# GOA FOUNDATION v. UNION OF INDIA & ORS

- **Citation:** [2014] 5 S.C.R. 302
- **Court:** Supreme Court of India
- **Decided:** 2014-04-21
- **Case number:** Writ Petition (Civil~No. 435 of 2012
- **Bench:** A.K. Patnaik, Surinder Singh Nijjar, Fakkir Mohamed Ibrahim Kalifulla
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/goa-foundation-v-union-of-india-ors-30087
- **Pages:** 84

## Headnote

Commission of inquiry Act, 1952:
ss. BB and BC - Justice Shah Commission - Report on
illegal mining ·in State of Goa - Held: Jn view of the stand of
the State Government that no action will be taken against
m;ning Jesse.Es only on the basis of the findings in the report
0 of Justiee Shah Commission without making its own
assessment of facts and without first giving the mining lessees
opportunity of hearing and opportunity to produce evidence
in their defence, Court is not inclined to quash the report of
Justice Shah Commission on the ground that provisions of
ss. BB and BC of the 1952 Act, and principles of natural justice
E have not been complied with - However, Court cannot direct
prosecution of the mining lessees on the basis of the findings
in the report of Justice Shah Commission, if they have not
been given opportunity of being heard and to produce
evidence in their defence and not allowed right to crossF examine and the right to be represented by a legal
practitioner before the Commission as provided in ss. BB and
BC.
Mines and Minerals (Development and Regulation) Act,
G 1957:
H
ss .8(2) and 8(3) -
Renewal of mining lease -
Concessions granted before liberation of Goa, deemed to be
mining leases - Deemed mining leases to excavate iron ore
302
· GOA FOUNDATION v. UNION OF INDIA
303
in State of Goa - Held: Renewal beyond first renewal for a A
period of twenty years is conditional upon State Government
forming an opinion that in the interest of mineral development,
B
it is necessary to do so and also conditional upon State
Government recording reasons for such renewal of a mining
lease in respect of iron ore which is not specified in Part A
and Part B of the First Schedule - Deemed mining leases of
lessees in Goa expired on 22.11.1987 and the maximum
period (20 years) of renewal of deemed mining leases in Goa
has also expired on 22. 11. 2007 -
Therefore, mining by
lessees in Goa after 22. 11. 2007 was illegal -
Accordingly, c
- order dated 10.09.2012 of Government of Goa suspending
mining operations in the State and order dated 14.09.2012
of MoEF, Government of India, suspending the environmental
clearances granted to mines in the State are not liable to be
quashed by the Court, and the same will have to continue ti/I
0
decisions are taken by State Government to grant fresh leases
and decisions are taken by MoEF to grant fresh environmental
clearances for mining projects -
Mineral Concession Rules,
1960 -
r.24A -
Goa, Daman and Diu Mining Concessions
(Abolition and Declaration as Mining Leases) Act, 1987- s.
E
5 - Public Interest Litigation.
ss. 4 and 9 - Removing of dump· from mining area and
keeping it beyond mining area - Held: Dumping of minerals
outside the leased area of the mining lessees is not
permissible under MMDR Act and Rules made thereunder
F
-
The moment mineral is removed or consumed from the
leased area, the holder of a mining lease has to pay royalty
- By virtue of ss. 9 of MMDR Act, tailings and rejects
excavated during mining operations being minerals wi/I also
be exigible to royalty the moment they are removed from the
G
leased area - Mineral Concession Rules, 1960 - r. 64-C.
Mines and Minerals:
Prohibition on mining activities - In areas adjacent to
National Park or Wildlife Sanctuary - Held: Supreme Court
H
304
SUPREME COURT REPORTS
[2014] 5 S.C.R.
A in exercise of its power under Art. 32 of the Constitution can
direct the State to prohibit mining activities in an area
adjacent to a National Park or a Wildlife Sanctuary for the
purpose of protecting the flora, fauna and wildlife habitat of
the National Park/Wildlife Sanctuary -
State can be directed
s by the Court by an appropriate writ or direction not to grant
mining /eases or not to allow mining that will be violative under
Art. 21 of the Constitution - The order passed by the Court
saying that there will be no mining activity within one kilometer
safety zone around National Park or Wildlife Sanctuary has
c to be enforced - Until the Central Gov

## Text

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A
B
c
[2014] 5 S.C.R. 302
GOA FOUNDATION
v.
UNION OF INDIA & ORS.
(Writ Petition (Civil) No. 435 of 2012)
APRIL 21, 2014
[A.K. PATNAIK, SURINDER SINGH NIJJAR AND
FAKKIR MOHAMED IBRAHIM KALIFULLA, JJ.]
Commission of inquiry Act, 1952:
ss. BB and BC - Justice Shah Commission - Report on
illegal mining ·in State of Goa - Held: Jn view of the stand of
the State Government that no action will be taken against
m;ning Jesse.Es only on the basis of the findings in the report
0 of Justiee Shah Commission without making its own
assessment of facts and without first giving the mining lessees
opportunity of hearing and opportunity to produce evidence
in their defence, Court is not inclined to quash the report of
Justice Shah Commission on the ground that provisions of
ss. BB and BC of the 1952 Act, and principles of natural justice
E have not been complied with - However, Court cannot direct
prosecution of the mining lessees on the basis of the findings
in the report of Justice Shah Commission, if they have not
been given opportunity of being heard and to produce
evidence in their defence and not allowed right to crossF examine and the right to be represented by a legal
practitioner before the Commission as provided in ss. BB and
BC.
