TaxTMI 
TaxTMI 
2017 (8) TMI 1446
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....ohapatra, Sr. Adv., Mr. Ramesh Singh, Adv., Mr. Shrey Kapoor, Adv., Mr. Lalitendu Mohapatra, Adv., Mr. Puneet Parihar, Adv., for M/s Aura & Co. I.A. 42 (Sarda Mines) 40, 61 : Mr. Gopal Subramanium, Sr. Adv., Mr. Parag P. Tripathi, Sr. Adv. , Mr. Gopal Jain, Sr. Adv., Mr. R.N. Karanjawala, Adv., Mr. Naveen Kumar, Adv., Mrs. Nandini Gore, Adv., Ms. Natasha Sehrawat, Adv., Ms. Khushboo Bari, Adv., Mrs. Manik Karanjawala, Adv. IA 22,68,75 & 85 : Mr. Gopal Subramanium, Sr. Adv., Mr. Naveen Kumar, Adv., Mr. Sudeep Dey, Adv., Mr. Nishi Kant Singh, Adv. IA15-16 : Mr. Anand Varma, Adv., Mr. Kaustubh Prakash, Adv., Ms. Shubhangi Jain, Adv., Mr. R.M. Patnaik, Adv. I.A.39, 71,63 : Mr. P. Chidambaram, Sr. Adv., Mr. Raju Ramachandran, Sr. Adv., Mrs. Vanita Bhargava, Adv., Mr. Ajay Bhargava, Adv., Mr. Kudrat Dev, Adv., Ms. Shreya Agrawal, Adv., for M/s Khaitan & Co. Indrani Patnaik : Mr. Gopal Subramaniam, Sr. Adv., Mr. Ashok K. Parija, Sr. Adv., Mr. Anand Verma, Adv., Mr. Mahesh Agarwal, Adv., Mr. Naveen Kumar, Adv., Mr. Dhananjay Mishra, Adv, Mr. Gaurav Khanna, Adv., Ms. Nishit Agarwal, Adv., Ms. Devika Mohan, Adv., Mr. E.C. Agrawala, AOR Tata Steel Ltd. : Dr. A.M. Singhvi, Sr....
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..... Naveen Kumar, Adv., Ms. Ameyavikrama Thanvi, Adv. I.A. 38 : Mr. Ajit Kumar Sinha, Sr. Adv., Mr. Naveen Kumar, Adv., Ms. Alankrita Sinha, Adv. I.A.62&84,51,82,83,88,89 : Mr. Naveen Kumar, Adv., Mr. Sudeep Dey, Adv., Mr. Nishi Kant Singh, Adv. I.A. 54 : Mr. B.V. Gadnis, Adv., Mr. Vishwanath Gadnis, Adv., Mr. V.S. Lakshmi, Adv., Mr. Naveen Kumar, Adv., Mr. Abhishek Kumar, AOR I.A. 92,93,94 : Mr. Ambhoj Kumar Sinha, AOR. I.A.95,96 : Mr. Sanjay R. Hegde, Sr. Adv., Mr. S.K. Biswal, Adv., Mr. Sachin Das, Adv., Mr. Azim H. Laskar, Adv., Mr. Chandra Bhushan Prasad, Adv., Mr. Biswajit Das, Adv., Mr. S. Udaya Kumar Sagar, Adv., Mr. Mrityunjai Singh, Adv., Mr. Bhavani Shankar, Adv., Mrs. V.S. Lakshmi, Adv., Mr. Naveen Kumar, Adv. Jindal Steel : Mr. Aakash Bajaj, Adv., for M/s. Khaitan & Co., Ms. Nandini Sen, Adv., Mr. Chanchal Kr. Ganguli, Adv., Mr. Manoj Kumar Goyal, Adv., Mohd. Ainul Ansari, Adv., Mr. Yagesh Kumar Dahiya, Adv., Mr. Sunil Khatwani, Adv., Mr. Taiba Khan, Adv., Dr. Monika Gusain, Adv. ORDER Madan B. Lokur, J. 1. The facts revealed during the hearing of these writ petitions filed under Article 32 of the Constitution suggest a mining scandal of enormo....
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....g operations should be permitted to be undertaken in the non forest area of the mining lease only if (i) it has the requisite environmental clearance; (ii) it has the consent to operate from the State Pollution Control Board under the Air and Water Acts; (iii) Mining Plan is duly approved by the competent authority; and (iv) the NPV for the entire forest falling within the mining lease is deposited in the Compensatory Afforestation Fund. The mining in the forest land included in the mining lease should be permissible only if, in addition to the above, the approval under the FC Act/TWP has been obtained; (c) No forest land can be leased/assigned without first obtaining the approval under the FC Act. Therefore, the forest area approved under the FC Act should not be lesser than the total forest area included in the mining leases approved under the MMDR Act, 1957. Both necessarily have to be the same. In view of the above, this Hon'ble Court while permitting grant of Temporary Working Permission to the mines in Orissa and Goa has made it one of the pre-conditions that the NPV will be paid for the entire forest area included in the mining leases. Similarly, all the mi....
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....te, the following order was passed by this Court: "The CEC has filed its Report. The State would like to file its response. Six weeks time is granted for the same. The recommendations of the CEC which are acceptable to the State Government can be complied with." It may be mentioned that some of the recommendations made by the CEC have been accepted and implemented by the State of Odisha. 6. The issue of mining in Odisha again came up for consideration on 16th September, 2013 and this Court passed the following order: "We call for a report from the Central Empowered Committee within a period of six weeks. We direct that the parties of the State Government of Odisha and the Central Government will cooperate with the Central Empowered Committee to enquire into the matter and furnish a report. The matter be listed on a Monday after six weeks." 7. With reference to the order passed on 16th September, 2013 the CEC conducted an inquiry and some information was sought from M/s Sarda Mines Private Limited (for short 'SMPL'). This was objected to by SMPL who filed an application which was taken up for consideration on 9th December, 2013. The following orde....
