Supreme Court of India
COMMON CAUSEversusUNION OF INDIA AND ORS.
- Citation
- 2017 INSC 700
- Decided
- 2 August 2017
- Disposal
- Directions issued
Holding
The Court held that the CEC acted within its jurisdiction, the Commission's reports are not vitiated by lack of notices, EIA 1994/2006 mandates environmental clearance for any expansion, renewal or new mining project, illegal mining includes excess extraction within a lease, Section 21(5) of the MMDR Act applies fully requiring 100% recovery of the mineral's value, and no CBI investigation was ordered.
Summary
The Supreme Court examined a massive illegal mining scandal in Odisha involving 187 iron and manganese ore leases, many of which operated without environmental or forest clearances, exceeded mining plans, or violated statutory provisions. The Court rejected the lease‑holders' claim that the Justice M.B. Shah Commission's reports were vitiated for lack of notices under the Commissions of Inquiry Act, holding that the reports were general fact‑findings and that procedural fairness had been afforded. It affirmed the jurisdiction and remit of the Central Empowered Committee (CEC) to investigate all aspects of illegal mining and declined to rely on the Commission's findings for its orders. The Court clarified that the Environment Impact Assessment (EIA) 1994 and 2006 notifications require a fresh environmental clearance for any expansion, renewal, or new mining project, and that illegal mining includes excess extraction within a lease as well as operations outside the lease area. Accordingly, Section 21(5) of the MMDR Act applies to such violations, mandating 100% recovery of the mineral's value, and rejected the CEC’s suggestion of a 30% recovery. No direction for a CBI investigation was issued, but the Court ordered the establishment of an expert committee to identify systemic lapses, directed the Union to revise the National Mineral Policy, and set timelines for settlement of pending notices and compensation.
Issues considered
- The CEC exceeded its jurisdiction or its remit?
- The lack of notices under Sections 8B and 8C of the Commissions of Inquiry Act vitiated the Commission's reports?
- The scope of EIA 1994 and 2006 notifications regarding environmental clearance for existing, renewed, or expanded mining leases?
- The definition of "illegal mining" and the applicability of Section 21(5) of the MMDR Act to excess extraction within a lease?
- The quantum of compensation recoverable under Section 21(5) – 30% versus 100% of the mineral's value?
- The necessity of a CBI investigation into alleged corruption and illegal mining?
- The violation of the Forest (Conservation) Act, 1980 and its consequences?
- The breach of Rule 37 of the Mineral Concession Rules, 1960 and Rule 6 of the MMDR Act?
Legislation cited
- Air (Prevention and Control of Pollution) Act, 1981
- Commissions of Inquiry Act, 1952s. 8B, s. 8C
- Environment Impact Assessment Notification, 14 September 2006
- Environment Impact Assessment Notification, 27 January 1994
- Environment (Protection) Act, 1986s. 3(1), s. 3(2)(v)
- Forest (Conservation) Act, 1980s. 2
- Mineral Concession Rules, 1960s. 22, s. 22A, s. 24, s. 27, s. 31, s. 37
- Mineral Conservation and Development Rules, 1988s. 10, s. 13, s. 31, s. 37, s. 38, s. 41, s. 9
- Mines and Minerals (Development and Regulation) Act, 1957s. 10, s. 12, s. 13, s. 18, s. 21(1), s. 21(5), s. 4(1), s. 4(2), s. 5(2), s. 6
- Water (Prevention and Control of Pollution) Act, 1974
Subjects
illegal miningenvironmental clearancemining leaseEIA 1994EIA 2006MMDR ActMineral Concession RulesMineral Conservation and Development RulesForest Conservation ActSection 21(5) compensationCentral Empowered Committeeexpert committeeintergenerational equityCBI investigationNational Mineral Policy
Judgment
[2017] 13 S.C.R. 361
COMMON CAUSE A
v.
UNION OF INDIA AND ORS.
(Writ Petition (Civil) No. 114 of2014)
AUGUST 2, 2017 B
(MADAN B. LOKUR AND DEEPAK GUPTA, JJ.]
Mines and Minerals - Illegal mining of enonnous proportions
in districts of Odisha - Writ petition partly based on reports given
by Justice MB. Shah Commissions of Inquiry sought directions,
c
inter alia, to Union ofIndia and Government ofOdisha to immediately
stop forthwith all illegal mining in the State of Odis ha and for CBI
investigation into such illegal mining - Plea of mining lease holders
that reports given by Commission were v,itiated as they were not
given notice u/ss.8B, 8C of the 1952 Act. and thus. the very
foundation of the writ petition goes away - Held: First report given D
by Commission was a general, overall perspective on the subject -
No irregularity or illegality has been committed so as to vitiate the
first report - Second report went into specific details of several
mining lease holders, but herein one is not concerned with those
specifics - Therefore. whether notices were issued or not to the E
lease holders who were the subject matter of discussion in the second
report is of no consequence -However. the reports of the
Commission are not being relied upon for the purpose of present
judgment and order - Further. for now, no direction is being given
with regard to any investigation by CBI - Expert Committee be set
up under the guidance of a retiredjudge of Supreme Court to identifY F
the lapses occ1:l'red over the years enabling rampant illegal or
unlawful mining in Odisha and measures to prevent this ji·om
happening in other parts of the country - Furthe1; directions issued -
Commissions of Inquiry Act. 1952 - ss.8B. 8C.
Committees: G
Central Empowered Committee (CEC)- Constitution of-Held:
CEC was first constituted by Supreme Court in T. N. Godavarma11
case as an interim body - Thereafter, it was constituted by
notification issued uls.3(3) of the 1986 Act - It has continued
H
361
362 SUPREME COURT REPORTS [2017] 13 S.C.R.
A fimctioning and is now an established body which renders extremely
valuable advice to this Court- Environment (Protection) Act, 1986 -
s.3(3).
Central Empowered Committee (CEC) - Jurisdiction of -
Challenge to - Plea of lease holders that in giving the report on
B mining. CEC tfXceeded its remit - Held: Not tenable - Jurisdiction
of CEC was not limited and it was expected to give a detailed report
on all aspecrs of illegal mining or mining being carried out without
any lawful authority in whatever manne1:
lllines and Minerals (Development and Regulatio11) Act, 1957
c (MMDR) - ss.4(1). 4(2). 5(2). IO. 12. 13. 18. 21 - Grant ofmi11ing
lease -- Schenie of - Discussed.
s. 6 - Maximum area for which a prospecting licence or
mining lease may be granted - Violation of by various companies -
If any - Discussed.
D Mineral Concession Rules, 1960 (MCR):
Distinction between A!CR and MCDR - Held: The distinction
is that the MCR deal. inter alia. with the grant of a mining lease and
not commencement of mining operations - However. the MCDR deal.
inter alia. with the commencement ofmining operations and protection
E of environmenr by preventing and controlling pollution which might
he caused by mining operations- Mineral Conservation and
Development Rules. 1988 (MCDR).
r.22A - Held: r.22A makes it clear that mining operations
shall be undertaken only in accordance with the duly approved
F 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.
1:24A - Plea of mining lease holders that since many of them
G were grantedfirst deemed statutory renewal of mining lease ulr.24A.
the requirements ofEnvironment Impact Assessment (EJA) Notification
of 1994 (EIA 1994) would not be applicable - Held: Nor tenable -
For renewal qf mining lease. an application is required to be made
by mining lease holders and the deemed renewal clause ulr.24A will
come into operation onzv ajier an application for renewal is made
H
COMMON CAUSE v. UNION OF INDIA AND ORS. 363
in Form Jin Schedule I of MCR - Even otherwise, renewal of a A
mining lease would require a prior environmental clearance (EC)
in terms of EIA 1994.
r.37 - Violation of - Several mining lease holders entered
into raising contracts which were actually a transfer of lease as
postulated by r. 3 7 - Held: Rule 3 7 provides. inter alia, that a mining B
lessee shall not without the previous consem in writing of the State
Government or Central Government, as the case may be, assign.
sublet, mortgage, or in any other manne1; transfer the mining lease,
or any right,. title or interest therein - It will he appropriate if a
fresh look is given to the raising contracts entered into by mining
lease holders and the raising contractor - Committee appointed. C
Mineral Conservation and Development Rules, 1988 (MCDR):
Purpose and objective of - Held: Is to ~~sure that mining
operations are cmried out in a scientific manner with a high degree
of responsibility including responsibility in protecting and D
preserving the environment and the flora of the area.
r. 31 - Protection of environment under - Obligation of - Held:
Rule 31 provides that every holder of a mining lease shall take all
possible precautions for the protection of environment and control
of pollution while conducting any mining operations in the area - E
Air (Prevention and Control of Pollution) Act, 1981 - Environment
(Protection) Act, 1986 - Water (Prevention and Control of Pollution)
Act. 1974.
Notijicatio11/Circular:
Environment Impact Assessment (E!A) Notification dtd. 27'" F
Jan. 1994 - Nature of - Held: It is a prohibitory notification and
directs that on and from the date of its publication in the official
gazette: (i) expansion or modernization of any activity (if pollution
load is to exceed the existing one) and (ii) a new project listed in
Schedule I to the notification. shall not be undertaken unless it has
G
been accorded EC by the Central Government in accordance with
the procedure specified in the notification - Further. EIA 1994 is
also mandatory in character - It is applicable to all mining
operations, new mining projects and renewal of mining leases -
Environment (Protection) Act, 1986 - ss.3(1). 3(2){v) - Environment
(Protection) Rules. 1986 - r.5(3)(d). H
364 SUPREME COURT REPORTS [2017] 13 S.C.R.
A Environment Impact Assessment (EIA) Notification dtd. 27'''
Jan. 1994 - Grant under, of environment clearance (EC) - Purpose
of - Held: On receipt of an EC a mining lease holder can extract a
mineral only from a specified site, upto the sanctioned capacity
and only for a period of five years from the date of grant of EC -
Consequently. a mining lease holder would necessarily have to obtain
B
a fresh EC every five years and can also apply for an increase in
the sanctioned capacity - Environment.
Environment Impact Assessment (EIA) Notification dtd. 27"'
Jan. 1994 - Grant under. of EC- Operation of- Held: There is no
concept of a retr(Jspective EC - Its validity effectively starts only
c from the day it is granted - It takes precedence over the mining
lease - Thus, mining operations under a mining lease are dependent
on and 'subordinate· to the EC - Environment.
Environment Impact Assessment (E/A) Notification dtd. 27"'
Jan. 1994 - EC - Requirement of. for ongoing mining project -
D Exemption. when given - Held: An exemption is granted from the
requirement of obtaining an EC if there is no expansion and the
existing pollution load is not exceeded - However. a no objection
certificate from the SPCB is necessary for continuing the mining
operations - Env,ironment.
E Environment Impact Assessment (EIA) Notification dtd. 27"'
Jan. 1994 - Exprmsion and modernization of existing projects -
Base year for considering pollution load while proposing any
expansion activity - Determination of - Discussed - Environment.
Environme111 Impact Assessment (EIA) 14"' September. 2006 -
F Requirement under - Environment Clearance (EC) - Held: EIA 2006
required prior EC for projects or activities mentioned in the Schedule
to it. both for major as well as minor minerals. if the leased area is
5 hectares or more - Environment.
Environme11t Impact Assessment (EIA) 14"' September. 2006 -
G Environment Clearance (EC) - Grant of - If retrospective - Held:
An EC will come into force not earlier than the date of its grant -
The concept of an ex post facto or a retrospective EC is completely
alien to environmental jurisprudence - Environment.
Mines and Minerals:
H Mining plan - Actual Production limit - Violations of - Held:
COMMON CAUSE v. UNION OF INDIA AND ORS. 365
A mining plan is valid for a period of five years - 20% deviation A
from the mining plan (in terms of over-production) would he
reasonable and permissible - A mining lease holder cannot extract
the five year quantity (with a variation of 20%) in one or two years
only.
Illegal Mining - What is - Plea of lessees that a mining B
operation only outside the mining lease area would constitute 'illegal
mining· - Held: Not tenable - J//egal mining takes within its fold
excess extraction of a mineral over the permissible limit even within
the mining lease area which is held under lawful authority. if that
excess extraction is contrary to the mining scheme. the mining plan,
the mining lease or a statutory requirement - Mines and Minerals c
(Development and Regulation) Act. 1957 - s.23 C - Mineral
Concession Rules. 1960 - r.2(iia) .
Encroachment - lllegal mining outside the sanctioned mining
areas - Direction issued.
D
Consequences of lllegal mining - Discussed - Mines and
Minerals (Development and Regulation) Act. 1957 - s.21 (5).
Illegal mining - Penalty/Compensation for - Discussed -
Mines and Minerals (Development and Regulation) Act, 1957
(MMDR) - s.21(5).
E
Fore..vt (Conservation) Act, 1980 - s.2 - Violation of - Held:
Since defauWng mining lease holders had paid additional Net
Present Value (NPV) as well as an amount towards penal
compensatory afforestation. it must be assumed that violation of
the Act has been condoned to a limited extent - Environment.
F
Issuing directions, the Court
HELD:
Justice M.B. Shah Commission of Inquiry
1. The first report given by the Commission was a general, G
overall perspective on the subject, therefore, there is absolutely
no question of any notice being Issued to any mining lease holder
under Section .SB or the right of cross examination being granted
to any mining lease holder under Section SC of the 1952 Act.
While the second report went into specific details of several mining
lease holders -but herein one is not concerned with these H
366 SUPRJ'ME COURT REPORTS [2017] 13 S.C.R.
A specifics. Therefore, whether notices were or were not issued to
the lease holders who were the subject matter of discussion in
the second repQrt is of no consequence.No irregularity .or illegality
has been committed so as to vitiate the first report. A resume of
the procedure followed will indicate that full opportunity was given
to the lease holders to have their say. [Paras 32-34, 43] (394-E;
B
398-A-B, D; 401-C-DJ
Central Empofered Committee and Initial contention
2.1 The Central Empowered Committee or the CEC was
first constituted by this Court by an order in T.N.Godavar111a11 as
c an interim body. Thereafter, it was constituted by a notification
issued under Section 3(3) of the Environment (Protection) Act,
1986. Jt has continued functioning and assisting this Court for
more than a decade and even though it has been criticized on a
couple of occasions, it is now an established hody which renders
extremely valuable advice to this Court and provides factual
D material on the basis of which this Court can make some
recommendati'iJns and pass appropriate orders. The CEC as a
fact finding body has functioned impartially and it is only on the
conclusions arrived at hy the CEC on the basis of the facts
gathered that ~here can he some debate and discussion. [Paras
E 54, 55J [404-F-H; 405-C]
2.2 The jµrisdiction of the CEC was not limited and it was
expected to give a detailed report on all aspects of illegal mining
or mining being carried out without any lawful authority in
whatever manner. [Para 53] (404-E]
F Statutory provisions
3.1 The grant of a mining lease is governed by the provisions
of the Mines and Minerals (Development and Regulation) Act,
1957 (or the MMDR Act}, the Mineral Concession Rules, 1960
(or the MCR) and the Mineral Conservation and Development
G Rules, 1988 (or the MCDR).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
H
COMMON CAUSE v. UNION Of INDIA AND ORS. 367
undertaken for the purpose of winning any mineral. Section 4(2) A
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. Section 5(2) of the MMDR Act
provides for certain restrictions on the grant of a mining lease.·
(Paras 60-62) (406-H; 407-A-D)
B
3.2 ,Section 10 of the MMDR act provides for the procedure
for obtaining a mining lease. Section 13 of the MMDR Act
provides for the rule making power of the Central Government
in respect of minerals. The Mineral Concession Rules, 1960
(MCR) are.framed in exercise of power conferred by Section 13
of the MMDRAct. [Paras 63, 65) (407-D-E, G] C
3.3 Section 18 of the MMDR Act makes it the duty of the
Central Government to take all such steps as may be necessary
for the conservation and systematic development of minerals in
India and for tl:te protection of the environment. The Mineral
Conservation and Development Rules, 1988 (MCDR) are framed D
in exercise of power conferred by Section 18 of the MMDR Act.
Section 21 of the MMDR Act deals with penalties. [Para 66, 68)
(407-H; 408-A, CJ
3.4 The distinction between the MCR and the MCDR is
that the MCR deal, inter alia, with the grant of a mining lease E
and not commencement of mining operations. However, the
MCDR deal, inter alia, with the commencement of mining
operations and protection of the environment by preventing and
controlling pollution which might be caused by mining operations.
(Para 67) (408-B-C) F
Mineral Concession Rules, 1960
4..1 Rule 22, MCR 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. Sub rule (5) of Rule 22 deals
with a mining plan and it requires that a mining plan shall G
incorporate, amongst other things, a tentative scheme of mining
and annual programme and plan for excavation for year to year
for five years. 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 H
368 SUPREME COURT REPORTS [2017] 13 S.C.R.
A importance for a mining lease holder and is in essence
sacrosanct.A mining scheme and a mining plan are a sine qua no11
for the grant of a mining lease. [Paras 69, 70] [408-E-H]
4.2 Rtjle 27 of the MCR deals with the conditions that every
mining lease is subject to. One of the conditions is that the lessee
B shall comply with the MCDR. [Para 71) [409-A)
4.3 Rlllc 37 of the MCR deals with the transfer of a lease
and provides, inter alia, that a mining lessee shall not without the
previous co11sent in writing of the State Government or the Central
Government, as the case may be, assign, sublet, mortgage, or in
c any other manner, transfer the mining lease, or any right, title or
interest therein. The lessee shall not enter into or make any
bona fide arrangement, contract or understanding whereby the
lessee will or may directly or indirectly be financed to a substantial
extent in r:espect of its operations or undertakings or be
substantially controlled by any person or body of persons. Sub-
D rule (3) of Rule 37 of the MCR enables a State Government to
determine any lease if the mining lessee has committed a breach
of Rule 37 of the MCR or has transferred any lease or any right,
title or interest therein otherwise than in accordance with sub-
rule (2) of ~ule 37 of the MCR. [Para 75] [409-E-G]
E Mineral Conservation and Development Rules, t 988
5.1 Cl)apter V of the MCDR deals with "Environment".
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
F operations in the area. 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 control and within
permissible limits specified under various environmental laws
including the Air (Prevention and Control of Pollution) Act, 1981
G and the Environment (Protection) Act, 1986. The provisions of
the Water (Prevention and Control of Pollution) Act, 1974 are
required to be adhered to by the mining lease holder. [Paras 79-
81] [409-G-lll; 410-D-F, G]
5.2 The overall purpose and objective of the MMDR Act
as well as the rules framed there under is to ensure that mining
H
COMMON CAUSE v. UNION OF INDIA AND ORS. 369
operations are carried out in a scientific manner with a high degree A
of responsibility including responsibility in protecting and
preserving the environment and the flora of the area. Through
this process, the holder of a mining lease is obliged to adhere to
the standards laid down under the Environment (Protection) Act,
1986 or the EPA as well as the laws pertaining to air and water B
pollution and also by necessary implication, the provisions of the
Forest (Conservation) Act, 1980 (for short 'the FC Act').
Exploitation .of the natural resources is ruled out. If the holder
of a mining lease docs not adhere to the provisions of the statutes
or the rules or the terms and conditions of the mining lease, that
person is liable to incur penalties under Section 21 of the MMDR C
Act. Jn addition thereto, Section 4A of the MMDR Act which
provides for the termination of a mining lease is applicable. (Para
83] (411-B-D]
Environment Impact Assessment Notification of 27!.h January,
1994 D
6.1 The Environment Impact Assessment Notification is a
prohibitory notification and directs that on and from the date of
its publication in the official gazette: (i) expansion or
modernization of any activity (if pollution load is to exceed the
existing one) and (ii) a new project listed in Schedule I to the E
notification, shall not be undertaken unless it has been accorded
environmental clearance (for short EC) by the Central Government
in accordance with the procedure specified in the notification.
