Common Cause Vs. Union of India and Ors.

[Writ Petition (Civil) No. 114 of 2014]

Prafulla Samantra and ANR. Vs. Union of India and Ors.

[Writ Petition (Civil) No. 194 of 2014]

Madan B. Lokur, J.

1. The facts revealed during the hearing of these writ petitions filed under Article 32 of the Constitution suggest a mining scandal of enormous proportions and one involving megabucks. Lessees in the districts of Keonjhar, Sundergarh and Mayurbhanj in Odisha have rapaciously mined iron ore and manganese ore, apparently destroyed the environment and forests and perhaps caused untold misery to the tribals in the area. However, to be fair to the lessees, they did the detail steps taken to ameliorate the hardships of the tribals, but it appears to us that their contribution is perhaps not more than a drop in the ocean - also too little, too late.

Facts leading up to the report of the Central Empowered Committee

2. Rabi Das, the editor of a daily newspaper called Ama Rajdhani filed I.A. No. 2746-2748 of 2009 in a pending writ petition being T.N. Godavarman v. Union of India.1 He prayed, inter alia, for the following directions from this Court: "

a) Issue a direction to the Central Empowered Committee to conduct an exhaustive fact finding study of the illegal mining in Keonjhar, Sundargarh and other Districts of Orissa;

b) Direct appointment of a "Commission" to investigate and study the modalities of the illegal machinations, fix responsibility on individuals (in Government and outside it) and recommend remedial measures to be immediately implemented by the Government of India and the Government of Orissa;

c) Direct the Respondents to take effective and appropriate action to ensure closure/stoppage of all the illegal mining activities in the concerned areas and direct prosecution and punish all those found guilty of this illegal mining in violation of the Mines and Minerals (Development and Regulation) Forest (Conservation) Act, 1980 and other relevant laws."

3. The applications were taken up for consideration on 6th November, 2009 when notice was issued to the Central Empowered Committee (for short 'the CEC') to file its report/response within six weeks.

4. On 26th April, 2010 the CEC submitted an interim report which was noted by this Court and taken on record. The report was of a general nature but contained quite a few recommendations. Some of the recommendations presently relevant are as follows:

"(b) Even otherwise the Rule 24-A(6), MCR, 1960 does not authorize the lessee to operate a mine without the statutory clearances/approvals. Therefore, in respect of a mine covered under the 'deemed extension' clause, the mining operations should be permitted to be undertaken in the non forest area of the mining lease only if

(i) it has the requisite environmental clearance;

(ii) it has the consent to operate from the State Pollution Control Board under the Air and Water Acts;

(iii) Mining Plan is duly approved by the competent authority; and

(iv) the NPV for the entire forest falling within the mining lease is deposited in the Compensatory Afforestation Fund. The mining in the forest land included in the mining lease should be permissible only if, in addition to the above, the approval under the FC Act/TWP has been obtained;

(c) No forest land can be leased/assigned without first obtaining the approval under the FC Act. Therefore, the forest area approved under the FC Act should not be lesser than the total forest area included in the mining leases approved under the MMDR Act, 1957. Both necessarily have to be the same. In view of the above, this Hon'ble Court while permitting grant of Temporary Working Permission to the mines in Orissa and Goa has made it one of the pre-conditions that the NPV will be paid for the entire forest area included in the mining leases. Similarly, all the mining lease holders in Orissa should be directed to pay the NPV for the entire forest area, included in the mining lease;

(d) In Orissa, substantial areas included in the mining leases as non forest land have subsequently been identified as DLC forest (deemed forest/forest like areas) by the Expert Committee constituted by the State Government pursuant to this Hon'ble Court's order dated 12.12.1996.

While processing and/or approving the proposals under the FC Act in many cases such areas have been treated as non-forest land.

It is recommended that

(i) the NPV for the entire DLC area included in the mining lease, after deducting the NPV already paid, should be deposited by the concerned lease holder and

(ii) the mining operations in the unbroken DLC land (virgin land) should be permissible only if the permission under the FC Act has been obtained/is obtained for such area. Keeping in view the peculiar circumstances as was existing in Orissa and subject to the above, the mining operations in the broken DLC land may be allowed to be continued provided the other statutory requirements and Rules are otherwise being complied with."

The report concluded by recording as follows: "

a) an attempt has been made for the first time by the CEC to comply and analyse the status of all the mining leases in a State and to suggest effective and remedial measures - something made possible because of the unstinted cooperation extended by the senior functionaries of the Forest and Mines Departments of the State Government; and

b) the above recommendations if accepted and implemented will, besides ensuring that mining is done in compliance with the statutory provisions, result in recovery of additional amount towards the NPV etc. running into hundreds of crores of rupees. It would be appropriate that a part of this additional amount, say 50% is used through a SPV for undertaking specific tribal welfare and area development works so as to ensure inclusive growth of the mineral bearing areas. The CEC proposes to file detailed schemes in this regard for seeking permission of this Hon'ble Court provided the State of Orissa as well as the MoEF endorse the course of action proposed above." The significance of the second conclusion will be discussed by us a little later.

5. Notice was issued on the report returnable on 7th May, 2010. On the adjourned date, the following order was passed by this Court: "The CEC has filed its Report. The State would like to file its response. Six weeks time is granted for the same. The recommendations of the CEC which are acceptable to the State Government can be complied with." It may be mentioned that some of the recommendations made by the CEC have been accepted and implemented by the State of Odisha.

6. The issue of mining in Odisha again came up for consideration on 16th September, 2013 and this Court passed the following order: "We call for a report from the Central Empowered Committee within a period of six weeks. We direct that the parties of the State Government of Odisha and the Central Government will cooperate with the Central Empowered Committee to enquire into the matter and furnish a report. The matter be listed on a Monday after six weeks."

