/2022 INSC 0755/
IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
IA No. 10973/2018, 83141/2017, 72931/2017 and 218/2014
IN
WRIT PETITION (CIVIL) NO. 562 OF 2009
SAMAJ PARIVARTANA SAMUDAYA 
AND ORS.                    .....PETITIONERS
VERSUS
STATE OF KARNATAKA AND ORS.   ..... RESPONDENTS
ORDER
1. The present hearing is in continuation of our earlier hearing and
order dated 20.05.2022, whereby this Court had considered and
granted  certain   reliefs  relating  to  the   sale  and  export   of  iron  ore
in the Districts of Bellary, Tumkur and Chitradurga in the State
of Karnataka. In the said order, we had specifically left open the
question   of   the   lifting/relaxation   of   the   ceiling   limit   for
production   of   iron   ore   in   the   abovementioned   Districts   and   had
sought an opinion from the Oversight Authority appointed by this
Court   vide   order   dated   21.04.2022.   The   observations   made   by
1 REPORTABLE

this Court were as follows:
“22….For   the   present,   we   propose   to   confine   the
scope   of   this   order   to   examining   the   twin   prayers
made   by   learned   counsel   for   the   applicants   namely,
permission to sell the unsold stock of iron ore already
excavated without resorting to the process of eauction
conducted through the Monitoring Committee and for
lifting   the   ban   on   export   of   iron   ore/pellets   from   the
districts of Bellary, Chitradurga and Tumkur situated
in   the   State   of   Karnataka.   Although   certain
submissions   were   made   by   the   parties   regarding
lifting   of   the   ceiling   limit   for   total   production   of   iron
ore, at this juncture we are not inclined to decide the
said issue.
32. With respect to the submissions of the parties in
relation to the lifting of the ceiling limit for production
of   iron   ore   for   mining   leases   in   the   Districts   of
Bellary,   Chitradurga   and   Tumkur,   we   are   of   the
considered   opinion   that   it   would   be   expedient   to
obtain   an   opinion   from   the   Oversight   Authority
appointed   by   this   Court   vide   order   dated   21st   April,
2022   about   the   same   before   deciding   the   said   issue.
We   request   the   Oversight   Authority   to   take   inputs
from   the   stakeholders,   including   the   CEC   and   the
Monitoring   Committee,   and   to   send   his   opinion   to
this Court preferably within a period of 4 weeks.”
2. On the last date of hearing, this Court took on record the Report
filed   by   the   learned   Oversight   Authority   and   had   directed   that
copies   of   the   same   be   made   available   to   the   parties   whereafter,
the matter was posted for considering the issue of lifting of ceiling
limit.  
3. Heard   Mr.   Prashant   Bhushan,   learned   counsel   appearing   on
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behalf of the original petitioner and Mr. Dushyant Dave, learned
senior   counsel   appearing   on   behalf   of   Federation   of   Indian
Mineral Industries, South.
4. Mr.   Prashant   Bhushan   submitted   that   the   ceiling   limits   were
imposed   in   view   of   the   earlier   CEC   recommendation   and   the
report of the learned Lokayukta, which suggested that the rate of
mining   of   iron   ore   in   the   State   of   Karnataka   was   unsustainable
and   would   result   in   exhaustion   of   the   iron   ore   deposits   in   the
State   of   Karnataka   within   30   years.   This   as   per   the   learned
counsel   would   seriously   impact   the   goal   of   inter­generational
equity.   Lastly,   he   submitted   that   as   the   learned   Oversight
Authority   has   sought   additional   information   regarding   the
infrastructural   capacity   before   giving   an   opinion   as   to   the
viability of lifting of the ceiling limit, this Court should presently
refrain from passing any orders at this juncture.
