Illegal miners must pay back in full: Supreme Court

“Cannot have their cake and eat it too, along with icing”

Updated - August 02, 2017 11:32 pm IST

Published - August 02, 2017 09:10 pm IST - NEW DELHI

Illegal mining to the tune of Rs. 35,000 crore took place in Goa from 2005 to 2012.

Illegal mining to the tune of Rs. 35,000 crore took place in Goa from 2005 to 2012.

Noting that “very powerful and vested interests or a failure of nerve” have thwarted the objective of the decade-old National Mineral Policy to prevent the theft of precious natural resources of the country, the Supreme Court on Wednesday directed that mining companies and leaseholders who have engaged in mining activities without forest or environmental clearance will have to pay the public exchequer compensation equivalent to 100% value of the minerals they extracted illegally. “The mining leaseholders cannot have their cake and eat it too, along with icing on the top,” a Bench of Justices Madan B. Lokur and Deepak Gupta observed in their judgment.

The court gave the Centre a deadline of December 31, 2017 to announce a “fresh and more effective, meaningful and implementable policy.” “It is high time the Union revisits the National Mineral Policy,” the SC observed. The judgment was on the basis of a PIL plea filed by NGO Common Cause about the rampant illegal mining of iron and manganese ore in Odisha. Of a total of 187 mining lease holders in Keonjhar, Sundergarh and Mayurbhanj districts, 102 were found to have had no environmental or forest clearance.

The court observed that it must be the same or worse situation in other States.

The court's decision to lay down the law that miners should reimburse to the public the entire value of the minerals they had extracted illegally comes despite the Supreme Court's own Central Empowered Committee's advice to reduce the compensation to 30% instead of a 100%. The judgment records that the Union too had raised objections to the court's suggestion during the court hearing to squeeze 100% compensation from defaulting mining leaseholders. The government had disagreed, saying it would be contrary to the statutory scheme.

"In our opinion, there can be no compromise on the quantum of compensation that should be recovered from any defaulting lessee (miner) - it should be 100%. If there had been illegal mining, the defaulting lessee must bear the consequences of the illegality and not be benefitted by pocketing 70% of the illegally mined ore," Justice Lokur, who wrote the judgment for the Bench, reasoned.

The court asked "why the State should be compelled to forego what is its due from the exploitation of a natural resource and on contrary be a party in flling the coffers of the defaulting lessees in an ill-gotten manner".

The court set 2000-2001 as the base year from which the 100% compensation would be calculated. It said the recovery should be as per Section 21 (5) of the Mines and Minerals Act. This particular section provides that if a person extracts a mineral without lawful authority, the State may recover the mineral or the prive of the mineral, rent, royalty or tax from him.

In calculating the 100% compensation, any payments earlier to the exchequer as damages or for afforestation will not be taken into consideration.

Explaining the term 'illegal mining', the court re-inforced the Environment Impact Assessment (EIA) notifications of 1994 and 2006, which provides for mandatory environmental clearance in case of expansion in mining activities and if the leased area for mining is five hectares or more, respectively.

In fact, the court went a step ahead from the 1994 notification, holding that prior environmental clearance will be required for renewal of mining licences taken post January 26, 1994 even if such renewal does not involve any expansion of mining operations or modernisation activity or increase in pollution load.

The court said EIA 1994 and 2006 would also apply for mining areas less than five hectares.

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