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....ng W.P. (C) No. 114 of 2014 was filed by Common Cause. Several prayers were made in the writ petition, and some of the more significant prayers read as follows:- "(a) Issue a writ of mandamus or any other appropriate writ directing the Union of India and Government of Odisha to immediately stop forthwith all illegal mining in the State of Odisha and to terminate all leases that are found to be involved in illegal mining and mining in violation of the provisions of the Forest Conservation Act 1980, the environment laws and other laws. (b) Issue a writ of mandamus or any other appropriate writ directing the Union of India and Government of Odisha to take action against all the violators involved either directly or indirectly in illegal mining including those named in the report of Justice Shah Commission. (c) Issue a writ of mandamus or any other appropriate writ directing a thorough investigation by an SIT or CBI under the supervision of this Hon'ble Court, as is recommended by the Justice Shah Commission into illegal mining in Odisha and collusion between private companies/individuals and public officials of the State/Central Governments. xxx xxx....
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.... namely, Keonjhar, Sundergarh and Mayurbhanj, the total number of leases granted for mining iron and manganese ore are 187. Of these, 102 lease holders did not have requisite environmental clearance (under the Environment (Protection) Act, 1986) or approval under the Forest (Conservation) Act, 1980 or approved mining plan and/or Consent to Operate under the provisions of the Air (Prevention and Control of Pollution) Act, 1981 or the Water (Prevention and Control of Pollution) Act, 1981. This Court directed that mining operations in these 102 mining leases shall remain suspended but it will be open to such lease holders to move the concerned authorities for necessary clearances, approvals or consents and "as and when the mining lessees are able to obtain all the clearances/approvals/consent they may move this Court for modification of this interim order in relation to their cases." 11. This Court also found that 29 out of 187 mining leases had been determined or rejected or had lapsed. It was directed that mining operations in these 29 mining leases will also remain suspended but it would be open to all these concerned lessees to move the authorities for necessary relief....
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....t left it open to the mining lease holders to apply for modification of the interim order dated 16th May, 2014 on obtaining necessary clearances. 15. During the hearing of these petitions, we were informed that the balance 26 mining leases are now operational in view of the amendment to Section 8(3) of the MMDR Act with effect from 12th January, 2015. However, we are not aware whether these 26 mining leases have the necessary statutory clearances. 16. We may also mention that pursuant to the liberty granted to move for modification of the interim order of 16th May, 2014 we have received 17 interim applications for modification. Through a chart handed over to us in Court on 3rd May, 2017 we have been informed that in respect of two of the 17 applications, that is, Zenith Mining (I.A. No. 45) and Kavita Agrawal (I.A. No. 47), the lease has not been extended or has been determined and they do not have any Environmental Clearance or Forest Clearance. In respect of J.N. Pattnaik (I.A. No. 66), there is no Forest Clearance available. We were also informed that S.A. Karim (I.A. No.9) actually had a working lease and had wrongly been included as a non-operational lease. 17. Be ....
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....es); (ii) Violation of Rule 24 of the Minerals (other than Atomic and Hydrocarbons Energy Minerals) Concession Rules, 2016 (hereinafter referred to as MCR, 2016) and Rule 37 of the Mineral Concessions Rules, 1960 (hereinafter referred to as MCR, 1960) (9 leases); (iii) Illegal mining in forest lands (20 leases); and (iv) Iron ore produced without/in excess of the environmental clearance (each of the operating leases involved)." 20. Insofar as the first issue is concerned, it is common ground that that issue has been fully, conclusively and exhaustively dealt with by this Court by a judgment and order dated 4th April, 2016 (Common Cause v. Union of India). (2016) 11 SCC 455 Therefore, the first issue does not survive for consideration by us. 21. As far as the remaining three issues are concerned, these overlap with topics I, II and V dealt with by the CEC. Detailed submissions were made before us by learned counsel for all the appearing parties on these issues as well as by the learned Amicus and the learned Attorney General. We propose to deal with them in this judgment and order. 22. We may mention that submissions were also made on topics III a....
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....ich the management, regulatory and monitoring systems have failed to deter, prevent, detect and punish offences relating to mining, storage, transportation, trade and export of such ore, done illegally or without lawful authority, and the persons responsible for the same; (iii) to inquire into the tampering of official records, including records relating to land and boundaries, to facilitate illegal mining and identify, as far as possible, the person responsible for such tampering; and (iv) to inquire into the overall impact of such mining, trade, transportation and export, done illegally or without lawful authority, in terms of destruction of forest wealth, damage to the environment, prejudice to the livelihood and other rights of tribal people, forest dwellers and other persons in the mined areas, and the financial losses caused to the Central and State Governments. 3. The Commission shall also recommend remedial measures to prevent such mining, trade, transportation and export done illegally or without lawful authority." 28. In the preamble to the notification appointing the Commission, it was noted that there were reports that mining, raising, tran....
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....Application for renewal of mining lease is not decided for one or other pretexts, may be, there is lack of co-ordination among various departments which are required to decide renewal application. There is gross misuse of deemed refusal and deemed extension of both the provisions of renewal of leases (before 27.09.1994 and after) under Rule 24-A of MCR, 1960. This casual and negative approach has caused dearly to State exchequer in the form of hundred crores of stamp duty and others. - - - - - - - - - - - - - (C) Violation of the provisions of the Forest (Conservation) Act, 1980, Rules & guidelines and directions issued by the Hon'ble Supreme Court of India. - - - - - - - - - - - - - (D) Violation of the provisions of the Environment (Protection) Act, 1986. - - - - - - - - - - - - - (E) Misuse of Rules: 10 & 12 of MCDR, 1988 [Mineral Conservation and Development Rules, 1988] which provides for modification and review of mining plan only for a specific purpose, namely, (i) Safe and scientific mining; (ii) conservation of minerals; (iii) the protection of environment; and (iv) in case of modific....
