Illegal Mining In Goa: Even If State Renewal Struck Down, Leases Deemed To Be Extended Till 2020, Argues ASG Nadkarni

The Supreme Court division bench of Justices Madan B. Lokur and Deepak Gupta today resumed the hearing on the challenge posed by Goa Foundation, a non-profit organization, to the renewal of 88 iron ore mining leases by the state of Goa in January, 2015.

The arguments opened with Advocate Mr. Prashant Bhushan contending, on behalf of Goa Foundation, that immediately upon the cabinet nod to the Mines and Minerals Amendment Ordinance of 2015, mandating the auction of mining leases, the State Government hastened to grant the impugned renewals. The grievance of the petitioners, he said, arises from the failure of the Government to adopt the more rational approach of conducting a public auction to ensure optimal utilization of the natural resources.

Mr. Bhushan also sought to challenge the constitutional validity of the Mines and Minerals (Development and Regulation) Amendment Act of 2015, in so far as it inserts section 8A in the Act of 1957, thereby increasing the duration of mining leases granted prior to the said amendment to fifty years, authorizing the state governments to renew the same for twenty years and pending such renewal, providing for the automatic extension thereof till 31st March, 2020.

Additional Solicitor General Mr. Atmaram Nadkarni, appearing for the state of Goa, retorted that the renewals were made in accordance with the Mines and Minerals (Development and Regulation) Act of 1957, the rules framed thereunder and the Goa Mineral Policy of 2013, pursuant to the judgment in the Natural Resources Allocation case [(2012) 10 SCC 1], wherein the Apex Court had held the mode of auction to not be a constitutional requirement for the alienation of natural resources.

The bench then inquired from Mr. Nadkarni, “Is it possible for the state government to reject the applications for renewal now after the 2015 amendment? Why must the renewal operate automatically when there needs to be application of mind to ascertain if the renewal would be in the interest of mineral development?”

The Senior Counsel, in explanation, submitted that none of the impugned 88 leases had “lapsed” or been “determined” under section 4A of the Act of 1957, but their term had ‘expired’ for the purpose of its old section 8, and the applications for renewal in respect thereof had been filed prior to the expiration. What the effect of the new section 8A of the Act of 1957 is that, unless the mining leases are “determined” on environmental grounds or have “lapsed” because of persistent disuse or their “renewal has been rejected” for a violation of the terms of the lease, they shall be “deemed” to have been “extended” till 31st March, 2020. However, such mere “extension” is not an automatic “renewal”.

Mr. Nadkarni proceeded to cite the judgment of the Supreme Court in the matter of Common Cause and Ors. v. Union of India and Ors. [(2016) 11 SCC 455] wherein the top court has upheld this interpretation of section 8A. Further, Mr. Nadkarni clarified that the grant of such a renewal shall continue to be subject to the requirement of being “in the interest of mineral development”, with the statutory prerequisites of an approved mining plan, environmental and forest clearances still in place.

The Bench summed up the crux of the arguments advanced to imply that even if the renewals permitted by the state under section 8(3) of the Act of 1957, as it stood prior to the 2015 amendment, are struck down, the ‘deemed extension’ until the year 2020 as conferred by sub-sections (5) and (6) of section 8A of the amended act would still continue in force. The matter is next listed for hearing on 8th November, 2017.