For over half a century, the fate of Goa’s mining industry has been entangled in a complex legal battle, stemming from the transition between Portuguese colonial rule and Indian sovereignty. The Goa Abolition Act of 1987—formally titled The Goa, Daman and Diu Mining Concessions (Abolition and Declaration as Mining Leases) Act, 1987—was intended to resolve the status of pre-existing mining concessions. However, its implementation triggered a series of legal challenges that continue to this day, raising fundamental questions about property rights, sovereignty, and the legacy of colonialism.

Portuguese Colonial Mining Laws and Goa’s Mining Boom

The Portuguese introduced colonial mining laws in 1906. Under this system, a “title of manifest,” akin to a prospecting license, preceded a “title of concession” (TC), which was similar to a mining lease but perpetual in nature.

Following India’s economic blockade of Portuguese Goa in 1955, iron ore exports surged as a vital source of foreign exchange for essential imports, such as food. Post-World War II reconstruction needs fueled the demand. By the time of Goa’s liberation in 1961, approximately 800 mineral concessions, evidenced by titles of concession, had been issued.

Liberation and Legal Transition

Goa’s liberation on December 19, 1961, was legally an annexation by conquest. To maintain economic stability, India deemed it critical to sustain iron ore exports for foreign exchange. Goa’s miners, among India’s wealthiest individuals, wielded considerable political influence, complicating the transition.

Two immediate concerns emerged. First, India sought to align Goa’s mining regime with Indian laws, particularly the Mines and Minerals (Development and Regulation) Act (MMDR Act). Second, pre-existing mining arrangements needed to conform to the MMDR Act. Section 16 of the MMDR Act, introduced during India’s independence and the accession of princely states, empowered a Controller of Mining Leases to modify prior arrangements accordingly.

On March 4, 1962, the Goa, Daman and Diu (Administration) Act, 1962 was enacted, stipulating that all laws in force before December 20, 1961, including Portuguese laws, would remain effective until amended or repealed by a competent authority. This created a legal interregnum from December 20, 1961, to March 3, 1962, during which no laws technically applied.

Later, on November 28, 1962, the Goa, Daman and Diu (Laws) Regulation No. 12 of 1962 was issued under Article 240 of the Constitution, extending a schedule of Indian laws—including the MMDR Act—to Goa upon notification by the Lieutenant-Governor. The MMDR Act took effect in Goa from October 1, 1963, except for Section 16. Although it was later asserted that the Portuguese Colonial Mining Laws were repealed, the notification of September 30, 1963 did not explicitly state this. Notably, five new titles of concession were issued in 1963 before this date, after which only prospecting licenses and mining leases were granted under the MMDR Act.

Section 16 of the MMDR Act, enabling modification of mining leases, was enforced in Goa from January 15, 1966, via a notification on January 4, 1966. This sparked a protracted struggle to bring titles of concession under the MMDR Act. The Controller of Mining Leases issued orders under Rule 5 of the Mining Leases (Modification of Terms) Rules, 1956. Concession holders challenged these orders, filing revision applications with the Central Government under Section 30 of the MMDR Act. They argued that titles of concession were not mining leases and that only leases granted after 1949 could be modified. This led to a complex cycle of revision orders, further applications, amendments to the MMDR Act in 1972, and additional orders by the Controller. Eventually, the matter reached the Judicial Commissioner’s Court in Panaji (later the Goa Bench of the Bombay High Court in 1981).

Throughout this period, mining continued—minerals were exported, foreign exchange earned, and taxes paid under the Portuguese Colonial Mining Laws. Titles of concession were transferred, relinquished, or renewed. Despite the Goa Administration Act, 1962 requiring formal repeal of Portuguese laws, this never occurred.

A Parallel Dispute: Gosalia vs. Agarwal

Amid this legal tangle, a separate conflict unfolded between V.S. Gosalia and G.N. Agarwal over four potential mines. In 1959, Agarwal acquired four titles of manifest and applied for titles of concession, which remained pending until 1963 when the MMDR Act took effect in Goa. In 1964, Gosalia sought a prospecting license over a large area, including Agarwal’s claims. After delays and revisions, mining leases were slated for Gosalia. Agarwal countered, asserting existing rights from his titles of manifest, claiming he had met all conditions. The High Court ruled in Agarwal’s favor, effectively validating his titles of manifest.

Gosalia appealed to the Supreme Court. In its August 27, 1981, judgment in Vinodkumar Shantilal Gosalia v. Gangadhar Narsingdas Agarwal [(1981) 4 SCC 226], the Court relied on Pema Chibar v. Union of India ([1966] I SCR 357). It held that while the Goa Administration Act, 1962 continued Portuguese laws, rights under those laws did not persist unless explicitly recognized by India, the new sovereign. The Court ruled that Agarwal’s titles of manifest were not recognized post-liberation and thus ceased to exist after 1961. Agarwal lost, and Gosalia secured his mining lease.