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.... the Government of Odisha seeking the following information regarding each lease holder:- "(i) the name of the lessee; (ii) area of the lease; (iii) date of the execution of the lease deed; (iv) present status (renewal, mining plan, mining scheme) approval date; (v) production and export particulars from the year 2008-09 up to January, 2011; etc." 36. On 20th April, 2011 the Commission sent the second questionnaire to the said concerned Secretary seeking further information in a Form consisting of 14 questions and 4 tables. 37. Thereafter, between 24th and 26th August, 2011 the Commission issued the first notice to various mining lessees in Odisha seeking information on affidavit as per Proforma A and B enclosed with the notice. In Proforma A the lease holder was asked to submit details which included the details of environment clearance, forest clearance and renewal of lease and whether the leased mine was in operation or not. In Proforma B the lease holder was asked to submit details which included the details of dispatch, domestic consumption and export in million tonnes of iron ore and manganese ore from 2006-07 to 2010-1....
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....1. 23.03.2013 Office of the Commission, Ahmedabad. 12. 02.04.2013 Circuit House, Annexe, Ahmedabad. 13. 03.04.2013 -do- 14. 04.04.2013 -do- 15. 12.04.2013 Office of the Commission, Ahmedabad. 16. 13.04.2013 -do- 17. 21.04.2013 Gujarat University Convention Centre, Nr. Helmet Cross Road, 132 ft. Ring Road, Ahmedabad. 18. 24.05.2013 Office of the Commission, Ahmedabad. 19. 25.05.2013 -do- 41. The number of learned counsel and representatives who were heard by the Commission and with whom interactions took place are mentioned in Annexure A to Volume I of the first report. The list of learned counsel runs into 18 pages - from page 33 to page 50 of Volume I of the first report. Some individual lawyers appeared for several lease holders but the fact of the matter is that everybody who wanted to be heard was given a hearing. 42. The function of the Commission as stated in the first report, at the present stage, is best described in the words of the Commission itself. It is stated as follows:- "The function of the Commission, at this stage, is only to inquire, assess the data collected and to submi....
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....ions pertaining to the State of Goa. This was dealt with by this Court in paragraphs 11 to 14 of its decision. This Court declined to quash the report in view of the statement made by the learned Advocate General of Goa. But, this Court took the view that: "we will, however, examine the legal and environmental issues raised in the Report of Justice Shah Commission and on the basis of our findings on these issues consider granting the reliefs prayed for in the writ petition filed by Goa Foundation and the reliefs prayed for in the writ petitions filed by the mining lessees, which have been transferred to this Court." 45. In the present petitions before us, there is no challenge to the reports of the Justice Shah Commission. However, we propose (as in Goa Foundation) to confine ourselves to some limited facts adverted to by the CEC in its final report. We do not propose to base any of our conclusions on the reports of the Commission. 46. Learned counsel for the petitioners insisted that the illegal or unlawful mining activity carried on in the State of Odisha as noted by the Commission deserves to be investigated by the Central Bureau of Investigation. Reference in this regard ....
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.... conducts a detailed enquiry into all cases that have been registered between 2008 and 2011. It was also noted that the railways have issued demand notices to the extent of Rs. 1,874 crores. The latest position with regard to these notices is not available. 49. It was also noted that notices have been issued in 146 cases to various lease holders for recovery of mined ore as per Section 21(5) of the MMDR Act. In the Koira circle notices have been issued to 55 lessees for more than Rs. 13,000 crores; in Joda circle notices have been issued to 72 lessees for recovery of more than Rs. 44,000 crores; in Keonjhar circle notices have been issued to 4 lessees for recovery of about Rs. 1,065 crores; in Koraput circle notices have been issued to three lessees for the recovery of about Rs. 44 lakhs; and in Bolangir circle notice has been issued to 1 lessee for the recovery of about Rs. 29.5 crores. In Baripada circle notices have been issued to 11 lessees for recovery of more than Rs. 467 crores. In other words notices have been issued to the lessees for recovery of more than Rs. 59,000 crores! (According to the CEC the figure exceeds Rs. 61,000 crores)!! 50. We have adverted to the rep....
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.... functioning of the CEC have been discussed by this Court in Samaj Parivartana Samudaya v. State of Karnataka. (2013) 8 SCC 154 In that decision, questions were raised about the credibility of the CEC and while rejecting the submissions, it was made clear that the recommendations made by the CEC are subject to the satisfaction of this Court. We need say nothing more except that during the course of hearing of the present petitions, some of the conclusions arrived at by the CEC were disputed by the petitioners and even by the learned Amicus and some were supported by learned counsel for the mining lease holders, the learned Attorney General and the learned counsel for the State of Odisha. It is therefore quite clear that in the present cases, the CEC as a fact finding body has functioned impartially and it is only on the conclusions arrived at by the CEC on the basis of the facts gathered that there can be some debate and discussion. Anyone may disagree with the views of the CEC and there is no need to make heavy weather about this at all. 56. In so far as the report given by the CEC on 16th October, 2014 (the final report) is concerned, before going into the details thereof, we ....
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....h the annual production and other details were reconciled. The reconciled leasewise and yearwise production and other details provided to the CEC by the State of Odisha may be seen in the statement enclosed at Annexure - R-11 to this Report. The figures modified in the said statement, after reconciliations, are shown in bold print." 59. The CEC noted that the Director, Mines and Geology of the Government of Odisha had informed the CEC that each lease holder with the exception of SMPL and JSPL agreed with the reconciled production details. On facts, therefore, there is no dispute with regard to the contents of the report of the CEC, although the conclusions might be disputed. Separately, the CEC has dealt with the facts concerning SMPL and JSPL pursuant to a meeting held with them on 11th September, 2014. Statutory provisions 60. The grant of a mining lease is governed by the provisions of the Mines and Minerals (Development and Regulation) Act, 1957 (or the MMDR Act), the Mineral Concession Rules, 1960 (or the MCR) and the Mineral Conservation and Development Rules, 1988 (or the MCDR). 61. Section 4(1) of the MMDR Act provides that no person shall undertake any mining oper....
