Supreme Court of India
GOA FOUNDATIONversusUNION OF INDIA & ORS.
- Citation
- 2014 INSC 962
- Decided
- 21 April 2014
- Disposal
- Disposed off
- Bench
- A K PATNAIK
Holding
The Court upheld the validity of the Justice Shah Commission report, declared the deemed mining leases and their twenty‑year renewal period expired, prohibited dumping outside lease areas and mining within one kilometre of protected zones, affirmed the suspension orders, and directed compensation, enforcement of MC Rules, and creation of a 10% permanent fund.
Summary
The Supreme Court examined public‑interest petitions concerning illegal iron‑ore mining in Goa, the validity of the Justice Shah Commission report, and the status of mining leases deemed to have arisen from pre‑1961 Portuguese concessions. It held that the Commission’s report could not be quashed for procedural lapses, but prosecutions could not rely solely on it without affording lessees a hearing. The Court declared that the deemed mining leases expired on 22‑Nov‑1987 and the statutory twenty‑year renewal period lapsed on 22‑Nov‑2007, rendering mining after that date illegal. Dumping of mineral waste outside the leased area was prohibited, and mining within one kilometre of national parks or wildlife sanctuaries was barred. The suspension orders of 10‑Sep‑2012 (Goa) and 14‑Sep‑2012 (MoEF) were upheld, and the State was directed to enforce the MC Rules, compensate workers, allocate 10% of sale proceeds to a permanent fund, and monitor environmental impacts. The State may decide the policy for future lease grants, subject to the MMDR Act and constitutional principles.
Issues considered
- The report of the Justice Shah Commission may be quashed for non‑compliance with Sections 88 and 8C of the Commissions of Inquiry Act, 1952 and principles of natural justice.
- Whether the mining leases in Goa, deemed under the 1987 Abolition Act, have expired and whether renewal periods under the MMDR Act and MC Rules are applicable.
- Whether dumping of tailings, rejects or overburden outside the leased area is permissible under the MMDR Act, the Mineral Concession Rules and the MCD Rules.
- Whether mining activities are prohibited within a specified distance (1 km or 10 km) from the boundaries of National Parks and Wildlife Sanctuaries.
- Whether the orders dated 10‑Sep‑2012 (Goa) and 14‑Sep‑2012 (MoEF) suspending mining operations and environmental clearances are legally valid.
- Whether violations of Rules 37 and 38 of the Mineral Concession Rules have occurred and what remedial action is required.
- Whether workers are entitled to lay‑off compensation under Section 25C of the Industrial Disputes Act, 1947 and whether storage charges to Marmagoa Port Trust are recoverable.
- Whether a permanent fund funded by 10% of iron‑ore sale proceeds should be created for sustainable development and inter‑generational equity.
- Whether future mining leases must be granted by public auction or may be allotted according to State policy consistent with the MMDR Act.
Legislation cited
- Air (Prevention & Control of Pollution) Act, 1981s. 31A
- Commissions of Inquiry Act, 1952s. 88, s. 8C
- Environment (Protection) Act, 1986s. Rule 5
- Forest (Conservation) Act, 1980
- Goa, Daman and Diu Mining Concessions (Abolition and Declaration as Mining Leases) Act, 1987s. 4, s. 5
- Industrial Disputes Act, 1947s. 25C
- Mineral Concession Rules, 1960s. Rule 16, s. Rule 24A (sub‑rules 8,9,6), s. Rule 37, s. Rule 38, s. Rule 64C
- Mines and Minerals (Development and Regulation) Act, 1957s. 4, s. 8(1), s. 8(2), s. 8(3), s. 8(4), s. 9
- Water (Prevention & Control of Pollution) Act, 1974s. 33A
- Wild Life (Protection) Act, 1972
Subjects
illegal miningmining leasesenvironmental protectionnatural justiceCommissions of Inquiry ActMMDR ActMineral Concession Ruleseco‑sensitive zonesinter‑generational equitycompensationpermanent fundauction of natural resourcesprotected areasdumping of tailings
Judgment
[2014] 5 S.C.R. 302
A GOA FOUNDATION
v.
UNION OF INDIA & ORS.
(Writ Petition (Civil) No. 435 of 2012)
APRIL 21, 2014
B
[A.K. PATNAIK, SURINDER SINGH NIJJAR AND
FAKKIR MOHAMED IBRAHIM KALIFULLA, JJ.]
Commission of inquiry Act, 1952:
c
ss. BB and BC - Justice Shah Commission - Report on
illegal mining ·in State of Goa - Held: Jn view of the stand of
the State Government that no action will be taken against
m;ning Jesse.Es only on the basis of the findings in the report
of Justiee Shah Commission without making its own
0
assessment of facts and without first giving the mining lessees
opportunity of hearing and opportunity to produce evidence
in their defence, Court is not inclined to quash the report of
Justice Shah Commission on the ground that provisions of
ss. BB and BC of the 1952 Act, and principles of natural justice
E have not been complied with - However, Court cannot direct
prosecution of the mining lessees on the basis of the findings
in the report of Justice Shah Commission, if they have not
been given opportunity of being heard and to produce
evidence in their defence and not allowed right to cross-
F examine and the right to be represented by a legal
practitioner before the Commission as provided in ss. BB and
BC.
Mines and Minerals (Development and Regulation) Act,
G 1957:
ss .8(2) and 8(3) - Renewal of mining lease -
Concessions granted before liberation of Goa, deemed to be
mining leases - Deemed mining leases to excavate iron ore
H 302
· GOA FOUNDATION v. UNION OF INDIA 303
in State of Goa - Held: Renewal beyond first renewal for a A
period of twenty years is conditional upon State Government
forming an opinion that in the interest of mineral development,
it is necessary to do so and also conditional upon State
Government recording reasons for such renewal of a mining
lease in respect of iron ore which is not specified in Part A B
and Part B of the First Schedule - Deemed mining leases of
lessees in Goa expired on 22.11.1987 and the maximum
period (20 years) of renewal of deemed mining leases in Goa
has also expired on 22. 11. 2007 - Therefore, mining by
lessees in Goa after 22. 11. 2007 was illegal - Accordingly, c
- order dated 10.09.2012 of Government of Goa suspending
mining operations in the State and order dated 14.09.2012
of MoEF, Government of India, suspending the environmental
clearances granted to mines in the State are not liable to be
quashed by the Court, and the same will have to continue ti/I
0
decisions are taken by State Government to grant fresh leases
and decisions are taken by MoEF to grant fresh environmental
clearances for mining projects - Mineral Concession Rules,
1960 - r.24A - Goa, Daman and Diu Mining Concessions
(Abolition and Declaration as Mining Leases) Act, 1987- s.
5 - Public Interest Litigation. E
ss. 4 and 9 - Removing of dump· from mining area and
keeping it beyond mining area - Held: Dumping of minerals
outside the leased area of the mining lessees is not
permissible under MMDR Act and Rules made thereunder F
- The moment mineral is removed or consumed from the
leased area, the holder of a mining lease has to pay royalty
- By virtue of ss. 9 of MMDR Act, tailings and rejects
excavated during mining operations being minerals wi/I also
be exigible to royalty the moment they are removed from the G
leased area - Mineral Concession Rules, 1960 - r. 64-C.
Mines and Minerals:
Prohibition on mining activities - In areas adjacent to
National Park or Wildlife Sanctuary - Held: Supreme Court H
304 SUPREME COURT REPORTS [2014] 5 S.C.R.
A in exercise of its power under Art. 32 of the Constitution can
direct the State to prohibit mining activities in an area
adjacent to a National Park or a Wildlife Sanctuary for the
purpose of protecting the flora, fauna and wildlife habitat of
the National Park/Wildlife Sanctuary - State can be directed
s by the Court by an appropriate writ or direction not to grant
mining /eases or not to allow mining that will be violative under
Art. 21 of the Constitution - The order passed by the Court
saying that there will be no mining activity within one kilometer
safety zone around National Park or Wildlife Sanctuary has
c to be enforced - Until the Central Government takes into
account various factors mentioned in sub-r. (1 ), follows the
procedure laid down in sub-r. (3) and issues a notification
under r.5 prohibiting mining operations in a certain area, there
can be no prohibition under law to carry on mining activity
beyond 1 km. of the boundaries of National Parks or Wildlife
0
Sanctuaries - Direction given to issue notification under r. 5
- Constitution of India, 1950 - Arts. 32 and 21 - Environment
Protect~on Rules, 1986 - r.5.
Granting of mining /eases for excavation of iron ore -
E Modality of - Held: State Government may grant mining
/eases of iron ore and other ores in accordance with its policy
decision and in accordance with MMDR Act and the Rules
made thereunder in consonance with constitutional provisions
- Until the final report is submitted by the Expert Committee,
F State Government will, in the interests of sustainablf;f
development and intergenerational equity, permit a maximum
annual excavation of 20 million MT from the mining /eases
in the State other than from dumps - Directions given to
appropriate the sale proceeds of ores sold in e-auction as
G suggested in the judgment - Monitoring Committee directed
to make the payments as mentioned in the judgment - 50%
of wages and dearness allowance directed to be paid to
workers in the muster rolls of mining /eases who have not
been paid their wages during the period of suspension of
H mining operations - Direction also given to set aside amount
GOA FOUNDATION v. UNION OF INDIA 305
,'towards Goan Iron Ore Permanent Fund - Industrial Disputes A
Act, 1947 - s.25 C - Goa Pollution Control Board directed to
monitor air and water pollution in mining areas - Public
Interest litigation.
Mineral Concession Rules, 1960:
8
rr. 37 and 38 - Held: State Government will initiate action
against those mining lessees who violate rr.37 and 38 and
will strictly enforce the Goa (Prevention of Illegal Mining,
Storage and Transportation of Minerals) Rules - Goa
(Prevention of Illegal Mining, Storage and Transportation of C
Minerals) Rules, 2013.
Reports were received about widespread mining of
iron ore and manganese ore in various States in
contravention of the provisions of the Mines and Minerals
0
(Development and Regt1lation) Act, 1957(MMDR Act),
Forests (Conservation) Act, 1980, Environment
Protection Act, 1986 and other rules and guidelines.
Therefore, the Central Government appointed the Justice
Shah Commission in .order, inter a/ia, to inquire into and
recommend remedial measures to prevent illegal mining,
E
trade, transportation and export of iron ore and
manganese ore. As regard State of Goa, the mining
concessions granted by Portuguese Government prior to
1961, were abolished by Goa, Daman and Diu Mining
Concessions (Abolition and Declaration as Mining F
Leases) Act, 1987 (the Abolition Act), and every mining
concession was deemed to be a mining lease granted
under MMDR Act. The Commission visited Goa, issued
notices to all concerned including the lessees and
submitted its report on 15.3.2012. On 10.9.2012 the State G
Government of Goa passed an order suspending all
mining operations in the State with effect from 11.9.2012.
On the basis of the findings of the Commission, Writ
Petition No. 435 of 2012 was filed in public interest
seeking directions to the Union of India and the State of H
306 SUPREME COURT REPORTS [2014) 5 S.C.R.
A Goa to terminate the mining leases of the lessees
involved in mining in violation of relevant statutory
provisions, as also for prosecution of all those who
committed offences under different laws. The mining
lessees and Goa Mining Association also filed writ
B petitions in the High Court seeking to quash the findings
in the report of the Justice Shah Commission. These writ
petitions were transferred to the Supreme Court. The
Court by an interim order directed that mining operations
in identified leases be kept in abeyance. The Court also
C directed that the process of verification of the inventory
of excavated mineral ores lying at various stockyards, its
e-auction and deposit of sale proceeds be monitored by
a Monitoring Committee. The Court further constituted an
Expert Committee to conduct a macro study as to the
ceiling of annual excavation of iron ore from the State of
0
Goa keeping in mind the principles of sustainable
development and inter generational equity and other
relevant factors.
Disposing of the matters, the Court
E
HELD:
Challenge to the Report of the Justice Shah Commission:
1.1. Section 88 of the Commissions of Inquiry Act,
F 1952(the 1952 Act) provides that if a person is likely to be
prejudicially affected by the inquiry, the Commission shall
give to that person a reasonable opportunity of being
heard and to produce evidence in his defence; and s.8C
provides that every such person will have a right to cross-
G examine and the right to be represented by a legal
practitioner before the Commission. As the State
Government of Goa has taken a stand before this Court
that no action will be taken against the mining lessees
only on the basis of the findings in the report of the
H Justice Shah Commission without making its own
GOA FOUNDATION v. UNION OF INDIA 307
.
assessment of facts and without first giving the mining A
lessees the opportunity of hearing and the opportunity
to produce evidence in their defence, this Court is not.
inclined to quash the report of the Justice Shah
Commission on the ground that the provisions of ss. S8
and SC of the 1952 Act, and the principles of natural B
justice have not been complied with. [para S and 11) [324-
G; 326-C-G]
1.2. At the same time, this Court cannot also direct
prosecution of the mining lessees on the basis of the
findings in the report of the Justice Shah Commission, if C
they have not been given the opportunity of being heard
.. and to produce evidence in their defenc;e and have not
' been' allowed the right to cross-examine and the right to
·.be represented by a legal practitioner before the
Commission as provided in ss. S8 and SC respectively D
of the 1952-Act. [para 11] [326-G-H; 327-A]
Kiran Bedi v. Committee of Inquiry and another 19S9
(1) SCR 20 = (19S9) 1 SCC 494, State of Bihar v. L K. Advani
2003 (3) Suppl. SCR S44 = (2003) S SCC 361 and Union of E
India v. Tulsiram Patel 19S5 (2) Suppl. SCR 131 = 19S5(3)
sec 39S - cited.
Whether the mining leases held by the lessees have
expired:
F
2.1. Most of the mining leases in which the State
Government has not passed orders are deemed to have
been extended under sub-r. (9) of r.24A of the Mineral
Concession Rules, 1960 (MC Rules). Therefore, the
finding in the Justice Shah Commission report that the G
applications for renewal were not disposed of within the
, stipulated time and the leases were in contravention of
the MC Rules is, not correct. This opinion of the Justice·
Shah Commission, was based on sub-rr. (4) and (5) of
H
308 SUPREME COURT REPORTS [2014] 5 S.C.R.
A r.24A of the MC Rules, which were applicable generally
to an application for renewal of mining leases, and stood
excluded to the extent specific provisions have been
subsequently made by the rule-making authorities in sub-
rr. (8) and (9) of r.24A of the MC Rules in respect of the
B deemed leases in Goa. [para 11 and 18] [327-B-C; 333-H;
334-A-C]
State of UP. & Ors. v. Lalji Tandon (dead) through LRs.
2003 (5) Suppl. SCR 77 = (2004) 1 SCC 1 - cited.
C 2.2. Sub-s. (1) of s. 8 of the Mines and Minerals
(Devnlopment and Regulation) Act, 1957 (MMDR Act),
which provides the maximum and minimum periods for
which a mining lease may be granted, will not apply to
deemed mining leases in Goa because sub-s. (1) of s. 5
o of the Goa, Daman and Diu Mining Concessions
(Abolition and Declaration as Mining Leases Act, 1987
(Abolition Act) provides that the period of such deemed
mining leases will extend upto six months from the date
of assent notwithstanding anything contained in the
E MMDR Act. Thus, notwithstanding anything contained in
sub-s. (1) of s.8 of the MMDR Act, the period of a deemed
mining lease in Goa was to expire on 22.11.1987 (six
months from the date of assent). Under sub-s. (2) of s. 8
of the MMDR Act, a mining lease may be renewed for a
F period not exceeding twenty years. Sub-s. (3) of s. 8,
however, provides that notwithstanding anything
contained in sub-s. (2), if the State Government is of the
opinion that in the interest of mineral development, it is
necessary so to do, it may for reasons to be recorded,
authorise the renewal of a mining lease in respect of
G minerals not specified in Part A and Part B of the First
Schedule for a further period or periods not exceeding
twenty years in each case. Thus, renewal beyond the first
renewal for a period of twenty years is conditional upon
the State Government forming an opinion that in the
H
GOA FOUNDATION v. UNION OF INDIA 309
interest of mineral development, it is necessary to do so A
and also conditional upon the State Government
recording reasons for such renewal of a mining lease in
respect of iron ore which is not specified in Part A and
Part B of the First Schedule. [para 23] [337-B-G]
B
Tata Iron and Steel Company Ltd. v. Union of India &
Anr. 1996 (3) Suppl. SCR 808::-(1996) 9 SCC 709- referred
to.
2.3. Sub-r. (6) of r.24A o.f the MC Rules will apply to a
case of first renewal under sub-s. (2) of s. 8 of the MMDR C
Act other than a case covered under sub-r. (9) of r.24A
of the MC Rules, but will not apply to renewal under sub-
s. (3) of s. 8 of the MMDR Act. The deemed mining leases
of the lessees in Goa expired on 22.11.1987 under sub-
s. (1) of s. 5 of the Abolition Act and the maximum of 20 D
years renewal period of the deemed mining leases in Goa
as provided in sub-s. (2) of s. 8 of the MMDR Act read with
sub-r. (8) and (9) of r.24A of the MC Rules expired on
22.11.2001. [para 24] [338-F-H; 339-A]
E
Whether dump can be kept beyond the lease area:
3.1. A holder of a mining lease does not have any
right to dump any reject, tailings or waste in any area
outside the leased area of the mining lease on the
strength of a mining lease granted under the MMDR Act F
and the Rules made thereunder. Rule 64C of the MC
Rules, exempts the removal of tailings or rejects from the .
. leased area for the purpose of dumping and not for the
purpose of sale or consumption from the levy of royalty.
Rule 64C of the MC Rules does not authorise dumping G
of tailings or rejects in any area outside the leased area.
If r.64C of the MC Rules suggests that tailings or rejects.
· can be dumped outside the leased area, it must give way
to s.4 of the MMDR Act, which does not authorise
dumping of minerals outside the leased area, and must H
310 SUPREME COURT REPORTS [2014] 5 S.C.R.
A give way to s.9 of the MMDR Act which does not
authorise removal of minerals outside the leased area
without payment of royalty. Thus, dumping of any waste
materials, tailings and rejects outside the leased area
would be without a valid authorization under the lease-
s deed. This Court, therefore, holds that dump cannot be
kept by the lessees beyond the leased area. [para 24, 29-
31] [339-A-B; 342-F-G, H; 343-A, D-G]
The Central Bank of India & Ors. v. Their Workmen,
C etc. 1960 SCR 200 =AIR 1960 SC 12 - relied on.
