TaxTMI 
TaxTMI 
2017 (8) TMI 1446
X X X X Extracts X X X X
X X X X Extracts X X X X
....dv., 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. Adv., Mr. Ashok K. Parija, Sr.Adv., Mr. Gopal Jai....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 enormous proportions and one involving megabucks. Lessees in the districts of Keonjhar, Sundergarh a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ironmental 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 mining lease holders in Orissa should be directed to pay the NPV for the entire forest area, included in the mining lease; (d) In Orissa, subst....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 order was passed on that day: "By our order dated 16th September, 2013, we had called for a Report from the Central Empowered Committee within a period of six weeks. It is stated on behalf of the Cen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 xxx (e) Issue a writ of mandamus or any other appropriate writ directing the respondents to recover the illegally accumulated wealth through illegal mining and related activity, as per Section 21(5) of the MMDR Act, 1957 [Mines and Minerals (Development and Regulation) Act, 1957] and launch prosecution....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ons 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 and as and when they get the appropriate relief, they could move this Court for modification of the interim order. 12. This Court also found that 53 iron ore/manganese ore mining leases were operational and that they had necessary approvals under the Forest (Conservation) Act, 1980, consent to operate granted by the Odisha State Pollution Control Board and also approved ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 that as it may, learned counsel for the lease holders drew our attention to the record of proceedings of 16th May, 2014 and particularly the following paragraph appearing therein: "We have passed interim order in a separate sheet. The Central Empowered Committee will give a final report on the Writ Petition by the end of July, 2014 and the matter will be listed in the first week of Au....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ned, 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 and IV identified by the CEC, that is, illegal mining outside the sanctioned mining lease areas and mining leases acquired in violation of Section 6 of the MMDR Act. We will consider these issues as well. 23. As far as topics VI and VII identified by the CEC are concerned, we would like to hear the parties in detail in respect of these issues. 24. No challenges or submissions were made on topics VIII, IX and X and therefore we accept the report of the CEC on these topics. 25. At this stage, we may m....
X X X X Extracts X X X X
X X X X Extracts X X X X
....act 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, transportation and export of iron ore and manganese ore illegally or without lawful authority was being carried on in various States in one or more of the following forms: "(a) mining without a licence; (b) mining outside the lease area; (c) undertaking mining in a lease area without taking approval of the concerned State Government for transfer of concession; b raising of minerals without lawful authority; c raising of minerals without paying royalty in accordance with the quantities and grade; d mining in contravention of a mining p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....preme 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 modification, explanation for the same. - - - - - - - - - - - - - (F) Encroachment:- On the basis of Google Image, the survey report prepared by the State Government by DGPS method, it was found that in 82 mining leases, there was encroachment. Out of the said leases, re-survey was ordered for 37 leases." 30. Soon thereafter, the Commission gave its Second Report on Illegal Mining of Iron and Manganese Ores in the State of Odisha, sometime in October, 2013. This report dealt with specific lease holders and violations committed by them. It is not necessary for us to delve into those specific details. 31. It was submitted before us by learned counsel for the mining lease holders that the reports given by the Co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ce. 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 2010-11. 38. The Commission visited Odisha from 7th December, 2011 to 14th December, 2011, from 3rd October, 2012 to 11th October, 2012 and from 31st October, 2010 to 8th November, 2012. The purpose of the visits was to collect information and seek explanations and gather facts from the concerned Departments of the Government of India and the Government of Odisha. During the visits, the Commission received as many as 140 complaints alleging illegal mining. Accordingly, a public hearing was held in Keonjhar and Bhubaneshwar on 11th and 12th December, 2011. 39. On 21st December, 2012 and 12th January, 2013 several senior counsel were given a personal hearing by the Commission including a personal hearing to the Federation of Indian Mining Industries (for short 'FIMI'). Following the subm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s 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 submit the report on the said basis. On that basis, some remedial measures are suggested by the Commission for controlling illegal mining and violation of the Acts and/or Rules. For that, there is no question of issuing notices to the lessees. For collecting the data and assessing it, the Principles of Natural Justice are fully complied with, as stated above. On the basis of the data submitted by the lessees and the submissions made by Ld. Counsel for them, the report is submitted." It is further clarified on page 198 of Volume I of the first report that with regard to individual mining leases in which there is a violation of the provisions of the Forest (Conservation) Act, 1980 and/or conditions of environmental clearance etc. a report would be submitted later on. 43. It is therefore abundantly clear that the first report is generally a limited fact finding enquiry on the basis of information supplied by the mining lease holders. Therefore, th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r 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 was made to the passage in Part III of Volume I of the first report of the Commission to the following effect:- "Since this is one of the biggest illegal mining ever observed by the Commission, it is strongly felt that this is a fit case to handover to Central Bureau of Investigation, for further investigation and follow up action." 