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TMI Blog2017 (8) TMI 1446X X X X Extracts X X X X X X X X Extracts X X X X ..... osited 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, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... For M/s. Karanjawala Co. OMC : Mr. V. Giri, Sr. Adv., Mr. Raj Kumar Mehta, AOR, Mr. Elangbam Premjit Singh, Adv., Ms. Himanshi Andley, Adv. SAIL : Mr. Sunil Kumar Jain, AOR, Mr. Akarsh Garg, Adv., Mr. K.P.S. Chani, Adv. Odisha : Ms. Kirti Renu Mishra, AOR, Ms. Apurva Upmanyu, Adv. Jharkhand : Mr. Gopal Prasad, Adv. FIMI : Mr. Sunil Dogra, Adv., Mr. Vivek Vishnoi, Adv., Mr. Abhishek Sharma, AOR, Mr. Suchit Mohanty, Adv., Mr. Anupam Lal Das, AOR, Mr. Balaji Srinivasan, AOR, Mr. Ashok K. Parija, Sr. Adv., Mr. Gaurav Kejriwal, AOR, Mr. Keshav Mohan, Adv., Mr. Sujit Keshri, Adv. I.A. 45-48 : Mr. Saraswata Mohapatra, Adv., Mr. P.R. Mishra, Adv., Ms. Rajani Ohri Lal, Adv., Mr. Himinder Lal, AOR, Mr. Ashok Panigrahi, AOR I.A.12,13,15,16,18,19,28,29,30,54,60,90 : Mr. Ashok Kr. Parija, Sr. Adv., Mr. Dhananjaya Mishra, Adv., Mr. Arnav Dash, Adv., Mr. Bishwaranjan Sahoo, Adv., Mr. Avnish Kr. Sharma, Adv., Mr. R.M. Patnaik, Adv., Mr. Gaurav Khanna, Adv., Mr. Tayenjam Momo Singh, AOR, Mr. Ashok Kr. Panda, Sr. Adv., Mr. Tejaswi Kumar Pradhan, AOR, Mr. Manoranjan Paikaray, Adv., Mr. Aniruddha Purushotham, Adv., Mr. Satyabrata Panda, Adv., Mr. M. Paikaray, Adv. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... haps 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. Facts leading up to the report of the Central Empowered Committee 2. Rabi Das, the editor of a daily newspaper called Ama Rajdhani filed I.A. No. 2746-2748 of 2009 in a pending writ petition being T.N. Godavarman v. Union of India. W.P. No. 202 of 1995 He prayed, inter alia, for the following directions from this Court: a) Issue a direction to the Central Empowered Committee to conduct an exhaustive fact finding study of the illegal mining in Keonjhar, Sundargarh and other Districts of Orissa; b) Direct appointment of a Commission to investigate and study the modalities of the illegal machinations, fix responsibility on individuals (in Government and outside it) and recommend remedial measures to be immediately implemented by the Government of India and the Government of Orissa; c) Direct the Respondents to take effective and appropriate action to ensure closure/stoppage of all th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med 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 been treated as non-forest land. It is recommended that (i) the NPV for the entire DLC area included in the mining lease, after deducting the NPV already paid, should be deposited by the concerned lease holder and (ii) the mining operations in the unbroken DLC land (virgin land) should be permissible only if the permission under the 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. The report concluded by recording as follows: a) an attempt has been made for the first time by the CEC to comply and analyse the status of all the mining leases in a State and to suggest effective and remedial measures - something made possible because of the unstinted cooperation extended by the senio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r have not been furnished by the State Government. Mr. Venugopal, learned senior counsel for the applicant M/s. Sarda Mines Private Limited in IA No.3721 submits that since some of the matters are pending before the High Court, a prayer has been made for not furnishing the required information to the Central Empowered Committee. List this matter in the second week of January, 2014. In the meantime, the Central Empowered Committee may not submit its final Report. 8. The matter was again taken up on 13th January, 2014 and this Court passed the following order: We have heard learned counsel for the parties. We have also perused the letter dated 17th October, 2013 of the Member Secretary, Central Empowered Committee sent to the Chief Secretary, Government of Odisha along with its annexures and in particular, the Statement of Details of information and documents sought by Central Empowered Committee for the meeting convened on 30th October, 2013, which cover forest and environmental issues. We, accordingly, modify the order dated 9th December, 2013 and direct the Central Empowered Committee to submit its final report on the queries made by the State Government wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed would be used for the welfare of local communities, tribals and villagers. 9. The writ petition was taken up for consideration on 21st April, 2014 when the following order was passed: We have heard the preliminary objections with regard to the writ petition and we are not convinced that the writ petition is not maintainable. Issue notice. As the State of Odisha, Union of India and the CEC have already been served with the notices, no further notices be issued to them. Notice, however, be issued to respondent nos. 4 and 5 returnable within four weeks. It appears from the averments in paragraph 14 of the writ petition that several lessees are operating without clearances under the Environment (Protection) Act, 1986 and the Forest (Conservation) Act, 1980, and without renewal by the Government. Hence, an interim order needs to be passed in respect of these lessees who are operating the leases in violation of the law. For consideration of the interim order that should be passed, only this writ petition be listed next Monday, the 28th of April, 2014, as first item. It will be open for all parties and intervenors/proposed intervenors to file their respective affida ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onmental clearance). In addition 3 mining leases were located in forest as well as non-forest land, but mining operations were being conducted in non-forest areas of the mining lease as the lease holders did not have approvals under the Forest (Conservation) Act, 1980. Therefore a total of 56 iron ore/manganese ore mining leases were operating in the State of Odisha. 