COMMON CAUSE versus UNION OF INDIA AND ORS.
[2017] 13 S.C.R. 361, Supreme Court of India, 2017
Outcome: Directions issued
Segment: Ratio
[2017] 13 S.C.R. 361 
COMMON CAUSE 
v. 
UNION OF INDIA AND ORS. 
(Writ Petition (Civil) No. 114 of2014) 
AUGUST 2, 2017 
(MADAN B. LOKUR AND DEEPAK GUPTA, JJ.] 
Mines and Minerals - Illegal mining of enonnous proportions 
in districts of Odisha - Writ petition partly based on reports given 
by Justice MB. Shah Commissions of Inquiry sought directions, 
inter alia, to Union of India and Government ofOdisha to immediately 
stop forthwith all illegal mining in the State of Odis ha and for CBI 
investigation into such illegal mining - Plea of mining lease holders 
that reports given by Commission were v,itiated as they were not 
given notice u/ss.8B, 8C of the 1952 Act. and thus. the very 
foundation of the writ petition goes away - Held: First report given 
by Commission was a general, overall perspective on the subject -
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No irregularity or illegality has been committed so as to vitiate the 
first report - Second report went into specific details of several 
mining lease holders, but herein one is not concerned with those 
specifics - Therefore. whether notices were issued or not to the 
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lease holders who were the subject matter of discussion in the second 
report is of no consequence -However. the reports of the 
Commission are not being relied upon for the purpose of present 
judgment and order - Further. for now, no direction is being given 
with regard to any investigation by CBI - Expert Committee be set 
up under the guidance of a retiredjudge of Supreme
Court to identifY 
the lapses occ1:l'red over the years enabling rampant illegal or 
unlawful mining in Odisha and measures to prevent this ji·om 
happening in other parts of the country - Furthe1; directions issued -
Commissions of Inquiry Act. 1952 - ss.8B. 8C. 
Committees: 
Central Empowered Committee (CEC)- Constitution of-Held: 
CEC was first constituted by Supreme Court in T. N. Godavarma11 
case as an interim body -
Thereafter, it was constituted by 
notification issued uls.3(3) of the 1986 Act - It has continued 
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[2017] 13 S.C.R. 
A fimctioning and is now an established body which renders extremely 
valuable advice to this Court- Environment (Protection) Act, 1986 -
s.3(3). 
Central Empowered Committee (CEC) -
Jurisdiction of -
Challenge to - Plea of lease holders that in giving the report on 
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mining. CEC tfXceeded its remit - Held: Not tenable - Jurisdiction 
of CEC was not limited and it was expected to give a detailed report 
on all aspecrs of illegal mining or mining being carried out without 
any lawful authority in whatever manne1: 
lllines and Minerals (Development and Regulatio11) Act, 1957 
c (MMDR) - ss.4(1). 4(2). 5(2). IO. 12. 13. 18. 21 - Grant ofmi11ing 
lease -- Schenie of - Discussed. 
s. 6 - Maximum area for which a prospecting licence or 
mining lease may be granted - Violation of by various companies -
If any - Discussed. 
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Mineral Concession Rules, 1960 (MCR): 
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Distinction between A!CR and MCDR - Held: The distinction 
is that the MCR deal. inter alia. with the grant of a mining lease and 
not commencement of mining operations - However. the MCDR deal. 
inter alia. with the commencement of mining operations and protection 
of environmenr by preventing and controlling pollution which might 
he caused by mining operations- Mineral Conservation and 
Development Rules. 1988 (MCDR). 
r.22A - Held: r.22A makes it clear that mining operations 
shall be undertaken only in accordance with the duly approved 
mining plan -
Therefore. a mining plan is of considerable importance 
for a mining lease holder and is in essence sacrosanct - A mining 
scheme and a mining plan are a sine qua non for the grant of a 
mining lease. 
1:24A - Plea of mining lease holders that since many of them 
were grantedfirst deemed statutory renewal of mining lease ulr.24A. 
the requirements of Environment Impact Assessment (EJA) Notification 
of 1994 (EIA 1994) would not be applicable - Held: Nor tenable -
For renewal qf mining lease. an application is required to be made 
by mining lease holders and the deemed renewal clause ulr.24A will 
come into operation onzv ajier an application for renewal is made
COMMON CAUSE v. UNION OF INDIA AND ORS. 
363 
in Form Jin Schedule I of MCR - Even otherwise, renewal of a 
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mining lease would require a prior environmental clearance (EC) 
in terms of EIA 1994. 
r.37 - Violation of - Several mining lease holders entered 
into raising contracts which were actually a transfer of lease as 
postulated by r. 3 7 - Held: Rule 3 7 provides. inter alia, that a mining B 
lessee shall not without the previous consem in writing of the State 
Government or Central Government, as the case may be, assign. 
sublet, mortgage, or in any other manne1; transfer the mining lease, 
or any right,. title or interest therein - It will he appropriate if a 
fresh look is given to the raising contracts entered into by mining 
lease holders and the raising contractor - Committee appointed. 
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Mineral Conservation and Development Rules, 1988 (MCDR): 
Purpose and objective of - Held: Is to ~~sure that mining 
operations are cmried out in a scientific manner with a high degree 
of responsibility including responsibility in protecting and D 
preserving the environment and the flora of the area. 
r. 31 - Protection of environment under - Obligation of - Held: 
Rule 31 provides that every holder of a mining lease shall take all 
possible precautions for the protection of environment and control 
of pollution while conducting any mining operations in the area -
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Air (Prevention and Control of Pollution) Act, 1981 - Environment 
(Protection) Act, 1986 - Water
(Prevention and Control of Pollution) 
Act. 1974. 
Notijicatio11/Circular: 
Environment Impact Assessment (E!A) Notification dtd. 27'" 
Jan. 1994 - Nature of - Held: It is a prohibitory notification and 
directs that on and from the date of its publication in the official 
gazette: (i) expansion or modernization of any activity (if pollution 
load is to exceed the existing one) and (ii) a new project listed in 
Schedule I to the notification. shall not be undertaken unless it has 
been accorded EC by the Central Government in accordance with 
the procedure specified in the notification - Further. EIA 1994 is 
also mandatory in character - It is applicable to all mining 
operations, new mining projects and renewal of mining leases -
Environment (Protection) Act, 1986 - ss.3(1). 3(2){v) - Environment 
(Protection) Rules. 1986 - r.5(3)(d). 
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Environment Impact Assessment (EIA) Notification dtd. 27''' 
Jan. 1994 - Grant under, of environment clearance (EC) - Purpose 
of - Held: On receipt of an EC a mining lease holder can extract a 
mineral only from a specified site, upto the sanctioned capacity 
and only for a period of five years from the date of grant of EC -
Consequently. a mining lease holder would necessarily have to obtain 
a fresh EC every five years and can also apply for an increase in 
the sanctioned capacity - Environment. 
Environment Impact Assessment (EIA) Notification dtd. 27"' 
Jan. 1994 - Grant under. of EC- Operation of- Held: There is no 
concept of a retr(Jspective EC - Its validity effectively starts only 
from the day it is granted - It takes precedence over the mining 
lease - Thus, mining operations under a mining lease are dependent 
on and 'subordinate· to the EC - Environment. 
Environment Impact Assessment (E/A) Notification dtd. 27"' 
Jan. 1994 - EC - Requirement of. for ongoing mining project -
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Exemption. when given - Held: An exemption is granted from the 
requirement of obtaining an EC if there is no expansion and the 
existing pollution load is not exceeded - However. a no objection 
certificate from the SPCB is necessary for continuing the mining 
operations - Env,ironment. 
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Environment Impact Assessment (EIA) Notification dtd. 27"' 
Jan. 1994 - Exprmsion and modernization of existing projects -
Base year
for considering pollution load while proposing any 
expansion activity - Determination of - Discussed - Environment. 
Environme111 Impact Assessment (EIA) 14"' September. 2006 -
Requirement under - Environment Clearance (EC) - Held: EIA 2006 
required prior EC for projects or activities mentioned in the Schedule 
to it. both for major as well as minor minerals. if the leased area is 
5 hectares or more - Environment. 
Environme11t Impact Assessment (EIA) 14"' September. 2006 -
Environment Clearance (EC) - Grant of - If retrospective - Held: 
An EC will come into force not earlier than the date of its grant -
The concept of an ex post facto or a retrospective EC is completely 
alien to environmental jurisprudence - Environment. 
Mines and Minerals: 
Mining plan - Actual Production limit - Violations of - Held:
COMMON CAUSE v. UNION OF INDIA AND ORS. 
365 
A mining plan is valid for a period of five years - 20% deviation 
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from the mining plan (in terms of over-production) would he 
reasonable and permissible - A mining lease holder cannot extract 
the five year quantity (with a variation of 20%) in one or two years 
only. 
Illegal Mining - What is - Plea of lessees that a mining B 
operation only outside the mining lease area would constitute 'illegal 
mining· - Held: Not tenable -
J//egal mining takes within its fold 
excess extraction of a mineral over the permissible limit even within 
the mining lease area which is held under lawful authority. if that 
excess extraction is contrary to the mining scheme. the mining plan, 
the mining lease or a statutory requirement - Mines and Minerals 
(Development and Regulation) Act. 1957 - s.23 C - Mineral 
Concession Rules. 1960 - r.2(iia) . 
Encroachment - lllegal mining outside the sanctioned mining 
areas - Direction issued. 
Consequences of lllegal mining - Discussed - Mines and 
Minerals (Development and Regulation) Act. 1957 - s.21 (5). 
Illegal mining - Penalty/Compensation for - Discussed -
Mines and Minerals (Development and Regulation) Act, 1957 
(MMDR) - s.21(5). 
Fore..vt (Conservation) Act, 1980 - s.2 - Violation of - Held: 
Since defauWng mining lease holders had paid additional Net 
Present Value (NPV) as well as an amount towards penal 
compensatory afforestation. it must be assumed that violation of 
the Act has been
condoned to a limited extent - Environment. 
Issuing directions, the Court 
HELD: 
Justice M.B. Shah Commission of Inquiry 
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1. The first report given by the Commission was a general, 
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overall perspective on the subject, therefore, there is absolutely 
no question of any notice being Issued to any mining lease holder 
under Section .SB or the right of cross examination being granted 
to any mining lease holder under Section SC of the 1952 Act. 
While the second report went into specific details of several mining 
lease holders -but herein one is not concerned with these H
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specifics. Therefore, whether notices were or were not issued to 
the lease holders who were the subject matter of discussion in 
the second repQrt is of no consequence.No irregularity .or illegality 
has been committed so as to vitiate the first report. A resume of 
the procedure followed will indicate that full opportunity was given 
to the lease holders to have their say. [Paras 32-34, 43] (394-E; 
398-A-B, D; 401-C-DJ 
Central Empofered Committee and Initial contention 
2.1 The Central Empowered Committee or the CEC was 
first constituted by this Court by an order in T.N.Godavar111a11 as 
an interim body. Thereafter, it was constituted by a notification 
issued under Section 3(3) of the Environment (Protection) Act, 
1986. Jt has continued functioning and assisting this Court for 
more than a decade and even though it has been criticized on a 
couple of occasions, it is now an established hody which renders 
extremely valuable advice to this Court and provides factual 
material on the basis of which this Court can make some 
recommendati'iJns and pass appropriate orders. The CEC as a 
fact finding body has functioned impartially and it is only on the 
conclusions arrived at hy the CEC on the basis of the facts 
gathered that ~here can he some debate and discussion. [Paras 
54, 55J [404-F-H; 405-C] 
2.2 The jµrisdiction of the CEC was not limited and it was 
expected to give a detailed report on all
aspects of illegal mining 
or mining being carried out without any lawful authority in 
whatever manner. [Para 53] (404-E] 
Statutory provisions 
3.1 The grant of a mining lease is governed by the provisions 
of the Mines and Minerals (Development and Regulation) Act, 
1957 (or the MMDR Act}, the Mineral Concession Rules, 1960 
(or the MCR) and the Mineral Conservation and Development 
Rules, 1988 (or the MCDR).Section 4(1) of the MMDR Act 
provides that no person shall undertake any mining operation in 
any area except under and in accordance with the terms and 
conditions of a mining lease granted under the MMDR Act and 
the rules made thereunder. A mining operation is defined in 
Section 3(d) of the MMDR Act as meaning any operation
COMMON CAUSE v. UNION Of INDIA AND ORS. 
367 
undertaken for the purpose of winning any mineral. Section 4(2) 
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of the MMDR Act provides that no mining lease shall be granted 
otherwise than in accordance with the provisions of the said Act 
and the rules made thereunder. Section 5(2) of the MMDR Act 
provides for certain restrictions on the grant of a mining lease.· 
(Paras 60-62) (406-H; 407-A-D) 
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3.2 ,Section 10 of the MMDR act provides for the procedure 
for obtaining a mining lease. Section 13 of the MMDR Act 
provides for the rule making power of the Central Government 
in respect of minerals. The Mineral Concession Rules, 1960 
(MCR) are.framed in exercise of power conferred by Section 13 
of the MMDRAct. [Paras 63, 65) (407-D-E, G] 
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3.3 Section 18 of the MMDR Act makes it the duty of the 
Central Government to take all such steps as may be necessary 
for the conservation and systematic development of minerals in 
India and for tl:te protection of the environment. The Mineral 
Conservation and Development Rules, 1988 (MCDR) are framed D 
in exercise of power conferred by Section 18 of the MMDR Act. 
Section 21 of the MMDR Act deals with penalties. [Para 66, 68) 
(407-H; 408-A, CJ 
3.4 The distinction between the MCR and the MCDR is 
that the MCR deal, inter alia, with the grant of a mining lease 
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and not commencement of mining operations. However, the 
MCDR deal, inter alia, with the commencement of mining 
operations and protection of the environment by
preventing and 
controlling pollution which might be caused by mining operations. 
(Para 67) (408-B-C) 
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Mineral Concession Rules, 1960 
4 .. 1 Rule 22, MCR provides for an application to be made 
for the grant of a mining lease in respect of land in which the 
mineral vests in the government. Sub rule (5) of Rule 22 deals 
with a mining plan and it requires that a mining plan shall 
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incorporate, amongst other things, a tentative scheme of mining 
and annual programme and plan for excavation for year to year 
for five years. Rule 22A of the MCR makes it clear that mining 
operations shall be undertaken only in accordance with the duly 
approved mining plan. Therefore, a ·mining plan is of considerable H
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A importance for a mining lease holder and is in essence 
sacrosanct.A mining scheme and a mining plan are a sine qua no11 
for the grant of a mining lease. [Paras 69, 70] [408-E-H] 
4.2 Rtjle 27 of the MCR deals with the conditions that every 
mining lease is subject to. One of the conditions is that the lessee 
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shall comply with the MCDR. [Para 71) [409-A) 
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4.3 Rlllc 37 of the MCR deals with the transfer of a lease 
and provides, inter alia, that a mining lessee shall not without the 
previous co11sent in writing of the State Government or the Central 
Government, as the case may be, assign, sublet, mortgage, or in 
any other manner, transfer the mining lease, or any right, title or 
interest therein. The lessee shall not enter into or make any 
bona fide arrangement, contract or understanding whereby the 
lessee will or may directly or indirectly be financed to a substantial 
extent in r:espect of its operations or undertakings or be 
substantially controlled by any person or body of persons. Sub-
rule (3) of Rule 37 of the MCR enables a State Government to 
determine any lease if the mining lessee has committed a breach 
of Rule 37 of the MCR or has transferred any lease or any right, 
title or interest therein otherwise than in accordance with sub-
rule (2) of ~ule 37 of the MCR. [Para 75] [409-E-G] 
Mineral Conservation and Development Rules, t 988 
5.1 Cl)apter V of the MCDR deals with "Environment".
Rule 31 of the MCDR provides that every holder of a mining 
lease shall take all possible precautions for the protection of the 
environment and control of pollution while conducting any mining 
operations in the area. Rule 37 of the MCDR requires-certain 
precautions to be taken against air pollution and obliges the 
mining lease holder to keep air pollution under control and within 
permissible limits specified under various environmental laws 
including the Air (Prevention and Control of Pollution) Act, 1981 
and the Environment (Protection) Act, 1986. The provisions of 
the Water (Prevention and Control of Pollution) Act, 1974 are 
required to be adhered to by the mining lease holder. [Paras 79-
81] [409-G-lll; 410-D-F, G] 
5.2 The overall purpose and objective of the MMDR Act 
as well as the rules framed there under is to ensure that mining
COMMON CAUSE v. UNION OF INDIA AND ORS. 
369 
operations are carried out in a scientific manner with a high degree 
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of responsibility including responsibility in protecting and 
preserving the environment and the flora of the area. Through 
this process, the holder of a mining lease is obliged to adhere to 
the standards laid down under the Environment (Protection) Act, 
1986 or the EPA as well as the laws pertaining to air and water B 
pollution and also by necessary implication, the provisions of the 
Forest (Conservation) Act, 1980 (for short 'the FC Act'). 
Exploitation .of the natural resources is ruled out. If the holder 
of a mining lease docs not adhere to the provisions of the statutes 
or the rules or the terms and conditions of the mining lease, that 
person is liable to incur penalties under Section 21 of the MMDR C 
Act. Jn addition thereto, Section 4A of the MMDR Act which 
provides for the termination of a mining lease is applicable. (Para 
83] (411-B-D] 
Environment Impact Assessment Notification of 27!.h January, 
1994 
6.1 The Environment Impact Assessment Notification is a 
prohibitory notification and directs that on and from the date of 
its publication in the official gazette: (i) expansion or 
modernization of any activity (if pollution load is to exceed the 
existing one) and (ii) a new project listed in Schedule I to the 
notification, shall not be undertaken unless it has been accorded 
environmental clearance (for short EC) by the Central
Government 
in accordance with the procedure specified in the notification. 
[Para 85] [411-E-F, H; 412-A-B) 
6.2 The notification provides, among other things, that in 
case of mining operations, site clearance shall be granted for a 
sanctioned capacity and shall be valid for a period of five years 
from commencing mining operations .. What this means is that on 
receipt of an EC a mining lease holder can extract a mineral only 
from a specified site, upto the sanctioned capacity and only for a 
period of five years from the date of the grant of an EC. This is 
regardless of the quantum of extraction permissible in the mining 
plan or the mining lease and regardless of the duration of the 
mining lease. Consequently, a mining lease holder would 
necessarily have to obtain a fresh EC every five years and can 
also apply for an increase in the sanctioned capacity. There is no 
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concept of a uetrospective EC and its validity effectively starts 
only from the day it is granted. Thus, the EC takes precedence 
over the miqing lease or to put it conversely, the mining 
operations u1nder a mining lease arc dependent on and 
'subordinate' lo the EC. [Para 86] [412-B-D] 
6.3 If at1y proposed expansion or modernization activity 
results in an ~ncrease in the pollution load, then a prior EC is 
required. The project proponent should approach the concerned 
State Pollutiot1 Control Board (spcb) for certifying whether the 
proposed expansion or modernization is likely to exceed the 
existing pollution load or not. If the pollution load is not likely to 
be exceeded, the project proponent will not be required to seek 
an EC but a copy of such a certificate from the SPCB will require 
to be submitted to the Impact Assessment Agency which can 
review the certificate. [Para 88] [413-B-C] 
6.4 Existing mining projects that have a no objection 
certificate from the SPCB before 27'" January, 1994 will not be 
required to obtain an EC from the Impact Assessment Agency. 
Of course, this is subject to the substantive portion of EIA 1994. 
However, if the existing mining project does not have a no 
objection certificate from the SPCB, then an EC will be required 
under EIA 1994. [Para 90] [413-F-G] 
6.5 The base year would need to be the immediately 
preceding year that is 1993-94. In its report, the
CEC has taken 
1993-94 as the base year and there is no error in this. If the 
annual production of any year from 1994-95 onwards exceeds 
the annual production of 1993-94 or its preceding years, it would 
constitute expansion and if that expansion results in an increase 
in the pollution load over the existing levels, then an EC is 
mandated. [Para 92] [414-B-D] 
6.6 EIA 1994 was intended to prevent the existing 
environmental load from increasing based on the existing data of 
the immediate past and not data of a few years gone by. The only 
exception that could be made in this regard would be if there is 
no production during 1993-94. In that event, the immediately 
preceding year would be relevant. In respect of a project that 
has commenced prior to 27'" January, 1994 there is an exemption 
from the requirement of obtaining an EC if there is no expansion
COMMON CAUSE v. UNION OF INDIA AND ORS. 
