Madras HC Orders CBI Probe Into Rs.5800 Crore Illegal Sand Mining In Tamil Nadu

The Madras High Court on Monday ordered a Central Bureau of Investigation probe into the alleged illegal beach sand mining operation, amounting to Rs 5,832 crore, by private mining companies in the coastal districts of Tirunelveli, Tuticorin, and Kanyakumari in Tamil Nadu.

The court emphasized that the role of officials in the scam must be scrutinized and noted that a potential political nexus could not be ruled out. A division bench comprising Justices S. M. Subramaniam and M. Jothiraman directed the CBI to register criminal cases and commence investigations.

The directive was issued in response to a batch of petitions, including a suo motu Public Interest Litigation (PIL), V. V. Minerals, and 29 others. “In light of the above discussions, this Court finds it a fit case to refer the matter to the CBI. Hence, based on the findings in the Committee reports discussed above and all other materials available on record, the CBI is directed to register criminal cases and launch investigations.

Additionally, any pending cases relating to these issues, currently under the Tamil Nadu Police, shall be transferred to the CBI to enable an effective investigation. All related case files must be handed over to the CBI within four weeks,” the bench stated.

The court directed the CBI Director to establish multiple Special Investigation Teams (SITs) composed of officials with expertise and high integrity to conduct the probe, with the Director overseeing the investigations. The probe must examine the modus operandi of the illegal beach sand mining network, the role of officials—including their actions and inactions—across the chain of command responsible for this significant economic loss to the state exchequer.

Further, the court-mandated an inquiry into the alleged corruption and collusion of officials with mining companies engaged in illicit mining, transportation, storage, and export.

The investigation should cover all accountable departments. It must also assess the role of officials involved in royalty settlements, wherein arbitrary fixation of royalty benefited respondent companies.

The court underscored that the potential political involvement in the scam required scrutiny. “Hence, the CBI is directed to investigate the alleged political nexus and examine the role of policymakers in colluding with private mining entities,” the bench stated.

Additionally, the bench highlighted the need for a multidisciplinary probe into the presence of high concentrations of monazite in processed stocks and whether this prescribed substance had been exported, as it is a matter of national security. It emphasized the necessity of investigating the unauthorized inclusion of monazite by the state government without the mandatory approval of the central government, to determine if there was collusion between the political, executive, and private mining entities.

Beyond the key issues identified, the court authorized the CBI to expand its investigation as necessary and to submit a final report before the Jurisdictional Court. Given the substantial economic impact of the illegal mining and export operations—resulting in financial losses running into thousands of crores—the Government of India was directed to scrutinize all financial and commercial transactions of the respondent mining companies dealing with beach sand minerals (BSMs).

The case was also referred for investigation to agencies including the Enforcement Directorate, the Income Tax Department, the Customs and Excise Department, and the Commercial Taxes Department.

The Government of Tamil Nadu and the Government of India were directed to initiate simultaneous departmental disciplinary proceedings against officials implicated in the scam. The court further granted liberty to any individual to initiate contempt proceedings should any of its directives be violated.

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