Non-Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

Interlocutory Application No.29984 of 2021

In
Special Leave Petition (Civil) No. 10587 of 2019

Bajri Lease LoI Holders Welfare Society

Through its President .... Petitioner(s)
Versus

The State of Rajasthan & Ors. ….Respondent(s)

WITH

Special Leave Petition (Civil) No. 10670 of 2019

JUDGMENT

L. NAGESWARA RAO, J.

1. Realising the damage caused to lakes, riverbeds and

groundwater on account of quarry/ mining leases, the Ministry

of Environment, Forest and Climate Change (“MoEFCC”)

constituted a Core Group by its order dated 24.03.2009, to

look into the following points:

“(i) To consider the environmental aspects of mining

of minor minerals (quarrying as well as riverbed
mining) for their integration into the mining process.

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 (ii) Specific safeguard measures required to minimise
the likely adverse impacts of mining on environment
with specific reference to impact on water bodies as
well as groundwater so as to ensure sustainable
mining.

(iii) To evolve model guidelines so as to address

mining as well as environmental concerns in a
balanced manner for their adoption and
implementation by all the mineral-producing States. ”

2. A report was submitted by the Core Group on the basis

of which several recommendations were made by the MoEFCC

relating to sand mining in March, 2010. Later, Model

Guidelines on “Environmental Aspects of Quarrying of Minor

Minerals” were formulated in 2010 for sustainable mining of

minor minerals, along with draft rules titled Minor Minerals

Conservation and Development Rules, 2010. In Deepak

Kumar v. State of Haryana1, this Court directed the State

Governments and Union Territories to implement the

recommendations made by the MoEFCC in its report of March,

2010 and the Model Guidelines framed by the Ministry of

Mines within a period of six weeks from the date of the

judgment. The State Governments and Union Territories were

also directed to frame necessary rules under Section 15 of the

Mines and Minerals (Development and Regulation) Act, 1957

(“MMDR Act”). The above directions were issued by this

1 (2012) 4 SCC 629

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Court after recording the deleterious effects of sand mining on

biodiversity, such as destabilization of the soil structure of

river banks and loss of habitat, to name a few.

3. Pursuant to the directions issued by this Court in

Deepak Kumar (supra), the Rajasthan Minor Mineral

Concession Rules, 1986 (“1986 Rules”) were amended by

notifications dated 23.05.2012, 19.06.2012 and 21.06.2012.

By the said notifications, mining leases for sand were to be

given by tender / auction for a period of five years. Letters of

Intent (“LoIs”) were to be issued to the eligible applicants by

the competent authority and the eligible applicants were

required to submit the requisite No Objection Certificates,

Environmental Clearance (“EC”) and approved mining plan. As

the grant of EC was likely to be delayed, the State of

Rajasthan incorporated a provision in the 1986 Rules by way

of the amendment dated 21.06.2012, permitting sand mining

through the then existing system of Royalty Collection

Contract and issue of Temporary Work Permit, till EC is

granted.

4. A total of 130 mining plots were identified for conduct of

auction for sand mining. Tenders were received for 105 plots.

LoIs were issued to each of the successful bidders with respect

to the105 plots, who were further directed to submit a mining

application and obtain EC under the notification dated

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14.09.2006 issued by the MoEFCC (“EIA Notification, 2006”)