371 
and the existing pollution load is not exceeded. In any event, a 
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no objection certificate from the SPCB is necessary for continuing 
the mining operations. Consequently, even if any mining lease 
holder does not have an EC or does not require an EC for 
continuing mining operations (but has a no objection certificate 
f~om the SPCB), the absence of an E.C would not have an adverse 
impact on the mining lease holder unless of course, there was an 
expansion in the mining operations without any certificate from 
the SPCB. [Paras 93, 94] [414-G-H; 415-A-C] 
6. 7 The approval of a mining plan does not imply that a 
mining lease holder can commence mining operations. The mining 
lease holder is nevertheless obliged to comply with statutory 
provisions including the EPA and other laws. The EJA 1994 would 
apply to the renewal of a mining lease that came up for 
consideration post 27'" January, 1994. In other words, for the 
renewal of a mining lease, an EC was required by the mining 
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.. lease holder. EIA 1994 is mandatory in character; that it is 
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applicable to all mining operations -expansion of production or 
even increase in lease area, modernization of the extraction 
process, new mining projects and renewal of mining leases. A 
mining lease holder is obliged to adhere to the terms and 
conditions of a mining lease and the applicable laws and the mere 
fact that a mining plan has been approved does not entitle a mining
lease holder to commence mining operations. In M. C. Mehta this 
Court concluded that EIA 1994 is clearly applicable to the renewal 
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of a mining lease. [Paras 103-105] [416-F-G; 418-C-D, G-H] 
6.8 An EC is required to be obtained before the renewal of 
a mining lease and the term 'expansion' would include an increase 
in production or the lease area or both. It was submitted on 
behalf of the mining lease holders that the possibility of getting 
an ex post facto EC was a signal to the mining lease holders that 
obtaining an EC was not mandatory or that if it was not obtained, 
the default was retrospectively condonable. This submission is 
liable to be rejected. [Paras 106-107] [419-B-C] 
Environment Impact Assessment Notification of 14!!! September, 
2006 
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7.1 On 1411' September, 2006 another EIA Notification was 
issued by the MoEF. This notification (for short EIA 2006) 
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[2017) 13 S.C.R. 
required prior EC for projects or activities mentioned in the 
Schedule to it both for major as well as minor minerals if the 
leased area is 5 hectares or more. Post EIA 2006, every mining 
lease holder having a lease area of 5 hectares or more and 
undertaking mining operations in respect of major minerals was 
obliged to get an EC in terms of EIA 2006. [Paras 108, 114] [419-
E-G; 421-A-B] 
7.2 A mining plan is subordinate to the EC and having an 
approved 111ining plan does not imply that a mining lease holder 
can commence mining operations. That being so, a modified 
mining plan without a revised or amended EC, is of no 
consequence. [Para 116] [421-D] 
7.3 20% deviation from the mining plan (in terms of over-
production) would be reasonable and permissible. [Paras 118] 
(422-A-BJI 
7.4 For the purposes of renewal of the mining lease, an 
application is required to be made by the mining lease holders 
and the deemed renewal clause under Rule 24A of the MCR will 
come into operation only after an application for renewal is made 
in Form Ji in Schedule I of the MCR Even otherwise, in view of 
EIA 1994, it is quite clear that the renewal of a mining lease 
would require a prior EC. [Para 121] [423-B-C] 
7.5 There is no doubt that the grant of an EC cannot be 
taken as a mechanical exercise. It can only be granted after due 
diligence and reasonable care since damage to the environment 
can have a long term
impact. ETA 1994 is therefore very clear 
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that if expansion or modernization of any mining activity exceeds 
the existing pollution load, a prior EC is necessary. Even for the 
renewal of a mining lease where there is no expansion or 
modernization of any activity, a prior EC is necessary. Such 
importance having been given to an EC, the grant of an ex post 
G facto environmental clearance would be detrimental to the 
environment and contd lead to irreparable degradation of the 
environment. The concept of an ex post facto or a retrospective 
EC is completely alien to environmental jurisprudence including 
EIA 1994 and EJA 2006. An EC will come into force not earlier 
than the date of its grant. (Paras 123, 1241 [423-H; 424-A-C] 
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COMMON CAlJSE v. UNION OF INDIA AND ORS. 
Illegal Mining 
8. The holder of a mining lease is required to adhere to the 
terms of the mining scheme, the mining plan and the mining lease 
as well as the statutes such as the EPA, the FCA, the Water 
(Prevention and Control of Pollution) Act, 1974 and the Air 
(Prevention and Control of Pollution) Act, 1981. If any mining 
operation is conducted in violation of any of these requirements, 
then that mining operation is illegal or unlawful. Any extraction 
of a mineral through an illegal or unlawful mining operation would 
become illegally or unlawfully extracted mineral. lllegal mining 
·is not confined only to mining operations outside a leased area. 
Such an activity is obviously illegal or unlawful mining. Illegal 
.mining takes within its fold excess extraction of a mineral over 
;the permissible limit even within the mining lease area which is 
held under lawful authority, if that excess extraction is contrary 
to the mining scheme, the mining plan, the mining lease or a 
stat_ufory ·requirement. [Paras 128, 129] [425-B-D] 
,Encroachments 
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9.1 Section 4(1) of the MMDR Act makes it clear that no 
per.son can carry out any mining operations except under and in 
accordance with the terms and conditions of a mining lease granted 
under the MMDRAct and the rules made thereunder. Obviously 
, therefore, any person carrying on mining operations without a 
,!llining lease, is indulging in illegal or unlawful mining. This would 
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~~o necessarily imply that if a mining lease is granted to a person 
,!;V,hO ~arries out mining operations outside the boundaries of the 
,P.J:i'!;ing lease, the mineral extracted would be the result of illegal 
·,!Ir unlawful mining. In its report, the CEC has dealt with illegal 
1 !Dining outside the sanctioned mining areas. It is stated that 82 
.,mining leases for iron ore and manganese ore were identified by 
,Jhe Commission where there were encroachments in the form of 
,,illegal mining pits, illegal over-burden dumps etc. [Paras 130, 
.. ,pl] (425-E-H] 
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9.2 A fresh Joint Survey to be conducted by concerned 
,.<officers of the Government of Odisha from the Revenue 
Department, the Forest Department, the Mining Department and 
any· other department that may be deemed necessary. The J<'orest 
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Survey of India, the MoEF, the Indian Bureau of Mines and the 
Geological Sl)rvey of India should also be associated in the Joint 
Survey. It would also be appropriate if the CEC is also associated 
in the Joint Survey and the best and latest technology should be 
made use of including satellite imagery and thereafter a report 
be submitted in this Court after hearing the 82 lessees identified 
by the Commission. [Para 134] [426-E-F] 
Adherence tg the mining plan 
10. A mining plan is valid for a period of five years but there 
could be a 20% variation in extraction over and above the mining 
c plan. This i$ the maximum that is stated to be reasonably 
permissible according to the :vlinistry of Mines. In terms of Ruic 
22(5) of the MCR a mining plan shall incorporate a tentative 
scheme of mining and annual program and plan for excavation 
from year to year for five years. At best, there could be a variation 
in extraction of 20% in each given year but this would be subject 
D 
to the overall mining plan limit of a variation of 20% over five 
years. What this means is that a mining lease holder cannot 
extract the five year quantity (with a variation of 20%) in one or 
two years only. The extraction has to be staggered and continued 
over a period, of five years. While mining in excess of permissible 
E 
limits under the mining plan or the EC or FC on leased area may 
not amount to mining on land occupied without lawful
authority, it 
would certail)ly amount to illegal or unlawful mining or mining 
without auth$rity of law. (Paras 135, 139) (427-B; 428-E-F] 
Section 21 of the MMDR Act 
F 
11.1 Section 21(1) of the MMDR Act is clearly relatable to 
a penal offence and applies if any one contravenes the provisions 
of Section 4(1) of the MMDR Act. Section 4(1) of the MMDR 
Act prohibits the undertaking of any mining operation in any area 
except under and in accordance with the terms and conditions of 
G a mining lease and the rules made thereunder. Therefore, when 
a person carries out a mining operation in any area other than a 
leased area or violates the terms of a mining lease, which 
incorporates the mining plan and which requires adherence to 
the law of the land, that person becomes liable for prosecution 
under Section 21(1) of the MMDR Act. In the event of a 
H 
conviction, he or she shall be punishable with imprisonment for a 
*
COMMON CAUSE v. UNION OF INDIA AND ORS. 
375 
term which may extend to five years and with fine which may 
A 
extend to Rs.5 lakh per hectare of the area. [Para 141] [428-G-
H; 429-A-B] 
11.2 There is no ambiguity in Section 21(5) of the MMDR 
Act or in its application. Though Section 21(1) of the MMDR Act 
might be in the realm· of criminal liability, Section 21(5) of the B 
MMDR Act is certainly not within that realm. Section 21(5) of 
the MMDR Act is applicable when any per ·~n raises, without 
any lawful authority, any mineral from any land. In that event, the 
State Government is entitled to recover from such person the 
mineral so raised or where the mineral has already been disposed 
. 
c 
of, the price thereof as compen~ation. The words 'any land' ate 
not confined to the mining lease area. As far as the mining lease 
area is concerned, extraction of a mineral over and above what is 
permissible under the mining plan or under the EC undoubtedly 
attracts the provisions of Section 21(5) of the MMDR Act being 
extraction without lawful authority. It would also attract Section 
D 
. 21(1) of the MMDR Act. In any event, Section 21(5) of the Act is 
certainly attracted and is not limited to a violation committed by 
a person only outside the mining lease area - it includes a violation 
committed even within the mining lease area. This is also because 
the MMDR Act is intended, among other things, to penalize illegal 
or unlawful mining on any land including mining lease
land and 
E 
also preserve and protect the environment. Action nnder the 
EPA or the MCR could be the primary action required to be taken 
with reference to the MCR and Rule 2(ii a) thereof read with the 
Explanation but that cannot preclude compensation to the State 
under Section 21(5) of the MMDR Act. The MCR cannot be 
F 
read to govern the MMDR Act. [Paras 149, 150] [432-C-G] 
11.3 There can be no compromise on the quantum of 
compensation that should be recovered from any defaulting 
lessee - it should be 100%. If there has been illegal mining, the 
defaulting lessee must bear the consequences of the illegality 
G 
and not be benefited by pocketing 70% of the illegally mined 
ore. [Para 153] [433-D-E] 
Calculations on merits 
12. The base year of 1993-94 Is most appropriate; Some 
lessees might lose.in the process while some of them might benefit H
376 
A 
B 
c 
D 
SUPREME COURT REPORTS 
[2017] 13 S.C.R. 
but that cannot Jlie avoided. In any event, each mining lease holder 
is being given tl).e benefit of calculations only from 2000-01 and 
Is not being 'penalized' for the period prior thereto. The 
compensation should be payable from 2000-200 I onwards at 
100% of the price of the mineral, as rationalized by the CEC. 
[Paras 155, 156) [434-G-H; 435-BJ 
Violation of Fo~est (Conservation} Act, 1980 
13. Given the fact that the defaulting mining lease holders 
have been asked! to pay and have paid additional NPV as well as 
an amount towards penal compensatory afforestation, it must be 
assumed the violation of the FCA has been condoned to a limited 
extent. A violation of the FCA is condonable on payment of penal 
compensatory afforestation charges. This obviously would not 
apply to illegal or unlawful mining under Section 21(5) of the 
MMDR Act, but it is made clear that the mining lease holders 
would be entitled to the benefit of any Temporary Working 
Permission granted. )Paras 178, 185] [440-C-D; 443-D) 
Conclusions on the issues of mining without an EC or FC or both 
14. To avoid any misunderstanding, confusion or ambiguity, 
the following is made very clear: (1) A mining project that has 
E 
commenced prior to 27"' January, 1994 and has obtained a No 
Objection Cer~ificate from the SPCB prior to that date is 
permitted to continue its mining operations without obtaining an 
EC from the Impact Assessment Agency.
However, this is subject 
to any expansion (including an increase in the lease area) or 
modernization activity after 27" January, 1994 which would result 
F 
in an increase in the pollution load. In that event, a prior EC is 
required. However, if the pollution load is not expected to · 
increase despite the proposed expansion (including an increase 
in the lease are'1) or modernization activity, a certificate to this 
effect is absolut~ly necessary from the SPCB, which would be 
G 
reviewed by the Impact Assessment Agency; (2) The renewal of 
a mining lease after 27'" January, 1994 will require an EC even if 
there is no expansion or modernization activity or any increase 
in the pollution load; (3)For considering the pollution load the 
base year would be 1993-94, which is to say that if the annual 
production after 27"' January, 1994 exceeds the annual production 
H
COMMON CAUSE v. UNION OF INDIA AND ORS. 
377 
of 1993-94, it would be treated as an expansion requiring an EC; 
A 
(4) There is no doubt that a new mining project after 27'" January, 
1994 would require a prior EC; (5) Any iron ore or manganese 
ore extracted contrary to EIA 1994 or EIA 2006 would constitute 
illegal or unlawful mining (as understood and interpreted) and 
compensation at .100% of the price of the mineral should be B 
recovered from 2000-2001 onwards in terms of Section 21(5) of 
the MMDR Act, if the extracted mineral has been disposed of. 
In addition, any rent, royalty or tax for the period that such mining 
activity was carried out outside the mining lease area should be 
recovered; (6) With effect from 141• September, 2006 all mining 
projects having a lease area of 5 hectares or more are required C 
to have an EC. The extraction of any mineral in such a case 
without an EC would amount to illegal or unlawful mining 
attracting the provisions of Section 21(5) of the MMDR Act; (7) 
For a mining lease of iron ore or manganese ore of less than 5 
hectares area, the provisions of EIA 1994 will continue to apply D 
subject to EIA 2006; (8) Any mining activity carried on after 7'" 
January, 1998 without an FC amounts to illegal or unlawful mining 
in terms of the provisions of Section 21(5) of MMDR Act 
attracting 100% recovery of the price of the extracted mineral 
that is disposed of; (9) In the event of any overlap, that is, illegal 
or unlawful mining
without an FC or without an EC or without E 
both would attract only 100% compensation and not 200% 
compensation. In other words, only one set of compensation 
would be payable by the mining lease holder; and (10) No mining 
lease holder will be entitled to the benefit of any payments made 
towards NPV or additional NPV or penal compensatory 
afforestation. [Para 186) [443-E-H; 444-A-H; 445-A-B) 
F 
Violation of Section 6 of the MMDR Act 
15. As far as .Essel Mining and Industries Limited is concerned, 
'this mining lease holder will be dealt with on another occasion 
since even the CEC has placed this mining lease holder in a G 
special category. Similarly, so far as Rungta Mines Limited, 
Rungta Sons Pvt. Limited and M/s 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 MMDR Act, there are some critical observations 
H
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SUPREME COURT REPORTS 
[2017] 13 S.C.R. 
made by the Commission with regard to the 'Rungta Group'. The 
Rungta companies will be heard to ascertain, inter alia, whether 
there has been any violation of the provisions of Section 6 of the 
MMDR Act. As far as Jindal Steel & Power Limited is concerned, 
this company will be heard on another occasion since the 
suggestion of the CEC is that it is the benami holder of Sarda 
Mines Pvt •. Ltd. If it is so held to be a benami holder of Sarda 
Mines Pvt. Lt<l. then there is a violation of Section 6 of the 
MMDR Act. [Ilaras 192, 193, 194] [446-D-G] 
Violation of Ru\e 37 of the Mineral Concession Rules, 1960 
c 
16. 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. Such an order ought to be passed 
with the consent of the mining lease holders since any delay in 
disposal of the issue would not really sub-serve the interests of 
anybody including the mining lease holders. The proposed 
D Committee appointed in respect of the eight mining lease holders 
will be entitled to lift the corporate veil, the importance of which 
in cases such as the present, has been emphasized. [Paras 203, 
204] [448-E, G] 
Intergenerationail equity 
E 
17. This is an aspect that needs serious consideration 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. 
F 
The National Mineral Policy, 2008 (effective from March 2008) 
seems to be only 11n paper and is not being enforced perhaps due 
to the involvement of very powerful vested interests or a failure 
of nerve. The N•tional Mineral Policy, 2008 is almost a decade 
old and a variety of changes have taken place since then, Including 
G (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, mcauin;;fu! and implementable policy within 
the next few months and In any event before 31" December, 2017. 
[Para 209] [449-A, G-H; 450-A-C] 
H
COMMON CAUSE v. UNION OF INDIA AND ORS. 
379 
Inquiry by the Central Bureau of Investigation 
A 
18. For the present, no direction is being proposed to be 
given for 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 
B 
identification of lapses and finding solutions .to the problems that 
are 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 
C 
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. 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 
D 
prevent this from happening in other parts of the country. [Para 
211] [450-E-H] 
Utilization of funds by the Special Puroose Vehicle 
19. To ensure that the amounts deposited by some of the 
mining lease holders and also made available to the State of E 
Odisha as a result of the orders that are being passing today, are 
utilized for the benefit of tribals
in the affected districts and for 
area development works, the Chief Secretary of Odisha to file an 
affidavit stating the work done as well as providing the audited 
accounts of 'the receipt and expenditure of the Special Purpose 
F 
Vehicle (SPV) from its inception. [Paras 217, 218) (454-A-C) 
Conclusion 
20.1 I.A. Nos. 45 (f'tled by Zenith Mining) and 47 (filed by 
Kavita Agra"'.al) are dismissed since their lease has not been 
extended or has been determined and they do not have any G 
environment clearance or forest clearance. I.A. No. 66 (filed by 
J.N. Pattnaik) is also dismissed since there is no forest clearance 
available. It is informed that S.A. Karim (I.A. No.9) actually had a 
working lease and has wrongly been included as a non-operational 
lease. A.ccordingly, I.A. No. 9 (filed by S.A. Karim) is also H
380 
SUPREME COURT REPORTS 
[2017] 13 S.C.R. 
A 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. [Paras 220-222) (454-
D-F) 
20.2 Pending show cause notices issued by the State 
B Government should be decided by 31" December, 2017 (if not 
already decide!J) after hearing the concerned noticees. This Court 
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 
C purpose the m11tter be listed again after two weeks so that a 
convenient date of hearing can be fixed. 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-
D start their mining operations. (Paras 223-2251 (454-G-H; 455-A] 
20.3 This Court would like to hear the eight concerned 
mining lease holders who arc in violation Rule 37 of the MCR, 
on the question of appointing an appropriate Committee in 
respect of the applicability of Rule 37 of the Mineral Concession 
E Rules to them. Further, this Court would also like to hear 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 
F 
measures not only to the State of Odisha but generally to all other 
States where milling activities are proceeding on a large scale. 
For the present, no direction is being passed with regard to any 
investigation by the CBI. The Union of India Is directed to have 
a fresh look at the National Mineral Policy, 2008 which is almost 
a decade old, particularly with regard to conservation and mineral 
G development. The exercise should be completed by 31" 
December, 2017. [Paras 226-228) (455-B-E) 
H 
20.4 The Chief Secretary of Odisha should file an affidavit 
as indicated within a period of six weeks and in any case on or 
before 30"' Septelllber, 2017. The Registry will list these petitions
COMMON CAUSE v. UNION OF INDIA AND ORS. 
381 
along with the affidavit immediately after Its receipt, for A 
consideration. [Para 229] [455-E] 
Khemka & Co. (Agencies) Pvt. Ltd. v. State of 
Maharashtra (1975) 2 SCC 22 : [1975] 3 SCR 753 -
held inapplicable. 
Karnataka; State of Bihar v. Banshi Ram Modi (1985) 
3 SCC 643 : [1985] 1 Suppl. SCR 345 - explained. 
T.N. 
Godavarman 
v. 
Union of India 
2016 
(8) SCALE 615; MC. Mehta v. Union of India (2004) 
12 SCC 118 : [2004) 3 SCR 128; Rare Earth v. Senior 
Geologist. Department of Mines & Geology (2004) 2 
SCC 783 : [2004] 1 SCR 965 - relied on. 
Common Cause v. Union of India & Ors. (2014) 14 
SCC 155 : [2014) 7 SCR 561; Goa Foundation v. Union 
of India (2014) 6 SCC 590 : [2014] 5 SCR 302; 
Common Cause v. Union of India (2016) 11 SCC 455; 
T.N. Godavarman v. Union of India) (2013) 8 SCC 198; 
Samaj Parivartana Samudaya v. State of Karnataka 
(2013) 8 SCC 154 : [2013) 6 SCR 810; Ambica Quarry 
Works v. State of Gujarat and Ors (1987) 1 SCC 213 : 
(1987] 1 SCR 562; Rural Litigation and Entitlement 
Kendra v. State of UP. (1989) Supp. (1) SCC 504 : 
[1988) 2 Suppl. SCR690; T.N. Godavarman v. Union 
of India (1997) 2 SCC 267 : [1996) 9 Suppl. SCR 
982; T.N. Godavarman v. Union of India (1997) 3 SCC 
312 : [1997] 2 SCR 642; T.N. Godavarman v. Union of 
India (2011) 15 SCC 658; State of Rajasthan v. Gotan 
Lime Stone Khanij Udyog (P). Ltd. (2016) 4 SCC 469 : 
(2016) 1 SCR 216 - referred to. 
Case Law Reference 
2016 (8) SCA,LE
615 
relied on 
Para2 
[2014) 7 SCR 561 
referred to 
Para 10 
. (2014) 5 SCR 302 
referred to 
Para 14 
(2016) u sec 455 
referred to 
Para 20 
B 
c 
D 
E 
F 
G 
H
382 
A 
B 
c 
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SUPREME COURT REPORTS 
(2017] 13 S.C.R. 
(2013) s sec 198 
referred to 
Para 54 
[2013) 6 SCR 810 
referred to 
Para 55 
[20041 3 SCR 128 
relied on 
Para 97 
[1975) 3 SCR 753 
held inapplicable 
Para 143 
[20041 1 SCR 965 
relied on 
Paru 148 
[1985) 1 Suppl. SCR 345 
explained 
Para 160 
[1987) 1 SCR 562 
referred to 
Para 164 
[1988) 2 Suppl. SCR 690 
referred to 
Para 165 
[1996) 9 Suppl. SCR 982 
referred to 
Para 166 
[1997) 2 SCR 642 
referred to 
Para 170 
(2011) 15 sec 658 
referred to 
Para 185 
[2016( 1 S<:'R 2l6 
referred to 
Para 204 
CIVIL ORIGINAL JURISDICTION : Writ Petition (Civil) No. 
114 of2014 
Under article 32 of the Constitution of India. 
WITH 
W. P. (C) No. 194 of2014. 
Ms. Pinky Anand, ASG, Harish N. Salve (AC}, Ms. V. Mohana, 
A.K. Panda, Gopal Subramanium, Manas Ranjan Mohapatra, Parag P. 
Tripathi, Gopal Jain, P. Chidambaram, Raju Ramachandran, Ashok K. 
Parija, Dr. A.M. Singhvi, V. Giri, Ashok Kr. Panda, Ashok H. Desai, 
Rana Mukherjee. Krishnan Venugopal, Ajit Kumar Sinha, Sanjay R. 
