2016 Supreme(SC) 284

SUPREME COURT OF INDIA
T.S. THAKUR, CJI., V. GOPALA GOWDA, R. BANUMATHI, JJ.
State of Kerala & Ors. – Appellants
Versus
M/s Kerala Rare Earth & Minerals Limited & Ors. – Respondents
Civil Appeal Nos. 3608, 3609 & 3610 of 2016 (Arising out of S.L.P.(C) Nos. 1490, 1840 & 1914 OF 2015)
Decided on : 08-04-2016

IMPORTANT POINTS (majority view)
If the subject of regulation and development of mines and minerals is brought under control of Parliament then any legislation by State thereafter would amount to trenching upon the subject under control of Parliament and hence would be unconstitutional.
State Government’s general executive power cannot be invoked to make a reservation dehors Section 17A, MMDR Act.
If a Law requires a particular thing to be done in a particular manner, the act must be done in that manner alone to be valid.

Headnote:Per T.S. Thakur, J. (majority view)

       (a) Mining laws – Subject of regulation and development of mines and minerals, if brought under control of Parliament – Any legislation by State thereafter – Would amount to trenching upon the subject under control of Parliament – Hence unconstitutional. (Para 8)

       AIR 1961 SC 459; AIR 1964 SC 1284; (1990) 1 SCC 12; 1991 Supp (1) SCC 430; 1995 Supp (2) SCC 686; (2001) 1 SCC 91; 1995 Supp(1) SCC 642 – Relied upon

       (b) Mining laws – State Industrial Policy 2007 and Mining Policy 2008 of Government of India – 2008 Policy not reserving minerals in question to State agencies – State policy denying mining lease to any agency other than State agencies – Contrary to 2008 Policy – Contrary to 2008 Policy. (Para 12)

       (2012) 11 SCC 1 – Relied upon

       (c) Mines and Minerals (Development and Regulation) Act, 1957 – Section 17A – Approval of Central Government for reserving any mining area – Instantly no approval taken for reserving mining areas – State Government’s general executive power cannot be invoked to make a reservation dehors Section 17A – Reservation by State untenable. (Para 15, 16, 17)

       (d) Administrative law – Law requiring a particular thing to be done in a particular manner – The act must be done in that manner alone to be valid. (Para 16)

       (2002) 1 SCC 633; (2004) 6 SCC 440; AIR 1964 SC 358; (1978) 1 SCC 405 – Relied upon

       Per R. Banumathi, J. (dissenting)

       (e) Constitution of India – Article 246, Entry 54 of List I and Entry 23 of List II of Seventh Schedule – Subjects brought under control of Union – State loses legislative competence to enact law on such subject. (Para 9)

       AIR 1964 SC 1284 – Relied upon

       (f) Mines and Minerals (Development and Regulation) Act 1957 and Mineral Concession Rules 1960 – Mines and Minerals vest in State – Ownership and right of State remains untouched by Act, 1957 – No agency has any right to mining lease – State has full discretion. (Para 11, 12)

       (2012) 11 SCC 1; (2007) 9 SCC 78; (1981) 2 SCC 205; (1996) 6 SCC 702 – Relied upon

       (g) Mines and Minerals (Development and Regulation) Act, 1957 – Section17A – State’s power to reserve any area not already held under prospecting licence or mining lease – Available to State with approval, not prior approval, of Centre. (Para 16)

       (2010) 13 SCC 1; (2012) 11 SCC 1 – Relied upon

       (h) Mines and Minerals (Development and Regulation) Act, 1957 – Section 17A(2) r/w MC Rules, 1960, Article 298 and Entry 23 of List II, Constitution of India – State empowered to reserve mining areas with approval of Centre – Reservation of areas for State/Central agencies – Authority of State to order reservation flows from its ownership of the mines – Not in derogation of Act, 1957. (Para 20)

       (i) State Industrial Policy 2007 r/w Article 48A, Constitution of India – State reserving mining of minerals in question for State/Central agencies – Consistent with environment protection – Not violative of Act, 1957 and National Policy. (Para 25, 29)

       (1981) 2 SCC 205; (2012) 11 SCC 1 – Relied upon

       (j) Administrative law – Centre remitting the mater to State for reconsideration – State empowered to consier applications afresh on merits – Section 10(3), Mines and Minerals (Development and Regulation) Act, 1957 – No “institutional insubordination”. (Para 35, 36, 38)

       (2010) 13 SCC 1 – Relied upon

       (1976) 4 SCC 427 – Distinguished

       (k) Mining lease – Promissory estoppel and legitimate expectation – Respondent expending huge amount on acquisition of mining lands – Disappointment of expectation – Cannot be a ground for interfering with policy of State reserving areas for exploitation of beach sand mineral by State/Central Public Sector Undertakings – State granting lease to first respondent, but stopping it within ten days - Promissory estoppel not attracted. (Para 39, 41)

       (2012) 11 SCC 1 – Relied upon

       Facts of the case:

       By an order dated 15th September, 2004 the Government of Kerala sanctioned the grant of mining leases for Ilmenite, Rutile, Leucoxene, Zircon and Sillimanite (non-scheduled mineral) for a period of 20 years. Shortly after the issue of the sanction order, however, the State Government by another order dated 25th September, 2004 stayed further action in the matter. This was followed by nine letters dated 12th October, 2006, 16th October, 2006 and 9th November, 2006 addressed to the respondent-company stating that the Government of Kerala was not granting mining leases for mineral sand to private parties.

       The respondent-company filed Writ Petitions which were partly allowed.

       The State Government preferred Writ Appeals which were heard and dismissed.

       Finding of the Court (majority view):

       Reservation of mining areas by the State is not tenable.

       Result: Appeals dismissed.