Case BriefsSupreme Court

Supreme Court: The bench of MR Shah* and Krishna Murari has allowed mining baron G. Janardhan Reddy to stay at Bellary upto 06.11.2022 to be with his daughter who has delivered a baby. He has, however, been directed to move out of Bellary and remain out of Bellary in Karnataka and Districts of Ananthapuram and Cuddapah in Andhra Pradesh from 07.11.2022 till the trial is concluded.

Reddy, who is a mining tycoon and also a former Karnataka MLA, has been facing trial for serious offences relating to illegal mining. He has been charged under under Sections 120(B), 420, 379, 409, 468, 411, 427 and 447 of the Penal Code, 1860; Section 2 of the Forest Act, 1927, Rule 21 read with   Rules 4(1), 4(1)(A) and 23 of the Mines and Minerals (Development and Regulation) Act, 1957.

CBi has been conducting investigation in the case and it is its apprehension that as most of the witnesses are from Bellary in Karnataka and District of Ananthapuram and Cuddapah in Andhra Pradesh, if Reddy is allowed to enter, stay and function in the Districts of Bellary in Karnataka and District of Ananthapuram and Cuddapah in Andhra Pradesh, he may influence and/or tamper with the witnesses. In past, the apprehensions are proved to be true and even the judicial officers were influenced/tried to be influenced.

The Court expressed dismay over the fact that even after a period of 11 years of filing the FIR and despite Supreme Court’s direction for expedition of the trial, the trial has not begun on the ground that the accused/co-accused are filing the applications for discharge one after another.

Stressing on the early conclusion of the trial would enhance the faith of people in justice delivery system, the Court held that the trial must come to its logical end at the earliest.

“Any attempt on the part of the accused to delay the trial of serious offences is to be dealt with iron hands. More the delay, more the possibilities of influencing the witnesses.”

The Court, hence, directed the trial Court to begin the trial on day to day basis and once the trial begins, Reddy must be restrained from entering into the Districts of Bellary in Karnataka and District   of Ananthapuram and Cuddapah in Andhra Pradesh looking to the strong apprehension on the part of the CBI.

Directions

(1) Trial Court/Special Court to conduct the trial on day to day basis from 09.11.2022 and conclude it within a period of six months without fail;

(2) The prosecution may examine first, the witnesses from Bellary in Karnataka and District of Ananthapuram and Cuddapah in Andhra Pradesh as far as possible;

(3) All the accused are hereby directed to cooperate the Special Court in conclusion of the trial at the   earliest and within the period stipulated hereinabove and any attempt on the part of the accused   to delay the trial shall be viewed very seriously;

(4) Reddy is permitted to stay at Bellary upto 06.11.2022 to visit his daughter. He shall then move out of Bellary from 07.11.2022 till the trial is concluded.

[Gali Janardhan Reddy v. State of Andhra Pradesh, 2022 SCC OnLine SC 1375, decided on 10.10.2022]


*Judgment by: Justice MR Shah


For accused: Senior Advocate Meenakshi Arora

For respondent: ASG Madhavi Divan

NGT
Case BriefsTribunals/Commissions/Regulatory Bodies

National Green Tribunal, New Delhi (NGT): The Bench of Adarsh Kumar Goel, J (Chairperson) and Sudhir Agarwal, J (Judicial Member) and Prof. A. Senthil Vel (Expert Member) took suo moto cognizance based on media report titled “Non compliance of EC conditions by Kulda coal mine, Odisha & Tamnar Thermal Plant, Chhattisgarh” highlighting environment norms violations, particularly EC conditions in relation to operation of Kulda coal mine and Tamnar thermal plant, Chhattisgarh.