and submit the same within a period of 12 months. Between

November, 2013 and March, 2016, 65 out of the 82 LoI holders

presented final Environment Management Plant (EMP) after

Environment Impact Assessment (EIA) study and public

hearing. The Expert Appraisal Committee (EAC) constituted

under the EIA Notification, 2006 by the MoEFCC recommended

grant of EC to these 65 LoI holders. As EC was not granted by

the MoEFCC to most of the LoI holders within a period of six

months, the State of Rajasthan sought for extension of time

for continuing the then existing system of sand mining by way

of Royalty Collection Contract. The High Court refused the

request made by the State Government by an order dated

21.10.2013. Aggrieved thereby, the State Government filed

SLP (C) No. 34134 of 2013 before this Court. This Court

passed an interim order dated 25.11.2013 permitting the 82

LoI holders, who had submitted their applications for obtaining

EC to the MoEFCC, to carry on mining operations in

accordance with the notification dated 21.06.2012 amending

the 1986 Rules. Temporary Work Permits were issued to 80 out

of the 82 LoI holders to carry on mining operations pursuant to

the said interim order. The interim order dated 25.11.2013

was extended by this Court on 24.02.2014 and 27.03.2014.

Ultimately, by an order dated 16.11.2017, this Court

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restrained all the 82 mining lease / quarry holders from

carrying on mining of sand and bajri, unless a scientific

replenishment study is completed and EC is granted by the

MoEFCC. This Court was concerned about the continuation of

mining without EC. The State Government stopped the mining

activities pursuant to the order passed by this Court on

16.11.2017.

5. Shortly after, a notification was issued by the State of

Rajasthan on 28.12.2017 with respect to Rule 51 of the

Rajasthan Minor Mineral Concession Rules, 2017 (“2017

Rules”), permitting grant of short-term permits for excavation

of sand in Khatedari lands only for Government-related works

or organisations aided by the Government. The 2017 Rules

were amended on 25.06.2018 by which Rule 17A was

inserted, enabling the Government to grant mining lease in

Khatedari lands to Khatedars.

6. On 28.02.2018, sub-rule (4) of Rule 5 of the 2017 Rules

was amended. By the said amendment, the time period of

one year for fulfilment of the conditions of the LoIs, including

execution and registration of mining lease, was extended to

13 months from the date of commencement of the 2017

Rules, failing which the rights of the applicants would stand

forfeited. According to the State Government, the LoIs of 74

members of the Bajri Lease LoI Holders Welfare Society had

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lapsed owing to non-fulfilment of conditions within the period

of 13 months. The remaining 8 LoI holders, who had been

issued EC and subsequently granted mining leases, could not

continue with mining operations without the requisite

replenishment study reports.

7. The Bajri Lease LoI Holders Welfare Society challenged

the vires of sub-rule (4) of Rule 5 of the 2017 Rules in the High

Court of Rajasthan. On 09.04.2019, the High Court dismissed

the writ petitions. Thereafter, the Petitioner-Society filed SLP

(C) No.10587 of 2019 assailing the judgment of the High

Court. Notice was issued in the matter and an interim order

was passed on 10.05.2019 restraining cancellation of the LoIs

of the members of the Petitioner-Society. On 19.02.2020, this

Court, taking note of the scale of the issue of illegal sand

mining in the State of Rajasthan, directed the Central

Empowered Committee (“CEC”) to submit a report on the

problems relating to sand mining that are faced by traders,

consumers, transporters, the State and other stakeholders and

also on measures to stop illegal sand mining.

8. The CEC submitted its report to this Court dated

23.12.2020, in which the following recommendations have

been made:

“A. All the Khatedari leases located within 5 kms from

the river bank as well as leases where violation of the

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lease conditions including misuse of e-ravannas are
detected are terminated forthwith and the State
Government shall not issue fresh Khatedari leases
except for Palaeo deposits in the District of Binaker
without the approval of this Hon’ble Court.

B. The State Government shall dispense with the

Excess Royalty Collection Contract system in respect
of any kind of sand mining leases forthwith and the
royalty shall be paid on line by the lessee to the State
Government and generate royalty paid e-ravanna
before transporting of sand from the mining site;

C. The MoEF&CC will issue EC in respect of all the

valid LoI holders recommended by the EAC in its
meeting held during 2014-2016 without insisting on
submission of scientific study report as a precondition
for grant of EC within a period of three months.
MoEF&CC shall also prescribe detailed methodology
in consultation with CMPDI for undertaking
replenishment study during the course of mining as
discussed in para 11 (iii) of this Report.

