Supreme Court of India
GEOMIN MINERALS & MARKETING (P) LTD.versusSTATE OF ORISSA AND ORS.
- Citation
- 2013 INSC 343
- Decided
- 10 May 2013
- Disposal
- Disposed off
- Bench
- RAJENDRA MAL LODHA
Holding
The Supreme Court held that the High Court erred in entertaining a premature writ petition and in adjudicating the merits of the State's recommendation; the recommendation is subject to prior Central Government approval and the dispute must be remitted to the Central Government for determination under the Mines and Minerals (Development and Regulation) Act, 1957.
Summary
The State of Orissa recommended POSCO for a prospecting licence, which Geomin Minerals & Marketing (P) Ltd. challenged, claiming a preferential right as an earlier applicant. The Orissa High Court set aside the recommendation, holding Geomin had such a right, but the Supreme Court found the writ petition premature because the State's recommendation required prior approval of the Central Government under the Mines and Minerals (Development and Regulation) Act, 1957. The Court held that the High Court erred by examining the merits and the legality of the recommendation, which is within the exclusive jurisdiction of the Central Government. It clarified that no statutory or fundamental right exists to obtain a licence and that the matter must be decided by the Central Government after considering the State’s inter‑se merit table. Consequently, the Supreme Court set aside the High Court’s order and remitted the matter to the Central Government for approval under Sections 5(1) and 11(5) of the Act.
Issues considered
- Whether the writ petition filed by Geomin was premature under Article 226.
- Whether the recommendation made by the State Government under Section 11(5) of the MM(D&R) Act is valid without prior Central Government approval.
- Whether Geomin has a preferential right under the pre‑amended or amended provisions of Section 11 of the MM(D&R) Act.
- Whether the High Court erred in deciding the merits of the recommendation.
- Whether the matter should be decided by the Central Government under Sections 5(1) and 11(5).
Legislation cited
- Mines and Minerals (Development and Regulation) Act, 1957s. 11(5), s. 4(3), s. 5(1), s. 63A
Subjects
mineral concessionpreferential rightrecommendationcentral government approvalwrit petitionprematureSection 5Section 11inter se meritjurisdictionArticle 226
Judgment
[2013] 8 S.C.R. 914
A GEOMIN MINERALS & MARKETING (P) LTD.
V.
STATE OF ORISSA AND ORS.
(Civil Appeal No. 4561 of 2013 etc.)
MAY 10, 2013
B
[R.M. LODHA AND SUDHANSU JYOTI
MUKHOPADHAYA, JJ.]
Mines and Minerals (Development and Regulation) Act,
C 1957 - ss. 5(1) proviso, 11(5), 4(3), 63A - Grant of mineral
concession - Recommendation for - By State Government
- To Central Government - Recommendation challenged -
High Court in exercise of its writ jurisdiction, set aside the
recommendation deciding the case on merits - Held: High
o Court committed grave error of law in deciding the case on
merits and deciding the question of legality of
recommendation - The petition was pre-mature - The Court
should have left the matter to Central Government - Matter
remitted to Central Government to consider the question of
E approval of the recommendation made by the State -
Constitution of India, 1950 - Article 226.
The State Government made recommendation to the
Central Government in favour of POSCO (appellant in
appeal No. 4563 of 13) for grant of prospecting licence.
F The revisional authority set aside the recommendation
and directed the State Government to consider all the
pending applications simultaneously. Writ petition
challenging the order of revisional authority on the
ground that direction for simultaneous consideration of
G all the applications affected the preferential rights of the
first day applicants u/s. 11 (2) of Mines and Minerals
(Development and Regulation} Act, 1957, was dismissed
by High Court holding that there was no preferential right
for the applicant. The appellant-Company 'G' (appellant
H 914
GEOMIN MINERALS & MARKETING (P) LTD. v. STATE 915
OF ORISSA
in appeal No. 4561/13) filed writ petition seeking A
expeditious disposal of its application for mineral
concession and the same was directed by High Court. In
the meantime, s. 11 of the 1957 Act was amended
inserting first proviso to s. 11 (2) and new sub-section (4)
was introduced in s. 11. B
The State Government, pursuant to the order of
revisional authority, after giving a hearing to all the
applicants prepared inter se merit of all the applicants. As
no recommendation was made by the State Government, C
the company 'G' filed writ petition seeking direction for
disposal of pending applications. During pendency of the
petition, the State Government made recommendation in
favour of POSCO to the Central Government. Company
'G' then challenged the recommendation. High Court
allowed the writ petition holding that recommendation in D
favour of POSCO was invalid and the company 'G' had
preferential right for grant of licence and lease. Since no
specific direction was given in favour of Company 'G' for
issuance of licence in its favour, Company 'G'
approached this Court. POSCO and State Government E
also challenged the order of High Court.
Disposing of the appeals, the Court
HELD: 1.1. Under Section 5 of the Mines and Minerals
F
(Development and Regulation) Act, the State Government
cannot grant a reconnaissance permit, prospective
licence or mining lease to any person unless previous
approval of the Central Government has been obtained.
The proviso to Section 5(1) expressly prohibits grant of
PL except with previous approval of Central Government. G
Further, where Section 11 (5) is invoked, there also prior
approval of the Central Government is required. The
proviso to Section 11 (5) prescribes that prior approval of
Central Government shall be obtained "before passing
any order under the sub-section". In the present case the H
916 SUPREME COURT REPORTS [2013] 8 S.C.R.
A State Government has only made recommendations and
has sought approval of Central Government under
proviso to Section 5(1) and proviso to Section 11 (5) but
no final decision has been taken. The State Government
can pass final order granting mining licence only if
B approval is granted by the Central Government under
Section 5(1) or Section 11 (5). [Para 22] [941-G-H; 942-A-C]
Monnet /spat Energy v. Union of India and Ors. (2012)
11 sec 1: 2012 (7) SCR 644 - relied on.
C 1.2. Iron ore is a major mineral specified in Para C of
the First Schedule. In matters of such major mineral, State
Government itself cannot undertake prospective or
mining operations without having prior consultation with
the Central Government as per Section 4(3) of the Act,
D and if prospecting licence or mining lease is to be granted
to any other person, then previous approval of Central
Government is to be obtained under proviso to Section
5(1). The consideration of recommendation made by the
Central Government for grant of prior approval is an
E exclusive jurisdiction of the Central Government under
the MM(D&R) Act, 1957 and there is no good reason for
pre-empting the Central Government from considering
the merits of the recommendation. [Para 23] [943-B-D]
1.3. The second proviso to Rule 63A also provides
F that the disposal of the applications by the State
Government in case of minerals listed in the First
Schedule to the Act shall mean either recommendation
to the Central Government for grant of mineral
concession, and in all other cases disposal shall mean
G refusal to grant the mineral concession. This is also an
indication that the recommendation made by the State
Government does not constitute an order as envisaged
by Section 30 of the Act. [Para 25] [943-H; 944-A-B]
H 1.4. Until the Central Government has passed an
GEOMIN MINERALS & MARKETING (P) LTD. v. STATE 917
OF ORISSA
order either granting or refusing approval under Section A
5(1) and Section 11 (5) of the Act, it would not be
permissible for any person to file a writ petition under
Article 226 of the Constitution of India and any such
petition if filed would be premature. In the instant case,
the High Court committed a grave error of law in B
proceeding to observe that 'special reasons' did not exist
on invoking Section 11 (5) and that there was no
comparison of merits in the record. It is apparent from the
records that the State Government has tabulated and
evaluated the inter se merits and has concluded that c
POSCO is more meritorious. All applications were given
a hearing. In the circumstances, the High Court's
observations are not justified and in fact the High Court
appears to have usurped the jurisdiction of the Central
Government in proceeding to make these remarks. The 0
scrutiny of the merits was premature and the High Court
should have refrained from entering into the merits. [Para
24] [943-D-G]
1.5. No applicant has statutory or fundamental right
to obtain prospecting licence or a mining lease. E
Therefore, the High Court before interfering with the
recommendation, ought to have looked into the nature of
recommendation. The High Court committed a grave
error of law in deciding the case on merits and deciding
the question of legality of the recommendation made by F
the State Government. In fact they should have left the
matter to the Central Government to pass an appropriate
order in accordance with law instead of entertaining a
pre-mature writ petition. The State Government by its
recommendation having forwarded the tabulated chart G
showing inter se merit of each applicant, it was not for
the High Court to sit in appeal to decide who amongst ·
all is more meritorious and is entitled for preferential right.
