Eager to end the mining stalemate, Goan legislators recently unanimously passed a resolution urging Parliament to amend the law to give the erstwhile Portuguese concessions a tenure of 50 years from 1987. We take a look at the legal tenability of this move
By BUSINESS GOA TEAM
Ever since the Supreme Court’s judgment on February 7, 2018, various solutions have been part of the public discourse in Goa. However, six months after the judgment and nothing moving on the ground, the chorus has narrowed to a legislative cure.
Recently, Goa’s Assembly passed a unanimous and unprecedented resolution urging Parliament to amend the law to give the erstwhile Portuguese concessions a tenure of 50 years from 1987. While it is to be seen if this ‘request’ from Goa will meet with the approval of Parliament, the legal tenability of such a move is worth considering.
In legal parlance, a law enacted to overcome a judicial pronouncement is called a “validating legislation”. Literally speaking, it validates something already done, which has been held by the court to be invalid. This is most commonly adopted by Parliament in matters of taxation, which go unnoticed except by chartered accountants and tax lawyers. One that is common knowledge is the Vodafone verdict of the Supreme Court being overcome by means of a retrospective amendment.
Closer home, the people of Goa would remember the Ordinance promulgated by the Governor of Goa to amend the Land Acquisition Act to prevent the demolition of a part of a hotel in Dona Paula, ordered by the Supreme Court. The Ordinance then became an Act and was expectedly challenged before the Supreme Court, only to be upheld.
The most recent instance of such an exercise was the ordinance to allow the ancient event of Jallikattu, banned by the Supreme Court. Another such instance was the ordinance to defer the implementation of NEET exams, after the Supreme Court upheld its validity at a time when it would be a little too late for students to prepare for it.
How does it work?
To the uninitiated, it might seem an affront to the Court and a mockery of the judicial process and the majesty of the highest court in the country. However, it is the Supreme Court itself that has been upholding such laws.
Bereft of the legalese, what is not permissible is the legislature declaring the court’s verdict to be wrong and also merely declaring that the court’s verdict won’t stand. However, what is permissible and has been consistently held so by the Supreme Court is that the legislature can change the basis of the judicial verdict, thus rendering the court’s finding academic.
How will it work here?
All the rhetoric surrounding the judgment in the public discourse would make it confusing to decipher the basis of the judgment in question. However, legally speaking, the basis of the court’s direction that new leases ought to be granted in Goa and that the existing ones cannot mine any further is simply that – leases in Goa which have been converted from Portuguese perpetual concessions had a maximum tenure of six months and 20 years from the coming into force of the Goa, Daman and Diu Mining Concessions (Abolition and Declaration as Mining Leases) Act, 1987 and this had been already held to be so in the 2014 judgment. Consequently, no renewal of these leases was permissible in law, even though the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act, 1957) provides for it.
This isn’t the first time though that Parliament will have the occasion to cure a situation based on the issue of renewal of leases. The 2014 judgment concerning Goa, for the first time, held that those that had applied for a second or subsequent renewal under the MMDR Act, 1957 could not continue mining in the mean time. On this basis, the court had held the mining done in Goa from 2007 to 2012 to be illegal.
The enormity of the problem was understood by all when the time came to apply the same legal position to hundreds of leases in Odisha that were operating similarly on a deemed extension for years, i.e. they had applied for a second or subsequent renewal and the state government had been sitting on their applications. Faced with this scenario, an ordinance was promulgated by the President on January 12, 2015 introducing primarily four regimes:
- All leases whenever granted and for whatever time granted would now be treated as having been granted for 50 years.
- All leases where this 50 year period might have been over, but had a subsisting renewal term, would run till the end of such term.
- All leases in whose case the 50 years was over, where there was no subsisting renewal but renewal applications were pending will be retrospectively deemed extended till 2030 for captive mines and 2020 for non-captive mines.
- Going forward, mines will only be granted by means of auctions.
The leases in Goa are peculiar in many ways, beginning with their history. They were all historically granted by the Portuguese as perpetual concessions.
After the liberation of Goa, Indian laws were extended to Goa with corresponding identical Portuguese laws ceasing to have force. On October 1, 1963 the MMDR Act was extended to Goa. However, even the Indian government did not treat the Portuguese concessions to be covered within its ambit.
When certain taxes were sought to be collected under the Indian law from some of these concessionaires, V M Salgaocar challenged the same in the High Court and, on September 29, 1983, the High Court directed that these could not be collected, after the lawyer for the Government of India conceded that it was not their intention to treat these concessions as mining leases under the MMDR Act.
However, Parliament appears to have had different ideas then. On May 23, 1987, Parliament enacted the Abolition Act and converted the concessions into mining leases with a tenure ending in six months with a renewal as a matter of right (which in terms of the MMDR Act would be of 20 years and would thus eventually end on November 22, 2007). What is interesting though it that to overcome the judgment secured by V M Salgaocar, Parliament inserted a retrospective start date for these leases i.e. December, 20, 1961 so as to be able to collect dead rent and royalty from them; something that the High Court had injuncted the Government from doing.
When the concessionaires challenged this Act in the High Court, they succeeded to the extent that the High Court on June 20, 1997 held that the collection of dead rent and royalty would only be prospective. However, the High Court upheld the remainder of the Act. This judgment remains challenged by both the concessionaires and the Central Government and is pending in the Supreme Court since 1998.
Given this situation, if the leases in Goa have to fit themselves into the three categories created in 2015, they would either have to get the 50 years tenure, a renewal term or the extension till 2020. As for the 50 years, with a fictional start date in 1961, their 50 years would end in 2011. They cannot get the benefit of a subsisting renewal period since the Supreme Court has held only the leases in Goa are not entitled to a second renewal. As for the extension till 2020, again the Supreme Court has not given effect to the same as far as leases in Goa are concerned.
The basis of the judgment being the renewals, their permissibility and correctness, if Parliament were to make the leases in Goa, just as with other lessees, free from the concept of renewals with retrospective effect, then the judgment would not continue to operate. In other words, if the leases in Goa are deemed to be not dependent on renewals, the judgment’s basis will not survive.
The suggestion of the Goa Assembly appears to be in line with this thought process. If the Abolition Act or the MMDR Act is suitably amended to make the Goan leases subject to a single grant of 50 years beginning with 1987 and ending in 2037, any judicial verdict on renewals would be inapplicable to them.
This could be achieved either by amending the start date of the leases in the Abolition Act or by clarifying in the MMDR Act that for Goan concessions, the start date would be from 1987.
Legal opinion at the moment seems to suggest that such a legislation, if it sees the light of the day, would meet the test of judicial scrutiny. As the action moves to Delhi at Sansad Marg, Goa and Goans will watch with a baited breath.