GOA FOUNDATION Vs UNION OF INDIA .
Bench: A.K. PATNAIK,SURINDER SINGH NIJJAR,FAKKIR MOHAMED IBRAHIM KALIFULLA
Case number: W.P.(C) No.-000435-000435 / 2012
Diary number: 32067 / 2012
Advocates: PRASHANT BHUSHAN Vs
Page 1
Page 2
Page 3
Page 4
Page 5
Page 6
Page 7
Page 8
Page 9
Page 10
Page 11
Page 12
Page 13
Page 14
Page 15
Page 16
Page 17
Page 18
Page 19
Page 20
Page 21
Page 22
Page 23
Page 24
Page 25
Page 26
Page 27
Page 28
Page 29
Page 30
Page 31
Page 32
Page 33
Page 34
Page 35
Page 36
Page 37
Page 38
Page 39
Page 40
Page 41
Page 42
Page 43
Page 44
Page 45
Page 46
Page 47
Page 48
Page 49
Page 50
Page 51
Page 52
Page 53
Page 54
Page 55
Page 56
Page 57
Page 58
Page 59
Page 60
Page 61
Page 62
Page 63
Page 64
Page 65
Page 66
Page 67
Page 68
Page 69
Page 70
Page 71
Page 72
Page 73
Page 74
Page 75
Page 76
Page 77
Page 78
Page 79
Page 80
Page 81
Page 82
Page 83
Page 84
Page 85
Page 86
Page 87
Page 88
Page 89
Page 90
Page 91
Page 92
Page 93
Page 94
Page 95
Page 96
Page 97
Page 98
Page 99
Page 100
Page 101
Page 102
Page 103
Page 104
Page 105
Page 106
Page 107
Page 108
Page 109
Page 110
Page 111
Page 1
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
WRIT PETITION (CIVIL) No. 435 OF 2012
Goa Foundation … Petitioner
Versus Union of India & Ors. … Respondents
WITH
WRIT PETITION (C) No. 99 OF 2013,
WRIT PETITION (C) No. 184 OF 2013,
TRANSFERRED CASE No.136 OF 2013 (ARISING OUT OF T. P. (C) No. 8 OF 2013),
TRANSFERRED CASE No.133 OF 2013 (ARISING OUT OF T.P.(C) No. 230 OF 2013),
TRANSFERRED CASE No.131 OF 2013 (ARISING OUT OF T.P.(C) No. 1441 OF 2013),
TRANSFERRED CASE No.132 OF 2013 (ARISING OUT OF T.P.(C) No. 1186 OF 2013),
TRANSFERRED CASE No.143 OF 2013 (ARISING OUT OF T.P.(C) No. 574 OF 2013),
TRANSFERRED CASE No.140 OF 2013 (ARISING OUT OF T.P.(C) No. 766 OF 2013),
TRANSFERRED CASE No.142 of 2013 (ARISING OUT OF T.P.(C) No. 770 OF 2013),
Page 2
TRANSFERRED CASE No.141 OF 2013 (ARISING OUT OF T.P.(C) No. 776 OF 2013),
TRANSFERRED CASE No.139 OF 2013 (ARISING OUT OF T.P.(C) No. 836 OF 2013),
TRANSFERRED CASE No.134 OF 2013 (ARISING OUT OF T.P.(C) No. 864 OF 2013),
TRANSFERRED CASE No.135 OF 2013 (ARISING OUT OF T.P.(C) No. 866 OF 2013),
AND
TRANSFERRED CASE No.138 OF 2013 (ARISING OUT OF T.P.(C) No. 869 OF 2013),
JUDGEMENT
A. K. PATNAIK, J.
1. This batch of Writ Petitions and Transferred Cases
relate to mining in the State of Goa and as issues raised
are common to the Writ Petitions and the Transferred
Cases, the cases have been analogously heard and are
being disposed of by this common judgment.
Facts relating to mining in Goa:
2. Prior to 19.12.1961 when Goa was a Portuguese
territory, its Portuguese Government had granted mining
2
Page 3
concessions in perpetuity to concessionaires. On
19.12.1961, Goa was liberated and became part of the
Indian Union and on 01.10.1963, the Mines and Minerals
(Development & Regulation) Act, 1957 (for short ‘the
MMDR Act’) was made applicable to the State of Goa. On
10.03.1975, the Controller of Mining Leases issued a
notification calling upon every lessee and sub-lessee to file
returns under Rule 5 of the Mining Leases (Modification of
Terms) Rules, 1956 and sent copies of the notification to
the concessionaires in Goa. Aggrieved, the
concessionaires moved the Bombay High Court, Goa
Bench, and by judgment dated 29.09.1983, in Vassudeva
Madeva Salgaocar vs. Union of India [1985(1) Bom. CR
36], the Bombay High Court restrained the Union of India
from treating the concessions as mining leases and from
enforcing the notification against the concessionaires.
3. Parliament thereafter passed the Goa, Daman and
Diu Mining Concessions (Abolition and Declaration as
Mining Leases) Act, 1987 (for short ‘the Abolition Act’)
which received the assent of the President on 23.05.1987.
Section 4 of the Abolition Act abolished the mining
3
Page 4
concessions and declared that with effect from the 20th
day of December, 1961, every mining concession will be
deemed to be a mining lease granted under the MMDR Act
and that the provisions of the MMDR Act will apply to such
mining lease. Section 5 of the Abolition Act further
provided that the concession holder shall be deemed to
have become a holder of the mining lease under the
MMDR Act in relation to the mines in which the concession
relates and the period of such lease was to extend upto
six months from the date when the Abolition Act received
President’s assent, i.e. upto 22.11.1987. On 14.10.1987,
sub-rules (8) and (9) were inserted in Rule 24A of the
Mineral Concession Rules, 1960 (for short ‘the MC Rules’)
which deal with renewal of mining leases in Goa, Daman
and Diu. The Abolition Act was challenged by the lessees
before the Bombay High Court in a writ petition. The High
Court passed an interim order permitting the lessees to
carry on mining operations and the mining business in the
concessions for which renewal applications had been filed
under Rule 24A of the MC Rules. Subsequently, the High
Court held in its judgment dated 20.06.1997 that the
4
Page 5
Abolition Act was valid but Section 22(i)(a) of the Abolition
Act would operate prospectively and not retrospectively.
The concessionaires filed special leave petition against the
judgment dated 20.06.1997 before this Court. On
02.03.1998, this Court passed an interim order permitting
the concessionaires to carry on mining operations and
mining business in the mining areas for which renewal
applications have been made on the condition that the
lessee pays to the Government dead rent from the date of
commencement of the Abolition Act. Subsequently, this
Court granted leave in the special leave petition and
continued the aforesaid interim order.
The Justice Shah Commission and its report:
4. As reports were received from various State
Governments of widespread mining of iron ore and
manganese ore in contravention of the provisions of the
MMDR Act, the Forests (Conservation) Act 1980, the
Environment (Protection) Act, 1986 and other rules and
guidelines issued thereunder, the Central Government
appointed the Justice Shah Commission under Section 3 of
the Commissions of Inquiry Act, 1952 by notification dated
5
Page 6
22.11.2010. Paras 2 and 3 of the notification, which are
relevant, are extracted hereinbelow:
“2. The terms of reference of the Commission shall be-
(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, companies and others that are engaged in such mining, trade and 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 deter, prevent, detect and punish offences relating to mining, 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 and identify, as far as possible, the persons 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 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.
6
Page 7
3. The Commission shall also recommend remedial measures to prevent such mining, trade, transportation and export done illegally or without lawful authority.”
The Justice Shah Commission visited Goa and issued
notices under Section 4 of the Commissions of Inquiry Act,
1952 calling for information from concerned authorities
and the lessees and submitted its interim report on
15.3.2012 to the Ministry of Mines, Union of India. On
7.9.2012, the Justice Shah Commission Report on Goa was
tabled in Parliament along with an Action Taken Report of
the Ministry of Mines and on 10.9.2012 the State
Government of Goa passed an order suspending all mining
operations in the State of Goa with effect from 11.9.2012.
5. Pursuant to this order of the State Government, on
11.09.2012 and 12.09.2012 the District Magistrates of the
State of Goa banned transportation of iron ore in their
respective districts and the Director of Mines and Geology
ordered for verification of mineral ore which was already
extracted. On 13.9.2012, the Director of Mines and
Geology, Government of Goa issued Show Cause Notices
to 40 mining leases. On 14.9.2012, the Ministry of
7
Page 8
Environment and Forests of the Union of India also
directed that all Environmental Clearances granted to
mines in the State of Goa be kept in abeyance.
6. On the basis of findings in the report of the Justice
Shah Commission on illegal mining in the State of Goa,
the Goa Foundation has filed Writ Petition (C) 435 of 2012
as Public Interest Litigation praying for directions to the
Union of India and the State of Goa to take steps for
termination of the mining leases of lessees involved in
mining in violation of the Forest (Conservation) Act, 1980,
the Mines and Minerals (Regulation and Development)
Act, 1957, the Mineral Concessions Rules, 1960, the
Environment (Protection) Act, 1986, the Water
(Prevention & Control of Pollution) Act, 1974 and the
Air (Prevention and Control of Pollution) Act, 1981 as well
as the Wild Life (Protection) Act, 1972. The Goa
Foundation has prayed that a direction be issued to the
respondents to prosecute all those who have committed
offences under the different laws and are involved in the
pilferage of State revenue through illegal mining
activities in the State of Goa including the public servants
8
Page 9
who have aided and abetted the offences. The Goa
Foundation has also sought for appointment of an
independent authority with full powers to take control,
supervise and regulate mining operations in the State of
Goa and to ensure the implementation of the laws.
Besides, the aforesaid main reliefs, the Goa Foundation
has also prayed for some incidental and consequential
reliefs. On 5.10.2012, this Court issued notice in Writ
Petition (Civil) No. 435 of 2012 to the respondents and
directed the Central Empowered Committee (for short
“CEC”) to submit its report on the writ petition and also
directed that till further orders, all mining operations in
the leases identified in the report of the Justice Shah
Commission and transportation of iron ore and
manganese ore from those leases, whether lying at the
mine-head or stockyards, shall remain suspended, as
recommended in the report of the Justice Shah
Commission.
7. Different mining lessees of the State of Goa and the
Goa Mining Association also filed Writ Petitions in the
Bombay High Court, Goa Bench for a declaration that the
9
Page 10
report of the Shah Commission is illegal and for quashing
the findings in the report of the Justice Shah Commission
and also for quashing the order dated 10.9.2012 of the
Government of Goa suspending mining operations in the
State of Goa and the order dated 14.9.2012 of the Ministry
of Environment and Forests, Government of India,
directing that the Environmental Clearances granted to
the mines in the State of Goa be kept in abeyance. These
Writ Petitions have been transferred to this Court for
hearing along with the hearing of Writ Petition (Civil) No.
435 of 2012 filed by the Goa Foundation.
8. The Writ Petitions and the Transferred Cases were
heard during September, October and November,
2013. On 11th November, 2013, an order was
passed by this Court directing that the inventory of
the excavated mineral ores lying in different
mines/stockyards/jetties/ports in the State of Goa
made by the Department of Mines and Geology of
the Government of Goa be verified and thereafter the
whole of the inventorised mineral ores be sold by e-
auction and the sale proceeds (less taxes and
10
Page 11
royalty) be retained in separate fixed deposits (lease-
wise) by the State of Goa till the Court delivers the
judgment in these matters on the legality of the
leases from which the mineral ores were extracted.
The Court has also directed that this entire process of
verification of the inventory, e-auction and deposit of
sale proceeds be monitored by a Monitoring
Committee appointed by the Court. By the said order
dated 11.11.2013, this Court also constituted an
Expert Committee to conduct a macro EIA Study on
what should be the ceiling of annual excavation of
iron ore from the State of Goa considering its iron ore
resources and its carrying capacity, keeping in mind
the principles of sustainable development and inter-
generational equity and all other relevant factors. On
11.11.2013 the case was also reserved for judgment.
Challenge to the Report of the Justice Shah Commission:
9. As we have already noticed, in the cases transferred
from the Bombay High Court to this Court, the mining
lessees have prayed for quashing the report of the Justice
11
Page 12
Shah Commission. Mr. K.K. Vengupal, learned senior
counsel appearing for the mining lessees, submitted that
the Justice Shah Commission did not issue any notice
under Section 8B of the Commissions of Inquiry Act, 1952
to the mining lessees giving a reasonable opportunity of
being heard in the inquiry and to produce evidence in their
defence. He further submitted that the Justice Shah
Commission also did not permit the mining lessees to
cross examine the witnesses, to address the Commission
and to be represented by legal practitioners before the
Commission contrary to the provisions of Section 8C of the
Commissions of Inquiry Act, 1952. He submitted that even
otherwise there is gross breach of the principles of natural
justice and fair play by the Justice Shah Commission and,
therefore, the report of the Commission was violative of
Article 14 of the Constitution. He submitted that the
report of the Justice Shah Commission should, therefore,
be quashed. In support of this submission, he relied on
the decisions of this Court in Kiran Bedi v. Committee of
Inquiry and another [(1989) 1 SCC 494], State of Bihar v.
12
Page 13
L.K. Advani [(2003) 8 SCC 361] and Union of India v.
Tulsiram Patel [1985(3) SCC 398].