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....¸ with the commencement of mining operations and protection of the environment by preventing and controlling pollution which might be caused by mining operations. 68. Section 21 of the MMDR Act deals with penalties and sub-section (1) thereof provides that whoever contravenes the provisions of sub-section (1) or sub-section (1A) of Section 4 shall be punished with imprisonment for a term which may extend to two years or with fine which may extend to Rs. 25,000 or with both. Sub-section (5) of Section 21 of the MMDR Act provides that whenever any person raises without any lawful authority, any mineral from any land, the State Government may recover from such person the minerals so raised or where such mineral has been disposed of the price thereof. In addition thereto the State Government may also recover from such person rent, royalty or tax, as the case may be for the period during which the land was occupied by such person without any lawful authority. Mineral Concession Rules, 1960 69. As far as the MCR are concerned, Rule 22 is of some importance and this provides for an application to be made for the grant of a mining lease in respect of land in which the minera....
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....ay be, assign, sublet, mortgage, or in any other manner, transfer the mining lease, or any right, title or interest therein. The lessee shall not enter into or make any bona fide arrangement, contract or understanding whereby the lessee will or may directly or indirectly be financed to a substantial extent in respect of its operations or undertakings or be substantially controlled by any person or body of persons. Sub-rule (3) of Rule 37 of the MCR enables a State Government to determine any lease if the mining lessee has committed a breach of Rule 37 of the MCR or has transferred any lease or any right, title or interest therein otherwise than in accordance with sub-rule (2) of Rule 37 of the MCR. Mineral Conservation and Development Rules, 1988 76. The MCDR promulgated under Section 18 of the MMDR Act and referred to in Rule 27 of the MCR are also of some significance. Rule 9 of the MCDR prescribes that no person shall commence mining operations in any area except in accordance with a mining plan approved under Clause (b) of sub-section (2) of Section 5 of the MMDR Act. 77. The mining plan may be modified in terms of Rule 10 of the MCDR in the interest of safe and scient....
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....uired to restore, to the extent possible, other flora destroyed by the mining operations. 83. Briefly therefore, the overall purpose and objective of the MMDR Act as well as the rules framed there under is to ensure that mining operations are carried out in a scientific manner with a high degree of responsibility including responsibility in protecting and preserving the environment and the flora of the area. Through this process, the holder of a mining lease is obliged to adhere to the standards laid down under the Environment (Protection) Act, 1986 or the EPA as well as the laws pertaining to air and water pollution and also by necessary implication, the provisions of the Forest (Conservation) Act, 1980 (for short 'the FC Act'). Exploitation of the natural resources is ruled out. If the holder of a mining lease does not adhere to the provisions of the statutes or the rules or the terms and conditions of the mining lease, that person is liable to incur penalties under Section 21 of the MMDR Act. In addition thereto, Section 4A of the MMDR Act which provides for the termination of a mining lease is applicable. This provides that where the Central Government, after consultation wi....
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....nder a mining lease are dependent on and 'subordinate' to the EC. 87. On 4th May, 1994 an Explanatory Note was added to EIA 1994. We are concerned with the 1st Note which deals with the expansion and modernization of existing projects. This reads as follows: "1. Expansion and modernization of existing projects A project proponent is required to seek environmental clearance for a proposed expansion/modernization activity if the resultant pollution load is to exceed the existing levels. The words "pollution load" will in this context cover emissions, liquid effluents and solid or semi-solid wastes generated. A project proponent may approach the concerned State Pollution Control Board (SPCB) for certifying whether the proposed modernization/expansion activity as listed in Schedule-I to the notification is likely to exceed the existing pollution load or not. If it is certified that no increase is likely to occur in the existing pollution load due to the proposed expansion or modernization, the project proponent will not be required to seek environmental clearance, but a copy of such certificate issued by the SPCB will have to be submitted to the Impact Assessment A....
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....ary for an ongoing project which does not propose any expansion, or to put it differently, what is the validity period for a no objection certificate from the SPCB? 92. In our opinion, as far as the first question is concerned, a reading of EIA 1994 read with the 1st Note implies that the base year would need to be the immediately preceding year that is 1993-94. This is obvious from the opening sentence of the 1st Note, that is, "A project proponent is required to seek environmental clearance for a proposed expansion/modernization activity if the resultant pollution load is to exceed the existing levels." (Emphasis supplied). In its report, the CEC has taken 1993-94 as the base year and we see no error in this. Even the MoEF in its circular dated 28th October, 2004 stated with regard to the expansion in production: "If the annual production of any year from 1994-95 onwards exceeds the annual production of 1993-94 or its preceding years (even if approved by IBM), it would constitute expansion." If that expansion results in an increase in the pollution load over the existing levels, then an EC is mandated. 93. It was contended on behalf of the mining lease holders that in terms....
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...., uncertain and ambiguous cannot be accepted. In our opinion, on a composite reading of EIA 1994, it is clear that: (i) A no objection certificate from the SPCB was necessary for continuing mining operations; (ii) An expansion or modernization activity required an EC unless the pollution load was not exceeded beyond the existing levels; (iii) The base year for determining the pollution load and therefore the proposed expansion would be with reference to 1993-94; (iv) Whether an expansion or modernization would lead to exceeding the existing pollution load or not would require a certificate from the SPCB which could be reviewed by the IAA; (v) New projects require an EC; and (vi) Existing projects do not require an EC unless there is an expansion or modernization for the duration (if any) of the validity of the certificate from the SPCB. We need not say anything more on this subject since the CEC has proceeded to discuss the issue of mining in excess of the EC or in excess of the mining plan only from the year 2000-01 onwards. The prior period may, therefore, be ignored and it is the period from 2000-01 onwards which is actually relevant for the present discussion. 96. It was sub....
