W.P.(C)/2025/2012 of S.N.MOHANTY AND ANR Vs UNION OF INDIA AND ORS

THE HIGH COURT OF DELHI AT NEW DELHI

Judgment delivered on: 01.08.2012

+W.P. (C) 2025/2012

M/S S.N. MOHANTY & ANOTHER

… Petitioners

Versus

UNION OF INDIA & OTHERS

… Respondents

Advocates who appeared in this case:For the Petitioners: Mr Parag Tripathi, Sr Advocate with Mr R.M. Patnaik,Mr Anand Varma and Mr Anuj BhandariFor the Respondents 1-3: Mr Sachin Dutta

AND

WP (C) 1430/2012

FEDERATION OF INDIAN MINERAL INDUSTRIES … Petitioner

Versus

UNION OF INDIA & OTHERS

… Respondents

Advocates who appeared in this case:For the Petitioners: Mr Parag Tripathi, Sr Advocate with Mr R.M. Patnaik,Mr Anand Varma and Mr Anuj BhandariFor the Respondents 1-3: Mr S.C. Sharma

CORAM:-HON’BLE MR JUSTICE BADAR DURREZ AHMEDHON’BLE MR JUSTICE SIDDHARTH MRIDUL

JUDGMENT

BADAR DURREZ AHMED, J

1.These writ petitions raise common issues and are, therefore,being dealt with together. We shall, however, be referring to the facts ofWP(C) No.2025/2012 (M/s S.N. Mohanty and Another v. Union of Indiaand Another) for the sake of convenience.Furthermore, we shall beconsidering the facts insofar as the petitioner No.1 in that writ petition,namely, M/s S.N. Mohanty, is concerned.

2.The prayers made are, inter alia, as under:-

"(a)Declare that the notification dated 4[th]April2011 shall not be applicable to mining projects /units which already possess valid and subsistingEnvironmental Clearances (EC);2011 shall not be applicable to mining projects /units which already possess valid and subsistingEnvironmental Clearances (EC);

(b)In the alternative to prayer (a), issue anappropriate writ order quashing the NotificationSO No.695(E) dated 4[th]April, 2011 issued bytheMinistry ofEnvironmentandForests,Government of India insofar that it seeks tosubstitute Column 5 of Item 1(a) of NotificationSO No.533(3) dated 14[th]September, 2006.”appropriate writ order quashing the NotificationSO No.695(E) dated 4[th]April, 2011 issued bytheMinistry ofEnvironmentandForests,Government of India insofar that it seeks tosubstitute Column 5 of Item 1(a) of NotificationSO No.533(3) dated 14[th]September, 2006.”

3.As can be seen from the prayers indicated above, thepetitioners essentially seek declaration that the notification dated04.04.2011 is not applicable to mining projects / units, which alreadypossess valid and subsisting environmental clearances. It is only in the

WP(C) Nos.2025/12 & 1430/12

alternative to this, that prayer has been made for issuance of anappropriate writ or order quashing the said notification dated 04.04.2011issued by the Ministry of Environment and Forests, Government of Indiato the extent it seeks to substitute Column No.5 of Item No.1(a) of theNotification dated 14.09.2006.

4.Before we embark upon discussion of the rival contentionsof the parties, it would be appropriate to briefly refer to the relevantprovisions of the said two notifications.The notification dated14.09.2006 (hereinafter referred to as 'the Notification of 2006') wasissued by the Ministry of Environment and Forests under Sections 3(1)and 3(2)(v) of the Environment (Protection) Act, 1986 read with Rule5(3)(d) of the Environment (Protection) Rules, 1986 and was insupersession of the earlier Notification of 27.01.1994. By virtue of theNotification of 2006, the Central Government directed that on and fromthe date of the publication of the said notification, the requiredconstructionofnewprojectsoractivitiesortheexpansionormodernisation of the existing projects or activities listed in the Scheduleto the said Notification entailing capacity addition with change in processand / or technology can be undertaken in any part of India only after theprior environmental clearances from the Central Government or, as thecase may be, by the State Level Environment Impact AssessmentAuthority duly constituted by the Central Government under Section 3(3)of the said Act, in accordance with the procedures specified in thenotification. It is important to note that this notification was in respect ofnew projects or activities or the expansion or modernisation of theexisting projects or activities listed in the Schedule to the Notificationwhich entailed capacity addition with change in process and / ortechnology.