Matter in concern

In the present matter, it was alleged by the media report that violation of environment norms had taken place in the course of transportation of coal from Kulda to Tamnar in 200 dumpers of 21 tonne capacity, through 14 villages with a combined population of over 15,000 as per census 2011, requiring 400 daily trips or a truck passing every 3-4 minutes. Due to non-availability of dedicated coal linkage and delay in construction work, JPL will continue transportation of coal by road from Kulda. Due to these frequent trips, villagers have complained of spike in respiratory illness and contamination of water bodies and cropland, leading to loss of productivity and blackening of vegetables and paddy.

Bench’s take

Taking suo moto cognizance based on a media report, the bench constituted a joint Committee of CPCB, State PCBs of Odisha and Chhattisgarh, Regional Officer of MoEF&CC at Bhuvneshwar and District Magistrates Sundergarh (Orissa) and Raipur (Chattisgarh), vide order dated 30-03-2022, to ascertain facts and furnish a report to the Tribunal regarding the alleged violation of environment norms.

The joint committee filed its report dated 11-07-2022 and acknowledged the violations and recommended remedial actions.

Observation of the Committee

The joint committee observed, at present, more than 1,400 heavy coal-transporting vehicles, both loaded and unloaded trucks, ply on the road due creating a heavy traffic which has affected the use of the road by villagers for their basic needs. Moreover, the road in concern was in a damaged condition for more than five years and due to this the villagers have faced fugitive dust problems and noise issues during plying of vehicles.

Summarising the observations of the members of the committee, all agreed that the road passing through the villages is not in motorable condition and has an impact on the environment, health and safety of local villagers. The road in concern needs to be repaired and renovated at the earliest.

The Committee also recommended for the preparation of transport management plan after in depth study, in terms of the total area required for the transportation of the coal and other commodities in the next 20 years.

Bench’s decision

Accepting the reports filed by the Committee, the bench ordered to repair and renovate the road used for the transportation of coal from Kulda coal mine in Odisha to Tamnar thermal power plant in Chhattisgarh at the earliest and also to take remedial actions in terms of the recommendations to stop further pollution and to fix liability for the past violations on ‘Polluter Pays’ principle.

To implement the order, the bench suggested the the Chief Secretaries (Orissa and Chhattisgarh) to hold a joint meeting along with the Project Proponents (PPs) and Members of the joint Committee to be chaired by the Chief Secretary, Orissa  within one month, to work out further course of action and the joint Committee may file an action taken report within three months.

[In re: News report published in the Newspaper named Indian Express, Daily News Paper dated : 4th February, 2022, Kolkata, Late City Edition titled “Non compliance of EC conditions by Kulda coal mine, Odisha & Tamnar Thermal Plant, Chhattisgarh”, Original Application No. 236/2022, dated 15-07-2022]

 


Ritu Singh, Editorial Assistant has put this report together

Experts CornerKhaitan & Co

Background

Last year, the Central Government introduced a slew of changes to the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) through the Mines and Minerals (Development and Regulation) Amendment Act, 2021 dated 28-3-2021 (2021 Amendment). One of the significant changes was the deletion of a section related to transfer of mines, more specifically, which also dealt with the transfer of captive non-auction mines upon payment of transfer charges.

So, how does this change impact stakeholders in the mining industry?

Before we delve into the impact of the latest changes, we must understand the journey of transfer charges under mining laws in India.

The road so far

One of the pivotal moments in the development of mining laws in India came in the year 2015 — when the Mines and Minerals (Development and Regulation) Amendment Act, 2015 dated 27-3-2015 (2015 Amendment) was introduced to bring a significant change to the existing mining laws with a primary objective to introduce a more transparent manner of allocation of mines through an auction route process. While this was a positive change, it came with its own challenges.

The 2015 Amendment only allowed transfer of a mineral concession granted through an auction process — which consequently impacted mining lease holders that held mining leases granted to them prior to 2015 albeit not under an auction process and were therefore, prohibited from transferring their mineral concessions.