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....clear whether or not they were required to obtain an EC particularly in respect of pre-EIA 1994 mining leases and operations. 100. As mentioned above, these dates and the text of the circulars were emphasized by learned counsel for the lease holders to contend that it was not obligatory for the mining lease holders, who did not expand their mining operations, to obtain an EC and in any event the period for obtaining an EC was extended till 31st March, 2003 with ex post facto approval. In this context, reliance was placed on M.C. Mehta referred to above. 101. We are not in agreement with the contention of learned counsel for the mining lease holders on the interpretation given to the various circulars for the reasons given above and must also correctly appreciate the decision of this Court in M.C. Mehta. 102. In M.C. Mehta the issue that arose for consideration was whether mining activity in the Aravalli hills causes environmental degradation and what directions are required to be issued. While considering this issue, this Court also considered EIA 1994 and the circular dated 14th May, 2002. In doing so, this Court categorically held in paragraph 37 of the Report that the i....
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.... was required by the mining lease holder. It was held in paragraph 77 of the Report: "We are unable to accept the contention that the notification dated 27-1-1994 would not apply to leases which come up for consideration for renewal after issue of the notification. The notification mandates that the mining operation shall not be undertaken in any part of India unless environmental clearance by the Central Government has been accorded. The clearance under the notification is valid for a period of five years. In none of the leases the requirements of the notification were complied with either at the stage of initial grant of the mining lease or at the stage of renewal. Some of the leases were fresh leases granted after issue of the notification. Some were cases of renewal. No mining operation can commence without obtaining environmental impact assessment in terms of the notification." 105. It is clear from the decision rendered by this Court that EIA 1994 is mandatory in character; that it is applicable to all mining operations -expansion of production or even increase in lease area, modernization of the extraction process, new mining projects and renewal of mining leases....
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....he MoEF. This notification (for short EIA 2006) required prior EC for projects or activities mentioned in the Schedule to it both for major as well as minor minerals if the leased area is 5 hectares or more. We were informed that several mining lease holders, in compliance with EIA 2006, applied for and were granted an EC. 109. It was submitted by learned counsel for the mining lease holders that the confusion, vagueness and uncertainty caused by EIA 1994 and subsequent circulars and other communications did not end with the issuance of EIA 2006. Reference was made to a circular dated 13th October, 2006 which deals with interim operational guidelines till 13th September, 2007 in respect of applications made under EIA 1994. We do not see the relevance of this circular (which really dealt with transitional issues) not only for the reason given in M.C. Mehta that circulars cannot override statutory notifications but also because it deals with the procedure for considering applications made under EIA 1994. 110. Reference was also made to a circular dated 2nd July, 2007. The passage relied upon reads as follows:- "It is clarified that all such mining projects which did no....
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.... the mining plan (with approval) and that therefore they had extracted iron ore or manganese ore, as the case may be, in terms of the mining plan but not necessarily in terms of the EC that had been obtained, if at all. 116. We have already held that a mining plan is subordinate to the EC and in M.C. Mehta it was held by this Court that having an approved mining plan does not imply that a mining lease holder can commence mining operations. That being so, a modified mining plan without a revised or amended EC, is of no consequence. What the contention of learned counsel suggests to us is that under the shield of a modified mining plan, illegal or unlawful mining in the form of mining without an EC, mining by over-reaching EIA 1994 and EIA 2006 was being carried out. 117. The contention apart, the subterfuge of obtaining a modified mining plan to get over the adverse effects of excess and illegal or unlawful production of iron ore or manganese ore was deprecated by the Ministry of Mines of the Government of India. In a letter dated 29th October, 2010 addressed to the Controller General, Indian Bureau of Mines it was pointed out that State Governments had expressed a concern tha....
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....ed in principle such anomalies can be resolved in advance. The Committee feels the MoEF should also have a cushion of +10% per cent in production while giving EIA clearance." 120. The above passage indicates that the permissible variation in production as per the Indian Bureau of Mines is +10% but according to the letter dated 12th December, 2011 issued by the Ministry of Mines, the reasonable variation limit could be +20%. It is not clear why there was a shift in the variation, but as rightly pointed out by learned counsel for the petitioners, the fact that in some cases the variation exceeded 20% was a cause for concern which necessitated strict and punitive action. 121. A submission was made by learned counsel for the mining lease holders to the effect that since many of them had been granted the first deemed statutory renewal of the mining lease under Rule 24A of the MCR, the requirements of EIA 1994 would not be applicable. We were shown various amendments made to Rule 24A of the MCR from time to time particularly the amendments made on 10th February, 1987, 7th January 1993, 27th September, 1994, 17th January, 2000, 18th July, 2014 and 8th October, 2014. In our opinion, ....
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.... impact. EIA 1994 is therefore very clear that if expansion or modernization of any mining activity exceeds the existing pollution load, a prior EC is necessary and as already held by this Court in M. C. Mehta even for the renewal of a mining lease where there is no expansion or modernization of any activity, a prior EC is necessary. Such importance having been given to an EC, the grant of an ex post facto environmental clearance would be detrimental to the environment and could lead to irreparable degradation of the environment. The concept of an ex post facto or a retrospective EC is completely alien to environmental jurisprudence including EIA 1994 and EIA 2006. We make it clear that an EC will come into force not earlier than the date of its grant. Illegal Mining 125. A question raised by learned counsel for the mining lease holders concerned the interpretation of the expression 'illegal mining'. Reliance was placed on the report of the CEC which refers to Rule 2(iia) of the MCR to conclude that the violation of any rule within the mining lease area would not come within the definition of 'illegal mining' except where there has been a violation of the rules framed under S....
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.... a natural resource which is intended for the benefit of everyone and not only for the benefit of the mining lease holders. Encroachments 130. Section 4(1) of the MMDR Act makes it clear that no person can carry out any mining operations except under and in accordance with the terms and conditions of a mining lease granted under the MMDR Act and the rules made thereunder. Obviously therefore, any person carrying on mining operations without a mining lease, is indulging in illegal or unlawful mining. This would also necessarily imply that if a mining lease is granted to a person who carries out mining operations outside the boundaries of the mining lease, the mineral extracted would be the result of illegal or unlawful mining. 131. In its report, the CEC has dealt with illegal mining outside the sanctioned mining areas. It is stated that 82 mining leases for iron ore and manganese ore were identified by the Commission where there were encroachments in the form of illegal mining pits, illegal over-burden dumps etc. 132. In respect of these 82 mining leases, the State of Odisha appointed a Committee on the suggestion of the Commission, to survey and identify the exact exte....
