New Delhi: The Supreme Court stayed the mining of limestone by Lafarge Umiam Mining Pvt. Ltd (LUMPL) in Meghalaya on Friday.

The decision may hit the production of cement by a unit of Lafarge SA, the world’s largest cement maker, in neighbouring Bangladesh unless it’s able to source limestone from alternative sources to feed the plant.

The Supreme Court was hearing a petition filed by 21 local tribals and the Shella Action Committee, a non-governmental organization.

The petition claimed that LUMPL had obtained environmental clearance by falsely declaring forest areas as wasteland and non-forest areas; it also alleged that the company had illegally transferred tribal land protected under the sixth schedule of the Constitution to itself and mortgaged it in favour of foreign banks to secure a loan of $153 million (around Rs713 crore today).

“This is a serious allegation and Lafarge must clarify its position," said justice S.H. Kapadia, a member of the three-judge bench. “This cannot go on."

By staying mining operations, the apex court bench headed by Chief Justice of India K.G. Balakrishnan overturned a previous order passed in November 2007 that had allowed the France-based company to carry on mining operations in the area.

LUMPL is a 100% subsidiary of Lafarge Surma Cement Ltd of Bangladesh, which operates the 1.2 million tonnes per annum cement plant at Chhatak, Bangladesh, the company said in emailed press release.

Lafarge Surma is a joint venture between Lafarge SA and Cementos Molins SA of Spain.

The ore is transported on a conveyor belt over a 17km stretch, with 7km of this in India and the rest located in Bangladesh across the international border.

The sixth schedule of the Constitution protects the rights of various hill communities, especially with respect to land.

Responding to the judge’s remarks, LUMPL’s lawyer Mukul Rohatgi said: “I am not aware of these allegations."

LUMPL has been asked to file its responses to the points raised in court at the next hearing, which has been fixed for 19 March, the company said in the release.

“We are studying the details of the order and all necessary information will be provided as per the directions of the Honourable Supreme Court— within the stipulated time," the company said. In the interim, “the court has asked LUMPL to hold its mining operations in abeyance... However, the Honourable Supreme Court has allowed the company (LUMPL) to export the mined limestone lying at the site."

Harish Salve, amicus curiae (adviser to the court) in the matter, asked for a stay on the mining operations, referring to the adverse Central Empowered Committee (CEC) report of September 2007, which had observed there was no public interest in allowing this to be undertaken in a location that had ecological implications.

The CEC report had stated that Lafarge Surma Cement was situated in Bangladesh and that since the company only sourced raw material, it didn’t generate value addition, employment generation, taxes, revenue or other economic benefits to India.

“This raises serious doubts and concerns about the public interest and desirability in allowing the mining in an eco-sensitive area in the North-Eastern region," CEC noted.

CEC had decided to give its go-ahead for the project since the matter was too advanced to be reversed, but recommended levying “penal consequences and deterrent cost" on the company and government officials.

Referring to the committee’s report that the government was left with no option, but to permit the Lafarge project to proceed, justice Kapadia said: “There is no question of fait accompli and things can be redressed."