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 20

th

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 11

th

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 7

th

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

23

rd

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 (23

rd

May, 1987) i.e. upto 22

nd

November, 1987. The CEC has

further stated that by notifications dated 20

th

November,

1987 and 20

th

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

22

nd

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 22

nd

November, 1988 and 59 such leases have filed

applications for the first renewal of the deemed mining

leases after 22

nd

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 14

th

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 14

th

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 27

th

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 14

th

October, 1987 and

sub-rule (9) as was substituted by G.S.R. 724(E), dated

27

th

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 t he

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.

38Mr. 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 3

rd

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 27

th

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 21

st

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 21

st

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-CostiCodli 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;

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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;

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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:

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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

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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)

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Page 111 …....…………..………………………..J.

(Fakkir Mohamed Ibrahim Kalifulla)

New Delhi,

April 21, 2014.

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