13. As far as the break-up of the 56 operational mining leases is concerned, it was found that 14 mining leases were operating on first renewal basis in accordance with the deeming provisions of Section 8(2) of the Mines and Minerals (Development and Regulation) Act, 1957 (for short the MMDR Act ) read with Rule 24-A(6) of the Mineral Concession Rules, 1960 (for short the MCR ) and 16 mining leases were operating since lease deeds for grant of renewal had been executed in their favour. The remaining 26 mining leases were operating on second and subsequent renewal basis with the renewal applications pending a final decision with the State Government. 14. In respect of the 14 first renewal mining leases, this Court permitted them to continue their operations for the time being in view of the deemed renewal provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are mentioning this in the context of the order passed on 13th January, 2014 adverted to above to the effect that The Report will not cover cases other than forest and environmental issues. 18. In its final report, the CEC has dealt with the following ten topics: In this final report dated the CEC dealt with the following ten topics:- I. Production of iron ore and manganese ore without/in excess of the environmental clearance/Mining Plan/Consent to Operate. II. Mining leases operated in violation of the Forest (Conservation) Act, 1980. III. Illegal mining outside the sanctioned mining lease areas. IV. Mining leases acquired in violation of Section 6 of the MMDR Act, 1957. V. Violation of Rule 37 of the Mineral Concession Rules, 1960 by the lessees. VI. Illegalities involved in the mining leases of Essel Mining Industries Ltd. VII. Illegalities involved in the mining lease of Sharda Mines (P) Ltd. VIII. Massive illegal mining in Uliburu Forest land. IX. Inordinate delays in taking decisions by the State Government regarding renewal of the mining leases. X. Other issues. 19. By an order dated 16th January, 2015 objections to the final report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rather frightening figures mentioned by the CEC in its final report. According to the CEC, excess mining without environmental clearance or beyond what was authorized by the environmental clearance is 2130.988 lakh MT of iron ore and 24.129 lakh MT of manganese ore making a total of 2155.117 lakh MT of iron and manganese ore. This does not include extraction of ore without forest clearance. These figures give an indication of the extent of excess or illegal or unlawful mining carried out. 26. In terms of rupees, according to the CEC the total notional value of minerals produced without an environmental clearance or in excess of the environmental clearance, at the weighted average price of minerals as proposed by the Indian Bureau of Mines comes to about ₹ 17091.24 crores for iron ore and about ₹ 484.92 crores for manganese ore making a total of ₹ 17,576.16 crores. Again, this does not include mining without forest clearance. It is for this reason that we have referred to the megabucks and rapacious mining. Justice M.B. Shah Commission of Inquiry 27. Apparently, and it appears quite independently of all these developments, the Central Government issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of a mining plan; e transportation of raised mineral without lawful authority; f mining and transportation of raised mineral in contravention of applicable Central and State Acts and rules thereunder; g conducting of multiple trade transactions to obfuscate the origin and source of minerals in order to facilitate their disposal; h tampering with land records and obliteration of inter-state boundaries with a view to conceal mining outside lease areas; i forging or misusing valid transportation permits and using forged transport permits and other documents to raise, transport, trade and export minerals; It is in the above context that the Terms of Reference were framed. 29 On 1st July, 2013 the Commission gave the First Report on Illegal Mining of Iron and Manganese Ores in the State of Odisha. The report contains an executive summary and very briefly the Commission stated that: (i) All modes of illegal mining, as stated in the notification dated 22nd November, 2010 of the Central Government are being committed in the State of Odisha; (ii) There is a complete disregard and contempt for law and lawful authorities on the part of many of the emerging breed of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lease holders that the reports given by the Commission were not acceptable on the ground that a notice had not been given to the lease holders under Section 8B or Section 8C of the Commissions of Inquiry Act, 1952. It was submitted that under these circumstances the reports given by the Commission were vitiated and therefore the foundation of the writ petition filed by Common Cause was taken away. We are not in agreement with learned counsel for the mining lease holders. 32. The first report given by the Commission was a general, overall perspective on the subject while the second report went into specific details of several mining lease holders - but we are not concerned with those specifics. Therefore, whether notices were or were not issued to the lease holders who were the subject matter of discussion in the second report is of no consequence. 