The above position however changed slightly in 2016 when the Government brought about the Mines and Minerals (Development and Regulation) Amendment Act, 2016 dated 9-5-2016 (2016 Amendment). The 2016 Amendment resolved the anomaly created by the 2015 Amendment by introducing a new provision that allowed for the transfer of non-auction captive mines and thereby paving way for the introduction of the concept of transfer charges as notified under Minerals (Transfer of Mining Lease Granted Otherwise than through Auction for Captive Purpose) Rules, 2016 on 30-5-2016 (Transfer Rules).

Transfer charges were, in effect, an additional royalty payable to the Government by a mining lease holder to whom such captive non-auction mining lease (granted prior to 2015) was transferred. While transfer charges were introduced, provisions related to transfer of mineral concessions under MMDR Act still had to be followed, and the condition of obtaining a prior approval of State Government continued to apply.

Per the Transfer Rules, a mining lease could be transferred upon the following payments being made to the State Government concerned:

(i) upfront payment equivalent to 0.50% based on estimation of the value of estimated resources for such mine, adjustable against the transfer charges payable;

(ii) a performance security equivalent to 0.50% of the value of estimated resources; and

(iii) an additional royalty equivalent to 80% of royalty in addition to the royalty payable to the State Government concerned.

Challenges

While the Transfer Rules provisioned for transfer of captive non-auction mines, it suffered from some lacunae. Firstly, the transferee was required to make an upfront payment of 0.50% of “value of estimated resources” within 30 days of the State Government concerned making such demand, however neither was the methodology for calculation of such value prescribed, nor was the aforesaid term defined, which brought in an element of subjectivity. The Transfer Rules provided for the State Government to demand an upfront payment — for transferor and transferees that meant that prior to such a transfer, one would necessarily have to do an analysis and understand at least the approximate costs involved in undertaking such a transfer. As there was no set method for the calculation of the upfront payment, captive mine holders would usually conduct a cost analysis to estimate the approximate range of upfront payment required to be paid to the State Government. Accordingly, the ‘value of estimated resources’ available for transfer would be estimated assuming scenarios such as the capacity of the plant and year on year mineral requirement to be extracted for the remaining life of the mine or the term of the mining lease, as the case maybe. Such estimate could also be calculated by using data from filings made to regulatory authorities (for example, the Indian Bureau of Mines) by a mineral concession holder or based on data from environmental approvals accorded to such mineral concession holders. The State Governments, though, would typically demand transfer charges upon conducting a geological study of the mining lease area and determining the mineable reserves available for transfer.

Further, there were other practical considerations to be kept in mind due the sector dynamics especially in industries where a captive plant may have more than one captive mine — how to treat mining lease allocations that were under pending litigations or even commercial contingencies created, such as businesses struggling or companies holding mining leases but under financial stress. The transfer charges formula, therefore, did not per se factor in the ground realities and dynamic nature of the mining sector. The consequent cost of paying such additional royalty by a transferee of a mineral concession dissuaded such transferees from incurring such a significant financial cost and amplified the business risk.

The 2021 Amendment

Through the 2021 Amendment, Section 12-A(6) of the MMDR Act that required payment of transfer charges has been deleted, and a new proviso has been inserted in Section 12-A(2) for transfer of mineral concessions, which clarifies that transfer charges are no longer payable by the transferee of mining lease. However, any transfer charges already paid prior to the 2021 Amendment will not be refundable. The relevant proviso is reproduced below:

Provided that the transferee of mining lease shall not be required to pay the amount or transfer charges referred to in sub-section (6), as it stood prior to the commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2021, after such commencement but no refund shall be made of the charges already paid.

Furthermore, the Ministry of Mines through Notification dated 2-11-2021 has rescinded the Transfer Rules, that prescribed the transfer charges and other payments, including upfront payment, recurring transfer charges and submission of performance security. It is important to note that while transfer charges are no longer applicable on a transfer of mine — stamp duty and registration fees on merger orders, mineral development and production agreements, transfer deeds and new mining leases will still be payable. A detailed cost analysis is also required for land leased or owned in and around such mining lease areas and transfer thereto from a real estate perspective.