47. Similarly, on page 125 of Chapter II of Volume I of the report, it is stated as follows:- "Terms of Reference No. 8 provides that "The Commission may take the services of any investigating agency of the Central Government in order to effectively address its terms of reference. The Commission, therefore, suggests that Central Bureau of Investigation (C.B.I.) may be directed to investigate into allegations of corruption made against politicians, bureaucrats and others." We will consider this at the appropriate stage. Suffice it to say for the time being that the Commission made certain significant observations in Chapter ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssued 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 reports of the Commission, without relying on them, only to highlight the gravity of the situation and nothing more. The gravity of the situation is also apparent from the report of the CEC and the Commission seems to support it. Initial contention 51. The initial contention urged on behalf of the respondents - lease holders was that in giving the report dated 16th October, 2014 the CEC has exceeded its remit. In this context, reference was made to the order of 13th January, 2014 in which it is stated that "The Report will not cover cases other than forest and environmental issues." 52. We are of opinion that this objection deserves immediate rejection. The subsequent orders passed by this Court have been completely overlooked by learned counsel inasmuch on 21st April, 2014 it was specifically noted by this Court that "CEC, in the meanwhile, will make out a list of such lessees who are operating the leases in violation of the law." Similarly, in the record of proceedings of 16th May, 2014 it was noted that "The Central Emp....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 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 may mention that the CEC has stated that it held meetings with the Chief Secretary and other senior officials of the State of Odisha and others on six dates. It also heard the lease holders and others on seven dates and it held meetings with three of the lease holders that is Jindal Steel and Power Ltd. (JSPL), Sarda Mines Pvt. Limited (SMPL) and Essel Mining and Industries Ltd. (Essel) on 10th September, 2014. The CEC visited the site of the mining lease of SMPL from 4th March, 2014 to 7th March, 2014 and had site visits of a number of other lessees from 12th July, 2014 to 16th July, 2014. 57. As far as the facts collected by the CEC are concerned, there is no dispute with regard to their correctness. The CEC has recorded that there are 187 iron ore and manganese ore mining leases in the State of Odisha. On the basis of the material and information collected, a statement was prepared showing lease-wise and year-wise details of production of iron ore and manganese ore, permissible production and production without environmental clearance/....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Development Rules, 1988 (or the MCDR). 61. Section 4(1) of the MMDR Act provides that no person shall undertake any mining operation in any area except under and in accordance with the terms and conditions of a mining lease granted under the MMDR Act and the rules made thereunder. A mining operation is defined in Section 3(d) of the MMDR Act as meaning any operation undertaken for the purpose of winning any mineral. Section 4(2) of the MMDR Act provides that no mining lease shall be granted otherwise than in accordance with the provisions of the said Act and the rules made thereunder. 62. Section 5(2) of the MMDR Act provides for certain restrictions on the grant of a mining lease. It provides that the State Government shall not grant a mining lease unless it is satisfied that the applicant has a mining plan duly approved by the Central Government or the State Government in respect of the concerned mine and for the development of mineral deposits in the area concerned. 63. Section 10 of the MMDR act provides for the procedure for obtaining a mining lease and sub-section (1) thereof provides that an application is required to be made for a mining lease in respect of any land in w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s provides for an application to be made for the grant of a mining lease in respect of land in which the mineral vests in the government. An application for the grant of a mining lease is required to be made by an applicant to the State Government in Form I to the MCR. Sub rule (5) of Rule 22 deals with a mining plan and it requires that a mining plan shall incorporate, amongst other things, a tentative scheme of mining and annual programme and plan for excavation for year to year for five years. 70. Rule 22A of the MCR makes it clear that mining operations shall be undertaken only in accordance with the duly approved mining plan. Therefore, a mining plan is of considerable importance for a mining lease holder and is in essence sacrosanct. A mining scheme and a mining plan are a sine qua non for the grant of a mining lease. 71. Rule 27 of the MCR deals with the conditions that every mining lease is subject to. One of the conditions is that the lessee shall comply with the MCDR. 72. The format of a mining lease is given in Form K to the MCR and this is relatable to Rule 31 of the MCR which provides that on an application for the grant of a mining lease, if an order has been made ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mining plan may be modified in terms of Rule 10 of the MCDR in the interest of safe and scientific mining, conservation of minerals or for protection of the environment. However, the application for modifications shall set forth the intended modifications and explain the reasons for such modifications. The mining plan cannot be modified just for the asking. 