# GEOMIN MINERALS & MARKETING (P) LTD v. STATE OF ORISSA AND ORS

- **Citation:** [2013] 8 S.C.R. 914
- **Court:** Supreme Court of India
- **Decided:** 2013-05-10
- **Case number:** Civil Appeal No. 4561 of 2013
- **Bench:** R.M. Lodha, Sudhansu Jyoti Mukhopadhaya
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/geomin-minerals-marketing-p-ltd-v-state-of-orissa-and-ors-29385
- **Pages:** 37

## Headnote

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
F
HELD: 1.1. Under Section 5 of the Mines and Minerals
(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
Gov

## Text

_Characters 0–39,801 of 70,534. This is a partial read: ask again with offset=39801 for what follows._

[2013] 8 S.C.R. 914
A
GEOMIN MINERALS & MARKETING (P) LTD.
B
V.
STATE OF ORISSA AND ORS.
(Civil Appeal No. 4561 of 2013 etc.)
MAY 10, 2013
[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
F
HELD: 1.1. Under Section 5 of the Mines and Minerals
(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
0
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 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:
2010 (11) SCR 240
2012 (7) SCR 644
1981 (2) SCR 742
referred to
relied on
referred to
Para 14.2
Para 21
Para 31
D
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
B
for the appearing parties.
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
H
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
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.
7. In the meantime, during the pendency of the
B
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
E
F
G
H
being W.P(C) No.23 of 2009 inter alia with the following prayer:
"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
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
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
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
A
B
c
SUPREME COURT REPORTS
[2013] 8 S.CR
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,
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
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.
13. Learned counsel Mr. K.K.Venugopal appearing on
behalf of POSCO India Pvt. Ltd. made the following
submissions:
8
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
F
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
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
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
F
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:-
Section 11 (4) of the amended Section will apply.
Section 11 (5) will not be available.
(a)
(b)
(c)
D
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
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.
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
F
G
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.
8
14.4 Memorandum of Understanding or the arrangements
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.
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
B
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
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
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
E
F
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.