.L.2010 along with mining plan such action of the State Government for the purpose of ensuring the effective surrender offered by M/s.Dalmia having been made in the general public interest, as the leasehold rights of the mining activities would be in the lands belonging to the State and that too Forest Lands, such action taken in accepting the surrender by waiving the 12 months period should be taken as having come into effect. We find force in the said submission of the learned senior counsel for the appellant.Therefore, if such a different connotation is followed for the expressionand when we apply the said principle to the case on hand with particular reference to Rule 37(1A) we have explained in detail as to how the voidness of the leasehold right would result in by virtue of the serious violations committed by M/s. Dalmia while dealing with the mining lease in M.L.No.2010 while carrying out the first renewal in the year 1983 when the violation of Section 2 of the Forest Act, 1980 occurred and subsequently when Stage I ex post facto approval was granted on 24.12.1997 by imposing conditions which were flagrantly violated by M/s. Dalmia and thereby made the lease void ab initio.Our above conclusion as regards the surrender effected by M/s. Dalmia answers question Nos.(i) to (iii) framed in paragraph 48. With that we come to the next question as to whether the act of surrender in order to become complete should have been accepted by the State. It must be stated that acceptance by the State though not a statutory requirement, the provisions contained in the mining lease, in particular, Part VIII paragraphs 4 and 5 impliedly require such acceptance. While answering question Nos.(i) to (iii), we have elaborately noted as to the manner in which M/s.proposal to determine the lease as initiated in its communication dated 27.3.2001 ultimately resulted in the surrender of the lease by acknowledging the sum of Rs.22,332/- towards final dues payable by it under the said lease. We have also held that the Director of Mines and Geology was the competent authority to receive a proposal for determination of lease by M/s. Dalmia. The subsequent correspondence exchanged between M/s. Dalmia and the Director of Mines and Geology also confirm that the proposal of M/s. Dalmia was considered and subsequent directions were issued for the purpose of accepting the surrender proposed and ultimately by acknowledging the payment of arrears and issuance of no due certificate the surrender was finally accepted on behalf of the State Government by the Director of Mines and Geology. Therefore, while holding that acceptance of surrender is impliedly mandated under Rule 29 read along with paragraphs 4 and 5 of Part VIII of the mining lease, there was a factual acceptance on behalf of the State of Karnataka of the mining lease M.L. No.2010.Under Rule 27, it is stated that every mining lease shall be subject to certain conditions. Sub-Rule (2) states that a mining lease may contain such other conditions as the State Government may deem necessary in regard to conditions (a) to (o). Under the said sub-Rule (2) in clause (l), it is provided that delivery of possession of lands and mines on the surrender, expiration or determination of lease. What is required under Rule (2) of Rule 27 was that a mining lease may contain many conditions including what is specified in Clause (l). The reference to Rule 27 (2)(l) was relied upon by learned counsel for the State. Except merely drawing our attention to the said sub-clause (l) of Rule 27 (2), we were not drawn to any of the clause contained in the mining lease in M.L. No.2010 to state that such a condition was specifically incorporated in the mining lease. It is not even the case of the first respondent or the respondent State that such a condition for physical possession of the lands on surrender was specified in the mining lease.100. In such circumstances, we do not find any need or necessity to delve deep into the said contention in order to find out whether or not such a condition should have been fulfilled by M/s. Dalmia or by the State Government for the purpose of surrender to come into effect. We, therefore, hold that insofar M.L. No.2010 was concerned, there being no specific provision as specified in Clause (l) of Rule 27 (2) there was no mandatory requirement of delivery of possession as stipulated therein.101. When we come to question Nos.(vi), (vii), (viii), (ix) and (x) the said questions would arise if at all the surrender had not taken place and thereby assuming the lease continued for non-compliance of the conditions imposed in the in principle stage-I approval in the order dated 24.12.1997, did the mining lease stood automatically expired on 24.11.2003. Question No.