Odisha has won its appeals only in part. The Supreme Court has held that Rule 12(1)(ee) of the 2016 mineral concession rules enables a State Government to undertake mining when a lessee fails to fulfil its extraction obligations, but does not make that intervention mandatory. The Court modified the Orissa High Court’s direction and required the State to endeavour to secure optimum utilisation of the mines in accordance with law.
New Delhi: The State Government’s power to undertake mining activity when a lessee fails to extract minerals as the lease deed requires is discretionary, not mandatory, the Supreme Court has held, clarifying that the relevant rule confers a choice on the State and does not impose an obligation [State of Odisha & Others v. Citizens Action Forum, Bhubaneswar].
A Bench of Chief Justice Surya Kant, Justice Joymalya Bagchi and Justice V. Mohana passed the order on November 4, 2026. The signed order was uploaded on the Supreme Court’s website on November 7.
Paragraph 13 of the High Court judgment, as modified
Under paragraph 5 of its order, the Supreme Court allowed the appeals only in part. It modified paragraph 13 of the impugned judgment and directed Odisha to make an endeavour under Rule 12(1)(ee) for optimum utilisation of the mines in accordance with law.
The High Court’s judgment is not set aside in its entirety. What survives is a direction towards lawful and optimum use of the mines; what is corrected is the view that the rule makes State-led extraction compulsory.
Why the rule is not a command
In paragraph 4, the Bench turned to the express language of the rule and held that it is enabling in nature. Where the lessee has failed to perform its extraction obligations under the lease deed, the State Government has discretion to undertake mining activity.
The Court also explained what follows if the State does exercise that power. The lessee is liable, on demand, to reimburse all expenses incurred by the Government in undertaking the activity.
That is why the Bench rejected the mandatory construction adopted in paragraph 13 of the High Court’s judgment. A power the State can exercise in the specified circumstances is different from a requirement that it must undertake the mining itself whenever those circumstances arise.
How the appeals reached the Court
The appeals arose from proceedings in W.P.(C) No. 31036/2025 before the Orissa High Court at Cuttack. The Supreme Court’s record identifies the High Court’s orders of January 29 and February 10, 2026, the latter in I.A. No. 2359/2026.
The signed order addressed one question: whether Rule 12(1)(ee) of the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016, required the State to undertake mining activity when the lessee failed to extract minerals in accordance with its lease obligations.
Additional Solicitor General K.M. Nataraj appeared for Odisha, while advocate Matrugupta Mishra represented the contesting respondent, which was on caveat. The Court condoned delay, granted leave and disposed of the appeals through the signed order; pending applications were closed.
Case Title: State of Odisha & Others v. Citizens Action Forum, Bhubaneswar
Case Numbers: Civil Appeal Nos. 14128–14129/2026; Diary No. 34272/2026
Court: Supreme Court of India
Bench: Chief Justice Surya Kant, Justice Joymalya Bagchi and Justice V. Mohana
Order Date: November 4, 2026
Provision Considered: Rule 12(1)(ee), Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016
Outcome: Appeals partly allowed; paragraph 13 of the High Court judgment modified.
