TMI Blog2018 (2) TMI 1848X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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. 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. The decision of the Bombay High Court in Lithoferro v. State of Goa (and batch) [2014 (8) TMI 1171 - BOMBAY HIGH COURT] giving directions different from those given by this Court in Goa Foundation is set aside. 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 env ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent : None JUDGMENT Madan B. Lokur, J. 1. 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. 2. 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 Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of tribal people, forest dwellers and other persons in the mined areas, and the financial losses caused to the Central and State Governments. 3. The Commission shall also recommend remedial measures to prevent such mining, trade, transportation and export done illegally or without lawful authority. 5. 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 Anr. 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-there is some duplication) in the State of Goa by an order dated 14th September, 2012. 6. Subsequent to the reports given by Justice Shah, a writ petition was filed by Goa Found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t features of the Mineral Policy may be mentioned. It is stated in the Preamble to the Mineral Policy: The Goan economy is heavily dependent on the iron ore industry insofar as the major share of the regional income from the mineral industry and its allied activities like transport and trade is concerned. However, during the period from 2006-07 to 2011-12, due to huge spurt in demand of low grade ore in international market followed by illegalities and irregularities in the previous regulatory regime, the State has witnessed the peak of chaotic and unregulated mining without any concern for fragile ecology and environment of the State or for the general well being of an average Goan. It has resulted in massive export of unaccounted ore from unidentified sources like dumps and tailings. The reckless exploitation without any concern for sustainability that the State has witnessed in last five years has serious implications. Minerals are a finite and non-renewable natural resource and must be exploited wisely in the larger interest of the State. It is high time that the new Government that has received an unprecedented mandate from the people of Goa should take note that depen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arnataka. The low grade of ore has been competitive in global markets, because of the non reliance on railways and close distances of mines to ports thereby reducing the overall cost. The high silica presence in Goan ore also is a favourable factor for preference for Goan ore over Australian and Brazilian low grade ore. 13. It appears from the above that the extraction of iron ore in Goa is geared only towards export and not for domestic purposes because of the low Fe content and high silica presence. Vishwanath Anand Expert Appraisal Committee 14. 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 terms of reference of the EAC were as follows: (a) To examine the information/documents submitted by each of the 139 project proponents in response to aforesaid direction dated 14th September, 2012 under Environment (Protection) Act, 1986 for keeping environment clearance in abeyance and making case-by-case recommendations to the MoEF;1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lopment Research Centre, Ottawa, Canada (2006); MoEF (2014); research papers prepared by the Goa University and the National Institute of Oceanography; Indian Institute of Technology (Indian School of Mines), Dhanbad (2013); Pollution Control Board, Goa (Annual Report) and other literature. It noted large-scale degradation of the environment in Goa due to mining operations. A Final Report was also submitted by the Expert Committee to the Court on or about 12th April, 2015-it was obviously not available to the Court. Other proceedings in the High Court 20. Quite independent of the cases pending in this Court, writ petitions were filed by several mining lease holders in the Bombay High Court praying either for consideration of their application for a second renewal of the mining lease or for the grant of a mining lease on second renewal. The High Court heard those writ petitions and delivered its judgment on 13th August, 2014.3 In the course of its judgment, the High Court referred to the Mineral Policy and observed: The State Government also framed Goa Mineral Policy, 2013, which was duly gazetted on 28th September, 2013 and was placed on record before the Supreme Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government agreed to grant the second renewal of mining leases Under Section 8(3) of the MMDR Act and thereafter amended the Stamp Act and directed some of the Petitioners to pay the stamp duty and even accepted the same. Thus, the Government gave promise that the mining leases would be executed Under Section 8(3) and pursuant to the promise, the Petitioners altered their position by depositing the huge stamp duty. Therefore, it is now not open for the Government to resile from the promise as it is estopped by the doctrine of promissory estoppel from doing so. The Petitioners legitimately expected that after payment of the stamp duty, the Government would execute the second leases Under Section 8(3) of the MMDR Act. In our considered opinion, the principle of promissory estoppel is squarely applicable to the facts of the present case. The Government is reluctant to execute the lease deeds Under Section 8(3) only on the ground that it is not open for it to do so in the light of the Apex Court judgment in Writ Petition (C) No. 435/2012. We have already held that the Supreme Court judgment in Writ Petition (C) No. 435/2012 is not an impediment in the Government's way in executing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iolation of Article 14 of the Constitution. The relevant extracts read as under: Background.