Court Allows E-auction for Iron Ore Sales, Orders CBI Probe into Illegal Mining Activities

The Court endorsed the continuation of E-auction for iron ore sales, with M/s NMDC authorized to mine and sell through E-auction, disbursing 80% of proceeds. It highlighted illegalities in mining leases, ordering CBI investigations into M/s Associated Mining Company and M/s Obulapuram Mining Company Private Limited. The Court directed a CBI probe into third-party illegal mining by M/s Deccan Mining Syndicate in an area leased to M/s NMDC. The judgment permitted the CEC to review leaseholders' representations and scheduled further proceedings for consideration, including an application from the State of Karnataka.

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Issues involved:
The judgment addresses issues related to E-auction of iron ore, illegalities in mining leases, alleged linkages between illegal mining in different districts, and investigations by CBI.

E-auction of Iron Ore:
The Court acknowledged the success of E-auction in selling iron ore and endorsed the continuation of E-auction to ensure the best possible price. It accepted the recommendation for M/s NMDC to continue mining operations subject to selling iron ore only through E-auction, with 80% of proceeds disbursed to M/s NMDC. The Court clarified that E-auction would proceed regardless of existing contracts and that challenges to E-auction would be exclusively under the jurisdiction of the Court.

Illegalities in Mining Leases:
The judgment highlighted serious illegalities in mining lease No. 2434 of M/s. Associated Mining Company, including illegal renewal, discrepancies in boundary pillars, and exaggerated iron ore production. The Court noted linkages between illegal mining activities in different districts and ordered investigations by the CBI. The Court also sought updates from the CBI regarding investigations into M/s. Obulapuram Mining Company Private Limited.

Third-Party Illegal Mining:
The Court noted massive illegal mining by a third party in mining lease No. 1111 of M/s. NMDC, despite complaints by M/s. NMDC. The Court directed the CBI to investigate the encroachment by M/s. Deccan Mining Syndicate in the area leased to M/s. NMDC. The judgment outlined the scope of investigations by the CBI and indicated a focus on illegalities by specific companies, with further directions to be issued as more reports are submitted.

Representation and Directions:
The judgment allowed CEC to consider representations from leaseholders against Joint Team findings, with subsequent findings to be presented to the Court for appropriate directions. The matter was scheduled for further consideration on 30th September 2011, particularly regarding an application to be filed by the State of Karnataka.

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