[Para 85] [411-E-F, H; 412-A-B)
6.2 The notification provides, among other things, that in F
case of mining operations, site clearance shall be granted for a
sanctioned capacity and shall be valid for a period of five years
from commencing mining operations .. What this means is that on
receipt of an EC a mining lease holder can extract a mineral only
from a specified site, upto the sanctioned capacity and only for a
period of five years from the date of the grant of an EC. This is G
regardless of the quantum of extraction permissible in the mining
plan or the mining lease and regardless of the duration of the
mining lease. Consequently, a mining lease holder would
necessarily have to obtain a fresh EC every five years and can
also apply for an increase in the sanctioned capacity. There is no H
370 SUPR;EME COURT REPORTS [2017] 13 S.C.R.
A concept of a uetrospective EC and its validity effectively starts
only from the day it is granted. Thus, the EC takes precedence
over the miqing lease or to put it conversely, the mining
operations u1nder a mining lease arc dependent on and
'subordinate' lo the EC. [Para 86] [412-B-D]
B 6.3 If at1y proposed expansion or modernization activity
results in an ~ncrease in the pollution load, then a prior EC is
required. The project proponent should approach the concerned
State Pollutiot1 Control Board (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
c 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. [Para 88] [413-B-C]
6.4 Existing mining projects that have a no objection
D certificate from the SPCB before 27'" January, 1994 will not be
required to obtain an EC from the Impact Assessment Agency.
Of course, this is subject to the substantive portion of EIA 1994.
However, if the existing mining project does not have a no
objection certificate from the SPCB, then an EC will be required
E under EIA 1994. [Para 90] [413-F-G]
6.5 The base year would need to be the immediately
preceding year that is 1993-94. In its report, the CEC has taken
1993-94 as the base year and there is no error in this. If the
annual production of any year from 1994-95 onwards exceeds
F the annual production of 1993-94 or its preceding years, it would
constitute expansion and if that expansion results in an increase
in the pollution load over the existing levels, then an EC is
mandated. [Para 92] [414-B-D]
6.6 EIA 1994 was intended to prevent the existing
G environmental load from increasing based on the existing data of
the immediate past and not data of a few years gone by. The only
exception that could be made in this regard would be if there is
no production during 1993-94. In that event, the immediately
preceding year would be relevant. In respect of a project that
has commenced prior to 27'" January, 1994 there is an exemption
H from the requirement of obtaining an EC if there is no expansion
COMMON CAUSE v. UNION OF INDIA AND ORS. 371
and the existing pollution load is not exceeded. In any event, a A
no objection certificate from the SPCB is necessary for continuing
the mining operations. Consequently, even if any mining lease
holder does not have an EC or does not require an EC for
continuing mining operations (but has a no objection certificate
f~om the SPCB), the absence of an E.C would not have an adverse
B
impact on the mining lease holder unless of course, there was an
expansion in the mining operations without any certificate from
the SPCB. [Paras 93, 94] [414-G-H; 415-A-C]
6. 7 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 c
provisions including the EPA and other laws. The EJA 1994 would
apply to the renewal of a mining lease that came up for
consideration post 27'" January, 1994. In other words, for the
renewal of a mining lease, an EC was required by the mining
..lease holder. EIA 1994 is mandatory in character; that it is D
applicable to all mining operations -expansion of production or
even increase in lease area, modernization of the extraction
process, new mining projects and renewal of mining leases. 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 E
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. [Paras 103-105] [416-F-G; 418-C-D, G-H]
6.8 An EC is required to be obtained before the renewal of
a mining lease and the term 'expansion' would include an increase F
in production or the lease area or both. 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. This submission is G
liable to be rejected. [Paras 106-107] [419-B-C]
Environment Impact Assessment Notification of 14!!! September,
2006
7.1 On 1411' September, 2006 another EIA Notification was
issued by the MoEF. This notification (for short EIA 2006) H
372 Sl,IPREME COURT REPORTS [2017) 13 S.C.R.
A required prior EC for projects or activities mentioned in the
Schedule to it both for major as well as minor minerals if the
leased area is 5 hectares or more. Post EIA 2006, every mining
lease holder having a lease area of 5 hectares or more and
undertaking mining operations in respect of major minerals was
obliged to get an EC in terms of EIA 2006. [Paras 108, 114] [419-
B
E-G; 421-A-B]
7.2 A mining plan is subordinate to the EC and having an
approved 111ining plan does not imply that a mining lease holder
can commence mining operations. That being so, a modified
mining plan without a revised or amended EC, is of no
c consequence. [Para 116] [421-D]
7.3 20% deviation from the mining plan (in terms of over-
production) would be reasonable and permissible. [Paras 118]
(422-A-BJI
D 7.4 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 Ji in Schedule I of the MCR Even otherwise, in view of
EIA 1994, it is quite clear that the renewal of a mining lease
E would require a prior EC. [Para 121] [423-B-C]
7.5 There is no doubt that the grant of an EC cannot be
taken as a mechanical exercise. It can only be granted after due
diligence and reasonable care since damage to the environment
can have a long term impact. ETA 1994 is therefore very clear
F that if expansion or modernization of any mining activity exceeds
the existing pollution load, a prior EC is necessary. Even for the
renewal of a mining lease where there is no expansion or
modernization of any activity, a prior EC is necessary. Such
importance having been given to an EC, the grant of an ex post
G facto environmental clearance would be detrimental to the
environment and contd lead to irreparable degradation of the
environment. The concept of an ex post facto or a retrospective
EC is completely alien to environmental jurisprudence including
EIA 1994 and EJA 2006. An EC will come into force not earlier
than the date of its grant. (Paras 123, 1241 [423-H; 424-A-C]
H
COMMON CAlJSE v. UNION OF INDIA AND ORS. 373
Illegal Mining A
8. The holder of a mining lease is required to adhere to the
terms of the mining scheme, the mining plan and the mining lease
as well as the statutes such as the EPA, the FCA, the Water
(Prevention and Control of Pollution) Act, 1974 and the Air
(Prevention and Control of Pollution) Act, 1981. If any mining B
operation is conducted in violation of any of these requirements,
then that mining operation is illegal or unlawful. Any extraction
of a mineral through an illegal or unlawful mining operation would
become illegally or unlawfully extracted mineral. lllegal mining
·is not confined only to mining operations outside a leased area.
Such an activity is obviously illegal or unlawful mining. Illegal c
.mining takes within its fold excess extraction of a mineral over
;the permissible limit even within the mining lease area which is
held under lawful authority, if that excess extraction is contrary
to the mining scheme, the mining plan, the mining lease or a
stat_ufory ·requirement. [Paras 128, 129] [425-B-D] D
,Encroachments
' 9.1 Section 4(1) of the MMDR Act makes it clear that no
per.son can carry out any mining operations except under and in
accordance with the terms and conditions of a mining lease granted
under the MMDRAct and the rules made thereunder. Obviously E
, therefore, any person carrying on mining operations without a
,!llining lease, is indulging in illegal or unlawful mining. This would
1 ~~o necessarily imply that if a mining lease is granted to a person
,!;V,hO ~arries out mining operations outside the boundaries of the
,P.J:i'!;ing lease, the mineral extracted would be the result of illegal F
·,!Ir unlawful mining. In its report, the CEC has dealt with illegal
1
!Dining outside the sanctioned mining areas. It is stated that 82
.,mining leases for iron ore and manganese ore were identified by
,Jhe Commission where there were encroachments in the form of
,,illegal mining pits, illegal over-burden dumps etc. [Paras 130,
..,pl] (425-E-H] G
· '" 9.2 A fresh Joint Survey to be conducted by concerned
,.<officers of the Government of Odisha from the Revenue
Department, the Forest Department, the Mining Department and
any· other department that may be deemed necessary. The J<'orest
H
374 SUPREME COURT REPORTS [2017] 13 S.C.R.
A Survey of India, the MoEF, the Indian Bureau of Mines and the
Geological Sl)rvey of India should also be associated in the Joint
Survey. It would also be appropriate if the CEC is also associated
in the Joint Survey and the best and latest technology should be
made use of including satellite imagery and thereafter a report
be submitted in this Court after hearing the 82 lessees identified
B
by the Commission. [Para 134] [426-E-F]
Adherence tg the mining plan
10. A mining plan is valid for a period of five years but there
could be a 20% variation in extraction over and above the mining
c plan. This i$ the maximum that is stated to be reasonably
permissible according to the :vlinistry of Mines. In terms of Ruic
22(5) of the MCR a mining plan shall incorporate a tentative
scheme of mining and annual program and plan for excavation
from year to year for five years. At best, there could be a variation
in extraction of 20% in each given year but this would be subject
D to the overall mining plan limit of a variation of 20% over five
years. What this means is that a mining lease holder cannot
extract the five year quantity (with a variation of 20%) in one or
two years only. The extraction has to be staggered and continued
over a period, of five years. While mining in excess of permissible
E limits under the mining plan or the EC or FC on leased area may
not amount to mining on land occupied without lawful authority, it
would certail)ly amount to illegal or unlawful mining or mining
without auth$rity of law. (Paras 135, 139) (427-B; 428-E-F]
Section 21 of the MMDR Act
F 11.1 Section 21(1) of the MMDR Act is clearly relatable to
a penal offence and applies if any one contravenes the provisions
of Section 4(1) of the MMDR Act. Section 4(1) of the MMDR
Act prohibits the undertaking of any mining operation in any area
except under and in accordance with the terms and conditions of
G 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
H conviction, he or she shall be punishable with imprisonment for a
*
COMMON CAUSE v. UNION OF INDIA AND ORS. 375
term which may extend to five years and with fine which may A
extend to Rs.5 lakh per hectare of the area. [Para 141] [428-G-
H; 429-A-B]
11.2 There is no ambiguity in Section 21(5) of the MMDR
Act or in its application. Though Section 21(1) of the MMDR Act
might be in the realm· of criminal liability, Section 21(5) of the B
MMDR Act is certainly not within that realm. Section 21(5) of
the MMDR Act is applicable when any per ·~n raises, without
any lawful authority, any mineral from any land. In that event, the
State Government is entitled to recover from such person the
.mineral so raised or where the mineral has already been disposed c
of, the price thereof as compen~ation. The words 'any land' ate
not confined to the mining lease area. As far as the mining lease
area is concerned, extraction of a mineral over and above what is
permissible under the mining plan or under the EC undoubtedly
attracts the provisions of Section 21(5) of the MMDR Act being
extraction without lawful authority. It would also attract Section D
.21(1) of the MMDR Act. In any event, Section 21(5) of the Act is
certainly attracted and is not limited to a violation committed by
a person only outside the mining lease area - it includes a violation
committed even within the mining lease area. This is also because
the MMDR Act is intended, among other things, to penalize illegal
or unlawful mining on any land including mining lease land and E
also preserve and protect the environment. Action nnder the
EPA or the MCR could be the primary action required to be taken
with reference to the MCR and Rule 2(ii a) thereof read with the
Explanation but that cannot preclude compensation to the State
under Section 21(5) of the MMDR Act. The MCR cannot be F
read to govern the MMDR Act. [Paras 149, 150] [432-C-G]
11.3 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 G
and not be benefited by pocketing 70% of the illegally mined
ore. [Para 153] [433-D-E]
Calculations on merits
12. The base year of 1993-94 Is most appropriate; Some
lessees might lose.in the process while some of them might benefit H
376 SUPREME COURT REPORTS [2017] 13 S.C.R.
A but that cannot Jlie avoided. In any event, each mining lease holder
is being given tl).e benefit of calculations only from 2000-01 and
Is not being 'penalized' for the period prior thereto. The
compensation should be payable from 2000-200 I onwards at
100% of the price of the mineral, as rationalized by the CEC.
[Paras 155, 156) [434-G-H; 435-BJ
B
Violation of Fo~est (Conservation} Act, 1980
13. Given the fact that the defaulting mining lease holders
have been asked! to pay and have paid additional NPV as well as
an amount towards penal compensatory afforestation, it must be
c assumed the violation of the FCA has been condoned to a limited
extent. A violation of the FCA is condonable on payment of penal
compensatory afforestation charges. This obviously would not
apply to illegal or unlawful mining under Section 21(5) of the
MMDR Act, but it is made clear that the mining lease holders
would be entitled to the benefit of any Temporary Working
D Permission granted. )Paras 178, 185] [440-C-D; 443-D)
Conclusions on the issues of mining without an EC or FC or both
14. To avoid any misunderstanding, confusion or ambiguity,
the following is made very clear: (1) A mining project that has
E commenced prior to 27"' January, 1994 and has obtained a No
Objection Cer~ificate from the SPCB prior to that date is
permitted to continue its mining operations without obtaining an
EC from the Impact Assessment Agency. However, this is subject
to any expansion (including an increase in the lease area) or
modernization activity after 27" January, 1994 which would result
F in an increase in the pollution load. In that event, a prior EC is
required. However, if the pollution load is not expected to ·
increase despite the proposed expansion (including an increase
in the lease are'1) or modernization activity, a certificate to this
effect is absolut~ly necessary from the SPCB, which would be
G reviewed by the Impact Assessment Agency; (2) The renewal of
a mining lease after 27'" 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 27"' January, 1994 exceeds the annual production
H
COMMON CAUSE v. UNION OF INDIA AND ORS. 377
of 1993-94, it would be treated as an expansion requiring an EC; A
(4) There is no doubt that a new mining project after 27'" 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) and
compensation at .100% of the price of the mineral should be B
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 141• September, 2006 all mining
projects having a lease area of 5 hectares or more are required C
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 D
subject to EIA 2006; (8) Any mining activity carried on after 7'"
January, 1998 without an FC amounts to illegal or unlawful mining
in terms of the provisions of Section 21(5) of MMDR Act
attracting 100% recovery of the price of the extracted mineral
that is disposed of; (9) In the event of any overlap, that is, illegal
or unlawful mining without an FC or without an EC or without E
both would attract only 100% compensation and not 200%
compensation. In other words, only one set of compensation
would be payable by the mining lease holder; and (10) No mining
lease holder will be entitled to the benefit of any payments made
towards NPV or additional NPV or penal compensatory
afforestation. [Para 186) [443-E-H; 444-A-H; 445-A-B) F
Violation of Section 6 of the MMDR Act
15. As far as .Essel Mining and Industries Limited is concerned,
'this mining lease holder will be dealt with on another occasion
since even the CEC has placed this mining lease holder in a G
special category. 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
H
378 SUPREME COURT REPORTS [2017] 13 S.C.R.
A made by the Commission with regard to the 'Rungta Group'. The
Rungta companies will be heard to ascertain, inter alia, whether
there has been any violation of the provisions of Section 6 of the
MMDR Act. As far as Jindal Steel & Power Limited is concerned,
this company will be heard on another occasion since the
suggestion of the CEC is that it is the benami holder of Sarda
B
Mines Pvt•.Ltd. If it is so held to be a benami holder of Sarda
Mines Pvt. Lt<l. then there is a violation of Section 6 of the
MMDR Act. [Ilaras 192, 193, 194] [446-D-G]
Violation of Ru\e 37 of the Mineral Concession Rules, 1960
c 16. It will be appropriate if in fact a fresh look is given to
the raising contracts entered Into by the mining lease holders
and the raising contractors. Such an order ought to be passed
with the consent of the mining lease holders since any delay in
disposal of the issue would not really sub-serve the interests of
anybody including the mining lease holders. The proposed
D Committee appointed in respect of the eight mining lease holders
will be entitled to lift the corporate veil, the importance of which
in cases such as the present, has been emphasized. [Paras 203,
204] [448-E, G]
Intergenerationail equity
E
17. This is an aspect that needs serious consideration by
the policy and decision makers in our country in the governance
structure. At present, keeping in mind the indiscriminate mining
operations in Odisha, it does appear that there Is no effective
check on mining operations nor is there any effective mining policy.
F The National Mineral Policy, 2008 (effective from March 2008)
seems to be only 11n paper and is not being enforced perhaps due
to the involvement of very powerful vested interests or a failure
of nerve. The N•tional Mineral Policy, 2008 is almost a decade
old and a variety of changes have taken place since then, Including
G (unfortunately) the advent of rapacious mining in several parts of
the country. Therefore, it is high time that the Union of India
revisits the National Mineral Policy, 2008 and announces a fresh
and more effective, mcauin;;fu! and implementable policy within
the next few months and In any event before 31" December, 2017.
[Para 209] [449-A, G-H; 450-A-C]
H
COMMON CAUSE v. UNION OF INDIA AND ORS. 379
Inquiry by the Central Bureau of Investigation A
18. For the present, no direction is being proposed to be
given for an investigation or inquiry by the CBI for the reason
that what is of immediate concern is to learn lessons from the
past so that rapacious mining operations are not repeated in any
other part of the country. This can be achieved through the B
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 C
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. 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 D
prevent this from happening in other parts of the country. [Para
211] [450-E-H]
Utilization of funds by the Special Puroose Vehicle
19. To ensure that the amounts deposited by some of the
mining lease holders and also made available to the State of E
Odisha as a result of the orders that are being passing today, are
utilized for the benefit of tribals in the affected districts and for
area development works, 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 Special Purpose F
Vehicle (SPV) from its inception. [Paras 217, 218) (454-A-C)
Conclusion
20.1 I.A. Nos. 45 (f'tled by Zenith Mining) and 47 (filed by
Kavita Agra"'.al) are dismissed since their lease has not been
extended or has been determined and they do not have any G
environment clearance or forest clearance. I.A. No. 66 (filed by
J.N. Pattnaik) is also dismissed since there is no forest clearance
available. It is informed that S.A. Karim (I.A. No.9) actually had a
working lease and has wrongly been included as a non-operational
lease. A.ccordingly, I.A. No. 9 (filed by S.A. Karim) is also H
380 SUPREME COURT REPORTS [2017] 13 S.C.R.
A dismissed but as being infructuous. However, it is made clear
that the State, Government should ·ensure that the lessee S.A.
Karim in fact has valid statutory clearances. [Paras 220-222) (454-
D-F)
20.2 Pending show cause notices issued by the State
B Government should be decided by 31" December, 2017 (if not
already decide!J) after hearing the concerned noticees. This Court
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
C purpose the m11tter be listed 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 31" 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-
D start their mining operations. (Paras 223-2251 (454-G-H; 455-A]
20.3 This Court would like to hear the eight concerned
mining lease holders who arc in violation Rule 37 of the MCR,
on the question of appointing an appropriate Committee in
respect of the applicability of Rule 37 of the Mineral Concession
E Rules to them. Further, this Court would also like to hear 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
F States where milling activities are proceeding on a large scale.
For the present, no direction is being passed with regard to any
investigation by the CBI. The Union of India Is directed to have
a fresh look at the National Mineral Policy, 2008 which is almost
a decade old, particularly with regard to conservation and mineral
G development. The exercise should be completed by 31"
December, 2017. [Paras 226-228) (455-B-E)
20.4 The Chief Secretary of Odisha should file an affidavit
as indicated within a period of six weeks and in any case on or
before 30"' Septelllber, 2017. The Registry will list these petitions
H
COMMON CAUSE v. UNION OF INDIA AND ORS. 381
along with the affidavit immediately after Its receipt, for A
consideration. [Para 229] [455-E]
Khemka & Co. (Agencies) Pvt. Ltd. v. State of
Maharashtra (1975) 2 SCC 22 : [1975] 3 SCR 753 -
held inapplicable.