--In accordance with the Directions contained in the judgment and order of the Hon'ble Supreme Court dated 21st April, 2014 in Writ Petition (Civil) No. 435 of 2012, the Hon'ble Supreme Court has declared that all the Mining Leases in the State of Goa have expired on 22nd November, 2007..... It has further been directed by the Hon'ble Supreme Court that it is for the State Government to decide as a matter of Policy, in what manner Mining Leases are to be granted in the future..... The Hon'ble Supreme Court has in its judgment and Order dated 21st April, 2014 clearly held that the action of allowing the mines to be run on Deemed Extension Basis from the years 2007 to 2012 was completely illegal and has further declared that the so-called deemed mining leases in the State of Goa have expired in the year 2007..... Few things emerge out of the Hon'ble Supreme Court's Order. In the first place, the mining leases have been held to have expired in the year 2007. In the second place, the State Government has been directed, in accordance with its policy to grant fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gation into the violations of matters under Rule 37 and 38 of the Mineral Concession Rules, 1960 as directed by the Hon'ble Supreme Court.... As is seen from the aforesaid, the judgment and order of the Hon'ble High Court is an intervening circumstance inasmuch as it directs the execution of Lease Deeds in 28 cases and consideration of the Application Under Section 8(3) by the State Government in the other cases.... In the considered Opinion of the State Government, it would be futile to challenge the judgment of the Hon'ble High Court before the Hon'ble Apex Court as that would once again delay the commencement of the Mining Operations. As a matter of fact, a substantial portion of the State's Revenue comes from the Mining Sector. The State has been virtually starved of funds for undertaking many activities including Infrastructural Projects; and on account of the stopping of the Mining Operation, the State had to walk a tightrope as there has been no Revenue coming from one of the major source of Revenue.... Having regard to the aforesaid, the State Government thought it proper to act in accordance with the Directions of the Hon'ble Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port or found to be engaged in, any kind of illegality of whatsoever nature such as illegal Sale of Ore, Sale of Royalty Challan without Ore, Encroachment of adjoining areas outside the lease over production in excess of the limit specified in the Environmental Clearance; those which have undertaken unscientific mining operations; those who have violated or have not paid the Royalty amount; those who have re-used old Royalty Challans for defrauding; and those involved in Illegal Mining Activities shall not be considered for renewal of the Mining Leases. For this purpose, presently the inquiries are in progress at various levels and foras including the investigation by the SIT Team, by the Team of Chartered Accountants which have been set up by the State Government and after the Inquiry is complete or during the course of the inquiry where it is found that any violations have taken place, such persons shall not be considered for Grant/Renewal of the Leases..... Those Mining Lease Holders who have paid Stamp Duty, in which there are no violations found in terms of Mr. Justice Shah Inquiry/Public Accounts Committee Report, shall be considered for Renewal. [Deleted from the gazet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isms for: (i) Improved transparency in the allocation of mineral resources; (ii) Obtaining for the government its fair share of the value of such resources; (iii) Attracting private investment and the latest technology; and (iv) Eliminating delay in administration, so as to enable expeditious and optimum development of the mineral resources of the country. 27. What was the nature of the proposed amendments? As far as we are concerned, the introduction of Section 10B in the MMDR Act (relating to competitive bidding) is significant and this reads: Mining leases for notified minerals B. (1) Notwithstanding anything contained elsewhere in this Act, but subject to the provisions of Section 10A and Section 17A, the procedure for obtaining a mining lease for notified minerals in respect of land in which the minerals vest in the Government shall be as laid down in this Section. (2) and (3) xxx (4) For the purpose of granting a mining lease in respect of any notified mineral in such notified area, the State Government shall select, through auction by a method of competitive bidding, including e-auction, an applicant who satisfies the eligibility conditions. (5) The Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the recommendation of the EAC and the directions of this Court. It was noted that the EAC had observed that there were violations of the following nature: (i) No clearance from the National Board of Wildlife and non-compliance of orders of this Court on the subject; (ii) Excess production; (iii) Dump mining; (iv) Intersecting ground water table and drawal of ground water without permission of the Central Ground Water Board; (v) No forest clearance obtained where required; (vi) Encroachment and false information/concealment of fact. It was stated that the MoEF had decided to refer the cases to the appropriate authorities (including the State Government) for taking action on the violations. Accordingly, a request was made to examine the report of the EAC and take appropriate action against the concerned lessees. 