The Goa Foundation Vs. M/s Sesa Sterlite Ltd. & Ors. [February 7, 2018]

The Goa Foundation Vs. M/s. Sesa Sterlite Ltd. & Ors.

[Special Leave to Appeal (Civil) No. 32138 of 2015]

[SLP (C) Nos. 32699-32727 of 2015]

[Writ Petition (C) No. 711 of 2015]

[Writ Petition (C) No. 720 of 2015]

Madan B. Lokur, J

1. Rapacious and rampant exploitation of our natural resources is the hallmark of our iron ore mining sector - coupled with a total lack of concern for the environment and the health and well-being of the denizens in the vicinity of the mines. The sole motive of mining lease holders seems to be to make profits (no matter how) and the attitude seems to be that if the rule of law is required to be put on the backburner, so be it. Unfortunately, the State is unable to firmly stop violations of the law and other illegalities, perhaps with a view to maximize revenue, but without appreciating the long term impact of this indifference. Another excuse generally put forth by the State is that of development, conveniently forgetting that development must be sustainable and equitable development and not otherwise.

2. Effective implementation and in some instances circumvention of the mining and environment related laws is a tragedy in itself. Laxity and sheer apathy to the rule of law gives mining lease holders a field day, being the primary beneficiaries, with the State being left with some crumbs in the form of royalty. 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.

3. The Government of India appears to have received information of large-scale illegal mining of iron ore and manganese ore in different States in contravention of the provisions of the Mines and Minerals (Development and Regulation) Act, 1957 (the MMDR Act), the Forest (Conservation) Act, 1980, the Environment (Protection) Act, 1986 and other rules and guidelines issued on the subject from time to time.

4. Acting on this information, the Government of India appointed Justice M.B. Shah a former judge of this Court as a commission of inquiry under Section 3 of the Commissions of Inquiry Act, 1952 by a notification dated 22nd November, 2010. The terms of reference of the Commission for the State of Goa were as follows:

2. The terms of reference of the Commission shall be -

(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 persons 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."

5. Justice Shah visited Goa and after calling for and receiving information from the concerned authorities as well as the mining lease holders, he submitted a report on 15th March, 2012 and another on 25th April, 2012 to the Ministry of Mines in the Government of India. The reports were tabled in Parliament on 7th September, 2012 along with an Action Taken Report and as a result, the Government of Goa passed an order dated 10th September, 2012 suspending all mining operations in the State with effect from 11th September, 2012. The Ministry of Environment and Forests (MoEF) of the Government of India acted similarly and kept in abeyance the environmental clearances granted to 139 mines (actually 137 mines - there is some duplication) in the State of Goa by an order dated 14th September, 2012.

6. Subsequent to the reports given by Justice Shah, a writ petition was filed by Goa Foundation in this Court being WP (C) No. 435 of 2012. The writ petition was a public interest litigation praying, inter alia, for directions to the Union of India and the State of Goa to take steps to terminate the mining leases where mining was carried out in violation of various statutes.

7. Similarly, several mining lease holders preferred writ petitions in the Bombay High Court for a declaration that the reports given by Justice Shah are illegal and also for quashing the orders dated 10th September, 2012 and 14th September, 2012 whereby mining operations were suspended and environmental clearances were kept in abeyance. The writ petitions filed in the High Court were transferred to this Court for hearing along with WP (C) No. 435 of 2012.

8. This Court heard all these matters and rendered its decision in Goa Foundation v. Union of India on 21st April 2014.1 Among other conclusions arrived at, it was held by the Court that all the iron ore and manganese ore leases had expired on 22nd November, 2007. Consequently, 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.

For a second renewal of the mining lease, it was held that the State Government must apply its mind and record reasons for renewal being in the interest of mineral development and the necessity to renew the mining lease. Any decision taken by the State Government should also be in conformity with the constitutional provisions.

The decision taken by the State of Goa to grant a mining lease in a particular manner or to a particular party could be examined by way of judicial review. It was also held that the orders dated 10th September, 2012 and 14th September, 2012 are not liable to be quashed and that they would continue till decisions are taken to grant fresh leases and fresh environmental clearances for mining projects.

Goa Mineral Policy 2013

9. During the pendency of the proceedings before the Court, the State of Goa announced the draft Goa Mineral Policy on 21st August, 2012. After suggestions etc. were received, the Mineral Policy was finalized and gazetted on 28th September, 2013.

10. A few salient features of the Mineral Policy may be mentioned. It is stated in the Preamble to the Mineral Policy: "The Goan economy is heavily dependent on the iron ore industry insofar as the major share of the regional income from the mineral industry and its allied activities like transport and trade is concerned."

"However, during the period from 2006-07 to 2011-12, due to huge spurt in demand of low grade ore in international market followed by illegalities and irregularities in the previous regulatory regime, the State has witnessed the peak of chaotic and unregulated mining without any concern for fragile ecology and environment of the State or for the general well being of an average Goan. It has resulted in massive export of unaccounted ore from unidentified sources like dumps and tailings.

The reckless exploitation without any concern for sustainability that the State has witnessed in last five years has serious implications. Minerals are a finite and non-renewable natural resource and must be exploited wisely in the larger interest of the State. It is high time that the new Government that has received an unprecedented mandate from the people of Goa should take note that dependence on mining presents extreme externalities and the State has to tread cautiously promoting a sustainable extraction regime to facilitate systematic, scientific and planned utilization of mineral resources and to streamline mineral based development of the State, keeping in view, protection of environment, health and safety of the people in and around the mining areas rather than race to bottom."

[Emphasis supplied by us].