10. Mr. Mohan Prasaran, learned Solicitor General for the
Union of India, on the other hand, submitted that as the
notification dated 22.11.2010 of the Central Government
appointing the Justice Shah Commission under Section 3
of the Commissions of Inquiry Act, 1952 would show,
reports were received from various State Governments of
widespread mining of iron ore and manganese ore in
contravention of the MMDR Act, the Forest (Conservation)
Act, 1980 and the Environment (Protection) Act, 1986 or
other Rules and Licenses issued thereunder and for this
reason, the Central Government appointed the Justice
Shah Commission for the purpose of making inquiry into
these matters of public importance. He submitted that
after the Justice Shah Commission submitted the report
pointing out various illegalities, the Union Government has
kept the environment clearances in abeyance and it will
take legal action on the basis of its own assessment of the
facts and not on the basis of the facts as found in the
Justice Shah Commission’s report. Similarly, Mr. Atmaram
13
Page 14
N.S. Nadkarni, the Advocate General appearing for the
State of Goa, submitted that after going through the
report of the Justice Shah Commission, the State
Government has suspended all mining and transportation
of ores and no legal action will be taken against the
mining lessees on the basis of the findings in the Justice
Shah Commission’s report unless due opportunity is given
to the mining lessees to place their defence against the
findings of the Justice Shah Commission.
11. We find that Section 8B of the Commissions of
Inquiry Act, 1952 provides that if a person is likely to be
prejudicially affected by the inquiry, the Commission shall
give to that person a reasonable opportunity of being
heard and to produce evidence in his defence and Section
8C of the Commissions of Inquiry Act, 1952 provides that
every such person will have a right to cross-examine and
the right to be represented by a legal practitioner before
the Commission. As the State Government of Goa has
taken a stand before us that no action will be taken
against the mining lessees only on the basis of the
findings in the report of the Justice Shah Commission
14
Page 15
without making its own assessment of facts and without
first giving the mining lessees the opportunity of hearing
and the opportunity to produce evidence in their defence,
we are not inclined to quash the report of the Justice Shah
Commission on the ground that the provisions of Sections
8B and 8C of the Commissions of Inquiry Act, 1952 and
the principles of natural justice have not been complied
with. At the same time, we cannot also direct prosecution
of the mining lessees on the basis of the findings in the
report of the Justice Shah Commission, if they have not
been given the opportunity of being heard and to produce
evidence in their defence and not allowed the right to
cross-examine and the right to be represented by a legal
practitioner before the Commission as provided in
Sections 8B and 8C respectively of the Commissions of
Inquiry Act, 1952. We will, however, examine the legal
and environmental issues raised in the report of the
Justice Shah Commission and on the basis of our findings
on these issues consider granting the reliefs prayed for in
the writ petition filed by Goa Foundation and the reliefs
15
Page 16
prayed for in the writ petitions filed by the mining lessees,
which have been transferred to this Court.
Whether the leases held by the mining lessees have expired:
12. According to the Justice Shah Commission report,
prior to 7th January, 1993, sub-rule (4) of Rule 24A of the
MC Rules provided that the renewal application of the
lessee is required to be disposed of within six months from
the date of its receipt and sub rule (5) of Rule 24A
provided that if the application is not disposed of within
stipulated time, the same shall be deemed to have been
refused. The Justice Shah Commission has found that the
applications of several mining leases for renewal were not
disposed of within the stipulated time and there was no
provision in the MC Rules to condone the delay and,
therefore, these leases are in contravention of the MC
Rules and are void and have no effect as provided in
Section 19 of the MMDR Act.
13. The CEC in its report has stated that under Section 4
of the Abolition Act, the concessions were abolished from
23rd May, 1987 and treated as deemed leases under the
16
Page 17
MMDR Act and the period of deemed leases under Section
5 of the Abolition Act was extended upto six months with
effect from the date of assent to the Abolition Act (23rd
May, 1987) i.e. upto 22nd November, 1987. The CEC has
further stated that by notifications dated 20th November,
1987 and 20th May, 1988, however, the Government of
Goa allowed extension of six months each (totaling one
year) for making applications for the first renewal of
deemed mining leases and this one year period expired on
22nd November, 1988. The CEC has further stated that as
per the information provided to the CEC, out of 595 mining
concessions abolished and converted into deemed mining
leases under Section 4 of the Abolition Act, as many as
379 deemed mining lease holders have filed applications
for the first renewal of the mining leases before 22nd
November, 1988 and 59 such leases have filed
applications for the first renewal of the deemed mining
leases after 22nd November, 1988, i.e., beyond the time
limit permitted under Rule, 24A(8) of the MC Rules.
14. In reply, learned counsel for the lessees and Mr.
Arvind Datar, learned senior counsel appearing for the
17
Page 18
State of Goa, submitted that sub-rules (4) and (5) of Rule
24A of the MC Rules did not apply to the State of Goa.
They submitted that sub-rules (8) and (9) of Rule 24A of
the MC Rules apply specifically to the State of Goa and
sub-rule (8) of Rule 24A of the MC Rules provides that an
application for the first renewal of the deemed mining
lease referred to in Section 4 of the Abolition Act shall be
made to the State Government in Form ‘J’ before the
period of six months of the mining lease as provided in
Section 5(1) of the Abolition Act. They submitted that the
proviso to sub-rule (8) of Rule 24A of the MC Rules
conferred power on the State Government to extend time
for making such application upto a total period not
extending one year. They submitted that, by two
notifications, the State Government extended time for a
period of one year upto 22.11.1988 and within this period
most of the lessees have applied for the first renewal of
the deemed mining lease. Learned counsel for the lessees
and learned counsel for the State of Goa submitted that
sub-rule (9) of Rule 24A of the MC Rules makes it clear
that if an application for first renewal is made within the
18
Page 19
time referred to in sub-rule (8) of Rule 24A of the MC Rules
or within the time allowed by the State Government under
the proviso to sub-rule (8) of Rule 24A of the MC Rules, the
period of that lease shall be deemed to have been
extended by a further period till the State Government
passes orders thereon.
15. For easy reference, Chapter II containing Sections 4
and 5 of the Abolition Act is extracted hereinbelow:
“CHAPTER II
ABOLITION OF MINING CONCESSIONS AND DECLARATION AS MINING LEASES UNDER THE MINES AND MINERALS ACT
4. (1) Every mining concession specified in the First Schedule shall, on and from the appointed day, be deemed to have been abolished, and shall, with effect from that day, be deemed to be a mining lease granted under the Mines and Minerals Act, and the provisions of that Act shall, save as otherwise provided in this Act, apply to such mining lease.
(2) Every mining concession specified in the Second Schedule shall, on and from the day next after the date of grant of the said concession and specified in the
19
Page 20
corresponding entry in the eighth column of the said Schedule, be deemed to have been abolished, and shall, with effect from that day, be deemed to be a mining lease granted under the Mines and Minerals Act, and the provisions of that Act shall, save as otherwise provided in this Act, apply to such mining lease.
(3) If, after the date of assent, the Central Government is satisfied,. whether from any information received by it or otherwise, that there has been any error, omission or misdescription in relation to the particulars of any mining concession or the name and residence of any concession holder specified in the First or the Second Schedule, it may, by notification, correct such error, omission or misdescription, and on the issue of such notification, the First or the Second Schedule, as the case may be, shall be deemed to have been amended accordingly.
5. (1) Where a mining concession has been deemed to be a mining lease under section 4, the concession holder shall, on and from the day mentioned in that section, be deemed to have become the holder of such mining lease under the Mines and Minerals Act in relation to the mine to which the mining concession relates, subject to the condition that the period of such lease shall, notwithstanding anything contained in that Act, extend up to a period of six months from the date of assent.
(2) On the expiry of the period of any mining lease under sub-section (1), it may, if so desired by the holder of such lease and on an application being made
20
Page 21
by him in accordance with the provisions of the Mines and Minerals Act and the rules made thereunder, be renewed on such terms and conditions, and up to the maximum period for which, such lease can be renewed under the provisions of that Act and the rules made thereunder.”
16. For easy reference, Rule 24A of the MC Rules is also
extracted hereinbelow:
“24A. Renewal of mining lease. – (1) An application for the renewal of a mining lease shall be made to the State Government in Form J, at least twelve months before the date on which the lease is due to expire, through such officer or authority as the State Government may specify in this behalf.
(2) The renewal or renewals of a mining lease granted in respect of a mineral specified in Part ‘A’ and Part ‘B’ of the First Schedule to the Act may be granted by the State Government with the previous approval of the Central Government.;
(3) The renewal or renewals of a mining lease granted in respect of a mineral not specified in Part ‘A’ and Part ‘B’ of the First Schedule to the Act may be granted by the State Government.;
Provided that before granting approval for second or subsequent renewal of a mining lease, the State Government shall seek a report from the Controller General, Indian Bureau of Mines, as to whether it would be in the interest of mineral development to grant the renewal of the mining lease.
21
Page 22
Provided further that in case a report is not received from Controller General, Indian Bureau of Mines in a period of three months of receipt of the communication from the State Government, it would be deemed that the Indian Bureau of Mines has no adverse comments to offer regarding the grant of the renewal of mining lease.
(4) An application for the renewal of a mining lease shall be disposed of within a period of six months from the date of its receipt. (Omitted)
(5) If an application is not disposed of within the period specified in sub-rule (4) it shall be deemed to have been refused. (Omitted)
(6) If an application for the renewal of a mining lease made within the time referred to in sub-rule (1) is not disposed of by the State Government before the date of expiry of the lease, the period of the lease shall be deemed to have been extended by a further period till the State Government passes order thereon.
(7) Omitted.
(8) Notwithstanding anything contained in sub-rule (1) and sub-rule (6), an application for the first renewal of a mining lease, so declared under the provisions of section 4 of the Goa, Daman and Diu Mining Concession (Abolition and Declaration as Mining Lease ) Act,1987, shall be made to the State Government in Form J before the expiry of the period of mining lease in terms of sub- section (1) of section 5 of the said Act, through such office or authority as the State Government may specify in this behalf:
22
Page 23
Provided that the State Government may, for reasons to be recorded in writing and subject to such conditions as it may think fit, allow extension of time for making of such application up to a total period not exceeding one year.
(9) If an application for first renewal made within the time referred to in sub-rule (8) or within the time allowed by the State Government under the proviso to sub-rule (8), the period of that lease shall be deemed to have been extended by a further period till the State Government passes orders thereon.
(10) The State Government may condone delay in an application for renewal of mining lease made after the time limit prescribed in sub-rule (1) provided the application has been made before the expiry of the lease.”
17. Sub-rule (8) of Rule 24A of the MC Rules has been
inserted by G.S.R. 855(E), dated 14th October, 1987 and
this sub-rule (8) of Rule 24A of the MC Rules provides that
notwithstanding anything contained in sub-rule (1) and
sub-rule (6), an application for the first renewal of a
deemed mining lease, referred to in Section 4 of the
Abolition Act, shall be made to the State Government in
Form J before the expiry of the six months period of
deemed mining lease as provided in Section 5 (1) of the
Abolition Act. The proviso to sub-rule (8) of Rule 24A of
23
Page 24
the MC Rules, however, empowers the State Government
to extend the time for making such application upto a
total period not extending one year. In exercise of these
powers in the proviso to sub-rule (8) of Rule 24A of the MC
Rules, the State Government of Goa has, in fact, extended
time for making applications for first renewal upto
22.11.1988, by two notifications dated 20.11.1987 and
20.05.1988. Sub-rule (9) of Rule 24A of the MC Rules,
which was also inserted by G.S.R. 855(E), dated 14th
October, 1987, reads as follows:
“In an application for first renewal made within the time referred to in sub-rule (8) or within the time allowed by the State Government under the proviso to sub-rule (8), the period of that lease shall be deemed to have been extended by a period of one year from the date of expiry of lease or date of receipt of application, whichever is later, provided that the period of deemed extension of lease shall end with the date of receipt of the orders of the State Government thereon, if such orders are made earlier.”
Sub-rule (9) was substituted by G.S.R. 724(E) dated 27th
September, 1994 by the existing sub-rule (9) (extracted
above) to provide that if an application for first renewal is
made within the time referred to in sub-rule (8) or within
24
Page 25
the time allowed by the State Government under the
proviso to sub-rule (8), the period of that lease shall be
deemed to have been extended by a further period till the
State Government passes orders thereon. In our
considered opinion, the intention of rule-making
authorities is very clear from sub-rule (9) as was originally
inserted by G.S.R. 855(E), dated 14th October, 1987 and
sub-rule (9) as was substituted by G.S.R. 724(E), dated
27th September, 1994, that until orders were passed by
the State Government on an application for first renewal
of a lease filed by a lessee within the time allowed, the
lease was deemed to have been extended.
18. The lessees have contended that they had filed their
applications by 22.11.1988, i.e. the date up to which the
State Government had allowed time under the proviso to
sub-rule (8) of Rule 24A of the MC Rules. The State
Government has also taken the stand that most of the
applications for first renewal were filed within the time
allowed by the State Government and this stand is also
supported by the facts found by the CEC. The result is
that most of the mining leases in which the State
25
Page 26
Government has not passed orders are deemed to have
been extended under sub-rule (9) of Rule 24A of the MC
Rules. Hence, the finding in the Justice Shah Commission
report that the applications for renewal were not disposed
of within the stipulated time and the leases are in
contravention of the MC Rules is, thus, not correct. This
opinion of the Justice Shah Commission, as we have
noticed, was based on sub-rules (4) and (5) of Rule 24A of
the MC Rules, which were applicable generally to an
application for renewal of mining leases, stood excluded to
the extent specific provisions have been subsequently
made by the rule-making authorities in sub-rules (8) and
(9) of Rule 24A of the MC Rules in respect of the deemed
leases in Goa.
