COMMON CAUSE versus UNION OF INDIA AND ORS.
[2017] 13 S.C.R. 361, Supreme Court of India, 2017
Outcome: Directions issued
Segment: Ratio
COMMON CAUSE v. UNION OF INDIA AND ORS. 
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[MADAN B. LOKUR, J.] 
compensation. In other words, only one set of compensation 
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would be payable by the mining lease holder. 
(I 0) No mining lease holder will be entitled to the benefit of any 
payments made towards NPV or additional NPV or penal 
compensatory afforestation. 
Violation of Section 6 of the MMDR Act 
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187. We have examined the report of the CEC with regard to the 
alleged violation of Section 6 of the MMDRAct and find that there have 
been several amendments to Section 6 relating to the maximum area for 
which a mining lease may be granted to a person. The following is the 
result of the amendments: 
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From 1.6.1958 to 11.9.1972 - maximum lease area 10 sq. 
miles. 
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From 12.9.1972 to 9.2.1987 - maximum lease area IO sq. 
km or 1000 hectares in any one State. 
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3. 
From I0.2.1987to 17.12.1999-maximumleasearea 10 
sq.km or 1000 hectares in any part of the country. 
4. 
From 18.12.1999 till date-maximum lease area 10 sq.km 
or 1000 hectares in one State. 
188. While the word 'person' has not been defined in the MMDR 
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Act, a reading of Section 5 thereof indicates that the State Government 
shall not grant a mining lease to any person unless such person is an 
Indian national or a company as defined in the Companies Act, 1956 and 
subsequently in the Companies Act of2013. 
189. Sub-section (2) of Section 6 of the MMDR Act provides 
that a person acquiring by, or in the name of, another person a
mining 
lease which is intended for him/her shall be deemed to be acquiring it 
himselfi'herself. 
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190. For the purposes of determining the total area that can be 
acquired for mining operations, Section 6(3) of the MMDRAct provides 
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that.the area held under a mining lease by a person as a member of a 
cooperative society, company or other corporation or a Hindu Undivided 
Family or a partner ofa firm shall be deducted from the area referred to 
so that the sum total of the area held by such person under a mining 
lease only as such member or partner or individually may not in any 
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case exceed the total area specified. 
191. In this background, the CEC examined the case of seven 
mining lease holders. They are: 
1. 
Essel Mining and Industries Limited 
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2. 
Rungta Mines Limited 
3. 
Rungta Sons Pvt. Limited 
4. 
Bonai Industrial Company Limited 
5. 
Fee grade & Co. Pvt. Limited 
6. 
Mis Mangilal Rungta 
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7. 
Jindal Steel & Power Limited 
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192. As far as Essel Mining and Industries Limited is concerned 
we propose to deal with this mining lease holder on another occasion 
since even the CEC has placed this mining lease holder in a special 
category. 
193. Similarly, so far as Rungta Mines Limited, Rungta Sons Pvt. 
Limited and Mis Mangilal Rungta are concerned, although the CEC has 
come to the conclusion that these persons have not acquired mining 
leases in violation of Section 6 of the MMDRAct, there are some critical 
observations made by the Commission with regard to the 'Rungta Group'. 
Learned counsel for the petitioner submitted that the view of the CEC in 
this regard needs reconsideration. Since the 'Rungta Group' was not 
heard by us, we propose to hear the above-Rungta companies to ascertain, 
inter alia, whether there has been any violation of the provisions of 
Section 6 of the MMDRAct. 
194. As far as Jindal Steel & Power Limited is concerned, we 
propose to hear this company on another occasion since the suggestion 
of the CEC is that it is the benami holder ofSarda Mines Pvt.
Ltd. Ifit 
is so held to be a benami holder of Sarda Mines Pvt. Ltd. then there is a 
violation of Section 6 of the MMDR Act. However, the CEC has 
refrained from malcing any observations or recommendation in this regard. 
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Accordingly, we propose to hear Jindal Steel & Power Limited on a 
later occasion on this limited issue. 
195. As far as Bonai Industrial Company Limited and Feegrade 
& Co. Pvt. Limited are concerned, the CEC has concluded that they 
have not violated Section 6 of the MMDRAct. That being the position, 
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and nothing having been shown to the contrary, we accept the
COMMON CAUSE v. UNION OF INDIA AND ORS. 
[MADAN B. LOKUR, J.] 
recommendation of the CEC in this regard. 