Karnataka; State of Bihar v. Banshi Ram Modi (1985) B
3 SCC 643 : [1985] 1 Suppl. SCR 345 - explained.
T.N. Godavarman v. Union of India 2016
(8) SCALE 615; MC. Mehta v. Union of India (2004)
12 SCC 118 : [2004) 3 SCR 128; Rare Earth v. Senior
Geologist. Department of Mines & Geology (2004) 2 c
SCC 783 : [2004] 1 SCR 965 - relied on.
Common Cause v. Union of India & Ors. (2014) 14
SCC 155 : [2014) 7 SCR 561; Goa Foundation v. Union
of India (2014) 6 SCC 590 : [2014] 5 SCR 302;
Common Cause v. Union of India (2016) 11 SCC 455; D
T.N. Godavarman v. Union of India) (2013) 8 SCC 198;
Samaj Parivartana Samudaya v. State of Karnataka
(2013) 8 SCC 154 : [2013) 6 SCR 810; Ambica Quarry
Works v. State of Gujarat and Ors (1987) 1 SCC 213 :
(1987] 1 SCR 562; Rural Litigation and Entitlement E
Kendra v. State of UP. (1989) Supp. (1) SCC 504 :
[1988) 2 Suppl. SCR690; T.N. Godavarman v. Union
of India (1997) 2 SCC 267 : [1996) 9 Suppl. SCR
982; T.N. Godavarman v. Union of India (1997) 3 SCC
312 : [1997] 2 SCR 642; T.N. Godavarman v. Union of
India (2011) 15 SCC 658; State of Rajasthan v. Gotan F
Lime Stone Khanij Udyog (P). Ltd. (2016) 4 SCC 469 :
(2016) 1 SCR 216 - referred to.
Case Law Reference
2016 (8) SCA,LE 615 relied on Para2
G
[2014) 7 SCR 561 referred to Para 10
. (2014) 5 SCR 302 referred to Para 14
(2016) u sec 455 referred to Para 20
H
382 SUPREME COURT REPORTS (2017] 13 S.C.R.
A (2013) s sec 198 referred to Para 54
[2013) 6 SCR 810 referred to Para 55
[20041 3 SCR 128 relied on Para 97
[1975) 3 SCR 753 held inapplicable Para 143
B [20041 1 SCR 965 relied on Paru 148
[1985) 1 Suppl. SCR 345 explained Para 160
[1987) 1 SCR 562 referred to Para 164
[1988) 2 Suppl. SCR 690 referred to Para 165
c [1996) 9 Suppl. SCR 982 referred to Para 166
[1997) 2 SCR 642 referred to Para 170
(2011) 15 sec 658 referred to Para 185
[2016( 1 S<:'R 2l6 referred to Para 204
D CIVIL ORIGINAL JURISDICTION : Writ Petition (Civil) No.
114 of2014
Under article 32 of the Constitution of India.
WITH
W. P. (C) No. 194 of2014.
E
Ms. Pinky Anand, ASG, Harish N. Salve (AC}, Ms. V. Mohana,
A.K. Panda, Gopal Subramanium, Manas Ranjan Mohapatra, Parag P.
Tripathi, Gopal Jain, P. Chidambaram, Raju Ramachandran, Ashok K.
Parija, Dr. A.M. Singhvi, V. Giri, Ashok Kr. Panda, Ashok H. Desai,
Rana Mukherjee. Krishnan Venugopal, Ajit Kumar Sinha, Sanjay R.
F Hegde, Sr. Advs., A.D.N. Rao, Ms. Aparajita Singh, Siddhartha
Chowdhury, (ACs), Prashant Bhushan, Devesh Kumar Agnihotri, Pranav
Sachdeva, Suman! Bhushan. Nischal Kumar Neeraj, Arun Kumar Singh,
Suresh Chandra Tripathi, Ms. Swarupama Chaturvedi, Balendu Shekhar,
Ms. Meenakshi Grover, Ms. GunwantDara, Raj Bahadur, GS. Makker,
G B. Krishna Prasad, D.L. Chidananda, Ravindra Bana, Ms. Gargi Khanna,
Atulesh Kumar, P.K. Mullick, Ramesh Singh, Shrey Kapoor, Lalitendu
Mohapatra, Puneet Parihar (for Mis Aura & Co.), R.N. Karanjawala,
Naveen Kumar, Mrs. Nandini Gore, Ms. Natasha Sehrawat, Ms.
Khushboo Bari, Mrs. Manik Karanjawala, Sudeep Dey, Nishi Kant Singh,
Anand Varma, Kaustubh Prakash, R.M. Patnaik, Mrs. Vanita Bhargava,
H
COMMON CAUSE v. UNION OF INDIA AND ORS. 383
Ajay Bhargava, Kudrat Dev, Ms. ShreyaAgrawal, (for M/s Khaitan & A
Co.), Indrani Patnaik, Anand Verma, Mahesh Agarwal, Dhananjay
Mishra, Gaurav Khanna, Ms. Nishit Agarwal, Ms. Devika Mohan,
E.C. Agrawala, Amar Dave, R.N. Karanjawala, Ms. Nandini Gore,
Abhinay Sharma, Ms. Neha Khandelwal, Ms. Sonia Nigam, Amit
Bhandari., Mrs. Manik Karanjawala (For Mis. Karanjawala & Co.), B
Raj Kumar Mehta, Elangbam Premjit Singh, Ms. HimanshiAndley, Sunil
Kumar Jain. Akarsh Garg, K.P.S. Chani, Ms. Kirti Renu Mishra, Ms.
Apurva Upmanyu, Gopal Prasad, Sunil Dogra, Vivek Vishnoi, Abhishek
Sharma, Suchit Mohanty, Anupam Lal Das, Balaji Srinivasan, Gaurav
Kejriwal, Keshav Mohan, Sujit Keshri: Saraswata Mohapatra,
P.R. Mishra, Ms. Rajani Ohri Lal, Himindcr Lal, Ashok Panigrahi, C
Dhananjaya Mishra, Arnav Dash, Bishwaranjan Sahoo, Avnisli Kr.
Sharma, R.M. Patnaik, Gaurav Khanna, TayenjamMomo Singh, Tejaswi
Kumar Pradhan, Manoranjan Paikaray, Aniruddha Purushotham, Shiv
Mangal Sharma, Lalit Mohapatra (for M/s Aura & Co.), Lalitendu.
Mohapatra, NishitAgarwal, T.R. Rehman, (for Mis Aura & Co.), Mis Fox D
Manda! & Co., Ms. Ruchi Kohli, Ms. Movita, RL. Mitra, Ms. Daisy
Hannah, Ms. Akhila J., Haris Beeran, Kedar Nath Tripathy, Nishikant
Singh, Sudeep Dey, Ms. Ameyavikrama Thanvi, Ms. Alankrita Sinha,
B.V. Gadnis, Vishwanath Gadnis, VS. Lakshmi, AbhishekKurnar,Ambhoj
Kumar Sinha, S.K. Biswal, Sachin Das, Azim H. Laskar, Chandra
Bhushan Prasad, Biswajit Das, S. Udaya Kumar Sagar, Mrityunjai Singh, E
Bhavani Shankar, Mrs. V.S. Lakshmi.AakashBajaj (forM/sKhaitan&
Co.), Ms. Nandini Sen, Chanchal Kr. Ganguli, Manoj Kumar Goyal,
Mohd. Ainu) Ansari, Yagcsh Kumar Dahiya, Sunil Khatwani, TaibaKhan,
Dr. Monika Gusain, Advs., for the appearing parties.
The Judgment of the Court was delivered by F
MADAN B. LOKUR, J. I. 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 and Mayurbhanj in
Odisha have rapaciously mined iron ore and manganese ore, apparently G
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.
H
384 SUPREME COURT REPORTS (2017] 13 S.C.R.
A Facts leading up to the report of the Central Empowered
Committee
2. Rabi JDas, the editor of a daily newspaper called Arna Rdjdhani
filed I.A. No. 2746-2748 of 2009 in a pending writ petition being T.N.
Godavarman v. Union of India. 1 He prayed, inter alia, for the
B following directions from this Court:
" a) Issue a direction to the Central Empowered C01nmittee to
co11duct an exhaustive fact finding study of the illegal mining
in Keonjhar, Sundargarh and other Districts ofOrissa;
b) Direct appointment cifa "Commission" to investigate and
c study the modalities of the illegal machinations, fix
re;-ponsibility on individuals (in Government and outside it)
and recommend remedial measures to be immediately
implemented by the Government of India and the
Government of 01issa;
D c) Direct the Respondents to take effective and appropriate
action to ensure closure/stoppage of all the illegal mining
acti'.lities in the concerned areas and direct prosecution and
punish all those found guilty of this illegal mining in violation
of the Mines and Minerals (Development and Regulation)
E Act, 1957, Forest (Conservation) Act, 1980 and other
relevant laws."
3. The applications were taken up for consideration on 6"
November, 2009 when notice was issued to the Central Empowered
Committee (for short 'the CEC') to file its repqrt/response within six
weeks.
F
4. On 26" April. 20 I 0 the CEC submitted an interim report which
wa> noted by this Court and taken on record. The neport was of a
general nature but contained quite a few recommendations. Some of
•he reco111mendations presently relevant are as follows:
G "(b) Even otherwise the Rule 24-A(6), MCR, 1960 does not
authorize the lessee to operate a mine without the statutory
clearances/approvals. Therefore, in respect of a mine
covered under the 'deemed extension' clause, the mining
operations should be permitted to be undertaken in the non
H ' W.P. No. 202 of 1995
COMMON CAUSE v. UNION OF INDIA AND ORS. 385.
[MADAN B. LOKUR, J.)
forest area of the mining lease only if(i) it has the requisite A
environmental clearance; (ii) it has the consent to operate
from the State Pollution Control Board under the Air and
Water Acts; (iii) Mining Plan is duly approved by the
competent authority; and (iv) the NPV for the entire forest
falling within the mining lease is deposited in the B
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 c
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 MMDRAct, 1957. Both necessarily have to be
the same. In view of the above, this Hon 'hie Court while
permitting grant of Temporary Working Permission to the D
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; E
(d) In Orissa, substantial areas included in the mining leases as
non forest land have subsequently been identified as DLC
forest (deemed forest/forest like areas) by the Expert
Committee constituted by the State Government pursuant
to this Hon'ble Court's order dated 12.12.1996. While F
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 G
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 H
386 SUPREME COURT REPORTS [2017] 13 S.C.R.
A 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 ·
B State and to suggest effective and remedial measures -
something made possible because of the unstinted
cooperation extended by the senior functionaries of the
Forest and Mines Departments of the State Government;
and
c b) the above recommendations if accepted and implemented
will, besides ensuring that mining is done in compliance with
the statutory provisions, result in recovery of additional
an1vunt towards the NPV etc. running into hundreds of
crores ofrupees. It would be appropriate that a part of this
D additional amount, say 50% is used through a SPV for
undertaking specific tribal welfare and area development
works so as to ensure inclusive growth ofthe mineral bearing
areas. The CEC proposes to file detailed schemes in this
regard for seeking pennission of this Hon 'ble Court provided
the State of Orissa as well as the MoEF endorse the course
E of action proposed above."
The significance of the second conclusion will be discussed by us a little
later.
5. Notice was issued on the report returnable on 7'" May, 20 I 0.
On the adjourned date, the following order was passed by this Court:
F
"'The CEC has filed its Report. The State would like to file its
respc;mse. Six weeks time is granted for the same. The
recommendauons of the CEC which are acceptable to the State
Govenunent can be complied with."
G 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 16"' September, 2013 and this Court passcJ the following order:
"We call for a report from the Central Empo'Wered Committee
H within a period of six weeks. We direct that the parties of the
COMMON CAUSE v. UNION OF INDIA AND ORS. 387
[MADAN B. LOKUR, J.]
State Government of Odisha and the Central Government A
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 B
Mis SardaMines Private Limited (for short 'SMPL"). This was objected
to by SMPL who filed an application which was taken up for consideration
on 9'' December, 2013. The following order was passed on that day:
"By our order dated J6ili September, 2013, we had called for a
Report from the Central Empowered Committee within a period C
of six weeks. It is stated on behalf of the Central Empowered
Committee that the Report could not be ready as part of the
information called for have not been furnished by the State
Government.
Mr. Venugopal, learned senior counsel for the applicant M/s. D
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. E
In the meantime. the Central Empowered Committee may not
submit its final Report." ,•
8. The matter was again taken up on 13" January, 2014 and this
Court passed the following order:
F
"We have heard learned counsel for the parties.
We have also perused the letter dated l 7th October, 2013 of
the Member Secretary, Central. Empowered Committee sent to
the Chief Secretary, Government of Odisha along with its
annexurcs and in particular, the Statement of Details of G
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 H
..
388 SUPREME COURT REPORTS [2017] 13 S.C.R.
A report on the queries made by the State Government with regard
to the details of the documents sought for in the letter dated
17"' October, 2013 within a period of six weeks.
The Report will not cover cases other than forest and
environmental issues.
B
The lessees and others from whom information is sought for will
cooperate if they do not cooperate the Central Empowered
Conµnittec will give its report.
A copy of the interim report of26"' April, 2010 will be furnished
to the learned counsel appearing for the State of Odisha.
c
This matter be listed on 20"' January, 2014 for consideration of
the recommendations made by the Central Empowered
Comnrittee in the said Report dated26'' April, 2010."
Thereafter and partly based on reports given by Justice M.B. Shah, a
D retired judge of this Court, holding a commission under the Commissions
oflnquiry Act, 1952 a writ petition being W.P. (C) No. 114 of2014 was
filed by Common Cause. Several prayers were made in the writ petition,
and some ofthe more significant prayers read as follows:-
"(a) Issue a writ of mandamus or any other appropriate writ
directing the Union of India and Government of Odisha to
E
immediately stop forthwith all illegal mining in the State ofOdisha
and tll> terminate all leases that are found to be involved in illegal
minil)g 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
F
directing the Union of India and Government of Odisha to talce
action against all the violators involved either directly or indirectly
in illegal mining, including
I
those named in the report of Justice
Shah Commission. ·
(c) Issue a writ of mandamus or any other appropriate writ
G directing a thorough investigation by an SIT or CBI under the
supervision of this Hon 'ble Court, as is recommended by the
Ju;tice Shah Commission into illegal mining in Odisha and collusion
between private companies/individuals and public officials ofthe
State/Central Governments.
H
COMMON CAUSE v. UNION OF INDIA AND ORS. 389
[MADAN B. LOKUR, J.)
xxx xxx xxx A
( 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 prosecutions B
under Section 21 (I) of the MMDRAct 1957, and directth~t the
money recovered would be used for the welfare of local
communities, tribals and villagers."
9. The writ petition was taken up for consideration on 21 "April,
2014 when the following order was passed: c
"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.
D
As the State of Odisha, Union oflndia and the CEC have already
been served with the notices, no further notices be issu~~-- to
them.
Notice, however, be issued to respondent nos. 4 and 5 returnable
within four weeks.
E
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
F
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 28" of April,
2014, as first item. lt will be open for all parties and intervenors/
proposed intervenors to file their respective affidavits.
G
CEC, in the meanwhile, will make out a list of such lessees who
are operating the leases in violation of the law. This list be
prepared by the CEC without reference to the Shah
Commission's Report.
H
390 SUPREME COURT REPORTS (2017) 13 S.C.R.
A Liberty is given to the parties to produce their papers before
CEC. The State ofOdisha and the Union of India will cooperate
with CEC to prepare the list."
Report of ~he Central Empowered Committee
10. The CEC gave its final report on 25th April, 2014 which was
B considered ljy this Court and a detailed interim order was passed on 16"'
May, 2014.' The sum and substance of the final report dated 25th April,
2014 and the interim order is that in the districts of Odisha that we are
concerned with, namely, Keonjhar, Sundergarh and Mayurbhanj, the total
number ofleases granted for mining iron and manganese ore are 187.
c Of these, I 02 lease holders did not have requisite environmental clearance
(under the Environment (Protection) Act, 1986) or approval under the
Forest (Conservation) Act, 1980 or approved mining plan and/or Consent
to Operate under the provisions of the Air (Prevention and Control of
Pollution) Act, 1981 or the Water (Prevention and Control of Pollution)
Act, 1981. This Court directed that 1nining operations in these I 02 mining
D 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 interiip order in relation to their cases."
E 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.
F
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 mining plans.
(There is no specific mention about environmental clearance). In addition
G
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
(Conservatio11) Act, 1980. Therefore a total of 56 iron ore, manganese
ore mining leases were operating in the State of Odisha.
H 'Common Cause v. Union oflndia & Ors. (2014) 14 SCC 155
COMMON CAUSE v. UNION OF INDIA AND ORS. 391
[MADAN B. LOKUR, J.]
13. As far as the break-up of the 56 operational mining leases is A
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
B
were operating since lease deeds for grant ofrenewal 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 C
the deemed renewal provisions. This Court also permitted 16 mining
leases to continue to operate since they had lease deeds executed in
their favour. With regard to the remaining 26 mining leases operating on
second and subsequent renewal applications, this Court drew attention
to the decision rendered on 21"April,2014 in Goa Follndatitm v. Union D
ofIndia' wherein it was held that the provision for a second or subsequent
deemed renewal was not available in view of Section 8(3) of the MMDR
Act. Consequently, these 26 lease holders were restrained from operating
until express orders were passed by the State Government under Section
8(3) of the MMDR Act. Six months time was granted to the State
Government to take a final decision on the renewal applications. This E
Court left it open to the mining lease holders to apply fonnodification of
the interim order dated 16'" May, 2014 on obtai11ing necessary clearances.
15. During the hearing of these petitions, we were informed that
the balance 26 mining leases are now operational in view of the
amendment to Section 8(3) of the MMDR Act with effect from 12'" F
January, 2015. However, we are not aware whether these 26 mining
leases have the necessary statutory clearances.
16. We may also mention that pursuant to the liberty granted to
move for modification of the interim order of 161h May, 2014 we have
received 17 interim applications for modification. Through a chart handed G
over to us in Court on 3"' May, 2017 we have been informed that in
respect of two ofthe 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
'(2014) 6 sec 590 H
392 SUPREME COURT REPORTS (2017] 13 S.C.R.
A 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) ;ictually 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
B our attention to the record of proceedings of 16"' 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
c week of August, 2014 before the Green Bench."
We are mentioning this in the context of the order passed on J3ili 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
D topics: In thi~ final report dated the CEC dealt with the following ten
topics:-
"I. Production ofiron ore and manganese ore without/in excess
of the environmental clearance/Mining Plan/Consent to
Operate.
E 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
MMDRAct, 1957.
F V. Violation ofRule 37 ofthe Mineral Concession Rules, 1960
by the lessees.
VI. Illegalities involved in the mining leases ofEssel Mining &
Industries Ltd.
VII. Illegalities involved in the mining lease of Sharda Mines (P)
G Ltd.
VIIJ.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."
H
COMMON CAUSE v. UNION OF INDIA AND ORS. 393
[MADAN B. LOKUR, J.]
19. By an order dated 16'' January, 2015 objections to the final A
report were permitted and we have since received quite a few objections.