Mines and Minerals (Development and Regulation) Act,
G 1957:
H
ss .8(2) and 8(3) -
Renewal of mining lease -
Concessions granted before liberation of Goa, deemed to be
mining leases - Deemed mining leases to excavate iron ore
302
· GOA FOUNDATION v. UNION OF INDIA
303
in State of Goa - Held: Renewal beyond first renewal for a A
period of twenty years is conditional upon State Government
forming an opinion that in the interest of mineral development,
B
it is necessary to do so and also conditional upon State
Government recording reasons for such renewal of a mining
lease in respect of iron ore which is not specified in Part A
and Part B of the First Schedule - Deemed mining leases of
lessees in Goa expired on 22.11.1987 and the maximum
period (20 years) of renewal of deemed mining leases in Goa
has also expired on 22. 11. 2007 -
Therefore, mining by
lessees in Goa after 22. 11. 2007 was illegal -
Accordingly, c
- order dated 10.09.2012 of Government of Goa suspending
mining operations in the State and order dated 14.09.2012
of MoEF, Government of India, suspending the environmental
clearances granted to mines in the State are not liable to be
quashed by the Court, and the same will have to continue ti/I
0
decisions are taken by State Government to grant fresh leases
and decisions are taken by MoEF to grant fresh environmental
clearances for mining projects -
Mineral Concession Rules,
1960 -
r.24A -
Goa, Daman and Diu Mining Concessions
(Abolition and Declaration as Mining Leases) Act, 1987- s.
E
5 - Public Interest Litigation.
ss. 4 and 9 - Removing of dump· from mining area and
keeping it beyond mining area - Held: Dumping of minerals
outside the leased area of the mining lessees is not
permissible under MMDR Act and Rules made thereunder
F
-
The moment mineral is removed or consumed from the
leased area, the holder of a mining lease has to pay royalty
- By virtue of ss. 9 of MMDR Act, tailings and rejects
excavated during mining operations being minerals wi/I also
be exigible to royalty the moment they are removed from the
G
leased area - Mineral Concession Rules, 1960 - r. 64-C.
Mines and Minerals:
Prohibition on mining activities - In areas adjacent to
National Park or Wildlife Sanctuary - Held: Supreme Court
H
304
SUPREME COURT REPORTS
[2014] 5 S.C.R.
A in exercise of its power under Art. 32 of the Constitution can
direct the State to prohibit mining activities in an area
adjacent to a National Park or a Wildlife Sanctuary for the
purpose of protecting the flora, fauna and wildlife habitat of
the National Park/Wildlife Sanctuary -
State can be directed
s by the Court by an appropriate writ or direction not to grant
mining /eases or not to allow mining that will be violative under
Art. 21 of the Constitution - The order passed by the Court
saying that there will be no mining activity within one kilometer
safety zone around National Park or Wildlife Sanctuary has
c to be enforced - Until the Central Government takes into
account various factors mentioned in sub-r. (1 ), follows the
procedure laid down in sub-r. (3) and issues a notification
under r.5 prohibiting mining operations in a certain area, there
can be no prohibition under law to carry on mining activity
0 beyond 1 km. of the boundaries of National Parks or Wildlife
Sanctuaries - Direction given to issue notification under r. 5
- Constitution of India, 1950 - Arts. 32 and 21 - Environment
Protect~on Rules, 1986 - r.5.
Granting of mining /eases for excavation of iron ore -
E Modality of - Held: State Government may grant mining
/eases of iron ore and other ores in accordance with its policy
decision and in accordance with MMDR Act and the Rules
made thereunder in consonance with constitutional provisions
- Until the final report is submitted by the Expert Committee,
F State Government will, in the interests of sustainablf;f
development and intergenerational equity, permit a maximum
annual excavation of 20 million MT from the mining /eases
in the State other than from dumps - Directions given to
appropriate the sale proceeds of ores sold in e-auction as
G suggested in the judgment - Monitoring Committee directed
to make the payments as mentioned in the judgment -
50%
of wages and dearness allowance directed to be paid to
workers in the muster rolls of mining /eases who have not
been paid their wages during the period of suspension of
H mining operations - Direction also given to set aside amount
GOA FOUNDATION v. UNION OF INDIA
305
,'towards Goan Iron Ore Permanent Fund - Industrial Disputes
A
Act, 1947 - s.25 C - Goa Pollution Control Board directed to
monitor air and water pollution in mining areas - Public
Interest litigation.
Mineral Concession Rules, 1960:
8
rr. 37 and 38 - Held: State Government will initiate action
against those mining lessees who violate rr.37 and 38 and
will strictly enforce the Goa (Prevention of Illegal Mining,
Storage and Transportation of Minerals) Rules -
Goa
(Prevention of Illegal Mining, Storage and Transportation of C
Minerals) Rules, 2013.
Reports were received about widespread mining of
iron ore and manganese ore in various States in
contravention of the provisions of the Mines and Minerals
0
(Development and Regt1lation) Act, 1957(MMDR Act),
Forests (Conservation) Act, 1980, Environment
Protection Act, 1986 and other rules and guidelines.
