W.P.(C) No.30325 of 2025 Page 1 of 16

IN THE HIGH COURT OF ORISSA AT CUTTACK

W.P.(C) No.30325 of 2025

CNR No. ODHC010749892025

M/s. Lal Trades and Agencies Pvt.

Ltd., Mayurbhanj

…. Petitioner

-Versus-

Union of India and others …. Opposite Parties

Advocates appeared in this case:

For Petitioner : Mr. Durga Prasad Nanda,

Senior Advocate assisted by

Mr. Subhankar Rout, Advocate

For Opposite Parties : Mr. P.K. Parhi, Deputy Solicitor

General of India along with

Mr. S.S. Kashyap,

Central Government Counsel

Mr. D. Tripathy,

Addl. Government Advocate

CORAM:

HON’ BLE THE CHIEF JUSTICE

AND

HON’BLE MR. JUSTICE CHITTARANJAN DASH

J U D G M E N T

----------------------------------------------------------------------------------

Date of Hearing : 18

th

August, 2026

Date of Judgment : 11

th

November, 2026

----------------------------------------------------------------------------------

HARISH TANDON, CJ.

1. The present writ petition is filed assailing the order dated 1

st

October, 2025 passed by the Revisional Authority in R.A. No. WP(C)/30325/2025

ODHC010749892025

2026:OHC:285-DB

W.P.(C) No.30325 of 2025 Page 2 of 16

22/(22)/2024-RC-1, whereby and whereunder the challenge was made

to a demand notice dated 26

th

July, 2024 for excessive extraction of ore

during the period 2019-20.

2. An interesting point is raised in the instant writ petition, which

was also taken before the Revisional Authority, but the order of the

Revisional Authority was restricted to one aspect without touching the

other, and the counsel appearing for the respective parties were invited

to advert to the said issue and arguments were advanced thereupon.

3. In order to appreciate the contention raised herein, the narration

of the facts emanating from the pleadings is required to be recapitulated

and/or adumbrated hereinafter. The petitioner is a beneficiation of the

iron ore since last 15 to 20 years in the district of Mayurbhanj by

processing low grade iron ore to high grade iron ore. The Environmental

Clearance (EC) was issued to the petitioner by the Ministry of

Environment and Forest, Government of India on 9

th

April, 2010 in

accordance with Environmental Impact Assessment (EIA) Notification

2006 for an annual production capacity of 0.72 MT per annum. The

mining scheme was also approved by the Indian Bureau of Mines (IBM)

vide letter dated 27

th

March, 2015 enhancing the production of iron ore

from 0.72 Million Tonnes Per annum (MTPA) to 1.5 MTPA. A

W.P.(C) No.30325 of 2025 Page 3 of 16

supplementary lease deed was executed on 20

th

December, 2016 having

validity until 26

th

May, 2020. An application was made online on 9

th

March, 2018 to establish the Terms of Reference for conducting a

detailed Environmental Impact Assessment study to obtain

environmental clearance for the increased production capacity from 0.72

MTPA to 1.5 MTPA. The Ministry of Environment and Forest approved

the recommendation of the Expert Appraisal Committee to enhance the

production as prayed for. However, in the interregnum the Mining Plan

for Badampahar Iron Ore Mines was modified and approved by IBM on

26

th

July, 2018 and a proposal for the enhancement of the production

capacity as aforesaid was recommended by the Expert Appraisal

Committee on 22/23

rd

January, 2019 and the Ministry of Environment

and Forest granted EC for enhanced production capacity of 1.5 MTPA.

The Production capacity between April, 2019 to March, 2020 having

enhanced and accepted by the office of the Deputy Director of Mines,

Baripada Circle as there was no irregularity found in respect of the

production achieved. The statutory payments including the royalty for

the year 2019-20 was also paid.

4. There being no whisper on the part of the authority in raising any

discrepancy in the production of the iron ore and having accepted the

W.P.(C) No.30325 of 2025 Page 4 of 16

statutory payments required under the Mines and Minerals

(Development and Regulation) Act (MMDR Act in short) until a show

cause notice dated 31

st

May, 2023 was issued by the Deputy Director of

Mines, Baripada Mining Circle, Baripada touching upon the production

achieved during the financial year 2019-20, and raising a demand of

more than Rs.50.00 crores and odd as it exceeds the limit setforth in the

EC. The said show cause was duly responded by the petitioner and

specific stand was taken that the target of the production is always fixed

on annual basis and not on monthly basis, and once the annual target is

modified in the EC, the production so made is well within the purview

thereof. After receiving the reply to the said show cause notice, a fresh

show cause notice was issued on 07

th

May, 2024 by the said authority

wherein the demand was reduced from Rs.50.00 crores and odd to Rs.