D. River sand mining in Rajasthan is permitted to be

conducted after obtaining all statutory clearances
and payment of dues and applicable taxes following
the procedure listed in para 11 (iii) of this report.

E. The MoEF&CC shall arrange for scrutiny of the DSR

prepared as provided in MoEF&CC Guidelines of 2016
and 2020 and the production figures approved in the

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DSR are scrupulously followed by the authorities
under the EP Act 1986 while issuing the EC.

F. The period of actual mining of sand under TWP

should be adjusted against the five-year lease period.

G. Government of Rajasthan will constitute an

Empowered Committee headed by the Chief
Secretary to consider and settle claims of excess
payments collected from the LoI holders during the
period of working under TWP. The Committee shall
examine each of the cases and take a decision in this
regard within a period of six months from the date of
orders. Monthly progress reports in this regard may
be sent to CEC.

H. The State Government will auction the sand

mining leases after proper ground demarcation and
after assessing the extractable sand resources as
given in the approved DSR and after obtaining no
objection certificates from all concerned authorities.
The sale of mining blocks objected to by any of the
government departments shall not be put up for
tender/auction.

I. State Government to review the amendments to

Rule 5(4) of RMMCR, 2017 so that it will not be an
impediment for execution of sand mining lease.

J. For brazen violation of this Hon’ble Court order

dated 16.11.2017 exemplary penalty of Rs.10 lakhs
per vehicle and Rs.5 lakhs per cu.m of sand seized
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 may be imposed as a deterrent. This will be in
addition to what has already been ordered/collected
by the State agencies as penalty/compensation.

K. State Government of Rajasthan is directed to

conduct drone survey in respect of all the remaining
Khatedari leases and complete the same within the
next four months to assess the irregularities if any
committed by them. A copy of this Report may also
be made available to CEC.”

9. The State of Rajasthan has filed Interlocutory Application

No. 29984 of 2021 requesting this Court to accept the

recommendations made by the CEC in respect of all points,

except recommendations ‘A’ and ‘J’. Recommendation ‘A’

relates to termination of Khatedari leases within 5 km of the

river bank and restriction on the State Government to grant

fresh Khatedari leases without the approval of this Court.

Recommendation ‘J’ pertains to exemplary penalty of Rs.10

lakh per vehicle and Rs.5 lakh per cubic metre of sand seized

for violation of the order passed by this Court on 16.11.2017.

10. The reasons given by the State of Rajasthan for its

objection to the recommendation made by the CEC for

cancellation of Khatedari leases is that mineral wealth lying in

agricultural land should also be utilized. The State

Government has brought to the notice of this Court that a

request was made to the MoEFCC to revisit the Enforcement &

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Monitoring Guidelines for Sand Mining, 2020 (“2020 Sand

Mining Guidelines”) regarding excavation of sand within the

periphery of 5 km from the river bed. In view of scanty rain

fall patterns in the State, the submission of the State is that

mining leases in agricultural fields should be permitted.

Insofar as additional penalty recommended by the CEC for the

illegal sand mining and transportation is concerned, the State

is of the opinion that the penalties recommended are

excessive and their recovery would be difficult.

11. Interlocutory Application No. 54981 of 2021 seeking

intervention has been filed on behalf of 10 Khatedars who

asserted that no illegal sand mining is being carried on by

them. It was argued on their behalf that these Khatedars

have been acting in accordance with the conditions of their

lease. It was contended that the CEC committed an error in

recommending cancellation of their mining leases. The said

Khatedars found fault with recommendation ‘C’ of the CEC in

favour of the LoI holders.