Samaj Parivartana Samudaya and Ors. v. State of
Karnataka and Ors. (2013) 8 SCC 154 - cited.
3.2. Rule 16 of the MCD Rules, cannot be read to
o permit dumping of overburden and waste materials
obtained from mining operations outside the leased area.
[para 32] [344-D-E]
3.3. Inasmuch as the activity of dumping mineral
wastes will pollute the environment, it will come within the
E meaning of activity of mining included in the Schedule to
the notification issued under sub"r. (3) of r. 5 of the
Environment (Protection) Rules, 1986(the 1986 Rules).
Thus, for dumping of mining waste on a private land, a
prior clearance of the Central Government under the
F notification issued under sub-r. (3) of r.5 of the 1986 Rules
would be necessary. [para 33) [345-A-C)
3.4. The moment the mineral is removed or
consumed from the leased area, the holder of a mining
G lease has to pay royalty. By virtue of ss. 9 of the MMDR
Act, tailings and rejects excavated during mining
operations being minerals will also be exigible to royalty
the moment they are removed from the leased area. [para
30) [343-8-C]
H
GOA FOUNDATION v. UNION OF INDIA 311
Within what distance from the boundaries of National A
Parks and Wildlife Sanctuaries, is mining not permissible
in the State of Goa:
4.1. This Court in exercise of its power under Art. 32
of the Constitution can direct the State to prohibit mining B
activities in an area adjacent to a National Park or a
Wildlife Sanctuary for the purpose of protecting the flora,
fauna and wildlife habitat of the National Park/Wildlife
Sanctuary because these constitute part of the natural
environment necessary for healthy life of persons living C
in t1'1e State of Goa. The right to life under Art. 21 of the
Constitution "is a guarantee against the State and for
enforcing this fundamental right of persons, the State,
wh'ich alone has a right to grant mining leases of the
mines located inside the State, can be directed by the
0
Court by an appropriate writ or direction not to grant
mining leases or not to allow mining that will be violative
under Art. 21 of the Constitution. [para 33 and 41] [345-
- C-D; 351-B-E]
In Re: Construction of Park at NO/DA near Okh/a Bird E
=
Sanctuary 2010 (15) SCR 783 (2011) 1 SCC 744 - referred
to
4.2. The order passed by this Court on 04.08.2006 in
T.N. Godavarman Thirumulpad v. Union of India & Ors.,
F
saying that there will be no mining activity within one
kilometer safety zone ar-0und National Park or Wildlife
Sanctuary has to be enforced and there can be no mining
activities within this area of one kilometer from the
boundaries of National Parks and Wildlife Sanctuaries in
the State of Goa. [para 42] [352-B, H; 353-A] G
4.3. In the order dated 4.12.2006 in Writ Petition (C)
No.460 of 2004 (Goa Foundation v. Union of India), the
Court has. not prohibited any mining activity within 10
kilometer distance from the boundaries of the National H
312 SUPREME COURT REPORTS [2014] 5 S.C.R.
A Parks or Wildlife Sanctuaries. There is, therefore, no
direction, interim or final, of this Court prohibiting mining
activities within 10 kms. of the boundaries of National
Parks or Wildlife Sanctuaries. [para 43] [353-B; 354-C]
4.4. Apart from the powers of. the Court, the Central
8
Government has powers under r.5 of the Environment
Protection Rute5 1986 to prohibit carrying on of mining
operations in areas which are proximate to a Wildlife
Sanctuary or a National P-ark. However, until the Central
Government takes into account various factors
C mentioned in sub-r. (1 ), follows the procedure laid down
in sub-r. (3) and issues a notification under r.5 prohibiting
mining operations in a certain area, there can be no
prohibition under law to carry on mining activity beyond
1 km. of the boundaries of National Parks or Wildlife
D Sanctuaries. In fact, the process of issuing a notification
unde.r r.5 of the 1986 Rules prohibiting mining activities
in eco-sensitive zones around the National Parks or
Wildlife Sanctuaries in the State of Goa has now been
initiated. This Court directs the Ministry of Environment
E and Forests to follow the procedure and issue the
notification of eco sensitive zones under r.5 of the 1986
Rules within six months. [para 44-46] [354-0-E; 357-E-G;
358-E]
F Whether there has been a violation of Rules 37 and 38 of
the MC Rules by the mining lessees in the State of Goa:
5.1. Sub-r.(1 )(a) of r.37 of MC Rules lays down that
the lessee cannot assign, sublet, mortgage, or in any
other manner, transfer the mining lease, or any right, title
G or interest therein, without the previous consent in
writing of the State Government in the case of those
minerals which are not specified in Part A and Part B of
the First Schedule to the Act. Since iron ore is specified
in Part C of the First Schedule to the Act, the previous
H consent in writing of the State Government is necessary
GOA FOUNDATION v. UNION OF INDIA . 313
before any such transfer is made by a mining lessee. If A
these violations of r.37 are allowed, there shall be
substantial leakage of revenue and mining operations
cannot be effectively regulated and controlled by the
State Government. The State Government, therefore,
must initiate action against those mining leases who B
violate r.37 of the Rules. [Paras 46 and 49] [358-F; 361 ·G·
H; 362-A-B; 363-B]
5.2. Rule 38 of the MC Rules provides that the State
Government may, in the interest of mineral developm~nt
and with reasons to be recorded in writing, permit C
amalgamation of two or more adjoining leases held by a
lessee, provided that the period of amalgamated leases
shall be co-terminus with the· lease whose period will
expire first. If the State Government has not permitted
amalgamation of adjoining leases in the interest of D
mineral development and has not recorded the reasons
for such permission, the State Government cannot allow
the amalgamation of the leases. [para 50] [363-C-D]
Was there a complete lack of control on produttion and E
transportation of mineral from the mining leases in the
State of Goa:
6. This Court entirely agrees with the CEC report that
in the absenc·e of proper checks, verifications and
. controls, there is bound to be illegal mining, storage and F·
transportation of minerals, but after the CEC Report, the
Goa (Prevention of Illegal Mining, Storage and
Transportation of Minerals) Rules, 2013 have been
framed by the State Government u/s 23(c) of the MMDR
Act, in order to prevent illegal mining and to regulate the G
sale, export and transit of ore, storage of mineral and
transportation and winning of mineral. These rules will
have to be strictly enforced by the State Government and
it is hoped that by such strict enforcement of these rules,
the mining, storage and transportation of minerals in the H
314 SUPREME COURT REPORTS [2014] 5 S.C.R.
A State of Goa will get controlled and regulated and the
leakages and evasion of revenue will, to a large extent,
be prevented. [para 50, 52] [363-E; 364-G-H; 365-A, B-C]
To what extent mining has damaged the environment in
Goa and what measures are to be taken to ensure inter-
8
generational equity and sustainable development:
7.1. The Expert Committee constituted by this Court
has submitted an interim report dated 14.03.2014,
indicating that the economy of Goa depends on tourism
C and iron ore mining, besjdes agriculture, horticulture and
minor industries, but in recent years, while there has been
increase in the growth rate in tourism and mining, there
has been a decline in the growth rate of agriculture and
fishing. The Expert Committee has in particular
D highlighted the damage that has been done by increase
in the production of iron ore through mining to the
environment in Goa. [para 52 and 56] [365-C-D; 367-C-D]
7.2. The Expert Committee has also studied the
E sustainability of iron ore mining in the State of Goa and
after analyzing the existing data from TERI report, 1997,
ISM, Dhanbad Report, 2013, Pollution Control Board, Goa
(Annual Report) and relevant literature relating to
sustainability and after adopting the Folchi method, has
given the opinion that mining at the rate of 20 to 27.5
F million tons per annum appears sustainable in the State
of Goa, and for the time being annual excavation of 20
million tons of iron ore may be permitted in Goa with
adequate monitoring impacts on different ecological and
environmental parameters. [para 56] [368-E-F; 369-C-D]
G
7.3. Under s. 33A of the Water (Prevention and
Contrdl of Pollution) Act, 1974 (1974 Act) and and s. 31A
of the Air (Prevention and Control of Pollution) Act,
1981 ('the 1981 Act'), the Goa State Pollution Control
H Board has powers to issue any direction including the
GOA FOUNDATION v. UNION OF INDIA 315
power to close, prohibit or regulate mining operations or A
even to stop or regulate supply of electricity, water or any
other service with a view to prevent water pollution or air
pollution, but it has failed to discharge its statutory
functions and duties. In future the Goa State Pollution
Control Board will exercise strict vigil and monitor the B
water quality and air quality in accordance with the
provisions of the two Acts and if necessary, will exercise
the powers conferred on it to close oown mining
operation of a lessee who does not conform to the air
emission and water discharge standards while carrying c
on mining operations and does not take other preventive
measures as directed by the State Pollution Control
Board. [para 60) [374-B-C; 375-C-D]
7.4. Regarding the regulation by the Ministry of
Environment and Forests, in the order dated 06.01.2014, D
this Court directed Union of India to appoint a Regulator
with offices in as many States as possible under sub-s.
(3) of s. 3 of the Environment (Protection) Act, 1986. As
and when the Union of India appoints such a Regulator
with an office for Goa, he will carry out its functions in E
accordance with the order passed under sub-s. (3) of s.
3. [para 61) [375-E-G]
7.5. From the report of the Expert Committee it is
evident that the State of Goa heavily depends on iron ore F
mining for revenue as well as employment. This Court,
cannot, therefore, prohibit mining altogether, but if mining
has to continue, the lessees who benefit the most from
mining, must contribute from their sale proceeds to the
Goa Iron Ore Permanent Fund for sustainable mining. G
Accordingly, in exercise of powers under Art. 32 read with
/
Art. 21 of the Constitution, this Court directs that 10% of
the sale proceeds of iron ore excavated in the State of
Goa and sold by the lessees must be appropriated
towards the Goan Iron Ore Permanent Fund for the
purpos~: of, sustainable development and inter-
~· -. __lo';_ ...;,..'j:_ - --- - .•
H
316 SUPREME COURT REPORTS [2014] 5 S.C.R.
A generational equity and the State of Goa in consultation
with the CEC will frame a comprehensive scheme in this
regard and submit the same to this Court within six
months. [para 63] [376-E, H; 377-A-B]
8 Whether in future the mining leases are to be auctioned
or have to be granted in accordance with the policy of
the State and the provisions of the MMDR Act and the MC
Rules?
8. This Court is of the considered opinion that it is
C for the State Government to decide as a matter of policy
in what manner the leases of mineral·resources would be
granted, but such a decision has to be taken in
accordance with the provisions of the MMDR Act and the
Rules made thereunder and in consonance with the
D constitutional provisions; and the decision taken by the
State of Goa to grant a mining lease in a particular manner
or to a particular party can be examined by way of judicial
review by the Court. [para 66] [377-C; 378-F-G]
E Natural Resources A/location, In Re, Special Reference
No.1 of 2012 2012 (9) SCR 311 = (2012) 10 sec 1- relied
on.
Centre for Public Interest Litigation & Ors. v. Union of
India & Ors. 2012 (3) SCR 147 = (2012) 3 SCC 1 - cited.
F
Whether suspension of mining operations in the State of
Goa by order dated 10.09.2012 of the Government of Goa
and the suspension of the Environmental Clearances
granted to the mines in the State of Goa by order dated
G 14.09.2012 were legal and valid?
9.1. Since it has been 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,
H mining by the lessees in Goa after 22.11.2007 was illegal,
GOA FOUNDATION v. UNION OF INDIA 317
. .
the order dated 10.09.2012 of the Government of Goa A
suspending mining operations in the State of Goa and the
order dated 14.09.2012 of the MoEF, Government of India,
suspending the environmental clearances granted to the
mines in the State of Goa, are not liable to be quashed
by this Court and the same will have to continue till B
decisions are taken by the State Government to grant
fresh leases and decisions are taken by the MoEF to grant
fresh environmental clearances for mining projects. [Para
66, 67 and 71(i)] [379-D-H; 380-A-B; 382-D-E]
9.2. Since it has been held that renewal of all the C
deemed mining leases in the State of Goa had expired on
22.11.2007, the mining lessees will not be entitled to the
sale value of the ores sold in e-auction but they will be
entitled to the approximate cost (not actual cost) of the
extraction of the ores. Following the principle of lay-off D
compensation in terms of s.25C of the Industrial Disputes
Act, 1947, this Court holds that the workers who could
not be paid wages by the lessees will have to be paid
compensation at the rate of 50% of their basic wages and
dearness allowance during the period of non-employment E
on account of suspension of mining operations.
· Moreover, Marmagoa Port Trust will have to be paid 50%
of their charges for storage of the mineral ores after
05.10.2012. The entire sale value of the stock of mineral
ores sold by e-auction less the average cost of F
excavation, 50% of the wages and allowances and 50%
of the storage charges to be paid to MPT is thus due to
State Government which is the owner of the mineral ores
which have been sold by e-auction. The State
Government will set aside 10% of the balance amount G
towards Goan Iron Ore Permanent Fund. [para 69-70]
[381-B-H; 382-A]
10.1. The State Government will within six months
frame a comprehensive scheme with regard to the Goan
Iron Ore Permanent Fund in consultation with the CEC H
318 SUPREME COURT REPORTS [2014] 5 S.C.R.
A for sustainable development and intergenerational equity
and submit the same to this Court within six months.
(para 71] (384-H; 385-A]
10.2. The Expert Committee will submit its report
within six months on how the mining dumps in the State
B of Goa should be dealt with and will submit its final report
within twelve months on the cap to be put on th~ annual
excavation of iron ore in Goa. [para 71] (385-B]
Vassudeva Madeva Salgaocar vs. Union of India (1985)
C 1 Born. CR 36 - cited.
Case Law Reference:
(1985) 1 Born. CR 36 cited para 2
1989 (1) SCR 20 cited para 9
D 2003 (3) Suppl. SCR 844 cited para 9
1985 (2) Suppl. SCR 131 cited para 9
2003 (5) Suppl. SCR 77 cited Para 20
1996 (3) Suppl. SCR 808 referred to Para 20
E
(2013) 8 sec 154 cited para 26
1960 SCR 200 relied on para 31
2010 (15) SCR 783 referred to para 41
F 2012 (3) SCR 147 cited Para 64
2012 (9) SCR 311 relied on para 65
CIVIL ORIGINAL JURISDICTION : Writ Petition (Civil~No.
435 of 2012.
G Under Article 32 of the Constitution of India.
WITH
T.C. (C) No. 131, 132, 133, 134, 135, 138, 139, 140, 141,
142, 143 of 2013, W.P. (C) No. 184, 99 of 2013 and T.C. (C)
H No. 136 of 2013.
GOA FOUNDATION v. UNION OF INDIA 319
ANS Nadkarni, AG, Mukul Rohatgi, Suryanarayana Singh, A
Addi. A.G, Datta Prasad Lawande, GA. Nikhil D. Pai, Neha
Umesh Kholkar, AGAs, Prashant Bhushan, Amit Sharma,
Yashraj Singh Deora, K.J. John & Co. Harish Pandey, P.S.
Sudheer, Mitter & Mitter Co., A. Venayagam Balan, Abhijat P.
Medh, P.V. Yogeswaran, Jyoti Mendiratta, Madhu Sikri, Dr. B
Vipin Gupta, Ninad Laud, Aparna Singhal, Mahesh Agarwal,
E.C, Agarwala, Sudha Gupta, Parekh & Co., Shadman Ali, D.S.
Mahra, Yashraj Singh Deora, Mohan Pandey, Shreekant N.
Terdal, J.S. Wad & Co., Ninad Laud, Abhijit Gosavi, Jayant
Mohan, Harish Pandey, K.J. John & Co., Chander Shekhar c
Ashri, Moh it Abraham, Shiv Kumar Suri, P .S. Sudheer, T.
Mahipal, Parijat Sinha, S.M. Walawaikar, Rameshwar Prasad
Goyal, M.P. Jha, Siddharth Bhatnagar, A. Subhashini,
Bhavanishankar V. Gadnis, A. Venayagam Balan, Prafulla
Hede for the appearing parties.
D
The Judgment of the Court was delivered by
A. K. PATNAIK, J. 1. This batch of Writ Petitions and
Transferred Cases relate to mining in the State of Goa and as
·issues raised are common to the Writ Petitions and the E
Transferred Cases, the cases have been analogously heard and
are being disposed of by this common judgment.
Facts relating to mining in Goa:
,
2. Prior to 19.12.1961 when Goa was a Portuguese F
territory, Its Portuguese Government had granted mining
concessions in perpetuity to concessionaires. On 19.12.1961,
Goa was liberated and became part of the Indian Union and
on 01.10.1963, the Mines and Minerals (Development &
Regulation) Act, 1957 (for short 'the MMDR Act') was made G
applicable to the State of Goa. On 10.03.1975, the Controller
of Mining Leases issued a notification calling upon every lessee
and sub-lessee to file returns under Rule 5 of the Mining Leases
(Modification of Terms) Rules, 1956 and sent copies of the
notification to the concessionaires in Goa. Aggrieved, the H
320 SUPREME COURT REPORTS [2014] 5 S.C.R.
A concessionaires moved the Bombay High Court, Goa Bench,
and by judgment dated 29.09.1983, in Vassudeva Madeva
Salgaocar vs. Union of India [1985(1) Born. CR 36], the
Bombay High Court restrained the Union of India from treating
the concessions as mining leases and from enforcing the
B notification against the concessionaires.
3. Parliament thereafter passed the Goa, Daman and Diu
Mining Concessions (Abolition and Declaration as Mining
Leases) Act, 1987 (for short 'the Abolition Act') which received
the assent of the President on 23.05.1987. Section 4 of the
C Abolition Act abolished the mining concessions and declared
that with effect from the 2oth day of December, 1961, every
mining concession will be deemed to be a mining lease
granted under the MMDR Act and that the provisions of the
MMDR Act will apply to such mining lease. Section 5 of the
D Abolition Act further provided that the concession holder shall
be deemed to have become a holder of the mining lease under
the MMDR Act in relation to the mines in which the concession
relates and the period of such lease was to extend upto six
months from the date when the Abolition Act received
E President's assent, i.e. upto 22.11.1987. On 14.10.1987, sub-
rules (8) and (9) were inserted in Rule 24A of the Mineral
Concession Rules, 1960 (for short 'the MC Rules') which deal
with renewal of mining leases in Goa, Daman and Diu. The
Abolition Act was challenged by the lessees before the Bombay
F High Court in a writ petition. The High Court passed an interim
order permitting the lessees to carry on mining operations and
the mining business in the concessions for which renewal
applications had been filed unde.r Rule 24A of the MC Rules.