[Paras 34 and 35] [949-H; 950-A-D]
H
918 SUPREME COURT REPORTS [2013] 8 S.C.R.
A 2.1. Amended Section 11 (2) is applicable where the
State Government has not notified in the Official Gazette
the area for grant of reconnaissance permit or
prospective licence or mining lease and two or more
persons have applied for reconnaissance permit,
B prospective licence or mining lease in respect of any land
in such area, the applicant whose application was
received earlier, shall have the preferential right to be
considered for grant of reconnaissance permit,
prospective licence or mining lease, over the applicant
c whose application was received later. However, as per
First proviso to Section 11 (2), where an area is available
for grant of reconnaissance permit, prospecting.licence
or mining licence, and the State Government has invited
applications by notification in the Official Gazette for
grant of such permit, licence or lease, all the applications
0
received during the period specified in such notification
and the applications which had been received prior to the
publication of such notification in respect of the lands
within such area and had not been disposed of, shall be
deemed to have been received on the same day for the
E purposes of assigning priority under said sub-section.
Thus under amended Proviso to Section 11 (2), even
those applications received prior to the publication but
had not been disposed of, shall be deemed to have been
received on the same day for the purpose of assigning
F priority under the said sub Section. [Para 32] [948-G-H;
949-A-D]
2.2. This is not the stage to decide as to whether in
the present case the pre-amended or amended Section
G 11(2) shall be applicable and thereby priority should be
assigned under pre-amended or amended Section 11 (2)
as the matter has already been considered by the State
Government and recommendation is required to be
considered by the Central Government under Section
H 5(1) of the Act. The Central Government is required to go
GEOMIN MINERALS & MARKETING (P) LTD. v. STATE 919
OF ORISSA
through the relevant facts of each case to determine A
whether the recommendation is to be approved or not.
[Para 33) [949-E-G)
Sandur Manganese and Iron Ores Limited v. State of
Karnataka (2010) 13 SCC 1: 2010 (11) SCR 240; State of B
Tamil Nadu v. Mis Hind Stone (1981) 2 SCC 205: 1981 (2)
SCR 742 - referred to.
3. The matter is, therefore, remitted to the Central
Government to consider the question of approval under
Section 5(1) taking into consideration the C
recommendations made by the State Government. While
deciding the question, it will keep in mind the objections
raised by the parties. [Para 36) [950-D-E]
Case Law Reference:
D
2010 (11) SCR 240 referred to Para 14.2
2012 (7) SCR 644 relied on Para 21
1981 (2) SCR 742 referred to Para 31
CIVIL APPELLATE JURISDICTION : Civil Appeal No. E
4561 of 2013.
From the Judgment and Order dated 14.07.2010 in WPC
No. 23/2009 of the High Court of Orissa at Cuttack.
WITH F
C.A. No. 4562 and 4563 of 2013.
Rakesh Dwivedi, K.K. Venugopal, K.V. Vishwanathan,
S.K. Padhi, Ravindra Shrivastva, Manu Nair, Prashant Mehta
(for Suresh A. Shroff & Co.) Shibashish Misra, Sansriti Pathak, G
Nikhil Sharma, Sangeeta Manda!, Swati Sinha, Amar Gupta,
Dheeraj Nair, Ananya Kumar, Bansuri Swaraj, Divyam Agarwal,
Vijay Kumar (for Fox Manda! & Co.). Asha G. Nair, Baldev
Atreya, Aditya Sharma, Sunita Sharma, Chetan Chawla, D.S.
Mahra, Rahul Chandra, Anupendra Singh Jassol, Sanjeev H
920 SUPREME COURT REPORTS [2013] 8 S.C.R.
A Kumar, (for Khaitan & Co.) Shubhranshu Padhi, Nirnimesh
Dube, T. Harish Kumar, Ratan Kumar Singh, P .S. Sudheer,
Sharad Kumar, Rishi Maheshwari, Abu John Mathew, Atul Jha,
Sandeep Jha, Dharmendra Kumar Sinha, Kanchan Kaur Dhodi
for the appearing parties.
B
The Judgment of the Court was delivered by
SUDHANSU JYOTI MUKHOPADHAYA, J. 1. Leave
granted.
c 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
D 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
E 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)
F 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.
G 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
H Concession Rules, 1960. The first set comprised of 85.60
GEOMIN MINERALS & MARKETING (P) LTD. v. STATE 921
OF ORISSA [SUDHANSU JYOTI MUKHOPADHAYA, J.]
acres plus 94.47 acres of land in Village Kansar and Village A
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 re-grant. The
State Government vide notification dated 20th August, 1991 B
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 Ill which was c
declared to be reserved for public sector corporations vide
Notification dated 05.06.1962 and 06.12.1962. The State
Government decided to de-reserve the said mineral bearing
areas and the availability of the said area was notified vide
Notification dated 23rd August, 1991. The date of availability
0
for re-grant 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. E
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 F
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 G
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 H
922 · SUPREME COURT REPORTS [2013] 8 S.C.R.
A 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
B the Central Government by its letter dated 16.7.2007 had
informed the State Government that the recommendation in
favour of POSCO could not be processed as the process of
hearing in respect of 203 applicants was still not complete. It
was noted that the recommendation in favour of POSCO was
C for an area which was partially notified and partially non-notified
and, hence, the applications should be considered accordingly
as per law.
5. The order passed by the Revisional Authority dated
27th September, 2007 was challenged by one 'Dhananjay
D Kumar Dagara' before the Orissa High Court in a Writ Petition
being W.P(C) No. 15315 of 2007. It was challenged on the
ground that the directions for simultaneous consideration of all
applications affects the preferential rights of the first day
applicants under Section 11 (2) of the MM(D&R) Act. In the said
E Writ Petition No. 15315 of2007, Geomin Minerals & Marketing
(P) Ltd. filed an application for intervention. The intervention
application was dismissed by the Orissa High Court on 22nd
February, 2008 with the observation that Geomin Minerals &
Marketing (P) Ltd. may take independent steps in respect of
F its grievance. On 2nd May, 2008 the Orissa High Court by
judgment in W.P(C) No.15315 of 2007 held that there was no
preferential right for the applicant. The High Court thus
dismissed the writ petition and upheld the order of the
Revisional Authority dated 27th September, 2007.
G
6. Geomin Minerals & Marketing (P) Ltd. filed another Writ
Petition being W.P(C) No.6484 of 2008 praying expeditious
disposal of all pending applications for mineral concessions
filed by it, based on its right arising from Rule 63-A of the MC
Rules. The said writ petition was disposed of on 14th July, 2008
H
GEOMIN MINERALS & MARKETING (P) LTD. v. STATE 923
OF ORISSA [SUDHANSU JYOTI MUKHOPADHAYA, J.]
by the Orissa High Court with a direction to the State A
Government to consider the pending PL/RP applications of
Geomin Minerals & Marketing (P) Ltd. preferably within a
period of six months without discrimination and in accordance
with law.