32. The second order passed on 20th March, 2015 was an Office Memorandum to the effect that if a project proponent has a valid and subsisting environmental clearance for a mining project under the Environment Impact Assessment Notification of 27th January, 1994 (EIA 1994) or Environment Impact Assessment Notification of 14th September, 2006 (EIA 2006), it will not be requi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) Relatable to the second renewal of the mining leases: (i) In view of the decision in Goa Foundation only fresh leases were to be granted by the State of Goa and not second renewals. (ii) For granting fresh leases, the State of Goa should have introduced competitive bidding or the auction process. (iii) Assuming the decision to grant a second renewal to the mining lease holders was valid, the second renewals were not in accordance with law and should be set aside. (b) Relatable to the grant of environmental clearances: In view of the decision in Goa Foundation fresh environmental clearances were required to be obtained by the mining lease holders. (c) The impugned judgment and order passed by the High Court in Lithoferro on 13th August, 2014 was erroneous and deserves to be set aside. Whether fresh mining leases were required to be granted? 36. The controversy in this regard has arisen in view of what is stated in paragraph 82 of the decision in Goa Foundation. It was stated as follows: 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 al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gao Port Trust would be entitled to 50% of the storage charges. Out of the balance amount, 10% would be appropriated to the Goan Iron Ore Permanent Fund for the purpose of sustainable development and intergenerational equity and the remaining amount would be appropriated by the State who is the owner of the mineral ores illegally excavated by the mining lease holders and sold by e-auction. With this in mind, the Court declared in paragraph 87.5 of the Report: 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. It was then directed by the Court in paragraph 88.4 of the Report as follows: 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 the MMDR Act and the Rules made thereunder in consonance with the constitutional provisions. 41. The Court was quite obviously aware that it was concerned, inter alia, with the second renewal of mining leases and yet it chose to r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, the applicant had an absolute and legitimate ownership over the same. We may note, that the above position was emphasized, stressed and persistently reiterated to make the stand absolutely crystal clear. The learned judges considered the submissions and held by an order dated 14th October, 2014 that the direction in Goa Foundation was clear and categorical that the iron ore vested in the State Government and therefore the application deserved dismissal. In other words, the mining lease holders deserved no latitude for the illegal mining and all issues needed to be dealt with strictly. 45. There is additional material to support the view that the Court had intended the State of Goa to grant fresh mining leases rather than grant a second renewal. 46. From a reading of the decision rendered by the Bombay High Court in Lithoferro (subject matter of SLP (C) No. 32138 of 2015 and SLP (C) Nos. 32699-32727 of 2015) it is evident that the State of Goa understood the decision of this Court in Goa Foundation to mean that fresh mining leases were required to be granted on the basis of a policy yet to be framed by the State of Goa and the issue of second renewals did not survive con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Applications for Renewal were filed well within time as contemplated by Rule 24A of the Mineral Concession Rules, 1960. Presently, the State has ordered renewal of 28 mining leases, granted in principle approvals and has collected Renewal Fees/Stamp Duty from 27 Mining Leases.. 48. In other words, notwithstanding the in-principle grant of second renewal of 28 mining leases and collection of renewal fees or stamp duty, this Court in Goa Foundation consciously required the State of Goa to grant fresh leases. What is equally significant is that the State of Goa also understood the decision of the Court in the same manner and intended to act on that basis. 49. Unfortunately, the State of Goa was overtaken by events in that the High Court delivered its judgment in Lithoferro on 13th August, 2014 and while doing so, it misunderstood or incorrectly appreciated the decision of this Court in Goa Foundation and disagreed with the view of the State of Goa. While this Court had required the State of Goa to grant fresh mining leases and the State of Goa was willing to comply with this direction, the High Court instead directed it to execute mining leases Under Section 8(3) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of a fresh lease and therefore when the mining leases were renewed, it amounted to the grant of a fresh lease in compliance with the directions of this Court. Reliance was placed upon Delhi Development Authority v. Durga Chand Kaushish (1973) 2 SCC 825 wherein this Court held: A renewal of a lease is really the grant of a fresh lease. It is called a renewal simply because it postulates the existence of a prior lease which generally provides for renewals as of right. In all other respects, it is really a fresh lease. 53. Reference was also made to Provash Chandra Dalui v. Biswanath Banerjee 1989 Supp (1) SCC 487 in which it was held in paragraph 14 of the Report that there is a distinction between extension of a lease and renewal of a lease. We do not find any relevance of this to our discussion. Reference was also made to the view expressed in M.C. Mehta v. Union of India (2004) 12 SCC 118 wherein this Court noted that it is settled law that grant of renewal is a fresh grant and must be consistent with law. 54. Finally reliance was placed on State of West Bengal v. Calcutta Mineral Supply Company Private Limited (2015) 8 SCC 655 in which decision it was noted in parag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore when the leaned judges directed the grant of 'fresh leases' in Goa Foundation it was a deliberate and conscious decision distinct and different from granting a second renewal of expired mining leases. 58. In our opinion, the direction in Goa Foundation is quite clear and instead of considering the grant of a second renewal of the mining leases, the State of Goa was required to consider the grant of fresh mining leases. Therefore the decision of the State of Goa to grant a second renewal of the mining leases is erroneous, contrary to the decision in Goa Foundation and must be and is quashed. Whether the State of Goa should have auctioned the mining leases? 