When the matter was taken up for consideration by this Court on 7"'
October, 2015 and pursuant to the order passed on that date, the learned
Amicus filed a statement dated 30"' October, 2015 in a tabufar form
dealing with each I.A. filed in respect of the observations and B
recommendations made by CEC. Thereafter, when the matter was again
taken up for consideration the learned Arnicus filed a note dated 15''
March, 2016 wherein the following four issues were flagged:-
"(i) Leases lapsed under Section 4A(4) of the Mines and
Minerals (Development and Regulation) Act, 1957
(hereinafter referred to as MMDRAct, 1957) (11 leases); C
(ii) Violation of Rule 24 of the Minerals (other than Atomic
and Hydrocarbons Energy Minerals) Concession Rules, 2016
(hereinafter referred to as MCR, 2016) and Rule 37 of the
Mineral Concessions Rules, 1960 (hereinafter referred to
as MCR, 1960) (9 leases); D
(iii) Illegal mining in forest lands (20 leases); and
(iv) Iron ore produced without/in excess of the environmental
clearance (each of the operating leases involved)."
20. Insofar as the first issue is concerned, it is common ground E
that that issue has been fully, conclusively and exhaustively dealt with by
this Court by a judgment and order dated 4'' April, 2016 (Common Cause
v. Union of India).' Therefore, the first issue does not survive for
consideration by us.
21. As far as the remaining three issues are concerned, these F
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 Arnicus and the learned
Attorney General. We propose to deal with them in this judgment and
order.
G
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.
• (20 I 6) 11 sec 455 H
394 SUP~EME COURT REPORTS (2017] 13 S.C.R.
A 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, DC
and X and therefore we accept the report of the CEC on these topics.
B 25. At this stage. we may mention some 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
c 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
D excess of the environmental clearance, at the weighted average price of
minerals as proposed by the Indian Bureau of Mines comes to about
Rs.17091.24 crores for iron ore and about Rs.484.92 crores for
manganese ore making a total ofRs.17,576.16 crores. Again, this does
not include mining without forest clearance. It is forth is reason that we
have referred to the megabucks and rapacious mining.
E
Justice M.B. Shah Commission of Inquiry
27. Apparently, and it appears quite independently of all these
developments, the Central Government issued a notification on 22""
November, 2010 under the Commissions oflnquiry Act, 1952 whereby
it appointed Justice M.B. Shah, a retired judge of this Court to conduct
F
an inquiry on the following Terms of Reference:
"2. (i) to inquire into and determine the nature and extent of
mining and trade and transportation, done illegally or without
lawful authority, of iron ore and manganese ore, and the losses
therefrom; and to identify, as far as possible, the persons, firms,
G
companies and others that are engaged in such mining, trade
~nd transportation of iron ore and manganese ore, done illegally
or without lawful authority;
(ii) to inquire into and determine the extent to which the
management, regulatory and monitoring systems have failed to
H
COMMON CAUSE v. UNION OF INDIA AND ORS. 395
[MADAN B. LOKUR. J.]
deter, prevent, detect and punish offences relating to mining, A
storage, transportation, trade and export of such ore, done illegally
or without lawful authority, and the persons responsible for the
same;
(iii) to inquire into the tampering of official records, including
records relating to land and boundaries, to facilitate illegal mining B
and identify, as far as possible, the person responsible for such
tampering; and
(iv) to inquire into the overall impact of such mining, trade,
transportation and export, done illegally or without lawful authority,
in terms of destruction of forest wealth, damage to the c
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 b
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 E
authority was being carried on in various States in cine 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 F
of the concerned State Government for transfer of
concession;
(b) raising ofminerals without lawful authority;
( c) raising of minerals without paying royalty in accordance
with the quantities and grade; G
(d) mining in contravention ofa mining plan;
( e) transportation of raised mineral without lawful authority;
( f) mining and transportation ofraised mineral in contravention
of applicable Central and State Acts and rules thereunder;
H
396 SUPREME COURT REPORTS [2017] 13 S.C.R.
A (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
B areas;
(i) forging or misusing valid transportation permits and using
fwged transport permits and other documents to raise,
tnansport, trade and export minerals;"
It is in the above context that the Terms of Reference were framed.
c
29. On l" July, 2013 the Commission gave the First Report on
Illegal Mining oflron 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 22"d November, 20 I 0 of the Central Government are being
D committed in the State ofOdisha; (ii) There is a complete disregard and
contempt for law and lawful authorities on the part of many of the
emerging breed of entrepreneurs; (iii) It appears that the law has been
made helpless because of its systematic non implementation. The
executive summary states that the following are discussed in the report:
E "(A) l1'formation regarding mining leases should be placed on
website to make mining operations more transparent and to
display the information for each lease on the departmental/State
website with various conditions which are required to be adhered
by the lessee.
F (B) Misuse of Rule 24-A(6) ofMCR, 1960 [Mineral Concession
Rules, 1960] which provides for deemed extension of lease.
Application for renewal of mining lease is not decided for one or
other pretexts, may be, there is lack of co-ordination among
various departments which are required to decide renewal
application. There is gross misuse of deemed refusal and deemed
G
extension of both the provisions of renewal of leases {before
27.09.1994 and after) under Rule 24-A ofMCR, 1960. This
casual and negative approach has caused dearly to State
exchequer in the form of hundred crores of stamp duty and
others.
H
COMMON CAUSE v. UNION OF INDIA AND ORS. 397
[MADAN B. LOKUR, J.)
(C) Violation of the provisions of the Forest (Conservation) Act, A
1980, Rules & guidelines and directions issued by the Hon 'hie
Supreme Court oflndia.
(D) Violation of the provisions of the Environment (Protection)
Act, 1986. B
(E) Misuse of Rules: 10 & 12 of MCDR, 1988 [Mineral
Conservation and Development Rules, 1988) which provides for
modification and review ofmining plan only for a specific purpose, c
namely,
(i) Safe and scientific mining;
(ii) conservation of minerals;
(iii) the protection of environment; and
D
(iv) in case of modification, explanation for the same.
(F) Encroachment:-
On the basis of Google Image, the survey report prepared by the E
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, F
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 Commission were not
G
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. H
398 SUPREME COURT REPORTS (2017) 13 S.C.R.
A 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 specific~. Therefore, whether notices were or were not issued to
the lease holdets who were the subject matter of discussion in the second
report is of no consequence.
B
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 Conunission for the purposes of our judgment
c and order.
34. The procedure followed by the Commission has been mentioned
in Volume I Part II of the first report, but it is not necessary for us to
recount each and every detail. Suffice it to say that a resume of the
procedure followed will indicate that full opportunity was given to the
D lease holcJers to have their say.
Resume of the procedure followed by the Commission
35. In March 20 I I the Commission sent the first questionnaire to
the concerned Secretary of the Government of Odisha seeking the
E following information regarding each lease holder:-
"(i) the name of the lessee;
(ii) area of the lease;
(iii) date of the execution of the lease deed;
F (iv) present status (renewal, mining plan, mining scheme)
approval date;
(v) production and export particulars from the year 2008-09 up
to January, 201 I; etc."
36. On 20th April, 20 II the Commission sent the second
G questionnaire to the said concerned Secretary seeking further information
in a Fonn consisting of 14 questions and 4 tables.
37. Thereafter, between 24th and 26th August, 20 ll the Commission
issued the first notice to various mining lessees in Odisha seeking
information on affidavit as per Profonna A and B enclosed with the
H
COMMON CAUSE v. UNION OF INDIA AND ORS. 399
[MADAN B. LOKUR, J.]
notice. In Proforma A the lease holder was asked to submit details A
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.
B
38. The Commission visited Odisha from 7'" December.• 2011 to
J4th December, 2011, from 3"' October, 2012 to 11'" October, 2012 and
from 31" October, 2010 to 8'" 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 C01nmission received as
c
many as 140 complaints alleging illegal mining. Accordingly, a public
hearing was held in Keonjhar and Bhubaneshwar on I I"' and 12'"
December, 2011.
39. On21" December, 2012and12"' January, 2013 several senior
counsel were given a personal hearing by the Commission including a D
personal hearing to the Federation oflndian Mining Industries (for short
'FIMI'). Following the submissions made, a fresh notice was issued to
the lease holders from 28'" 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 E
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 F
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.
G
(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
foamed counsel for the lease holders, the State of Odisha, FIMI,
H
400 SUPREME COURT REPORTS [2017] 13 S.C.R.
A Federation oflnpian Chambers of Commerce and Industry (FICCI) and
the Ministry of Environment and Forest of the Government of India (for
short 'MoEF') which are as follows:
HEARING DATE PLACE
NO.
B I. 21.12.2012 Office of the Commission. Ahmedabad.
2. 12.01.2013 -do-
3. 18.022013 -do-
4.
1------"
27.02.2013 Circuit House, Bhubaneshwar (Odisha)._
5. 28.02.2013 -do-
~- ·--·
6. 01.03.2013 -do-
c 7. 02.032013 -do-
8. 04.03.2013 -do-
9. 16.03.2013 Circuit House, Annexe, Ahmedabad.
JO. 20.03.2013 -do-
I I. 23.03.2013 Office of the Commission. Ahmedabad.
12. 02.04.2013 Circuit House, Annexe, Ahmedabad.
D 13. 03.04.2013 -do-
14. 04.04.2013 -do-
15. 12.04.2013 Office of the Commission. Ahmedabad.
16. 13.04.2013 -do-
17. 21.04.2013 Gujarat University Convention Centre,
Nr. Helmet Cross Road, 132 fl. Ring
Road, Ahmedabad.
E 24.05.2013 Office of the Commission, Ahmedabad.
18.
19. 2~.05.2013 -do-
41. The number ofleamed counsel and representatives who were
heard by the Commission and with whom interactions took place are
mentioned in Annexure A to Volume I of the first report. The list of
F learned counsel runs into 18 pages - from page 33 to page 50 ofVolume
I of the first report. Some individual lawyers appeared for several lease
holders but the fact of the matter is that everybody who wanted to be
heard was given a hearing.
42. The function of the Commission as stated in the first report, at
G 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
H the Commission for controlling illegal mining and violation of the
COMMON CAUSE v. UNION OF INDIA AND ORS. 401
[MADAN B. LOKUR, J.)
Acts and/or Rules. For that, there is no question of issuing notices A
to the lessees.
For collecting the data and assessing it, the Principles ofNatural
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." B
It is further clarified on page 198 ofVolume I of the first report that with
regard to individual mining leases in which there 1s a violation of the
provisions of the Forest (Conservation) Act, 1980 and/or conditions of
environmental clearance etc. a report wonld be submitted later on.
43. It is therefore abundantly clear that the first report is generally c
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 or the
right of cross examination being granted to any mining lease holder under
Section 8C of the Commissions of Inquiry Act, 1952. We are satisfied D
that the Commission made adequate efforts to collect the facts and this
collation in the first report was possible with the assistance of the mining
lease holders and their learned counsel and representatives as well as
the government authorities and FIMI and FICCI. Under these
circumstances, no lease holder can seriously contend that the procedure
adopted by the Commission in collecting facts was either irregular or not E
in accordance with law. As mentioned above, any mining lease holder
who wanted to be heard was given an opportunity of being heard and
was fully aware of what the Commission was attempting to achlcve and
if any particular mining lease holder chose not to associate with it, it was
at his or her own peril. Lack of knowledge of the proceedings before F
the Commission cannot be appreciated and we are quite satisfied that all
the mining lease holders were fully aware of what was going on, if not
personally then certainly through their list of learned counsel running
into 18 pages or their representatives individually or their Federation.
44. In Goa Foundation there was a challenge to the report of the G
Justice Shah Commission in respect of its conclusions pertaining to the
State of Goa. This was dealt with by this Court in paragraphs 11 to 14 of
its decision. Tills Court declined to quash the report in view ofthe statement
made by the learned Advocate General of Goa. But, this Court took the
view that: "we will, however, examine the legal and environmental issues
raised in the Report of Justice Shah Commission and on the basis of our H
402 SUPREME COURT REPORTS [2017] 13 S.C.R.
A findings on these issues consider granting the reliefs prayed for in the
writ petition filed by Goa Foundation and the reliefs prayed for in the
writ petitions tiled by the mining lessees, which have been transferred to
this Court."
45. In the present petitions before us, there is no challenge to the
B reports of the lustice Shah Commission. However, we propose (as in
Goa Fo1111dation) to confine ourselves to some limited facts adverted
to by the CEC in its final report. We do not propose to base any of our
conclusions on the reports· of the Commission.
46. Learned counsel for the petitioners insisted that the illegal or
c unlawful mining activity carried on in the State ofOdisha 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:-
D "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 oflnvestigation, for further investigation and
follow i?P action."
47. Similarly, on page 125 of Chapter II ofVolume I of the report,
E it is stated as follows:-
"Terrns ofReference 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
F 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
G Chapter II of the report to the effect that:
a. That the tribals in the area have been displaced or stay in
pathetic and miserable conditions in same area. There is rampant
air pollution with the trees having the colour of minerals making
it clear that tribals are forced to breathe polluted air and drink
H polluted water.
COMMON CAUSE v. UNION OF INDIA AND ORS. 403
[MADAN B. LOKUR, J.]
b. Streams and ground water is polluted and there is hardly any A
facility of drinking water. Women have been seen fetching water
from dirty nalas.
c. Mining companies and beneficiation plants are drawing water
from rivers and nearby water resources are getting depleted at
a fast rate. The river Baitrani has been seriously affected by this B
activity.
d. Basic facilities such as medical facilities. shelter/residence,
education facilities are absent. Roads have a heavy flow of
traffic and on one road of the area about 7000 trucks passed
during night time. C
e. The labour is not being paid adequate wages beyond the
minimum wages even though the income of the mine owners
.
runs into billions of rupees .
48.Adverting to corruption in the area due to illegal mining activities,
the Commission felt thatthe Vigilance Commission was unlikely to conduct D
ail 'impartial and independent enquiry for arriving at just and proper
findings because of external pressures. Accordingly, it would be more
appropriate if the Central Bureau ofinvestigation (CBI) conducts a
detailed enquiry into all cases that have been registered between 2008
and 2011. It was also noted that the railways have issued demand notices E
to the extent ofRs.1,874 crores. The latest position with regard to these
notices is not available.
49. It was also noted that notices have been issued in 146 cases
to various lease holders for recovery of mined ore as per Section 21 (5)
of the MMDR Act. In the Koira circle notices have beeu issued to 55
F
lessees for more than Rs. 13,000 crores; in Joda circle notices have
been issued to 72 lessees for recovery of more than Rs. 44.000 crores;
in Keonjhar cirdc notices have been issued to 4 lcssees forrecovery of
about Rs. 1,065 crores; in Koraput circle notices have been issued to
three lessees for the recovery of about Rs. 44 lakhs; and in Bolangir
circle notice has been issued to I lessee for the recovery of about Rs.29 .5 G
crores. In Baripada circle notices have been issued to 11 lessees for
recovery of more than Rs. 467 crores. In other words notices have
be'en,issued to the lessees for recovery of more than Rs. 59.000 crores!
(According to the CEC the figure exceeds Rs. 61,000 crores) !!
H
404 SUPREME COURT REPORTS [2017] 13 S.C.R.
A 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
B 51. The initial contention urged on behalf of the respondents -
lease holders was that in giving the report dated 16"' October, 2014 the
CEC has exceeded its remit. In this context, reference was made to the
order of 13" January, 2014 in which it is stated that "The Report will not
cover cases other than forest and environmental issues."
c 52. We aie of opinion that this objection deserves immediate
rejection. The subsequent orders passed by this Court have been
completely overlooked by learned counsel inasmuch on 21" 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
D of the law." Similarly, in the record of proceedings of J6th May, 2014 it
was noted that "The Central Empowered Committee will give a final
report on the Writ Petition by the end of July, 2014 ......... "
53. From a reading of the orders and the proceedings that have
been held in this regard from time to time, it is quite obvious to us that the
E jurisdiction of the CEC was not limited and it was expected to give a
detailed report on all aspects of illegal mining or mining being carried out
without any lawful authority in whatever manner. The initial objection
raised on behalf of the lease holders is therefore rejected.
Central Empowered Committee
F 54. The Central Empowered Committee or the CEC was first
constituted by this Court by an order dated 9th May, 2002
(T. N. Godavarman v. Union ofIndia)' as an interim body. Thereafter,
it was constituted by a notification dated I 7'h September, 2002 issued
under Section 3(3) of the Environment (Protection)Act, 1986 (for short
G 'the EPA'). It has continued functioning and assisting this Court for
more than a decade and even though it has been criticized on a couple of
occasions, it is now an established body which renders extremely valuable
advice to this Court and provides factual material on the basis of which
this Court can make some recommendations and pass appropriate orders.''
'(2013) 8 sec 198
H 'T.N. Godavam1an v. Union oflndia, (2013) 8 SCC 198 and (2013) 8 SCC 204
COMMON CAUSE v. UNION OF INDIA AND ORS. 405
[MADAN B. LOKUR, J.] ,
55. The details of the functioning of the CEChave been discussed A
by this Court in Samaj Parivartana Samudaya v. State ofKarnataka. 7
In that decision, questions were raised about the credibility of the CEC
and while rejecting the submissions, it was made clear that the
recommendations made by the CEC are subject to the satisfaction of
this Court. We need say nothing more except that during the course of B
hearing of the present petitions, some of the conclusions arrived at by
the CEC were disputed by the petitioners and even by the learnedAmicus
and some were supported by learned counsel for the mining lease holders,
the learned Attorney General and the learned counsel for the State of
Odisha. It is therefore quite c!ear that in the present cases, the CEC as
a fact finding body has functioned impartially and it is only on the C
conclusions arrived at by the CEC on the basis of the facts gathered that
there can be some debate and discussion. Anyone may disagree with
the views of the CEC and there is no need to make heavy weather
about this at all.
56. In so far as the report given by the CEC on 16'h October, 2014 D
(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 E
Essel Mining and Industries Ltd. (Essel) on lO'h September, 2014. The
CEC visited the site of the mining lease ofSMPL from4"' March, 2014
to 7'" March, 2014 and had site visits of a number of other lessees from
12'h July, 2014 to 16'h July, 2014.
57. As far as the facts collected by the CEC are concerned, there F
·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, pennissible production and G
production without environmental clearance/beyond environmental
clearance. The details in this regard have been given as Annexure R-14
to the final report.
1
c20!3) s sec 154
H
406 SUP~EME COURT REPORTS (2017] 13 S.C.R.
A 58. Regarding the correctness of the information, the CEC has
this to say:
"24. A copy of the above said statement prepared by the CEC
was made available, through the Director, Mines and Geology,
Government ofOdisha and also through the Federation oflndian
B Mining Industries (FIMI), to the lessees of each of the mining
leases to enable them to verify the production and other details
as given in the statement. During the hearings held before the
CEC between 5•h August and 12m August, 2014 and also in the
representations filed before the CEC a large number oflessees
stated that the yearwise production details are not correctly
c reflected in the statement. Some of them also stated that the
environment clearance details are not properly reflected in the
statement. Therefore, it was decided that (a) the State
Government will reconcile the annual production and other details
with the respective lessees and (b) the copies of the environmental
D clearances may also be filed before the CEC by those lessees
who are c!isputing the environmental clearances details provided
by the State. Accordingly a meeting was convened by the
Director; Mines & Geology (DMG) with the lessees on 141h
August, 2014 and during which the annual production and other
details were reconciled. The reconciled leasewise and yearwise
E production and other details provided to the CEC by the State of
Odisha may be seen in the statement enclosed at Annexure -
R-11 to this Report. The figures modified in the said statement,
after reconciliations, arc shown in bold print."
