E-auction system for selling iron ore in Karnataka: SC

The Supreme Court on Monday said the selling of iron ore in Karnataka has been conducted in “the most outrageous manner” in past and it cannot be allowed to come back again.
 
The court rejected a plea by lobby group Federation of Indian Mineral Industries (FIMI), South and M/s Vedanta Ltd for scrapping e-auction system for selling iron ore in Karnataka.
 
Karnataka government, as well as the court-appointed Central Empowered Committee, supported the plea. Both wanted to replace the e-auction by setting up a committee of officials to monitor the sale through e-platform by long-term agreements.
 
However, a three-judge bench presided over by Justice Ranjan Gogoi said, “The experience of the past has been horrific. Sale and purchase of iron-ore had been conducted in the most outrageous manner and on wholly unacceptable terms resulting, inter alia, in huge leakage of government revenue. Such experiences and events cannot be allowed to resurface.”
 
Taking an overall view of the matter, we are of the opinion that time has not come to dispense with the existing policy of sale and purchase of iron-ore in Karnataka through the court-appointed monitoring committee by e-auction put in place by an order on September 2, 2011, the bench said.
 
The court, though, agreed that it is correct that any trading process has to be free and fair with liberty to the contracting parties to work out their own terms of sale and purchase.
 
“What cannot be ignored are the circumstances which had prompted the court to conceive of and continue with a departure from the normal rule and instead to have a regulated, if not, highly controlled system of sale and purchase of iron-ore,” the bench, also comprising Justices Prafulla C Pant and Navin Sinha said.
 
The court also noted the concept of e-auction was proposed by it in its order on April 18, 2013 “to comprehensively deal with the issue of illegal mining and depredation of nature and environment”.
“
There is a vivid and graphic description of the enormity of the illegal mining and consequential damage to the ecology and environment that had led to the intervention of this court and had prompted exercise of its jurisdiction in the present matter. Innovative measures and orders with the aid of Article 142 (order for complete justice) of the Constitution were felt necessary and consequently passed by the court from time to time,” the bench said.
 
The plea was opposed by NGO Samaj Parivartan Samudaya which stated the e-auction was meant to provide the best price and royalty to the state government.
 
The court also said since a cap on production (30 million metric tonne) and restoration of ecology and environment through a Comprehensive Environment Plans for the Mining Impact Zone (CEPMIZ) has been under consideration of it, the time was not ripe for restoration of normal sale and purchase iron ore in Karnataka