59. As mentioned in the Grant of Mining Leases Policy there were several options available to the State of Goa. It took the view that all its options were foreclosed post the decision of the High Court and it was obliged to grant a second renewal of the mining leases. We have already held that this was not so and that the decision to grant a second renewal of the mining leases was erroneous and fresh leases were required to be granted in accordance with the decision in Goa Foundation. In view of our c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in garnering maximum financial benefit and have no respect for the constitutional ethos and values. In other words, 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. 61. In Manohar Lal Sharma v. Principal Secretary (2014) 9 SCC 516 a Bench of 3 judges of this Court paraphrased the above passages and observed that the view expressed in CPIL necessitated a reference by the President of India to this Court Under Article 143(1) of the Constitution being Special Reference No. 1-Natural Resources Allocation (2012) 10 SCC 1. 62. What was the Advisory Opinion given by this Court in Natural Resources Allocation? Among the questions referred for opinion were the following: Question 1. Whether the only permissible method for disposal of all natural resources across all sectors and in all circumstances is by the conduct of auctions? Question 2. Whether a broad proposition of law that only the route of auctions can be resorted to for disposal of natural resources does not run contrary to several judgments of the Supreme Court including t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n considered from the standpoint of legitimate deviations from an auction. After adverting to several decisions of this Court where auctions were not the favoured method of allocation of natural resources, it was held between paragraphs 129 and 131 of the Report as follows: Hence, it is manifest that there is no constitutional mandate in favour of auction Under Article 14. The Government has repeatedly deviated from the course of auction and this Court has repeatedly upheld such actions. The judiciary tests such deviations on the limited scope of arbitrariness and fairness Under Article 14 and its role is limited to that extent. Essentially, whenever the object of policy is anything but revenue maximisation, the executive is seen to adopt methods other than auction. A fortiori, besides legal logic, mandatory auction may be contrary to economic logic as well. Different resources may require different treatment. Very often, exploration and exploitation contracts are bundled together due to the requirement of heavy capital in the discovery of natural resources. A concern would risk undertaking such exploration and incur heavy costs only if it was assured utilisation of the resou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een paragraphs 148 and 150 of the Report in the following words: In our opinion, 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. Regard being had to the aforesaid precepts, we have opined that auction as a mode cannot be conferred the status of a constitutional principle. 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 ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r be a valid method for disposal of natural resources. It was further held that natural resources cannot be alienated by way of largesse-there must be a reciprocal consideration either in the form of earning revenue or sub-serving the common good or both. The learned judge had this to say: The policy of allocation of natural resources for public good can be defined by the legislature, as has been discussed in the foregoing paragraphs. Likewise, policy for allocation of natural resources may also be determined by the executive. The parameters for determining the legality and constitutionality of the two are exactly the same. In the aforesaid view of the matter, there can be no doubt about the conclusion recorded in the main opinion that auction which is just one of the several price recovery mechanisms, cannot be held to be the only constitutionally recognised method for alienation of natural resources. That should not be understood to mean that it can never be a valid method for disposal of natural resources (refer to paras 186 to 188 of my instant opinion). I would, therefore, conclude by stating that no part of the natural resource can be dissipated as a matter of largesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the views expressed by Justice Khehar and held, in paragraph 104 of the Report: In light of the above legal position, the argument that auction is the best way to select private parties as per Article 39(b) does not merit acceptance. 72. This Court then exercised its power of judicial review and considered the merits of the explanation given by the Central Government for not adopting the competitive bidding route for the allocation of coal blocks. The various submissions made, the various hurdles faced (including objections of the State Governments) as well as the impracticality of opening up the allocation of coal blocks to competitive bidding were considered and then it was held (after opening the window of Article 14 of the Constitution) in paragraph 110 of the Report: The above facts show that it took almost 8 years in putting in place allocation of captive coal blocks through competitive bidding. During this period, many coal blocks were allocated giving rise to present controversy, which was avoidable because competitive bidding would have brought in transparency, objectivity and very importantly given a level playing field to all applicants of coal and lowered th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... policy, which is backed by a constitutionally recognised social purpose intended to achieve the welfare of the community, the considerations which would govern would be different from those when it alienates natural resources