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.... maximum that is stated to be reasonably permissible according to the Ministry of Mines. In terms of Rule 22(5) of the MCR a mining plan shall incorporate a tentative scheme of mining and annual program and plan for excavation from year to year for five years. At best, there could be a variation in extraction of 20% in each given year but this would be subject to the overall mining plan limit of a variation of 20% over five years. What this means is that a mining lease holder cannot extract the five year quantity (with a variation of 20%) in one or two years only. The extraction has to be staggered and continued over a period of five years. If any other interpretation is given, it would lead to an absurd situation where a mining lease holder could extract the entire permissible quantity under the mining plan plus 20% in one year and extract miniscule amounts over the remaining four years, and this could be done without any reference to the EC. The submission of learned counsel in this regard simply cannot be accepted. 136. In the letter dated 12th December, 2011 sent by the Secretary in the Ministry of Mines of the Government of India to the Chief Secretary of the Government of ....
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..... Such Act or Rules, including the Environment (Protection) Act, 1986, or the Forest (Conservation) Act, 1980, etc. clearly provide penalties for violations under those laws. This aspect may be clarified to the State Accountant General also." 139. All that we need say for the present is that the interpretation given in the aforesaid letter to Section 21(5) of the MMDR Act is not fully correct. While mining in excess of permissible limits under the mining plan or the EC or FC on leased area may not amount to mining on land occupied without lawful authority, it would certainly amount to illegal or unlawful mining or mining without authority of law. Section 21 of the MMDR Act 140. The discussion on illegal or unlawful mining takes us to the question of the consequence of illegal or unlawful mining and the interpretation of Section 21(1) and Section 21(5) of the MMDR Act. 141. Section 21(1) of the MMDR Act is clearly relatable to a penal offence and applies if any one contravenes the provisions of Section 4(1) of the MMDR Act. Section 4(1) of the MMDR Act prohibits the undertaking of any mining operation in any area except under and in accordance with the terms and conditio....
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....nt. 145. As far as the Union of India is concerned, in its affidavit filed on 20th January, 2017 by Shri Sudhakar Shukla, Economic Advisor in the Government of India, Ministry of Mines, it is submitted (and this submission is supported by the learned Attorney General in his oral submissions) that Section 21(5) of the MMDR Act is in two parts. The first part refers to the raising of minerals without any lawful authority from any land. The second part is in addition to what is recoverable under the first part. The addition is to the effect that when a person raises a mineral from any area not in his or her lawful authority, that person is also liable to pay the rent, royalty or tax for the period during which the land was occupied without lawful authority. 146. It is further submitted that 'illegal mining' as defined in Rule 2(iia) of the MCR is also required to be read in the context of Rule 26(4) and Rule 27(4A) of the MCR which deal with the refusal to renew a mining lease if the mining lease holder is convicted of illegal mining and the determination of a mining lease in the event the mining lease holder is convicted of illegal mining. It is submitted that the definition of....
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....ch the law subjects a wrongdoer in favour of the person wronged, not limited to the damages suffered. (See Aiyar, P. Ramanatha: The Law Lexicon, 2nd Edn., p. 1431.) 14. In support of the submission that the demand for the price of mineral raised and exported is in the nature of penalty, the learned counsel for the appellants has relied on the marginal note of Section 21. According to Justice Singh, G.P.: Principles of Statutory Interpretation (8th Edn., 2001, at p. 147), though the opinion is not uniform but the weight of authority is in favour of the view that the marginal note appended to a section cannot be used for construing the section. There is no justification for restricting the section by the marginal note nor does the marginal note control the meaning of the body of the section if the language employed therein is clear and spells out its own meaning. In Director of Public Prosecutions v. Schildkamp (1969) 3 All ER 1640 : (1970) 2 WLR 279 (HL) Lord Reid opined that a sidenote is a poor guide to the scope of a section for it can do no more than indicate the main subject with which the section deals and Lord Upjohn opined that a sidenote being a brief précis....
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....thereof read with the Explanation but that cannot preclude compensation to the State under Section 21(5) of the MMDR Act. The MCR cannot be read to govern the MMDR Act. 151. What is the significance of this discussion? It was submitted that the CEC has taken the following view: "...... it may be appropriate that 30% of the notional value of the iron and manganese produced by each of the lessees without/in excess of the environmental clearances may be directed to be recovered from the concerned lessees and with the explicit understanding the concerned lessees as well as the officers will continue to be liable for action under the provisions of the respective Acts." 152. Learned counsel for the petitioners and the learned Amicus were of opinion that the provisions of Section 21(5) of the MMDR Act require that the entire price of the illegally mined ore should be recovered from each defaulting lessee. Similarly, in its affidavit, the Union of India differs with the recommendation of the CEC. According to the affidavit of the Union of India this would be contrary to the statutory scheme and in fact 100% recovery should be made under the provisions of Section 21(5) of the....
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....09 would be taken as 6 lakh MT (12x6/12 lakh MT) and 12 lakh MT per annum in the subsequent year; and (c) wherever a mining lease having environmental clearance has been granted revised environmental clearance for a higher production the permissible annual production for the year, during which the revised environmental clearance has been granted, has been considered on pro rata basis of the quantities prescribed in the earlier environmental clearance and the revised environmental clearance. For example if the mining lease was having environmental clearance for annual production of 12 lakh MT and say on 28th September, 2009 it has been granted revised environmental clearance for annual production of say 24 lakh MT then in that case the permissible production for the year 2009-10 would be taken as 18 lakh MT (12x6/12+24x6/12) and 24 lakh MT per annum in subsequent years." 155. A submission made by the mining lease holders was that the maximum production in any year up to 1993-94 should be considered as the base for making the calculations. Such a contention was also urged before the CEC and was rejected. We have examined this contention independently and are of the view t....