(vii) again pertains to the lease becoming void ab initio by virtue of contravention of Rules 29 and 37 of Mining Concession Rules read with Section 19 of the MMDR Act. The next question pertains to the prior approval for any mining lease to come into operation as stipulated in Section 2 of the Forest Act of 1980. In fact, the said question was required to be considered in the light of the contention raised on behalf of the appellants that ex post facto approval is not provided for under the Forest Act of 1980 and that such a course was adopted only by this Court in Godavarman I and II as a one time measure. Whereas on behalf of the first respondent, it was contended that there was a clear distinction as regards the grant of mining lease on the one hand under the provisions of MMDR Act and the Mining Concession Rules and the requirement of approval under Section 2 of the Forest Act 1980 and the one does not overlap the other. In the first instance, in support of the said stand made on behalf of the first respondent, reliance was placed upon amended Forest Conservation Rules, in particular Rules 6, 7 and 8 and state that non-compliance of Section 2 of the Forest Act will not ipso facto make the lease void ab initio. The consideration of the said questions would become relevant for the purpose of considering the subsequent claim of M/s. Dalmia as well as the first respondent that mining lease M.L. No.2010 stood transferred by M/s. Dalmia in favour of the first respondent pursuant to the application of transfer dated 4.2.2002 made by M/s. Dalmia and the order dated 16.3.2002 of the State Government by which such a transfer of lease of M.L. No. 2010 was granted in favour of the first respondent.102. When we consider question Nos.(vi), (vii), (viii), (ix) and (x) as far as question No.(vi) is concerned, we have found that when during the operation of the first renewal viz., between 25.11.1983 and 24.11.2003, there was a statutory violation in as much as the mandatory requirement of approval under Section 2 of the Forest Act, 1980 was not secured on the date when the first renewal was granted viz., 07.06.1986. However, fortunately for M/s.Dalmia, Godavarman I and Godavarman II judgments of this Court came for its rescue by way of a general direction while all mining operations were directed to be stopped in Godavarman I, subsequently in Godavarman II direction was issued to the Central Government to consider ex post facto approval under Section 2 of the Act as a one time measure. Pursuant to the said direction, in the case of M/s.Dalmia, an order came to be passed on 24.12.1997, granting in-principle first stage approval by imposing three conditions. The said order further directed that while granting in principle first stage approval, to enable M/s.Dalmia to carry on its mining operations, the requirement of fulfillment of three conditions were mandated to be complied within a period of five years from the date of the said order i.e. on or before 24.12.2002. Admittedly, M/s.Dalmia did not comply with those conditions. The stand of M/s.Dalmia was that as on that date it was in possession of only 134.92 hectares and that even in respect of those areas since it was carrying on mining operations with the permission of the Forest Department of the State Government, no further compliance was required.103. As far as the surrender of land and afforestation compensation was concerned, M/s. Dalmia took a categorical stand that it was not liable to comply with those directions. Therefore, the outcome of such a stand taken on by M/s.Dalmia was to the effect that in-principle stage I approval granted by MOEF was not carried out. Of course, Mr.Krishnan Venugopal, learned senior counsel in his submissions contended that having regard to the subsequent amendment of the Forest (Conservation) Rules in particular Rules 6, 7 and 8 and also a communication of the MOEF dated 14.9.2001, the non-compliance of the conditions will not have any impact on the validity of the lease as the amended Rules and the communication of the MOEF made it clear that the compliance of such conditions imposed can always be carried out even after the expiry of the initial period of five years and the MOEF came forward to give extension of time for compliance of whatever conditions which were imposed at the time of grant of the first renewal to enable the lessee to continue to retain its mining lease and thereby seek for further renewal.104. It is true that a reference to the amended Rules 6, 7 and 8 as well as the earlier communication of MOEF did to some extent support the stand of the learned senior counsel