Therefore, the Central Government appointed the Justice
Shah Commission in .order, inter a/ia, to inquire into and
recommend remedial measures to prevent illegal mining,
trade, transportation and export of iron ore and
manganese ore. As regard State of Goa, the mining
concessions granted by Portuguese Government prior to
1961, were abolished by Goa, Daman and Diu Mining
Concessions (Abolition and Declaration as Mining
Leases) Act, 1987 (the Abolition Act), and every mining
concession was deemed to be a mining lease granted
under MMDR Act. The Commission visited Goa, issued
notices to all concerned including the lessees and
submitted its report on 15.3.2012. On 10.9.2012 the State
G
Government of Goa passed an order suspending all
mining operations in the State with effect from 11.9.2012.
E
F
On the basis of the findings of the Commission, Writ
Petition No. 435 of 2012 was filed in public interest
seeking directions to the Union of India and the State of
H
306
SUPREME COURT REPORTS
[2014) 5 S.C.R.
A Goa to terminate the mining leases of the lessees
involved in mining in violation of relevant statutory
provisions, as also for prosecution of all those who
committed offences under different laws. The mining
lessees and Goa Mining Association also filed writ
B petitions in the High Court seeking to quash the findings
in the report of the Justice Shah Commission. These writ
petitions were transferred to the Supreme Court. The
Court by an interim order directed that mining operations
in identified leases be kept in abeyance. The Court also
C directed that the process of verification of the inventory
of excavated mineral ores lying at various stockyards, its
e-auction and deposit of sale proceeds be monitored by
a Monitoring Committee. The Court further constituted an
Expert Committee to conduct a macro study as to the
0 ceiling of annual excavation of iron ore from the State of
Goa keeping in mind the principles of sustainable
development and inter generational equity and other
relevant factors.
E
Disposing of the matters, the Court
HELD:
Challenge to the Report of the Justice Shah Commission:
1.1. Section 88 of the Commissions of Inquiry Act,
F 1952(the 1952 Act) provides that if a person is likely to be
prejudicially affected by the inquiry, the Commission shall
give to that person a reasonable opportunity of being
heard and to produce evidence in his defence; and s.8C
provides that every such person will have a right to crossG examine and the right to be represented by a legal
practitioner before the Commission. As the State
Government of Goa has taken a stand before this Court
that no action will be taken against the mining lessees
only on the basis of the findings in the report of the
H Justice Shah Commission without making its own
GOA FOUNDATION v. UNION OF INDIA
307
assessment of facts and without first giving the mining
A
lessees the opportunity of hearing and the opportunity
to produce evidence in their defence, this Court is not.
inclined to quash the report of the Justice Shah
Commission on the ground that the provisions of ss. S8
and SC of the 1952 Act, and the principles of natural
B
justice have not been complied with. [para S and 11) [324G; 326-C-G]
1.2. At the same time, this Court cannot also direct
prosecution of the mining lessees on the basis of the
findings in the report of the Justice Shah Commission, if C
they have not been given the opportunity of being heard
.. and to produce evidence in their defenc;e and have not
' been' allowed the right to cross-examine and the right to
·.be represented by a legal practitioner before the
Commission as provided in ss. S8 and SC respectively
D
of the 1952-Act. [para 11] [326-G-H; 327-A]
Kiran Bedi v. Committee of Inquiry and another 19S9
(1) SCR 20 = (19S9) 1 SCC 494, State of Bihar v. L K. Advani
2003 (3) Suppl. SCR S44 = (2003) S SCC 361 and Union of E
India v. Tulsiram Patel 19S5 (2) Suppl. SCR 131 = 19S5(3)
sec 39S - cited.
Whether the mining leases held by the lessees have
expired:
F
2.1. Most of the mining leases in which the State
Government has not passed orders are deemed to have
been extended under sub-r. (9) of r.24A of the Mineral
Concession Rules, 1960 (MC Rules). Therefore, the
finding in the Justice Shah Commission report that the
G
applications for renewal were not disposed of within the
, stipulated time and the leases were in contravention of
the MC Rules is, not correct. This opinion of the Justice·
Shah Commission, was based on sub-rr. (4) and (5) of
H
..
308
SUPREME COURT REPORTS
[2014] 5 S.C.R.
A r.24A of the MC Rules, which were applicable generally
to an application for renewal of mining leases, and stood
excluded to the extent specific provisions have been
subsequently made by the rule-making authorities in subrr. (8) and (9) of r.24A of the MC Rules in respect of the
B deemed leases in Goa. [para 11 and 18] [327-B-C; 333-H;
334-A-C]
State of UP. & Ors. v. Lalji Tandon (dead) through LRs.
2003 (5) Suppl. SCR 77 = (2004) 1 SCC 1 - cited.