B
7. In the meantime, during the pendency of the
applications preferred by different persons including Geomin
Minerals & Marketing (P) Ltd. for Preferential Licence ('PL' for
short) and Mining Licence ('ML' for short), on 20th December,
1999 amendments carried out in Section 11 of MM(D&R) Act
became effective. By the amending Act, the first proviso to C
Section 11 (2) of MM(D&R) Act was inserted as under:
"11. Preferential right of certain persons.
(2) ..... D
Provided that where an area is available for grant of
reconnaissance permit, prospecting licence or mining
lease, as the case may be, and the State Government has
invited applications by notification in the Official Gazette
for grant of such permit, licence or lease, all the E
applications received during the period specified in such
notification and the applications which had been received
prior to the publication of such notification in respect of the
lands within such area and had not been disposed of, shall
be deemed to have been received on the same day for F
the purposes of assigning priority under this sub-section."
The non obstante clause i.e. Sub-section (4) of Section 11
was re-numbered as Sub-section (5), and a new Sub-section
(4) was introduced, which reads as under:- G
"11. (4) Subject to the provisions of sub-section (1 ), where
the State Government notifies in the Official Gazette an
area for grant of reconnaissance permit, prospecting
licence or mining lease, as the case may be, all the
H
924 SUPREME COURT REPORTS [2013) 8 S.C.R.
A applications received during the period as specified in
such notification, which shall not be less than thirty days,
shall be considered simultaneously as if all such
applications have been received on the same day and the
State Government. after taking into consideration the
B matters specified in sub-section (3), may grant the
reconnaissance permit, prospecting licence or mining
lease, as the case may be, to such one of the applicants
as it may deem fit."
8. Pursuant to the order of the Revisional Authority dated
C 27th September, 2007 passed in the case of Kudremukh
Company, the State Government issued a notice to Geomin
Minerals & Marketing (P) Ltd. under Rule 12(1) of the MC Rules
giving them opportunity of being heard. The officials of the
Geomin Minerals & Marketing (P) Ltd. attended the hearing.
D Thereafter, by a minutes of the meeting, inter se merits of all
applicants was prepared by the State of Orissa on 17th
October, 2008, but no recommendation was made. Therefore,
Geomin Minerals & Marketing (P) Ltd. filed a Writ Petition
being W.P(C) No.23 of 2009 inter alia with the following prayer:
E
"Order the opposite parties to dispose of all pending
applications for Mineral Concessions filed by the petitioner
and set out in the petition in accordance with its vested
right to preferential consideration in view of the fact that
F the petitioner's applications have been filed on the first date
of availability and eligibility.
Issue a writ of prohibition or any other appropriate writ,
order or direction restraining the opposite parties from
considering applications for Mineral Concessions of later
G applicants to the petitioner until the applications of the
petitioner are first considered and disposed of by
according priority or preferential right based on the
petitioner being a first day applicant having applied for the
concerned Mineral Concessions set out in the petition on
H the first date of availability and eligibility."
GEOMIN MINERALS & MARKETING (P) LTD. v. STATE 925
OF ORISSA [SUDHANSU JYOTI MUKHOPADHAYA, J.]
The Writ Petition was filed on 5th January, 2009 by Geomin A
Minerals & Marketing (P) Ltd. and just after few days on 9th
January, 2009, the State Government made impugned
recommendation to the Central Government in favour of
POSCO under Section 11 (3) and (5) of the MM(D&R) Act. The
said recommendation was challenged by Geomin Minerals & B
Marketing (P) Ltd. by filing a petition for amendment.
9. On hearing the parties, the High Court framed the
following issues for consideration:
1. Whether the writ petition is maintainable due to C
availability of alternative remedy ?
2. Whether the writ petition is premature ?
3. Whether the writ petition is maintainable due to delay
0
and laches?
4. Whether the writ petition is barred by res-judicata ?
5. Whether the area in question was earlier reserved or it
is a non-reserved area? E
6. Whether the petitioner has any preferential right under
Section-11 of the M.M. (D&R) Act?
7. Whether recommendation made by the State
Government under section 11 (5) of the M.M.(D&R) Act in F
favour of POSCO is valid ?
10. In the present case, the second issue is important as
the respondents to the writ petitions raised the question of
maintainability on one of the grounds that the application was G
pre-mature. The said issue was answered by the High Court
in a cryptic manner without any reason, as apparent from its
finding which is produced below.
"Issue no.2,
H
926 SUPREME COURT REPORTS [2013] 8 S.CR
A Whether the writ petition is premature ?
This issue is answered in favour of the petitioner as
the petitioner has approached this Court at a time when
its right to be considered along with POSCO has been
threatened to be infringed by the action of the State, which,
B
according to the petitioner. 1s illegal and contrary to the
statutory provision. So the petitioner prayed for preferential
right under Article 226 of the Constitution of India.
Hence the writ petition cannot be said to be premature as
c the petitioner could not have waited till the harm is caused
to him (See Bengal Immunity Co Ltd., v. State of Bihar
and others, AIR 1955 SC-661)."
Issue Nos. 6 and 7 relate to preferential right of Geomin
0 Minerals & Marketing (P) Ltd. under Section 11 of the MM
(D&R) Act and validity of recommendation made by the State
Government under Section 11 (5) of the said Act in favour of
POSCO. Both the issues were determined by the High Court
in favour of Geomin Minerals & Marketing (P) Ltd., and against
E the POSCO. Referring to Section 11(2), (3) and (4) the High
Court held that the Geomin Minerals & Marketing (P) Ltd. has
preferential right for grant of licence and lease and that the
recommendation made by the State Government under Section
11 (5) in favour of ?OSCO is invalid.
F 11. The judgment afo•9said has been challenged by
Geomin Minerals & Marketing (P) Ltd. by filing an appeal as
no specific direction has been given for issuance of licence in
its favour. The POSCO and the Government of Orissa have also
challenged the judgment by filing their respective appeals. No
G separate appeal has been preferred by Kudremukh Company
or Jindal Steel and Power Ltd. or any other, but some of them
have filed intervention applications and petitions for
impleadment. Accordingly, at the time of hearing of the appeals,
respondents and interveners were heard and, therefore, we
H allow the applications for intervention and impleadment.
GEOMIN MINERALS & MARKETING (P) LTD. v. STATE 927
OF ORISSA [SUDHANSU JYOTI MUKHOPADHAYA, J]
12. The learned counsel for the parties argued in detail for A
few days but in view of the nature of order we intend to pass it
is not necessary to discuss each and every submission except
the relevant one, as recorded hereunder:
Stand of POSCO India Pvt. Ltd. 8
13. Learned counsel Mr. K.K.Venugopal appearing on
behalf of POSCO India Pvt. Ltd. made the following
submissions:
13.1 The recommendation in favour of POSCO India has c
been made in accordance with the provisions contained in
Section 11 (2), (3) and (5) of MM(D&R) Act and other relevant
provisions of Mineral Concession Rules, 1960.
13.2 The POSCO was found to be the most meritorious
0
applicant and "hence the State Government by exercising its
power under Section 11 (5) of MM(D&R) Act. 1957 has decided
to recommend an extent of 2500 Hectares to Government of
India for prior approval for grant of PL in their favour.