19. Mr. Prashant Bhushan, learned counsel for the Goa
Foundation, however, submitted that sub-section (2) of
Section 8 of the MMDR Act prior to its amendment
provided that a mining lease may be renewed for only ten
years and, therefore, if the deemed mining leases of the
lessees expired on 22.11.1987, even if the lease was
renewed on the application of first renewal made by the
26
Page 27
lessees in Goa, the period of lease under the first renewal
would expire on 21.11.1997 and after 21.11.1997, there
can be no deemed extension. Alternatively, he submitted
that sub-section (2) of Section 8 of the MMDR Act as
amended by Act 25 of 1994 provided that the mining
lease may be renewed for a maximum period not
exceeding twenty years. He submitted that as the
deemed mining leases expired on 22.11.1987, the lessees
would be entitled to a renewal for a maximum period of
twenty years upto 21.11.2007 and after 21.11.2007, the
lessees would not be entitled to any renewal and hence
the lessees were not entitled to operate the lease beyond
21.11.2007.
20. Learned counsel for the lessees, on the other hand,
submitted that sub-section (3) of Section 8 of the MMDR
Act makes it clear that notwithstanding anything
contained in sub-section (2) of Section 8 of the MMDR Act,
the State Government can authorise renewal of a mining
lease in respect of minerals not specified in Part A and
Part B of the First Schedule for a further period or periods
not exceeding twenty years in each case. They submitted
27
Page 28
that iron ore is specified in Part C in the First Schedule and
hence the State Government can authorise renewal of the
mining lease in respect of iron ore for a period or periods
not exceeding twenty years in each case. They also
referred to sub-rule (3) of Rule 24A which provided that
renewal or renewals of a mining lease granted in respect
of a mineral not specified in Part A and Part B of the First
Schedule to the MMDR Act may be granted by the State
Government provided that before granting approval for
second or subsequent renewal of a mining lease, the State
Government shall seek a report from the Controller
General, Indian Bureau of Mines, as to whether it would be
in the interest of mineral development to grant the
renewal of the mining lease. Learned counsel for the
lessees submitted that as the application of the lessees for
renewal of mining leases have not been disposed of by the
State Government before the date of expiry of lease, the
period of lease shall be deemed to have been extended by
a further period till the State Government passes orders
thereon as provided in sub-rule (6) of Rule 24A of the MC
Rules. They submitted that it will be clear from sub-rule
28
Page 29
(6) of Rule 24A of the MC Rules that the intention of rule-
making authorities is that there may not be any hiatus in
mining, and mineral development in the country may
continue without break, without any loss to the economy
and loss of revenue to the Government. They cited the
judgment of this Court in State of U.P. & Ors. v. Lalji
Tandon (dead) through LRs. [(2004) 1 SCC 1], in which this
Court has held that there is a difference between an
extension of lease and renewal of lease and whereas in
the case of extension of lease it is not necessary to have a
fresh deed of lease executed, in case of renewal of lease,
a fresh deed of lease shall have to be executed between
the parties. They also cited Tata Iron and Steel Company
Ltd. v. Union of India & Anr. [(1996) 9 SCC 709] in support
of their argument that under sub-section (3) of Section 8
of the MMDR Act, the Government can renew the mining
lease for a further period if it was in the interest of mineral
development.
21. Mr. Nadkarni, learned Advocate General for the State
of Goa, submitted that the then State Government of Goa
allowed the working of the mines from 2007 till 2012
29
Page 30
based on deemed extension status but it has been
decided by the State Government now in the Goa Mining
Policy of 2013 that no mine can be allowed on deemed
extension basis. The clear stand of the State Government
of Goa in the resume of arguments filed by the learned
Advocate General Mr. Nadkarni is that the deemed
extension status would not mean that a mine can be
allowed to run indefinitely without a decision on the
renewal application.
22. Section 8 of the MMDR Act is extracted hereinbelow:
“8. Periods for which mining leases may be granted or renewed
(1) The maximum period for which a mining lease may be granted shall not exceed thirty years:
Provided that the minimum period for which any such mining lease may be granted shall not be less than twenty years;
(2) A mining lease may be renewed for a period not exceeding twenty years]:
(3) Notwithstanding anything contained in sub-section (2), if the State Government is of opinion that in the interests of mineral development it is necessary so to do, it may, for reasons to be recorded, authorise the renewal of a mining lease in respect of minerals not specified in Part A and Part B of
30
Page 31
the First Schedule for a further period or periods not exceeding twenty years in each case.
(4) Notwithstanding anything contained in sub-section(2) and sub-section (3), no mining lease granted in respect of mineral specified in Part A or Part B of the First Schedule shall be renewed except with the previous approval of the Central Government.”
23. Sub-section (1) of Section 8 of the MMDR Act, which
provides the maximum and minimum periods for
which a mining lease may be granted will not apply
to deemed mining leases in Goa because sub-section
(1) of Section 5 of the Abolition Act provides that the
period of such deemed mining leases will extend
upto six months from the date of assent
notwithstanding anything contained in the MMDR
Act. In other words, notwithstanding anything
contained in sub-section (1) of Section 8 of the
MMDR Act, the period of a deemed mining lease in
Goa was to expire on 22.11.1987 (six months from
the date of assent). Under sub-section (2) of Section
8 of the MMDR Act, a mining lease may be renewed
for a period not exceeding twenty years. Sub-
section (3) of Section 8, however, provides that
31
Page 32
notwithstanding anything contained in sub-section
(2), if the State Government is of the opinion that in
the interest of mineral development, it is necessary
so to do, it may for reasons to be recorded,
authorise the renewal of a mining lease in respect of
minerals not specified in Part A and Part B of the
First Schedule for a further period or periods not
exceeding twenty years in each case. Thus, renewal
beyond the first renewal for a period of twenty years
is conditional upon the State Government forming an
opinion that in the interest of mineral development,
it is necessary to do so and also conditional upon the
State Government recording reasons for such
renewal of a mining lease in respect of iron ore
which is not specified in Part A and Part B of the First
Schedule. In Tata Iron and Steel Company Ltd. v.
Union of India & Anr. (supra), this Court has held that
the language of sub-section (3) of Section 8 is quite
clear that ordinarily a lease is not to be granted
beyond the time specified in sub-section (2) and only
if the Government is of the view that it would be in
32
Page 33
the interest of mineral development, it is
empowered to renew lease of a lessee for a further
period after recording sound reasons for doing so.
This Court has further held in the aforesaid case that
this measure has been incorporated in the legislative
scheme as a safeguard against arbitrariness and the
letter and spirit of the law must be adhered to in a
strict manner.
24. The MC Rules have been made under Section 13 of
the MMDR Act by the Central Government and
obviously could not have been made in a manner
inconsistent with the provisions of the Act. Sub-rule
(6) of Rule 24A of the MC Rules provides that if an
application for the renewal of a mining lease made
within the time referred to in sub-rule (1) is not
disposed of by the State Government before the
date of expiry of the lease, the period of the lease
shall be deemed to have been extended by a further
period till the State Government passes order
thereon. This sub-rule cannot apply to a renewal
under sub-section (3) of Section 8 of the MMDR Act
33
Page 34
because the renewal under this provision cannot be
made without express orders of the State
Government recording reasons for renewal in the
interest of mineral development. In other words, so
long as there is a right of renewal in the lessee
which in the case of a mining lease is for a maximum
period of twenty years, the provision regarding
deemed extension of a lease can operate, but if the
right of renewal of a mining lease is dependent upon
the State Government forming an opinion that in the
interest of mineral development it is necessary to do
so and the State Government recording reasons
therefor, a provision regarding deemed extension till
orders are passed by the State Government on the
application of renewal cannot apply. We are,
therefore, of the opinion that sub-rule (6) of Rule
24A of the MC Rules will apply to a case of first
renewal under sub-section (2) of Section 8 of the
MMDR Act other than a case covered under sub-rule
(9) of Rule 24A of the MC Rules, but will not apply to
renewal under sub-section (3) of Section 8 of the
34
Page 35
MMDR Act. In our view, the deemed mining leases
of the lessees in Goa expired on 22.11.1987 under
sub-section (1) of Section 5 of the Abolition Act and
the maximum of 20 years renewal period of the
deemed mining leases in Goa as provided in sub-
section (2) of Section 8 of the MMDR Act read with
sub-rules (8) and (9) of Rule 24A of the MC Rules
expired on 22.11.2007.
Whether dump can be kept beyond the lease area:
25. The report of the Justice Shah Commission states that
about 2796.24 ha of area have been found to be under
encroachment by the mining lessees out of which about
578.42 ha have been found to have been illegally used for
extraction/removal of iron ore. The CEC in its report has
stated that the CEC visited some of the areas stated to be
under encroachments and a number of lease holders have
filed representations against the findings of the Shah
Commission stating that they are not involved in any
encroachment. According to the Goa Foundation, this was
a gross illegality committed by the mining lessees.
35
Page 36
26. Mr. A.D.N. Rao, the Amicus Curiae, referred to
Section 9 of the MMDR Act to submit that any removal of
minerals from the leased area can be made by holder of a
mining lease only on payment of royalty. He submitted
that the waste material and overburden, therefore, cannot
be dumped outside the leased area without payment of
royalty. He referred to paragraph 48 of the judgment of
this Court in Samaj Parivartana Samudaya and Ors. v.
State of Karnataka and Ors. [(2013) 8 SCC 154] in which
this Court has observed that dumping of mining waste
(overburden dumps) also constitutes mining operations
within the meaning of Section 3(d) of the MMDR Act and,
therefore, the use of forest land for such activity would
require clearances under the Forest Conservation Act,
1980. He submitted that in the event dumping of mining
waste outside the leased area is to be done, it can only be
done after clearance is obtained under the Forest
Conservation Act, 1980.
27. The learned counsel appearing for the mining lessees
submitted that the lessees have actually used areas
outside the mining lease which are also owned mostly by
36
Page 37
the lessees for clearing the dump and this was
permissible under the Mineral Conservation and
Development Rules, 1988 (for short ‘MCD Rules’) and the
MC Rules. In particular, they referred to Rule 16 of the
MCD Rules, which provides for separate stacking of non-
saleable minerals, such as over burden and waste material
obtained during mining operation, on the ground
earmarked for the purpose, which should be away from
the working pit. They also referred to Rule 64 C of the MC
Rules which provides that on removal of tailings or rejects
from the leased area for dumping outside leased area,
such tailings or rejects are not liable for payment of
royalty. The State Government has supported this stand
of the mining lessees that dumping of the overburden and
mining waste outside the lease area was permissible
under the MC Rules and MCD Rules.
28. Sections 4(1) and 9(2) of the MMDR Act, Rule 64C of
the MC Rules and Rule 16 of the MCD Rules are extracted
below:
“4. Prospecting or mining operations to be under licence or lease.--(1) No person shall undertake any reconnaissance,
37
Page 38
prospecting or mining operations in any area, except under and in accordance with the terms and conditions of a reconnaissance permit or of a prospecting licence or, as the case may be, a mining lease, granted under this Act and the rules made thereunder:
Provided that nothing in this sub-section shall affect any prospecting or mining operations undertaken in any area in accordance with the terms and conditions of a prospecting licence or mining lease granted before the commencement of this Act which is in force at such commencement.
Provided further that nothing in this sub- section shall apply to any prospecting operations undertaken by the Geological Survey of India, the Indian Bureau of Mines, the Atomic Minerals Directorate for Exploration and Research of the Department of Atomic Energy of the Central Government, the Directorates of Mining and Geology of any State Government (by whatever name called), and the Mineral Exploration Corporation Limited, a Government Company within the meaning of Section 617 of the Companies Act, 1956.
Provided also that nothing in this sub-section shall apply to any mining lease (whether called mining lease, mining concession or by any other name) in force immediately before the commencement of this Act in the Union territory of Goa, Daman and Diu.
………………………………………………………….. ”
“9. Royalties in respect of mining leases.--
38
Page 39
(1) ……………………………………………………….
(2) The holder of a mining lease granted on or after the commencement of this Act shall pay royalty in respect of any (mineral removed or consumed by his agent, manager, employee, contractor of sub- lessee) from the leased area at the rate for the time being specified in the Second Schedule in respect of that mineral.
.......................................................................”
“64C. Royalty on tailings or rejects.--On removal of tailings or rejects from the leased area for dumping and not for sale or consumption, outside leased area such tailings or rejects shall not be liable for payment of royalty:
Provided that in case so dumped tailings or rejects are used for sale or consumption on any later date after the date of such dumping, then, such tailings or rejects shall be liable for payment of royalty.”
“16. Separate stacking of non-salable minerals.--(1) The overburden and waste material obtained during mining operations shall not be allowed to be mixed with non- salable or sub-grade minerals/ores. They shall be dumped and stacked separately on the ground earmarked for the purpose.
(2) The ground selected for dumping of overburden, waste material, the sub-grade or non-salable ores/minerals shall be away from working pit. It shall be proved for absence or presence of underlying mineral deposits before it is brought into use for dumping.
39
Page 40
(3) Before starting mining operations, the ultimate size of the pit shall be determined and the dumping ground shall be so selected that the dumping is not carried out within the limits of the ultimate size of the pit except in cases where concurrent backfilling is proposed.”
29. Under Section 4 of the MMDR Act, a person who
holds a mining lease granted under the MMDR Act
and the Rules made thereunder is entitled to carry
on mining operations in accordance with the terms
of the lease in the leased area and may carry on all
other activities connected with mining within the
leased area. Rule 31 of the MC Rules prescribes
that the lease deed will be in Form K or in a form
near thereto. Part I of Form K delineates the area of
the lease and Part II of Form K authorizes the
activities that can be done by the lessee in the
leased area. Thus, a holder of a mining lease does
not have any right to dump any reject, tailings or
waste in any area outside the leased area of the
mining lease on the strength of a mining lease
granted under the MMDR Act and the Rules made
thereunder. Such area outside the leased area of
40
Page 41
the mining lease may belong to the State or may
belong to any private person, but if the mining lease
does not confer any right whatsoever on the holder
of a mining lease to dump any mining waste outside
the leased area, he will have no legal right
whatsoever to remove his dump, overburden,
tailings or rejects and keep the same in such area
outside the leased area. In other words, dumping of
any waste materials, tailings and rejects outside the
leased area would be without a valid authorization
under the lease-deed.
