SAMAJ PARIVARTANA SAMUDAYA AND ORS. versus STATE OF KARNATAKA AND ORS. on 20 May 2022

ORDER

1. The present writ petition was filed under Article 32 of theConstitution of India over a decades ago, seeking directions to therespondent No. 1/State of Karnataka, respondent No. 2/State of AndhraPradesh and respondent No.3/Union of India to stop all mining and relatedFactivities in the forest areas of Karnataka and Andhra Pradesh beingcarried out and in violation of the order dated 12.12.1996, passed by thisCourt in T.N. Godavarman Thirumulpad v. Union of India[1]and theForest (Conservation) Act, 1980.

2. Directions were also sought to be issued to the respondents/GStates and the Union of India to declare all mining contracts/sub-leasesissued in violation of the Mines and Minerals (Development andRegulation) Act, 1957 as illegal and take penal actions against theviolators. The third prayer made was for directing stoppage of all miningactivities along side the border and within the forest areas in the BellaryH1 (1997) 2 SCC 267

Reserve Forest. Lastly, directions were sought to declare Notificationdated 15.03.2003 and other related Notifications dereserving lands formining operations, as null and void.

3. The writ petitioner had approached this Court against theindiscriminate and rampant mining activity that was being carried outunder the nose of the Authorities, in particular in the District of Bellary.The reports submitted by the Central Empowered Committee[2] bore outthe submissions made by the petitioner regarding large scale illegal miningin the area resulting in complete degradation of the environment. As aresult, vide order dated 29.07.2011, all mining activity was prohibited inthe District of Bellary, followed by the Districts of Tumkur andChitradurga. Taking note of the rampant encroachment in forest land bylease-holders and illegal mining operations taking place in the same area,a joint team was constituted vide order dated 06.05.2011 to conduct asurvey of the area which revealed how illegal mining had ravaged theforest area of the aforesaid districts.

4. The CEC submitted a report, termed as the “Final Report”dated 03.02.2012, making several recommendations one of which wasto categorise the mines into three categories based on the extent ofencroachment in respect of the mining pits and overburden dumps,determined in terms of percentage qua the total lease area. Threecategories of the mines were suggested as ‘A’, ‘B’ and ‘C’. Anotherrecommendation made by the CEC was relating to the conditionsproposed for reopening of mining and resumption of the mining operationfor this Court to consider as part of the Reclamation and RehabilitationPlans.

5. The recommendation made by the CEC vide its report dated13[th] March, 2012, relating to the prescription of a ceiling limit for thetotal production of iron ore for mining leases in the Districts of Bellary,Chitradurga and Tumkur, prohibition of export of iron ore outside thecountry using the mode of e-auction to be conducted by a MonitoringCommittee for the sale of iron ore, deposit of 10% of the sale pricereceived during the e-auction with the Monitoring Committee along withthe other charges and constitution of and assigning various responsibilitiesto the Monitoring Committee, were duly considered and accepted bythis Court in its order dated 13[th] April, 2012. On 3[rd] September, 2012permission was granted by this Court to re-open all eighteen mines of 2 For short the “CEC”

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A‘A’ and ‘B’ category subject to certain conditions. A similarrecommendation was made by the CEC for reopening of the remainingmines of ‘A’ and ‘B’ category in its report dated 15[th] February, 2013.

6. Coming to the directions issued by this Court regarding the saleof existing stock of iron ore extracted through illegal mining, vide orderBdated 23[rd] September, 2011, this Court had directed disposal of theaccumulated iron ore through the process of e-auction conducted by theMonitoring Committee and had further constituted a ‘Special PurposeVehicle’[3] in terms of the order dated 29[th] October, 2012, for takingameliorating and mitigating measures as per the “ComprehensiveEnvironment Plans for the mining Impact Zone”[4] around the mining leasesCin three Districts of the State of Karnataka with directions issued to theMonitoring Committee to provide the payment received by it to the SPVin that regard.

