Supreme Court imposes 100% penalty on illegal mining in Odisha

The apex court ruled out CBI probe into unlawful mining in Odisha and other states as well

Dealing a body blow to the mining companies that unlawfully raised huge quantities of iron ore and manganese ore, the Supreme Court on Wednesday called for the recovery of 100 per cent compensation in lieu of the excess ore lifted.

Disposing of a writ petition filed by Common Cause in a case of rampant illegal mining in Odisha, the apex court ruled that there can be no compromise on the quantum of compensation that should be recovered from any defaulting lessee – it should be 100 per cent. Though the Supreme Court appointed central empowered committee (CEC) in its report on illegal mining in the state had recommended realisation of only 30 per cent of the illegally excavated ore, it has categorically ordered for recovery of the full price.

A clutch of miners — both captive and non-captive — have to cough up the penalty as a result of this order. Mining companies in dock include Tata Steel, Essel Mining & Industries Ltd, Indrani Patnaik, Rungta Mines, Serajuddin & Company and even state run entities like Odisha Mining Corporation (OMC).

“If there has been illegal mining, the defaulting lessee must bear the consequences and not be benefited by pocketing 70 per cent of the illegally mined ore. It simply does not stand to reason why the state should be compelled to forego what is its due from the exploitation of a natural resource and on the contrary be a party in filling the coffers of defaulting lessees in an ill received manner”, the court order read.

Considering 2000-01 as the base year, the apex court in an indictment of illegal mining said, “The mining lease holders cannot have their cake and eat it too, along with the icing on top.”

Since the recommendation made by the CEC in this regard is not totally unreasonable, we accept that the compensation should be payable from 2000-2001 onwards at 100 per cent of the price of mineral, as rationalised by CEC, the judgement stated.

A state government official said that the penalty figure for illegal iron ore and manganese ore raised worked out to be Rs 58,000 crore. The Indian Bureau of Mines (IBM) had calculated the notional value of excess minerals at Rs 17,576.16 crore. The CEC report says miners illegally extracted 215.5 million tonnes.

Naveen Kumar, counsel for the mining firms said that the Odisha government has to redo its calculation of penalty. The court verdict makes it abundantly clear that the payment already been made by the mining lease holders towards NPV (net present value), additional NPV or penal compensatory afforestation is neither adjustable nor refundable since that falls in a different category altogether.

The order from SC had one bout of relief for the besieged miners as it ruled out a probe by the Central Bureau of Investigation (CBI) into the unlawful mining.

“For the present, we do not propose to direct an investigation or inquiry by CBI for the reason that what is of immediate concern is to learn lessons from the past so that rapacious mining operations are not repeated in any other part of the country. This can be achieved through the identification of lapses and finding solutions to the problems that are faced”, a bench of Justice Madan B Lokur and Justice Deepak Gupta announced in the order.

Supreme Court also gave direction for setting up of an expert committee presided over by a retired judge to identify 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 Odisha but generally to all other states where mining activities are proceeding on a large scale. It also directed the Union government to have a fresh look at the almost decade old National Mineral Policy-2008 especially on the areas of conservation and development.

According to the court order, the whole exercise is to be completed by December 31 this year. The Odisha chief secretary is required to file an affidavit within six weeks, latest by September 30.