IA Nos.40 of 2015 etc. in W.P. (C) No.114 of 2014 Page 1 of 14
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICITON
I.A. No. 40 of 2015, I.A.No.42 of 2015,
IA No.61 of 2015 in IA No.40 of 2015 and IA No.111989 of 2018
IN
WRIT PETITON (C) NO. 114 OF 2014
Common Cause …Petitioner
versus
Union of India & Ors. …. Respondents
(IN RE: SARDA MINES PVT. LTD.)
J U D G M E N T
Madan B. Lokur, J.
1. In this batch of substantive applications, we are concerned with what is
described as “Illegalities involved in the mining lease of Sarda Mines Private
Limited” by the Central Empowered Committee in its report of 16th October,
2014.
2. It is not necessary to repeat all the facts leading up to these applications
since the background has already been detailed by us in Common Cause v. State
of Orissa.
1
1
(2017) 9 SCC 499
IA Nos.40 of 2015 etc. in W.P. (C) No.114 of 2014 Page 2 of 14
3. While dealing with the mining lease of Sarda Mines Private Limited, the
Central Empowered Committee or the CEC concerned itself with seven issues.
They are:
1. Regarding renewal of the mining lease.
2. Regarding validity of the Environmental Clearance.
3. Regarding sale of iron ore in the form of ROM by Sarda Mines
Private Limited.
4. Regarding diversion of additional land for mining and allied
activities
5. Regarding production of iron ore without/in excess of the
Environmental clearance.
6. Regarding enquiry done by the State Government for alleged
violation of Rule 37, MCR, 1960 [Mineral Concession Rules of
1960].
7. Regarding alleged ownership of the mining lease actually being
with Jindal Steel and Power Ltd.
4. For the present, we are concerned only with the validity of the
environmental clearance granted to Sarda Mines Private Limited or SMPL and
the production of iron ore without/in excess of the environmental clearance. The
concern relates to a mining lease granted to SMPL over 947.046 hectares of land
for 20 years from 14th August, 2001 to 13th August, 2021. The mining lease is of
Thakurani Mines, Block B, Village Soyabali, District Keonjhar in Odisha. We
are not concerned with the validity or otherwise of the grant or renewal of the
mining lease to SMPL.
IA Nos.40 of 2015 etc. in W.P. (C) No.114 of 2014 Page 3 of 14
Grant of permission to mine
5. It has been pointed out to us and this is not disputed, that SMPL was
granted permission on 13th July, 1999 to extract 1,40,000 MT of iron ore per
annum. The permission granted clearly indicates that it is in the context of
reopening (to the extent of broken up area of 94.024 acres) the existing mine
where the highest production was 1,39,802.00 MT during 1966 as certified by the
Deputy Director (Mines). The said extraction or production was of iron ore and
the permission granted in 1999 was also for extraction or production of iron ore.
This was in accord with the provisions of the Mines and Minerals (Development
and Regulation) Act, 1957 (MMDR Act) that permits mining of the mineral iron
ore.
The permission granted on 13th July, 1999 reads as follows:
“Subject: Reopening of iron ore mines in Block-B in village Soyabali of
Thakurani iron ore mines in District Keonjhar, Orissa -
clarifications reg.
Sir,
This has reference to letter of 10th June, 1999 jointly from you and Shri
M.L. Sarda seeking clarification on applicability of the provisions of the
EIA Notification of 1994. We have noted the following:
(i) The Department of Steel and Mines, Government of Orissa has
agreed to renew mining lease in respect of Block-B covering an
area of 2340.20 acres in village Soyabali of the Thakurani iron ore
mines in favour of Shri S.L. Sarda and Shri M.L. Sarda.
(ii) The entire lease area is in reserve forest for which de-reservation
proposal has been forwarded by the DFO, Keonjhar to the PCCF,
Bhubaneswar.
(iii) Already broken up area is 94.024 acres.
IA Nos.40 of 2015 etc. in W.P. (C) No.114 of 2014 Page 4 of 14
(iv) Highest production from Block-B mines was 1,39,802.00 MT
during 1966 as certified by Dy. Director (Mines), Joda, Keonjhar
in his letter No. 7892 dated 26.5.99.
(v) Applications have been submitted to Orissa State Pollution
Control Board for obtaining “consent to operate” and IBM for
approval of mining plan.
Further, it has been noted that you are planning to reopen the mine
sometimes by the end of 1999 without change in broken up area and
production level. Also there is no plan to modernise the mine. It has also
been noted that wet drilling will be adopted on working phases. Besides
management of surface run off, mine water discharge and plantation of
OB dumps, water spraying on haul roads, transfer points and crushing
plant will be done regularly.
The provisions of EIA Notification of 1994 are not applicable to the
renewal of mining lease proposals that do not involve expansion or
modernisation. However, you should confine excavation only to already
broken up area of 94.024 acres as per mining plan approved and limit
production to 1,40,000 MTPA [TPA?]. You are also advised to obtain
other statutory approvals from the concerned authorities including the
forestry clearance under the Forest (Conservation) Act, 1980 and ensure
compliance with the general environmental conditions as indicated in
Annexure-I. In case, you plan any expansion or modernisation then prior
approval under the provisions of the EIA Notification of 1994 as amended
subsequently should be obtained from the Ministry.”
