Supreme Court scraps mining leases of Jindals, Kalyani in Karnataka

In a setback to steel giants Jindal Vijayanagara Steel Ltd and Kalyani Steels, the Supreme Court has scrapped a Karnataka high court judgment of last year allowing them mining leases in the state. PD Dinakaran, the controversial former chief justice of the high court, headed the bench which granted the leases overlooking violation of forest laws.

Dinakaran, who has been shifted to the Sikkim high court after facing allegations of misconduct, has also been accused of delivering controversial orders. In this case, he had overruled an earlier judgment of a single-judge bench of DV Shylendra Kumar to grant the leases to the companies.

Justice Shylendra Kumar had asked the Karnataka government to put on hold all mining leases in forest areas as the provisions of the Karnataka Forest Act and Forest Conservation Act had been overlooked while according such permission.

However, Dinakaran scrapped that order, observing, “We must not overlook the basic aim to make India an industrialised nation.”
The Supreme Court, while quashing this judgment, has asked Karnataka to consider all applications afresh and recommend to the Union government within four months whether the parties are entitled to the leases or not.

The two compankies can now apply for fresh leases in accordance with the law. The appellants — MSPL and Sandur (India), two other mining companies - have also been asked to apply afresh.

The apex court bench of justices P Sathasivam and HL Dattu, however, refrained from making any comment on Dinakaran’s judgment and the role played by the Karnataka chief minister in granting leases to the two companies.

The mining dispute between the parties and the government relates to MSPL’s application in May, 2001, for grant of lease over an area of 298.5 hectares in Eddinpada area in Kumaraswamy range of the state. The area was previously held by Sandur. MSPL had sought relaxation of conditions under the mining rules. In October, 2002, Jindal also made an application seeking lease of the same area.

The Karnataka government had recommended to the Centre for grant of lease to MSPL and sought relaxation of mining rules. The Union government had returned the proposal asking the state to wait for an environmental study being carried out by the National Environmental Engineering Research Institute (NEERI).

Meanwhile, MSPL filed a law suit in the high court. While it was still pending, the Union government granted approval to Jindal and Kalyani in 2006. In August, 2008, justice Shylendra Kumar allowed the writ petitions filed by MSPL and Sandur as well as others and quashed the lease grant. Justice Dinakaran’s bench reversed it.