Mining minerals

‘Government owned mining minerals’, Uttarakhand HC overrules state rule, refers to 2G spectrum case

New Delhi: The Uttarakhand High Court struck down the state government’s mining rule that allowed it to award mining leases to bhumidhars (landowners) through a recommendation process instead of a tender process.

A bench headed by Chief Justice Vipin Sanghi concluded that the rule contravened the Supreme Court’s ruling on the allocation of 2G spectrum handed down in 2012.

The 2012 ruling outlawed the government’s first-come, first-served policy in granting 2G licenses. It was declared “unconstitutional and arbitrary” and the court canceled the 122 licenses issued in 2008 by the then Minister of Communications and Information Technology, A. Raja.

“It pains us to see how the state lets its precious resource be exploited with almost no return,” observed the bench, which also included Judge Ramesh Chandra Khulbe.

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Modified rule based on a “tiny” fee

The Order dated September 26, 2022 rescinded the State’s Notice issued October 28, 2021 which amended Rule 3 of the Uttarakhand Minor Minerals (Concession) Rules 2001.

The amended rule allowed a bhumidhar to use dirt, sand, rock, boulders, gravel, etc. excavated on its own property for the purpose of construction on its property.

For such extraction, he said, there was no requirement to obtain environmental clearance and the bhumidhar could even use a JCB machine for this purpose.

Although the amended rule provided for the payment of a royalty on the minor ore extracted, the amount to be paid in such circumstances was nominal compared to the royalty price paid by a contractor who was awarded a mining lease after having qualified the bidding process.

A person operating mining leases for minor minerals in Uttarakhand has challenged these changes in the HC as “unconstitutional”. HC, in turn, suspended the disputed rule in January this year.

The amendment, his lawyer argued, allowed backdoor access to bhumidhars in the mining trade, without a transparent and public process. Moreover, the royalty obligation of this new class of mining traders, he said, was only Rs 70-85 per metric ton, compared to Rs 460 per metric ton payable by the petitioner and the mine operators. similarly placed.

He relied on the judgment of 2G spectrum to say that a similar modus operandi was followed in the state for the allocation of mining leases as it was done in the case of the allocation of 2G spectrum.

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State owned mining »

In its defense, the state said the new rule was to make it easier to clear agricultural land that is affected during the rainy season.

He said that as most of the private land in Uttarakhand is located at the foot of rivers and other water bodies, garbage accumulates in the said area after rains. However, the strict mining rule prevented landowners from clearing their land for house building and farming.

Rejecting the state’s explanation, the HC said, “Minor minerals are state property. Simply because the same is deposited on the lands belonging to the bhoomidhars during the flood season, it does not become the private property of the bhoomidhar.”

The court noted that it supported the state’s purpose behind the amendment, but disagreed with how it intended to carry it out. The bench said that, under the pretense of allowing the removal of the deposit to make the land available for agriculture, the state actually granted substantial mining leases.

The court also criticized the low royalty rates for extracting and commercially exploiting minor minerals on these private lands and said the charges were a fraction of the prevailing market rate.

To encourage the extraction of minor minerals from fertile agricultural land, the state could have granted a concession to the bhumidharssay “up to 10%,” above the prevailing market rate, the court recommended.

“However, the Respondents cannot be charitable enough to relinquish their rights to the minor minerals which are miniscule by market rates, and this also to the detriment of the Claimant, who obtained the valuable mineral rights”, the court said. tenuous.

It also found that the amended rule did not provide a cap on the number of licenses to be bhumidharswhich may be granted on the recommendation of the Director General, Geology and Mining Unit.

“Completely unguided and unrestricted authority is vested in the Director General of the Geology and Mining Unit in this regard,” the court said.

(Edited by Theres Sudeep)

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