What lies ahead?

The removal of transfer charges and rescission of Transfer Rules will provide a conducive environment for boosting the transactions landscape for captive mine holders and catalyse fresh investments in the sector. However, the legislature has made it clear that transfer charges paid prior to the 2021 Amendment will not be refunded. This may be amenable to a challenge by those who were required to bear the additional royalty prior to omission to the 2021 Amendment, and the same will have to stand the test of time and judicial scrutiny.

Nonetheless, the rescission of Transfer Rules and the amendments brought to the MMDR Act is a welcome step in the right direction with an aim to ease transfer of mineral concessions for captive non-auction mines — thereby attracting investment in the mining sector and eventually increasing mineral output and revenue to the State Governments, by soldering up the existing regulatory gaps in the mining sector.


† Partner, Khaitan & Co.

†† Senior Associate, Khaitan & Co.

††† Associate, Khaitan & Co.

Case BriefsSupreme Court

Supreme Court: In the case where the National Green Tribunal had directed that unless the State Expert Appraisal Committee (SEAC) and the State Environment Impact Assessment Authority (SEIAA) grants approval to the District Survey Report (DSR) for the purpose of mining of sand, the same cannot be carried out in the State of Bihar, the bench of L. Nageswara Rao, Sanjiv Khanna and BR Gavai, JJ has modified the said order and has allowed the State to continue with legal mining activities through Bihar State Mining Corporation with certain necessary arrangements.

“… until the DSRs are finalized and granted approval by SEAC and SEIAA, it is appropriate that certain necessary arrangements are permitted so that the State can continue with legal mining activities. This apart from preventing illegal mining activities, would also ensure that the public exchequer is not deprived of its share in legalized mining.”

Understanding the need for a balanced approach of sustainable development ensuring environmental safeguards, the Court noticed that,

“…it also cannot be ignored that when legal mining is banned, it gives rise to mushroom growth of illegal mining, resulting into clashes between sand mafias, criminalization and at times, loss of human lives. It also cannot be disputed that sand is required for construction of public infrastructural projects as well as public and private construction activities. A total ban on legal mining, apart from giving rise to illegal mining, also causes huge loss to the public exchequer.”

Preparation of DSRs as per Enforcement and Monitoring Guidelines for Sand Mining, 2020

In accordance with the Enforcement and Monitoring Guidelines for Sand Mining, 2020,

  • the DSR is required to be prepared before the auction/e-auction/grant of mining lease by Mining Department or Department dealing with mining activity in the respective States.
  • the potential site for mining having its impact on the forest, protected area, habitation and bridges should be avoided. For this, a sub-divisional committee is required to be formed which, after the site visit, is required to decide regarding the suitability of the sites for mining.
  • the sub-divisional committee is further required to record its reasons for selecting the mining lease in the patta land. Various details are required to be given in the annexures appended to the said policy.

Preparation of DSRs through Private consultants – Unnecessary

When the 2020 guidelines as well as the notification issued by MoEF and CC of 2016 itself provide for constitution of sub-divisional committees comprising of the officers of the State Government from various Departments for identification of the potential sites for mining, there would be no necessity of the DSRs being prepared through private consultants as directed by the Tribunal in the impugned order.

The sub-divisional committee consists of various officers from Revenue Department, Irrigation   Department, State Pollution Control Board, Forest Department and Geology Mining Department of the State Government who are better equipped to visit the sites and prepare the draft DSR for the concerned district.

“The advent of modern technology, various technological gadgets like Drones and satellite imaging etc. can be used for identification of the potential sites and preparation of the DSR and also to check misuse and unauthorized mining.”

Apart from that, preparation of DSR through private consultants would also unnecessarily burden the public exchequer.