13.3 In the present case, there are at least two reasons E
as to why there cannot be any claim of priority on the part of
Geomin. When the area in question was released from
reservation and de-notified on 23.8.1991, no outside date
before which applications had to be made had been fixed. The
Government of India (Revisional Authority), in exercise of its F
revisional jurisdiction, vide order 27.9.2007, had directed the
State Government to consider all the pending applications
simultaneously. This order was challenged by one Dhananjay
Kumar Dagara, and the Writ Petition was dismissed by the
High Court. The decision of the Central Government thus G
became final. If the applications were to be considered
simultaneously, which means as if they were received on the
same day, the proviso to Section11 (2) of the Act would apply
Indubitably, in any comparison based on the factors set out in
the tabulated statements, POSCO would be far ahead of the
H
928 SUPREME COURT REPORTS [2013] 8 S.C R.
A other applicants, based on its experience, investment,
technology used, integrated project, captive use of the iron ore,
total employment (direct and indirect) and, above all, public
interest. Thus, Section 11 (3) of the Act wholly applies in
POSCO's favour.
B
13.4 Apart from Section 11 (3), the State Government has
made the recommendation also under Section 11 (5) for the
simple reason that POSCO stood head and shoulders above
the other applicants, in respect of public interest. If the gap
between POSCO and the other applicants, even in regard to
C the very considerations specified in Section 11 (3) is so vast,
then, in such a case, the very same factors, qualitatively and
quantitatively, would attract Section 11 (5) as well. In any event,
in this case, there is one factor which beyond doubt attracts
Section 11 (5), and that is the sophisticated and advanced finex
D technology, which not only reduces pollution but is also able to
utilize low grade ore to make steel. Section 11 (5) would clearly
be attracted on this ground alone, and, in whatever manner one
approaches the issue, POSCO has rightly been recommended
by the State Government for grant of the Prospecting Licence.
E
13.5 The recommendation dated 9.1.2009 made in favour
of POSCO falls within the parameters of Sections 11 (3) and
11 (5) of the MM(D&R) Act. The State Government followed the
direction of the Revisional Authority (Central Government )
F dated 27.9.2007, which was upheld by the High Court and had
become final, and simultaneously considered the inter se merits
of all the applicants whose PL applications were pending
disposal before the State Government. It was after a rigorous
exercise of calling all the applicants for personal hearing and
G to make a presentation that the State Government took the
considered view to hold that POSCO was the most meritorious
applicant.
13.6 Once there was a direction of the Revisional Authority,
which was affirmed by the Orissa High Court in the Dagara
H case (which order attained finality), that the State Government
GEOMIN MINERALS & MARKETING (P) LTD. v. STATE 929
OF ORISSA [SUDHANSU JYOTI MUKHOPADHAYA, J.]
was required to consider all pending applications A
simultaneously and come to a decision after evaluating the inter
se merits of all the applicants. An inter se comparison of
multiple applicants for grant of a mineral concession is
envisaged only under Section 11 (3) of the MM(D&R) Act. This
being so, in any inter se comparison (whether pursuant to B
Section 11 (2) or not), the criteria on the basis of which a
decision must be taken by the State Government is what is
specified in Section 11 (3).
13.7 The High Court has failed to point out as to what would
amount to "speci9I reasons". The Impugned Judgment also C
does not appreciate that the recommendation in favour of
POSCO has been made by the State Government keeping in
mind the larger interests of the State and its citizens. The basis
of this decision was the economic and environmental benefit
accruing to the State from POSCO's mining methods. D
13.8 POSCO is a wholly owned subsidiary of Mis POSCO,
which is a Korean compay having more than 25 years
experience in developing minerals in various countries in the
world and is the world's second largest steel maker by market E
value and Asia's most profitable stee'I maker. M/s POSCO's
operating profit margin is the top in the World Steel Industry,
and it is the most competitive steel maker as per 2010 World
Steel Dynamics. According to 2010 World Economic Forum
M/s POSCO is one among the 100 companies to last the next F
100 years. Geomin is a company which was incorporated in
September, 1991, with an au'thorised share capital of
Rs.1,00,000/- (Rupees one lakh), obvio,usly only with a view to
take advantage of the notification dated 23.8.1991 issued by
the State Government. Geomin did not have any experience of G
having undertaken any mining activities, and, therefore, cannot
be said to have possessed any special knowledge or
experience in mining operations. Further, sometime in the year
2007, control of Geomin, through acquisition of a majority of
the share of the company, was taken over by one 'Navayuga
H
930 SUPREME COURT REPORTS [2013] 8 S.C.R
A Steel Limited'. In the submission of the appellant, the
experience and/or qualifications of 'Navayuga Steel Limited'
cannot be used in support of Geomin's application made in the
year 1991, since the merit of an applicant for a prospecting
license/mining lease would have to be judged as on the date
B of the application itself, as otherwise the process of selection
would be rendered arbitrary if an applicant is permitted to add
to its qualifications after knowing the relative qualifications of
other applicants. If this is permitted, such a process of adding
to one's qualifications would become never-ending. In any
C event, if in substance and in effect a totally new entity has been
permitted to be brought into existence, by transfer of substantial
shares to another company, the original applicant can no more
claim priority o its application as its character has undergone
a substantial transformation.
D 13.9 The reliance by Kudremukh Company on Section
11 (1) of the Act is wholly erroneous, as (admittedly) no
reconnaissance permit was ever granted in its favour. Under
Section 11 (1) of the MM(D&R) Act, preference can be claimed
if an applicant for the grant of a PL has already been granted
E a reconnaissance permit qua the said area; and the conditions
prescribed in the first proviso to Section 11 (1) are met. The
reconnaissance work stated to have been carried out by the
Department of Geology of the State Government, at
Kudremukh's expense, also cannot attract Section 11 (1) of the
F Act in its favour. Further, in any event, Kudremukh Company is
bound by the aforementioned direction for simultaneous
consideration of all applications given by the Central
Government, as per the decision of Revisional Authority; which
was upheld by the High Court.
G Stand of Geomin Minerals & Marketing (P) Ltd.
14. Learned counsel for the Geomin Minerals & Marketing
(P) Ltd. made the following submissions:
H 14.1 A preferential right in the field of mining is an important
GEOMIN MINERALS & MARKETING (P) LTD. v. STATE 931
OF ORI SSA [SUDHANSU JYOTI MUKHOPADHAYA, J ]
right. The preferential right conferred under un-amended A
Section 11 upto 1999 cannot be curtailed under amended
Section 11. Since Geomin Minerals & Marketing (P) Ltd.
applied on 29th October, 1991 the law that was applicable on
the said date of application i.e. an amended Section 11 shall
be applicable for consideration of application filed by Geomin B
Minerals & Marketing (P) Ltd.
14.2 On the other hand if the amended Section 11 is
applied, in that event the judgment of this Court in Sandur
Manganese & Iron Ores Limited v. State of Kamataka (2010) C
13 SCC 1 will apply. The consequence will be as follows:-
(a) Section 11 (4) of the amended Section will apply.
(b) Section 11 (5) will not be available.
D
(c) If amended Section 11 (4) applies, then all persons
applied on 29th October, 1991 will be treated as
first applicants. The choice between them will be
governed by Section 11 (3).
(d) Even if Section 11 (5) is applied, special reasons E
referred to in Section 11 (5) cannot be same that of
the reasons to be recorded for the purpose of
Section 11 (3).
In the present case, the exercise which State Government F
has done mixes up the matter under Section 11 (3) and 11 (5)
for recommending the name of M/s POSCO India Pvt. Ltd.,
therefore it is contrary to the provisions of Section 11 and
recommendation in favour of the POSCO India Pvt. Ltd. is not
bona fide.
G
14.3 Amended Section 11 is prospective in nature. It is
the Rule on the date of application that would be applicable and
not the Rule on the date of consideration. In view of Rule 8(C)
of Mineral Concession Rules it cannot be said that Section 11
will be applicable from the date of consideration. As per the H
932 SUPREME COURT REPORTS [2013] 8 S.C.R.
A ratio of the judgement in Sandur Manganese & Iron Ores
Limited v. State of Karnataka (2010) 13 SCC 1 if amended
Section 11 is applied then Geomin Minerals & Marketing (P)
Ltd. is entitled for benefit of the aforesaid judgment.