C
2.2. Sub-s. (1) of s. 8 of the Mines and Minerals
(Devnlopment and Regulation) Act, 1957 (MMDR Act),
which provides the maximum and minimum periods for
which a mining lease may be granted, will not apply to
deemed mining leases in Goa because sub-s. (1) of s. 5
o of the Goa, Daman and Diu Mining Concessions
(Abolition and Declaration as Mining Leases Act, 1987
(Abolition Act) provides that the period of such deemed
mining leases will extend upto six months from the date
of assent notwithstanding anything contained in the
E MMDR Act. Thus, notwithstanding anything contained in
sub-s. (1) of s.8 of the MMDR Act, the period of a deemed
mining lease in Goa was to expire on 22.11.1987 (six
months from the date of assent). Under sub-s. (2) of s. 8
of the MMDR Act, a mining lease may be renewed for a
F period not exceeding twenty years. Sub-s. (3) of s. 8,
however, provides that notwithstanding anything
contained in sub-s. (2), if the State Government is of the
opinion that in the interest of mineral development, it is
necessary so to do, it may for reasons to be recorded,
authorise the renewal of a mining lease in respect of
G minerals not specified in Part A and Part B of the First
Schedule for a further period or periods not exceeding
twenty years in each case. Thus, renewal beyond the first
renewal for a period of twenty years is conditional upon
the State Government forming an opinion that in the
H
GOA FOUNDATION v. UNION OF INDIA
309
interest of mineral development, it is necessary to do so A
and also conditional upon the State Government
recording reasons for such renewal of a mining lease in
respect of iron ore which is not specified in Part A and
Part B of the First Schedule. [para 23] [337-B-G]
B
Tata Iron and Steel Company Ltd. v. Union of India &
Anr. 1996 (3) Suppl. SCR 808::-(1996) 9 SCC 709- referred
to.
2.3. Sub-r. (6) of r.24A o.f the MC Rules will apply to a
case of first renewal under sub-s. (2) of s. 8 of the MMDR C
Act other than a case covered under sub-r. (9) of r.24A
of the MC Rules, but will not apply to renewal under subs. (3) of s. 8 of the MMDR Act. The deemed mining leases
of the lessees in Goa expired on 22.11.1987 under subs. (1) of s. 5 of the Abolition Act and the maximum of 20 D
years renewal period of the deemed mining leases in Goa
as provided in sub-s. (2) of s. 8 of the MMDR Act read with
sub-r. (8) and (9) of r.24A of the MC Rules expired on
22.11.2001. [para 24] [338-F-H; 339-A]
Whether dump can be kept beyond the lease area:
E
3.1. A holder of a mining lease does not have any
right to dump any reject, tailings or waste in any area
outside the leased area of the mining lease on the
strength of a mining lease granted under the MMDR Act F
and the Rules made thereunder. Rule 64C of the MC
Rules, exempts the removal of tailings or rejects from the .
. leased area for the purpose of dumping and not for the
purpose of sale or consumption from the levy of royalty.
Rule 64C of the MC Rules does not authorise dumping G
of tailings or rejects in any area outside the leased area.
If r.64C of the MC Rules suggests that tailings or rejects.
· can be dumped outside the leased area, it must give way
to s.4 of the MMDR Act, which does not authorise
dumping of minerals outside the leased area, and must H
310
SUPREME COURT REPORTS
[2014] 5 S.C.R.
A give way to s.9 of the MMDR Act which does not
authorise removal of minerals outside the leased area
without payment of royalty. Thus, dumping of any waste
materials, tailings and rejects outside the leased area
would be without a valid authorization under the leases deed. This Court, therefore, holds that dump cannot be
kept by the lessees beyond the leased area. [para 24, 2931] [339-A-B; 342-F-G, H; 343-A, D-G]
The Central Bank of India & Ors. v. Their Workmen,
C etc. 1960 SCR 200 =AIR 1960 SC 12 - relied on.
Samaj Parivartana Samudaya and Ors. v. State of
Karnataka and Ors. (2013) 8 SCC 154 - cited.
3.2. Rule 16 of the MCD Rules, cannot be read to
o permit dumping of overburden and waste materials
obtained from mining operations outside the leased area.
[para 32] [344-D-E]
3.3. Inasmuch as the activity of dumping mineral
wastes will pollute the environment, it will come within the
E meaning of activity of mining included in the Schedule to
the notification issued under sub"r. (3) of r. 5 of the
Environment (Protection) Rules, 1986(the 1986 Rules).
Thus, for dumping of mining waste on a private land, a
prior clearance of the Central Government under the
F notification issued under sub-r. (3) of r.5 of the 1986 Rules
would be necessary. [para 33) [345-A-C)
3.4. The moment the mineral is removed or
consumed from the leased area, the holder of a mining
G lease has to pay royalty. By virtue of ss. 9 of the MMDR
Act, tailings and rejects excavated during mining
operations being minerals will also be exigible to royalty
the moment they are removed from the leased area. [para
30) [343-8-C]
H
GOA FOUNDATION v. UNION OF INDIA
311
Within what distance from the boundaries of National
A
Parks and Wildlife Sanctuaries, is mining not permissible
in the State of Goa:
4.1. This Court in exercise of its power under Art. 32
of the Constitution can direct the State to prohibit mining
B
activities in an area adjacent to a National Park or a
Wildlife Sanctuary for the purpose of protecting the flora,
fauna and wildlife habitat of the National Park/Wildlife
Sanctuary because these constitute part of the natural
environment necessary for healthy life of persons living C
in t1'1e State of Goa. The right to life under Art. 21 of the
Constitution "is a guarantee against the State and for
enforcing this fundamental right of persons, the State,
wh'ich alone has a right to grant mining leases of the
mines located inside the State, can be directed by the
0
Court by an appropriate writ or direction not to grant
mining leases or not to allow mining that will be violative
under Art. 21 of the Constitution. [para 33 and 41] [345-
- C-D; 351-B-E]
In Re: Construction of Park at NO/DA near Okh/a Bird
E
Sanctuary 2010 (15) SCR 783 = (2011) 1 SCC 7 44 - referred
to
F
4.2. The order passed by this Court on 04.08.2006 in
T.N. Godavarman Thirumulpad v. Union of India & Ors.,
saying that there will be no mining activity within one
kilometer safety zone ar-0und National Park or Wildlife
Sanctuary has to be enforced and there can be no mining
activities within this area of one kilometer from the
boundaries of National Parks and Wildlife Sanctuaries in
the State of Goa. [para 42] [352-B, H; 353-A]
G
4.3. In the order dated 4.12.2006 in Writ Petition (C)
No.460 of 2004 (Goa Foundation v. Union of India), the
Court has. not prohibited any mining activity within 10
kilometer distance from the boundaries of the National
H
312
SUPREME COURT REPORTS
[2014] 5 S.C.R.
