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The Andhra Pradesh government told the Supreme Court that it could not allow Obulapuram mining Business to sell and dispose of iron ore deposits to pay its due taxes and duties as the CBI is conducting an enquiry on illegal mining inside the state.

Attorney General Goolam E Vahanvati appearing for the state government told a unique forest bench headed by the Chief Justice S H Kapadia that the excavated iron ore could possibly be necessary by the investigation agency.

He also rejected the apprehensions raised by OMC, owned by powerful Reddy brothers of Karnataka, that the ores would get soiled and lose value immediately after acquiring wet in approaching monsoon season.

Mr Vahanvati said that “Material would not be damaged except causing some oxidation … CBI calls for material to be kept there to take a stock.”

Mr Vanhanvati’s response came following the bench throughout its last hearing asked the state no matter whether OMC should be allowed to sell 250,000 metric tonnes of iron ore lying at its mines and deposit the cash earned from it into a separate bank account until the matter was pending in court.

The apex court’s directions came immediately after OMC in its application prior to the court sought permission to dispose of 250,000 metric tonnes of iron ore to pay the tax departments demand of INR 184 crores.

The bench, which also comprised Justice Afatab Alam and Justice KS Radhakrishnan adjourned the matter, saying that it would pursue this case in July following hearing on illegal mining by Lafarge in East Khasi Hill in Meghalaya was completed. Furthermore, the bench also directed the OMC to give a list of mined iron ores prior to Might 2010 and soon after 2010.

The organization owners Reddy brothers, who hold mining leases for more than 140 hectares of land spread in Andhra Pradesh’s Anantapur district, are accused of encroaching upon reserve forest land.

Earlier, the apex court had in March 2010 directed OMC to stop mining activities over allegations of mining within the Bellary Forest region. On the other hand, later on Could ten that year, it allowed OMC to resume mining in the undisputed region, when directing it not to mine on a distance upto 50 meters on either side in the inter-state boundary of Andhra Pradesh and Karnataka.

However, on January 7, 2011, Central Empowered Committee a high powered panel appointed by the apex court, recommended cancellation of OMC’s mining lease following acquiring large-scale illegal mining and violations of different environmental laws in the latter’s mining operations.

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