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Economy Sep 12, 2012

Goa mining scam: Why Digambar Kamat may go scot free

By Raman Kirpal

Goa Chief Minister Manohar Parrikar may file an FIR against his predecessor Digambar Kamat of the Congress in the mining scam but the latter is sure to come out clean, courtesy some help from the Union Ministry of Mines.

The ministry has rejected a major recommendation of the Justice Shah Commission's report on Goa mining. According to the existing law, miners get 'deemed extension' if the state government fails to clear the application for renewal of mining lease in time. Thus almost all the iron ore mines in Goa were breathing on the 'deemed extension' law. The Shah Commission report said there should be a time limit to 'eternal' mining even when the state government does not give approval for renewal of the lease. Why any miner needs to seek renewal, if the extension is deemed?

"The period of such deemed extension should be limited to a period of only one year'' from the expiry date of lease, Justice Shah observes and recommends.

The Ministry of Mine, in its Action Taken Report (ATR), says: "Not agreed.'' "...such a move would encourage corruption enabling the use of threat of delay to gain undue pecuniary advantages. For a miner the cost of shutting down a mining operation and restarting it would be a major disincentive and will push him to corruption,'' the ministry's ATR says.

Reuters

This rejection of the commission's recommendation in one stroke has helped Digambar Kamat wriggle out from the huge Goa mining scam that Firstpost had reported first on 5 September 2011.

The Shah Commission has pegged total losses to the Goa exchequer from 2006-2011 at Rs 34,935 crore.

The story of Kamat, who was the mining minister for the longest period (12 years in a row) in Goa, revolves around the rule of "deemed extension" only. And the ministry has legitimised Kamat's acts by rejecting the commission's recommendation.

Most of the mining leases had expired and these miners had applied for the renewal to the Kamat government. But Kamat sat over them and under the existing rules the miners got the 'deemed extension' despite 'no approval'.

"Even though first renewal applications were filed in time, they were not decided by the mines department and, the leases are permitted to occupy/operate the mines. The reasons for this are not known? This is in gross violation of the then Rule 24A (2), (4), (5) and (6) of the MCR, 1960. The leases are allowed on deemed extension, which was not in existence at that point of time,'' the report says.

"In case of 97 mining leases, the applications are apparently not disposed of within the stipulated time, and therefore, renewal after cut-off date, can not be justified as there was no provision and jurisdiction to condone the delay. All such renewals are void and of no effect. State Government should take action accordingly. Action should also be initiated against all the concerned officials and Ministers (in this case Digambar Kamat) who are responsible for renewal against the law,'' says the commission report.

These 97 mines, which were benefitted by Kamat's 'indecision', include Sesa and Dempo (managed and owned by Vedanta now), Salgaocar, Timblo and Chowgule mines. The commission's report notes that this happened despite the fact that the Goa Government follows 'single file system'.

"The file is initiated at the office of Director (Mines) or Additional Principal Chief Conservator of Forest, moves to Government (Secretary) and then to concerned Minister/Chief Minister. Thereafter, orders are issued. Thus the entire contents of the matter remain available when the final approval is accorded by the concerned Ministers or Chief Minister. All the decisions taken at various levels are based on the full knowledge of issues and contents of matters. It is therefore apparent that knowing well the favourable orders as discussed hereinafter, were issued in violation of various enactments,'' the report observes, indicting Kamat in the mining mess of Goa.

Thus Justice Shah holds that entire administration, including the chief minister, had intentionally violated the law. But the ministry cleaned Kamat's slate by endorsing the 'deemed extension' and thus rejecting the commission's advice.

The second major charge against Kamat was that he revived mining leases that failed to apply for renewals in time after a new law came into being in 1987. As reported by Firstpost earlier, the law Kamat has helped undermine is the Goa, Daman and Diu Mining Concessions (Abolition and Declaration as Mining Leases) Act, 1987, which ended the previous Title Concessions (TCs) given to miners when Goa was a Portuguese colony.

Under the 1987 Act, all the title concessionaires (Sesa, Dempo, Salgaocar, Chowgule, Timblo, etc.) were expected to apply for leases within a year, failing which their leases would lapse and be time-barred. The deadline for the application was sometime in 1988.

Justice Shah Commission categorically states: "Condonation of delay apparently arbitrarily and without jurisdiction which amounts to favouring for reasons best known."

Firstpost had reported that Kamat personally entertained applications for renewals of leases filed as late as 1996 and 2000. Ten applications for renewal were filed in 1996 and two applications in 2000. Kamat condoned delays in two cases and had kept the remaining eight applications "under process". This gave the miners the advantage of "deemed extension" law.

In one 'condoned' case, Kamat handed over three mines of the late Zoiram Neogui to a Congressman, Dinar P Tarcar. Tarcar runs these mines through his company Minescape Earth Movers Pvt Ltd. Zoiram Neogui's application was filed in 1996, but Dinar Tarcar appeared as attorney for all the legal heirs of Zoiram and argued that the delay be condoned in 2005, when the China market was hot for iron ore.

Not only this. In some cases, Kamat had required the Central government's permission for mine operations. The Shah Commission has listed 10 such leases, including Timblo, VM Salgaocar and Chowgule, which remained operative with Kamat's `deemed' consent without the Central government's approval. There may be many more such cases, the report adds.

Kamat even revived some of the Title Concessions, which were cancelled during the Portuguese rule, the report notes. "There are at least nine Concessions which were cancelled or declared free area but incorporated in Schedule I of the Goa Abolition Act 1987," the report says.

Justice Shah says it may be a case of oversight, but Firstpost had reported that Kamat had even handed over "enemy property" to the Timblos for mining. Badrudin Mavani, who owned a Title Concession (No. 14) under the Portuguese, had moved to Pakistan after partition.

Mavani's mining lease was not given to anyone till 2004, when in the absence of Mavani, Kamat put his signature to handing over the Mavani lease to Timblos for mining. And for his protection, Kamat took an "indemnity bond" from the Timblos in case Mavani or his heirs suddenly reappear on the scene.

The Shah Commission report had also recommended a total ban on export of iron ore and manganese ore, because the main cause and incentive for illegal mining was huge profit possible due to exports. The commission recommended that the government should first put its house in order and till then it should put total ban on the export, as natural resource, namely iron ore, has made only few persons billionaires.

The ministry's ATR, however, referred it to the Department of Commerce, with a rider that exports cannot be the reason for illegal mining. "Rather it is lack of governance at State Government levels which has largely contributed to illegal mining," it contends.

Mining is the second largest revenue (after Tourism) earning activity in Goa. The Shah Commission report asks: "Are we going to continuously regularize illegality? It is believed by some persons that the liberty is given to them to loot the national wealth. This tendency may finally lead to anarchy and chaos..."

by Raman Kirpal

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