Orissa HC Orders ₹1.99 Crore CAMPA Refund To Mining Lessee, Rejects Holdback For Possible Levy On 0.22 Hectares of Forest Land

The Petitioner, the new lessee of the Kanther-Koira Manganese Ore Block, deposited ₹2,66,15,250 in the Orissa CAMPA account on 26 June 2020, calculated at ₹7.50 lakh per hectare under the MoEF&CC guideline for transfer of forest clearance.

After the 2021 amendment to the MMDR Act and subsequent guidelines, the Petitioner’s compensatory liability was determined as ₹66,51,000, leaving an asserted surplus of ₹1,99,64,250.

Despite repeated refund requests, the amount remained unpaid.

The State relied on a condition requiring a fresh diversion proposal for a residual 0.22 hectares, while the Union cited a guideline against refunding interest on compensatory levies.

The State had earlier sought time before the Court to make the refund.

Article 300-A of the Constitution prohibits the State from taking or retaining property without authority of law, while Article 14 requires administrative action to bear a rational relationship to its purpose.

Under Section 8B of the MMDR Act, as amended in 2021, statutory clearances could vest in a successor lessee; the MoEF&CC guidelines dated 7 July 2021 limited the incoming lessee’s liability for NPV, Safety Zone Plantation and Compensatory Afforestation to amounts not already paid by the previous lessee.

Sections 2, 3A and 3B of the Van (Sanrakshan Evam Samvardhan) Adhiniyam, 1980 govern approval for diversion and consequences of contravention.

U.P. Pollution Control Board v. Kanoria Industrial Ltd., (2001) 2 SCC 549, supports writ relief for money retained without lawful authority.

Interest is compensatory and depends on the circumstances; the Court relied on Alok Shanker Pandey v. Union of India, (2007) 3 SCC 545, and Sandvik Asia Ltd. v. CIT, (2006) 2 SCC 508.

The Court treated the 2020 payment as an advance subject to adjustment, not a finally determined levy; once the Petitioner’s liability was fixed at ₹66,51,000, the department’s own records established the refundable balance of ₹1,99,64,250.

The unsubmitted diversion proposal concerned a possible future liability, not a present debt, and the State identified no legal authority to retain the entire surplus as security; retaining it was also disproportionate to the uncertain liability.

The claim was suitable for writ relief because the amount was established by official records and the State had sought time to refund it.

Interest at 18% from the deposit date was not justified: the surplus became ascertainable on 12 May 2023. The Court therefore ordered 6% simple interest from that date, or the higher rate actually earned on the refundable amount, and distinguished the guideline on interest for lawfully realized compensatory levies from the unutilised surplus at issue.

Opposite Party No. 2 was directed to refund ₹1,99,64,250 within six weeks, with interest at 6% per annum from 12 May 2023 until payment or the higher rate actually earned in the CAMPA account, subject to verification.

If payment was not made within six weeks, interest would accrue at 9% per annum thereafter.

Opposite Party No. 5 was directed to take steps to restore or remit any amount transferred to National CAMPA.

The Petitioner remained bound by the transfer conditions, and the authorities retained liberty to determine and recover any compensatory levies lawfully payable for the residual area.