(1) Subject to the conditions of this rule, where production operations are not commenced within a period of two years from the date of execution of the deed of lease, or is discontinued for a continuous period of two years after commencement of such operations, the administering authority shall, by an order, declare the production lease as lapsed and communicate the declaration to the lessee.
(2) Where a lessee is unable to commence the production operation within a period of two years from the date of execution of the deed of production lease, or discontinues production operation for a period exceeding two years for reasons beyond his control, he may submit an application to the administering authority, explaining the reasons for the same, at least three months before the expiry of such period.
(3) The administering authority may on receipt of an application made under subrule (2) and on being satisfied about the adequacy and genuineness of the reasons for the non-commencement of production operations or discontinuance thereof, pass an order before the date on which the lease would have otherwise lapsed, extending or refusing to extend the period of the lease;
Provided that where the administering authority on receipt of an application under sub-rule (2) does not pass an order before the expiry of the date on which the lease would have otherwise lapsed, the lease shall be deemed to have been extended until the order is passed by the administering authority or until a period of two years, whichever is earlier.
Explanation 1.- Where the non-commencement of the production operations within a period of two years from the date of execution of production lease is on account of-
(a) delay in supply or installation of machinery ; or [WT1I—Tg^3(i)] *mfl *ft TT^m : gmmRor 119
(b) delay in getting financial assistance from the banks, or any financial institutions ; or
(c) ensuring supply of the mineral in an industry of which the lessee is the owner or in which he holds not less than fifty per cent of the controlling interest;
and the lessee is able to furnish documentary evidence supported by a duly sworn affidavit, the administering authority may consider if there are sufficient reasons for non-commencement of operations for a continuous period of more than two years.
Explanation 2.- Where the discontinuance of production operations for a continuous period of two years after the commencement of such operations is on account of -
(a) orders passed by any statutory or judicial authority ; or
(b) operations becoming highly uneconomical ; or
(c) strike or lock out;
and the lessee is able to furnish documentary evidence supported by a duly sworn affidavit, the administering authority may consider if there are sufficient reasons for discontinuance of operations for a continuous period of more than two years.