Supreme Court Dismisses Vedanta’s Plea to Renew Mining Lease in Goa

Curtains are finally down on the mining lobby’s last-ditch attempt to exploit legal loopholes to circumvent the spirit of the Supreme Court’s landmark ruling in 2018.

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New Delhi: The Supreme Court bench of Justices D.Y. Chandrachud, Vikram Nath and Hima Kohli on Tuesday dismissed the appeal filed by Vedanta Ltd against a Bombay high court order concerning their alleged mining rights for a period of 50 years, that is till 2037, despite earlier Supreme Court judgments cancelling their leases. The bench also allowed the withdrawal of a writ petition by former mining lease holder Geetabala Parulekar.

On July 9, the Supreme Court had dismissed a batch of review petitions filed by the Goa government and by Vedanta against its judgment dated February 7, 2018 (in Goa Foundation v Sesa Sterlite) cancelling the grant of second renewal for 88 mining leases in Goa and directing grant of fresh leases and environmental clearances.

In Goa Foundation v Sesa Sterlite, the Supreme Court had invalidated the renewals granted under Section 8(3) of the MMDR Act, as it stood before the 2015 amendment Act, and held that the tenure of the leases ended on November 22, 2007.  The judgment was authored by Justice Madan B. Lokur, on behalf of himself and Justice Deepak Gupta, both of whom subsequently retired.

The bench of Justices Lokur and Gupta had concluded as follows:

“The State of Goa was not under any constitutional obligation to grant fresh mining leases through the process of competitive bidding or auction.

  1. The second renewal of the mining leases granted by the State of Goa was unduly hasty, without taking all relevant material into consideration and ignoring available relevant material and therefore not in the interests of mineral development. The decision was taken only to augment the revenues of the State which is outside the purview of Section 8(3) of the MMDR Act.”

On October 29, 2019, Vedanta wrote to the Goa government demanding an extension of their mining lease deed to enable them to carry on mining operations till 2037. The company argued that they were entitled to a 50-year period on their lease, after amendments to the MMDR Act, 1957 came into force on January 12, 2015.

Also read: Vedanta-Owned Company Evaded Thousands of Crores of Mining Royalties Owed to Rajasthan Govt

The Goa government agreed with their standpoint, but expressed an inability to extend the lease deed due to the judgment delivered by the Supreme Court in February 2018.

Vedanta, however, argued that with the coming into force of the 2015 Amendment Act, the tenure of all mining leases is deemed to be 50 years from the date of grant. The company pointed out that the Supreme Court had in Common Cause v Union of India (2016) had clarified that the benefit of such a tenure shall accrue even to leases that expired before the coming into force of the 2015 Amendment Act.

Vedanta thus submitted that notwithstanding the expiry of its leases on November 22, 2007, in view of Section 8A(3) of the MMDR Act, its leases stood extended by operation of law till November 22, 2037, that is, 50 years from the date of grant and which in the present case would be 50 years from 1987. The company attached a written opinion of senior advocate, Harish Salve, on the issue, in its submission to the Goa government.

Based on Salve’s opinion, Vedanta submitted that the direction in Goa Foundation-II (2018) judgment for the grant of fresh mining leases would come into play, and would take effect only after the 50-year period expires in 2037. “It is of some significance that the judgment in Goa Foundation (2018) does not address the effect of Section 8A upon the leases that were deemed to be granted and renewed by the operation of the Abolition Act,” Vedanta wrote to the Goa government.

In response, the Goa government pointed to Supreme Court’s directions in the Goa Foundation-II (2018) judgment as follows:

Paragraph 6: “The mining lease holders who have been granted the second renewal in violation of the decision and directions of this court in Goa  Foundation are given time to manage their affairs and may continue their mining operations till 15th March, 2018.  However, they are directed to stop all mining operations with effect from 16th March, 2018 until fresh mining leases (not fresh renewals or other renewals) are granted and fresh environmental clearances are granted.”

The Bombay high court, in its November 25, 2019 order in Vedanta Limited v Director of Mines & Geology & Others, rejected Vedanta’s contention that the state government was obliged to amend the lease deed in view of Section 8(A)(3) of the MMDR Act. Vedanta also submitted to the high court that the Supreme Court’s judgment in Goa Foundation (2018) did not come in the way of the state government in considering its representation.

