Common Cause and Lokniti Programme of the Centre for the Study of Developing Societies (CSDS), launched India’s first Status of Policing in India Report (SPIR 2018) at the India Habitat Centre on May 9.

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W.P. (C) 114/2014
Writ against Illegal Mining in Odisha

Status Report

In the context of a public outcry over massive mining scandals in various parts of the country, the Government of India had set up the Justice M. B. Shah Commission of Inquiry in November 2010 to inquire into the illegal mining, trade and transportation of iron ore and manganese ore, identify the deficiencies in the systems of management and regulation, and assess their overall impact in terms of environmental damage, prejudice to livelihoods and other rights of the local populations, and the financial losses caused to the Central and State Governments. The Commission’s reports on mining in Goa, (March-April 2012), brought to light massive illegalities in the extraction of iron and manganese ores. The Commission next submitted a 5 volume report on the mining sector in Orissa in July 2013 and sought a further extension of one year to complete its inquiry in other major mining areas. The Government, however, refused to extend its term beyond October 2013. Before it was wound up, the Commission submitted its report on mining in the state of Jharkhand (4 volumes), along with the second report on Orissa (3 volumes) and the third report on Goa. The Commission’s first report on Orissa, documents the reckless plunder of the nation’s mineral wealth and the flagrant violation of the laws relating to mining and environment protection and the fundamental rights of the local populations. The Government has resisted the demands for placing the Orissa report in the public domain. It has also failed to take any action on the findings of the report, or to lay it in Parliament along with an Action Taken Report (ATR) within six months of its submission as per the prescribed procedure. Common Cause has filed before the apex court, a writ on the substantive issues highlighted in the Orissa reports, to force the hand of the UOI and to seek urgent judicial intervention in the matter.

Following the filing of the petition, the operation of 26 illegal mines was stayed. The court in 2016 had directed the states to consider applications of miners filed before January 2015 or 12 months before the expiry of the lease. The court had held that mining leases will not lapse automatically unless the state governments hear the companies and pass orders to that effect.

The Supreme Court on August 2, 2017 imposed a hundred percent penalty on mining companies indulging in illegal mining on account of lack of forest and environment clearances, mining outside lease/permitted area and for mining in excess of what has been allowed. The bench headed by Justice Lokur directed that an Expert Committee be constituted and presided over by a retired judge for identifying the lapses that have occurred over the years that have enabled rampant illegal and unlawful mining in Odisha and to recommend preventive measures not only to the State of Odisha but generally to all other States where mining activities are proceeding on a large scale. The Union of India was directed to have a fresh look at the National Mineral Policy, 2008 which is almost a decade old, particularly with regard to conservation and mineral development and that the exercise should be completed by 31st December, 2017.

On August 28, 2017, the Apex Court listed the matter on 24th October 2017, for hearing the applications filed by Jindal Steel and Power Limited, Sarda Mines Pvt. Ltd., Essel Mining And Industries Ltd. And Rungta Group of Companies. On September 14, 2017, it was ordered to renew the FDR further, for a period of 91 days from the date of its maturity.

On October 24, 2017, various Interlocutory Applications filed in the matter were dismissed. Further, in I.A no. 90729/2017 the court ordered that the CEC as well as the State Government should sit together to iron out all anomalies so that the payments are made where the computation is completed on or before November 30, 2017 in accordance with the judgment of this Court.

On November 11, 2017, a committee of Justice G.S. Singhvi and Justice Anil Dave was requested to submit their report within a period of 12 weeks from the date of the first hearing. The report of the Committee was asked to be placed before this Court for consideration as soon as the same would be filed in the Registry of this Court. The court ordered that some of the writ petitions filed by some of the lessees as well as by the State of Odisha in the High Court of Odisha will be rendered in fructuous and that the State of Odisha may take appropriate steps in that regard.

On December 2017, the court admitted that royalty was paid on the fines. It was observed that the extraction/cleaning clearly amounts to a mining operation relating to iron ore on which royalty is paid by the applicant and the objections of the Jindal Steel and Power Limited to the CEC Report were disposed of.

On January 30, 2018 in IA NO. 9110/2018 filed by M/s. Essel Mining & Industries Limited requested for condonation of delay in making the payment. Learned counsel for the applicant submitted that since the time was short, there has been a few days delay in depositing the amount. The delay was condoned. IA Nos. 7253 & 7256/2018 were disposed of and the delay in making the deposit by the applicant was condoned subject to payment of interest at the rate of 12% per annum for the period of 11 days with the interest component to be paid within two weeks.