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....usion of feldspar and quartz in the mining lease, Modi could not be permitted to mine these two minerals. This led Modi to approach the High Court with the contention that he was not breaking up or clearing any forest land other than the land on which mining operations were already being carried on. The High Court allowed the writ petition but feeling aggrieved, the State of Bihar preferred an appeal in this Court. 162. The question before this Court was a narrow one, namely, whether prior approval of the Central Government is necessary in respect of a mining lease, granted for winning a certain mineral prior to the coming into force of the FCA, if the lessee applies to the State Government after the FCA came into force for permission to win and carry any new mineral from the broken up area? 163. While answering this question in the negative, it was held that after the commencement of the FCA no fresh breaking up of forest land or no fresh clearing of the forest on any such land could be permitted by the State Government or any authority without the approval of the Central Government. However, in respect of broken up land, it was held that if the State Government permits the ....
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.... up for consideration in T.N. Godavarman v. Union of India. (1997) 2 SCC 267 In its decision of 12th December, 1996 this Court observed that during the course of hearing it appeared that there is a misconception about the true scope of the FCA and the meaning of the word 'forest' used therein. Consequently, there is also a misconception about the need for prior approval of the Central Government as mandated by Section 2 of the FCA in respect of certain activities in a forest area, which activities are more often of a commercial nature. 167. In this context, it was held that 'forest' must be understood according to its dictionary meaning and it would cover all statutorily recognized forests, whether designated, reserved, protected or otherwise. It was further held that 'forest' would also include any area recorded as a forest in the government records irrespective of the ownership. With this in mind, this Court directed that prior approval of the Central Government is required for any non-forest activity within the area of any 'forest'. In accordance with Section 2 of the FCA all on-going activity within any forest in any State throughout the country, without prior approval of th....
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...., 1998. The lands identified by the DLC are compendiously referred to as DLC lands. 173. In this background in IA Nos. 2746-2748 of 2009 in the case of T.N. Godavarman the CEC was directed to submit a report which it did on 26th April, 2010. It was recommended by the CEC that given the peculiar circumstances prevailing in the State of Odisha, mining operations in the entire DLC lands included in the mining leases, may be allowed to continue on payment of the Net Present Value (NPV) subject to the fulfillment of other statutory requirements and rules being complied with. 174. By an order dated 7th May, 2010 this Court directed that the recommendation of the CEC acceptable to the State Government could be complied with. Consequently, the State of Odisha appears to have implemented the recommendations regarding recovery of NPV and realized an amount of about Rs. 1750 crores as additional NPV. 175. We have been informed that in addition to the above, the mining lease holders have subsequently deposited an amount under the heading of penal compensatory afforestation which was introduced through guidelines issued by the MoEF on 3rd February, 1999. The guidelines in this regard, ....
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....th April, 2010 as are acceptable to it. The relevant recommendations made by the CEC read as follows: "(c) No forest land can be leased/assigned without first obtaining the approval under the FC Act. Therefore, the forest area approved under the FC Act should not be lesser than the total forest area included in the mining leases approved under the MMDR Act, 1957. Both necessarily have to be the same. In view of the above, this Hon'ble Court while permitting grant of Temporary Working Permission to the mines in Orissa and Goa has made it one of the pre-conditions that the NPV will be paid for the entire forest area included in the mining leases. Similarly, all the mining lease holders in Orissa should be directed to pay the NPV for the entire forest area, included in the mining leases; (d) In Orissa, substantial areas included in the mining leases as non forest land have subsequently been identified as DLC forest (deemed forest/forest like areas) by the Expert Committee constituted by the State Government pursuant to this Hon'ble Court's order dated 12.12.1996. While processing and/or approving the proposals under the FC Act in many cases such areas have b....
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....se before 31st December, 2017. 181. The CEC has also dealt with 18 others mining lease holders (other than M/s. Essel Mining and Industries Ltd. relating to the Kasia Iron Ore Mines and Jilling-Langlotta Iron & Manganese Ore Mines). With regard to these 18 mining lease holders, the view taken by us above would hold good and clearly they are liable to compensate the State for the entire price of the iron ore and manganese ore illegally mined with effect from 7th January, 1998 until the forest clearance was obtained by the concerned mining lease holder. 182. We have fixed 7th January, 1998 as the cut-off date despite the orders dated 12th December, 1996 and 4th March, 1997 only for the reason that it is possible that some mining lease holders (we do not know how many) were not aware that they were inadvertently conducting mining operations on DLC lands which were identified by the State of Odisha as forest lands on the directions of this Court. For the purposes of Section 21(5) of the MMDR Act, they are entitled to the benefit of doubt and along with them, the other mining lease holders before us. The CEC in this regard has observed as follows: "It will be see....
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....(2011) 15 SCC 681 that a violation of the FCA is condonable on payment of penal compensatory afforestation charges. This obviously would not apply to illegal or unlawful mining under Section 21(5) of the MMDR Act, but we make it clear that the mining lease holders would be entitled to the benefit of any Temporary Working Permission granted. Conclusions on the issues of mining without an EC or FC or both 186. To avoid any misunderstanding, confusion or ambiguity, we make the following very clear: (1) A mining project that has commenced prior to 27th January, 1994 and has obtained a No Objection Certificate from the SPCB prior to that date is permitted to continue its mining operations without obtaining an EC from the Impact Assessment Agency. However, this is subject to any expansion (including an increase in the lease area) or modernization activity after 27th January, 1994 which would result in an increase in the pollution load. In that event, a prior EC is required. However, if the pollution load is not expected to increase despite the proposed expansion (including an increase in the lease area) or modernization activity, a certificate to this effect is absolutely ....