5. On   the   other   hand,   Mr.   Dushyant   Dave,   Senior   Advocate
submitted  that  the   present  regime  relating   to  iron  ore  mining  in
the   State   of   Karnataka,   with   Court   imposed   ceiling   limits,   has
been   in   existence   for   over   a   decade.   When   the   ceiling   limit   was
first   imposed,   the   Court   was   confronted   with   a   vastly   different
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situation, where there was rampant illegal mining activity taking
place in the State of Karnataka. The said situation has now been
remedied   through   series   of   orders   passed   by   this   Court.   As   a
result, all illegal mining  in the area has been halted and several
ameliorative   measures   have   been   taken   for   the   improvement   of
the   environment   and   ecology   of   the   region.   In   such
circumstances,   the   learned   Senior   Advocate   submitted   that   the
present   mining   lease   holders,   who   are   complying   with   all   the
laws,   are   being   unfairly   penalized   for   the   illegalities   that   were
committed   a   decade   ago.   Such   ceiling   limits   has   resulted   in   a
discriminatory  situation where mining  lease holders in the State
of   Karnataka   are   governed   by   one   legal   regime,   while   those   in
other States of the country are governed by a completely different
regime.
6. At   this   juncture,   it   might   be   relevant,   to   highlight   the   history   of
the ceiling limits on production of iron ore through various Court
orders. On 29.07.2011 and 26.08.2011, this Court had imposed
a ban on mining in the districts of Bellary, and Chitradurga and
Tumkur,   respectively   based   on   the   report   of   the   Centrally
Empowered Committee (‘ CEC ’). 
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7. On   13.04.2012,   this   Court   had   accepted   some   of   the
recommendations   contained   in   the   Report   dated   13.03.2012   of
the CEC, including the following recommendation:
“B) a ceiling of   25 Million Metric Tonnes (MMT) for
total   production   of   iron   ore   from   all   the   mining
leases   in   District   Bellary   may   be   prescribed.   A
ceiling   of   5   MMT   for   production   of   iron   ore   from
all the  mining leases in Districts Chitradurga and
Tumkur together  may be prescribed”
( emphasis supplied )
8. The   above   position   was   reiterated   by   this   Court   vide   judgment
dated   18.04.2013,   wherein   the   underlying   set   of   petitions   were
disposed. 
9. Vide   judgment   dated   14.12.2017,   while   dealing   with   certain
applications   seeking   enhancement/lifting   of   ceiling   cap.   This
court   had   permitted   to   increase   the   same   from   25   MMT   to   28
MMT with respect to Bellary District , and from   5 MMT to 7 MMT
for   Chitradurga   and   Tumkur   Districts   collectively ,   based   on   a
fresh   report   of   the   CEC   dated   14.07.2017.   Certain   observations
made by this Court for granting the relaxation merit reiteration:
“ 16.   The   cap   fixed   by   this   Court   by   Orders   dated
5.08.2011 and 1.09.2014 was in a situation where
there   was   virtually   no   control   or   effective
regulatory   measures   as   to   the   maximum   output
that   could   be   generated   by   a   particular   mine.
There   was   no   scientific   study   of   the   iron   ore
reserves   allocated   to   a   particular   mine   in   the
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lease   granted.   As   a   result,   it   was   virtually   a   free
for all exercise designed to achieve the maximum
profit   within   the   shortest   possible   time   frame.
There   was   rampant   and   illegal   mining   with
encroachments   into   forest   land,   particularly   for
use   as   overburdened   dumps   resulting   from
excessive   mining.   This   had   led   to   environmental
and   ecological   depredation   to   an   extent   that
necessitated   judicial   intervention   to   resolve   a
situation which is the normal course may have fallen
within the executive domain. It is on the basis of the
intervention   by  the   Court  that   R&R   Plans   have   been
prepared   for   each   mine   by   an   expert   body,   ICFRE,
based   on   a   scientific   study   of   various   parameters
including   mining   reserves.   R&R   Plans   have   been
drawn up specifying a particular/permissible limit for
each   mine   on   the   basis   of   limitations   of   reserves,
dumping   areas,   available   infrastructure   etc.