6. Again, the admitted position is that SMPL did not act upon the permission
granted on 13th July, 1999 till 13/14 August, 2001. The apparent reason is that the
mining lease in favour of SMPL was renewed only on 13/14 August, 2001. It is
only after the mining lease was renewed that SMPL started mining or extracting
iron ore on the basis of the permission granted on 13th July, 1999.
Grant of environmental clearance
7. The next important date that we are concerned with is 22nd September,
2004 that is the date on which SMPL was granted environmental clearance for
the extraction of iron ore. The environmental clearance granted to SMPL was for
IA Nos.40 of 2015 etc. in W.P. (C) No.114 of 2014 Page 5 of 14
expansion of production of iron ore (lump) from 1.5 lakh tonnes per annum
(LTPA) to 4.0 million tonnes per annum (MTPA). There was a progressive
gradation in the production capacity inasmuch as during the first year the increase
in production was permitted from 1.5 LTPA to 0.5 MTPA; 3.0 MTPA by the third
year and 3.750 MTPA from the fifth year to achieve the rated capacity in
production of 4.0 MTPA during the 17th year.
8. However, what is strange about the environmental clearance granted to
SMPL on 22nd September, 2004 is that it referred to the “proposal for expansion
of production of iron ore (lump)” from 1.5 LTPA to 4.0 MTPA. In fact, the
permission granted on 13th July, 1999 was for production of iron ore and not for
iron ore (lump). It is not even the case of SMPL that it was granted the permission
on 13th July, 1999 for the extraction or production of iron ore (lump), Moreover,
the MMDR Act refers to the mineral iron ore and not to iron ore (lump). The
concept of extraction or production of iron ore (lump) introduced in the
environmental clearance was alien to the permission granted on 13th July, 1999
and the MMDR Act. Therefore, the environmental clearance granted on 22nd
September, 2004 must be understood in the context of the permission granted on
13th July, 1999 and the MMDR Act. If so appreciated, then it is clear that
environmental clearance was granted to SMPL only related to the expansion of
production of iron ore from 1.5 LTPA to 4.0 MTPA. As mentioned above, it is
not even the case of SMPL that it was granted permission to extract iron ore
(lump) to the extent of 1.4 LTPA in terms of the permission granted on 13th July,
IA Nos.40 of 2015 etc. in W.P. (C) No.114 of 2014 Page 6 of 14
1999. Our understanding of the environmental clearance in this context and in
this regard keeping these factors in mind is of considerable importance insofar as
the decision in the applications is concerned, as will be apparent a little later.
Retrospective effect of the environmental clearance
9. Learned counsel for SMPL did not contest or dispute that an environmental
clearance does not have any retrospective effect. It is operational from the date it
is granted. In any event, this issue is no longer res integra having been settled in
the decision rendered in Common Cause in paragraph 87 of the Report. The
submission made, however, was that the benefit of retrospectivity of the
environmental clearance should be given to SMPL from the date on which the
mining lease was renewed, that is, with effect from 13/14 August, 2001. The
reason for claiming this benefit is that the expanded permissible production would
then commence from August 2001 and SMPL would be entitled to extract a larger
quantity of iron ore with the progressive gradation given in the environmental
clearance with the result that the 3
rd year of production would be 2004 and the 5th
year of production would be 2006 and not 2009. Similarly, the 17th year of
production would be 2018 and not 2021.
10. We simply cannot accept this submission since it is plainly contrary to the
decision of this Court in Common Cause. Moreover and additionally, accepting
the submission would mean that for the period from 13/14 August, 2001 till 22nd
September, 2004 SMPL would have the benefit of the permission granted on 13th
IA Nos.40 of 2015 etc. in W.P. (C) No.114 of 2014 Page 7 of 14
July, 1999 as well as the retrospective benefit of the environmental clearance
dated 22nd September, 2004 meaning thereby that SMPL would have two mining
permissions, which is obviously not possible. However, we cannot deny to SMPL
the benefit of the permission granted on 13th July, 1999 on the basis of which
SMPL carried out mining activities from the date of renewal of the mining lease
that is 13/14 August, 2001 till 22nd September, 2004. Even learned Amicus does
not have any objection to granting the benefit of the permission to SMPL for this
period, to the extent that SMPL extracted or produced 1.4 LTPA of iron ore
during this period. Therefore, the mining activity carried out by SMPL from
13/14 August, 2001 till the date of the environmental clearance, that is, 22nd
September, 2004 is legal to the extent of 1.4 LTPA and SMPL cannot be penalised
for this mining activity during this period.
11. It was submitted by learned counsel for SMPL that if the environmental
clearance is not given retrospective effect then it would mean that its validity
would not be co-extensive with the term of the mining lease. Resultantly, the
operation of the environmental clearance though granted for the life of the mining
lease would necessarily be curtailed to the detriment of SMPL. This submission
is noted only to be rejected. The submission made can hardly be a ground for
giving retrospective effect to the environmental clearance. If the life of the
environmental clearance is curtailed due to operation of the law, then so be it.