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....tion of Section 6 of the MMDR Act and find that there have been several amendments to Section 6 relating to the maximum area for which a mining lease may be granted to a person. The following is the result of the amendments: 1. From 1.6.1958 to 11.9.1972 - maximum lease area 10 sq. miles. 2. From 12.9.1972 to 9.2.1987 - maximum lease area 10 sq. km or 1000 hectares in any one State. 3. From 10.2.1987 to 17.12.1999 - maximum lease area 10 sq.km or 1000 hectares in any part of the country. 4. From 18.12.1999 till date - maximum lease area 10 sq.km or 1000 hectares in one State. 188. While the word 'person' has not been defined in the MMDR Act, a reading of Section 5 thereof indicates that the State Government shall not grant a mining lease to any person unless such person is an Indian national or a company as defined in the Companies Act, 1956 and subsequently in the Companies Act of 2013. 189. Sub-section (2) of Section 6 of the MMDR Act provides that a person acquiring by, or in the name of, another person a mining lease which is intended for him/her shall be deemed to be acquiring it himself/herself. 190. For the purposes of determining....
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....ection 6 of the MMDR Act. That being the position, and nothing having been shown to the contrary, we accept the recommendation of the CEC in this regard. Violation of Rule 37 of the Mineral Concession Rules, 1960 196. The CEC has discussed the possible violation of Rule 37 of the MCR. In this context, it was noted that there were several mining lease holders who had entered into raising contracts which were actually a transfer of the lease as postulated by Rule 37 of the MCR. 197. On this basis the State of Odisha constituted a Committee on 8th July, 2011 to carry out a study of the financial transactions between the mining lease holders and the raising contractors to determine whether there is a prima facie violation of Rule 37 of the MCR. 198. On an examination of the material before it the Committee concluded that eight mining lease holders violated Rule 37 of the MCR. These mining lease holders are as under: i) R.P. Sao, Guali Iron Ore Mines, Keonjhar ii) Indrani Patnaik, Unchabali Iron Ore Mines, Keonjhar iii) M/s K.J.S. Ahluwalia, Nuagaon Iron Ore Mines, Keonjhar iv) M/s Aryan Mining & Trading Corporation Pvt. Ltd., Narayanposhi....
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....suggestion is reasonable and it will be appropriate if in fact a fresh look is given to the raising contracts entered into by the mining lease holders and the raising contractors. We are also of opinion that such an order ought to be passed with the consent of the mining lease holders since any delay in disposal of the issue would not really sub-serve the interests of anybody including the mining lease holders. 204. Accordingly, for considering the appointment of an appropriate Committee in respect of the eight mining lease holders mentioned above we would like to hear learned counsel for the parties. We make it clear that the proposed Committee will be entitled to lift the corporate veil, the importance of which in cases such as the present, has been emphasized in State of Rajasthan v. Gotan Lime Stone Khanij Udyog (P). Ltd. (2016) 4 SCC 469 Intergenerational equity 205. Mr. Prashant Bhushan, learned counsel for the petitioner sought to impress upon us the need to consider intergenerational equity and if possible to place a limit on the extent of mining in the State of Odisha by referring to an article titled: "Intergenerational equity: a legal framework for global enviro....
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....) the advent of rapacious mining in several parts of the country. Therefore, it is high time that the Union of India revisits the National Mineral Policy, 2008 and announces a fresh and more effective, meaningful and implementable policy within the next few months and in any event before 31st December, 2017. We are constrained to pass this direction in view of the facts disclosed in these petitions and in judgments delivered by this Court with regard to mining in Goa and Karnataka. Inquiry by the Central Bureau of Investigation 210. It was emphasized by Shri Prashant Bhushan that because of the rampant illegal or unlawful mining being carried out in Odisha, there should be an enquiry by the Central Bureau of Investigation (for short 'the CBI') to ascertain and determine the persons involved either in turning a Nelson's eye to rampant illegal or unlawful mining or being conspirators in the activity and the extent of the illegal or unlawful mining. It was submitted that the Justice Shah Commission had very strongly recommended an inquiry conducted by the CBI and criminal elements being brought to book for the despoliation of the land. 211. For the present, we do not propose ....
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....lth, education, communication, recreation, livelihood and cultural lifestyle as indicated in this Court's judgment in T.N. Godavaraman Thirumulpad v. Union of India & Others (2008) 2 SCC 222." 214. Subsequently on 28th April, 2014 this Court accepted the scheme prepared by the Government of Odisha in consultation with the Central Empowered Committee. The scheme was captioned "Setting up of Special Purpose Vehicle (SPV) for undertaking specific tribal welfare and area development works so as to ensure inclusive growth of mineral bearing areas in the State of Odisha". This Court then passed the following order on 28th April, 2014: "Pursuant to orders passed by this Court on 7th [27th] January, 2014, the Government of Odisha in consultation with the Central Empowered Committee has prepared a Scheme captioned "Setting up of Special Purpose Vehicle (SPV) for undertaking specific tribal welfare and area development works so as to ensure inclusive growth of mineral bearing areas in the State of Odisha. The Central Empowered Committee has submitted a Report dated 9th April, 2014 and has recommended that the Scheme prepared by the Government of Odisha may be approved by....
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....'ble Supreme Court. 10. The accounts of the SPV will be internally audited annually by the Chartered Accountant firms empanelled with the CAG/Principal Accountant General, Odisha. The audit of the accounts of the SPV, receipts as well as expenditure, will be done annually by the office of the Principal Accountant General, Odisha. 11. The State Government has, earlier, registered a Society, namely, Society for Inclusive Development of Mineral Bearing Areas of Odisha, which has been registered vide registration number 23354/74 of 2011-12 under the Societies Registration Act, 1860 to act as SPV for the purpose. It is now proposed to wind up the said Society and to replace it with 'Odisha Mineral Bearing Areas Development Corporation' to be set up under section 25 of the Companies Act. 216. It appears that the scheme has been implemented with the Chief Secretary of Odisha as the ex-officio Chairman of the SPV. There are several other members and directors of the SPV. There is no further information available with this Court with regard to the implementation of the scheme. 217. During the course of hearing, some of the mining lease holders represented by Shri Gop....