30. Moreover, Section 9(2) of the MMDR Act makes the
holder of a mining lease granted on or after the
commencement of the Act liable to pay royalty in
respect of any mineral removed or consumed by
him or by his agent, manager, employee, contractor
or sub-lessee from the leased area. Thus, the
moment the mineral is removed or consumed from
the leased area, the holder of a mining lease has to
pay royalty. By virtue of Section 9 of the MMDR Act,
tailings and rejects excavated during mining
41
Page 42
operations being minerals will also be exigible to
royalty the moment they are removed from the
leased area.
31. Rule 64C of the MC Rules states that on removal of
tailings or rejects from the leased area for dumping
and not for sale or consumption, outside leased
area such tailings or rejects shall not be liable for
payment of royalty. Rule 64C of the MC Rules,
therefore, exempts the removal of tailings or rejects
from the leased area for the purpose of dumping
and not for the purpose of sale or consumption from
the levy of royalty. Rule 64C of the MC Rules does
not authorise dumping of tailings or rejects in any
area outside the leased area. This Court has held in
The Central Bank of India & Ors. v. Their Workmen,
etc. [AIR 1960 SC 12] that ‘if a rule goes beyond
what the section contemplates, the rule must yield
to the statute’. In our view, if Rule 64C of the MC
Rules suggests that tailings or rejects can be
dumped outside the leased area, it must give way
to Section 4 of the MMDR Act, which does not
42
Page 43
authorise dumping of minerals outside the leased
area and must give way to Section 9 of the MMDR
Act which does not authorise removal of minerals
outside the leased area without payment of royalty.
We, therefore, hold that dump cannot be kept by
the lessees beyond the leased area.
32. Rule 16 of the MCD Rules provides that the
overburden and waste material obtained during mining
operations shall be dumped and stacked separately on the
ground earmarked for the purpose and the ground
selected for dumping of overburden, waste material shall
be away from working pit. There is nothing in sub-rules
(1), (2) and (3) of Rule 16 of the MCD Rules, which
provides that such overburden or waste material obtained
from mining operations shall be kept ‘outside the leased
area’. On the other hand, clause (7) of Part II of Form-K
provides as follows:
“Liberty and power to enter upon and use a sufficient part of the surface of the said lands for the purpose of stacking, heaping, storing or depositing therein any produce of the mines or works carried on and any tools, equipment, earth and materials and substances dug or raised under the
43
Page 44
liberties and powers mentioned in this part.”
The expression ‘said lands’ in clause (7) of Part II of Form-
K quoted above refers to the area of the lease in Part I of
Form K and, therefore, is confined to the leased area.
Rule 16 of the MCD Rules, therefore, cannot be read to
permit dumping of overburden and waste materials
obtained from mining operations outside the leased area.
33. Learned counsel for the lessees, however, submitted
that many of these areas in which they have dumped the
overburdens, tailings and rejects are lands owned by them
and by virtue of their ownership right they could dump the
mining waste on their own lands. This contention of
learned counsel appearing for the lessees loses sight of
the fact that most of these lands are located in forest
areas where non-forest activity, such as mining, is
prohibited under Section 2 of the Forest Conservation Act,
1980 without the prior permission of the Central
Government. Moreover, the notification issued under sub-
rule (3) of Rule 5 of the Environment (Protection) Rules,
1986 requiring prior environmental clearance covers the
44
Page 45
activity of mining. Sub-rule (3) of Rule 5 empowers the
Central Government to impose prohibition or restrictions
on the location of an industry or the carrying on of
processes and operations in an area for the purpose of
protecting the environment. Inasmuch as the activity of
dumping mineral wastes will pollute the environment, it
will come within the meaning of activity of mining included
in the Schedule to the notification issued under sub-rule
(3) of Rule 5 of the Environment (Protection) Rules, 1986.
Thus, for dumping of mining waste on a private land, a
prior clearance of the Central Government under the
notification issued under sub-rule (3) of Rule 5 of the
Environment (Protection) Rules, 1986 would be necessary.
We, therefore, do not find any merit in the contention of
learned counsel for the lessees that they can dump mining
waste outside the leased area.
Within what distance from the boundaries of National Parks and Wildlife Sanctuaries, is mining not permissible in the State of Goa:
34. The Justice Shah Commission has stated in its report
that the National Board for Wild Life (NBWL) adopted “The
Wild Life Conservation Strategy–2002” and took a decision
45
Page 46
in its meeting held on 21.1.2002 under the Chairmanship
of Prime Minister to notify the areas within 10 kms. from
the boundaries of National Parks and Sanctuaries as eco-
fragile zones under section 3(v) of the Environment
(Protection) Act and Rule 5, Sub-rule (1)(viii) & (x) of the
Environment (Protection) Rules and this decision has been
communicated on 5.2.2002 to the Chief Wild Life Warden,
Government of Goa and the State Government has been
requested to list out such areas and furnish a detailed
proposal for their notification as eco–sensitive areas under
the Environment (Protection) Act, 1986. The Justice Shah
Commission has found that this has not been done till date
but the Government of Goa has allowed mines to operate.
In this context, the Justice Shah Commission Report has
referred to the order dated 04.12.2006 of this Court in
Writ Petition No.460/2004 (Goa Foundation v. Union of
India) by which this Court had directed the MoEF to refer
to the Standing Committee of the National Board for Wild
Life, under Sections 5B and 5C (2) of the Wild Life
(Protection) Act, the cases in which environmental
clearance has already been granted where activities are
46
Page 47
within 10 kms. zone. According to the report of the Justice
Shah Commission, in spite of the clear provisions of
Section 3(2)(v) of the Environment (Protection) Act, 1986
and the EIA Notifications, conferring the jurisdiction, power
and authority on the Central Government (MoEF) to grant
or refuse prior environment clearance for any iron ore
mining activity within 10 kms. of National Parks,
Sanctuaries and Protected Areas and despite provisions in
Section 5C(2)(b) of the Wild Life (Protection) Act, 1972
putting a restriction on mining activities inside National
Parks, Sanctuaries and other Protected and eco–sensitive
Areas, mining activities have been permitted within 10
kms. and inside the National Parks, Sanctuaries and
Protected Areas. The report of the Justice Shah
Commission further states that out of the environmental
clearances, the clearances with regard to 74 mining leases
should have been placed before the Standing Committee
of the National Board for Wildlife in accordance with the
order dated 04.12.2006 of this Court. The report of the
Justice Shah Commission further states that there has
been a total failure on the part of the MoEF in not
47
Page 48
considering this issue while granting the environmental
clearances.
35. The Justice Shah Commission in its report has further
stated that in the order dated 04.08.2006 of this Court in
T.N. Godavarman Thirumulpad v. Union of India & Ors.,
this Court has taken a view that 1 km. from the
boundaries of National Parks and Sanctuaries would be a
safety zone, subject to the orders that may be made in IA
No.1000 regarding Jamua Ramgarh Sanctuary and the
State will not grant any Temporary Working Permit (TWP)
in these safety zones comprising 1 km. from the
boundaries of National Parks and Sanctuaries and yet
some of the mines within 1 km. from the boundaries of
National Parks and Sanctuaries have been allowed in the
State of Goa.
36. The CEC in its report is of the view that had the MoEF
implemented this Court’s orders dated 14.02.2000 and
04.12.2006, the unregulated and environmentally
unsustainable manner in which mining has taken place in
Goa would have been avoided. The CEC has suggested
that all environmental clearances granted for mining
48
Page 49
leases located upto a distance of 10 kms. from the
boundaries of National Parks and Wildlife Sanctuaries
should be directed to be kept in abeyance and the
environmental clearances should be directed to be
considered by the Standing Committee of the National
Board for Wildlife in accordance with this Court’s order
dated 04.12.2006 and the Additional Principal Chief
Conservator of Forests, Regional Office, MoEF, Bangalore,
should be directed to verify, after examining the EIA/EMP
reports and other relevant details, whether the mining
operations will have adverse impact on the flora, fauna
and wildlife habitat and whether the distance of the
National Parks/Wildlife Sanctuaries and that the status of
the ‘forest’ have been correctly stated in the
EC/application for taking a decision regarding EC’s and
only after considering the recommendations of the
Standing Committee of the National Board of Wildlife and
the report of the Additional Principal Chief Conservator of
Forests (Central) and other relevant information/details,
this Court may take a decision. Mr. Prashant Bhushan,
learned counsel appearing for the Goa Foundation,
49
Page 50
submitted that there should be no mining activity within
any National Parks/Wildlife Sanctuaries or within 10 kms.
from the boundaries of National Parks and Wildlife
Sanctuaries so that the flora, fauna and wildlife habitat of
National Parks and Wildlife Sanctuaries are protected.
37. Learned counsel for the lessees, on the other hand,
stated that so far as the State of Goa is concerned, on the
one side, there is a coastal regulation zone in which
mining is not permitted and, on the other side, are the
National Parks and Wildlife Sanctuaries in which again
mining is not permitted and as a consequence a very
small strip of land is available for mining. They submitted
that there is no basis for presuming that an area outside
the limits of a National Park or a Wildlife Sanctuary is
required to be maintained as a buffer zone. They
submitted that by the order dated 04.12.2006 of this
Court passed in Writ Petition (C) No.460 of 2004, this
Court did not finally fix the buffer zone of 10 kms. from the
boundaries of National Parks and Wildlife Sanctuaries, but
granted a last opportunity to the States to submit their
recommendations for eco-sensitive zone and that the
50
Page 51
issue is still pending in I.A. No.1000 in Writ Petition 202 of
1995 in T.N. Godavarman Thirumulpad v. Union of India &
Ors. They further argued that by the order dated
04.08.2006, this Court had only directed that no mining
would be permitted by Temporary Working Permits within
1 km. from the National Parks and Wildlife Sanctuaries and
by the said order, absolute ban has not been imposed
against mining even within 1 km. from the boundaries of
National Parks and Wildlife Sanctuaries. They argued that
for declaration of eco-sensitive zone, a notification under
Section 3 of the Environment (Protect) Act, 1986 is
mandatory and till date no such notification has been
issued for the State of Goa delineating any eco-sensitive
zone and in the absence of such a notification mining
activities cannot be prohibited beyond the boundaries of a
national park/wildlife sanctuary.
38 Mr. Nadkarni, learned Advocate General appearing
for the State of Goa, submitted that presently the State of
Goa is not permitting mining inside any National Park or
Wildlife Sanctuary. He submitted that each of the seven
wildlife sanctuaries in the State of Goa have got revenue
51
Page 52
villages and local habitation of people inside the
sanctuaries and before notifying the buffer zone around a
wildlife sanctuary the consequences of the restrictions of
the buffer zone on the local population and on the local
development have to be weighed. He submitted that the
State Government is of the considered opinion that while
evolving a conservation strategy, the following peculiar
local constraints in the State of Goa have to be
considered:
(i) The State of Goa is the 3rd smallest State in the Union; with a total geographical are of only 3,702 square metres; and out of that, an area of 1,440 square metres is under ‘Forest’ (protected/reserved/private) which is almost about 38% of the total geographical area;
(ii) Out of the said area under ‘Forest’ nearly 62% i.e. 75.35 square metres has been declared as ‘National Park’, and/or ‘Wildlife Sanctuary’;
(iii) An area of approximately or more than 70 square kilometres falls under the ‘Coastal Regulation Zone’ (CRZ). Indeed, the CRZ runs into 106 kms., of the Coastal Belt of the State of Goa;
(iv) In fact, the total land mass available to the State of Goa, free from various restrictions, would further be reduced by 196.80 square kilometers, i.e. up to 5.32%,
52
Page 53
on account of Rivers, Lakes and other Water Bodies;
(v) Indeed, approximately 40% of the land is under agriculture which the Government has decided not to be diverted under any circumstances;
(vi) Further, the State Government has also directed that no ‘Forest Land’ is to be diverted for any mining purpose.
He submitted that considering all these constraints, the
State Government has recommended that an area up to 1
km. from the boundaries of National Parks/Wildlife
Sanctuaries should be treated as safety zones but even in
these safety zones mining activity should be prohibited in
a phased manner in 5 to 10 years.
39. Mr. Mohan Parasaran, learned Solicitor General,
submitted that the Principal Chief Conservator of Forests
and Chief Wildlife Warden, Government of Goa, vide his
letter dated 02.05.2013 has submitted six proposals for
declaration of eco-sensitive zones around six protected
areas in the State of Goa (National Parks/Wildlife
Sanctuaries) and the proposals were referred to a
Committee constituted under the Chairmanship of Dr.
53
Page 54
Rajesh Gopal, Additional Director General of Forests and
Member Secretary of National Tiger Conservation
Authority-Chairman, with the following Terms of
Reference:
(i) The Committee will undertake a site specific site survey of all six protected areas in Goa, with reference to studying the topography and report on the existing natural boundaries around that is outside each protected area. Such boundaries could include inter alia rivers, hills etc.
(ii) The Committee will draw up a definition of what could constitute a credible natural boundary, always keeping in mind that the object is to protect the flora, fauna and biodiversity in the PA from biotic pressure.
(iii) The Committee will submit its views on whether any of the natural boundaries of the PAs in Goa could be an effective boundary of a robust Eco-Sensitive Zone around the P.A.
He submitted that the Committee has submitted its report
on 18.10.2013 and the report has been considered by the
Ministry of Environment and Forests and by office
memorandum dated 24.10.2013, the Ministry of
Environment and Forests has not accepted the
recommendation of the Government of Goa regarding
54
Page 55
buffer zone and instead accepted the recommendation of
the Committee to define the eco-sensitive zones in site
specific manner subject to the relevant Court orders on
the subject and that a draft notification defining eco-
sensitive zones around each of the six protected areas
would be issued for stakeholder consultations.