5.We now move on to paragraph 2 of the Notification of 2006which reads as under:-which reads as under:-

“2.RequirementsofpriorEnvironmentalClearance (EC):- The flowing projects or activities shallrequire prior environmental clearance from the concernedregulatory authority, which shall hereinafter referred tobe as the Central Government in the Ministry ofEnvironment and Forests for matters falling underCategory ‘A’ in the Schedule and at State level the StateEnvironment Impact Assessment Authority (SEIAA) formatters falling under Category ‘B’ in the said Schedule,before any construction work, or preparation of land bythe project management except for securing the land, isstarted on the project or activity:

(i)All new projects or activities listed in theSchedule to this notification;Schedule to this notification;(ii)Expansionandmodernizationofexistingprojects or activities listed in the Schedule tothis notification with addition of capacitybeyond the limits specified for the concernedprojects or activities listed in the Schedule tothis notification with addition of capacitybeyond the limits specified for the concerned

sector, that is, projects or activities whichcrossthethresholdlimitsgivenintheSchedule, after expansion or modernization;(iii)Any change in product – mix in an existingmanufacturingunitincludedinSchedulebeyond the specified range.”

Paragraph 7(1) is also relevant and the same reads as under:

“7.StagesinthePriorEnvironmentalClearance (EC) Process for New Projects:-

7(i)The environmental clearance process for newprojects will comprise of maximum of four stages, allof which may not apply to particular cases as set forthbelow in this notification. These four stages in sequentialorder are:-

Stage (1) Screening (Only for Category ‘B’ projects andactivities)Stage (1) Screening (Only for Category ‘B’ projects andactivities)

Stage (2) ScopingStage (2) Scoping

Stage (3) Public ConsultationStage (3) Public Consultation

Stage (4) Appraisal”Stage (4) Appraisal”

We now move on to paragraph 9 of the said Notification of

2006 which is with regard to the validity of the Environmental Clearance

(EC). The same reads as under:-

“9.Validity of Environmental Clearance (EC):The “Validity of Environmental Clearance” is meant theperiod from which prior environmental clearance isgranted by the regulatory authority, or may be presumedby the applicant to have been granted under subparagraph (iv) of paragraph 7 above, to the start ofproduction operations by the project or activity, orcompletion of all construction operations in case ofconstruction projects (item 8 of the Schedule), to whichthe application for prior environmental clearance refers.

The prior environmental clearance granted for projector activity shall be valid for period of ten years in thecase of River Valley projects [item 1(c) of the Schedule],project life as estimated by Expert Appraisal Committeeor State Level Expert Appraisal Committee subject to amaximum of thirty years for mining projects and fiveyears in the case of all other projects and activities.However, in the case of Area Development projects andTownships [item 8(b)], the validity period shall belimitedonlytosuchactivitiesasmaybetheresponsibility of the applicant as developer.Thisperiod of validity may be extended by the regulatoryauthority concerned by maximum period of five yearsprovided an application is made to the regulatoryauthority by the applicant within the validity period,together with an updated Form 1, and SupplementaryForm 1A, for Construction projects or activities (item 8of the Schedule). In this regard the regulatory authoritymay also consult the Expert Appraisal Committee orState Level Expert Appraisal Committee as the case maybe.”

Reading the above provisions of the notification, it becomes clear that therequirement of an EC is prescribed only in respect of the followingprojects or activities:-

1)New Projects or activities listed in the Scheduleto the Notification;to the Notification;

2)Expansion and modernisation of the existingprojects or activities listed in the Schedule to theNotification with addition of capacity beyond thelimits specified for the concerned sector, i.e.,projects or activities which cross the thresholdprojects or activities listed in the Schedule to theNotification with addition of capacity beyond thelimits specified for the concerned sector, i.e.,projects or activities which cross the threshold

limits given in the Schedule, after expansion ormodernization;modernization;

3)Any change in product – mix in an existingmanufacturing unit included in the Schedulebeyond the specified range.manufacturing unit included in the Schedulebeyond the specified range.

