This is the third in a series discussing various developments with Goa mining. In the first post, we had discussed the Rule 12(1)(hh) notice issued to the former holders of the 88 illegally renewed leases asking them to take their property and vacate the leases. How will the former leaseholders react? Will they approach the Supreme Court for a stay on the basis that their challenge to the 1987 Act has not been decided? This has been their implicit threat.
In the second post, we discussed the clear discriminatory behaviour of the Goa government in issuing notices of 88 leases while 187 leases that have terminated have not been issued similar notices. We also raised the question of residual liabilities of the former leaseholders. This is important to close the chapter.
In this post, we examine some other implications of these 88 leases reverting to the state.
Does the state have liabilities to the former leaseholders?
Surprisingly, yes, there may well be liabilities. When the 88 leases were renewed, the stamp duty was raised. However, given the obvious legal uncertainty, the former leaseholders managed to have a clause inserted in the amendment to the Stamp Act that allows for refund of stamp duty.
Provided that the duty payable under sub-section (1) shall not exceed the amount in Rupees arrived at by applying a rate of ten times annual extraction of mineral permitted under the Environmental Clearance issued for such mining lease under the relevant law in force, multiplied by the period of the lease:
The Indian Stamp (Goa Amendment) Act, 2012 (Goa Act 24 of 2012)
Provided further that in case any mining lease is required to surrender the Lease or permanently abstain from undertaking any mineral excavation by or for reasons of any operation of Law, court orders passed or any notification issued generally under any Law for the time being in force and reasons or cause of such prohibition or restriction is not in any manner attributable to such lessee or mining operation undertaken and carried out by the lessee or his agents, servants, employees or persons claiming through or under such lessee, to the extent of such balance period of lease outstanding and unexpired the lessee shall be granted refund of duty paid under sub-section (1) herein-above.
According to Starred Legislative Assembly Question 15A answered on 26-Mar-2015, of the 88 renewed leases, 51 had paid stamp duty of Rs. 796 crore. Twenty year renewal. Stamp duty capped at 10 years. Leases had opportunity to work for 3 years (2015-2018). Quick estimates are that former leaseholders may demand Rs. 558 crores to be returned for seven years lost. Could the Goa government claim that the Supreme Court cancelled the lease renewals because the former leaseholders carrying on mining after 2007 without a lease until they were stopped – arguably, this is “attributable to such lessee or mining operation undertaken.”
Surface rights
Historically, mining is considered a temporary use of land. How does this work? The leaseholder enters into agreements with the holders of the surface rights (as per Form 1 & 14) to use the land. At the end of the lease period, the mine is closed, land restored and in theory returned to the owner of the surface rights in the same condition prior to mining. For the period of the lease, the leaseholder is required to pay “surface rent” to the Goa government – it is not clear if this is further paid to the owners of the surface rights, who may be paid separately under their agreements with the leaseholder.
What happens now that there are no leases or leaseholders? Presumably the agreements for surface rights expire. As we have discussed, the mines have not been closed. Can the surface right owner take possession of their land / surface? Well, the law has changed, making things more ambiguous.
In the MMDR Amendment Act 2021, the explanation to Section 3(i) was added, saying “(i) a mine continues to be a mine till exhaustion of its mineable mineral reserve and a mine may have different owners during different times from the grant of first mining lease till exhaustion of such mineable mineral reserve; (ii) the expression “mineral reserve” means the economically mineable part of a measured and indicated mineral resource.” Therefore as long as there is any mineral “economically mineable”, the surface rights owner must wait.
But there is no existing relationship between the Goa government mines department and the surface rights owner. And this addition to the MMDR Act implies that temporary may be very very long. It would seem that either the Goa government closes the mine & restores the land to hand back to the surface rights owner, or it acquire the surface rights from the surface rights owners under the Right to Fair. Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.
Managing the abandoned lease
During the period until either the mine is close, restored and handed back to the surface rights owners, or in the alternative successfully restarted / auctioned off, how will the Goa government manage the area? There are numerous risks, including tailing dam collapses, erosion from the dumps leading to siltation, theft of any ore or other property remaining on the lease, and even accidental death of wildlife, cattle and even humans. On top of that, water from the mining pits is used both for irrigation as well as augmenting water supply from Opa. The CM has promised to put in pumps with electric supply to pump out water in the monsoons.
Dumps outside lease areas
These are clearly the property of the Goa government since they have been removed illegally and no royalty was paid (and cannot now be paid). However, these dumps are lying on lands that were owned or rented by the former leaseholders. According to unstarred Legislative Assembly Question 79 answered on 16-Mar-2016, former leaseholders paid Rs. 426 crore by way of land conversion fees after the illegalities were detected (for both private and government land). Now who pays whom? When do the dumps get moved out of private land?