SC judgment: A grand slam against illegal orders and connivance of Goan politicians and miners

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By Claude Alvares*

On February 7, 2018, the Supreme Court pronounced judgement in SLA (civil) 32128 / 2015 (Goa Foundation vs SesaSterlite Ltd. &Ors, “Goa Mining Lease Renewal case”). In a  virtual grand slam against illegal orders and connivance of Goan politicians and miners, the Supreme Court cancelled all renewals of mining leases for iron ore extraction in the state of Goa and wiped the slate clean for a fresh beginning.

It also set aside a judgement of the Bombay High Court dated 13.8.2014 which had directed renewals of these mining leases on grounds that diverged from those given in the directions of the Supreme Court in Writ Petition No.435/2012. The appeals filed by the Goa Foundation and Rama Velip against the High Court judgement were allowed.

Earlier, in 2014, the SC had pronounced judgement in WP(c) 435 of 2012 (Goa Foundation vsUOI &Ors, “Goa mining case”). In that judgement, the SC had ruled that all iron ore mining leases in Goa had expired on 22-Nov-2007 and mining after that (until the ban on 10-Sep-2012) was illegal. The SC then permitted the Goa government to resume mining after granting “fresh leases and fresh ECs”.

Instead of prosecuting the illegal mining and going in for mineral auctions, the BJP government, led first by Manohar Parrikar and then Laxmikant Parsekar, renewed 88 mining leases. 56 of 88 were renewed in the week between cabinet approval and promulgation of the MMDR Amendment Ordinance. Similarly, despite a finding that every single lease had violated the environmental laws, the MoEF&CC lifted the ban on 72 ECs.

The Supreme Court judgement of February 7, 2018 in effect reverts absolute control over the mineral resources of Goa back into the hands of the State and the people of the state. If the people of Goa do not intervene effectively now and take control of this mineral wealth in their interests and those of their children, nothing can ever help them.

The Supreme Court has ruled that all activity in the affected mining leases will stop by March 16, 2018. The SC has directed the Goa government to expedite recovery of amounts due from the erstwhile mining lease holders which run into several hundred crores.

Some observations of the Supreme Court are pertinent:

“The State ignored the fact that every single mining lease holder had committed some illegality or the other in varying degrees. To identify these illegalities (although they had already been identified by the Justice Shah Commission and by the EAC), a Special Investigation Team had been set up as also a team of Chartered Accountants.  Instead of waiting for a report from any one of these teams, the State acted in violation of the Grant of Mining Leases Policy and renewed the mining leases.”

“Unfortunately, the undue haste in which the State acted gives the impression that it was willing to sacrifice the rule of law for the benefit of the mining lease holders and the explanation of satisfying the needs of some sections of society for their livelihood (after keeping them in the lurch for more than two years) was a mere fig leaf. The real intention of the second renewal was to satisfy the avariciousness of the mining lease holders who were motivated by profits to be made through the exploitation of natural resources.“

“The Grant of Mining Leases Policy was eventually published on 20th January, 2015 but it was acted upon even before it was gazetted. … A partial explanation for this hurry, if we may venture to suggest, is that the State of Goa was aware (like everybody else) on 17th November, 2014 if not earlier, of the policy of the Government of India to auction the grant of mining leases which policy was made available in the public domain on that date and suggestions invited.”

“… It is therefore clear that the considerations that weighed with the State were not for the people of Goa but were for the mining lease holders.”

“With the mining lease holders violating virtually every applicable law or legal requirement, it is clear that the rule of law was not their concern. The list of violations and their variety was documented by the EAC and it makes for some very sad reading. To make matters worse, it was clearly mentioned in the Grant of Mining Leases Policy that a Special Investigating Team and a team of Chartered Accountants would look into all the violations but the State chose not to wait for any of the reports.  There is no explanation for this.”