7. With reference to the order passed on 16th September, 2013 the CEC conducted an inquiry and some information was sought from M/s Sarda Mines Private Limited (for short 'SMPL'). This was objected to by SMPL who filed an application which was taken up for consideration on 9th December, 2013. The following order was passed on that day: "By our order dated 16th September, 2013, we had called for a Report from the Central Empowered Committee within a period of six weeks. It is stated on behalf of the Central Empowered Committee that the Report could not be ready as part of the information called for have not been furnished by the State Government.

Mr. Venugopal, learned senior counsel for the applicant M/s. Sarda Mines Private Limited in IA No.3721 submits that since some of the matters are pending before the High Court, a prayer has been made for not furnishing the required information to the Central Empowered Committee. List this matter in the second week of January, 2014. In the meantime, the Central Empowered Committee may not submit its final Report."

8. The matter was again taken up on 13th January, 2014 and this Court passed the following order: "We have heard learned counsel for the parties. We have also perused the letter dated 17th October, 2013 of the Member Secretary, Central Empowered Committee sent to the Chief Secretary, Government of Odisha along with its annexures and in particular, the Statement of Details of information and documents sought by Central Empowered Committee for the meeting convened on 30th October, 2013, which cover forest and environmental issues.

We, accordingly, modify the order dated 9th December, 2013 and direct the Central Empowered Committee to submit its final report on the queries made by the State Government with regard to the details of the documents sought for in the letter dated 17th October, 2013 within a period of six weeks. The Report will not cover cases other than forest and environmental issues. The lessees and others from whom information is sought for will cooperate if they do not cooperate the Central Empowered Committee will give its report. A copy of the interim report of 26th April, 2010 will be furnished to the learned counsel appearing for the State of Odisha.

This matter be listed on 20th January, 2014 for consideration of the recommendations made by the Central Empowered Committee in the said Report dated 26th April, 2010." Thereafter and partly based on reports given by Justice M.B. Shah, a retired judge of this Court, holding a commission under the Commissions of Inquiry Act, 1952 a writ petition being was filed by Common Cause. Several prayers were made in the writ petition, and some of the more significant prayers read as follows:-

"(a) Issue a writ of mandamus or any other appropriate writ directing the Union of India and Government of Odisha to immediately stop forthwith all illegal mining in the State of Odisha and to terminate all leases that are found to be involved in illegal mining and mining in violation of the provisions of the Forest Conservation Act 1980, the environment laws and other laws.

(b) Issue a writ of mandamus or any other appropriate writ directing the Union of India and Government of Odisha to take action against all the violators involved either directly or indirectly in illegal mining including those named in the report of Justice Shah Commission.

(c) Issue a writ of mandamus or any other appropriate writ directing a thorough investigation by an SIT or CBI under the supervision of this Hon'ble Court, as is recommended by the Justice Shah Commission into illegal mining in Odisha and collusion between private companies/individuals and public officials of the State/Central Governments.

xxx xxx xxx

(e) Issue a writ of mandamus or any other appropriate writ directing the respondents to recover the illegally accumulated wealth through illegal mining and related activity, as per Section 21(5) of the MMDR Act, 1957 [Mines and Minerals (Development and Regulation) Act, 1957] and launch prosecutions under Section 21(1) of the MMDR Act 1957, and direct that the money recovered would be used for the welfare of local communities, tribals and villagers."

9. The writ petition was taken up for consideration on 21st April, 2014 when the following order was passed: "We have heard the preliminary objections with regard to the writ petition and we are not convinced that the writ petition is not maintainable. Issue notice. As the State of Odisha, Union of India and the CEC have already been served with the notices, no further notices be issued to them. Notice, however, be issued to respondent nos. 4 and 5 returnable within four weeks. It appears from the averments in paragraph 14 of the writ petition that several lessees are operating without clearances under the Environment (Protection) Act, 1986 and the Forest (Conservation) Act, 1980, and without renewal by the Government.

Hence, an interim order needs to be passed in respect of these lessees who are operating the leases in violation of the law. For consideration of the interim order that should be passed, only this writ petition be listed next Monday, the 28th of April, 2014, as first item. It will be open for all parties and intervenors/proposed intervenors to file their respective affidavits.CEC, in the meanwhile, will make out a list of such lessees who are operating the leases in violation of the law.This list be prepared by the CEC without reference to the Shah Commission's Report. Liberty is given to the parties to produce their papers before CEC. The State of Odisha and the Union of India will cooperate with CEC to prepare the list." Report of the Central Empowered Committee

10. The CEC gave its final report on 25th April, 2014 which was considered by this Court and a detailed interim order was passed on 16th May, 2014.2 The sum and substance of the final report dated 25th April, 2014 and the interim order is that in the districts of Odisha that we are concerned with, namely, Keonjhar, Sundergarh and Mayurbhanj, the total number of leases granted for mining iron and manganese ore are

187. Of these, 102 lease holders did not have requisite environmental clearance (under the Environment (Protection) Act, 1986) or approval under the Forest (Conservation) Act, 1980 or approved mining plan and/or Consent to Operate under the provisions of the Air (Prevention and Control of Pollution) Act, 1981 or the Water (Prevention and Control of Pollution) Act, 1981.

This Court directed that mining operations in these 102 mining leases shall remain suspended but it will be open to such lease holders to move the concerned authorities for necessary clearances, approvals or consents and "as and when the mining lessees are able to obtain all the 2 Common Cause v. Union of India & Ors. (2014) 14 SCC 155 clearances/approvals/consent they may move this Court for modification of this interim order in relation to their cases."

11. This Court also found that 29 out of 187 mining leases had been determined or rejected or had lapsed. It was directed that mining operations in these 29 mining leases will also remain suspended but it would be open to all these concerned lessees to move the authorities for necessary relief and as and when they get the appropriate relief, they could move this Court for modification of the interim order.

