National Mineral Policy 2006 - Department of Mines

The actual process of transfer is not transparent. Rule 14(vii) of MCR states that transfersshall be subject to the sanction of the state government. MCR Form P is the format in which atransfer deed is to be executed. MCR Form F (Model Form of PL) contains a provision, PartIV(1) that summarises some of the requirements for a transfer. Rule 50 of MCDR requiresthat a notice of transfer be sent to the Controller General, the Controller of Mines, and theRegional Controller and Rule 52 of the MCDR requires a notice to be sent to the stategovernment in a prescribed form, namely MCDR Form L. Rule 51 of MCDR specifies thatcertain records must be transferred to the new licence holder and that a list of such recordsmust be sent to specified officials. Other Rules such as 46, 48, and 49 of MCR are alsoapplicable to transfers.1.70 Representations have been made before the Committee that most explorationcompanies find the provisions of India’s MMDR Act and its Rules pertaining to transfer ofPLs confusing. The requirements are scattered and the actual transfer procedure is unclear. Inmost new mining laws, the important right to transfer a PL is specified directly in the statutebut in the Indian system, the right arises from the licence. The need to obtain governmentapproval prior to transfer introduces an element of uncertainty, as the approval may be eitherwithheld or be slow to come. That the government has a duty to approve a transfer ifspecified requirements are met by the transferor and the transferee is not clearly stated. Ifinvestment in prospecting by prospecting firms is to be encouraged then discretion to deny atransfer should be limited to a finding that the transferee does not meet predeterminedqualifications. The uncertainty arises out of the fact that there is no obligation on theauthority to approve a transfer if all requirements have been met, the approving authority isnot required to inform an applicant for a transfer of the reasons for denying the transfer, andguidance is not provided regarding a time frame for approval/disapproval.1.71 The Committee, therefore, recommends that the right to transfer a PL should beexplicitly stated in the MMDR Act (and not left to the mining rules or the licenceinstrument). Greater transparency can be achieved by stating in the MMDR Act that aprospecting licensee has the right to transfer his licence to a qualified entity. A singleapproving authority should be named. The Rules should provide in a single section a detaileddescription of the procedure, requirements that must be met, the circumstances under whichan application can be denied, and a requirement for the approving authority to give reasonsfor denying an application. The Rules already provide that a transferee assume and be47