40. We have considered the submissions of learned
counsel for the parties and we find that presently no
mining operations are being carried on inside any
National Park or Wildlife Sanctuary, and the State of
Goa has taken a stand before us that it will not
permit any mining operations inside any National
Park or Wildlife Sanctuary. Hence, the only question
that we have to decide is whether mining could have
been permitted or could be permitted within a certain
distance from the boundaries of the National Park or
Wildlife Sanctuary in the State of Goa.
41. This Court in exercise of its power under Article 32 of
the Constitution can direct the State to prohibit
mining activities in an area adjacent to a National
Park or a Wildlife Sanctuary for the purpose of
55
Page 56
protecting the flora, fauna and wildlife habitat of the
National Park/Wildlife Sanctuary because these
constitute part of the natural environment necessary
for healthy life of persons living in the State of Goa.
The right to life under Article 21 of the Constitution is
a guarantee against the State and for enforcing this
fundamental right of persons the State, which alone
has a right to grant mining leases of the mines
located inside the State, can be directed by the Court
by an appropriate writ or direction not to grant
mining leases or not to allow mining that will be
violative under Article 21 of the Constitution. In Re:
Construction of Park at NOIDA near Okhla Bird
Sanctuary [(2011) 1 SCC 744] a three-Judge Bench
(Forest Bench) of this Court has observed:
“…… Environment is one of the facets of the right to life guaranteed under Article 21 of the Constitution. Environment is, therefore, a matter directly under the Constitution and if the Court perceives any project or activity as harmful or injurious to the environment it would feel obliged to step in. ….”
Thus, the submissions of learned counsel for the lessees
that until a notification is issued under the Environment
56
Page 57
(Protection) Act, 1986 and the Rules made thereunder
prohibiting mining activities in an area outside the
boundaries of a National Park/Wildlife Sanctuary, no
mining can be prohibited by this Court is misconceived.
42. We may now examine whether this Court has by the
orders passed on 04.08.2006 and 04.12.2006, prohibited
mining activities around National Parks or Wildlife
Sanctuaries. When we read the order of this Court passed
on 04.08.2006 in T.N. Godavarman Thirumulpad v. Union
of India & Ors., we find that the Court while considering
the question of grant of Temporary Working Permits for
mining activities in National Parks, Sanctuaries and forest
areas, directed that Temporary Working Permits shall be
granted only where the conditions stipulated in the said
order are satisfied. Condition Nos. (ii) and (iii) stipulated
in the order dated 04.08.2006 are extracted hereinbelow:
“(ii) The mine is not located inside any National Park/Sanctuary notified under Section 18, 26-A or 35 of the Wildlife (Protection) Act, 1972;
(iii) The grant of the T.W.P. would not result in any mining activity within the safety zone around such areas referred to in (ii) above, (as an interim measure, one kilometre safety zone shall be maintained
57
Page 58
subject to the orders that may be made in I.A. No.1000 regarding Jamua Ramgarh Sanctuary);’”
It would, thus, be clear that this Court was of the opinion
that grant of Temporary Working Permits should not result
in any mining activities within the safety zones around a
National Park or Wildlife Sanctuary and as an interim
measure, one kilometer safety zone was to be maintained
subject to the orders that may be made in I.A. No.1000 in
Jamua Ramgarh Sanctuary. This order dated 04.08.2006
has not been varied subsequently nor any orders made in
I.A.No. 1000 regarding Jamua Ramgarh Sanctuary saying
that Temporary Working Permits can be granted within
one kilometer safety zone beyond the boundaries of a
National Park or Wildlife Sanctuary. The result is that the
order passed by this Court saying that there will be no
mining activity within one kilometer safety zone around
National Park or Wildlife Sanctuary has to be enforced and
there can be no mining activities within this area of one
kilometer from the boundaries of National Parks and
Wildlife Sanctuaries in the State of Goa.
58
Page 59
43. When, however, we read the order dated 4.12.2006
of this Court in Writ Petition (C) No.460 of 2004 (Goa
Foundation v. Union of India), we find that the Court has
not prohibited any mining activity within 10 kilometer
distance from the boundaries of the National Parks or
Wildlife Sanctuaries. The relevant portion of the order
dated 04.12.2006 is quoted hereinbelow:
“The Ministry is directed to give a final opportunity to all States/Union Territories to respond to its letter dated 27th May, 2005. The State of Goa also is permitted to given appropriate proposal in addition to what is said to have already been sent to the Central Government. The Communication sent to the States/Union Territories shall make it clear that if the proposals are not sent even now within a period of four weeks of receipt of the communication from the Ministry, this Court may have to consider passing orders for implementation of the decision that was taken on 21st January, 2002, namely, notification of the areas within 10 km. of the boundaries of the sanctuaries and national parks as eco-sensitive areas with a view to conserve the forest, wildlife and environment and having regard to the precautionary principles. If the State/Union Territories now fail to respond, they would do so at their own risk and peril.
The MoEF would also refer to the Standing Committee of the National Board for Wildlife, under sections 5 (b) and 5 (c) (ii)
59
Page 60
of the Wild Life (Protection) Act, the cases where environment clearance has already been granted where activities are within 10 km. zone.”
It will be clear from the order dated 4.12.2006 of this
Court that this Court has not passed any orders for
implementation of the decision taken on 21st January,
2002 to notify areas within 10 kms. of the boundaries of
National Parks or Wildlife Sanctuaries as eco sensitive
areas with a view to conserve the forest, wildlife and
environment. By the order dated 04.12.2006 of this Court,
however, the Ministry of Environment and Forest,
Government of India, was directed to give a final
opportunity to all States/Union Territories to respond to
the proposal and also to refer to the Standing Committee
of the National Board for Wildlife the cases in which
environment clearance has already been granted in
respect of activities within the 10 kms. zone from the
boundaries of the wildlife sanctuaries and national parks.
There is, therefore, no direction, interim or final, of this
Court prohibiting mining activities within 10 kms. of the
boundaries of National Parks or Wildlife Sanctuaries.
60
Page 61
44. Apart from the powers of the Court to give a direction
prohibiting mining activities up to a certain distance from
the boundaries of National Parks or Wildlife Sanctuaries,
the Central Government has powers under Rule 5 of the
Environment Protection Rules, 1986 to prohibit carrying on
of mining operations in areas which are proximate to a
Wildlife Sanctuary or a National Park. Rule 5 of the
Environment (Protection) Rules, 1986 is extracted herein
under:
“5. Prohibitions and restrictions on the location of industries and the carrying on processes and operations in different areas (1) The Central government may take into consideration the following factors while prohibiting or restricting the location of industries and carrying on of processes and operations in different areas-
(i) Standards for quality of environment in its various aspects laid down for an area.
(ii) The maximum allowable limits of concentration of various environmental pollutants (including noise) [or an area.
(iii) The likely emission or discharge of environmental pollutants from an industry, process or operation proposed to be prohibited or restricted.
(iv) The topographic and climatic features of an area.
61
Page 62
(v) The biological diversity of the area which, in the opinion of the Central Government needs to be preserved.
(vi) Environmentally compatible land use.
(vii) Net adverse environmental impact likely to be caused by an industry, process or operation proposed to be prohibited or restricted.
(viii) Proximity to a protected area under the Ancient Monuments and Archaeological Sites and Remains Act, 1958 or a sanctuary, National Park, game reserve or closed area notified as such under the Wild Life (Protection) Act, 1972 or places protected under any treaty, agreement or convention with any other country or countries or in pursuance of any decision made in any international confcrcnce1 association or other body.
(ix) Proximity to human settlements. (x) Any other factor as may be considered by the Central Government to be relevant to the protection of the environment in an area.
(2) While prohibiting or restricting the location of industries and carrying on of processes and operations in an area, the Central Government shall follow the procedure hereinafter laid down.
(3) (a) Whenever it appears to the Central Government that it is expedient to impose prohibition or restrictions on the locations Of an industry or the carrying on of processes and operations in an area, it may by notification in the Official Gazette and in such other manner as the Central government
62
Page 63
may deem necessary from time to time, give notice of its intention to do so.
(b) Every notification under clause (a) shall give a brief description of the area, the industries, operations, processes in that area about which such notification pertains and also specify the reasons for the imposition of prohibition or restrictions on the locations of the industries and carrying on of process or operations in that area.
(c) Any person interested in filing an objection against the imposition of prohibition or restrictions on carrying on of processes or operations as notified under clause (a) may do so in writing to the Central Government within sixty days from the date of publication of the notification in the Official Gazette.
(d) The Central Government shall within a period of one hundred and twenty days from the date of publication of the notification in the Official Gazette consider all the objections received against such notification and may within one hundred and eighty days from such day of publication] impose prohibition or restrictions on location of such industries and the carrying on of any process or operation in an area.
(4) Notwithstanding anything contained in sub-rule (3), whenever it appears to the Central Government that it is in public interest to do so, it may dispense with the requirement of notice under clause (a) of sub- rule (3).”
45. Sub-rule (1) of Rule 5 lists the number of factors,
which the Central Government has to take into
63
Page 64
consideration while prohibiting or restricting the carrying
on of processes and operations in different areas. Sub-
rule (2) of Rule 5 provides that before prohibiting the
processes and operations in the area the Central
Government has to follow the procedure laid down in sub-
rule (3). The procedure in sub-rule (3) of Rule 5 of the
Environment (Protection) Rules, 1986 includes giving
notice of the intention of the Central Government to
prohibit the carrying on of processes and operations in the
reserved area, giving brief description of the area, the
operations and processes in that area relating to which
the notification pertains and also specifying the reasons
for the imposition of the prohibition on carrying on of the
processes or operations in that area, and an opportunity
to persons interested in filing an objection against the
imposition of such prohibition on carrying on of processes
or operations by the Central Government. These
procedural checks have been made in Rule 5 because a
notification issued by the Central Government prohibiting
an operation or a process will have serious consequences
on the rights of different persons. For example, persons
64
Page 65
who are carrying on the process or operation and those
who are directly or indirectly employed in the process or
the operation may be affected by the proposed prohibition
of the process or the operation in the entire area.
Therefore until the Central Government takes into account
various factors mentioned in sub-rule (1), follows the
procedure laid down in sub-rule (3) and issues a
notification under Rule 5 prohibiting mining operations in a
certain area, there can be no prohibition under law to
carry on mining activity beyond 1 km. of the boundaries of
National Parks or Wildlife Sanctuaries.
46. In fact, we find that the process of issuing a
notification under Rule 5 of the Environmental
Protection Rules, 1986 prohibiting mining activities in
eco-sensitive zones around the National Parks or
Wildlife Sanctuaries in the State of Goa has now been
initiated. The Government of Goa vide letter dated
02.05.2013 submitted the following six proposals for
declaration of eco- sensitive zones around protected
areas in the State of Goa to the Ministry: (i) Cotigao
65
Page 66
Wildlife Sanctuaries; (ii) Netravali Wildlife Sanctuary;
(iii) Bhagwan Mahaveer Wildlife Sanctuary and
Bhagwan Mahaveer National Park; (iv) Madei Wildlife
Sanctuary; (v) Bondla Wildlife Sanctuary; and (vi) Dr.
Salim Ali Bird Sanctuary. These six proposals were
referred to a Committee constituted under the
Chairmanship of Dr. Rajesh Gopal, Additional Director
General of Forests and Member Secretary of National
Tiger Conservation Authority, with specified terms of
reference and the Committee gave its findings and
the Ministry of Environment and Forests, Government
of India by the Office Memorandum dated 24.10.2013
have accepted the findings of the Committee and
rejected the proposals of the Government of Goa. It
is also stated in the Office Memorandum dated
24.10.2013 of the Ministry of Environment and
Forests, Government of India that a draft notification
defining Eco-Sensitive Zones around each protected
area is being issued for stakeholder consultations.
This notification will have to be issued under sub-rule
(3) of Rule 5 of the Environment (Protection) Rules,
66
Page 67
1986, and after objections are received, the Central
Government will have to consider the same and
thereafter take the decision regarding imposition of
prohibition of mining activities in the eco sensitive
areas within the period stipulated in sub-rule 3(b) of
Rule 5 of the Environment (Protection) Rules, 1986.
At this stage, we can only direct the Ministry of
Environment and Forests to follow the procedure and
issue the notification of eco sensitive zones under
Rule 5 of the Environment (Protection) Rules, 1986
within six months.
Whether there has been a violation of Rules 37 and 38 of the MC Rules by the mining lessees in the State of Goa:
47. The Justice Shah Commission has found in its report
that in the State of Goa, 16
companies/firms/individuals are carrying out mining
operations under different leases granted to them as
a single unit as if the leases are amalgamated. The
Shah Commission has referred to Rule 38 of the MC
Rules which provides that the State Government
may, in the interest of mineral development and with
67
Page 68
reasons to be recorded in writing, permit
amalgamation of two or more adjoining leases held
by a lessee provided that the period of amalgamated
leases shall be co-terminus with the lease whose
period will expire first. The Justice Shah Commission
is of the opinion that as amalgamation of two leases
can only be permitted by the State Government for
reasons to be recorded in writing, and no such
permission has been taken from the State
Government for the amalgamation of different leases
as a single unit, the lessees who are operating
different leases as a single unit have violated Rule 38
of the MC Rules.