12. Learned counsel for SMPL has shown us a Summary of the Project,
IA Nos.40 of 2015 etc. in W.P. (C) No.114 of 2014 Page 8 of 14
Environmental Impact Assessment and Environmental Management Plan relating
to the proposed expansion of the Thakurani iron ore mine, Block-B, District
Keonjhar, Orissa. This document is of February 2002 and is to be found on page
25 of volume 168 of the paper book. He has drawn our attention to page 28 thereof
which relates to the mining proposed by open-cast method using drilling and
blasting. The production build-up is given in the form of a chart but it takes 2001-
2002 as the first year of production. This is obviously on the assumption that the
environmental clearance relates back to the date of renewal of the mining lease
in 2001. However, since we have held that the environmental clearance does not
and cannot have any retrospective effect, the first year of production should in
fact be 2004-2005 (pro rata) based on the environmental clearance. On the basis
of the chart pointed out by learned counsel for SMPL, it is quite clear that there
has been excess mining of iron ore from the first year of production itself. This
excess mining is clearly illegal and must be penalised in terms of our judgement
in Common Cause.
13. We leave it to the Central Empowered Committee (CEC) to quantify the
penalty to be imposed on SMPL from 22nd September, 2004 and based on the
terms of the environmental clearance. The calculation should also take into
consideration our conclusion that the environmental clearance is not retrospective
and the first year of production, in view of the environmental clearance granted
to SMPL would be 2004-2005. Any mining in excess of the environmental
clearance by SMPL would be and is illegal.
IA Nos.40 of 2015 etc. in W.P. (C) No.114 of 2014 Page 9 of 14
Extraction of iron ore (lump)
14. The main rub of the controversy before us lies in the terminology employed
in the environmental clearance granted to SMPL - whether it was entitled to
extract iron ore (lump) or mineral iron ore, within the limits laid down in the
environmental clearance.
15. Before resolving this controversy, it must be clearly understood that
extraction of the mineral iron ore is the extraction of iron ore Run of Mine or
ROM. Lumps of iron ore are, in a sense, a by-product of ROM as are topsoil,
mineral rejects, sub-grade ore and fines and the distinctions made are for the
purposes of payment of royalty. The submission of learned counsel for SMPL is
to the effect that SMPL was entitled to extract iron ore (lump) in terms of the
environmental clearance. If this submission is to be taken literally, then SMPL
was entitled to extract only iron ore (lump) without extracting iron ore ROM. This
would be much like the argument put forth by Portia enabling Shylock to extract
his pound of flesh without spilling a drop of blood. However, we need not take a
decision in this regard merely on semantics.
16. That lumps are a by-product of the extraction of iron ore ROM is clear
from the decision of this Court rendered in National Mineral Development
Corporation Ltd. v. State of M.P.
2 wherein this Court noted the process of
winning the mineral as described by the appellant therein in the following words:
2
(2004) 6 SCC 281
IA Nos.40 of 2015 etc. in W.P. (C) No.114 of 2014 Page 10 of 14
“Iron ore deposits occur mostly in the hill ranges and iron ore is
found on the top of the hill i.e. on the surface. The process by
which the mineral is won has been described by the appellant as
under:
“The ore is extracted by opencast method of mining for
which mining benches are prepared. Firstly, holes are
drilled on the benches covering the entire height of the
bench at regular distance depending on ore types. After
charging of the holes with explosives this portion of the
bench is blasted. The blasted material known as ROM
(run-of-mines) consists of large boulders, fragments and
fines along with other contaminants. ROM is
transported to crushing plant by dumpers and crushed
to below 150 mm sizes. This crushed ROM contains
lump, fines and also contaminants such as alumina and
silica. The crushed ore is transported to screening plant
through conveyor belts and is washed with water and
screened in vibrating screens. Vibrating screens segregate
ore into different sizes such as lump, calibrated ore and
fines……” (Emphasis supplied by us).
17. Similarly, in Tata Steel Limited v. Union of India3
it was observed that in
the process of mining, iron ore is extracted (that is ROM) and separated into ore
lumps, fines and waste material which is commonly known as slime.
18. Looked at in this light, the context in which permission was granted to
SMPL on 13th July, 1999 is important. Permission was granted to SMPL to extract
the mineral iron ore. This had no reference at all to the sub-category or by-product
called iron ore (lump) but must be understood as permission to extract mineral
iron ore ROM. It was this permission that was sought to be proposed for
expansion of production and if it is looked at in this contemporaneous or historical
(whichever) background, then it is quite obvious that the environmental clearance
3
(2015) 6 SCC 193
IA Nos.40 of 2015 etc. in W.P. (C) No.114 of 2014 Page 11 of 14
granted on 22nd September, 2004 was only with reference to iron ore ROM. This
must also be read in the context of the MMDR Act which refers to the mineral
iron ore and does not refer to iron ore (lump). A combination of these two factors
convinces us that the environmental clearance granted to SMPL was only with
reference to iron ore ROM and not iron ore (lump), notwithstanding the
terminology employed in the environmental clearance.