11. Notwithstanding this serious indictment of the pre-existing "policy for mining natural resources in Goa, the Mineral Policy did not address itself to the allocation or distribution of the natural resources in any of its paragraphs and many sub-paragraphs. The topics dealt with in the Mineral Policy include objectives and parameters, sustainable mining and mineral conservation, mineral administration, regulation of mines and minerals, pollution and its social impact, and policy highlights. Some of the other topics dealt with in the Mineral Policy include capping, based on carrying capacity of public roads and to protect inter-generational equity, mines safety and rehabilitation of affected people, stakeholder participation (including corporate social responsibility), welfare and social responsibilities and establishment of the Goa Minerals Development Fund etc.

12. However, what is of some significance is that paragraphs 1.4.4 and 1.4.5 of the Mineral Policy state that Goan iron ore is low grade, that is having low iron (or Fe) content and that its extraction provides no or minimal domestic value addition. Almost all the iron ore extracted in Goa is exported and we were informed that only one mining lease holder captively consumes Goan extracted iron ore. Paragraphs 1.4.4 and 1.4.5 of the Mineral Policy read as follows:

"1.4.4 No Domestic Value Addition: The nature of Goan iron ore is such that value addition opportunities in the domestic market are minimal. The Chinese and Japanese use Goan iron ore for blending purposes to bring down the average cost of iron ore, whereas Indian steel producers have a wide range of high grade fines to choose from. Despite the closure of mining operations in the neighbouring State of Karnataka, Goan iron ore is not used in Indian Steel Industry due to its low Fe content.

1.4.5. Low Grade v/s High Grade: Goan iron ore has always been of low grade Fe content in comparison with that of Odisha, Jharkhand and Karnataka. The low grade of ore has been competitive in global markets, because of the non reliance on railways and close distances of mines to ports thereby reducing the overall cost. The high silica presence in Goan ore also is a favourable factor for preference for Goan ore over Australian and Brazilian low grade ore."

[Emphasis supplied by us].

13. It appears from the above that the extraction of iron ore in Goa is geared only towards export and not for domestic purposes because of the low Fe content and high silica presence.

Vishwanath Anand Expert Appraisal Committee

14. During the pendency of the writ petition in the Court, the MoEF constituted an Expert Appraisal Committee (EAC) on 21st March, 2013 with Shri Vishwanath Anand, former Secretary in the MoEF as the Chairman to specifically look into issues related to illegal mining in the State of Goa. The terms of reference of the EAC were as follows:

(a) To examine the information/documents submitted by each of the 139 project proponents in response to aforesaid direction dated 14th September, 2012 under Environment (Protection) Act, 1986 for keeping environment clearance in abeyance and making case-by-case recommendations to the MoEF;2

(b) To evaluate status of compliance with respect to conditions stipulated as part of environment clearance;

(d) To examine the observations relating to MoEF in Justice Shah Commission report on illegal mining of iron and manganese ore in the State of Goa and make appropriate recommendations.

15. The EAC gave its report sometime in October 2013 with regard to 137 mining leases. Very briefly, the EAC found many of the mining lease holders had:

(i) No approval from the National Board of Wildlife; or

(ii) Indulged in excess mining; or

(iii) Indulged in dump mining; or

(iv) Intersected groundwater level; or

(v) No clearance from the Central Ground Actually 137 project proponents - there is some duplication Water Board to draw ground water; or

(vi) No forest clearance.

We may also note that the EAC also recommended the revocation of environmental clearance granted to several mining lease holders for a variety of reasons.

16. The Mineral Policy and the report of the EAC were perhaps placed before the Court in the writ petition filed by Goa Foundation and the transferred cases, but not dealt with, except for a brief mention of the Mineral Policy.

17. All the cases before the Court were heard quite extensively in September, October and November 2013. Judgment was reserved on 11th November, 2013 and pronounced on 21st April, 2014. Some of the conclusions arrived at by the Court relevant for our discussions have already been mentioned above.

18. At this stage, it may be mentioned that on 11th November, 2013 read with an order dated 18th November, 20133 this Court constituted an Expert Committee "to conduct a macro EIA study on what should be the ceiling of annual excavation of iron ore from the State of Goa considering its iron ore resources and its carrying capacity keeping in mind the principles of sustainable development and intergenerational equity and all other relevant factors." The members of the Expert Committee were:

1. Dr. C.R. Babu (Ecologist)

2. Dr S.C. Dhiman (Geologist/Hydrogeologist)

3. Prof. B.K. Mishra (Mineralogist)

4. Prof. S. Parameswarappa (Forestry)

5. Shri Parimal Rai (nominee of the Ministry of Environment and Forests, Government of India).

19. The Expert Committee submitted an Interim Report dated 14th March, 2014 to the Court after considering reports prepared by the Tata Energy Research Institute (TERI), New Delhi (1997); TERI and International Development Research Centre, Ottawa, Canada (2006); MoEF (2014); research papers prepared by the Goa University and the National Institute of Oceanography; Indian Institute of Technology (Indian School of Mines), Dhanbad (2013); Pollution Control Board, Goa (Annual Report) and other literature. It noted large-scale degradation of the environment in Goa due to mining operations. A Final Report was also submitted by the Expert Committee to the Court on or about 12th April, 2015 - it was obviously not available to the Court. Other proceedings in the High Court

20. Quite independent of the cases pending in this Court, writ petitions were filed by several mining lease holders in the Bombay High Court praying either for consideration of their application for a second renewal of the mining lease or for the grant of a mining lease on second renewal. The High Court heard those writ petitions and delivered its judgment on 13th August, 2014.4 In the course of its judgment, the High Court referred to the Mineral Policy and observed:

"The State Government also framed Goa Mineral Policy, 2013, which was duly gazetted on 28th September, 2013 and was placed on record before the Supreme Court in Writ Petition (C) 435/2012. The State Government, in terms of this policy, in principle, agreed to renew 28 leases. These leaseholders were also asked to pay stamp duty. In some cases, after payment of the stamp duty, decision under Section 8(3) of the MMDR Act was taken to renew the leases and that decision is also gazetted. Thus, the petitions are classified in three categories mentioned hereinbelow:

(A) Where there is notification issued in the Official Gazette after taking a decision for renewal;

(B) Where there is a decision for renewal and there is stamp duty collected; and

All the petitioners initially sought directions to the State Government to decide their applications for renewal filed in the year 2007. However, the petitions which fell in the first two categories were subsequently amended and directions were sought against the Government to execute second renewal lease deeds."