7. In the year 2015, an application was moved by the Federationof Indian Mineral Industries, Southern Region, FIMI South (IA 248 ofD2015) for permission to sell the iron ore and manganese ore within theState of Karnataka, without taking recourse to e-auction to be conductedby the Monitoring Committee, as set up by this Court. The said prayerwas opposed by the petitioner and the other stake holders. However, theCEC vide its report dated 28[th] April, 2016, had agreed to the prayerEmade by FIMI South on the ground that in view of the several orderspassed by this Court, the basic objective behind sale of iron ore throughthe Monitoring Committee had been achieved and an alternate systemneeded to be put in place. The State of Karnataka had also agreed to thesuggestions made by the CEC and submitted a model to the Court formonitoring sale of iron ore through the e-platform on the basis of a long-Fterm agreement.

8. Highlighting the reason behind constituting the MonitoringCommittee and the role attributed to it for the sale of iron ore throughe-auction and further, observing that the connected aspect of lifting ofthe cap or enhancing the cap on production and launching of the CEPMIZGscheme, was still under consideration, this Court had rejected the aforesaidapplication filed by FIMI South vide order dated 28[th] August, 2017[5],opining that time had not yet come to dispense with the existing policy of 3 For short ‘SPV’4 For short ‘CEPMIZ’H5 Reported as (2018) 11 SCC 433

SAMAJ PARIVARTANA SAMUDAYA AND ORS. v. STATE OFKARNATAKA AND ORS.

sale and purchase of iron ore in the State of Karnataka through theCourt appointed Monitoring Committee by e-auction and for grant ofpermission to sell the iron ore on a direct sale basis through long termcontracts or through spot sale and that restoration of ‘Normalcy’ in thesale and purchase of iron ore must be deferred till significant headway ismade in respect of the other connected aspects noticed in the FinalOrder dated 18[th] April, 2013.

9. Another order that needs to be noted was one passed in thepresent petition on 14[th] December, 2017[6]. The said order was passed onapplications moved by M/s. Karnataka Iron and Steel ManufacturersAssociation (IA No. 273/2017), FIMI South (IA 56562/2017) andChitradurga Sustainable Mining Forum (IA No. 76163 and 76167/2017)seeking removal of the annual cap of mining fixed by this Court and forpermission to extract iron ore as per the approved R & R Plans,reclamation and rehabilitation plan. A similar request was made by theMinistry of Mines, Union of India in IA No. 103342/2017, stating thatthe annual mineral policy was under revision and the discretion of fixinga cap upon extraction of mineral ought best to be left to the Ministry. Onits part, the State of Karnataka had highlighted the significant improvementmade in the infrastructure and suggested a gradual increase in the annualcap based on iron ore extraction from 30 MMT that had been fixed inrespect of all the three Districts, to 50 MMT.

10. After examining the recommendations made by the CEC inits report dated 14[th] July, 2017 and taking into account the submissionsmade by Mr. M.K. Jiwrajka, former Member Secretary of CEC as alsoMr. Prashant Bhushan, learned counsel for the petitioner, this Court hadpassed an order on 14[th] December, 2017, accepting the recommendationsmade by the CEC for enhancement of the cap for category ‘A’ and ‘B’mines subject to imposition of conditions relating to category ‘C’ minesin the three Districts of Bellary, Tumkur and Chitradurga.

11. We have taken the pains to extract the chronology of eventsbefore proceeding to deal with the applications that have been moved byseveral parties pressing for modification of the Court’s order dated 23[rd]September, 2011 and seeking permission for discontinuation of compulsorysale of iron ore through e-auction and for permission to export the pelletsmanufacturers from the iron ore extracted from the mines in the Stateof Karnataka.

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A12. The reliefs sought by various/interveners through independentapplications are as follows:

i.IA. No. 205/2014and IA No. 206/2014moved byKIOCL Ltd., a government of India enterprise (forintervention and modification of the order dated 23[rd]BSeptember, 2011.)

ii.IA No. 24335/2018, IA No. 61304/2019 and IA No.17007/2021filed by FIMI South (for permission to exportpellets manufactured from iron ore in State of Karnataka,permission to export unsold iron ore despite being put onCe-auction for more than three occasion and freedom to enterinto contract of iron ore from lessees in the State ofKarnataka.)

iii.IA No. 98216/2020 and IA No. 98219/2020 filed byM/s. SLR Metaliks (for impleadment and for permission toenter into contracts directly for purchase of iron ore fromlessees in Karnataka without resorting to e-auction.)