Directions

(i) The exercise of preparation of DSR for the purpose of mining in the State of Bihar in all the districts shall be undertaken afresh. The draft DSRs shall be prepared by the sub-divisional committees   consisting of the Sub-Divisional Magistrate, Officers from Irrigation Department, State Pollution Control Board or Committee, Forest Department, Geological or mining officer. The same shall be prepared by undertaking site visits and also by using modern technology. The said draft DSRs shall be prepared   within a period of 6 weeks from the date of this order. After the draft DSRs are prepared, the District Magistrate of the concerned District shall forward the same for examination and evaluation by the SEAC.   The same shall be examined by the SEAC within a period of 6 weeks and its report shall be forwarded to the SEIAA within the aforesaid period of 6 weeks from the receipt of it. The SEIAA will thereafter consider the grant of approval to such DSRs within a period of 6 weeks from the receipt thereon;

(ii) While preparing DSRs and the appraisal thereof by SEAC and SEIAA, it should be ensured that a strict adherence to the procedure and parameters laid down in the policy of January 2020 should be followed;

(iii) Until further orders, the State Government can carry on mining activities through Bihar State Mining Corporation for which it may employ the services of the contractors. However, while doing so, the State Government shall ensure that all environmental concerns are taken care of and no damage is caused to the environment.

[State of Bihar v. Pawan Kumar, CIVIL APPEAL NOS. 3661­3662 OF 2020, order dated 12.11.2021]


Counsels:

For State: Senior Advocate Atmaram Nadkarni

For applicant: Senior Advocate P.S. Patwalia

Legislation UpdatesStatutes/Bills/Ordinances

President promulgated — The Mineral Laws (Amendment) Ordinance, 2020

The ordinance for amendment in the MMDR Act 1957 and the CMSP Act 2015 has been promulgated. The Union Cabinet had earlier approved the amendments intending to open up new areas of growth in the coal & mining sector.

The amendments in the Acts would enable the following:

  1. Enhancing the  ease of doing business
  2. Democratization of the coal mining sector by opening it up to anyone willing to invest.
  3. Offering of unexplored and partially explored coal blocks for mining through prospecting license-cum-mining Lease (PL- cum-ML).
  4. Promoting Foreign Direct Investment in the coal mining sector by removing the restriction and eligibility criteria for participation.
  5. Allowing of the successful bidder/allottee to utilise mined coal in any of the plants of its subsidiary or holding company
  6. Attracting large investment in the coal mining sector as restrictions of end-use has been dropped.

The details are as given below:

  1. Amendments in respect of the Ministry of Coal

Amendment 1:   To provide for allocation of coal blocks for composite prospecting licence-cum-mining lease (PL-cum-ML)

Earlier, there was no provision for grant of composite prospecting licence-cum-mining lease (PL-cum-ML) in respect of coal/ lignite. A coal/lignite block could be either be allocated for PL or for ML. The Amendment has enabled the allocation of coal blocks for composite prospecting licence-cum-mining lease (PL-cum-ML) which will help in increasing the inventory of coal/ lignite blocks for allocation. Coal blocks with different grades and in a wide geographical distribution will now be available for allocation.

The Sections involved were Section 4(2), 5(1), 8(4), 8(8), 8(9) and 31(2)(b) of the CMSP Act and Section 11A and 13(2) of the MMDR Act

Amendment 2:   Clarifying the power of Central Government to specify the purpose of allocation and that ‘any’ company can participate

There was a lack of clarity earlier in the language of the provisions in the Acts leading to a restrictive interpretation of the eligibility conditions in the auction. It has now been clarified that any company selected through auction/ allotment can carry on coal mining operation for own consumption, sale or for any other purposes, as may be specified by the Central Govt. allowing wider participation and competition in the auction.

Thus, the companies which do not possess any prior coal mining experience in India but are financially strong and or have mining experience in other minerals or in other countries can now participate in auction of coal/lignite blocks. This would also allow the implementation of the 100% FDI through automatic route for sale of coal.

