2015 (8) TMI 723 - SC - Indian Laws

Termination of the mining leases of lessees involved in mining - 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 - Held that - As the State Government of Goa has taken a stand 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 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. 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 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 subsection (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. 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 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. - 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 . 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. - notification issued under subrule (3) of Rule 5 of the Environment (Protection) Rules 1986 requiring prior environmental clearance covers the 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. - No merit in the contention of learned counsel for the lessees that they can dump mining waste outside the leased area. 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. - 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. - submissions of lessees that until a notification is issued under the Environment (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. 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. - 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. 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 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. 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. 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 laid-off. 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 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. - Decided in favour of Appellant.

Summary

Issues Involved:
1. Validity of mining leases in Goa.
2. Legality of the Justice Shah Commission report.
3. Dumping of minerals outside leased areas.
4. Proximity of mining operations to National Parks and Wildlife Sanctuaries.
5. Violations of Rules 37 and 38 of the Mineral Concession Rules (MC Rules).
6. Control and monitoring of mining operations.
7. Environmental impact and sustainable development.
8. Future grant of mining leases.
9. Legality of suspension orders by the Government of Goa and the Ministry of Environment and Forests (MoEF).

Detailed Analysis:

1. Validity of Mining Leases in Goa:
The Supreme Court held that the deemed mining leases in Goa expired on 22.11.1987, and the maximum renewal period of 20 years expired on 22.11.2007. Consequently, mining operations conducted by the lessees after 22.11.2007 were illegal. Therefore, the orders dated 10.09.2012 by the Government of Goa and 14.09.2012 by the MoEF suspending mining operations and environmental clearances were upheld.

2. Legality of the Justice Shah Commission Report:
The Court acknowledged that the Justice Shah Commission did not comply with Sections 8B and 8C of the Commissions of Inquiry Act, 1952, which require giving affected parties a reasonable opportunity to be heard. However, since the State Government assured that no action would be taken based solely on the Commission's findings without due process, the report was not quashed. The Court examined the legal and environmental issues raised in the report independently.

3. Dumping of Minerals Outside Leased Areas:
The Court held that dumping of minerals outside the leased area is not permissible under the MMDR Act and the Rules made thereunder. The lessees cannot dump waste materials, tailings, and rejects outside the leased area without valid authorization. Rule 64C of the MC Rules does not authorize such dumping, and any implication to the contrary must give way to the statutory provisions of the MMDR Act.

4. Proximity of Mining Operations to National Parks and Wildlife Sanctuaries:
The Court enforced the order dated 04.08.2006, stating that no mining activity can occur within one kilometer of the boundaries of National Parks and Wildlife Sanctuaries. The Court clarified that there was no prohibition on mining activities within 10 kilometers of these boundaries unless a notification under the Environment (Protection) Act, 1986, is issued. The MoEF was directed to issue such notifications within six months.

5. Violations of Rules 37 and 38 of the MC Rules:
The Court found that several lessees violated Rule 37 by transferring mining leases without the previous consent of the State Government. The State Government was directed to take action against these violations. Additionally, the Court held that amalgamation of leases without State Government permission, as required under Rule 38, was not permissible.

6. Control and Monitoring of Mining Operations:
The Court noted the lack of proper checks and controls in mining operations, leading to illegal mining and revenue leakage. The Goa (Prevention of Illegal Mining, Storage, and Transportation of Minerals) Rules, 2013, were to be strictly enforced by the State Government. The Goa State Pollution Control Board was directed to exercise its powers under the Water (Prevention & Control of Pollution) Act, 1974, and the Air (Prevention and Control of Pollution) Act, 1981, to monitor and regulate mining activities.

7. Environmental Impact and Sustainable Development:
The Court emphasized the need for sustainable development and inter-generational equity. An Expert Committee was constituted to conduct a macro EIA study and propose a ceiling on annual excavation of iron ore. The Committee recommended a temporary cap of 20 million tons per annum until a detailed study is completed. The Court directed the creation of the Goan Iron Ore Permanent Fund, funded by 10% of the sale proceeds of iron ore, to ensure sustainable mining practices.

8. Future Grant of Mining Leases:
The Court held that it is within the State Government's policy discretion to decide the manner of granting mining leases, provided it complies with the MMDR Act, the Rules made thereunder, and constitutional provisions. The decision of the State Government in this regard is subject to judicial review.

9. Legality of Suspension Orders:
The suspension orders dated 10.09.2012 by the Government of Goa and 14.09.2012 by the MoEF were upheld as the mining operations after 22.11.2007 were illegal. The Court directed that the inventory of excavated ores be sold by e-auction, and the proceeds be managed as per specified guidelines, including payments towards excavation costs, worker compensation, storage charges, and contributions to the Goan Iron Ore Permanent Fund.

Conclusion:
The Supreme Court's judgment addresses multiple issues related to mining operations in Goa, emphasizing legal compliance, environmental protection, and sustainable development. The Court's directives aim to rectify past illegalities, enforce strict monitoring, and ensure that future mining activities align with constitutional and statutory mandates.