7.It is also clear that prior environmental clearance granted for aproject or activity is to be valid for period of 10 years in the case ofriver valley projects, and, insofar as mining projects are concerned, thevalidity of the EC is for the project life as estimated by the ExpertAppraisal Committee or the State level Expert Appraisal Committee,subject to maximum of 30 years.Insofar as the other projects areconcerned, the validity of the EC is five years.

8.In the present case, we are concerned with mining projectsand, therefore, the validity of the EC would be for the entire project life,but subject to maximum of 30 years. In other words, if the project lifeextends beyond 30 years, the EC would be available only for 30 years andafter that fresh EC would be required.

9.We are now required to consider the Schedule to the saidNotification of 2006 which provides list of projects or activities

requiring prior EC.We are concerned only with Item No.1(a) of theSchedule which reads as under:-

“SCHEDULE(See paragraph 2 and 7)

LIST OF PROJECTS OR ACTIVITIES REQUIRING PRIORENVIRONMENTAL CLEARANCE

In Column (5) containing the conditions, it is mentioned that GeneralConditions shall apply. It is followed by note which does not concernthe present controversy.

10.Now, by virtue of the Notification dated 04.04.2011, severalamendments were introduced in the said Notification of 2006. In otherwords, the Notification dated 04.04.2011 (hereinafter referred to as 'theNotification of 2011') was an amending notification seeking to amend

certain parts of the earlier Notification of 2006.The amendment withwhich we are concerned is the one that has been brought about in Column

(5) of Item 1(a) of the Schedule.The entire contents of the earlier

Column (5) are to be substituted by the following:

“General condition shall apply.Note

(i)Prior environmental clearance is as well requiredat the stage of renewal of mine lease for whichat the stage of renewal of mine lease for which

appliance should be made up to one year prior todate of renewal.date of renewal.

(ii)Mineral prospecting is exempted.xxxxxxxxxxxx”xxxxxxxxxxxx”

(Underlining added)

11.It is apparent that by way of the Notification of 2011, anamendment has been introduced in the Notification of 2006, whereby it isnow requirement that even at the stage of renewal of mining lease andnot just at the stage of grant of initial lease, prior environmental clearanceis necessary.

12.Mr Parag Tripathi, the learned senior counsel, appearing forthe petitioners, submitted that the prayers made are fashioned in such away that the grant of the declaration sought would remove the grievanceof the petitioners as well as save the Notification. It is for this reason thatthe petitioners seek declaration to the effect that the Notification of

04.04.2011 does not apply to mining projects / units which alreadypossess valid and subsisting environmental clearances (ECs). Accordingto Mr Parag Tripathi, if such declaration is granted, there would be noneed for the petitioners to seek the quashing of the Notification of 2011 tothe extent it seeks to substitute the contents of the Column No.5 of ItemNo.1(a) of the Schedule to the Notification of 2006.Mr Tripathisubmitted that there is no logic in the requirement of an EnvironmentalClearance at the renewal stage in cases of persons, like the petitioners,who were working the mines and already had valid and subsisting ECs.He further submitted that the EC itself imposed stringent conditionswhich could not be deviated from. It was pointed out that, for example,the EC given to M/s S.N. Mohanty on 15.01.2007 comprises of severalSpecific Conditions as well as General Conditions.

13.Before we examine the contentions of the EC granted to M/sS.N. Mohanty, it may be relevant to point out at this stage that M/s S.N.Mohanty had been working the mines under mining lease granted to iton 02.04.1982 for period of 30 years. At that point of time, there wasno requirement of obtaining an EC. It is subsequent to the enactment ofthe said Environment Act and the decision of the Supreme Court inM.C.Mehta v. Union of India and Others: 2004 (12) SCC 118 that the

WP(C) Nos.2025/12 & 1430/12

petitioner No.1 (M/s S.N. Mohanty) thought it advisable to apply for anEC even prior to the due date of renewal of the mining lease. It is in thisbackdrop that, before the initial 30 years period of the mining leaseexpired, that is, much prior to 02.04.2012, in the year 2006-07 itself, thesaid M/s S.N. Mohanty applied for an EC and the same was granted on15.01.2007. As we have seen above, the said EC is for the project life,subject to maximum of 30 years. The petitioner No.1's mining leasewas, as mentioned above, initially for period of 30 years and it wasrenewable for another two periods of 20 years each. The first renewal felldue, as mentioned above, on 02.04.2012. Thus, it is clear that even priorto the renewal falling due on 02.04.2012, the said M/s S.N. Mohanty hadobtained the EC on 15.01.2007.