14.4 Memorandum of Understanding or the arrangements
8
outside the provisions of the MM(D&R) Act cannot be used to
trample on the rights of prior or same day applicants. This
principle is to be followed irrespective of whether the
unamended or amended Section 11 is applied.
C 14.5 First Day Applicant enjoys and is entitled to priority
over all subsequent days applications including the POSCO
application which was made on 27th September, 2005 i.e. after
about 14 years from the date of the Geomin applications.
D Stand of the State of Orissa:
15. Mr. Rakesh Dwivedi, learned senior counsel for the
State of Orissa to the facts as noticed above contended as
follows:
E 15.1 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 19th December, 2006.
Pursuant to which the Revisional Authority after hearing the
matter set aside the recommendation made in favour of
F POSCO and the State Government was directed vide order
dated 27th September, 2007 to consider all pending
applications simultaneously and to decide inter se merit and
then pass an order as per law after affording an opportunity to
all the applicants. Earlier the recommendation in favour of
G POSCO was made for an area which was partially notified and
partially non-notified and other applications were not
considered and hence the matter was remitted back by the
Revisional Authority to the State Government.
15.2 The State Government had thereafter granted hearing
H to all the applicants and had considered the inter se merit of
GEOMIN MINERALS & MARKETING (P) LTD. v. STATE 933
OF ORISSA [SUDHANSU JYOTI MUKHOPADHAYA, J.]
the applicants. An overall holistic consideration and record A
shows that the Government had an inter se comparison of the
applicants as directed by the Central Government and had also
made recommendation in favour of POSCO by invoking
Section 11 (5) of the MM(DR) Act, 1957.
B
15.3 The case of Geomin had been considered. During
the hearing, Geomin stated that it is a joint venture between
Navyuga Group and T.P. Minerals Group and it wanted to set
up one ore based steel complex of 12 MTPA capacity but at
that time their project was under consideration by the High level C
clearance authority. The case of Kudremukh Company based
on PL No.1991 dated 17/2/2002 was considered. This
company proposed to invest Rs.100 Crores in mines and
Rs.5,000 Crores in industry and its plant was in Mangalore,
State of Karnataka. It was proposing some plants in
Sundergarh District but there was no definite proposal received D
by the State. Jindal Steel and Power Limited (hereinafter
referred to as the 'JSPL') had submitted four PL and one ML
applications. The PL applications are dated 22/2/2007. They
did not submit sufficient documents as required under Rule
22(3)(i) of MC Rules and legally accepted Geological E
Prospecting Report for their ML application. This company is
part of Jindal Group and was operating a steel plant at Raigarh,
Chhattisgarh. It was considered to be a serious contender for
the applied area. There applied area was 4930.57 hectares
after clubbing the four PL applications. Out of this only 90 F
hectares are overlapping with the PL application of POSCO.
Thus, their PL applications cover an area which is
overwhelmingly distinct from the area recommended for
POSCO. Consequently, JSPL had not filed any Writ Petition
nor had applied for impleadment before the High Court. It has G
chosen to move an intervention application belatedly in the SLP
filed by Geomin. This application has not been allowed and it
is liable to be rejected. The PL Application No. 2122 dated 27/
9/2005 for 6828.54 hectares filed by POSCO India was
considered and they were considered to be a front runner and H
934 SUPREME COURT REPORTS [2013] 8 S.C.R.
A possessing outstanding merit in comparison to all other
applicants. They proposed to set up a World's first steel plant
project using FINEX technology which was a next generation
eco-friendly process which allows direct use of cheap iron ores
fines and non-coking coal as feed stock and has consequently
B lower emissions as compared to blast furnace. They had
assured captive consumption of the mineral at their plant at
Paradip which was to be a port based steel plant It was likely
to create huge employment and generate huge revenue.
15.4 In Part-F, Summary, it has been noted that only two
C companies i.e. POSCO India ltd. and Jindal Stripes have
achieved the miles stones or the eligibility criteria laid down in
the MOU for recommendation of raw-material linkage to their
proposed steel plant. It mentions "as far as relevant merits are
concerned in terms of proposed investment, financial resources
D capability for scientific mining and exploration of ore, it could
be safely concluded that M/s. POSCO India (P) Ltd. stands out
as the most meritorious among all the MOU signed applicants
and as well as other applicants as narrated above, it mentions
that application of Jindal Stainless was being considered for
E other areas. The "conclusion" has been drawn and it has been
specifically stated in sub-para (c) that Geomin Minerals and
Marketing has some merit but they cannot be considered at par
with POSCO India. Kudremukh Company was found to be
highly meritorious but its merit was not comparitable with M/s.
F POSCO India taking into account the comprehensive advantage
of POSCO in terms of revenue and employment generation. In
sub-para (f) it was concluded that on account of the ability to
carry out scientific exploration and mining, capability to mobilize
adequate financial resources for investment, setting up of value
G addition facilities including 12 MTPA steel plant based on eco-
friendly and resource use efficient technology which will
generate huge revenue and employment, the POSCO India
deserves precedence over all other applicants and it stands out
as the most meritorious.
H
GEOMIN MINERALS & MARKETING (P) LTD. v. STATE 935
OF ORISSA [SUDHANSU JYOTI MUKHOPADHAYA, J.]
15.5. While considering the extent of area to be A
recommended, it was noted that POSCO had applied for
6828.24 hectares in Kandhar region. Considering all relevant
aspects the State Government decided to recommend an area
of 4050 hectares only in favour of POSCO to the Government
of India for prior approval for grant of PL. Expressly invoking B
Section 11 (5) of MMDR Act, 1957 in addition to the inter se
comparison of merits, the comparative statement table
prepared with the parameters under Section 11 (3) in view and
with table forms parts of the minutes. The minutes recorded that
applications are to be disposed of in accordance with Section c
11 (2) & (3) and relevant provisions of Mineral Concession
Rules. The State Government has complied with the directions
of the Central Government and has applied its mind to all
relevant factors and material produced by the various applicants
and after making inter se comparison of minutes arrived at a 0
conclusion that POSCO was more meritorious from the point
of scientific exploration and mining, mobilization of financial
resources, use of eco-friendly and resources - use efficient
technology investments including the steel plant project and
general of employment and revenue. In addition, the State
E
Government has also invoked the provisions of Section 11 (5)
of the Act.
15.6 Further stand of the State of Orissa is that: Geomin's
application PL No.1334 dated 29/10/1991 cannot be
considered to be a prior application in view of the following F
facts:
Geomin had made 7 PL applications for different areas
to the State Government of Orissa. An area of 186 hectares in
Village Rantha, District Sundergarh applied vide application G
No.1334 dated 29.10.1991 is overlapping. Thus, the area
recommended for POSCO includes about 186 hectares of
area applied for by Geomin.
15. 7 The order of the High Court dated 14th July, 2008 had
been passed in the context of PL Application No.1338 in H
936 SUPREME COURT REPORTS [2013] 8 S.C.R.
A Malantoli Block. This has nothing to do with the area
recommended for POSCO.
After the above High Court order, Geomin made a
representation with respect to PL Application No.1337.
B 15.8 Geomin's applications, in particular PL No.1334, all
dated 29th October, 1991 were made on an individual basis
as a Private Ltd. Company. The nature of business indicated
was mining, processing and sale of minerals and mineral
products. The affidavit mentions that it is a new company and
C therefore there are no income tax/sales tax returns or clearance
certificates. As regards financial resources the application
simply says "sound" and refers to Articles of Association. In the
experience column Geomin shows no experience and refers
to qualified and experienced "people" in the company. No name
D or details are given. Geomin does not hold any PL or ML. There
is no claim that any Director has any such experience. The
application is highly deficient and there is no proposal for
setting up any industry based on minerals. After 14 years from
the notification under Rule 59 a letter dated 7.09.2004 for
E sympathetic consideration was made and order dated
15.7.2003 passed by the Central Government (Tribunal) was
referred to Geomin, also wrote a letter dated 27.12.2005
requesting that they should be allowed to submit fresh proposal.
