JSW Steel deal | Mining controversies, Karnataka CMs go hand in hand

Karnataka Chief Minister Siddaramaiah, even as he is battling the Opposition's charges over MUDA land allotments, in on to the next controversy.

His government’s approval to execute the absolute sale deed of 3,666 acres in Ballari district in favour of Sajjan Jindal-led JSW Steel Ltd, which has remained controversial for several years now, is turning out to be another political hot-potato. 

The Congress government in the state is finding itself defending the move, saying it executed the sale deed under 'legal compulsion'.

However, it is not just the current Chief Minister. Over the past 10 years, successive governments in Karnataka have faced allegations of selling huge tracts of mineral-rich land at "throwaway prices”.

Three Chief Ministers — BS Yediyurappa, Siddaramaiah and HD Kumaraswamy — have sought to sell huge tracts of mineral-rich land during their respective tenures.

Siddaramaiah in a corner

Siddaramaiah, whose government decided to sell 3,667 acres of land in Ballari district to JSW Steel, finds himself in a truly sticky situation. According to government sources, besides Opposition parties, his own Cabinet colleagues are opposing the land sale.

Sources in the Congress told The Federal that “as many as five state ministers" are opposing the Cabinet’s decision. These include Karnataka Law and Parliamentary Affairs Minister HK Patil, Forests Minister Eshwar Khandre, and Social Welfare Minister HC Mahadevappa.

“It is Energy Minister KJ George and a few others who supported the proposal mooted in the Cabinet by the Minister for Medium and Large Industries MB Patil,” said one of the sources.

Last week, senior BJP leader Arvind Bellad, addressing the media, accused the Congress government of selling the land to JSW Steels at a throwaway price. This is nothing but a big scam, he alleged. Further, he claimed that the land was sold for 'some consideration'.

Political tool or scam

The state government's decision to execute the sale deed has prompted two questions. One, is the Karnataka JSW land deal truly a scam or just a political tool for the Opposition? Two, why are successive governments bent on selling the land instead of leasing it out for a specific period?

The sale decision has become the latest weapon for the Opposition BJP and Janata Dal (Secular) to attack the Congress government.

It's not just the Opposition. The farming community is also opposing the state government’s move. Taking exception to the Cabinet’s decision, Karnataka Rajya Raitha Sangha Badagalapura Nagendra president Badagalapura Nagendra accused the government of selling the land at a very low price.

He further expressed concern over poor farmers getting evicted from their land. “The Congress party, which had been opposing such a sale, is now getting ready to sell the government land. It only shows that all the political parties are keen to return favours to the steel company,” Nagendra told The Federal.

Charges against other CMs

The JD(S), which is now accusing the state government of corruption, has faced its share of accusations, too.

Kumaraswamy, as Union Minister for Steel and former Chief Minister, recently faced the wrath of environmentalists for allowing KIOCL (formerly Kudremukh Iron Ore Company Ltd), a Central Public Sector Undertaking (CPSU), to mine iron ore in the Devadari forests in Ballari district.

He is also facing criticism for sanctioning 550 acres of agricultural land in October 2007 to Sri Sai Venkateshwara Minerals Company (SSVMC), which reportedly was not a registered company then. The Lokayukta, which investigated this deal, accused Kumaraswamy of violating norms in its report submitted in 2010-11.

The current Karnataka government sought the Governor’s permission to prosecute Kumaraswamy in this case, supposedly as a retaliatory strategy to the BJP-JD(S) combine seeking Siddaramaiah’s resignation in the MUDA site allotment case.

Yediyurappa in the dock

Yediyurappa, who headed a BJP government in Karnataka from May 2008 to August 2011, faced a massive corruption charged that significantly impacted his political career.

In 2012, he was accused by the Lokayukta and the Supreme Court-appointed Central Empowered Committee (CEC) of misusing his office to receive ₹20-crore kickback from South West Mining Company Ltd (SWMCL) in a quid pro quo deal.

The Central Bureau of Investigation (CBI) charged Yediyurappa and others of criminal conspiracy, forgery and corruption.

Apart from SWMCL, Jindal Steel Works and Mysore Minerals Ltd also came under the CBI scanner.

Timeline of JSW Steel land deal

The land deal with JSW Steels was originally proposed in 1996, when HD Deve Gowda headed a Janata Dal government in Karnataka. This deal got a fresh lease of life in 2006, ironically, when the JD(S)-BJP coalition government approved it.

The deal was signed by Yediyurappa, who was then the Deputy Chief Minister and state Industries Minister. The initial proposal was to lease out 2,000 acres in two villages of Ballari for six years.

In 2007, land to the extent of 1,666 acres in three more villages were brought under the deal for a lease period of 10 years. Per the agreement, the government was to sell the land to the company after 10 years.

Sale on hold

In 2012, the sale of the land was kept on hold after JSW Steel’s name appeared in the 2011 Lokayukta report on illegal mining.

In 2013, after the Congress came to power in Karnataka, a sub-committee was formed under HK Patil to implement the Lokayukta recommendation to stop illegal mining. On the committee's advice in 2014, the land sale was kept on hold pending legal opinion.

But, the Karnataka High Court quashed the allegation against JSW Steel.

In May 2019, a JD(S)-Congress government, headed by Kumaraswamy decided to honour the 2006 agreement to sell the land. Even then, according to sources, “both BJP and HK Patil of Congress opposed the government move”.

Legal compulsions

The question is what made the Siddaramaiah government go ahead with this proposal despite the fact that it was bound to create controversy. According to MB Patil, it is a legality.

The Cabinet made the decision after JSW Steel approached the court seeking direction to the state government to execute the lease-cum-sale deed signed in 2006 and 2007, he said.

MB Patil argued that the government is just complying with the law of the land after taking the opinion of the legal department. The legal department said in its report that “the company, in pursuant to the land allotment, has utilised the same for setting up the integrated steel plant and there is no breach of terms of the lease-cum agreement”.

Forced to defend

HK Patil, who opposed the sale deal earlier, is now forced to defend the government’s decision.

“The government has legal compulsions to execute the sale deed, as there is writ of mandamus (a judicial remedy used to direct a state or local agency to correct a public record) and we have decided to execute the sale deed,” he told media persons.

However, a senior Congress leader observed that any major objection to the land deal could develop into a Pandora's box. “As all the Chief Ministers, including Deve Gowda, Kumaraswamy and Yediyurappa, are involved in the 28-year land deal for mining, neither Opposition parties nor the ruling government had any problem in sealing the deal. Any opposition will result in skeletons tumbling out of the cupboard,” said the leader. 

The BJP and JD(S), it appears, may still want to seize the opportunity to challenge Siddaramaiah, who's already in the line of fire.