21. In its decision, the High Court held:

(i) The decision of this Court [in Goa Foundation] is not an impediment on the State of Goa in considering the applications filed by the petitioners before the High Court for a second renewal of the mining lease. On the contrary, the decision casts an obligation on the Government of Goa to consider all the applications for renewal under Section 8(3) of the MMDR Act;

(ii) Consideration of the applications should be in accordance with the Mineral Policy, the provisions of the MMDR Act and the Rules made thereunder and in accordance with constitutional provisions;

(iii) The expression "fresh leases" occurring in paragraph 67 (82) of the decision of this Court [in Goa Foundation] is an affirmation of the law that the renewal of a lease is also a fresh grant. For arriving at this conclusion, the High Court placed reliance on State of M.P. v. Krishnadas Tikaram.

The High Court finally held:

"In the case in hand, admittedly, all the petitioners have made applications for second renewal within the time limit i.e. before expiry of the term of first renewal of the mining leases. The mining plans for the second renewal, thereafter, came to be approved by the IBM. The IBM also recorded its subjective satisfaction that the same is in the interest of mineral development. Thus, there is enough material on record to show that the Government agreed to grant the second renewal of mining leases under Section 8(3) of the MMDR Act and thereafter amended the Stamp Act and directed some of the petitioners to pay the stamp duty and even accepted the same.

Thus, the Government gave promise that the mining leases would be executed under Section 8(3) and pursuant to the promise, the petitioners altered their position by depositing the huge stamp duty. Therefore, it is now not open for the Government to resile from the promise as it is estopped by the doctrine of promissory estoppel from doing so. The petitioners legitimately expected that after payment of the stamp duty, the Government would execute the second leases under Section 8(3) of the MMDR Act. In our considered opinion, the principle of promissory estoppel is squarely applicable to the facts of the present case. The Government is reluctant to execute the lease deeds under Section 8(3) only on the ground that it is not open for it to do so in the light of the Apex Court judgment in Writ Petition (C) No. 435/2012. We have already held that the Supreme Court judgment in Writ Petition (C) No. 435/2012 is not an impediment in the Government"s way in executing the leases in terms of Section 8(3) of the MMDR Act."

22. In view of the above conclusions, the High Court passed the following orders:

"(I) The Respondent-State of Goa is directed to execute the lease deeds under Section 8(3) of the MMDR Act in favour of the petitioners/lease holders who/which have already paid the stamp duty pursuant to the orders of the Government, in accordance with the Goa Mineral Policy, 2013 placed before the Supreme Court in Writ Petition (Civil) No. 435/2012 and subject to the conditions laid down by the Apex Court in the said Writ Petition.

(II) So far as the petitioners/lease holders who/which have not paid the stamp duty are concerned, the Respondent-State of Goa is directed to decide their renewal applications under Section 8(3), as expeditiously as possible, and preferably within a period of three months from the date of receipt of copy of this order."

23. Two petitions for special leave have been filed directed against the judgment and order passed by the High Court on 13th August, 2014 being SLP (C) No. 32138 of 2015 and SLP (C) Nos. 32699-32727 of 2015 and these are also before us. Goa Grant of Mining Leases Policy 2014

24. Keeping in mind the orders and directions passed by this Court and the High Court, the State of Goa formulated the Goa Grant of Mining Leases Policy 2014. We were informed by the learned Additional Solicitor General that the Grant of Mining Leases Policy was approved by the Council of Ministers of the Goa State Cabinet on 1st October, 2014. It was issued on 4th November, 2014 and placed on the website of the Directorate of Mines and Geology of the Government of Goa on the same day. However, it was gazetted on 20th January, 2015 with two paragraphs deleted from the document issued on 4th November, 2014. The two deleted paragraphs are indicated below.

25. The Grant of Mining Leases Policy makes for some very important and interesting reading and includes an impassioned plea for rejecting the process of competitive bidding of mining leases for the time being. It also contains the statement made by the Chief Minister on the floor of the Goa State Legislative Assembly.

While the Grant of Mining Leases Policy is a large document, it is necessary to read relevant extracts from it since it indicates the factors that went into taking the policy decision and also to appreciate if there was any violation of Article 14 of the Constitution. The relevant extracts read as under: Background.-- In accordance with the Directions contained in the judgment and order of the Hon"ble Supreme Court dated 21st April, 2014 in Writ Petition (Civil) No.435 of 2012, the Hon"ble Supreme Court has declared that all the Mining Leases in the State of Goa have expired on 22nd November, 2007.....

It has further been directed by the Hon"ble Supreme Court that it is for the State Government to decide as a matter of Policy, in what manner Mining Leases are to be granted in the future..... The Hon"ble Supreme Court has in its Judgment and Order dated 21st April, 2014 clearly held that the action of allowing the mines to be run on Deemed Extension Basis from the years 2007 to 2012 was completely illegal and has further declared that the so-called deemed mining leases in the State of Goa have expired in the year 2007.....

Few things emerge out of the Hon"ble Supreme Court"s Order. In the first place, the mining leases have been held to have expired in the year 2007. In the second place, the State Government has been directed, in accordance with its policy to grant fresh leases in the State. With these, the options available with the State Government are as follows:- The State Government can directly auction the leases in order to secure the best returns for the grant of leases by way of a competitive bidding process,

(a) The State Government can also form a State Corporation and undertake the mining activities through the State Mineral Development Corporation.