Accordingly,   recommendations   have   been   made   for
increase   of   MPAP   for   13   different   category   ‘A’   mines
and   also   for   increase   of   MPAP   in   respect   of   2   leases
held   by   the   public   sector   lessee,   i.e.,   NMDC.
Similarly,   10   mines   are   anticipated   to   undertake
operations within  a short  time….The  solution  offered
by   the   Court   has   to   be   realistic.   Therefore,   it   is   the
various   features   of   the   current   scenario   on   the
ground   as   highlighted   in   the   report   of   the   CEC   that
would   deserve   a   close   look/consideration.   In   this
regard,   we   may   also   take   note   of   the   fact   that   the
assessment of reserves has also changed over the
years   and   today   the   iron­ore   reserves   across   the
State   of   Karnataka,   comprising   of   haematite   and
magnetite reserves, is to the tune of 10.071 BMT
(Billion   Metric   Tonnes) .   All   these   reasons   impel   us
to   accept   the   recommendations   of   the   CEC   for
enhancement   of   the   cap   for   category   A   and   B   Mines
in  the  3 district  of Bellary, Tumkur   and Chitradurga
as well as the recommendations with regard to MPAP
of   NMDC   and   MML,   as   mentioned   in   paragraph   12
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hereinabove,   with   the   further   direction   that   all
pending proposals for enhancement of MPAP shall be
decided   without   delay,   naturally,   subject   to   the   cap
as above.”
( emphasis supplied )
10. It is in light of the above set of facts that the submissions made
by   learned   counsel   ought   to   be   considered.   In   2017,   this   court
was of the view that the situation had vastly changed in the State
of Karnataka and had therefore allowed an increase in the ceiling
limit. We are now in the year 2022. It can be no one’s case that
the   situation   subsisting   in   the   State   of   Karnataka   currently,   is
the   same   as   had   existed   when   the   underlying   petition   was   first
taken   up,   or   when   the   Court   had   passed   the   order   in   2017,
relaxing the ceiling limit to some extent.
11. This   is   also   clear   from   the   changed   stance   of   the   State   of
Karnataka and the CEC before this Court. In 2017, the CEC had
recommended   a   cumulative   increase   in   the   ceiling   limit   up   to   5
MMT,   whereas   now,   the   CEC   supports   the   view   that   the   ceiling
limit need not to continue. The State of Karnataka, in 2017, had
submitted before this Court that the ceiling limit may be raised to
40 MMT, and gradually increased later to 50 MMT. However, the
State   of   Karnataka   is   now   in   favor   of   a   complete   removal   of   the
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ceiling limit. 
12. In   fact,   it   appears   that   the   CEC,   the   State   of   Karnataka,   the
Ministry   of   Steel,   Union   of   India,   Karnataka   Iron   and   Steel
Manufacturers   Association   (‘KISMA’)   and   the   mining   lease
holders   are   all   ad   idem   that   the   changed   situation   on   ground
warrants   a   complete   removal   of   the   ceiling   limits   that   were
imposed   by   this   Court   to   ensure   protection   of   the   environment
and   keeping   in   mind   the   principles   governing   intergenerational
equity.   The   response   dated   10.04.2022   of   the   CEC   (viz.   CEC
Report No. 3 of 2022) on the issue of lifting of ceiling limits merits
reproduction and is extracted herein below:  
“ 17.   This   Hon’ble   Court   by   orders   dated
05.08.2011   and   01.09.2014   had   fixed   a
production   cap   of   25   MMT   in   respect   of
District   Bellary   and   5   MMT   in   respect   of
Districts   Chitradurga   and   Tumkur.   This
Hon’ble   Court   by   Judgement   dated
14.12.2017   enhanced   the   production   cap   to
28   MMT   in   respect   of  District   Bellary  and   7
MMT   for   Districts   Chitradurga   and   Tumkur.
