Goa: The Foundation Cases

In one line

The Supreme Court held the Goa iron ore leases had expired in 2007, the State renewed them anyway, and the Court quashed the renewals and made the miners pay into a fund for the generations that will not have the ore.

In the wording a student can write in an exam: in Goa Foundation v. Union of India, (2014) 6 SCC 590, the Supreme Court held that the mining leases in Goa expired in 2007 and that all mining after that date was illegal; it capped annual extraction at 20 million tonnes until an expert committee on Goa's carrying capacity reported, directed that the sale value of the ore already extracted go to the State as owner after the lessees' cost of excavation and the unpaid workers' and the port's shares, and ordered ten per cent of the balance, and henceforth ten per cent of the sale price of the ore sold, into a Goan Iron Ore Permanent Fund on the principle of intergenerational equity; and in Goa Foundation v. Sesa Sterlite Ltd, (2018) 4 SCC 218, it quashed the 88 second renewals the State had granted between November 2014 and January 2015, because the 2014 judgment required fresh leases.

The background

Goa's iron ore is low grade and was mined for export, largely to China, and the boom of the 2000s multiplied the output several times over in a State the size of a district. The Shah Commission, appointed under the Commissions of Inquiry Act to inquire into illegal mining, reported in 2012 on Goa, finding extraction beyond the approved quantity, mining outside the leased area, and working without environmental or forest clearance. The State suspended mining, and the matter reached the Supreme Court.

The 2014 judgment

Facts. The Portuguese Government had granted mining concessions in perpetuity before Goa's liberation in December 1961. The Goa, Daman and Diu Mining Concessions (Abolition and Declaration as Mining Leases) Act, 1987 turned them into deemed mining leases under the Indian Act, running until 22 November 1987. Renewal applications were made and not decided, and the lessees went on mining after 2007 on the footing that their leases stood deemed extended until the State decided.

Held. The Court declared that the deemed leases expired on 22 November 1987 and the maximum twenty-year renewal on 22 November 2007, so that mining after that date was illegal: the rule deeming a lease extended while a renewal application is pending cannot apply to a second renewal under section 8(3), which needs the State's express order, for reasons recorded, that renewal is in the interests of mineral development. It declared that there can be no mining within one kilometre of the national parks and sanctuaries of Goa until the order of 4 August 2006 is modified, and that it is for the State to decide as a matter of policy how leases are granted in future, subject to judicial review. It directed a cap of 20 million tonnes of annual excavation, other than from dumps, until the expert committee on Goa's carrying capacity reported; that the sale value of the ore already extracted pay the lessees the average cost of excavation, the unpaid workers half their wages and dearness allowance and the port half its storage charges, ten per cent of the balance going to a Goan Iron Ore Permanent Fund and the rest to the State as owner; and that the lessees henceforth pay ten per cent of the sale price of the iron ore they sell into the Fund, on the principle of intergenerational equity.