59. The CEC noted that the Director, Mines and Geology of the
F Government of Odisha had informed the CEC that each lease holder
with the exception of SMPL and JSPL agreed with the reconciled
production details. On facts, therefore, there is no dispute with regard
to the contents of the report of the CEC, although the conclusions might
be disputed. Separately, the CEC has dealt with the facts concerning
G SMPL and JSPL pursuant to a meeting held with them on 11 mSeptember,
2014.
Statutory provisions
60. The grant of a mining lease is governed by the provisions of
the Mines and Minerals (Development and Regulation) Act, 1957 (or
H
COMMON CAUSE v. UNION OF INDIA AND ORS. 407
[MADAN B. LOKUR, J.]
the MMDR Act), the Mineral Concession Rules, 1960 (or the MCR) A
and the Mineral Conservation and Development Rules, 1988 (or the
MCDR).
61. Section 4(1) of the MMDRAct 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 B
under the MMDRAct and the rules made thereunder. A mining operation
is defined in Section 3(d) of the MMDRAct 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.
c
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 D
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 (I) thereof provides that an
application is required to be made for a mining lease in respect of any
land in which the mineral vests in tlie government and the application E
shall be made to the State Government in the prescribed form and along
with the prescribed fee.
64. Section 12 of the MMDRAct requires the State Government
to maintain a set of registers. Among the registers that the State
Government is required to maintain are a register of applications for F
mining leases and a register of mining leases. Every such register shall
be open to inspection by any person on payment of such fee as the State
Government may fix.
65. Section 13 of the MMDR Act provides for the rule making
power of the Central Government in respect of minerals. The MCR are G
framed in exercise of power conferred by Section 13 of the MMDR
Act.
66. Section 18 of the MMDRActmakes it the duty of the Central
Government to take all such steps as may be necessary for the
H
408 SUPREME COURT REPORTS [2017] B S.C.R.
A conservation and systematic development of minerals in India and for
the protection of the e11vironment by preventing or controlling any pollution
which may be cansed by mining operations. The MCDR are framed in
exercise of power conferred by Section 18 of the MMDRAct.
67. The distinction between the MCR and the MCDR is that the
B MCR deal, inter a/ia. with the grant of a mining lease and not
commencement of mining operations. However, the MCDR deal, inter
alia. with the commencement of mining operations and protection of
the environment by preventing and controlling pollution which might be
caused by mining operations.
c 68. Sec~ion 21 of the MMDR Act deals with penalties and sub-
section ( 1) theteof provides that whoever contravenes the provisions of
sub-section (I) or sub-section (I A) of Section 4 shall be punished with
imprisonment for a term which may extend to two years or with fine
which may extend to Rs. 25,000 or with both. Sub-section ( 5) of Section
21 of the MMDR Act provides that whenever any person raises without
D any lawful authority, any mineral from any land, the State Government
may recover from such person the minerals so raised or where such
mineral has been disposed of the price thereof. In addition thereto the
State Government may also recover from such person rent, royalty or
tax, as the case may be for the period during which the land was occupied
E by such person without any lawful authority.
Mineral Concession Rules, 1960
69. As far as the MCR are concerned, Rule 22 is of some
importance and this provides for an application to be made for the grant
of a mining lease in respect of land in which the mineral vests in the
F 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.
G
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.
H
COMMON CAUSE v. UNION OF INDIA AND ORS. 409
[MADAN B. LOKUR, J.]
71. Rule 27 ofthe MCR deals with the conditions that every mining A
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 for B
the grant of such lease, a lease deed in Form K or in a form as near
thereto as circumstances of each case may require, shall be executed
within six weeks of the order, or within such extended period as the
State Government may allow.
73. Part VII of Form K deals with the covenants of the lessee/
lessees. Clause 10 thereof requires the lessee to keep records and
c
accounts regarding production and employees etc. The lessee is required,
inter alia, to maintain a record of the quantity and quality of the mineral
released from the leased land, the prices and all other particulars of all
sales of the mineral and such other facts, particulars and circumstances,
as the Central Government or the State Government may require. D
74. Clause 11 C is of some importance and it requires that the
lessee shall take measures for the protection of the environment like
planting of trees, reclamation ofland, use of pollution control devices
and such other measures a~ may be prescribed by the Central Government
or the State Government from time to time at the expense of the lessee.
E
75. Rule 37 of the MCR deals with the transfer of a lease and
provides, inter alia, that a mining lessee shall not without the previous
consent in writing of the State Government or the Central Government,
as the case may be, assign, sublet, mortgage, or in any other manner,
transfer the mining lease, or any right, title or interest therein. The lessee
shall not enter into or make any bona fide arrangement, contract or F
understanding whereby the lessee will or may directly or indirectly be
financed to a substantial extent in respect ofits operations or undertakings
or be substantially controlled by any person or body of persons. Sub-
rule (3) ofRule 37 of the MCR enables a State Government to determine
any lease ifthe mining lessee has committed a breach of Rule 37 of the G
MCR or has transferred any lease or any right, title or interest therein
otherwise than in accordance with sub-rule (2) of Rule 37 of the MCR.
Mineral Conservation and Development Rules, 1988
76. The MCDR promulgated under Section 18 of the MMDR
Act and referred to in Rule 27 of the MCR are also of some significance. H
410 SUPREME COURT REPORTS [2017] 13 S.C.R.
A Rule 9 of the MCDR prescribes that no person shall commence mining
operations in any area except in accordance with a mining plan approved
under Clause (b) of sub-section (2) of Section 5 of the MMDRAct.
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
B minerals or for protection of the environment. However, the application
for modificatiojls shall set forth the intended modifications and explain
the reasons for $uch modifications. The mining plan cannot be modified
just for the asking.
78. Rule 13 of the MCDR provides that mining operations are
c required to be carried out by every holder of a mining lease in accordance
with the approved mining plan. Ifthe mining operations are not so carried
out, the mining ©perations 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
D "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 ofpollution
while conducting any mining operations in the area.
80. Rule 37 of the MCDR requires certain precautions to be taken
E against air pollution and obliges the mining lease holder to keep air pollution
under control and within permissible limits specified under various
environmental laws including the Air (Prevention and Control of Pollution)
Act, 1981 and the Environment (Protection) Act, 1986.
81. Rule 38 of the MCDR requires the holder of a mining lease to
take all possible precautions to prevent or reduce the passage of toxic
F
and objectionable liquid effluents from the mine into surface water bodies,
ground water aquifer and usable lands to a minimum. It also mandates
effluents to be suitably treated, ifrequired, to conform to the standards
laid down in this regard. In other words, the provisions of the Water
(Prevention and Control of Pollution) Act, 1974 are required to be adhered
G to by the mining lease holder.
82. Rule 41 of the MCDR requires every holder of a mining lease
to carry out mining operations in such a manner as to cause least damage
to the flora of the area and the nearby areas. Every holder of a mining
lease is required to take immediate measures for planting not less than
H twice the number of trees destroyed by reason of any mining operations
COMMON CAUSE v. UNION OF INDIA AND ORS. 411
[MADAN B. LOKUR, J.]
and to look after them during the subsistence of the lease after which A
these trees shall be handed over to the State Forest Department or any
other appropriate authority. The holder of a mining lease is also required
to restore, to the extent possible, other flora destroyed by the mining
operations.
83. Briefly therefore, the overall purpose and objective of the B
MMDR Act as well as the rules framed there under is to ensure that
mining operations are carried out in a scientific manner with a high degree
of responsibility including responsibility in protecting and preserving the
environment and the flora of the area. Through this process, the holder
of a mining lease is obliged to adhere to the standards laid down under
the Environment (Protection) Act, 1986 or the EPA as well as the laws
c
pertaining to air and water pollution and also by necessary implication,
the provisions of the Forest (Conservation) Act, 1980 (for short 'the FC
Act'). Exploitation of the natural resources is ruled out. If the holder of
a mining lease docs not adhere to the provisions of the statutes or the
rules or the terms and conditions of the mining lease, that person is liable D
to incur penalties under Scction21 of the MMDRAct. In addition thereto,
Section 4A of the MMDRAct which provides for the termination ofa
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
E
development, preservation ofnatural environment, prevention ofpollution,
etc. then the Central Government may request the State Government to
prematurely terminate a mining lease.
Environment Impact Assessment Notification of 27•• January,
1994
F
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 G
Notification dated 27'h January, 1994 was issued by the Central
Government in exercise of powers conferred by Section 3(1) and Section
3(:2j(v) of the EPA read with Rule 5(3)(d) of the Environment (Protection)
Rules, 1986. The Environment Impact Assessment Notification dated
27"' January, 1994 (for short 'EIA 1994') is a prohibitory notification and
directs that on and from the date ofits publication in the official gazette: H
412 SUPI{EME COURT REPORTS (2017] 13 S.C.R.
A (i) expansion or modernization ofany activity (ifpollution load is to exceed
the existing one) and (ii) a new project listed in Schedule I to the
notification, shall not be undertaker. unless it has been accorded
environmental clearance (for short EC) by the Central Government in
accordance wit!i the procedure specified in the notification.
B 86. The notification provides, among other things, that in case of
mining operations, site clearance shall be granted fora sanctioned capacity
and shall be valid for a period of five years from commencing mining
operations. What this means is that on receipt of an EC a mining lease
holder can extrru;t a mineral on! y from a specified site, up to the sanctioned
capacity and only for a period of five years from the date of the grant of
c an EC. This is regardless of the quantum of extraction permissible in the
mining plan or the mining lease and regardless of the duration of the
mining lease. Consequently, a mining lease holder would necessarily have
to obtain a fresh EC every five years and can also apply for an increase
in the sanctioned capacity. There is no concept of a retrospective EC
D and its validity effectively starts only from the day it is granted. Thus,
the EC takes precedence over the mining lease or to put it conversely,
the mining operations under a mining lease are dependent on and
'subordinate' to the EC.
87. On 4" May, 1994 an Explanatory Note was added to EIA
E 1994. We are concerned with the I" Note which deals with the expansion
and modernization of existing projects. This reads as follows:
"l. Expansion and mcl:i.ernization of existing projects
A project proponent is required to seek environmental clearance
for a proposed expansion/modernization activity if the resultant
F pollution load is to exceed the existing levels. The words "pollution
load" will in this context cover emissions, liquid effluents and
solid or semi-solid wastes generated. A project proponent may
approach the concerned State Pollution Control Board (SPCB)
for certifying whether the proposed modernization/expansion
G activity as listed in Schedule-I to the notification is likely to exceed
t.'1e existing pollution load or not. Ifit is certified that no increase
is likely to occur in the existing pollution load due to the proposed
expansion or modernization, the project proponent will not be
required to seek environmental clearance, but a copy of such
certificate issued by the SPCB will have to be submitted to the
H
COMMON CAUSE v. UNION OF INDIA AND ORS. 413
[MADAN B. LOKUR J.]
Impact Assessment Agency (IAA) for information. The IAA A
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 B
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 ornot. 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 c
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 D
mining operations? This is answered in the 8" Note which is also of
some importance and this reads as follows:
"8. Exemption for projects already initiated
For projects listed in Schedule-I to the notification in respect of E
which required land has been acquired and all relevant clearances
of the State Government including NOC from the respective
State Pollution Control Boards have been obtained before 27"
January, 1994, a project proponent will not be required to seek
. environmental clearance from the !AA. However those units
who have not as yet commenced production will inform the !AA." F
90. The above Note makes it clear that existing mining projects
that have a no objection certificate from the SPCB before 27" January,
1994 will not be required to obtain an EC from the Impact Assessment
Agency. Of conrse, this is subject to the substantive portion ofEIA 1994
and the I "Note. However, ifthe existing mining project does not have a G
no objection certificate from the SPCB, then an EC will be required
under EIA 1994.
91. Two questions immediately arise from a reading of the I" and
the 8"' Note. The first question is: What is the base year for considering
H
414 SUPREME COURT REPORTS [2017] 13 S.C.R.
A the pollution load while proposing any expansion activity? The second
question is: What is the duration for which an EC is not necessary for an
ongoing project which does not propose any expansion, or to put it
differently, what is the validity period for a no objection certificate from
the SPCB?
B 92. In our opinion, as far as the first question is concerned, a
reading of ETA 1994 read with the l" Note implies that the base year
would need to be the immediately preceding year that is 1993-94. This
is obvious from the opening sentence of the I'' Note, that is, "A project
proponent is required to seek environmental clearance for a proposed
expansion/modernization &etivity ifthe resultant pollution load is to exceed
c the existing levels." (Emphasis supplied). In its report, the CEC has
taken 1993-94 as the base year and we see no error in this. Even the
MoEF in its circular dated 28"' October, 2004 stated with regard to the
expansion in production: "If the annual production of any year from
1994-95 onwards exceeds the annual production of 1993-94 or its
D preceding years (even if approved by IBM), it would constitute
expansion." If th~t expansion results in an increase in the pollution load
over the existing levels, then an EC is mandated.
93. It was contended on behalf of the mining lease holders that in
terms of the circular of28'h October, 2004 the annual production even
E 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 I" 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
F 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 ifthe interpretation sought to be given is accepted, ihere 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
G 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 event, the immediately preceding
year would be relevant and that is the only reasonable interpretation that
H we see for the use of the words "or its preceding years".
COMMON CAUSE v. UNION OF INDIA AND ORS. 415
[MADAN B. LOKUR, J.]
94. On the question of the duration or exemption period from an A
EC in respect of a project that has commenced prior to 27"' January,
1994 the substantive portion of ETA 1994 and the 8th Note grant an
exemption from the requirement ofobtaining an EC if there is no expansion
and the existing pollution load is not exceeded. In any event, a no objection
certificate from the SPCB is necessary for continuing the mining B
operations. Consequently, even if any mining lease holder does not have
an EC or does not require an EC for continuing mining operations (but
has a no objection certificate from the SPCB), the absence of an EC
would not have an adverse impact on the mining lease holder unless of
course, there was an expansion in the mining operations without any
certificate from the SPCB. In addition to this, the validity period (if any) C
of the certificate from the SPCB is important - we have not been made
aware whether there is such a validity period or not.
95. The contention oflearned counsel for the mining lease holders
that ETA 1994 was rather vague, uncertain and ambiguous cannot be
accepted. In our opinion, on a composite reading ofEIA 1994, it is clear D
that: (i) A no objection certificate from the SPCB was necessary for
continuing mining operations; (ii) An expansion or modernization activity
required an EC unless the pollution load was not exceeded beyond the
existing levels; (iii) The base year for determining the pollution load and
therefore the proposed expansion would be with reference to 1993-94;
(iv) Whether an expansion or modernization would lead to exceeding E
the existing pollution load or not would require a certificate from the
SPCB which could be reviewed by the IAA; (v) New projects require
an EC; and (vi) Existing projects do not require an EC unless there is an
expansion or modernization for the duration (if any) of the validity of the
certificate from the SPCB. We need not say anything 11).ore on this F
subject since the CEC has proceeded to discuss the issue of mining in
excess of the EC or in excess of the mining plan only from the year
2000-01 onwards. The prior period may, therefore, be ignored and it is
the period from 2000-01 onwards which is actually relevant for the present
discussion.
G
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 19"' June, 1997 of the MoEF to the Chief Conservator of
Forests in the MoEF. H
416 SUPREME COURT REPORTS [2017] 13 S.C.R.
A 97. Learned counsel forthe mining lease holders sought to buttress
their submission that EIA 1994 was vague and ambiguous by mentioning
two circulars i$sued by the MoEF on 5th November, 1998 and 27th
December, 200@ extending the period for obtaining an EC for new units.
However, these' circulars are apparently not on our record (which goes
into 148 volumi:s) and therefore we cannot make any comment about
B
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 J4th May. 2002
which later on became the subject of consideration by this Court in M. C
c Mehta v. Union of India.• A reading of the circular of J4th May, 2002
indicates that several units had come up in violation ofEIA 1994. The
MoEF had taken the view that such units may be permitted to apply for
an EC by 31" March, 1999 which was then extended to 30th June, 2001
by circulars dated 5'" November, 1998 and 27th December, 2000
respectively.
D
98. By tlie circular dated J4th May, 2002 the deadline for applying
for an EC was extended up to 31" March, 2003 as a last and final
opportunity to obtain an ex post facto EC in respect of units which had
commenced mining operations without obtaining a prior EC in violation
ofEIA 1994. The circular also stated that: "Suitable directions shall be
E
issued by all States/UTs under the Environment (Protection) Actto units
to stop construction activities/operations of all such units that fail to apply
for environmental clearance by 31" March, 2003. Units which fail to
comply with these directions shall be proceeded against forthwith under
the relevant provisions of the Environment (Pl Act, 1986 without making
F reference to this Ministry."
99. It was submitted that in view of these ambiguous and unclear
signals emanating from the MoEF which resulted in confusion being
worse confounded, the mining lease holders were not clear whether or
not they were required to obtain an EC particularly in respect of pre-
G EIA 1994 mining leases and operations.
100. As mentioned above, these dates and the text of the circulars
were emphasized by learned counsel for the lease holders to contend
that it was not obligatory for the mining lease holders, who did not expand
their mining operations, to obtain an EC and in any event the period for
H '(2004)12SCCll8
COMMON CAUSE v. UNION OF INDIA AND ORS. 417
[MADAN B. LOKUR J.]
obtaining an EC was extended till 31" March, 2003 with ex post facto A
approval. In this context, reliance was placed on M.C. Mehta referred
to above.
101. We are not in agreement with the contention oflearned counsel
for the mining lease holders on the interpretation given to the various
circulars for the reasons given above and must also correctly appreciate B
the decision of this Court inM.C. Mehta.
102. In M.C. Mehta the issue that arose for consideration was
whether mining activity in the Aravalli hills causes environmental
degradation and what directions are required to be issued. While
considering this issue, this Court also considered EIA 1994 and the circular c
dated 14'h May, 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 D
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 E
circular. Further, ifMOEF intended to apply this circular also to
mining activity commenced and continued in violation of this
notification, it would also show total non-sensitivity ofMOEF to
the principles of sustainable development and the object behind
the issue of notification. The circular has no applicability to the F
mining activity."
103. Adverting to the MMDR Act, this Court expressed the view
in paragraph 52 of the Report thatthe approval ofa 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 G
provisions including the EPA and other laws. It was said:
"The grant of permission for mining and approving mining plans
and the scheme by the Ministry of Mines, Government of India
by itself does not mean that mining operation can commence. It
cannot be accepted that by approving mining plan and scheme
H
418 SUPREME COURT REPORTS [2017] 13 S.C.R.
A by the Ministry of Mines, the Central Government is deemed to
have approved mining and it can commence forthwith on such
approviil ....... A mining leaseholder is also required to comply
with o~her statutory provisions such as the Environment
(Protection) Act, 1986, the Air (Prevention and Control of
Pollution) Act, 1981, the Water (Prevention and Control of
B
Pollution) Act, 1974 and the Forest (Conservation) Act, 1980.
Mere approval of the mining plan by the Government of India,
Ministry of Mines would not absolve the leaseholder from
complying with the other provisions."