F 
Hegde, Sr. Advs., A.D.N. Rao, Ms. Aparajita Singh, Siddhartha 
Chowdhury, (A Cs), Prashant Bhushan, Devesh Kumar Agnihotri, Pranav 
Sachdeva, Suman! Bhushan. Nischal Kumar Neeraj, Arun Kumar Singh, 
Suresh Chandra Tripathi, Ms. Swarupama Chaturvedi, Balendu Shekhar, 
Ms. Meenakshi Grover, Ms. GunwantDara, Raj Bahadur, GS. Makker, 
G 
B. Krishna Prasad, D.L. Chidananda, Ravindra Bana, Ms. Gargi Khanna, 
Atulesh Kumar, P.K. Mullick, Ramesh
Singh, Shrey Kapoor, Lalitendu 
Mohapatra, Puneet Parihar (for Mis Aura & Co.), R.N. Karanjawala, 
Naveen Kumar, Mrs. Nandini Gore, Ms. Natasha Sehrawat, Ms. 
Khushboo Bari, Mrs. Manik Karanjawala, Sudeep Dey, Nishi Kant Singh, 
H 
Anand Varma, Kaustubh Prakash, R.M. Patnaik, Mrs. Vanita Bhargava,
COMMON CAUSE v. UNION OF INDIA AND ORS. 
383 
Ajay Bhargava, Kudrat Dev, Ms. ShreyaAgrawal, (for M/s Khaitan & 
A 
Co.), Indrani Patnaik, Anand Verma, Mahesh Agarwal, Dhananjay 
Mishra, Gaurav Khanna, Ms. Nishit Agarwal, Ms. Devika Mohan, 
E.C. Agrawala, Amar Dave, R.N. Karanjawala, Ms. Nandini Gore, 
Abhinay Sharma, Ms. Neha Khandelwal, Ms. Sonia Nigam, Amit 
Bhandari., Mrs. Manik Karanjawala (For Mis. Karanjawala & Co.), 
B 
Raj Kumar Mehta, Elangbam Premjit Singh, Ms. HimanshiAndley, Sunil 
Kumar Jain. Akarsh Garg, K.P.S. Chani, Ms. Kirti Renu Mishra, Ms. 
Apurva Upmanyu, Gopal Prasad, Sunil Dogra, Vivek Vishnoi, Abhishek 
Sharma, Suchit Mohanty, Anupam Lal Das, Balaji Srinivasan, Gaurav 
Kejriwal, Keshav Mohan, Sujit Keshri: Saraswata Mohapatra, 
P.R. Mishra, Ms. Rajani Ohri Lal, Himindcr Lal, Ashok Panigrahi, 
C 
Dhananjaya Mishra, Arnav Dash, Bishwaranjan Sahoo, Avnisli Kr. 
Sharma, R.M. Patnaik, Gaurav Khanna, TayenjamMomo Singh, Tejaswi 
Kumar Pradhan, Manoranjan Paikaray, Aniruddha Purushotham, Shiv 
Mangal Sharma, Lalit Mohapatra (for M/s Aura & Co.), Lalitendu. 
Mohapatra, NishitAgarwal, T.R. Rehman, (for Mis Aura & Co.), Mis Fox 
D 
Manda! & Co., Ms. Ruchi Kohli, Ms. Movita, RL. Mitra, Ms. Daisy 
Hannah, Ms. Akhila J., Haris Beeran, Kedar Nath Tripathy, Nishikant 
Singh, Sudeep Dey, Ms. Ameyavikrama Thanvi, Ms. Alankrita Sinha, 
B.V. Gadnis, Vishwanath Gadnis, VS. Lakshmi, AbhishekKurnar,Ambhoj 
Kumar Sinha, S.K. Biswal, Sachin Das, Azim H. Laskar, Chandra
Bhushan Prasad, Biswajit Das, S. Udaya Kumar Sagar, Mrityunjai Singh, 
E 
Bhavani Shankar, Mrs. V.S. Lakshmi.AakashBajaj (forM/sKhaitan& 
Co.), Ms. Nandini Sen, Chanchal Kr. Ganguli, Manoj Kumar Goyal, 
Mohd. Ainu) Ansari, Yagcsh Kumar Dahiya, Sunil Khatwani, TaibaKhan, 
Dr. Monika Gusain, Advs., for the appearing parties. 
The Judgment of the Court was delivered by 
F 
MADAN B. LOKUR, J. I. The facts revealed during the hearing 
of these writ petitions filed under Article 32 of the Constitution suggest a 
mining scandal of enormous proportions and one involving megabucks. 
Lessees in the districts of Keonjhar, Sundergarh and Mayurbhanj in 
Odisha have rapaciously mined iron ore and manganese ore, apparently 
G 
destroyed the. environment and forests and perhaps caused untold misery 
to the tribals in the area. However, to be fair to the lessees, they did the 
detail steps taken to ameliorate the hardships of the tribals, but it appears 
to us that their contribution is perhaps not more than a drop in the ocean -
also too little, too late. 
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SUPREME COURT REPORTS 
(2017] 13 S.C.R. 
A Facts leading up to the report of the Central Empowered 
Committee 
2. Rabi JDas, the editor of a daily newspaper called Arna Rdjdhani 
filed I.A. No. 2746-2748 of 2009 in a pending writ petition being T.N. 
Godavarman v. Union of India. 1 He prayed, inter alia, for the 
B 
following directions from this Court: 
c 
D 
E 
F 
" a) 
Issue a direction to the Central Empowered C01nmittee to 
co11duct an exhaustive fact finding study of the illegal mining 
in Keonjhar, Sundargarh and other Districts ofOrissa; 
b) 
Direct appointment cifa "Commission" to investigate and 
study the modalities of the illegal machinations, fix 
re;-ponsibility on individuals (in Government and outside it) 
and recommend remedial measures to be immediately 
implemented by the Government of India and the 
Government of 01issa; 
c) 
Direct the Respondents to take effective and appropriate 
action to ensure closure/stoppage of all the illegal mining 
acti'.lities in the concerned areas and direct prosecution and 
punish all those found guilty of this illegal mining in violation 
of the Mines and Minerals (Development and Regulation) 
Act, 1957, Forest (Conservation) Act, 1980 and other 
relevant laws." 
3. The applications were taken up for consideration on 6" 
November, 2009 when notice was issued to the Central Empowered 
Committee (for short 'the CEC') to file its repqrt/response within six 
weeks. 
4. On 26" April. 20 I 0 the CEC submitted an interim
report which 
wa> noted by this Court and taken on record. The neport was of a 
general nature but contained quite a few recommendations. Some of 
•he reco111mendations presently relevant are as follows: 
G 
"(b) Even otherwise the Rule 24-A(6), MCR, 1960 does not 
authorize the lessee to operate a mine without the statutory 
clearances/approvals. Therefore, in respect of a mine 
covered under the 'deemed extension' clause, the mining 
operations should be permitted to be undertaken in the non 
H 
' W.P. No. 202 of 1995
COMMON CAUSE v. UNION OF INDIA AND ORS. 
385. 
[MADAN B. LOKUR, J.) 
forest area of the mining lease only if(i) it has the requisite 
A 
environmental clearance; (ii) it has the consent to operate 
from the State Pollution Control Board under the Air and 
Water Acts; (iii) Mining Plan is duly approved by the 
competent authority; and (iv) the NPV for the entire forest 
falling within the mining lease is deposited in the B 
Compensatory Afforestation Fund. 
The mining in the forest land included in the mining lease 
should be permissible only if, in addition to the above, the 
approval under the FC Act/TWP has been obtained; 
( c) No forest land can be leased/assigned without first obtaining 
the approval under the FC Act. Therefore, the forest area 
approved under the FC Act should not be lesser than the 
total forest area included in the mining leases approved 
under the MMDRAct, 1957. Both necessarily have to be 
the same. In view of the above, this Hon 'hie Court while 
permitting grant of Temporary Working Permission to the 
mines in Orissa and Goa has made it one of the pre-
conditions that the NPV will be paid for the entire forest 
area included in the mining leases. Similarly, all the mining 
lease holders in Orissa should be directed to pay the NPV 
for the entire forest area, included in the mining lease; 
( d) In Orissa, substantial areas included in the mining leases as 
non forest land have subsequently been identified as DLC 
forest (deemed forest/forest like
areas) by the Expert 
Committee constituted by the State Government pursuant 
to this Hon'ble Court's order dated 12.12.1996. While 
processing and/or approving the proposals under the FC 
Act in many cases such areas have been treated as non-
forest land. It is recommended that (i) the NPV for the 
entire DLC area included in the mining lease, after deducting 
c 
D 
E 
F 
the NPV already paid, should be deposited by the concerned 
lease holder and (ii) the mining operations in the unbroken 
G 
DLC land (virgin land) should be permissible only if the 
permission under the FC Act has been obtained/is obtained. 
for such area. Keeping in view the peculiar circumstances· 
as was existing in Orissa and subject to the above, the mining 
operations in the broken DLC land may be allowed to be 
H
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SUPREME COURT REPORTS 
[2017] 13 S.C.R. 
continued provided the other statutory requirements and 
Rules are otherwise being complied with." 
The report concluded by recording as follows: 
" a) an attempt has been made for the first time by the CEC to 
comply and analyse the status of all the mining leases in a · 
State and to suggest effective and remedial measures -
something made possible because of the unstinted 
cooperation extended by the senior functionaries of the 
Forest and Mines Departments of the State Government; 
and 
b) the above recommendations if accepted and implemented 
will, besides ensuring that mining is done in compliance with 
the statutory provisions, result in recovery of additional 
an1vunt towards the NPV etc. running into hundreds of 
crores ofrupees. It would be appropriate that a part of this 
additional amount, say 50% is used through a SPV for 
undertaking specific tribal welfare and area development 
works so as to ensure inclusive growth of the mineral bearing 
areas. The CEC proposes to file detailed schemes in this 
regard for seeking pennission of this Hon 'ble Court provided 
the State of Orissa as well as the MoEF endorse the course 
of action proposed above." 
The significance of the second conclusion will be discussed by us a little 
later. 
5. Notice was issued on the report returnable on 7'" May, 20 I 0. 
On the adjourned date, the following order was passed by this Court: 
"'The CEC has filed its
Report. The State would like to file its 
respc;mse. Six weeks time is granted for the same. The 
recommendauons of the CEC which are acceptable to the State 
Govenunent can be complied with." 
It may be mentioned that some of the recommendations made by the 
CEC have been accepted and implemented by the State of Odisha. 
6. The issue of mining in Odisha again came up for consideration 
on 16"' September, 2013 and this Court passcJ the following order: 
"We call for a report from the Central Empo'Wered Committee 
within a period of six weeks. We direct that the parties of the
COMMON CAUSE v. UNION OF INDIA AND ORS. 
387 
[MADAN B. LOKUR, J.] 
State Government of Odisha and the Central Government A 
will cooperate with the Central Empowered Committee to enquire 
into the matter and furnish a report. 
The matter be listed on a Monday after six weeks." 
7. With reference to the order passed on 16th September, 2013 
the CEC conducted an inquiry and some information was sought from 
B 
Mis SardaMines Private Limited (for short 'SMPL"). This was objected 
to by SMPL who filed an application which was taken up for consideration 
on 9'' December, 2013. The following order was passed on that day: 
"By our order dated J6ili September, 2013, we had called for a 
Report from the Central Empowered Committee within a period 
C 
of six weeks. It is stated on behalf of the Central Empowered 
Committee that the Report could not be ready as part of the 
information called for have not been furnished by the State 
Government. 
Mr. Venugopal, learned senior counsel for the applicant M/s. 
D 
Sarda Mines Private Limited in IA No.3721 submits that since 
some of the matters are pending before the High Court, a prayer 
has been made for not furnishing the required information to the 
Central Empowered Committee. 
List this matter in the second week of January, 2014. 
In the meantime. the Central Empowered Committee may not 
submit its final Report." 
,• 
8. The matter was again taken up on 13" January, 2014 and this 
Court passed the following order: 
"We have heard
learned counsel for the parties. 
We have also perused the letter dated l 7th October, 2013 of 
the Member Secretary, Central. Empowered Committee sent to 
E 
F 
the Chief Secretary, Government of Odisha along with its 
annexurcs and in particular, the Statement of Details of G 
information and documents sought by Central Empowered 
Committee for the meeting convened on 30th October, 2013, 
which cover forest and environmental issues. 
We, accordingly, modify the order dated 9th December, 2013 
and direct the Central Empowered Committee to submit its final 
H 
..
388 
SUPREME COURT REPORTS 
[2017] 13 S.C.R. 
A 
report on the queries made by the State Government with regard 
to the details of the documents sought for in the letter dated 
17"' October, 2013 within a period of six weeks. 
B 
c 
The Report will not cover cases other than forest and 
environmental issues. 
The lessees and others from whom information is sought for will 
cooperate if they do not cooperate the Central Empowered 
Conµnittec will give its report. 
A copy of the interim report of26"' April, 2010 will be furnished 
to the learned counsel appearing for the State of Odisha. 
This matter be listed on 20"' January, 2014 for consideration of 
the recommendations made by the Central Empowered 
Comnrittee in the said Report dated26'' April, 2010." 
Thereafter and partly based on reports given by Justice M.B. Shah, a 
D 
retired judge of this Court, holding a commission under the Commissions 
oflnquiry Act, 1952 a writ petition being W.P. (C) No. 114 of2014 was 
filed by Common Cause. Several prayers were made in the writ petition, 
and some ofthe more significant prayers read as follows:-
E 
F 
G 
H 
"(a) Issue a writ of mandamus or any other appropriate writ 
directing the Union of India and Government of Odisha to 
immediately stop forthwith all illegal mining in the State ofOdisha 
and tll> terminate all leases that are found to be involved in illegal 
minil)g and mining in violation of the provisions of the Forest 
Conservation Act 1980, the environment laws and
other laws. 
(b) Issue a writ of mandamus or any other appropriate writ 
directing the Union of India and Government of Odisha to talce 
action against all the violators involved either directly or indirectly 
in illegal mining including those named in the report of Justice 
, 
I 
Shah Commission. · 
( c) Issue a writ of mandamus or any other appropriate writ 
directing a thorough investigation by an SIT or CBI under the 
supervision of this Hon 'ble Court, as is recommended by the 
Ju;tice Shah Commission into illegal mining in Odisha and collusion 
between private companies/individuals and public officials of the 
State/Central Governments.
COMMON CAUSE v. UNION OF INDIA AND ORS. 
389 
[MADAN B. LOKUR, J.) 
xxx 
xxx 
xxx 
A 
( e) Issue a writ of mandamus or any other appropriate writ 
directing the respondents to recover the illegally accumulated 
wealth through illegal mining and related activity, as per Section 
21(5) of the MMDR Act, 1957 [Mines and Minerals 
(Development and Regulation)Act, 1957) and launch prosecutions 
B 
under Section 21 (I) of the MMDRAct 1957, and directth~t the 
money recovered would be used for the welfare of local 
communities, tribals and villagers." 
9. The writ petition was taken up for consideration on 21 "April, 
2014 when the following order was passed: 
c 
"We have heard the preliminary objections with regard to the 
writ petition and we are not convinced that the writ petition is 
not maintainable. 
Issue notice. 
As the State of Odisha, Union oflndia and the CEC have already 
been served with the notices, no further notices be issu~~-- to 
them. 
Notice, however, be issued to respondent nos. 4 and 5 returnable 
within four weeks. 
It appears from the averments in paragraph 14 of the writ petition 
that several lessees are operating without clearances under the 
Environment (Protection) Act, 1986 and the Forest (Conservation) 
Act, 1980, and without renewal by the Government. Hence, an 
interim order needs to be passed in respect of these lessees who 
are operating the leases in violation of the law. 
For consideration of the interim order that should be passed, 
only this
writ petition be listed next Monday, the 28" of April, 
2014, as first item. lt will be open for all parties and intervenors/ 
proposed intervenors to file their respective affidavits. 
CEC, in the meanwhile, will make out a list of such lessees who 
are operating the leases in violation of the law. This list be 
prepared by the CEC without reference to the Shah 
Commission's Report. 
D 
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SUPREME COURT REPORTS 
(2017) 13 S.C.R. 
A 
Liberty is given to the parties to produce their papers before 
CEC. The State ofOdisha and the Union of India will cooperate 
with CEC to prepare the list." 
B 
c 
D 
E 
F 
G 
H 
Report of ~he Central Empowered Committee 
10. The CEC gave its final report on 25th April, 2014 which was 
considered ljy this Court and a detailed interim order was passed on 16"' 
May, 2014.' The sum and substance of the final report dated 25th April, 
2014 and the interim order is that in the districts of Odisha that we are 
concerned with, namely, Keonjhar, Sundergarh and Mayurbhanj, the total 
number ofleases granted for mining iron and manganese ore are 187. 
Of these, I 02 lease holders did not have requisite environmental clearance 
(under the Environment (Protection) Act, 1986) or approval under the 
Forest (Conservation) Act, 1980 or approved mining plan and/or Consent 
to Operate under the provisions of the Air (Prevention and Control of 
Pollution) Act, 1981 or the Water (Prevention and Control of Pollution) 
Act, 1981. This Court directed that 1nining operations in these I 02 mining 
leases shall remain suspended but it will be open to such lease holders to 
move the concerned authorities for necessary clearances, approvals or 
consents and, "as and when the mining lessees are able to obtain all the 
clearances/approvals/consent they may move this Court for modification 
of this interiip order in relation to their cases." 
11. This
Court also found that 29 out of 187 mining leases had 
been determined or rejected or had lapsed. It was directed that mining 
operations in these 29 mining leases will also remain suspended but it 
would be open to all these concerned lessees to move the authorities for 
necessary relief and as and when they get the appropriate relief, they 
could move this Court for modification of the interim order. 
12. This Court also found that 53 iron ore/manganese ore mining 
leases were operational and that they had necessary approvals under 
the Forest (Conservation) Act, 1980, consent to operate granted by the 
Odisha State Pollution Control Board and also approved mining plans. 
(There is no specific mention about environmental clearance). In addition 
3 mining leases were located in forest as well as non-forest land, but 
mining operations were being conducted in non-forest areas of the mining 
lease as the lease holders did not have approvals under the Forest 
(Conservatio11) Act, 1980. Therefore a total of 56 iron ore, manganese 
ore mining leases were operating in the State of Odisha. 
'Common Cause v. Union oflndia & Ors. (2014) 14 SCC 155
COMMON CAUSE v. UNION OF INDIA AND ORS. 
391 
[MADAN B. LOKUR, J.] 
13. As far as the break-up of the 56 operational mining leases is 
A 
concerned, it was found that 14 mining leases were operating on first 
renewal basis in accordance with the deeming provisions of Section 
8(2) of the Mines and Minerals (Development and Regulation)Act, 1957 
(for short 'the MMDR Act') read with Rule 24-A(6) of the Mineral 
Concession Rules, 1960 (for short 'the MCR') and 16 mining leases 
were operating since lease deeds for grant ofrenewal had been executed 
in_their favour. The remaining 26 mining leases were operating on second 
and subsequent renewal basis with the renewal applications pending a 
final decision with the State Government. 
B 
14. In respect of the 14 first renewal mining leases, this Court 
permitted them to continue their operations for the time being in view of C 
the deemed renewal provisions. This Court also permitted 16 mining 
leases to continue to operate since they had lease deeds executed in 
their favour. With regard to the remaining 26 mining leases operating on 
second and subsequent renewal applications, this Court drew attention 
to the decision rendered on 21"April,2014 in Goa Follndatitm v. Union 
of India' wherein it was held that the provision for a second or subsequent 
deemed renewal was not available in view of Section 8(3) of the MMDR 
Act. Consequently, these 26 lease holders were restrained from operating 
until express orders were passed by the
State Government under Section 
8(3) of the MMDR Act. Six months time was granted to the State 
Government to take a final decision on the renewal applications. This 
Court left it open to the mining lease holders to apply fonnodification of 
the interim order dated 16'" May, 2014 on obtai11ing necessary clearances. 
15. During the hearing of these petitions, we were informed that 
the balance 26 mining leases are now operational in view of the 
amendment to Section 8(3) of the MMDR Act with effect from 12'" 
January, 2015. However, we are not aware whether these 26 mining 
leases have the necessary statutory clearances. 
16. We may also mention that pursuant to the liberty granted to 
move for modification of the interim order of 161h May, 2014 we have 
received 17 interim applications for modification. Through a chart handed 
over to us in Court on 3"' May, 2017 we have been informed that in 
respect of two of the 17 applications, that is, Zenith Mining (I.A. No. 45) 
and Kavita Agrawal (I.A. No. 47), the lease has not been extended or 
has been determined and they do not have any Environmental Clearance 
'(2014) 6 sec 590 
D 
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SUPREME COURT REPORTS 
(2017] 13 S.C.R. 
A 
or Forest Clearance. In respect of J.N. Pattnaik (I.A. No. 66), there is 
no Forest Clearance available. We were also informed that S.A. Karim 
(I.A. No.9) ;ictually had a working lease and had wrongly been included 
as a non-operational lease. 
17. Be that as it may, learned counsel for the lease holders drew 
B 
our attention to the record of proceedings of 16"' May, 2014 and 
particularly the following paragraph appearing therein: 
"We have passed interim order in a separate sheet. The Central 
Empowered Committee will give a final report on the Writ Petition 
by the end of July, 2014 and the matter will be listed in the first 
c 
week of August, 2014 before the Green Bench." 
We are mentioning this in the context of the order passed on J3ili January, 
2014 adverted to above to the effect that "The Report will not cover 
cases other than forest and environmental issues." 