A Parks or Wildlife Sanctuaries. There is, therefore, no
direction, interim or final, of this Court prohibiting mining
activities within 10 kms. of the boundaries of National
Parks or Wildlife Sanctuaries. [para 43] [353-B; 354-C]
8
4.4. Apart from the powers of. the Court, the Central
Government has powers under r.5 of the Environment
Protection Rute5 1986 to prohibit carrying on of mining
operations in areas which are proximate to a Wildlife
Sanctuary or a National P-ark. However, until the Central
Government takes into account various factors
C mentioned in sub-r. (1 ), follows the procedure laid down
in sub-r. (3) and issues a notification under r.5 prohibiting
mining operations in a certain area, there can be no
prohibition under law to carry on mining activity beyond
1 km. of the boundaries of National Parks or Wildlife
D Sanctuaries. In fact, the process of issuing a notification
unde.r r.5 of the 1986 Rules prohibiting mining activities
in eco-sensitive zones around the National Parks or
Wildlife Sanctuaries in the State of Goa has now been
initiated. This Court directs the Ministry of Environment
E and Forests to follow the procedure and issue the
notification of eco sensitive zones under r.5 of the 1986
Rules within six months. [para 44-46] [354-0-E; 357-E-G;
358-E]
F Whether there has been a violation of Rules 37 and 38 of
the MC Rules by the mining lessees in the State of Goa:
5.1. Sub-r.(1 )(a) of r.37 of MC Rules lays down that
the lessee cannot assign, sublet, mortgage, or in any
other manner, transfer the mining lease, or any right, title
G or interest therein, without the previous consent in
writing of the State Government in the case of those
minerals which are not specified in Part A and Part B of
the First Schedule to the Act. Since iron ore is specified
in Part C of the First Schedule to the Act, the previous
H consent in writing of the State Government is necessary
GOA FOUNDATION v. UNION OF INDIA
. 313
before any such transfer is made by a mining lessee. If A
these violations of r.37 are allowed, there shall be
substantial leakage of revenue and mining operations
cannot be effectively regulated and controlled by the
State Government. The State Government, therefore,
must initiate action against those mining leases who
B
violate r.37 of the Rules. [Paras 46 and 49] [358-F; 361 ·G·
H; 362-A-B; 363-B]
5.2. Rule 38 of the MC Rules provides that the State
Government may, in the interest of mineral developm~nt
and with reasons to be recorded in writing, permit C
amalgamation of two or more adjoining leases held by a
lessee, provided that the period of amalgamated leases
shall be co-terminus with the· lease whose period will
expire first. If the State Government has not permitted
amalgamation of adjoining leases in the interest of D
mineral development and has not recorded the reasons
for such permission, the State Government cannot allow
the amalgamation of the leases. [para 50] [363-C-D]
Was there a complete lack of control on produttion and
E
transportation of mineral from the mining leases in the
State of Goa:
6. This Court entirely agrees with the CEC report that
in the absenc·e of proper checks, verifications and
F·
. controls, there is bound to be illegal mining, storage and
transportation of minerals, but after the CEC Report, the
Goa (Prevention of Illegal Mining, Storage and
Transportation of Minerals) Rules, 2013 have been
framed by the State Government u/s 23(c) of the MMDR
Act, in order to prevent illegal mining and to regulate the
G
sale, export and transit of ore, storage of mineral and
transportation and winning of mineral. These rules will
have to be strictly enforced by the State Government and
it is hoped that by such strict enforcement of these rules,
the mining, storage and transportation of minerals in the
H
314
SUPREME COURT REPORTS
[2014] 5 S.C.R.