104. This Court also considered the question of the applicability
c ofEIA 1994 to the renewal of an existing mining lease. It was held that
the said notification would apply to the renewal of a mining lease that
came up for consideration post 27ili January, 1994. In other words, for
the renewal of a mining lease, an EC was required by the mining lease
holder. It was held in paragraph 77 of the Report:
D "We are unable to accept the contention that the notification
dated 27•1-1994 would not apply to leases which come up for
consideration for renewal after issue of the notification. The
notification mandates that the mining operation shall not be
undertaken in any part of India unless environmental clearance
E by the Central Government has been accorded. The clearance
under the notification is valid for a period of five years. In none
of the leases the requirements of the notification were complied
with either at the stage of initial grant of the mining lease or at
the stage of renewal. Some of the leases were fresh leases
granted after issue of the notification. Some were cases of
F renewal. No mining operation can commence without obtaining
environmental impact assessment in terms of the notification."
105. It is clear from the decision rendered by this Court that EIA
1994 is mandatory in character; that it is applicable to all mining operations
- expansion of production or even increase in lease area, modernization
G of the 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
H concluded that EIA 1994 is clearly applicable to the renewal ofamining lease.
COMMON CAUSE v. UNION OF INDIA AND ORS. 419
[MADAN B. LOKUR, J.]
I 06. Subsequent to the decision inM.C. Mehta two clarificatory A
circulars were issued by MoEF on 28" October, 2004 and 25 1h 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
B
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
c
agree. We have referred to various provisions of the MMDR Act and
the rules framed thereunder to indicate the statutory importance given
to the protection and preservation of the environment. This was also
emphasized in M. C. Mehta in which it was also stated that "It does not
appear that MOEF intended to legalise the commencement or D
continuance of mining activity without compliance of stipulations of the
notification." It appears to us that the MoEF was, in a sense, cajoling the
mining lease holders to comply with the law and EIA 1994 rather than
use the stick. That the mining lease holders chose to misconstrue the
soft implementation as a licence to not abide by the requirements of the
law is unfortunate and was an act of omission or commission by them at E
their own peril. We cannot attribute insensitivity to the MoEF or even to
the mining lease holders to environment protection and preservation, but
at the same time we cannot overlook the obligation of everyone to abide
by the law. That the MoEF took a soft approach cannot be an escapist
exc~se for non-compliance with the law or EIA 1994. F
Environment Impact Assessment Notification of 14 September, 2006
1
•
I 08. On J4th September, 2006 another EIA Notification was issued
by the MoEF. This notification (for short EIA2006) required prior EC
for projects or activities mentioned in the Schedule to it both for major as
well as minor minerals if the leased area is 5 hectares or more. We were G
informed that several mining lease holders, in compliance with EIA2006,
applied for and were granted an EC.
109. It was submitted by learned counsel for the mining lease
holders that the confusion, vagueness and uncertainty caused by EIA
1994 and subsequent circulars and other communications did. not end H
420 SUPREME COURT REPORTS [2017] 13 S.C.R.
A with the issuance of EIA 2006. Reference was made to a circular dated
13'" October, 2006 which deals with interim operational guidelines till
13'" September, 2007 in respect of applications made under EIA 1994.
We do not see' the relevance of this circular (which really dealt with
transitional is~ues) not only for the reason given in M.C llfehta that
circulars cannot override statutory notifications but also because it deals
B
with the procedure for considering applications made under ETA 1994.
110. Reference was also made to a circular dated 2"' July, 2007.
The passage relied upon reads as follows:-
"It is clarified that all such mining projects which did not require
c environmental clearance under the ETA Notification, 1994 would
continue to operate without obtaining environmental clearance
till the mining lease falls due for renewal, ifthere is no increase
in lease area and/or there is no enhancement of production. Jn
the event of any increase in lease area and or production, such
projects would need to obtain prior environmental clearance.
D 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 oflease area or production."
111. The aforesaid circular relates to three categories that is: (i)
E Mining leases, where no EC was required under ETA 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 au EC at the time ofrenewal of
the mining lease even if there was no increase in the lease area or
F enhancement of production.
112. Reference was also made to an Office Memorandum dated
19'" August, 20 I 0. However a reading of this document brings out that it
basica!Jy relates to construction at site but makes it clear that no activity
relating to any project covered under EIA 2006 including civil construction
G could be undertaken without obtaining a prior EC except fencing of the
site to protect it from getting encroached and construction of temporary
sheds for the guards.
Il3. Reference was also made to Office Memorandums dated
16'" November, 2010 and 12"' December, 2012 but having gone through
H them we find them oflittle relevance as they deal with procedural issues only.
COMMON CAUSE v. UNION OF INDIA AND ORS. 421
[MADAN B. LOKUR, J.]
114. All that we need to say on this subject is that there is no A
confusion, vagueness or uncertainty in the application ofElA 1994 and
ElA 2006 insofar as mining operations were commenced on mining leases
before 27'h January, 1994 (or even thereafter). Post ElA 2006, every
mining lease holder having a lease area of 5 hectares or more and
undertaking mining operations in respect of major minerals (with which
B
we are concerned) was obliged-to get an EC in tenns of EIA 2006.
115. An attempt was then made by learned counsel for the mining
lease holders to get out of the rigours of ElA 1994 and ElA 2006 by
contending that some of them had modified the mining plan (with approval)
and that therefore they had extracted iron ore or manganese ore, as the
case may be, in tenns of the mining plan but not necessarily in tcnns of
c
the EC that had been obtained, if at all.
116. We have already held that a mining plan is subordinate to the
EC and in M. C. Mehta it was held by this Court that having an approved
mining plan docs not imply that a mining lease holder can commence
mining operations. That being so, a modified mining plan without a revised D
or amended EC, is of no consequence. What the contention of learned
counsel suggests to us is that under the shield of a modified mining plan,
illegal or unlawful mining in the fonn ofmining without an EC, mining by
over-reaching EIA 1994 and ElA 2006 was being carried out.
117. The contention apart, the subterfuge of obtaining a modified E
mining plan to get over the adverse effects of excess and illegal or unlawful
production ofiron ore or manganese ore was deprecated by the Ministry
of Mines of the Government of India. In a letter dated 29'h October,
20 I 0 addressed to the Controller General, Indian Bureau of Mines it
was pointed out that State Governments had expressed a concern that F
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 G
prospectively only and earlier instances of irregular mining shall not be
regularized through a modification of the mining plan.
118. hi a subsequent letter dated 12"' 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 .
'J
422 SUPREME COURT REPORTS (2017] 13 S.C.R.
A 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
B
limit and that appropriate steps were ueeded to curb these violations.
Learned counsel for the petitioners submitted that such egregious
violations must be firmly dealt with by cancellation or termination of the
mining lease and a soft approach is not called for.
119. In (his context, it is worth noting that a High Level Committee
c (called the Hocla Committee) on the National Mineral Policy noted in its
Report dated 212"' December, 2006 in paragraph 3.47 as follows :
"3.47 An EMP (Environment Management Plan] has to be
prepared under the MCDR and got approved by IBM. However,
this EMP is not acceptable to the MoEF. The miner has to prepare
D two EMPs separately - one for IBM and another for MoEF.
The Committee suggests that IBM and MoEF should prepare
guidelines for a composite EMP so that IBM can approve the
same in consultation with MoEF's field offices. This will eliminate
anomalous situations where increase of even a few tonnes in
production requires project authorities to get a fresh EMP
E approved from the MoEF although the IBM allows a grace of
±I 0% per cent, keeping in view the fluctuations in the market
situation and process complexities. If a single EMP is accepted
in principle such anomalies can be resolved in advance. The
Committee feels the MoEF should also have a cushion of± I 0%
F per cent in production while giving EIA clearance."
120. The above passage indicates that the permissible variation in
production as per the Indian Bureau of Mines is ±10% but according to
the letter dated I 2th December, 20 I I issued by the Ministry of Mines,
the reasonable variation limit could be +20%. It is not clear why there
was a shift in the variation, but as rightly pointed out by learned counsel
G
for the petitioners, the fact that in some cases the variation exceeded
20% was a cause for concern which necessitated strict and punitive
action.
121.A submission was made by learned counsel for the mining
lease holders to the effect that since many of them had been granted the
H
COMMON CAUSE v. UNION OF INDIA AND ORS. 423
[MADAN B. LOKUR. J.]
first deemed statutory renewal of the mining lease under Rule 24A of A
the MCR, the requirements of EIA 1994 would not be applicable. We
were shown various amendments made to Rule 24A of the MCR from
time to time particularly the amendments made on 10'' February, 1987,
7th January 1993, 27'' September, 1994, 17'' January, 2000, ] 8th July,
2014 and 8'' October, 2014. In our opinion, none of these are of any
B
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 Jin 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 C
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 D
28'' 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 E
grant of an EC. In this context, it was pointed out that there were
enormous delays in granting an EC and that the Hoda Committee had
noted with reference to EIA 2006 that if all goes well, the grant of an EC
talces about 232 days whereas the international norm is that an EC is
granted within six months or 180 days. According to the additional affidavit F
filed by some mining lease holders, the period of232 days mentioned by
the Hoda Committee was actually a conservative estimate and that in
fact it takes anything upto 390 days for the grant of an EC. It was
submitted that the position was even worse under EIA 1994 since the
MoEF rarely showed any urgency in the grant of an EC. Examples
were cited before us to show that in some instances the grant of an EC G
took m0 re than two years. Taking all this into consideration it was
submitted that it would be more appropriate that the EC is given
retrospective effect from the date of the application.
124. We are not in agreement with learned counsel for the mining
lease holders. There is no doubt that the grant of an EC cannot be taken B
424 SUPREME COURT REPORTS [2017] 13 S.C.R.
A as a mechanical exercise. It can only be granted after due diligence and
reasonable care since damage to the environment can have a long term
impact. EIA 1994 is therefore very clear that if expansion or
modernization of any mining activity exceeds the existing pollution load,
a prior EC is necessary and as already held by this Court in M. C
B Mehta even for the renewal of a mining lease where there is no expansion
or modernization of any activity, a prior EC is necessary. Such importance
having been given to an EC, the grant of an ex post facto environmental
clearance woul¢1 be detrimental to the environment and could lead to
irrepara hie degtladation of the environment. The concept of an ex post
facto or a retr¢>spective EC is completely alien to environmental
C jurisprudence iQ.cluding EIA 1994 and EIA 2006. We make it clear that
an EC will come into force not earlier than the date of its grant.
Illegal Mining
125. A question raised by learned counsel for the mining lease
holders concerned the interpretation of the expression 'illegal mining'.
D Reliance was placed on the report of the CEC which refers to Ru le
2(iia) of the MCR to conclude that the violation of any rule within the
mining lease area would not come within the definition of' illegal mining'
except where there has been a violation of the rules framed under Section
23C of the MMDRAct.
E According to the CEC:
" 17. Ill~gal mining has been defined as mining operations
undertal<ien 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
F 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 isa difference ofopinion
between the CEC and the Commission on what is illegal mining or mining
G without lawful authority and we will give our views oJl 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
H holders.
COMMON CAUSE v. UNION OF INDIA AND ORS. 425
[MADAN B. LOKUR, J.]
128. The simple reason fornot accepting this interpretation is that A
Rule 2(ii a) of the MCR was inserted by a notification dated 26" 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 and the mining lease as
well as the statutes such as the EPA, the FCA, the Water (Prevention
B
and Control of Pollution) Act, 1974 and theAir (Prevention and Control
of Pollution) Act, 1981. Ifany mining operation is conducted in violation
of any of these requirements, then that mining operation is illegal or
unlawful. Any extraction of a mineral through an illegal or unlawful
mining operation would become illegally or unlawfully extracted mineral.
129. It is not, as suggested by learned counsel, that illegal mining c
is confined only to mining operations outside a leased area. Such an
activity is obviously illegal or unlawful mining. Illegal mining takes within
its fold excess extraction of a mineral over the permissible limit even
within the mining lease area which is held under lawful authority, ifthat
excess extraction is contrary to the mining scheme, the minillg plan, the D
mining lease or a statutory requirement. Even otherwise, it is not possible
for us to accept the narrow interpretation sought to be canvassed by
learned counsel for the mining lease holders particularly since we are
dealing with a natural resource which is intended for the benefit of
everyone and not only for the benefit of the mining lease holders.
E
Encroachments
130. Section 4(1) of the MMDRAct makes it clear that no person·
can carry out any mining operations except under and in accordance
with.the terms and conditions of a mining lease granted under the MMDR
Act and the rules made thereunder. Obvionsly therefore, any person F
carrying on mining operations without a mining lease, is indulging in illegal
or unlawful mining. This would also necessarily imply that if a mining
lease is granted to a person who carries out mining operations outside
the boundaries of the mining lease, the mineral extracted would be the
result ofillegal or unlawful mining.
G
131. In its report, the CEC has dealt with illegal mining outside the
sanctioned mining areas. It is stated that 82 mining leases for iron ore
and manganese ore were identified by the Commission where there
were encroachments in the form of illegal mining pits, illegal over-burden
dumps etc.
H
426 SUPREME COURT REPORTS [2017] 13 S.C.R.
A 132. In respect of these 82 mining leases, the State of Odisha
appointed a Committee on the suggestion of the Commission, to survey
and identify the exact 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 offi~ers of the Revenue Department, Forest Department
B
and Mining Dep~rtment of the State of Odisha who carried out a field
survey in respect of39 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 Odis ha.
c 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
D 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
E of Odisha from the Revenue Department, the Forest Department, the
Mining Department and any other department that may be deemed
necessary. The Forest Survey of India, the MoEF, the Indian Bureau of
Mines and the Geological Survey of India should also be associated in
the Joint Survey. In our opinion, it would also be appropriate if the CEC
is also associated in the Joint Survey and the best and latest technology
F should be made use ofincluding satellite imagery and thereafter a report
is submitted in this Court on or before 31" December, 20 I 7 after hearing
the 82 lessees identified by the Commission.
Adherence to the mining plan
G 135. A side issue raised by learned counsel for the mining lease
holders in this regard was the necessity (if any) of adhering to the annual
plan or calendar plan of mining. It was contended that a mining lease
holder could mine in excess of the annual plan. While it is so, this
submission must be tempered and appreciated in the proper context. A
mining plan is valid for a period of five years but there could be a 20%
H variation in extraction over and above the mining plan. This is the
COMMON CAUSE v. UNION OF INDIA AND ORS. 427
[MADAN B. LOKUR J.]
maximum that is stated to be reasonably permissible according to the A
Ministry of Mines. In terms of Rule 22(5) of the MCR a mining plan
shall incorporate .a tentative scheme of mining and annual program and
plan for excavation from year to year for five years. At best, there
could be a variation in extraction of 20% in each given year but this
would be subject to the overall mining plan limit of a variation of 20%
B
over five years. What this means is that a mining lease holder cannot
extract the five year quantity (with a variation of 20%) in one or two
years only. The extraction has to be ·staggered and continued over a
period of five years. If any other interpretation is given, it would lead to
an absurd situation where a mining lease holder could extract the entire
permissible quantity under the mining plan plus 20% in one year and c
extract miniscule amounts over the remaining four years, and this could
be done without any reference to the EC. The submission of learned
counsel in this regard simply cannot be accepted.
136. In the letter dated I 2'h December, 2011 sent by the Secretary
in the Ministry ofMines ofthe Government oflndia to the Chief Secretary D
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 a/ia, that an analysis of production and violations in I 04
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 E
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 5'" 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 F
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 an.dForest laws. Having said that, the State Mining G
and Geology officials should not also lose focus on taking stringent action
against any instances of illegal mining, ~ndertaken outsid~ the leased
area, and passed off as excess production." It is quite clear from the
correspondence placed before us that as far as the Union of India is
concerned, any violation of the requirements of the law has to be firmly
dealt with. H
428 SUPREME COURT REPORTS [2017] 13 S.C.R.
A 138. With reference to the interpretation of Section 21(5) of the
MMDRAct (which we shall soon consider) it was stated as follows:
"Section 21 (5) ofMMDRAct is clearly applicable on such land
which is occupied without lawful authority. It is clarified that in
the context ofMMDR Act, 1957, violations pertaining to mining
B operations within the mining lease area are to be dealt with only
in terms of the provisions of the Mineral Conservation and
Development Rules 1988. The State Governments have clear
powers to tackle any offences related to mining outside the mining
lease area in terms of Section 23C of the MMDR Act, 1957.
However, the interpretation that a land granted under a Mining
c lease by the State Government can be held to be occupied without
lawful authority on the grounds of violation of.provisions of any
other law of the land is not appropriate and such interpretation
may not stand in the Court oflaw. Such Act or Rules, including
the Environment (Protection) Act, 1986, or the Forest
D (Conservation) Act, 1980, etc. clearly provide penalties for
violations under those laws. This aspect may be clarified to the
State Accountant General also."
139. All that we need say for the present is that the interpretation
given in the aforesaid letter to Section 21(5) of the MMDR Act is not
E fully correct. While mining in excess of permissible limits under the mining
plan or the EC or FC on leased area may not amount to mining on land
occupied without lawful authority, it would certainly amount to illegal or
unlawful mining or mining without authority oflaw.
Section 21 of the MMDR Act
F 140. The discussion on illegal or unlawful mining takes us to the
question of the consequence of illegal or unlawful mining and the
interpretation of Section 21(1) and Section 21(5) of the MMDRAct.
141. Section 21(1) of the MMDR Act is clearly relatable to a
penal offence and applies if any one contravenes the provisions of Section
G 4( 1) of the MMDR Act. Section 4(1) of the MMDR Act prohibits the
undertaking of any mining operation in any area except under and in
accordance with the terms and 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
H
COMMON CAUSE v. UNION OF INDIA AND ORS. 429
[MADAN B. LOKUR, J.]
adherence to the law of the land, that person becomes liable for A
prosecution under Section 21(1) of the MMDRAct. In the event ofa
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, B
according to the CEC the provision is applicable only if a person indulges
in illegal mining outside the mining lease area. Consequently, Section
2J(5}ofthe MMDRAct 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 C
-interpretation is supported by learned counsel forthe mining lease holders
who affirm that Section 21(5) of the MMDRAct 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 mining is
mining outside the mining lease area and Section 21(5) of the MMDR D
Act has to be understood in that light.
143. Reference was also made to the Explanation to Rule 2(iia)
of the MCR where .it is stated that for the purposes of this clause, the
·violation ofany rules, other than the rules made under section 23C of the
MMDRAct, within the mining lease area by a holder of a mining lease E
shall not include illegal mining. In other words, it was submitted that
Section 21(5) of the MMDR Act is required to be understood in the
context of Rule 2(iia) of the MCR.
144. It was submitted by Shri Ashok Desai learned senior counsel
for one of the intervenors, that the penalty postulated by Section 21(5) F
of the MMDR Act though an imposition of a pecuniary liability, is
punishment for the commission of an offence. By referring to Khemka
& 'Co. (Agencies) Pvt, Ltd. v. State of Maharashtra' it was contended
that the liability sought to be imposed by Section 21(5) of the MMDR
Act is not a liability that is created by a clear, unambiguous and express
enactment. G
.. 145. As far as the Union of India is concerned, in its affidavit
filed on 20" January, 2017 by Shri Sudhakar Shukla, Economic Advisor
in the Government of India, Ministry of Mines, it is submitted (and this
> '11975)2SCC22
H
430 SUPREME COURT REPORTS (2017] 13 S.C.R.
A submission is supported by the learned Attorney General in his oral
submissions) that Section 21(5) of the MMDRAct is in two parts. The
first part refers to the raising of minerals without any lawful authority
from any land. The second part is in addition to what is recoverable
under the first fart. The addition is to the effect that when a person
raises a minera from any area not in his or her lawful authori_ty, that
B
person is also li~ble to pay the rent, royalty or tax for the period during
which the land 'f'as occupied without lawful authority.
