SC Quashes All The 88 Mining Leases In Goa

In a landmark judgment with far reaching implications, the Supreme Court on February 7 dealt a severe body blow to Goa's mining magnets by cancelling leases of all 88 mines and ordered that fresh licences be granted through an auction process. Doubtless, the court's order will cover every one of 88 mines operational in Goa. These licences were given to 88 companies in Goa in 2015.

While craving for the exclusive indulgence of my esteemed readers, let me inform them that the Apex Court directed the Centre and the Goa government to grant fresh environmental clearances to them. It said the state government was obliged to grant fresh mining leases in accordance with law in view of its previous judgment and not second renewals to mining lease holders. The Apex Court had said in previous judgments that only fresh leases were to be granted by the Goa government, not second renewals.

For my esteemed readers exclusive indulgence, let me also inform them that a Bench of Justices Madan B Lokur and Deepak Gupta said that mining lease holders who have been granted a second renewal in violation of its previous decisions and directions, are granted time to manage their affairs and may continue mining operations till March 15, 2018. The Bench said in no uncertain terms that, 'However, they are directed to stop all mining operations with effect from March 16, 2018 until fresh mining leases (not fresh renewals or other renewals) are granted and fresh environmental clearances are granted.' Thus we see that there is no room for doubt on what the Supreme Court wants.

To put things in perspective, the Supreme Court added that, 'The second renewal of the mining leases granted by the State of Goa was unduly hasty, without taking all relevant material into consideration and ignoring available relevant material and therefore not in the interests of mineral development.' The decision, the Bench said, was taken only to augment the revenues of the state, which is outside the purview of Section 8(3) of the Mines and Minerals (Development and Regulation) Act. This is certainly a clear setback to the Goa state government!

Simply put, the Bench queered the pitch by stating explicitly that, 'The second renewal of the mining leases granted by the State of Goa is liable to be set aside and quashed.' It further also directed the setting up of an SIT and a team of chartered accountants to recover the amount from mining companies, which were allowed to extract ore in violation of the law. A clear wrong was thus made out!

It cannot be lightly dismissed that the Bench of Supreme Court of Justices Madan B Lokur and Deepak Gupta also in the same vein added that, 'Judiciary must be very cautious and circumspect in diluting or setting aside an economic policy of the government. Courts must intervene against an economic policy of the government only if it was constitutionally unavoidable. Otherwise, good governance could be a casualty.' The court made the observations after quashing the Goa government's policy to grant a second renewal of 88 mining leases with retrospective effect. Justice Lokur observed that, 'Till recently, policy matters, particularly economic policy, were hands off as far as the courts were concerned.' However, recent decisions had seen the court 'partially modify this theory and keep the window open to judicially review a policy if it does not serve the common good.' There can be no denying or disputing it!

It is noteworthy that the landmark judgment came on a petition filed by an NGO titled Goa Foundation, which had earlier also raised the issue of companies carrying out mining in violation of various statutes. The Goa Foundation, through its lawyer Prashant Bhushan had argued cogently that the state's policy on renewing leases did not conform to the Supreme Court's stand on optimum utilization of natural resources. Bhushan contended that the state government ought to have auctioned the mining leases instead of renewing them.

Truly speaking, Bhushan also pointed out that the mines ordinance approved on 12 January 2015 did not spell out a renewal procedure. He said that all renewals were done before the ordinance came into force with 31 leases being renewed on 12 January, 2015. The Goa Foundation petition alleges that miners and government authorities had colluded to circumvent not just the ordinance, but also the Supreme Court's ruling of April 21, 2014. The renewal was against the court's precedents laid down for the appropriate and optimum utilization of natural resources.

According to the petition, 56 leases were renewed between 6 and 12 January 2015, shortly before the ordinance was passed. The petition has named 20 miners whose leases have been renewed. Some of these companies had earlier moved the Bombay High Court seeking to direct the Goa government to consider and grant a second renewal of mining leases.

Be it noted, it was on their petition that the Panaji bench of the Bombay High Court had on 13 August 2014 directed the state government of Goa to execute a second renewal of leases in favour of companies that had paid the required stamp duty. In 2017, the Goa Foundation had appealed this decision before the Supreme Court. The appeal had said that the order 'disembodies the directions' of the court.

Of course, Goa Chief Minister Manohar Parrikar said that there was 'no need to panic' over the Supreme Court order quashing the second renewal of iron ore mining leases given to 88 companies in the state in 2015. He also submitted that, 'According to my information, there is nothing applicable until March 15. I do not want to comment anything unless I go through it.' He also appeared unperturbed and said that, '…That means different possibilities are open. The order does not come into effect from tomorrow so there is no need to panic.'

Needless to say, the Supreme Court on February 7 in its 102-page judgment observed how these leases were hastily renewed by the State in 2014 with retrospective effect from 2007, just before an amended Mines and Minerals (Development and Regulation) Act made auction of leases mandatory for mining notified minerals like iron ore. It cannot be missed out here that the judgment by a Bench of Apex Court comprising of Justices Deepak Gupta and Madan B Lokur traced the 'rapacious and rampant exploitation' of Goa's fragile ecology by private mining lease holders, whose sole motive is to make profit for years. This should never have been allowed to take place at the first instance!

