Can a State Increase Royalty During the Subsistence of a Mining Lease? Supreme Court Clarifies
Case Name: State of Haryana & Others v. M/s Faridabad Gurgaon Minerals & Another (with State of Haryana & Others v. M/s Ganpati Enterprises Slate Mines)
Date of Judgment: 13 July 2026
Citation: 2026 INSC 690 | Civil Appeals arising out of SLP (Civil) Diary Nos. 15252 of 2017 & 30225 of 2017
Bench: Justice Dipankar Datta and Justice Augustine George Masih
Held: The Supreme Court held that the State Government is empowered to revise royalty and dead rent during the subsistence of a mining lease in exercise of its statutory powers under the Mines and Minerals (Development and Regulation) Act, 1957 and the applicable mining rules. The Court ruled that the absence of an express clause in the lease deed permitting revision does not curtail the State’s statutory authority, as such power forms an implied condition of every mining lease granted under the statutory framework.
Summary: The dispute arose after the State of Haryana enhanced royalty and dead rent payable under mining leases through a notification issued in 2005. The lessees challenged the enhancement, contending that their lease deeds did not contain any provision allowing the State to revise royalty during the lease period. The Punjab and Haryana High Court accepted the challenge and quashed the enhancement.
Allowing the State’s appeals, the Supreme Court held that mining leases are statutory grants governed by the MMDR Act and the Punjab Minor Mineral Concession Rules, 1964. It observed that the statutory power to revise royalty and dead rent continues throughout the lease period and cannot be excluded merely because the lease deed is silent on the issue. The Court further held that the State had considered relevant material before enhancing the rates and that the notification was neither arbitrary nor violative of the Rules of Business.
Decision: The Supreme Court allowed the appeals, set aside the Punjab and Haryana High Court’s judgment, and upheld the validity of the 2005 notification enhancing royalty and dead rent. The Court held that the respondents were liable to pay royalty and dead rent at the revised statutory rates during the subsistence of their mining leases.