(b) The State Government could also proceed to grant fresh leases, in terms of the MMRD Act by the following the process of preferential grant of leases to certain persons as specified in the MMRD Act.

(c) Yet another option available to the State Government was to decide the renewal applications which were pending since the year 2006 and which had remained without any disposal. Each of the aforesaid modes has its own merits and de-merits....

While the State Government was in the process of deliberating on all these issues at various levels, the judgment and order of the Hon"ble High Court in Writ Petition filed by certain lease holders came to be delivered on 13th August, 2014 whereby the Hon"ble High Court has directed the execution of the Lease Deeds under Section 8(3) of the MMRD Act in favour of the lease holders who have already paid the stamp duty pursuant to Orders of the State Government in accordance with the Goa Mineral Policy, 2013, placed before the Hon"ble Supreme Court and subject to the conditions..... This judgment and order of the Hon'ble High Court virtually leaves no choice to the State Government, thereby to completely abandon the process of competitive bedding [bidding] for earning the best revenue to the State Government.

While this was the position taken by the State Government in the Goa Mineral Policy, 2013, and the Hon"ble High Court has interpreted the Order of the Hon"ble Supreme Court in Writ Petition (Civil) No.435/2012, the State Government in view of Hon'ble High Court order, has for the present ruled out the process of going for competitive bidding. The State Government is considering actively, within its Constitutional powers and functions, to come out with regulatory and controlling measures and levy and collect appropriate returns having regard to the fact that the soil comprising the land belongs to the State....

The State Government has also commenced the inquiry and investigation into the violations of matters under Rule 37 and 38 of the Mineral Concession Rules, 1960 as directed by the Hon"ble Supreme Court.... As is seen from the aforesaid, the Judgment and order of the Hon"ble High Court is an intervening circumstance inasmuch as it directs the execution of Lease Deeds in 28 cases and consideration of the Application under Section 8(3) by the State Government in the other cases.... In the considered Opinion of the State Government, it would be futile to challenge the Judgment of the Hon"ble High Court before the Hon"ble Apex Court as that would once again delay the commencement of the Mining Operations.

As a matter of fact, a substantial portion of the State"s Revenue comes from the Mining Sector. The State has been virtually starved of funds for undertaking many activities including Infra-structural Projects; and on account of the stopping of the Mining Operation, the State had to walk a tight-rope as there has been no Revenue coming from one of the major source of Revenue....

Having regard to the aforesaid, the State Government thought it proper to act in accordance with the Directions of the Hon"ble Supreme Court by balancing the equities, needs; as also to sub-serve the Public Interest and by having sustainable development by protecting the Ecological and all other factors.

Policy Framework.-- The State Government has been considering and deliberating the entire matter, and thought it proper having regard to the facts that:

(a) The Mining Lease Holders had applied for the Second Renewal well within time.

(b) The fact that the Applications of the Mining lease holders for the Second Renewal were not disposed off by the then State Government and for which the Lease Holders cannot be blamed.

(c) Having further regard to the fact that mining Lease Holders despite the closure of the mining operations, when called by the State to do so within the period, have paid the Stamp Duty; as also, other levies.

(d) Such payments helped the State Government to override the financial crisis at that point of time.

(e) Having regard to the fact that a large number of labour staff employed with these lease holders.

(f) That concerned Mining Lease Holders have invested heavily into the development of Mines; as also, into the Machinery such as Ripper Dozers, Cranes, wheel loader, Beneficiation plants etc.

(g) Other methods are not as suitable as this method for various reasons listed [in] Hon"ble Chief Minister statement to the House listed above. The State Government after having considered the matter from every possible angle, has decided to exercise its Power under Section 8(3) of the Mines and Mineral Regulations and Development Act, 1957, and to consider each of the cases on their own merits and subject to compliance with the Conditions which may be laid down by the State Government including for strict Pollution Control measures, and thereafter take a decision on the renewal in terms of Section 8(3) of the MMRD Act, 1957, complying fully with the Procedure laid down therein.

Though the State Government has in principle decided to follow the route of the renewal of Lease under Section 8(3) of the MMRD Act, it shall be subject to the following:- Unless and until the Inquiry initiated pursuant to the Judgment and Order of the Honourable Supreme Court of India against those Mine Lease Holders found to be violating either Rule 37 or Rule 38 of the Mineral Concession Rules 1960, or otherwise indicted in the Report of the Justice Shah Commission/PAC report or found to be engaged in, any kind of illegality of whatsoever nature such as illegal Sale of Ore, Sale of Royalty Challan without Ore, Encroachment of adjoining areas outside the lease over production in excess of the limit specified in the Environmental Clearance; those which have undertaken unscientific mining operations; those who have violated or have not paid the Royalty amount; those who have re-used old Royalty Challans for defrauding; and those involved in Illegal Mining Activities shall not be considered for renewal of the Mining Leases.

For this purpose, presently the inquiries are in progress at various levels and foras including the investigation by the SIT Team, by the Team of Chartered Accountants which have been set up by the State Government and after the Inquiry is complete or during the course of the inquiry where it is found that any violations have taken place, such persons shall not be considered for Grant/Renewal of the Leases..... Those Mining Lease Holders who have paid Stamp Duty, in which there are no violations found in terms of Mr. Justice Shah Inquiry/Public Accounts Committee Report, shall be considered for Renewal.

[Deleted from the gazetted Policy].

The formation of the entire Policy is aimed that it is required to balance various interests having regard to the Principle of Sustainable Development; but by keeping in mind the commercial interest of the present state of economy, the interest of the labour class, the interest of the working class including other staff, the interest of the market in the Mining Localities, the interest of the Public Sector, the interest of the existing Mining Lease Holders and the overall welfare needs of the State; and require all urgent infrastructural development. By balancing all these interests the present Policy has been formulated by the State Government."

