Illegal Mining in Goa: Second renewal of mining leases granted in violation of Goa Foundation case quashed

Supreme Court: Showing dismay over large-scale illegal mining of iron ore and manganese ore in the State of Goa, the bench of Madan B. Lokur and Deepak Gupta, JJ issued several directions to ensure implementation of mining related environment protection laws and said:

“For the State to generate adequate revenue through the mining sector and yet have sustainable and equitable development, the implementation machinery needs a tremendous amount of strengthening while the law enforcement machinery needs strict vigilance. Unless the two marry, we will continue to be mute witnesses to the plunder of our natural resources and left wondering how to retrieve an irretrievable situation.”

Clarifying the directions issued by the Court in Goa Foundation v. Union of India, (2014) 6 SCC 590, on 21st April 2014, the Bench said that as per the said decision, the State of Goa was obliged to grant fresh mining leases in accordance with law and not second renewals to the mining lease holders. Also, the State of Goa was not under any constitutional obligation to grant fresh mining leases through the process of competitive bidding or auction.

The Court noticed:

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

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

Hence, the Court set aside the second renewal of the mining leases granted by the State of Goa is liable to be set aside and issued the following directions:

  • The mining lease holders who have been granted the second renewal in violation of the decision and directions of this Court in Goa Foundation are given time to manage their affairs and may continue their mining operations till 15th March, 2018. However, they are directed to stop all mining operations with effect from 16th March, 2018 until fresh mining leases (not fresh renewals or other renewals) are granted and fresh environmental clearances are granted.
  • The State of Goa should take all necessary steps to grant fresh mining leases in accordance with the provisions of the Mines and Minerals (Development and Regulation) Act, 1957. The Ministry of Environment and Forest should also take all necessary steps to grant fresh environmental clearances to those who are successful in obtaining fresh mining leases. The exercise should be completed by the State of Goa and the Ministry of Environment and Forest as early as reasonably practicable.
  • The State of Goa will take all necessary steps to ensure that the Special Investigation Team and the team of Chartered Accountants constituted pursuant to the Goa Grant of Mining Leases Policy 2014 give their report at the earliest and the State of Goa should implement the reports at the earliest, unless there are very good reasons for rejecting them.
  • The State of Goa will take all necessary steps to expedite recovery of the amounts said to be due from the mining lease holders pursuant to the show cause notices issued to them and pursuant to other reports available with the State of Goa including the report of Special Investigation Team and the team of Chartered Accountants.

In Goa Foundation case, it was held that all the iron ore and manganese ore leases had expired on 22nd November, 2007 and hence, any mining operation carried out by the mining lease holders after that date was illegal. It was also held that all the mining lease holders had enjoyed a first deemed renewal of the mining lease and for a second renewal an express order was required to be passed in view of and in terms of Section 8(3) of the MMDR Act. [Goa Foundation v. Sesa Sterlite Ltd., 2018 SCC OnLine SC 98, decided on 07.02.2018]

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