for commercial exploitation. When a public body is actuated by a constitutional purpose embodied in the Directive Principles, the considerations which weigh with it in determining the mode of alienation should be such as would achieve the underlying object. In certain cases, the dominant consideration is not to maximize revenues but to achieve social good such as when the alienation is to provide affordable housing to members of the Scheduled Castes or Tribes or to implement housing schemes for Below the Poverty Line (BPL) families. In other cases where natural resources are alienated for commercial exploitation, a public authority cannot allow them to be dissipated at its unbridled discretion at the cost of public interest. The window is now more than ajar. 74. Till fairly recently, policy matters particularly of economic policy were hands-off as far as the courts were concerned.11 But the recent decisions of this Court, including by the Constitution B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... good or a social or welfare purpose, it cannot be dissipated in favour of a private entrepreneur virtually free of cost or for a consideration not commensurate with its worth without attracting Article 14 and Article 39(b) of the Constitution. Whether the decision of the State of Goa forsaking the auction route is arbitrary? 77. Keeping in mind the broad principles identified above, the question that arises for our consideration is whether the State of Goa was justified in not adopting the auction route for the grant of mining leases and simply granting a second renewal. For a better understanding of this issue, it would be worthwhile to again refer to the Goa Mineral Policy, the report of the EAC, the Grant of Mining Leases Policy and the decision of the Bombay High Court, which documents were relied upon by the learned Additional Solicitor General. (i) Goa Mineral Policy 78. The Mineral Policy makes it very clear that during the period from about 2006 till about 2012 (for about 5 years) extraction of iron ore in Goa was nothing but a free-for-all situation. Illegalities and irregularities were committed in abundance by all concerned, particularly the mining lease ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the fragile ecology of Goa and the well-being of the average Goan and the Rule of law is concerned, the Mineral Policy categorically states that the State had witnessed, from 2006-07 till 2011-12 the peak of chaotic and unregulated mining without any concern for the fragile ecology and environment of the State or for the general well-being of an average Goan. Surely, all this cannot be ignored or brushed aside particularly since the exploitation of mineral resources for five years had no element of social or public purpose, no concern for society and no regard for the environment and the laws. (ii) Vishwanath Anand Expert Appraisal Committee 82. A reading of the report of the EAC is disturbing and acutely highlights the damage to the environment and ecology by the mining lease holders. The complete indifference by all concerned is evident from a careful reading of the report. We propose to refer to and quote in extenso the 'summary of observations' and the 'concluding remarks' from the report of the EAC since they are self explanatory: Summary of Observations I. The absence of specific conditions highlighting the mandatory requirement to obtain pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the period they remained closed. However, when one looks at the manner in which the directives dated 04.08.2006 and 04.12.2006 of the Supreme Court have been implemented one cannot help but feel that there is the absence of a bridge mechanism within the Ministry to ensure and oversee that directives of the Courts are complied with due diligence and seriousness. There are two factors which stand out; in some ECs as mentioned in this report, the condition was inserted that the project proponent should seek approval of the CWLW [Chief Wild Life Warden], in others it was stated that approval of the Competent Authority/Standing Committee of the NBWL should be obtained and in a third category no condition at all was imposed, even though some of these ECs pertain to the same meeting and timelines between 2005 and 2007. It is strange that concerned officials in the MOEF were not aware that other than the Standing Committee of the NBWL no other person was authorised to grant the permission envisaged by the order dated 04.12.2006 of the Supreme Court. This is not to state that any discrepancy in the EC letter would absolve the project proponent from complying with the law of the land. Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so ensure that mining in this region is carried out in accordance with best sectoral practices using appropriately clean technologies. 83. The report of the EAC reveals that there is not a single environment related or mining related law or legal requirement that was not violated by one or the other mining lease holder. Quite clearly, the Rule of environmental law in Goa had gone with the wind. 84. There was one extremely important requirement relating to extraction of groundwater-that is clearance from the Central Ground Water Board-but even that was ignored. During the course of submissions, we were informed that there is plenty of groundwater available in Goa. However, what seems to have been overlooked is that with the intersection of groundwater levels with mining operations, the groundwater would get depleted much faster than expected or the quality of the groundwater would deteriorate. It is for this reason that MoEF insisted that clearance for drawal of groundwater must be taken from the Central Ground Water Board and care taken in respect of the intersection of groundwater level with mining operations (this happened in 46 cases). Unfortunately, no heed was paid to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the contemporaneous facts beginning with the Budget Speech given by the Hon'ble Minister of Finance of the Government of India on 10th July, 2014 makes it clear that an amendment to the MMDR Act was