12. This Court also found that 53 iron ore/manganese ore mining leases were operational and that they had necessary approvals under the Forest (Conservation) Act, 1980, consent to operate granted by the Odisha State Pollution Control Board and also approved mining plans. (There is no specific mention about environmental clearance). In addition 3 mining leases were located in forest as well as non-forest land, but mining operations were being conducted in non-forest areas of the mining lease as the lease holders did not have approvals under the Forest (Conservation) Act, 1980. Therefore a total of 56 iron ore/manganese ore mining leases were operating in the State of Odisha.

13. As far as the break-up of the 56 operational mining leases is concerned, it was found that 14 mining leases were operating on first renewal basis in accordance with the deeming provisions of Section 8(2) of the Mines and Minerals (Development and Regulation) Act, 1957 (for short 'the MMDR Act') read with Rule 24-A(6) of the Mineral Concession Rules, 1960 (for short 'the MCR') and 16 mining leases were operating since lease deeds for grant of renewal had been executed in their favour. The remaining 26 mining leases were operating on second and subsequent renewal basis with the renewal applications pending a final decision with the State Government.

14. In respect of the 14 first renewal mining leases, this Court permitted them to continue their operations for the time being in view of the deemed renewal provisions. This Court also permitted 16 mining leases to continue to operate since they had lease deeds executed in their favour. With regard to the remaining 26 mining leases operating on second and subsequent renewal applications, this Court drew attention to the decision rendered on 21st April, 2014 in Goa Foundation v. Union of India3wherein it was held that the provision for a second or subsequent deemed renewal was not available in view of Section 8(3) of the MMDR Act.

Consequently, these 26 lease holders were restrained from operating until express orders were passed by the State Government under Section 8(3) of the MMDR Act. Six months time was granted to the State Government to take a final decision on the 3 (2014) 6 SCC 590 renewal applications. This Court left it open to the mining lease holders to apply for modification of the interim order dated 16th May, 2014 on obtaining necessary clearances.

15. During the hearing of these petitions, we were informed that the balance 26 mining leases are now operational in view of the amendment to Section 8(3) of the MMDR Act with effect from 12th January, 2015. However, we are not aware whether these 26 mining leases have the necessary statutory clearances.

16. We may also mention that pursuant to the liberty granted to move for modification of the interim order of 16th May, 2014 we have received 17 interim applications for modification. Through a chart handed over to us in Court on 3rd May, 2017 we have been informed that in respect of two of the 17 applications, that is, Zenith Mining (I.A. No. 45) and Kavita Agrawal (I.A. No. 47), the lease has not been extended or has been determined and they do not have any Environmental Clearance or Forest Clearance. In respect of J.N. Pattnaik (I.A. No. 66), there is no Forest Clearance available. We were also informed that S.A. Karim (I.A. No.9) actually had a working lease and had wrongly been included as a non-operational lease.

17. Be that as it may, learned counsel for the lease holders drew our attention to the record of proceedings of 16th May, 2014 and particularly the following paragraph appearing therein: "We have passed interim order in a separate sheet. The Central Empowered Committee will give a final report on the Writ Petition by the end of July, 2014 and the matter will be listed in the first week of August, 2014 before the Green Bench." We are mentioning this in the context of the order passed on 13th January, 2014 adverted to above to the effect that "The Report will not cover cases other than forest and environmental issues."

18. In its final report, the CEC has dealt with the following ten topics: In this final report dated the CEC dealt with the following ten topics:-

"I. Production of iron ore and manganese ore without/in excess of the environmental clearance/Mining Plan/Consent to Operate.

II. Mining leases operated in violation of the Forest (Conservation) Act, 1980.

III. Illegal mining outside the sanctioned mining lease areas.

IV. Mining leases acquired in violation of Section 6 of the MMDR Act, 1957.

V. Violation of Rule 37 of the Mineral Concession Rules, 1960 by the lessees.

VI. Illegalities involved in the mining leases of Essel Mining & Industries Ltd.

VII. Illegalities involved in the mining lease of Sharda Mines (P) Ltd.

VIII. Massive illegal mining in Uliburu Forest land.

IX. Inordinate delays in taking decisions by the State Government regarding renewal of the mining leases.

X. Other issues."

19. By an order dated 16th January, 2015 objections to the final report were permitted and we have since received quite a few objections. When the matter was taken up for consideration by this Court on 7th October, 2015 and pursuant to the order passed on that date, the learned Amicus filed a statement dated 30th October, 2015 in a tabular form dealing with each I.A. filed in respect of the observations and recommendations made by CEC.

Thereafter, when the matter was again taken up for consideration the learned Amicus filed a note dated 15th March, 2016 wherein the following four issues were flagged:-

"(i) Leases lapsed under Section 4A(4) of the Mines and Minerals (Development and Regulation) Act, 1957 (hereinafter referred to as MMDR Act, 1957) (11 leases);

(ii) Violation of Rule 24 of the Minerals (other than Atomic and Hydrocarbons Energy Minerals) Concession Rules, 2016 (hereinafter referred to as MCR, 2016) and Rule 37 of the Mineral Concessions Rules, 1960 (hereinafter referred to as MCR, 1960) (9 leases);

(iii) Illegal mining in forest lands (20 leases); and

(iv) Iron ore produced without/in excess of the environmental clearance (each of the operating leases involved)."

20. Insofar as the first issue is concerned, it is common ground that that issue has been fully, conclusively and exhaustively dealt with by this Court by a judgment and order dated 4th April, 2016 (Common Cause v. Union of India). Therefore, the first issue does not survive for consideration by us.

21. As far as the remaining three issues are concerned, these overlap with topics I, II and V dealt with by the CEC. Detailed submissions were made before us by learned counsel for all the appearing parties on these issues as well as by the learned Amicus and the learned Attorney General. We propose to deal with them in this judgment and order.