Violation of Rule 37 of the Mineral Concession Rules, 1960 
196. The CEC has discussed the possible violation of Rule 37 of 
the MCR. In this context, it was noted that there were several mining 
lease holders who had entered into raising contracts which were actually 
a transfer of the lease as postulated by Ruic 3 7 of the MCR. 
197. On this basis the State ofOdisha constituted a Committee on 
8'' July, 2011 to carry out a study of the financial transactions between 
the mining lease holders and the raising contractors to determine whether 
there is a primafacie violation of Rule 37 of the MCR. 
198. On an examination of the material before it the Committee 
concluded thaJ eight mining lease holders violated Rule 37 of the MCR. 
These mining lease holders are as under: 
i) 
R.P. Sao, Guali Iron Ore Mines, Keonjhar 
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Indrani Patnaik, Unchabali Iron Ore Mines, Keonjhar 
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iit) Mis K.J.S. Ahluwalia, Nuagaon Iron Ore Mines, Keonjhar 
iv) Mis Aryan Mining & Trading Corporation Pvt. Ltd., 
Narayanposhi Iron Ore Mines, Sundergarh 
v) 
Mis Mideast Integrated Steel Ltd., Roida, Sidhamatha Iron 
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Ore Mines, Keonjhar 
vi) Ka vita Agrawal, Kusumdihi Manganese Mines, Sundergarh 
vii) Mala Roy & Others, Jalabari Iron Ore Mines, Keonjhar 
viii) Mis. Sharda Mines (P) Ltd., Thakurani Iron Ores Mines, 
Keonjhar 
199. Pursuant to the report of the Committee, a show
cause notice 
was issued to these mining lease holders by the State of Odis ha. Six of 
the mining lease holders (other than Mis Aryan Mining & Trading 
Corporation Pvt. Ltd. (for short Aryan) and Ka vita Agrawal (Kusumdihi 
Manganese Mines) challenged the show cause notice and the decision 
of the Committee by filing revision petitions under Section 30 of the 
MMDR Act read with Rule 55 of the MCR before the Central 
Government. The challenge to the show cause notice was on the ground 
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that persons who were not government servants could not have been 
included in the Committee and also that the Committee was not notified 
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in the official gazette as required by Section 26(2) of the MMDRAct. 
200. The Central Government set aside the order constituting the 
Conunittee and the State of Odisha has challenged the orders of the 
Central Government before the Orissa High Court through writ petitions. 
We are told that the writ petitions filed by the State ofOdisha are pending 
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in the High Court. 
20 I. As far as Aryan is concerned, we were informed that the 
matter was pending with the State of Odisha and a request was made to 
us to permit the State ofOdisha to pass a final order on the submissions 
made by Aryan. On 28'h April, 2017 we had permitted the State of 
c Odisha to pass final orders but we are not aware whether any orders 
have since been passed. 
202. As far as Kavita Agrawal is concerned, her lease was 
terminated by the State of Odisha and the Central Government also 
dismissed her revision petition on 28th April. 2014. The said mining lease 
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holder has since filed a writ petition which is pending in the Orissa High 
Court. 
203. During the course of hearing it was proposed by learned 
counsel appearing for some of the mining lease holders that it might be 
appropriate if 1;he raising contracts between these eight mining lease 
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holders and the raising contractors are given a fresh look. This suggestion 
was not acceptable to one of the mining lease holders. However, we 
are of opinion that the suggestion is reasonable and it
will be appropriate 
if in fact a fresh look is given to the raising contracts entered into by the 
mining lease holders and the raising contractors. We are also of opinion 
that such an order ought to be passed with the consent of the mining 
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lease holders since any delay in disposal of the issue would not really 
sub-serve the interests of anybody including the mining lease holders. 
204. Accordingly, for considering the appointment of an appropriate 
Conunittee in respect of the eight mining lease holders mentioned above 
we would like to hear learned counsel for the parties. We make it clear 
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that the proposed Committee will be entitled to lift the corporate veil, the 
importance of which in cases such as the present, has been emphasized 
in State of Rajasthan v. Gotan Lime Stone Khanij Udyog (P). Ltd." 
Intergenerational equity 
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'"(2016) 4 sec 469
COMMON CAUSE v. UNION OF INDIA AND ORS. 
449 
[MADAN B. LOKUR, J.] 
205. Mr. Prashant Bhushan, learned counsel for the petitioner A 
sought to impress upon us the need to consider intergenerational equity 
and if possible to place a limit on the extent of mining in the State of 
Odisha by referring to an article titled: "Intergenerational equity: a legal 
framework for global environment change" by Edith Brown Weiss. He 
laid emphasis on three principles that form the basis of intergenerational 
equity. 