Subsequently, the High Court held in its judgment dated
G 20.06.1997 that the Abolition Act was valid but Section 22(i)(a)
of the Abolition Act would operate prospectively and not
retrospectively. The concessionaires filed special leave petition
against the judgment dated 20.06.1997 befo~e this Court. On
02.03.1998, this Court passed an inter+m order permitting the
H concessionaires to carry on mining operations and mining
GOA FOUNDATION v. UNION OF INDIA 321
[A.K. PATNAIK, J.]
business in the mining areas for which renewal applications A
have been made on the condition that the lessee pays to the
Government dead rent from the date of commencement of the
Abolition Act. Subsequently, this Court granted leave in the
special leave petition and continued the aforesaid interim order.
B
·The Justice Shah Commission and its report:
4. As reports were rec~ived from various State
Governments of widespread mining of iron ore and manganese
ore in contravention of the provisions of the MMDR Act, the
Forests (Conservation) Act 1980, the Environment (Protection) c·
Act, 1986 and other rules and guidelines issued thereunder, the
Central Government appointed the Justice Shah Commission
under Section 3 of the Commissions of Inquiry Act, 1952 by
notification dated 22.11.2010. Paras 2 and 3 of the notification,
which are relevant, are extracted hereinbelow: D
"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, E
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; · F
(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 G
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
H
322 SUPREME COURT REPORTS [2014] 5 S.C.R.
A 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
B 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.
c 3. The Commission shall also recommend remedial
measures to prevent such mining, trade, transportation and
export done illegally or without lawful authority."
The Justice Shah Commission visited Goa and issued
D notices under Section 4 of the Commissions of Inquiry Act, 1952
calling for information from concerned authorities and the
lessees and submitted its interim report on 15.3.2012 to the
Ministry of Mines, Union of India. On 7.9.2012, the Justice Shah
Commission Report on Goa was tabled in Parliament along
E with an Action Taken Report of the Ministry of Mines and on
10.9.2012 the State Government of Goa passed an order
suspending all mining operations in the State of Goa with effect
from 11.9.2012 ..
5. Pursuant to this order of the State Government, on
F 11.09.2012 and 12.09.2012 the District Magistrates of the
State of Goa banned transportation of iron ore in their
respective districts and the Director of Mines and Geology
ordered for verification of mineral ore which was already
extracted. On 13.9.2012, the Director of Mines and Geology,
G Government of Goa issued Show Cause Notices to 40 mining
leases. On 14.9.2012, the Ministry of Environment and Forests
of the Union of India also directed that all Environmental
Clearances granted to mines in the State of Goa be kept in
abeyance.
H
GOA FOUNDATION v. UNION OF INDIA 323
[A.K. PATNAIK, J.]
6. On the basis of findings in the report of the Justice Shah A
Commission on illegal mining in the State of Goa, the Goa
Foundation has filed Writ Petition (C) 435 of 2012 as Public
Interest Litigation praying for directions to the Union of India and
the State of Goa to take steps for termination of the mining
leases of lessees involved in mining in violation of the Forest B
(Conservation) Act, 1980, the Mines and Minerals (Regulation
and Development) Act, 1957, the Mineral Concessions Rules,
1960, the Environment (Protection) Act, 1986, the Water
(Prevention & Control of Pollution) Act, 1974 and the
Air (Prevention and Control of Pollution) Act, 1981 as well as c
the Wild Life (Protection) Act, 1972. The Goa Foundation has
prayed that a direction be issued to the respondents to
prosecute all those who have committed offences under the
different laws and are involved in the pilferage of State revenue
through illegal mining activities in the State of Goa including the D
public servants who have aided and abetted the offences. The
Goa Foundation has also sought for appointment of an
independent authority with full powers to take control, supervise
and regulate mining operations in the State of Goa and to
ensure the implementation of the laws. Besides, the aforesaid E
main reliefs, the Goa Foundation has also prayed for some
incidental and consequential reliefs. On 5.10.2012, this Court .
issued notice in Writ Petition (Civil) No. 435 of 2012 to the
respondents and directed the Central Empowered Committee
(for short "CEC") to submit its report on the writ petition and
also directed that till further orders, all mining operations in the F
leases identified in the report of the Justice Shah Commission
a.nd transportation of iron ore and manganese ore from those
leases, whether lying at the mine-head or stockyards, shall
remain suspended, as recommended in the report of the
Justice Shah Commission. G
7. Different mining lessees of the State of Goa and the
Goa Mining Association also filed Writ Petitions in the Bombay
High Court, Goa Bench for a declaration that the report of the
Shah Commission is illegal and for quashing the findings in the H
324 SUPREME COURT REPORTS [2014] 5 S.C.R.
A report of the Justice Shah Commission and also for quashing
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 the Ministry of Environment and Forests,
Government of India, directing that the Environmental
B Clearances granted to the mines in the State of Goa be kept
in abeyance. These Writ Petitions have been transferred to this
Court for hearing along with the hearing of Writ Petition (Civil)
No. 435 of 2012 filed by the Goa Foundation.
8. The Writ Petitions and the Transferred Cases were
C heard during September, October and November, 2013. On
11th November, 2013, an order was passed by this Court
directing that the inventory of the excavated mineral ores lying
in different mines/stockyards/jetties/ports in the State of Goa
made by the Department of Mines and Geology of the
D Government of Goa be verified and thereafter the whole of the
inventorised mineral ores be sold by e-auction and the sale
proceeds (less taxes and royalty) be retained in separate fixed
deposits (lease-wise) by the State of Goa till the Court delivers
the judgment in these matters on the legality of the leases from
E which the mineral ores were extracted. The Court has also
directed that this entire process of verification of the inventory,
e-auction and deposit of sale proceeds be monitored by a
Monitoring Committee appointed by the Court. By the said
order dated 11.11.2013, this Court also constituted an Expert
F .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
inter-generational equity and all other relevant factors. On
G 11.11.2013 the case was also reserved for judgment.
Challenge to the Report of the Justice Shah Commission:
9. As we have already noticed, in the cases transferred
from the Bombay High Court to this Court, the mining lessees
H have prayed for quashing the report of the Justice Shah
GOA FOUNDATION v. UNION OF INDIA 325
[A.K. PATNAIK, J.]
Commission. Mr. K.K. Vengupal, learned senior counsel A
appearing for the mining lessees, submitted that the Justice
Shah Commission did not issue any notice under Section 88
of the Commissions of Inquiry Act, 1952 to the mining lessees
giving a reasonable opportunity of being heard in the inquiry
and to produce evidence in their defence. He further submitted B
that the Justice Shah Commission also did not permit the
mining lessees to cross examine the witnesses, to address the
Commission and to be represented by legal practitioners
before the Commission contrary to the provisions of Section
8C of the Commissions of Inquiry Act, 1952. He submitted that c
even otherwise there is gross breach of the principles of natural
justice and fair play by the Jus.tice Shah Commission and,
therefore, the report of the Commission was violative of Article
114 of the Constitution. He submitted that the report of the
Justice Shah Commission should, therefore, be quashed. In 0
support of this submission, he relied on the decisions of this
Court in· Kiran Bedi v. Committee of Inquiry and another
((1989) 1 SCC 494], State of Bihar v. L.K. Advani [(2003) 8
SCC 361] and Union of India v. Tulsiram Patel [1985(3) SCC
398].
E
10. Mr. Mohan Prasaran, learned Solicitor General for the
Union of India, on the other hand, submitted that as the
notification dated 22.11.2010 of the Central Government
appointing the Justice Shah Commission under Section 3 of
the Commissions of Inquiry Act, 1952 would show, reports were F
received from various State Governments of widespread mining
of iron ore and manganese ore in contravention of the MMDR
Act, the Forest (Conservation) Act, 1980 and the Environment
(Protection) Act, 1986 or other Rules and Licenses issued
thereunder and for this reason, the Central Government
appointed the Justice Shah Commission for the purpose of G
making inquiry into these matters of public importance. He
submitted that after the Justice Shah Commission submitted
the report pointing out various illegalities, the Union Government
has kept the environment clearances in abeyance and it will
H
326 SUPREME COURT REPORTS [2014] 5 S.C.R.
A take legal action on the basis of its own assessment of the facts
and not on the basis of the facts as found in the Justice Shah
Commission's report. Similarly, Mr. Atmaram N.S. Nadkarni, the
Advocate General appearing for the State of Goa, submitted
that after going through the report of the Justice Shah
8 Commission, the State Government has suspended all mining
and transportation of ores arid no· 1egal action will be taken
against the mining lessees on the basis of the findings in the
Justice Shah Commission's report unless due opportunity is
given to the mining lessees to place their defence against the
c findings of the Justice Shah Commission.
11. We find that Section 88 of the Commissions of Inquiry
Act, 1952 provides that if a person is likely to be prejudicially
affected by the inquiry, the Commission shall give to that person
a reasonable opportunity of being heard and to produce
D evidence in his defence and Section 8C of the Commissions
of Inquiry Act, 1952 provides that every such person will have
a right to cross-examine and the right to be represented by a
legal practitioner before the Commission. As the State
Government of Goa has taken a stand before us that no action
E will be taken against the mining lessees only on the basis of
the findings in the report of the Justice Shah Commission
without making its own assessment of facts and without first
giving the mining lessees the opportunity of hearing and the
opportunity to produce evidence in their defence, we are not
F inclined to quash the report of the Justice Shah Commission
on the ground that the provisions of Sections 88 and 8C of the
Commissions of Inquiry Act, 1952 and the principles of natural
justice have not been complied with. At the same time, we
cannot also direct prosecution of the mining lessees on the
G basis of the findings in the report of the Justice Shah
Commission, if they have not been given the opportunity of being
heard and to produce evidence in their defence and not allowed
the right to cross-examine and the right to be represented by a
legal practitioner before the Commission as provided in
H Sections 88 and 8C respectively of the Commissions of Inquiry
GOA FOUNDATION v. UNION OF INDIA 327
[A.K. PATNAIK, J.]
Act, 1952. We will, however, examine the legal and A
environmental issues raised in the report of the 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 B
Court.
Whether the leases held by the mining lessees have
expired:
12. According to tile Justice Shah Commission report, prior -C
to 7th January, 1993, sub-rule (4) of Rule 24A of the MC Rules
provided that the renewal application of the lessee is required
to be disposed of within six months from the date of its receipt
and sub rule (5) of Rule 24A provided that if the application is
not disposed of within stipulated time, the same shall be o
deemed to have been refused. The Justice Shah Commission
has found that the applications of several mining leases for
renewal were not disposed of within the stipulated time and
there was no provision in the MC Rules to condone the delay
and, therefore, these leases are in contravention of the MC E
Rules and are void and have no effect as provided in Section
19 of the MMDR Act.
13. The CEC in its report has stated that under Section 4
of the Abolition Act. the concessions were abolished from 23rd
May, 1987 and treated as deemed leases under the MMDR F
Act and the period of deemed leases under Section 5 of the
Abolition Act was extended upto six months with effect from the
date of assent to the Abolition Act (23rd May, 1987) i.e. upto
22nd November, 1987. The CEC has further stated that by
notifications dated 20th November, 1987 and 20th May, 1988, G
however, the Government of Goa allowed extension of six
mpnths each (totaling one year) for making applications for the
first renewal of deemed mining leases and this one year period
expired on 22nd November, 1988. The CEC has further stated
H
328 SUPREME COURT REPORTS [2014) 5 S.C.R.
A that as per the information provided to the CEC, out of 595
mining concessions abolished and converted into deemed
mining leases under Section 4 of the Abolition Act, as many
as 379 deemed mining lease holders have filed applications
for the first renewal of the mining leases before 22nd
B November, 1988 and 59 such leases have filed applications
for the first renewal of the deemed mining leases after 22nd
November, 1988, i.e., beyond the time limit permitted under
Rule, 24A(8) of the MC Rules.
14. In reply, learned counsel for the lessees and Mr. Arvind
C Datar, learned senior counsel appearing for the State of Goa,
submitted that sub-rules (4) and (5) of Rule 24A of the MC Rules
did not apply to the State of Goa. They submitted that sub-rules
(8) and (9) of Rule 24A of the MC Rules apply specifically to
the State of Goa and sub-rule (8) of RulG 24A of the MC Rules
D provides that an application for the first renewal of the deemed
mining lease referred to in Section 4 of the Abolition Act shall
be made to the State Government in Form 'J' before the period
of six months of the mining lease as provided in Section 5(1)
of the Abolition Act. They submitted that the proviso to sub-rule
E (8) of Rule 24A of the MC Rules conferred power on the State
Government to extend time for making such application upto
a total period not extending one year. They submitted that, by
two notifications, the State Government extended time for a
period of one year upto 22.11.1988 and within this period most
F of the lessees have applied for the first renewal of the deemed
mining lease. Learned counsel for the lessees and learned
counsel for the State of Goa submitted that sub-rule (9) of Rule
24A of the MC Rules makes it clear that if an application for
first renewal is made within the time referred to in sub-rule (8)
G of Rule 24A of the MC Rules or within the time allowed by the
State Government under the proviso to sub-rule (8) of Rule 24A
of the MC Rules, the period of that lease shall be deemed to
have been extended by a further period till the State Government
passes orders thereon.
H
GOA FOUNDATION v. UNION OF INDIA 329
[A.K. PATNAIK, J.]
15. For easy reference, Chapter II containing Sections 4 A
and 5 of the Abolition Act is extracted hereinbelow:
"CHAPTER II
ABOLITION OF MINING CONCESSIONS AND
DECLARATION AS MINING LEASES UNDER THE B
MINES AND MINERALS ACT
4. (1) Every mining concession specified in the First
Schedule shall, on and from the appointed day, be
deemed to have been abolished, and shall, with effect from C
that day, be deemed to be a minjng lease granted under
the Mines anctMinerals Act, and the provisions of that Act
shall, save as otherwise provided in this Act, apply to such
mining lease.
D
(2) Every mining concession specified in the Second
Schedule shall, on and from the day next after the date of
grant of .the said concession and specified in the
corresponding entry in the eighth column of the said
Schedule, be deemed to have been abolished; and shall,
· with effect from that day, be deemed to be a mining lease E
granted under the Mines and Minerals Act, and the
provisions of that Act shall, save as otherwise provided in
this Act, apply to such mining lease.
(3) If, after the date of assent, the Central Government is F
satisfied,. whether from any information received by it or
otherwise, that there has been· any error, omission or
misdescription in relation to the particulars of any mining
concession or the name and residence of any concession
holder specified in the First or the Second Schedule, it G
may, by notification, correct such error, omission or
misdescription, and on the issue of such notification, the
First or the Second Schedule, as the case may be, shall
be deemed to have been amended accordingly.
H
330 SUPREME COURT REPORTS [2014] 5 S.C.R.
A 5. (1) Where a mining concessio11 has been deemed to
be a mining lease under section 4, the concession holder
shall, on and from the day mentioned in that section, be
deemed to have become the holder of such mining lease
under the M~es and Minerals Act in relation to the mine
B to which the mining concession relates, subject to the
condition that U1e period of such lease shall,
notwithstanding anything contained in that Act, extend up
to a period of six months from the date of assent..
·(2) On the expiry of the period of any mining lease under
e sub-section (1 ), it may, if so desired by the holder of such
lease and on an application being made by him in
accordance with the provisions of the Mines and Minerals
Act and the rules made thereunder, be renewed on such
terms and conditions, and up to the maximum period for
D which, such lease can be renewed under the provisions
of that Act and the rules made thereunder." ·
16. For easy reference, Rule 24A of the MC Rules is also
extracted hereinbelow:
E
"24A. Renewal of mining lease. - (1) An application for
the renewal of a mining lease shall be made to the _State
Government in Form J, at least twelve months before the
date on which the lease is due to expire, through such
officer or authority as the State Government may specify
F in this behalf.
(2) The renewal or renewals of a mining lease granted in
respect of a mineral specified in Part 'A' and Part 'B' of
the First Schedule to the Act may be granted by the State
G Government with the previous approval of the Central
Government.;
(3) The renewal or renewals of a mining l~ase granted in
respect of a mineral not spedfied in Part 'A' and Part 'B'
H
GOA FOUNDATION v. UNION OF INDIA 331
[A.K. PATNAIK, J.]
o.f the First Schedule to the Act may be granted by the A
State_ Government.;
Provided that before granting approval for second or
subsequent renewal of a mining lease, the State
Government shall seek a report from the Controller B
General, lndran Bureau of Mines, as to whether it would
be in the interest of mineral development to grant the
renewal of the mining lease.
Provided further that in case a report is not received from
Controller General, Indian Bureau of Mines in a period of C
three months of receipt of the communication from the
State Government, it would be deemed that the Indian
Bureau of Mines has no adverse comments to offer
regarding the grant of the renewal of mining lease.
D
(4) An application for the renewal of a mining lease shall
be disposed of within a period of six ·months from the date
of its receipt. (Omitted)
(5) If an· application is not disposed of within the period
specifieei l!1 sub-rule (4) it shall be deemed to have been E
refused. (Omitted)
(6) If an ~pplication for the renewal of a mining lease made
within the time referred to in sub-rule (1) is not disposed
of by the State Government before the date of expiry of F
the lease, the period of the lease shall be deemed to have
been extended by a further period till the State Government
passes order thereon.
(7) Omitted.
G
(8) Notwithstanding anything contained in sub-rule (1) and
sub-rule (6), an application for the first renewal of a mining
lease, so declared under the provisions of section 4 of the
Goa, Daman and Diu Mining Concession (Abolition and
Declaration as Mining Lease ) Act,1987, shall be made H
332 SUPREME COURT REPORTS [2014] 5 S.C.R.
A to the State Government in Form J before the expiry of the
period of mining lease in terms of sub-section (1) of
section 5 of the said Act, through such office or authority
as the State Government may specify in this behalf:
Provided that the State Government may, for reasons to
B
be recorded in writing and subject to such conditions as it
may think fit, allow extension of time for making of such .
application up to a total period not exceeding one year.
