SAMAJ PARIVARTANA SAMUDAYA AND ORS.versusSTATE OF KARNATAKA & ORS.

                        [2017] 7 S.C.R. 725                                  ..
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        SAMAJ PARIVARTANA SAMUDAYA AND ORS.                              A
                                 v.
                STATE OF KARNATAKA & ORS.
                         I. A. No. 248 of2015
                                 in                                      B

                  Writ Petition (C) No. 562 of2009
                        AUGUST 28, 2017
           [RANJAN GOGOi, PRAFULLA C. PANT
                 AND NAVIN SINHA, JJ.J                                   c
         Mines and Minerals - Sale of iron-ore in State of Karnataka
- Interim application is .filed by FIMI seeking the direction fiwn the
Court that iron-ore and manganese ore may be sold in Karnataka
without recourse to e-auction conducted by the monitoring
committee set up by the Supreme Court - Held: The sale and purchase      D
of iron-ore had been conducted in the most outrageous manner
and on wholly unacceptable terms in the past resulting, inter a/ia,
in huge leakage of government revenue - Such experiences and
events cannot be allowed to resurface - Therefore, on an overall
view of the matter, dispensation is not warranted with the existing
policy of sale and purchase of iron-ore by e-auction in the State of     E
Karnataka - The restoration of 'normalcy' in the process of sale
and purchase of iron-ore must wait for the jilfure and at least till
such time that significant headways are made in the other cu11nected
aspects of the matter.
         Disposing of the I.A., the Court                                F
         HELD: Sale and purchase of iron-ore through the Court
Appointed Monitoring Committee and by e-auction is not a
singular but a connected facet of what was visualized by the Court
 in its bid to check, control and regulate mining and also to restore
 nature and environment to its earlier pristine purity, so far as        G
 possible. A cap on production and restoration of ecology and
 environment through a Comprehensive Environment Plans for
 the Mining Impact Zone (CEPMIZ) has been visualized by this
 Court in its order dated 18th April, 2013. The connected aspects
 i.e. lifting of the cap or enhancement thereof and launching of the
 CEPMIZ scheme is under active consideration of this Court in            H
                                   725


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726           SUPREME COURT REPORTS                         [2017] 7 S.C.R.


A other connected Interlocutory Applications (I.As.). When the
  said connected issues are pending, it cannot be said that the
  situation has become ripe for the normal rule of sale and purchase
  to be restored so far as the sale of iron-ore in the State of
  Karnataka is concerned. The experience of the past has been
  horrific. It cannot be allowed to come back. Sale and purchase of
B
  iron-ore had been conducted in the most outrageous manner and
  on wholly unacceptable terms resulting, inter alia, in huge leakage
  of government revenue. Such experiences and events cannot
  be allowed to resurface. Taking an overall view of the matter,
  time has not come to dispense with the existing policy of sale
c and purchase of iron-ore in the State of Karnataka through the
  Court Appointed Monitoring Committee by e-auction. The
  restoration of 'normalcy' in the process of sale and purchase of
  iron-ore must wait for the future and at least till such time that
  significant headways are made in the other connected aspects of
D the matter dealt with by the final order of this Court dated 18th
  April, 2013 passed in Writ Petition (C) No.562 of 2009 .. The
  application filed by FIMI South is rejected. The suggestions of
  the CEC and the State of Karnataka as made in their respective
  reports/affidavits filed before the Court are also not accepted.
  (Paras 10-12) (729-E-H; 730-A-DJ
 E          CIVIL ORIGINAL JURISDICTION: I. A. No. 248 of 2015 m
      Writ Petition (Civil) No. 562 of2009.
            Under Article 32 of the Constitution oflndia.
            S.S. Shamshery,AAG, ShyamDivan, Sr.Advocate (A.C.), A.D.N.
      Rao (AC), Siddhartha Chowdhury(AC), Prashant Bhushan, Ms. Anitha
 F
      Shenoy, Jayant Mohan, Kumar Dushyant Singh, Kuna! Verma,
      Yugandhara Pallav Jha, K. Raghavacharyulu, Kailash Pandey, Ranjeet
      Singh (for Gaichagpou Gangmei), Kuna! Chatterji, Chanchal K. Ganguli,
      Amit Sharma, Ankit Raj, Ms.Ruchi Kohli, M. Yogesh Kanna,
      Ms.Mahalakshmi, Ms. Sujatha B., Sandiv Kalia, Dr. Sanjay Gupta,
 G    Nandram, Advs. for the appearing parties.
            The Judgment of the Court was delivered by
            RANJAN GOGOi, J. 1. This application (I.A. N0.248 of2015)
      has been filed seeking the following direction from the Court:

 H
  SAMAJ PARIVARTANA SAMUDAYA AND ORS. v. STATE OF                              727
        KARNATAKA & ORS. [RANJAN GOGOi, J.]