19. Taking the view as canvassed by learned counsel for SMPL would lead to
a rather anomalous situation wherein, for the purposes of extracting iron ore
(lump) of a permissible quantity, SMPL could extract as much iron ore ROM as
it desired. In other words, for the purposes of extracting iron ore (lump) of 4.0
MTPA could it be said that SMPL was entitled to extract iron ore ROM to the
extent of 6.0 MTPA or even 8.0 MTPA? The answer to this is certainly in the
negative otherwise the environmental clearance granted to SMPL would be
devoid of any rational meaning whatsoever. Also taking this into consideration,
it does appear to us that though the environmental clearance granted to SMPL
was unhappily worded, it must be given a realistic meaning so that it is not
rendered ineffective on the ground of vagueness and to the detriment of the
environment as also to the detriment of SMPL.
20. In this context, it is necessary to refer to the Summary of the Project,
Environmental Impact Assessment and Environmental Management Plan of
February 2002 placed on record by SMPL in volume 168 of the paper book. The
IA Nos.40 of 2015 etc. in W.P. (C) No.114 of 2014 Page 12 of 14
table or chart on page 28 thereof and which forms a part of the document indicates
that for the production ore extraction of iron ore (lump) the total excavation of
iron ore ROM proposed is almost double the quantity. The chart is as follows:
Years Lump Ore
(+5- 180m
and 30 +
18m) (MT)
Total
Excavation
(MT)
ROM
(MT)
Top
Soil
(MT)
Mineral
rejects
(MT)
Subgrade
Ore (MT)
Fines,
-5 mm
(MT)
1
st year
2001-2002
0.500 1.151 0.770 0.000 0.349 0.032 0.270
2
nd year
2002-2003
1.196 2.159 1.840 0.000 0.267 0.052 0.644
3
rd year
2003-2004
1.976 3.499 3.040 0.000 0.121 0.338 1.064
4
th year
2004-2005
2.990 4.829 4.600 0.000 0.183 0.046 1.610
5
th year
2005-2006
3.750 6.058 5.770 0.000 0.231 0.057 2.020
Sub Total 10.412 17.696 16.020 0.000 1.151 0.525 5.606
2007-2011 18.750 33.571 28.850 0.024 1.342 3.355 10.100
2012-2016 18.750 33.547 28.850 0.000 1.342 3.355 10.100
2017-2021 20.00 35.779 30.770 0.000 1.431 3.578 10.770
Grand Total 67.912 120.593 104.90 0.024 5.266 10.813 36.576
21. It is quite clear to us even from the above chart that the interpretation
sought to be given by learned counsel for SMPL to the environmental clearance
was never intended and if it was, then the unfortunate consequence would be that
the environmental clearance must be held to be invalid and quashed, resulting in
greater damage to the interests of SMPL than envisaged. On a realistic
interpretation to the environmental clearance, for the purposes of calculating
excess or illegal production of iron ore, the entire extraction of iron ore ROM is
IA Nos.40 of 2015 etc. in W.P. (C) No.114 of 2014 Page 13 of 14
required to be taken into consideration.
22. We may note in this context that it has come on record that the entire iron
ore ROM extracted by SMPL is actually sold to Jindal Steel and Power Ltd. or
JSPL and it is not only iron ore (lump) that is sold to JSPL. In this factual
background, the issue of the relationship between SMPL and JSPL arises but we
are not concerned with this for the present. However, what is more important is
that it is the sale of iron ore ROM that is made by SMPL to JSPL and not the sale
of iron ore (lump). In other words, SMPL is desirous of taking full advantage of
its extraction and production of iron ore ROM but at the same time shying away
from the legal consequences that follow.
23. It was submitted by learned counsel for SMPL that the CEC has confused
itself between extraction or production of iron ore ROM and extraction or
production of iron ore (lump) and as a consequence, it has arrived at an incorrect
figure of excess or illegal mining by SMPL. In fact, the contention is that SMPL
has neither been involved in any excess or illegal mining and the conclusions
arrived at by the CEC are totally incorrect. We cannot accept this submission in
view of the discussion above, including the conduct and activities of SMPL, the
provisions of the MMDR Act and the context in which the permission and
environmental clearance was granted to SMPL. Under the circumstances, we find
no merit in the objections raised by SMPL to the report of the CEC with regard
to the validity of the environmental clearance or the excess or illegal mining of
IA Nos.40 of 2015 etc. in W.P. (C) No.114 of 2014 Page 14 of 14
iron ore by SMPL.
24. However, in view of our conclusion, the CEC might have to rework the
quantum of excessive or illegal mining carried out by SMPL and the consequent
penalty. For this, we grant 6 weeks’ time to the CEC to do the needful. All records
relevant for arriving at a decision should be made available by SMPL and the
concerned authorities to the CEC.
25. The substantive applications are disposed of to the above extent and in
terms of the above directions.
