The Madras High Court has held that an instrument purporting to assign a mining lease over land belonging to the State Government is subject to the bar on registration under Section 22-A of the Registration Act, 1908, if it lacks the sanction of the competent authority. The registering officer has a duty and the ancillary power to inquire into the existence of such sanction.
The Court emphasised that under the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act), and the Mineral Concession Rules, 1960, the “previous consent in writing” of the State Government is a mandatory precondition for the valid assignment of a mining lease. Any assignment made without such prior consent is void and prohibited by law.
Accordingly, the Court said that an instrument documenting a void transaction (such as an assignment of a mining lease without prior government consent) is prohibited from registration under Section 22-B of the Registration Act, and a scheme sanctioned by the BIFR does not override other statutory mandates, such as the requirement for prior consent under the MMDR Act, unless an express exemption is granted within the scheme itself.
The Court, therefore, remanded the matter back to the respondent authority (Sub-Registrar) to pass a fresh order after conducting a proper enquiry, as to whether, (i) the ‘previous consent in writing’ of the State Government was obtained for the assignment of the mining lease by BSCL to SAIL; and (ii) if such consent was not obtained, what is the effect of Sections 22-A and 22-B of the Registration Act on the registrability of the document.
A Single Judge Bench of Justice Mohammed Shaffiq observed that Section 22-A of the Registration Act statutorily mandates a registering officer to refuse registration of instruments transferring immovable property belonging to the State Government unless a sanction from the competent authority is produced. The Bench also observed that while a registrar cannot adjudicate title, they are under an obligation to refuse registration of transfers of State land without the requisite sanction, and this duty implies an ancillary power to call for documents to verify compliance.
The Bench clarified that a lease is the instrument through which leasehold rights are transferred, and one cannot be separated from the other. The Bench also noted that the phrase “by way of” in Section 22-A suggests the list of transfer types is illustrative, not exhaustive, and would include an assignment of mining rights.
The Bench rejected the petitioner’s argument that the BIFR-sanctioned scheme provided immunity from other laws. It observed that the scheme did not expressly exempt the statutory requirement of obtaining prior consent from the State Government under the MMDR Act. The Bench strongly asserted that a BIFR sanction cannot be interpreted as a license to contravene the law, particularly laws related to natural resources held by the State under the public trust doctrine.
The Bench also dismissed the petitioner’s contention that the State’s acceptance of dead rent amounted to implied consent. Citing legal precedent, the Bench concluded that mere payment and acceptance of rent do not, by themselves, prove a lessor’s assent to a lease or its assignment.
Briefly, the petitioner, SAIL Refractory Company Limited (SAIL), a subsidiary of the Steel Authority of India Limited, was incorporated to take over the Salem Refractory Unit of M/s. Burn Standard Company Limited (BSCL), a Government of India undertaking. BSCL held various mining leases for magnesite over thousands of acres in Salem District, granted by the Government of Tamil Nadu. In the meantime, BSCL was declared a “Sick Unit”, and the Board of Industrial and Financial Reconstruction (BIFR), via a scheme, approved the transfer of its Salem Refractory Unit to the petitioner.
Later, a ‘Deed of Transfer’ was executed between BSCL and SAIL for a nominal consideration of Re. 1/-. This deed transferred the unit as a “going concern”, which included all assets, liabilities, rights, and leasehold interests. The petitioner therefore presented the Subject Deed for registration, which was held in abeyance for over a decade, primarily because the petitioner’s request for a stamp duty waiver was repeatedly declined by the State Government. The document was subsequently impounded.
After some time, the petitioner paid the demanded stamp duty of Rs. 5.78 Crores and registration charges of Rs. 72.30 Crores. Despite this, the 1st Respondent (Sub-Registrar) refused to register the Subject Deed under Section 22-A(1)(i) of the Registration Act, 1908, on the grounds that the deed involved the transfer of over 1700 acres of Government-leased lands without any valid title of transfer between the parties. The refusal order also cited the non-production of original title documents.
Appearances:
Additional Solicitor General ARL. Sundaresan and Advocate V.P. Raman, for the Petitioner
Addl. Advocate General J. Ravindran, Special Government Pleader U. Baranidharan, along with Advocates V. Raghavachari and M. Elumalai, for the Respondents
