IMPORTANT POINTS
Grant of prospecting licence without prior approval of Central Government is not permissible.
Preferential rights accrue u/s 11(1) that too, to only those who already have reconnaissance permit or prospecting licence.
Section 11(1) cannot be overridden by special reasons.

Headnote:(a) Mines and Minerals (Development and Regulation) Act, 1957 - Section 11(5) - Section 11(2) - Unless expressly provided to the contrary a State power to reserve any mining area within its territory to itself for its own use is inseparable element of ownership and incident of sovereignty - Act does not restrict such power - State is within its competence to set aside land owned by it for its exclusive use and under its dominance control. (Para 21)
        (2012) 11 SCC 1 - Relied upon
        (2010) 13 SCC 1 - Referred
        (b) Mines and Minerals (Development and Regulation) Act, 1957 - Section 5(1) and 11(5) r/w Article 226, Constitution of India - Prior approval of Central Government is mandatory - Even State Government cannot itself undertake prospecting u/s 4(3) without prior approval of the Central Government - Grant of prospecting licence to anybody by State without prior approval of Central Government is not permissible - Any writ petition filed before the Central Government issues an order approving or rejecting a proposal would be premature. (Para 24)
        (c) Mineral Concession Rules, 1960 - Rule 63A - Recommendation of the State Government - Does not constitute an order under section 30. (Para 25)
        (d) Mines and Minerals (Development and Regulation) Act, 1957 - Sections 11(1), 11(2) ands 11(5) - Person already having reconnaissance permit or prospecting licence under section 11(1) only can have preferential right for obtaining a prospecting licence or mining lease u/s 11(5) - Provision of section 11(1) cannot be overridden by special reasons - Section 11(5) being not subject to section 11(2), the preference u/s 11(2) can be overridden by special reasons. (Para 28)
        (e) Mines and Minerals (Development and Regulation) Act, 1957 - Sections 11(1) and 11(2) - Distinction - Expression used in 11(1) is "shall have a preferential right for obtaining" - Section 11(2) uses expression "shall have the preferential right to be considered for grant" - Preferential right u/s 11(2) is only in relation to ’consideration’ - It does not preclude consideration of other applicants - Prior application can have preference only if on inter se consideration all applicants are at par. (Para 29)
        (f) Mines and Minerals (Development and Regulation) Act, 1957 - Section 11(2) - Applicability of amended or pre-amended provision - Matter already considered by State Government and recommendation made to Central Government - Order of Central Government u/s 5(1) awaited - Not the stage to consider applicability of section 11(2), amended or pre-amended. (Para 33)
        (1981) 2 SCC 205 - Relied upon
       Facts of the case:
        This is a case regarding re-grant of mining lease.
       Finding of the Court:
        High Court erred in law. The writ petition was premature and not maintainable.
       Result : Appeal allowed.

Judgment :-

SudhansuJyoti Mukhopadhaya, J.

Leave granted.

2. These appeals by special leave have been preferred against the order of Division Bench of Orissa High Court, Cuttack dated 14th July, 2010 in W.P. (C) No.23 of 2009 whereby the writ petition preferred by Geomin Minerals & Marketing (P) Ltd. was allowed and the recommendation made by the State Government dated 9th January, 2009 in favour of POSCO India (P) Ltd. was set aside with a direction to the State Government to take a fresh decision in terms of order dated 27th September, 2007 passed by the Revisional Authority in Revision Application File No.22 (41)/2007-RC-1 by giving the Geomin Minerals & Marketing (P) Ltd. the preferential right of consideration. The Division Bench further observed that in the event the State Government decides to invoke the provisions of Section 11(5) of the Mines and Minerals (Development and Regulation) Act, 1957 (hereinafter referred to as the “MM(D&R) Act”) , “special reasons” for the same in terms of guidelines dated 24th June, 2009 issued by the Ministry of Mines, Government of India be recorded in writing. The State Government was directed to complete the entire exercise within specified period.

3. The factual matrix of the case is as follows:

The availability of two sets of land for fresh grant of lease was notified by the State of Orissa vide Notification dated 20th August, 1991 issued under Rule 59(1) of the Mineral Concession Rules, 1960. The first set comprised of 85.60 acres plus 94.47 acres of land in Village Kansar and Village Gokhurang of Balangir District which had earlier been granted on lease in favour of Shri S.K. Padhi and Shri B.K. Agarwal. These leases were subsequently surrendered to the State Government and were, therefore, available for regrant. The State Government vide notification dated 20th August, 1991 notified the availability w.e.f. 24th October,1991. The second set of land comprised of 283.06 square miles in Horomoto Guali Block, Malangtoli Block, Khandhdhar-Pahar in Block Keonjhar and Sundargarh districts, Taldihi Toda Block, Sundargarh District and Dubna Block I and III which was declared to be reserved for public sector corporations vide Notification dated 05.06.1962 and 06.12.1962. The State Government decided to dereserve the said mineral bearing areas and the availability of the said area was notified vide Notification dated 23rd August,1991. The date of availability for regrant was on and from 29th October, 1991. The dispute in the case of Geomin’s SLP No. 31593/2010 is regarding 186 hectares of land located in village Rantha District Sundergarh. Although, the recommendation made in favour of POSCO covers an area of 2500 hectares, thus Geomin’s interest is limited to a fraction of the land recommended for POSCO.

4. POSCO had made an application for prospecting licence for an area of 6828.54 hectares. Initially a recommendation was made to the Central Government in favour of POSCO for an area of 6204.352 hectares by the State Government on 19.12.2006. The recommendation was challenged by Kudremukh Iron Ore Company (hereinafter referred to as the “Kudremukh Company”) by means of a writ petition being W.P. No. 1775 of 2007. The High Court refrained from exercising its discretion since the matter was pending before the Central Government and directed that representation of Kudremukh Company may be treated as revisional application. The recommendation of the State Government was set aside vide order dated 27th September,2007 by the Revisional Authority as all mineral concession applications were not considered simultaneously and no orders were passed on those applications. It was directed that all pending applications be considered simultaneously and inter se merit be examined and then order be passed as per law after affording an opportunity of hearing to all the applicants. Earlier the Central Government by its letter dated 16.7.2007 had informed the State Government that the recommendation in favour of

Click Here to Read the rest of this document

2013 Supreme(SC) 479

IMPORTANT POINTS Grant of prospecting licence without prior approval of Central Government is not permissible. Preferential rights accrue u/s 11(1) that too, to only those who already have reconnaissance permit or prospecting licence. Section 11(1) cannot be overridden by special reasons.

Cases Referred (3)

IMPORTANT POINTS
Grant of prospecting licence without prior approval of Central Government is not permissible.
Preferential rights accrue u/s 11(1) that too, to only those who already have reconnaissance permit or prospecting licence.
Section 11(1) cannot be overridden by special reasons.