40.00 crores and odd for the same year, which was also responded by

the petitioner taking a plea that IBM has already approved the variation

up to 20% of the tentative annual production, and therefore, any

variation that has been perceived by the authorities are within the

purview of the same, and it cannot be said to be unlawful extraction of

the ore. Despite the specific stand having taken in the reply that the

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variation up to 20% is accepted and approved by the IBM, the demand

notice was issued on 26

th

July, 2024 for Rs.40.00 crores and odd.

5. The said order was assailed before the Revisional Authority,

wherein the parties filed their respective pleadings. However, in the

interregnum, the authorities issued trading license in Form-D from time

to time upon compliance of all the requisites provided in the statute,

which was valid until 21

st

May, 2025. On expiration of the same, the

petitioner made an application for issuance of the said trading license to

be issued, but the same was withheld as there has been outstanding

dues.

6. The said decision was challenged by the petitioner in W.P.(C) No.

14602 of 2025, which was disposed of on 20

th

May, 2025 directing the

authorities to take a decision on the said application within the time

stipulated therein with specific observation that until the decision is

taken on the renewal application, he shall be permitted to continue the

trade on the basis of the trading license granted earlier. Subsequently,

the payments were made under the statutory heads. Yet, the renewal of

the trading license was rejected on the ground that the petitioner did not

submit the Mining Dues Clearance Certificate (MDCC). Be that as it

may, ultimately the Revision Application pending before the Revisional

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Authority was dismissed on 1

st

October, 2025, which is assailed in the

instant writ petition.

7. The principal issue involved in the instant writ petition is whether

the variation of ± 20% can be read harmoniously with the judgment

rendered by the apex Court in Common Cause v. Union of India and

others, reported in (2017) 9 SCC 499 in relation to excess production

beyond the legally permissible production framework. Even the State in

the counter affidavit have clearly averred that the petitioner extracted

the ore within the limit provided in the Mining Plan, but beyond the

limit set for in the EC provided for the year 2019-20, and in view of the

judgment rendered by the apex Court in Common Cause (supra), it

would be regarded as an unlawful extraction of the ore inviting the

penalty under Section 21 (5) of the MMDR Act.

8. Before we proceed to decide the same, the object and purpose, and

the scheme of the MMDR Act is required to be succinctly narrated and

understood. Section 4(1) of the said Act creates an embargo on a person

to undertake any mining operation except in accordance with the terms

and conditions of the mining lease granted under the said Act and the

Rules made thereunder. The “mining operation” is defined in Section

3(d) of the Act to mean any operation undertaken for the purpose of

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winning any mineral. Such prohibition can also be seen under Section

4(2) of the said Act, whereas Section 5 postulates certain restrictions on

the grant of a mining lease upon the State Government unless the

mining plan is duly approved by the Central Government or the State

Government in respect of a specific mine. Section 18 of the Act is

repository of the duties and responsibilities of the Central Government

to take all steps for conservation and systematic development of

minerals in India, and also for protection of the environment by

preventing or controlling any pollution, which may be caused by mining

operation. Two Rules i.e. Mineral Conservation and Development

Rules, 1988 (MCDR) and Mineral Concession Rules, 1960 (MCR) are

framed in exercise of the rule making power where the MCR is focusing

on the grant of a mining lease; on the other hand, the MCDR contains an

exhaustive provisions relating to commencement of the mining

operations and protection of the environment. Section 21(5) of the

MMDR Act, which is central to the core issue, contains a penal

provision—where any person raises without any lawful authority, any

mineral from any land, the State Government may recover from such

person the minerals so raised or where such mineral has been disposed

of, the price thereof. In addition to the same, the State Government may

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also recover rent, royalty or tax as the case may be for the period during

which the land was occupied without any lawful authority.