78. Rule 13 of the MCDR provides that mining operations are required to be carried out by every holder of a mining lease in accordance with the approved mining plan. If the mining operations are not so carried out, the mining operations may be suspended by the Regional Controller of Mines in the Indian Bureau of Mines or another authorized officer. 79. From our point of view, Chapter V of the MCDR dealing with "Environment" is of significance. In this Chapter, Rule 31 of the MCDR provides that every holder of a mining lease shall take all possible precautions for the protection of the environment and control of pollution while conducting any mining operations in the area. 80. Rule 37 of the MCDR requires certain precautions to be taken against air pollution and obliges the mining lease holder to keep air pollution under contr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....applicable. This provides that where the Central Government, after consultation with the State Government is of opinion that it is expedient in the interest of regulation of mines and mineral development, preservation of natural environment, prevention of pollution, etc. then the Central Government may request the State Government to prematurely terminate a mining lease. Environment Impact Assessment Notification of 27th January, 1994 84. As can be seen from the statutory scheme adverted to above, protection and preservation of the environment is a significant and integral component of a mining plan, a mining lease and mining operations ˗˗ and rightly so. 85. Keeping this in mind, an Environment Impact Assessment Notification dated 27th January, 1994 was issued by the Central Government in exercise of powers conferred by Section 3(1) and Section 3(2)(v) of the EPA read with Rule 5(3)(d) of the Environment (Protection) Rules, 1986. The Environment Impact Assessment Notification dated 27th January, 1994 (for short 'EIA 1994') is a prohibitory notification and directs that on and from the date of its publication in the official gazette: (i) expansion or modernization of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he SPCB will have to be submitted to the Impact Assessment Agency (IAA) for information. The IAA will however, reserve the right to review such cases in the public interest if material facts justifying the need for such review come to light." 88. The Note is significant and from its bare reading it is clear that if any proposed expansion or modernization activity results in an increase in the pollution load, then a prior EC is required. The project proponent should approach the concerned State Pollution Control Board (for short the SPCB) for certifying whether the proposed expansion or modernization is likely to exceed the existing pollution load or not. If the pollution load is not likely to be exceeded, the project proponent will not be required to seek an EC but a copy of such a certificate from the SPCB will require to be submitted to the Impact Assessment Agency which can review the certificate. 89. What is the requirement, if any, under EIA 1994 with regard to an existing mining lease where there is no proposal for expansion or modernization? Does such a mining lease holder require an EC to continue mining operations? This is answered in the 8th Note which is also of some i....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... mining lease holders that in terms of the circular of 28th October, 2004 the annual production even prior to 1993-94 could be considered for ascertaining if there was an expansion or not. We cannot accept this submission for a variety of reasons. For one, the existing levels mentioned in the 1st Note clearly have reference to the immediately preceding year and not to a preceding year in a comparatively remote past. Secondly, a very high annual production in any one year is not reflective of a consistent pattern of production - it could very well be a freak year and that freak year certainly cannot be a basic standard or the norm to measure expansion. Then if the interpretation sought to be given is accepted, there would be an absence of consistency and a lack of uniformity with different mining lease holders having different base years. This is hardly conducive to good governance. Finally, EIA 1994 was intended to prevent the existing environmental load from increasing based on the existing data of the immediate past and not data of a few years gone by. We may add that the only exception that could be made in this regard would be if there is no production during 1993-94. In that e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t discussion. 96. It was submitted by learned counsel for the mining lease holders that the MoEF had caused some confusion with regard to the requirement of an EC at the time of renewal of a mining lease. In this connection, reference was made to a Press Note of July 1994 and a letter dated 19th June, 1997 of the MoEF to the Chief Conservator of Forests in the MoEF. 97. Learned counsel for the mining lease holders sought to buttress their submission that EIA 1994 was vague and ambiguous by mentioning two circulars issued by the MoEF on 5th November, 1998 and 27th December, 2000 extending the period for obtaining an EC for new units. However, these circulars are apparently not on our record (which goes into 148 volumes) and therefore we cannot make any comment about them. These circulars were mentioned to also contend that even for new units the absence of an EC would not have an adverse impact on them, since the period for obtaining an EC was extended from time to time. A reference was also made to a circular dated 14th May, 2002 which later on became the subject of consideration by this Court in M.C. Mehta v. Union of India. (2004) 12 SCC 118 A reading of the circular of 14th Ma....