Citizens' Action Forum vs State Of Odisha And Others .... Opposite ...
2026 Latest Caselaw 712 Ori

Orissa High Court

Citizens' Action Forum vs State Of Odisha And Others .... Opposite ... on 29 January, 2026

Author: Murahari Sri Raman

Bench: Murahari Sri Raman

      IN THE HIGH COURT OF ORISSA AT CUTTACK
                         W.P.(C) No. 31036 of 2025

   Citizens' Action Forum,                            ....                 Petitioner
   Bhubaneswar

                                       -Versus-
   State of Odisha and others                         ....         Opposite Parties


  Advocates appeared in this case:
      For Petitioner                 : Mr. Matrugupta Mishra, Advocate


      For Opposite Parties           : Mr. Debashis Tripathy,
                                      Additional Government Advocate


                          CORAM:
                HON' BLE THE CHIEF JUSTICE
                            AND
          HON'BLE MR. JUSTICE MURAHARI SRI RAMAN

                               JUDGMENT

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

Date of Judgment : 29th January, 2026

--------------------------------------------------------------------------------- HARISH TANDON, CJ.

1. The petitioner showed a serious concern on the

underutilization of the mineral resources across the State of Odisha

and inaction on the part of the State machineries in enforcing the

statutory obligations envisaged under the Mines and Minerals

(Development and Regulation) Act, 1957 (for short, 'the MMDR

Act, 1957'), in the instant public interest litigation (for short,

'PIL').

2. The focus is centralized to promote well-conceived mining

practices to ensure strict compliance of the statutory frameworks

as the State of Odisha holds considerable amount of natural

resources, in particular, iron ore reserves having a potential

capacity to meet the requisite requirements in the indigenous

market. It is not only to further Make in India initiative undertaken

by the Government but making the company more reliant on the

optimum use of the natural resources having direct or indirect

impact on economic, social and political development. A radical

shift was envisioned in the year 2015 from the conventional way

of allotting the mines through an executive fiat to the auction

regime for allocation of the specified minerals in fair and

transparent manner. In order to ensure such policy decision, the

amendments were brought in MMDR Act, 1957 on 26 th March

2015, which came into effect on and from 12th January, 2015.

3. In commensurate with such amendment having brought in

the said Act, correspondingly the Mineral (Auction) Rules, 2015

(for short, 'the Auction Rules, 2015') was framed followed by the

Minerals (Other than Atomic and Hydro Carbons Energy

Minerals) Concession Rules, 2016 (for short, 'the Concession

Rules, 2016'). Rule 12 (1) (ee) of the Concession Rules, 2016

encompasses not only several obligations, rights and the privileges

of the mining lessee but subject to the conditions that in the event

the mining lessee failed to carry out or perform any of its

obligations thereunder or under the lease deed within the specified

time, it is obligatory on the part of the State Government to

perform or carry out the mining activities and the expenses

incurred in this regard shall be borne by the lessee. The said Rule

12 (1) (ee) is reproduced as under:

"12. Terms and conditions of a mining lease.--(1) Every mining lease shall be subject to the following conditions:--

xxx xxx xxx (ee) if the lessee fails to carry out or perform any of its obligations hereunder or under the lease deed within the time specified in that behalf, the State Government may cause the same to be carried out or performed and the lessee shall pay the State Government, on demand, all expenses incurred in this regard by the State Government and the decision of the State Government as to such expenses shall be final;"

4. Keeping in mind the avowed object and the purpose of

regulating the mining activities, the Mineral Conservation and

Development Rules, 2017 (for short, 'the 2017 Rules) was framed

and notified by the Central Government focusing on the scientific

mining, reporting and sustainability obligations to ensure regulated

exploitation of the minerals. In close proximity of time, National

Steel Policy, 2017 (for short, 'the 2017 Policy') was also issued by

the Ministry of Steel aiming to embrace the technology to meet the

competition in the global market ensuring the raw material

security and cost-efficient domestic availability of the iron ore.

5. The Apex Court in Common Cause v. Union of India,

reported in (2017) 9 SCC 499 showed its deep concern on the

unregulated mining activities involving scandal of

enormous proportions leading to megabucks. Several issues were

raised and the Constitution Bench of the apex Court showed its

serious concern and directed the Central Government to have a

fresh look at the National Mineral Policy, 2008 (for short, '2008

Policy') with regard to the conservation and mineral development.

The Committee was constituted and the report was submitted on

31st December 2017, which was published inviting suggestions

from the different sectors as well as the public at large.

6. Upon taking into consideration the suggestions, advice and

changes to be brought in the said policy, National Mineral Policy,

2019 was issued in the month of March 2019, which supersedes

the old aged 2008 Policy. The endeavor was shown to lay down

the strategies for optimum, scientific and sustainable utilization of

minerals affecting the public at large and to meet the public

interest. A concern was shown therein to regulate the

exploitations/mining by providing infrastructure and obligation to

collect the revenue, to make annual business plan/roadmap in the

mining sector in order to ensure transparency and fair-play and to

streamline such activities, and above all, to rationalize unused

PSUs reserved areas for speedy development.