to be effected sooner than later. The Grant of Mining Leases Policy overlooks that and proceeds on the basis that the judgment of the High Court delivered on 13th August, 2014 left the Government of Goa with no choice but to abandon the grant of mining leases through competitive bidding, even though that might be the most appropriate method of obtaining the best revenue for the public good. The Government of Goa had therefore for the present ruled out the process of going in for competitive bidding keeping also in mind that the State was virtually starved of funds and had to balance the equities and needs of all, including the labour class, working class and other staff, markets in mining localities, public sector, mining lease holders, welfare needs of the State, environment and fragile ecology of the State and general well-being of the average Goan. 91. The State of Goa was also alive to the fact that many (if not all) mining lease holders had violated the terms of the min ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 93. Be that as it may, there is no doubt that iron ore mining in Goa was solely for commercial purposes-it was extracted primarily for export to China and Japan without any value addition to the domestic industry. True this brought in considerable foreign exchange-nevertheless iron ore extraction gave insignificant value addition (if at all) to Indian industry. The only advantage that iron ore extraction gave to the State was in terms of royalty, but the larger benefit accrued to the private mining lease holder who could obtain a mining lease on renewal virtually free and without any social or welfare purpose. In other words, the State sacrificed maximizing revenue for no apparent positive reason, virtually surrendering itself to the commercial and profit making motives of private entrepreneurs and ignoring the interests of Goan society in general. Therefore, in principle, the decision of the State of Goa to not auction the grant of mining leases was flawed in that it did not serve the common or public or social good but primarily assisted in filling the coffers of private entrepreneurs. We are not inclined to go so far as to describe the decision as arbitrary since it is not neces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny deviation, the same cannot be sustained. It is the normal Rule of construction that when a statute vests certain power in an authority to be exercised in a particular manner then the said authority has to exercise it only in the manner provided in the statute itself. This principle has been reiterated in CIT v. Anjum M.H. Ghaswala (2002) 1 SCC 633 SCC at p.644; Captain Sube Singh v. Lt. Governor of Delhi (2004) 6 SCC 440 and State of U.P. v. Singhara Singh (1964) 4 SCR 485. Reference may also be made to paragraph 44 of the Report that reads thus: Mr. Harish N. Salve and Mr. Dushyant Dave, by drawing our attention to the decision of this Court in Tisco Ltd. v. Union of India [(1996) 9 SCC 709], submitted that inasmuch as this Court had upheld the grants based on captive consumption , there is no flaw or error in the recommendation of the State Government dated 6-12-2004. A perusal of the above decision clearly shows that it concerned with Section 8(3) of the MMDR Act which requires consideration of the extremely general criterion of the interests of mineral development before granting second renewal of a mining lease. Unlike in Section 11(3), no further criteria were speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he MMDR Act. The Constitution Bench dealt with this submission in paragraph 83 of the Report by observing: Moreover, if the judgment in 2G case (2012) 3 SCC 1 is to be read as holding auction as the only permissible means of disposal of all natural resources, it would lead to the quashing of a large number of laws that prescribe methods other than auction e.g. the MMDR Act. However, the Constitution Bench did not advert to the consequence vis-`-vis the MMDR Act of holding that auction was not mandated as the only method of allocating a natural resource. Since the question does not arise in these cases, we decline to go into this issue-we need not finally adjudicate whether the State of Goa should have auctioned the mining leases but we are called upon to decide whether the grant of second renewals was valid in law. Judicial review of renewals 100. In view of decisions of this Court, including in Natural Resources Allocation it is permissible for this Court to judicially review, to a limited and restricted extent, the Grant of Mining Leases Policy, among other things, if it falls foul of Article 14 read with Article 39(b) of the Constitution and if it ignores the commo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and Order of the Hon'ble Supreme Court of India against those Mine Lease Holders found to be violating either Rule 37 or Rule 38 of the Mineral Concession Rules, 1960, or otherwise indicated in the Report of the Justice Shah Commission/PAC report or found to be engaged in, any kind of illegality of whatsoever nature such as illegal Sale of Ore, Sale of Royalty Challan without Ore, Encroachment of adjoining areas outside the lease over production in excess of the limit specified in the Environmental Clearance; those which have undertaken unscientific mining operations; those who have violated or have not paid the Royalty amount; those who have re-used old Royalty Challans for defrauding; and those involved in Illegal Mining Activities shall not be considered for renewal of the Mining Leases. For this purpose, presently the inquiries are in progress at various levels and foras including the investigation by the SIT Team, by the Team of Chartered Accountants which have been set up by the State Government and after the inquiry is complete or during the course of the inquiry where it is found that any violations have taken place, such persons shall not be considered for Grant/R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aiting for any approval or deemed approval of the mining plan from the Indian Bureau of Mines or any other authority. 