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Report that the intention of the MoEF was not to legalize the continuance of mining activity without complying with the requisite stipulations. If that were unfortunately so, then it would demonstrate a lack of sensitivity of the MoEF to the principles of sustainable development and the object behind issuing EIA 1994. This Court said: "It does not appear that MOEF intended to legalise the commencement or continuance of mining activity without compliance of stipulations of the notification. In any case, a statutory notification cannot be notified [modified] by issue of circular. Further, if MOEF intended to apply this circular also to mining activity commenced and continued in violation of this notification, it would also show total non-sensitivity of MOEF to the principles of sustainable development and the object behind the issue of notification. The circular has no applicability to the mining activity." 103. Adverting to the MMDR Act, this Court expressed the view in paragraph 52 of the Report that the approval of a mining plan does not imply that a mining lease holder can commence mining operations. The mining lease holder is nevertheless obliged to comply with statutory prov....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... lease holder is obliged to adhere to the terms and conditions of a mining lease and the applicable laws and the mere fact that a mining plan has been approved does not entitle a mining lease holder to commence mining operations. In M.C. Mehta this Court concluded that EIA 1994 is clearly applicable to the renewal of a mining lease. 106. Subsequent to the decision in M.C. Mehta two clarificatory circulars were issued by MoEF on 28th October, 2004 and 25th April, 2005. These were adverted to by learned counsel for the mining lease holders but in our opinion they are not relevant except to the extent that they make it explicit that following the decision of this Court in M.C. Mehta, an EC is required to be obtained before the renewal of a mining lease and that the term 'expansion' would include an increase in production or the lease area or both. 107. It was submitted on behalf of the mining lease holders that the possibility of getting an ex post facto EC was a signal to the mining lease holders that obtaining an EC was not mandatory or that if it was not obtained, the default was retrospectively condonable. We do not agree. We have referred to various provisions of the MMDR Act a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rance under the EIA Notification, 1994 would continue to operate without obtaining environmental clearance till the mining lease falls due for renewal, if there is no increase in lease area and/or there is no enhancement of production. In the event of any increase in lease area and or production, such projects would need to obtain prior environmental clearance. Further, all such projects which have been operating without any environmental clearance would obtain environmental clearance at the time of their lease renewal even if there is no increase either in terms of lease area or production." 111. The aforesaid circular relates to three categories that is: (i) Mining leases, where no EC was required under EIA 1994 would continue to operate without an EC; (ii) If there was an increase in the lease area or enhancement of production, an EC was required by the mining lease holder; (iii) All projects would require an EC at the time of renewal of the mining lease even if there was no increase in the lease area or enhancement of production. 112. Reference was also made to an Office Memorandum dated 19th August, 2010. However a reading of this document brings out that it basically relate....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n modifying mining plans for allowing an increase in production of ore without adequate intimation to the State Governments. A concern was raised that such a revision was often being used to increase production of ore, which is sometimes not accounted for in mining operations in the concerned mining lease. It was made clear that all modifications of mining plans shall be effective prospectively only and earlier instances of irregular mining shall not be regularized through a modification of the mining plan. 118. In a subsequent letter dated 12th December, 2011 addressed to the Chief Secretary in the Government of Orissa the said Ministry of Mines noted that there were violations of the actual production limit laid down in the mining plan and that the State Government had finally taken steps to curb illegal mining in respect of over-production of minerals. There was a reference to suggest (and we take it to be so) that 20% deviation from the mining plan (in terms of over-production) would be reasonable and permissible. However, it appears from a reading of the communication that illegal mining was going on beyond the 20% deviation limit and that appropriate steps were needed to cur....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at for the purposes of renewal of the mining lease, an application is required to be made by the mining lease holders and the deemed renewal clause under Rule 24A of the MCR will come into operation only after an application for renewal is made in Form J in Schedule I of the MCR. Under Rule 26 of the MCR, the State Government may refuse to renew the mining lease. That apart, the position in environmental jurisprudence with regard to the renewal of a mining lease has been made explicit by this Court in M.C. Mehta. Even otherwise, in view of EIA 1994, it is quite clear that the renewal of a mining lease would require a prior EC. 122. We may also draw attention in this regard to a circular dated 28th October, 2004 issued by the MoEF wherein it was stated that in view of the decision in M.C. Mehta all mining projects of major minerals of more than 5 hectares lease area that had not yet obtained an EC would have to do so at the time of renewal of the lease. 123. Finally, it was submitted that whenever an EC is granted, it would have retrospective effect from the date of the application for grant of an EC. In this context, it was pointed out that there were enormous delays in granting ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ining has been defined as mining operations undertaken by any person in any area without holding a mining lease. It does not include violation of any rules within the mining lease area except the Rules made under Section 23C of the MMDR Act, 1957. The mining lease area shall be considered as an area held with lawful authority by the lessee (refer Rule 2(iia), MCR, 1960)." 