Mine lease cancelled without mandatory 30-day notice and proportionality check: Rajasthan HC orders restoration

Jodhpur: The Rajasthan High Court has restored a mining lease that authorities cancelled without giving the mandatory 30-day termination notice. Justice Sanjeet Purohit gave this ruling on 13 April 2026, also finding that the State jumped to cancellation without first considering the lighter penalty option available under the rules.

Takhat Singh held a 50-year mining lease for quartz and feldspar in Rajsamand district, granted on 7 February 2020. In January 2022, the Mine Engineer issued a notice charging Singh with two violations: failing to install permanent boundary pillars on the lease area, and carrying out unauthorized mining. Singh filed a detailed reply, disputing both charges and submitting that the pillars were in place and all mining had been done within the leased area with valid documents.

The Mine Engineer rejected Singh’s reply in April 2022 without addressing any of his specific contentions. The order simply called the reply “unsatisfactory” and imposed a penalty of Rs. 1.53 crore with no explanation. Singh challenged this order, but while his appeal was being considered, the Additional Director (Mines) cancelled the lease outright in October 2022.

After the lease was cancelled, the State introduced an Amnesty Scheme — a programme allowing mining lessees to settle outstanding dues at reduced rates. Singh availed the scheme, paid the full revised amount, and received a “No Due Certificate” from the Mine Engineer on 29 November 2024. Despite this, the State refused to restore his lease, even though other lessees in identical situations got their leases back after making the same payment.

Senior Advocate Mr. Vikas Balia, assisted by Mr. Amit Vyas, raised four grounds before the High Court. First, Rule 28(2)(xvii)(a) of the Rajasthan Minor Mineral Concession Rules, 2017 — the law that sets out the conditions for cancelling a mining lease — requires a specific 30-day notice immediately before any termination decision. No such notice was issued. Second, the same rule gives authorities two choices when a breach occurs: cancel the lease, or impose a financial penalty. Authorities jumped to cancellation without considering the lesser option. Third, the April 2022 penalty order that triggered the cancellation was entirely unreasoned — it dismissed Singh’s detailed reply without dealing with a single contention he raised. Fourth, other lessees who paid under the Amnesty Scheme had their leases restored; denying Singh the same benefit was hostile discrimination.

The State argued that the October 2022 cancellation followed proper procedure. On the notice requirement, it submitted that the January 2022 notice had already warned Singh that the lease could be terminated if breaches were not remedied — and that this was sufficient compliance. The State also argued that Singh’s Amnesty payment came after the lease was already cancelled and so could not be a ground for restoration.

Justice Purohit held that Rule 28(2)(xvii)(a) of the MMCR 2017 prescribes a graduated, step-by-step process before a mining lease can be cancelled. The process begins with a notice asking the lessee to fix the breach. If the breach goes uncured, financial penalties apply first — forfeiture of 10% of the security deposit, then 20%. Only then may the authority move toward cancellation. And even at that final stage, a fresh 30-day notice is mandatory.

The Court was direct about what this notice must say and when it must come. It must be a specific warning, issued immediately before the termination decision, that the lessee’s last chance to fix the breach is running out. Mentioning termination as one of several possible outcomes in an early show-cause notice does not satisfy this requirement. The Court observed: “A decision of termination shall be taken only if the lessee has failed to remedy the breach after serving of a thirty days’ notice” — meaning the clock on that 30-day notice starts running at the door of termination, not months earlier. Since no such notice was issued before the October 2022 cancellation, the termination failed on this ground alone.

On proportionality, the Court found the action equally flawed. Rule 28(2)(xvii)(a) uses the phrase “or in the alternative” when listing cancellation and financial penalty as the two available responses to a breach. This language signals that cancellation is not the automatic default — it is one of two options, and the authority must actually weigh whether the lesser option would suffice. Cancelling without that consideration violates the doctrine of proportionality — the legal principle that punishment must match the offence, and that the most extreme action must be justified over milder alternatives. The Court relied on its earlier judgments in M/s Sojat Lime Company v. State of Rajasthan and M/s Neel Kanth Chemical Works v. State of Rajasthan, both of which required authorities to consider lesser penalties before cancelling a lease.

The Court also found the April 2022 penalty order — the foundation on which the cancellation rested — to be fatally flawed. Any body with the power to take decisions affecting a person’s legal rights must give reasons for those decisions. The Mine Engineer had received a detailed, point-by-point reply from Singh and brushed it aside with a single word: “unsatisfactory.” That is not a reasoned order. Without a valid foundation order, everything built on it — including the cancellation — could not stand.

On the Amnesty Scheme discrimination, the Court cited its own earlier ruling in Om Prakash Agrawal v. State of Rajasthan, which held that once a lessee pays the full outstanding amount under the Amnesty Scheme, the mining lease must be restored from the date of cancellation. Singh had paid, received a No Due Certificate, and was in exactly the position of others who had been granted restoration. Refusing him the same benefit, with no reasonable basis for the difference, violated the constitutional guarantee of equality under Article 14.

The High Court allowed the petition and quashed both the April 2022 penalty order and the October 2022 cancellation order. The State has been directed to restore Takhat Singh’s mining lease forthwith. He is free to resume mining operations in accordance with law, subject to complying with applicable conditions and clearing any remaining dues.