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Karnataka Mining : Amicus Curiae Suggests Doing Away With Contribution To SPV From Iron Ore Sale Value

LIVELAW NEWS NETWORK

16 Feb 2023 10:05 AM IST

    • Karnataka Mining : Amicus Curiae Suggests Doing Away With Contribution To SPV From Iron Ore Sale Value

    In the PIL regarding iron ore mining in certain districts of Karnataka, Senior Advocate Shyam Diwan, Amicus Curiae, on Wednesday told the Supreme Court that the Amicus was appointed in view of the "serious environmental dimensions" to the matter which are no longer involved as such, and that moving forward, it is the common consensus that the collection of 10% of the sale value from all...

    In the PIL regarding iron ore mining in certain districts of Karnataka, Senior Advocate Shyam Diwan, Amicus Curiae, on Wednesday told the Supreme Court that the Amicus was appointed in view of the "serious environmental dimensions" to the matter which are no longer involved as such, and that moving forward, it is the common consensus that the collection of 10% of the sale value from all the mining lessees towards the Special Purpose Vehicle for taking ameliorating and mitigating measures may no longer be needed

    The bench of Justices K. M. Joseph, Sanjiv Khanna and M. M. Sundresh was hearing the matter.
    At the outset, Senior Advocate Mukul Rohtagi, for the central PSU NMDC Ltd. (the contribution towards the SPV of which is 20% of the sale value of the two mines owned by it) submitted, "Your Lordships reduced 20 to 10 10 years ago. I am still at 20. The state is opposing the return of money by saying that if money is given back to NMDC, the state will lose revenue"
    Bench: "Who is the money actually with?"
    Mr. Rohatgi: "The money is lying with the state"
    Mr. Divan: "The Amicus was appointed in view of the serious environmental dimensions to this matter. There were forests which were being encroached, mining that was going on. Every rule was being broken. As such, there are none of those dimensions which are involved. We are now moving forward. What I have been able to find is that so far as the future is concerned, as far as retention of the 10% is concerned, I see everyone seems to be ad idem that there is no need, moving forward, to have that retention"
    Mr. Divan: "Now the question is with respect to the amount which has been collected. I find that there seems to be a slight deviation. The Central Empowered Committee says that this money can also go back. The Monitoring committee has a slightly different view and that view of the Monitoring Committee, also appointed by this Court, is that so far as moving forward is concerned, no retention etc to go, but in so far as the collections which have been made are concerned, those have gone to found a Special Purpose Vehicle which is the whole long-term plan to ensure that there is sufficient infrastructure over there and the damage does not recur"
    Advocate Prashant Bhushan, for the petitioner: "They (NMDC) may be category A now because now they have complied with all the clearances (The CEC had submitted a report on 03.02.2012 , making several recommendations one of which was to categorise the mines into three categories based on the extent of encroachment in respect of the mining pits and overburden dumps, determined in terms of percentage qua the total lease area. Three categories of the mines were suggested as ‘A’, ‘B’ and ‘C’)....Prior to that, because they didn’t have the clearances, in my respectful submission, for the past, they should be treated like the other non-'A' category people, that is 20% should be retained from these people, like category B etc"
    Mr. Rohatgi: "I am category 'A' from the beginning, I’m not 'B' or 'C'".
    Advocate Nikhil Goel, for the state of Karnataka: "There were cases where the leases were terminated a decade ago, there was mining in violation of forest clearance".
    Senior Advocate Dushyant Dave, for the Federation of Indian Mineral Industries, South: "This application should not be entertained. They have not filed a review. Specifically, this question was raised in our application. We said our lease is expired. He responded in reply that their lease is expired, don’t give it. Now by filing clarificatory application it cannot be done. Despite the fact that there is an order in our favour, the state is not implementing".
    Mr. Dave: "I am accepting that this is forest land and I would like to now move forward by taking forest clearance. I gave an undertaking to the High Court also that in case it is held to be forest land, I will comply. The problem is that from 2009, we are agitating, it is frustrating that the matter is not being heard. We succeeded in the High Court in 2016...."
    Bench: “We would have heard it today….We have read the matter, but this bench is recently constituted….”
    Mr. Diwan had also earlier told the bench that the matter came up and was notified and listed on Monday evening for the first time, and that he has not been able to get the adequate inputs for most of these matters.
    The bench then adjourned the matter to February 22
    In August last year, noting that the situation merits a cautious approach, the Supreme Court, refused to accept the recommendation of the Centrally Empowered Committee (CEC) to grant complete relaxation of the ceiling limit imposed on production of iron ore in certain districts in the state of Karnataka. The Apex Court observed that though generally it has accepted the recommendation of the CEC with respect to ceiling limits, it cannot accede to its latest recommendation in toto.
    The Bench of CJI N.V. Ramana and Justices Hima Kohli and C.T. Ravikumar enhanced the limit from 28 MMT to 35 MMT for iron ore production in Bellary District and from 7 MMT to 15 MMT for Chitradurga and Tumkur Districts collectively. While increasing the ceiling limit, it observed that in order to achieve sustainable development, the environmental concerns have to be balanced against the goals of economic development.

    "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….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."

    Previously, the Apex Court had lifted the curbs on iron ore sale in three districts of Karnataka (Bellary, Chitradurga and Tumkur) and allowed its export subject to the terms and conditions imposed by the Government of India. The Court allowed the mine operators to sell the already excavated iron ore by entering into direct contracts without resorting to e-auction. However, it had left open the question regarding lifting of the ceiling limit for production of iron ore and sought the opinion of the Court appointed Oversight Authority in this regard.

    Pertinently, the order dated 26.08.2022 notes that the Oversight Authority in its report dated 29.07.2022 has expressed its inability to express firm opinion quathe ceiling limit, in view of the conflicting reports submitted by the CEC and the Monitoring Committee. While the CEC has opined in its report dated 10.04.2022, that orders of fixing direct level caps on production of iron ore by Category A and Category B mines be vacated from the financial year 2022-2023, the Monitoring has taken a divergent view, alluding to the infrastructural capacity to transport the iron ore excavated once the ceiling is lifted.

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

    Click Here To Read/Download Order

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    KarnatakaJustice KM Joseph
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