for the first respondent. However, persuasive such a contention may be as raised on behalf of the first respondent, we find it extremely difficult to accept such a contention. As rightly pointed out by Mr.Kapil Sibal, learned senior counsel when we construe Rules 29 and 37(1A) read along with Section 19 of the MMDR Act, de hors any liberal approach offered by the authorities of MOEF under the provisions of the Forest Act, such relaxation in the matter of compliance of conditions of prior approval would always be subject to the mining lease granted under the provisions of MMDR Act and the Mineral Concession Rules is in a live stage. In other words, unless the mining lease granted under the provisions of the MMDR Act read along with the provisions contained in the Mineral Concession Rules continue to remain valid and operative, the question of compliance of the conditions for prior approval under Section 2 of the Forest Act even with whatever relaxation granted by the authorities under the said Act will be of no use.Keeping the above said mandatory prescription in Section 19 in mind, when we analysis the case on hand, in the first place, admittedly after the first renewal, there was a serious violation of failure to get the prior approval under Section 2 of the Forest Act, 1980 i.e. when the renewal order was passed on 07.03.1986. Therefore, if we strictly apply Section 19, it must be stated that even as on 07.03.1986, for violation of Section 2 of the Forest Act, 1980 it must be stated that, in law, there was no mining lease at all in existence as it became void on the expiry of the initial period of the original lease granted in 1953. It may be contended that such violation get cured by virtue of the judgments in Godavarman I and Godavarman II, though for argument sake, such a contention put forth on behalf of M/s.Dalmia and the first respondent can be taken to be available, as pointed out by us earlier, based on the said judgments of this Court when the in-principle first stage approval was granted by imposing conditions in the order dated 24.12.1997, such conditions were blatantly violated by M/s.Dalmia by taking a stand that it was not bound to comply with those conditions. The reply of M/s.Dalmia dated 16.04.1999, was sufficient to confirm the said stand of M/s.Dalmia. Therefore, as on 16.04.1999, since the lessee viz., M/s.Dalmia refused to comply with the conditions imposed in the in-principle first stage approval, it cannot lie in the mouth of either M/s.Dalmia or anyone who seek to claim any right through M/s.Dalmia by contending that any violation of Section 19 of MMDR Act or any of the Rules of Mineral (Concession) Rules or orders made therein or Section 2 of the Forest Act of 1980 should be ignored and the plea made on behalf of M/s.Dalmia as well as the first respondent should be accepted.107. We are unable to accept such an extreme proposition canvassed on behalf of M/s.Dalmia and the first respondent, as in our considered opinion, the violation had occurred at the time of the order of first renewal viz., 07.03.1986 itself, striking at the very root of the validity of the lease, as it must be held that it was void at that very stage itself for non-compliance of the prior approval under Section 2 of the Forest Act, 1980 and in any case, on the blatant refusal to comply with the conditions imposed in the in-principle first stage approval granted in the year 24.12.1997. Once we are able to come to the said conclusion, we hold that the mining lease which was held by M/s.Dalmia in M.L.No.2010 became void and inoperative for violation of the mandatory requirements of the conditions.In the first blush it may appear that what all required is the acceptance by the transferee to comply with all the conditions and liabilities which the transferor was obliged to fulfill in respect of the mining lease. But on a deeper scrutiny of the said Rule, it will have to be stated that if there was a total violation of mandatory statutory conditions under the MMDR Act and by virtue of the requirements in this case of the fulfillment of Section 2 of the Forest Act, 1980 as well as the proviso to Section 5 of the MMDR Act, the question of considering the very application for consent to transfer should be held to be not available at all. As we have held in the earlier part of this order that M/s.Dalmia committed serious violation in regard to the compliance of Section 2 of the Forest Act, 1980 at the time of first renewal in the year 1983/86 itself and in any event, by refusing to comply with the conditions imposed in the order dated 24.12.1997, the said violation would strike at the very root of the claim for transfer of the dead lease as