2018 (2) TMI 1848 - SC - Indian Laws

Large-scale illegal mining of iron ore and manganese ore in different States in contravention of the provisions of the Mines and Minerals (Development and Regulation) Act, 1957 (the MMDR Act), the Forest (Conservation) Act, 1980, the Environment (Protection) Act, 1986 and other Rules and guidelines issued on the subject from time to time - issuance of fresh mining leases/second renewals - recovery of the amounts due from the mining lease holders. HELD THAT - As a result of the decision, declaration and directions of this Court in Goa Foundation, 2015 (8) TMI 723 - SUPREME COURT , the State of Goa was obliged to grant fresh mining leases in accordance with law and not second renewals to the mining lease holders. The State of Goa was not under any constitutional obligation to grant fresh mining leases through the process of competitive bidding or auction. The second renewal of the mining leases granted by the State of Goa was unduly hasty, without taking all relevant material into consideration and ignoring available relevant material and therefore not in the interests of mineral development. The decision was taken only to augment the revenues of the State which is outside the purview of Section 8(3) of the MMDR Act. The second renewal of the mining leases granted by the State of Goa is liable to be set aside and is quashed. The Ministry of Environment and Forest was obliged to grant fresh environmental clearances in respect of fresh grant of mining leases in accordance with law and the decision of this Court in Goa Foundation and not merely lift the abeyance order of 14th September, 2012. The decision of the Bombay High Court in Lithoferro v. State of Goa (and batch) 2014 (8) TMI 1171 - BOMBAY HIGH COURT giving directions different from those given by this Court in Goa Foundation is set aside. The mining lease holders who have been granted the second renewal in violation of the decision and directions of this Court in Goa Foundation are given time to manage their affairs and may continue their mining operations till 15th March, 2018. However, they are directed to stop all mining operations with effect from 16th March, 2018 until fresh mining leases (not fresh renewals or other renewals) are granted and fresh environmental clearances are granted. The State of Goa should take all necessary steps to grant fresh mining leases in accordance with the provisions of the Mines and Minerals (Development and Regulation) Act, 1957. The Ministry of Environment and Forest should also take all necessary steps to grant fresh environmental clearances to those who are successful in obtaining fresh mining leases. The exercise should be completed by the State of Goa and the Ministry of Environment and Forest as early as reasonably practicable. The State of Goa will take all necessary steps to ensure that the Special Investigation Team and the team of Chartered Accountants constituted pursuant to the Goa Grant of Mining Leases Policy 2014 give their report at the earliest and the State of Goa should implement the reports at the earliest, unless there are very good reasons for rejecting them. The State of Goa will take all necessary steps to expedite recovery of the amounts said to be due from the mining lease holders pursuant to the show cause notices issued to them and pursuant to other reports available with the State of Goa including the report of Special Investigation Team and the team of Chartered Accountants. Petitions and SLP disposed off.

Issues Involved:
1. Environmental degradation and violation of mining laws.
2. Government action on illegal mining.
3. Impact of the Goa Mineral Policy 2013.
4. Judicial review of the second renewal of mining leases.
5. Requirement of fresh environmental clearances.
6. Competitive bidding for mining leases.
7. Validity of the High Court's decision in Lithoferro.

Detailed Analysis:

1. Environmental Degradation and Violation of Mining Laws:
The judgment highlights the rampant exploitation of natural resources in the iron ore mining sector, characterized by a lack of concern for the environment and the health of local residents. The mining operations were conducted with a profit motive, often sidelining the Rule of law. The State's inability to curb these violations was noted, emphasizing the need for sustainable and equitable development.

2. Government Action on Illegal Mining:
The Government of India received information about large-scale illegal mining and appointed Justice M.B. Shah as a commission of inquiry. The commission's terms included investigating illegal mining activities, tampering of official records, and the overall impact on the environment and local communities. The commission's reports led to the suspension of mining operations in Goa and the abeyance of environmental clearances for numerous mines.

3. Impact of the Goa Mineral Policy 2013:
The Goa Mineral Policy 2013 was introduced during the court proceedings. It acknowledged the chaotic and unregulated mining activities that had taken place, emphasizing the need for sustainable extraction and protection of the environment. The policy, however, did not address the allocation or distribution of natural resources comprehensively.

4. Judicial Review of the Second Renewal of Mining Leases:
The Supreme Court in Goa Foundation v. Union of India held that all iron ore and manganese ore leases had expired on 22nd November 2007, making subsequent mining operations illegal. The court mandated that fresh leases be granted in accordance with law, and the State of Goa was required to apply its mind and record reasons for any renewal. The decision of the Bombay High Court directing the execution of second renewals was found to be erroneous, as it misunderstood the Supreme Court's mandate for fresh leases.

5. Requirement of Fresh Environmental Clearances:
The court emphasized that fresh environmental clearances were necessary for the renewal of mining leases. The Ministry of Environment and Forests (MoEF) had lifted the abeyance order on environmental clearances without due consideration of the violations and the need for fresh clearances. This action was found to be contrary to the decisions in M.C. Mehta and Common Cause, which required compliance with statutory provisions at the stage of renewal.

6. Competitive Bidding for Mining Leases:
The judgment discussed whether the State of Goa should have auctioned the mining leases. While the court acknowledged that auction is a preferable method for allocating natural resources, it held that it is not a constitutional mandate. The decision to not auction the leases was subject to judicial review, and the court found that the State's decision was flawed as it did not serve the common good but primarily benefited private entrepreneurs.

7. Validity of the High Court's Decision in Lithoferro:
The Supreme Court set aside the Bombay High Court's decision in Lithoferro, which had directed the State to grant second renewals of mining leases. The High Court's decision was found to be inconsistent with the Supreme Court's direction in Goa Foundation, which required the grant of fresh leases.

Conclusion and Directions:
1. The State of Goa was required to grant fresh mining leases, not second renewals.
2. There was no constitutional obligation to grant leases through competitive bidding.
3. The second renewals were set aside as they were not in the interests of mineral development.
4. Fresh environmental clearances were mandated.
5. The High Court's decision in Lithoferro was set aside.
6. Mining operations were allowed to continue till 15th March 2018, after which they must stop until fresh leases and clearances are granted.
7. The State of Goa and MoEF were directed to expedite the grant of fresh leases and clearances.
8. The State was instructed to implement reports from the Special Investigation Team and Chartered Accountants.
9. The State was directed to expedite the recovery of dues from mining lease holders.

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