The above policy is in principle decision of the State Government and will be vetted for exact legal requirements from specific necessities as also from financial view points and notified thereafter."

[Deleted from the gazetted Policy].

[Emphasis supplied by us].

26. Around this time, and pursuant to the Budget Speech given by the Hon"ble Minister of Finance of the Government of India on 10th July, 2014 it appears that steps were being taken by the concerned Ministry in the Government of India to amend the MMDR Act.7 In fact a draft Mines and Minerals (Development and Regulation) Act, 2014 was prepared on or about 16th November, 2014 and uploaded on the website of the Ministry of Mines on 17th November, 2014. This information was placed before us from the response given by the Hon"ble Minister of Mines to Unstarred Question No. 2485 to be answered in the Lok Sabha on 8th December, 2014. The question was:

(a) whether the Government proposes to formulate a new policy on grant of mining leases for various minerals by amending the Mines and Minerals (Development and Regulation) Act, 1957;

(b) if so, the details thereof along with the time by which the new policy is likely to be implemented;

And the answer was: (a) & (b): Yes Madam. The Ministry has drafted the Mines and Minerals (Development and Regulation) (MMDR) (Amendment) Bill, 2014, which has been uploaded on the website of the Ministry on 17.11.2014, calling for comments/suggestions on the draft Bill. The last date for receipt of the comments/suggestions is 10th December 2014. Based on the comments/suggestions received the draft Bill will be finalized and taken forward for introduction in the Parliament.

The Bill is designed to put in place mechanisms for:

(i) Improved transparency in the allocation of mineral resources;

(ii) Obtaining for the government its fair share of the value of such resources;

(iii) Attracting private investment and the latest technology; and

(iv) Eliminating delay in administration, so as to enable expeditious and optimum development of the mineral resources of the country.

27. What was the nature of the proposed amendments?

As far as we are concerned, the introduction of Section 10B in the MMDR Act (relating to competitive bidding) is significant and this reads: "Mining leases for notified minerals 10B.

(1) Notwithstanding anything contained elsewhere in this Act, but subject to the provisions of Section 10A and Section 17A, the procedure for obtaining a mining lease for notified minerals in respect of land in which the minerals vest in the Government shall be as laid down in this Section.

(2) and

(3) xxx

(4) For the purpose of granting a mining lease in respect of any notified mineral in such notified area, the State Government shall select, through auction by a method of competitive bidding, including e-auction, an applicant who satisfies the eligibility conditions.

(5) The Central Government shall prescribe the terms and conditions, and procedure, subject to which the auction will be conducted, including the bidding parameters for the selection, which could include a share in the production of the mineral, or any payment linked to the royalty payable, or any other relevant parameter, or any combination or modification of them.

(6) and

(7) xxx" [Iron ore was proposed as a notified mineral in the draft statute].

28. Immediately after 4th November, 2014 (the date on which the Grant of Mining Leases Policy was uploaded on the website of the Government of Goa) the State Government commenced granting a second renewal of the mining leases from 5th November, 2014 onwards and that process was completed on 12th January, 2015. The following table gives the dates of second renewal of 88 mining leases granted by the State Government on or before 12th January, 2015:

Sr. No.

Date of renewal order

Number of renewal orders passed

5.11.2014

6.11.2014

7.11.2014

10.12.2014

24.12.2014

1.1.2015

2.1.2015

5.1.2015

6.1.2015

10.

9.1.2015

11.

12.1.2015

TOTAL

29. The date of 12th January, 2015 is significant since on that date the President promulgated the Mines and Minerals (Development and Regulation) Amendment Ordinance, 2015 (which was later enacted by Parliament) whereby the grant of mining leases for notified minerals was through competitive bidding or the auction process. It is important to mention here that the approval of the Ordinance by the Cabinet of the Government of India became public knowledge on 5th January, 20158 and it is within a week from that date that the Government of Goa granted a second renewal to 25 mining leases and to make matters worse, a second renewal was granted to 31 mining leases on 12th January, 2015 the day the Ordinance came into force making a total of 56 renewals of mining leases. Environmental clearance and orders dated 20th March, 2015

30. Following the renewal of 88 mining leases, the State of Goa requested the MoEF by letters dated 7th January, 2015 and 5th February, 2015 to lift the abeyance order of 14th September, 2012 on the environmental clearances. Consequently, the MoEF passed three orders on 20th March, 2015 (the actual sequence of the orders is not very clear).

31. The first order of 20th March, 2015 was in the form of a letter addressed to the Principal Secretary, Environment, Government of Goa and it recorded that MoEF had considered all the 139 cases in which the abeyance order has been passed and had taken into account the request of the State Government, the recommendation of the EAC and the directions of this Court. It was noted that the EAC had observed that there were violations of the following nature:

(i) No clearance from the National Board of Wildlife and non-compliance of orders of this Court on the subject;

(ii) Excess production;

(iii) Dump mining;

(iv) Intersecting ground water table and drawal of ground water without permission of the Central Ground Water Board;

(v) No forest clearance obtained where required;

(vi) Encroachment and false information/concealment of fact.

It was stated that the MoEF had decided to refer the cases to the appropriate authorities (including the State Government) for taking action on the violations. Accordingly, a request was made to examine the report of the EAC and take appropriate action against the concerned lessees.

32. The second order passed on 20th March, 2015 was an Office Memorandum to the effect that if a project proponent has a valid and subsisting environmental clearance for a mining project under the Environment Impact Assessment Notification of 27th January, 1994 (EIA 1994) or Environment Impact Assessment Notification of 14th September, 2006 (EIA 2006), it will not be required to obtain a fresh environmental clearance at the time of renewal of the mining lease. This was subject to the maximum period of validity of 30 years for the environmental clearance for a mining lease.