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iv.IA No.152631/2018moved by M/s. Vedanta Ltd. (forpermission to export/sell iron ore without recourse toe-auction in the State of Karnataka.)

Ev.IA No. 64798/2019 in IA No. 152631/2018filed by Stateof Karnataka Gani Avalambhithara Vedike (for interventionand permission to export/sell iron ore which steel plantsand other industries are unwilling to purchase in the e-auctionprocess, by selling it directly on or above the prevailingmarket price.)

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vi.IA No. 97376/2019 in IA No. 24335/2018 and 152631/2018 filed by Karnataka Sponge Iron ManufacturerAssociations (for intervention and permission to exportpellets in the State of Karnataka.)

Gvii.IA No. 61452/2020 filed by Mineral Enterprises Limited(for permission as one time measure to sell/export unsoldiron ore without resorting to the e-auction framework.)

viii.IA No. 37678/2022filed by NMDC Limited, a CentralPSU (for permission to offer iron ore extracted by it on H

direct sale basis without resorting to e-auction and for exportpurposes.)

13. A reply affidavit dated 1[st] April, 2022 has been filed by thepetitioner opposing the request of the mining companies and pelletsmanufacturing companies for permission to export iron ore and pelletsand stating that if the production of iron ore is in excess of the demandof the domestic steel industries as alleged, then the Court may considerreducing the cap of iron ore extraction instead of permitting export thereof.Mr. Prashant Bhushan, learned counsel appearing for the petitionercontended that if it is claimed by the applicants that the domestic steelindustry has created a cartel due to which they are not purchasing theiron ore, then the problem of cartelization needs to be addressed. Similarly,permission for exporting pellets has also been opposed by the petitionerand it has been submitted that the order dated 23[rd] September, 2011passed by this Court does not deserve modification.

14. The Monitoring Committee has filed a status report dated09[th] April, 2022, stating inter alia that as on 31[st] March, 2022, the closingbalance of the iron ore is 8.29 MMT (approx.). During the year 2021,33.156 MMT of iron ore was sold through e-auction. As on 01.04.2021,the opening stock of iron ore in respect of running mines (Category ‘A’and ‘B’) is 6.65 MMTs (approx.). The report also furnishes the list ofiron ore mining leases operating outside the Districts of Bellary,Chitradurga and Tumkur, in a tabulated form prescribing the approvedcapacity and the actual production achieved by them. Another tabulatedstatement contains the list of iron ore mining leases in the aforesaidthree districts for category ‘A’ ‘B’ and ‘C’ auctioned mines in separatecategories showing approved Maximum Permissible Annual Production[7]and actual production and despatches.

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A15. The CEC has submitted Report No. 3 of 2022 dated 10[th] April,2022 in response to the directions issued by this Court on 30[th] March,2022. After referring to the earlier reports submitted by it from time totime, it has been stated that only a temporary ban on exports was imposedby this Court at a critical time when mining operations were restricted inthe State of Karnataka and that it was never the intention of this CourtBto restrict the mining operations for all times to come; that sale throughe-auction conducted through the Monitoring Committee had achievedits objective and it was no longer necessary to continue with the samedispensation in view of the improvement in the situation. Citing theinformation furnished by the Monitoring Committee relating to the closingCbalance of stock available in category ‘A’ ‘B’ and ‘C’ as on 31[st] March,2022, that adds up to 1,19,47,839.3 MT, the CEC has recommendedvacation of the orders passed by this Court directing sale of iron orethrough e-auction to be conducted by the Monitoring Committee with arider that the said procedure continue to be adopted for the sale of balanceof old stock of iron ore including sub grade iron ore available on the dateDof imposition of the ban. It has been suggested that all the balance oldstock be sold through e-auction before the end of July, 2022 and if anystock is left unsold, only then should the lessee be permitted to dispose itof without adopting the e-auction process.

