Supreme Court hearing on Goa Foundation challenge to validity of 88 Mining leases ends. Judgment reserved. 

Supreme Court hearing on Goa Foundation challenge to validity of 88 Mining leases ends. Judgment reserved. 

The petition had asked for CBI inquiry into grant of leases, in view of Vigilance Department's lack of enthusiasm to investigate the complaint filed by the GF. Goa govt. slept over mining lease issue for three years; did nothing to recover money or file criminal complaints against former lessees; ensured loss to public exchequer of Rs.79,000 crores by re-gifting the leases free of cost to mining companies. MOEF order dated 20.3.2015 restoring environment clearances was also challenged.

The Supreme Court on 21st November concluded the hearing of several petitions challenging the grant of 88 mining leases to several companies and former lease-holders and reserved its judgement on the issues raised. Separate petitions had been filed by the Goa Foundation and Sudeep Tamankar.

 

Related article: Commentary on the Supreme Court judgment - illegal mining in odisha by Norma Alvares

 

In addition, the Court also heard two separate appeals filed by the Goa Foundation and by Rama Velip and others against the 13.8.2014 judgement of the Bombay High Court which had directed the Goa government to decide applications filed by the various lease-holders for grant of further renewals of their leases, which had already come to an end on 22.11.2007.

The Foundation's petition challenged the 88 lease renewals on four major grounds:

  1. The renewal orders violate the directions given in the Supreme Court's judgement in WP No.435/2012, the earlier PIL filed by the Goa Foundation.
  2. The renewal orders are in violation of specific provisions of the MMDR Act, 1957; the Mineral Concession Rules, 1960 and the MCDR Rules, 1988.
  3. The renewal of the leases violates the constitutional provisions governing the allocation of natural resources, highlighted by the Supreme Court in the cases of the coal block allocations, the judgement in the allocation of spectrum (2G scam) and Presidential Reference.
  4. The petition also challenged the revocation order dated 20.3.2015 passed by the Ministry of Environment and Forests, in respect of 91 mining leases. The order withdrew the suspension of environment clearances for 91 mining leases in the State.

In its judgement dated 21.4.2014, the Supreme Court had declared all mining leases in Goa as invalid from 22.11.2007. Since the leases had expired, they could not be renewed. A finding of illegal mining also attracted the provisions of Section 21(1) (jail term/fine) as well as 21(5) (recovery of mineral or its value). We estimate the recoverable amount in excess of Rs. 65,000 crores. The Goa government also had a clean slate – no leases.

In the above circumstances, the Goa Foundation told the Court it would have been best if the Goa government had first disposed off the dumps, amalgamated the existing leases into a few large ones, issued these leases to itself and then asked mining companies to mine on its behalf under contract and pass the ore extracted to the Government for auction through MMTC. Companies profits would then remain around 10-15%, which is more than enough compensation for mining.

However, the Goa government decided to act against public interest and return the leases to the former lease-holders despite their gross misconduct in the past 8 years when mining took place. The Goa government said it decided against auctions of leases in fear of the unknown mining mafia entering the state. It said it decided against PSU mining due to corruption and inefficiency in public sector bodies. However, by renewing the leases from the date of expiry (2007), it also put into question the recovery of Rs.65,000 crores for illegal mining by these companies.

Due to the control of the Mines Department by miners, the Goa government was determined to hand the leases back to the same old lease-holders. Thus, within days of the Supreme Court judgement on 21.4.2014, the Bombay High Court at Goa was approached with writ petitions by former lease-holders. Some of them claimed they had paid stamp duty on demand from the Goa government. The High Court entertained the petitions and directed the government to renew the leases by its judgement dated 13.8.2014.

The Goa government resisted the petition filed by the miners in Court by filing an affidavit stating this could not be done. However, it refused to appeal the High Court's order, forcing the Goa Foundation to approach the Supreme Court instead.

On November 5, 2014, the Mines Department began approving the first of several second renewals of leases belonging to former lease-holders. As soon as the Goa government came to know that an amendment was being brought to the MMDR Act which would eliminate the possibility of renewing leases, it made great haste to grant a total of 54 renewals in the short span of 6 days. 31 of these renewals were granted on 12.1.2015, on which date the provision to grant second renewal had ceased to exist.

A few months later, on 20.3.2015, the Ministry of Environment & Forests also obliged the mining lobby and revoked its suspension of Environment Clearances in respect of 91 mining leases.

When the Goa Foundation put the second renewal list (of 88 leases) together with the MOEF order dated 20.3.2015, it found that only 61 leases had both a renewal order and the EC restored.

 

To make things worse, the leases have been renewed free of cost, involving iron ore valued at several thousand crores of rupees, all belonging to the people & future generations of the State. The figures about this are as follows:

  • Total quantity permitted for extraction as per ECs granted in 88 leases: 43.973 million metric tonnes (MMT), for at least 12 years (Nov-Jan 2014 – 21-Nov-2027
  • Value of mineral ore @ Rs. 311.12 crores per MMT Rs. 164,172 crores
  • Extraction costs for 43.973 million tonnes @ Rs. 120.25 crores per MMT Rs. 63,453 crores. 
  • Net value of iron ore @ Rs. 190.87 crores per MMT Rs. 100,720 crores
  • Royalty @ Rs. 8.46 crores per MMT to Goa Govt Rs. 4,467 crores 6. Goa Iron Ore Permanent Fund @ 10% of sale value, Rs. 31.11 crores per MMT Rs. 16,417 crores
  • Net loss to the public of Goa: Rs. 151 crores per MMT Rs. 79,836 crores

 

The GF does not have problems with mining, if done through proper controls. At present, the manner in which these leases have been approved show that the former lease holders still control everything that happens in the Department of Mines & Geology. People of Goa will never benefit in such circumstances, though they own the ore collectively and should get all the benefits from its sale. The foundation insists that due process should be followed and all the norms lead down by the SC be observed. 

Read : Rahul Basu discusses 'inter-generaltional Equity with Norma Alvares. 

 

Disclaimer:"The views in the article are of the author and do not represent the views of the Invisible Lawyer"

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