14.The EC granted to the said M/s S.N. Mohanty indicated inparagraph 2 that the Ministry of Environment and Forests had examinedthe application in accordance with Section 12 of the EIA Notification,2006 read with para 2.1 1(i) of the Circular No.J-1-11013/41/2006-IA.II(I) dated 13.0.2006 (sic) and accorded the EC to the Rakela Iron OreMining Project of M/s S.N. Mohanty for an annual production capacity of3,00,000 tonnes (0.3 million tonnes) of iron ore by opencast semimechanized method involving mining lease area of 18.31 ha, subject to

implementation of the specific and general conditions and environmentalsafeguards prescribed in the said EC.The Specific Conditions requirecompliance with detailed instructions with regard to, inter alia, regularmonitoring of ground water level, plantations, dimensions of retainingwalls, forestry clearance, catch drains, top soil, rain water harvesting,vehicular emissions, blasting operations, manner in which drills are to beoperated, sewage treatment plant, etc. Apart from this, compliance is alsorequired with the General Conditions. One of the General Conditions isthat there should be no change in the mining technology and scope ofwork should be made without prior approval of the Ministry ofEnvironment and Forests.Another condition is that no change in thecalendar plan, including the excavation quantum of mineral iron ore andwaste should be made.Measures should be taken for control of noiselevels below 85 dBA in the work environment. It is also required thatindustrial waste water should be properly collected and treated so as toconform to the prescribed standards.There are several other suchGeneral Conditions which require compliance on the part of the person towhom the mining lease has been given.

15.Importantly, paragraph 3 of the EC stipulates that the Ministryor any other competent authority may alter / modify the above Special or

General Conditions or stipulate any further conditions in the interests ofenvironment protection.Paragraph 4 of the EC further stipulates thatfailure to comply with any of the conditions mentioned above may resultin withdrawal of the clearance and attract action under the Environment(Protection) Act, 1986.

16.It was, therefore, contended on behalf of the petitioners thatthe conditions indicated in the EC fall in very broad spectrum and giveamplepowerstotherespondentstoregulatetheenvironmentalconditions. In this backdrop, Mr Tripathi submitted that the amendingNotification of 2011, which introduced stipulation requiring anenvironmental clearance at the renewal stage even in respect of those whoalready had an environmental clearance, would be an arbitrary andonerous condition.He submitted that the preparation leading upto theapplication of an EC required enormous financial expenditure whichcould run into more than crore of rupees and which also entailed timeconsuming process which would, in the minimum, be of 210 days.Itwas, therefore, submitted by Mr Tripathi that the Notification of04.04.2011 should be read in such way that it applied only to thosemining operations which did not already have an EC at the time theysought renewal of the mining lease. The notification ought not to apply

to those persons who already have valid and subsisting EC which wouldcover the entire period of renewal that they were seeking. In the facts ofM/s S.N. Mohanty, the EC was granted on 15.01.2007 and was valid for30 years, whereas the renewal that is sought with effect from 02.04.2011,would be for 20 years and, as such, the EC, which had already been givento the petitioner No.1 (M/s S.N. Mohanty), would cover the entire periodof renewal also.It was, therefore, contended that apart from beingarbitrary, it would be illogical to require person, such as M/s S.N.Mohanty to once again apply for an EC when it already possessed validand subsisting EC.

17.Mr Tripathi reiterated that it was not their intention to seek thequashing of the notification or any part thereof, but, to seek declaration,as indicated above, which would save the notification as also remove thegrievance of the petitioners.