On February 15, 2018, the applicant in IA Nos. 9110/2018 & 9117/2018 stated that as per the judgment of this Court dated 2nd August, 2017, the amount due along with interest with regard to the JillingLangalotta, Koira and Kasia mines have been paid. Both the applications were disposed of with the direction to the Odisha government to permit the applicant to resume mining. IA NO. 18926/2018 filed by M/S Patnaik Minerals Pvt. Ltd stated that there was a delay of 31 days in making the payment due to the State Government but the entire amount has been paid with interest. The court condoned the delay and disposed of the application. IA No. 22301/2018 was withdrawn.

On February 23, 2018, an Application was moved by the amicus to bring on record the fact that perhaps there is an oversight and the name of M/s Serajuddin & Co. was left out for consideration in the judgment and order dated August 2, 2017 as being one of the Mining Lease Holders who may be in violation of Rule 37 and Rule 38 of the Mineral Concession Rules, 1960.
I.A. No. 21415/2018 was moved by M/s Serajuddin & Co. for permission to continue mining. The court permitted the applicant to continue regular mining since the applicant and the state stated that all the payments had been made with interest, hence the application was disposed of. In I.A. No. 27229 and 27242 filed by Mr. Birat Chandra Dagara delay in making the payment was condoned subject to payment of interest at 12% per annum. Learned counsel for the State of Odisha said that the payment has been made along with interest. The application was disposed of.

On March 13, 2018, the Committee requested for an extension by ten weeks to complete the enquiry and it was allowed.

On March 21, 2018, the FDR was ordered to be renewed for a further period of one year.

On April 3, 2018, IA No. 43947/2018 was ordered to be listed after the report from the CEC is received and the applicant was allowed to restart mining, since the payment had been made in terms of Rule 49 of the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016. Further on April 9, 2018, it was clarified that there is no prohibition against re-starting mining notwithstanding the examination of the application filed by the applicant by the CEC.

On May 11, 2018, IA NO. 108236/2017 has been disposed of. The Steel Authority of India Ltd. may operationalize the mining lease, subject to confirmation from the State of Odisha., which is to be verified by the learned counsel for the State of Odisha within one week.

On July 24, 2018, the state of Odisha was directed to file an affidavit within two weeks on IA No. 99347/2018. IA No.86784/2018 was dismissed.

On August 9, 2018, IA Nos. 110569 & 110570/2018 were dismissed. The learned counsel for the applicant(s) said they would like to take instructions whether the amount can be deposited with interest without prejudice.

On September 6, 2018, Sr. Advocate Mr. Gopal Subramanium presented some suggestions, framed in consultation with some others advocates and they were accepted by Mr. Prashant Bhushan, learned counsel for the petitioner and by the learned Amicus.
The SC has ordered that the amount of Rs.237.05 crores lying in the Ministry along with interest should be handed over to the Special Purpose Vehicle and clarified that the Special Purpose Vehicle and utilization of funds are not adversarial. The learned Counsel for the State of Odisha said she will get back within two weeks after taking instructions in this regard.

Additional Affidavits & Supplementary Additional Affidavit were filed by the state of Odisha. Report no. 4 of 2018 was submitted by CEC & it stands disposed of.

With regard to I.A. No. 58800/2018, the Learned counsel for the State of Odisha has confirmed the receipt of all the due payments from the applicant (Birat Chandra Dagara). The SC allowed the application and said that the State of Odisha may take certain necessary steps. In addition to this, SC said:

Mining may be resumed subject to compliance of all the regulatory requirements including clearances.

In accordance with the hearing on September 24, 2018, the IA No. 139365/2017 has been disposed of, as stated by learned counsel for the Odisha Mining Corporation Limited and that of the state of Odisha, all payments have been made and all necessary permissions have been obtained and under the circumstances, the Odisha Mining Corporation Limited may be permitted to resume mining.

In addition to this, in the IA Nos. 111982/2018, 111973 & 136382/2018 the learned Counsel of the State of Odisha confirmed that the payment has been made. The Court disposed of the matter and ordered that subject to clearances being obtained, the applicant(s) may be permitted to resume mining.

IA Nos. 113096/2018 113096, 110418/2018, 132667/2018, 130078-79/2018 & 130083/2018 have been listed to be heard on October 31, 2018. In IA No. 113096/2018, the Court has ordered to issue notice returnable on 31st October, 2018.

During the hearings from 18 September 2018 to 5 October 2018, the arguments were heard in part.

On 8 October 2018, agruments on the issue concerning Sarda Mines Pvt. Ltd were concluded and the order has been reserved. 

On 26 October 2018, the matter was relisted to October 29, 2018. 

On 29 October 2018, with the agreement of all the parties, Hon’ble Mr. Justice A.K. Patnaik, retired Judge of the Supreme Court has been appointed as an Oversight Authority to consider the effective functioning of the SPV and the following orders have been issued in this regard:-

(a) Hon’ble Mr. Justice A.K. Patnaik is appointed by this Court to oversee the work and progress carried out by the Special Purpose Vehicle (‘OMBADC’). Hon’ble Mr. Justice A.K. Patnaik may assume charge as an Oversight Authority in terms of the orders of this Court with immediate effect and may issue suitable communications to the State Government including the OMBADC.