The Sections involved are 11A of the MMDR Act and Section 4(2) and 5(1) of the CMSP Act.

Amendment 3:   Flexibility in deciding the end-use of Schedule II and III coal mines

Hitherto, the Schedule II and III coal mines could only be auctioned to companies that are engaged in specified end-use. Now, the omission of sub-section (3) of Section 4 of the CMSP Act has provided flexibility to the Central Govt. in deciding the end-use of Schedule II and III coal mines under the CMSP Act. This would allow wider participation in the auction of Schedule II and III coal mines, for a variety of purposes such as own consumption, sale or for any other purpose, as may be specified by the Central Govt.

Amendment 4:   Termination of the allocations made under the CMSP Act, their reallocation and compensation

The CMSP Act and the CMSP Rules were silent on the subsequent allocation of coal mines upon the termination of allocations made under the Act as well as rights and liabilities of the allottee, whose allocation has been terminated. With the amendment of Section 8 (insertion of sub section (13), (14) and (15) in CMSP Act), it is has become possible to provide for allocation of the coal mine to next successful bidder or allottee, subsequent to termination of its allocation along with the matters incidental to it. The Act now also provides for compensation to the allocated whose allocation has been terminated.

Amendment 5:  Appointment of Designated Custodian in mines under production:

Earlier, there was no provision for appointment of designated custodian for management of the mines under production whose vesting/ allotment order has been cancelled. By amending Section 18 of the CMSP Act, it is now possible for the appointment of designated custodians for management of the mines, apart from Schedule II mines, which have come under production and whose vesting/ allotment order has been cancelled. It, therefore, addresses the issue of management and operation of the mines after their termination, which have come under production.

Amendment 6:  Dispensing with the requirement of previous approval in certain cases

With the amendment of Section 5 and 17A of the MMDR Act, the repetitive and redundant provision requiring previous approval of the Central Government even in cases where the allocation or reservation of coal/ lignite block has been made by the Central Govt. itself has been done away with. This would significantly reduce the time taken for operationalisation of coal/ lignite mines.

Amendment 7:   Entitlement to successful allocattee to utilise the coal mined in plants of Holding and Subsidiary company:

Earlier a successful allocattee was entitled to utilise the mined coal only in any of its plants. With the amendment of  Section 20(2)of the CMSP Act now the reference of Holding company and the Subsidiary company has been added. This would make the successful bidder/allottee entitled to utilise mined coal in any of its plants or plants of its subsidiary or holding company.

Amendment 8:  Certain Consequential and clarificatory Amendments:

Certain consequential and clarificatory amendments were required in the language of various provisions for the smooth implementation of the CMSP Act. Section 9 and 20(1) of the CMSP Act have now been amended which has resulted in the clarification of language of Section 9 (related to priority of disbursal) Further, language of Section 20(1) has been clarified to avoid any arrangement between two coal linkage holders as the same is not subject matter of the CMSP Act.

  1. Amendments in respect of Ministry of Mines

Amendment 1:   Insertion of new section 4B (after section 4A) to enable the Central Govt. to prescribe conditions for ensuring sustained production by the holder of mining leases, who have acquired rights/approvals/clearances etc. transferred from the previous lessee, as per the provisions under section 8B, which is incorporated in this amendment:

The pre-amended MMDR Act, provided a time period of two years for the new lessee for starting the mining operation, whereas the newly introduced section 8B of this Act, provides for deemed acquiring of valid rights /approvals /clearances by the new lessee. The objective of the amendment is to ensure the continuity of production of minerals. Hence, there is a need to specify the conditions for production by the new lessee, who will avail benefits of section 8B. Further, the Central Government derives power to prescribe the conditions for the new lessees to commence production without prejudice to the time period of two years for starting the production prescribed in Section 4A.