Earlier on 20.12.2004 AXL also submitted a letter. Thereafter
F another letter dated 30.12.2006 was written. In this letter for the
first time it was proposed that a 0.5 MTPA capacity steel plant
in the State of Orissa would be set up through our group
company AXL Industries and PLs were required for that
purpose. In the aforesaid letters, there is no claim for any
G preference under Section 11 (2). The third letter dated 7.6.2007
refers to the proposal to set up 0.5 MTPA capacity steel plant
in Orissa and also offers to consider setting up of the project
through Geomin itself or to consider amalgamation of the two
companies. Then by letter dated 6.10.2007 it informed that
H Geomin has now entered into a partnership with the Navyuga
GEOMIN MINERALS & MARKETING (P) LTD. v. STATE 937
OF ORISSA [SUDHANSU JYOTI MUKHOPADHAYA, J.]
Group of companies who are a large conglomerate with A
interests in engineering, exports, mining, ports, power, real
estate, l.T., etc. It further informed that Navyuga Group is
planning to set up steel plant in Orissa with 12 MTPA capacity.
By letter it was also informed that Navyuga has already
acquired 50% equity stake in Geomin. Therefore the request B
was made to consider its application "keeping the above in
mind'. By the fifth letter dated 13.11.2007 they wished to know
the status of Geomin's applications regarding the process of
evaluation of applications over Khandhar Block. District
Sundargarh. c
15.9 If the provisions operating at the time of the
applications are to be considered then Geomin's application
would stand rejected in terms of Rule 24(3) of Mineral
Concession Rules, 1960 which was omitted on 7.01.1993.
Secondly, the Geomin's application was highly deficient and the D
deficiencies were partially removed which were provided after
the notice issued. Moreover, Geomin first placed reliance on
0.5 MTPA steel plant being set up by its group company AXL
Industries then offered to set up the said project by itself.
Thereafter relied upon 12 MTPA steel plant being set up by E
Navyuga Group which acquired 50% equity stake was later
increased to 70% of the equity share. Application was sought
to be considered on this basis. Therefore, Geomin's
application is effectively and substantively of October/
December, 2007. F
15.10 Section 11 as amended by Act 38 of 1999 w.e.f.
18th December, 1999, would apply. The contention of Geomin
that the old provisions would apply is incorrect. This matter is
not res integra. In the case of State of Tamil Nadu vs. Hind G
Stone, (1981) 2 SCC 205, this Court has decided that the
provisions of the Act and Rules as operating at the time of
consideration would be applicable.
H
938 SUPREME COURT REPORTS [2013] 8 S.C R
A Stand taken by Kudremukh Company:
16. Learned senior counsel appearing on behalf the
Kudremukh Company submitted as follows~
16.1 That the State Government vide letter dated
B 25.04.2009 has communicated the rejection of the applications
of the Company, to the extent of an area of 2130 hectares,
which was within the recommended area of POSCO of 2500
hectares. The applications of the Company were rejected on
the ground that the M/s. POSCO was the most meritorious of
C all the applications. The rejection of the Companys' ML/PL
application had been challenged before the Ld. Central Mines
Tribunal by filing Revision Application No.22(6)/2009-RC-I &
Revision Application No.22(7)/2009-RC-I respectively. The
Revisional Authority vide final orders dated 23.8.2011, has
D been pleased to allow the revision applications and set aside
the orders dated 25.4.2009 passed by the State Government
rejecting the ML and PL applications of the Company.
16.2. The State of Orissa has filed two Writ Petitions being
E W.P.(C) No.6429 of 2012 and W.P.(C) No.6431 of 2012
against the Final Order No.550/2011 & 549/11 dated
23.09.2011 passed by Government of India in Revision
Application No.22(6)/2009-RC-I & Revision Application
No.22(7)/2009-RC-1 respectively. The same is pending
F adjudication before the Orissa High Court. The Company is not
aware if Mis. POSCO has challenged the said order passed
by the Ld. Revisional Authority.
16.3. The recommendation in favour of POSCO
purportedly under Section 11 (5) is not a valid recommendation
G as per the provisions of the Act. Section 11 (5) would have no
application in the present case where the applicants were
being considered simultaneously and the same has to be
granted to the applicant who satisfies the criteria under Section
11 (3) when compared with the others. The Revisional Authority
H vide order dated 27 .09.2007 had directed to consider all
GEOMIN MINERALS & MARKETING (P) LTD. v. STATE 939
OF ORISSA [SUDHANSU JYOTI MUKHOPADHAYA, J.)
applications 'simultaneously'. Therefore, all the applications A
had to be considered taking into consideration the parameters
of Section 11 (3). The State Government itself in its
recommendation dated 9.01.2009 had stated that the
applicants were evaluated and taken up for disposal in
accordance with Section 11 (2) and (3) of the Act. But ultimately B
made the purported recommendation in favour of POSCO
under Section 11 (5) of the Act, which is not applicable.
16.4. Section 11 (5) would be applicable only if the area
is 'non-notified' and the State Government has for 'special C
reasons' wants to give preference to a later applicant to an
application which was received earlier. The 'special reasons'
need not be other than what has been mentioned in Section
11 (3) but may be over and above the reasons mentioned in
Section 11 (3). Section 11 (5) will have no application where
applications are considered simultaneously for areas which are D
notified, which is the present case. The recommendation dated
9.01.2009 made by the State Government is not sustainable.
17. As far as the contentions raised by Geomin Mienrals
claiming priority by virtue of being an earlier applicant, it was E
submitted that the said contention no longer holds force after
the amendment of Section 11 (2) of the Act. As per the
amended Section 11 (2), all applications which were made
during the period of notification and all applications received
prior to the publication and had not been disposed of shall be F
deemed to have been received on the same day for the
purpose of assigning priority. Therefore, a prior applicant has
no preferential right to be considered over a later applicant. It
is submitted that the.right, if any, under the pre-amended
provisions stands obliterated after the amendment came into G
force and cannot be construed as a 'vested' right.
18. It was further contended that the Court, if it so deems
fit may direct the Central Government to consider all
applications while deciding grant of prior approval under
H
940 SUPREME COURT REPORTS (2013] 8 S.C.R
A Section 5(1) of the Act, after giving the parties a right to
represent and decide the same taking all factors into
consideration that· Kudremukh Company is a public sector
undertaking and the substantial area of the proposed
recommended area was prospected at the cost of Kudremukh
B Company. The same may be decided uninfluenced by any
observations made in the impugned judgment and the
recommendation made under Section 11 (5).
19. The contentions of the Kudremukh Company was
summarised as follows:
c
(i) The Kudremukh Company is a public sector
undertaking which is best suited to protect national
resources of the country.
D (ii) The Company may be allotted at least the portion
of the area which was prospected by the
Department of Geology at the cost of more than 1
crore;
(iii) Based on the assurances of the State Government
E at the highest level, the Company has altered its
position to its detriment and the Government ought
to have granted the Pl/ML to the petitioner;
(iv) The Company is more meritorious as compared to
F others, as it has special knowledge in mining
operations, the nature and quality of the technical
staff and adequate financial resources, which are
the prescribed considerations in Section 11 (3) of
the Act: As far as the so-called proposed
G investment in Industry based on mines by POSCO
is concerned, it is still illusory and nothing tangible
has been invested on the ground. The Company's ..
nierit has also been recognised by the State
Govemmenf, but it erroneously claimed that POSCO
is more meritorious on the ground of the so-called
H
GEOMIN MINERALS & MARKETING (P) LTD. v. STATE 941
OF ORISSA [SUDHANSU JYOTI MUKHOPADHAYA, J.]
proposed steel plant which is yet to take off and the A
work on the plant has not yet commenced.