The   availability   of   iron   ore   as   approved   in   the
R&R   plans   currently   exceeds   the   limit   of   35
MMT per annum fixed by this Hon’ble Court. As
per the latest data furnished by the Monitoring
Committee,   currently   34   category   ‘A’   and   ‘B’
mining   leases   are   in   operation   with   an
approved MPAP of 36.31 MMT. An Additional 9
Category   “C”   mining   leases   and   4   Category   “A”
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and “B” expired leases, which were e­auctioned,
are   operational   with   MPAP   of   5.54   MMT   and
2.41 MMT respectively. Another 4 mining leases
located   in   Districts   Bagalkote   and   Davanagere
have   production   capacity   of   6.29   lakh   MT   per
annum and 60000 MT per annum respectively.
The production of iron ore in these two Districts
is   not   affected   by   the   orders   of   this   Hon’ble
Court. The sum of approved annual production
capacity   of   iron   ore   in   Karnataka   as   on   31   .
03.2022   adds   upto   44.949   MMT.   In   addition,
there are 5 Category “C” and 2 expired Category
“A”   &   “B”   mines   which   have   been   e­auctioned
by   the   state   but   the   execution   of   lease
agreements   are   pending   in   respect   of   these   7
mines as on 31.3.2022.
…
…
23. Keeping in view the facts highlighted in the
preceding  paragraphs,   it  is  for   consideration   of
this   Hon’ble   Court   whether   the   restrictions   on
production and sale of the iron ore in the three
Districts   Bellary,   Chitradurga   and   Tumkur
imposed   following   the   total   ban   on   mining   are
required   to   be   reviewed   and   if   agreed   upon   by
this   Hon’ble   Court   the   following   may   please   be
considered
(i)   Vacation   of   the   orders   of   this   Hon’ble
Court directing sale of iron ore through e­
auction   conducted   by   the   Monitoring
Committee,   and   which   ore   has   been
produced   by   the   lessees   after   resumption
of   mining   operation.   However,   the   sale   of
balance   old   stock   of   iron   ore,   including
sub­grade iron ore available on the date of
imposition of ban on mining be continued
through   e­auction.   The   Monitoring
Committee   be   directed   to   dispose   all   the
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balance old stock through e­auction before
31 st
 July 2022. If any stock over which the
lessee   has   the   ownership   right   is   left
unsold   the   lessee   may   be   allowed   to
dispose of it.
(ii) The collection of 10 per cent of the sale
value from all the lessee except NMDC and
20%   of   sale   value   from   NMDC   towards
their   contribution   to   the   SPV   may   be
discontinued.
(iii) Vacation of the orders on total ban on
export   of   iron   ore   and   pellets   from   the
districts   of   Bellary,   Chitradurga   and
Tumkur.
(iv)   Vacation   of   the   orders   on   fixing
district level caps on production of iron
ore   in   respect   of   Category   ‘A’   and
Category   ‘B’   mines   from   the   financial
year 2022­2023.
24. However the system of determination of the
Maximum   Permissible   Annual   Production
(MPAP) being fixed through the R&R Plans and
Supplementary   Environment   Plans,   after
ensuring   the   scientific   and   sustainable   mining
and   after   taking   into   account   the   mining
reserves   available   within   the   lease   area   and
after   following   the   standards   stipulated   under
various   environmental   and   mining   statutes,   as
approved   in   order   dated   13.4.2012   and
judgement   dated   18.4.2013   of   this   Hon’ble
Court,   may   continue.   All   mining   leases   to
operate strictly adhering to such MPAP, as may
be fixed /refixed.”
