Mining lease transfer permission cannot be cancelled for minor irregularities or unproven control through shareholding changes.

The Rajasthan HC held that cancellation of a mining lease transfer permission could not rest on minor pre-transfer irregularities such as stamp papers purchased before incorporation, affidavits and resolution filed after the application, or delayed registration of the transfer deed, because these did not invalidate the transfer request or the permission granted. It further held that a post-transfer change in shareholding, by itself, did not prove direct or indirect financing or substantial control by another person so as to trigger the transfer prohibition under the mining rules. The impugned order was also found to lack reasons and to fall short of fair decision-making, so the cancellation was unsustainable.

---

---

Issues: Whether the order cancelling the mining lease and declaring the transfer permission void could be sustained on the alleged pre-transfer irregularities and the alleged post-transfer violation of the transfer restrictions under the mining rules.

Analysis: The cancellation was founded on alleged defects in the transfer application, including purchase of stamp papers before incorporation, filing of affidavits and resolution after the application, and delayed registration of the transfer deed. The Court held that these matters did not affect the validity of the transfer request or the permission granted, and at most amounted to inconsequential irregularities. It further held that the post-transfer change in shareholding and the company becoming a wholly owned subsidiary did not, by itself, establish that the lessee was directly or indirectly financed or substantially controlled by another person so as to attract the transfer prohibition. The impugned order was also found to be unsupported by reasons and inconsistent with the requirement of fair decision-making.

Conclusion: The cancellation of the transfer permission and mining lease was unsustainable.

---