State is not constitutionally mandated to auction mineral dumps located outside mining lease areas.

The Petitioner, an environmental NGO, challenged Clause 2(2) of the "Policy for Regulating Iron Ore Dump Handling in the State of Goa, 2023." This clause permits erstwhile mining lessees (whose leases expired in 2007 or were quashed in 2018) to remove inventoried mining dumps located outside lease areas on private or government land upon payment of conversion fees and royalty, rather than putting them to public auction.

Procedurally, this follows the Supreme Court's decisions in Goa Foundation-1 (2014) and Goa Foundation-2 (2018), which declared mining after 2007 illegal and mandated fresh leases via auction.

In 2022, the Supreme Court permitted the State to carry out dump mining as per an Expert Committee's recommendations.

The Petitioner contended that these dumps are natural resources that must be auctioned to prevent loss to the public exchequer.

1. Whether the State of Goa can alienate valuable minerals contained in mining dumps without holding a public auction

2. Whether dump mining can be permitted without granting a formal mining lease in respect of the land where the dump is located

3. Whether Clause 2(2) of the Dump Policy 2023 violates the principles of natural resource allocation established by the Supreme Court

The court primarily applied Article 141 of the Constitution, which makes Supreme Court orders binding on all courts.

It relied on the "preferable but not mandatory" doctrine for auctions established in Natural Resources Allocation, In Re, Special Ref. No. 1 of 2012, which held that auction is not a constitutional mandate for all natural resources unless the alienation lacks social or public good.

The court also invoked the principle of judicial restraint in executive policy matters as seen in BALCO Employees Union v. Union of India, which restricts courts from interfering in economic policies unless they are illegal or capricious.

Furthermore, it considered Section 10(B) of the MMDR Act, 1957, regarding the auction of notified minerals.

The Court reasoned that while Goa Foundation-1 declared dumping outside lease areas illegal, the Supreme Court did not order the confiscation of these dumps.

Instead, the Supreme Court’s 2022 order specifically authorized the State to handle dumps in accordance with the Expert Committee's recommendations, which left the policy for non-lease area dumps to the State's discretion.

The High Court noted that auctions are a "price discovery mechanism" but not the sole legal method for disposal.

Since the ex-lessees had already paid conversion fees and were required to pay royalties and a 22% premium under the policy, the process was deemed sufficiently transparent and not causing a loss to the exchequer.

The Court further distinguished "dumps" (waste material generated under approved plans) from primary mineral extraction, concluding they do not strictly fall under the mandatory auction requirements of Section 10(B) of the MMDR Act.

It held that the policy align with the Supreme Court's 2022 directions and the recommendations of the Expert Committee.

The Court cannot sit in appeal over the economic wisdom of the State’s policy or mandate an auction when the Supreme Court has permitted the State to evolve its own handling procedure.

All approvals granted to Respondent No. 4 under the policy were upheld.