A State of Goa will get controlled and regulated and the
leakages and evasion of revenue will, to a large extent,
be prevented. [para 50, 52] [363-E; 364-G-H; 365-A, B-C]
To what extent mining has damaged the environment in
8 Goa and what measures are to be taken to ensure intergenerational equity and sustainable development:
7.1. The Expert Committee constituted by this Court
has submitted an interim report dated 14.03.2014,
indicating that the economy of Goa depends on tourism
C and iron ore mining, besjdes agriculture, horticulture and
minor industries, but in recent years, while there has been
increase in the growth rate in tourism and mining, there
has been a decline in the growth rate of agriculture and
fishing. The Expert Committee has in particular
D highlighted the damage that has been done by increase
in the production of iron ore through mining to the
environment in Goa. [para 52 and 56] [365-C-D; 367-C-D]
7.2. The Expert Committee has also studied the
E sustainability of iron ore mining in the State of Goa and
after analyzing the existing data from TERI report, 1997,
ISM, Dhanbad Report, 2013, Pollution Control Board, Goa
(Annual Report) and relevant literature relating to
sustainability and after adopting the Folchi method, has
given the opinion that mining at the rate of 20 to 27.5
F million tons per annum appears sustainable in the State
of Goa, and for the time being annual excavation of 20
million tons of iron ore may be permitted in Goa with
adequate monitoring impacts on different ecological and
environmental parameters. [para 56] [368-E-F; 369-C-D]
G
7.3. Under s. 33A of the Water (Prevention and
Contrdl of Pollution) Act, 1974 (1974 Act) and and s. 31A
of the Air (Prevention and Control of Pollution) Act,
1981 ('the 1981 Act'), the Goa State Pollution Control
H Board has powers to issue any direction including the
GOA FOUNDATION v. UNION OF INDIA
315
power to close, prohibit or regulate mining operations or A
even to stop or regulate supply of electricity, water or any
other service with a view to prevent water pollution or air
pollution, but it has failed to discharge its statutory
functions and duties. In future the Goa State Pollution
Control Board will exercise strict vigil and monitor the
B
water quality and air quality in accordance with the
provisions of the two Acts and if necessary, will exercise
the powers conferred on it to close oown mining
operation of a lessee who does not conform to the air
emission and water discharge standards while carrying c
on mining operations and does not take other preventive
measures as directed by the State Pollution Control
Board. [para 60) [374-B-C; 375-C-D]
7.4. Regarding the regulation by the Ministry of
Environment and Forests, in the order dated 06.01.2014,
D
this Court directed Union of India to appoint a Regulator
with offices in as many States as possible under sub-s.
(3) of s. 3 of the Environment (Protection) Act, 1986. As
and when the Union of India appoints such a Regulator
with an office for Goa, he will carry out its functions in
E
accordance with the order passed under sub-s. (3) of s.
3. [para 61) [375-E-G]
7 .5. From the report of the Expert Committee it is
evident that the State of Goa heavily depends on iron ore
F
mining for revenue as well as employment. This Court,
cannot, therefore, prohibit mining altogether, but if mining
has to continue, the lessees who benefit the most from
mining, must contribute from their sale proceeds to the
Goa Iron Ore Permanent Fund for sustainable mining.
G
Accordingly, in exercise of powers under Art. 32 read with
/
Art. 21 of the Constitution, this Court directs that 10% of
the sale proceeds of iron ore excavated in the State of
Goa and sold by the lessees must be appropriated
towards the Goan Iron Ore Permanent Fund for the
purpos~: of, sustainable development and interH
~·
-.
_ _lo';_ ...;,..'j:_
-
---
- .•
316
SUPREME COURT REPORTS
[2014] 5 S.C.R.
A generational equity and the State of Goa in consultation
with the CEC will frame a comprehensive scheme in this
regard and submit the same to this Court within six
months. [para 63] [376-E, H; 377-A-B]
8 Whether in future the mining leases are to be auctioned
or have to be granted in accordance with the policy of
the State and the provisions of the MMDR Act and the MC
Rules?
8. This Court is of the considered opinion that it is
C for the State Government to decide as a matter of policy
in what manner the leases of mineral·resources would be
granted, but such a decision has to be taken in
accordance with the provisions of the MMDR Act and the
Rules made thereunder and in consonance with the
D constitutional provisions; and the decision taken by the
State of Goa to grant a mining lease in a particular manner
or to a particular party can be examined by way of judicial
review by the Court. [para 66] [377-C; 378-F-G]
E
Natural Resources A/location, In Re, Special Reference
No.1 of 2012 2012 (9) SCR 311 = (2012) 10 sec 1- relied
on.
F
Centre for Public Interest Litigation & Ors. v. Union of
India & Ors. 2012 (3) SCR 147 = (2012) 3 SCC 1 - cited.
Whether suspension of mining operations in the State of
Goa by order dated 10.09.2012 of the Government of Goa
and the suspension of the Environmental Clearances
granted to the mines in the State of Goa by order dated
G 14.09.2012 were legal and valid?
9.1. Since it has been held that the deemed mining
leases of the lessees in Goa expired on 22.11.1987 and
the maximum period (20 years) of renewal of the deemed
mining leases in Goa has also expired on 22.11.2007,
H mining by the lessees in Goa after 22.11.2007 was illegal,
GOA FOUNDATION v. UNION OF INDIA
317
.
.
the order dated 10.09.2012 of the Government of Goa A
suspending mining operations in the State of Goa and the
order dated 14.09.2012 of the MoEF, Government of India,
suspending the environmental clearances granted to the
mines in the State of Goa, are not liable to be quashed
by this Court and the same will have to continue till B
decisions are taken by the State Government to grant
fresh leases and decisions are taken by the MoEF to grant
fresh environmental clearances for mining projects. [Para
66, 67 and 71(i)] [379-D-H; 380-A-B; 382-D-E]
9.2. Since it has been held that renewal of all the C
deemed mining leases in the State of Goa had expired on
22.11.2007, the mining lessees will not be entitled to the
sale value of the ores sold in e-auction but they will be
entitled to the approximate cost (not actual cost) of the
extraction of the ores. Following the principle of lay-off D
compensation in terms of s.25C of the Industrial Disputes
Act, 1947, this Court holds that the workers who could
not be paid wages by the lessees will have to be paid
compensation at the rate of 50% of their basic wages and
dearness allowance during the period of non-employment E
on account of suspension of mining operations.