18. In its final report, the CEC has dealt with the following ten 
D 
topics: In thi~ final report dated the CEC dealt with the following ten 
topics:-
E 
F 
G 
H 
"I. 
Production ofiron ore and manganese ore without/in excess 
of the environmental clearance/Mining Plan/Consent to 
Operate. 
II. 
Mining leases operated in violation of the Forest 
(Conservation)Act, 1980. 
III. Illegal mining outside the sanctioned mining lease areas. 
IV. Mining leases acquired in violation of Section 6 of the 
MMDRAct, 1957. 
V. 
Violation ofRule 37 of the Mineral
Concession Rules, 1960 
by the lessees. 
VI. Illegalities involved in the mining leases ofEssel Mining & 
Industries Ltd. 
VII. Illegalities involved in the mining lease of Sharda Mines (P) 
Ltd. 
VIIJ.Massive illegal mining in Uliburu Forest land. 
IX. Inordinate delays in taking decisions by the State 
Government regarding renewal of the mining leases. 
X. Other issues."
COMMON CAUSE v. UNION OF INDIA AND ORS. 
393 
[MADAN B. LOKUR, J.] 
19. By an order dated 16'' January, 2015 objections to the final 
A 
report were permitted and we have since received quite a few objections. 
When the matter was taken up for consideration by this Court on 7"' 
October, 2015 and pursuant to the order passed on that date, the learned 
Amicus filed a statement dated 30"' October, 2015 in a tabufar form 
dealing with each I.A. filed in respect of the observations and B 
recommendations made by CEC. Thereafter, when the matter was again 
taken up for consideration the learned Arnicus filed a note dated 15'' 
March, 2016 wherein the following four issues were flagged:-
"(i) Leases lapsed under Section 4A(4) of the Mines and 
Minerals (Development and Regulation) Act, 1957 
(hereinafter referred to as MMDRAct, 1957) (11 leases); 
C 
(ii) 
Violation of Rule 24 of the Minerals (other than Atomic 
and Hydrocarbons Energy Minerals) Concession Rules, 2016 
(hereinafter referred to as MCR, 2016) and Rule 37 of the 
Mineral Concessions Rules, 1960 (hereinafter referred to 
as MCR, 1960) (9 leases); 
D 
(iii) Illegal mining in forest lands (20 leases); and 
(iv) Iron ore produced without/in excess of the environmental 
clearance (each of the operating leases involved)." 
20. Insofar as the first issue is concerned, it is common ground 
E 
that that issue has been fully, conclusively and exhaustively dealt with by 
this Court by a judgment and order dated 4'' April, 2016
(Common Cause 
v. Union of India).' Therefore, the first issue does not survive for 
consideration by us. 
21. As far as the remaining three issues are concerned, these 
overlap with topics I, II and V dealt with by the CEC. Detailed 
submissions were made before us by learned counsel for all the appearing 
parties on these issues as well as by the learned Arnicus and the learned 
Attorney General. We propose to deal with them in this judgment and 
order. 
22. We may mention that submissions were also made on topics 
III and IV identified by the CEC, that is, illegal mining outside the 
sanctioned mining lease areas and mining leases acquired in violation of 
Section 6 of the MMDR Act. We will consider these issues as well. 
• (20 I 6) 11 sec 455 
F 
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SUP~EME COURT REPORTS 
(2017] 13 S.C.R. 
A 
23. As far as topics VI and VII identified by the CEC are 
B 
c 
D 
E 
F 
G 
H 
concerned, we would like to hear the parties in detail in respect of these 
issues. 
24. No challenges or submissions were made on topics VIII, DC 
and X and therefore we accept the report of the CEC on these topics. 
25. At this stage. we may mention some rather frightening figures 
mentioned by the CEC in its final report. According to the CEC, excess 
mining without environmental clearance or beyond what was authorized 
by the environmental clearance is 2130.988 lakh MT of iron ore and 
24.129 lakh MT of manganese ore making a total of 2155.117 lakh MT 
of iron and manganese ore. This does not include extraction of ore 
without forest clearance. These figures give an indication of the extent 
of excess or illegal or unlawful mining carried out. 
26. In terms of rupees, according to the CEC the total notional 
value of minerals produced without an environmental clearance or in 
excess of the environmental clearance, at the weighted average price of 
minerals as proposed by the Indian Bureau of Mines comes to about 
Rs.17091.24 crores for iron ore and about Rs.484.92 crores for 
manganese ore making a total ofRs.17,576.16 crores. Again, this does 
not include mining without forest clearance. It is forth is reason that we 
have referred to the megabucks and rapacious mining. 
Justice M.B. Shah Commission of Inquiry 
27. Apparently, and it appears
quite independently of all these 
developments, the Central Government issued a notification on 22"" 
November, 2010 under the Commissions oflnquiry Act, 1952 whereby 
it appointed Justice M.B. Shah, a retired judge of this Court to conduct 
an inquiry on the following Terms of Reference: 
"2. (i) to inquire into and determine the nature and extent of 
mining and trade and transportation, done illegally or without 
lawful authority, of iron ore and manganese ore, and the losses 
therefrom; and to identify, as far as possible, the persons, firms, 
companies and others that are engaged in such mining, trade 
~nd transportation of iron ore and manganese ore, done illegally 
or without lawful authority; 
(ii) to inquire into and determine the extent to which the 
management, regulatory and monitoring systems have failed to
COMMON CAUSE v. UNION OF INDIA AND ORS. 
395 
[MADAN B. LOKUR. J.] 
deter, prevent, detect and punish offences relating to mining, 
A 
storage, transportation, trade and export of such ore, done illegally 
or without lawful authority, and the persons responsible for the 
same; 
(iii) to inquire into the tampering of official records, including 
records relating to land and boundaries, to facilitate illegal mining 
B 
and identify, as far as possible, the person responsible for such 
tampering; and 
(iv) to inquire into the overall impact of such mining, trade, 
transportation and export, done illegally or without lawful authority, 
in terms of destruction of forest wealth, damage to the c 
environment, prejudice to the livelihood and other rights of tribal 
people, forest dwellers and other persons in the mined areas, 
and the financial losses caused to the Central and State 
Governments. 
3. The Commission shall also recommend remedial measures to b 
prevent such mining, trade, transportation and export done illegally 
or without lawful authority." 
28. In the preamble to the notification appointing the Commission, 
it was noted that there were reports that mining, raising, transportation 
and export of iron ore and manganese ore illegally or without lawful 
E 
authority was being carried on in various States in cine or more of the 
following forms: 
"(a) mining without a licence; 
(b) mining outside the lease area; 
(c) undertaking mining in a lease area without taking
approval 
F 
of the concerned State Government for transfer of 
concession; 
(b) raising of minerals without lawful authority; 
( c) raising of minerals without paying royalty in accordance 
with the quantities and grade; 
( d) mining in contravention ofa mining plan; 
( e) transportation of raised mineral without lawful authority; 
( f) 
mining and transportation ofraised mineral in contravention 
of applicable Central and State Acts and rules thereunder; 
G 
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396 
SUPREME COURT REPORTS 
[2017] 13 S.C.R. 
A 
(g) conducting of multiple trade transactions to obfuscate the 
origin and source of minerals in order to facilitate their 
disposal; 
(h) tampering with land records and obliteration of inter-state 
boundaries with a view to conceal mining outside lease 
B 
areas; 
c 
D 
E 
F 
G 
H 
(i) 
forging or misusing valid transportation permits and using 
fwged transport permits and other documents to raise, 
tnansport, trade and export minerals;" 
It is in the above context that the Terms of Reference were framed. 
29. On l" July, 2013 the Commission gave the First Report on 
Illegal Mining oflron and Manganese Ores in the State of Odisha. The 
report contains an executive summary and very briefly the Commission 
stated that: (i) All modes of illegal mining, as stated in the notification 
dated 22"d November, 20 I 0 of the Central Government are being 
committed in the State ofOdisha; (ii) There is a complete disregard and 
contempt for law and lawful authorities on the part of many of the 
emerging breed of entrepreneurs; (iii) It appears that the law has been 
made helpless because of its systematic non implementation. The 
executive summary states that the following are discussed in the report: 
"(A) l1'formation regarding mining leases should be placed on 
website to make mining operations more transparent and to 
display the information for each lease on the departmental/State 
website with various conditions which are required
to be adhered 
by the lessee. 
(B) Misuse of Rule 24-A(6) ofMCR, 1960 [Mineral Concession 
Rules, 1960] which provides for deemed extension of lease. 
Application for renewal of mining lease is not decided for one or 
other pretexts, may be, there is lack of co-ordination among 
various departments which are required to decide renewal 
application. There is gross misuse of deemed refusal and deemed 
extension of both the provisions of renewal of leases {before 
27.09.1994 and after) under Rule 24-A ofMCR, 1960. This 
casual and negative approach has caused dearly to State 
exchequer in the form of hundred crores of stamp duty and 
others.
COMMON CAUSE v. UNION OF INDIA AND ORS. 
397 
[MADAN B. LOKUR, J.) 
(C) Violation of the provisions of the Forest (Conservation) Act, 
A 
1980, Rules & guidelines and directions issued by the Hon 'hie 
Supreme Court oflndia. 
(D) Violation of the provisions of the Environment (Protection) 
Act, 1986. 
B 
(E) Misuse of Rules: 10 & 12 of MCDR, 1988 [Mineral 
Conservation and Development Rules, 1988) which provides for 
modification and review of mining plan only for a specific purpose, c 
namely, 
(i) Safe and scientific mining; 
(ii) conservation of minerals; 
(iii) the protection of environment; and 
(iv) in case of modification, explanation for the same. 
(F) Encroachment:-
On the basis of Google Image, the survey report prepared by the 
State Government by DGPS method, it was found that in 82 
mining leases, there was encroachment. Out of the said leases, 
re-survey was ordered for 3 7 leases." 
30. Soon thereafter, the Commission gave its Second Report on 
Illegal Mining of Iron and Manganese Ores in the State of Odisha, 
sometime in October, 2013. This report dealt with specific lease holders 
and violations committed by them. It is not necessary for us to delve into 
those specific details. 
31. It was submitted before us by learned counsel for the mining 
lease holders that the reports given by the Commission were not 
acceptable on the ground that a notice had not been given to the lease 
holders under Section 8B or Section 8C of the Commissions of Inquiry 
Act, 1952.
It was submitted that under these circumstances the reports 
given by the Commission were vitiated and therefore the foundation of 
the writ petition filed by Common Cause was taken away. We are not in 
agreement with learned counsel for the mining lease holders. 
D 
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398 
A 
B 
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SUPREME COURT REPORTS 
(2017) 13 S.C.R. 
32. The first report given by the Commission was a general, overall 
perspective on the subject while the second report went into specific 
details of several mining lease holders - but we are not concerned with 
those specific~. Therefore, whether notices were or were not issued to 
the lease holdets who were the subject matter of discussion in the second 
report is of no consequence. 
33. What we are really perturbed about is the facts stated by the 
Commission in the first report. So far as this is concerned, we are of the 
view that no irregularity or illegality has been committed so as to vitiate 
the first report. Notwithstanding this, we are not relying upon any of the 
facts determined by the Conunission for the purposes of our judgment 
and order. 
34. The procedure followed by the Commission has been mentioned 
in Volume I Part II of the first report, but it is not necessary for us to 
recount each and every detail. Suffice it to say that a resume of the 
procedure followed will indicate that full opportunity was given to the 
lease holcJers to have their say. 
Resume of the procedure followed by the Commission 
35. In March 20 I I the Commission sent the first questionnaire to 
the concerned Secretary of the Government of Odisha seeking the 
E 
following information regarding each lease holder:-
"(i) the name of the lessee; 
(ii) 
area of the lease; 
(iii) date of the execution of the lease deed; 
F 
(iv)
present status (renewal, mining plan, mining scheme) 
G 
H 
approval date; 
(v) production and export particulars from the year 2008-09 up 
to January, 201 I; etc." 
36. On 20th April, 20 II the Commission sent the second 
questionnaire to the said concerned Secretary seeking further information 
in a Fonn consisting of 14 questions and 4 tables. 
37. Thereafter, between 24th and 26th August, 20 ll the Commission 
issued the first notice to various mining lessees in Odisha seeking 
information on affidavit as per Profonna A and B enclosed with the
COMMON CAUSE v. UNION OF INDIA AND ORS. 
399 
[MADAN B. LOKUR, J.] 
notice. In Proforma A the lease holder was asked to submit details 
A 
which included the details of environment clearance, forest clearance 
and renewal of lease and whether the leased mine was in operation or 
not. In Proforma B the lease holder was asked to submit details which 
included the details of dispatch, domestic consumption and export in 
million tonnes of iron ore and manganese ore from 2006-07 to 2010-11. 
38. The Commission visited Odisha from 7'" December .• 2011 to 
J4th December, 2011, from 3"' October, 2012 to 11'" October, 2012 and 
from 31" October, 2010 to 8'" November, 2012. The purpose of the 
visits was to collect information and seek explanations and gather facts 
from the concerned Departments of the Government of India and the 
Government of Odisha. During the visits, the C01nmission received as 
many as 140 complaints alleging illegal mining. Accordingly, a public 
hearing was held in Keonjhar and Bhubaneshwar on I I"' and 12'" 
December, 2011. 
39. On21" December, 2012and12"' January, 2013 several senior 
counsel were given a personal hearing by the Commission including a 
personal hearing to the Federation oflndian Mining Industries (for short 
'FIMI'). Following the submissions made, a fresh notice was issued to 
the lease holders from 28'" January, 2013 seeking information in 
Proformas A to H. In terms of the fresh notice, the lease holder was 
required to verify the facts
stated therein (which were collected by the 
Commission) and if found incorrect then to state the correct facts. The 
fresh notice specifically mentioned that: 
"(i) The lessee shall come fully prepared to answer, related to 
this matter and submit all related records. 
B 
c 
D 
E 
(ii) 
Explain the production from the leased area without having 
F 
approval under F(C)Act, 1980. 
(iii) Explain the production during the deemed extension period 
without having approval under EIA Notification dated 
27.01.1994 and amendments thereon. 
(iv) Explain the excess production in violation of EIA 
Notification dated 27.01.1994 and amendments thereon 
under the EP Act, 1986." 
40. The report mentions the various dates of hearing given to 
foamed counsel for the lease holders, the State of Odisha, FIMI, 
G 
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SUPREME COURT REPORTS 
[2017] 13 S.C.R. 
A 
Federation oflnpian Chambers of Commerce and Industry (FICCI) and 
the Ministry of Environment and Forest of the Government of India (for 
short 'MoEF') which are as follows: 
B 
c 
D 
E 
F 
HEARING 
DATE 
PLACE 
NO. 
I. 
21.12.2012 
Office of the Commission. Ahmedabad. 
2. 
12.01.2013 
-do-
3. 
18.022013 
-do-
4. 
1------" 
27.02.2013 
Circuit House, Bhubaneshwar (Odisha)._ 
5. 
28.02.2013 
-do-
~-
·--· 
6. 
01.03.2013 
-do-
7. 
02.032013 
-do-
8. 
04.03.2013 
-do-
9. 
16.03.2013 
Circuit House, Annexe, Ahmedabad. 
JO. 
20.03.2013 
-do-
I I. 
23.03.2013 
Office of the Commission. Ahmedabad. 
12. 
02.04.2013 
Circuit House, Annexe, Ahmedabad. 
13. 
03.04.2013 
-do-
14. 
04.04.2013 
-do-
15. 
12.04.2013 
Office of the Commission. Ahmedabad. 
16. 
13.04.2013 
-do-
17. 
21.04.2013 
Gujarat University Convention Centre, 
Nr. Helmet Cross Road, 132 fl. Ring 
Road, Ahmedabad. 
18. 
24.05.2013 
Office of the Commission, Ahmedabad. 
19. 
2~.05.2013 
-do-
41. The number ofleamed counsel and representatives who were 
heard by the Commission and with whom interactions took place are 
mentioned in Annexure A to Volume I of the first report. The list of 
learned counsel runs into 18 pages - from page 33 to page 50 ofVolume 
I of the first report. Some individual lawyers appeared for several lease 
holders but the fact of the matter is that everybody who wanted to be 
heard was given a hearing. 
42. The function of the Commission as stated
in the first report, at 
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the present stage, is best described in the words of the Commission 
itself. It is stated as follows:-
"The function of the Commission, at this stage, is only to inquire, 
assess the data collected and to submit the report on the said 
basis. On that basis, some remedial measures are suggested by 
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the Commission for controlling illegal mining and violation of the
COMMON CAUSE v. UNION OF INDIA AND ORS. 
401 
[MADAN B. LOKUR, J.) 
Acts and/or Rules. For that, there is no question of issuing notices 
A 
to the lessees. 
For collecting the data and assessing it, the Principles ofNatural 
Justice are fully complied with, as stated above. On the basis of 
the data submitted by the lessees and the submissions made by 
Ld. Counsel for them, the report is submitted." 
B 
It is further clarified on page 198 ofVolume I of the first report that with 
regard to individual mining leases in which there 1s a violation of the 
provisions of the Forest (Conservation) Act, 1980 and/or conditions of 
environmental clearance etc. a report wonld be submitted later on. 
43. It is therefore abundantly clear that the first report is generally 
a limited fact finding enquiry on the basis of information supplied by the 
mining lease holders. Therefore, there is absolutely no question of any 
notice being issued to any mining lease holder under Section 8B or the 
right of cross examination being granted to any mining lease holder under 
Section 8C of the Commissions of Inquiry Act, 1952. We are satisfied 
that the Commission made adequate efforts to collect the facts and this 
collation in the first report was possible with the assistance of the mining 
lease holders and their learned counsel and representatives as well as 
the government authorities and FIMI and FICCI. Under these 
circumstances, no lease holder can seriously contend that the procedure
adopted by the Commission in collecting facts was either irregular or not 
in accordance with law. As mentioned above, any mining lease holder 
who wanted to be heard was given an opportunity of being heard and 
was fully aware of what the Commission was attempting to achlcve and 
if any particular mining lease holder chose not to associate with it, it was 
at his or her own peril. Lack of knowledge of the proceedings before 
the Commission cannot be appreciated and we are quite satisfied that all 
the mining lease holders were fully aware of what was going on, if not 
personally then certainly through their list of learned counsel running 
into 18 pages or their representatives individually or their Federation. 
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44. In Goa Foundation there was a challenge to the report of the 
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Justice Shah Commission in respect of its conclusions pertaining to the 
State of Goa. This was dealt with by this Court in paragraphs 11 to 14 of 
its decision. Tills Court declined to quash the report in view of the statement 
made by the learned Advocate General of Goa. But, this Court took the 
view that: "we will, however, examine the legal and environmental issues 
raised in the Report of Justice Shah Commission and on the basis of our 
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findings on these issues consider granting the reliefs prayed for in the 
writ petition filed by Goa Foundation and the reliefs prayed for in the 
writ petitions tiled by the mining lessees, which have been transferred to 
this Court." 
45. In the present petitions before us, there is no challenge to the 
reports of the lustice Shah Commission. However, we propose (as in 
Goa Fo1111dation) to confine ourselves to some limited facts adverted 
to by the CEC in its final report. We do not propose to base any of our 
conclusions on the reports· of the Commission. 
46. Learned counsel for the petitioners insisted that the illegal or 
unlawful mining activity carried on in the State ofOdisha as noted by the 
Commission deserves to be investigated by the Central Bureau of 
Investigation. Reference in this regard was made to the passage in Part 
III of Volume I of the first report of the Commission to the following 
effect:-
"Since this is one of the biggest illegal mining ever observed by 
the Commission, it is strongly felt that this is a fit case to handover 
to Central Bureau oflnvestigation, for further investigation and 
follow i?P action." 
47. Similarly, on page 125 of Chapter II ofVolume I of the report, 
it is stated as follows:-
"Terrns ofReference No. 8 provides that "The Commission may 
take the services of any investigating agency of the Central 
Government in order to effectively address its terms of
reference. 
The Commission, therefore, suggests that Central Bureau of 
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Investigation (C.B.I.) may be directed to investigate into 
allegations of corruption made against politicians, bureaucrats 
and others." 
We will consider this at the appropriate stage. Suffice it to say for the 
time being that the Commission made certain significant observations in 
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Chapter II of the report to the effect that: 
a. That the tribals in the area have been displaced or stay in 
pathetic and miserable conditions in same area. There is rampant 
air pollution with the trees having the colour of minerals making 
it clear that tribals are forced to breathe polluted air and drink 
H 
polluted water.
COMMON CAUSE v. UNION OF INDIA AND ORS. 
403 
[MADAN B. LOKUR, J.] 
b. Streams and ground water is polluted and there is hardly any 
A 
facility of drinking water. Women have been seen fetching water 
from dirty nalas. 
c. Mining companies and beneficiation plants are drawing water 
from rivers and nearby water resources are getting depleted at 
a fast rate. The river Baitrani has been seriously affected by this 
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activity. 
d. Basic facilities such as medical facilities. shelter/residence, 
education facilities are absent. Roads have a heavy flow of 
traffic and on one road of the area about 7000 trucks passed 
during night time. 
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e. The labour is not being paid adequate wages beyond the 
minimum wages even though the income of the mine owners 
runs into billions of rupees . 
. 
48.Adverting to corruption in the area due to illegal mining activities, 
the Commission felt thatthe Vigilance Commission was unlikely to conduct 
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ail 'impartial and independent enquiry for arriving at just and proper 
findings because of external pressures. Accordingly, it would be more 
appropriate if the Central Bureau ofinvestigation (CBI) conducts a 
detailed enquiry into all cases that have been registered between 2008 
and 2011. It was also noted that the railways have issued demand notices 
to the extent ofRs.1,874 crores. The latest position with regard to these 
notices is not available. 