48. The CEC in its report, however, has not stated about
any violation of Rule 38 of the MC Rules and has
instead stated that Rule 37 of the MC Rules which
provides that the lessee shall not, without the
previous consent in writing of the State Government
assign, sublet, mortgage, or in any other manner,
transfer the mining lease, or any right, title or
68
Page 69
interest therein, has been violated by several
lessees. The CEC has reported that there are several
complaints received by the State Government that
the leases have been operated by the persons other
than the lessees. The CEC has observed in its report
that Rule 37 itself provides that in such cases of
violation of Rule 37, the State Government may
determine the mining lease, but the State
Government has taken no action and has taken a
stand that working of the mining leases by a person
other than lease holder is a prevailing mining
practice in Goa and these facts are in the knowledge
of the Government. Mr. Prashant Bhushan, learned
counsel for the Goa Foundation, submitted that in all
these cases the violation should be identified by a
Committee headed by the Chief Secretary, Goa, and
those lessees who have been found to have violated
Rule 37 of the MC Rules, should be penalized by
determination of the leases.
49. Rules 37 and 38 of the MC Rules are extracted
hereinbelow:
69
Page 70
“37. Transfer of lease. – (1) The lessee shall not, without the previous consent in writing of the State Government and in the case of mining lease in respect of any mineral specified in [Part ‘A’ and Part ‘B’ of] the First Schedule to the Act, without the previous approval of the Central Government :-
(a) assign, sublet, mortgage, or in any other manner, transfer the mining lease, or any right, title or interest therein, or
(b) enter into or make any bonafide arrangement, contract, or understanding whereby the lessee will or may be directly or indirectly financed to a substantial extent by, or under which the lessee's operations or undertakings will or may be substantially controlled by, any person or body of persons other than the lessee:
Provided further that where the mortgagee is an institution or a Bank or a Corporation specified in Schedule V, it shall not be necessary for the lessee to obtain any such consent of the State Government.
(1A) The State Government shall not give its consent to transfer of mining lease unless the transferee has accepted all the conditions and liabilities which the transferor was having in respect of such mining lease.
(2) Without prejudice to the provisions of sub-rule (1) the lessee may, subject to the conditions specified in the proviso to rule 35, transfer his lease or any right, title or interest therein to a person who has filed an affidavit stating that he has filed an up- to-date income-tax returns, paid the income tax assessed on him and paid the
70
Page 71
income tax on the basis of self-assessment as provided in the Income Tax Act, 1961( 43 of 1961), on payment of a fee of five hundred rupees to the State Government:
Provided that the lessee shall make available to the transferee the original or certified copies of all plans of abandoned workings in the area and in a belt 65 metres wide surrounding it;
Provided further that where the mortgagee is an institution or a Bank or a Corporation specified in Schedule V, it shall not be necessary for any such institution or Bank or Corporation to meet with the requirement relating to income tax;
Provided further that the lessee shall not charge or accept from the transferee any premium in addition to the sum spent by him, in obtaining the lease, and for conducting all or any of the operations referred to in rule 30 in or over the land leased to him;
(3) The State Government may, by order in writing determine any lease at any time if the lessee has, in the opinion of the State Government, committed a breach of any of the provisions of sub-rule (1) or sub-rule (1A) or has transferred any lease or any right, title or interest therein otherwise than in accordance with sub-rule (2);
Provided that no such order shall be made without giving the lessee a reasonable opportunity of stating his case.
38. Amalgamation of leases. – The State Government may, in the interest of mineral development and with reasons to
71
Page 72
be recorded in writing, permit amalgamation of two or more adjoining leases held by a lessee:
Provided that the period of amalgamated leases shall be co-terminus with the lease whose period will expire first:
Provided further that prior approval of the Central Government shall be required for such amalgamation in respect of leases for minerals specified in Part ‘A’ and Part ‘B’ of the First Schedule to the Act.
It will be clear from sub-rule (1)(a) of Rule 37 that the
lessee cannot assign, sublet, mortgage, or in any other
manner, transfer the mining lease, or any right, title or
interest therein, without the previous consent in writing of
the State Government in the case of those minerals which
are not specified in Part A and Part B of the First Schedule
to the Act. Since iron ore is specified in Part C of the First
Schedule to the Act, the previous consent in writing of the
State Government is necessary before any such transfer is
made by a mining lessee. Sub-rule (1A) of Rule 37 further
states that the State Government shall not give its
consent to transfer of a mining lease unless the transferee
has accepted all the conditions and liabilities which the
transferor was having in respect of such mining lease.
72
Page 73
Sub-rule (3) of Rule 37 further provides that the State
Government may, by order in writing determine any lease
at any time if the lessee has, in the opinion of the State
Government committed a breach of any of the provisions
of sub-rule (1) or sub-rule (1A) of Rule 37 of the MC Rules.
These provisions have been made in Rule 37 to ensure
that all the conditions and liabilities to which a lessee is
subjected to under a mining lease are also accepted by
the transferee. Sub-rule (2) of Rule 37 further provides
that without prejudice to the provisions of sub-rule (1), the
lessee may transfer his lease or any right, title or interest
therein to a person who has filed an affidavit stating that
he has filed up-to-date income-tax returns, paid the
income-tax assessed on him and paid the income-tax on
the basis of self-assessment as provided in the Income
Tax Act, 1961. This provision is meant to ensure that the
transferee of a mining lease is an income-tax assessee
and is paying his income tax assessed on him and due
from him on the basis of self-assessment. Sub-rule (3) of
Rule 37 empowers the State Government to determine
any lease at any time if the lessee has, in the opinion of
73
Page 74
the State Government, committed a breach of any of the
provisions of sub-rule (1) or sub-rule (1A) or has
transferred any lease or any right, title, or interest therein
otherwise than in accordance with sub-rule (2) after giving
the lessee a reasonable opportunity of stating his case.
The intent of the Rule-making authority in making these
provisions in Rule 37 is that the liabilities and conditions in
a mining lease are also enforceable against the transferee
and that the transferee pays his dues towards income tax
regularly. Rule 37, therefore, cannot be allowed to be
violated by the lessees with impunity and the State
Government cannot overlook transfers by saying that the
transfers of the mining leases are part of the mining
practice in the State of Goa. In our view, if these
violations of Rule 37 are allowed, there shall be
substantial leakage of revenue and mining operations
cannot be effectively regulated and controlled by the
State Government. The State Government, therefore,
must initiate action against those mining leases who
violate Rule 37 of the Rules.
74
Page 75
50. Rule 38 of the MC Rules provides that the State
Government may, in the interest of mineral
development and with reasons to be recorded in
writing, permit amalgamation of two or more
adjoining leases held by a lessee, provided that the
period of amalgamated leases shall be co-terminus
with the lease whose period will expire first. If the
State Government has not permitted amalgamation
of adjoining leases in the interest of mineral
development and has not recorded the reasons for
such permission, the State Government cannot allow
the amalgamation of the leases.
Was there a complete lack of control on production and transportation of mineral from the mining leases in the State of Goa:
51. The CEC in its report has stated that in the State of
Goa, there is no system of periodic verification of the
quantity of iron ore produced in the mining leases,
the payments of royalty, the permits issued for
transportation of mineral by the Mining Department,
the transit permits issued by the Forest Department
75
Page 76
nor any reconciliation of the quantity of the mineral
stated to have been produced in the mining lease
with the quantity of the mineral for which royalty has
been paid and transit permits have been issued, and
there is no verification of the transit permits at the
check posts and no verification of the quantity of the
mineral exported/domestically used vis-à-vis the
quantity legally produced. According to the CEC, in
the absence of such checks/verifications/controls,
illegal mining can easily be undertaken and the
actual quantity of iron ore produced and transported
from the mining leases may not be accounted for by
the State of Goa or by the lessees, resulting in
leakage of revenue. The CEC in its report has given
a chart to show the difference of figures in the iron
ore exported as provided by the Goan Mineral Ore
Exporters’ Association and the total iron ore
produced in the State of Goa as per reports compiled
by the Indian Bureau of Mines, which is extracted
hereinbelow:
Year Goan Iron Total (In Lakh
76
Page 77
Ore Exports Production MT)
Excess of exports over production
2006-2007 308.940 277.931 31.009 2007-2008 334.334 300.091 34.253 2008-2009 380.752 315.994 64.758 2009-2010 456.869 331.649 125.22 2010-2011 468.464 328.059 140.405 Total 1949.369 1553.724 395.645
According to the CEC, there is every reason to believe that
the excess quantity of 395.645 lakh MT, as shown in the
aforesaid chart, is illegally mined ore.
52. We entirely agree with the CEC report that in the
absence of proper checks, verifications and controls,
there is bound to be illegal mining, storage and
transportation of minerals, but we find that after the
CEC Report, the Goa (Prevention of Illegal Mining,
Storage and Transportation of Minerals) Rules, 2013
have been framed by the State Government under
Section 23(c) of the MMDR Act. A reading of these
Rules show that several provisions have been made
in these rules to prevent illegal mining and to
77
Page 78
regulate the sale, export and transit of ore, storage
of mineral and transportation and winning of mineral.
The rules also provide for establishment of check
posts, barriers and weighbridges and inspection of
minerals in transit. Moreover, these rules empower
any person authorised by the Government to enter,
inspect, search and seize articles. These rules will
have to be strictly enforced by the State Government
and we hope that by such strict enforcement of these
rules, the mining, storage and transportation of
minerals in the State of Goa will get controlled and
regulated and the leakages and evasion of revenue
will, to a large extent, be prevented.
To what extent mining has damaged the environment in Goa and what measures are to be taken to ensure inter-generational equity and sustainable development:
53. Mr. Prashant Bhushan, learned senior counsel
appearing for Goa Foundation, relying on the report of the
Justice Shah Commission, submitted that substantial
damage has been caused to the eco sensitive zone in Goa
by excavating large quantities of iron ore through mining
and as suggested by the Justice Shah Commission action
78
Page 79
should be taken in this regard. He submitted that the
conditions stipulated in the EIA clearances imposed by the
Chief Wildlife Warden, Goa, have not been implemented.
He submitted that the environmental clearance system
has actually collapsed resulting in amassing of wealth by
certain individuals and companies at the cost of the
environment and the eco-system. He submitted that
principles of sustainable development and inter-
generational equity which were part of the fundamental
right under Article 21 of the Constitution, require that a
cap should be put on the annual excavation of iron ore
from different mines in the State of Goa, after taking into
account the need to conserve iron ore resources for future
generations and the carrying capacity of the State of Goa
for mining and transportation of mineral ores.
54. Learned counsel appearing for the lessees, on the
other hand, submitted that there are adequate provisions
in the MCD Rules for preventing damage to the
environment and for restoration of the environment. They
referred to Rules 23A, 23B, 23D and 23E of the MCD Rules
which relate to the mine closure plan which must provide
79
Page 80
for protective measures including reclamation and
rehabilitation work. They submitted that the holder of the
mining lease, therefore, has to take all the protective
measures including reclamation and rehabilitation work
before abandoning the mine. They submitted that
Chapter V of the MCD Rules also contains various
provisions which a holder of mining lease has to comply
and these provisions include precautions for protection of
environment and controlling of pollution while conducting
mining operations in the area. In reply to the submissions
of Mr. Bhushan that there should be a cap on the annual
excavation of mineral ore in the State of Goa to ensure
that future generations are not denied the mineral
resources, Mr. Mukul Rohtagi, learned senior counsel
appearing for Sesa Goa Limited, relied on a publication of
the British Geological Survey and submitted that there
would never be any scarcity of mineral resources and
there would be enough for the future generations. He
submitted that Sesa Goa Limited has also taken steps to
reclaim the land which was damaged through mining
operation and produced photographs to show how
80
Page 81
reclamation and rehabilitation work has been done after
mining was over in any area.
55. Mr. N.S. Nadakarni, learned Advocate General for the
State of Goa, submitted that in the Goa Mineral Policy of
2013, State Government has proposed a capping of the
mineral ores to be excavated annually in the State of Goa
based on the carrying capacity of public roads and the
need to protect inter-generational equity. He submitted
that as per the Goa Mineral Policy of 2013, until the road
capacity in Goa improves, there should be a gross capping
at 45 MT per annum.
56. After considering the aforesaid submissions of
learned counsel for the parties, we took the view that a
Committee of Experts must conduct a macro EIA study
and propose ceiling of the annual excavation of iron ore
from the State of Goa, considering its iron ore resources
and its carrying capacity and keeping in mind the
principles of sustainable development and inter-
generational equity and all other relevant factors.
Accordingly, by orders dated 11.11.2013 and 18.11.2013,
we constituted an Expert Committee comprising Professor
81
Page 82
C.R. Babu (Ecologist), Dr. S.D. Dhiman (Geologist/Hydro-
geologist), Professor B.K. Mishra (Mineralogist), Professor
S. Parameshwarppa (Forestry), Shri Parimal Rai (Nominee
of the Ministry of Environment and Forests, Government of
India). This Expert Committee has submitted an interim
report dated 14.03.2014. In this report, the Expert
Committee has indicated that the economy of Goa
depends on tourism and iron ore mining, besides
agriculture, horticulture and minor industries, but in
recent years, while there has been increase in the growth
rate in tourism and mining, there has been a decline in
the growth rate of agriculture and fishing. The Expert
Committee has in particular highlighted the damage that
has been done by increase in the production of iron ore
through mining to the environment in Goa in the following
words:
“The production of iron ore has jumped from 14.6 million tons in 1941 to 41.17 million tons in 2010-11. In 1980’s the production was about 10 MT/annum. The quantum jump in iron ore production in Goa was essentially due to steep rise in exports of fines and other low grade ore of 42% Fe content to China. This has led to massive negative
82
Page 83
impacts on all ecosystems leading to enhanced air, water, and soil pollution affecting quality of life across Goa. This is evident by three important reports i.e. (i) Area wide Environmental Quality Management (AEQM) Plan for the Mining belt of Goa by Tata Energy Research Institute, New Delhi and Goa (1997) and it was submitted to the Directorate of Planning, Statistics, and Evaluation, Government of Goa, (ii) Environmental and Social Performance Indicators and Sustainability Markers in Minerals Development Reporting progress towards improved Ecosystem Health and Human Well-being, Phase-III by TERI and International Development Research Centre, Ottawa, Canada (2006) and (iii) the Regional Environmental Impact Study of iron ore mining in Goa region sponsored by MoEF, New Delhi (2014) by Indian School of Mines. Besides the above three main Reports, a number of scientific research papers on the impact of iron ore mining on the environment and ecology of diverse ecosystems were published by scientists working at Goa university and NIO.