22. We may mention that submissions were also made on topics III and IV identified by the CEC, that is, illegal mining outside the sanctioned mining lease areas and mining leases acquired in violation of Section 6 of the MMDR Act. We will consider these issues as well.

23. As far as topics VI and VII identified by the CEC are concerned, we would like to hear the parties in detail in respect of these issues.

24. No challenges or submissions were made on topics VIII, IX and X and therefore we accept the report of the CEC on these topics. 4 (2016) 11 SCC 455

25. At this stage, we may mention some rather frightening figures mentioned by the CEC in its final report. According to the CEC, excess mining without environmental clearance or beyond what was authorized by the environmental clearance is 2130.988 lakh MT of iron ore and 24.129 lakh MT of manganese ore making a total of 2155.117 lakh MT of iron and manganese ore. This does not include extraction of ore without forest clearance. These figures give an indication of the extent of excess or illegal or unlawful mining carried out.

26. In terms of rupees, according to the CEC the total notional value of minerals produced without an environmental clearance or in excess of the environmental clearance, at the weighted average price of minerals as proposed by the Indian Bureau of Mines comes to about Rs.17091.24 crores for iron ore and about Rs.484.92 crores for manganese ore making a total of Rs.17,576.16 crores. Again, this does not include mining without forest clearance. It is for this reason that we have referred to the megabucks and rapacious mining.

Justice M.B. Shah Commission of Inquiry

27. Apparently, and it appears quite independently of all these developments, the Central Government issued a notification on 22nd November, 2010 under the Commissions of Inquiry Act, 1952 whereby it appointed Justice M.B. Shah, a retired judge of this Court to conduct an inquiry on the following Terms of Reference:

"2.

(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 person 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.

3. The Commission shall also recommend remedial measures to prevent such mining, trade, transportation and export done illegally or without lawful authority."

28. In the preamble to the notification appointing the Commission, it was noted that there were reports that mining, raising, transportation and export of iron ore and manganese ore illegally or without lawful authority was being carried on in various States in one or more of the following forms:

"(a) mining without a licence;

(b) mining outside the lease area;

(c) undertaking mining in a lease area without taking approval of the concerned State Government for transfer of concession;

b raising of minerals without lawful authority;

c raising of minerals without paying royalty in accordance with the quantities and grade;

d mining in contravention of a mining plan; e transportation of raised mineral without lawful authority;

f mining and transportation of raised mineral in contravention of applicable Central and State Acts and rules thereunder;

g conducting of multiple trade transactions to obfuscate the origin and source of minerals in order to facilitate their disposal;

h tampering with land records and obliteration of inter-state boundaries with a view to conceal mining outside lease areas;

i forging or misusing valid transportation permits and using forged transport permits and other documents to raise, transport, trade and export minerals;"

It is in the above context that the Terms of Reference were framed.

29. On 1st July, 2013 the Commission gave the First Report on Illegal Mining of Iron and Manganese Ores in the State of Odisha. The report contains an executive summary and very briefly the Commission stated that:

(i) All modes of illegal mining, as stated in the notification dated 22nd November, 2010 of the Central Government are being committed in the State of Odisha;

(ii) There is a complete disregard and contempt for law and lawful authorities on the part of many of the emerging breed of entrepreneurs;

(iii) It appears that the law has been made helpless because of its systematic non implementation. The executive summary states that the following are discussed in the report:

"(A) Information regarding mining leases should be placed on website to make mining operations more transparent and to display the information for each lease on the departmental/State website with various conditions which are required to be adhered by the lessee.

(B) Misuse of Rule 24-A(6) of MCR, 1960 [Mineral Concession Rules, 1960] which provides for deemed extension of lease. Application for renewal of mining lease is not decided for one or other pretexts, may be, there is lack of co-ordination among various departments which are required to decide renewal application. There is gross misuse of deemed refusal and deemed extension of both the provisions of renewal of leases (before 27.09.1994 and after) under Rule 24-A of MCR, 1960. This casual and negative approach has caused dearly to State exchequer in the form of hundred crores of stamp duty and others. - - - - - - - - - - - - -

(C) Violation of the provisions of the Forest (Conservation) Act, 1980, Rules & guidelines and directions issued by the Hon'ble Supreme Court of India. - - - - - - - - - - - - -

(D) Violation of the provisions of the Environment (Protection) Act, 1986. - - - - - - - - - - - - -

(E) Misuse of Rules: 10 & 12 of MCDR, 1988 [Mineral Conservation and Development Rules, 1988] which provides for modification and review of mining plan only for a specific purpose, namely,

(i) Safe and scientific mining;

(ii) conservation of minerals;

(iii) the protection of environment; and

(iv) in case of modification, explanation for the same.

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

(F) Encroachment:- On the basis of Google Image, the survey report prepared by the State Government by DGPS method, it was found that in 82 mining leases, there was encroachment. Out of the said leases, re-survey was ordered for 37 leases."

30. Soon thereafter, the Commission gave its Second Report on Illegal Mining of Iron and Manganese Ores in the State of Odisha, sometime in October, 2013. This report dealt with specific lease holders and violations committed by them. It is not necessary for us to delve into those specific details.

31. It was submitted before us by learned counsel for the mining lease holders that the reports given by the Commission were not acceptable on the ground that a notice had not been given to the lease holders under Section 8B or Section 8C of the Commissions of Inquiry Act, 1952. It was submitted that under these circumstances the reports given by the Commission were vitiated and therefore the foundation of the writ petition filed by Common Cause was taken away. We are not in agreement with learned counsel for the mining lease holders.

32. The first report given by the Commission was a general, overall perspective on the subject while the second report went into specific details of several mining lease holders - but we are not concerned with those specifics. Therefore, whether notices were or were not issued to the lease holders who were the subject matter of discussion in the second report is of no consequence.

