Illegal Mining in Odisha: Landmark Judgment on Environmental and Regulatory Violations

The Supreme Court judgment in the case of Common Cause v. Union of India sheds light on one of the largest mining scandals in India, exposing the illegal extraction of iron ore and manganese in the state of Odisha. The judgment underscores the environmental degradation, regulatory failures, and the massive financial implications of unchecked mining activities.

The case arose from petitions filed under Article 32 of the Constitution, highlighting extensive illegal mining in Keonjhar, Sundergarh, and Mayurbhanj districts of Odisha. The court’s observations point to a mining scandal of unprecedented scale, with lessees allegedly operating in violation of statutory provisions, causing severe environmental damage and disregarding tribal welfare.

Background of the Case

The case originated from a public interest litigation filed by Common Cause and another petition by Prafulla Samantra and Anr. against the Union of India and others. The petitions were filed to address rampant illegal mining activities in Odisha and sought the following key reliefs:

• Immediate cessation of illegal mining activities.
• Investigation by a Special Investigation Team (SIT) or the Central Bureau of Investigation (CBI).
• Recovery of the financial losses incurred due to illegal mining.
• Prosecution of those involved in the violations.

Findings of the Court

The Supreme Court noted that extensive mining operations were carried out without necessary environmental and forest clearances, leading to the destruction of forests and severe environmental pollution. The court observed:

“The facts revealed during the hearing of these writ petitions suggest a mining scandal of enormous proportions and one involving megabucks. Lessees have rapaciously mined iron ore and manganese ore, apparently destroyed the environment and forests, and perhaps caused untold misery to the tribals in the area.”

Role of the Central Empowered Committee (CEC)

The Central Empowered Committee (CEC) was tasked with examining the extent of illegal mining in Odisha. The CEC’s findings revealed:

• Excess mining beyond permitted limits.
• Non-compliance with environmental and forest regulations.
• Encroachment on forest lands.
• Illegal mining outside the sanctioned lease areas.
• Failure of state machinery in regulating mining operations.

According to the CEC’s final report, the total illegal extraction of iron and manganese ore was 2,155.117 lakh metric tons, valued at over ₹17,576.16 crores. The report also noted the rampant air and water pollution caused by mining activities, affecting the lives of local communities.

Arguments by the Petitioners

The petitioners, led by advocate Prashant Bhushan, contended that the large-scale illegal mining activities in Odisha were carried out with the tacit approval of authorities. They argued:

“The evidence provided by the CEC and the Justice M.B. Shah Commission clearly establishes that mining was conducted without environmental clearances, causing irreversible environmental damage. The court must direct the government to recover the financial loss incurred and prosecute those responsible.”

They also stressed the need for a stricter regulatory framework to prevent further exploitation of natural resources.

Arguments by the Respondents

The respondents, which included mining companies and the state government, argued that many of the alleged violations were due to procedural lapses and bureaucratic delays in granting clearances. They claimed:

“Mining activities were conducted in good faith, and delays in approvals should not be attributed to deliberate violations. The companies have made substantial contributions towards tribal welfare and environmental conservation.”

Some mining companies contended that they had paid compensatory afforestation fees and NPV (Net Present Value) to mitigate the environmental impact.

Key Observations by the Supreme Court

The Supreme Court firmly rejected the arguments of the respondents, stating:

“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.”

The court held that mining operations conducted without mandatory environmental and forest clearances were illegal and liable for full compensation under Section 21(5) of the Mines and Minerals (Development and Regulation) Act, 1957.

Supreme Court’s Verdict

In a landmark decision, the Supreme Court ordered:

• Mining companies to pay 100% of the value of illegally extracted ore as compensation.
• The government to recover dues from the companies amounting to over ₹59,000 crores.
• Immediate cessation of mining activities without environmental and forest clearances.
• The state to set up a Special Purpose Vehicle (SPV) for tribal welfare and area development, funded through the recovered compensation.
• Implementation of stricter regulatory frameworks to prevent illegal mining.
• Re-evaluation of the National Mineral Policy to ensure sustainable and lawful mining practices.

Impact of the Judgment

This verdict sets a precedent for mining regulations across India. By holding mining companies accountable for their environmental violations and enforcing strict penalties, the Supreme Court has reaffirmed its commitment to sustainable development. The judgment ensures that mining activities adhere to legal frameworks, prioritize environmental protection, and contribute to the welfare of affected communities.

The ruling is expected to lead to a significant shift in the mining sector, compelling companies to comply with environmental laws and discouraging regulatory negligence.

As India moves forward, this judgment serves as a crucial reminder that natural resources belong to the people and must be preserved for future generations.

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Download Judgment: Common Cause, Praful vs Union of India and O Supreme Court of India Judgment Dated 02-08-2017.pdf

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