The Bombay high court rejected Vedanta’s plea that the Supreme Court’s judgment in Goa Foundation (2018) was “per incuriam” and/or “sub silentio” and therefore, the state government or for that matter, the high court, should not consider itself to be bound by the said decision. Vedanta, however, did not press its plea of “per incuriam” during the hearing, but requested that the issue of “sub silentio” might be considered.

The high court asked Vedanta how it could direct the state government to consider its representation without being bound by the clear directions issued by the Supreme Court in the Goa Foundation-II (2018). “It will not be proper course of action for this court to follow. The state government too, quite correctly, has refused to adopt such a course of action,” the high court observed in its order.

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The high court pointed out that when the Supreme Court delivered its judgment in the Goa Foundation-II (2018), the provisions of Section 8(A)(3) of the MMDR Act or for that matter the entire 2015 Amendment, by which such provision was introduced, were already in force. The Supreme Court had made specific reference to the 2015 Amendment as also its earlier decision in Common Cause. The high court was disinclined to entertain Vedanta’s petition particularly because the state government had already filed a review petition before the Supreme Court in respect of the Goa Foundation-II (2018) judgment.

The high court found fault with Vedanta for not making the Goa Foundation a party in its petition.

Vedanta’s writ petition before the Bombay high court was dismissed  on November 25, 2019, expressing inability to grant relief in view of the Supreme Court’s judgment of February 7, 2018. It is in response to the high court’s dismissal that Vedanta filed an SLP which was dismissed by the Supreme Court bench on Tuesday.

Parulekar also filed a similar representation before the Goa government demanding lease extension till 2037. This was also rejected by the Goa government. Unlike Vedanta, Parulekar did not move the high court, but filed a writ petition directly in the apex court.

On Tuesday, the Supreme Court disapproved of Vedanta’s attempt to raise the ground of “per incuriam” against the Goa Foundation-II judgment. “You cannot have two bites in the cherry. This is an abuse of the process of the law. It cannot be open to you to come again. You had argued the review here.  You cannot bite the cherry here and there,” LiveLaw quoted the bench as saying.

Also read: Mining Had Always Affected Villagers in Goa. The Sudden Stop Finds Them Worse Off

Claude Alvares, director of the Goa Foundation, in a statement said:

“This was the last straw to which the mining lobby in Goa was hanging on to in desperation…After the dismissal of the review petitions (by the Supreme Court in July 2021), it was apparent that the appeals and petitions filed by Vedanta and Parulekar would also go out of the window. With this development, the private mining industry and its lobbies which held sway over the sector for more than 50 years has come to an inglorious end.”

It was thanks to Goa Foundation’s PIL, for the first time since mining leases were handed out by the Portuguese in the last century, that mining in Goa was brought to an abrupt end, suspending more than a decade of senseless extraction and looting which irreversibly brutalised the natural environment, destroyed the peace of village communities and damaged public health. The statutory authorities and other public bodies turned a blind eye or participated in the plunder and assault.The judgment in Goa Foundation-1 was delivered by the Supreme Court bench of Justices A.K. Patnaik, Surinder Singh Nijjar and Fakkir Mohamed Ibrahim Kalifulla in 2014.

“Rapacious and rampant exploitation of our natural resources is the hallmark of our iron ore mining sector – coupled with a total lack of concern for the environment and the health and well-being of the denizens in the vicinity of the mines,” Justices Lokur and Gupta wrote in 2018.  Development must be sustainable and equitable development, and not otherwise, they had held. With Tuesday’s order, the Supreme Court has sought to reiterate its 2013 and 2018 rulings in Goa Foundation.

On Tuesday, as reported by LiveLaw, the Supreme Court bench indicted the Goa government for backing large entities in renewal of mining lease without following due process. It asked the Solicitor General, Tushar Mehta, who appeared for the Goa government, to advise his client to follow competitive bidding in handing out mining leases to maximise revenue instead of backing the renewal of leases of large mining companies.