SAMAJ PARIVARTANA SAMUDAYA AND ORS. VS STATE OF KARNATAKA AND ORS CASE

SAMAJ PARIVARTANA SAMUDAYA AND ORS. VERSUS STATE OF KARNATAKA AND ORS

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले



IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
IA No. 10973/2018, 83141/2017, 72931/2017 and 218/2014
IN
WRIT PETITION (CIVIL) NO. 562 OF 2009
SAMAJ PARIVARTANA SAMUDAYA
AND ORS. .....PETITIONERS
VERSUS
STATE OF KARNATAKA AND ORS. ..... RESPONDENTS
ORDER
1. The present hearing is in continuation of our earlier hearing and
order dated 20.05.2022, whereby this Court had considered and
granted certain reliefs relating to the sale and export of iron ore
in the Districts of Bellary, Tumkur and Chitradurga in the State
of Karnataka. In the said order, we had specifically left open the
question   of   the   lifting/relaxation   of   the   ceiling   limit   for
production of iron ore in the abovementioned Districts and had
sought an opinion from the Oversight Authority appointed by this
Court  vide  order dated 21.04.2022. The observations made by
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REPORTABLE
this Court were as follows:
“22….For   the   present,   we   propose   to   confine   the
scope of this order to examining the twin prayers
made by learned counsel for the applicants namely,
permission to sell the unsold stock of iron ore already
excavated without resorting to the process of eauction
conducted through the Monitoring Committee and for
lifting the ban on export of iron ore/pellets from the
districts of Bellary, Chitradurga and Tumkur situated
in   the   State   of   Karnataka.   Although   certain
submissions   were   made   by   the   parties   regarding
lifting of the ceiling limit for total production of iron
ore, at this juncture we are not inclined to decide the
said issue.
32. With respect to the submissions of the parties in
relation to the lifting of the ceiling limit for production
of   iron   ore   for   mining   leases   in   the   Districts   of
Bellary,   Chitradurga   and   Tumkur,   we   are   of   the
considered   opinion   that   it   would   be   expedient   to
obtain   an   opinion   from   the   Oversight   Authority
appointed by this Court vide order dated 21st April,
2022 about the same before deciding the said issue.
We request the Oversight Authority to take inputs
from the stakeholders, including the CEC and the
Monitoring Committee, and to send his opinion to
this Court preferably within a period of 4 weeks.”
2. On the last date of hearing, this Court took on record the Report
filed by the learned Oversight Authority and had directed that
copies of the same be made available to the parties whereafter,
the matter was posted for considering the issue of lifting of ceiling
limit.  
3. Heard   Mr.   Prashant   Bhushan,   learned   counsel   appearing   on
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behalf of the original petitioner and Mr. Dushyant Dave, learned
senior   counsel   appearing   on   behalf   of   Federation   of   Indian
Mineral Industries, South.
4. Mr. Prashant Bhushan submitted that the ceiling limits were
imposed in  view  of  the earlier CEC recommendation and  the
report of the learned Lokayukta, which suggested that the rate of
mining of iron ore in the State of Karnataka was unsustainable
and would result in exhaustion of the iron ore deposits in the
State  of   Karnataka   within   30  years.  This   as  per   the   learned
counsel   would   seriously   impact   the   goal   of   inter­generational
equity.   Lastly,   he   submitted   that   as   the   learned   Oversight
Authority   has   sought   additional   information   regarding   the
infrastructural   capacity   before   giving   an   opinion   as   to   the
viability of lifting of the ceiling limit, this Court should presently
refrain from passing any orders at this juncture.
5. On   the   other   hand,   Mr.   Dushyant   Dave,   Senior   Advocate
submitted that the present regime relating to iron ore mining in
the State of Karnataka, with Court imposed ceiling limits, has
been in existence for over a decade. When the ceiling limit was
first imposed, the Court was confronted with a vastly different
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situation, where there was rampant illegal mining activity taking
place in the State of Karnataka. The said situation has now been
remedied through series of orders passed by this Court. As a
result, all illegal mining in the area has been halted and several
ameliorative measures have been taken for the improvement of
the   environment   and   ecology   of   the   region.   In   such
circumstances, the learned Senior Advocate submitted that the
present mining lease holders, who are complying with all the
laws, are being unfairly penalized for the illegalities that were
committed a decade ago. Such ceiling limits has resulted in a
discriminatory situation where mining lease holders in the State
of Karnataka are governed by one legal regime, while those in
other States of the country are governed by a completely different
regime.
