States hit the jackpot with SC mining decision

The Supreme Court’s decision Wednesday will allow states to reap massive sums from companies that mined illegally.

States across the country have just struck gold—from shuttered iron-ore mines.

The Supreme Court’s ruling Wednesday on compensation for illegal mining has opened the door for states to follow Orissa’s example and recover what the court’s judgment referred to as “megabucks.”

Orissa’s state government is set to receive an estimated Rs 68,000 crore, following the court’s ruling entitling it to 100 per cent of all revenue from illegal mining since 2000-2001. But, according to a law officer involved in the case,  Jharkhand, Goa and Karnataka could likely receive similarly large hauls by filing litigation in line with the court’s precedent.

“Illegal mining has been curbed to a great extent after the court’s intervention but those who made money before will now have to pay up,” said the law officer, who requested anonymity due to professional obligations. “Some state governments haven’t actively gone after the companies but will now be forced to recover from them.”

Other states might be able to further increase their load due to the court’s wide definition of ‘illegal mining,’ which includes any violation of the Mines and Mineral Development Act, apart from mining on land not under lease.

The mining lease holders “cannot have their cake and eat it too, along with the icing on top.” Justices Madan B. Lokur and Deepak Gupta wrote in the order. “We think that the mining lease holders should be grateful since they have not been penalized for [the] period before 2000.”

The decision parted ways with the court-appointed Centrally Empowered Committee (CEC), which had previously recommended recovering only 30 per cent of illegal mining proceeds. In the case in question, Orissa would have received only around Rs 17,500 crores. The Orissa state government, as well as the central government, argued for full compensation so states could recover the full amount lost.

Following the court’s ruling, the Orissa state government will now determine how much each liable company must pay.

Common Cause, a non-profit led by advocate Prashant Bhushan, brought the case after the government tabled the M.B Shah Commission of Inquiry Report on illegal mining in 2014. The report found a total of 146 cases of illegal mining activity on iron and manganese ore leases in Orissa between 2001-2009. Of these cases, over 100 came from just two tribal districts in the state—Keonjhar and Sundergarh.

The apex court is separately hearing a joint plea from mining leaseholders seeking to resume operations, after the court shuttered all mining in Orissa in 2014.