9. The MCR contains a provision relating to the mining plan, which

will incorporate a tentative scheme of mining and annual programme

and plan for excavation for year-to-year for a specified period. It further

mandates the mining operation to be undertaken only in accordance

with the duly approved mining plan, and therefore, it assumes the

character of an essential document without which no mining operations

can be commenced and/or undertaken. Even a mining scheme is to be

framed and it would not be incongruous to suggest that both the mining

scheme and mining plan are essential for grant of the mining lease. The

prescribed form therein also obligated the lessee of the mining lease to

maintain a record of quantity and quality of the mineral released from

the leased land, the prices and other particulars of the sales of the

mineral and many other facts as the Central Government or a State

Government may require. One of the clauses contained in the prescribed

form further imposed an obligation on the part of the lessee to take all

possible measures to protect the environment by using various devices

and restoring the same at their expenses. So far as the MCDR is

concerned, it contains an exhaustive provision not only in relation to the

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commencement of the mining operation in accordance with the

approved mining plan, but a right conferred upon the lessee to modify

the same as and when the circumstances so warrant, and also to ensure

all possible steps to protect the environment and control the pollution

while conducting such mining operation. The Central Government

issued an Environment Impact Assessment (EIA) Notification dated 27

th

January, 1994 signifying that the mining activity should be undertaken

in accordance with the EC and the procedure provided therein, and from

time to time have issued further Notifications. The said EIA

Notifications were considered by the Apex Court in Common Cause

(supra) and held to be a prohibitory in nature, and mining activities in

departure from a mining plan or an EC was considered to be unlawful.

10. The scheme and object as discussed hereinabove leaves no

ambiguity that the winning of the minerals should be in conformity with

the mining plan as well as the EC, and the apex Court in Common

Cause (supra) has held that the mining plan is „subordinate‟ to EC. The

comprehensive provisions contained in both the substantive Act as well

as the Rules framed thereunder engulf within its folds both the necessity

of a mining plan as well as the EC. The issue was raised in this regard,

which was clarified in the letter dated 12

th

December, 2011 issued by

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the Central Government that if there is any violation of the actual

production limit laid down in the mining plan, the State Government

should take steps to curb such illegal mining in respect of

overproduction. It was also suggested that 20% deviation from the

mining plan (in terms of the overproduction) would be reasonable and

permissible. The Apex Court noticed the said letter but was focusing on

the issue that there have been several mining leaseholders, who were

making overproduction beyond 20% of the deviation limit. The Apex

Court also noticed the noting of the High Level Committee (Hoda

Committee) on the National Mineral Policy in its report date 22

nd

December, 2006 and quoted such observations contained in paragraph

3.47 in the following:

“120. xxx

“3.47 An EMP [Environment Management Plan]

has to be prepared under the MCDR and got

approved by IBM. However, this EMP is not

acceptable to the MoEF. The miner has to prepare

two EMPs separately—one for IBM and another for

MoEF. The Committee suggests that IBM and

MoEF should prepare guidelines for a composite

EMP so that IBM can approve the same in

consultation with MoEF's field offices. This will

eliminate anomalous situations where increase of

even a few tonnes in production requires project

authorities to get a fresh EMP approved from the

MoEF although the IBM allows a grace of ±10%,

W.P.(C) No.30325 of 2025 Page 11 of 16

keeping in view the fluctuations in the market

situation and process complexities. If a single EMP

is accepted in principle such anomalies can be

resolved in advance. The Committee feels the MoEF

should also have a cushion of ±10% in production

while giving EIA clearance.”

11. In Paragraph 121 of the said judgment, the Apex Court held that

though the permissible variation in production as per the IBM is ±10%,

but in the said letter, the Ministry of Mines accepted the variation upto

±20%, and a categorical observation was made that no clarity can be

seen why there has been a shift from ±10% to 20% in the following:

“121. The above passage indicates that the

permissible variation in production as per the Indian

Bureau of Mines is ±10% but according to the Letter

dated 12-12-2011 issued by the Ministry of Mines,

the reasonable variation limit could be ±20%. It is

not clear why there was a shift in the variation, but

as rightly pointed out by the learned counsel for the

petitioners, the fact that in some cases the variation

exceeded 20% was a cause for concern which

necessitated strict and punitive action.”

12. The Bench proceeded to hold that although the extraction of the

minerals beyond the leased area is unlawful but even if the extraction is

beyond the permissible limit within the leased area is also unlawful. The

Bench in Common Cause (supra) extensively dealt the permissible

W.P.(C) No.30325 of 2025 Page 12 of 16

variation upto ±20% and held that at best there could be a variation in

extraction of 20% in each year but it would be subject to the overall

mining plan limit of a variation of 20% over the five years, and observed

that it would be preposterous that in one year the leaseholder would

extract 20% in excess of the mining plan for one year and for rest of the

years, it would extract the minerals, which brings within the said limit of

20% in the following:

“Adherence to the mining plan

136. A side issue raised by the learned counsel for

the mining leaseholders in this regard was the necessity

(if any) of adhering to the annual plan or calendar plan

of mining. It was contended that a mining leaseholder

could mine in excess of the annual plan. While it is so,

this submission must be tempered and appreciated in the

proper context. A mining plan is valid for a period of

five years but there could be a 20% variation in

extraction over and above the mining plan. This is the

maximum that is stated to be reasonably permissible

according to the Ministry of Mines. In terms of Rule

22(5) of the MCR a mining plan shall incorporate a

tentative scheme of mining and annual programme and

plan for excavation from year-to-year for five years. At

best, there could be a variation in extraction of 20% in

each given year but this would be subject to the overall

mining plan limit of a variation of 20% over five years.

