MANU/SC/0491/2014

FACTS

Apparently 102 mining leases in the state of Orissa do not have requisite environmental clearances, approvals under the Forest Act, 1980, approved Mining Plan and/or Consent to Operate. Also 29 mining leases have been determined or have been rejected or have lapsed. A total of 56 iron ore/manganese mining leases are presently operating in the State of Odisha, but out of these 56 operating mining leases, lease deeds in respect of 16 mining leases have been executed and the balance 40 mining leases are operating under the deemed renewal provision in Rule 24A(6) of the Mineral Concession Rules, 1960. Out of these 40 mining leases, 14 leases are operating as first renewal and 26 leases are operating as second and subsequent renewals and the renewal applications are at various stages of examination and in some cases ‘in principle’ decision to grant the renewals have been taken and the follow up actions are under process.

ISSUE

Whether an interim order needs to be passed against the several lessees who were operating without clearances under the Environment Act, 1986 and the Forest Act, 1980, and without renewal by the Government?

PETITIONER’S CONTENTION

It was submitted that the lessees are not at fault inasmuch as they have submitted their applications for renewal in time and it was for the State Government to consider their applications and pass orders in terms of Section 8(3) of the Mines and Minerals Act, 1957 and, therefore, the lessees should not be allowed to suffer closure of their mines for the fault of the State Government

JUDGEMENT

The court refused the contention of the lessees because Under Section 8(2) of the Mines and Minerals Act, 1957 the lessees have a statutory right of a first renewal for a maximum period of 20 years, but after the expiry of the first renewal they have right only to apply for further renewal of the leases Under Section 8(3) of the Mines and Minerals Act, 1957 and the State Government has the power to renew for a further period only if it is of the opinion that in the interest of mineral development it is necessary so to do and only if reasons are recorded by the State Government for such renewal of the leases and in the case of the 26 lessees who are operating under the second and subsequent renewals, this opinion has not been formed and the reasons have not been recorded by the State Government in terms of Section 8(3) of the Mines and Minerals (Development and Regulation) Act, 1957.

It is also stated that more than 50% of the requirement of iron ore of the country is met from the State of Odisha and a large number of iron ore leases in the State are granted for captive mining and the ore from the mines is being utilized for the manufacturing of the steel in the plants of the lessees. The commercial miners are also providing raw material to iron and steel industries not only in the State but also in the whole country. While there is a need to impose time limits by various authorities, closure of mining operations due to delay in decisions by the State Government on mining lease renewal applications, may adversely affect the availability of critical raw materials like iron ore for domestic value addition industry, including the steel sector and, therefore, where the application for renewals have been made within the time prescribed under the statute, the State Government which has to take the decision should be directed to decide the applications in a time bound manner so that the industry is not penalized.

CONCLUSION

The court came to the conclusion that 26 leases operating as second and subsequent renewals without any express orders of renewal passed by the State Government will not be allowed to operate by the State Government until express orders are passed in terms of Section 8(3) of the Mines and Minerals Act, 1957 and also all the renewal applications needs to be disposed of by the state government within six months from the date of order.