16. The second suggestion made by the CEC is to discontinueEcollection of 10% of the sale value from all the lessees except for NMDCLimited and 20% of the sale value from NMDC Limited toward theircontribution to the SPV. Thirdly, it has been suggested that the total banimposed on export of iron ore and pellets from the districts of Bellary,Chitradurga and Tumkur, be lifted. Lastly, CEC has sought vacation ofFthe orders fixing district level caps on production of iron ore in respect ofcategory ‘A’ and ‘B’ mines from the Financial Year 2022-23 onwards.The report concludes by requesting that the system of determination ofMPAP being fixed through the R & R Plans and SupplementaryEnvironment Plans, as approved by this Court by the orders dated13.04.2012 and 18.04.2013, may be continued.G

17. The Ministry of Steel, Union of India has filed an affidavitdated 16[th] April, 2022, stating inter alia that keeping in mind the fact thatagainst a requirement of 192 MT of iron ore for producing 120 MT ofsteel annually, this Court may consider vacating the order for districtlevel caps on iron ore mines imposed in the three districts of the State ofH

Karnataka, by treating the mines in the said State at par with the minesin the rest of the country.

18. The Ministry of Mines, Union of India has filed a separateaffidavit dated 9[th] April, 2022, stating inter alia that over the years, thescenario has changed which would be apparent from the reports submittedby the CEC from time to time. Further, the Mines and Mineral(Development and Regulation) (Amendment) Act, 2015 has been putinto place and all the said steps taken together, necessitate a relook atthe restriction imposed earlier and therefore operation of mines in theState of Karnataka may be aligned with the rest of the country. TheMinistry has said that it has no objection to export of iron ore mined inthe State of Karnataka, just as it is being done in the rest of the country.

19. KISMA has filed two affidavits dated 08.04.2022 and18.04.2022, opposing the applications mentioned above for permissionto export iron ore pellets as prayed for by FIMI South, KIOCL Limited,Vedanta Limited and others and stated that the process of e-auctionthrough the Monitoring Committee should not be discarded as the saidprocess is fair and transparent. Opposing the request for permission toexport iron ore, it has been averred that any such permission may resultin the miners fixing the base price so high as to oust the domestic steelindustries that may result in manipulation by the miners.

20. A similar objection has been raised with respect to the requestfor export of iron ore pellets. The stand of KISMA is that export of ironore ought not be permitted since it will result in starving the domesticsteel and allied industries and permitting the mining industries to earnquick profits in the international markets due to the surge in the prices ofiron ore in the recent past. In its subsequent affidavit, KISMA had addedthat if this Court is inclined to permit export of iron ore from the State ofKarnataka, the same may be permitted subject to additional safeguardsand guidelines as recommended by the CEC in its Report No. 19/2019,reiterated later in Report No. 16/2020 and Report No. 20/2020.

21. The State of Karnataka had filed an affidavit dated 17[th] May,2021 in reply to IA No. 152631/2018 that was moved by Vedanta Limited,followed by an additional reply to the said application filed on 19[th] April,2022. In both the said affidavits State of Karnataka has submitted thatno export ought to be permitted of iron ore which was excavated frommines situated within the State. Disagreeing with Report No. 3/2022

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Asubmitted by the CEC recommending grant of permission for exportingiron ore mined within the State, it has been averred that such arecommendation is not backed by any cogent material.

22. We have considered the argument advanced by learned counselfor the parties, perused the latest report of the CEC and the MonitoringBCommittee, examined the stand of the Ministry of Steel and Ministry ofMines, Union of India as also of the State of Karnataka. The data placedbefore us by the respective parties in their applications under considerationhas also been scanned. For the present, we propose to confine the scopeof this order to examining the twin prayers made by learned counsel forthe applicants namely, permission to sell the unsold stock of iron oreCalready excavated without resorting to the process of e-auction conductedthrough the Monitoring Committee and for lifting the ban on export ofiron ore/pellets from the districts of Bellary, Chitradurga and Tumkursituated in the State of Karnataka. Although certain submissions weremade by the parties regarding lifting of the ceiling limit for total productionDof iron ore, at this juncture we are not inclined to decide the said issue.

23. Records reveals that repeated attempts to resort to the e-auction process for the sale of already excavated iron ore mined in thethree districts of Bellary, Chitradurga and Tumkur in the State ofKarnataka, have not borne any fruitful results. As a consequence thereof,Elarge stock of iron ore, including sub-grade iron ore, is lying unused. Ason 31.03.2022, the stocks available in category ‘A’ and ‘B’ mines isstated to be 82,98,130.5 MT. The stocks available in the auctionedcategory ‘C’ mines as on the above date is 12,25,100.5 MTs. The stockin respect of e-auction category ‘A’ and category ‘B’ expired leases is2,33,126.73 MTs and in mining leases outside the districts of Bellary,FChitradurga and Tumkur, is 93,181 MT. The closing balance of iron oreavailable in all the mines across the State of Karnataka as on 31[st] March,2022, adds up to 11,94,783.93 MT.

