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Noting that compensation or penalty to be paid by those indulging in illegal sand mining cannot be restricted to the value of illegally-mined minerals, a 3-judge bench of the Supreme Court has observed that the cost of restoration of environment as well as the cost of ecological services should be part of the same.

A bench of Justices L Nageswara Rao, Sanjiv Khanna and BR Gavai further said that the “Polluter Pays” principle as interpreted by the Supreme Court meant that the absolute liability for harm to the environment extended not only to compensate the victims of pollution but also the cost of restoring the environmental degradation.

“Remediation of the damaged environment is part of the process of “Sustainable Development” and as such the polluter is liable to pay the cost to the individual sufferers as well as the cost of reversing the damaged ecology”, opined the bench.

While hearing an SLP filed by the  Bajri Lease LoI Holders Welfare Society assailing certain provisions of the Rajasthan Minor Mineral Concession Rules, 2017, the Court had in February 2020, after taking note of the scale of the issue of illegal sand mining in the State of Rajasthan, directed the Central Empowered Committee (“CEC”) to submit a report on the problems relating to sand mining that are faced by traders, consumers, transporters, the State and other stakeholders and also on measures to stop illegal sand mining.

In December 2020, the CEC submitted its report making certain recommendations. The State of Rajasthan then filed an Interlocutory Application requesting the Supreme Court to accept all the recommendations made by the CEC except recommendations ‘A’ and ‘J’.

Recommendation ‘A’ relates to termination of Khatedari leases within 5 km of the river bank and restriction on the State Government to grant fresh Khatedari leases without the approval of this Court.

Recommendation ‘J’ pertains to exemplary penalty of Rs.10 lakh per vehicle and Rs.5 lakh per cubic metre of sand seized for violation of the order passed by this Court on November 16, 2017 whereby it had restrained a total of 82 mining lease / quarry holders from carrying on mining of sand and bajri, unless a scientific replenishment study is completed and Environmental Clearance was granted by the Ministry of Environment, Forest and Climate Change (MoEFCC).

The top court opined that unabated illegal mining has resulted in the emergence of sand mafia who have been conducting illegal mining in the manner of organized criminal activities and have been involved in brutal attacks against members of local communities, enforcement officials, reporters and social activists for objecting to unlawful sand excavation.

It was further remarked that when this 82 mining lease / quarry holders were restrained from carrying on mining of sand and bajri unless a scientific replenishment study was completed and EC was issued by the MoEFCC, the State of Rajasthan ought not to have issued mining leases in favour of the Khatedars.

With this view, the Court went on to approve the recommendation of the CEC that all Khatedari leases located within 5 km from the river bed and those leases where lease conditions had been violated had to be terminated forthwith and that Khatedari leases would be granted only with the permission of this Court.

Referring to Section 21(5) of the Mines and Minerals (Development and Regulation) Act, 1957 , which empowers the State Government to recover the price of the illegally-mined mineral, in addition to recovery of rent, royalty or tax, the Court said that the penalty recommended by the CEC for illegal sand mining would be in addition to the penalty that can be imposed by the State Government in terms of Section 21(5) of the Act.

“However, the basis for imposition of exemplary penalty of Rs. 10 lakh per vehicle and Rs. 5 lakh per cubic metre of sand has not been stated by the CEC in its report. The CEC is directed to follow the directions given by the NGT in respect of imposition of penalty / determining scale of compensation for illegal mining and the provisions of the 2020 Sand Mining Guidelines and determine the penalty / compensation afresh and submit a report to this Court within a period of eight weeks from today”, concluded the bench.

The Court thus approved all recommendations made by the CEC except “Recommendation J” and disposed of the IA in such terms.

Cause Title: Bajri Lease LoI Holders Welfare Society Throughs its President v State of Rajasthan & Ors