49. It was also noted that notices have been issued in 146 cases 
to various lease holders
for recovery of mined ore as per Section 21 ( 5) 
of the MMDR Act. In the Koira circle notices have beeu issued to 55 
lessees for more than Rs. 13,000 crores; in Joda circle notices have 
been issued to 72 lessees for recovery of more than Rs. 44.000 crores; 
in Keonjhar cirdc notices have been issued to 4 lcssees forrecovery of 
about Rs. 1,065 crores; in Koraput circle notices have been issued to 
three lessees for the recovery of about Rs. 44 lakhs; and in Bolangir 
circle notice has been issued to I lessee for the recovery of about Rs.29 .5 
crores. In Baripada circle notices have been issued to 11 lessees for 
recovery of more than Rs. 467 crores. In other words notices have 
be'en,issued to the lessees for recovery of more than Rs. 59.000 crores! 
(According to the CEC the figure exceeds Rs. 61,000 crores) ! ! 
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50. We have adverted to the reports of the Commission, without 
B 
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relying on them, only to highlight the gravity of the situation and nothing 
more. The gravity of the situation is also apparent from the report of the 
CEC and the Commission seems to support it. 
Initial contention 
51. The initial contention urged on behalf of the respondents -
lease holders was that in giving the report dated 16"' October, 2014 the 
CEC has exceeded its remit. In this context, reference was made to the 
order of 13" January, 2014 in which it is stated that "The Report will not 
cover cases other than forest and environmental issues." 
52. We aie of opinion that this objection deserves immediate 
rejection. The subsequent orders passed by this Court have been 
completely overlooked by learned counsel inasmuch on 21" April, 2014 
it was specifically noted by this Court that "CEC, in the meanwhile, will 
make out a list of such lessees who are operating the leases in violation 
of the law." Similarly, in the record of proceedings of J 6th May, 2014 it 
was noted that "The Central Empowered Committee will give a final 
report on the Writ Petition by the end of July, 2014 ......... " 
53. From a reading of the orders and the proceedings that have 
been held in this regard from time to time, it is quite obvious to us that the 
E 
jurisdiction of the CEC was not limited and it was expected to give a 
detailed report on all aspects of illegal
mining or mining being carried out 
without any lawful authority in whatever manner. The initial objection 
raised on behalf of the lease holders is therefore rejected. 
Central Empowered Committee 
F 
54. The Central Empowered Committee or the CEC was first 
constituted by this Court by an order dated 9th May, 2002 
(T. N. Godavarman v. Union of India)' as an interim body. Thereafter, 
it was constituted by a notification dated I 7'h September, 2002 issued 
under Section 3(3) of the Environment (Protection)Act, 1986 (for short 
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'the EPA'). It has continued functioning and assisting this Court for 
more than a decade and even though it has been criticized on a couple of 
occasions, it is now an established body which renders extremely valuable 
advice to this Court and provides factual material on the basis of which 
this Court can make some recommendations and pass appropriate orders.'' 
'(2013) 8 sec 198 
'T.N. Godavam1an v. Union oflndia, (2013) 8 SCC 198 and (2013) 8 SCC 204 
H
COMMON CAUSE v. UNION OF INDIA AND ORS. 
405 
[MADAN B. LOKUR, J.] , 
55. The details of the functioning of the CEChave been discussed 
A 
by this Court in Samaj Parivartana Samudaya v. State ofKarnataka.7 
In that decision, questions were raised about the credibility of the CEC 
and while rejecting the submissions, it was made clear that the 
recommendations made by the CEC are subject to the satisfaction of 
this Court. We need say nothing more except that during the course of B 
hearing of the present petitions, some of the conclusions arrived at by 
the CEC were disputed by the petitioners and even by the learnedAmicus 
and some were supported by learned counsel for the mining lease holders, 
the learned Attorney General and the learned counsel for the State of 
Odisha. It is therefore quite c !ear that in the present cases, the CEC as 
a fact finding body has functioned impartially and it is only on the 
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conclusions arrived at by the CEC on the basis of the facts gathered that 
there can be some debate and discussion. Anyone may disagree with 
the views of the CEC and there is no need to make heavy weather 
about this at all. 
56. In so far as the report given by the CEC on 16'h October, 2014 
D 
(the final report) is concerned, before going into the details thereof, we 
may mention that the CEC has stated that it held meetings with the 
Chief Secretary and other senior officials of the State of Odisha and 
others on six dates. It also heard the lease holders and
others on seven 
dates and it held meetings with three of the lease holders that is Jindal 
Steel and Power Ltd. (JSPL), Sarda Mines Pvt. Limited (SMPL) and 
Essel Mining and Industries Ltd. (Essel) on lO'h September, 2014. The 
CEC visited the site of the mining lease ofSMPL from4"' March, 2014 
E 
to 7'" March, 2014 and had site visits of a number of other lessees from 
12'h July, 2014 to 16'h July, 2014. 
57. As far as the facts collected by the CEC are concerned, there 
·is no dispute with regard to their correctness. The CEC has recorded 
that there are 187 iron ore and manganese ore mining leases in the State 
of Odisha. On the basis of the material and information collected, a 
statement was prepared showing lease-wise and year-wise details of 
production of iron ore and manganese ore, pennissible production and 
production without environmental clearance/beyond environmental 
clearance. The details in this regard have been given as Annexure R-14 
to the final report. 
1 c20!3) s sec 154 
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58. Regarding the correctness of the information, the CEC has 
this to say: 
"24. A copy of the above said statement prepared by the CEC 
was made available, through the Director, Mines and Geology, 
Government ofOdisha and also through the Federation oflndian 
Mining Industries (FIMI), to the lessees of each of the mining 
leases to enable them to verify the production and other details 
as given in the statement. During the hearings held before the 
CEC between 5•h August and 12m August, 2014 and also in the 
representations filed before the CEC a large number oflessees 
stated that the yearwise production details are not correctly 
reflected in the statement. Some of them also stated that the 
environment clearance details are not properly reflected in the 
statement. Therefore, it was decided that (a) the State 
Government will reconcile the annual production and other details 
with the respective lessees and (b) the copies of the environmental 
clearances may also be filed before the CEC by those lessees 
who are c!isputing the environmental clearances details provided 
by the State. Accordingly a meeting was convened by the 
Director; Mines & Geology (DMG) with the lessees on 141h 
August, 2014 and during which the annual production and other 
details were reconciled. The reconciled leasewise and yearwise 
production and other details provided to the CEC by the State of 
Odisha may be seen in the
statement enclosed at Annexure -
R-11 to this Report. The figures modified in the said statement, 
after reconciliations, arc shown in bold print." 
59. The CEC noted that the Director, Mines and Geology of the 
Government of Odisha had informed the CEC that each lease holder 
with the exception of SMPL and JSPL agreed with the reconciled 
production details. On facts, therefore, there is no dispute with regard 
to the contents of the report of the CEC, although the conclusions might 
be disputed. Separately, the CEC has dealt with the facts concerning 
SMPL and JSPL pursuant to a meeting held with them on 11 m September, 
2014. 
Statutory provisions 
60. The grant of a mining lease is governed by the provisions of 
the Mines and Minerals (Development and Regulation) Act, 1957 (or
COMMON CAUSE v. UNION OF INDIA AND ORS. 
[MADAN B. LOKUR, J.] 
the MMDR Act), the Mineral Concession Rules, 1960 (or the MCR) 
and the Mineral Conservation and Development Rules, 1988 (or the 
MCDR). 
61. Section 4(1) of the MMDRAct provides that no person shall 
undertake any mining operation in any area except under and in 
accordance with the terms and conditions of a mining lease granted 
under the MMDRAct and the rules made thereunder. A mining operation 
is defined in Section 3(d) of the MMDRAct as meaning any operation 
undertaken for the purpose of winning any mineral. Section 4(2) of the 
MMDR Act provides that no mining lease shall be granted otherwise 
than in accordance with the provisions of the said Act and the rules 
made thereunder. 
62. Section 5(2) of the MMDR Act provides for certain restrictions 
on the grant of a mining lease. It provides that the State Government 
shall not grant a mining lease unless it is satisfied that the applicant has 
407 
A 
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a mining plan duly approved by the Central Government or the State 
Government in respect of the concerned mine and for the development 
D 
of mineral deposits in the area concerned. 
63. Section 10 of the MMDR act provides for the procedure for 
obtaining a mining lease and sub-section (I) thereof provides that an 
application is required to be made for a mining lease in respect of any 
land in which the mineral vests in tlie government and the application 
shall be made to the State Government in the
prescribed form and along 
with the prescribed fee. 
64. Section 12 of the MMDRAct requires the State Government 
to maintain a set of registers. Among the registers that the State 
Government is required to maintain are a register of applications for 
mining leases and a register of mining leases. Every such register shall 
be open to inspection by any person on payment of such fee as the State 
Government may fix. 
65. Section 13 of the MMDR Act provides for the rule making 
power of the Central Government in respect of minerals. The MCR are 
framed in exercise of power conferred by Section 13 of the MMDR 
Act. 
66. Section 18 of the MMDRActmakes it the duty of the Central 
Government to take all such steps as may be necessary for the 
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conservation and systematic development of minerals in India and for 
the protection of the e11vironment by preventing or controlling any pollution 
which may be cansed by mining operations. The MCDR are framed in 
exercise of power conferred by Section 18 of the MMDRAct. 
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67. The distinction between the MCR and the MCDR is that the 
MCR deal, inter a/ia. with the grant of a mining lease and not 
commencement of mining operations. However, the MCDR deal, inter 
alia. with the commencement of mining operations and protection of 
the environment by preventing and controlling pollution which might be 
caused by mining operations. 
68. Sec~ion 21 of the MMDR Act deals with penalties and sub-
section ( 1) theteof provides that whoever contravenes the provisions of 
sub-section (I) or sub-section (I A) of Section 4 shall be punished with 
imprisonment for a term which may extend to two years or with fine 
which may extend to Rs. 25,000 or with both. Sub-section ( 5) of Section 
21 of the MMDR Act provides that whenever any person raises without 
any lawful authority, any mineral from any land, the State Government 
may recover from such person the minerals so raised or where such 
mineral has been disposed of the price thereof. In addition thereto the 
State Government may also recover from such person rent, royalty or 
tax, as the case may be for the period during which the land was occupied 
by such person
without any lawful authority. 
Mineral Concession Rules, 1960 
69. As far as the MCR are concerned, Rule 22 is of some 
importance and this provides for an application to be made for the grant 
of a mining lease in respect of land in which the mineral vests in the 
government. An application for the grant of a mining lease is required to 
be made by an applicant to the State Government in Form I to the MCR. 
Sub rule ( 5) of Rule 22 deals with a mining plan and it requires that a 
mining plan shall incorporate, amongst other things, a tentative scheme 
of mining and annual programme and plan for excavation for year to 
year for five years. 
70. Rule 22A of the MCR makes it clear that mining operations 
shall be undertaken only in accordance with the duly approved mining 
plan. Therefore, a mining plan is of considerable importance for a mining 
lease holder and is in essence sacrosanct. A mining scheme and a mining 
plan are a sine qua non for the grant of a mining lease.
COMMON CAUSE v. UNION OF INDIA AND ORS. 
409 
[MADAN B. LOKUR, J.] 
71. Rule 27 of the MCR deals with the conditions that every mining 
A 
lease is subject to. One of the conditions is that the lessee shall comply 
with the MCDR. 
72. The format of a mining lease is given in Form K to the MCR 
and this is relatable to Rule 31 of the MCR which provides that on an 
application for the grant of a mining lease, if an order has been made for 
B 
the grant of such lease, a lease deed in Form K or in a form as near 
thereto as circumstances of each case may require, shall be executed 
within six weeks of the order, or within such extended period as the 
State Government may allow. 
73. Part VII of Form K deals with the covenants of the lessee/ c 
lessees. Clause 10 thereof requires the lessee to keep records and 
accounts regarding production and employees etc. The lessee is required, 
inter alia, to maintain a record of the quantity and quality of the mineral 
released from the leased land, the prices and all other particulars of all 
sales of the mineral and such other facts, particulars and circumstances, 
as the Central Government or the State Government may require. 
74. Clause 11 C is of some importance and it requires that the 
lessee shall take measures for the protection of the environment like 
planting of trees, reclamation ofland, use of pollution control devices 
and such other measures a~ may be prescribed by the Central Government 
or the State Government from time
to time at the expense of the lessee. 
75. Rule 37 of the MCR deals with the transfer of a lease and 
provides, inter alia, that a mining lessee shall not without the previous 
consent in writing of the State Government or the Central Government, 
as the case may be, assign, sublet, mortgage, or in any other manner, 
transfer the mining lease, or any right, title or interest therein. The lessee 
shall not enter into or make any bona fide arrangement, contract or 
understanding whereby the lessee will or may directly or indirectly be 
financed to a substantial extent in respect ofits operations or undertakings 
or be substantially controlled by any person or body of persons. Sub-
rule (3) ofRule 37 of the MCR enables a State Government to determine 
any lease ifthe mining lessee has committed a breach of Rule 37 of the 
MCR or has transferred any lease or any right, title or interest therein 
otherwise than in accordance with sub-rule (2) of Rule 37 of the MCR. 
Mineral Conservation and Development Rules, 1988 
76. The MCDR promulgated under Section 18 of the MMDR 
Act and referred to in Rule 27 of the MCR are also of some significance. 
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Rule 9 of the MCDR prescribes that no person shall commence mining 
operations in any area except in accordance with a mining plan approved 
under Clause (b) of sub-section (2) of Section 5 of the MMDRAct. 
77. The mining plan may be modified in terms of Rule 10 of the 
MCDR in the interest of safe and scientific mining, conservation of 
minerals or for protection of the environment. However, the application 
for modificatiojls shall set forth the intended modifications and explain 
the reasons for $uch modifications. The mining plan cannot be modified 
just for the asking. 
78. Rule 13 of the MCDR provides that mining operations are 
required to be carried out by every holder of a mining lease in accordance 
with the approved mining plan. If the mining operations are not so carried 
out, the mining ©perations may be suspended by the Regional Controller 
of Mines in the Indian Bureau of Mines or another authorized officer. 
79. From our point of view, Chapter V of the MCDR dealing with 
"Environment" is of significance. In this Chapter, Rule 31 of the MCDR 
provides that every holder of a mining lease shall take all possible 
precautions for the protection of the environment and control of pollution 
while conducting any mining operations in the area. 
80. Rule 37 of the MCDR requires certain precautions to be taken 
against air pollution and obliges the mining lease holder to keep air pollution 
under
control and within permissible limits specified under various 
environmental laws including the Air (Prevention and Control of Pollution) 
Act, 1981 and the Environment (Protection) Act, 1986. 
81. Rule 38 of the MCDR requires the holder of a mining lease to 
take all possible precautions to prevent or reduce the passage of toxic 
and objectionable liquid effluents from the mine into surface water bodies, 
ground water aquifer and usable lands to a minimum. It also mandates 
effluents to be suitably treated, ifrequired, to conform to the standards 
laid down in this regard. In other words, the provisions of the Water 
(Prevention and Control of Pollution) Act, 1974 are required to be adhered 
to by the mining lease holder. 
82. Rule 41 of the MCDR requires every holder of a mining lease 
to carry out mining operations in such a manner as to cause least damage 
to the flora of the area and the nearby areas. Every holder of a mining 
lease is required to take immediate measures for planting not less than 
twice the number of trees destroyed by reason of any mining operations
COMMON CAUSE v. UNION OF INDIA AND ORS. 
[MADAN B. LOKUR, J.] 
411 
and to look after them during the subsistence of the lease after which 
A 
these trees shall be handed over to the State Forest Department or any 
other appropriate authority. The holder of a mining lease is also required 
to restore, to the extent possible, other flora destroyed by the mining 
operations. 
83. Briefly therefore, the overall purpose and objective of the 
B 
MMDR Act as well as the rules framed there under is to ensure that 
mining operations are carried out in a scientific manner with a high degree 
of responsibility including responsibility in protecting and preserving the 
environment and the flora of the area. Through this process, the holder 
of a mining lease is obliged to adhere to the standards laid down under 
the Environment (Protection) Act, 1986 or the EPA as well as the laws 
pertaining to air and water pollution and also by necessary implication, 
the provisions of the Forest (Conservation) Act, 1980 (for short 'the FC 
Act'). Exploitation of the natural resources is ruled out. If the holder of 
c 
a mining lease docs not adhere to the provisions of the statutes or the 
rules or the terms and conditions of the mining lease, that person is liable 
D 
to incur penalties under Scction21 of the MMDRAct. In addition thereto, 
Section 4A of the MMDRAct which provides for the termination ofa 
mining lease is applicable. This provides that where the Central 
Government, after
consultation with the State Government is of opinion 
that it is expedient in the interest of regulation of mines and mineral 
development, preservation of natural environment, prevention of pollution, 
etc. then the Central Government may request the State Government to 
prematurely terminate a mining lease. 
Environment Impact Assessment Notification of 27•• January, 
1994 
84. As can be seen from the statutory scheme adverted to above, 
protection and preservation of the environment is a significant and integral 
component of a mining plan, a mining lease and mining operations - and 
rightly so. 
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85. Keeping this in mind, an Environment Impact Assessment 
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Notification dated 27'h January, 1994 was issued by the Central 
Government in exercise of powers conferred by Section 3(1) and Section 
3(:2j(v) of the EPA read with Rule 5(3)(d) of the Environment (Protection) 
Rules, 1986. The Environment Impact Assessment Notification dated 
27"' January, 1994 (for short 'EIA 1994') is a prohibitory notification and 
directs that on and from the date ofits publication in the official gazette: 
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(i) expansion or modernization ofany activity (if pollution load is to exceed 
the existing one) and (ii) a new project listed in Schedule I to the 
notification, shall not be undertaker. unless it has been accorded 
environmental clearance (for short EC) by the Central Government in 
accordance wit!i the procedure specified in the notification. 
86. The notification provides, among other things, that in case of 
mining operations, site clearance shall be granted fora sanctioned capacity 
and shall be valid for a period of five years from commencing mining 
operations. What this means is that on receipt of an EC a mining lease 
holder can extrru;t a mineral on! y from a specified site, up to the sanctioned 
capacity and only for a period of five years from the date of the grant of 
an EC. This is regardless of the quantum of extraction permissible in the 
mining plan or the mining lease and regardless of the duration of the 
mining lease. Consequently, a mining lease holder would necessarily have 
to obtain a fresh EC every five years and can also apply for an increase 
in the sanctioned capacity. There is no concept of a retrospective EC 
and its validity effectively starts only from the day it is granted. Thus, 
the EC takes precedence over the mining lease or to put it conversely, 
the mining operations under a mining lease are dependent on and 
'subordinate' to the EC. 
87. On 4" May, 1994 an Explanatory Note
was added to EIA 
1994. We are concerned with the I" Note which deals with the expansion 
and modernization of existing projects. This reads as follows: 
"l. Expansion and mcl:i.ernization of existing projects 
A project proponent is required to seek environmental clearance 
for a proposed expansion/modernization activity if the resultant 
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pollution load is to exceed the existing levels. The words "pollution 
load" will in this context cover emissions, liquid effluents and 
solid or semi-solid wastes generated. A project proponent may 
approach the concerned State Pollution Control Board (SPCB) 
for certifying whether the proposed modernization/expansion 
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activity as listed in Schedule-I to the notification is likely to exceed 
t.'1e existing pollution load or not. Ifit is certified that no increase 
is likely to occur in the existing pollution load due to the proposed 
expansion or modernization, the project proponent will not be 
required to seek environmental clearance, but a copy of such 
certificate issued by the SPCB will have to be submitted to the 
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COMMON CAUSE v. UNION OF INDIA AND ORS. 
413 
[MADAN B. LOKUR J.] 
Impact Assessment Agency (IAA) for information. The IAA 
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will however, reserve the right to review such cases in the public 
interest if material facts justifying the need for such review come 
to light." 
88. The Note is significant and from its bare reading it is clear 
that if any proposed expansion or modernization activity results in an 
increase in the pollution load, then a prior EC is required. The project 
proponent should approach the concerned State Pollution Control Board 
(for short the SPCB) for certifying whether the proposed expansion or 
modernization is likely to exceed the existing pollution load ornot. If the 
pollution load is not likely to be exceeded, the project proponent will not 
be required to seek an EC but a copy of such a certificate from the 
SPCB will require to be submitted to the Impact Assessment Agency 
which can review the certificate. 
89. What is the requirement, if any, under EIA 1994 with regard 
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to an existing mining lease where there is no proposal for expansion or 
modernization? Does such a mining lease holder require an EC to continue 
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mining operations? This is answered in the 8" Note which is also of 
some importance and this reads as follows: 
"8. Exemption for projects already initiated 
For projects listed in Schedule-I to the notification in respect of E 
which required land has been acquired and all relevant clearances 
of the State Government
including NOC from the respective 
State Pollution Control Boards have been obtained before 27" 
January, 1994, a project proponent will not be required to seek 
. environmental clearance from the !AA. However those units 
who have not as yet commenced production will inform the !AA." 
F 
90. The above Note makes it clear that existing mining projects 
that have a no objection certificate from the SPCB before 27" January, 
1994 will not be required to obtain an EC from the Impact Assessment 
Agency. Of conrse, this is subject to the substantive portion ofEIA 1994 
and the I "Note. However, ifthe existing mining project does not have a 
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no objection certificate from the SPCB, then an EC will be required 
under EIA 1994. 
91. Two questions immediately arise from a reading of the I" and 
the 8"' Note. The first question is: What is the base year for considering 
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the pollution load while proposing any expansion activity? The second 
question is: What is the duration for which an EC is not necessary for an 
ongoing project which does not propose any expansion, or to put it 
differently, what is the validity period for a no objection certificate from 
the SPCB? 