...……………………J
(Madan B. Lokur)
...…………………....J
New Delhi; (Deepak Gupta)
November 12, 2018
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICITON
I.A. No. 40 of 2015, I.A.No.42 of 2015,
IA No.61 of 2015 in IA No.40 of 2015 and IA No.111989 of 2018
IN
WRIT PETITON (C) NO. 114 OF 2014
Common Cause …Petitioner
versus
Union of India & Ors. …. Respondents
(IN RE: SARDA MINES PVT. LTD.)
J U D G M E N T
Madan B. Lokur, J.
1. In this batch of substantive applications, we are concerned with what is
described as “Illegalities involved in the mining lease of Sarda Mines Private
Limited” by the Central Empowered Committee in its report of 16th October,
2014.
2. It is not necessary to repeat all the facts leading up to these applications
since the background has already been detailed by us in Common Cause v. State
of Orissa.
1
1
(2017) 9 SCC 499
IA Nos.40 of 2015 etc. in W.P. (C) No.114 of 2014 Page 2 of 14
3. While dealing with the mining lease of Sarda Mines Private Limited, the
Central Empowered Committee or the CEC concerned itself with seven issues.
They are:
1. Regarding renewal of the mining lease.
2. Regarding validity of the Environmental Clearance.
3. Regarding sale of iron ore in the form of ROM by Sarda Mines
Private Limited.
4. Regarding diversion of additional land for mining and allied
activities
5. Regarding production of iron ore without/in excess of the
Environmental clearance.
6. Regarding enquiry done by the State Government for alleged
violation of Rule 37, MCR, 1960 [Mineral Concession Rules of
1960].
7. Regarding alleged ownership of the mining lease actually being
with Jindal Steel and Power Ltd.
4. For the present, we are concerned only with the validity of the
environmental clearance granted to Sarda Mines Private Limited or SMPL and
the production of iron ore without/in excess of the environmental clearance. The
concern relates to a mining lease granted to SMPL over 947.046 hectares of land
for 20 years from 14th August, 2001 to 13th August, 2021. The mining lease is of
Thakurani Mines, Block B, Village Soyabali, District Keonjhar in Odisha. We
are not concerned with the validity or otherwise of the grant or renewal of the
mining lease to SMPL.
IA Nos.40 of 2015 etc. in W.P. (C) No.114 of 2014 Page 3 of 14
Grant of permission to mine
5. It has been pointed out to us and this is not disputed, that SMPL was
granted permission on 13th July, 1999 to extract 1,40,000 MT of iron ore per
annum. The permission granted clearly indicates that it is in the context of
reopening (to the extent of broken up area of 94.024 acres) the existing mine
where the highest production was 1,39,802.00 MT during 1966 as certified by the
Deputy Director (Mines). The said extraction or production was of iron ore and
the permission granted in 1999 was also for extraction or production of iron ore.
This was in accord with the provisions of the Mines and Minerals (Development
and Regulation) Act, 1957 (MMDR Act) that permits mining of the mineral iron
ore.
The permission granted on 13th July, 1999 reads as follows:
“Subject: Reopening of iron ore mines in Block-B in village Soyabali of
Thakurani iron ore mines in District Keonjhar, Orissa -
clarifications reg.
Sir,
This has reference to letter of 10th June, 1999 jointly from you and Shri
M.L. Sarda seeking clarification on applicability of the provisions of the
EIA Notification of 1994. We have noted the following:
(i) The Department of Steel and Mines, Government of Orissa has
agreed to renew mining lease in respect of Block-B covering an
area of 2340.20 acres in village Soyabali of the Thakurani iron ore
mines in favour of Shri S.L. Sarda and Shri M.L. Sarda.
(ii) The entire lease area is in reserve forest for which de-reservation
proposal has been forwarded by the DFO, Keonjhar to the PCCF,
Bhubaneswar.
(iii) Already broken up area is 94.024 acres.
IA Nos.40 of 2015 etc. in W.P. (C) No.114 of 2014 Page 4 of 14
(iv) Highest production from Block-B mines was 1,39,802.00 MT
during 1966 as certified by Dy. Director (Mines), Joda, Keonjhar
in his letter No. 7892 dated 26.5.99.
(v) Applications have been submitted to Orissa State Pollution
Control Board for obtaining “consent to operate” and IBM for
approval of mining plan.
Further, it has been noted that you are planning to reopen the mine
sometimes by the end of 1999 without change in broken up area and
production level. Also there is no plan to modernise the mine. It has also
been noted that wet drilling will be adopted on working phases. Besides
management of surface run off, mine water discharge and plantation of
OB dumps, water spraying on haul roads, transfer points and crushing
plant will be done regularly.
The provisions of EIA Notification of 1994 are not applicable to the
renewal of mining lease proposals that do not involve expansion or
modernisation. However, you should confine excavation only to already
broken up area of 94.024 acres as per mining plan approved and limit
production to 1,40,000 MTPA [TPA?]. You are also advised to obtain
other statutory approvals from the concerned authorities including the
forestry clearance under the Forest (Conservation) Act, 1980 and ensure
compliance with the general environmental conditions as indicated in
Annexure-I. In case, you plan any expansion or modernisation then prior
approval under the provisions of the EIA Notification of 1994 as amended
subsequently should be obtained from the Ministry.”
