2017 (8) TMI 1446 - SC - Indian Laws

Writ petitions under Article 32 of the Constitution suggest a mining scandal of enormous proportions and one involving megabucks. Lessees in the districts of Keonjhar, Sundergarh and Mayurbhanj in Odisha have rapaciously mined iron ore and manganese ore, apparently destroyed the environment and forests and perhaps caused untold misery to the tribals in the area. However, to be fair to the lessees, they did the detail steps taken to ameliorate the hardships of the tribals, but it appears to us that their contribution is perhaps not more than a drop in the ocean also too little, too late. We would like to hear Jindal Steel and Power Limited, Sarda Mines Private Limited, Rungta Group of Companies and Essel Mining and Industries Limited on the applications filed by them. For this purpose list the matter again after two weeks so that a convenient date of hearing can be fixed. The amounts determined as due from all the mining lease holders should be deposited by them on or before 31st December, 2017. Subject to and only after compliance with statutory requirements and full payment of compensation and other dues, the mining lease holders can re-start their mining operations. We would also like to hear the eight concerned mining lease holders on the question of appointing an appropriate Committee in respect of the applicability of Rule 37 of the Mineral Concession Rules to them. We would also like to hear learned counsel for all the parties with regard to setting up of an Expert Committee presided over by a retired judge of this Court to identify the lapses that have occurred over the years that have enabled rampant illegal and unlawful mining in Odisha and to recommend preventive measures not only to the State of Odisha but generally to all other States where mining activities are proceeding on a large scale. For the present, we pass no direction with regard to any investigation by the CBI. We direct the Union of India to have a fresh look at the National Mineral Policy, 2008 which is almost a decade old, particularly with regard to conservation and mineral development. The exercise should be completed by 31st December, 2017.

Issues Involved:
1. Illegal mining and environmental violations in Odisha.
2. Violations of the Forest (Conservation) Act, 1980.
3. Violations of the Mines and Minerals (Development and Regulation) Act, 1957.
4. Violations of the Mineral Concession Rules, 1960.
5. Recommendations for policy and procedural reforms.
6. Compensation and penalties for illegal mining.
7. Utilization of funds for tribal welfare and area development.
8. Inquiry and investigation into illegal mining activities.

Detailed Analysis:

Illegal Mining and Environmental Violations in Odisha:
The Supreme Court identified a significant mining scandal in Odisha involving illegal extraction of iron ore and manganese ore, causing environmental destruction and tribal misery. The Central Empowered Committee (CEC) reported that 102 leaseholders lacked requisite environmental clearances, leading to a suspension of their operations. The Court emphasized that mining operations must comply with statutory provisions, including environmental and forest clearances.

Violations of the Forest (Conservation) Act, 1980:
The Court noted that mining operations in forest areas without prior approval from the Central Government violated Section 2 of the FCA. The CEC reported violations by 18 mining leaseholders who mined in forest lands without clearances. The Court directed that compensation equivalent to 100% of the price of the illegally mined ore be recovered from these leaseholders.

Violations of the Mines and Minerals (Development and Regulation) Act, 1957:
The Court clarified that mining without requisite clearances and beyond permissible limits under the mining plan constitutes illegal mining under Section 21(5) of the MMDR Act. The CEC recommended recovering 30% of the notional value of the illegally mined ore, but the Court mandated 100% recovery to ensure no benefit from the illegal activity.

Violations of the Mineral Concession Rules, 1960:
The CEC identified violations of Rule 37 of the MCR by eight mining leaseholders who entered into raising contracts amounting to a transfer of the lease. The State of Odisha issued show-cause notices, and the Court proposed a fresh examination of these contracts by an appropriate committee.

Recommendations for Policy and Procedural Reforms:
The Court highlighted the need for a fresh and effective National Mineral Policy to prevent illegal mining. It directed the Union of India to revisit the National Mineral Policy, 2008, and announce a new policy by 31st December 2017.

Compensation and Penalties for Illegal Mining:
The Court mandated that compensation for illegal mining be calculated from 2000-2001 onwards, with 100% recovery of the price of the illegally mined ore. The Court rejected the CEC's recommendation of 30% recovery, emphasizing full compensation to prevent illegal benefits.

Utilization of Funds for Tribal Welfare and Area Development:
The Court approved a scheme for utilizing 50% of the additional NPV recovered from mining leaseholders for tribal welfare and area development through a Special Purpose Vehicle (SPV). The Chief Secretary of Odisha was directed to file an affidavit detailing the utilization of these funds.

Inquiry and Investigation into Illegal Mining Activities:
The Court deferred the decision on a CBI inquiry but proposed setting up an Expert Committee under a retired Supreme Court judge to identify lapses that enabled illegal mining and recommend preventive measures. The Court emphasized the need for technological tools to monitor mining activities and prevent illegal exploitation.

Conclusion:
The Supreme Court's judgment addressed multiple issues related to illegal mining in Odisha, emphasizing strict compliance with environmental and forest laws, full recovery of compensation for illegal mining, and the need for policy reforms to prevent future violations. The Court also focused on the utilization of funds for the welfare of affected communities and proposed an expert inquiry to identify systemic lapses.

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