Amendment 2:  Amendment of Section 8A by introducing a proviso to clarify the intent of Section 8A(4) of the MMDR Act:

The previous section 8A(4) of the MMDR Act provided for auction of leases on the expiry of the lease. There existed scope for ambiguity about initiating the advance action/process by the State Government for notifying the expiring leases for auction. With the amendment, it has been clarified that State Government can take up advance steps for auction of blocks before the expiry of lease period. This would ensure that the production of the minerals from such blocks can be seamlessly continued.

Amendment 3:  Provisions to ensure that the successful bidder of mining leases expiring under Section 8A(5) & 8A(6), shall acquire all valid rights/approvals/clearances; for a period of two years and within which period he/she shall apply for a fresh licence:

The working mining leases of Odisha are expiring during 2020. These leases produced about 58 Million Tonne of iron ore, 1.80 Million Tonne of chromite and 0.77 Million Tonne of manganese during the year 2018-19.  Statutory clearances required to start the mining operations for the new leases have to be granted expeditiously to enable the new lessees to continue the mining operations.

The new lessee has to obtain 20 approvals to start the mining operations, of which 9 are related to different Central Govt. Ministries and the remaining are from the State Government. In the normal course, the minimum time period required to obtain these approvals vary from two to three years. This whole process would delay the commencement of mining operations by the new lessees. Any delay in commencing the mining operations by the new lessee would adversely affect the mineral production in the country, which in turn would impact the important downstream industries like steel, cement, etc.

With the insertion of new section 8B (after section 8A) of the MMDR Act, the successful bidders of the mining leases expiring under section 8A(5) & 8A(6) of the MMDR Act, deemed to have acquired all valid rights/ approvals/ clearances/ licenses and the like; for a period of two years and can start mining operation without loss of time. Seamless continuance of mining operations is in public interest as this will prevent disruption in the supply of raw material (mineral) to the industries.

The above amendments (1,2&3) pertaining to Mines will promote ease of doing business and will benefit the holders of auctioned brownfield mining leases on the expiry of their lease period starting from March 2020 and then from March 2030.

Amendment 4:   Provisions to enable the holders of Non-Exclusive Reconnaissance permit of deep seated minerals and other minerals of the national interest to obtain composite licence (PL-cum-ML) or Mining Lease:

The previous legislative provisions did not allow the non-exclusive reconnaissance permit holders to apply for a mining lease. The private participation in exploration was therefore negligible. In order to enhance the exploration of deep-seated minerals, a facilitating environment has been envisaged to be provided with the insertion of new proviso after sub-section 2 of section 10C. This amendment would allow NERP holders of deep-seated minerals or any minerals of the national interest to apply for a composite licence (PL-cum-ML) or Mining Lease. This would hence augment the exploration of the deep-seated minerals and minerals of national interest, some of which are strategically important for the country.

Amendment 5:   Empowers the Central Government to frame rules in respect of newly introduced sections:

The difficulty of the Central Govt. which had to derive power to make rules to implement the provision of the amended Act has now been removed with the insertion of new clauses in sub-section 2 of section 13. This would give the Central Government power to frame subordinate legislation to implement the intent of the Ordinance.


Ministry of Coal

[Press Release dt. 11-01-2020]

[Source: PIB]

Case BriefsSupreme Court

Supreme Court: In the case where the role and power of the Central Government while dealing with the request of a State Government for reservation of lands for government companies or corporations owned and controlled by the State Government under Section 17A(2) of the Mines and Minerals (Development and Regulations) Act, 1957 was in question, the Bench of Madan B. Lokur and Deepak Gupta, JJ held

“The State Government being the owner of the land and minerals, has a right to make a proposal to the Central Government to reserve lands not held under a prospecting licence or mining lease for exploitation by the State Government companies or undertakings but approval of the Central Government is necessary.”