       "that iron-ore and manganese ore may be sold in Karnataka               A
       without recourse to e-auction conducted by the monitoring
       committee set up by this Hon'ble Court."
         2. The response of the Central Empowered Committee ("CEC"
  for short) was sought for by this Court. Pursuant thereto a report dated
  28th April, 2016 of the CEC has been submitted. In the said report the       B
  CEC has stated that it agrees with the statement of the applicant -
  Federation oflndian Industries, Southern Region (FIMI South) that the
. basic objectives behind the sale of iron ore through the Monitoring
  Committee, in terms of the various orders passed by this Court from
  time to time, have been achieved and an alternative system needs to be
  put in place. The main suggestions of the CEC are as follows:
                                                                               c
       (I) The mechanism must provide for the registration of both the
       buyers and sellers of iron-ore. The sellers of the ore, or the mining-
       ore lessees, must declare their statutory approvals, modalities of
       the Reclamation and Rehabilitation Plan ('R & R Plan') and the
       estimated annual quantity of iron-ore produced by them. The D
       buyers of the ore must declare their eligibility to purchase the ore
       and the industry connected with said purchase.
       (II) The sale of iron-ore by sellers to the buyers must be through
       an online platform. This e-platform must provide for all the relevant
       information concerning the iron-ore, such as the grade and              E
       moisture-content of the ore, minimum acceptable price by the
       seller and the provision to view the bids offered by registered
       buyers on a real-time basis so that there could be a price-match
       amongst prospective buyers.
       (III) The mechanism must provide for online registration of the F
       agreements and transactions executed between the registered .
       buyers and sellers.
       (IV) The mechanism must provide a method for online deposit of
       applicable royalty, taxes, contribution to· fhe Special Purpose
       Vehicle ('SPY') and other statutory duties; along with the              G
       subsequent online confirmation of such receipt.
       (V) The mechanism must consist of checks-and-balances which ·
       can be implemented across thee-platform, in order to ensure that

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728            SUPREME COURT REPORTS                           [2017) 7 S.C.R.


A           the sale or purchase of iron-ore is not substantially below the
            market price.
             3. In its counter/reply, the State of Karnataka has indicated its
      broad agreement with the suggestions of the CEC and has incorporated
      certain additional recommendations including setting up of a Committee
 B    consisting of officials of the State Government to monitor the sale of
      iron-ore through the e-platform on the basis of long term agreements, a
      Model of which has also been submitted to the Court.
            4. Other stake-holders like the writ petitioners in Writ Petition (C)
      No. 562/2009- Samaj Parivartana Samudaya and ors. have objected to
 c    any change from the existing pattern of sale of iron-ore through the
      Monitoring Committee whereas Mis Vedanta Ltd., an iron-ore lessee
      operating within the State of Karnataka has supported the stand taken
      by FIMI South in the present I.A. i.e. I.A. No.248 of2015.
             5. The Monitoring Conunittee through whom iron-ore is currently
 D    being sold bye-auction was constituted by the order of this Court dated
      2nd September, 2011 accepting the recommendations of the CEC dated
      I st September, 2011 to sell the total quantity of illegally extracted iron-
      ore which at that point of time was 25 MMT (approximately).
             6. After the sale of the illegally mined iron-ore was complete, this
 E    Court by order dated 23rd September, 2011 continued to entrust the duty
      and responsibility of sale of iron-ore to the Monitoring Committee. The
      above position was continued by this Court by its Order dated 18.4;2013
      disposing of Writ Petition I No. 562/2009 and other connected cases.
      This is how the current status/situation with regard to sale of iron-ore by
      e-auction through the Court Appointed Monitoring Committee continues.
 F
            7. In the order of this Court dated 18th April, 2013 in Writ Petition
      I No. 562 of2009 there is a vivid and graphic description of the enormity
      of the illegal mining and consequential damage to the ecology and
      environment that had led to the intervention of this Court and had
      prompted exercise of its jurisdiction in the present matter. Innovative
 G    measures and orders with the aid of Ar:ticle 142 of the Constitution of
      India were felt necessary and consequently passed by the Court from
      time to time including the final order dated 18th April, 2013 to
      comprehensively deal with the issue of illegal mining and depredation of
      nature and environment. It is in the above said context that the constitution
 H    of the Monitoring Committee and the continuance of its role in the
  SAMAJ PARIVARTANA SAMUDAYA AND ORS.' v. STATE OF                              729
        KARNATAKA & O'lS. [RANJAN GOGOi, J.]