These reports and publications substantiates that the mining, particularly the enhanced level of annual production contributed to adverse impacts on the ecological systems, socio economics of Goa and health of people of Goa leading to loss of ecological integrity. This is due to enhanced levels of pollutants, particularly RSPM and SPM, sedimentation of materials from dumps and iron ore in rivers, estuaries and
83
Page 84
shallow depth (20m) of sea water, agricultural fields, high concentration of Fe and Mn in surface waters and their bioaccumulation.”
The Expert Committee has also studied the sustainability
of iron ore mining in the Goa and after analyzing the
existing data from TERI report, 1997, ISM, Dhanbad
Report, 2013, Pollution Control Board, Goa (Annual
Report) and relevant literature relating to sustainability
and after adopting the Folchi method has given the
opinion that mining at the rate of 20 to 27.5 million tons
per annum appears sustainable in the State of Goa.
However, in its summary of recommendations, the Expert
Committee has made these recommendations:
“10. To eliminate the element of subjectivity, due to the time constraints and limitation of available authentic time series data relating to mineral resources and environmental impact of mining in the State of Goa, this Committee suggests that mining be permitted to be carried out at the level of 20 million ton per annum with adequate monitoring of impacts on different ecological and environmental parameters, which will also help this Committee in its future appraisal.
84
Page 85
11. Till the scientific study by this Committee is completed, which may take about 12 months more, the mining activity at levels as directed by the Hon’ble Supreme Court, be strictly monitored and regulated by the Department of Mines and Geology and Goa State Pollution Control Board of the State of Goa, in consultation with other statutory bodies such as Indian Bureau of Mines, Ministry of Environment and Forests (Govt. of India) and others.”
It, thus, appears that the Expert Committee has suggested
that for the time being annual excavation of 20 million
tons of iron ore may be permitted in Goa with adequate
monitoring impacts on different ecological and
environmental parameters, which will also help the Expert
Committee in its future appraisal. Regarding the
authorities or agencies which should strictly monitor and
regulate the mining activities in Goa, the Expert
Committee has recommended that the Department of
Mines and Geology of Government of Goa and the Goa
State Pollution Control Board in consultation with other
statutory bodies such as Indian Bureau of Mines, Ministry
of Environment and Forests (Government of India) should
carry on such monitoring and regulation strictly. The
Expert Committee, however, has said nothing about how
85
Page 86
the mining dumps inside or outside the leased areas
noticed by the Justice Shah Commission are to be dealt
with presumably because in our order dated 11.11.2013
we had not issued any direction in this regard. We think
that we should seek the opinion of the Expert Committee
in this regard.
57. We find that the State Government has also engaged
the services of NEERI for macro level EIA study for Clusters
of Iron Ore Mines in the State of Goa, but NEERI in its
preliminary report has not recommended as to what
should be the total quantum of annual production of iron
ore in Goa in future. We also find that Ministry of
Environment and Forests, Government of India had
entrusted the Indian School of Mines (ISM), Dhanbad to
carry out a regional environment impact assessment
study of mining in Goa region and ISM, Dhanbad has
submitted its report proposing a cap of 24.995 MT per
annum on the basis of the carrying capacity of the existing
infrastructure of Goa. Relevant portion of the report of
ISM, Dhanbad, is extracted hereinbelow:
“20.7.4.7 Cluster Wise Capping on Transport
86
Page 87
The cap of 24.995MTPA proposed in the aforementioned section is dependent primarily on the existing infrastructure and must be followed based on the spatial variations. To present an overall capacity of mining in North Goa and South Goa, the road capacity has been taken as a parameter. The capacity was arrived at 13.685MTPA for North Goa and 11.31MTPA for South Goa. The cap proposed will not include the mines lying within the buffer zones as these have imposed restriction of phasing out in time bound period. Further, this cap can be represented into a cluster wise scenario to decipher how much each cluster will be able to transport under the existing transport facilities. The values are presented in table below.
Table 20.7.19: Cluster Wise Capping on Transport Based on Existing Transport Facilities
Cluster Routes Capacity of the Routes (MTPA)
Capacity of the Cluster (MTPA)
Adwalpal- Bicholim
Adwalpale to Sirsai Jetty
0.81 5.875
Shrigao to Sirsai Jetty
1.26
Shrigao to Kalvin Jetty
1.16
Dahbdhaba to Sarmanas
2.645
Velguem- Pissurlem
Sonshi to Amona Jetty
2.11 7.9
Sanquelim to Amona Jetty
0.52
Honda to Navelim(Maina
1.32
Sonshi to Khazan Jetty
1.32
87
Page 88
Ambesi to Cotambi Jetty
1.29
Digneum to Surla Jetty
1.34
Codli-Costi Codli to Amona Jetty
1.94 4.69
Codli to Capxem Jetty
1.24
Costi to Sanvordem
1.51
Collem Collem to Amona Jetty
1.94 2.76
Shigao to Sanvordem
0.82
Tollem Tollem to Shelvona Jetty
1.71 1.71
Maina- Sulcorna
Sulcorna to Shelvona Jetty
1.02 2.06
Maina to Shelvona
1.04
Total capacity of the Region 24.995
Thus, the cumulative ore transportation capacity of the
existing road networks is 24.995MTPA.”
We, therefore, find that the Expert Committee as well as
ISM, Dhanbad, after considering the available data and
after considering the adverse impact on environment and
the limited carrying capacity of the transport system in
Goa, are of the opinion that a cap between 20 to 27.5
million tons per annum should be fixed for excavation of
iron ore in the State of Goa. In its recommendations,
however, the Expert Committee has suggested that till the
88
Page 89
scientific study by the Expert Committee is completed in
about 12 months or so, and more of data including
impacts on different ecological environmental parameters
is available through monitoring of the impacts by different
agencies including the Goa State Pollution Control Board,
20 million tons per annum should be fixed as the annual
excavation of iron ore in Goa.
58. Even this mining of 20 million tons per annum in the
State of Goa, according to the Expert Committee, has to
be strictly monitored and regulated by the Department of
Mines and Geology, Government of Goa and the Goa State
Pollution Control Board in consultation with other statutory
bodies such as the Indian Bureau of Mines, the Ministry of
Environment and Forests (Government of India) and
others. It was the responsibility of the Government of
Goa, Department of Mines, to enforce the provisions of the
MMDR Act, the MC Rules and the MCD Rules, but as we
have already noticed, this responsibility was not properly
discharged. We hope that in future, it will enforce the
provisions of the MMDR Act, the MC Rules, the MCD Rules
89
Page 90
and the Goa (Prevention of Illegal Mining, Storage and
Transportation of Minerals) Rules, 2013.
59. The Goa State Pollution Control Board has immense
powers under the Water (Prevention & Control of Pollution)
Act, 1974 (for short ‘the 1974 Act’) to prevent pollution of
water. Section 33A of the 1974 Act which confers on the
State Pollution Control Board the power to give directions
is quoted hereinbelow:
“33A. Power to give directions.— Notwithstanding anything contained in any other law, but subject to the provisions of this Act, and to any directions that the Central Government may give in this behalf, a Board may, in the exercise of its powers and performance of its functions under this Act, issue any directions in writing to any person, officer or authority, and such person, officer or authority shall be bound to comply with such directions.
Explanation.—For the avoidance of doubts, it is hereby declared that the power to issue directions under this section includes the power to direct— (a) the closure, prohibition or regulation of any industry, operation or process; or
(b) the stoppage or regulation of supply of electricity, water or any other service.”
90
Page 91
Similarly, the Air (Prevention and Control of Pollution) Act,
1981(for short ‘the 1981 Act’) confers immense powers on
the State Pollution Control Board to prevent air pollution.
Section 31A of the 1981 Act which confers powers on the
State Pollution Control Board to give directions is quoted
hereinbelow:
“31A. Power to give directions.— Notwithstanding anything contained in any other law, but subject to the provisions of this Act, and to any directions that the Central Government may give in this behalf, a Board may, in the exercise of its powers and performance of its functions under this Act, issue any directions in writing to any person, officer or authority, and such person, officer or authority shall be bound to comply with such directions.
Explanation.—For the avoidance of doubts, it is hereby declared that the power to issue directions under this section includes the power to direct—
(a) the closure, prohibition or regulation of any industry, operation or process; or
(b) the stoppage or regulation of supply of electricity, water or any other service.”
60. It will be clear from the aforesaid provisions of
Section 33A of the 1974 Act and Section 31A of the 1981
91
Page 92
Act that the Goa State Pollution Control Board had powers
to issue any direction including the power to close,
prohibit or regulate mining operations or even to stop or
regulate supply of electricity, water or any other service
with a view to prevent water pollution or air pollution. Yet,
from the report of the Expert Committee as well as the
reports of ISM, Dhanbad and NEERI, it is clear that iron ore
production in Goa has led to massive negative impacts on
all ecosystems leading to enhanced air, water and soil
pollution affecting quality of life across Goa. The Goa
State Pollution Control Board in its note filed in Writ
Petition (C) No.435 of 2012, however, states:
“Details of monitoring of water quality (with regards to mining leases) from 2007 to 2012 – The Board conducts inspections during the monsoon and other seasons also to verify the discharge of surface runoff/discharge from the pit outside the mining lease and also collects samples for analyzing in the Board Laboratory. Wherever the parameters exceed the prescribed limits necessary directions are issued to the mining units to take remedial measures for controlling the waste water being discharged into the water bodies/fields without treatment. Directions are also issued to provide settling ponds, arrestor walls, filter beds so as to ensure that no untreated waste
92
Page 93
water is discharged into the water bodies/fields.
Details of monitoring of air quality (with regards to mining leases) from 2007 to 2012 – The Board is presently carrying out the periodic monitoring of Air Quality in pre-selected areas throughout the State to comply with one of the mandates of the Central Pollution Control Board (CPCB) under National Ambient Monitoring Programme (NAMP) at 16 stations.”
We do not agree with Mr. Arvind Datar, learned senior
counsel for the Goa State Pollution Control Board, that
sincere efforts were made by the Pollution Control Board
to monitor the water quality and air quality in the mining
areas. Rather, it appears that the Goa State Pollution
Control Board, though conferred with immense statutory
powers, has failed to discharge its statutory functions and
duties. We hope that in future the Goa State Pollution
Control Board exercises strict vigil and monitors the water
quality and air quality in accordance with the provisions of
the two Acts and if necessary, exercises the powers
conferred on it to close down mining operation of a lessee,
if the lessee does not conform to the air emission and
water discharge standards while carrying on mining
93
Page 94
operations and does not take other preventive measures
as directed by the State Pollution Control Board.
61. Regarding the regulation by the Ministry of
Environment and Forests, in our order dated 06.01.2014
passed in I.A. Nos.1868, 2091, 2225-2227, 2380, 2568 and
2937 in Writ Petition (Civil) No.202 of 1995 (T.N.
Godavarman Thirumulpad v. Union of India & Ors.), we
have already directed Union of India to appoint a
Regulator with offices in as many States as possible under
sub-section (3) of Section 3 of the Environment
(Protection) Act, 1986 as directed in the order in the case
of Lafarge Umiam Mining Private Limited. As and when
the Union of India appoints a Regulator under sub-section
(3) of Section 3 of the Environment (Protection) Act, 1986
with an office for Goa in compliance with the aforesaid
direction of this Court, the Regulator so appointed will
carry out its functions in accordance with the order passed
under sub-section (3) of Section 3 of the Environment
(Protection) Act, 1986.
62. Regulatory and monitoring measures enforced by the
Departments of Mines and Geology, the Goa State
94
Page 95
Pollution Control Board and the Regulator appointed by
the Central Government under sub-section (3) of Section 3
of the Environment (Protection) Act, 1986 cannot,
however, restore entirely the environment that is
damaged in course of mining operations. The Expert
Committee has, therefore, recommended that a
permanent fund for inter-generational equity and
sustainability of mining for all times to come named as
“Goan Iron Ore Permanent Fund” be created and an
expert group may be constituted by the State for working
out the details of this fund. Mr. Harish Salve, learned
Amicus Curiae, submitted that as the lessees of mining
leases earn out of the sale proceeds of the iron ore
excavated by them, they should be directed to contribute
10% of the sale proceeds of all iron ore excavated in the
State of Goa and sold by them towards the Goan Iron Ore
Permanent Fund. He cited the judgment of this Court in
Samaj Parivartana Samudaya and Ors. v. State of
Karnataka and Ors. (supra) in which this Court has
similarly directed for creation of a Special Purpose Vehicle
out of 10% of the sale proceeds of the ore sold by e-
95
Page 96
auction. There is a lot of force in the aforesaid submission
of Mr. Salve.
63. We find from the report of the Expert Committee that
the State of Goa heavily depends on iron ore mining for
revenue as well as employment. The legislative policy
behind the MMDR Act made by Parliament is mineral
development through mining. The State Government of
Goa has also adopted the executive policy to encourage
mining of minerals in Goa. Moreover, as Mr. Ravi Shankar
Prasad, learned senior counsel appearing for 33
Panchayats, has submitted about 1.5 lakh people are
directly employed in mining in Goa and large number of
persons have taken bank loans and purchased trucks for
transportation of iron ore. Hence, people who earn their
livelihood through work in connection with mining will be
seriously affected if mining is totally banned to protect the
environment. We cannot, therefore, prohibit mining
altogether, but if mining has to continue, the lessees who
benefit the most from mining, must contribute from their
sale proceeds to the Goan Iron Ore Permanent Fund for
sustainable mining. Accordingly, in exercise of our powers
96
Page 97
under Article 32 read with Article 21 of the Constitution,
we direct that henceforth 10% of the sale proceeds of iron
ore excavated in the State of Goa and sold by the lessees
must be appropriated towards the Goan Iron Ore
Permanent Fund for the purpose of sustainable
development and inter-generational equity and the State
of Goa in consultation with the CEC will frame a
comprehensive scheme in this regard and submit the
same to this Court within six months.