126. As can be seen from the above, there is a difference of opinion between the CEC and the Commission on what is illegal mining or mining without lawful authority and we will give our views on the subject. 127. According to the lessees a mining operation only outside the mining lease area would constitute 'illegal mining' making illegal mining lease centric. We are unable to accept this narrow interpretation given by the CEC and relied upon by learned counsel for the mining lease holders. 128. The simple reason for not accepting this interpretation is that Rule 2(ii a) of the MCR was inserted by a notification dated 26th July, 2012 while we are concerned with an earlier period. That apart, as mentioned above, the holder of a mining lease is required to adhere to the terms of the mining scheme, the mining plan....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lease holder and the area under encroachment/illegal mining. The Committee or the Joint Survey consisted of officers of the Revenue Department, Forest Department and Mining Department of the State of Odisha who carried out a field survey in respect of 39 mining leases. The findings of the field survey or the Joint Survey were verified by a team comprising of the Director Mines, Chief Engineer, ORSAC and the Additional Secretary, F & E Department of the Government of Odisha. 133. It is mentioned in the report of the CEC that the Joint Survey for each of the 39 mining leases is technically sound and reliable. However, in respect of some of the leases, it would be desirable for the State Government to take another look at the results of the field survey. Unfortunately, the CEC has not identified these mining leases that require another look. Be that as it may, the fact is that a joint survey has not been conducted in respect of 43 mining leases. 134. We are of the view that for completing the record and taking the report of the CEC to its logical conclusion, it would be appropriate if a fresh Joint Survey is conducted by concerned officers of the Government of Odisha from the Revenu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ved mining plan, it was stated, inter alia, that an analysis of production and violations in 104 mining leases for bulk minerals in the last ten years was undertaken by the Indian Bureau of Mines. It was noted that in 71 cases there was excess ore produced beyond the reasonable variation limit of 20%. It was noted that this was partly due to the failure of the State machinery to restrict the movement of minerals. 137. In a further letter dated 5th September, 2012 it was reiterated that any violation of the mining plan or the mining scheme noticed by the State Government should be immediately brought to the notice of the Indian Bureau of Mines to initiate suitable action. It was reiterated that transit passes to such mines should not be issued by the State Government so as to stop any additional outgo. It was added: "Needless to say any revision on the limits of production is subjected to statutory clearances under Environment and Forest laws. Having said that, the State Mining and Geology officials should not also lose focus on taking stringent action against any instances of illegal mining, undertaken outside the leased area, and passed off as excess production." It is quite clea....
X X X X Extracts X X X X
X X X X Extracts X X X X
....area other than a leased area or violates the terms of a mining lease, which incorporates the mining plan and which requires adherence to the law of the land, that person becomes liable for prosecution under Section 21(1) of the MMDR Act. In the event of a conviction, he or she shall be punishable with imprisonment for a term which may extend to five years and with fine which may extend to Rs. 5 lakh per hectare of the area. 142. As far as Section 21(5) of the MMDR Act is concerned, according to the CEC the provision is applicable only if a person indulges in illegal mining outside the mining lease area. Consequently, Section 21(5) of the MMDR Act is not attracted even if the mineral raised within the mining lease area is without an EC or beyond the quantity prescribed by the EC or beyond the quantity permitted in the mining plan. In such a situation, the provisions of the EPA or the MCR come into play. This interpretation is supported by learned counsel for the mining lease holders who affirm that Section 21(5) of the MMDR Act is mining lease area centric. In other words, according to the CEC and the learned counsel, for the purposes of Section 21(5) of the MMDR Act illegal minin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ions of Section 21(5) of the MMDR Act. 147. In conclusion, it is reiterated by the Union of India on affidavit as follows: "55. That considering all the above, the Ministry would like to submit that the provisions of sub-section (5) of Section 21 would apply to all minerals raised without any lawful authority, be it forest clearances or environment clearances or any other such legal requirements. 56. That penalties would arise under section 21(5) of the MMDR Act, 1957, in respect of any form of mining activity without lawful authority. Mining outside lease area would on the face of it amount to mining without lawful authority and would attract the provisions of section 21(5); and, in addition, all forms of mining without lawful authority including that in breach of the limits imposed by the Environmental Clearance carried out within the lease area would also invite penalties under section 21 (5)." (Emphasis given by us). 