(9) If an application for first renewal made within the time
c referred to in sub-rule (8) or within the time allowed by the
State Government under the proviso to sub-rule (8), the
period of that lease shall be deemed to have been
extended by a further period till the State Government
passes orders thereon.
D
(10) The State Government may condone delay in an
application for renewal of mining lease made after the time
limit prescribed in sub-rule (1) provided the application has
been made before the expiry of the lease."
E 17. Sub-rule (8) of Rule 24A of the MC Rules has been
inserted by G.S.R. 855(E), dated 14th October, 1987 and this
sub-rule (8) of Rule 24A of the MC Rules provides that
notwithstanding anything contained in sub-rule (1) and sub-rule
(6), an application for the first renewal of a deemed mining
F lease, referred to in Section 4 of the Abolition Act, shall be
made to the State Government in Form J before the expiry of
the six months period of deemed mining lease as provided in
Section 5 (1) of the Abolition Act. The proviso to sub-rule (8)
of Rule 24A of the MC Rules, however, empowers the State
G Government to extend the time for making such application upto
a total· period not extending one year. In exercise of these
powers in the proviso to sub-rule (8) of Rule 24A of the MC
Rules, the State Government of Goa has, in fact, extended time
for making applications for first renewal upto 22.11.1988, by
H two notifications dated 20.11.1987 and 20.05.1988. Sub-rule
GOA FOUNDATION v. UNION OF INDIA 333
[A.K. PATNAIK, J.]
(9) of Rule 24A of the MC Rules, which was also inserted by A
G.S.R. 855(E}, dated 14th October, 1987, reads as follows:
"In an application for first renewal made within the time
referred to in sub-rule (8) or within the time allowed by the
State Government under the proviso to sub-rule (8), the
8
period of that lease shall be deemed to have been
extended by a period of .one year from the date of expiry
of lease or date of receipt of application, whichever is later,
provided that the period of deemed extension of lease
shall end with the date of receipt of the orders of the State C
Government thereon, if such orders are made earlier."
Sub-rule (9) was substituted by G.S.R. 724(E) dated 27th
September, 19S4 by the existing sub-rule (9) (extracted above)
to provide that if an application for first renewal is made within
the time referred to in sub-rule (8) or within the time allowed by D
the State Government under the proviso to sub-rule (8), the
period of that lease shall be deemed to have been extended
by a further period till the State Government passes orders
thereon. In our considered opinion, the intention of rule-making
authorities is very clear from sub-rule (9) as was originally E
inserted by G.S.R. 855(E), dated 14th October, 1987 and sub-
rule (9) as was substituted by G.S.R. 724(E), dated 27th
September, 1994, that until orders were passed by the State
Government on an application for first renewal of a lease filed
by a lessee within the time allowed, the lease was deemed to F
have been extended. ·
18. The lessees have contended that they had filed their
applications by 22.11.1988, i.e. the date up to which the State
Government had allowed time under the proviso to sub-rule (8)
of Rule 24A of the MC Rules. The State Government has also G
taken the stand that most of the applications for first renewal
were filed within the time allowed by the State Government and
this stand is also supported by the facts found by the CEC. The
result is that most of the mining leases in which the State
Government has not passed orders are deemed tohave been H
334 SUPREME COURT REPORTS [2014] 5 S.C.R.
A extended under sub-rule (9) of Rule 24A of the MC Rules.
Hence, the finding in the Justice Shah Commission report that
the applications for renewal were not disposed of within the
stipulated time and the leases are in contravention of the MC
Rules is, thus, not correct. This opinion of the Justice Shah
s Commission, as we have noticed, was based on sub-rules (4)
and (5) of Rule 24A of the MC Rules, which were applicable
generally to an application for renewal of mining leases, stood
excluded to the extent specific provisions have been
subsequently made by the rule-making authorities in sub-rules
c (8) and (9) of Rule 24A of the MC Rules in respect of the
deemed leases in Goa.
19. Mr. Prashant Bhushan, learned counsel for the Goa
Foundation, however, submitted that sub-section (2) of Section
8 of the MMDR Act prior to its amendment provided that a
D mining lease may be renewed for only ten years and, therefore,
if the deemed mining leases of the lessees expired on
22.11.1987, even if the lease was renewed on the application
of first renewal made by the lessees in Goa, the period of lease
under the first renewal would expire on 21.11.1997 and after
E 21.11.1997, there can be no deemed extension. Alternatively,
he submitted that sub-section (2) of Section 8 of the MMDR Act
as amended by Act 25 of 1994 provided that the mining lease
may be renewed for a maximum period not exceeding twenty
years. He submitted that as the deemed mining leases expired
F on 22.11.1987, the lessees would be entitled to a renewal for
a maximum period of twenty years upto 21.11.2007 and after
21.11.2007, the lessees would not be entitled to any renewal
and hence the lessees were not entitled to operate the lease
beyond 21.11.2007.
G
20. Learned counsel for the lessees, on the other hand,
submitted that sub-section (3) of Section 8 of the MMDR Act
makes it clear that notwithstanding anything contained in sub-
section (2) of Section 8 of the MMDR Act, the State
Government can authorise renewal of a mining lease in respect
H
GOA FOUNDATION v. UNION OF INDIA 335
[A.K. PATNAIK, J.]
·of minerals not specified in Part A and Part B of the First A
Schedule for a further period or periods not exceeding twenty
years in each case. They submitted that. iron ore is specified
in Part C in the First Schedule and hence the State Government
can authorise renewal of the mining lease in respect of iron ore
for a period or periods not exceeding twenty years in each case. s
They also referred to sub-rule (3) of Rule 24A which provided
that renewal or renewals of a mining lease granted in respect
of a mineral not specified in Part A and Part B of the First
Schedule to the MMDR Act may be granted by the State
Government provided that before granting approval for second c
or subsequent renewal of a mining lease, the State Government
shall seek a report from the Controller General, Indian Bureau
of Mines, as to whether it would be in the interest of mineral
development to grant the renewal of the mining lease. Learned
counsel for the lessees submitted that as the application of the
0
lessees for renewal of mining leases have not been disposed
of by the State Government before the date of expiry of lease,
the period of lease shall be deemed to have been extended
by a further period till the State Government passes orders
thereon as provided in sub-rule (6) of Rule 24A of the MC
Rules. They submitted that it will be clear from sub-rule (6) of E
Rule 24A of the MC Rules that the intention of rule-making
authorities is that there may not be any hiatus in mining, and
mineral development in the country may continue without break,
without any loss to the economy and loss of revenue to the
Government. They cited the judgment of this Court in State of F
UP. & Ors. v. LaljiTandon (dead) through LRs. [(2004) 1 SCC
1], in which this Court has held that there is a difference
between an extension of lease and renewal of lease and
whereas in the case of extension of lease it is not necessary
to have a fresh deed of lease executed, in case of renewal of G
lease, a fresh deed of lease shall have to be executed between
the parties. They also cited Tata Iron and Steel Company Ltd.
v. Union of India & Anr. [(1996) 9 SCC 709] in support of their
argument that under sub-section (3) of Section 8 of the MMDR
Act, the Government can renew the mining lease for a further H
336 SUPREME COURT REPORTS [2014] 5 S.C.R.
A period if it was in the interest of mineral development.
21. Mr. Nadkarni, learned Advocate General for the State
of Goa, submitted that the then State Government of Goa
allowed the working of the mines from 2007 till 2012 based on
deemed extension status but it has been decided by the State
8
Government now in the Goa Mining Policy of 2013 that no mine
can be allowed on deemed extension basis. The clear stand
of the State Government of Goa in the resume of arguments
filed by the learned Advocate General Mr. Nadkarni is that the
deemed extension status would not mean that a mine can be
C allowed to run indefinitely without a decision on the renewal
application.
22. Section 8 of the MMDR Act is extracted hereinbelow:
0 "8. Periods for which mining leases may be granted
or renewed
(1) The maximum period for which a mining lease may be
granted shall not exceed thirty years:
E Provided that the minimu.m period for which any such
mining lease may be granted shall not be less than twenty
years;
(2) A mining lease may be renewed for a period not
exceeding twenty years]:
F
(3) Notwithstanding anything contained in sub-section (2),
if the State Government is of opinion that in the interests
of mineral development it is necessary so to do, it may,
for reasons to be recorded, authorise the renewal of a
G mining lease in respect of minerals not specified in Part
A and Part B of the First Schedule for a further period or
periods not exceeding twenty years in each case.
(4) Notwithstanding anything contained in sub-section(2)
H and sub-section (3), no mining lease granted in respect
GOA FOUNDATION v. UNION OF INDIA 337
[A.K. PATNAIK, J.]
of mineral specified in Part A or Part B of the First A
Schedule shall be renewed except with the previous
approval of the Central Government."
23. Sub-section (1) of Section 8 of the MMDR Act, which
provides the maximum and minimum periods for which a 8
mining lease may be granted will not apply to deemed mining
leases in Goa because sub-section (1) of Section 5 of the
Abolition Act provides that the period of such deemed mining
leases will extend upto six months from the date of assent
notwithstanding anything contained in the MMDR Act. In other
words, notwithstanding anything contained in sub-section (1) of C
'Section 8 of the MMDR Act, the period of a deemed mining
lease in Goa was to expire on 22.11.1987 (six months from the
date of assent). Under sub-section (2) of Section 8 of the
MMDR Act, a mining lease may be renewed for a period not
exceeding twenty years. Sub-section (3) of Section 8, however, D
provides that notwithstanding anything contained in sub-section
(2), if the State Government is of the opinion that in the interest
of mineral development, it is necessary so to do, it may for
reasons to be recorded, authorise the renewal of a mining lease
in respect of minerals not specified in Part A and Part B of the E
First Schedule for a further period or periods not exceeding
twenty years in each case. Thus, renewal beyond the first
renewal for a period of twenty years is conditional upon the
State Government forming an opinion that in the interest of
mineral development, it is necessary to do so and also F
conditional upon the State Government recording reasons for
such renewal of a mining lease in respect of iron ore which is
not specified in Part A and Part B of the First Schedule. In Tata
Iron and Steel Company Ltd. v. Union of India &Anr. (supra),
this Court has held that the language of sub-section (3) of G
Section 8 is quite clear that ordinarily a lease is not to be
granted beyond the time specified in sub-section (2) and only
if the Government is of the view that it would be in the interest
of mineral development, it is empowered to renew lease of a
lessee for a further period after recording sound reasons for H
338 SUPREME COURT REPORTS [2014] 5 S.C.R.
A doing so. This Court has further held in the aforesaid case that
this measure has been incorporated in the legislative scheme
as a safeguard against arbitrariness and the letter and spirit
of the law must be adhered to in a strict manner.
24. The MC Rules have been made under Section 13 of
8
the MMDR Act by the Central Government and obviously could
not have been made in a manner inconsistent with the provisions
of the Act. Sub-rule (6) of Rule 24A of the MC Rules provides
that if an application for the renewal of a mining lease made
C within the time referred to in sub-rule (1) is not disposed of by
the State Government before the date of expiry of the lease,
the period of the lease shall be deemed to have been extended
by a further period till the State Government passes order
thereon. This sub-rule cannot apply to a renewal under sub-
section (3) of Section 8 of the MMDR Act because the renewal
D under this provision cannot be made without express orders of
the State Government recording reasons for renewal in the
interest of mineral development. In other words, so long as there
is a right of renewal in the lessee which in the case of a mining
lease is for a maximum period of twenty years, the provision
E regarding deemed extension of a lease can operate, but if the
right of renewal of a mining lease is dependent upon the State
Government forming an opinion that in the interest of mineral
development it is necessary to do so and the State Government
recording reasons therefor, a provision regarding deemed
F extension till orders are passed by the State Government on
the application of renewal cannot apply. We are, therefore, of
the opinion that sub-rule (6) of Rule 24A of the MC Rules will
apply to a case of first renewal under sub-section (2) of Section
8 of the MMDR Act other than a case covered under sub-rule
G (0) of Rule 24A of the MC Rules, but will not apply to renewal
under sub-section (3) of Section 8 of the MMDR Act. In our
view, the deemed mining leases of the lessees in Goa expired
on 22.11.1987 under sub-section (1) of Section 5 of the
Abolition Act and the maximum of 20 years renewal period of
H the deemed mining leases in Goa as provided in sub-section
GOA FOUNDATION v. UNION OF INDIA 339
[A.K. PATNAIK, J.]
(2) of Section 8 of the MMDR Act read with sub-rules (8) and A
(9) of Rule 24A of the MC Rules expired on 22.11.2007.
Whether dump can be kept beyond the lease area:
25. The report of the Justice Shah Commission states that
about 2796.24 ha of area have been found to be under B
encroachment by the mining lessees out of which about 578.42
ha have been found to have been illegally used for extraction/
removal of iron ore. The CEC in its report has stated that. the
CEC visited some of the areas stated to be under
encroachments and a number of lease holders have filed C
representations against the findings of the Shah Commission
stating that they are not involved in any encroachment.
According to the Goa Foundation, this was a gross illegality
committed by the mining lessees.
D
· 26. Mr. A.D.N. Rao, the Amicus Curiae, referred to Section
9 of the MMDR Act to submit that any removal of minerals from
the leased area can be made by holder of a mining lease only
on payment of royalty. He submitted that the waste material and
overburden, therefore, cannot be dumped outside the leased E
area without payment of royalty. He referred to paragraph 48 ·
of the judgment of this Court in Samaj Parivartana Samudaya
and Ors. v. State of Kamataka and Ors. [(2013) 8 SCC 154]
in which this Court has observed that dumping of mining waste
(overburden dumps) also constitutes mining operations within F
the meaning of Section 3(d) of the MMDR Act and, therefore,
the use of forest land for such activity would require clearances
under the Forest Conservation Act, 1980. He submitted that in
the event dumping of mining waste outside the leased area is
to be done, it can only be done after clearance is obtained
under the Forest Conservation Act, 1980. G
27. The learned counsel appearing for the mining lessees
submitted that the lessees have actually used areas outside the
mining lease which are also owned mostly by the lessees for
clearing the dump and this was permissible under the Mineral H
340 SUPREME COURT REPORTS [2014] 5 S.C.R.
A Conservation and Development Rules, 1988 (for short 'MCD
Rules') and the MC Rules. In particular, they referred to Rule
16 of the MCD Rules, which provides for separate stacking of
non-saleable minerals, such as over burden and waste
material obtained during mining operation, on the ground
s earmarked for the purpose, which should be away from the
working pit. They also referred to Rule 64 C of the MC Rules
which provides that on removal of tailings or rejects from the
leased area for dumping outside leased area, such tailings or
rejects are not liable for payment of royalty. The State
c Government has supported this stand of the mining lessees that
dumping of the overburden and mining waste outside the lease
area was permissible under the MC Rules and MCD Rules.
28. Sections 4(1) and 9(2) of the MMDR Act, Rule 64C of
the MC Rules and Rule 16 of the MCD Rules are extracted
D below:
"4. Prospecting or mining operations to be under
licence or lease.-(1) No person shall undertake any
reconnaissance, prospecting or mining operations in any
E area, except under and in accordance with the terms and
conditions of a reconnaissance permit or of a prospecting
licence or, as the case may be, a mining lease, granted
under this Act and the rules made thereunder:
Provided that nothing in this sub-section shall affect any
F prospecting or mining operations undertaken in any area
in accordance with the terms and conditions of a
prospecting licence or mining lease granted before the
commencement of this Act which is in force at such
commencement.
G
Provided further that nothing in this sub-section shall apply
to any prospecting operations undertaken by the
Geological Survey of India, the Indian Bureau of Mines, the
Atomic Minerals Directorate for Exploration and Research
H of the Department of Atomic Energy of the Central
GOA FOUNDATION v. UNION OF INDIA 341
[A.K. PATNAIK, J.]
Government, the Directorates of Mining and Geology of any A
State Government (by whatever name called), and the
Mineral Exploration Corporation Limited, a Government
Company within the meaning of Section 617 of the
Companies Act, 1956.
B
Provided also that nothing in this sub-section shall apply
to any mining lease (whether called mining lease, mining
concession or by any other name) in force immediately
before the commencement of this Act in the Union territory
of Goa, Daman and Diu.
c
"
"9. Royalties in respect of mining leases.-
..
(1) ............................................................... .
D
(2) The holder of a mining lease granted on or after the
commencement of this Act shall pay royalty in respect of
any (mineral removed or consumed by his agent, manager,
employee, contractor of sub-lessee) from the leased area
at the rate for the time being specified in the Second E
Schedule in respect of that mineral.
"64C. Royalty on tailings o~ rejects.-On removal of
tailings or rejects from the leased area for dumping and F
not for sale or consumption, outside leased area such
tailings or rejects shall not be liable for payment of royalty:
Provided that in case so dumped tailings or rejects are
used for sale or consumption on any later date after the G
date of such dumping, then, such tailings or rejects shall
be liable for payment of royalty."
"16. Separate stacking of non-salable minerals.-(1)
The overburden and waste material obtained during mining
H
342 SUPREME COURT REPORTS [2014] 5 S.C.R.
A operations shall not be allowed to be mixed with non-
salable or sub-grade minerals/ores. They shall be dumped
and stacked separately on the ground earmarked for the
purpose.
(2) The ground selected for dumping of overburden, waste
B
material, the sub-grade or non-salable ores/minerals shall
be away from working pit. It shall be proved for absence
or presence of underlying mineral deposits before it is
brought into use for dumping.
c (3) Before starting mining operations, the ultimate size of
the pit shall be determined and the dumping ground shall
be so selected that the dumping is not carried out within
the limits of the ultimate size of the pit except in cases
wher~ concurrent backfilling is proposed."
D
29. Under Section 4 of the MMDR ·Act, a person who holds
a mining lease granted under the MMDR Act and the Rules
made thereunder is entitled to carry on mining operations in
accordance with the terms of the lease in the leased area and
E may carry on all other activities connected with mining within
the leased area. Rule 31 of the MC Rules prescribes that the
lease deed will be in Form K or in a form near thereto. Part I
of Form K delineates the area of the lease and Part II of Form
K authorizes the activities that can be done by the lessee in
the leased area. Thus, a holder of a mining lease does not have
F any right to dump any reject, tailings or waste in any area
outside the leased area of the mining lease on the strength of
a mining l~ase granted under the MMDR Act and the Rules
made thereunder. Such area outside the leased area of the
mining lease may belong to the State or may belong to any '
G private person, but if the mining lease does not confer any right
whatsoever on the holder of a mining lease to dump any mining
waste outside the leased area, he will have no legal right
whatsoever to remove his dump, overburden, tailings or rejects
and keep the same in such area outside the leased area. In
H other words, dumping of any waste materials, tailings and
GOA FOUNDATION v. UNION OF INDIA 343
[A.K. PATNAIK, J.]
rejects outside the leased area would be without a valid A
authorization under the lease-deed.
