Supreme Court Modifies Mining Cap in Karnataka: Samaj Parivartana Samudaya vs. State of Karnataka (2017)

Introduction

Date of the Judgment: 14 December 2017
Citation: 2017 INSC 1037
Judges: Ranjan Gogoi, J., Abhay Manohar Sapre, J., Navin Sinha, J.
Can a court-imposed cap on mining production be modified due to changed circumstances? The Supreme Court of India addressed this question in a Public Interest Litigation concerning mining activities in Karnataka. The core issue revolved around whether to maintain, modify, or lift the existing cap on iron ore production in the districts of Bellary, Chitradurga, and Tumkur. The judgment was delivered by a three-judge bench comprising Justices Ranjan Gogoi, Abhay Manohar Sapre, and Navin Sinha, with the opinion authored by Justice Ranjan Gogoi.

Case Background

Initially, the Supreme Court imposed an absolute ban on mining activities in Bellary, Chitradurga, and Tumkur districts of Karnataka due to rampant illegal mining and ecological degradation. This ban was implemented through orders dated 29 July 2011 and 26 August 2011. To ensure a minimum supply of iron ore, the Court permitted M/s National Mineral Development Corporation (NMDC), a public sector entity, to extract 12 Million Metric Tonnes (MMT) of iron ore annually via an order on 5 August 2011. Subsequently, the Court accepted recommendations from the Indian Council of Forestry Research and Education (ICFRE), setting a maximum production limit of 25 MMT for Bellary and 5 MMT for Chitradurga and Tumkur districts. Mining operations were allowed to resume in a limited manner for Category ‘A’ and ‘B’ leases, subject to strict adherence to the Reclamation and Rehabilitation (R&R) Plans approved by the Monitoring Committee. M/s Sandur Manganese and Iron Ores Ltd. and M/s MSPL Ltd., resumed their mining operations with Maximum Permissible Annual Production (MPAP) fixed by the Monitoring Committee. However, the Central Empowered Committee (CEC) recommended an enhancement of MPAP for both companies which was approved by the Monitoring Committee. However, due to subsequent orders of the Court, the lessees were not able to fully exploit their approved MPAP.

Timeline:

Course of Proceedings

The judgment does not specify any lower court proceedings. The matter was directly taken up by the Supreme Court of India as a Public Interest Litigation (PIL).

Legal Framework

The judgment primarily deals with the implementation and modification of orders passed by the Supreme Court itself, rather than interpreting specific statutes or constitutional provisions. The core of the legal framework is based on the principle of intergenerational equity and the need to protect the environment from the adverse effects of illegal mining. The Court’s previous orders established production caps and required adherence to R&R Plans. The present judgment re-evaluates these caps in light of changed circumstances and expert recommendations.

Arguments

Arguments by M/s Sandur Manganese and Iron Ores Ltd. and M/s MSPL Ltd.:

• They sought modification of the Court’s orders dated 5 August 2011 and 1 September 2014 to allow them to extract iron ore according to their approved MPAP.
• They argued that the orders permitting NMDC and MML to extract iron ore had effectively reduced their own MPAP due to the overall cap imposed by the Court.

Arguments by M/s Karnataka Iron and Steel Manufacturers Association (KISMA):

• KISMA sought a separate cap of 10 MMT for the earlier Category ‘C’ leases that were now being auctioned, independent of the 30 MMT cap for the three districts.
• They submitted that the existing cap was primarily allocated to Category ‘A’ and ‘B’ mines, leaving no room for the auctioned Category ‘C’ mines.
• They stated that their members are prepared to construct closed-pipe downhill conveyor belt systems, railway sidings, and railway sub-lines as per the R&R Plans.

Arguments by Federation of Indian Minerals-Southern Region (FIMI-South):

• FIMI-South supported KISMA’s prayer, arguing that the current cap should be vacated, allowing each lessee to extract iron ore as per their approved R&R Plan.
• They contended that the active MPAP of mining leases in the three districts was already over 35 MMT, making the 30 MMT cap impractical.

Arguments by Chitradurga Sustainable Mining Forum:

• They joined KISMA and FIMI-South in seeking the vacation of the annual cap, allowing each lessee to operate as per their approved R&R Plan.

Arguments by the State of Karnataka:

• The State of Karnataka submitted that the cap should be raised from 30 MMT to 40 MMT due to increased demand for iron ore.
• They pointed out significant infrastructure improvements and suggested a gradual increase to 50 MMT, subject to successful implementation of the Comprehensive Environmental Plans for the Mining Impact Zone (CEPMIZ).

Arguments by the Ministry of Mines, Government of India:

• They argued that fixing a cap on mineral extraction should be the discretion of the Executive branch, not the Court.
• They referred to the Court’s observation in Common Cause vs. U.O.I. & Ors. [2017 (9) SCC 499] that fixing a cap is the business of the Executive.
• They supported the CEC’s recommendations for enhancing the cap and that the revised cap should be independent of the newly auctioned Category ‘C’ mines.