24. On glancing over the earlier orders passed by this Court,evidently it was on account of the rampant illegal mining that had beenGtaking place in the State of Karnataka and had severely impacted theecology of the region that the Court was compelled to impose a blanketban on mining operations in three specific districts. Post imposition ofthe ban, the Court was confronted with a situation where a huge stock-pile of iron ore had accumulated in the mines and stock yards that neededH

to be disposed of. Accordingly, a transparent process of e-auction wasadopted on the recommendations of the CEC with a further directionthat the sale proceeds would be placed in a separate account pendingsettlement of ownership rights over such stock of iron ore. This modehas been consistently adopted for sale of the stock of excavated iron oreunder the aegis of the Monitoring Committee that was called upon todeduct 10% of the sale value in respect of all the category ‘A’ and ‘B’mines and 20% of the sale value in respect of two mines owned byNMDC Limited, for being deposited in the SPV accounts towardsimplementation of the CEPMIZ. Report 3 of 2022 submitted by the CECrecords that the collection in the SPV maintained by the MonitoringCommittee as on 31[st] March, 2022, has crossed ` 20,000 crores whichamount would be adequate to meet the expenses connected with theactivities proposed to be undertaken under the CEPMIZ.

25. It is also pertinent to note that in the earlier orders dated13[th] April, 2012 and 11[th] August, 2014 passed by this Court in IA No. 205– 206 of 2014, it had been clarified that the “system of sale through theMonitoring Committee may be reviewed after two years”. It is afterthe passage of eight years that this Court is revisiting the system thatwas put in place.

26. Report No. 19/2019 dated 18[th] July, 2019 filed by the CEC isalso relevant in the above context and is extracted below:

“21. It is seen that the State of Karnataka during the year2018-19 has produced about 30.33 MMT of iron ore. Out ofthis the unsold stock of iron ore is 15.86 MMT break up being10.43 MMT of old stock and 5.43 MMT of fresh stock of ore.

22. Since the steel manufacturers have been importing ironore from the other States or from foreign countries, theMonitoring Committee has in their Report dated 3.5.2019acknowledged that the import of iron ore from outside thecountry has impacted the demand for iron ore and pricing ine-auction sale. This further supported by the low off take ine-auction sale as can be seen from the sale data for the period1.1.2018 to 30.6.2018 and 1.7.2018 to 31.3.2019. Duringthe period 1.1.2018 to 31.3.2019 a total of 229 e-auctions ofiron ore have been conducted by the Monitoring Committee.It will be seen that on 72 days, out f 229 days, 50% or more A

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than 50% of the quantity offered for sale has been purchasedby the end users in the e-auction whereas on remaining 157days less than 50% of the quantity offered for sale has beenpurchased. On 8 days when e-auction was conducted therehas been zero bid while on 12 days 100% of the quantityoffered for sale has been bid.

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25. It is not in dispute that the “iron ore lumps” are in demandand get sold at market price. As such the issue before thisHon’ble Court is with regard to the sale of “iron ore fines”which is not taking place specially from the mines located inDistricts Tumkur and Chitradurga. The mining lease of theApplicant is also one such mine located in DistrictChitradurga. The quality of the iron ore fines from these twodistricts is also of concern as they have higher manganesecontent and other impurities. All this adversely affect thedemand for the iron ore fines so much so that even at thereserve price at Rs. 450/ per tonne the material is not gettingsold in consecutive auctions.