148. On behalf of the State of Odisha, it was submitted by Shri Rakesh Dwivedi learned senior counsel by relying upon Karnataka Rare Earth v. Senior Geologist, Department of Mines & Geology (2004) 2 SCC 783 that what is sought to be achieved by Section 21(5) ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... as a punctuation mark. 15. We are clearly of the opinion that the marginal note "penalties" cannot be pressed into service for giving such colour to the meaning of sub-section (5) as it cannot have in law. The recovery of price of the mineral is intended to compensate the State for the loss of the mineral owned by it and caused by a person who has been held to be not entitled in law to raise the same. There is no element of penalty involved and the recovery of price is not a penal action. It is just compensatory." 149. We are in agreement with the view expressed by the learned Attorney General and Shri Dwivedi as also the view expressed in Karnataka Rare Earth. The decision in Khemka & Co. is not at all apposite. There is no ambiguity in Section 21(5) of the MMDR Act or in its application. We are also of opinion that though Section 21(1) of the MMDR Act might be in the realm of criminal liability, Section 21(5) of the MMDR Act is certainly not within that realm. 150. In our opinion, Section 21(5) of the MMDR Act is applicable when any person raises, without any lawful authority, any mineral from any land. In that event, the State Government is entitled to recover from such per....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er only 30% of the value of the illegally mined ore should be accepted. 153. In our opinion, there can be no compromise on the quantum of compensation that should be recovered from any defaulting lessee - it should be 100%. If there has been illegal mining, the defaulting lessee must bear the consequences of the illegality and not be benefited by pocketing 70% of the illegally mined ore. It simply does not stand to reason why the State should be compelled to forego what is its due from the exploitation of a natural resource and on the contrary be a party in filling the coffers of defaulting lessees in an ill gotten manner. Calculations on merits 154. The issue now is with regard to the calculations made by the CEC with regard to the production of iron ore and manganese ore without or in excess of the EC and/or the mining plan. As already mentioned above, the figures were not disputed (except by JSPL and SMPL). Therefore, only the application of the figures requires consideration and so we do not need to examine each individual case. However to understand and appreciate the manner in which the CEC has arrived at its figures, we may state that this has been specifically mentioned....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mining lease holder is being given the benefit of calculations only from 2000-01 and is not being 'penalized' for the period prior thereto. We think the mining lease holders should be grateful for this since it was submitted by learned counsel for the petitioners and the learned Amicus that the penalty should be levied from the date of EIA 1994. In our opinion, the cut-off from 2000-2001 (without interest) is undoubtedly reasonable and there can be hardly be any grievance in this regard. The mining lease holders cannot have their cake and eat it too, along with the icing on top. 156. Since the recommendation made by the CEC in this regard is not totally unreasonable, we accept that the compensation should be payable from 2000-2001 onwards at 100% of the price of the mineral, as rationalized by the CEC. Violation of the Forest (Conservation) Act, 1980 157. Before dealing with the violations of Section 2 of the Forest (Conservation) Act, 1980 (for short 'the FCA'), it is necessary to give a brief background. 158. The FCA came into operation initially through the Forest (Conservation) Ordinance, 1980 with effect from 25th October, 1980. The said Ordinance was repealed and subsequ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ate of Gujarat and Ors (1987) 1 SCC 213 when the lease of the mining holder came up for renewal, the FCA had already come into force. Since the forest department of the State of Gujarat refused to give a no objection certificate, the application for renewal of the lease was rejected. The question that arose for consideration was whether, after coming into force of the FCA, the mining lease holder was entitled to renewal of the mining lease. While answering the question in the negative this Court held that the renewal of a lease cannot be claimed as a matter of right. The primary purpose of the FCA was to prevent deforestation and ecological imbalance as a result of deforestation. Therefore, the primary duty under the FCA was to the community and the obligation to society must predominate over the obligation to the individuals. While distinguishing Banshi Ram Modi this Court held that renewal of the lease would lead to further deforestation or at least it would not help in reclaiming the area where deforestation had already taken place. The primary purpose of the FCA is to prevent further deforestation and any interpretation must sub-serve that purpose and implement the FCA. Under t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... identify areas which are 'forest' irrespective of whether they are so notified, recognized or classified under any law and irrespective of the ownership of the land of such forest. 169. Pursuant to the directions given by this Court, the State of Odisha constituted District Level Committees (for short 'DLC') for identification of forest lands. After the identification process, appropriate affidavits were filed by the State of Odisha in this Court in 1997-98, the last being dated 6th January, 1998. 170. In the meanwhile, in T.N. Godavarman v. Union of India (1997) 3 SCC 312 this Court passed certain directions on 4th March, 1997 with regard to what was categorized as mining matters. The directions given by this Court are as follows: "9. We direct that - (1) where the lessee has not forwarded the particulars for seeking permission under the FCA, he may do so immediately; (2) the State Government shall forward all complete pending applications within a period of 2 weeks from today to the Central Government for requisite decisions; (3) applications received (or completed) hereafter would be forwarded within two weeks of their being so made. (4) the Central Government shall....