206. The first principle relied on is called the principle of 
'conservation of options'. This requires each generation to conserve the 
diversity of the natural and cultural resource base in such a manner that 
the options available to future generations are not restricted. It was 
submitted that the extent of mining activities being carried on in. Odisha 
indicate that the entire iron ore will perhaps be fully extracted within a 
period of 30 years and nothing would be available for future generations. 
Therefore some sort of a limit would have to be placed on the mining 
operations. 
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207. The second principle relied on is the principle of'conservation 
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of quality'. This was with reference to the submission that future 
generations should not be subjected to a quality of the planet worse than 
what it is today. In other words .. future generations arc also entitled to 
quality enjoyment of the diversity in the natural and cultural resource 
base. 
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208. The
third principle relied upon was the principle of 
'conservation of access' which is to say that future generations have an 
equitable right to access the diversity of the natural and cultural resource 
base as is available to the present generation. 
209. There is no doubt considerable substance in the submission 
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particularly if this is considered in the light of intergenerational rights 
and obligations which have been dealt Vlith in the said article. However, 
it is really not for this Court to lay down limits on the extent of mining 
activities that should be permitted by the State ofOdisha or by the Union 
ofJndia. Nevertheless, this is an aspect that needs serious consideration 
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by the policy and decision makers in our country in the governance 
structure. At present, keeping in mind the indiscriminate mining operations 
in Odisha, it does appear that there is no effective check on mining 
operations nor is there any effective mining policy. The National Mineral 
Policy, 2008 (effective from March 2008) seems to be only on paper 
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and is not being enforced perhaps due to the involvement of very powerful 
vested interests or a failure of nerve. We arc of opinion that the National 
Mineral Policy, 2008 is almost a decade old and a variety of changes 
have taken place since then, including (unfortunately) the advent of 
rapacious mining in several parts of the country. Therefore, it is high 
time that the Union of India revisits the National Mineral Policy, 2008 
and announces a fresh and more effective, meaningful and implementable 
policy within the next few months and in any event before 31" December, 
2017. We are constrained to pass this direction in view of the facts 
disclosed in these petitions and in judgments delivered by this Court with 
regard to mining in Goa and Karnataka. 
Inquiry by the Central Bureau of Investigation 
210. It was emphasized by Shri Prashant Bhushan that because 
of the rampant illegal or unlawful mining being carried out in Odisha, 
there should be an enquiry by the Central Bureau of Investigation (for 
short 'the CBI') to ascertain and determine the persons involved either 
in turning a Nelson's eye to rampant illegal or unlawful mining or being 
conspirators in the activity and the extent of the illegal or unlawful mining. 
It was submitted that the Justice Shah Commission had very strongly 
recommended an inquiry conducted by the CBI and criminal clements 
being brought to book for the despoliation
of the land. 
21 l. For the present, we do not propose to direct an investigation 
or inquiry by the CBI for the reason that what is of immediate concern 
is to learn lessons from the past so that rapacious mining operations are 
not repeated in any other part of the country. This can be achieved 
through the identification oflapses and finding solutions to the problems 
that arc faced. Undoubtedly, there have been very serious lapses that 
have enabled large scale mining activities to be carried out without forest 
clearance or environment clearance and eventually the persons 
responsible for this will need to be booked but as mentioned above, the 
violation of the laws and policy need to be prevented in other parts of the 
country. The rule of law needs to be established. We are therefore of 
the view that it would be appropriate if an Expert Committee is set up 
under the guidance of a retired judge of this Court to identify the lapses 
that have occurred over the years enabling rampant illegal or unlawful 
mining in Odisha and measures to prevent this from happening in other 
parts of the country.
COMMON CAUSE v. UNION OF INDIA AND ORS. 
451 
[MADAN B. LOKUR, J.] 
212. There is no doubt that the recommendations of the 
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Commission can form a platform for the study but it is also necessary to 
use technology for maintenance of registers, records and data through 
computers, satellite imagery, videography and other technology tools so 
that the natural wealth of our country is not rapaciously exploited for the 
benefit of a few to the detriment of a large number, many of whom are 
tribals inhabiting the land for several generations. 