Mr Tripathi reiterated that it was not their intention to seek the

18.The learned counsel appearing on behalf of the respondentssubmitted that the amendment, which has been introduced by virtue of theNotification of 2011, was with view to conform to the directions andobservations of the Supreme Court in the case of M.C. Mehta (supra).Mr Sachin Dutta, appearing for the respondents in one of the petitions,

submitted that they have been candid enough to state that in their earliernotification of 2006, they had not properly brought out the intendment ofthe Supreme Court in M.C. Mehta (supra) inasmuch as there was noprovision relating to the renewal of mining lease. He submitted thatthere is specific direction given in M.C. Mehta (supra) in paragraph 76thereof to the extent that it is settled law that the grant of renewal is afresh grant and must be consistent with law.Thus, according to MrDutta, the very same conditions which necessarily apply at the stage ofgrant of mining lease, would also apply at the stage of renewal of thesaid lease.One of the conditions necessary for the grant of freshmining lease is that there must be prior EC. So, if the same conditionswere to apply, at the time of renewal of the lease, it would mean that aprior EC would also be necessary at the time of the renewal of the leaseand, it is because of this understanding of the Supreme Court decision inM.C. Mehta (supra), which has dawned upon the respondents, albeit aftersome delay, they have brought out the said amending Notification of2011 so that renewals are also brought within the ambit of theNotification of 2006. In sum and substance, Mr Dutta as also the othercounsel, appearing on behalf of the respondents, submitted that they were

simply implementing their understanding of the Supreme Court decisionin M.C. Mehta (supra) insofar as renewals were concerned.

19.We have already seen that the Notification of 2006 did notspeak of renewals.But, it must be noted that the said Notification of2006 was clearly in respect of (1) new projects or activities listed in theSchedule to the said Notification; (2) expansion and modernization of theexisting projects or activities, etc.; and (3) any change in the productmixed in an existing manufacturing unit, included in the Schedule to theNotification beyond the specified range. In other words, the scope of theNotification of 2006 was essentially to cover all the new projects,expansions, modernizations, change in technology, change in capacity,change in product mix, etc. This meant that it was targeted in respect ofany change.In other words, the requirement of an EC was necessarywhenever there was any change.Be it by setting up new projects orexpanding an existing one or changing the technology of the existingproject or changing the product mix of an existing manufacturing unit. Ifwe read the Notification of 2006 strictly, it did not apply to situationwhere there was no change. We realize that the notification of 2006 wasintroduced after the decision of the Supreme Court in M.C. Mehta(supra). Therefore, it would be necessary for us to examine the scope

and width of the observations and directions given in M.C. Mehta(supra).

20.In the context of the applicability of the earlier Notification of27.01.1994, which was superseded by the Notification of 2006, themining lease holders had urged before the Supreme Court that the leasesin question do not relate to expansion or modernization of any activity aspostulated by the said notification. They further contended that the saidNotification of 1994 applied only to new project which meant that itwould apply to mining leases granted after the issuance of thenotification. It was argued on behalf of the lease holders that the renewalof the existing mining lease was neither an expansion nor modernizationnor was it new project and, therefore, the Notification of 1994 wouldhave no applicability at the time of consideration of the renewal of thelease. The contention, therefore, before the Supreme Court was that sincea renewal did not fall within the scope of expansion or modernization norwas it new project, therefore, the Notification of 1994 would not applyto mining leases even at the stage of renewal.Consequently, it wasargued before the Supreme Court that no EC would be necessary in suchcases even at the time of renewal. It is in this backdrop that the Supreme

Court, negativing the contentions raised on behalf of the mining leaseholders, held as under:-

“75.Be that as it may and reverting to legalposition in Ambica Quarry Works v. State of Gujarat andOrs.: 1987 (1) SCC 213, though case under Forest(Conservation) Act, 1980 rejecting the contention thatapproval at the stage of renewal was not necessary andalso the plea that since the leaseholders had invested sumof money in mining operation, it was the duty of theauthorities to renew the lease, it was held that havingregard to the awareness that deforestation and ecologicalimbalances as result of deforestation have become socialmenaces and the same should be prevented and that theconcept that power coupled with the duty enjoined uponthe respondents to renew the lease stood eroded by themandate of the FC Act. It was held that The primary dutywas to the community and that duty took precedence. Insuch cases, the obligation to the society must predominateover the obligation to the individuals. It would be appositeto reproduce what was said by Justice Mukherjee (as hethen was) in paras 14 and 15 which read thus:

"14.Here the case of the appellants is thatthey have invested large sums of money inmining operations. therefore, it was the duty ofthe authorities that the power of grantingpermission should have been so exercised thatthe appellants had the full benefits of theirinvestments. It was emphasized that none of theappellants, had committed any breach of theterms of grant (SIC)or were there any otherfactors disentitling them to such renewal. Whilethere was power to grant renewal and in thesecases have were clauses permitting renewals, itmight have cast duty to grant such renewal inthefactsandcircumstancesofthecasesspecially in view of the investments made bythe appellants in the areas covered by the

quarryingleases,butrenewalscannotbeclaimed as matter of right for the followingreasons.

