51 mining firms stripped of licences escape penalty

Penal clauses have to be ratified by court, says official

The cancellation of 51 ‘C’ category mining leases in the three districts of Chitradurga, Tumkur and Bellary appears to be nothing more than a moral victory as all the mining companies will be walking away without paying a penalty or arrears for their illegal mining activity.

Forest department officials state that they are ‘dumbstruck’ with the hasty decision of the government to issue the cancellation orders against the 51 mining companies, which have indulged in gross illegal mining, without including any sort of a penal or recovery clause for depriving the State of its mineral resources worth thousands of crores of rupees.

As one senior official in the department said: “The best deal was cut for the ‘C’ category mine owners who walked away without paying for the losses, as the larger ‘A’ and ‘B’ category mines are paying for their comparatively lesser indiscretions.”

While the ‘A’ and ‘B’ category mines have been subjected to the rehabilitation and reclamation (R and R) clause and asked to contribute to the forest compensatory fund to continue mining, the ‘C’ category miners have been exempted, despite them being the worst offenders.

According to sources, the ‘C’ category mining companies which include Matha Minerals (which has shares of former minister V Somanna’s sons), V S Lad and sons (owned by MLA Anil Lad), Mysore Minerals Limited (MML), SB Minerals (owned by former tourism minister Anand Singh), Associated Mining Company (owned by former minister G Janardhana Reddy) and Hothur Traders (owned by Ambika Ghorpade and Yogendranath Singh) have not been penalised a single dime.

Officials state that let alone the penalties, all the 51 mining companies owe arrears as they have not paid fully the Forest Development Tax (FDT) and taxes to the Mines and Geology department.

When questioned on whether the State government had any intention of penalising the ‘C’ category mining lessees and recover the taxes, Tushar Girinath, Secretary for Mines, said: “The cancellation of the leases is by itself a big blow to the companies. Further, we will initiate action against these companies through a civil action suit of recovering the loss to the State exchequer.”

Court order cited

He defended the move to issue the Government Order as it was a fait accompli to the SC ruling, barring which the government would have faced contempt of court.

According to the secretary, the companies which have indulged in illegal mining will be held accountable once the department estimates the actual mining which has taken place.

“Each iron ore pit will take no less than 10 days to be assessed. Specialised machinery will be required to assess and that is available with only four companies in the country. We will approach these companies to assist us in determining the extent of ore which has been mined and then calculate the losses,” he said.

The Central Empowered Committee (CEC), in one of its reports, had suggested to the State that the value to be recovered from persons responsible for illegalities should be five times the value prevailing at the time of the commission of offence and their respective lease, licence, permit should be withdrawn forthwith.

On whether the government will be able to recover the sum to such an extent, Girinath said that the reports do not have any weight as the matter has to be addressed to the SC or the HC, which have given directives with regard to illegal mining.

“Our hands are bound by the SC and HC rulings. Once the penal clauses are ratified by the judiciary, only then can we proceed further,” he said.

It is said that once the losses are estimated, the department will place the extent of recovery to be made before a high-level committee to get its opinion and then submit it to the SC for ratification.