Illegal Mining: Recent SC Order and Its Relevence

What is the recent Supreme Court Order on Illegal Mining and how it is a benchmark ruling?

In its recent landmark judgement on illegal mining, the Supreme Court has imposed a penalty of 100% on the mining companies who had indulged in this practice. The matter came before the apex court as a result of a writ petition filed by the Common Cause Society against the rampant extraction from iron and manganese ore beyond legal limits. It went beyond the limit of compensation recommended by the Central Empowered Committee (CEC), an expert body set up by the court to look inquire into the issue of illegal mining i.e. 30% of the illegally excavated ore. The rationale behind this order is that the defaulting lessees of the mines should not receive any benefits out of their illegal work. Among the companies held liable are Odisha Mining Corporation, Tata Steel, Essel Mining and Industries Ltd, Rungta Mines etc.

The financial year 2000-2001 has been taken as the base year from when the compensation of 100% is to be collected. The calculation of this compensation excludes the payments already made by the mining lease holders like the additional net present value or penal compensatory afforestation considering these as separate penalties. The Court has also set up an expert committee headed by a retired judge to identify the loopholes in the existing policies (especially the National Mineral Policy 2008) that permitted illegal mining for so many years. The deadline set for the above activities is December 31 of this year.

A Benchmark Ruling

In this judgement the Supreme Court for the first time went beyond the traditional polluter pays principle (the party polluting the natural environment has to pay for it) and enforced more stringent actions, leaving no scope for reduction of liability for the illegal activities. Thus the Court’s concern was not merely the harm to natural environment but also derogation of legal norms. This is evident from the fact that the Court refused to accept the argument that companies owning mines prior to 1994 (when the Environment Impact Assessment Notification was first issued) did not require environmental clearance.  Further, the scope of illegal mining was expanded from outside the leased area to also excessive use in the leased area.

One can describe this judgement as the first of its kind when the issue of illegal mining and impact on environment, lives of forest dwellers and tribals has taken such an importance that a complete revisiting of the situation is taking place. For the first time, the court emphasized the need for intergenerational equity in use of mines.


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