The Supreme Court of India has strongly criticized the Odisha Government for its prolonged delay in recovering over ₹2,700 crore in compensation from illegal mining leaseholders. The compensation pertains to illegal extraction of iron and manganese ore carried out without prior environmental clearance—one of India’s most serious mining regulation violations.
The matter was heard by a Bench comprising Justice Dipankar Datta and Justice AG Masih, which was assessing the State’s compliance with the directions issued in a landmark 2017 Supreme Court judgment relating to illegal mining operations in Keonjhar, Sundargarh and Mayurbhanj districts of Odisha.
Background: The 2017 Supreme Court Judgment
In 2017, the Supreme Court ruled that several mining leaseholders in Odisha had conducted large-scale mining operations without obtaining mandatory environmental permits under the Environment (Protection) Act, 1986. The Court directed:
- Immediate cessation of illegal mining activities.
- Recovery of compensation from the defaulters by 31 December 2017.
- Deposit of compensation into the State treasury, to be utilized for environmental restoration.
The compensation estimate at that time amounted to over ₹17,576 crore, of which ₹2,700 crore remains unrecovered even today.
Petitioner’s Allegations: Collusion & Administrative Indifference
The petition was filed by *Common Cause, represented by senior advocate *Prashant Bhushan. During the hearing, Bhushan sharply criticized the Odisha Government’s failure to act, stating that:
“There has been inordinate delay. The monies had to be paid by 31 December 2017. And the amount calculated at that time was without interest—if interest is added, the liability becomes nearly double.”
He suggested that the State machinery appeared to be acting in collusion with illegal mining entities, raising concerns about transparency and accountability in enforcement.
Illegal mining in Odisha has historically been linked to political patronage, weak monitoring, and economic dependence on the mining sector. Reform-oriented activists have long argued that non-recovery of dues undermines both environmental governance and public revenue generation.
Odisha Government’s Response: Seeks More Time
The Advocate General of Odisha rejected any assertions of collusion. He requested four weeks’ time to meet with the Chief Secretary and relevant district-level authorities to finalize steps for recovery.
“Kindly grant reasonable time; whatever legal steps are required under law, I will ensure they are taken,” the AG submitted.
However, this request did not impress the Bench. The Court observed that nearly eight years have passed since the deadline for recovery. The delay has directly impacted:
- Restoration of degraded mining-affected ecosystems.
- Public funds that could be used for welfare and development.
- The credibility of the regulatory and legal enforcement process.
Supreme Court’s Remarks: “Not Pleased” with Odisha’s Conduct
Citing a lack of seriousness, the Bench recorded:
“We are not pleased with the manner in which the State of Odisha has been proceeding for recovery of the compensation.”
The Court further noted that:
- No meaningful coercive action had been taken against defaulting leaseholders.
- No significant recovery progress was shown despite repeated court directions.
The Advocate General assured the Court that he would take personal interest in coordinating the recovery efforts going forward.
Eight Weeks Granted, But Under Strict Watch
The Supreme Court adjourned the case for eight weeks, directing the State to show substantial progress by the next hearing.
This means:
- Odisha must begin initiating recovery proceedings, including attachment of properties, bank accounts, or mining assets, if needed.
- The State must file a comprehensive status report showing steps taken.
- The Court may consider stronger judicial intervention if progress remains unsatisfactory.
Why This Issue Matters: Environmental, Legal & Economic Implications
1. Environmental Restoration
The regions affected—Keonjhar, Sundargarh, and Mayurbhanj—have witnessed:
- Deforestation
- Groundwater depletion
- Soil erosion
- Loss of tribal land and livelihood resources
The compensation funds are intended to support ecosystem regeneration, afforestation, and local community rehabilitation.
2. Rule of Law & Governance Accountability
Failure to enforce recovery reflects poorly on:
- State administrative efficiency
- Monitoring mechanisms for mining operations
- Judicial compliance efforts
3. Public Revenue Loss
₹2700 crore (and nearly double with interest) is public money, which could be used for:
- Healthcare and education
- Tribal welfare schemes
- Infrastructure development
Allowing illegal miners to avoid payment signals economic injustice and regulatory leniency.
Connection to Larger Judicial Trends
The Supreme Court in recent years has repeatedly:
- Intervened to accelerate trial delays
- Pushed for transparency in mining and environmental authorization
- Emphasized the “Polluter Pays” principle
- Criticized State inaction in corruption-pooled sectors
The Court’s stance aligns with broader efforts to strengthen environmental rule of law in India.
What Happens Next?
If Odisha fails to show measurable progress, the Court may:
- Appoint a special monitoring committee
- Direct coercive revenue recovery
- Initiate contempt proceedings against responsible officials
- Recommend CBI or SIT inquiry if collusion allegations gain traction
For now, all eyes are on the eight-week deadline.
Conclusion
The Supreme Court’s stern message signals that non-enforcement of environmental penalties will not be tolerated. The Odisha Government must now demonstrate accountability, transparency, and seriousness in recovering the ₹2700 crore owed to the public exchequer.
This case stands as a crucial test of environmental governance, judicial authority, and State responsibility in India’s mining sector.
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