6. Again, the admitted position is that SMPL did not act upon the permission
granted on 13th July, 1999 till 13/14 August, 2001. The apparent reason is that the
mining lease in favour of SMPL was renewed only on 13/14 August, 2001. It is
only after the mining lease was renewed that SMPL started mining or extracting
iron ore on the basis of the permission granted on 13th July, 1999.
Grant of environmental clearance
7. The next important date that we are concerned with is 22nd September,
2004 that is the date on which SMPL was granted environmental clearance for
the extraction of iron ore. The environmental clearance granted to SMPL was for
IA Nos.40 of 2015 etc. in W.P. (C) No.114 of 2014 Page 5 of 14
expansion of production of iron ore (lump) from 1.5 lakh tonnes per annum
(LTPA) to 4.0 million tonnes per annum (MTPA). There was a progressive
gradation in the production capacity inasmuch as during the first year the increase
in production was permitted from 1.5 LTPA to 0.5 MTPA; 3.0 MTPA by the third
year and 3.750 MTPA from the fifth year to achieve the rated capacity in
production of 4.0 MTPA during the 17th year.
8. However, what is strange about the environmental clearance granted to
SMPL on 22nd September, 2004 is that it referred to the “proposal for expansion
of production of iron ore (lump)” from 1.5 LTPA to 4.0 MTPA. In fact, the
permission granted on 13th July, 1999 was for production of iron ore and not for
iron ore (lump). It is not even the case of SMPL that it was granted the permission
on 13th July, 1999 for the extraction or production of iron ore (lump), Moreover,
the MMDR Act refers to the mineral iron ore and not to iron ore (lump). The
concept of extraction or production of iron ore (lump) introduced in the
environmental clearance was alien to the permission granted on 13th July, 1999
and the MMDR Act. Therefore, the environmental clearance granted on 22nd
September, 2004 must be understood in the context of the permission granted on
13th July, 1999 and the MMDR Act. If so appreciated, then it is clear that
environmental clearance was granted to SMPL only related to the expansion of
production of iron ore from 1.5 LTPA to 4.0 MTPA. As mentioned above, it is
not even the case of SMPL that it was granted permission to extract iron ore
(lump) to the extent of 1.4 LTPA in terms of the permission granted on 13th July,
IA Nos.40 of 2015 etc. in W.P. (C) No.114 of 2014 Page 6 of 14
1999. Our understanding of the environmental clearance in this context and in
this regard keeping these factors in mind is of considerable importance insofar as
the decision in the applications is concerned, as will be apparent a little later.
Retrospective effect of the environmental clearance
9. Learned counsel for SMPL did not contest or dispute that an environmental
clearance does not have any retrospective effect. It is operational from the date it
is granted. In any event, this issue is no longer res integra having been settled in
the decision rendered in Common Cause in paragraph 87 of the Report. The
submission made, however, was that the benefit of retrospectivity of the
environmental clearance should be given to SMPL from the date on which the
mining lease was renewed, that is, with effect from 13/14 August, 2001. The
reason for claiming this benefit is that the expanded permissible production would
then commence from August 2001 and SMPL would be entitled to extract a larger
quantity of iron ore with the progressive gradation given in the environmental
clearance with the result that the 3
rd year of production would be 2004 and the 5th
year of production would be 2006 and not 2009. Similarly, the 17th year of
production would be 2018 and not 2021.
10. We simply cannot accept this submission since it is plainly contrary to the
decision of this Court in Common Cause. Moreover and additionally, accepting
the submission would mean that for the period from 13/14 August, 2001 till 22nd
September, 2004 SMPL would have the benefit of the permission granted on 13th
IA Nos.40 of 2015 etc. in W.P. (C) No.114 of 2014 Page 7 of 14
July, 1999 as well as the retrospective benefit of the environmental clearance
dated 22nd September, 2004 meaning thereby that SMPL would have two mining
permissions, which is obviously not possible. However, we cannot deny to SMPL
the benefit of the permission granted on 13th July, 1999 on the basis of which
SMPL carried out mining activities from the date of renewal of the mining lease
that is 13/14 August, 2001 till 22nd September, 2004. Even learned Amicus does
not have any objection to granting the benefit of the permission to SMPL for this
period, to the extent that SMPL extracted or produced 1.4 LTPA of iron ore
during this period. Therefore, the mining activity carried out by SMPL from
13/14 August, 2001 till the date of the environmental clearance, that is, 22nd
September, 2004 is legal to the extent of 1.4 LTPA and SMPL cannot be penalised
for this mining activity during this period.
11. It was submitted by learned counsel for SMPL that if the environmental
clearance is not given retrospective effect then it would mean that its validity
would not be co-extensive with the term of the mining lease. Resultantly, the
operation of the environmental clearance though granted for the life of the mining
lease would necessarily be curtailed to the detriment of SMPL. This submission
is noted only to be rejected. The submission made can hardly be a ground for
giving retrospective effect to the environmental clearance. If the life of the
environmental clearance is curtailed due to operation of the law, then so be it.
