88 iron ore mining leases granted 2nd renewal by Government in Goa cancelled by Supreme Court

February 7, 2018

A Bench of Supreme Court Judges Justice Madan B Lokur and Justice Deepak Gupta passed Judgment in The Goa Foundation v. M/s Sesa Sterlite Ltd & Ors, SLP (C) 32138 of 2015 and SLP No. 32699-32727, Writ Petition (C) No. 711 of 2015 and 720 of 2015.

The Judgment starts with "Rapacious and rampant exploitation of our natural resources is the hallmark of our iron ore mining sector - coupled with a total lack of concern for the environment and the health and well-being of the denizens in the vicinity of the mines. The sole motive of mining lease holders seems to be to make profits (no matter how) and the attitude seems to be that if the rule of law is required to be put on the backburner, so be it. Unfortunately, the State is unable to firmly stop violations of the law and other illegalities, perhaps with a view to maximize revenue, but without appreciating the long term impact of this indifference. Another excuse generally put forth by the State is that of development, conveniently forgetting that development must be sustainable and equitable development and not otherwise."

"Effective implementation and in some instances circumvention of the mining and environment related laws is a tragedy in itself. Laxity and sheer apathy to the rule of law gives mining lease holders a field day, being the primary beneficiaries, with the State being left with some crumbs in the form of royalty. For the State to generate adequate revenue through the mining sector and yet have sustainable and equitable development, the implementation machinery needs a tremendous amount of strengthening while the law enforcement machinery needs strict vigilance. Unless the two marry, we will continue to be mute witnesses to the plunder of our natural resources and left wondering how to retrieve an irretrievable situation."

The facts of the case is that the Government of India received information of large-scale illegal mining of iron ore and manganese ore in different States in contravention of the provisions of the Mines and Minerals (Development and Regulation) Act, 1957 (the MMDR Act), the Forest (Conservation) Act, 1980, the Environment (Protection) Act, 1986 and other rules and guidelines issued on the subject from time to time. Acting on this information, the Government of India appointed Justice M.B. Shah a former judge of this Court as a commission of inquiry under Section 3 of the Commissions of Inquiry Act, 1952 by a notification dated 22nd November, 2010.

Justice Shah visited Goa and after calling for and receiving information from the concerned authorities as well as the mining lease holders, he submitted a report on 15th March, 2012 and another on 25th April, 2012 to the Ministry of Mines in the Government of India. The reports were tabled in Parliament on 7th September, 2012 along with an Action Taken Report and as a result, the Government of Goa passed an order dated 10th September, 2012 suspending all mining operations in the State with effect from 11th September, 2012. The Ministry of Environment and Forests (MoEF) of the Government of India acted similarly and kept in abeyance the environmental clearances granted to 139 mines (actually 137 mines - thereis some duplication) in the State of Goa by an order dated 14th September, 2012.

Subsequent to the reports given by Justice Shah, a writ petition was filed by Goa Foundation in Supreme Court being WP (C) No. 435 of 2012. The writ petition was a public interest litigation praying, inter alia, for directions to the Union of India and the State of Goa to take steps to terminate the mining leases where mining was carried out in violation of various statutes. Similarly, several mining lease holders preferred writ petitions in the Bombay High Court for a declaration that the reports given by Justice Shah are illegal and also for quashing the orders dated 10th September, 2012 and 14th September, 2012 whereby mining operations were suspended and environmental clearances were kept in abeyance. The writ petitions filed in the High Court were transferred to this Court for hearing along with WP (C) No. 435 of 2012.

The Supreme Court heard all these matters and rendered its decision in Goa Foundation v. Union of India on 21st April 2014. Among other conclusions arrived at, it was held by the Court that all the iron ore and manganese ore leases had expired on 22nd November, 2007. Consequently, any mining operation carried out by the mining lease holders after that date was illegal. It was also held that all the mining lease holders had enjoyed a first deemed renewal of the mining lease and for a second renewal an express order was required to be passed in view of and in terms of Section 8(3) of the MMDR Act. For a second renewal of the mining lease, it was held that the State Government must apply its mind and record reasons for renewal being in the interest of mineral development and the necessity to renew the mining lease. Any decision taken by the State Government should also be in conformity with the constitutional provisions. The decision taken by the State of Goa to grant a mining lease in a particular manner or to a particular party could be examined by way of judicial review. It was also held that the orders dated 10th September, 2012 and 14th September, 2012 are not liable to be quashed and that they would continue till decisions are taken to grant fresh leases and fresh environmental clearances for mining projects Goa.

