Supreme Court Chides Odisha Govt For Delay In Recovering ₹2700 Crore Compensation From Illegal Mining Leaseholders

The Supreme Court on Wednesday pulled up the State of Odisha for its failure to recover compensation exceeding ₹2,700 crore from mining leaseholders involved in illegal mining of iron and manganese ore without obtaining prior environmental clearance.

A Bench comprising Justice Dipankar Datta and Justice AG Masih was hearing a plea concerning the non-recovery of dues that were imposed pursuant to the Supreme Court's 2017 judgment, which had directed the State to recover compensation from defaulting leaseholders operating in the districts of Keonjhar, Sundargarh and Mayurbhanj.

During the hearing, Advocate Prashant Bhushan, appearing for the petitioner, Common Cause, alleged that the State authorities appeared to be “in collusion” with the leaseholders, given the prolonged inaction. “There has been inordinate delay. The monies had to be paid by 31 December 2017, and this amount is without interest. With interest, it will be almost double,” he submitted.

In response, the Advocate General of Odisha denied any collusion and sought four weeks' time to meet with the Chief Secretary and other officials to ensure appropriate action is taken. “Kindly grant reasonable time; whatever legal steps are required under law, I will ensure that they are taken,” the AG assured the Court.

Expressing dissatisfaction, the Bench observed in its order that it was “not pleased with the manner in which the State of Odisha has been proceeding for recovery of the compensation.” The Court recorded the submission of the Advocate General that he would take personal interest in the matter and ensure concrete steps are taken against the defaulters.

The matter has been adjourned for eight weeks, with the Court directing the State to show progress in recovery efforts by the next date of hearing.

Background

In its 2017 judgment, the Supreme Court held that several mining leaseholders in Odisha had extracted iron and manganese ore without obtaining necessary clearances under the Environment (Protection) Act, 1986, and the Forest (Conservation) Act, 1980. The Court ordered recovery of the full price of illegally mined minerals from the leaseholders, as mandated under Section 21(5) of the MMDR Act. The total notional value of the illegally mined ore, as noted by the Court in that judgment, was over ₹17,500 crore.

Common Cause filed the present miscellaneous application over unrecovered dues. In January 2025, the Court took note of an affidavit filed by the Additional Secretary, Department of Steel and Mines, Government of Odisha, stating that as on January 20, 2025, the total outstanding dues stood at ₹2721.65 crore, with accrued interest amounting to ₹3506.68 crore. The State had then informed the Court that proceedings for recovery were pending before various forums, including actions under the Odisha Public Demands Recovery Act, 1962.

According to that affidavit, compensation had been recovered from three lessees, while recovery was underway in four cases pursuant to Supreme Court orders allowing sale of minerals. In five cases, recovery was held up due to litigation, and in fourteen cases, attachment proceedings were in process under the OPDR Act.

Case : COMMON CAUSE Vs UNION OF INDIA