X X X X Extracts X X X X
X X X X Extracts X X X X
....was accorded by the concerned State Government in anticipation of approval of the Central Government under the Act and/or where work has been carried out in forest area without proper authority. Such anticipatory action is neither proper not permissible under the Act which clearly provides for prior approval of the Central Government in all cases. Proposals seeking ex-post-facto approval of the Central Government under the Act are normally not entertained. The Central Government will not accord approval under the Act unless exceptional circumstances justify condonation. However, penal compensatory afforestation would be insisted upon by the MoEF on all such cases of condonation. 4.3.2 The penal compensatory afforestation will be imposed over the area worked/used in violation. However, where the entire area has been deforested due to anticipatory action of the State Government, the penal compensatory afforestation will be imposed over the total lease area." 176. It was submitted by learned counsel for the lessees that since additional NPV as well as an amount towards penal compensatory afforestation has been paid by the defaulting mining lease holders, the violation of Section 2 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he FC Act has been obtained/is obtained for such area. Keeping in view the peculiar circumstances as was existing in Orissa and subject to the above, the mining operations in the broken DLC land may be allowed to be continued provided the other statutory requirements and Rules are otherwise being complied with." 179. This still leaves open the question of violation of the order passed by this Court on 12th December, 1996 followed by the order dated 4th March, 1997 namely that mining must cease forthwith in forest areas. In regard to this violation, the only benefit (at best) that can be granted to the mining lease holders that we are concerned with, is till 6th January, 1998 when the affidavit was filed in this Court in I.A.Nos. 2746-2748 of 2009 in T.N. Godavarman. With effect from 7th January, 1998 any mining activity in forest and DLC lands would clearly be completely illegal and unauthorized and the benefit that the mining lease holders have derived from this illegal mining would be subject to Section 21(5) of the MMDR Act. Therefore, the price of the iron ore and manganese ore mined by the mining lease holders from 7th January, 1998 is payable until forest clearance under Sec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n the forest land in violation of the Forest (Conservation) Act, 1980 may be directed to be recovered from the respective lessees. Wherever the mineral production is both from the forest land as well as non-forest land then in such cases the notional value of the production from the forest land may be calculated on pro rata basis of the extent of the forest land and non-forest land involved. The notional value of the mineral, time limit for payment of the compensation, use of the amount received as compensation and other conditions as decided by this Hon'ble Court in respect of the production without/in excess of the environmental clearance may be directed to be followed on pari-passu basis." 183. For the reasons that we have already expressed above, we are not in agreement with the CEC that only a part of the notional value (in this case 70%) of the iron ore and manganese ore produced by the mining lease holders should be recovered. We are of the view that Section 21(5) of the MMDR Act should be given full effect and so we reiterate that the recovery should be to the extent of 100%. 184. There may be some overlap in the period when mining operations were conducted by the mining ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uction after 27th January, 1994 exceeds the annual production of 1993-94, it would be treated as an expansion requiring an EC. (4) There is no doubt that a new mining project after 27th January, 1994 would require a prior EC. (5) Any iron ore or manganese ore extracted contrary to EIA 1994 or EIA 2006 would constitute illegal or unlawful mining (as understood and interpreted by us) and compensation at 100% of the price of the mineral should be recovered from 2000-2001 onwards in terms of Section 21(5) of the MMDR Act, if the extracted mineral has been disposed of. In addition, any rent, royalty or tax for the period that such mining activity was carried out outside the mining lease area should be recovered. (6) With effect from 14th September, 2006 all mining projects having a lease area of 5 hectares or more are required to have an EC. The extraction of any mineral in such a case without an EC would amount to illegal or unlawful mining attracting the provisions of Section 21(5) of the MMDR Act. (7) For a mining lease of iron ore or manganese ore of less than 5 hectares area, the provisions of EIA 1994 will continue to apply subject to EIA 2006. (8) Any mining activity ca....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l area specified. 191. In this background, the CEC examined the case of seven mining lease holders. They are: 1. Essel Mining and Industries Limited 2. Rungta Mines Limited 3. Rungta Sons Pvt. Limited 4. Bonai Industrial Company Limited 5. Feegrade & Co. Pvt. Limited 6. M/s Mangilal Rungta 7. Jindal Steel & Power Limited 192. As far as Essel Mining and Industries Limited is concerned we propose to deal with this mining lease holder on another occasion since even the CEC has placed this mining lease holder in a special category. 193. Similarly, so far as Rungta Mines Limited, Rungta Sons Pvt. Limited and M/s Mangilal Rungta are concerned, although the CEC has come to the conclusion that these persons have not acquired mining leases in violation of Section 6 of the MMDR Act, there are some critical observations made by the Commission with regard to the 'Rungta Group'. Learned counsel for the petitioner submitted that the view of the CEC in this regard needs reconsideration. Since the 'Rungta Group' was not heard by us, we propose to hear the above Rungta companies to ascertain, inter alia, whether there has been any violation of the provisions of Section 6 of the MMD....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (Kusumdihi Manganese Mines) challenged the show cause notice and the decision of the Committee by filing revision petitions under Section 30 of the MMDR Act read with Rule 55 of the MCR before the Central Government. The challenge to the show cause notice was on the ground that persons who were not government servants could not have been included in the Committee and also that the Committee was not notified in the official gazette as required by Section 26(2) of the MMDR Act. 200. The Central Government set aside the order constituting the Committee and the State of Odisha has challenged the orders of the Central Government before the Orissa High Court through writ petitions. We are told that the writ petitions filed by the State of Odisha are pending in the High Court. 201. As far as Aryan is concerned, we were informed that the matter was pending with the State of Odisha and a request was made to us to permit the State of Odisha to pass a final order on the submissions made by Aryan. On 28th April, 2017 we had permitted the State of Odisha to pass final orders but we are not aware whether any orders have since been passed. 202. As far as Kavita Agrawal is concerned, her lease....