Utilization of funds by the Special Purpose Vehicle 
213. In LA. Nos.2746-2748 of 2009 filed by Rabi Das, an order 
was passed on 27'h January, 2014 relating to the preparation of a scheme 
by the CEC for setting up a Special Purpose Vehicle (SPV) for tribal 
welfare and area development works. The relevant extract of the order 
reads thus: 
"50% of the additional amounts of Net Present Value (NPV) 
recovered by the State ofOdisha from the mining lessees will be 
used by the State of Odisha through a Special Purpose Vehicle 
(SPV) for undertaking specific tribal welfare and area 
development works so as to ensure inclusive f,'l"owth of the mineral 
bearing areas.The Siate ofOdisha will accordingly file within 
four weeks from today, a comprehensive plan forthe development 
of tribals out of the aforesaid funds, taking into consideration 
their requirements of health, education, communication, 
recreation, livelihood and cultural lifestyle
as indicated in this 
Court's judgment in T. N. Godavaraman Thirumulpad v. 
Union of India & Others (2008) 2 SCC 222." 
214. Subsequently on 28'h April, 2014 this Court accepted the 
scheme prepared by the Government of Odisha in consultation with the 
Central Empowered Committee. The scheme was captioned "Setting 
up of Special Purpose Vehicle (SPV) for undertaking specific tribal 
welfare and area development works so as to ensure inclusive growth 
of mineral bearing areas in the State of Odisha". This Court then passed 
the following order on 28"' April, 2014: 
"Pursuant to.orders passed by this Court on 7th [27"] January, 
2014, the Government of Odisha in consultation with the Central 
Empowered Committee has prepared a Scheme captioned 
"Setting up of Special Purpose Vehicle (SPV) for undertaking 
specific tribal welfare and area development works so as to 
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ensure inclusive growth of mineral bearing areas in the State of 
Odis ha. 
The Central Empowered Committee has submitted a Report 
dated 9th April, 2014 and has recommended that the Scheme 
prepared by the Government ofOdisha may be approved by this 
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Court and the ad hoc CAMPA may be directed to transfer to the 
SPY 50 IJer cent of the additional amount of the NPY recovered 
from the mining lease holders by the State of Odisha for 
undertaking tribal welfare and development works. 
We have perused the Scheme prepared by the State Government 
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of Odisha and the recommendation of the Central Empowered 
Committee and we approve the Scheme and direct as hoc 
CAMPA to transfer to the SPY 50 per cent of the additional 
amount of the NPY within a month for undertaking tribal welfare 
development works. 
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215. Some of the salient features of the Scheme arc as follows: 
5. The SPY will undertake specific tribal welfare and area 
development works so as to ensure inclusive growth of the mineral 
bearing areas. These will include works/projects related to 
livelihood intervention, health, water supply and sanitation, 
educati<!m, special programmes for development of women and 
children, entrepreneurial development of local people, 
communication and infrastructure projects and agro silvi-
horticultural based livelihood projects through identified
agencies/ 
Government Departments. While taking up such projects/works 
a bottom up planning and participatory approach will be followed. 
9. The general superintendence of the affairs will be vested in 
its Board of Directors including (a) to receive grants/funds and 
have custody of the same, (b) to approve Annual Budget 
Estimates and sanction the expenditure within the limits of the 
Budget, (c) to enter into any agreement for and on behalf of the 
SPY; ( d) institute and defend legal proceedings (e) to consider 
and approve the Annual Report, audit report, annual accounts 
and the financial estimates of the SPY, (fl to prescribe procedure 
to be followed for implementation of the projects/works and for
COMMON CAUSE v. UNION OF INDIA AND ORS. 
453 
[MADAN B. LOKUR, J.] 
maintenance of accounts and (g) to undertake any other ancillary 
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activities/works for the furtherance of the objective of the SPV. 
(a) The funds made available to the SPV will be utilized only 
for the purpose for which the SPV has been set up and will 
not be used for any other purpose or transferred to any other 
authority; and 
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(b) The composition of the Board of Directors of the SPV, as 
provided in the present scheme, will be modified only after 
obtainingperrnission from the Hon'ble Supreme Court. 
I 0. The accounts of the SPV will be internally audited annually 
by the Chartered Accountant firrns empanelled with the CAGI 
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Principal Accountant General, Odisha. The audit of the accounts 
of the SPV, receipts as well as expenditure, will be done annually 
by the office of the Principal Accountant General, Odis ha. 
11. The State Government has, earlier, registered a Society, 
namely, Society for Inclusive Development of Mineral Bearing 
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Areas of Odisha, which has been registered vide registration 
number 23354174 of 2011-12 under the Societies Registration 
Act, 1860 to act as SPV for the purpose. It is now proposed to 
wind up the said Society and to replace it with 'Odisha Mineral 
Bearing Areas Development Corporation' to be set up under 
section 25 of the Companies Act. 