“The entire exercise undertaken by the State was a hasty charade, regardless of violations of the law by the mining lease holders, without any benefit to the Indian industry and without any concern for the health of the average Goan.”

“In other words, without even receipt of any report from the Indian Bureau of Mines and even before the expiry of the statutory waiting period,  the State of Goa renewed some mining leases.  This is patently illegal.”

“What is unfortunate about the entire commercial activity of the mining lease holders is that there was no social or public purpose attached to the mining operations. There was one and only one objective behind the mining activity and that was profit maximization. The renewal of the mining leases would give considerable profits to the mining lease holders well beyond the benefits that could accrue to the State or to the average resident of Goa. It was observed by Justice Khehar in Natural Resources Allocation that material resources of the country should not be dissipated free of cost or at a consideration lower than their actual worth. This was not kept in mind and mining leases were renewed for a small payment of stamp duty and royalty. It is therefore clear that the considerations that weighed with the State were not for the people of Goa but were for the mining lease holders.  This certainly cannot be described as being “in the interests of mineral development.”

“In this background, there is little to suggest that the State considered the requirements of Section 8(3) of the MMDR Act in that the interests of mineral development was secondary while granting the second renewal of mining leases.”

“What is disturbing is that notwithstanding several and various violations, the MoEF granted environmental clearance to 72 mining leases. It seems to us that the MoEF acted without any application of mind in lifting the order placing all the environmental clearances in abeyance.”

“We were informed by the learned Additional Solicitor General that show cause notices have now been issued to some mining lease holders demanding huge amounts – some running into hundreds of crores of rupees towards value of ore extracted in excess of the environmental clearance. We were handed over some sample show cause notices (about 12) issued in September and October 2017 and the figures are quite staggering – the demand raised being about Rs. 1500 crores!  Similarly, from the Summary of Mining Audit Report submitted by the auditors (and handed over to us by the learned Additional Solicitor General – for the period July 2016 to December 2016) the amount demanded (including interest) by the State of Goa from the mining lease holders through show cause notices issued is about Rs. 1500 crores! And without making any serious attempt to recover such huge amounts, the State of Goa has granted second renewal of mining leases and the MoEF played ball by lifting the abeyance order in respect of the environment clearances. The inferences that can be drawn are quite obvious.”

Freeze bank accounts, prevent flight

It is clear that multiple amounts are now recoverable under Section 21(5) of the MMDR Act. For example, Goa Foundation has estimated that Rs. 65,058 crores (Rs. 4.5 lakhs per Goan) is conservatively recoverable for the period of illegal mining between 22-Nov-2007 and 10-Sep-2012. There are numerous other illegalities as well as compensation for environmental damage under the environmental laws. The Goa government must immediately ask for a freeze on all assets of all erstwhile mining leaseholders.

Break the miner-politician nexus

Since Manohar Parrikar masterminded and pushed the various decisions that the Supreme Court has found questionable enough to set aside, and since the Apex Court has clearly stated that the decisions to grant the renewals were taken to benefit the mining lease holders and not the Goans, it is time to ask whether the citizens of Goa were not badly let down by the actions of the Chief Minister. It was wrong on the part of the Chief Minister to favour the mafia controlling the mining sector in Goa and whose illegal mining activities led to the closure of mining operations for nearly 4 years.

Mr Parrikar ought to have known that what he was doing was morally indefensible and politically wrong. When such decisions are found to be not just wrong, and illegal, but done for the benefit of private interests, the message is clear: Parrikar should put in his papers. It is time the SIT also take up the complaint filed by the Goa Foundation first with the CBI and then with the Vigilance department, asking for an investigation into the grant of these leases, now that the Apex Court has found them to be granted for considerations that fly against the public interest and against the interests of the Goan community.

Once again the Supreme Court has shown that it remains the only bulwark for civil society against the distribution and pocketing of public resources by individuals and private companies, actively supported in this theft by the politicians of our time.

*Director, Goa Foundation

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Posted in Law

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