30. Moreover, Section 9(2) of the Mtv1DR Act makes the
holder of a mining lease granted on or after the commencement
:1f the Act liable to pay royalty in· respect of any mineral removed
8
or consumed by him or by his agent, manager, employee,
contractor or sub-lessee from the leased area. Thus, the
moment the mineral is removed or consumed from the leased
area, the holder of a mining lease has to pay royalty. By virtue
of Section 9 of the MMDR Act, tailings and rejects excavated
during mining operations being minerals will also be exigible C
to royalty the moment they are removed from the leased area.
31. Rule 64C of the MC Rules states that on removal of
tailings or rejects from the leased area for dumping and not for
sale or consumption, outside leased area such tailings or D
rejects shall not be liable for payment of royalty. Rule 64C of
the'MC Rules, therefore, exempts the removal of tailings or
rejects from the leased area for the purpose of dumping and
not for the purpose of sale or consumption from the levy of
royalty. Rule 64C of the MC Rules does not authorise dumping E
of tailings or rejects in any area outside the leased area. This
Court has held in The Central Bank of India & Ors. v. Their
Workmen, etc. [AIR 1960 SC 12] that 'if a rule goes beyond
what the section contemplates, the rule must yield to the statute'.
In our view, if Rule 64C of the MC Rules suggests that tailings F
or rejects can be dumped outside the leased area, it must give
way to Section 4 of the MMDR Act, which does not authorise
dumping of minerals outside t,he leased area and must give
way to Section 9 of the MMDR Act which does not authori!?e .
removal of minerals outside the .leased area with.ou't payment
qf royalty. We, therefore, hold that d.ump c~nriot be kept by the G
lesse'es beyond.the l~ased area. ·
32. Rule 16 of the MCD Rules provides that the overburden
and waste material obtained during mining operations shall be
dumped and stacked separately on the ground earmarked for H
344 SUPREME COURT REPORTS [2014] 5 S.C.R.
A the purpose and the ground selected for dumping of
overburden, waste material shall be away from working pit.
There is nothing in sub-rules (1 ), (2) and (3) of Rule 16 of the
MCD Rules, which provides that such overburden or waste
material obtained from mining operations shall be kept 'outside
B the leased area'. On the other hand, clause (7) of Part II of
Form-K provides as follows:
"Liberty and power to enter upon and use a sufficient part
of the surface of the said lands for the purpose of stacking,
heaping, storing or depositing therein any produce of the
c mines. o"r works carried on and any tools, equipment, earth
and materials and substances dug or raised under the
liberties and powers mentioned in this part."
The expression 'said lands' in clause (7) of Part II of Form-
D K quoted above refers to the area of the lease in Part I of Form
K and, therefore, is confined to the leased area. Rule 16 of the
MCD Rules, therefore, cannot be read to permit dumping of
overburden and waste materials obtained from mining
operations outside the leased area.
E
33. Learned counsel for the lessees, however, submitted
that many of these areas in which they have dumped the
overburdens, tailings and rejects are lands owned by them and
by virtue of their ownership right they could dump the mining
waste on their own lands. This contention of learned counsel
F appearing for the lessees loses sight of the fact that most of
these lands are located in forest areas where non-forest activity,
such as mining, is prohibited under Section 2 of the Forest
Conservation Act, 1980 without the prior permission of the
Central Government. Moreover, the notification issued under
G sub-rule (3) of Rule 5 of the Environment (Protection) Rules,
1986 requiring prior environmental clearance covers the activity
of mining. Sub-rule (3) of Rule 5 empowers the Central
Government to impose prohibition or restrictions on the location
of an industry or the carrying on of processes and operations
H in an area for the purpose of protecting the environment.
GOA FOUNDATION v. UNION OF INDIA 345
[A.K. PATNAIK, J.]
Inasmuch as the activity of dumping mineral wastes will pollute A
the environment, it will come within the meaning of activity of
mining inc1u9ed in the Schedule to the notification issued under
sub-rule (3) of Rule 5 of the Environment (Protection) Rules,
1986. Thus, for dumP,ing of mining' waste on a private land, a
prior clearance of the Central Government under the notification B
issued under sub-rule (3) of Rule 5 of the Environment
(Protection) Rules, 1986 would be necessary. We, therefore,
do not find any ryierit in the contention of learned counsel for
the lessees that they can dump mining waste outside the ~ased
area. c
Within what distance from the boundaries of National
Parks and Wildlife Sanctuaries, is mining not permissible
in the State of Goa:
34. The Justice Shah Commission has stated in its report D
that the National Board for Wild Life (NBWL) adopted "The
Wild Life Conservation Strategy-2002" and took a decision in
·its meeting held on 21.1.2002 under the Chairmanship of Prime
Minister to notify the areas within 1O kms. from the boundaries
of National Parks and Sanctuaries as eco-fragile zones under E
section 3(v) of the Environment (Protection) Act and Rule 5,
Sub-rule (1 )(viii) & (x) of the Environment (Protection) Rules and .
this decision has been communicated on 5.2.2002 to the Chief
Wild Life Warden, Government of Goa and the State
Government has been requested to list out such areas and F
furnish a detailed proposal for their notification as eco-
sensitive areas under the Environment (Protection) Act, 1986.
The Justice Shah Commission has found that this has not been·
done till date but the Government of Goa has allowed mines to
operate. In this context, the Justice Shah Commission Report G
has referred to the order dated 04.12.2006 of this Court in Writ
Petition No.460/2004 (Goa Foundation v. Union of India) by
which this Court had directed the MoEF to refer to the Standing
Committee of the National Board for Wild Life, under Sections
5B and 5C (2) of the Wild Life (Protection) Act, the cases in H
346 SUPREME COURT REPORTS [2014] 5 S.C.R.
A which environmental clearance has already been granted where
activities are within 10 kms. zone. According to the report of
the Justice Shah Commission, in spite of the clear provisions
of Section 3(2)(v) of the Environment (Protection) Act, 1986 and
the EIA Notifications, conferring the jurisdiction, power and
B authority on the Central Government (MoEF) to grant or r~fuse
prior environment clearance for any iron ore mining activity
within 10 kms. of National Parks, Sanctuaries and Protected
Areas and despite provisions in Section 5C(2)(b) of the Wild
Life (Protection) Act, 1972 putting a restriction on mining
c activities inside National Parks, Sanctuaries and other
Protected and eco-sensitive Areas, mining activities have
been permitted within 10 kms. and inside the National Parks,
Sanctuaries and Protected Areas. The report of the Justice
Shah Commission further states that out of the environmental
clearances, the clearances with regard to 74 mining leases
0
should have been placed before the Standing Committee of the
National Board for Wildlife in accordance with the order dated
04.12.2006 of this Court. The report of the Justice Shah
Commission further states that there has been a total failure
E on the part of the MoEF in not considering this issue While
granting the environmental clearances.
35. The Justice Shah Commission in its report has further
stated that in the order dated 04.08.2006 of this Court in T.N.
Godavarman Thirumulpad v. Union of India & Ors., this Court
F has taken a view that 1 km. from the boundaries of National
Parks and Sanctuaries would be a safety zone, subject to the
orders that may be made in IA No.1000 regarding Jamua
Ramgarh Sanctuary and the State will not grant any Temporary
Working Permit (TWP) in these safety zones comprising 1 km.
G from the boundaries of National Parks and Sanctuaries and yet
some of the mines within 1 km. from the boundaries of National
Parks and Sanctuaries have been allowed in the State of Goa.
36. The CEC in its report is of the view that had the MoEF
implemented this Court's orders dated 14.02.2000 and
H
GOA FOUNDATION v. UNION OF INDIA 34 7
[A.K. PATNAIK, J.]
04.12.2006, the unregulated and environmentally unsustainable A
manner in which mining has taken place in Goa would have
been avoided. The CEC has suggested that all environmental
clearances granted for mining leases located upto a distance
of 10 kms. from the boundaries of National Parks and Wildlife
. Sanctuaries should be directed to be kept in abeyance and the B
environmental clearances should be directed to be considered
by the Standing Committee of the National Board for Wildlife
in accordance with this Court's order datid 04.12.2006 and the
Additional Principal Chief Conservator of Forests, Regional
Office, MoEF, Bangalore, should be directed to verify, after c
' examining the EIA/EMP reports and other relevant details,
whether the mining operations will have adverse impact on the
flora, fauna and wildlife habitat and whether the distance of the
National Parks/Wildlife Sanctuaries and that the status of the
'forest' have been correctly stated in the EC/application for
0
taking a decision regarding EC's and only after considering the
recommendations of the Standing Committee of the National
Board of Wildlife and the report of the Additional Principal Chief
Conservator of Forests (Central) and other relevant information/
details, this Court may take a decision. Mr. Prashant Bhushan, E
learned counsel appearing for the Goa Foundation, submitted
that there should be no mining activity within any National Parks/
Wildlife Sanctuaries or within 10 kms. from the boundaries of
National Parks and Wildlife Sanctuaries so that the flora, fauna
and wildlife habitat of National Parks and Wildlife Sanctuaries
are protected. F
37. Learned counsel for the lessees, on the other hand,
stated that so far as the State of Goa is concerned, on the one
side, there is a coastal regulation zone in which mining is not
permitted and, on the other side, are the National Parks and G
Wildlife Sanctuaries in which again mining is not permitted and
as a consequence a very small strip of land is available for
mining. They submitted that there is no basis for presuming that
an area outside the limits of a National Park or a Wildlife
Sanctuary is required to be maintained as a buffer zone. They H
348 SUPREME COURT REPORTS [2014] 5 S.C.R.
A submitted that by the order dated 04.12 .2006 of this Court
passed in Writ Petition (C) No.460 of 2004, this Court did not
finally fix the buffer zone of 10 kms. from the boundaries of
National Parks and Wildlife Sanctuaries, but granted a last
opportunity to the States to submit their recommendations for
B eco-sensitive zone and that the issue is still pending in I .A.
No.1000 in Writ Petition 202 of 1995 in T.N. Godavarman
Thirumu/pad v. Union of India & Ors. They further argued that
by the order dated 04.08.2006, this Court had only directed that
no mining would be permitted by Temporary Working Permits
c within 1 km. from the National Parks and Wildlife Sanctuaries
and by the said order, absolute ban has not been imposed
against mining even within 1 km. from the boundaries of
National Parks and Wildlife Sanctuaries. They argued that for
declaration of eco-sensitive zone, a notification under Section
3 of the Environment (Protect) Act, 1986 is mandatory and till
D date no such notification has been issued for the State of Goa
delineating any eco-sensitive zone and in the absence of such
a notification mining activities cannot be prohibited beyond the
boundaries of a national park/wildlife sanctuary.
E 38. Mr. Nadkarni, learned Advocate General appearing for
the State of Goa, submitted that presently the State of Goa is
not permitting mining inside any National Park or Wildlife
Sanctuary. He submitted that each of the seven wildlife
sanctuaries in the State of Goa have got revenue villages and
F local habitation of people inside the sanctuaries and ~efore
notifying the buffer zone around a wildlife sanctuary the
consequences of the restrictions of the buffer zone on the local
population and on the local development have to be weighed.
He submitted that the State Government is of the considered
G opinion that while evolving a conservation strategy, the
following peculiar local constraints in the State of Goa have to
be considered:
(i) The State of Goa is the 3rd smallest State in the Union;
with a total geographical are of only 3,702 square metres;
H
GOA FOUNDATION v. UNION OF INDIA 349
[A.K. PATNAIK, J.]
and out of that, an area of 1,44D square metres is under A
'Forest' (protected/reserved/private) which is almost about
38% of the total geographical area;
(ii) Out of the said area under 'Forest' nearly 62% i.e.
75.35 square metres has been declared as 'National B
Park', and/or 'Wildlife Sanctuary';
(iii) An area of approximately or more than 70 square
kilometres falls under the 'Coastal Regulation Zone' (CRZ).
Indeed, the CRZ runs into 106 kms., of the Coastal Belt of
the State of Goa; C
(iv) In fact, the total land mass available to the State of Goa,
free from various restrictions, would further be reduced by
196.80 square kilometers, i.e. up to 5.32%, on account of
Rivers, Lakes and other Water Bodies; o
(v) Indeed, approximately 40% of the land is under
agriculture which the Government has decided not to be
diverted under any circumstances;
(vi) Further, the State Government has also directed that E
no 'Forest Land' is to be diverted for any mining purpose.
He submitted that considering all these constraints, the
State Government has recommended that an area up £o 1 km.
from the boundaries of National Parks/Wildlife Sanctuaries F
should be treated as safety zones but even in these safety
zones mining activity should be prohibited in a phased manner
in 5 to 10 years.
39. Mr. Mohan Parasaran, learned Solicitor General,
submitted that the Principal Chief Conservator of Forests and G
Chief Wildlife Warden, Government of Goa, vide his letter dated
02.05.2013 has submitted six proposals for declaration of eco~
sensitive zones around six protected areas in the State of Goa
(National Parks/Wildlife Sanctuaries) and the proposals were
referred to a Committee constituted under the Chairmanship H
350 SUPREME COURT REPORTS [2014] 5 S.C.R.
A of Dr. Rajesh Gopal, Additional Director General of Forests and
Member Secretary of National Tiger Conservation Authority-
Chairman, with the following Terms of Reference:
(i) The Committee will undertake a site specific site
survey of all six protected areas in Goa, with
B
reference to studying the topography and report on
the existing natural boundaries around that is
outside each protected area. Such boundaries
could include inter alia rivers, hills etc.
c (ii) The Committee will draw up a definition of what
could constitute a credible natural boundary, always
keeping in mind that the object is to protect the
flora, fauna and biodiversity in the PA from biotic
pressure.
D
(iii) The Committee will ·slibmit its views on whether any
of the natural boundaries of the PAs in Goa could
be an effective boundary of a robust Eco-Sensitive
Zone around the P.A.
E He submitted that the Committee has submitted its report
on 18.10.2013 and the report has ·been considered by the
Ministry of Environment and Forests and by office
memorandum dated 24.10.2013, the Ministry of Environment
and Forests has not accepted the recommendation of the
F Government of Goa regarding buffer zone and instead
accepted the recommendation of the Committee to define the
eco-sensitive zones in site specific manner subject to the
relevant Court orders on the subject and that a draft notification
dewning eco-sensitive zones around each of the six protected
G _areas would. be issued for stakeholder consultations.
40. We have considered the submissions of learned
counsel for the parties and we find that presently no mining
operations are being carried on inside any National Park or
H Wildlife Sanctuary, and the State of Goa has taken a stand
GOA FOUNDATION v. UNION OF INDIA 351
[A.K. PATNAIK, J.]
before us that it will not permit any mining operations inside any A
National Park or Wildlife Sanctuary. Hence, the only question
that we have to decide is whether mining could have been
permitted or could be permitted within a certain distance from
the boundaries of the National Park or Wildlife Sanctuary in the
State of Goa. B
41. This Court in exercise of its power under Article 32 of
the Constitution can direct the State to prohibit mining activities .
in an area adjacent to a National Park or a Wildlife Sanctuary
for the purpose of protecting the flora, fauna and wildlife habitat C
of the National Park/Wildlife Sanctuary because· these
constitute part of the natural environment necessary for healthy
life of persons living in the State of Goa. The right to life under
Article 21 of the Constitution is a guarantee against the State
and for enforcing this fundamental right of persons the State,
which alone has a right to grant mining leases of the mines D
located inside the State, can be directed by the Court by an
appropriate writ or direction not to grant mining leases or not
to allow mining that will be violative under Article 21 of the
Constitution. In Re: Construction of Park at NO/DA near Okhla
Bird Sanctuary {(2011) 1 SCC 744] a three-Judge Bench E
(Forest Bench) of this Court has observed:
" ...... Environment is one of the facets of the right to life
guaranteed under Article 21 of the Constitution.
Environment is, therefore, a matter directly under the F
Constitution and if the Court perceives any' project or
activity as harmful or injurious to the environment it would
feel obliged to step in ..... "
Thus, the submissions of learned counsel for the lessees
that until a notification is issued under the Environment G
(Protection) Act, 1986 and the Rules made thereunder
prohibiting mining activities in an area outside the bou.ndaries
of a National Park/Wildlife Sanctuary, no miniJ:lg can be
prohibited by this Court is misconceived.
H
352 SUPREME COURT REPORTS [2014] 5 S.C.R.
A 42. We may now examine whether this Court has by the
orders passed on 04.08.2006 and 04.12.2006, prohibited
mining activities around National Parks or Wildlife Sanctuaries.
When we read the order of this Court passed on 04.08.2006
in T.N. Godavarman Thirumu/pad v. Union of India & Ors.,
B we find that the Court while considering the question of grant
of Temporary Working Permits for mining activities in National
Parks, Sanctuaries and forest areas, directed that Temporary
Working Permits shall be granted only ~here the conditions
stipulated in the said order are satisfied. Condition Nos. (ii) and
c (iii) stipulated in the order dated 04.08.2006 are extracted
hereinbelow:
"(ii) The mine is not located inside any National Park/
Sanctuary notified under Section 18, 26-A or 35 of the
Wildlife (Protection) Act, 1972;
D
(iii) The grant of the T.W.P. would not result in any mining
activity within the safety zone around such areas referred
to in (ii) above, (as an interim measure, one kilometre
safety zone shall be maintained subject to the orders that
E may be made in I.A. No.1000 regarding Jamua Ramgarh
Sanctuary);'"
It would, thus, be clear that this Court was of the opinion
that grant of Temporary Working Permits should not result in
any mining activities within the sa.fety zones around a National
F Park or Wildlife Sanctuary and as an interim measure, one
kilometer safety zone was to be maintained subject to the
orders that may be made in I.A. No.1000 in Jamua Ramgarh
Sanctuary. This order dated 04.08.2006 has not been varied
subsequently nor any orders made in I.A.No. 1000 regarding
G Jamua Ramgarh Sanctuary saying that Temporary Working
Permits can be granted within one kilometer safety zone
beyond the boundaries of a National Park or Wildlife Sanctuary.