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216. It appears that the scheme has been implemented with the 
Chief Secretary ofOdisha as the ex-officio Chairman
of the SPV. There 
are several other members and directors of the SPV. There is no further 
information available with this Court with regard to the implementation 
of the scheme. 
217. During the. course of hearing, some of the mining lease 
holders represented by Shri Gopal Sµbramanium, Senior Advocate 
offered to deposit and in fact did deposit an amount ofRs.237 .05 crores 
for utilization by the SPV for carrying out welfare works and activities 
in the districts ofKeonjhar, Sundergarh and Mayurbhanj in Odisha. The 
deposit was made by way of a cheque on 6'" April, 2017 and was without 
prejudice to the rights and contentions of lessees. In terms of our 
directions, the Registry has encashed the cheque and kept the amount in 
a short term fixed deposit. We have mentioned this only to point out that 
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there are huge amounts available with the Special Purpose Vehicle for 
tribal welfare and area development works and we have absolutely no 
idea about the utilization of the funds or whether they are in fact being 
used for tribal welfare and area development works. We also expect 
that as a result of' the orders that we are passing today, very large amounts 
will again be rnade available to the State of Odisha. These amounts 
should also be kept with the Special Purpose Vehicle. 
218. To ensure that the amounts are utilized for the benefit of 
tribals in the affeicted districts and for area development works, we would 
like the Chief Secretary of Odisha to file au affidavit stating the work 
done as well as providing the audited accounts of the receipt and 
expenditure of the SPV from its inception. 
Conclusion 
219. In view of findings above, we dispose of the writ petitions to 
the extent of the directions that we have already given. 
220. I.A. Nos. 45 (filed by Zenith Mining) and47 (filed by Kavita 
Agrawal) arc dismissed since their lease has not been extended or has 
been determined and they do not have any environment clearance or 
forest clearance. 
221. I.A. No. 66 (filed by J.N. Pattnaik) is also dismissed since 
there is no forest clearance available. 
222. We have been informed that S.A. Karim (I.A. No.9) actually 
had a working lease and has \vrongly been included as a non-operational 
lease.
Accordingly, I.A. No. 9 (filed by S.A. Karim) is also dismissed 
but as being infructuous. However, it is made clear that the State 
Government should ensure that the lessee S.A. Karim in fact has valid 
statutory clearances. 
223. Pending show cause notices issued by the State Government 
should be decided by 31" December, 201 7 (if not already decided) after 
hearing the concerned noticees. 
224. We would like to hear Jindal Steel and Power Limited, Sarda 
Mines Private Limited, Rungta Group of Companies and Essel Mining 
and Industries Limited on the applications filed by them. For this purpose 
list the matter again after two weeks so that a convenient date of hearing 
can be fixed.
COMMON CAUSE v. UNION OF INDIA AND ORS. 
[MADAN B. LOKUR, J.] 
225. The amounts determined as due from all the mining lease 
holders should be deposited by them on or before 31" December, 2017. 
Subject to and only after compliance with statutory requirements and 
full payment of compensation and other dues, the mining lease holders 
can re-start their mining operations. 
226. We would also like to hear the eight concerned mining lease 
holders on the question of appointing an appropriate Committee in respect 
of the applicability of Rule 3 7 of the Mineral Concession Rules to them. 
227. We would also like to hear learned counsel for all the parties 
with regard to setting up of an Expert Committee presided over by a 
retired judge of this Court to identify the lapses that have occurred over 
the years that have enabled rampant illegal and unlawful mining in Odisha 
and to recommend preventive measures not only to the State ofOdisha 
but generally to all other States where mining activities are proceeding 
on a large scale. For the present, we pass no direction with regard to 
any investigation by the CBI. 
228. We direct the Union of India to have a fresh look at the 
National Mineral Policy, 2008 which is almost a decade old, particularly 
with regard to conservation and mineral development. The exercise 
should be completed by 31" December, 2017. 
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229. The Chief Secretary of Odisha should file an affidavit as 
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· indicated by us within a period of six
weeks and in any case on or before 
30'h September, 2017. The Registry will list these petitions along with 
the affidavit immediately after its receipt for our consideration. 
230. All other pending l.A.s are disposed ofin terms ofourorders. 
Divya Pandey 
Directions issued. 
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