Mining suspended; only judicially supervised e-auctions, sale proceeds escrowed, expert macro EIA to set sustainable extraction cap

SC, in writ proceedings concerning large-scale iron ore mining in Goa, continued its earlier suspension of mining but permitted transportation and sale of approximately 11.48 million tons of already excavated ore strictly through court-supervised e-auction. It directed that net sale proceeds (after taxes and royalty) be kept lease-wise in fixed deposits by the State, to be disbursed only after final adjudication on the legality of the leases. A three-member Monitoring Committee was constituted to verify inventories, conduct e-auctions and maintain accounts. SC further constituted an Expert Committee to undertake a Macro EIA Study and recommend a cap on annual iron ore excavation in Goa, based on sustainable development and inter-generational equity principles.

---

---

1. ISSUES PRESENTED AND CONSIDERED

1.1 Whether, and under what safeguards, the already excavated mineral ores lying in mines, stockyards, jetties and ports in the State of Goa could be transported and sold during the subsistence of the Court-ordered suspension of mining and transportation operations.

1.2 Whether principles of sustainable development and inter-generational equity under Article 21 require prescription of a ceiling/cap on annual excavation of iron ore in the State of Goa, and the appropriate mechanism for determining such ceiling/cap.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1 - Transport and sale of already excavated mineral ore during suspension of mining/transport operations

Interpretation and reasoning

2.1 The Court noted that, pursuant to earlier orders suspending all mining operations and transportation of iron ore and manganese ore in Goa, approximately 11.48 million tons of excavated mineral ores were lying in different mines and stockyards, for which inventory had already been prepared by the Department of Mines and Geology, Government of Goa.

2.2 It was taken into account that (i) such excavated mineral ores could not be put back into the earth, and (ii) their continued storage in mines/stockyards risked environmental pollution. The State of Goa submitted that these factors, coupled with the framing and notification of the Goa (Prevention of Illegal Mining, Storage and Transportation of Minerals) Rules, 2013, justified allowing early transportation of the already excavated ore.

2.3 The petitioner's counsel did not object to transportation but contended that exports should not be permitted and that the ore should be sold through e-auction to domestic industrial consumers. Intervening steel industries from Karnataka sought permission to purchase the ore to meet their raw material needs.

2.4 The Amicus Curiae proposed that: (i) a Monitoring Committee, on the pattern of the committee previously constituted for Karnataka, be appointed; (ii) the Committee verify the already mined mineral available at mining heads, jetties, etc.; (iii) sale be conducted exclusively through e-auction; (iv) sale proceeds, net of royalty, taxes and other charges, be held in designated accounts; and (v) release of sale/export proceeds to leaseholders be deferred until a final decision on the legality of the iron ore and leases, after appropriate deductions and with the Court's permission.

2.5 The Court accepted the need for a controlled, transparent and monitored mechanism which would (a) prevent environmental harm from continued storage, (b) avoid regularization of any illegality until the main issues on the legality of leases were adjudicated, and (c) preserve financial proceeds so they could be adjusted in accordance with the final judgment on legality and liability.

Conclusions

2.6 The Court directed that the inventory of excavated mineral ores lying in different mines/stockyards/jetties/ports in Goa, as made by the Department of Mines and Geology, be first verified.

2.7 It ordered that the whole of the inventorised mineral ores be sold by e-auction and that the sale proceeds, after deduction of taxes and royalty, be retained in separate fixed deposits, lease-wise, by the State of Goa until delivery of the Court's judgment on the legality of the leases from which the ore was extracted.

2.8 The Court constituted a Monitoring Committee to oversee verification of inventory, e-auction, release of sold mineral with appropriate checks and balances, maintenance of lease-wise accounts and deposit of sale proceeds, comprising: (i) a senior officer of the Mines Department nominated by the Chief Secretary, Government of Goa, not below the rank of Joint Secretary to the Government of India; (ii) Dr. U.V. Singh, Additional Principal Chief Conservator of Forests, Karnataka Forest Department (also a member of the Karnataka Monitoring Committee); and (iii) Mr. Sheikh Naimuddin, retired IRS officer and former Member, CBDT and Special Secretary, Government of India.

2.9 The Court laid down that: (a) the retired member would receive remuneration equivalent to his last pay drawn for his period of service on the Committee; (b) the serving members would receive their regular salary as if on duty; (c) all members would be entitled to travel allowances as per actuals and daily allowances at rates applicable to a Secretary to the Government of India; (d) secretarial assistance would be provided by the State of Goa; and (e) initially, all remuneration and allowances would be paid by the State of Goa and later reimbursed out of the sale proceeds after the Court's final judgment.