33. What we are really perturbed about is the facts stated by the Commission in the first report. So far as this is concerned, we are of the view that no irregularity or illegality has been committed so as to vitiate the first report. Notwithstanding this, we are not relying upon any of the facts determined by the Commission for the purposes of our judgment and order.

34. The procedure followed by the Commission has been mentioned in Volume I Part II of the first report, but it is not necessary for us to recount each and every detail. Suffice it to say that a resume of the procedure followed will indicate that full opportunity was given to the lease holders to have their say.

Resume of the procedure followed by the Commission

35. In March 2011 the Commission sent the first questionnaire to the concerned Secretary of the Government of Odisha seeking the following information regarding each lease holder:-

"(i) the name of the lessee;

(ii) area of the lease;

(iii) date of the execution of the lease deed;

(iv) present status (renewal, mining plan, mining scheme) approval date;

(v) production and export particulars from the year 2008-09 up to January, 2011; etc."

36. On 20th April, 2011 the Commission sent the second questionnaire to the said concerned Secretary seeking further information in a Form consisting of 14 questions and 4 tables.

37. Thereafter, between 24th and 26th August, 2011 the Commission issued the first notice to various mining lessees in Odisha seeking information on affidavit as per Proforma A and B enclosed with the notice. In Proforma A the lease holder was asked to submit details which included the details of environment clearance, forest clearance and renewal of lease and whether the leased mine was in operation or not. In Proforma B the lease holder was asked to submit details which included the details of dispatch, domestic consumption and export in million tonnes of iron ore and manganese ore from 2006-07 to 2010-11.

38. The Commission visited Odisha from 7th December, 2011 to 14th December, 2011, from 3rd October, 2012 to 11th October, 2012 and from 31st October, 2010 to 8th November, 2012. The purpose of the visits was to collect information and seek explanations and gather facts from the concerned Departments of the Government of India and the Government of Odisha. During the visits, the Commission received as many as 140 W.P. (C) Nos. 114/2014 etc. complaints alleging illegal mining. Accordingly, a public hearing was held in Keonjhar and Bhubaneshwar on 11th and 12th December, 2011.

39. On 21st December, 2012 and 12th January, 2013 several senior counsel were given a personal hearing by the Commission including a personal hearing to the Federation of Indian Mining Industries (for short 'FIMI'). Following the submissions made, a fresh notice was issued to the lease holders from 28th January, 2013 seeking information in Proformas A to H. In terms of the fresh notice, the lease holder was required to verify the facts stated therein (which were collected by the Commission) and if found incorrect then to state the correct facts.

The fresh notice specifically mentioned that:

"(i) The lessee shall come fully prepared to answer, related to this matter and submit all related records.

(ii) Explain the production from the leased area without having approval under F(C) Act, 1980.

(iii) Explain the production during the deemed extension period without having approval under EIA Notification dated 27.01.1994 and amendments thereon.

(iv) Explain the excess production in violation of EIA Notification dated 27.01.1994 and amendments thereon under the EP Act, 1986."

40. The report mentions the various dates of hearing given to learned counsel for the lease holders, the State of Odisha, FIMI, Federation of Indian Chambers of Commerce and Industry (FICCI) and the Ministry of Environment and Forest of the Government of India (for short 'MoEF') which are as follows:

HEARING NO.

DATE

PLACE

21.12.2012

Office of the Commission, Ahmedabad.

12.01.2013

-do-

18.02.2013

-do-

27.02.2013

Circuit House, Bhubaneshwar (Odisha).

28.02.2013

-do-

01.03.2013

-do-

02.03.2013

-do-

04.03.2013

-do-

16.03.2013

Circuit House, Annexe, Ahmedabad.

10.

20.03.2013

-do-

11.

23.03.2013

Office of the Commission, Ahmedabad.

12.

02.04.2013

Circuit House, Annexe, Ahmedabad.

13.

03.04.2013

-do-

14.

04.04.2013

-do-

15.

12.04.2013

Office of the Commission, Ahmedabad.

16.

13.04.2013

-do-

17.

21.04.2013

Gujarat University Convention Centre, Nr. Helmet Cross Road, 132 ft. Ring Road, Ahmedabad.

18.

24.05.2013

Office of the Commission, Ahmedabad.

19.

25.05.2013

-do-

41. The number of learned counsel and representatives who were heard by the Commission and with whom interactions took place are mentioned in Annexure A to Volume I of the first report. The list of learned counsel runs into 18 pages - from page 33 to page 50 of Volume I of the first report. Some individual lawyers appeared for several lease holders but the fact of the matter is that everybody who wanted to be heard was given a hearing.

42. The function of the Commission as stated in the first report, at the present stage, is best described in the words of the Commission itself. It is stated as follows:- "The function of the Commission, at this stage, is only to inquire, assess the data collected and to submit the report on the said basis. On that basis, some remedial measures are suggested by the Commission for controlling illegal mining and violation of the Acts and/or Rules. For that, there is no question of issuing notices to the lessees.

For collecting the data and assessing it, the Principles of Natural Justice are fully complied with, as stated above. On the basis of the data submitted by the lessees and the submissions made by Ld. Counsel for them, the report is submitted." It is further clarified on page 198 of Volume I of the first report that with regard to individual mining leases in which there is a violation of the provisions of the Forest (Conservation) Act, 1980 and/or conditions of environmental clearance etc. a report would be submitted later on.

43. It is therefore abundantly clear that the first report is generally a limited fact finding enquiry on the basis of information supplied by the mining lease holders. Therefore, there is absolutely no question of any notice being issued to any mining lease holder under Section 8B or the right of cross examination being granted to any mining lease holder under Section 8C of the Commissions of Inquiry Act, 1952. We are satisfied that the Commission made adequate efforts to collect the facts and this collation in the first report was possible with the assistance of the mining lease holders and their learned counsel and representatives as well as the government authorities and FIMI and FICCI.