15.The rules dealt with situation prior tothe coming into operation of 1980 Act. '1980Act' was an Act in recognition of the awarenessthat deforestation and ecological imbalances asa result of deforestation have become socialmenacesandfurtherdeforestationandecological imbalances should be prevented.That was the primary purpose writ large in theAct of 1980. therefore the concept that powercoupled with the duty enjoined upon therespondents to renew the lease stands eroded bythe mandate of the legislation as manifest in1980. Act in the facts and circumstances ofthese cases. The primary duty was to thecommunity and that duty took precedence, inour opinion, in these cases. The obligation tothesocietymustpredominateovertheobligation to the individuals."

76.In Rural Litigation and Entitlement Kendra v.State of U.P.: 1989 Supp (1) SCC 504, agreeing withviews expressed in Ambica Quarry Works v. State ofGujarat and Ors.: 1987 (1) SCC 213, it was held that theFC Act applies to renewals as well and even if there was aprovision for renewal in the lease agreement on exercise oflessee's option, the requirement of the Act had to besatisfied before such renewal could be granted, in State ofM.P. and Ors. v. Krishnadas Tikaram: 1995 Supp (1) SCC587, these two decisions were relied upon and it was heldthat even the renewal of lease cannot be granted withoutthe prior concurrence of the Central Government. It issettled law that the grant of renewal is fresh grant andmust be consistent with law.

77.We are unable to accept the contention thatthe notification dated 27[th]January, 1994 would not apply

to leases which come up for consideration for renewal afterissue of the notification. The notification mandates that themining operation shall not be undertaken in any part ofIndia unless environmental clearance by the CentralGovernment has been accorded.The clearance under thenotification is valid for period of five years. In none ofthe leases the requirement of notification was compliedwith either at the stage of initial grant of the mining leaseor at the stage of renewal. Some of the leases were freshleases granted after issue of the notification. Some werecases of renewal. No mining operation can commencewithout obtaining environmental impact assessment interms of the notification.”

(Underlining added)

21.Thus, it is apparent from the above extract that the decision ofthe Supreme Court was that since the renewal of lease was like freshgrant, it must be consistent with law. It did not matter if the initial grantwas prior to the Notification of 1994. Even if the Notification of 1994was to be prospective, it would certainly apply to renewals subsequent to1994.Thus, prior EC would be necessary whenever renewal wassought of the initial grant. All that the Supreme Court meant was thatafter 1994, there could be no fresh grant or renewal of an existing leaseunless and until there was prior EC.

22.In our view, it does not mean that if person has valid andsubsisting EC at the point of time he seeks renewal of the mining lease,he would still be required to obtain another EC prior to the grant of

renewal by the respondents.That, in our view, is not the intent andpurport of the Supreme Court directions in M.C. Mehta (supra).Theclear direction of the Supreme Court was that there ought not to be anymining activity without an EC. If the lease holder already has valid andsubsisting EC, there cannot be requirement that during the validity andsubsistence of the said EC, he would be asked to get another EC at thepoint he seeks renewal.We agree with the learned counsel for thepetitioners that if the intent of the respondents was to comply strictly withthe directions and observations of the Supreme Court in M.C. Mehta(supra), the same would be fully realized by reading the amendmentintroduced to Colum No.5 of the Schedule 1(a) of the Notification of2006 by virtue of the Notification of 2011 in such way that it would notapply to mining projects / units which already possess valid andsubsisting ECs. It is declared accordingly. This being the position, thereis no need for us to examine the alternative prayer of the petitioners. Thewrit petitions are allowed as above. There shall be no order as to costs.

BADAR DURREZ AHMED, J

August 01, 2012dutt

SIDDHARTH MRIDUL, J