Whether in future the mining leases are to be auctioned or have to be granted in accordance with the policy of the State and the provisions of the MMDR Act and the MC Rules?
64. Mr. Prashant Bhushan, learned counsel for Goa
Foundation, submitted that in Article 39(b) of the
Constitution, it is provided that the ownership and control
of the material resources of the community should be so
distributed so as to best subserve the common good and,
therefore, the State cannot distribute the material
resource of the community in any way it likes. He
submitted that in Centre for Public Interest Litigation &
Ors. v. Union of India & Ors. [(2012) 3 SCC 1], a two-Judge
97
Page 98
Bench of this Court has held relying on Article 39(b) of the
Constitution that the State is the legal owner of the
natural resources as a trustee of the people and although
it is empowered to distribute the same, the process of
distribution must be guided by the constitutional principles
including the doctrine of equality and larger public good.
He submitted that in the aforesaid case, the two Judge
Bench has further held that a duly publicized auction
conducted fairly and impartially is perhaps the best
method for discharging this burden and methods like ‘first-
come-first-served’ when used for alienation of natural
resources/public property are likely to be misused by
unscrupulous people who are only interested in garnering
maximum financial benefit and have no respect for the
constitutional ethos and values. He relied on the
conclusion of the two Judge Bench of this Court in the
aforesaid case that while transferring or alienating the
natural resources, the State is duty-bound to adopt the
method of auction by giving wide publicity so that all
eligible persons can participate in the process. He
submitted that as MMDR Act does not prohibit the State
98
Page 99
from holding auction of the mining leases, this Court
should direct that in future the mining leases must be
auctioned by the State Government.
65. Learned counsel for the lessees and the learned
Advocate General, on the other hand, submitted that the
MMDR Act and the MC Rules have made specific
provisions regarding the manner in which the State is to
grant mining leases and it is for the State to take decisions
on grant of mining leases in accordance with the policy
and the provisions of the MMDR Act and the MC Rules.
They cited the opinion of the Constitution Bench of this
Court in Natural Resources Allocation, In Re, Special
Reference No.1 of 2012 [(2012) 10 SCC 1] that auction
despite being a more preferable method of
alienation/allotment of natural resources, cannot be held
to be a constitutional requirement or limitation for
alienation of all natural resources and, therefore, every
method other than auction cannot be struck down as ultra
vires the constitutional mandate.
99
Page 100
66. We are of the considered opinion that it is for the
State Government to decide as a matter of policy in what
manner the leases of these mineral resources would be
granted, but this decision has to be taken in accordance
with the provisions of the MMDR Act and the Rules made
thereunder and in consonance with the constitutional
provisions and the decision taken by the State of Goa to
grant a mining lease in a particular manner or to a
particular party can be examined by way of judicial review
by the Court. To quote the opinion of four Judges out of
five Judges expressed by D.K. Jain J. in Natural Resources
Allocation, In Re, Special Reference No.1 of 2012 (supra):
“Alienation of natural resources is a policy decision, and the means adopted for the same are thus, executive prerogatives. However, when such a policy decision is not backed by a social or welfare purpose, and precious and scarce natural resources are alienated for commercial pursuits of profit maximising private entrepreneurs, adoption of means other than those that are competitive and maximise revenue may be arbitrary and face the wrath of Article 14 of the Constitution. Hence, rather than prescribing or proscribing a method, we believe, a judicial scrutiny of methods of disposal of natural resources should depend on the facts and circumstances of each case, in
10
Page 101
consonance with the principles which we have culled out above. Failing which, the Court, in exercise of power of judicial review, shall term the executive action as arbitrary, unfair, unreasonable and capricious due to its antimony with Article 14 of the Constitution.”
Whether suspension of mining operations in the State of Goa by order dated 10.09.2012 of the Government of Goa and the suspension of the Environmental Clearances granted to the mines in the State of Goa by order dated 14.09.2012 were legal and valid?
67. As we have held that the deemed mining leases of
the lessees in Goa expired on 22.11.1987 and the
maximum period (20 years) of renewal of the deemed
mining leases in Goa has also expired on 22.11.2007,
mining by the lessees in Goa after 22.11.2007 was illegal.
Hence, the order dated 10.09.2012 of the Government of
Goa suspending mining operations in the State of Goa and
the order dated 14.09.2012 of the MoEF, Government of
India, suspending the environmental clearances granted
to the mines in the State of Goa, which have been
impugned in the writ petitions in the Bombay High Court,
Goa Bench (transferred to this Court and registered as
10
Page 102
transferred cases) cannot be quashed by this Court. The
order dated 10.09.2012 of the Government of Goa and the
order dated 14.09.2012 of the MoEF will have to continue
till decisions are taken by the State Government to grant
fresh leases and decisions are taken by the MoEF to grant
fresh environmental clearances for mining projects.
68. On 05.10.2012, this Court while issuing notice in Writ
Petition (C) No.435 of 2012 (Goa Foundation vs. Union of
India & Others) also passed orders that all mining
operations in the leases identified in the report of the
Justice Shah Commission and transportation of iron ore
and manganese ore from those leases, whether lying at
the mine-head or stockyards, shall remain suspended.
Thereafter on 11.11.2013, this Court passed an order that
the inventory of the excavated mineral ores lying in
different mines/stockyards/jetties/ports in the State of Goa
made by the Department of Mines and Geology of the
Government of Goa be verified and thereafter the whole of
the inventorised mineral ores be sold by e-auction and the
sale proceeds (less taxes and royalty) be retained in
separate fixed deposits (lease-wise) by the State of Goa
10
Page 103
till this Court delivers judgment in these matters on the
legality of the leases from which the mineral ores were
extracted. In our order passed on 11.11.2013, we had
also directed that this entire process of verification of the
inventory, e-auction and deposit of sale proceeds be
monitored by a Monitoring Committee appointed by the
Court. The Monitoring Committee comprising Dr. U.V.
Singh (Additional Principal Chief Conservator of Forests,
Karnataka), Shri Shaikh Naimuddin (former Member of
Central Board of Direct Taxes) and Parimal Rai (Nominee
of Govt. of Goa) have in the meanwhile monitored the e-
auction. We extract hereinbelow the relevant portion of
the interim report dated 12.03.2014 of the Monitoring
Committee:
“After the two e-auctions, the total ore auctioned is about 1.62 million MT and the total value realized is 260.68 crores approximately. As directed by this Hon’ble Court, the State Government has been requested to maintain separate accounts, lease wise, and keep the sale proceeds as fixed deposits in Nationalized Banks.
The process of transportation of ore for export has not yet been initiated because of the storage charges being demanded from the successful bidder by
10
Page 104
the Marmagoa Port Trust (MPT). As a result, the process of e-auction is likely to slow down. The extent of storage charges demanded is as per Annexure MC III.”
69. As we have held that renewal of all the deemed
mining leases in the State of Goa had expired on
22.11.2007, the mining lessees will not be entitled to the
sale value of the ores sold in e-auction but they will be
entitled to the approximate cost (not actual cost) of the
extraction of the ores. On account of suspension of
mining operations in the State of Goa, the workers who
were employed by the lessees claim that they have not
been paid their wages. Under Section 25C of the
Industrial Disputes, Act, 1947, when a workman whose
name is borne on the muster rolls of an industrial
establishment and who has completed not less than one
year of continuous service under an employer is laid-off,
he is entitled to be paid by the employer for all the days
which he is so laid-off, except for such weekly holidays as
may intervene, compensation which shall be equal to 50%
of the total of the basic wages and dearness allowance
that would have been payable to him had he not been so
10
Page 105
laid-off. Following this principle of lay-off compensation,
we hold that workers who could not be paid wages by the
lessees will have to be paid compensation at the rate of
50% of their basic wages and dearness allowance during
the period of non-employment on account of suspension of
mining operations. Moreover, Marmagoa Port Trust will
have to be paid 50% of their charges for storage of the
mineral ores after 05.10.2012.
70. The entire sale value of the stock of mineral ores sold
by e-auction less the average cost of excavation, 50% of
the wages and allowances and 50% of the storage charges
to be paid to MPT is thus due to State Government which
is the owner of the mineral ores which have been sold by
e-auction. The State Government will set-aside 10% of
this balance amount for the Goan Iron Ore Permanent
Fund for the purpose of sustainable development and
inter-generational equity. This entire exercise of
calculating the average cost of extraction of ores to be
paid to the mining lessees, 50% of the basic wages and
dearness allowance to be paid to the workers, 10% of the
balance amount towards the Goan Iron Ore Permanent
10
Page 106
Fund and the balance amount to be appropriated by the
State Government will be done by the Director of Mines
and Geology, Government of Goa, under the supervision of
the Monitoring Committee. Till this exercise is over and
the report of the Monitoring Committee is filed, the
Monitoring Committee will continue and their members
will be paid their remuneration allowances as directed in
the order dated 11.11.2013.
71. In the result, we declare that:
(i) the deemed mining leases of the lessees in Goa expired on 22.11.1987 and the maximum of 20 years renewal period of the deemed mining leases in Goa expired on 22.11.2007 and consequently mining by the lessees after 22.11.2007 was illegal and hence the impugned order dated 10.09.2012 of Government of Goa and the impugned order dated 14.09.2012 of the MoEF, Government of India are not liable to be quashed;
(ii) dumping of minerals outside the leased area of the mining lessees is not permissible under the MMDR Act and the Rules made thereunder;
10
Page 107
(iii) until the order dated 04.08.2006 of this Court is modified by this Court in I.A. No.1000 in T.N. Godavarman Thirumulpad v. Union of India & Ors., there can be no mining activities within one kilometer from the boundaries of National Parks and Sanctuaries in Goa;
(iv) by the order dated 04.12.2006 in Writ Petition (C) No.460 of 2004 (Goa Foundation v. Union of India), this Court has not prohibited mining activities within 10 kilometers distance from the boundaries of the National Parks or Wildlife Sanctuaries;
(v) it is for the State Government to decide as a matter of policy in what manner mining leases are to be granted in future but the constitutionality or legality of the decision of the State Government can be examined by the Court in exercise of its power of judicial review.
And we direct that:
(i) MoEF will issue the notification of eco-sensitive zones around the National Park and Wildlife Sanctuaries of Goa after following the procedure discussed in this judgment within a period of six months from today;
(ii) the State Government will initiate action against those mining lessees who violate Rules 37 and 38 of the MC Rules;
10
Page 108
(iii) the State Government will strictly enforce the Goa (Prevention of Illegal Mining, Storage and Transportation of Minerals) Rules, 2013;
(iv) the State Government may grant mining leases of iron ore and other ores in Goa in accordance with its policy decision and in accordance with MMDR Act and the Rules made thereunder in consonance with the constitutional provisions;
(v) until the final report is submitted by the Expert Committee, the State Government will, in the interests of sustainable development and intergenerational equity, permit a maximum annual excavation of 20 million MT from the mining leases in the State of Goa other than from dumps;
(vi) the Goa Pollution Control Board will strictly monitor the air and water pollution in the mining areas and exercise powers available to it under the 1974 Act and 1981 Act including the powers under Section 33A of the 1974 Act and Section 31A of the 1981 Act and furnish all relevant data to the Expert Committee;
(vii) the entire sale value of the e-auction of the inventorised ores will be forthwith realised and out of the total sale value, the Director of Mines and Geology, Government of Goa, under the supervision of the Monitoring Committee will make the following payments:
10
Page 109
(a) Average cost of excavation of iron ores to the mining lessees;
(b) 50% of the wages and dearness allowance to the workers in the muster rolls of the mining leases who have not been paid their wages during the period of suspension of mining operations;
(c) 50% of the claim towards storage charges of MPT.
Out of the balance, 10% will be appropriated towards the Goan Iron Ore Permanent Fund and the remaining amount will be appropriated by the State Government as the owner of the ores;
(viii) the Monitoring Committee will submit its final report on the utilization and appropriation of the sale proceeds of the inventorised ores in the manner directed in this judgment within six months from today;
(ix) henceforth, the mining lessees of iron ore will have to pay 10% of the sale price of the iron ore sold by them to the Goan Iron Ore Permanent Fund.
(x) the State Government will within six months from today frame a comprehensive scheme with regard to the Goan Iron Ore Permanent Fund in consultation with the CEC for sustainable development and
10
Page 110
intergenerational equity and submit the same to this Court within six months from today; and
(xi) the Expert Committee will submit its report within six months from today on how the mining dumps in the State of Goa should be dealt with and will submit its final report within twelve months from today on the cap to be put on the annual excavation of iron ore in Goa.
70. With the aforesaid declarations and directions, Writ
Petition (C) No.435 of 2012 is allowed. The Transferred
Cases and IA filed by MPT as well as other IAs also stand
disposed of. The interim order dated 05.10.2012 of this
Court is vacated. These matters will be listed as and when
the Monitoring Committee and the Expert Committee
submit their final reports and the State Government
submits the scheme for the Goan Iron Ore Permanent
Fund. The parties shall bear their own costs.
....……………..……………………….J. (A. K. Patnaik)
…...…………..………………………..J.
(Surinder Singh Nijjar)
11
Page 111
…....…………..………………………..J. (Fakkir Mohamed Ibrahim Kalifulla)
New Delhi, April 21, 2014.
11