As things stand, the Bench said that, 'Rapacious and rampant exploitation of our natural resources is the hallmark of our iron ore mining sector – coupled with a total lack of concern for the environment and the health and well-being of the denizens in the vicinity of the mines.' It also added that, 'The sole motive of mining lease holders seems to be to make profits (no matter how) and the attitude seems to be that if the rule of law is required to be put on the backburner, so be it.' This landmark judgment came on the petition filed by an NGO, Goa Foundation, challenging the Goa government's order in 2015 for a second renewal of 88 mining leases. It also set aside the Bombay High Court order allowing the state government to grant a second renewal to mining leases.

As it turned out, the Supreme Court said while summing up Goa's mineral policy that, 'The primary beneficiary was, of course, the mining lease holder, a private entity, and the price was paid by the average Goan who had to suffer a polluted environment and witness the damage to the State's ecology.' The judgment minced no words in narrating the role played by the Goa government in the loot of natural resources. It said the State gave private entrepreneurs mining leases 'virtually for a song'. It also held that, 'Unfortunately, the state was unable to firmly stop violations of the law and other illegalities, perhaps with a view to maximize revenue, but without appreciating the long term impact of this indifference.'

Truth be told, the Bench led by Justice Madan B Lokur who authored the judgment pulled back no punches in stating unambiguously that, 'The State sacrificed maximizing revenue for no apparent positive reason, virtually surrendering itself to the commercial and profit-making motives of private entrepreneurs and ignoring the interests of Goan society in general.' The Bench found that some private miners owed the State 'staggering' sums of up to Rs 1500 crore 'towards value of ore extracted in excess of the environmental clearance'. It was also held by the Bench categorically that the State government had made no 'serious attempts to recover such huge amounts'.

Equally significant is the glaring fact pointed out by the Bench that, 'The Union Ministry of Environment and Forests also 'played ball' by giving environment clearances to 72 of these mining leases.' The Apex Court quoted from Centre's own Vishwanath Anand Environment Appraisal Committee set up in 2013 to probe mining illegalities and held that, 'There was not a single environment related or mining related law or legal requirement that was not violated by one or the other mining lease holder. Quite clearly, the rule of environmental law in Goa had gone with the wind.' The court found that even groundwater was not spared by the evils of rampant mining.

Let me hasten to add here that the 88 mining leaseholders have now time till March 15 to wrap up their operations. But they have no time beyond March 15. The Apex Court has directed the companies to wind down their operations by March 15.

Let me also hasten to add here that the court also ordered the Centre and the State government to grant fresh mining leases strictly as per the provisions of the Mines and Minerals (Development and Regulation) Act, 1957. It banned any second renewals of mining leases. It also directed to recover money from the companies for indulging in illegal mining.

Briefly stated, the court said there was no need to grant the fresh mining leases through competitive bidding or auction. The judgment also made it clear that, 'The State of Goa was not under any constitutional obligation to grant fresh mining leases through the process of competitive bidding or auction'. However, the Apex Court insisted that the Environment Ministry grant fresh environmental clearances to each new mining lease in the State.

To be sure, the Apex Court ordered a Special Investigation Team (SIT) and the team of chartered accountants constituted pursuant to the Goa Grant of Mining Leases Policy in 2014 to submit a report on the illegalities a report on the illegalities that had been committed so far in the State. This is the second time that the Apex Court has intervened to stop illegal mining in Goa. In 2014, in the Goa Foundation case, the Apex Court has found that rampant mining was going on in the State despite all the iron ore and manganese ore leases having expired way back in November 2007.

More pertinently, the Supreme Court gave the following important instructions while quashing the mining leases that were renewed by the Goa government –

1. Fresh Leases: Goa should grant fresh mining leases as per the provisions of the Mines and Minerals (Development and Regulation) Act, 1957.

2. Green Clearance: Ministry of Environment should grant fresh environmental clearances to the new mining leases as soon as possible.

3. Stop Operation: Mining lease holders illegally given second renewal should stop operations with effect from March 16, 2018.

4. File Report: A Special Investigation Team and a team of Chartered Accountants will give a report on the illegalities committed so far.

According to the top court Bench, circumvention of mining and environment related laws is a big tragedy in itself. The Bench further said that, 'Laxity and sheer apathy to the rule of law gives mining lease holders a 'field day' as they are the primary beneficiaries and the state is left with some crumbs in the form of royalty.' This should never be allowed to happen!

On a concluding note, the Supreme Court has taken very seriously the exploitation of resources in the mining sector solely for profit maximization. This alone explains that why it has not hesitated in cancelling the leases of 88 firms in Goa. It has also pulled back no punches in criticizing the State government for allowing this to happen!