X X X X Extracts X X X X
X X X X Extracts X X X X
....future generations. Therefore some sort of a limit would have to be placed on the mining operations. 207. The second principle relied on is the principle of 'conservation of quality'. This was with reference to the submission that future generations should not be subjected to a quality of the planet worse than what it is today. In other words, future generations are also entitled to quality enjoyment of the diversity in the natural and cultural resource base. 208. The third principle relied upon was the principle of 'conservation of access' which is to say that future generations have an equitable right to access the diversity of the natural and cultural resource base as is available to the present generation. 209. There is no doubt considerable substance in the submission particularly if this is considered in the light of intergenerational rights and obligations which have been dealt with in the said article. However, it is really not for this Court to lay down limits on the extent of mining activities that should be permitted by the State of Odisha or by the Union of India. Nevertheless, this is an aspect that needs serious consideration by the policy and decision makers in ou....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d policy need to be prevented in other parts of the country. The rule of law needs to be established. We are therefore of the view that it would be appropriate if an Expert Committee is set up under the guidance of a retired judge of this Court to identify the lapses that have occurred over the years enabling rampant illegal or unlawful mining in Odisha and measures to prevent this from happening in other parts of the country. 212. There is no doubt that the recommendations of the Commission can form a platform for the study but it is also necessary to use technology for maintenance of registers, records and data through computers, satellite imagery, videography and other technology tools so that the natural wealth of our country is not rapaciously exploited for the benefit of a few to the detriment of a large number, many of whom are tribals inhabiting the land for several generations. Utilization of funds by the Special Purpose Vehicle 213. In I.A. Nos.2746-2748 of 2009 filed by Rabi Das, an order was passed on 27th January, 2014 relating to the preparation of a scheme by the CEC for setting up a Special Purpose Vehicle (SPV) for tribal welfare and area development works. The....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent features of the Scheme are as follows: 5 The SPV will undertake specific tribal welfare and area development works so as to ensure inclusive growth of the mineral bearing areas. These will include works/projects related to livelihood intervention, health, water supply and sanitation, education, special programmes for development of women and children, entrepreneurial development of local people, communication and infrastructure projects and agro silvi-horticultural based livelihood projects through identified agencies/Government Departments. While taking up such projects/works a bottom up planning and participatory approach will be followed. 9 The general superintendence of the affairs will be vested in its Board of Directors including (a) to receive grants/funds and have custody of the same, (b) to approve Annual Budget Estimates and sanction the expenditure within the limits of the Budget, (c) to enter into any agreement for and on behalf of the SPV; (d) institute and defend legal proceedings (e) to consider and approve the Annual Report, audit report, annual accounts and the financial estimates of the SPV, (f) to prescribe procedure to be followed for implementation of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nds or whether they are in fact being used for tribal welfare and area development works. We also expect that as a result of the orders that we are passing today, very large amounts will again be made available to the State of Odisha. These amounts should also be kept with the Special Purpose Vehicle. 218. To ensure that the amounts are utilized for the benefit of tribals in the affected districts and for area development works, we would like the Chief Secretary of Odisha to file an affidavit stating the work done as well as providing the audited accounts of the receipt and expenditure of the SPV from its inception. Conclusion 219. In view of findings above, we dispose of the writ petitions to the extent of the directions that we have already given. 220. I.A. Nos. 45 (filed by Zenith Mining) and 47 (filed by Kavita Agrawal) are dismissed since their lease has not been extended or has been determined and they do not have any environment clearance or forest clearance. 221. I.A. No. 66 (filed by J.N. Pattnaik) is also dismissed since there is no forest clearance available. 222. We have been informed that S.A. Karim (I.A. No.9) actually had a working lease and has wrongly been i....