The result is that the order passed by this Court saying that there
will be no mining activity within one kilometer safety zone
H around National Park or Wildlife Sanctuary has to be enforced
GOA FOUNDATION v. UNION OF INDIA 353
[A.K. PATNAIK, J.]
and there can be no mining activities within this area of one A
kilometer from the boundaries of National Parks and Wildlife
Sanctuaries in the State of Goa.
43. When, however, we read the order dated 4.12.2006 of
this Court in Writ Petition (C) No.460 of 2004 (Goa Foundation 8
v. Union of India), we find that the Court has not prohibited any
mining activity within 10 kilometer distance from the boundaries
of the National Parks or Wildlife Sanctuaries. The relevant
portion of the order dated 04.12.2006 is quoted hereinbelow:
"The Ministry is direded t1> give a final opportunity to all C
States/Union Territories to respond to its letter dated 27th
May, 2005. The State of Goa also is 'permitted to given
appropriate proposal in addition to what is· said to have
already been sent to the Central Government. The
Communication sent to the States/Union Territories shall D
make it clear that if the proposals are not sent even now
within a period of four weeks of receipt of the
communication from the Ministry, this Court may have to
consider passing orders for implementation of the decision
that was taken on 21st January, 2002, namely, notification E
of the areas within 10 km. of the boundaries of the
sanctuaries and national parks as eco-sensitive areas with
a view to conserve the forest, wildlife and environment and
· having regard to the precautionary ~rinciples. If the State/
Union Territories now fail to respond, they would do so at F
their own risk and peril.
The MoEF would also refer to the Standing Committee of
the National Board for Wildlife, under sections 5 (b) and 5
(c) (ii) of the Wild Life (Protection) Act, the cases where G
environment clearance has already been granted where
activities are within 10 km. zone."
ltwi11 be clear from the~rder dated 4.12.2006 of this Court.
that this Court has not passed any orders for implementatioo
of the decision taken on 21st January, 2002 to notify areas H
354 SUPREME COURT REPORTS [2014) 5 S.C.R.
A within 10 kms. of the boundaries of National Parks or Wildlife
Sanctuaries as eco sensitive areas with a view to conserve the
forest, wildlife and environment. By the order dated 04.12.2006
of this Court, however, the Ministry of Environment and Forest,
Government of India, was directed to give a final opportunity
8 . t.o all Sta~.Union Territories to respond to the proposal and
also to refer to the Standing Committee of the National Board
for Wildlife the cases in which environment clearance has
already been-granted in respect Qf activities within the 10 kms.
zone from the boundaries of the wildlife sanctuaries and
C national parks. There is, therefore, no direction, interim or final,
of this Court prohibiting mining activities within 10 kms. of the
boundaries of National Parks or Wildlife Sanctuaries.
44. Apart from the powers of the Court to give a direction
prohibiting mining activities up to a certain distance from the
D boundaries of National Parks or Wildlife Sanctuaries, the
Central Government has powers under Rule 5 of the
Environment Protection Rules, 1986 to prohibit carrying on of
mining operations in areas which are proximate to a Wildlife
Sanctuary or a National Park. Rule 5 of the Environment
E (Protection) Rules, 1986 is extracted herein under:
"5. Prohibitions and restrictions on the location of
industries and the carrying on processes and
operations in different areas
F (1) The Central government may take into consideration
the following factors while prohibiting or restricting the
location of industries and carrying on of processes and
operations in different areas-
•G (i) Standards for quality of environment in its various ·
aspects laid down for an area.
(ii) The maximum allowable limits of concentration of
various environmental pollutants (including noise) [or an
area.
H
GOA FOUNDATION v. UNION OF INDIA 355
[A.K. PATNAIK, J.]
(iii). The likely emission or discharge of environmental A
pollutants from an industry, process or operation proposed
to be prohibited or restricted.
(iv) The topographic and climatic features of an area.
(v) The biological diversity of the area which, in the opinion B
of the Centr.al Government needs to be preserved.
(vi) Environmentally compatible Ian<! use.
(vii) Net adverse environmental impact likely to be caused C
by an industry, process or operation proposed to be
prohibited or restricte,d.
-.
(viii) Proximity to a protected area under the Ancient
Monuments and Archaeological Sites and Remains Act,
1958 or a sanctuary, National Park, game reserve or D
closed area notified as such under the Wild Life (Protection)
Act, 1972 or places protected under any treaty, agreement
or convention with any other country or countries or in
pursuance of any decision made in any international
confcrcnce1 association or other body. E
(ix) Proximity to human settlements.
(x) Any other factor as may be considered by the Central
Government to be relevant to the protection of the
environment in an area. F
(2) While prohibiting or restricting the location of industries
and carrying on of processes and operations in an area,
the Centra.1 Government shall follow the procedure
hereinafter laid down. G
(3) (a) Whenever it appears to the Central Government that
it is expedient to impose prohibition or restrictions on the
locations Of an industry or the carrying on of processes and
operations in an area, it may by notification in the Official
H
356 SUPREME COURT REPORTS [2014] 5 S.C.R.
A Gazette and in such other manner as the Central
government may deem necessary from time to time, give
notice of its intention to do so.
(b) Every notification under clause (a) shall give a brief
description of the area, the industries, operations,
B
processes in that area about which such notification
pertains and also specify the reasons for the imposition
of prohibition or restrictions on the locations of the
industries and carrying on of process or operations in that
area.
c
{c) Any person interested in filing an objection against the
imposition of prohibition or restrictions on carrying on of
processes or operations as notified under clause (a) may
do so in writing to the Central Government within sixty days
D from the date of publication of the notification in~the Official
Gazette.
(d) The Central Government shall within a period of one
hundred and twenty days from the date of publication of
the notification in the Official Gazette consider all the
E
objections received against such notification and
may within one hundred and eighty days from such day of
publication] impose prohibition or restrictions oil location
of such industries and the carrying on of any process or
operation in an area. '
F
(4) Notwithstanding anything contained in sub-rule (3),
whenever it appears to the Central Government that it is
in public interest to do so, it may dispense with the
requirement of notice under clause (a) of sub-rule (3)."
G
45. Sub-rule (1) of Rule 5 lists the number of factors, which
the Central Government has to take into consideration while
prohibiting or restricting the carrying on of processes and
operations in different areas. Sub-rule (2) of Rule 5 provides
H that before prohibiting the processes and operations in the
GOA FOUNDATION v. UNION OF INDIA 357
[A.K. PATNAIK, J.]
area the Central Government has to follow the procedure laid A
down in sub-rule (3). The procedure in sub-rule (3) of Rule 5 of
the Environment (Protection) Rules, 1986 includes giving notice
of the intention of the Central Government to prohibit the
carrying on of processes and operations in the reserved area,
giving brief description of the area, the operations and B
processes in that area relating to which the notification pertains
and also specifying the reasons for the imposition of the
prohibition on carrying on of the processes or operations in that
area, and an opportunity to persons interested in filing an
objection against the imposition of such prohibition on carrying c
on of processes or operations by the Central Government.
These procedural checks have been made in Rule 5 because
a notification issued by the Central Government prohibiting an
operation or a process will have serious consequences on the
rights of different persons. For example, persons who are
0
carrying on the process or operation and those who are directly
or indirectly employed in the process or the operation may be
affected by the proposed prohibition of the process or the
operation in the entire area. Therefore until the Central
Government takes into account various factors mentioned in
sub~rule (1), follows the procedure laid down in sub-rule (3) and
E
issues a notification under Rule 5 prohibiting mining operations
in a certain area, there can be no prohibition under law to carry
on mining activity beyond 1 km. of the boundaries of National
Parks or Wildlife Sanctuaries.
F
46. In fact, we find that the process of issuing a notification
under Rule 5 of the Environmental Protection Rules, 1986
prohibiting mining activities in eco-sensitive zones around the
National Parks or Wildlife Sanctuaries in the State of Goa has
now been initiated. The Government of Goa vide \
letter dated G
02.05.2013 submitted the following six proposals for declaration
of eco- sensitive zones around protected areas in the State of
Goa to the Ministry: (i) Cotigao WjJdlife Sanctuaries; (ii)
Netravali Wildlife Sanctuary; (iii) Bh~gwan Mahaveer Wildlife
Sanctuary and Bhagwan Mahaveer National Park; (iv) Madei H
358 SUPREME COURT REPORTS [2014] 5 S.C.R.
A Wildlife Sanctuary; (v) Bondla Wildlife Sanctuary; and (vi) Dr.
Salim Ali Bird Sanctuary. These six proposals were referred
to a Committee constituted under the Chairmanship of Dr.
Rajesh Gopal, Additional Director General of Forests and
Member Secretary of National Tiger Conservation Authority,
B with specified terms of reference and the Committee gave its
findings and the Ministry of Environment and Forests,
Government of India by the Office Memorandum dated
24.10.2013 have accepted the findings of the Committee and
rejected the proposals of the Government of Goa. It is also
c stated in the Office Memorandum dated 24.10.2013 of the
Ministry of Environment and Forests, Government of India that
a draft notification defining Eco-Sensitive Zones around each
protected area is being issued for stakeholder consultations.
This notification will have to be issued under sub-rule (3) of Rule
D 5 of the Environment (Protection) Rules, 1986, and after
objections are received, the Central Government will have to
consider the same and thereafter take the decision regarding
.... position of prohibition of mining activities in the eco sensitive
areas within the period stipulated in sub-rule 3(b) of Rule 5 of
the Environment (Protection) Rules, 1986. At this stage, we can
E only direct the Ministry of Environment and Forests to follow the
procedure and issue the notification of eco sensitive zones
under Rule 5 of the Environment (Protection) Rules, 1986 within
six months.
F Whether there has been a violation of Rules 37 and 38 of
the MC Rules by the mining lessees in the State of Goa:
47. The Justice Shah Commission has found in its report
that in the State of Goa. 16 companies/firms/individuals are
G carrying out mining operations under different leases granted
to them as a single unit as if the leases are amalgamated. The
Shah Commission has referred to Rule 38 of the MC Rules
which provides that the State Government may, in the interest
of mineral development and with reasons to be recorded in
writing, permit amalgamation of two or more adjoining leases
H
GOA FOUNDATION v. UNION OF INDIA 359
[A.K. PATNAIK, J.]
held by a lessee provided that the period of amalgamated A
leases shall be co-terminus with the lease whose period will
expire first. The Justice Shah Commission is of the opinion that
as amalgamation of two leases can only be permitted by the
State Government for reasons to be recorded in writing, and
no such permission has been taken from the State Government B
for the amalgamation of different leases as a single unit, the
lessees who are operating different leases as a single unit
have violated Rule 38 of the MC Rules.
48. The CEC in its report, however, has not stated about
any violation of Rule 38 of the MC Rules and has instead stated C
that Rule 37 of the MC Rules which provides that the lessee
shall not, without the previous consent in writing of the State
Government assign, sublet, mortgage, or in any other manner,·
transfer the mining lease, or any right, title or interest therein,
has been violated by several lessees. The CEC has reported D
that there are several complaints received by the State
Government that the leases have been operated by the persons
other than the lessees. The CEC has observed in its report that
Rule 37 itself provides that in such cases of violation of Rule
37, the State Government may determine the mining lease; but E
the State Government )las taken no action and has taken a
stand that working of the mining leases by a person other than
lease holder is a prevailing mining practice in Goa and these
.. facts are in the knowledge of the Government. Mr. Prashant
.Bhushan, learned counsel for the Goa Foundation, submitted F
that in all these cases the violation should be identified by a
Committee headed by the Chief Secretary, Goa, and those
lessees who have been found to have violated Rule 37 of the
MC Rules, should be penalized by determination of the leases.
49. Rules 37 and 38 of the MC Rules are extracted G
hereinbelow:
"37. Transfer of lease. - (1) The lessee shall not, without
the previous consent in writing of the State Government and
in the case of mining lease in respect of any mineral H
3El0 SUPREME COURT REPORTS [2014] 5 S.C.R.
A specified in [Part 'A' and Part 'B' o~ the First Schedule to
the Act, without the previous approval of the Central
Government :-
(a) assign, sublet, mortgage, or in any other manner,
transfer the mining lease, or any right, title or interest
B
therein, or
(b) enter into or make any bonafide arrangement, contract,
or understanding whereby the lessee will or may be directly
or indirectly financed to a substantial extent by, or under
c which the lessee's operations or undertakings will or may
be substantially controlled by, any person or body of
persons other than the lessee:
Provided further that where the mortgagee is an institution
D or a Bank or a Corporation specified in Schedule V, it shall
not be necessary for the lessee to obtain any such consent
of the State Government.
(1A) The State Government shall not give its consent to
transfer of mining lease unless the transferee has accepted
E all the conditions and liabilities which the transferor was
having in respect of such mining lease.
(2) Without prejudice to the provisions of sub-rule (1) the
lessee may, subject to the conditions specified in the
F proviso to rule 35, transfer his lease or any right, title or
interest therein to a person who has filed an affidavit stating
that he has filed an up-to-date income-tax returns, paid the
income tax assessed on him and paid the income tax on
the basis of self-assessment as provided in the Income Tax
G
Act, 1961 ( 43 of 1961 ), on payment of a fee of five hundred
rupees to the State Government:
Providnd that the lessee shall make available to the
transferee the original or certified copies of all plans of
abandoned workings in the area and in a belt 65 metres
H wide surrounding it;
GOA FOUNDATION v. UNION OF INDIA 361
[AK. PATNAIK, J.]
Provided further that where the mortgagee is an institution A
or a Bank or a Corporation specified-in Schedule V, it shall
not be necessary for any such institution or Bank or
Corporation to meet with the requirement relating to
income tax;
B
Provided further that the lessee shall not charge or accept
from the transferee any premium in addition to the sum
spent by him, in obtaining the lease, and for conducting
all or any of the operations referred to in rule 30 in or over
the land leased to him;
c
(3) The State Government may, by order in writing ·
determine any lease at any time if the lessee has, in the
opinion of the State Government, committed a breach of
any of the provisions of sub-rule (1) or sub-rule ( 1A) or has.
transferred any lease or any right, title or interest therein D
otherwise than in accordance with sub-rule (2);
Provided that no such order shall be made without giving
the lessee a reasonable opportunity of stating his case.
38. Amalgamation of leases . ....: The State Government E
may, in the interest of mineral development and with
reasons to be recorded in writing, permit amalgamation
of two or more adjoining leases held by a lessee:
Provided that the period of amalgamated leases shall be F
co-terminus with the lease whose period will expire first:
Provided further that prior approval of the Central
Government shall be required for such amalgamation in
respect of leases for minerals specified in Part 'A' and _ G
Part 'B' of the First Schedule to the Act.
It will be clear from sub-rule (1 )(a)-of Rule 37 that the
lessee cannot assign, sublet, mortgage, or in any other manner,
transfer the mining lease, or any right, title or interest therein,
without the previous consent in writing of the State Government H
362 SUPREME COURT REPORTS [2014] 5 S.C.R.
A in the case of those minerals which are not specified in Part A
and Part B of the First Schedule to the Act. Since iron ore is
specified in Part C of the First Schedule to the Act, the previous
consent in writing of the State Government is necessary before
any such transfer is made by a mining lessee. Sub-rule (1A) of
B Rule 37 further states that the State Government shall not give
its consent to transfer of a mining lease unless the transferee
has accepted all the conditions and liabilities which the
transferor was having in respet:t of such mining lease. Sub-rule
(3) of Rule 37 further provides that the State Government may,
c by order in writing determine any lease at any time if the lessee
has, in the opinion of the State Government committerd a
breach of any of the provisions of sub-rule (1) or sub-rule (1 A)
of Rule 37 of the MC Rules. These provisions have been made
in Rule 37 to ensure that all the conditions and liabilities to which
0 a lessee is subjected to under a mining lease are also
accepted by the transferee. Sub-rule (2) of Rule 37 further
provides that without prejudice to the provisions of sub-rule (1 ),
the lessee may transfer his lease or any right, title or interest
therein to a person who has filed an affidavit stating that he has
E filed up-to-date income-tax returns, paid the income-tax
assessed on him and paid the income-tax on the basis of self-
assessment as provided in the Income Tax Act, 1961. This
provision is meant to ensure that the transferee of a mining
lease is an income-tax assessee and is paying his. income tax _
assessed on him and due from him on the basis of self-
F assessment. Sub-rule (3) of Rule 37 empowers the State
Government to determine any lease at any time if the lessee
has, in the opinion of the State Government, committed a
breach of any of the provisions of sub-rule (1) or sub-rule (1 A)
or has transferred any lease or any right, title, or interest therein
G otherwise than in accordance with sub-rule (2) after giving the
lessee a reasonable opportunity of stating his case. The intent
of ,Mie Rule-making authority in making these provisions in Rule
37 is that the liabilities and conditions in a mining lease are
also enforceable against the transferee and that the transferee
H pays his dues towards income tax regularly. Rule 37, therefore,
GOA FOUNDATION v. UNION OF INDIA 363
[A.K. PATNAIK, J.] -
cannot be allowed to be violated by the lessees with impunity A
and the State Government cannot overlook transfers by saying
that the transfers of the mining leases are part of the mining
practice in the State of Goa. In our view, if these-violations of
Rule 37 are allowed, there shall be substantial leakage of
revenue and mining operations cannot be effectively regulated B
and controlled by the State Government. The State Government,
therefore, must initiate action against those mining leases who
violate Rule 37 of the Rules.
50. Rule 38 of the MC Rules provides that the State
Government may, in the interest of mineral development and C
with reasons to be recorded in writing, permit amalgamation"
of two or more adjoining leases held by a lessee, provided that
the period of amalgamated leases shall be co-terminus with the
lease whose period will expire first. If the State Government has
not permitted amalgamation of adjoining leases in the interest D
of mineral development and has not recorded the reasons for
such permission, the State Government cannot allow the
amalgamation of the leases.