12. Learned counsel for SMPL has shown us a Summary of the Project,
IA Nos.40 of 2015 etc. in W.P. (C) No.114 of 2014 Page 8 of 14
Environmental Impact Assessment and Environmental Management Plan relating
to the proposed expansion of the Thakurani iron ore mine, Block-B, District
Keonjhar, Orissa. This document is of February 2002 and is to be found on page
25 of volume 168 of the paper book. He has drawn our attention to page 28 thereof
which relates to the mining proposed by open-cast method using drilling and
blasting. The production build-up is given in the form of a chart but it takes 2001-
2002 as the first year of production. This is obviously on the assumption that the
environmental clearance relates back to the date of renewal of the mining lease
in 2001. However, since we have held that the environmental clearance does not
and cannot have any retrospective effect, the first year of production should in
fact be 2004-2005 (pro rata) based on the environmental clearance. On the basis
of the chart pointed out by learned counsel for SMPL, it is quite clear that there
has been excess mining of iron ore from the first year of production itself. This
excess mining is clearly illegal and must be penalised in terms of our judgement
in Common Cause.
13. We leave it to the Central Empowered Committee (CEC) to quantify the
penalty to be imposed on SMPL from 22nd September, 2004 and based on the
terms of the environmental clearance. The calculation should also take into
consideration our conclusion that the environmental clearance is not retrospective
and the first year of production, in view of the environmental clearance granted
to SMPL would be 2004-2005. Any mining in excess of the environmental
clearance by SMPL would be and is illegal.
IA Nos.40 of 2015 etc. in W.P. (C) No.114 of 2014 Page 9 of 14
Extraction of iron ore (lump)
14. The main rub of the controversy before us lies in the terminology employed
in the environmental clearance granted to SMPL - whether it was entitled to
extract iron ore (lump) or mineral iron ore, within the limits laid down in the
environmental clearance.
15. Before resolving this controversy, it must be clearly understood that
extraction of the mineral iron ore is the extraction of iron ore Run of Mine or
ROM. Lumps of iron ore are, in a sense, a by-product of ROM as are topsoil,
mineral rejects, sub-grade ore and fines and the distinctions made are for the
purposes of payment of royalty. The submission of learned counsel for SMPL is
to the effect that SMPL was entitled to extract iron ore (lump) in terms of the
environmental clearance. If this submission is to be taken literally, then SMPL
was entitled to extract only iron ore (lump) without extracting iron ore ROM. This
would be much like the argument put forth by Portia enabling Shylock to extract
his pound of flesh without spilling a drop of blood. However, we need not take a
decision in this regard merely on semantics.
16. That lumps are a by-product of the extraction of iron ore ROM is clear
from the decision of this Court rendered in National Mineral Development
Corporation Ltd. v. State of M.P.
2 wherein this Court noted the process of
winning the mineral as described by the appellant therein in the following words:
2
(2004) 6 SCC 281
IA Nos.40 of 2015 etc. in W.P. (C) No.114 of 2014 Page 10 of 14
“Iron ore deposits occur mostly in the hill ranges and iron ore is
found on the top of the hill i.e. on the surface. The process by
which the mineral is won has been described by the appellant as
under:
“The ore is extracted by opencast method of mining for
which mining benches are prepared. Firstly, holes are
drilled on the benches covering the entire height of the
bench at regular distance depending on ore types. After
charging of the holes with explosives this portion of the
bench is blasted. The blasted material known as ROM
(run-of-mines) consists of large boulders, fragments and
fines along with other contaminants. ROM is
transported to crushing plant by dumpers and crushed
to below 150 mm sizes. This crushed ROM contains
lump, fines and also contaminants such as alumina and
silica. The crushed ore is transported to screening plant
through conveyor belts and is washed with water and
screened in vibrating screens. Vibrating screens segregate
ore into different sizes such as lump, calibrated ore and
fines……” (Emphasis supplied by us).
17. Similarly, in Tata Steel Limited v. Union of India3
it was observed that in
the process of mining, iron ore is extracted (that is ROM) and separated into ore
lumps, fines and waste material which is commonly known as slime.
18. Looked at in this light, the context in which permission was granted to
SMPL on 13th July, 1999 is important. Permission was granted to SMPL to extract
the mineral iron ore. This had no reference at all to the sub-category or by-product
called iron ore (lump) but must be understood as permission to extract mineral
iron ore ROM. It was this permission that was sought to be proposed for
expansion of production and if it is looked at in this contemporaneous or historical
(whichever) background, then it is quite obvious that the environmental clearance
3
(2015) 6 SCC 193
IA Nos.40 of 2015 etc. in W.P. (C) No.114 of 2014 Page 11 of 14
granted on 22nd September, 2004 was only with reference to iron ore ROM. This
must also be read in the context of the MMDR Act which refers to the mineral
iron ore and does not refer to iron ore (lump). A combination of these two factors
convinces us that the environmental clearance granted to SMPL was only with
reference to iron ore ROM and not iron ore (lump), notwithstanding the
terminology employed in the environmental clearance.