Under these circumstances, no lease holder can seriously contend that the procedure adopted by the Commission in collecting facts was either irregular or not in accordance with law. As mentioned above, any mining lease holder who wanted to be heard was given an opportunity of being heard and was fully aware of what the Commission was attempting to achieve and if any particular mining lease holder chose not to associate with it, it was at his or her own peril.

Lack of knowledge of the proceedings before the Commission cannot be appreciated and we are quite satisfied that all the mining lease holders were fully aware of what was going on, if not personally then certainly through their list of learned counsel running into 18 pages or their representatives individually or their Federation.

44. In Goa Foundation there was a challenge to the report of the Justice Shah Commission in respect of its conclusions pertaining to the State of Goa. This was dealt with by this Court in paragraphs 11 to 14 of its decision. This Court declined to quash the report in view of the statement made by the learned Advocate General of Goa. But, this Court took the view that: "we will, however, examine the legal and environmental issues raised in the Report of 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 prayed for in the writ petitions filed by the mining lessees, which have been transferred to this Court."

45. In the present petitions before us, there is no challenge to the reports of the Justice Shah Commission. However, we propose (as in Goa Foundation ) to confine ourselves to some limited facts adverted to by the CEC in its final report. We do not propose to base any of our conclusions on the reports of the Commission.

46. Learned counsel for the petitioners insisted that the illegal or unlawful mining activity carried on in the State of Odisha as noted by the Commission deserves to be investigated by the Central Bureau of Investigation. Reference in this regard was made to the passage in Part III of Volume I of the first report of the Commission to the following effect:- "Since this is one of the biggest illegal mining ever observed by the Commission, it is strongly felt that this is a fit case to handover to Central Bureau of Investigation, for further investigation and follow up action."

47. Similarly, on page 125 of Chapter II of Volume I of the report, it is stated as follows:- "Terms of Reference No. 8 provides that "The Commission may take the services of any investigating agency of the Central Government in order to effectively address its terms of reference. The Commission, therefore, suggests that Central Bureau of Investigation (C.B.I.) may be directed to investigate into allegations of corruption made against politicians, bureaucrats and others." We will consider this at the appropriate stage. Suffice it to say for the time being that the Commission made certain significant observations in Chapter II of the report to the effect that:

a That the tribals in the area have been displaced or stay in pathetic and miserable conditions in same area. There is rampant air pollution with the trees having the colour of minerals making it clear that tribals are forced to breathe polluted air and drink polluted water.

b Streams and ground water is polluted and there is hardly any facility of drinking water. Women have been seen fetching water from dirty nalas.

c Mining companies and beneficiation plants are drawing water from rivers and nearby water resources are getting depleted at a fast rate. The river Baitrani has been seriously affected by this activity.

d Basic facilities such as medical facilities, shelter/residence, education facilities are absent. Roads have a heavy flow of traffic and on one road of the area about 7000 trucks passed during night time.

e The labour is not being paid adequate wages beyond the minimum wages even though the income of the mine owners runs into billions of rupees.

48. Adverting to corruption in the area due to illegal mining activities, the Commission felt that the Vigilance Commission was unlikely to conduct an impartial and independent enquiry for arriving at just and proper findings because of external pressures. Accordingly, it would be more appropriate if the Central Bureau of Investigation (CBI) conducts a detailed enquiry into all cases that have been registered between 2008 and 2011. It was also noted that the railways have issued demand notices to the extent of Rs.1,874 crores. The latest position with regard to these notices is not available.

49. It was also noted that notices have been issued in 146 cases to various lease holders for recovery of mined ore as per Section 21(5) of the MMDR Act. In the Koira circle notices have been issued to 55 lessees for more than Rs. 13,000 crores; in Joda circle notices have been issued to 72 lessees for recovery of more than Rs. 44,000 crores; in Keonjhar circle notices have been issued to 4 lessees for recovery of about Rs. 1,065 crores; in Koraput circle notices have been issued to three lessees for the recovery of about Rs. 44 lakhs; and in Bolangir circle notice has been issued to 1 lessee for the recovery of about Rs.29.5 crores. In Baripada circle notices have been issued to 11 lessees for recovery of more than Rs. 467 crores. In other words notices have been issued to the lessees for recovery of more than Rs. 59,000 crores! (According to the CEC the figure exceeds Rs. 61,000 crores)!!

50. We have adverted to the reports of the Commission, without relying on them, only to highlight the gravity of the situation and nothing more. The gravity of the situation is also apparent from the report of the CEC and the Commission seems to support it.

Initial contention

51. The initial contention urged on behalf of the respondents - lease holders was that in giving the report dated 16th October, 2014 the CEC has exceeded its remit. In this context, reference was made to the order of 13th January, 2014 in which it is stated that "The Report will not cover cases other than forest and environmental issues."

52. We are of opinion that this objection deserves immediate rejection. The subsequent orders passed by this Court have been completely overlooked by learned counsel inasmuch on 21st April, 2014 it was specifically noted by this Court that "CEC, in the meanwhile, will make out a list of such lessees who are operating the leases in violation of the law." Similarly, in the record of proceedings of 16th May, 2014 it was noted that "The Central Empowered Committee will give a final report on the Writ Petition by the end of July, 2014........."

53. From a reading of the orders and the proceedings that have been held in this regard from time to time, it is quite obvious to us that the jurisdiction of the CEC was not limited and it was expected to give a detailed report on all aspects of illegal mining or mining being carried out without any lawful authority in whatever manner. The initial objection raised on behalf of the lease holders is therefore rejected.

