Republic of Bellary
People call it the Republic of Bellary. Flouting of norms, use of official power to earn unimaginable amounts from illegal mining is nothing common in Bellary which around 400 kilometres away from Bangalore. With a new Chief Minister taking over in Karnataka, people will keenly watch the formation of a new cabinet and the big question in the minds of the people is will the Reddy brothers make it or not? The Lokayukta report which claimed the head of B S Yeddyurappa digs deep into the activities in Bellary and on several ocassions, it has recommended that Gali Janardhan Reddy should be kept out of the cabinet and here is the reason why such a recommendation has been made.
Chapter seven of the report on illegal mining titled Associated Mining Company- A pool of Illegalities is not only shocking but spells out clearly how official power has been flouted to bring in the riches illegally. The report states that the title pool of illegalities is very apt in this case and the facts of this case state how people in power could misuse their offices and manipulate the law and executive to their advantage.
The Associated Mining Company was granted a mining lease for a period of 30 years on March 2 1966 and as per the conditions it was permitted to mine in an area of 16.9 hectares in Venkatagiri village of Sandur taluk, Ramghad forest block, Bellary district Karnataka State for winning of iron ore mineral. The lease period expired on March 1 1996. After the expiry the first renewal was effected on March 24 2000. This means that there was a gap of four years between the expiry of the lease and the first renewal in the year 2000. Hence there was no continuity for this renewal. Justice Santhosh Hegde in his report points out that the first renewal is in vilation of the Mines and Minerals Act and there is no approval from the central government for this deviation. Moreover the then minster for Mines in Karnataka, V Muniyappa had approved this renewal contrary to the recommendations of the Secretary, Mines. The then Director, Mines has submitted incorrect information to the Government of India regarding the facts of lease period and its renewals.
The report shows that the mining lease granted in favour of Associated Mining Company is since been taken over presently by all together new managing partners through back door entry to overcome the law. The new managing partners are Lakshmi Aruana and G Janaradhana Reddy.
Janardhan Reddy and Lakshmi Aruna formed part of the management in the year 2010 after which they opened up an account in the state Bank of India, Bellary which again was not intimated to the Commercial Taxes Department for the collection of VAT. Instead the old account no. 1425201000179 of Canara Bank, Bellary has been reported to the Department while having new registration for VAT.
The then Director, Mines Shivalinga Murthy has approved the issuance of MDP without taking approval of Central Government for transfer of rights or interest to new managing partners. He is not a Competent Authority to do so.
In the new account of AMC in SBI Bellay a/c no. 31000313003, there is a debit 269,15,73,602.00 and credit of Rs. 270,60,93,762.00 after 01-08-2009 to 08-02-2011. There are many huge transactions in the said account. The transaction gives the linkages between the Associated Mining Company and other companies/firms/individuals.
There is credit of Rs. 14,00,00,000.00 (Rupees Fourteen Crores) from Janadevi Minerals on 31-05-10 and 19-07-10 in the account of AMC. There is no permits issued as a party/purchaser from AMC. The Janadevi Minerals is also a front company/firm of ILC. Likewise, Rs. 34,15,00000.00 (Rupees Thirty four crores fifteen lakhs) have been credited from the account of Lakshmi Aruna Minerals on 25-06-10, 31-07-10, 20-08-10 and 30-08-10 in the account of AMC (SBI 3003). G. Lakshmi Aruna is the Managing Partner in both firms. There is another credit of Rs.3,00,00,000.00 (Rupees Three Crores) on 07-05-2010 from HDFC Bank of Eagle Traders and Logistics.
There are more transactions of this kind in this account. The money has been credited to this account through circuitous route. This indicates illegal activities of AMC in collusion with other companies.
It is pertinent to state here that royalty has been paid from the bank account of AMC (SBI, Bellary A/c no. 3003) to get issue MDP of the BRY Mines ML. No 2186. An amount of Rs. 96,80,000.00 and Rs. 87,44,000.00 have been paid in the form of Demand Draft favouring Deputy Director, Mines, Hospet. The permit numbers 5771884 dt. 22-05-10 and 571740 were issued. The permits were issued to transfer iron ore from BRY lease to JSW and Lakshmi Aruna Minerals has been stated as purchaser. As observed, the lease of Yogendranath Singh that in the said lease there was no iron ore available. Hence these permits were used in proxy to transport iron ore from unknown source.
Further there are debits from this account (SBI 3003) to Sri Bhakta Markandeshwara Minerals (SBMM) (Axis 2669), Divakar Minerals, JJ Impex, Shantha Lakshmi Jairam, Brahamini Industries, Vijay Mining Infrastructure and many others. The trail of huge amount in this account (SBI 3003) is allegedly linked with the illicit removal of ore from various mines.
Issue of permits- There is a shocking revelation in the report as to how
900 transit permits have been issued after expiry of lease period. This is a blatant misuse and action should be initiated against the concerned Foresters, Range Forest Officer and Deputy Conservator of Forests, Bellary.
The lease expired on 23-03-2010 the validity of the permits also expiries accordingly. Hence iron ore supplied from 24-03-2010 is illegal and unlawful. The quantity of 3,03,573 MT of iron ore supplied since 24-03-2010 to JSW by Associated Mining Company is illegal. There are no permits, AMC as a party, were issued from Deputy Director, Mines, Hospet and Deputy Conservator of Forests Bellary. It is presumed that either the mining activities continued after the expiry of lease period or the iron ore was supplied from unknown source. The market cost of the entire quantity of 3,03.573 MT iron ore should be recovered from the lessee with exemplary penalty. Further any other legal action should also be initiated.
The Deputy Conservator of Forests, Bellary has issued transit permits on 22-03-2010 for transportation of 80000 MT iron ore from the lease in two days. This is misuse of power and authority without application of mind. The Deputy Conservator of Forests has shown undue favour and facilitated illegal mining activities. Action should be initiated against the then Deputy Conservator of Forests, Bellary.
The Deputy Conservator of Forests has issued an order dated 22-03-2010 for deputing 17 foresters in addition to the already engaged for the purpose of issue of Form no. 27. All the foresters were called at the Range office and asked to sign the Form no. 27 sitting in the Range forest office. The transit permits were signed in the Range office under threat as confessed unanimously by them. This is nothing but misuse of authority and powers.
Further there is hardly 10 million tons iron ore reserve left out in the leased area and with the present rate of production it will last for another 9- 10 years only of the grade 60 plus.
The recommendations at the end of this chapter call for stringent action against all those involved in this episode. However the strongest recommendation is against Janardhan Reddy- “in view of the misconduct of Janardhana Reddy, Minister, noted in this Chapter, I recommend to the Competent Authority for his removal from the Cabinet.