(b) The priority of the projects as stated in the affidavit filed by the State of Odisha dated 20.10.2018 may be modified to prioritize the following and move them up the ladder with other activities in the first phase:

  1. Provision of drinking water through piped water supply projects
  2. Improvement of health services including development of primary health centers, mobile medical vans, eye clinics, infrastructure for specialty health care, hospitals, tie ups or referral systems with major hospitals, etc.
  3. Improvement of educational services including the infrastructure of educational institutions, technology based alternative learning, etc.

(c) Priority to the expenditure from the amounts recovered out of the judgment of this Court may be utilized in the districts of Keonjhar, Mayurbhanj and Sundargarh. However, Hon’ble Mr. Justice A.K. Patnaik is at liberty to ensure that the funds are utilized for nearby districts if it becomes necessary and if nearby districts are affected by pollution.

(d) Quarterly report of performance may be filed by the SPV before Hon’ble Mr. Justice A.K. Patnaik. The quarterly report may be filed for the first year and thereafter if necessary after six months.

(e) In addition, having regard to the nature of the funds and quantum of funds which are involved in the matter, the CEC may also carry out a complete on-the-spot verification about the utilization of the moneys and file a report before Hon’ble Mr. Justice A.K. Patnaik.

(f) Hon’ble Mr. Justice A.K. Patnaik may consult the Comptroller and Auditor General, the Principal Accountant General as well as the Chief Secretary to ensure that the idle and reserve funds may be deposited in the highest yield-granting risk-free securities.

(g) It will be open to Hon’ble Mr. Justice A.K. Patnaik to appoint such auditors as he may consider appropriate or request the CAG to get a distinct and accurate account of expenditures by the State Government/OMBADC from SPV funds.

Hon’ble Mr. Justice A.K. Patnaik may submit the first report to this Court as and when he deems appropriate.

After hearing the learned counsel for the parties and the amicus curiae and after having a look at the response filed by the State of Odisha with respect to the functioning of the Special Purpose Vehicle, the abovementioned orders have been issued. It has been established that a day to day oversight is not at all necessary. Additionally, the Oversight Authority is at liberty to take the assistance of any one or two officers or retired High Court Judges of his choice to assist him for this purpose.

On 31 October 2018, IA Nos. 110418/2018 & 132667/2018 (for condonation of delay in depositing the amount and for placing on record additional documents on behalf of M/s Geeta Rani Mohanty, a Partnership Firm) & 110418/2018 & 132667/2018 (for intervention on behalf of Geeta Rani Mohanty) were taken up.

The condonation of delay in depositing the amount and for placing on record additional documents is allowed subject to a faw exceptions.

The Court had concerns regarding the dispute inter se between the partners of M/s Geeta Rani Mohanty and Geeta Rani Mohanty. 

Applications for condonation of delay in depositing the amount and for placing on record additional documents . In IA No. 137884/2018, application for intervention was allowed only for the purpose of application for directions. 

It is submitted by the learned senior counsel appearing for M/s Geeta Rani Mohanty that there is no dispute and that any dispute is sought to be raised by Geeta Rani Mohanty.

A reportable judgment signed by the bench has been placed on the file on November 12, 2018, concerning the illegalities involved in the mining lease of Sarda Mines Private Limited (SMPL).

The Central Empowered Committee (CEC) concerned itself with seven major issues:

  1. Regarding renewal of the mining lease.
  2. Regarding validity of the Environmental Clearance.
  3. Regarding sale of iron ore in the form of ROM by Sarda Mines Private Limited.
  4. Regarding diversion of additional land for mining and allied activities
  5. Regarding production of iron ore without/in excess of the Environmental clearance.
  6. Regarding enquiry done by the State Government for alleged violation of Rule 37, MCR, 1960 [Mineral Concession Rules of 1960].
  7. Regarding alleged ownership of the mining lease actually being with Jindal Steel and Power Ltd.

CEC had challenged the validity of the activities of SPML vis-à-vis the terms of Environmental Clearance granted to them.

It was submitted by SMPL that the CEC had confused itself between extraction or production of iron ore ROM and extraction or production of iron ore. In fact, they claimed to have never engaged in any excess or illegal mining, contending the quantification of the penalty by the CEC is incorrect.

However, the court found no merits on the objections presented by SPML, specifically in light of the arguments held, their conduct and activities and their misinterpretation of the environmental clearance. The Court ordered the CEC to rework on the quantum of the penalty within 6 weeks and provide access of all the relevant documents to SPML. The matter against SPML stands disposed of.