6. At this juncture, it might be relevant, to highlight the history of
the ceiling limits on production of iron ore through various Court
orders. On 29.07.2011 and 26.08.2011, this Court had imposed
a ban on mining in the districts of Bellary, and Chitradurga and
Tumkur,   respectively   based   on   the   report   of   the   Centrally
Empowered Committee (‘CEC’). 
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7. On   13.04.2012,   this   Court   had   accepted   some   of   the
recommendations contained in the Report dated 13.03.2012 of
the CEC, including the following recommendation:
“B) a ceiling of 25 Million Metric Tonnes (MMT) for
total  production  of   iron  ore   from  all  the  mining
leases   in   District   Bellary  may   be   prescribed.   A
ceiling of 5 MMT for production of iron ore from
all the mining leases in Districts Chitradurga and
Tumkur together may be prescribed”
(emphasis supplied)
8. The above position was reiterated by this Court  vide  judgment
dated 18.04.2013, wherein the underlying set of petitions were
disposed. 
9. Vide  judgment   dated   14.12.2017,   while   dealing   with   certain
applications   seeking   enhancement/lifting   of   ceiling   cap.   This
court had permitted to increase the same from  25 MMT to 28
MMT with respect to Bellary District, and from 5 MMT to 7 MMT
for Chitradurga and Tumkur Districts collectively, based on a
fresh report of the CEC dated 14.07.2017. Certain observations
made by this Court for granting the relaxation merit reiteration:
“16. The cap fixed by this Court by Orders dated
5.08.2011 and 1.09.2014 was in a situation where
there   was   virtually   no   control   or   effective
regulatory  measures   as   to   the  maximum  output
that   could   be   generated   by   a   particular   mine.
There   was   no   scientific   study   of   the   iron   ore
reserves   allocated   to   a   particular   mine   in   the
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lease granted.  As  a result,  it  was  virtually  a  free
for all exercise designed to achieve the maximum
profit   within   the   shortest   possible   time   frame.
There   was   rampant   and   illegal   mining   with
encroachments   into   forest   land,   particularly   for
use   as   overburdened   dumps   resulting   from
excessive mining.  This  had   led  to  environmental
and   ecological   depredation   to   an   extent   that
necessitated   judicial   intervention  to   resolve   a
situation which is the normal course may have fallen
within the executive domain. It is on the basis of the
intervention by the Court that R&R Plans have been
prepared for each mine by an expert body, ICFRE,
based   on   a   scientific   study   of   various   parameters
including   mining   reserves.   R&R   Plans   have   been
drawn up specifying a particular/permissible limit for
each  mine  on  the  basis of  limitations  of reserves,
dumping   areas,   available   infrastructure   etc.
Accordingly, recommendations have been made for
increase of MPAP for 13 different category ‘A’ mines
and also for increase of MPAP in respect of 2 leases
held   by   the   public   sector   lessee,   i.e.,   NMDC.
Similarly,   10   mines   are   anticipated   to   undertake
operations within a short time….The solution offered
by the Court has to be realistic. Therefore, it is the
various   features   of   the   current   scenario   on   the
ground as highlighted in the report of the CEC that
would   deserve   a   close   look/consideration.   In   this
regard, we may also take note of the fact that the
assessment of reserves has also changed over the
years  and  today  the   iron­ore  reserves  across  the
State of Karnataka, comprising of haematite and
magnetite reserves, is to the tune of 10.071 BMT
(Billion Metric Tonnes). All these reasons impel us
to   accept   the   recommendations   of   the   CEC   for
enhancement of the cap for category A and B Mines
in the 3 district of Bellary, Tumkur and Chitradurga
as well as the recommendations with regard to MPAP
of NMDC and MML, as mentioned in paragraph 12
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hereinabove,   with   the   further   direction   that   all
pending proposals for enhancement of MPAP shall be
decided without delay, naturally, subject to the cap
as above.”
(emphasis supplied)
10. It is in light of the above set of facts that the submissions made
by learned counsel ought to be considered. In 2017, this court
was of the view that the situation had vastly changed in the State
of Karnataka and had therefore allowed an increase in the ceiling
limit. We are now in the year 2022. It can be no one’s case that
the situation subsisting in the State of Karnataka currently, is
the same as had existed when the underlying petition was first
taken up, or when the Court had passed the order in 2017,
relaxing the ceiling limit to some extent.