Was there a complete lack of control on production and E
transportation of mineral from the mining leases in the
State of Goa:
51. The CEC in its report has stated that in the State of
Goa, there is no system of periodic verification of the quantity
of iron ore produced in the mining leases, the payments of F
royalty, ·the permits issued for transportation of mineral by the
Mining Department, the transit permits issued by the Forest
Department nor any reconciliation of the quantity of the mineral
stated to have been produced in the mining lease with the
quantity of the mineral for which royalty has been paid and G
transit permits have been issued, and there is no verification
of the transit permits at the check posts and no verificatipn of
the quantity of the mineral exported/domestically used vis-a-vis
the quantity legally produced. According to the CEC, in the
absence of such checks/verifications/controls, illegal mining-can H
364 SUPREME COURT REPORTS [2014] 5 S.C.R.
A easily be undertaken and the actual quantity of rron ore
produced arid transported from the mining leases may not be
accounted for by the State of Goa or by the lessees, resulting
in leakage of revenue. The CEC in its report has given a chart
to show the difference of figures in the iron ore exported as
s provided by the Goan Mineral Ore Exporters' Association and
the total iron ore produced in the State of Goa as per reports
compiled by the Indian Bureau of Mines, which is extracted
hereinbelow:
Year Goan Iron Total (In Lakh MT)
c Ore Exports
.
Production Excess of
· exports over
production
2006-2007 308.940 277.931 31.009
D
2007-2008 334.334 300.091 34.253
2008-2009 380.752 315.994 64.758
2009-2010 456.869 331.649 125.22
E
2010-2011 468.464 328.059 140.405
Total 1949.369 1553.724 395.645
According to the CEC, there is every reason to believe that
F the excess quantity of 395.645 lakh MT, as shown in the
aforesaid chart, is illegally mined ore.
52. We entirely agree with the CEC report that in the
absence of proper checks, verifications and controls, there is
G bound to be illegal mining, storage and transportation of
minerals, but we find that after the CEC Report, the Goa
(Prevention of Illegal Mining, Storage and Transportation of
Minerals) Rules, 2013 have been framed by the State
Government under Section 23(c) of the MMDR Act. A reading
of these Rules show that several provisions have been made
H in these rules to prevent illegal mining and to regulate the sa!
GOA FOUNDATION v. UNION OF INDIA 365
[A.K. PATNAIK, J.]
export ~nd transit of ore, storage of mineral and transportation A
and winning of mineral. Th~Mules also provide for establishment
of check posts, barriers and weighbridges and inspection of
minerals in transit. Moreover, these rules empower any person
authorised by the Government to enter, inspect, search and
seize articles. These rules will have to be strictly enforced by B
the State Government and we hope that by such strict
enforcement of these rules, the mining, storage and
transportation of minerals in the State of Goa will get controlled
and regulated and the leakages and evasion of revenue will,
to a large extent, be prexented. c
To what extent mining has damaged the environment in
Goa and what measures are to be taken to ensure inter-
generational equity and sustainable development:
53. Mr. Prashant Bhushan, learned senior counsel D
appearing for Goa Foundation, relying on the report of the
Justice Shah Commission, submitted that substantial damage
has been caused to the eco sensitive zone in Goa by excavating
large quantities of iron ore through mining and as suggested
by the Justice Shah Commission action should be taken in this E
regard. He submitted that the conditions stipulated in the EIA
clearances imposed by the Chief Wildlife Warden, Goa, have
not been implemented. He submitted that the environmental
cle<!rance system has actually collapsed resulting in amassing
of wealth by certain individuals and companies at the cost of F
the environment and the eco-system. He submitted that
principles of sustainable development and inter-generational
equity which were part of the fundamental right under Article 21
of the Constitution, require that a cap should be put on the
annual excavation of iron ore from different mines in the State G
of Goa, after taking into account the need to conserve iron ore
resources for future generations and the carrying capacity of.
the State of Goa for mining and transportation of mineral ores.
54. Learned counsel appearing for the lessees, on the
other hand, submitted that there are adequate provisions in the H
366 SUPREME COURT REPORTS [2014] 5 S.C.R.
A MCD Rules for preventing damage to the environment and for
restoration of the environment. They referred to Rules 23A, 238,
230 and 23E of the MCD Rules which relate to the mine closure
plan which must provide for protective measures including
reclamation and rehabilitation work. They submitted that the
B holder of the mining lease, therefore, has to take all the
pro\ective measures including reclamation and rehabilitation
work before abandoning the mine. They submitted that Chapter
V of the MCD Rules also contains various provisions "Xhich a
holder of mining lease has to comply and these provisions
c include precautions for protection of environment and controlling
of pollution while conducting mining operations in the area. In
reply to the submissions of Mr. Bhushan that there should be a
cap.on the annual excavation of mineral ore in the State of Goa
to ensure that future generations are not denied the mineral
resources, Mr. Mukul Rohtagi, learned senior counsel
0
appearing for Sesa Goa Limited, relied on a publication of the
British Geological Sur\tey and submitted that there would never
be any scarcity of mine:ral resources and there would be
enough for the future generations. He submitted that Sesa Goa
Limited has also taken steps to reclaim the land which was
E damaged through mining operation and produced photographs
to show how reclamation and rehabilitation work has been
done after mining was oller in any area.
55. Mr. N.S. Nadakarni, learned Advocate General for the
F State of Goa, submitted that in the Goa Mineral Policy of 2013,
State Government has proposed a capping of the mineral ores
to be excavated annually in the State of Goa based on the
·carrying capacity of public roads and the need to protect inter-
generational equity. He submitted that as per the Goa Mineral
G Policy of 2013, until the road capacity in Goa improves, there
~hould be a gross capping at 45 MT per annum.
56. After considering the aforesaid submissions of learned
counsel for the parties, we took the view that a Committee of
Experts must conduct a macro EIA study and propose ceiling
H
GOA FOUNDATION v. UNION OF INDIA 367
[A.K. PATNAIK, J.]
of the annual excavation of iron ore from the State of Goa, A
considering its iron ore resources and its carrying capacity and
keeping in mind the principles of sustainable development and
inter-generational equity and all other relevant factors.
Accordingly, by orders dated 11.11.2013 and 18.11.2013, we .
constituted an Expert Committee comprising Professor C.R. B
Babu (Ecologist), Dr. S.D. Dhiman (Geologist/Hydro-geologist),
Professor B.K. Mishra (Mineralogist), Professor S.
Parameshwarppa (Forestry), Shri Parimal Rai (Nominee of the
Ministry qfEnvironmentand Forests, Government of India). This
Expert Committee has submitted an interim report dated . c
14.03.2014. In this report, the Expert Committee has indicated ..
that the economy of Goa depends on tourism and iron ore
mining, besides agriculture, horticulture and minor industries,
but in recent years, while there has been increase in the growth
rate in tourism and mining, there has been a decline in the · D
growth rate of agriculture and fishing. The Expert Committee
has in particular highlig~ted the damage that has been done
by increase in the production of iron ore through mining to the
environment in Goa in the following words:
"The production of iron ore has jumped from 14.6 million . E
tons in 1941 to 41.17 million tons in 2.ill 0-41. In 1980's
the production was about 10 MT/annum. The quantum jump
in iron ore production in Goa was essentially due. to steep
rise in exports of fines and other low grade ore of 42% Fe
content to China. This has led to massive negative impacts F
on all ecosystems leading to enhanced air, water, and soi('
pollution affecting quality of life across Goa. This is evident
by three important reports i.e. (i) Area wide Environmental
Quality Management (AEQM) Plan for the Mining belt of
Goa by Tata Energy Research Institute, New Delhi and Goa G
(1997) and it was submitted to the Directorate of Planning,
Statistics, and Evaluation, Government of Goa, (ii)
Environmental and Social Performance Indicators and
Sustainability Markers in Minerals Development Reporting
progress towards improved Ecosystem Health and Human H
368 . SUPREME COURT REPORTS [2014] 5 S.C.R.
A Well-being, Phase-Ill by TERI and International
Development Research Centre, Ottawa, Canada (2006)
and (iii) the Regional Environmental Impact Study of iron
ore mining in Goa region sponsored by MoEF, New Delhi
(2014) by Indian School of Mines. Besides the above three
B main Reports, a number of scientific research papers on
the impact of iron ore mining on· the environment and
ecology of diverse ecosystems were published by
scientists working at Goa university and NIO.
These reports and publications substantiates that the
c mining, particularly the enhanced level of annual production
contributed to adverse impacts on the ecological systems,
socio economics of Goa and health of people of Goa
leading to loss of ecological integrity. This is due to
enhanced levels of pollutants, particularly RSPM and SPM,
D sedimentation of materials from dumps and iron ore in
rivers, estuaries and shallow depth (20m) of sea water,
agricultural fields, high concentration of Fe and Mn in
surface waters and their bioaccumulation."
E The Expert Committee has also studied the sustainability of iron
ore mining in the Goa and after analyzing the existing data from
TERI report, 1997, ISM, Dhanbad Report, 2013, Pollution
Control Bqard, Goa (Annual Report) and relevant literature
relating to '-sustainability and after adopting the Folchi method
F has given the opinion that mining at~he rate of 20 to 27.5 million
tons per annum appears sustainable in the State of Goa.
However, in its summary of recommendations, the Expert
Committee has made these recommendations:
"10. To eliminate the element of subjectivity, due to the
G time constraints and limitation of available authentic time
series data relating to mineral resources and
environmental impact of mining in the State of Goa, this
Committee suggests that mining be permitted to be carried
out at the level of 20 million ton per annum with adequate
H monitoring of impacts on different ecological and
GOA FOUNDATION v. UNION OF !NOIA 369
[A.K. PATNAIK, J.]
environmental parameters, which will also help this A
Committee in its future appraisal.
11. Till the scientific study by this Committee is completed,
which may take about 12 months more, the mining activity
at levels as directed by the Hon'ble Supreme Court, be
8
strictly mor:iitored and regulated by the Department of
Mines and Geology and Goa State.Pollution Control Board
of the State of Goa, in consultation with other statutory
bodies such as Indian Bureau of Mines, Ministry of
Environment and Forests (Govt. of India) and others."
c
It, thus, appears that the Expert Committee has suggested
that for the time being annual excavation of 20 million tons of
iron ore may be permitted in Goa with adequate monitoring
impacts on different ecological and environmental parameters,
which will also help the Expert Committee in its future appraisal.
0
. Regarding the authorities or agencies which should strictly
monitor and regulate the mining activities in Goa, the Expert
Committee has recommended that the Department of Mines
and Geology of Government of Goa and the Goa State Pollution
Control Board in consultation with other statutory bodies such
as Indian Bureau of Mines, Ministry of Environment and Forests E
(Government of India) should carry on such monitoring and
regulation strictly. The Expert Committee, however, has said
nothing about how the mining dumps inside or outside the
leased areas noticed by the Justice Shah Commission are to
be· dealt with presumably because in our order dated F
11.11.2013 we had not issued any direction in this regard. We
think that we should seek the opinion of the Expert Committee
in this regard.
57. We find that the State Government has also engaged
the services of NEER! for macro level EIA study for Clusters of G
Iron Ore Mines in the State of Goa, but NEER! in its preliminary
report has not recommended as to what should be the total
quantum of annual production of iron ore in Goa in future. We
also find that Ministry of Environment and Forests, Government
H
370 SUPREME COURT REPORTS (2014] 5 S.C.R.
A of India had entrusted the Indian School of Mines (ISM),
Dhanbad to carry out a
regional environment impact
assessment study of mining in Goa region and ISM, Dhanbad
has submitted its report proposing a cap of 24.995 MT per
annum on the basis of the carrying capacity of the existing
B infrastructure of Goa. Relevant portion of the report of ISM,
Dhanbad, is extracted hereinbelow:
"20.7.4.7 Cluster Wise Capping on Transport
The ~ap of 24.995MTPA proposed in the aforementioned
section is dependent primarily on the existing infrastructure
c and must be foUowed based on th~ spatial variations. To
present an overall capacity of mining in North Goa and
South Goa, the road capacity has been taken as a
parameter. The capacity was arrived at 13.685MTPA for
North Goa and 11.31 MTPA for South Goa. The cap
D proposed will not include the mines lying within the buffer
zones as these have imposed restriction of phasing out
in time bound period. Further, this cap can be represented
into a cluster wise scenario to decipher how much each
cluster will be able to transport under the existing transport
E facilities. The values are presented in table below.
Table 20.~.19: Cluster Wise Capping on Transport
Based on Existing Transport Facilities
Cluster Routes Capacity of Capacity of
F the Routes the Cluster
(MTPA) (MTPA)
Adwalpal- Adwalpale to 0.81 5.875
Bicholim Sirsai Jetty
G Shrigao to 1.26
Sirsai Jetty
Shrigao.to 1.16
Kalvin Jetty
Dahbdhaba to 2.645
H Sarmanas Jettv
GOA FOUNDATION v. UNION OF INDIA 371
[A.K. PATNAIK, J.]
Velguem- Sonshi to 2.11 7.9 A
Pissuriem Amona Jetty
Sanquelim to 0.52
Amona Jetty
Honda .to 1.32 B
Navelim(Maina)
Sonshi to 1.32
Khazan Jetty
Ambesi to·· 1.29
Cotambi Jetty c
Digneum to 1.34
Surla Jettv
Codi- Codli to 1.94 4.69
Cos ti Amona Jetty
I
D
. Codli to 1.24
Capxem Jetty
Costi to 1.51 '-
Sanvordem
Coll em Collem to 1.94 2.76 E
Amona Jetty
Shigao to 0.82
Sanvordem
Tollem Tollem to 1.71 1.71 F
Shelvona Jetty
Maina- Sulcorna to 1.02 2.06
Shelvona Shelvona Jetty
Maina to 1.04
Shelvona G
Total capacity of the· Region 24.995
· Thus, the cumulative ore transportation capacity of the
existing road networks is 24.995MTPA."
H
372 SUPREME COURT REPORTS [2014] 5 S.C.R.
A We, therefore, find that the Expert Committee as well as
ISM, Dhanbad, after considering the available data and after
considering the adverse impact on environment and the limited
carrying capacity of the transport system in Goa, are of the
opinion that a cap between 20 to 27.5 million tons per annum
B should be fixed for excavation of iron ore in the State of Goa.
In its recommendations, however, the Expert Committee has
suggested that till the scientific study by the Expert Committee
is completed in about 12 months or so, and more of data
including impacts on different ecological environmental
c parameters is available through monitoring of the impacts by
different agencies including the Goa State Pollution Control
Board, 20 million tons per annum should be fixed as the annual
excavation of iron ore in Goa.
58. Even this mining of 20 million tons per annum in the
D State of Goa, according to the Expert Committee, has to be
strictly monitored and regulated by the Department of Mines and
Geology, Government of Goa and the Goa State Pollution
Control Board in consultation with other statutory bodies such
as the Indian Bureau of Mines, the Ministry of Environment and
E Forests (Government of India) and others. It was the
responsibility of the Government of Goa, Department of Mines,
to enforce the provisions of the MMDR Act, the MC Rules and
the MCD Rules, but as we have alreadY, noticed, this
responsibility was not properly discharged. We hope that in
F future, it will enforce the provisions of the MMDR Act, the MC
Rules, the MCD Rules and the Goa (Prevention of Illegal Mining,
Storage and Transportation of Minerals) Rules, 2013.
59. The Goa State Pollution Control Board has immense
G powers under the Water (Prevention & Control of Pollution) Act,
1974 (for short 'the 1974 Act') to prevent pollution of water.
Section 33A of the 1974 Act which confers on the State
Pollution Control Board the power to give directions is quoted
herein below:
H
GOA FOUNDATION v. UNION OF INDIA 373
[A.K. PATNAIK, J.]
"3-3A. Power to give directions.-Notwithstanding A
anything contained in any other law, but subject to the
provisions of this Act, and to any directions that the Central ~.:
Government may give in this behalf, a Board may, in the
exercise of its powers and performance of its functions
under this Act, issue any directions in writing to any person, B
officer or authority, and such person, officer or authority
shall be bound to comply with such directions.
Explanation.-For the avoidance of doubts, it is hereby
declared that the power to issue directions under this C
section includes the power to direct-
(a) the closure, prohibition or regulation of any industry,
. operation or process; or
(b) the stoppage or regulation of supply of electricity, water D
or any other service."
Similarly, the Air (Prevention and Control of Pollution) Act,
1981 (for short 'the 1981 Act') confers immense powers on the
State Pollution Control Board to prevent air pollution. Section
31A of the 1981 Act which confers powers on the State Pollution E
Control Board to give directions is quoted hereinbelow:
"31A. Power to give direc.tions.-Notwithstanding
anything contained in any other law, 'but subject to the
provisions of this Act, and to any directions that the Central F
Government may give in this behalf, a Board may, in the
exercise of its powers and performance of its functions
under this Act, issue any directions in writing to any person,
officer or authority, and such person, officer or authority
shall be bound to comply with such directions. G
Expfanation.-For the avoidance of doubts, it is hereby
declared that the power to issue directions under this
section includes the power to direct-
H
374 SUPREME COURT REPORTS [2014] 5 S.C.R.
A (a) the closure, prohibition or regulation of any industry,
operation or process; or
(b) the stoppage or regulation of supply of electricity, water
or any other service."
B 60. It will be clear from the aforesaid provisions of Section
33A of the 1974 Act and Sec;tion 31 A of the 1981 Act that the
Goa State Pollution Control Board had powers to issue any
direction including the power to close, prohibit or regulate
mining operations or even to stop or regulate supply of
C electricity, water or any other service with a view to prevent
water pollution or air pollution. Yet, from the report of the Expert
Committee as well as the reports of ISM, Dhanbad and NEER!,
it is clear that iron ore production in Goa has led to massive
negative impacts on all ecosystems leading to enhanced air,
D water and soil pollution affecting quality of life across Goa. The
Goa State Pollution Control Board in its note filed in Writ
Petition (C) No.435 of 2012, however, states:
"Details of monitoring of water quality (with regards to
mining leases) from 2007 to 2012 - The Board conducts
E
inspections during the monsoon and other seasons also
to verify the discharge of surface runoff/discharge from the
pit outside the mining lease and also collects samples for
analyzing in the Board Laboratory. Wherever the
parameters exceed the prescribed limits necessary
F directions are issued to the mining units to take remedial
measures for controlling the waste water being discharged
into the water bodies/fields without treatment. Directions
are also issued to provide settling ponds, arrestor walls,
filter beds so as to ensure that no untreated waste water
G is discharged into the water bodies/fields.