On December 12, 2018,  the applicant says that the payment has been made and clearance is available in respect with IA Nos. 172486/2018 & 172493/2018. The State of Odisha has asked for a period of two weeks to file a reply.

On January 16, 2019, in IA No.110418/2018, the Senior Counsel appearing for the State of Odisha affirmed that all payments due from M/s Geeta Rani Mohanty (firm) have been received. Accordingly, the instant application for condonation of delay in depositing the amount of compensation was allowed. 

In IA Nos. 172486/2018 and 172493/2018  the Senior Counsel appearing for the State of Odisha affirmed that all payments due from M/s National Enterprises have been received. Application for intervention was allowed only for the purpose of application for directions and the delay in making the payment was condoned.

In IA No. 153571/2018 and 153579/2018, since the applicant had failed to deposit the entire amount, the application for direction was dismissed.

In IA No.137873/2018 in IA No.110418/2018, IA Nos.130079/2018, 130083/2018 and IA No.113096/2018 the applicants prayed for and were granted four weeks’ time to file rejoinder affidavit.

In IA No.180945/2018, the application for extension of time for framing new National Mineral Policy, on the basis of reasons stated, the time to complete the task of reviewing the National Mineral Policy, 2008 and announce a new National Mineral Policy is extended upto 30th April, 2019. IA No.180945/2018 stands disposed off.

In the course of hearing, the issue of deleterious effect of mining of vegetation in the area came up and the Court was informed about the  re-grassing technology. Senior Counsel appearing for the applicant, Mukul Rohatgi stated that the mine owners would be willing to bear the cost of re-grassing upon termination of mining activities in the area since it is in the larger interest of the environment. The Court directed the Senior Counsel for the state of Odisha, Rakesh Dwivedi to look into the matter and make appropriate suggestions for implementing this proposal. Senior Counsel appearing for Union of India stated that this will also form a part of the National Mining Policy 2019.

On mentioning by the Counsel for Common Cause, Prashant Bhushan, the Court has directed to ascertain the time period for the report of the Committee comprising Hon’ble Mr. G.S. Singhvi and Hon’ble Mr. Anil R. Dave, former Judges of this Court.

On March 26, 2019, IA no. 40121/2019 was listed to be heard on April 5, 2019, on mentioning.

On March 28, 2019, the matter was ordered to be listed on a Thursday, after four weeks.

On April 8, 2019,  the Court has ordered to issue notice returnable in 4 weeks.

On mentioning, the bench took up the matter on April 24, 2019. An order to list the IA Nos. 39315/2019 & 25405/2019 on April 29, 2019 before the appropriate Bench was issued.

On mentioning, the bench took up the matter on April 26, 2019 and ordered to list IA No. 58796/2019 alongwith IA Nos. 39315/2019 & 25405/2019 on April 29, 2019.

On April 29, 2019, the Report filed by the Union of India is taken on record and order to serve the copy of the Report to the contesting parties was issued. Parties may file a response within four weeks.

In IA No. 25405/2019, the IA was disposed of. The counsel for the applicant was heard and the court said:

" is open for the High Court to decide Writ Petition (C) No. 9428 of 2015 pending before it irrespective of the pendency of the Writ Petition (C) No. 114 of 2014 before this Court."

In IA No. 39315/2019, the IA was dismissed. The counsel for the applicant was heard and the court refused to grant a reduction of rate of interest, from 24% pa to 12% pa.

In IA No. 58796/2019, the Court has ordered to issue notice returnable in 4 weeks.

S.L.P. (C) No. 23644/2016 was ordered to be listed the next day, April 30, 2019.

On May 3, 2019, in S.L.P. (C) No. 23644/2016, the Amicus Curiae submitted that the report of the Central Empowered Committee will be filed on or before May 8, 2019.

On May 9, 2019, the bench has ordered S.L.P. (C) No. 23644/2016 to be listed after the summer vacation.

The matter is likely to be listed next on July 1, 2019.

WP 114 of 2014
WP 114 of 2014 16-May-2014-Interim Order
WP 114 of 2014 04-April-2016-Order
WP 114 of 2014_2nd Aug 2017
Order_24 September 2018
Order_18 Sep 2018
Order_24 Sep 2018
Order_28 Sep 2018
Order_08 Oct 2018
Order_29 Oct 2018
Order_31 Oct 2018
Order_12 Nov 2018
WP 114 of 2014_12th Nov 2018_Judgment
Order_04 Dec 2018
Order_12 Dec 2018
Order_16 Jan 2019
Order_18 Feb 2019
Order_26 Mar 2019
Order_28 Mar 2019
Order_08 Apr 2019
Order_24 Apr 2019
Order_26 Apr 2019
Order_29 Apr 2019
Order_3 May 2019
Order_09 May 2019