12. The CEC, in its report, has highlighted the delay in the

grant of EC by the MoEFCC to the LoI holders as the cause for

widening the gap in demand and supply of sand, which has

resulted in proliferation of illegal sand mining activities to

meet the shortfall in supply. The recommendation made by

the CEC is that the MoEFCC will issue EC in respect of all the

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valid LoI holders recommended by the EAC, within a period of

three months, without insisting on submission of the scientific

replenishment study report as a pre-condition for the grant of

EC, with the replenishment study due to be undertaken during

the course of mining.

13. In spite of the order passed by this Court on 16.11.2017

that no river sand shall be permitted unless a scientific

replenishment study is completed and EC is granted, 194

mining leases of Khatedari lands have been granted in the

State of Rajasthan, with most of these lands being in close

proximity of the river banks of the State. 114 Khatedari leases

are within a distance of 100 metres or less from the river bank

and only 23 Khatedari leases have been granted beyond a

distance of 5 km from the river bank. The CEC has stated in

its report that the agricultural lands do not have deposits of

quality sand suitable for construction, being a mixture of sand,

silt and clay. The Khatedars have been exploiting the

locational proximity to the river banks by excavating sand

from the river bed, instead of restricting the mining to their

leasehold areas, completely in violation of the mining plan.

The quantity of sand is in excess of the permissible limit which

is transported by being shown as having been mined in the

Khatedari lands. The CEC has commented upon the

involvement of sand mafia in the trade of sand illegally mined

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by the Khatedars as well as the involvement of authorities in

the State of Rajasthan. Therefore, the CEC has recommended

the cancellation of all Khatedari leases located within 5 km

from the river banks as well as those leases where violation of

lease conditions including misuse of e-ravannas are detected.

The CEC further recommended that no fresh Khatedari leases

shall be granted, except for Palaeo deposits, without the

approval of this Court.

14. Section 23C of the MMDR Act empowers the State

Governments to make rules for preventing illegal mining,

transportation and storage of minerals. This Court in Deepak

Kumar (supra) directed the State Governments / Union

Territories to formulate rules in accordance with the Model

Guidelines. Pursuant to the directions issued by this Court and

the National Green Tribunal (“NGT”), the Sustainable Sand

Mining Management Guidelines, 2016 were issued (“2016

Sand Mining Guidelines”). The responsibility for

implementation of the said Guidelines was placed on the State

Governments which had to create a mechanism to measure

the mined-out mineral and its transportation and also to

ensure that the amount of mineral mined does not exceed the

quantity permitted in the EC. The 2016 Sand Mining

Guidelines recommended use of Transport Permits with bar

codes, for generation of reports showing the daily lifting of

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sand and user performance reports. Transport Permits with

bar codes would also enable vehicles carrying sand to be

tracked from source to destination. Dissatisfied with the

ineffective monitoring mechanism, failure of the Mines

Surveillance System as well as lack of an effective institutional

monitoring mechanism not only at the stage of the grant of EC

but at subsequent stages with respect to illegal sand mining,

the NGT, in an order dated 05.04.2019 in National Green

Tribunal Bar Association v. Virender Singh in OA No. 360

of 2015 and connected matters, directed the MoEFCC and the

State Governments to review extant monitoring mechanisms

and consider revision of the 2016 Sand Mining Guidelines.

Consequently, the MoEFCC issued the 2020 Sand Mining

Guidelines.

15. The damage caused to the environment due to rampant

unscientific illegal mining needs no reiteration. Unabated

illegal mining has resulted in the emergence of sand mafia

who have been conducting illegal mining in the manner of

organized criminal activities and have been involved in brutal

attacks against members of local communities, enforcement

officials, reporters and social activists for objecting to unlawful

sand excavation. The statistics provided by the State

Government highlights the magnitude of the problem as about

2411 FIRs have been registered in relation to illegal mining in

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the State of Rajasthan, between 16.11.2017 and 30.01.2020.