What this means is that a mining leaseholder cannot

extract the five year quantity (with a variation of 20%)

in one or two years only. The extraction has to be

staggered and continued over a period of five years. If

any other interpretation is given, it would lead to an

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absurd situation where a mining leaseholder could

extract the entire permissible quantity under the mining

plan plus 20% in one year and extract miniscule

amounts over the remaining four years, and this could be

done without any reference to the EC. The submission

of the learned counsel in this regard simply cannot be

accepted.

137. In the Letter dated 12-12-2011 sent by the

Secretary in the Ministry of Mines of the Government of

India to the Chief Secretary of the Government of

Odisha (adverted to above) concerning violation of

annual production limit laid down in the approved

mining plan, it was stated, inter alia, that an analysis of

production and violations in 104 mining leases for bulk

minerals in the last ten years was undertaken by the

Indian Bureau of Mines. It was noted that in 71 cases

there was excess ore produced beyond the reasonable

variation limit of 20%. It was noted that this was partly

due to the failure of the State machinery to restrict the

movement of minerals.”

13. In paragraph 140 of the said judgment, it is ultimately held that

while mining in excess of permissible limits under the mining plan or

the EC or FC on leased area would amount to illegal or unlawful mining

or mining without authority of law. It is, thus, apparent from the

aforesaid observations that the Apex Court also took into consideration

the variation in the production limit up to ±10% as the decision to

permit the variation up to ±20% was held to be without any clarity

having brought in this regard. It is to be remembered that both the

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mining plan as well as EC are complementary to each other, and the

IBM, being the statutory authority under the MMDR Act, is not only

undertaking a subjective satisfaction in relation to an extraction of the

mineral on an yearly basis but also taking into account the

environmental impact that may be caused, and therefore, if the variation

of ±10% is considered to be permissible because of the working

procedures for the simple reason that while extracting the minerals, the

practical aspect has also to be taken into consideration as the winning of

the minerals manually or in a merchandised way may not bring the strict

precision of the limit.

14. The Apex Court also took into consideration the calculation

suggested by Central Empowered Committee (CEC) when there is a

variation in extraction of the minerals in accordance with the EC limit.

The reliance on Paragraph 151 of the said judgment by the State has to

be understood in the perspective of calculating the compensation from

the leaseholder, and has no bearing on the issue that if the variation up

to ±10% is permitted, it would invite any such compensation or penalty

under Section 21(5) of the Act.

15. It is thus apparent from the meaningful reading of the judgment

rendered in Common Cause (supra) that both the mining plan as well as

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the EC are mandatory and complements each other, but it would further

be evident from the observation that the Supreme Court accepted the

variation in terms of the said report up to ±10%. Taking into account

the practical aspect of operating the mines, we find no reason as to why

the State Government would not consider the said aspect, and once the

Apex Court has accepted that the variation as suggested by the IBM is

reasonable and justified, the authorities ought to have taken into

consideration the aforesaid aspect in calculating the compensation as

suggested by CEC and reflected in paragraph-155 of the said judgment.

16. We find no reason that such variation is not applicable in this

regard, and therefore, held that the authorities ought to have given the

buffer of ±10% variation while calculating the compensation as per the

formula given by the CEC and reflected in paragraph 155 of the said

judgment while calculating the permissible annual production and not

on monthly production. The order of Revisional Authority is, thus,

quashed and set aside. Consequently the demand raised is also quashed

and set aside. The authorities are directed to recalculate taking into

account ±10% variation over and above the EC limit, and in the event it

is found that the extraction of the ore exceeds the said variation limit,

would calculate the compensation in terms of the judgment rendered in

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Common Cause (supra) by giving a reasonable time to meet such

requirement.

17. The writ petition is, thus, disposed of.

I agree.

(Chittaranjan Dash)

Judge

(Harish Tandon)

Chief Justice

Arun Mishra/

M. Panda

Digitally Signed

Signed by: MRUTYUNJAYA PANDA

Reason: Authentication

Location: High Court of Orissa, Cuttack

Date: 11-Nov-2026 14:16:30

Signature Not Verified