Details of monitoring of air quality (with regards to mining
leases) from 2007 to 2012 - The Board is presently
carrying out the periodic monitoring of Air Quality in pre-
H selected areas throughout the State to comply with one of
GOA FOUNDATION v. UNION OF INDIA 375
· [A.K. PATNAIK, J.]
the- mandates of the Central Pollution Control Board A
(CPCB) under National Ambient Monitoring Programme
(NAMP) at 16 stations."
We do not agree with Mr. Arvind Datar, learned senior
counsel for the Goa State Pollution Control Board, that sincere B
efforts were made by the Pollution Control Board to monitor the
water quality and air quality in the mining areas. Rather, it
appears that the Goa State Pollution Control Board, though
conferred with immense statutory powers, has failed to
. discharge its statutory functions and duties. We hope that in C
future the Goa State Pollution Control Board exercises strict
vigil and monitors the water quality and air quality in accordance -
with the provisions of the two Acts and if necessary, exercises
the powers conferred on it to close down mining operation of
a lessee, if the lessee does not conform to the air emission
and water discharge standards while carrying on mining D
operations and does not take other preventive measures as
directed by the State Pollution Control Board.
61. Regarding the regulation by the Ministry of Environment
and Forests, in our order dated 06.01.2014 passed in I.A. E
Nos.1868, 2091, 2225-2227, 2380, 2568 and 2937 in Wrif
Petition (Civil) No.202 of 1995 (TN. Godavarman Thirumulpad
v. Union of India & Ors.), we have already directed Union of
India to appoint a Regulator ':"'ith offices in as many States as
possible under sub-section (3~ of Section 3 of the Environment F
(PrO'tection) Act, 1986 as directed in the order in the case of
Lafarge Umiam Mining Private Limited. As and when the
Union of India appoints a Regulator under sub-section (3) of
Section 3 of the Environment (Protection) Act, 1986 with an
office for Goa in compliance with. the aforesaid direction of this
G-
Court; the Regulator so appointed will carry out its functions in
accordance with the order passed under sub-section (3) of
Section 3 of the Environment (Protection) Act, 1986.
62. Reg~atory and monitoring measures enforced by the
Departments of Mines and Geology, the Goa State .Pollution H
376 SUPREME COURT REPORTS [2014] 5 S.C.R.
A Control Board and the Regulator appointed by the Central
Government under sub-section (3) of Section 3 of the
Environment (Protection) Act, 1986 cannot, however, restore
entirely the environment that is damaged in course of mining
operations. The Expert Committee has, therefore,
B recommended that a permanent fund for inter-generational
equity and sustainability of mining for all times to come named
as "Goan Iron Ore Permanent Fund" be created and an expert
group may be constituted by the State for working out the
details of this fund. Mr. Harish Salve, learned Amicus Curiae,
c submitted that as the lessees of mining le.ases earn out of the
sale proceeds of the iron ore excavated by them, they should
be directed to contribute 10% of the sale proceeds of all iron
ore excavated in the State of Goa and sold by them towards
the Goan Iron Ore Permanent Fund. He cited the judgment of
this Court in Samaj Parivartana Samudaya and Ors. v. State
0
of Kamataka and Ors. (supra) in which this Court has similarly
directed for creation of a Special Purpose Vehicle out of 10%
of the sale proceeds of the ore sold by a-auction. There is a
lot of force in the aforesaid submission of Mr. Salve.
E 63. We find from the report of the Expert Committee that
the State of Goa heavily depends on iron ore mining for revenue
as well as employment. The legislative policy behind the
· MMPR Act made by Parliament is mineral development through
mining. The State Government of Goa has also adopted the
F executive policy to encourage mining of minerals in Goa.
Moreover, as Mr. Ravi Shankar Prasad, learned senior counsel
appearing for 33 Panchayats, has submitted about 1.5 lakh
people are directly employed in mining in Goa and large
number of persons have taken bank loans and purchased trucks
G for transportation of iron ore. Hence, people who earn their
livelihood through work in connection with mining will be
seriously affected if mining is totally banned to protect the
environment. We cannot, therefore, prohibit mining altogether,
but if mining has to continue, the lessees who benefit the most
H from mining, must contribute from their sale proceeds to the
GOA FOUNDATION v. UNION OF INDIA 377
· [A.K. PATNAIK, J.]
Goan Iron Ore Permanent Fund for sustainable mining. A
Accordingly, in exercise of our powers under. Article 32 read
with Article 21 of the Constitution, we direct that henceforth 10% ·
of the sale proceeds of iron ore excavated in the State of Goa
and sold by the lessees must be appropriated towards the Goan
Iron Ore Permanent Fund for the purpose of sustainable B
development and inter-generational equity and the State of Goa
in consultation with the CEC will frame a comprehensive
scheme in this regard and submit the same to this Court within
six months. ·
Whether in future the mining leases are to be auctioned C
or have to be granted in accordance with the policy of
the State and the provisions of the MMDR Act and the-Mc
Rules?
64. Mr. Prashant Bhushan, learned counsel for Goa o
Foundation, submitted that in Article 39(b) of the Constitution,
it is provided that the ownership and control of the material
resources of the community should be so distributed so ias to
best subserve the common good and, therefore, the ·State
cannot distribute the material resource of the community in any E
way it likes. He submitted that in Centre for Public Interest
Litigation & Ors. v. Union of India & Ors. [(2012) 3 SCC 1], a
two-Judge Bench of this Court has held relying on Article 39(b)
of.the Constitution that the State is the legal owner of the natural
resourc~s·a's a trustee of the people and although it is
F
empowered to distribute the same, the process of distribution
must. be guided by the. constitutional principles including the
doctrfne of equality and larger public good. He submitted that
in the aforesaid case, the two Judge Bench has further held that
a duly publicized auction conducted fairly and impartially is G
perhaps the best method for discharging this burden and
methods like 'first-come-first-served' when used for alienation
of natural resources/public property are likely to be misused by
unscrupulous people who are· only interested in garnering
maximum financial benefit and have no respect for the
H
378 SUPREME COURT REPORTS [2014] 5 S.C.R.
A constitutional ethos and values. He relied on the conclusion of
the two Judge Bench of this Court in the aforesaid case that
while transferring or alienating the natural resources, the State
is duty-bound to adopt the method of auction by giving wide
publicity so that all eligible persons can participate in the
B process. He submitted that as MMDR Act does not prohibit the
State from holding auction of the mining leases, this Court
should direct that in future the mining leases must be auctioned
by the State Government.
65. Learned counsel for the lessees and the learned
C Advocate General, on the other hand, submitted that the MMDR
Act and the MC Rules have made specific provisions regarding
the manner in which the State is to grant mining leases and it
is for the State to take decisions on grant of mining leases in
accordance with the policy and the provisions of the MMDR Act
D and the MC Rules. They cited the opinion of the Constitution
Bench of this Court in Natural Resources Allocation, In Re,
Special Reference No. 1 of 2012 [(2012) 10 SCC 1] that
auction despite being a more preferable method of alienation/
allotment of natural resources, cannot be held to be a
E constitutional requirement or limitation for alienation of all natural
resources and, therefore, every method other than auction
cannot be struck down as ultra vires the constitutional mandate.
66. We are of the considered opinion that it is for the State
Government to decide as a matter of policy in what manner the
F leases of these mineral resources would be granted, but this
decision has to be taken in accordance with the provisions of
the MMDR Act and the Rules made thereunder and in
consonance with the constitutional provisions and the decision
taken by the State of Goa to grant a mining lease in a particular
G manner or to a particular party can be examined by way of
judicial review by the Court. To quote the opinion of four Judges
out of five Judges expressed by D.K. Jain J. in Natural
Resources Allocation, In Re, Special Reference No.1 of 2012
(supra):
H
GOA FOUNDATION v. UNION OF INDIA 379
[A.K. PATNAIK, J.]
"Alienation of natural resources is a policy decision, and A
the means adopted for the same are thus, executive
· prerogatives. However, when such a policy decision is not
backed by a social or welfare purpose, and precious and
scarce nat1;1ral·resources are alienated for commercial
pursuits of profit maximising priva!e entrepreneurs, B
adoption of means other than those that are competitive
and maximise revenue may be arbitrary and face the wrath
of Article ·14 of the Constitution. Hence, rather th.an
·· prescribing or. proscribing a method, we believe, a judicial
scrutiny of methods of disposal of natural resources should c
·. depend on the facts and circumstances of each case, in
coosonance with the principles which we have culled out
·.at:!.Ove. Failing which, the Court, in exercise of power of
'judicial review, shall term the executive action as arbitrary,
. ·:'unfair, unreasonable and capricious due to its antimony 0
·,-, : iwith
:'.·.
Article 14 of the Constitution."
I Whether suspension of mining operations in the State Of
Goa by or&er dated 10.09.2012 of the Government of Goa
and the slfsp~nsion of the Environmental Clearances
granted to the mines in the State of Goa by order dated E
14.09.2012 were legal and valid?
67_. As we have held that the deemed mining leases of the
lessees in Goa expired on 2·4.11.1987 and the maximum
period (20 years) of renewal of the deemed mining leases in F
Goa has also expired on 22.11.2007, mining by the lessees in
Goa after 22.11.2007 was illegal. Hence, the order dated
10.09.2012 of the Government of Goa suspending mining
operations in the State of Goa and the order dated 14.09.2012
of the MoEF, Government of India, suspending the G
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 10.09.2012 of the Government of Goa H
380 SUPREME COURT REPORTS (2014] 5 S.C.R.
A and the order dated 14.09.2012 of the MoEF will have to
continue till decisions are taken by the State Government to
grant fmsh leases and decisions are taken by the MoEF to
grant fresh environmental clearances for mining projects.
B 68. On 05.10.2012, this Court while issuing notice in Writ
Petition (C) No.435 of 2012 (Goa Foundation vs. Union of
lnaia & Others) also passed orders that all mining operations
in the leases identified in the report of the Justice Shah
Commission and transportation of iron ore and manganese ore
from those leases, whether lying at the mine-head or
C stockyards, shall remain suspended. Thereafter on 11.11.2013,
this Court passed an order that the inventory of the excavated
mineral ores lying in different mines/stockyards/jetties/ports in
the State.of Goa made by the Department of Mines and
Geology of the Government of Goa be verified and thereafter
D the whole of the inventorised mineral ores be sold by e-auction
and the sale proceeds (less taxes and royalty) be ,retained in
separate fixed deposits (lease-wise) by the State of Goa till this
Court delivers judgment in these matters on the legality of the
leases from which the mineral ores were extracted,• In our order
· E passed on 11.11.2013, we had also directed that this entire
process of verification of the inventory, e-auction and deposit
of sale proceeds be monitored by a Monitoring Committee
appointed by the Court. The Monitoring Committee comprising
Dr. U.V. Singh (Additional Principal Chief Conservator of
F Forests, Karnataka), Shri Shaikh Naimuddin (former Member
of Central Board of Direct Taxes) and Parimal Rai (Nominee
of Govt. of Goa) have in the meanwhile monitored thee-auction.
We extract herein below the relevant portion of the interim report
dated 12.03.2014 of the Monitoring Committee:
G
"After the two e-auctions, the total ore auctioned is about
1.62 million MT and the total value realized is 260.68
crores approximately. As directed by this Hon'ble Court,
the State Government has been requested to maintain
separate accounts, lease wise, and keep the sale
H proceeds as fixed deposits in Nationalized Banks.
GOA FOUNDATION v. UNION OF INDIA 381
[AK. PATNAIK, J.]
The process of transportation of ore for export has not yet A
peen initiated because 6f the storage charges being
demanded from the successful bidder by the Marmagoa
Port Trust (MPT). As a result, the process of a-auction is
. likely to slow down. The extent of storage charges
demanded is as per Annexure MC Ill." B
69. As we have held that renewal of all the deemed mining
leases in the State of Goa had expired on 22.11.2007, the
mining lessees will not be entitled to the sale value of the ores
sold in a-auction but they will be entitled to the approximate cost · C
(not actual cost) of the extraction of the ores. On account of
suspension of mining operations in the State of Goa, the
, workers who were employed by the lessees claim that they
: have not been paid their wages. Under Section 25C of the
Industrial Disputes, Act, 1947, when a workman whose name
is borne on the muster rolls of an industrial establishment and D
who has completed not less than one year of continuous service
under an employer is laid-off, he is entitled to be paid by the
' employer for all the days which he .is so laid-9!.f, except for such
weekly holidays as may intervene, compensation which shall
be equal to 50% of the total of the basic wages and dearness E
allowance that would have been payable to him had he not been
so laid-off. Following this principle of lay-off compensation, we
hold that workers who could not be paid wages by the le_ssees
will have to be paid compensation at the rate of 50% of their
basic wages and dearness allowance during the period of non- F
employment on account of suspension of mining operations.
Moreover, Marmagoa Port Trust will have to be paid 50% of
their charges for stora·ge of the mineral ores after 05.10.2012.
70. The entire sale value of the stock of mineral ores sold
G
' by a-auction less the average cost of excavation, 50% of the
wages and allowances and 50% of the storage charges to be
paid to MPT is thus due to State Government which is the
owner of the mineral ores which have been sold by a-auction.
The State Government will set-aside 10% of this balance
H
382 SUPREME COURT REPORTS. .[2014] 5 S.C.R.
A amount for the Goan Iron Ore Per:rnanent Fund for the purpose
of sustainable.development and .inter-generational equity. This
entire exercise of calculating the average cost of extractiorrof-
ores to be paid to the mining lessees, 50% of the basic wages
and dearness allowance to be paid to the workers, 10% of the
B balance amount towards the Goan Iron Ore Permanent Fund
and the balance amount to be appropriated by the State
Government will be done by the Director of Mines and Geology,
Government of Goa, under the supervision of the Monitoring
Committee. Till this exercise is over and the report of the
c Monitoring Committee is filed, the Monitoring Committee will
continue and their members will be paid their remuneration
allowances as directed in the order dated 11.11.2013.
· 71. In the result, we declare that: ,_,.
D (i) the deemed mining leases of the lessees in Goa expired
on 22. 11. 1987 and the maximum of 20 years renewal
period of the deerried mining leases in Goa expired on
22. 11.2007 and consequently mining by the lessees after
22. 11.2007 was illegal and hence the impugned order
E dated 10.09.2012 of Government of Goa and the
impugned order dated 14.09.2012 of the MoEF,
Government of India are not liable to be quashed;
(ii} :dumping of minerals outside the leased area of the
mining lessees is not permissible under the MMDR Act
F · and the Rules made thereunder;
(iii) until the order dated 04.08.2006 of this Court is
modified by this Court in I.A. No.1000 in TN. Godavarman
Thirumulpad v. Union of India & Ors., there can be no
G mining activities within one kilometer from the boundaries
of National Parks and Sanctuaries in Goa;
(iv) by the order dated 04.12.2006 in Writ Petition (C)
No.460 of 2004 (Goa Foundation v. Union of India), this
Court has not prohibited mining activities within 10
GOA FOUNDATION v. UNION OF IND[A 383
[A.K. PATNAIK, J.]
kilometers distance from the boundaries of the National A
Parks or Wildlife Sanctuaries;
(v) it is for the State Governmentto 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 8
the State Government can be examined by the Court in
· exercise of its power of judicial review.
And we direct that:
(i) MoEF will issue the notification of eco-sensitive zones c·
around the National Park and Wildlife Sanctuaries of Goa
after following the procedure discussed in this judgment
within a period of six months from today;
(ii) the State Government will initiate action against those
0
. mining lessees who violate Rules 37 and 38 of the MC
Rules;
(iii) the State Government will strictly enforce the Goa
(Prevention of Illegal Mining, Storage and Transportation
of Minerals) Rules, 2013; E
(iv) 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 MMDR Act and the Rules
made thereunder in consonance with the constitutional F
proyisions;
(v) until the final report is submitted by the Expert
Committee, the State Government will, in the interests of
sustainable development and intergenerational equity,
permit a maximum annual excavation of 20 million MT from G
the mining leases in the State of Goa other than from
dumps;
(vi) the Goa Pollution Control Board will strictly monitor the
air and water pollution in the mining areas and exercise H
384 SUPREME COURT REPORTS [2014) 5 S.C.R.
A powers available to it under the 1974 Act and 1981 Act
including the powers under Section 33A of the 1974 Act
and Section 31A of the 1981 Act and furnish all relevant
data to the Expert Committee;
(vii) the entire sale value of the e-auction of, the
B
inventorised ores will be forthwith realised and out of the
total sale value, the Director of Mines and Geology,
Government of Goa, under the supeNision of the Monitoring
Committee will make the following payments:
c (a) Average cost of excavation of iron ores to the
mining lessees;
(b) 50% of the wages and dearness allowance to
the workers in the muster rolls of the mining leases
D who have not been paid their wages during the
period of suspension of mining operations;
(c) 50% of the claim towards storage charges of
MPT.
E Out of the balance, 10% will be appropriated towards the,
Goan Iron Ore Permanent Fund and the remaining amount
will be appropriated by the State Government as the owner
of the ores;
(viii) the Monitoring Committee will submit its final report
F
on the utilization and appropriation of the sale proceeds
of the inventorised ores in the manner directed in this
judgment within six months from today;
(ix) henceforth, the mining lessees of iron ore will have to
G pay 10% of the sale price of the iron ore sold by them to
the Goan Iron Ore Permanent Fund.
(x) the State Government will within six months from today
frame a comprehensive scheme with regard to the Goan
H Iron Ore Permanent Fund in consultation with the CEC for
GOA FOUNDATION v. UNION OF INDIA 385
[A.K. PATNAIK, J.]
sustainable development and intergenerational equity and · A
submit the same to this Court within six months from today;
and
(xi) the Expert Committee will submit its report within six
months from today on how the mining dumps in the State 8
of Goa should be dealt with and will submit its final report
within twelve months from today on the cap to be put on
the annual excavation of iron ore in Goa.
70. With the aforesaid declarations and directions, Writ
Petition (C) No.435 of 2012 is allowed. The Transferred Cases C
and IA filed by MPT as well as other IAs also stand disposed
of. The interim order dated 05.10.2012 of this Court is vacated.
These matters will be listed as and when the Monitoring
Committee and the Expert Committee submit their final reports
and the State Government submits the scheme for the Goan D
Iron Ore Permanent Fund. The parties shall bear their own
costs.
Rajendra Prasad Matters disposed of.
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