matter of sale of iron-ore bye-auction had been conceived and continued         A
by this Court on the basis of the various orders passed from time to time.
         8. It is in the aforesaid backdrop and having regard to the progress
 achieved in terms of what was contemplated and visualized by this Court
 in its final order dated 18th April, 2013 that the tenability of the prayers
 made by the FIMI South will have to be considered.                             B
        9. What has been suggested in the report of the CEC dated 28th
 April, 2016 and the in-principle approval thereof by the State ofKarnataka
 along with the suggestions offered by the State would seem to indicate
 that in place of Monitoring Committee constituted by this Court another
 Monitoring Committee consisting of officials of the State Government           c
·(of Karnataka) is proposed to over-see and supervise the sale of
 iron-ore through a hybrid system oflong term contracts and sales through
 an e-platform including payment of taxes, royalty, etc.
        10. While it is correct that any trading process has to be free and
 fair with liberty to the contracting parties to work out their own terms of D
 sale and purchase, what cannot be ignored are the circumstances which
 had prompted the Court to conceive of and continue with a departure
 from the normal rule and instead to have a regulated, if not, highly
 controlled system of sale and purchase of iron-ore. Sale and purchase
 of iron-ore through the Court Appointed Monitoring Committee and by
 e-auction is not a singular but a connected facet of what was visualized E
 by the Court in its bid to check, control and regulate mining and also to
 restore nature and environment to its earlier pristine purity, so far as
 possible.
         11. A cap on production and restoration ofecology and environment
. through a Comprehensive Environment Plans forthe Mining Impact Zone F
  ('CEPMIZ' for short) has been visualized by this Court in its order dated
  i 8th April, 2013. The connected aspects i.e. lifting of the cap or
  enhancement thereof and launching of the CEPMIZ scheme is under
  active consideration of this Court in other connected Interlocutory
  Applications (I.As.). When the said connected issues are pending it G
  cannot be said that the situation has become ripe for the normal rule of
  sale and purchase to be restored so far as the sale of iron-ore in the
  State of Karnataka is concerned. The experience of the past has been
  horrific. It cannot be allowed to come back. Sale and purchase of iron-ore
  had been conducted in the most outrageous manner and on wholly
                                                                                H
730             SUPREME COURT REPORTS                       [2017] 7 S.C.R.



A  unacceptable terms resulting, inter alia, in huge leakage of government
   revenue. Such experiences and events cannot be allowed to resurface.
   Taking an overall view of the matter, we are of the opinion that time has
   not come to dispense with the existing policy of sale and purchase of
   iron-ore in the State ofKarnataka through the Court Appointed Monitoring
  ·Committee bye-auction. The restoration of 'normalcy' in the process
B
   of sale and purchase of iron-ore must wait for the future and at least till
   such time that significant headways are made in the other connected
   aspects of the matter dealt with by the final order of this Court dated
    18th April, 2013 passed in Writ Petition (Civil) No.562 of2009.
             12. We, therefore, for the present reject the application (I.A.
 c No.248) filed by FlMI South and consequently do not entertain the support
      to the. prayers made therein by Mis Vedanta Ltd. For the same reason
      we do not also accept the suggestions of the CEC and the State of
      Kamataka as made in their respective reports/affidavits filed before the
      Court.
 D           13. I.A. No.248 accordingly is disposed of in the above terms.



      Devika Gujral                                              I.A disposed of.