7. The apex Court in Bhushan Power and Steel Ltd. v. State

of Odisha (Through S.L. Seal, Additional Secretary, Steel and

Mines), reported in (2017) 2 SCC 125 succinctly and elucidely

jotted down the object and the purpose of bringing the auction

regime in the following:

"18. The exhaustive Statement of Objects and Reasons reveals that the extensive amendment in the Act were effected after extensive consultations and intensive scrutiny by the Standing Committee on Coal and Steel, who gave their Report in May 2013. As is evident from the Statement that difficulties were experienced because the existing Act does not permit the auctioning of mineral concessions. It was observed that with auctioning of mineral concessions, transparency in allocation will improve; the Government will get an increased share of the value of mineral resources; and that it will alleviate the procedural delay, which in turn would check slowdown which adversely affected the growth of mining sector.

19. The Amendment Act, 2015, as is evident from the objects, aims at : (i) eliminating discretion; (ii) improving transparency in the allocation of mineral resources; (iii) simplifying procedures; (iv) eliminating delay on administration, so as to enable expeditious and optimum development of the mineral resources of the country; (v) obtaining for the Government an enhanced share of the value of the mineral resources; and (vi) attracting private investment and the latest technology."

8. The petitioner in the instant PIL has not raised any concern

on the other aspect of law but is primarily founded upon under-

exploration and underutilization of the iron ores and the

corresponding obligation of the State to ensure the optimum use

thereof. The State of Odisha has a large number of iron ores

deposits having obvious geological potential of about 30% thereof

but despite having obligated the lessees to win the minerals strictly

in terms of the environmental clearance and the terms and

conditions embodied in the lease deed, some of the lessees are not

adhering to the actual output not only affecting the demand in the

market but also impacting the revenue to the Government

exchequer in the form of royalty. Although the provisions relating

to penalty and other allied impositions are incorporated in the Act,

yet neither action is taken by the State nor the provisions contained

under Rule 12 (1) (ee) of the Concession Rules, 2016 are

activated. It admits no ambiguity that the Government held the

mineral being a public resource in trust and, therefore, an

obligation is imposed on the Government to ensure optimum,

continuous and sustainable utilization of those minerals, which is

one of the constitutional obligations, enshrined under Article 39(b)

of the Constitution of India. The petitioner has highlighted the

discontinuous production, a chronic underutilization by the mining

lease holders despite the statutory duty cast upon it under the

MMDR Act, 1957 and the Concession Rules, 2016 for optimum

utilization in the public interest.

9. This Court passed an order in the instant writ petition on

7th November, 2025 directing the State Government to take

instructions on the issues raised in the instant writ petition. On 22 nd

December 2025, the State was directed to make an enquiry to

ascertain the mining lease holders, who are violating the terms and

conditions provided in the statute as well as in the deed in not

extracting the ores as mandated therein in the form of an affidavit.

The State filed an affidavit disclosing the outcome of an enquiry

having conducted in the interregnum wherefrom it appears that

almost majority of the mining lease holders have not secured the

optimum extraction of the iron ore where in some of the cases, the

demand in the form of penalty was raised, yet such demand is kept

in abeyance under the aegis of an interim order passed by this

Court.

10. The entire episode as succinctly narrated hereinabove

leaves no ambiguity that there is a patent underutilization of the

mines by the mining lease holders, but in none of the cases, we

find that the State has taken recourse to the provision contained

under Rule 12 (1) (ee) of the Concession Rules, 2016. The instant

PIL highlighted some of the mining blocks to corroborate the

factum of underutilization not only in one year but continuously

for several years resulting in deprivation of a statutory imposition

under the statute but also affects the livelihood of large number of

people. The petitioner underscores the average minimum

utilization of the ores and the huge loss suffered by the State,

which would roughly amount to rupees four thousand crores. The

provisions contained in the statutory framework cannot be put to

idle or a dead letter. The moment the Government has consciously

incorporated a provision like Rule 12 (1) (ee) of the Concession

Rules, 2016, to meet the avowed object and the purpose, it casts a

statutory duty on the Government to activate the said provision in

the larger public interest.

11. Rule 12 of the Concession Rules, 2016 contains exhaustive

terms and conditions, which are inhered and ingrained in every

mining lease and, therefore, such statutory terms and conditions

embodied in the mining lease, if provide for certain action to be

taken in the event of default or violation thereof, it is the ardent

duty of the State to take recourses thereunder. It is axiomatic to

record that failure on the part of the lessee to comply any terms

and conditions, be it statutory or otherwise, invites any

consequences for action to be taken, the State cannot remain static,

but should invoke such provision in the manner provided therein.

12. We have been given several instances in the affidavit form

by the State where some other lessees have failed to meet the

minimum exploration of the minerals/ores and, therefore, time has

come that the State must take responsibility to take shelter under

Rule 12 (1) (ee) of the Concession Rules, 2016.

13. We, therefore, direct the State Government to invoke the

provisions contained under Rule 12 (1) (ee) of the Concession

Rules, 2016 to carry out or perform the statutory obligations to

ensure the optimum utilization of the mines through the National

Mineral Development Corporation, which is owned and controlled

by the Central Government. The aforementioned direction shall

not only ensure the optimum utilization of the mines, but also

eradicate any burden on the government exchequer.

Signature Not 14. With this direction, the writ petition, stands disposed of.

Verified

Digitally Signed
Signed by:                                                                 (Harish Tandon)
MRUTYUNJAYA
PANDA                                                                       Chief Justice
Reason:
Authentication
Location: High Court
of Orissa, Cuttack                                                          (M.S. Raman)
Date: 29-Jan-2026
13:29:53                                                                       Judge


         M. Panda/Arun Mishra