109. This sequence of events acquires further significance when it is recalled that an Ordinance to amend the MMDR Act was made known to the general public on 5th January, 2015 and promulgated by the President on 12th January, 2015 thereby mandating competitive bidding or auction for the grant of mining leases. The State of Goa perhaps anticipated this in view of the publication of the draft Mines and Minerals (Development and Regulation) Act, 2014 and therefore hurried into the second renewal of mining leases (notwithstanding the Grant of Mining Leases Policy) to defeat the introduction of the auction process. In fact in the period from 5th January, 2015 to 12th January, 2015 the Government of Goa granted a second renewal to as many as 56 mining leases and from 17th November, 2014 the State of Goa granted a second renewal to as many as 75 mining leases. The sudden spurt of renewal of mining leases is beyond comprehension. The judgment and order of the High Court in Lithoferro cannot be used as a shield for explaining the haste. 110. These facts must also be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore from Goa was not used in the domestic steel industry. Therefore, it is not at all clear who, other than the mining lease holders making exports, was benefited by resumption of mining operations in Goa through a second renewal. 113. The Mineral Policy clearly suggests that for a period of five years between 2006 and 2012 the mining lease holders committed various illegalities and irregularities in the mining process. This is an indication of their exploitative and rapacious attitude having little or no concern for the environment, the fragile ecology of Goa or even the health and well-being of the average Goan. This irreparable damage was being caused by the mining lease holders without any benefit to the domestic industry. Therefore, while the mining lease holders may have contributed virtually nothing to the domestic industry, they might have made considerable profits through exports and might have also benefited the foreign exchange reserves of the country, but the real-time damage to the quality of health and life of the average Goan and damage to the environment and ecology of Goa is nevertheless incalculable or at least considerable-and export benefits cannot be weighed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... triggered by the interests of mineral development. The very large number of renewals granted over a comparatively brief period is a clear indication that the State did not have 'mineral development' in mind but had some other non-statutory interests while taking its decision to grant a second renewal to the mining leases. The haste with which the State took its decision also needs to be understood in the background of the fact that mining had been suspended by the State in September 2012 that is more than two years prior to the grant of second renewals. The urgency suddenly exhibited by the State therefore seems to be make-believe and motivated rather than genuine. 118. Facts from the record also disclose some interesting information regarding the second renewal of mining leases. The table below indicates that except 13 mining leases, all the others were renewed after publication of the draft Mines and Minerals (Development and Regulation) Act, 2014 on 17th November, 2014. The table is given below and is self explanatory: 119. Of the 13 mining leases renewed in November 2014, it is found that according to the State of Goa all of them are Category-I violators (exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Regulation) Amendment Ordinance, 2015 by the Cabinet of the Government of India became public knowledge. 12th January, 2015-President of India promulgated the Mines and Minerals (Development and Regulation) Amendment Ordinance, 2015. 123. It is possible that the State did have some serious governance issues to contend with as mentioned in the Grant of Mining Leases Policy, namely, since iron ore mining had been suspended for more than two years, the State faced a lack of funds resulting in its having difficulty in undertaking infrastructure projects and other activities. The State had also to contend with the adverse effects faced by a large population that was directly or indirectly dependent on the mining sector. Additionally, the transport sector was affected as well as barges used for transport through rivers from jetties. The stoppage of mining operations therefore affected several categories of stakeholders including small business or small commercial ventures and workers/labour. The Grant of Mining Leases Policy also noted that there was a tremendous loss of foreign exchange of about $8 billion through exports and more than ₹ 850 crores towards loans/advances on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions were suspended by the State of Goa on 10th September, 2012 and environmental clearances granted to the mines were kept in abeyance by the MoEF on 14th September, 2012. Considering all this, as well as the law laid down in Goa Foundation to the effect that there is no automatic second renewal of a mining lease but that a second renewal must be granted in accordance with the provisions of Section 8(3) of the MMDR Act, the Court used the expression grant fresh environmental clearances for mining projects in the passage referred to above. 127. We have already adverted to the report of the EAC. As far as the Expert Committee set up by the Court is concerned, it had furnished an Interim Report dated 14th March, 2014 in which it noted large-scale degradation of the environment and recommended placing an annual cap between 20 and 27.5 million tonnes on the extraction of iron ore in Goa. The Expert Committee noted the following (which makes for some very depressing reading): The production of iron ore has jumped from 14.6 million tons in 1941 to 41.17 million tons in 2010-2011. In 1980s the production was about 10 MT/annum. The quantum jump in iron ore production in Goa was ess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dverted to the contents of the orders passed on 20th March, 2015. 