Section 7:
Termination of operating right.
(1) Where the Central Government, after consultation with the
administering authority, is of the opinion 1[that it is expedient in public interest, strategic interest of the
country, in the interest of] development and regulation of offshore mineral resources, preservation of
natural environment and prevention of pollution, avoidance of danger to public health or communication,
ensuring safety of any offshore structure or conservation of mineral resources 2[or for any other reason],
the Central Government may prematurely terminate any operating right in respect of any mineral in any
offshore area or part thereof.
(2) No order for premature termination of operating right under sub-section (1) shall be made except
after giving the holder of operating right a reasonable 3[opportunity of being heard, except in cases where
premature termination is being done on the grounds of strategic interest of the country].
(3) Where the holder of any operating right fails to commence operation within the period specified in
section 14 or discontinues the operation for a period of two years, the operating right shall lapse from the
date of execution of the lease or, as the case may be, discontinuance of the operation:
Provided that the administering authority, on an application made by the holder of operating right and
after being satisfied that such non-commencement of operation or discontinuation thereof, is due to the
reasons beyond the control of the holder of operating right, may 4[extend the period specified in
section 14 by a further period not exceeding one year and such extension shall not be granted for more
than once during the entire period of operating right:]
5[Provided further that where the holder of operating right--
(a) fails to undertake operation; or
(b) having commenced the operation, discontinues such operation,
before the end of the extended period, such operating right shall also lapse from the date of execution of
the lease or, as the case may be, discontinuance of the operation.]
5[(4) Where the holder of a production lease fails to undertake production and dispatch for a period of
four years after the date of execution of the lease, or having commenced production and dispatch,
discontinues the same for a period of two years, then such lease shall lapse on the expiry of the period of
four years from the date of its execution or, as the case may be, two years from date of discontinuance of
the production and dispatch:
Provided that the administering authority may, on an application made by the lessee, and after being
satisfied that such non-commencement of production, or dispatch, or discontinuation thereof, was due to
the reasons beyond the control of the lessee, may extend such period by a further period not exceeding
one year, but such extension shall not be granted for more than once during the entire period of lease:
Provided further that where the lessee,--
(a) fails to undertake production or dispatch; or
(b) having commenced the production and dispatch, discontinues the same,
before the end of the extended period, such lease shall lapse from the date of its execution or, as the case
may be, discontinuance of production or dispatch.]
Notes:
1. Subs. by Act 17 of 2023, s. 5, for "that it is expedient in the interest of" (w.e.f. 17-8-2023).
2. Ins. by s. 5, ibid. (w.e.f. 17-8-2023).
3. Subs. by s. 5, ibid., for "opportunity of being heard" (w.e.f. 17-8-2023).
4. Subs. by s. 5, ibid., for "condone such non-commencement or discontinuation." (w.e.f. 17-8-2023).
5. Ins. by s. 5, ibid., (w.e.f. 17-8-2023).