11. This   is   also   clear   from   the   changed   stance   of   the   State   of
Karnataka and the CEC before this Court. In 2017, the CEC had
recommended a cumulative increase in the ceiling limit up to 5
MMT, whereas now, the CEC supports the view that the ceiling
limit need not to continue. The State of Karnataka, in 2017, had
submitted before this Court that the ceiling limit may be raised to
40 MMT, and gradually increased later to 50 MMT. However, the
State of Karnataka is now in favor of a complete removal of the
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ceiling limit. 
12. In fact, it appears that the CEC, the State of Karnataka, the
Ministry   of   Steel,   Union   of   India,   Karnataka   Iron   and   Steel
Manufacturers   Association   (‘KISMA’)   and   the   mining   lease
holders are all  ad idem  that the changed situation on ground
warrants   a   complete   removal   of   the   ceiling   limits   that   were
imposed by this Court to ensure protection of the environment
and keeping in mind the principles governing intergenerational
equity. The response dated 10.04.2022 of the CEC (viz. CEC
Report No. 3 of 2022) on the issue of lifting of ceiling limits merits
reproduction and is extracted herein below:  
“17. This   Hon’ble   Court   by   orders   dated
05.08.2011   and   01.09.2014   had   fixed   a
production   cap   of   25   MMT   in   respect   of
District   Bellary   and   5   MMT   in   respect   of
Districts   Chitradurga   and   Tumkur.   This
Hon’ble   Court   by   Judgement   dated
14.12.2017 enhanced the production cap to
28 MMT in respect of District Bellary and 7
MMT for Districts Chitradurga and Tumkur.
The availability of iron ore as approved in the
R&R plans  currently exceeds the  limit  of  35
MMT per annum fixed by this Hon’ble Court. As
per the latest data furnished by the Monitoring
Committee,   currently   34   category   ‘A’   and   ‘B’
mining   leases   are   in   operation   with   an
approved MPAP of 36.31 MMT. An Additional 9
Category “C” mining leases and 4 Category “A”
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and “B” expired leases, which were e­auctioned,
are operational with MPAP of 5.54 MMT and
2.41 MMT respectively. Another 4 mining leases
located in Districts Bagalkote and Davanagere
have production capacity of 6.29 lakh MT per
annum and 60000 MT per annum respectively.
The production of iron ore in these two Districts
is not  affected by the  orders of  this  Hon’ble
Court. The sum of approved annual production
capacity of iron ore in Karnataka as on 31 .
03.2022 adds upto 44.949 MMT. In addition,
there are 5 Category “C” and 2 expired Category
“A” & “B” mines which have been e­auctioned
by   the   state   but   the   execution   of   lease
agreements are pending in respect of these 7
mines as on 31.3.2022.
23. Keeping in view the facts highlighted in the
preceding paragraphs, it is for consideration of
this Hon’ble Court whether the restrictions on
production and sale of the iron ore in the three
Districts   Bellary,   Chitradurga   and   Tumkur
imposed following the total ban on mining are
required to be reviewed and if agreed upon by
this Hon’ble Court the following may please be
considered
(i) Vacation of the orders of this Hon’ble
Court directing sale of iron ore through eauction   conducted   by   the   Monitoring
Committee,   and   which   ore   has   been
produced by the lessees after resumption
of mining operation. However, the sale of
balance  old  stock  of  iron   ore,  including
sub­grade iron ore available on the date of
imposition of ban on mining be continued
through   e­auction.   The   Monitoring
Committee be directed to dispose all the
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balance old stock through e­auction before
31st July 2022. If any stock over which the
lessee   has   the   ownership   right   is   left
unsold   the   lessee   may   be   allowed   to
dispose of it.
(ii) The collection of 10 per cent of the sale
value from all the lessee except NMDC and
20%   of   sale   value   from   NMDC   towards
their   contribution   to   the   SPV   may   be
discontinued.
(iii) Vacation of the orders on total ban on
export   of   iron   ore   and   pellets   from   the
districts   of   Bellary,   Chitradurga   and
Tumkur.
(iv)   Vacation   of   the   orders   on   fixing
district level caps on production of iron
ore   in   respect   of   Category   ‘A’   and
Category   ‘B’  mines   from   the   financial
year 2022­2023.