Central Empowered Committee

54. The Central Empowered Committee or the CEC was first constituted by this Court by an order dated 9th May, 2002 (T.N.Godavarman v. Union of India)5 as an interim body. Thereafter, it was constituted by a notification dated 17th September, 2002 issued under Section 3(3) of the Environment (Protection) Act, 1986 (for short 'the EPA'). It has continued functioning and assisting this Court for more than a decade and even though it has been criticized on a couple of occasions, it is now an established body which renders extremely valuable advice to this Court and provides factual material on the basis of which this Court can make some recommendations and pass appropriate orders.6 5 (2013) 8 SCC 198 6 T.N. Godavarman v. Union of India, (2013) 8 SCC 198 and (2013) 8 SCC 204

55. The details of the functioning of the CEC have been discussed by this Court in Samaj Parivartana Samudaya v. State of Karnataka .

7 In that decision, questions were raised about the credibility of the CEC and while rejecting the submissions, it was made clear that the recommendations made by the CEC are subject to the satisfaction of this Court. We need say nothing more except that during the course of hearing of the present petitions, some of the conclusions arrived at by the CEC were disputed by the petitioners and even by the learned Amicus and some were supported by learned counsel for the mining lease holders, the learned Attorney General and the learned counsel for the State of Odisha.

It is therefore quite clear that in the present cases, the CEC as a fact finding body has functioned impartially and it is only on the conclusions arrived at by the CEC on the basis of the facts gathered that there can be some debate and discussion. Anyone may disagree with the views of the CEC and there is no need to make heavy weather about this at all.

56. In so far as the report given by the CEC on 16th October, 2014 (the final report) is concerned, before going into the details thereof, we may mention that the CEC has stated that it held meetings with the Chief Secretary and other senior officials of the State of Odisha and others on six 7 (2013) 8 SCC 154 dates. It also heard the lease holders and others on seven dates and it held meetings with three of the lease holders that is Jindal Steel and Power Ltd. (JSPL), Sarda Mines Pvt. Limited (SMPL) and Essel Mining and Industries Ltd. (Essel) on 10th September, 2014. The CEC visited the site of the mining lease of SMPL from 4th March, 2014 to 7th March, 2014 and had site visits of a number of other lessees from 12th July, 2014 to 16th July, 2014.

57. As far as the facts collected by the CEC are concerned, there is no dispute with regard to their correctness. The CEC has recorded that there are 187 iron ore and manganese ore mining leases in the State of Odisha. On the basis of the material and information collected, a statement was prepared showing lease-wise and year-wise details of production of iron ore and manganese ore, permissible production and production without environmental clearance/beyond environmental clearance.

The details in this regard have been given as Annexure R-14 to the final report.

58. Regarding the correctness of the information, the CEC has this to say:

"24. A copy of the above said statement prepared by the CEC was made available, through the Director, Mines and Geology, Government of Odisha and also through the Federation of Indian Mining Industries (FIMI), to the lessees of each of the mining leases to enable them to verify the production and other details as given in the statement. During the hearings held before the CEC between 5th August and 12th August, 2014 and also in the representations filed before the CEC a large number of lessees stated that the yearwise production details are not correctly reflected in the statement. Some of them also stated that the environment clearance details are not properly reflected in the statement. Therefore, it was decided that

(a) the State Government will reconcile the annual production and other details with the respective lessees and

(b) the copies of the environmental clearances may also be filed before the CEC by those lessees who are disputing the environmental clearances details provided by the State. Accordingly a meeting was convened by the Director, Mines & Geology (DMG) with the lessees on 14th August, 2014 and during which the annual production and other details were reconciled. The reconciled leasewise and yearwise production and other details provided to the CEC by the State of Odisha may be seen in the statement enclosed at Annexure - R-11 to this Report. The figures modified in the said statement, after reconciliations, are shown in bold print."

59. The CEC noted that the Director, Mines and Geology of the Government of Odisha had informed the CEC that each lease holder with the exception of SMPL and JSPL agreed with the reconciled production details. On facts, therefore, there is no dispute with regard to the contents of the report of the CEC, although the conclusions might be disputed. Separately, the CEC has dealt with the facts concerning SMPL and JSPL pursuant to a meeting held with them on 11th September, 2014.

Statutory provisions

60. The grant of a mining lease is governed by the provisions of the Mines and Minerals (Development and Regulation) Act, 1957 (or the MMDR Act), the Mineral Concession Rules, 1960 (or the MCR) and the Mineral Conservation and Development Rules, 1988 (or the MCDR).

61. Section 4(1) of the MMDR Act provides that no person shall undertake any mining operation in any area except under and in accordance with the terms and conditions of a mining lease granted under the MMDR Act and the rules made thereunder. A mining operation is defined in Section 3(d) of the MMDR Act as meaning any operation undertaken for the purpose of winning any mineral. Section 4(2) of the MMDR Act provides that no mining lease shall be granted otherwise than in accordance with the provisions of the said Act and the rules made thereunder.

62. Section 5(2) of the MMDR Act provides for certain restrictions on the grant of a mining lease. It provides that the State Government shall not grant a mining lease unless it is satisfied that the applicant has a mining plan duly approved by the Central Government or the State Government in respect of the concerned mine and for the development of mineral deposits in the area concerned.

63. Section 10 of the MMDR act provides for the procedure for obtaining a mining lease and sub-section (1) thereof provides that an application is required to be made for a mining lease in respect of any land in which the mineral vests in the government and the application shall be made to the State Government in the prescribed form and along with the prescribed fee.

64. Section 12 of the MMDR Act requires the State Government to maintain a set of registers. Among the registers that the State Government is required to maintain are a register of applications for mining leases and a register of mining leases. Every such register shall be open to inspection by any person on payment of such fee as the State Government may fix.

65. Section 13 of the MMDR Act provides for the rule making power of the Central Government in respect of minerals. The MCR are framed in exercise of power conferred by Section 13 of the MMDR Act.

66. Section 18 of the MMDR Act makes it the duty of the Central Government to take all such steps as may be necessary for the conservation and systematic development of minerals in India and for the protection of the environment by preventing or controlling any pollution which may be caused by mining operations. The MCDR are framed in exercise of power conferred by Section 18 of the MMDR Act.