stipulated in Section 19 of the MMDR Act. Therefore, on this ground as well, it must be held that there was no scope at all for the State Government to consider the application made by M/s.Dalmia for transferring of its mining lease in favour of the first respondent. When we go little further and examine Rule 29, as we have held that M/s.Dalmia had surrendered its mining lease M.L.No.2010 once and for all, based on its proposal made on 27.03.2001 and accepted by the Director of Mines and Geology on behalf of the State Government which became conclusive as on 31.01.2002, there was no live lease for the purpose of considering any application for transfer under Rule 37 of the Mineral (Concession) Rules. When that be the legal consequence in respect of the lease, which was void and inoperative, it must be held that there was no scope for holding that there was a valid transfer made by M/s.Dalmia in favour of the first respondent on 16.03.2002.As far as the question Nos.(xiii) and (xiv) are concerned, as to whether the order of transfer dated 16.3.2002 was bona fide taking into account the sequence of events and whether the transfer of lease dated 16.3.2002 can be held to be valid, we wish to recapitulate the various sequence of events as from 16.4.1999 till 30.1.2002 pertaining to the surrender of lease made by M/s. Dalmia. Since we have extensively dealt with the said issue in the earlier part of our order, we merely state that our conclusion as regards the coming into force of the surrender made on behalf of the M/s. Dalmia and its acceptance by the State Government from 31.01.2002 would be sufficient to hold that there was total lack of bona fides on the part of the State government in taking a sudden U-turn for passing the order of transfer dated 16.3.2002 in favour of the first respondent. In this context, as rightly contended on behalf of the appellant, the conduct of the Director of Mines and Geology, one Dr. Reddy who dealt with the applications made by one M.S.P.L. Ltd. through its Executive Director Mr. Rahul Baldota on 21.7.2001 and another applicant with reference to which Dr. Reddy made an endorsement in the office note dated 25.8.2001 which stated that the land covered by M.L. No.2010 was surrendered by M/s. Dalmia, that certain other applications were also received for grant of lease in respect of those lands apart from M.S.P.L. Ltd. and that there was no scope to consider any of those applications since in respect of surrendered land Rule 59(1) of Mineral Concession Rules would automatically come into play and any future grant of lease can only be done as specified under the said Rule. When such a clear stand was spelt out by the said officer, namely, Dr. Reddy while making the endorsement on 25.8.2001, we fail to see any justifiable reason as to how the very same officer in his capacity as Director of Mines and Geology could be a signatory to its recommendation dated 6.2.2002 for effecting the transfer and based on his recommendation the State Government allowed the application for transfer of M.L. No. 2010.We are, therefore, convinced that when once M.L. No.2010 had come to an end by virtue of the surrender effected by M/s. Dalmia and accepted by the State Government, there was no legal right or power with the State Government or any authority acting on behalf of the State Government to consider the very application for transfer made at the instance of M/s. Dalmia on 4.2.2002 and for passing the order of transfer dated 16.3.2002. It can only be stated that such a decision taken and passed in the order dated 16.3.2002 was in total violation of the provisions of the MMDR Act and the Mineral Concession Rules. It will have to be stated that once surrender of M.L. No.2010 had come into effect the only other course open to the State Government was to invoke Rule 59 by throwing open those lands by way of public auction in order to get the maximum revenue by granting any lease hold rights. Here again, it must be stated that apart from the act of surrender made by M/s.Dalmia which became final and conclusive due to non-compliance of the conditions imposed in the in-principle Stage I clearance dated 24.12.1997, M/s.Dalmia lost its right to retain the lease and the consequence of it rendered the lease itself void as per Rule 37(1A) and on this ground as well, there was no scope for the State Government or any other Authority acting on its behalf to have considered the transfer application of M/s.Dalmia with reference to a lease which ceased to exist as from 31.01.2002 due to the act of surrender and in any case from 24.12.2002 when the 5 year period to comply with the conditions imposed in the order dated 24.12.1997 expired.