130. The first order of 20th March, 2015 is essentially a communication documenting the variety of illegalities and irregularities committed by the mining lease holders and that the Government of India would be referring the cases for appropriate action and also requesting the Principal Secretary, Environment in the Government of Goa to take necessary action. 131. The second order of 20th March, 2015 is an Office Memorandum to the effect that a project proponent will not be required to obtain a fresh environmental clearance at the time of renewal of the mining lease. This is misleading information and contrary to the decision of this Court in M.C. Mehta v. Union of India (2004)12 SCC 118 as well as the decision rendered in Common Cause v. Union of India (2017) 9 SCC 499. 132. It was held in Ambica Quarry Works v. State of Gujarat (1987) 1 SCC 213, Rural Litigation and Entitlement Kendra v. State of U.P. 1989 Supp (1) SCC 504 and State of M.P. v. Krishnadas Tikaram 1995 Supp (1) SCC 587 (which decisions were followed in M.C. Mehta) that the renewal of a lease, whether under the provisions of the Forest (Conse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5, EIA 1994 having been replaced by EIA 2006. 135. As regards the 37 mining leases that had obtained environmental clearance under EIA 2006, since the validity of the environmental clearance is for the estimated project life or a maximum of 30 years in terms of paragraph 9 of EIA 2006 therefore no violation can be found on the ground of validity for the time period. To this limited extent, no interference is necessary at this stage in respect of these 37 mining leases. We make it clear, however, that this is subject to our conclusion that fresh mining leases were required to be granted by the State of Goa. Consequently, a mining lease holder obtaining a fresh mining lease would require a fresh environmental clearance in terms of EIA 2006. 136. What is disturbing is that notwithstanding several and various violations, the MoEF granted environmental clearance to 72 mining leases. It seems to us that the MoEF acted without any application of mind in lifting the order placing all the environmental clearances in abeyance. Since the entire exercise carried out by the MoEF on 20th March, 2015 was mechanical, at the behest of the State of Goa, without due application of mind, without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Mining Leases Policy, the amendment to the MMDR Act, the report of the EAC and the report of the Expert Committee must be considered in the larger context of constitutionalism, the Rule of law, environmental jurisprudence as well as the fundamental right of the people of Goa to have clean air and protection of the fragile ecology. Governance cannot and should not be carried out de hors the interests of the people and some uncomfortable decisions may be inevitable for balancing the equities. 139. Finally, a controversy (wholly unnecessary in our view) was raised with regard to the period of validity of the environmental clearance granted under EIA 1994. Firstly, in the view that we have taken, the validity period of an environmental clearance under EIA 1994 is academic since a fresh environmental clearance was necessary at the time of renewal of a lease. Secondly, the period of validity of an environmental clearance was considered in M.C. Mehta and it was clearly held that it is valid for 5 years only. In paragraph 77 of the Report it was observed: We are unable to accept the contention that the notification dated 27-1-1994 would not apply to leases which come up for cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2006 in paragraph 9 thereof. As far as we are concerned, it provides that in respect of mining operations, the environmental clearance would be valid for the project life as estimated by Expert Appraisal Committee or State Level Expert Appraisal Committee subject to a maximum of thirty years for mining projects.... . 144. For no apparent reason and after EIA 2006, the issue of the validity of an environmental clearance granted under EIA 1994 was raked up and a notification was issued by the MoEF on 21st August, 2013 in which it was noted that the notification of 4th May, 1994 provided that the clearance granted shall be valid for a period of five years from commencement of the construction or operation . Another notification of 21st August, 2013 goes on to say that the intent of the Central Government has been and has always been that the validity of the environmental clearance is for five years for commencement of the construction or operation and not that the environment clearance is only for five years from the commencement of construction or operation. Therefore, the Central Government clarified in the notification of 21st August, 2013 that the expression for a period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rections in M.C. Mehta. This question does not arise in the context of EIA 1994. 147. One final submission before us was that these cases be referred to a Bench of 9 learned judges since the constitutional validity of the Goa, Daman Diu Mining Concessions (Abolition Declaration of Mining Leases) Act, 1987 was under challenge in some cases and the decision in those cases would perhaps render the present proceedings infructuous. In some of these pending cases, this Court had passed an order on 29th October, 2002 to await the decision of 9 learned judges in Property Owners' Association v. State of Maharashtra (2013) 7 SCC 522 dated 20th February, 2002. We are not at all inclined to accept this request and mention it only to reject it. Correctness of the decision of the High Court in Lithoferro 148. As far as the SLPs are concerned (SLP (C) No. 32138 of 2015 and SLP (C) Nos. 32699-32727 of 2015) we set aside the judgment and order dated 13th August, 2014 of the High Court in view of our conclusion that the State of Goa was required to grant fresh licences in terms of the decision of this Court in Goa Foundation. The High Court proceeded on the erroneous basis that i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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