M/s. Geomysore Services (I) Pvt. Ltd. & Anr. vs M/s. Hutti Goldmines Co. Ltd. & Ors.

HELD: 1. State is the owner of the land and minerals. However, the control and regulation of mines and development of minerals are in the domain of the Union Government. The State Government is denuded of its legislative power to make any law in respect of regulation of mines and mineral development in so far as that field is covered by the provisions of the Mines and Minerals (Development and Regulation) Act, 1957. It is only if the field is vacant that the State can exercise its legislative powers. Otherwise, it has to exercise its power strictly in accordance with the powers specifically conferred on the State Government by the Act and the Minerals Concession Rules, 1960. While exercising the powers of reservation vested in Section 17A(2) of the Act, the State Government has to take approval of the Central Government. [Para 39] [556-D-F]

2. Section 17A(2) of the Act clearly provides that the State Government can reserve any area for undertaking prospecting or mining operations through a Government company or corporation with the approval of the Central Government. The Act does not lay down the parameters which the Central Government is required to follow. Therefore, the Central Government can take all the factors which are relevant for the purpose of deciding whether reservation should be made or not. The National Mineral Policy 2008 (NMP 2008) being a policy of the country, can definitely be taken into consideration while considering such a request. [Para 40] [557-B-C]

3. A policy of a Government is an important document. It cannot be brushed aside. The Central Government, while considering the request of the State Government, can take into consideration various factors which may include economic factors, the factors reflecting the image of the country internationally to the global world community and also other factors of national security etc.. Each case has to be decided on its own facts. Therefore, it cannot be said that only those factors can be taken into consideration, which flow from the Act or the Rules. [Para 41] [557-E]

4. Section 11(1) and Section 17A(2) of the Act have no connection with each other. Section 11(1) of the Act deals with preference to be given to Reconnaissance Permit (RP) holder and Prospecting Licence (PL) holder while considering their case for grant of PL and Mining Lease (ML) respectively. This has nothing to do with reservation of land under Section 17A(2) of the Act. The only connection, if it can be called that, is that if a land is held under a PL or ML, then action under Section 17A(2) of the Act cannot be initiated. Under Section 11(1) of the Act, an RP holder, who has carried out reconnaissance, is entitled for preference when his case is being considered for grant of PL. However, in Section 17A(2) of the Act, the bar to reservation is only in those cases where the land is held under a PL or ML. When any land is held under PL or ML, then the said land cannot even be considered for reservation. If the land sought to be reserved is not under PL or ML, then the State can make a proposal to reserve the land. If the land sought to be reserved is covered by an RP there is no bar to reserve the land for exploitation by State Government undertakings. This, however, does not mean that while dealing with the proposal of the State, the Central Government must make the reservation. The Central Government while granting approval, has to independently apply its mind and while doing so, there is nothing which debars the Central Government from taking into consideration the fact that some entity was granted RP and the effect thereof. No doubt, the Central Government cannot reject the proposal only on the ground that RP was issued since that would run counter to the provisions of Section 17A(2) of the Act. However, this is a fact which along with other facts can be taken into consideration while deciding the issue of reservation of land. [Paras 42 and 46] [557F-H; 558-A-B; 559-F-G]

5. In the present case, the Central Government took into consideration various factors and noted that PL applications had already been filed by Appellant Nos. 1 and 2 pursuant to RPs. It virtually held that the request of the State Government was at a belated stage and was against the provisions of the NMP, 2008, the emphasis in which was to provide a regulatory environment which is conducive to private investment. It may be true that the Central Government was influenced by the fact that the appellants, pursuant to the RPs, had completed the reconnaissance and submitted their consolidated reports, but there were other relevant factors also which were taken into consideration such as that the appellants had already applied for grant of PL and no security consideration or public interest was involved in making reservation for respondent No. 1. Therefore, the factors taken into consideration by the Central Government are relevant and germane to the issues and cannot be said to be such factors which are extraneous or could not have been taken into consideration. [Para 43] [558-C-E]

6. Section 17A(2) of the Act envisages four conditions, viz.

(a) The land is not held under prospecting licence or mining lease;

(b) there is approval by the Central Government; (c) a notification is issued in the Official Gazette specifying the boundaries of such area; and (d) such notification should identify the mineral or minerals in respect of which such areas are sought to be reserved. In the present case, only the first condition was fulfilled. None of the other conditions were satisfied. Therefore, the State of Karnataka could not have issued recommendation in favour of respondent No. 1 on 27.12.2008. Unless reservation takes place, a private company stands on the same footing as a Government company and in that eventuality, Section 11 of the Act would be applicable and the appellants being the RP holders and also being earlier PL applicants, had to be given preference. The Central Government was justified in rejecting the request of the State of Karnataka in reserving the land in question. [Paras 45 and 46] [558-G-H; 559-A-C, G-H]

Indian Charge Chrome Ltd. & Anr. v. Union of India & Ors. (2006) 12 SCC 331 : [2006] 10 Suppl. SCR 640 ; Monnet Ispat & Energy Ltd. v. Union of India & Ors (2012) 11 SCC 1: [2012] 7 SCR 644 ; Amritlal

Nathubhai Shah and Others v. Union Government of India and Another (1976) 4 SCC 108 : [1977] 1 SCR

372 ; State of T.N. v. M/s Hind Stone and Others (1981) 2 SCC 205 : [1981] 2 SCR 742 ; Indian Metals and Ferro Alloys Ltd. v. Union of India & Ors. (1992) 1 Suppl. SCC 91 : [1990] 2 Suppl. SCR 27 ; State of T.N. v. M.P.P. Kavery Chetty (1995) 2 SCC 402 : [1995] 1 SCR 441 ; Sandur Manganese and Iron Ores Ltd. v. State of Karnataka & Ors. (2010) 13 SCC 1 : [2010]

11 SCR 240 ; State of Kerala and Ors. v. Kerala Rare Earth & Minerals Ltd. & Ors. (2016) 6 SCC 323 : [2016] 5 SCR 515 – referred to.