· Moreover, Marmagoa Port Trust will have to be paid 50%
of their charges for storage of the mineral ores after
05.10.2012. The entire sale value of the stock of mineral
ores sold by e-auction less the average cost of F
excavation, 50% of the wages and allowances and 50%
of the storage charges to be paid to MPT is thus due to
State Government which is the owner of the mineral ores
which have been sold by e-auction. The State
Government will set aside 10% of the balance amount G
towards Goan Iron Ore Permanent Fund. [para 69-70]
[381-B-H; 382-A]
10.1. The State Government will within six months
frame a comprehensive scheme with regard to the Goan
Iron Ore Permanent Fund in consultation with the CEC H
318
SUPREME COURT REPORTS
[2014] 5 S.C.R.
A for sustainable development and intergenerational equity
and submit the same to this Court within six months.
(para 71] (384-H; 385-A]
10.2. The Expert Committee will submit its report
within six months on how the mining dumps in the State
B of Goa should be dealt with and will submit its final report
within twelve months on the cap to be put on th~ annual
excavation of iron ore in Goa. [para 71] (385-B]
Vassudeva Madeva Salgaocar vs. Union of India (1985)
C 1 Born. CR 36 - cited.
D
E
F
Case Law Reference:
(1985) 1 Born. CR 36
cited
para 2
1989 (1) SCR 20
cited
para 9
2003 (3) Suppl. SCR 844
cited
para 9
1985 (2) Suppl. SCR 131
cited
para 9
2003 (5) Suppl. SCR 77
cited
Para 20
1996 (3) Suppl. SCR 808
referred to
Para 20
(2013) 8 sec 154
cited
para 26
1960 SCR 200
relied on
para 31
2010 (15) SCR 783
referred to
para 41
2012 (3) SCR 147
cited
Para 64
2012 (9) SCR 311
relied on
para 65
CIVIL ORIGINAL JURISDICTION : Writ Petition (Civil~No.
435 of 2012.
G
Under Article 32 of the Constitution of India.
WITH
T.C. (C) No. 131, 132, 133, 134, 135, 138, 139, 140, 141,
142, 143 of 2013, W.P. (C) No. 184, 99 of 2013 and T.C. (C)
H
No. 136 of 2013.
GOA FOUNDATION v. UNION OF INDIA
319
ANS Nadkarni, AG, Mukul Rohatgi, Suryanarayana Singh,
A
Addi. A.G, Datta Prasad Lawande, GA. Nikhil D. Pai, Neha
Umesh Kholkar, AGAs, Prashant Bhushan, Amit Sharma,
Yashraj Singh Deora, K.J. John & Co. Harish Pandey, P.S.
Sudheer, Mitter & Mitter Co., A. Venayagam Balan, Abhijat P.
Medh, P.V. Yogeswaran, Jyoti Mendiratta, Madhu Sikri, Dr.
B
Vipin Gupta, Ninad Laud, Aparna Singhal, Mahesh Agarwal,
E.C, Agarwala, Sudha Gupta, Parekh & Co., Shadman Ali, D.S.
Mahra, Yashraj Singh Deora, Mohan Pandey, Shreekant N.
Terdal, J.S. Wad & Co., Ninad Laud, Abhijit Gosavi, Jayant
Mohan, Harish Pandey, K.J. John & Co., Chander Shekhar c
Ashri, Moh it Abraham, Shiv Kumar Suri, P .S. Sudheer, T.
Mahipal, Parijat Sinha, S.M. Walawaikar, Rameshwar Prasad
Goyal, M.P. Jha, Siddharth Bhatnagar, A. Subhashini,
Bhavanishankar V. Gadnis, A. Venayagam Balan, Prafulla
Hede for the appearing parties.
The Judgment of the Court was delivered by
A. K. PATNAIK, J. 1. This batch of Writ Petitions and
Transferred Cases relate to mining in the State of Goa and as
D
·issues raised are common to the Writ Petitions and the E
Transferred Cases, the cases have been analogously heard and
are being disposed of by this common judgment.
Facts relating to mining in Goa:
,
2. Prior to 19.12.1961 when Goa was a Portuguese
F
territory, Its Portuguese Government had granted mining
concessions in perpetuity to concessionaires. On 19.12.1961,
Goa was liberated and became part of the Indian Union and
on 01.10.1963, the Mines and Minerals (Development &
Regulation) Act, 1957 (for short 'the MMDR Act') was made G
applicable to the State of Goa. On 10.03.1975, the Controller
of Mining Leases issued a notification calling upon every lessee
and sub-lessee to file returns under Rule 5 of the Mining Leases
(Modification of Terms) Rules, 1956 and sent copies of the
notification to the concessionaires in Goa. Aggrieved, the
H
320
SUPREME COURT REPORTS
[2014] 5 S.C.R.
A
concessionaires moved the Bombay High Court, Goa Bench,
and by judgment dated 29.09.1983, in Vassudeva Madeva
Salgaocar vs. Union of India [1985(1) Born. CR 36], the
Bombay High Court restrained the Union of India from treating
the concessions as mining leases and from enforcing the
B
notification against the concessionaires.