The Court further clarified that each case has to be decided on its own merits and that the Central Government cannot be bound by any specific parameters. However, the Central Government can not only take into consideration factors of national security or public interest but also economic factors, the policy of the Government and all such other factors which are relevant to decide the issue whether the land should be reserved for exploitation only by State Government Undertakings;

Regarding the question as to the scope of applicability of Section 11(1) and Section 17A(2) of the Act and the effect of the right of preference granted to Reconnaissance Permit holder in terms of Section 11(1) of the Act while dealing with a matter under Section 17A(2) of the Act, the Court held that  Section 11(1) and Section 17A(2) of the Act have no connection with each other. Section 11(1) of the Act deals with preference to be given to Reconnaissance Permit holder and Prospecting Licence holder while considering their case for grant of Prospecting Licence and Mining Lease respectively. This has nothing to do with reservation of land under Section 17A(2) of the Act. The only connection, if it can be called that, is that if a land is held under a Prospecting Licence or Mining Lease, then action under Section 17A(2) of the Act cannot even be initiated. [Geomysore Services (I) Pvt. Ltd.v. Hutti Goldmines Co. Ltd., 2018 SCC OnLine SC 503, decided on 08.05.2018]

Hot Off The PressNews

Supreme Court: Coming down heavily upon Haryana Government for auctioning 558.53 hectares of land for mining purposes, though the available area was only 141.76 hectares, the bench of Madan B. Lokur and Deepak Gupta, JJ said:

“”You cannot go on making fool of the citizens like this. You are the state and it is your responsibility to ensure that what was advertised should be given.”

Observing that the petitioner firm was entitled to a refund of the deposited amount, the Court directed the state to refund the money the firm along with 9 per cent interest per annum from the date of deposit till the date of payment, keeping in view the “vast discrepancy” of area mentioned in the advertisement and area of land made available.

When the counsel for Haryana said it was the duty of the company to ascertain whether the land was actually 558.53 hectares, an annoyed bench said “it is very easy to blame the citizens for everything just because you are in power”. The bench said:

“The public notice was for 558.53 hectares. How can you give only 141.76 hectres and say it is the duty of applicant to verify this.”

Source: PTI

Case BriefsSupreme Court

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]

Case BriefsSupreme Court

Supreme Court: Concerned over a mining scandal of enormous proportions involving megabucks in the State of Odisha, the bench of Madan B. Lokur and Deepak Gupta, JJ said that though the Court cannot lay down limits on the extent of mining activities that should be permitted by the State of Odisha or by the Union of India, this is an aspect that needs serious consideration by the policy and decision makers in our country in the governance structure. The Court hence, directed the Union of India to revisit the National Mineral Policy, 2008 and announce a fresh and more effective, meaningful and implementable policy within the next few months and in any event before 31st December, 2017.

Taking note of the indiscriminate mining operations in Odisha, the Court said there is no effective check on mining operations nor is there any effective mining policy. Regarding the National Mineral Policy, 2008, the Court said that the same seems to be only on paper and is not being enforced perhaps due to the involvement of very powerful vested interests or a failure of nerve. The Court also said that the Policy was almost a decade old and the variety of changes that have taken place since then, including the advent of rapacious mining in several parts of the country, it was necessary that a new updated Policy was brought in.

Directing the constitution of an Expert Committee under the guidance of a retired Supreme Court judge for identifying the lapses that have occurred over the years enabling rampant illegal or unlawful mining in Odisha and measures to prevent this from happening in other parts of the country, the Court said that undoubtedly, there have been very serious lapses that have enabled large scale mining activities to be carried out without forest clearance or environment clearance and eventually the persons responsible for this will need to be booked but as mentioned above, the violation of the laws and policy need to be prevented in other parts of the country. The rule of law needs to be established.

The Court issued the above directions in the light of the rapaciously mining of iron ore and manganese in the districts of Keonjhar, Sundergarh and Mayurbhanj in Odisha that has apparently destroyed the environment and forests and has caused untold misery to the tribals in the area. [Common Cause v. Union of India, 2017 SCC OnLine SC 857, decided on 02.08.2017]