Supreme Court Upholds Mining Lease: Dhruva Enterprises vs. C. Srinivasulu (2021)

Date of the Judgment: September 15, 2021
Citation: (2021) INSC 628
Judges: L. Nageswara Rao, B.R. Gavai, and B.V. Nagarathna
Can a mining lease be cancelled if authorities reduce the area applied for, and if a water body is nearby? The Supreme Court recently addressed this question in a case involving Dhruva Enterprises. The court examined whether the National Green Tribunal (NGT) was correct in suspending a mining operation based on these grounds. This judgment clarifies the process for granting mining leases and the importance of following due procedure. The bench consisted of Justices L. Nageswara Rao, B.R. Gavai, and B.V. Nagarathna, with the judgment authored by Justice B.R. Gavai.

Case Background

Dhruva Enterprises applied for a mining lease on July 28, 2016, seeking to mine Quartz and Feldspar over 29 hectares in Kalwakole Village, Telangana. The application stated that the nearest habitation was Yenambetla, about 1.6 km away, and the nearest water body, Singotham Lake, was 0.25 km away. The application went through several stages of review, including by the Revenue Divisional Officer (RDO), the Assistant Director of Mines and Geology, and the Director of Mines and Geology. The Director of Mines and Geology approved a quarry lease for 24 hectares, directing Dhruva Enterprises to submit a mining plan, consent from the Telangana State Pollution Control Board, and Environmental Clearance (EC) from the Ministry of Environment & Forest (MoEF). The State Environment Impact Assessment Authority (SEIAA) granted EC on April 11, 2017, exempting the project from public hearing because the area was less than 25 hectares.

Timeline:

Course of Proceedings

Respondents 1 to 3 challenged the EC before the National Green Tribunal (NGT), Southern Zone, Chennai, which was later transferred to the NGT Principal Bench, New Delhi. The respondents argued that the area was reduced from 29 to 24 hectares to avoid public hearing and that Singotham Lake was too close to the mining area. The NGT initially stayed the order, which was challenged in the Supreme Court. The Supreme Court directed the NGT to hear the matter, following which the NGT ruled in favor of the respondents, directing a fresh Environmental Impact Assessment and suspending mining operations. Dhruva Enterprises then appealed to the Supreme Court.

Legal Framework

The case primarily revolves around the Environment Impact Assessment Notification 2006 (EIA Notification 2006) and the National Green Tribunal Act, 2010. The EIA Notification 2006 outlines the procedure for granting environmental clearances for projects, including mining. It specifies when a public hearing is required. The National Green Tribunal Act, 2010, establishes the NGT and defines its powers to hear appeals related to environmental matters. Specifically, the judgment refers to Section 16, Section 18(1), and Section 15 of the National Green Tribunal Act, 2010, which pertain to the appellate jurisdiction of the NGT. The EIA Notification 2006, as amended, stipulates that projects with a mining area of 25 hectares or more require a public hearing. The core issue is whether the reduction of the mining area from 29 to 24 hectares was a deliberate attempt to circumvent the public hearing process.

Arguments

Appellant’s Arguments (Dhruva Enterprises):

• The appellant argued that the reduction in the mining area from 29 hectares to 24 hectares was not their decision but was made by the authorities. They had originally applied for 29 hectares and had no intention to avoid public hearing.
• The appellant contended that the distance between the proposed mining area and Singotham Lake was 0.25 km, which is in compliance with the law. They supported this claim with Google Maps and photographs.
• The appellant highlighted that they had followed all procedures under the EIA Notification 2006, and the proposal underwent scrutiny at various stages before the SEIAA granted the EC.

Respondents’ Arguments (C. Srinivasulu and Others):

• The respondents argued that the mining area was reduced from 29 hectares to 24 hectares to avoid the requirement of a public hearing.
• They contended that Singotham Lake was in close proximity to the proposed mining area, making the EC legally incorrect.
• The respondents conceded that they would not object to mining activities if the distance between the mining area and the water body was more than 0.25 km.

Innovativeness of the Argument: The appellant innovatively used Google Maps and photographs to demonstrate the actual distance between the mining area and Singotham Lake, which was a critical point of contention.

Issues Framed by the Supreme Court

The Supreme Court considered the following issues:

1. Whether the area was reduced by the appellant from 29 hectares to 24 hectares only in order to avoid the rigours of public hearing.
2. Whether Singotham Lake was in close proximity to the proposed mining area, making the EC legally incorrect.

