SC for expanding CBI probe into illegal mining

In more trouble for jailed former Karnataka minister and mining baron G Janardhana Reddy, the Supreme Court on Friday wanted Central Bureau of Investigation to probe the "linkage" between mining activities in Karnataka's Bellary district and Ananthpur in Andhra Pradesh allegedly involving the Reddy brothers.

The court said CBI investigation was needed as it was prima facie satisfied with the materials placed before it that the iron ore extracted by two companies, Associated Mining Company and Deccan Mining Syndicate, was being illegally routed through Obulapuram in Andhra Pradesh.

The court was informed that AMC was owned by Bharatiya Janata Party leader and former Karnataka Tourism Minister Janardhana Reddy, and his wife while DMS was owned by another mining baron S M Jain.

Both the companies, according to the report of the apex court-appointed Central Empowered Committee, were involved in illegal mining in the lease area of 10.12 hectares in the village Jaisingapur village and there were irregularities in renewal of lease.

A bench headed by Chief Justice S H Kapadia specifically noted that Reddy's AMC was involved in "series of illegalities" and even the expert panel report of CEC suggested that the former minister and his wife G Lakshmi Aruna appeared to have taken charge of the company by "adopting dubious means to get themselves admitted as new partners and ensuring the retirement of all the existing partners of the firm".

The court, which issued notice to the CBI, also directed it to apprise it about the status of investigation it had undertaken against Reddy brothers' Obulapuram Mining Company pursuant to the registration of FIR by it on the next hearing on September 30.

The CBI, probing alleged illegal mining and irregularities in allotment of mining leases to Obulapuram Mining Company, had arrested one of the three Reddy brothers, Janardhana Reddy and his brother-in-law and OMC managing director Srinivas Reddy on September 5 from Bellary in Karnataka.

The duo are under judicial custody till October 3 and lodged at Chanchalguda Central Prison in Hyderabad. The apex court today passed the order after perusing the September 21 report of the CEC regarding the survey and demarcation, e-auction and related issues pertaining to the mining leases in districts of Bellary, Chitradurga and Tumkur.

"Essentially this court is prima facie satisfied with the material placed before it about the linkage of mining in Bellary and mining in Ananthpur District of Andhra Pradesh," the bench, also comprising Justices Aftab Alam and Swatanter Kumar said.

"We also prima facie found that material (ore) extracted by two companies, AMC and DMS is being routed through Obulapuram in Andhra Pradesh. It is for this reason we are issuing notice to the CBI. We want CBI to investigate this aspect of linkage," the bench said.

However, the bench asked the CEC to consider the representations of the lease holders on its report, which is based on findings of the Joint team, constituted in pursuance of May 6, 2011 order of the apex court for carrying out survey work and demarcation of 99 mining leases in Bellary, Chitradurga and Tumkur. It said the findings of the CEC should be placed before the apex court for direction.

The CEC report said that high level of production of iron ore (one million ton in 2009-10) shown by Reddy-owned AMC's "is not possible" from the said mining lease of only 10.12 Ha in Ananthpur District and these permits were being used for transportation of iron ore illegally mined from other areas.

During the hearing, the bench was informed by amicus curiae and senior advocate Shyam Divan that Janardhan Reddy, who was also the Minister incharge of Bellary district few months back, abused his official position in the appointment and transfers of government officials.

The CEC report also states that with regard to the two mining leases of state-owned National Mineral Development Corporation, "massive illegal mining" has taken place within its lease area by third parties.