When this Court has restrained 82 mining lease / quarry

holders from carrying on mining of sand and bajri unless a

scientific replenishment study is completed and EC is issued

by the MoEFCC, the State of Rajasthan ought not to have

issued mining leases in favour of the Khatedars. It is clear

from the report of the CEC that the majority of the Khatedari

leases are within 100 metres from the river bed. The 2020

Sand Mining Guidelines prescribe that mining plan for mining

leases on Khatedari lands shall only be approved if there is a

possibility of replenishment of the mineral or when there is no

possibility of river bed mining within 5 km of the patta land /

Khatedari land. Agreeing with the CEC’s conclusions on the

issue of mining leases in Khatedari lands facilitating

legalisation of transportation and sale of illegally extracted

sand, we approve the recommendation of the CEC that all

Khatedari leases which are located within 5 km from the river

bed and those leases where lease conditions have been

violated have to be terminated forthwith and that Khatedari

leases shall be granted only with the permission of this Court.

16. The CEC has recommended imposition of exemplary

penalty of Rs.10 lakh per vehicle and Rs.5 lakh per cubic

metre of sand seized, which would be in addition to what has

already been ordered / collected by the State agencies as

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compensation. Compensation / penalty to be paid by those

indulging in illegal sand mining cannot be restricted to the

value of illegally-mined minerals. The cost of restoration of

environment as well as the cost of ecological services should

be part of the compensation. The “Polluter Pays” principle as

interpreted by this Court means that the absolute liability for

harm to the environment extends not only to compensate the

victims of pollution but also the cost of restoring the

environmental degradation. Remediation of the damaged

environment is part of the process of “Sustainable

Development” and as such the polluter is liable to pay the

cost to the individual sufferers as well as the cost of reversing

the damaged ecology.2

17. The scale of compensation by those who are involved in

illegal mining has been dealt with by the NGT in National

Green Tribunal Bar Association v. Virender Singh

(supra). In its order dated 26.02.2021, the NGT considered and

approved the Report submitted by the Central Pollution

Control Board dated 30.01.2020, in pursuance of its earlier

orders, on scale of compensation to be recovered for violation

of norms for mining on “Polluter Pays” principle. Additionally,

para 9.2 of the 2020 Sand Mining Guidelines provides as

follows:

2 Vellore Citizens’ Welfare Forum v. Union of India & Ors. (1996) 5 SCC 647
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 “The environmental damages incurred or resulting
due to illegal mining shall be assessed by a
committee constituted by District Administration
having expertise from relevant fields, and also having
independent representation of locals and State
Pollution Control Board. Guidelines for assessment of
ecological damages prescribed by the State
Government or Concerned Pollution Control Boards or
any other authority shall be applicable and
compensation as fixed shall be paid by the project
proponent, in light of Hon’ble National Green Tribunal
orders.”

18. Section 21(5) of the MMDR Act empowers the State

Government to recover the price of the illegally-mined

mineral, in addition to recovery of rent, royalty or tax. The

penalty recommended by the CEC for illegal sand mining is in

addition to the penalty that can be imposed by the State

Government in terms of Section 21(5) of the Act. However, the

basis for imposition of exemplary penalty of Rs. 10 lakh per

vehicle and Rs. 5 lakh per cubic metre of sand has not been

stated by the CEC in its report. The CEC is directed to follow

the directions given by the NGT in respect of imposition of

penalty / determining scale of compensation for illegal mining

and the provisions of the 2020 Sand Mining Guidelines and

determine the penalty / compensation afresh and submit a

report to this Court within a period of eight weeks from today.

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19. The recommendations made by the CEC, except

recommendation ‘J’, are approved for implementation

forthwith. IA No. 29984 of 2021 and IA No. 54981 of 2021 are

disposed of.

20. SLP (C) No. 10587 of 2019 and SLP (C) No. 10670 of

2019 are directed to be listed after eight weeks.

...................................J.
[ L. NAGESWARA RAO ]

.............................J.
[ SANJIV KHANNA ]

.......................J.
[ B.R. GAVAI ]

New Delhi,
November 11, 2021.

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