33. What we are really perturbed about is the facts stated by the Commission in the first report. So far as this is concerned, we are of the view that no irregularity or illegality has been committed so as to vitiate the first report. Notwithstanding this, we are not relying upon any of the facts determined by the Commission for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Indian Mining Industries (for short FIMI ). Following the submissions made, a fresh notice was issued to the lease holders from 28th January, 2013 seeking information in Proformas A to H. In terms of the fresh notice, the lease holder was required to verify the facts stated therein (which were collected by the Commission) and if found incorrect then to state the correct facts. The fresh notice specifically mentioned that: (i) The lessee shall come fully prepared to answer, related to this matter and submit all related records. (ii) Explain the production from the leased area without having approval under F(C) Act, 1980. (iii) Explain the production during the deemed extension period without having approval under EIA Notification dated 27.01.1994 and amendments thereon. (iv) Explain the excess production in violation of EIA Notification dated 27.01.1994 and amendments thereon under the EP Act, 1986. 40. The report mentions the various dates of hearing given to learned counsel for the lease holders, the State of Odisha, FIMI, Federation of Indian Chambers of Commerce and Industry (FICCI) and the Ministry of Environment and Forest of the Government of India (for s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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, there is absolutely no question of any notice being issued to any mining lease holder under Section 8B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 II of the report to the effect that: a That the tribals in the area have been displac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 59,000 crores! (According to the CEC the figure exceeds ₹ 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 Empowered Committee will give a fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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/beyond environmental cleara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 988 (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 which the miner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ides 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 ..... t. 77. The 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 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of a mining lease is 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: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but a copy of such certificate issued by the 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 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n EC is mandated. 93. It was contended on behalf of the 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 wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from 2000-01 onwards which is actually relevant for the present 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. Unio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay, 2002. In doing so, this Court categorically held in paragraph 37 of the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he extraction process, new mining projects and renewal of mining leases. A mining 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ows:- It is clarified that all such mining projects which did not require environmental clearance 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 Memora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was pointed out that State Governments had expressed a concern that the Indian Bureau of Mines (IBM) had been 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 communicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2000, 18th July, 2014 and 8th October, 2014. In our opinion, none of these are of any consequence, the reason being that 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 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cept where there has been a violation of the rules framed under Section 23C of the MMDR Act. According to the CEC: 17. Illegal mining 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 per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stion of the Commission, to survey and identify the exact extent and location of the sanctioned lease area, lease area under occupation of the mining 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government of India to the Chief Secretary of the Government of Odisha (adverted to above) concerning violation of annual production limit laid down in the approved 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rea except under and in accordance with the terms and conditions of a mining lease and the rules made thereunder. Therefore, when a person carries out a mining operation in any 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 ₹ 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 Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted of illegal mining. It is submitted that the definition of illegal mining in the MCR must be strictly construed and limited to the provisions of the MCR and cannot apply to the provisions 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 Rak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ote being a brief pr cis of the section forms a most unsure guide to the construction of the