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28. This Hon’ble Court in its order dated 1.9.2016 in IA Nos.259 and 263 IA Nos. 259 in WP (C) 562/2009 whileconsidering the application for permission for export of ironore has, amongst others, observed that :

“Permission for export must be governed by norms andparameters of general application as distinguished from adhoc decisions in individual cases. Until such guidelines areframed, the prayer of M/s. Vedanta Ltd. for export of its ironore cannot be granted. So far as issue of framing of guidelines/norms for export are concerned, the same will be dealt withseparately at an appropriate time and state”, Permission to export is only an enabling provision to be madein respect of unsold stock of iron ore subject to the extantpolicy of Government of India in this regard. The actual exportof iron ore, however, will depend on the price of iron ore inthe international market vis-à-vis domestic market. Since the production of iron ore has crossed 30MMT per annum, aquestion that arises is whether it is time to review that Statespecific restrictions in Karnataka on sale of iron ore so thatsuch State specific restrictions do not work to the disadvantageof either’ the producer or the manufacturer or both. This ismore so in the changed situation, when the raw materialrequirement of steel and allied industries is not limited by theproduction of iron ore. In these circumstances ideally thedemand/supply and the price of the ore are best left to bedetermined by the market forces.

29. New mining leases are now sold through e-auction to theend users and the premium to be paid by the successful biddersis limited to the State specific prices notified by IBM based onthe monthly average price realized in respect of a given gradeor iron ore sold in the State. The eligibility to participate inthe sale of the new mines and to participate in e-auction saleof iron ore in Karnataka State is limited to the steel and alliedindustries, the end users. It has been stated by the Applicantthat this situation gives scope to the end user industry tomanipulate the sale price of ore which in turn will impact thepremium amount to be paid in respect of iron ore producedfrom the captive mines purchased by them. The sale price dataform steel mint in respect of Fe Fines and price at ex-minesfurnished by FIMI indicates that the IBM published iron oreprices between January, 2018 and May, 2019 have gonedown in Karnataka by (-) 18.7% while during the same periodthe IBM published prices in the States of Odisha andChhattisgarh have gone down by only (-) 2, 7% and (-) 7,7%respectively. A copy of the statement showing the ex-minesprice for 60% Fe Fines for the period January, 2018 to May,2019 is enclosed as ANNEXURE R-9 to this Report. It hasbeen that the difference in sale price is the result of limitingthe participation in e-auction to the end users who even resortto importing iron ore at higher landed cost though the sameis available in the State. In these circumstances the possibilityof manipulation of iron ore prices because of exclusivity givento the steel industry in purchase of iron ore from the mininglessees needs to be addressed.”

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27. In its Report No. 16/2020 dated 29.06.2020, CEC had madethe following pertinent observations:

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“10…..this Hon’ble Court had no intention of imposing apermanent ban on export of iron ore or pellets from the districtof Bellary, Chitradurga and Tumkur in Karnataka. Furtherban on export of iron ore and pellets has been ordered by theHon’ble Court solely in the context of ban on mining operationsin the three districts and as an interim measure. The re-opening of the Category “A” and Category “B” mines hastaken place in a phased manner after fulfilment of conditionsrelating to implementation of the R&R Plans and complianceof annual production limits fixed in respect of each mininglease based on the scientific principles on availability ofreserve, availability of the dump area and the transportinfrastructure available for evacuation of the iron ore fromthe mines.

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11. Pursuant to the implementation of the R&R Plans and thescientific fixation of the production limits in respect of eachof the operating mining lease, there ha been substantialimprovement in the environmental parameters in the threedistricts of Bellary, Chitradurga and Tumkur. The oppositionEby the Karnataka Iron and Steel Manufacturers Association(KISMA) to export of iron ore and pellets are based mainlyon commercial considerations and are not directly related toenvironmental issued concerning mining. The annualproduction levels have crossed 25 MMT which limit was earliersuggested by the CEC in its Report dated 2.4.2014 in IA No.F205 and IA No. 206 of 2014 filed by KIOCL for lifting banon export of iron ore and pellets. Currently there is norestriction on grant of new mining lease in Karnataka.