33. The third order passed on 20th March, 2015 related to lifting the abeyance order dated 14th September, 2012 on the environmental clearance of the mining leases for iron ore and manganese ore. The cases of all 139 mining leases in which the abeyance order was passed were considered and the abeyance order lifted in respect of 72 cases. The details in this regard are given in the table below:

Number

Remarks

Remaining

Total mines = 139

Inadvertent repetitions

137

Already withdrawn

135

Fully located in Protected Area (abeyance order cannot be lifted)

123

Partly located in Protected Area (abeyance order cannot be lifted)

117

Within 1 km. of Protected Area (awaiting modification of order dated 4.8.2006 passed by this Court)

Not having any Forest Clearance and will be considered only after clearance is obtained

Environmental Clearance already granted under EIA Notification of 27.1.1994 and no fresh clearance is required in view of Office Memorandum dated 20.3.2015. Abeyance order lifted.

Environmental Clearance already granted under EIA Notification of 14.9.2006. Abeyance order lifted.

Abeyance order lifted on 20th March, 2015 for 72 mines out of 139

34. The third order of 20th March, 2015 also placed certain additional specific conditions while lifting the abeyance order. These additional conditions were:

1. State Government of Goa shall develop and implement a credible mechanism to regularly monitor and ensure that capping of 20 MTPA on the mining leases in the State of Goa is implemented as per the directions of Hon"ble Supreme Court in its order dated 21.04.2014 and any further order in the matter of Goa Foundation vs. Union of India in W.P. 435 of 2012.

2. No Mining shall be allowed in the forest land for which FC [forest clearance] is not available.

3. The Mining of dumps is not permitted unless mentioned in approved mine plan and Environmental Clearance letter.

4. Dumping of material outside the mine lease is not permitted unless mentioned in approved mine plan and Environmental Clearance letter.

5. Prior permission be obtained from Central Ground Water Board for drawl of ground water and intersection of ground water table as applicable.

6. Violations will be dealt as per the existing law and lifting of abeyance of EC will not in any manner affect that.

7. If any violation is observed in future the environmental clearance will be cancelled as per rules.

8. State Government will take action in cases of violation under Section 15/19 of Environment (Protection) Act, 1986 as noted and recommended in EAC report.

9. Project Proponent will file six monthly compliance to Regional Officer, MoEFCC and State Pollution Control Board.

Questions for consideration

35. Broadly speaking, on the basis of the submissions and documents placed before us, the questions raised by the Goa Foundation, the State of Goa, the Union of India and the mining lease holders are three-fold:

(a) Relatable to the second renewal of the mining leases:

(i) In view of the decision in Goa Foundation only fresh leases were to be granted by the State of Goa and not second renewals.

(ii) For granting fresh leases, the State of Goa should have introduced competitive bidding or the auction process.

(iii) Assuming the decision to grant a second renewal to the mining lease holders was valid, the second renewals were not in accordance with law and should be set aside.

(b) Relatable to the grant of environmental clearances: In view of the decision in Goa Foundation fresh environmental clearances were required to be obtained by the mining lease holders.

(c) The impugned judgment and order passed by the High Court in Lithoferro on 13th August, 2014 was erroneous and deserves to be set aside.

Whether fresh mining leases were required to be granted?

36. The controversy in this regard has arisen in view of what is stated in paragraph 82 of the decision in Goa Foundation. It was stated as follows:

"As we have held that the deemed mining leases of the lessees in Goa expired on 22-11-1987 and the maximum period (20 years) of renewal of the deemed mining leases in Goa has also expired on 22-11-2007, mining by the lessees in Goa after 22-11-2007 was illegal.

Hence, the Order dated 10-9-2012 of the Government of Goa suspending mining operations in the State of Goa and the Order dated 14-9-2012 of MoEF, Government of India, suspending the environmental clearances granted to the mines in the State of Goa, which have been impugned in the writ petitions in the Bombay High Court, Goa Bench (transferred to this Court and registered as transferred cases) cannot be quashed by this Court. The Order dated 10.9.2012 of the Government of Goa and the Order dated 14.9.2012 of the MoEF will have to continue till decisions are taken by the State Government to grant fresh leases and decisions are taken by MoEF to grant fresh environmental clearances for mining projects."

[Emphasis supplied by us].

37. The issue that arose for discussion before us was the meaning and intention of the Court in the context of grant of "fresh leases" for mining projects. Did the Court literally mean that a fresh mining lease was required to be granted or was a second renewal sufficient compliance?

38. As the above quoted paragraph indicates, the Court was aware and conscious of the fact that the mining leases had expired on 22nd November, 2007 and the mining operations thereafter carried out by the mining lease holders was illegal. For this reason, the Court held that the suspension order passed by the State of Goa on 10th September, 2012 and the abeyance order passed by the MoEF on 14th September, 2012 did not require any interference.

39. Since the mining operations carried out after 22nd November, 2007 were illegal, the Court, in subsequent paragraphs of the judgment noted (as a follow up) that an order was passed on 5th October, 2012 suspending transportation of iron ore and manganese ore from those leases identified by the Justice Shah Commission.Thereafter on 11th November, 2013 it was directed that an inventory be made of the excavated mineral ores and the inventoried mineral ores be sold by e-auction under the supervision of a Monitoring Committee.

40. Further, it was held by the Court on 21st April, 2014 that from the e-auction sale of the mineral ores, the mining lease holders would be entitled to the average cost (not the actual cost) of extraction, the workers would be entitled to 50% wages and allowances on the principle of laid-off compensation and the Marmagao Port Trust would be entitled to 50% of the storage charges. Out of the balance amount, 10% would be appropriated to the Goan Iron Ore Permanent Fund for the purpose of sustainable development and intergenerational equity and the remaining amount would be appropriated by the State who is the owner of the mineral ores illegally excavated by the mining lease holders and sold by e-auction.