2.10 The Monitoring Committee was directed to ensure that accounts of sale of excavated ores were maintained lease-wise and to submit an interim report by 15.02.2014.

Issue 2 - Need for, and mechanism to determine, a cap on annual iron ore excavation in Goa based on sustainable development and inter-generational equity

Legal framework

2.11 The Court recorded the submission that principles of sustainable development and inter-generational equity, as part of the fundamental right under Article 21 of the Constitution, require that a cap be placed on annual extraction of iron ore, having regard to conservation of mineral resources for future generations and the carrying capacity of the State for mining and transportation.

2.12 The Court noted that the Goa Mineral Policy, 2013 referred to these principles and provided, inter alia:

(a) a gross capping of 45 million tons per annum on transportation using public roads, until road capacity improves, with additional capacity through non-public road corridors being excluded from this cap;

(b) an ad hoc capacity of 20 million tons for fresh excavation and 25 million tons for dumps, pending a decision on inter-generational equity capping, which was to be based on an environmental audit/EIA study by NEERI;

(c) area-wise capping based on road capacity, to be determined by a Committee headed by the Principal Secretary (Mines).

2.13 The Court further relied on its earlier decision in Samaj Parivartana Samudaya v. State of Karnataka, wherein it had been held that permissible annual production for a mining lease would depend on: (a) mineral reserves in the lease area; (b) area available for overburden/waste dumps, subgrade iron ore and other land uses; (c) existing transport facilities in relation to the traffic load; and (d) an overall ceiling on annual production from all mining leases in the district.

Interpretation and reasoning

2.14 The petitioner's counsel argued that, in light of the constitutional principles of sustainable development and inter-generational equity, a cap on annual excavation should be set after considering long-term conservation of iron ore resources and the State's carrying capacity for mining and transportation.

2.15 The State of Goa itself, through its Mineral Policy, 2013, had acknowledged the need for capping based on (i) carrying capacity of public roads, and (ii) inter-generational equity, with final inter-generational equity capping to be decided on the basis of scientific environmental audit/EIA studies.

2.16 The Amicus Curiae similarly submitted that a ceiling on total annual production from all leases in Goa was necessary to ensure mining was conducted in conformity with sustainable development principles.

2.17 The Court took into account its own precedent in Samaj Parivartana Samudaya, which endorsed an overall ceiling on annual production in a mining area as one of the determinants of permissible annual production and made clear that such ceilings must be grounded in objective factors, including resource reserves, land-use constraints, and transport carrying capacity.

2.18 In view of (i) the constitutional principles invoked, (ii) the policy stance of the State of Goa recognising capping, (iii) the Court's earlier decision on overall ceilings in mining areas, and (iv) the need for a scientifically informed decision, the Court concluded that a macro-level environmental impact assessment was necessary to determine an appropriate annual ceiling for iron ore excavation in Goa.

Conclusions

2.19 The Court held that a Committee of experts must conduct a Macro EIA Study to determine the ceiling/cap on annual excavation of iron ore from the State of Goa, having regard to iron ore resources of the State, its carrying capacity, and the principles of sustainable development and inter-generational equity, along with all other relevant factors.

2.20 An Expert Committee was constituted with the following composition:

(i) an ecologist; (ii) a geologist; (iii) a mineralogist; (iv) an expert on forestry; (v) a representative of the Department of Mines, Government of Goa, to be nominated by the Chief Secretary, Goa; and (vi) a representative of the Ministry of Environment & Forests, Government of India, to be nominated by the Secretary, MoEF.

2.21 The names of the individual members of the Expert Committee were to be finalised on a later specified date, when the matter would be listed for that limited purpose.

2.22 The Court ordered that each member of the Expert Committee who was not working in a government department or agency would be entitled to remuneration equivalent to last pay drawn, daily allowances at the rate applicable to a Secretary, Government of India, and actual travel expenses, payable from Ad-hoc CAMPA funds upon submission of bills to the Registry of the Court.

2.23 The Expert Committee was directed to submit an interim report by 15.02.2014 on the ceiling/capping to be prescribed for excavation of iron ore in Goa.

2.24 The Court further directed that, when the matters are listed in February 2014, the State of Goa and the Union of India shall produce in Court copies of the Environmental Impact Assessment reports prepared by NEERI and the Indian School of Mines, Dhanbad, respectively, relating to mining in the State of Goa, and that the writ petitions and connected matters stood reserved for judgment.

---