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Issues: (i) whether premature termination of mining leases under Section 4A of the Mines and Minerals (Regulation and Development) Act, 1957 required effective consultation between the Central Government and the State Government, formation of the requisite opinion, and a prior hearing to the affected lessees; (ii) whether leases in respect of minor minerals were capable of premature termination under Section 4A in appropriate cases.
Issue (i): whether premature termination of mining leases under Section 4A of the Mines and Minerals (Regulation and Development) Act, 1957 required effective consultation between the Central Government and the State Government, formation of the requisite opinion, and a prior hearing to the affected lessees.
Analysis: Section 4A does not itself terminate any lease. It operates only when the competent Government, after consultation, forms the opinion that premature termination is expedient in the interest of regulation of mines and mineral development. The power is not mechanical or automatic merely because a Government company is ready to undertake mining operations. Since termination of an existing lease entails civil consequences, the affected lessees must be afforded an opportunity to show cause before a final decision is taken, unless the statute clearly excludes such hearing. On the facts, the consultation was not effective and no opportunity of hearing was given before the impugned termination.
Conclusion: premature termination under Section 4A required effective consultation, a formed opinion on the statutory criterion, and prior notice and hearing to the lessees; the impugned termination was therefore invalid.
Issue (ii): whether leases in respect of minor minerals were capable of premature termination under Section 4A in appropriate cases.
Analysis: Although Section 4A(1) relates to major minerals and Section 4A(2) separately deals with minor minerals, the scheme of the provision shows that premature termination of minor mineral leases is also contemplated in appropriate cases. Section 14 does not exclude the operation of Section 4A(2) altogether.
Conclusion: leases in respect of minor minerals can also be prematurely terminated in appropriate cases under Section 4A.
Final Conclusion: the appeals failed because the termination orders were passed without the statutory foundation and without compliance with natural justice, though the power under Section 4A extends to minor mineral leases in appropriate cases.
Ratio Decidendi: a statutory power authorising premature termination of an existing mining lease must be exercised only after the required inter-governmental consultation and formation of the statutory opinion, and where the action visits civil consequences the affected lessee must ordinarily be heard unless expressly excluded.
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