Sustainable development is a constitutional requirement necessitating a balance between industrial growth and ecological preservation. The court ruled that the credibility and transparency of a user agency must be verified before granting access to national assets to ensure environmental protection and inclusive growth.

ORDER

1. M/s. Vedanta Aluminium Ltd. (formerly known as "Vedanta Alumina Ltd.") has filed an allplication before this Court seeking clearance of the proposal for use of 723.343 ha of land (including 58.943 ha of reserve forest land) in Lanjigarh Tehsil of Kalahandi District for setting up Alumia Refinery. The matter has been pending since 6.3.04. The Project consists of setting up of a large integrated aluminium complex in Orissa by M/s.Vedanta Aluminium Ltd. (M/s. VAL, for short).

2. The short question which needs to be answered is :whether M/s. VAL should be allowed to set up its Refinery/Project known as "Alumina Refinery Project". As stated above the Project involves the proposal for diversion of 58.943 ha of forest land.

3. As a matter of preface, we may state that adherence to the principle of Sustainable Development is now a constitutional requirement. How much damage to the environment and ecology has got to be decided on the facts of each case. While applying the principle of Sustainable Development one must bear in mind that development which meets the needs of the present without compromising the ability of the future generations to meet their own needs is Sustainable Development. Therefore, courts are required to balance development needs with the protection of the environment and ecology. It is the duty of the State under our Constitution to devise and implement a coherent and co-ordinated programme to meet its obligation of Sustainable Development based on inter-generational equity (See: A.P. Pollution Control Board v. Proof. M.V. Nayudu , [1999] 2 SCC 718. Mining is an important revenue generating industry. However, we cannot allow our national assets to be placed into the hands of companies without proper mechanism in place and without ascertaining the credibility of the User Agency.

4 It is not in dispute that in this case mining of bauxite deposits is required to take place on the top of Niyamgiri Hills. MOEF has given an environment clearance for Alumina Refinery Project. All requisite permissions have been obtained by the said applicant. The Refinery to be constructed by M/s. VAL is one million ton Alumina Refinery at Lanjigarh at an estimated cost of Rs. 4000 crores. The mining lease shall stand in the name of OMC Ltd. (State Undertaking). The agreement between OMC Ltd. and M/s. VAL indicates that it is a joint venture in which M/s. VAL is a contractor. The agreement further indicates that the material will be sold by the lessee to M/s.VAL.

5. CEC has objected to the grant of clearance as sought by M/s. VAL on the ground inter alia that the Refinery is totally dependent on mining of bauxite from Niyamgiri Hills, Lanjigarh, which is the only vital wildlife habitat, part of which constitutes elephant corridor and also on the ground that the said Project, including the mining area, would obstruct the proposed wildlife sanctuary and the residence of tribes like Dongaria Kandha. According to CEC, Niyamgiri Hills would be vitally affected if mining is allowed in the above area as Niyamgiri Hills is an important water source for two rivers. According to CEC, the Project would also destroy flora and fauna of the entire region and it would result in soil erosion. According to CEC, use of forest land in an ecologically sensitive area like Niyamgiri Hills should not permitted.

6 On the other side, we have a picture of abject poverty in which the local people are living in Lanjigarh Tehsil including the tribal people. There is no proper housing. There are no hospitals. There are no schools and people are living in extremely poor conditions which is not in dispute.

7. Indian economy for last couple of years has been growing at the rate of 8 to 9% of GDP. It is a remarkable achievement. However, accelerated growth rate of GDP does not provide Inclusive Growth. Keeping in mind the two extremes, this Court thought of balancing development vis-a-vis