20. In the aforesaid factual background and rival
contentions made in the appeals, intervention petitions as well
as counter affidavits, the main issue emerges for consideration B
is whether the writ petition was premature and in the case
of applicants whether pre amended Section 11 or
amended Section 11 of the MM(D&R) Act is applicable.
21. Before deciding the aforesaid issues it is relevant to
note that the issue relating to competence of the State C
Government to make reservation and the 1962 notification
issued by the State Government reserving certain areas fell for
consideration before this Court in Monnet /spat and Energy
Limited v. Union oflndia & Ors. (2012) 11 SCC 1. In the said
case, this Court held that the authority of the State Government D
to make reservation of a particular mining area within its
territory for its own use is the offspring of ownership, and it is
inseparable therefrom unless denied to it expressly by an
appropriate law. By MM(D&R) Act that has not been done by
Parliament. Setting aside by a State of land owned by it for its E
exclusive use and under its dominance control, is an incident
of sovereignty and ownership.
In the light of aforesaid observation made by this Court in
Monnet /spat Energy v. Union of India & Ors. (2012) 11 SCC
1 and in view of the relevant facts of the present case, it is to F
be determined as to whether the writ petition preferred by
Geomin was pre-mature.
22. Under Section 5 of the MM(D&R) Act, the State
Government cannot grant a reconnaissance permit, prospective G
licence or mining lease to any person unless previous approval
of the Central Government has been obtained. The proviso to
Section 5(1) expressly prohibits grant of PL except with
previous approval of Central Government as quoted hereunder:
H
942 SUPREME COURT REPORTS [2013] 8 S.C.R.
A Further, where Section 11 (5) is invoked, there also prior
approval of the Central Government is also required. The
proviso to Section 11 (5) prescribes that prior approval of
Central Government shall be obtained "before passing any
order under the sub-section". In the present case the State
B Government has only made recommendations and has sought
approval of Central Government under proviso to Section 5(1)
and proviso to Section 11 (5) but no final decision has been
taken. The State Government can pass final order granting
mining licence only if approval is granted by the Central
c Government under Section 5(1) or Section 11 (5) which reads
as follows:
"5(1 ). A State Government shall not grant a
reconnaissance permit, prospecting licence or mining
lease to any person unless such person-
D
(a) is an Indian national, or a company as defined in
sub-section (1) of section 3 of the Companies Act, 1956
(1 of 1956); and
(b) satisfies such conditions as may be prescribed:
E
Provided that in respect of any mineral specified in the
First Schedule, no reconnaissance permit, prospecting
licence or mining lease shall be granted except with the
previous approval of the Central Government.
F
11 (5). Notwithstanding anything contained in sub-section
(2), but subject to the provisions of.sub-section (1), the
State Government may, for any special reasons to be
recorded, grant a reconnaissance permit, prospecting
G licence or a mining lease, as the case may be, to an
applicant whose application was received later in
preference to an applicant whose application was received
earlier:
Provided that in respect of minerals specified in the First
H
GEOMIN MINERALS & MARKETING (P) LTD. v. STATE 943
OF ORISSA [SUDHANSU JYOTI MUKHOPADHAYA, J.]
Schedule, prior approval of the Central Government shall A
be obtained before passing any order under this sub-
section."
23. Iron ore is a major mineral specified in Para C of the
First Schedule. In matters of such major mineral, even State B
Government itself cannot undertake prospective or mining
operations without having prior consultation with the Central
Government as per Section 4(3) of the Act, and if prospecting
licence or mining lease is to be granted to any other person,
then previous approval of Central Government is to be obtained C
under proviso to Section 5(1). The consideration of
recommendation made by the Central Government for grant of
prior approval is an exclusive jurisdiction of the Central
Government under the MM(D&R) Act, 1957 and there is no
good reason for pre-empting the Central Government from
considering the merits of the recommendation. D
24. Until the Central Government has passed an order
either granting or refusing approval under Section 5(1) and
Section 11 (5) of the Act, it would not be permissible for any
person to file a writ petition under Article 226 of the Constitution E
of India and any such petition if filed would"be premature. In the
instant case, the High Court committed a grave error of law in
proceeding to observe that 'special reasons' did not exist on
invoking Section 11 (5) and that there was no comparison of
merits in the record. The record has been shown to this Court F
and it is apparent that the State Government has tabulated and
evaluated the inter se merits and has concluded that POSCO
is more meritorious. All applications were given a hearing. In
the circumstances, the High Court's observations are not
justified and in fact the High Court appears to have usurped G
the jurisdiction of the Central Government in proceeding to
make these remarks. The scrutiny of the merits was premature
and the High Court should have refrained from entering into the
merits.
25. The second proviso to Rule 63A also provides that the H
944 Sl:)PREME COURT REPORTS [2013] 8 S.C.R.
A disposal of the applications by the State Government in case
of minerals listed in tlfe First Schedule to the Act shall mean
either recommendation to the Central Government for grant of
mineral conce~sion, and in all other cases disposal shall mean
refusal to grant the mineral concession. This is also an
B indication that the recommendation made by the State
Government does not constitute an order as envisaged by
Section 30 of the Act.
26. The next issue relates to application of Section 11 i.e.
C whether pre-amended Section 11 or post amended Section 11
shall apply.
We have noticed that by amending Act, First Proviso to
Section 11 (2) was inserted. Pre-amended non obsente clause
i.e. sub Section 4 of Section 11 was re-nul'1bered as sub
D Section 5 to Section 11 and a new sub Section 4 to Section
11 was introduced by amending Act.
The pre amended provisions of Section 11 (2), (3) and (4)
and the post amended provisions of Section 11 (2), (3), (4) and
E (5) read as follows:
Pre-amended provisions of Section 11 (2), (3) and (4)
are as follows:-
"11(2). Subject to the provisions of sub-section (1 ), where
F two or more persons have applied for a prospecting
licence or a mining lease in respect of the same land, the
applicant whose application was received earlier shall
have a preferential right for the grant of the licence or
lease, as the case may be, over an applicant whose
G application· was received later:
Provided that where any such applications are received
on the same day, the State Government.after taking into
consideratio·n the matters specified in sub-section (3), may
grant the prospecting licence on mining lease, as the case
H
GEOMIN MINERALS & MARKETING (P) LTD. v. STATE 945
OF ORISSA [SUDHANSU JYOTI MUKHOPADHAYA. J.]
may be, to such one of the applicants as it may deem fit. A
11 (3). The matters referred to in sub-section (2) are the
following:-
(a) any special knowledge of, or experience in,
prospecting operations or mining operations, as the case B
may be, possessed by the applicant;
(b) the financial resources of the applicant;
(c) the nature and quality of the technical staff employed C
or to be employed by the applicant;
(d) such other matters as may be considered.
11 (4). Notwithstanding anything contained in subsection
(2) but subject to the provisions of sub-section (1), the State o
Government may for any special reasons to be recorded
and with the previous approval of the Central Government,
grant a prospecting licence or a mining lease to an
applicant whose application was received later in
preference to an applicant whose application was received E
earlier.