During the pendency of the proceedings before the Court, the State of Goa announced the draft Goa Mineral Policy on 21st August, 2012. After suggestions etc. were received, the Mineral Policy was finalized and gazetted on 28th September, 2013. Notwithstanding this serious indictment of the pre-existing "policy" for mining natural resources in Goa, the Mineral Policy did not address itself to the allocation or distribution of the natural resources in any of its 20 paragraphs and many sub-paragraphs. The topics dealt with in the Mineral Policy include objectives and parameters, sustainable mining and mineral conservation, mineral administration, regulation of mines and minerals, pollution and its social impact, and policy highlights. Some of the other topics dealt with in the Mineral Policy include capping, based on carrying capacity of public roads and to protect inter-generational equity, mines safety and rehabilitation of affected people, stakeholder participation (including corporate social responsibility), welfare and social responsibilities and establishment of the Goa Minerals Development Fund etc.

During the pendency of the writ petition in the Court, the MoEF constituted an Expert Appraisal Committee (EAC) on 21st March, 2013 with Shri Vishwanath Anand, former Secretary in the MoEF as the Chairman to specifically look into issues related to illegal mining in the State of Goa. The EAC gave its report sometime in October 2013 with regard to 137 mining leases. Very briefly, the EAC found many of the mining lease holders had: (i) No approval from the National Board of Wildlife; or (ii) Indulged in excess mining; or (iii) Indulged in dump mining; or (iv) Intersected groundwater level; or (v) No clearance from the Central Ground Water Board to draw ground water; or (vi) No forest clearance. We may also note that the EAC also recommended the revocation of environmental clearance granted to several mining lease holders for a variety of reasons.

The Mineral Policy and the report of the EAC were perhaps placed before the Court in the writ petition filed by Goa Foundation and the transferred cases, but not dealt with, except for a brief mention of the Mineral Policy. All the cases before the Court were heard quite extensively in September, October and November 2013. Judgment was reserved on 11th November, 2013 and pronounced on 21st April, 2014.

While disposing of the petitions the court made the following conclusions and directions:

1. As a result of the decision, declaration and directions of this Court in Goa Foundation, the State of Goa was obliged to grant fresh mining leases in accordance with law and not second renewals to the mining lease holders.

2. The State of Goa was not under any constitutional obligation to grant fresh mining leases through the process of competitive bidding or auction.

3. The second renewal of the mining leases granted by the State of Goa was unduly hasty, without taking all relevant material into consideration and ignoring available relevant material and therefore not in the interests of mineral development. The decision was taken only to augment the revenues of the State which is outside the purview of Section 8(3) of the MMDR Act. The second renewal of the mining leases granted by the State of Goa is liable to be set aside and is quashed.

4. The Ministry of Environment and Forest was obliged to grant fresh environmental clearances in respect of fresh grant of mining leases in accordance with law and the decision of this Court in Goa Foundation and not merely lift the abeyance order of 14th September, 2012.

5. The decision of the Bombay High Court in Lithoferro v. State of Goa (and batch) giving directions different from those given by this Court in Goa Foundation is set aside.

6. The mining lease holders who have been granted the second renewal in violation of the decision and directions of this Court in Goa Foundation are given time to manage their affairs and may continue their mining operations till 15th March, 2018. However, they are directed to stop all mining operations with effect from 16th March, 2018 until fresh mining leases (not fresh renewals or other renewals) are granted and fresh environmental clearances are granted.

7. The State of Goa should take all necessary steps to grant fresh mining leases in accordance with the provisions of the Mines and Minerals (Development and Regulation) Act, 1957. The Ministry of Environment and Forest should also take all necessary steps to grant fresh environmental clearances to those who are successful in obtaining fresh mining leases. The exercise should be completed by the State of Goa and the Ministry of Environment and Forest as early as reasonably practicable.

8. The State of Goa will take all necessary steps to ensure that the Special Investigation Team and the team of Chartered Accountants constituted pursuant to the Goa Grant of Mining Leases Policy 2014 give their report at the earliest and the State of Goa should implement the reports at the earliest, unless there are very good reasons for rejecting them.

9. The State of Goa will take all necessary steps to expedite recovery of the amounts said to be due from the mining lease holders pursuant to the show cause notices issued to them and pursuant to other reports available with the State of Goa including the report of Special Investigation Team and the team of Chartered Accountants.

Read the Judgment of Supreme Court of India in The Goa Foundation v. M/s Sesa Sterlite Ltd & Ors dated 7.2.2018