92. In our opinion, as far as the first question is concerned, a 
reading of ETA 1994 read with the l" Note implies that the base year 
would need to be the immediately preceding year that is 1993-94. This 
is obvious from the opening sentence of the I'' Note, that is, "A project 
proponent is required to seek environmental clearance for a proposed 
expansion/modernization &etivity ifthe resultant pollution load is to exceed 
the existing levels." (Emphasis supplied). In its report, the CEC has 
taken 1993-94 as the base year and we see no error in this. Even the 
MoEF in its circular dated 28"' October, 2004 stated with regard to the 
expansion in production: "If the annual production of any year from 
1994-95 onwards exceeds the annual production of 1993-94 or its 
preceding years (even if approved by IBM), it would constitute 
expansion." If th~t expansion results in an increase in the pollution load 
over the existing levels, then an EC is mandated. 
93. It was contended on behalf of the mining lease holders that in 
terms of the circular of28'h October, 2004 the annual production even 
prior to 1993-94 could
be considered for ascertaining if there was an 
expansion or not. We cannot accept this submission for a variety of 
reasons. For one, the existing levels mentioned in the I" Note clearly 
have reference to the immediately preceding year and not to a preceding 
year in a comparatively remote past. Secondly, a very high annual 
production in any one year is not reflective of a consistent pattern of 
production - it could very well be a freak year and that freak year 
certainly cannot be a basic standard or the norm to measure expansion. 
Then ifthe interpretation sought to be given is accepted, ihere would be 
an absence of consistency and a lack of uniformity with different mining 
lease holders having different base years. This is hardly conducive to 
G good governance. Finally, EIA 1994 was intended to prevent the existing 
environmental load from increasing based on the existing data of the 
immediate past and not data of a few years gone by. We may add that 
the only exception that could be made in this regard would be if there is 
no production during 1993-94. In that event, the immediately preceding 
H 
year would be relevant and that is the only reasonable interpretation that 
we see for the use of the words "or its preceding years".
COMMON CAUSE v. UNION OF INDIA AND ORS. 
415 
[MADAN B. LOKUR, J.] 
94. On the question of the duration or exemption period from an 
A 
EC in respect of a project that has commenced prior to 27"' January, 
1994 the substantive portion of ETA 1994 and the 8th Note grant an 
exemption from the requirement ofobtaining an EC if there is no expansion 
and the existing pollution load is not exceeded. In any event, a no objection 
certificate from the SPCB is necessary for continuing the mining 
B 
operations. Consequently, even if any mining lease holder does not have 
an EC or does not require an EC for continuing mining operations (but 
has a no objection certificate from the SPCB), the absence of an EC 
would not have an adverse impact on the mining lease holder unless of 
course, there was an expansion in the mining operations without any 
certificate from the SPCB. In addition to this, the validity period (if any) 
C 
of the certificate from the SPCB is important - we have not been made 
aware whether there is such a validity period or not. 
95. The contention oflearned counsel for the mining lease holders 
that ETA 1994 was rather vague, uncertain and ambiguous cannot be 
accepted. In our opinion, on a composite reading ofEIA 1994, it is clear 
that: (i) A no objection certificate from the SPCB was necessary for 
continuing mining operations; (ii) An expansion or modernization activity 
required an EC unless the pollution load was not exceeded beyond the 
existing levels;
(iii) The base year for determining the pollution load and 
therefore the proposed expansion would be with reference to 1993-94; 
(iv) Whether an expansion or modernization would lead to exceeding 
the existing pollution load or not would require a certificate from the 
SPCB which could be reviewed by the IAA; (v) New projects require 
an EC; and (vi) Existing projects do not require an EC unless there is an 
expansion or modernization for the duration (if any) of the validity of the 
certificate from the SPCB. We need not say anything 11).ore on this 
subject since the CEC has proceeded to discuss the issue of mining in 
excess of the EC or in excess of the mining plan only from the year 
2000-01 onwards. The prior period may, therefore, be ignored and it is 
the period from 2000-01 onwards which is actually relevant for the present 
discussion. 
96. It was submitted by learned counsel for the mining lease 
holders that the MoEF had caused some confusion with regard to the 
requirement of an EC at the time of renewal of a mining lease. In this 
connection, reference was made to a Press Note of July 1994 and a 
letter dated 19"' June, 1997 of the MoEF to the Chief Conservator of 
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97. Learned counsel forthe mining lease holders sought to buttress 
their submission that EIA 1994 was vague and ambiguous by mentioning 
two circulars i$sued by the MoEF on 5th November, 1998 and 27th 
December, 200@ extending the period for obtaining an EC for new units. 
However, these' circulars are apparently not on our record (which goes 
into 148 volumi:s) and therefore we cannot make any comment about 
them. These circulars were mentioned to also contend that even for 
new units the absence of an EC would not have an adverse impact on 
them, since the period for obtaining an EC was extended from time to 
time. A reference was also made to a circular dated J 4th May. 2002 
which later on became the subject of consideration by this Court in M. C 
Mehta v. Union of India.• A reading of the circular of J4th May, 2002 
indicates that several units had come up in violation ofEIA 1994. The 
MoEF had taken the view that such units may be permitted to apply for 
an EC by 31" March, 1999 which was then extended to 30th June, 2001 
by circulars dated 5'" November, 1998 and 27th December, 2000 
respectively. 
98. By tlie circular dated J 4th May, 2002 the deadline for applying 
for an EC was extended up to 31" March, 2003 as a last and final 
opportunity to obtain an ex post facto EC in respect of units which had 
commenced mining operations without obtaining a prior EC in violation 
ofEIA 1994. The circular also
stated that: "Suitable directions shall be 
issued by all States/UTs under the Environment (Protection) Actto units 
to stop construction activities/operations of all such units that fail to apply 
for environmental clearance by 31" March, 2003. Units which fail to 
comply with these directions shall be proceeded against forthwith under 
the relevant provisions of the Environment (Pl Act, 1986 without making 
reference to this Ministry." 
99. It was submitted that in view of these ambiguous and unclear 
signals emanating from the MoEF which resulted in confusion being 
worse confounded, the mining lease holders were not clear whether or 
not they were required to obtain an EC particularly in respect of pre-
EIA 1994 mining leases and operations. 
100. As mentioned above, these dates and the text of the circulars 
were emphasized by learned counsel for the lease holders to contend 
that it was not obligatory for the mining lease holders, who did not expand 
their mining operations, to obtain an EC and in any event the period for 
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'(2004)12SCCll8
COMMON CAUSE v. UNION OF INDIA AND ORS. 
417 
[MADAN B. LOKUR J.] 
obtaining an EC was extended till 31" March, 2003 with ex post facto 
A 
approval. In this context, reliance was placed on M.C. Mehta referred 
to above. 
101. We are not in agreement with the contention oflearned counsel 
for the mining lease holders on the interpretation given to the various 
circulars for the reasons given above and must also correctly appreciate 
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the decision of this Court inM.C. Mehta. 
102. In M.C. Mehta the issue that arose for consideration was 
whether mining activity in the Aravalli hills causes environmental 
degradation and what directions are required to be issued. While 
considering this issue, this Court also considered EIA 1994 and the circular c 
dated 14'h May, 2002. In doing so, this Court categorically held in 
paragraph 37 of the Report that the intention of the MoEF was not to 
legalize the continuance of mining activity without complying with the 
requisite stipulations. If that were unfortunately so, then it would 
demonstrate a lack of sensitivity of the MoEF to the principles of 
sustainable development and the object behind issuing EIA 1994. This 
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Court said: 
"It does not appear that MOEF intended to legalise the 
commencement or continuance of mining activity without 
compliance of stipulations of the notification. In any case, a 
statutory notification cannot be notified [modified] by issue of E 
circular. Further, ifMOEF intended to apply this circular
also to 
mining activity commenced and continued in violation of this 
notification, it would also show total non-sensitivity ofMOEF to 
the principles of sustainable development and the object behind 
the issue of notification. The circular has no applicability to the 
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mining activity." 
103. Adverting to the MMDR Act, this Court expressed the view 
in paragraph 52 of the Report thatthe approval ofa mining plan does not 
imply that a mining lease holder can commence mining operations. The 
mining lease holder is nevertheless obliged to comply with statutory 
G 
provisions including the EPA and other laws. It was said: 
"The grant of permission for mining and approving mining plans 
and the scheme by the Ministry of Mines, Government of India 
by itself does not mean that mining operation can commence. It 
cannot be accepted that by approving mining plan and scheme 
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by the Ministry of Mines, the Central Government is deemed to 
have approved mining and it can commence forthwith on such 
approviil ....... A mining leaseholder is also required to comply 
with o~her statutory provisions such as the Environment 
(Protection) Act, 1986, the Air (Prevention and Control of 
Pollution) Act, 1981, the Water (Prevention and Control of 
Pollution) Act, 1974 and the Forest (Conservation) Act, 1980. 
Mere approval of the mining plan by the Government of India, 
Ministry of Mines would not absolve the leaseholder from 
complying with the other provisions." 
104. This Court also considered the question of the applicability 
ofEIA 1994 to the renewal of an existing mining lease. It was held that 
the said notification would apply to the renewal of a mining lease that 
came up for consideration post 27ili January, 1994. In other words, for 
the renewal of a mining lease, an EC was required by the mining lease 
holder. It was held in paragraph 77 of the Report: 
"We are unable to accept the contention that the notification 
dated 27•1-1994 would not apply to leases which come up for 
consideration for renewal after issue of the notification. The 
notification mandates that the mining operation shall not be 
undertaken in any part of India unless environmental clearance 
by the Central Government has been accorded. The clearance 
under the notification is valid for a period of five years. In
none 
of the leases the requirements of the notification were complied 
with either at the stage of initial grant of the mining lease or at 
the stage of renewal. Some of the leases were fresh leases 
granted after issue of the notification. Some were cases of 
renewal. No mining operation can commence without obtaining 
environmental impact assessment in terms of the notification." 
105. It is clear from the decision rendered by this Court that EIA 
1994 is mandatory in character; that it is applicable to all mining operations 
- expansion of production or even increase in lease area, modernization 
G of the extraction process, new mining projects and renewal of mining 
leases. A mining lease holder is obliged to adhere to the terms and 
conditions of a mining lease and the applicable laws and the mere fact 
that a mining plan has been approved does not entitle a mining lease 
holder to commence mining operations. In M. C Mehta this Court 
H 
concluded that EIA 1994 is clearly applicable to the renewal ofamining lease.
COMMON CAUSE v. UNION OF INDIA AND ORS. 
419 
[MADAN B. LOKUR, J.] 
I 06. Subsequent to the decision inM.C. Mehta two clarificatory 
A 
circulars were issued by MoEF on 28" October, 2004 and 251h April, 
2005. These were adverted to by learned counsel for the mining lease 
holders but in our opinion they are not relevant except to the extent that 
they make it explicit that following the decision of this Court in M. C. 
Mehta, an EC is required to be obtained before the renewal of a mining 
lease and that the term 'expansion' would include an increase in production 
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or the lease area or both. 
107. It was submitted on behalf of the mining lease holders that 
the possibility of getting an ex post facto EC was a signal to the mining 
lease holders that obtaining an EC was not mandatory or that if it was 
not obtained, the default was retrospectively condonable. We do not 
agree. We have referred to various provisions of the MMDR Act and 
the rules framed thereunder to indicate the statutory importance given 
c 
to the protection and preservation of the environment. This was also 
emphasized in M. C. Mehta in which it was also stated that "It does not 
appear that MOEF intended to legalise the commencement or D 
continuance of mining activity without compliance of stipulations of the 
notification." It appears to us that the MoEF was, in a sense, cajoling the 
mining lease holders to comply with the law and EIA 1994 rather than 
use the stick. That the mining lease holders
chose to misconstrue the 
soft implementation as a licence to not abide by the requirements of the 
law is unfortunate and was an act of omission or commission by them at 
their own peril. We cannot attribute insensitivity to the MoEF or even to 
the mining lease holders to environment protection and preservation, but 
at the same time we cannot overlook the obligation of everyone to abide 
by the law. That the MoEF took a soft approach cannot be an escapist 
exc~se for non-compliance with the law or EIA 1994. 
Environment Impact Assessment Notification of 141• September, 2006 
I 08. On J 4th September, 2006 another EIA Notification was issued 
by the MoEF. This notification (for short EIA2006) required prior EC 
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for projects or activities mentioned in the Schedule to it both for major as 
well as minor minerals if the leased area is 5 hectares or more. We were 
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informed that several mining lease holders, in compliance with EIA2006, 
applied for and were granted an EC. 
109. It was submitted by learned counsel for the mining lease 
holders that the confusion, vagueness and uncertainty caused by EIA 
1994 and subsequent circulars and other communications did. not end 
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with the issuance of EIA 2006. Reference was made to a circular dated 
13'" October, 2006 which deals with interim operational guidelines till 
13'" September, 2007 in respect of applications made under EIA 1994. 
We do not see' the relevance of this circular (which really dealt with 
transitional is~ues) not only for the reason given in M.C llfehta that 
circulars cannot override statutory notifications but also because it deals 
with the procedure for considering applications made under ETA 1994. 
110. Reference was also made to a circular dated 2"' July, 2007. 
The passage relied upon reads as follows:-
"It is clarified that all such mining projects which did not require 
environmental clearance under the ETA Notification, 1994 would 
continue to operate without obtaining environmental clearance 
till the mining lease falls due for renewal, ifthere is no increase 
in lease area and/or there is no enhancement of production. Jn 
the event of any increase in lease area and or production, such 
projects would need to obtain prior environmental clearance. 
Further, all such projects which have been operating without any 
environmental clearance would obtain environmental clearance 
at the time of their lease renewal even if there is no increase 
either in terms oflease area or production." 
111. The aforesaid circular relates to three categories that is: (i) 
Mining leases, where no EC was required under ETA 1994
would continue 
to operate without an EC; (ii) If there was an increase in the lease area 
or enhancement of production, an EC was required by the mining lease 
holder; (iii) All projects would require au EC at the time ofrenewal of 
the mining lease even if there was no increase in the lease area or 
enhancement of production. 
112. Reference was also made to an Office Memorandum dated 
19'" August, 20 I 0. However a reading of this document brings out that it 
basica!Jy relates to construction at site but makes it clear that no activity 
relating to any project covered under EIA 2006 including civil construction 
G 
could be undertaken without obtaining a prior EC except fencing of the 
site to protect it from getting encroached and construction of temporary 
sheds for the guards. 
Il3. Reference was also made to Office Memorandums dated 
16'" November, 2010 and 12"' December, 2012 but having gone through 
H 
them we find them of little relevance as they deal with procedural issues only.
COMMON CAUSE v. UNION OF INDIA AND ORS. 
421 
[MADAN B. LOKUR, J.] 
114. All that we need to say on this subject is that there is no 
A 
confusion, vagueness or uncertainty in the application ofElA 1994 and 
ElA 2006 insofar as mining operations were commenced on mining leases 
before 27'h January, 1994 (or even thereafter). Post ElA 2006, every 
mining lease holder having a lease area of 5 hectares or more and 
undertaking mining operations in respect of major minerals (with which 
B 
we are concerned) was obliged-to get an EC in tenns of EIA 2006. 
115. An attempt was then made by learned counsel for the mining 
lease holders to get out of the rigours of ElA 1994 and ElA 2006 by 
contending that some of them had modified the mining plan (with approval) 
and that therefore they had extracted iron ore or manganese ore, as the c 
case may be, in tenns of the mining plan but not necessarily in tcnns of 
the EC that had been obtained, if at all. 
116. We have already held that a mining plan is subordinate to the 
EC and in M. C. Mehta it was held by this Court that having an approved 
mining plan docs not imply that a mining lease holder can commence 
mining operations. That being so, a modified mining plan without a revised 
D 
or amended EC, is of no consequence. What the contention of learned 
counsel suggests to us is that under the shield of a modified mining plan, 
illegal or unlawful mining in the fonn of mining without an EC, mining by 
over-reaching EIA 1994 and ElA
2006 was being carried out. 
117. The contention apart, the subterfuge of obtaining a modified 
mining plan to get over the adverse effects of excess and illegal or unlawful 
production ofiron ore or manganese ore was deprecated by the Ministry 
of Mines of the Government of India. In a letter dated 29'h October, 
20 I 0 addressed to the Controller General, Indian Bureau of Mines it 
was pointed out that State Governments had expressed a concern that 
the Indian Bureau of Mines (IBM) had been modifying mining plans for 
allowing an increase in production of ore without adequate intimation to 
the State Governments. A concern was raised that such a revision was 
often being used to increase production of ore, which is sometimes not 
accounted for in mining operations in the concerned mining lease. It was 
made. clear that all modifications of mining plans shall be effective 
prospectively only and earlier instances of irregular mining shall not be 
regularized through a modification of the mining plan. 
118. hi a subsequent letter dated 12"' December, 2011 addressed 
to the Chief Secretary in the Government of Orissa the said Ministry of 
Mines noted that there were violations of the actual production limit laid 
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down in the mining plan and that the State Government had finally taken 
steps to curb illegal mining in respect of over-production of minerals. 
There was a reference to suggest (and we take it to be so) that 20% 
deviation from the mining plan (in terms of over-production) would be 
reasonable and permissible. However, it appears from a reading of the 
communication that illegal mining was going on beyond the 20% deviation 
limit and that appropriate steps were ueeded to curb these violations. 
Learned counsel for the petitioners submitted that such egregious 
violations must be firmly dealt with by cancellation or termination of the 
mining lease and a soft approach is not called for. 
119. In (his context, it is worth noting that a High Level Committee 
(called the Hocla Committee) on the National Mineral Policy noted in its 
Report dated 212"' December, 2006 in paragraph 3.47 as follows : 
"3.47 An EMP (Environment Management Plan] has to be 
prepared under the MCDR and got approved by IBM. However, 
this EMP is not acceptable to the MoEF. The miner has to prepare 
two EMPs separately - one for IBM and another for MoEF. 
The Committee suggests that IBM and MoEF should prepare 
guidelines for a composite EMP so that IBM can approve the 
same in consultation with MoEF's field offices. This will eliminate 
anomalous situations where increase of even a few tonnes in 
production requires project
authorities to get a fresh EMP 
approved from the MoEF although the IBM allows a grace of 
±I 0% per cent, keeping in view the fluctuations in the market 
situation and process complexities. If a single EMP is accepted 
in principle such anomalies can be resolved in advance. The 
Committee feels the MoEF should also have a cushion of± I 0% 
per cent in production while giving EIA clearance." 
120. The above passage indicates that the permissible variation in 
production as per the Indian Bureau of Mines is ±10% but according to 
the letter dated I 2th December, 20 I I issued by the Ministry of Mines, 
the reasonable variation limit could be +20%. It is not clear why there 
was a shift in the variation, but as rightly pointed out by learned counsel 
for the petitioners, the fact that in some cases the variation exceeded 
20% was a cause for concern which necessitated strict and punitive 
action. 
121.A submission was made by learned counsel for the mining 
lease holders to the effect that since many of them had been granted the
COMMON CAUSE v. UNION OF INDIA AND ORS. 
423 
[MADAN B. LOKUR. J.] 
first deemed statutory renewal of the mining lease under Rule 24A of A 
the MCR, the requirements of EIA 1994 would not be applicable. We 
were shown various amendments made to Rule 24A of the MCR from 
time to time particularly the amendments made on 10'' February, 1987, 
7th January 1993, 27'' September, 1994, 17'' January, 2000, ] 8th July, 
2014 and 8'' October, 2014. In our opinion, none of these are of any 
consequence, the reason being that for the purposes of renewal of the 
mining lease, an application is required to be made by the mining lease 
holders and the deemed renewal clause under Rule 24A of the MCR 
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will come into operation only after an application for renewal is made in 
Form Jin Schedule I of the MCR. Under Rule 26 of the MCR, the State 
Government may refuse to renew the mining lease. That apart, the position 
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in environmental jurisprudence with regard to the renewal of a mining 
lease has been made explicit by this Court in M.C. Mehta. Even 
otherwise, in view of EIA 1994, it is quite clear that the renewal of a 
mining lease would require a prior EC. 
122. We may also draw attention in this regard to a circular dated D 
28'' October, 2004 issued by the MoEF wherein it was stated that in 
view of the decision in M.C. Mehta all mining projects of major minerals 
of more than 5 hectares lease area that had not yet obtained an EC 
· would have to do so at the time of renewal of the
lease. 
123. Finally, it was submitted that whenever an EC is granted, it 
would have retrospective effect from the date of the application for 
grant of an EC. In this context, it was pointed out that there were 
enormous delays in granting an EC and that the Hoda Committee had 
noted with reference to EIA 2006 that if all goes well, the grant of an EC 
talces about 232 days whereas the international norm is that an EC is 
granted within six months or 180 days. According to the additional affidavit 
filed by some mining lease holders, the period of232 days mentioned by 
the Hoda Committee was actually a conservative estimate and that in 
fact it takes anything upto 390 days for the grant of an EC. It was 
submitted that the position was even worse under EIA 1994 since the 
MoEF rarely showed any urgency in the grant of an EC. Examples 
were cited before us to show that in some instances the grant of an EC 
took m0re than two years. Taking all this into consideration it was 
submitted that it would be more appropriate that the EC is given 
retrospective effect from the date of the application. 
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124. We are not in agreement with learned counsel for the mining 
lease holders. There is no doubt that the grant of an EC cannot be taken 
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as a mechanical exercise. It can only be granted after due diligence and 
reasonable care since damage to the environment can have a long term 
impact. EIA 1994 is therefore very clear that if expansion or 
modernization of any mining activity exceeds the existing pollution load, 
a prior EC is necessary and as already held by this Court in M. C 
B Mehta even for the renewal of a mining lease where there is no expansion 
or modernization of any activity, a prior EC is necessary. Such importance 
having been given to an EC, the grant of an ex post facto environmental 
clearance woul¢1 be detrimental to the environment and could lead to 
irrepara hie degtladation of the environment. The concept of an ex post 
facto or a retr¢>spective EC is completely alien to environmental 
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jurisprudence iQ.cluding EIA 1994 and EIA 2006. We make it clear that 
an EC will come into force not earlier than the date of its grant. 
