SC directs companies to pay Rs 17,576 crore for illegal mining in Odisha


In a major setback to mining companies indulged in illegal extraction of iron and manganese ore in Odisha since 2001, the Supreme Court on Wednesday cracked the whip and directed them to pay a compensation of about Rs.17,576 crore.

A bench of Justices Madan B Lokur and Deepak Gupta ruled that the companies would be liable to pay back 100 percent of the price of mineral extracted by them in violation of law. It rejected the plea of Centre and SC-appointed Central Empowered Committee (CEC) that only 30 percent value of the mineral be recovered from the companies.

“In our opinion, there can be no compromise on the quantum of compensation that should be recovered from any defaulting lessee – it should be 100%. If there has been illegal mining, the defaulting lessee must bear the consequences of the illegality and not be benefited by pocketing 70% 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 gotten manner,” the bench said.

The bench accepted the “frightening figures” given by CEC on illegal mining in Odisha. According to the CEC, excess mining without environmental clearance or beyond what was authorized by the environmental clearance is 2130.988 lakh MT of iron ore and 24.129 lakh MT of manganese ore. This figure did not include extraction of ore without forest clearance.

In terms of rupees, according to the CEC the total notional value of minerals produced without an environmental clearance or in excess of the environmental clearance, comes to about Rs.17091.24 crores for iron ore and about Rs.484.92 crores for manganese ore making a total of Rs.17,576.16 crores.

The court said that companies could re-start their mining operation only after paying the compensation and set a deadline of December 31 for payment.

It said that there had been serious lapses on the part of government authority which led to large scale illegal mining activities and the responsible persons must be brought to book. Although the court turned down the plea for CBI inquiry against officials, it however, decided to appoint an expert committee headed by former SC judge to probe.

“The rule of law needs to be established. We are therefore of the view that it would be appropriate if an expert committee is set up under the guidance of a retired judge of this court to identify the lapses that have occurred over the years enabling rampant illegal or unlawful mining in Odisha and measures to prevent this from happening in other parts of the country,” it said. The court would pass formal order on setting up of committee on next date of hearing.

The bench also directed the Centre to take a fresh look at the National Mineral Policy particularly with regard to conservation and mineral development. “It is high time that Centre revisits 2008 policy and announces a fresh and more effective, meaningful and implementable policy within the next few months and in any event before December 31,” it said.


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