Treatment of the Issue by the Court:

Authorities

The Supreme Court relied on several documents and reports to arrive at its decision:

• Guidelines framed by the Government of Telangana dated 19th January 2015, specifying the competent authority for issuing NOC for mining leases.
• Letter from the Assistant Director of Mines and Geology, Mahabubnagar, to the RDO, Nagarkurnool, dated 28th July 2016, instructing on aspects to consider while issuing NOC.
• Report of the Tahsildar, Peddakothapally, dated 6th August 2016, after inspecting the site.
• NOC granted by the RDO, Nagarkurnool, dated 8th August 2016.
• Communication from the Director of Mines and Geology, Hyderabad, dated 7th September 2016, granting in-principle approval for a Quarry Lease for 24 hectares.
• Mining Plan submitted by the appellant on 20th October 2016.
• Minutes of the meeting of the State Expert Appraisal Committee (SEAC) held on 30th December 2016.
• Minutes of the meeting of the SEIAA held on 11th April 2017, granting EC to the project.
• Order dated 22nd April 2017, by the Government of Telangana, granting Quarry Lease for Quartz over 24 hectares.

Judgment

How each authority was viewed by the Court?

The Court relied on the various reports and communications from the Tahsildar, RDO, Director of Mines and Geology, SEAC and SEIAA to establish that the due process was followed in granting the mining lease and environmental clearance. The Court noted that the **Tahsildar’s report** confirmed the site inspection, the **RDO’s communication** granted the NOC, the **Director of Mines and Geology’s communication** approved the lease for 24 hectares, the **SEAC’s minutes** recommended the EC, and the **SEIAA’s minutes** granted the EC. These authorities were used to show that the reduction in area was not done by the appellant and that all procedures were followed.

The Supreme Court held that the National Green Tribunal (NGT) had erred in concluding that the appellant reduced the area to avoid public hearing and that the distance to Singotham Lake was not compliant with the law. The court noted that the appellant had applied for 29 hectares, but the authorities had recommended only 24 hectares. The court found that the authorities had physically inspected the site and used GPS to survey the area, maintaining a 0.25 km distance from Singotham Lake. The court concluded that the proposal underwent scrutiny at various stages and was found to be in conformity with the law. Therefore, the Supreme Court quashed the NGT’s order and upheld the mining lease granted to the appellant.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the procedural compliance and factual accuracy demonstrated by the appellant and the relevant authorities. The court emphasized that the reduction in the mining area was not a deliberate act by the appellant to avoid public hearing but was a decision made by the authorities. Additionally, the court found that the distance between the mining area and Singotham Lake was in compliance with the law, based on the reports of the Tahsildar and the Surveyor. The court also noted that the proposal had undergone scrutiny at various stages, including physical inspections and GPS surveys, before the EC and mining lease were granted. The court’s reasoning was based on the principle that if the prescribed procedure is followed and the facts are verified, then the decisions made by the authorities should be upheld.

Logical Reasoning:

The court’s reasoning was based on a careful examination of the facts and the due process followed by the authorities. The court emphasized that the appellant had followed all procedures and that the authorities had conducted thorough inspections and surveys before granting the mining lease and environmental clearance. The court’s decision is a clear statement that if the prescribed procedure is followed and the facts are verified, then the decisions made by the authorities should be upheld.

The Supreme Court stated, “It could thus be seen that the proposal of the appellant has undergone scrutiny at various stages. Only after it was found that it was in conformity with the provisions of law, the ‘in­principle’ approval and EC for Quarry Lease had been granted.”

The court also noted, “Insofar as the finding of the learned Tribunal that the area was reduced to 24 hectares from 29 hectares only in order to avoid the rigours of public hearing, is totally erroneous. The appellant had no role to play in the same.”

The court further clarified, “Insofar as the mandatory distance from the water body is concerned, the authorities upon survey had found that the mandatory distance of 0.25 km is maintained.”

Key Takeaways

• Mining lease applicants must ensure all procedures and legal requirements are strictly followed.
• Authorities must conduct thorough inspections and surveys before granting approvals.
• Reduction in the applied area by authorities does not necessarily invalidate the lease, provided it is not done to circumvent the law.
• The specified distance from water bodies must be accurately maintained and verified.
• The judgment reinforces the importance of due process and factual accuracy in environmental clearances and mining leases.

Directions

The Supreme Court did not provide any specific directions other than quashing the judgment and order of the National Green Tribunal, thereby upholding the mining lease granted to the appellant.

Development of Law

The ratio decidendi of this case is that if the authorities reduce the area applied for a mining lease, it is not the fault of the applicant as long as the due process has been followed. The judgment also clarifies that if the mandatory distance from water bodies is maintained, the mining lease can be upheld. This case reinforces the importance of following due process and factual accuracy in environmental clearances and mining leases.

Conclusion

The Supreme Court’s judgment in Dhruva Enterprises vs. C. Srinivasulu quashed the National Green Tribunal’s order, thereby upholding the mining lease granted to Dhruva Enterprises. The court found that the reduction of the mining area from 29 to 24 hectares was not done by the appellant to avoid public hearing but was a decision of the authorities. The court also found that the mandatory distance of 0.25 km from Singotham Lake was maintained. The judgment reinforces the importance of adhering to due process and factual accuracy in environmental clearances and mining leases.