The Supreme Court has now asked the Karnataka government to notify within two weeks the proposed Karnataka Prevention of Illegal Mining, Storage and Transportation Rules, 2010. As an alternative, it has also asked the State to lift the ban on transportation of iron ore slated for export. The Apex Court Bench has told the Karnataka government that an export ban order cannot be forever. The Karnataka government has sought more time from the court saying it was “doing a complete overhaul” of the laws governing the mining and transportation of ore.
The Karnataka state government in June 2010 had issued two orders in a bid to curb illegal mining in the state. The government had banned the export of iron ores and also refrained from issuing mineral dispatch permits for exporting such ores.
The mining companies which include MSPL, Mineral Enterprises Sesa Goa, John Mines and others had filed a petition before the Karnataka High Court and had claimed that "the industry is suffering heavy losses due to suspension of all mining activities, the state and central governments have lost about Rs.2,000 crore revenue in the form of customs duty, port handling charges, railway freight, forest development tax, royalty and local taxes since the ban was imposed”.
The mining companies contended that Mines and Minerals Development and Regulation (MMDR) Act, 1957 does not vest any power in the state government to impose a complete ban on mining, transportation or storage of minerals. “The only power the state government, even under the MMDR Act, has is to frame rules to create a machinery to detect and prevent illegal mining, transportation and storage of minerals in individual cases”.
The Karnataka High Court in November 2010 had upheld the government order and therefore the ban on export continued.
The Apex Court bench comprising of Justices R.V. Raveendran and A.K.Patnaik hearing the appeal filed by the mining companies has asked the government to reconsider its decision or frame legislation to curb the export of iron ore.
The Apex Court Bench has told the Karnataka government that an export ban order cannot be forever. The Karnataka government has sought more time from the court saying it was “doing a complete overhaul” of the laws governing the mining and transportation of ore.
The Apex Court observed that the ban was originally intended to be a temporary measure and was intended to apply for a period of six months. The six months time frame will expire during end January 2011. Consequently, the court has ordered that the State should either revoke the ban in the next two weeks or notify the Karnataka (Prevention of Illegal Mining, Transportation and Storage of Minerals) Rules, 2010 issued pursuant to Sections 21 and 23-C of the MMDR Act. The court has specifically observed that a framework should be in place for transportation and export of minerals, failing which the court will further consider the petitions on its merits during the 2nd week of February.
Mining Companies have engaged the some of the best legal brains to fight the ban order. Mineral Enterprises has engaged Senior Advocate Abhishek Manu Singhvi who is being briefed by Sajan Poovayya of Poovayya & Co.
MSPL has engaged Senior Advocate Krishnan Venugopal who is being briefed by Parekh & Co.
Sesa Goa has put up Senior Advocate Harish Salve and Bangalore based Senior Advocate DLN Rao who are being briefed by advocate Ankur S Kulkarni. Former Attorney General and Senior Advocate Soli Sorabjee is appearing for John Mines.
Senior Advocate K.V. Vishwanathan and Additional Solicitor General HP Rawal are briefed by Anita Shenoy to represent the Karnataka State government.
The matter has been posted for the first week of February.