Arguments by the Petitioner (Samaj Parivartana Samudaya):

• The petitioner argued that the cap should not be modified to maintain intergenerational equity and ensure the availability of iron ore for future generations.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the core issues that the Court addressed were:

1. Whether the existing cap on iron ore production in the districts of Bellary, Chitradurga, and Tumkur should be maintained, modified, or lifted.
2. Whether the newly auctioned Category ‘C’ mines should be included within the permissible quantum of production fixed for Category ‘A’ and ‘B’ mines.
3. Whether the recommendations of the CEC regarding the enhancement of MPAP for various mines should be accepted.

Treatment of the Issue by the Court

Authorities

The Court considered the following authorities:

• Common Cause vs. U.O.I. & Ors. [2017 (9) SCC 499] – Supreme Court of India. This case was cited by the Ministry of Mines to argue that fixing a cap on mineral extraction is the business of the Executive branch.

The Court also considered the following legal provisions:

• Orders dated 5.08.2011 and 1.09.2014 of the Supreme Court: These orders imposed the initial cap on mining production and permitted NMDC and MML to extract iron ore.
• Reclamation and Rehabilitation (R&R) Plans: These plans, approved by the Monitoring Committee, specified permissible limits for each mine based on scientific studies of reserves, dumping areas, and available infrastructure.

Judgment

How each authority was viewed by the Court:

• Common Cause vs. U.O.I. & Ors. [2017 (9) SCC 499]: The Court acknowledged the principle that fixing a cap on mineral extraction is the business of the Executive but noted that the present case was a result of rampant illegal mining that necessitated judicial intervention.
• Orders dated 5.08.2011 and 1.09.2014: The Court modified these orders to reflect the changed circumstances and the recommendations of the CEC.
• Reclamation and Rehabilitation (R&R) Plans: The Court relied heavily on these plans, which were prepared based on scientific studies, to determine the revised permissible limits for each mine.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• Changed Circumstances: The Court recognized that the situation on the ground had significantly changed since the initial cap was imposed. This included the preparation of R&R Plans, infrastructure improvements, and reassessment of mineral reserves.
• Scientific Basis: The Court relied on the scientific studies and recommendations of the CEC and ICFRE, which provided a more accurate assessment of permissible production limits for each mine.
• Economic Considerations: The Court acknowledged the increased demand for iron ore and the need to balance environmental protection with economic growth.
• Transparency: The Court noted that the auction of Category ‘C’ mines was conducted through a transparent process and that these mines should not be jeopardized by the cap fixed for Category ‘A’ and ‘B’ mines.
• Intergenerational Equity: While the Court acknowledged the need for intergenerational equity, it also recognized the need for a more realistic solution that takes into account the current situation.

The Court’s reasoning was based on a combination of factual changes and legal considerations. The factual changes included the preparation of R&R Plans, infrastructure improvements, and reassessment of mineral reserves. The legal considerations included the need to balance environmental protection with economic growth and the principle of intergenerational equity.

The Court also considered alternative interpretations, including maintaining the existing cap, but rejected them in favor of a more realistic solution that takes into account the current situation. The Court’s final decision was based on the recommendations of the CEC, which were supported by scientific studies and expert opinions.

The Court’s decision was made in clear and accessible language. The Court stated that the cap for Category A and B mines was to be enhanced, and that Category C mines were to be considered separately. The Court also directed that all pending proposals for enhancement of MPAP should be decided without delay.

The Court’s decision was unanimous with all three judges concurring on the final order. There was no minority opinion.

“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.”

“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.”

“The operation of the mines already auctioned and such auctions that may take place in the future ought not to be jeopardized by including the said mines, which are covered under a different legal and business regime, to come within the cap fixed for categories ‘A’ and ‘B’ mines.”

Key Takeaways

• The Supreme Court modified the existing cap on iron ore production in Bellary, Chitradurga, and Tumkur districts based on the recommendations of the CEC.
• The cap for Category ‘A’ and ‘B’ mines was enhanced, while Category ‘C’ mines were to be treated separately.
• The Court recognized the need to balance environmental protection with economic growth and considered the changed circumstances on the ground.
• The decision emphasizes the importance of scientific studies and expert opinions in determining permissible production limits.
• The judgment sets a precedent for modifying court-imposed caps when circumstances change and new scientific data becomes available.

Directions

The Supreme Court directed that all pending proposals for enhancement of MPAP should be decided without delay, subject to the revised cap.

Specific Amendments Analysis

There are no specific amendments discussed in the judgment.

Development of Law

The ratio decidendi of this case is that court-imposed caps on mining production can be modified based on changed circumstances, scientific studies, and expert recommendations. The Court emphasized the need for a realistic approach that balances environmental protection with economic growth. This judgment also clarifies that mines operating under different regimes (such as the auctioned Category ‘C’ mines) should be treated separately and not be subjected to the same production caps as other mines.

Conclusion

The Supreme Court’s judgment in Samaj Parivartana Samudaya vs. State of Karnataka modified the existing cap on iron ore production in Karnataka, recognizing the changed circumstances and the need for a more realistic approach. The Court accepted the recommendations of the CEC, enhancing the cap for Category ‘A’ and ‘B’ mines and treating Category ‘C’ mines separately. This decision underscores the importance of scientific studies, expert opinions, and economic considerations in regulating mining activities while maintaining environmental protection.