67. The distinction between the MCR and the MCDR is that the MCR deal, inter alia with the grant of a mining lease and not commencement of mining operations. However, the MCDR deal, inter alia with the commencement of mining operations and protection of the environment by preventing and controlling pollution which might be caused by mining operations.

68. Section 21 of the MMDR Act deals with penalties and sub-section (1) thereof provides that whoever contravenes the provisions of sub-section (1) or sub-section (1A) of Section 4 shall be punished with imprisonment for a term which may extend to two years or with fine which may extend to Rs. 25,000 or with both. Sub-section (5) of Section 21 of the MMDR Act provides that whenever 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 thereto the State Government may also recover from such person rent, royalty or tax, as the case may be for the period during which the land was occupied by such person without any lawful authority.

Mineral Concession Rules, 1960

69. As far as the MCR are concerned, Rule 22 is of some importance and this provides for an application to be made for the grant of a mining lease in respect of land in which the mineral vests in the government. An application for the grant of a mining lease is required to be made by an applicant to the State Government in Form I to the MCR. Sub rule (5) of Rule 22 deals with a mining plan and it requires that a mining plan shall incorporate, amongst other things, a tentative scheme of mining and annual programme and plan for excavation for year to year for five years.

70. Rule 22A of the MCR makes it clear that mining operations shall be undertaken only in accordance with the duly approved mining plan. Therefore, a mining plan is of considerable importance for a mining lease holder and is in essence sacrosanct. A mining scheme and a mining plan are a sine qua non for the grant of a mining lease.

71. Rule 27 of the MCR deals with the conditions that every mining lease is subject to. One of the conditions is that the lessee shall comply with the MCDR.

72. The format of a mining lease is given in Form K to the MCR and this is relatable to Rule 31 of the MCR which provides that on an application for the grant of a mining lease, if an order has been made for the grant of such lease, a lease deed in Form K or in a form as near thereto as circumstances of each case may require, shall be executed within six weeks of the order, or within such extended period as the State Government may allow.

73. Part VII of Form K deals with the covenants of the lessee/lessees. Clause 10 thereof requires the lessee to keep records and accounts regarding production and employees etc. The lessee is required, inter alia, to maintain a record of the quantity and quality of the mineral released from the leased land, the prices and all other particulars of all sales of the mineral and such other facts, particulars and circumstances, as the Central Government or the State Government may require.

74. Clause 11C is of some importance and it requires that the lessee shall take measures for the protection of the environment like planting of trees, reclamation of land, use of pollution control devices and such other measures as may be prescribed by the Central Government or the State Government from time to time at the expense of the lessee.

75. Rule 37 of the MCR deals with the transfer of a lease and provides, inter alia, that a mining lessee shall not without the previous consent in writing of the State Government or the Central Government, as the case may be, assign, sublet, mortgage, or in any other manner, transfer the mining lease, or any right, title or interest therein. The lessee shall not enter into or make any bona fide arrangement, contract or understanding whereby the lessee will or may directly or indirectly be financed to a substantial extent in respect of its operations or undertakings or be substantially controlled by any person or body of persons. Sub-rule (3) of Rule 37 of the MCR enables a State Government to determine any lease if the mining lessee has committed a breach of Rule 37 of the MCR or has transferred any lease or any right, title or interest therein otherwise than in accordance with sub-rule (2) of Rule 37 of the MCR.

Mineral Conservation and Development Rules, 1988

76. The MCDR promulgated under Section 18 of the MMDR Act and referred to in Rule 27 of the MCR are also of some significance. Rule 9 of the MCDR prescribes that no person shall commence mining operations in any area except in accordance with a mining plan approved under Clause (b) of sub-section (2) of Section 5 of the MMDR Act.

77. The mining plan may be modified in terms of Rule 10 of the MCDR in the interest of safe and scientific mining, conservation of minerals or for protection of the environment. However, the application for modifications shall set forth the intended modifications and explain the reasons for such modifications. The mining plan cannot be modified just for the asking.

78. Rule 13 of the MCDR provides that mining operations are required to be carried out by every holder of a mining lease in accordance with the approved mining plan. If the mining operations are not so carried out, the mining operations may be suspended by the Regional Controller of Mines in the Indian Bureau of Mines or another authorized officer.

79. From our point of view, Chapter V of the MCDR dealing with "Environment" is of significance. In this Chapter, Rule 31 of the MCDR provides that every holder of a mining lease shall take all possible precautions for the protection of the environment and control of pollution while conducting any mining operations in the area.

80. Rule 37 of the MCDR requires certain precautions to be taken against air pollution and obliges the mining lease holder to keep air pollution under control and within permissible limits specified under various environmental laws including the Air (Prevention and Control of Pollution) Act, 1981 and the Environment (Protection) Act, 1986.

81. Rule 38 of the MCDR requires the holder of a mining lease to take all possible precautions to prevent or reduce the passage of toxic and objectionable liquid effluents from the mine into surface water bodies, ground water aquifer and usable lands to a minimum. It also mandates effluents to be suitably treated, if required, to conform to the standards laid down in this regard. In other words, the provisions of the Water (Prevention and Control of Pollution) Act, 1974 are required to be adhered to by the mining lease holder.

82. Rule 41 of the MCDR requires every holder of a mining lease to carry out mining operations in such a manner as to cause least damage to the flora of the area and the nearby areas. Every holder of a mining lease is required to take immediate measures for planting not less than twice the number of trees destroyed by reason of any mining operations and to look after them during the subsistence of the lease after which these trees shall be handed over to the State Forest Department or any other appropriate authority. The holder of a mining lease is also required to restore, to the extent possible, other flora destroyed by the mining operations.

83. Briefly therefore, the overall purpose and objective of the MMDR Act as well as the rules framed there under is to ensure that mining operations are carried out in a scientific manner with a high degree of