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12. The recommendation made by the CEC in its Report No.19 of 2020 dated 18.07.2019 and Report No. 20 of 2019 dated18.07.2019 for lifting the ban imposed on export of iron orefines and pellets respectively have been made afterconsidering the availability of the iron ore on a sustainablebasis and the general policy of the Government of India onthe subject. In the circumstances, CEC is of the considered G

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view that orders specific to the three districts in the State ofKarnataka banning export of iron ore and pellets issued byHon’ble Court in the context of the total ban on mining in thethree districts ordered by this Hon’ble Court now requires tobe reviewed. The method of sale and price fixation of ironore are best left to be determined by the market forces as anyrestriction on sale including export will only benefit one partyat the cost of the other. Artificial suppression of the iron oreprices will also adversely impact the revenues of the StateGovernment. The recommendation of the CEC in its ReportNo. 19 dated 18.7.2019 on export of iron ore is restricted toiron ore fines which remains unsold/not purchased by the userindustry and lays down the guidelines/method of sale. Thereis in built provision in the condition of sale suggested by theCEC to overcome the scope of manipulation of prices. It maybe stated here that this Hon’ble Court in its order dated13.04.2012 and Judgment dated 18.04.2013 has stated thatthe exports outside the country should be permissible only inrespect of the material which the steel plants and associatedindustries are not willing to purchase on or above the averageprice realized by the Monitoring Committee for thecorresponding grades of fines/lumps.”

28. The Ministry of Steel, Union of India has supported theapplications moved by the interveners and submitted that the miningscenario has improved considerably since the year 2018 and in thatbackground, the Court may consider treating the mines situated in theState of Karnataka equal to those situated in the rest of the countrysince that would permit inter-state trade of iron ore mined in the State ofKarnataka, which is presently prohibited. The Ministry of Mines hasalso given its no objection to export of iron ore to other countries interms of the prevalent policy of the Government of India.

29. We are in broad agreement with the stand taken by the Ministryof Steel, Union of India and Ministry of Mines that it is necessary tocreate a level playing field for the mines situated in the districts of Bellary,Chitradurga and Tumkur with others situated in the rest of the country.As the CEC has indicated, the demand/supply and price of iron ore arebest left to be determined by the market forces. This Court is of the AB

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Aopinion that the time has come to review the system that was put inplace over a decade ago, on halting the unchecked excavation of ironore in the three prime Districts in the State of Karnataka. Ever sincethen, e-auction has been the only mode available for disposal of theexcavated iron ore. The said arrangement has worked out satisfactorilyso far. The situation that was prevalent in the region prior to the yearB2011, has now changed for the better. Having regard to the coursecorrection that has taken place, the regeneration post the ruinous damagecaused to the environment and the various steps taken by the Government,we are of the opinion that the order passed on 23[rd] September, 2011deserves to be relaxed. Additionally, it is a matter of record thatCconsecutive e-auctions conducted by the Monitoring Committee havebeen receiving a poor response and sale of iron ore even at the reserveprice is dismally low. Looking at the overall change in the outlook, therestrictions placed on the manner of conducting the sale of iron ore andfixation of the sale price need to be removed.

D30. Keeping in mind all the aforesaid factors, we are inclined tofavourably consider the prayer made by the applicants and grant thempermission to sell the already excavated iron ore stock-pile at variousmines and stock yards located in the Districts of Bellary, Tumkur andChitradurga in the State of Karnataka, without having to resort to theprocess of e-auction. Permission is granted to the applicants to enterEinto direct contracts to lift the excavated iron ore through inter Statesales. We also grant permission to the applicants to export the iron oreand pellets manufactured from the iron ore produced from the minessituated in the State of Karnataka, to countries abroad, as is being donein the rest of the country, but strictly in terms of the extant policy of theFGovernment of India.

31. With the above order, all the applications listed in paragraph12 stand allowed to the extent indicated above.

32. With respect to the submissions of the parties in relation to thelifting of the ceiling limit for production of iron ore for mining leases inGthe Districts of Bellary, Chitradurga and Tumkur, we are of the consideredopinion that it would be expedient to obtain an opinion from the OversightAuthority appointed by this Court vide order dated 21[st] April, 2022 aboutthe same before deciding the said issue. We request the OversightAuthority to take inputs from the stakeholders, including the CEC and H

SAMAJ PARIVARTANA SAMUDAYA AND ORS. v. STATE OFKARNATAKA AND ORS.

the Monitoring Committee, and to send his opinion to this Court preferablywithin a period of 4 weeks.

33. List for hearing on the said issue in the second week of July2022.

Nidhi Jain

Applications disposed of.

(Assisted by : Shashwat Jain, LCRA)

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