146. It is further submitted that 'illegal mining' as defined in Rule
2( iia) of the MCR is also required to be read in the context of Rule 26(4)
and Rule 27(4A) of the MCR which deal with the refusal to renew a
c mining lease if the mining lease holder is convicted ofillegal mining and
the determination of a mining lease in the event the mining lease holder
is convicted of illegal mining. It is submitted that the definition of illegal
mining in the MCR must be strictly construed and limited to the provisions
of the MC'R and cannot apply to the provisions of Section 21 ( 5) of the
D MMDRAct.
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
E 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
F 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 fonns of mining
without lawful authority including that in breach of the limits
imposed by the Environmental Clearance carried out within the
G lease area would also invite penalties under section 21 (5)."
(Emphasis given by us).
148. On behalf of the State ofOdisha, it was submitted by Shri
Rakesh Dwivedi learned senior counsel by relying upon Karnataka Rare
Earth v. Senior Geologist, Depart111e11t of Mines & Geology'" that
H " (2004) 2 sec 783
COMMON CAUSE v. UNION OF INDIA AND ORS. 431
[MADAN B. LOKUR, J.]
what is sought to be achieved by Section 21 (5) of the MMDR Act is to A
recover the price of the mineral that has been illegally or unlawfully or
unauthorisedly raised with an intention to compensate the State for the
loss of the mineral owned by it, the loss having been caused by a person
who is not authorized by law to raise that mineral. There is no element
of penalty involved in this and the recovery of the mineral or its price is
B
not a penal action but is merely compensatory. This is what this Court
had to say in Kamataka Rare Earth:
"12. ls the sub-section (5) of Section 21 a penal enactment?
Can the demand of mineral or its price thereunder be called a
penal action or levy of penalty?
13. A penal statute or pcnal law is a law that defines an offence c
and prescribes its corresponding fine, penalty or punishment.
(Blacks Law Dictionary, 7th Edn., p. 1421.) Penalty is a liability
composed (sic imposed) as a punishment on the party committing
the breach. The very use of the term "penal" is suggestive of
punishment and may also include any extraordinary liability to D
which the law subjects a wrongdoer in favour of the person
wronged, not limited to the damages suffered. (See Aiyar, P.
Ramanatha: The_LawLexicon, 2nd Edn., p. 1431.)
14. In support of the submission that the demand for the price of
mineral raised and exported is in the nature of penalty, the learned
E
counsel for the appellants has relied on the marginal note of
Section 21. According to Justice Singh, GP.: Principles of
Statutory Interpretation (8th Edn., 2001, at p. 147), though the
opinion is not uniform but the weight of authority is in favour of
the view _that the marginal note appended to a section cannot be
used for construing the section. There is no justification for F
restricting the section by the marginal note nor does the marginal
note control the meaning of the body of the section ifthe language
employed therein is clear and spells out its own meaning. In
Director of Public Prosecutions v. Schildkampn Lord Reid
opined that a sidenote is a poor guide to the scope of a section
G
for it can do no more than indicate the main subject with which
the section deals and Lord Upjohn opined that a sidenote being a
brief precis 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
" (1969) 3 All ER 1640 : (1970) 2 WLR 279 (HL) H
'
432 SUPREME COURT REPORTS (2017] 13 S.C.R.
A 15. We are clearly ofthe opinion thatthe 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 sam~. There is
B
no element of penalty involved and the recovery of price is not a
penal action. It is just compensatory."
149. We nre in agreement with the view expressed by the learned
Attorney Gen~ral and Shri Dwivedi as also the view expressed in
Karnataka Rate Earth. The decision in Khemka & Co. is not at all
c apposite. There is no ambiguity in Section 21 ( 5) of the MMDRACt or in
its application. We are also of opinion that though Section 21 ( 1) of the
MMDRAct might be in the realm of criminal liability, Section 21(5) of
the MMDR Act is certainly not within that realm.
150. In ouropinion, Section 21(5) of the MMDRAct is applicable
D 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 person the mineral so raised or where the mineral has already been
disposed of, the price thereof as compensation. The words 'any land'
are not confined to the mining lease area. As far as the mining lease
E area is concerned, extraction of a mineral over and above what is
permissible under the mining plan or under the EC undoubtedly attracts
the provisions of Section 21(5) of the MMDRAct being extraction without
lawful authority. It would also attract Section 21 (1) of the MMDR Act.
In any event, Section 21 ( 5) of the Act is certainly attracted and is not
limited to a violation committed by a person only outside the mining lease
F area - it includes a violation committed even within the mining lease
area. This is also because the MMDR Act is intended, among other
things, to penalize illegal or unlav.ful mining on any land including mining
lease land and also preserve and protect the environment. Action under
the EPA or the MCR could be the primary action required to be taken
G with reference to the MCR and Rule 2(ii a) thereof read with the
Explanation but that cannot preclude compensation to the State under
Section 21 (5) of the MMDR Act. The MCR cannot he read to govern
the MMDR Act.
151. What is the significance of this discussion? It was submitted
H that the CEC has taken the following view:
COMMON CAUSE v. UNION OF INDIA AND ORS. 433
[MADAN B. LOKUR, J.]
" ...... it may be appropriate that 30% of the notional value of A
the iron and manganese produced by each of the lessees without/
in excess of the environmental clearances may be directed to be
recovered from the concerned lessees and with the explicit
understanding the concerned lessees as well as the officers will
continue to be liable for action under the provisions of the B
respective Acts."
152. Learned counsel for the petitioners and the learned Amicus
were ofopinion that the provisions of Section 21(5) of the MMDRAct
require that the entire price of the illegally mined ore should be recovered
from each defaulting lessee. Similarly, in its affidavit, the Union of India
differs with the recommendation of the CEC. According to the affidavit C
· of the Union oflndia this would be contrary to the statutory scheme and
in fact 100% recovery should be made under the provisions of Section
21(5) of the 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 D
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 l 00%. 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 E
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 F
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 G
understand and appreciate the manner in which the CEC has arrived at
its figures, we may state that this has been specifically mentioned by the
CEC in its report. The basis of the calculations is as follows:
"(a) the production during the year 1993-94 has been considered
as the permissible production during each year till the mining
lease did not have the cnvironinental clearance; H
434 SUPREME COURT REPORTS (2017] 13 S.C.R.
A (bl the permissible production for the year in which the
environmental clearance was obtained for the first time has been
considered on pro rata basis of (a) the prescribed annual
production and (b) the date of the grant of the environmental
clearance. For this purpose the environmental clearance granted
on or before l 5'h of a month has been considered valid for the
B
entire month. Where the environmental clearance has been
granted after l S'h of a month it has been considered valid from
the subsequent month. For example if the environmental clearance
for a mining lease has been granted say on JO'h October, 2008
for an annual production of say 12 lakh MT then in that case the
c permissible production for the mining lease for the year 2008-09
would be taken as 6 lak:h MT (12x6/12 lak:h MT) and 12 lak:h
MT per annum in the subsequent year; and
( c) wherever a mining lease having environmental clearance has
been granted revised environmental clearance for a higher
D production the permissible annual production forthe year, during
which the revised environmental clearance has been granted,
has been considered on pro rata basis of the quantities prescribed
in the earlier environmental clearance and the revised
environmental clearance. For example ifthe mining lease was
having environmental clearance for annual production of 12 lakh
E MT and say on 28'h September, 2009 it has been granted revised
environmental clearance for annual production of say 24 lakh
MT then in that case the permissible production for the year
2009-10 would be taken as 18 lakh MT (12x6/12+24x6/12) and
24 lakh MT per annum in subsequent years."
F 155. A submission made by the mining lease holders was that the
maximum production in any year up to 1993-94 should be considered as
the base for making the calculations. Such a contention was also urged
before the CEC and was rejected. We have examined this contention
independently and arc of the view that the base year of! 993-94 is most
G 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
H
COMMON CAUSE v. UNION OF INDIA AND ORS. 435
[MADAN B. LOKUR, J.]
petitioners and the learned Amicus that the penalty should be levied from !.
the date ofEIA 1994. In ouropinion, 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 B
is not totally unreasonable, we accept that the comPJnsation should be
payable from 2000-2001 onwards at 100% of the price of the mineral,
as rationalized by the CEC.
Violation of tlie Forest (Conservation) Act, 1980
157. Before dealing with the violations of Section 2 of the Forest c
(Conservation) Act, 1980 (for short 'the FCA'), it is necessary to give a
briefbacki,'l'ound.
158. The FCA came into operation initially through the Forest
(Conservation) Ordinance, 1980 with effect from 25'" October, 1980.
The said Ordinance was repealed and subsequently the FCA came into D
effect on 25'" December, 1980.
159. Section 2 of the FCA provides that no State Government or
other authority shall make, except with the prior approval of the Central
Government, any order directing, inter alia. that any forest land or any
portion thereof may be used for non-forest purposes. E
160. The interpretation of Section 2 of the FCA first came up for
consideration in State of Bihar v. Banshi Ram Modi. 12 In that case,
Banshi Ram Modi was granted a mining lease for mining and winning
mica. During the course of mining operations, feldspar and quartz were
discovered. Modi then applied to the Central Government to include F
these minerals in the lease. The State Government agreed to do so but
did not obtain the previous approval of the Central Government for the
inclusion of the two minerals in the original lease.
161. The Central Government took the view that since its previous
approval had not been obtained for inclusion of feldspar and quartz in G
the mining lease, Modi could not be permitted to mine these two minerals.
This led Modi to approach the High Court with the contention that he
was not breaking up or clearing any forest land other than the land on
which mining operations were already being carried on. The High Court
"(1985) 3 sec 643 H
436 SUPREME COURT REPORTS [2017] 13 S.C.R.
A allowed the writ petition but feeling aggrieved, the State ofBiharpreferred
an appeal in this Court.
162. The question before this Court was a narrow one, namely,
whether prior approval ofthe Central Government is necessary in respect
of a mining lease, granted for winning a certain mineral prior to the
B coming into force of the FCA, if the lessee applies to the State
Government after the FCA came into force for permission to win and
carry any new mineral from the broken up area?
163. While answering this question in the negative, it was held
that after the commencement of the FCA no fresh breaking up of forest
c land or no fresh clearing of the forest on any such land could be permitted
by the State Government or any authority without the approval of the
Central Government. However, in respect of broken up land, it was
held foat if the State Government permits the lessee 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
D fresh forest land.
164. Subsequently in Ambica Quarry Works v. State ofGujarat
and Orsll 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
E 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
F 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
G 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 the circumstances, it was
held, considering the scheme of the FCA that refusal to renew the lease
without prior approval of the Central Governnient was not unjustified.
H "(19&7) 1sec213
COMMON CAUSE v. UNION OF INDIA AND ORS. 437
[MADAN B. LOKUR. J.]
165. This view was reiterated in Rural Litigation and A
Endtlement Kendra v. State of U.P. 14 It was held that the FCA does
not permit mining in a forest area. Reiterating the view expressed in
lb'iibica Quarry Works, it was observed that compliance of Section 2
of the FCA is necessary as a condition precedent even for the renewal
ofa mining lease. This Court went so far as to hold that if any decree or B
order has already been obtained by any of the mining lease holders,
'from any Court relating to renewal of their lease, the same shall stand
vacated and similarly, any appeal or other proceeding taken to obtain a
renewal or against any order or decree granting renewal shall also become
non est.
166. The definition of the word 'forest' for the purposes of the
c
FCA came up for consideration in T.N. Godavarman v. Union of
inilia. 15 In its decision of 12" December, 1996 this Court observed that
'dhring the course of hearing it appeared that there is a misconception
about the true scope of the FCA and the meaning of the word 'forest'
u~ed therein. Consequently, there is also a misconception about the D
need for prior approval of the Central Government as mandated by Section
2 of the FCA in respect of certain activities h1 a forest area, which
activities are more often of a commercial nature.
167. In this context, it was held that 'forest' must be understood
'according to its dictionary meaning and it would cover all statutorily E
recogrnzed forests, whether designated, reserved, protected or otherwise.
--rt was further held that 'forest' would also include any area recorded as
ki'otest in the government records irrespective of the ownership. With
' this 'iii mind, this Court directed that prior approval of the Central
'Government is required for any non-forest activity within the area of
any 'forest'. In accordance with Section 2 of the FCA all on-going F
'il&ivity within any forest in any State throughout the country, without
'phot·approval of the Central Government must cease forthwith. This
''partfoular 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 G
0 .areas which are 'forest' irrespective of whether they are so notified,
,,.recognized or classified under any law and irrespective of the ownership
ofJhe .land of such forest.
" (i 989) Supp. ( 1) sec 504
1
' (1997) 2 sec 267 H
438 SUPREME COURT REPORTS [2017] 13 S.C.R.
A 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 ofOdisha in this Court in 1997-98, the
last being dated 6'" January, 1998.
B 170. In the meanwhile, in T.N. Godal'arman "· Union ofIndia 16
this Court passed certain directions on 4'h March, 1997 with regard to
what was categorized as mining matters. The directions given by this
Court are as follows:
"9. We direct that -
c ( 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
appliaations within a period of2 weeks from today to the Central
Government for requisite decisions;
D (3) applications received (or completed) hereafter would be
forwarded within two weeks of their being so made.
(4) the Central Government shall dispose of all such applications
within six weeks of their being received. Where the grant of
final dlcarance is delayc;d, the Central Government may consider
the grant of working permissions as per existing practice."
E
171. It was also made clear that the order passed by this Court
including the earlier order dated 12'" December, 1996 shall be obeyed
and carried out by the Central Government and the State Governments
notwithstanding any order or direction passed by a court including a
High Court or T1ibunal to the contrary.
F
172. From the above, it is explicit that in terms of the orders
passed by this Court, there was a complete ban on non-forest activity on
forest lands with effect from 12"' December, 1996. The only issue that
remained was identification of all such lands by the District Level
Committees and as mentioned above this exercise was completed by
G the State of Odisha on or about 6'h January, 1998. The lands identified
by the DLC are compendiously referred to as DLC lands.
173. In this background in IA Nos. 2746-2748 of2009 in the case
of T. N. Godavarman the CEC was directed to submit a report which
H
10
(1997) J sec 312
COMMON CAUSE v. UNION OF INDIA AND ORS. 439
[MADAN B. LOKUR, J.]
it did on 26'h April, 2010. It was recommended by the CEC that given A
the peculiar circumstances prevailing in the State of Odisha, mining
operations in the entire DLC lands included in the mining leases, may be
allowed to continue on payment of the Net Present Value (NPV) subject
to the fulfillment of other statutory requirements and rules being complied
with.
B
174. By an order dated 7" May, 2010 this Court directed that the
recommendation of the CEC acceptable to the State Goverfiment could
be complied with. Consequently, the State of Odisha a~pears to have
implemented the recommendations regarding recovery of NPV and
realized an amount of ahout Rs. 1750 crores as additional NPV.
c
175. We have been informed that in addition to the above, the
mining lease holders have subsequently deposited an amount under the
heading of penal compensatory afforestation which was introduced
through guidelines issued by the MoEF on 3'd February, 1999. The
guidelines in this regard, were communicated by the Assistant Inspector
General of Forest to the Chief Secretary of all the State and Union D
Territories and the relevant portion thereof reads as follows:
"4.3. l 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 E
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 arc nonnally F
not entertained. The Central Government will not accord approval
under the Act unless exceptional circumstances justify
condonation. However, penal compensatory afforestation wonld
be insisted upon by the MoEF on all such cases of condonation.
4.3.2 The penal compensatory afforestation will be imposed G
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."
H
440 SUPREME COURT REPORTS [2017] 13 S.C.R.
A 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 of the FCA stands condoned or in any event the
illegal or unlawful mining in forest lands stands regularized.
B 177. The CEC did not accept this submission made on behalf of
the mining lease holders on the ground that no retrospective forest
clearance has b~en granted and even otherwise there is no provision to
condone or regularize the violation of Section 2 of the FCA.
178. We are of opinion that the view expressed by the CEC in
c this regard is partially correct. Given the fact that the defaulting mining
lease holders have been asked to pay and have paid additional NPV as
well as an amount towards penal compensatory afforestation, it must be
assumed the violation of the FCA has been condoned to a limited extent,
more particularly since in its order dated 7th May, 2010 this Court
permitted the State of Odisha to accept such recommendations of the
D CEC made in the report dated 26'' April, 2010 as are acceptable to it.
The relevant recommendations made by the CEC read as follows:
"(c) No forest land can be leased/assigned without first obtaining
the approval under the FC Act. Therefore, the forest area
approved under the FC Act should not be lesser than the total
E forest area included in the mining leases approved under the
MMD~Act, 1957. Both necessarily have to·be the same. In
view of the above, this Hon'ble Court while permitting grant of
Tempqrary Working Permission to the mines in Orissa and Goa
has made it one of the pre-conditions that the NPV will be paid
F for the entire forest area included in the mining leases. Similarly,
all the mining lease holders in Orissa should be dir~cted to pay
the NPV for the entire forest area, included in the mining leases;
(d) In Orissa, substantial areas included in the mining leases as
non forest land have subsequently been identified as DLC forest
G (deemed forest/forest like areas) by the Expert Committee
constituted by the State Government pursuant to this Hon 'hie
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
H lease, after deducting the NPV already paid, should be deposited
COMMON CAUSE v. UNION OF INDIA AND ORS. 441
[MADAN B. LOKUR, J.]
by the concerned lease holder and (ii) the mining operations in A
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 B
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 J21h December, 1996 followed by the order
dated 4"' March, 1997 namely that mining must cease forthwith in forest
areas. In regard to this violation, the only benefit (at best) that can be C
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 LA.Nos.
2746-2748 of2009 in T.N. Godavarman. With effect from 7"' January,
1998 any mining activity in forest and DLC lands would clearly be
completely illegal and unauthorized and the benefit that the mining lease D
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 7"' January, 1998
is payable until forest clearance under Section 2 of the FC Act is obtained
by the mining lease holders.
E
180. The report of the CEC dated 16'" October, 2014 deals with
51 mining leases. It has been recorded by the CEC that of them 15
mining leases have been found not involved in undertaking mining
operations in violation of the FCA. There are 16 mining leases that have
violated the provisions of the FCA between 25"' October, 1980 and 1999-
2000 and the State Government in some of the cases has already issued F
a show cause notice to the mining lease holders. It is further stated that
most of the violations pertain to the period prior to 12"' December, 1996.
The CEC has not made any particular recommendation in regard to
these 16 mining leases nor do we, except to direct the State Government
to promptly take a decision on the show cause notice preferably within a G
period of fonr months and in any case before 31" December, 2017.
181. The CEC has also dealt with 18 others mining lease holders
(other than M/s. Essel Mining and Industries Ltd. relating to the Kasia
Iron Ore Mines and Jilling-Langlotta Iron & Manganese Ore Mines).
With regard to these 18 mining lease holders, the view taken by us above H
442 SUPREME COURT REPORTS [2017) 13 S.C.R.
A would hold good and clearly they are liable to compensate the State for
the entire price of the iron ore and manganese ore illegally mined with
effect from 7'h January, 1998 until the forest clearance was obtained by
the concerned mining lease holder.
182. We have fixed 7'h January, 1998 as the cut-off date despite
B the orders dated 12'h December, 1996 and 4'" March, 1997 only for the
reason that it is possible that some mining lease holders (we do not know
how many) wore not aware that they were inadvertently conducting
mining operations on DLC lands which were identified by the State of
Odisha as fore~t lands on the directions of this Court. For the purposes
of Section 21 ( S) of the MMDR Act, they are entitled to the benefit of
c doubt and along with them, the other mining lease holders before us.