enacting section and very rarely it might throw some light on the intentions of Parliament just 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, Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the MMDR. We may note that only to this extent, the learned Attorney General differed with the view expressed by the Union of India and submitted that the recommendation of the CEC to recover 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... base year of 1993-94 is most appropriate - we have already given our reasons for this. Some lessees might lose in the process while some of them might benefit but that cannot be avoided. In any event, each 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee to remove any discovered mineral, it cannot be said that there has been a violation of Section 2 of the FCA particularly since there is no breaking up of any fresh forest land. 164. Subsequently in Ambica Quarry Works v. State 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 wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral Government must cease forthwith. This particular direction given by this Court is of immense significance. 168. This Court further directed each State Government to constitute within one month an Expert Committee, inter alia, to 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 appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tant Inspector General of Forest to the Chief Secretary of all the State and Union Territories and the relevant portion thereof reads as follows: 4.3.1 Cases have come to the notice of the Central Government in which permission for diversion of forest land 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he NPV for the entire DLC area included in the mining lease, after deducting the NPV already paid, should be deposited by the concerned lease holder and (ii) the mining operations in the unbroken DLC land (virgin land) should be permissible only if the permission under the 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest land in violation of the Forest (Conservation) Act, 1980 and consequently also in violation of this Hon ble Court order dated 12.12.1996. The CEC recommends that 70% of the notional value of the iron ore and manganese produced by the lessees by undertaking mining operations in 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 lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gency. (2) The renewal of a mining lease after 27th January, 1994 will require an EC even if there is no expansion or modernization activity or any increase in the pollution load. (3) For considering the pollution load the base year would be 1993-94, which is to say that if the annual production 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 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a member of a cooperative society, company or other corporation or a Hindu Undivided Family or a partner of a firm shall be deducted from the area referred to so that the sum total of the area held by such person under a mining lease only as such member or partner or individually may not in any case exceed the total 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 re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ore Mines, Keonjhar viii) M/s Sharda Mines (P) Ltd., Thakurani Iron Ores Mines, Keonjhar 199. Pursuant to the report of the Committee, a show cause notice was issued to these mining lease holders by the State of Odisha. Six of the mining lease holders (other than M/s Aryan Mining Trading Corporation Pvt. Ltd. (for short Aryan) and Kavita Agrawal (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eneration to conserve the diversity of the natural and cultural resource base in such a manner that the options available to future generations are not restricted. It was submitted that the extent of mining activities being carried on in Odisha indicate that the entire iron ore will perhaps be fully extracted within a period of 30 years and nothing would be available for 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 considere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... achieved through the identification of lapses and finding solutions to the problems that are faced. Undoubtedly, there have been very serious lapses that have enabled large scale mining activities to be carried out without forest clearance or environment clearance and eventually the persons responsible for this will need to be booked but as mentioned above, the violation of the laws and 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 detrimen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e perused the Scheme prepared by the State Government of Odisha and the recommendation of the Central Empowered Committee and we approve the Scheme and direct as hoc CAMPA to transfer to the SPV 50 per cent of the additional amount of the NPV within a month for undertaking tribal welfare development works. The Interlocutory applications be listed in the month of July, 2014. 215. Some of the salient 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 cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th April, 2017 and was without prejudice to the rights and contentions of lessees. In terms of our directions, the Registry has encashed the cheque and kept the amount in a short term fixed deposit. We have mentioned this only to point out that there are huge amounts available with the Special Purpose Vehicle for tribal welfare and area development works and we have absolutely no idea about the utilization of the funds 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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