Karnataka Mining : Supreme Court Allows NMDC To Reclaim Half Of Contribution Made To KMERC From 2019

In the PIL regarding iron ore mining in certain districts of Karnataka, the Supreme Court has passed an interim order allowing central government undertaking National Mineral Development Corporation (NMDC) to reclaim half of the contribution made to Karnataka Mining Environment Restoration Corporation (KMERC) from 2019.KMERC is a Special Purpose Vehicle set up by the Karnataka Government as per the orders of the Supreme Court for taking steps for mitigating the environmental damage due to mining. NMDC, which is carrying out iron ore mining in Karnataka, has been paying 20% of the sale value of the ores as contribution to KMERC as per Court orders. The Court allowed its plea to reduce the contribution as 10%.Also, the Court passed an interim order that the Special Purpose Vehicle shall remit back to NMDC Ltd, the collection to the extent of 10% of the sale value which was made from NMDC from 2019.The court also added that NMDC (the contribution towards the SPV up till now of which was 20% of the sale value of the two mines owned by it), shall now continue to pay at the rate of only 10%, at par with other Category 'A' mining leases. The Central Empowered Committee (CEC) had submitted a report on 03.02.2012, making several recommendations- one of which was to categorise the mines into three categories based on the extent of encroachment in respect of the mining pits and overburden dumps, determined in terms of percentage qua the total lease area. Three categories of the mines were suggested as ‘A’, ‘B’ and ‘CThe bench of Justices K. M. Joseph, Sanjiv Khanna and M. M. Sundresh was hearing the matter.The bench ordered as follows- "After we have heard the learned counsel for the parties, we are of the view that the applicant (NMDC) has made out a case for the grant of partial relief. At this stage, we bear in mind that Mr. Bhushan (for the petitioner) submitted that the applicant became compliant in April, 2018. No doubt the applicant is claiming remit of 10% from 2013, we feel that the interest of justice would be subserved at this stage pending a final adjudication in the matter, if we direct the Karnataka Mining Environment Restoration Corporation (KMERC; the SPV) to remit amount at the rate of 10% out of the 20% which has been collected from the applicant from 2019 till 31.1.2023 and the amount shall be remitted within a period of two months from today, subject to further orders passed by this court pending adjudication on all issues. The applicant will continue to remit contribution at the rate of 10%"Orally remarking that it is "agonised" that the progress towards rehabilitation remains at the stage of the DPR (Detailed Project Report), the Court also ordered that an affidavit will be filed on behalf of the state of Karnataka on the steps taken and the reason why the Comprehensive Environment Plan for the Mining Impact Zone (CEPMIZ) has not progressed, detailing within what Timelines the progress will be achieved with regard to it.The Karnataka government had constituted the Special Purpose Vehicle known as Karnataka Mining Environment Restoration Corporation on June 13, 2014, following a direction by the apex court in a PIL filed by NGO Samaj Parivartan Samudaya. The Court later passed directions that mining companies should make contributions to the SPV. Last week, amicus curiae Senior Advocate Shyam Divan had suggested that the 10% contribution to SPV can be done away with.Below is the exchange from yesterday's hearing :Senior Advocate Mukul Rohatgi, for NMDC: "The order of the Supreme Court was clear that when it became 10, it would apply to all of category A. The CEC has recommended on 26.9.2022 again that please release 10% to NMDC. This 10% which I should get, which I have paid over the last 10 years or more, amounts to about 2400 crore. What is the reason to stop a government corporation from getting it? The state is opposing, the monitoring committee is opposing? The CEC has recommended twice, that it is the order of this court that all category A will get 10%. There is no reason why I should not be getting my money just because somebody is opposing. As a matter of practice, the CEC has been treated by the Supreme Court to be an extension of an arm of the Supreme Court in every case. In every case, the CEC has to give a report before the Supreme Court, whether it is putting wireless lines or whatever. It was a body created under the orders of the Supreme Court. There are hundreds and thousands of orders of this court where the Supreme Court has always relied upon the CEC report, except for a minor variation here or there. Not only CEC, I am category A, that is confirmed by the final judgment of this Court. If everybody in category A is getting 10, I should also. Whatever be the position, I am a government corporation, I am presently before the Supreme Court, I should get my money as soon as possible. We are suffering, we also need money, there is no reason why a central government PSU should be...

Karnataka Mining : Supreme Court Allows NMDC To Reclaim Half Of Contribution Made To KMERC From 2019

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