Illegal Mining 
125. A question raised by learned counsel for the mining lease 
holders concerned the interpretation of the expression 'illegal mining'. 
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Reliance was placed on the report of the CEC which refers to Ru le 
2(iia) of the MCR to conclude that the violation of any rule within the 
mining lease area would not come within the definition of' illegal mining' 
except where there has been a violation of the rules framed under Section 
23C of the MMDRAct. 
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According to the CEC: 
" 17. Ill~gal
mining has been defined as mining operations 
undertal<ien by any person in any area without holding a mining 
lease. It does not include violation of any rules within the mining 
lease area except the Rules made under Section 23C of the 
MMDR Act, 1957. The mining lease area shall be considered 
as an area held with lawful authority by the lessee (refer Rule 
2(iia), MCR, 1960)." 
126.As can be seen from the above, there isa difference ofopinion 
between the CEC and the Commission on what is illegal mining or mining 
without lawful authority and we will give our views oJl the subject. 
127. According to the lessees a mining operation only outside the 
mining lease area would constitute 'illegal mining' making illegal mining 
lease centric. We are unable to accept this narrow interpretation given 
by the CEC and relied upon by learned counsel for the mining lease 
holders.
COMMON CAUSE v. UNION OF INDIA AND ORS. 
425 
[MADAN B. LOKUR, J.] 
128. The simple reason fornot accepting this interpretation is that 
A 
Rule 2(ii a) of the MCR was inserted by a notification dated 26" July, 
2012 while we are concerned with an earlier period. That apart, as 
mentioned above, the holder of a mining lease is required to adhere to 
the terms of the mining scheme, the mining plan and the mining lease as 
well as the statutes such as the EPA, the FCA, the Water (Prevention 
and Control of Pollution) Act, 1974 and theAir (Prevention and Control 
of Pollution) Act, 1981. If any mining operation is conducted in violation 
of any of these requirements, then that mining operation is illegal or 
unlawful. Any extraction of a mineral through an illegal or unlawful 
mining operation would become illegally or unlawfully extracted mineral. 
129. It is not, as suggested by learned counsel, that illegal mining 
is confined only to mining operations outside a leased area. Such an 
activity is obviously illegal or unlawful mining. Illegal mining takes within 
its fold excess extraction of a mineral over the permissible limit even 
within the mining lease area which is held under lawful authority, ifthat 
excess extraction is contrary to the mining scheme, the minillg plan, the 
mining lease or a statutory requirement. Even otherwise, it is not possible 
for us to accept the narrow interpretation sought to be canvassed by 
learned counsel for the mining lease holders
particularly since we are 
dealing with a natural resource which is intended for the benefit of 
everyone and not only for the benefit of the mining lease holders. 
Encroachments 
130. Section 4(1) of the MMDRAct makes it clear that no person· 
can carry out any mining operations except under and in accordance 
with.the terms and conditions of a mining lease granted under the MMDR 
Act and the rules made thereunder. Obvionsly therefore, any person 
carrying on mining operations without a mining lease, is indulging in illegal 
or unlawful mining. This would also necessarily imply that if a mining 
lease is granted to a person who carries out mining operations outside 
the boundaries of the mining lease, the mineral extracted would be the 
result ofillegal or unlawful mining. 
131. In its report, the CEC has dealt with illegal mining outside the 
sanctioned mining areas. It is stated that 82 mining leases for iron ore 
and manganese ore were identified by the Commission where there 
were encroachments in the form of illegal mining pits, illegal over-burden 
dumps etc. 
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132. In respect of these 82 mining leases, the State of Odisha 
appointed a Committee on the suggestion of the Commission, to survey 
and identify the exact extent and location of the sanctioned lease area, 
lease area under occupation of the mining lease holder and the area 
under encroachment/illegal mining. The Committee or the Joint Survey 
consisted of offi~ers of the Revenue Department, Forest Department 
and Mining Dep~rtment of the State of Odisha who carried out a field 
survey in respect of39 mining leases. The findings of the field survey or 
the Joint Survey were verified by a team comprising of the Director 
Mines, Chief Engineer, ORSAC and the Additional Secretary, F & E 
Department of the Government of Odis ha. 
133. It is mentioned in the report of the CEC that the Joint Survey 
for each of the 39 mining leases is technically sound and reliable. 
However, in respect of some of the leases, it would be desirable for the 
State Government to take another look at the results of the field survey. 
Unfortunately, the CEC has not identified these mining leases that require 
another look. Be that as it may, the fact is that a joint survey has not 
been conducted in respect of 43 mining leases. 
134. We are of the view that for completing the record and taking 
the report of the CEC to its logical conclusion, it would be appropriate if 
a fresh Joint Survey is conducted by concerned officers of the
Government 
of Odisha from the Revenue Department, the Forest Department, the 
Mining Department and any other department that may be deemed 
necessary. The Forest Survey of India, the MoEF, the Indian Bureau of 
Mines and the Geological Survey of India should also be associated in 
the Joint Survey. In our opinion, it would also be appropriate if the CEC 
is also associated in the Joint Survey and the best and latest technology 
should be made use ofincluding satellite imagery and thereafter a report 
is submitted in this Court on or before 31" December, 20 I 7 after hearing 
the 82 lessees identified by the Commission. 
Adherence to the mining plan 
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135. A side issue raised by learned counsel for the mining lease 
holders in this regard was the necessity (if any) of adhering to the annual 
plan or calendar plan of mining. It was contended that a mining lease 
holder could mine in excess of the annual plan. While it is so, this 
submission must be tempered and appreciated in the proper context. A 
mining plan is valid for a period of five years but there could be a 20% 
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variation in extraction over and above the mining plan. This is the
COMMON CAUSE v. UNION OF INDIA AND ORS. 
427 
[MADAN B. LOKUR J.] 
maximum that is stated to be reasonably permissible according to the 
Ministry of Mines. In terms of Rule 22(5) of the MCR a mining plan 
shall incorporate .a tentative scheme of mining and annual program and 
plan for excavation from year to year for five years. At best, there 
could be a variation in extraction of 20% in each given year but this 
would be subject to the overall mining plan limit of a variation of 20% 
over five years. What this means is that a mining lease holder cannot 
extract the five year quantity (with a variation of 20%) in one or two 
years only. The extraction has to be ·staggered and continued over a 
period of five years. If any other interpretation is given, it would lead to 
an absurd situation where a mining lease holder could extract the entire 
permissible quantity under the mining plan plus 20% in one year and 
extract miniscule amounts over the remaining four years, and this could 
be done without any reference to the EC. The submission of learned 
counsel in this regard simply cannot be accepted. 
136. In the letter dated I 2'h December, 2011 sent by the Secretary 
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in the Ministry ofMines of the Government oflndia to the Chief Secretary 
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of the Government of Odisha (adverted to above) concerning violation 
of annual production limit laid down in the approved mining plan, it was 
stated, inter a/ia, that an analysis of production and violations in I 04 
mining
leases for bulk minerals in the last ten years was undertaken by 
the Indian Bureau of Mines. It was noted that in 71 cases there was 
excess ore produced beyond the reasonable variation limit of 20%. It 
was noted that this was partly due to the failure of the State machinery 
to restrict the movement of minerals. 
137. In a further letter dated 5'" September, 2012 it was reiterated 
that any violation of the mining plan or the mining scheme noticed by the 
State Government should be immediately brought to the notice of the 
Indian Bureau of Mines to initiate suitable action. It was reiterated that 
transit passes to such mines should not be issued by the State Government 
so as to stop any additional outgo. It was added: "Needless to say any 
revision on the limits of production is subjected to statutory clearances 
under Environment an.dForest laws. Having said that, the State Mining 
and Geology officials should not also lose focus on taking stringent action 
against any instances of illegal mining, ~ndertaken outsid~ the leased 
area, and passed off as excess production." It is quite clear from the 
correspondence placed before us that as far as the Union of India is 
concerned, any violation of the requirements of the law has to be firmly 
dealt with. 
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138. With reference to the interpretation of Section 21(5) of the 
MMDRAct (which we shall soon consider) it was stated as follows: 
"Section 21 (5) ofMMDRAct is clearly applicable on such land 
which is occupied without lawful authority. It is clarified that in 
the context ofMMDR Act, 1957, violations pertaining to mining 
operations within the mining lease area are to be dealt with only 
in terms of the provisions of the Mineral Conservation and 
Development Rules 1988. The State Governments have clear 
powers to tackle any offences related to mining outside the mining 
lease area in terms of Section 23C of the MMDR Act, 1957. 
However, the interpretation that a land granted under a Mining 
lease by the State Government can be held to be occupied without 
lawful authority on the grounds of violation of.provisions of any 
other law of the land is not appropriate and such interpretation 
may not stand in the Court oflaw. Such Act or Rules, including 
the Environment (Protection) Act, 1986, or the Forest 
(Conservation) Act, 1980, etc. clearly provide penalties for 
violations under those laws. This aspect may be clarified to the 
State Accountant General also." 
139. All that we need say for the present is that the interpretation 
given in the aforesaid letter to Section 21(5) of the MMDR Act is not 
fully correct. While mining in excess of permissible limits under the mining 
plan or the EC or FC on leased area
may not amount to mining on land 
occupied without lawful authority, it would certainly amount to illegal or 
unlawful mining or mining without authority oflaw. 
Section 21 of the MMDR Act 
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140. The discussion on illegal or unlawful mining takes us to the 
question of the consequence of illegal or unlawful mining and the 
interpretation of Section 21(1) and Section 21(5) of the MMDRAct. 
141. Section 21(1) of the MMDR Act is clearly relatable to a 
penal offence and applies if any one contravenes the provisions of Section 
G 
4( 1) of the MMDR Act. Section 4(1) of the MMDR Act prohibits the 
undertaking of any mining operation in any area except under and in 
accordance with the terms and conditions of a mining lease and the 
rules made thereunder. Therefore, when a person carries out a mining 
operation in any area other than a leased area or violates the terms of a 
H 
mining lease, which incorporates the mining plan and which requires
COMMON CAUSE v. UNION OF INDIA AND ORS. 
429 
[MADAN B. LOKUR, J.] 
adherence to the law of the land, that person becomes liable for 
A 
prosecution under Section 21(1) of the MMDRAct. In the event ofa 
conviction, he or she shall be punishable with imprisonment for a term 
which may extend to five years and with fine which may extend to Rs.5 
lakh per hectare of the area. 
142. As far as Section 21(5) of the MMDR Act is concerned, 
B 
according to the CEC the provision is applicable only if a person indulges 
in illegal mining outside the mining lease area. Consequently, Section 
2J(5}ofthe MMDRAct is not attracted even if the mineral raised within 
the mining lease area is without an EC or beyond the quantity prescribed 
by the EC or beyond the quantity permitted in the mining plan. In such 
a situation, the provisions of the EPA or the MCR come into play. This 
C 
-interpretation is supported by learned counsel forthe mining lease holders 
who affirm that Section 21(5) of the MMDRAct is mining lease area 
centric. In other words, according to the CEC and the learned counsel, 
for the purposes of Section 21(5) of the MMDR Act illegal mining is 
mining outside the mining lease area and Section 21(5) of the MMDR 
D 
Act has to be understood in that light. 
143. Reference was also made to the Explanation to Rule 2(iia) 
of the MCR where .it is stated that for the purposes of this clause, the 
·violation ofany rules, other than the rules made under section 23C of the 
MMDRAct,
within the mining lease area by a holder of a mining lease 
E 
shall not include illegal mining. In other words, it was submitted that 
Section 21(5) of the MMDR Act is required to be understood in the 
context of Rule 2(iia) of the MCR. 
144. It was submitted by Shri Ashok Desai learned senior counsel 
for one of the intervenors, that the penalty postulated by Section 21(5) 
F 
of the MMDR Act though an imposition of a pecuniary liability, is 
punishment for the commission of an offence. By referring to Khemka 
& 'Co. (Agencies) Pvt, Ltd. v. State of Maharashtra' it was contended 
that the liability sought to be imposed by Section 21(5) of the MMDR 
Act is not a liability that is created by a clear, unambiguous and express 
enactment. 
G 
. . 
145. As far as the Union of India is concerned, in its affidavit 
filed on 20" January, 2017 by Shri Sudhakar Shukla, Economic Advisor 
in the Government of India, Ministry of Mines, it is submitted (and this 
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submission is supported by the learned Attorney General in his oral 
submissions) that Section 21(5) of the MMDRAct is in two parts. The 
first part refers to the raising of minerals without any lawful authority 
from any land. The second part is in addition to what is recoverable 
under the first fart. The addition is to the effect that when a person 
raises a minera from any area not in his or her lawful authori_ty, that 
person is also li~ble to pay the rent, royalty or tax for the period during 
which the land 'f'as occupied without lawful authority. 
146. It is further submitted that 'illegal mining' as defined in Rule 
2( iia) of the MCR is also required to be read in the context of Rule 26( 4) 
and Rule 27( 4A) of the MCR which deal with the refusal to renew a 
mining lease if the mining lease holder is convicted ofillegal mining and 
the determination of a mining lease in the event the mining lease holder 
is convicted of illegal mining. It is submitted that the definition of illegal 
mining in the MCR must be strictly construed and limited to the provisions 
of the MC'R and cannot apply to the provisions of Section 21 ( 5) of the 
MMDRAct. 
14 7. In conclusion, it is reiterated by the Union of India on affidavit 
as follows: 
"55. That considering all the above, the Ministry would like to 
submit that the provisions of sub-section (5) of Section 21 would 
apply to all minerals raised without any
lawful authority, be it . 
forest clearances or environment clearances or any other such 
legal requirements. 
56. That penalties would arise under section 21 (5) of the MMDR 
Act, 1957, in respect of any form of mining activity without lawful 
authority. Mining outside lease area would on the face of it 
amount to mining without lawful authority and would attract the 
provisions of section 21 ( 5); and, in addition, all fonns of mining 
without lawful authority including that in breach of the limits 
imposed by the Environmental Clearance carried out within the 
lease area would also invite penalties under section 21 (5)." 
(Emphasis given by us). 
148. On behalf of the State ofOdisha, it was submitted by Shri 
Rakesh Dwivedi learned senior counsel by relying upon Karnataka Rare 
Earth v. Senior Geologist, Depart111e11t of Mines & Geology'" that 
H 
" (2004) 2 sec 783
COMMON CAUSE v. UNION OF INDIA AND ORS. 
[MADAN B. LOKUR, J.] 
what is sought to be achieved by Section 21 (5) of the MMDR Act is to 
recover the price of the mineral that has been illegally or unlawfully or 
unauthorisedly raised with an intention to compensate the State for the 
loss of the mineral owned by it, the loss having been caused by a person 
who is not authorized by law to raise that mineral. There is no element 
of penalty involved in this and the recovery of the mineral or its price is 
not a penal action but is merely compensatory. This is what this Court 
had to say in Kamataka Rare Earth: 
"12. ls the sub-section (5) of Section 21 a penal enactment? 
Can the demand of mineral or its price thereunder be called a 
penal action or levy of penalty? 
13. A penal statute or pcnal law is a law that defines an offence 
and prescribes its corresponding fine, penalty or punishment. 
(Blacks Law Dictionary, 7th Edn., p. 1421.) Penalty is a liability 
composed (sic imposed) as a punishment on the party committing 
the breach. The very use of the term "penal" is suggestive of 
punishment and may also include any extraordinary liability to 
which the law subjects a wrongdoer in favour of the person 
wronged, not limited to the damages suffered. (See Aiyar, P. 
Ramanatha: The_LawLexicon, 2nd Edn., p. 1431.) 
14. In support of the submission that the demand for the price of 
mineral raised and exported is in the nature of penalty, the learned 
counsel for the appellants has
relied on the marginal note of 
Section 21. According to Justice Singh, GP.: Principles of 
Statutory Interpretation (8th Edn., 2001, at p. 147), though the 
opinion is not uniform but the weight of authority is in favour of 
the view _that the marginal note appended to a section cannot be 
used for construing the section. There is no justification for 
restricting the section by the marginal note nor does the marginal 
note control the meaning of the body of the section ifthe language 
employed therein is clear and spells out its own meaning. In 
Director of Public Prosecutions v. Schildkampn Lord Reid 
opined that a sidenote is a poor guide to the scope of a section 
for it can do no more than indicate the main subject with which 
the section deals and Lord Upjohn opined that a sidenote being a 
brief precis of the section forms a most unsure guide to the 
construction of the enacting section and very rarely it might throw 
some light on the intentions of Parliament just as a punctuation mark 
" (1969) 3 All ER 1640 : (1970) 2 WLR 279 (HL) 
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15. We are clearly of the opinion thatthe marginal note "penalties" 
cannot be pressed into service for giving such colour to the 
meaning of sub-section (5) as it cannot have in law. The recovery 
of price of the mineral is intended to compensate the State for 
the loss of the mineral owned by it and caused by a person who 
has been held to be not entitled in law to raise the sam~. There is 
no element of penalty involved and the recovery of price is not a 
penal action. It is just compensatory." 
149. We nre in agreement with the view expressed by the learned 
Attorney Gen~ral and Shri Dwivedi as also the view expressed in 
Karnataka Rate Earth. The decision in Khemka & Co. is not at all 
apposite. There is no ambiguity in Section 21 ( 5) of the MMDRACt or in 
its application. We are also of opinion that though Section 21 ( 1) of the 
MMDRAct might be in the realm of criminal liability, Section 21(5) of 
the MMDR Act is certainly not within that realm. 
150. In ouropinion, Section 21(5) of the MMDRAct is applicable 
when any person raises, without any lawful authority, any mineral from 
any land. In that event, the State Government is entitled to recover from 
such person the mineral so raised or where the mineral has already been 
disposed of, the price thereof as compensation. The words 'any land' 
are not confined to the mining lease area. As far as the mining lease 
area is concerned, extraction of a
mineral over and above what is 
permissible under the mining plan or under the EC undoubtedly attracts 
the provisions of Section 21(5) of the MMDRAct being extraction without 
lawful authority. It would also attract Section 21 (1) of the MMDR Act. 
In any event, Section 21 ( 5) of the Act is certainly attracted and is not 
limited to a violation committed by a person only outside the mining lease 
area - it includes a violation committed even within the mining lease 
area. This is also because the MMDR Act is intended, among other 
things, to penalize illegal or unlav.ful mining on any land including mining 
lease land and also preserve and protect the environment. Action under 
the EPA or the MCR could be the primary action required to be taken 
with reference to the MCR and Rule 2(ii a) thereof read with the 
Explanation but that cannot preclude compensation to the State under 
Section 21 (5) of the MMDR Act. The MCR cannot he read to govern 
the MMDR Act. 
151. What is the significance of this discussion? It was submitted 
that the CEC has taken the following view:
COMMON CAUSE v. UNION OF INDIA AND ORS. 
433 
[MADAN B. LOKUR, J.] 
" ...... it may be appropriate that 30% of the notional value of A 
the iron and manganese produced by each of the lessees without/ 
in excess of the environmental clearances may be directed to be 
recovered from the concerned lessees and with the explicit 
understanding the concerned lessees as well as the officers will 
continue to be liable for action under the provisions of the 
B 
respective Acts." 
152. Learned counsel for the petitioners and the learned Amicus 
were ofopinion that the provisions of Section 21(5) of the MMDRAct 
require that the entire price of the illegally mined ore should be recovered 
from each defaulting lessee. Similarly, in its affidavit, the Union of India 
differs with the recommendation of the CEC. According to the affidavit 
C 
· of the Union oflndia this would be contrary to the statutory scheme and 
in fact 100% recovery should be made under the provisions of Section 
21(5) of the MMDR We may note that only to this extent, the learned 
Attorney General differed with the view expressed .by the Union of 
India and submitted that the recommendation of the CEC to recover D 
only 30% of the value of the illegally mined ore should be accepted 
153. In our opinion, there can be no compromise on the quantum 
of compensation that should be recovered from any defaulting lessee -
it should be l 00%. If there has been illegal mining, the defaulting lessee 
must bear the consequences
of the illegality and not be benefited by 
pocketing 70% of the illegally mined ore. It simply does not stand to 
reason why the State should be compelled to forego what is its due from 
the exploitation of a natural resource and on the contrary be a party in 
filling the coffers of defaulting lessees in an ill gotten manner. 
Calculations on merits 
154. The issue now is with regard to the calculations made by the 
CEC with regard to the production of iron ore and manganese ore without 
or in excess of the EC and/or the mining plan. As already mentioned 
above, the figures were not disputed (except by JSPL and SMPL). 
Therefore, only the application of the figures requires consideration and 
so we do not need to examine each individual case. However to 
understand and appreciate the manner in which the CEC has arrived at 
its figures, we may state that this has been specifically mentioned by the 
CEC in its report. The basis of the calculations is as follows: 
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"(a) the production during the year 1993-94 has been considered 
as the permissible production during each year till the mining 
lease did not have the cnvironinental clearance; 
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(bl the permissible production for the year in which the 
environmental clearance was obtained for the first time has been 
considered on pro rata basis of (a) the prescribed annual 
production and (b) the date of the grant of the environmental 
clearance. For this purpose the environmental clearance granted 
on or before l 5'h of a month has been considered valid for the 
entire month. Where the environmental clearance has been 
granted after l S'h of a month it has been considered valid from 
the subsequent month. For example if the environmental clearance 
for a mining lease has been granted say on JO'h October, 2008 
for an annual production of say 12 lakh MT then in that case the 
permissible production for the mining lease for the year 2008-09 
would be taken as 6 lak:h MT (12x6/12 lak:h MT) and 12 lak:h 
MT per annum in the subsequent year; and 
( c) wherever a mining lease having environmental clearance has 
been granted revised environmental clearance for a higher 
production the permissible annual production forthe year, during 
which the revised environmental clearance has been granted, 
has been considered on pro rata basis of the quantities prescribed 
in the earlier environmental clearance and the revised 
environmental clearance. For example ifthe mining lease was 
having environmental clearance for annual production of 12 lakh 
MT and say on 28'h September, 2009 it has been granted revised
environmental clearance for annual production of say 24 lakh 
MT then in that case the permissible production for the year 
2009-10 would be taken as 18 lakh MT (12x6/12+24x6/12) and 
24 lakh MT per annum in subsequent years." 