With this in mind, the Court declared in paragraph 87.5 of the Report: "It is for the State Government to decide as a matter of policy in what manner mining leases are to be granted in future but the constitutionality or legality of the decision of the State Government can be examined by the Court in exercise of its power of judicial review."

[Emphasis supplied by us].

It was then directed by the Court in paragraph 88.4 of the Report as follows: "The State Government may grant mining leases of iron ore and other ores in Goa in accordance with its policy decision and in accordance with the MMDR Act and the Rules made thereunder in consonance with the constitutional provisions."

[Emphasis supplied by us].

41. The Court was quite obviously aware that it was concerned, inter alia, with the second renewal of mining leases and yet it chose to recount the factual situation, make a declaration and pass a direction without adverting to the possibility of a second renewal of a mining lease. The Court was also conscious that the mining lease holders had carried out indiscriminate and illegal mining for about five years (from November 2007 to September 2012) and had made profits out of the illegal mining.

The Court, in our opinion, was rather charitable in not penalizing the mining lease holders for the illegal mining carried out by them. But be that as it may, quite clearly, the sequence of events from September 2012 onwards, the appointment of a Monitoring Committee to dispose of the illegally mined ore, the declaration and direction unmistakably point to the intention of the Court to end the sordid chapter of illegal mining by the lease holders and start on a clean slate. Viewed in this perspective, we have no doubt that the Court really did intend the State of Goa to consider the grant of fresh leases in accordance with law.

42. In this context, the declaration of the Court in Goa Foundation in paragraph 87.5 of Report is also quite clear, namely, "It is for the State Government to decide as a matter of policy in what manner mining leases are to be granted in future...." The declaration was explicit and related to the grant of mining leases and not a second renewal.

43. Similarly, the direction given in paragraph 88.4 of the Report that "The State Government may grant mining leases of iron ore and other ores in Goa in accordance with its policy decision....." was equally explicit and related to the grant of mining leases and not a second renewal.

44. Subsequent events confirm our impression and view. The decision of the Court to e-auction the mined mineral ore was sought to be recalled through I.A. No. 86 of 2014 filed by M/s Bandekar Brothers Private Ltd. The applicant prayed for a direction to restrain the authorities from e-auctioning the iron ore mined by it prior to 22nd November, 2007 and that the mined ore should be released to the applicant with the right to dispose of the same. A Bench of three learned judges (other than those that decided Goa Foundation) noted that:

"The submissions advanced on behalf of the applicant were premised merely on the assertion, that the mineral ore which the applicant was claiming a right over, had been legitimately mined before 22.11.2007, and therefore, the applicant had an absolute and legitimate ownership over the same. We may note, that the above position was emphasized, stressed and persistently reiterated to make the stand absolutely crystal clear."

The learned judges considered the submissions and held by an order dated 14th October, 2014 that the direction in Goa Foundation was clear and categorical that the iron ore vested in the State Government and therefore the application deserved dismissal. In other words, the mining lease holders deserved no latitude for the illegal mining and all issues needed to be dealt with strictly.

45. There is additional material to support the view that the Court had intended the State of Goa to grant fresh mining leases rather than grant a second renewal.

46. From a reading of the decision rendered by the Bombay High Court in Lithoferro (subject matter of SLP (C) No. 32138 of 2015 and SLP (C) Nos. 32699-32727 of 2015) it is evident that the State of Goa understood the decision of this Court in Goa Foundation to mean that fresh mining leases were required to be granted on the basis of a policy yet to be framed by the State of Goa and the issue of second renewals did not survive consideration.

The contention of the learned Advocate General of the State of Goa in this regard is recorded by the High Court in the following words: "The learned Advocate General [of the State of Goa] took us through the Judgment of the Apex Court in Writ Petition (C) 435/2012 and relied upon the observations of the Supreme Court in paras 67, 68, 69 and 70.

The learned Advocate General submitted that the Honourable Supreme Court has held that the deemed mining leases of the lessees in Goa expired on 22nd November, 1987 and the maximum of 20 years renewal period of the deemed mining leases in Goa as provided under subsection (2) of Section 8 of the MMDR Act, read with sub-Rules 8 and 9 of Rule 24-A of the MC Rules expired on 22nd November, 2007. The learned Advocate General submitted that in view of these findings of the Supreme Court, there is no question of renewal of the mining leases.

The learned Advocate General submitted that in terms of the Supreme Court decision, it is for the State Government to grant fresh leases in accordance with the policy which is yet to be framed. The learned Advocate General submitted that the Supreme Court has kept Writ Petition (C) 435/2012 pending and, therefore, it is for the petitioners to approach the Supreme Court and seek appropriate orders. The learned Advocate General submitted that the orders on which the petitioners rely, at the most show that the Government in principle has agreed for renewal of the leases for a further period of 20 years and the same was not a final decision. He submitted that in terms of the said decision of the Apex Court, it is for the State Government to frame a fresh mining policy and after framing the same, to decide granting of fresh mining leases."

[Emphasis supplied by us].

47. While considering the submissions of the learned Advocate General and learned counsel, the High Court noted that this Court was alive to the fact that the State of Goa had granted in-principle second renewal to 28 mining leases and had collected renewal fees or stamp duty from 27 mining leases (presumably out of the 28 mining leases) as stated in the brief resume filed by the State of Goa in this Court. The High Court noted: (II) In the brief resume presented by the State of Goa and placed on record of the Supreme Court, in Writ Petition (C) 435/2012, it is inter alia, mentioned thus:

"...Presently in the State of Goa, it is found that the Applications for Renewal were filed well within time as contemplated by Rule 24A of the Mineral Concession Rules, 1960. Presently, the State has ordered renewal of 28 mining leases, granted in principle approvals and has collected Renewal Fees/Stamp Duty from 27 Mining Leases.."