19. Taking the view as canvassed by learned counsel for SMPL would lead to
a rather anomalous situation wherein, for the purposes of extracting iron ore
(lump) of a permissible quantity, SMPL could extract as much iron ore ROM as
it desired. In other words, for the purposes of extracting iron ore (lump) of 4.0
MTPA could it be said that SMPL was entitled to extract iron ore ROM to the
extent of 6.0 MTPA or even 8.0 MTPA? The answer to this is certainly in the
negative otherwise the environmental clearance granted to SMPL would be
devoid of any rational meaning whatsoever. Also taking this into consideration,
it does appear to us that though the environmental clearance granted to SMPL
was unhappily worded, it must be given a realistic meaning so that it is not
rendered ineffective on the ground of vagueness and to the detriment of the
environment as also to the detriment of SMPL.
20. In this context, it is necessary to refer to the Summary of the Project,
Environmental Impact Assessment and Environmental Management Plan of
February 2002 placed on record by SMPL in volume 168 of the paper book. The
IA Nos.40 of 2015 etc. in W.P. (C) No.114 of 2014 Page 12 of 14
table or chart on page 28 thereof and which forms a part of the document indicates
that for the production ore extraction of iron ore (lump) the total excavation of
iron ore ROM proposed is almost double the quantity. The chart is as follows:
Years Lump Ore
(+5- 180m
and 30 +
18m) (MT)
Total
Excavation
(MT)
ROM
(MT)
Top
Soil
(MT)
Mineral
rejects
(MT)
Subgrade
Ore (MT)
Fines,
-5 mm
(MT)
1
st year
2001-2002
0.500 1.151 0.770 0.000 0.349 0.032 0.270
2
nd year
2002-2003
1.196 2.159 1.840 0.000 0.267 0.052 0.644
3
rd year
2003-2004
1.976 3.499 3.040 0.000 0.121 0.338 1.064
4
th year
2004-2005
2.990 4.829 4.600 0.000 0.183 0.046 1.610
5
th year
2005-2006
3.750 6.058 5.770 0.000 0.231 0.057 2.020
Sub Total 10.412 17.696 16.020 0.000 1.151 0.525 5.606
2007-2011 18.750 33.571 28.850 0.024 1.342 3.355 10.100
2012-2016 18.750 33.547 28.850 0.000 1.342 3.355 10.100
2017-2021 20.00 35.779 30.770 0.000 1.431 3.578 10.770
Grand Total 67.912 120.593 104.90 0.024 5.266 10.813 36.576
21. It is quite clear to us even from the above chart that the interpretation
sought to be given by learned counsel for SMPL to the environmental clearance
was never intended and if it was, then the unfortunate consequence would be that
the environmental clearance must be held to be invalid and quashed, resulting in
greater damage to the interests of SMPL than envisaged. On a realistic
interpretation to the environmental clearance, for the purposes of calculating
excess or illegal production of iron ore, the entire extraction of iron ore ROM is
IA Nos.40 of 2015 etc. in W.P. (C) No.114 of 2014 Page 13 of 14
required to be taken into consideration.
22. We may note in this context that it has come on record that the entire iron
ore ROM extracted by SMPL is actually sold to Jindal Steel and Power Ltd. or
JSPL and it is not only iron ore (lump) that is sold to JSPL. In this factual
background, the issue of the relationship between SMPL and JSPL arises but we
are not concerned with this for the present. However, what is more important is
that it is the sale of iron ore ROM that is made by SMPL to JSPL and not the sale
of iron ore (lump). In other words, SMPL is desirous of taking full advantage of
its extraction and production of iron ore ROM but at the same time shying away
from the legal consequences that follow.
23. It was submitted by learned counsel for SMPL that the CEC has confused
itself between extraction or production of iron ore ROM and extraction or
production of iron ore (lump) and as a consequence, it has arrived at an incorrect
figure of excess or illegal mining by SMPL. In fact, the contention is that SMPL
has neither been involved in any excess or illegal mining and the conclusions
arrived at by the CEC are totally incorrect. We cannot accept this submission in
view of the discussion above, including the conduct and activities of SMPL, the
provisions of the MMDR Act and the context in which the permission and
environmental clearance was granted to SMPL. Under the circumstances, we find
no merit in the objections raised by SMPL to the report of the CEC with regard
to the validity of the environmental clearance or the excess or illegal mining of
IA Nos.40 of 2015 etc. in W.P. (C) No.114 of 2014 Page 14 of 14
iron ore by SMPL.
24. However, in view of our conclusion, the CEC might have to rework the
quantum of excessive or illegal mining carried out by SMPL and the consequent
penalty. For this, we grant 6 weeks’ time to the CEC to do the needful. All records
relevant for arriving at a decision should be made available by SMPL and the
concerned authorities to the CEC.
25. The substantive applications are disposed of to the above extent and in
terms of the above directions.
...……………………J
(Madan B. Lokur)
...…………………....J
New Delhi; (Deepak Gupta)
November 12, 2018