Shifting Government Stance and Judicial Restraints

The Government of India initially argued that titles of concession resembled mining leases, subjecting them to Section 30 of the MMDR Act. However, post-1981, it reversed course, asserting that titles of concession, like titles of manifest, were unrecognized by India and thus invalid. On September 29, 1983, the Bombay High Court in Vassudeva Madeva Salgaocar v. Union of India [(1985) 1 Bom CR 36] restrained the government from treating titles of concession as mining leases or enforcing Section 30 against concessionaires, given its stance that these titles lacked recognition. In a separate case, the government was barred from collecting royalties under the MMDR Act, as concessionaires paid mining taxes instead.

In Salgaocar v. Union of India, the High Court avoided ruling on whether titles of concession were recognized. It simply noted that if the government denied recognition, it could not simultaneously apply Section 30. This posed a dilemma: if mining occurred outside the MMDR Act, it was illegal, carrying severe consequences.

The Goa Abolition Act, 1987

To resolve this chaos, the Goa Abolition Bill was introduced in Parliament on April 30, 1987. It proposed deeming titles of concession as mining leases from December 20, 1961, expiring six months after the Act’s assent, with eligibility for a first renewal. Compensation totaling Rs. 61,94,000, plus interest, would be paid to concessionaires (now leaseholders), though royalties would be due from December 20, 1961.

The bill passed the Lok Sabha on May 6, 1987, and the Rajya Sabha on May 11, 1987, receiving presidential assent on May 23, 1987 (implying lease expirations on November 22, 1987). Goa became India’s 25th state on May 30, 1987. (Note: The debates in both houses offer valuable insights.)

Ongoing Litigation

Leaseholders immediately challenged the Act. On June 20, 1997, the Bombay High Court at Goa in Shri Quexova Sinal Cundo v. Union of India [(1997) SCC Online Bom 215 / (1998) 2 Bom CR 87] upheld the Act’s constitutional validity from 1961 but ruled that Section 22(i)(a), mandating royalty payments, applied prospectively from 1987, not retrospectively from 1961. Section 22(i)(b), addressing prior payments, remained intact.

Both leaseholders (in CA 1414 of 1998 and others) and the Government of India (in CA 1464 of 1998) appealed to the Supreme Court. Leaseholders contested a legal anomaly tied to an amendment to Article 31-C of the Constitution, which substituted wording later struck down by the Court. This raised questions about whether the original text revived and whether private property, including mining concessions, constituted “material resources of the community” under Articles 39(b) and (c).

On March 2, 1998, the Supreme Court issued an interim order in SLP (C) No. 23827 of 1997 (CA 1414 of 1998), allowing mining to continue pending appeals, provided leaseholders paid dead rent and royalties under the Act from 1987 onward, under protest. For 1961 to 1987, assessments could proceed, but recovery awaited further orders.

On October 29, 2002, the Court deferred judgment, awaiting a larger bench’s ruling in Property Owners’ Association v. State of Maharashtra. The first lease renewals expired on November 22, 2007, and while many sought second renewals, the state government granted none, except to Rajesh Timblo for TC 63 of 1951 in Curpem, Sanguem.

Supreme Court Rulings and Beyond

On April 21, 2014, in Goa Foundation I, the Supreme Court ruled that post-November 22, 2007, mining was illegal, as second renewals were neither granted nor deemed automatic. Fresh leases were mandated. Subsequent judgments on February 7, 2018 (Goa Foundation II), January 30, 2020 (Goa Foundation III), October 13, 2020 (MA 1260/2020 in Goa Foundation III), and July 9, 2021 (Review Petitions) reinforced this, effectively ending the titles of concession.

On November 5, 2024, a Constitutional Bench in Property Owners’ Association v. State of Maharashtra (CA 1012 of 2002) clarified that struck-down constitutional amendments revive original text. It further held that privately owned resources like mines and minerals, if critical to the community, fall under Article 39(b) and the Public Trust Doctrine, obligating the state to prioritize public interest over private gain.

Conclusion

Given these rulings, leaseholders’ challenges to the Goa Abolition Act seem unlikely to succeed. The unresolved issues are whether royalties are payable from December 20, 1961, to May 23, 1987, and whether prior payments are refundable.

March 3, 2025. By Rahul Basu, editing assistance from Grok 3.0, Gemini Flash 2.0 & Grammarly.