Case Note & Summary
The Supreme Court dismissed the appeal filed by the State of Odisha against the Orissa High Court's order directing the State to grant transport permits to Jindal Steel and Power Ltd. (JSPL) for lifting and transporting iron ore from the lease area of M/s Sarda Mines Pvt. Ltd. (SMPL). JSPL had purchased iron ore from SMPL, which was mined, processed, and stored at the dispatch point within SMPL's leasehold area. The dispute arose when SMPL's environmental clearance for enhanced production expired on 31.03.2014, and the State refused to issue transit permits for transporting the ore to JSPL's plants in Odisha and Chhattisgarh. JSPL approached the High Court, which quashed the State's refusal letters and directed issuance of permits, holding that transportation of already mined minerals is not part of 'mining operations' prohibited by the Supreme Court's interim directions of 16.05.2014. The State appealed, arguing that the sale did not absolve JSPL from compliance with environmental laws and that the ore might have been extracted in excess of the environmental clearance. During the pendency of the appeal, the Supreme Court in a related matter (Common Cause v. Union of India) directed SMPL to deposit dues and file an undertaking to comply with rules, after which SMPL could resume mining. SMPL filed an undertaking, and the State and SMPL did not controvert that no dispute survived. The Supreme Court noted that the parties confined themselves to the issue of JSPL's conditional entitlement to transport the ore. The Court held that the High Court correctly interpreted 'mining operations' under Section 3(d) of the MMDRA as not including transportation of already mined minerals. The Court also noted that the minerals were mined and processed before the expiry of environmental clearance, and JSPL had paid all royalties. Accordingly, the appeal was dismissed, and the State was directed to grant transport permits for the iron ore stock, subject to JSPL complying with all applicable laws and furnishing an undertaking to the State. The Court also disposed of the intervention applications, directing that the proceeds from the sale of the ore be credited to the working capital account of JSPL under the supervision of the consortium banks.
Headnote
A) Mining Law - Definition of Mining Operations - Section 3(d) of Mines and Minerals (Development and Regulation) Act, 1957 - Transportation of already mined minerals is not included in 'mining operations' - The High Court correctly held that transportation of minerals already raised is not prohibited by interim directions against mining operations - The Supreme Court affirmed that 'mining operations' under Section 3(d) means only winning of minerals, not transport after extraction (Paras 10, 18-20). B) Environmental Law - Environmental Clearance - Expiry of Clearance - Transportation of minerals already mined during validity of clearance is not barred by expiry of clearance - The lessee's environmental clearance had expired, but the minerals were mined and processed before expiry - The buyer's right to transport such minerals is not affected by the lessee's subsequent lack of clearance (Paras 5-6, 10). C) Constitutional Law - Writ of Mandamus - Entitlement to Transport Permits - Buyer who has legally procured, processed, and paid royalty on minerals is entitled to transport permits - The State cannot refuse transport permits solely because the lessee's environmental clearance expired, where the minerals were mined during validity and all dues paid (Paras 7-10, 18-20). D) Mining Law - Sale of Minerals - Effect on Statutory Compliance - Sale of minerals by lessee does not terminate application of MMDRA - Buyer's title is subject to lessee's compliance with laws - However, in this case, the lessee had valid environmental clearance at the time of mining and sale, and the buyer had paid royalty - The State's objections were not sustained (Paras 11-12, 18-20).
Issue of Consideration
Whether transportation of already mined, processed, and royalty-paid iron ore from the leasehold area of a lessee whose environmental clearance had expired constitutes 'mining operations' prohibited by the Supreme Court's interim directions, and whether the buyer (JSPL) is entitled to a writ of mandamus for transport permits.
Final Decision
The Supreme Court dismissed the appeal, affirming the High Court's order. The State of Odisha was directed to grant transport permits to JSPL for the iron ore stock, subject to JSPL complying with all applicable laws and furnishing an undertaking to the State. The Court also directed that proceeds from the sale of the ore be credited to JSPL's working capital account under the supervision of the consortium banks.
Law Points
- Definition of mining operations under Section 3(d) of MMDRA does not include transportation of already mined minerals
- sale of minerals by lessee to buyer does not absolve buyer from compliance with environmental laws
- buyer's title is subject to lessee's compliance
- interim directions prohibiting mining operations do not bar transportation of already mined and royalty-paid minerals