24. However the system of determination of the
Maximum   Permissible   Annual   Production
(MPAP) being fixed through the R&R Plans and
Supplementary   Environment   Plans,   after
ensuring the scientific and sustainable mining
and   after   taking   into   account   the   mining
reserves   available   within   the   lease   area   and
after following the standards stipulated under
various environmental and mining statutes, as
approved   in   order   dated   13.4.2012   and
judgement   dated   18.4.2013   of   this   Hon’ble
Court,   may   continue.   All   mining   leases   to
operate strictly adhering to such MPAP, as may
be fixed /refixed.”
13. The Monitoring Committee, without directly alluding to the issues
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raised by the others with respect to why the ceiling limit should
be maintained or lifted, has highlighted a separate concern, viz.,
the infrastructural incapacity to transport the iron ore excavated
if the ceiling limits were to be raised. It is in this context that the
learned Oversight Authority appointed by this Court expressed
his inability to conclude on the said issue. The learned Oversight
Authority, in his report dated 29.07.2022, observed as follows: 
The Oversight Authority as at present in unable
to express its firm opinion in the matter in view
of the conflicting reports submitted by Central
Empowered   Committee   and   the   Monitoring
Committee.  It is not for the Oversight Authority
to   express   any   opinion   as   to   whether   the
Monitoring Committee has exceeded its brief in
joining   an   issue   with   Central   Empowered
Committee by pleading for continuation of the
ceiling limit.   Be it as it may, it is just and
necessary to gather some further evidence in
the   matter   of   ‘current   available   road
infrastructure’,   ‘existing   as   well   as
improvements made to transport infrastructure’.
There is no evidence as such made available for
the   perusal   of   the   Oversight   Authority   as   to
what   are   the   developments   that   have   taken
place between today and 20.05.2022 i.e. when
the Hon’ble Supreme Court of India passed the
Orders referred to hereinabove.
14. Mr. Prashant Bhushan, learned counsel appearing on behalf of
the original petitioner, is therefore the sole objector to the request
11
of lifting of the ceiling limit, on principles. The motivating concern
behind the objection appears to be the anxiety that lifting of the
ceiling limit may spiral into the same situation that had resulted
in this Court’s judicial intervention in the first place. Learned
counsel submitted that such an order of lifting the ceiling limit
might   lead   to   unmitigated   mining   activity   in   the   State   of
Karnataka,   setting   the   clock   back   entirely   and   resulting   in
regression of the entire state of affairs. 
15. The   concerns   of   the   original   petitioner   and   the   Monitoring
Committee merit due consideration of this Court. Much good
work has been done in the State of Karnataka, because of the
action initiated by the original petitioner and the subsequent
judicial interventions by this Court. In fact, it is this progress
made steadily over the past decade that weighed with this Court
to even consider the relief regarding raising of the ceiling limit
sought by the present applicants. The concerns raised by the
original petitioner, of possible over excavation and its adverse
impact on intergenerational equity, must be balanced against the
concerns of the other parties, as the principles of sustainable
development also comes into play.
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16. This Court has generally accepted the recommendations of the
CEC when it comes to the ceiling limit. In the present case, the
CEC has recommended a complete relaxation of the ceiling limit.
But we are not inclined to allow the same in toto. Rather, the
situation   merits   a   cautious   approach,   keeping   in   view   the
concerns raised and to ensure that any changes in the situation
with respect to the mining activity in the State of Karnataka is
brought about gradually, we are of the opinion that the ceiling
limit of iron ore mining may be raised from 28 MMT to 35 MMT
for District Bellary, and from 7 MMT to 15 MMT for Chitradurga
and Tumkur Districts collectively. 
17. Conservation of the ecology and the environment must go hand
in hand with the spirit of economic development and the fine
balance between the two goals is what is sought to be achieved
even now.
18. IA Nos. 83141/2017, 72931/2017 and 218/2014 are disposed of
on the above terms. As far as IA No. 10973/2018 is concerned,
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the   same   relates   to   directions   to   the   CEC   and   Monitoring
Committee regarding deciding applications for enhancement of
MPAP in terms of the earlier orders of this Court. The same may
be considered by the Court on the next date of hearing. 
...........................CJI.
(N.V. RAMANA)
…...........................J.
(HIMA KOHLI)
      
                …...........................J.
(C.T. RAVIKUMAR)
NEW DELHI;
AUGUST 26, 2022.
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