The CEC in this regard has observed as follows:
"It will be seen that in the above cases the mining operations
have been done in the forest land in violation of the Forest
D (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
mangal)ese 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
E the respective lessees. Wherever the mineral production is both
from the forest land as well as non-forest land then in such cases
the notipnal 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
F limit for payment of the compensation, use ofthe 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."
(j 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%1 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%.
H
COMMON CAUSE v. UNION OF INDIA AND ORS. 443
[MADAN B. LOKUR, J.]
184. There may be some overlap in the period when mining A
operations were conducted by the mining lease holders without an EC
and/or an FC. We make it clear that mineral extracted either without an
EC or without an FC or without both would attract the provisions of
Section 21(5) of the MMDRAct and 100% of the price of the illegally
or unlawfully mined mineral must be compensated by the mining lease
B
holder. To the extent of the overlap or the common period, obviously
only one set of compensation is payable by the mining lease holder to the
State ofOdisha. We order accordingly. However, we make it clear that
whatever payment has already been made by the mining lease holders
towards NPV, additional NPV or penal compensatory afforestation is
neither adjustable nor refundable since that falls in a different category c
altogether.
185. We may note that this Court has held in T.N. Godavarman
v. Union ofIndia" that a violation of the FCA is condonable on payment
ofpenal compensatory afforestation charges. This obviously would not
· apply to illegal or unlawful mining under Section 21(5) of the MMDR D
Act, but we make it clear that the mining lease holders would be entitled
to the benefit of any Temporary Working Permission granted.
Conclusions on the issues of mining without an EC or FC or both
186. To avoid any misunderstanding, confusion or ambiguity, we
make the following very clear: E
(I) A mining project that has commenced prior to 2 7'h January,
1994 and has obtained a No Objection Certificate from the
SPCB prior to that date is permitted to continue its mining
operations without obtaining an EC from the Impact
Assessment Agency. However, this is subject to any F
expansion (including an increase in .the lease area) or
modernization activity after 27• January, 1994 which would
result in an increase in the pollution load. In that event, a
prior EC is required. However, if the pollution load is not
expected to increase despite the proposed expansion G
(including an increase in the lease area) or modernization
activity, a certificate to this effect is absolutely necessary
from the SPCB, which would be reviewed by the Impact
Assessment Agency.
"r201n15 sec 658 and (2011) 15 sec 681 H
444 SUPREME COURT REPORTS [2017] 13 S.C.R.
A (2) The renewal of a mining lease after 27'h January, 1994 will
require an EC even ifthere 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 ifthe annual production after
B 27'h January, 1994 exceeds the annual production of 1993-
94, it would be treated as an expansion requiring an EC.
(4) Tliicre is no doubt that a new mining project after 27'h
January, 1994 would require a prior EC.
(5) Any iron ore or manganese ore extracted contrary to EIA
c 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
2000-200 I onwards in terms of Section 21 (5) of the MMDR
Act, if the extracted mineral has been disposed of. In
D 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 14"' September, 2006 all mining projects
having a lease area of 5 hectares or more are required to
E 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 ofEIA 1994 will continue
F
to apply subject to EIA 2006.
(8) Any mining activity carried on after 7" January, 1998 without
an FC amounts to illegal or unlawful mining in terms of the
provisions of Section 21(5) ofMMDRAct attracting 100%
recovery of the price of the extracted mineral that is disposed
G
of.
(9) In the event ofany overlap, that is, illegdi or unlawful mining
without an FC or without an EC or without both would
attract only I 00% compensation and not 200%
H
COMMON CAUSE v. UNION OF INDIA AND ORS. 445
[MADAN B. LOKUR, J.]
compensation. In other words, only one set of compensation A
would be payable by the mining lease holder.
(I 0) No mining lease holder will be entitled to the benefit of any
payments made towards NPV or additional NPV or penal
compensatory afforestation.
Violation of Section 6 of the MMDR Act B
187. We have examined the report of the CEC with regard to the
alleged violation of Section 6 of the MMDRAct and find that there have
been several amendments to Section 6 relating to the maximum area for
which a mining lease may be granted to a person. The following is the
result of the amendments: C
I. From 1.6.1958 to 11.9.1972 - maximum lease area 10 sq.
miles.
2. From 12.9.1972 to 9.2.1987 - maximum lease area IO sq.
km or 1000 hectares in any one State. D
3. From I0.2.1987to 17.12.1999-maximumleasearea 10
sq.km or 1000 hectares in any part of the country.
4. From 18.12.1999 till date-maximum lease area 10 sq.km
or 1000 hectares in one State.
188. While the word 'person' has not been defined in the MMDR E
Act, a reading of Section 5 thereof indicates that the State Government
shall not grant a mining lease to any person unless such person is an
Indian national or a company as defined in the Companies Act, 1956 and
subsequently in the Companies Act of2013.
189. Sub-section (2) of Section 6 of the MMDR Act provides F
that a person acquiring by, or in the name of, another person a mining
lease which is intended for him/her shall be deemed to be acquiring it
himselfi'herself.
190. For the purposes of determining the total area that can be
acquired for mining operations, Section 6(3) of the MMDRAct provides G
that.the area held under a mining lease by a person as a member of a
cooperative society, company or other corporation or a Hindu Undivided
Family or a partner ofa 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 H
446 SUPREME COURT REPORTS (2017] 13 S.C.R.
A 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
B
3. Rungta Sons Pvt. Limited
4. Bonai Industrial Company Limited
5. Feegrade & Co. Pvt. Limited
6. Mis Mangilal Rungta
C 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.
D 193. Similarly, so far as Rungta Mines Limited, Rungta Sons Pvt.
Limited and Mis 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 MMDRAct, there are some critical
observations made by the Commission with regard to the 'Rungta Group'.
E 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 MMDRAct.
F 194. As far as Jindal Steel & Power Limited is concerned, we
propose to hear this company on another occasion since the suggestion
of the CEC is that it is the benami holder ofSarda Mines Pvt. Ltd. Ifit
is so held to be a benami holder of Sarda Mines Pvt. Ltd. then there is a
violation of Section 6 of the MMDR Act. However, the CEC has
refrained from malcing any observations or recommendation in this regard.
G Accordingly, we propose to hear Jindal Steel & Power Limited on a
later occasion on this limited issue.
195. As far as Bonai Industrial Company Limited and Feegrade
& Co. Pvt. Limited are concerned, the CEC has concluded that they
have not violated Section 6 of the MMDRAct. That being the position,
H and nothing having been shown to the contrary, we accept the
COMMON CAUSE v. UNION OF INDIA AND ORS. 447
[MADAN B. LOKUR, J.]
recommendation of the CEC in this regard. A
Violation of Rule 37 of the Mineral Concession Rules, 1960
196. The CEC has discussed the possible violation of Rule 37 of
the MCR. In this context, it was noted that there were several mining
lease holders who had entered into raising contracts which were actually
a transfer of the lease as postulated by Ruic 3 7 of the MCR. B
197. On this basis the State ofOdisha constituted a Committee on
8'' July, 2011 to carry out a study of the financial transactions between
the mining lease holders and the raising contractors to determine whether
there is a primafacie violation of Rule 37 of the MCR.
c
198. On an examination of the material before it the Committee
concluded thaJ eight mining lease holders violated Rule 37 of the MCR.
These mining lease holders are as under:
i) R.P. Sao, Guali Iron Ore Mines, Keonjhar
it) Indrani Patnaik, Unchabali Iron Ore Mines, Keonjhar D
iit) Mis K.J.S. Ahluwalia, Nuagaon Iron Ore Mines, Keonjhar
iv) Mis Aryan Mining & Trading Corporation Pvt. Ltd.,
Narayanposhi Iron Ore Mines, Sundergarh
v) Mis Mideast Integrated Steel Ltd., Roida, Sidhamatha Iron E
Ore Mines, Keonjhar
vi) Ka vita Agrawal, Kusumdihi Manganese Mines, Sundergarh
vii) Mala Roy & Others, Jalabari Iron Ore Mines, Keonjhar
viii) Mis. Sharda Mines (P) Ltd., Thakurani Iron Ores Mines, F
Keonjhar
199. Pursuant to the report ofthe 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 Mis Aryan Mining & Trading
Corporation Pvt. Ltd. (for short Aryan) and Ka vita Agrawal (Kusumdihi
G
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 H
448 SUPREME COURT REPORTS [2017] 13 S.C.R.
A in the official gazette as required by Section 26(2) of the MMDRAct.
200. The Central Government set aside the order constituting the
Conunittee 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 ofOdisha are pending
B in the High Court.
20 I. 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 ofOdisha to pass a final order on the submissions
made by Aryan. On 28'h April, 2017 we had permitted the State of
c 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 was
terminated by the State of Odisha and the Central Government also
dismissed her revision petition on 28th April. 2014. The said mining lease
D holder has since filed a writ petition which is pending in the Orissa High
Court.
203. During the course of hearing it was proposed by learned
counsel appearing for some of the mining lease holders that it might be
appropriate if 1;he raising contracts between these eight mining lease
E holders and the raising contractors are given a fresh look. This suggestion
was not acceptable to one of the mining lease holders. However, we
are of opinion that the suggestion is reasonable and it will be appropriate
if in fact a fresh look is given to the raising contracts entered into by the
mining lease holders and the raising contractors. We are also of opinion
that such an order ought to be passed with the consent of the mining
F lease holders since any delay in disposal of the issue would not really
sub-serve the interests of anybody including the mining lease holders.
204. Accordingly, for considering the appointment ofan appropriate
Conunittee in respect of the eight mining lease holders mentioned above
we would like to hear learned counsel for the parties. We make it clear
G that the proposed Committee will be entitled to lift the corporate veil, the
importance of which in cases such as the present, has been emphasized
in State of Rajasthan v. Gotan Lime Stone Khanij Udyog (P). Ltd."
Intergenerational equity
'"(2016) 4 sec 469
H
COMMON CAUSE v. UNION OF INDIA AND ORS. 449
[MADAN B. LOKUR, J.]
205. Mr. Prashant Bhushan, learned counsel for the petitioner A
sought to impress upon us the need to consider intergenerational equity
and if possible to place a limit on the extent of mining in the State of
Odisha by referring to an article titled: "Intergenerational equity: a legal
framework for global environment change" by Edith Brown Weiss. He
laid emphasis on three principles that form the basis of intergenerational
B
equity.
206. The first principle relied on is called the principle of
'conservation of options'. This requires each generation 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 c
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 D
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 arc also entitled to
quality enjoyment of the diversity in the natural and cultural resource
base. E
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 F
particularly if this is considered in the light of intergenerational rights
and obligations which have been dealt Vlith 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 ofOdisha or by the Union
ofJndia. Nevertheless, this is an aspect that needs serious consideration G
by the policy and decision makers in our country in the governance
structure. At present, keeping in mind the indiscriminate mining operations
in Odisha, it does appear that there is no effective check on mining
operations nor is there any effective mining policy. The National Mineral
Policy, 2008 (effective from March 2008) seems to be only on paper
H
450 SUPREME COURT REPORTS [2017] 13 S.C.R.
A and is not being enforced perhaps due to the involvement of very powerful
vested interests or a failure of nerve. We arc of opinion that the National
Mineral Policy, 2008 is almost a decade old and a variety of changes
have taken place since then, including (unfortunately) the advent of
rapacious mining in several parts of the country. Therefore, it is high
time that the Union of India revisits the National Mineral Policy, 2008
B
and announces a fresh and more effective, meaningful and implementable
policy within the next few months and in any event before 31" December,
2017. We are constrained to pass this direction in view of the facts
disclosed in these petitions and in judgments delivered by this Court with
regard to mining in Goa and Karnataka.
c Inquiry by the Central Bureau of Investigation
210. It was emphasized by Shri Prashant Bhushan that because
of the rampant illegal or unlawful mining being carried out in Odisha,
there should be an enquiry by the Central Bureau of Investigation (for
short 'the CBI') to ascertain and determine the persons involved either
D in turning a Nelson's eye to rampant illegal or unlawful mining or being
conspirators in the activity and the extent of the illegal or unlawful mining.
It was submitted that the Justice Shah Commission had very strongly
recommended an inquiry conducted by the CBI and criminal clements
being brought to book for the despoliation of the land.
E 21 l. For the present, we do not propose to direct an investigation
or inquiry by the CBI for the reason that what is of immediate concern
is to learn lessons from the past so that rapacious mining operations are
not repeated in any other part of the country. This can be achieved
through the identification oflapses and finding solutions to the problems
F that arc 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
G 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.
H
COMMON CAUSE v. UNION OF INDIA AND ORS. 451
[MADAN B. LOKUR, J.]
212. There is no doubt that the recommendations of the A
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
B
tribals inhabiting the land for several generations.
Utilization of funds by the Special Purpose Vehicle
213. In LA. Nos.2746-2748 of 2009 filed by Rabi Das, an order
was passed on 27'h January, 2014 relating to the preparation of a scheme
by the CEC for setting up a Special Purpose Vehicle (SPV) for tribal c
welfare and area development works. The relevant extract of the order
reads thus:
"50% of the additional amounts of Net Present Value (NPV)
recovered by the State ofOdisha from the mining lessees will be
used by the State of Odisha through a Special Purpose Vehicle D
(SPV) for undertaking specific tribal welfare and area
development works so as to ensure inclusive f,'l"owth of the mineral
bearing areas.The Siate ofOdisha will accordingly file within
four weeks from today, a comprehensive plan forthe development
of tribals out of the aforesaid funds, taking into consideration
their requirements of health, education, communication, E
recreation, livelihood and cultural lifestyle as indicated in this
Court's judgment in T. N. Godavaraman Thirumulpad v.
Union of India & Others (2008) 2 SCC 222."
214. Subsequently on 28'h April, 2014 this Court accepted the
scheme prepared by the Government of Odisha in consultation with the F
Central Empowered Committee. The scheme was captioned "Setting
up of Special Purpose Vehicle (SPV) for undertaking specific tribal
welfare and area development works so as to ensure inclusive growth
of mineral bearing areas in the State of Odisha". This Court then passed
the following order on 28"' April, 2014: G
"Pursuant to.orders passed by this Court on 7th [27"] January,
2014, the Government of Odisha in consultation with the Central
Empowered Committee has prepared a Scheme captioned
"Setting up of Special Purpose Vehicle (SPV) for undertaking
specific tribal welfare and area development works so as to
H
452 SUPREME COURT REPORTS (2017] 13 S.C.R.
A ensure inclusive growth of mineral bearing areas in the State of
Odis ha.
The Central Empowered Committee has submitted a Report
dated 9th April, 2014 and has recommended that the Scheme
prepared by the Government ofOdisha may be approved by this
B Court and the ad hoc CAMPA may be directed to transfer to the
SPY 50 IJer cent of the additional amount of the NPY recovered
from the mining lease holders by the State of Odisha for
undertaking tribal welfare and development works.
We have perused the Scheme prepared by the State Government
C of Odisha and the recommendation of the Central Empowered
Committee and we approve the Scheme and direct as hoc
CAMPA to transfer to the SPY 50 per cent of the additional
amount of the NPY within a month for undertaking tribal welfare
development works.
o The Interlocutory applications be listed in the month of July, 2014."
215. Some of the salient features of the Scheme arc as follows:
5. The SPY 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
E livelihood intervention, health, water supply and sanitation,
educati<!m, 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
F
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
G
Budget, (c) to enter into any agreement for and on behalf of the
SPY; ( d) institute and defend legal proceedings (e) to consider
and approve the Annual Report, audit report, annual accounts
and the financial estimates of the SPY, (fl to prescribe procedure
to be followed for implementation of the projects/works and for
H
COMMON CAUSE v. UNION OF INDIA AND ORS. 453
[MADAN B. LOKUR, J.]
maintenance of accounts and (g) to undertake any other ancillary A
activities/works for the furtherance of the objective of the SPV.
(a) The funds made available to the SPV will be utilized only
for the purpose for which the SPV has been set up and will
not be used for any other purpose or transferred to any other
authority; and B
(b) The composition of the Board of Directors of the SPV, as
provided in the present scheme, will be modified only after
obtainingperrnission from the Hon'ble Supreme Court.
I 0. The accounts of the SPV will be internally audited annually
by the Chartered Accountant firrns empanelled with the CAGI C
Principal Accountant General, Odisha. The audit of the accounts
of the SPV, receipts as well as expenditure, will be done annually
by the office of the Principal Accountant General, Odis ha.
11. The State Government has, earlier, registered a Society,
namely, Society for Inclusive Development of Mineral Bearing D
Areas of Odisha, which has been registered vide registration
number 23354174 of 2011-12 under the Societies Registration
Act, 1860 to act as SPV for the purpose. It is now proposed to
wind up the said Society and to replace it with 'Odisha Mineral
Bearing Areas Development Corporation' to be set up under
E
section 25 of the Companies Act.
216. It appears that the scheme has been implemented with the
Chief Secretary ofOdisha as the ex-officio Chairman of the SPV. There
are several other members and directors of the SPV. There is no further
information available with this Court with regard to the implementation
F
of the scheme.
217. During the. course of hearing, some of the mining lease
holders represented by Shri Gopal Sµbramanium, Senior Advocate
offered to deposit and in fact did deposit an amount ofRs.237 .05 crores
for utilization by the SPV for carrying out welfare works and activities
G
in the districts ofKeonjhar, Sundergarh and Mayurbhanj in Odisha. The
deposit was made by way of a cheque on 6'" 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
454 SUPREME COURT REPORTS (2017] 13 S.C.R.
A 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 rnade available to the State of Odisha. These amounts
B
should also be kept with the Special Purpose Vehicle.
218. To ensure that the amounts are utilized for the benefit of
tribals in the affeicted districts and for area development works, we would
like the Chief Secretary of Odisha to file au affidavit stating the work
done as well as providing the audited accounts of the receipt and
c 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.
D 220. I.A. Nos. 45 (filed by Zenith Mining) and47 (filed by Kavita
Agrawal) arc 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
E 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 \vrongly been included as a non-operational
lease. Accordingly, I.A. No. 9 (filed by S.A. Karim) is also dismissed
but as being infructuous. However, it is made clear that the State
F Government should ensure that the lessee S.A. Karim in fact has valid
statutory clearances.
223. Pending show cause notices issued by the State Government
should be decided by 31" December, 201 7 (if not already decided) after
hearing the concerned noticees.
G 224. 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.
H
COMMON CAUSE v. UNION OF INDIA AND ORS. 455
[MADAN B. LOKUR, J.]
225. The amounts determined as due from all the mining lease A
holders should be deposited by them on or before 31" 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.
226. We would also like to hear the eight concerned mining lease B
holders on the question of appointing an appropriate Committee in respect
of the applicability of Rule 3 7 of the Mineral Concession Rules to them.
227. 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 c
the years that have enabled rampant illegal and unlawful mining in Odisha
and to recommend preventive measures not only to the State ofOdisha
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.
D
228. 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 31" December, 2017.
229. The Chief Secretary of Odisha should file an affidavit as E
· indicated by us within a period of six weeks and in any case on or before
30'h September, 2017. The Registry will list these petitions along with
the affidavit immediately after its receipt for our consideration.
230. All other pending l.A.s are disposed ofin terms ofourorders.
F
Divya Pandey Directions issued.
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