3. Parliament thereafter passed the Goa, Daman and Diu
Mining Concessions (Abolition and Declaration as Mining
Leases) Act, 1987 (for short 'the Abolition Act') which received
the assent of the President on 23.05.1987. Section 4 of the
C
Abolition Act abolished the mining concessions and declared
that with effect from the 2oth day of December, 1961, every
mining concession will be deemed to be a mining lease
granted under the MMDR Act and that the provisions of the
MMDR Act will apply to such mining lease. Section 5 of the
D
Abolition Act further provided that the concession holder shall
be deemed to have become a holder of the mining lease under
the MMDR Act in relation to the mines in which the concession
relates and the period of such lease was to extend upto six
months from the date when the Abolition Act received
E
President's assent, i.e. upto 22.11.1987. On 14.10.1987, subrules (8) and (9) were inserted in Rule 24A of the Mineral
Concession Rules, 1960 (for short 'the MC Rules') which deal
with renewal of mining leases in Goa, Daman and Diu. The
Abolition Act was challenged by the lessees before the Bombay
F
High Court in a writ petition. The High Court passed an interim
order permitting the lessees to carry on mining operations and
the mining business in the concessions for which renewal
applications had been filed unde.r Rule 24A of the MC Rules.
Subsequently, the High Court held in its judgment dated
G
20.06.1997 that the Abolition Act was valid but Section 22(i)(a)
of the Abolition Act would operate prospectively and not
retrospectively. The concessionaires filed special leave petition
against the judgment dated 20.06.1997 befo~e this Court. On
02.03.1998, this Court passed an inter+m order permitting the
H
concessionaires to carry on mining operations and mining
GOA FOUNDATION v. UNION OF INDIA
321
[A.K. PATNAIK, J.]
business in the mining areas for which renewal applications A
have been made on the condition that the lessee pays to the
Government dead rent from the date of commencement of the
Abolition Act. Subsequently, this Court granted leave in the
special leave petition and continued the aforesaid interim order.
·The Justice Shah Commission and its report:
4. As reports were rec~ived from various State
Governments of widespread mining of iron ore and manganese
ore in contravention of the provisions of the MMDR Act, the
Forests (Conservation) Act 1980, the Environment (Protection)
Act, 1986 and other rules and guidelines issued thereunder, the
Central Government appointed the Justice Shah Commission
under Section 3 of the Commissions of Inquiry Act, 1952 by
notification dated 22.11.2010. Paras 2 and 3 of the notification,
which are relevant, are extracted hereinbelow:
"2. The terms of reference of the Commission shall beB
c·
D
(i) to inquire into and determine the nature and extent of
mining and trade and transportation, done illegally or
without lawful authority, of iron ore and manganese ore,
E
and the losses therefrom; and to identify, as far as
possible, the persons, firms, companies and others that
are engaged in such mining, trade and transportation of
iron ore and manganese ore, done illegally or without
lawful authority;
·
F
(ii) to inquire into and determine the extent to which the
management, regulatory and monitoring. systems have
failed to deter, prevent, detect and punish offences relating
to mining, storage, transportation, trade and export of such
G
ore, done illegally or without lawful authority, and the
persons responsible for the same;
(iii) to inquire into the tampering of official records,
including records relating to land and boundaries,/to
H
A
B
c
322
SUPREME COURT REPORTS
[2014] 5 S.C.R.
facilitate illegal mining and identify, as far as possible, the
persons responsible for such tampering; and
(iv) to inquire into the overall impact of such mining, trade
transportation and export done illegally or without lawful
authority, in terms of destruction of forest wealth, damage
to the environment, prejudice to the livelihood and other
rights of tribal people, forest dwellers and other persons
in the mined areas, and the financial losses caused to the
Central and State Governments.
3. The Commission shall also recommend remedial
measures to prevent such mining, trade, transportation and
export done illegally or without lawful authority."
The Justice Shah Commission visited Goa and issued
D notices under Section 4 of the Commissions of Inquiry Act, 1952
calling for information from concerned authorities and the
lessees and submitted its interim report on 15.3.2012 to the
Ministry of Mines, Union of India. On 7.9.2012, the Justice Shah
Commission Report on Goa was tabled in Parliament along
E with an Action Taken Report of the Ministry of Mines and on
10.9.2012 the State Government of Goa passed an order
suspending all mining operations in the State of Goa with effect
from 11.9.2012 ..
F
5. Pursuant to this order of the State Government, on
11.09.2012 and 12.09.2012 the District Magistrates of the
State of Goa banned transportation of iron ore in their
respective districts and the Director of Mines and Geology
ordered for verification of mineral ore which was already
extracted. On 13.9.2012, the Director of Mines and Geology,
G Government of Goa issued Show Cause Notices to 40 mining
leases. On 14.9.2012, the Ministry of Environment and Forests
of the Union of India also directed that all Environmental
Clearances granted to mines in the State of Goa be kept in
abeyance.
H
GOA FOUNDATION v. UNION OF INDIA
323
[A.K. PATNAIK, J.]
6. On the basis of findings in the report of the Justice Shah
A
Commission on illegal mining in the State of Goa, the Goa
Foundation has filed Writ Petition (C) 435 of 2012 as Public
Interest Litigation praying for directions to the Union of India and
the State of Goa to take steps for termination of the mining
leases of lessees involved in mining in violation of the Forest B
(Conservation) Act, 1980, the Mines and Minerals (Regulation
and Development) Act, 1957, the Mineral Concessions Rules,
1960, the Environment (Protection) Act, 1986, the Water
(Prevention & Control of Pollution) Act, 1974 and the
Air (Prevention and Control of Pollution) Act, 1981 as well as c
the Wild Life (Protection) Act, 1972. The Goa Foundation has
prayed that a direction be issued to the respondents to
prosecute all those who have committed offences under the
different laws and are involved in the pilferage of State revenue
through illegal mining activities in the State of Goa including the D
public servants who have aided and abetted the offences.