13. The Monitoring Committee, without directly alluding to the issues
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raised by  the others with  respect to  why  the ceiling  limit should
be maintained or lifted, has highlighted a separate concern,   viz. ,
the infrastructural incapacity to transport the iron ore excavated
if the ceiling limits were to be raised. It is in this context that the
learned   Oversight   Authority   appointed   by   this   Court   expressed
his inability to conclude on the said issue. The learned Oversight
Authority, in his report dated 29.07.2022, observed as follows: 
The Oversight Authority as at present in unable
to express its firm opinion in the matter in view
of   the   conflicting   reports   submitted   by   Central
Empowered   Committee   and   the   Monitoring
Committee.  It is not for the Oversight Authority
to   express   any   opinion   as   to   whether   the
Monitoring   Committee   has   exceeded   its   brief   in
joining   an   issue   with   Central   Empowered
Committee   by   pleading   for   continuation   of   the
ceiling   limit.     Be   it   as   it   may,   it   is   just   and
necessary   to   gather   some   further   evidence   in
the   matter   of   ‘current   available   road
infrastructure’,   ‘existing   as   well   as
improvements made to transport infrastructure’.
There is no evidence as such made available for
the   perusal   of   the   Oversight   Authority   as   to
what   are   the   developments   that   have   taken
place   between   today   and   20.05.2022   i.e.   when
the   Hon’ble   Supreme   Court   of   India  passed   the
Orders referred to hereinabove.
14. Mr.   Prashant   Bhushan,   learned   counsel   appearing   on   behalf   of
the original petitioner, is therefore the sole objector to the request
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of lifting of the ceiling limit, on principles. The motivating concern
behind the objection appears to be the anxiety  that lifting of the
ceiling limit may spiral into the same situation that had resulted
in   this   Court’s   judicial   intervention   in   the   first   place.   Learned
counsel   submitted   that   such   an   order   of   lifting   the   ceiling   limit
might   lead   to   unmitigated   mining   activity   in   the   State   of
Karnataka,   setting   the   clock   back   entirely   and   resulting   in
regression of the entire state of affairs. 
15. The   concerns   of   the   original   petitioner   and   the   Monitoring
Committee   merit   due   consideration   of   this   Court.   Much   good
work   has   been   done   in   the   State   of   Karnataka,   because   of   the
action   initiated   by   the   original   petitioner   and   the   subsequent
judicial   interventions   by   this   Court.   In   fact,   it   is   this   progress
made steadily over the past decade that weighed with this Court
to   even   consider   the   relief   regarding   raising   of   the   ceiling   limit
sought   by   the   present   applicants.   The   concerns   raised   by   the
original   petitioner,   of   possible   over   excavation   and   its   adverse
impact on intergenerational equity, must be balanced against the
concerns   of   the   other   parties,   as   the   principles   of   sustainable
development also comes into play.
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16. This   Court   has   generally   accepted   the   recommendations   of   the
CEC   when   it   comes   to   the   ceiling   limit.   In   the   present   case,   the
CEC has recommended a complete relaxation of the ceiling limit.
But   we   are   not   inclined   to   allow   the   same   in   toto.   Rather,   the
situation   merits   a   cautious   approach,   keeping   in   view   the
concerns raised and to ensure that any changes in the situation
with   respect   to   the   mining   activity   in   the   State   of   Karnataka   is
brought   about   gradually,   we   are   of   the   opinion   that   the   ceiling
limit of iron ore mining  may  be raised from  28 MMT to 35 MMT
for District Bellary, and from 7 MMT to 15 MMT for Chitradurga
and Tumkur Districts collectively. 
17. Conservation   of   the   ecology   and   the   environment   must   go   hand
in   hand   with   the   spirit   of   economic   development   and   the   fine
balance   between   the   two   goals   is   what   is   sought   to   be   achieved
even now.
18. IA Nos. 83141/2017, 72931/2017 and 218/2014 are disposed of
on   the   above   terms.   As   far   as   IA   No.   10973/2018   is   concerned,
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the   same   relates   to   directions   to   the   CEC   and   Monitoring
Committee   regarding   deciding   applications   for   enhancement   of
MPAP in terms of the earlier orders of this Court. The same may
be considered by the Court on the next date of hearing. 
...........................CJI.
(N.V. RAMANA)
…...........................J.
(HIMA KOHLI)
      
                …...........................J.
( C.T. RAVIKUMAR )
NEW DELHI;
AUGUST 26, 2022.
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