48. In other words, notwithstanding the in-principle grant of second renewal of 28 mining leases and collection of renewal fees or stamp duty, this Court in Goa Foundation consciously required the State of Goa to grant fresh leases. What is equally significant is that the State of Goa also understood the decision of the Court in the same manner and intended to act on that basis.

49. Unfortunately, the State of Goa was overtaken by events in that the High Court delivered its judgment in Lithoferro on 13th August, 2014 and while doing so, it misunderstood or incorrectly appreciated the decision of this Court in Goa Foundation and disagreed with the view of the State of Goa. While this Court had required the State of Goa to grant fresh mining leases and the State of Goa was willing to comply with this direction, the High Court instead directed it to execute mining leases under Section 8(3) of the MMDR Act in respect of those who had paid the renewal fees or stamp duty.

The High Court also directed the State of Goa to decide their pending second renewal applications within a period of three months keeping in mind the provisions of Section 8(3) of the MMDR Act (presumably after paying the renewal fees or stamp duty in terms of the Government order of 21st February, 2013). The understanding by the High Court of the decision of this Court in Goa Foundation is totally incorrect.

50. It appears from the contents of the Grant of Mining Leases Policy that in view of the decision of this Court in Goa Foundation the State was actively considering a policy for granting fresh mining leases by considering several factors. However, the decision and directions of the High Court supervened leaving no choice, according to the State, but to completely abandon the process of grant of fresh mining leases through the process of competitive bidding for earning revenue and justify the abandonment.

51. As per the Grant of Mining Leases Policy, the State of Goa therefore had two realistic options before it:

(i) To implement the judgment and order of this Court in Goa Foundation (as understood by the State of Goa) and grant fresh mining leases in the manner felt appropriate and in accordance with law;

(ii) To abide by the judgment of the High Court (and its understanding of the judgment of this Court in Goa Foundation while rejecting its understanding by the State of Goa) and grant second renewal to the mining leases in terms of Section 8(3) of the MMDR Act. The State of Goa appears to have taken the view that challenging the decision of the High Court (and therefore abiding by the decision of this Court) would delay the commencement of mining operations.

The State took into consideration that a substantial portion of its revenue comes from the mining sector and that the State had been virtually starved of funds on account of stoppage of mining operations. Therefore, the State decided to grant a second renewal to the mining leases and not grant fresh leases. This is quite apparent from the contents of the Grant of Mining Leases Policy wherein the above facts and conclusions have been stated in greater detail. Was this decision correct?

52. Learned counsel for the mining lease holders submitted that the renewal of a mining lease is equivalent to or amounts to the grant of a fresh lease and therefore when the mining leases were renewed, it amounted to the grant of a fresh lease in compliance with the directions of this Court. Reliance was placed upon Delhi Development Authority v. Durga Chand Kaushish11 wherein this Court held: "A renewal of a lease is really the grant of a fresh lease. It is called a "renewal" simply because it postulates the existence of a prior lease which generally provides for renewals as of right. In all other respects, it is really a fresh lease."

53. Reference was also made to Provash Chandra Dalui v. Biswanath Banerjee12 in which it was held in paragraph 14 of the Report that there is a distinction between extension of a lease and renewal of a lease. We do not find any relevance of this to our discussion. Reference was also made to the view expressed in M.C. Mehta v. Union of India13 wherein this Court noted that it is settled law that grant of renewal is a fresh grant and must be consistent with law.

54. Finally reliance was placed on State of West Bengal v. Calcutta Mineral Supply Company Private Limited14 in which decision it was noted in paragraph 31 of the Report that the renewal of a lease is a fresh grant. This decision also refers to Gajraj Singh v. State Transport Appellate Tribunal15 wherein this Court observed in paragraph 38 of the Report that the grant of renewal is a fresh grant though it breathes life into the operation of the previous lease or licence granted.

55. There is no doubt that the renewal of a lease is virtually the same as the grant of a fresh lease but a converse direction to grant a mining lease cannot be understood to mean granting a renewal of a mining lease. Obviously, the grant of a fresh lease is not the same as the renewal of a lease and when the Court in Goa Foundation required the State of Goa to grant a fresh lease, it did not require the State to renew the existing (expired) lease.

The Court could have explicitly declared and directed the State of Goa to grant a second renewal of the mining leases rather than to say it in a roundabout manner that it should do so by granting a fresh lease equivalent to a renewal. We simply cannot accept the submissions made by learned counsel for the mining lease holders in this regard.

56. That apart, as we have already noted above, the context and material on record disabuse the thought that the Court in Goa Foundation did not mandate the grant of fresh mining leases in accordance with law.

57. Learned counsel for the mining lease holders contended that the very same learned judges that decided Goa Foundation permitted the State Government in Common Cause v. Union of India to consider granting a second renewal of mining leases under Section 8(3) of the MMDR Act. Therefore the requirement in Goa Foundation for the grant of "fresh leases" must be understood in a manner similar to what was directed in Common Cause. We are unable to accept this contention.

The direction given in Common Cause was an interim direction and not a final direction as in Goa Foundation. Moreover, the facts in both cases are not at all similar so as to warrant a similar order being passed or understood. Finally, the fact that the same set of learned judges thought it fit to direct the grant of "fresh leases" in one set of cases and thought it fit to direct consideration of a "second renewal" in another set of cases indicates that the learned judges were aware of the difference in directions. Therefore when the leaned judges directed the grant of "fresh leases" in Goa Foundation it was a deliberate and conscious decision distinct and different from granting a second renewal of expired mining leases.

58. In our opinion, the direction in Goa Foundation is quite clear and instead of considering the grant of a second renewal of the mining leases, the State of Goa was required to consider the grant of fresh mining leases. Therefore the decision of the State of Goa to grant a second renewal of the mining leases is erroneous,