Post amended provisions of Section 11 (2), (3), (4) and (5)
are as follows:
11 (2). Subject to the provisions of sub-section(1 ), where F
the State Government has not notified in the Official
Gazette the area for grant of reconnaissance permit or
prospecting licence or mining lease, as the case may be,
and two or more _persons have applied for a
reconnaissance permit, prospecting licence or a mining G
lease in respect of any land in such area, the applicant
whose application was received earlier, shall have the
preferential right to be considered for grant of
reconnaissance permit, prospecting licence or mining
lease, as the case may be, over the applicant whose H
946 SUPREME COURT REPORTS [2013] 8 S.C.R.
A application was received later:
Provided that where an area is available for grant of
reconnaissance permit, prospecting licence or mining
lease, as the case may be, and the State Government has
invited applications by notification in the Official Gazette
B
for grant of such permit, licence or lease, all the
applications received during the period specified in such
notification and the applications which had been received
prior to the publication of such notification in respect of the
lands within such area and had not been disposed of, shall
c be deemed to have been received on the same day, for
the purposes of assigning priority under this sub section.
Provided further that where any such application are
received on the same day, the State Government, after
D taking into consideration the matter specified in sub-
section (3), may grant the reconnaissance permit,
prospecting licence or mining lease, as the case may be,
to such one of the applicants as it may deem fit.
11 (3). The matters referred to in sub-section (2) are the
E
following: -
(a)any special knowledge of, or experience in,
reconnaissance operations, prospecting operations or
mining operations, as the case may be, possessed by the
F applicant;
(b) the financial resources of the applicant;
(c) the nature and quality of the technical staff employed
or to be employed by the applicant;
G
(d) the investment which the applicant proposes to make
in the mines and in the industry based on the minerals;
(e) such other matters as may be prescribed.
H
GEOMIN MINERALS & MARKETING (P) LTD. v. STATE 947
OF ORISSA [SUDHANSU JYOTI MUKHOPADHAYA, J.]
11 (4). Subject to the provisions of sub-section (1 ), where A
the State Government notifies in the Official Gazette an
area for grant of retonnaissance permit, prospecting
licence or mining leas·e, as the case may be, all the
applications received during the period as specified in
such notification, which shall not be less than thirty days, B
shall be considered simultaneously as if all such
applications have been received on the same day and the
State Government, after taking into consideration the
matters specified in sub-section (3), may grant the
reconnaissance permit, prospecting licence or mining C
lease, as the case may be, to such one of the applicants
as it may deem fit.
11 (5). Notwithstanding anything contained in sub-section
(2), but subject to the provisions of sub-section (1), the
State Government may, for any special reasons to be D
recorded, grant a reconnaissance permit, prospecting
licence or a mining lease, as the case may be, to an
applicant whose application was received later in
preference to an applicant whose application was received
earlier: E
Provided that in respect of minerals specified in the First
Schedule, prior approval of the Central Government shall
be obtained before passing any order under this sub-
section."
F
27. The State of Orissa and some others have taken plea
that amended Section 11, as amended by Act 38 of 1999 w.e.f.
20th December, 1999, would apply.
28. According to the State of Orissa the preferential right G
envisaged in Section 11 (1) is considerably distinct from the
preference envisaged by Section 11 (2). It is only in the case
of Section 11 (1) where a person has already held a
reconnaissance permit or a prospective licence that he gets a
preferential right for obtaining a prospecting licence or mining H
948 SUPREME COURT REPORTS [2013] 8 S.C.R.
A lease. It may be seen that Section 11 (5) is subject to the
provisions of sub-section (1) and, therefore, the State
Government has no authority to give special reasons for
overriding the preference. Further, Section 11 (5) is
notwithstanding Section 11 (2), thus the preference under
8 Section 11 (2) can be overridden by special reasons~
29. Another distinction is that while Section 11 (1) uses the
expression "shall have a preferential right for obtaining",
Section 11 (2) uses the expression "shall have the preferential
right to be considered for grant". Thus, under Section 11 (2), the
C preferential right is only in relation to consideration. The
preference envisaged under Section 11 (2) does not mean that
the other applicants are not to be considered. It could only mean
that if on an inter se consideration, the applicants are at par,
then the prior application may be given a preference.
D
30. On the other hand learned counsel for the Geomin has
submitted that pre-amended Section 11 (2) shall be applicable.
31. In State of Tamil Nadu v. Mis Hind Stone, (1981) 2
sec 205 similar question fell for consideration before this
E Court. That was a case relating to renewal of lease for mining
minerals. The argument was that Rule 9 itself laid down the
criteria for grant of renewal of lease and therefore, Rule 8-C
should be confined, in considering applications for grant of
leases in the first instance. This Court held that an application
F for the renewal of a lease is, in essence an application for the
grant of a lease for a fresh period and, therefore, the Rule BC
is attracted.
32. Amended Section 11 (2) is applicable where the State
G Government has not notified in the Official Gazette the area for
grant of reconnaissance permit or prospective licence or mining
lease and two or more persons have applied for
reconnaissance permit, prospective licence or mining lease in
respect of any land in such area, the applicant whose
H application was received earlier, shall have the preferential right
GEOMIN MINERALS & MARKETING (P) LTD. v. STATE 949
O~ ORISSA [SUDHANSU JYOTI MUKHOPADHAYA, J.]
to be considered for grant of reconnaissance permit, A
prospective licence or mining lease, over the applicant whose
application was received later.
However, as per First proviso to Section 11 (2) where an
area is available for grant of reconnaissance permit, 8
prospecting licence or mining licence, and the State
Government has invited applications by notification in the
Official Gazette for grant of such permit, licence or lease, all
the applications received during the period specified in such
notification and the applications which had been received prior C
to the publication of such notification in respect of the lands
within ·such area and had not been disposed of, shall be
deemed to have been received on the same day for the
purposes of assigning priority under said sub-section. Thus
under amended Proviso to Section 11 (2), even those
applications received prior to the publication but had not been D
disposed of, shall be deemed to have been received on the
same day for the purpose of assigning priority under the said
sub Section.
33. According to us, this is not the stage to decide as to E
whether in the present case the pre-amended or amended
Section 11 (2) shall be applicable and thereby priority should
be assigned under pre-amended or amended Section 11 (2)
as the matter has already been considered by the State
Government and recommendation is required to be considered F
by the Central Government under Section 5(1) of the Act.
The Central Government is required to go through the
relevant facts of each case to determine whether the
recommendation is to be approved or not. While deciding the G
question the Central Government will keep in mind the order
which was passed by the Revisional Authority(Central
Government) in the case of Dagara on 2nd May, 2008.
34. It is well settled that no applicant has statutory or
fundamental right to obtain prospecting licence or a mining H
950 SUPREME COURT REPORTS [2013] 8 S.C.R.
A lease. In this connection one may refer to this Court decision
in Monnet /spat (supra). Therefore, the High Court before
interfering with the recommendation, ought to have looked into
the nature of recommendation.
35. In view of the finding as recorded above, we are of the
8
view that the High Court committed a grave error of law in
deciding the case on merits and deciding the question of
legality of the recommendation made by the State Government.
In fact they should have left the matter to the Central
Government to pass an appropriate order in accordance with
C law instead of entertaining a pre-mature writ petition. The State
Government by its recommendation having forwarded the
tabulated chart showing inter se merit of each applicant, it was
not for the High Court to sit in appeal to decide who amongst
all is more meritorious and is entitled for preferential right.
D
36. We, accordingly, set aside the impugned judgment
dated 14th July, 2010 passed by the Division Bench of the
Orissa High Court and remit the matter to the Central
Government to consider the question of approval under Section
E 5(1) taking into consideration the recommendations made by
the State Government. While deciding the question it will keep
in mind the objections raised by the parties as noticed in the
preceding paragraphs. It is expected that the decision will be
taken on an early date and shall be communicated to the State
F Government. The appeals are allowed with the aforesaid
observation and direction, but there shall be no order as to
costs.
K.K.T. Appeals disposed of.
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