155. A submission made by the mining lease holders was that the 
maximum production in any year up to 1993-94 should be considered as 
the base for making the calculations. Such a contention was also urged 
before the CEC and was rejected. We have examined this contention 
independently and arc of the view that the base year of! 993-94 is most 
appropriate - we have already given our reasons for this. Some lessees 
might lose in the process while some of them might benefit but that 
cannot be avoided. In any event, each mining lease holder is being given 
the benefit of calculations only from 2000-01 and is not being 'penalized' 
for the period prior thereto. We think the mining lease holders should be 
grateful for this since it was submitted by learned counsel for the
COMMON CAUSE v. UNION OF INDIA AND ORS. 
435 
[MADAN B. LOKUR, J.] 
petitioners and the learned Amicus that the penalty should be levied from !. 
the date ofEIA 1994. In ouropinion, the cut-off from 2000-2001 (without 
interest) is undoubtedly reasonable and there can be hardly be any 
grievance in this regard. The mining lease holders cannot have their 
cake and eat it too, along with the icing on top. 
156. Since the recommendation made by the CEC in this regard 
B 
is not totally unreasonable, we accept that the comPJnsation should be 
payable from 2000-2001 onwards at 100% of the price of the mineral, 
as rationalized by the CEC. 
Violation of tlie Forest (Conservation) Act, 1980 
157. Before dealing with the violations of Section 2 of the Forest 
(Conservation) Act, 1980 (for short 'the FCA'), it is necessary to give a 
briefbacki,'l'ound. 
158. The FCA came into operation initially through the Forest 
(Conservation) Ordinance, 1980 with effect from 25'" October, 1980. 
The said Ordinance was repealed and subsequently the FCA came into 
effect on 25'" December, 1980. 
159. Section 2 of the FCA provides that no State Government or 
other authority shall make, except with the prior approval of the Central 
Government, any order directing, inter alia. that any forest land or any 
portion thereof may be used for non-forest purposes. 
160. The interpretation of Section 2 of the FCA first came up for 
consideration in State of Bihar v. Banshi Ram Modi. 12 In that case,
Banshi Ram Modi was granted a mining lease for mining and winning 
mica. During the course of mining operations, feldspar and quartz were 
discovered. Modi then applied to the Central Government to include 
these minerals in the lease. The State Government agreed to do so but 
did not obtain the previous approval of the Central Government for the 
inclusion of the two minerals in the original lease. 
161. The Central Government took the view that since its previous 
approval had not been obtained for inclusion of feldspar and quartz in 
the mining lease, Modi could not be permitted to mine these two minerals. 
This led Modi to approach the High Court with the contention that he 
was not breaking up or clearing any forest land other than the land on 
which mining operations were already being carried on. The High Court 
"(1985) 3 sec 643 
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allowed the writ petition but feeling aggrieved, the State ofBiharpreferred 
an appeal in this Court. 
162. The question before this Court was a narrow one, namely, 
whether prior approval of the Central Government is necessary in respect 
of a mining lease, granted for winning a certain mineral prior to the 
coming into force of the FCA, if the lessee applies to the State 
Government after the FCA came into force for permission to win and 
carry any new mineral from the broken up area? 
163. While answering this question in the negative, it was held 
that after the commencement of the FCA no fresh breaking up of forest 
land or no fresh clearing of the forest on any such land could be permitted 
by the State Government or any authority without the approval of the 
Central Government. However, in respect of broken up land, it was 
held foat if the State Government permits the lessee to remove any 
discovered mineral, it cannot be said that there has been a violation of 
Section 2 of the FCA particularly since there is no breaking up of any 
fresh forest land. 
164. Subsequently in Ambica Quarry Works v. State of Gujarat 
and Orsll when the lease of the mining holder came up for renewal, the 
FCA had already come into force. Since the forest department of the 
State of Gujarat refused to give a no objection certificate, the application 
for renewal of the lease was rejected. The question that arose for
consideration was whether, after coming into force of the FCA, the 
mining lease holder was entitled to renewal of the mining lease. While 
answering the question in the negative this Court held that the renewal 
of a lease cannot be claimed as a matter of right. The primary purpose 
of the FCA was to prevent deforestation and ecological imbalance as a 
result of deforestation. Therefore, the primary duty under the FCA was 
to the community and the obligation to society must predominate over 
the obligation to the individuals. While distinguishing Banshi Ram Modi 
this Court held that renewal of the lease would lead to further 
deforestation or at least it would not help in reclaiming the area where 
deforestation had already taken place. The primary purpose of the FCA 
is to prevent further deforestation and any interpretation must sub-serve 
that purpose and implement the FCA. Under the circumstances, it was 
held, considering the scheme of the FCA that refusal to renew the lease 
without prior approval of the Central Governnient was not unjustified. 
"(19&7) 1sec213
COMMON CAUSE v. UNION OF INDIA AND ORS. 
437 
[MADAN B. LOKUR. J.] 
165. This view was reiterated in Rural Litigation and A 
Endtlement Kendra v. State of U.P. 14 It was held that the FCA does 
not permit mining in a forest area. Reiterating the view expressed in 
lb'iibica Quarry Works, it was observed that compliance of Section 2 
of the FCA is necessary as a condition precedent even for the renewal 
ofa mining lease. This Court went so far as to hold that if any decree or B 
order has already been obtained by any of the mining lease holders, 
'from any Court relating to renewal of their lease, the same shall stand 
vacated and similarly, any appeal or other proceeding taken to obtain a 
renewal or against any order or decree granting renewal shall also become 
non est. 
c 
166. The definition of the word 'forest' for the purposes of the 
FCA came up for consideration in T.N. Godavarman v. Union of 
inilia. 15 In its decision of 12" December, 1996 this Court observed that 
'dhring the course of hearing it appeared that there is a misconception 
about the true scope of the FCA and the meaning of the word 'forest' 
u~ed therein. Consequently, there is also a misconception about the 
D 
need for prior approval of the Central Government as mandated by Section 
2 of the FCA in respect of certain activities h1 a forest area, which 
activities are more often of a commercial nature. 
167. In this context, it was held that 'forest' must be understood 
'according to its dictionary
meaning and it would cover all statutorily 
E 
recogrnzed forests, whether designated, reserved, protected or otherwise. 
--rt was further held that 'forest' would also include any area recorded as 
ki'otest in the government records irrespective of the ownership. With 
' this 'iii mind, this Court directed that prior approval of the Central 
'Government is required for any non-forest activity within the area of 
any 'forest'. In accordance with Section 2 of the FCA all on-going 
F 
'il&ivity within any forest in any State throughout the country, without 
'phot·approval of the Central Government must cease forthwith. This 
''partfoular direction given by this Court is of immense significance. 
168. This Court further directed each State Government to 
constitute within one month an Expert Committee, inter alia, to identify 
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0.areas which are 'forest' irrespective of whether they are so notified, 
,,.recognized or classified under any law and irrespective of the ownership 
ofJhe .land of such forest. 
" (i 989) Supp. ( 1) sec 504 
1' (1997) 2 sec 267 
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169. Pursuant to the directions given by this Court, the State of 
Odisha constituted District Level Committees (for short 'DLC') for 
identification of forest lands. After the identification process. appropriate 
affidavits were filed by the State ofOdisha in this Court in 1997-98, the 
last being dated 6'" January, 1998. 
B 
170. In the meanwhile, in T.N. Godal'arman "· Union of India 16 
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this Court passed certain directions on 4'h March, 1997 with regard to 
what was categorized as mining matters. The directions given by this 
Court are as follows: 
"9. We direct that -
( 1) where the lessee has not forwarded the particulars for seeking 
permission under the FCA. he may do so immediately; 
(2) the State Government shall forward all complete pending 
appliaations within a period of2 weeks from today to the Central 
Government for requisite decisions; 
(3) applications received (or completed) hereafter would be 
forwarded within two weeks of their being so made. 
( 4) the Central Government shall dispose of all such applications 
within six weeks of their being received. Where the grant of 
final dlcarance is delayc;d, the Central Government may consider 
the grant of working permissions as per existing practice." 
171. It was also made clear that the order passed by this Court 
including the earlier order dated 12'" December, 1996 shall be obeyed 
and carried out by the Central Government and the State
Governments 
notwithstanding any order or direction passed by a court including a 
High Court or T1ibunal to the contrary. 
172. From the above, it is explicit that in terms of the orders 
passed by this Court, there was a complete ban on non-forest activity on 
forest lands with effect from 12"' December, 1996. The only issue that 
remained was identification of all such lands by the District Level 
Committees and as mentioned above this exercise was completed by 
the State of Odisha on or about 6'h January, 1998. The lands identified 
by the DLC are compendiously referred to as DLC lands. 
173. In this background in IA Nos. 2746-2748 of2009 in the case 
of T. N. Godavarman the CEC was directed to submit a report which 
10 (1997) J sec 312
COMMON CAUSE v. UNION OF INDIA AND ORS. 
[MADAN B. LOKUR, J.] 
it did on 26'h April, 2010. It was recommended by the CEC that given 
the peculiar circumstances prevailing in the State of Odisha, mining 
operations in the entire DLC lands included in the mining leases, may be 
allowed to continue on payment of the Net Present Value (NPV) subject 
to the fulfillment of other statutory requirements and rules being complied 
with. 
174. By an order dated 7" May, 2010 this Court directed that the 
recommendation of the CEC acceptable to the State Goverfiment could 
be complied with. Consequently, the State of Odisha a~pears to have 
implemented the recommendations regarding recovery of NPV and 
realized an amount of ahout Rs. 1750 crores as additional NPV. 
439 
A 
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175. We have been informed that in addition to the above, the 
mining lease holders have subsequently deposited an amount under the 
heading of penal compensatory afforestation which was introduced 
through guidelines issued by the MoEF on 3'd February, 1999. The 
guidelines in this regard, were communicated by the Assistant Inspector 
General of Forest to the Chief Secretary of all the State and Union 
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Territories and the relevant portion thereof reads as follows: 
"4.3. l Cases have come to the notice of the Central Government 
in which permission for diversion of forest land was accorded 
by the concerned State Government in anticipation of approval 
of the Central Government under the Act and/or where work
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has been carried out in forest area without proper authority. Such 
anticipatory action is neither proper not permissible under the 
Act which clearly provides for prior approval of the Central 
Government in all cases. Proposals seeking ex-post-facto 
approval of the Central Government under the Act arc nonnally 
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not entertained. The Central Government will not accord approval 
under the Act unless exceptional circumstances justify 
condonation. However, penal compensatory afforestation wonld 
be insisted upon by the MoEF on all such cases of condonation. 
4.3.2 
The penal compensatory afforestation will be imposed 
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over the area worked/used in violation. However, where the 
entire area has been deforested due to anticipatory action of the 
State Government, the penal compensatory afforestation will be 
imposed over the total lease area." 
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SUPREME COURT REPORTS 
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176. It was submitted by learned counsel for the lessees that since 
additional NPV as well as an amount towards penal compensatory 
afforestation has been paid by the defaulting mining lease holders, the 
violation of Section 2 of the FCA stands condoned or in any event the 
illegal or unlawful mining in forest lands stands regularized. 
177. The CEC did not accept this submission made on behalf of 
the mining lease holders on the ground that no retrospective forest 
clearance has b~en granted and even otherwise there is no provision to 
condone or regularize the violation of Section 2 of the FCA. 
178. We are of opinion that the view expressed by the CEC in 
this regard is partially correct. Given the fact that the defaulting mining 
lease holders have been asked to pay and have paid additional NPV as 
well as an amount towards penal compensatory afforestation, it must be 
assumed the violation of the FCA has been condoned to a limited extent, 
more particularly since in its order dated 7th May, 2010 this Court 
permitted the State of Odisha to accept such recommendations of the 
CEC made in the report dated 26'' April, 2010 as are acceptable to it. 
The relevant recommendations made by the CEC read as follows: 
"( c) No forest land can be leased/assigned without first obtaining 
the approval under the FC Act. Therefore, the forest area 
approved under the FC Act should not be lesser than the total
forest area included in the mining leases approved under the 
MMD~Act, 1957. Both necessarily have to·be the same. In 
view of the above, this Hon'ble Court while permitting grant of 
Tempqrary Working Permission to the mines in Orissa and Goa 
has made it one of the pre-conditions that the NPV will be paid 
for the entire forest area included in the mining leases. Similarly, 
all the mining lease holders in Orissa should be dir~cted to pay 
the NPV for the entire forest area, included in the mining leases; 
(d) In Orissa, substantial areas included in the mining leases as 
non forest land have subsequently been identified as DLC forest 
(deemed forest/forest like areas) by the Expert Committee 
constituted by the State Government pursuant to this Hon 'hie 
Court's order dated 12.12.1996. While processing and/or 
approving the proposals under the FC Act in many cases such 
areas have been treated as non-forest land. It is recommended 
that (i) the NPV for the entire DLC area included in the mining 
lease, after deducting the NPV already paid, should be deposited
COMMON CAUSE v. UNION OF INDIA AND ORS. 
441 
[MADAN B. LOKUR, J.] 
by the concerned lease holder and (ii) the mining operations in 
A 
the unbroken DLC land (virgin land) should be permissible only 
if the permission under the FC Act has been obtained/is obtained 
for such area. Keeping in view the peculiar circumstances as 
was existing in Orissa and subject to the above, the mining 
operations in the broken DLC land may be allowed to be continued 
B 
provided the other statutory requirements and Rules are otherwise 
being complied with." 
179. This still leaves open the question of violation of the order 
passed by this Court on J 21h December, 1996 followed by the order 
dated 4"' March, 1997 namely that mining must cease forthwith in forest 
areas. In regard to this violation, the only benefit (at best) that can be 
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granted to the mining lease holders that we are concerned with, is till 6th 
January, 1998 when the affidavit was filed in this Court in LA.Nos. 
2746-2748 of2009 in T.N. Godavarman. With effect from 7"' January, 
1998 any mining activity in forest and DLC lands would clearly be 
completely illegal and unauthorized and the benefit that the mining lease 
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holders have derived from this illegal mining would be subject to Section 
21(5) of the MMDR Act. Therefore, the price of the iron ore and 
manganese ore mined by the mining lease holders from 7"' January, 1998 
is payable until forest clearance under Section 2 of the FC Act is obtained 
by the mining
lease holders. 
E 
180. The report of the CEC dated 16'" October, 2014 deals with 
51 mining leases. It has been recorded by the CEC that of them 15 
mining leases have been found not involved in undertaking mining 
operations in violation of the FCA. There are 16 mining leases that have 
violated the provisions of the FCA between 25"' October, 1980 and 1999-
2000 and the State Government in some of the cases has already issued 
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a show cause notice to the mining lease holders. It is further stated that 
most of the violations pertain to the period prior to 12"' December, 1996. 
The CEC has not made any particular recommendation in regard to 
these 16 mining leases nor do we, except to direct the State Government 
to promptly take a decision on the show cause notice preferably within a 
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period of fonr months and in any case before 31" December, 2017. 
181. The CEC has also dealt with 18 others mining lease holders 
(other than M/s. Essel Mining and Industries Ltd. relating to the Kasia 
Iron Ore Mines and Jilling-Langlotta Iron & Manganese Ore Mines). 
With regard to these 18 mining lease holders, the view taken by us above 
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would hold good and clearly they are liable to compensate the State for 
the entire price of the iron ore and manganese ore illegally mined with 
effect from 7'h January, 1998 until the forest clearance was obtained by 
the concerned mining lease holder. 
182. We have fixed 7'h January, 1998 as the cut-off date despite 
the orders dated 12'h December, 1996 and 4'" March, 1997 only for the 
reason that it is possible that some mining lease holders (we do not know 
how many) wore not aware that they were inadvertently conducting 
mining operations on DLC lands which were identified by the State of 
Odisha as fore~t lands on the directions of this Court. For the purposes 
of Section 21 ( S) of the MMDR Act, they are entitled to the benefit of 
doubt and along with them, the other mining lease holders before us. 
The CEC in this regard has observed as follows: 
"It will be seen that in the above cases the mining operations 
have been done in the forest land in violation of the Forest 
(Conservation) Act, 1980 and consequently also in violation of 
this Hon'ble Court order dated 12.12.1996. The CEC 
recommends that 70% of the notional value of the iron ore and 
mangal)ese produced by the lessees by undertaking mining 
operations in the forest land in violation of the Forest 
(Conservation) Act, 1980 may be directed to be recovered from 
the respective lessees. Wherever the mineral production is both 
from the
forest land as well as non-forest land then in such cases 
the notipnal value of the production from the forest land may be 
calculated on pro rata basis of the extent of the forest land and 
non-forest land involved. The notional value of the mineral, time 
limit for payment of the compensation, use of the amount received 
as compensation and other conditions as decided by this Hon 'ble 
Court in respect of the production without/in excess of the 
environmental clearance may be directed to be followed on pari-
passu basis." 
183. For the reasons that we have already expressed above, we 
are not in agreement with the CEC that only a part of the notional value 
(in this case 70%1 of the iron ore and manganese ore produced by the 
mining lease holders should be recovered. We are of the view that 
Section 21(5) of the MMDR Act should be given full effect and so we 
reiterate that the recovery should be to the extent of 100%.
COMMON CAUSE v. UNION OF INDIA AND ORS. 
443 
[MADAN B. LOKUR, J.] 
184. There may be some overlap in the period when mining 
A 
operations were conducted by the mining lease holders without an EC 
and/or an FC. We make it clear that mineral extracted either without an 
EC or without an FC or without both would attract the provisions of 
Section 21(5) of the MMDRAct and 100% of the price of the illegally 
or unlawfully mined mineral must be compensated by the mining lease 
holder. To the extent of the overlap or the common period, obviously 
only one set of compensation is payable by the mining lease holder to the 
State ofOdisha. We order accordingly. However, we make it clear that 
whatever payment has already been made by the mining lease holders 
towards NPV, additional NPV or penal compensatory afforestation is 
neither adjustable nor refundable since that falls in a different category 
altogether. 
185. We may note that this Court has held in T.N. Godavarman 
v. Union of India" that a violation of the FCA is condonable on payment 
ofpenal compensatory afforestation charges. This obviously would not 
B 
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· apply to illegal or unlawful mining under Section 21(5) of the MMDR 
D 
Act, but we make it clear that the mining lease holders would be entitled 
to the benefit of any Temporary Working Permission granted. 
Conclusions on the issues of mining without an EC or FC or both 
186. To avoid any misunderstanding, confusion or ambiguity, we 
make the following very clear:
(I) A mining project that has commenced prior to 2 7'h January, 
1994 and has obtained a No Objection Certificate from the 
SPCB prior to that date is permitted to continue its mining 
operations without obtaining an EC from the Impact 
Assessment Agency. However, this is subject to any 
expansion (including an increase in .the lease area) or 
modernization activity after 27• January, 1994 which would 
result in an increase in the pollution load. In that event, a 
prior EC is required. However, if the pollution load is not 
expected to increase despite the proposed expansion 
(including an increase in the lease area) or modernization 
activity, a certificate to this effect is absolutely necessary 
from the SPCB, which would be reviewed by the Impact 
Assessment Agency. 
"r201n15 sec 658 and (2011) 15 sec 681 
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[2017] 13 S.C.R. 
A 
(2) 
The renewal of a mining lease after 27'h January, 1994 will 
require an EC even ifthere is no expansion or modernization 
activity or any increase in the pollution load. 
(3) 
For considering the pollution load the base year would be 
1993-94, which is to say that ifthe annual production after 
B 
27'h January, 1994 exceeds the annual production of 1993-
94, it would be treated as an expansion requiring an EC. 
(4) Tliicre is no doubt that a new mining project after 27'h 
January, 1994 would require a prior EC. 
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(5) 
Any iron ore or manganese ore extracted contrary to EIA 
1994 or EIA 2006 would constitute illegal or unlawful mining 
(as understood and interpreted by us) and compensation at 
100% of the price of the mineral should be recovered from 
2000-200 I onwards in terms of Section 21 (5) of the MMDR 
Act, if the extracted mineral has been disposed of. In 
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addition, any rent, royalty or tax for the period that such 
mining activity was carried out outside the mining lease area 
should be recovered. 
(6) 
With effect from 14"' September, 2006 all mining projects 
having a lease area of 5 hectares or more are required to 
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have an EC. The extraction of any mineral in such a case 
without an EC would amount to illegal or unlawful mining 
attracting the provisions of Section 21(5) of the MMDR 
Act. 
(7) 
For a mining lease of iron ore or manganese ore of less 
F 
than 5 hectares area, the provisions ofEIA 1994
will continue 
to apply subject to EIA 2006. 
(8) 
Any mining activity carried on after 7" January, 1998 without 
an FC amounts to illegal or unlawful mining in terms of the 
provisions of Section 21(5) ofMMDRAct attracting 100% 
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recovery of the price of the extracted mineral that is disposed 
of. 
(9) In the event ofany overlap, that is, illegdi or unlawful mining 
without an FC or without an EC or without both would 
attract only I 00% compensation and not 200% 
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