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whereby the writ petition preferred by Geomin Minerals & Marketing (P) Ltd. was allowed and the recommendation made by the State Government dated 9th January, 2009 in favour of POSCO India (P) Ltd. was set aside with a direction to the State Government to take a fresh decision in terms of order dated 27th September, 2007 passed by the Revisional Authority in Revision Application File No.22 (41)/2007­RC­1 by giving the Geomin Minerals & Marketing (P) Ltd. the preferential right of consideration. The Division Bench further observed that in the event the State Government decides to invoke the provisions of Section 11(5) of the Mines and Minerals (Development and Regulation) Act, 1957 (hereinafter referred to as the “MM(D&R) Act”) , “special reasons” for the same in terms of guidelines dated 24th June, 2009 issued by the Ministry of Mines, Government of India be recorded in writing.= It is well settled that no applicant has statutory or fundamental right to obtain prospecting licence or a mining lease.- In view of the finding as recorded above, we are of the 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 law instead of entertaining a pre­mature 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. 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 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 Government. The appeals are allowed with the aforesaid observation and direction, but there shall be no order as to costs.

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CIVIL APPEAL NO.  4561   OF 2013
(ARISING OUT OF SLP(C) NO.31593 OF 2010)
CIVIL APPEAL NO.  4562     OF 2013
(ARISING OUT OF SLP(C) NO.31957 OF 2010)
CIVIL APPEAL NO.  4563    OF 2013
(ARISING OUT OF SLP(C) NO.32040 OF 2010)
Leave granted.   
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2. These   appeals   by   special   leave   have   been
preferred   against   the   order   of   Division   Bench   of
Orissa High Court, Cuttack dated 14th  July, 2010 in
W.P.   (C)   No.23   of   2009   whereby   the   writ   petition
preferred   by   Geomin   Minerals   &   Marketing   (P)   Ltd.
was allowed and the recommendation made by the State
Government dated 9th January, 2009 in favour of POSCO
India (P) Ltd. was set aside with a direction to the
State Government to take a fresh decision in terms of
order   dated   27th  September,   2007   passed   by   the
Revisional   Authority   in   Revision   Application   File
No.22 (41)/2007­RC­1 by giving the Geomin Minerals &
Marketing   (P)   Ltd.   the   preferential   right   of
consideration.   The Division Bench further observed
that   in   the   event   the   State   Government   decides   to
invoke the provisions of Section 11(5) of the Mines
and Minerals (Development and Regulation) Act, 1957
(hereinafter   referred   to   as   the   “MM(D&R)   Act”)   ,
“special reasons” for the same in terms of guidelines
dated   24th  June,   2009   issued   by   the   Ministry   of
Mines,   Government   of   India   be   recorded   in   writing.
The   State   Government   was   directed   to   complete   the
entire exercise within specified period.  
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3. The factual matrix of the case is as follows:
The availability of two sets of land for fresh
grant of lease was notified by the State of Orissa
vide   Notification   dated   20th  August,   1991   issued
under   Rule   59(1)   of   the   Mineral   Concession   Rules,
1960.   The first set comprised of 85.60 acres plus
94.47   acres   of   land   in   Village   Kansar   and   Village
Gokhurang of Balangir District which had earlier been
granted   on   lease   in   favour   of   Shri   S.K.   Padhi   and
Shri   B.K.   Agarwal.     These   leases   were   subsequently
surrendered   to   the   State   Government   and   were,
therefore,   available   for   re­grant.   The   State
Government vide notification dated 20th  August, 1991
notified   the   availability   w.e.f.   24th  October,1991.
The   second   set   of   land   comprised   of   283.06   square
miles   in   Horomoto   Guali   Block,   Malangtoli   Block,
Khandhdhar­Pahar   in   Block   Keonjhar   and   Sundargarh
districts,   Taldihi   Toda   Block,   Sundargarh   District
and Dubna Block I and III which was declared to be
reserved   for   public   sector   corporations   vide
Notification   dated   05.06.1962   and   06.12.1962.     The
State   Government   decided   to   de­reserve   the   said
mineral   bearing   areas   and   the   availability   of   the
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said  area was  notified vide  Notification  dated 23rd
August,1991.   The date of availability for re­grant
was   on   and   from   29th  October,1991.     The   dispute   in
the case of Geomin’s SLP No. 31593/2010 is regarding
186   hectares   of   land   located   in   village   Rantha
District   Sundergarh.   Although,   the   recommendation
made   in   favour   of   POSCO   covers   an   area   of   2500
hectares,   thus   Geomin’s   interest   is   limited   to   a
fraction of the land recommended for POSCO.  
4. POSCO   had   made   an   application   for   prospecting
licence for an area of 6828.54 hectares.  Initially a
recommendation was made to the Central Government in
favour of POSCO for an area of 6204.352 hectares by
the   State   Government   on   19.12.2006.   The
recommendation was challenged by Kudremukh Iron Ore
Company   (hereinafter   referred   to   as   the   “Kudremukh
Company”) by means of a writ petition being W.P. No.
1775   of   2007.     The   High   Court   refrained   from
exercising   its   discretion   since   the   matter   was
pending   before   the   Central   Government   and   directed
that   representation   of   Kudremukh   Company   may   be
treated   as   revisional   application.     The
recommendation of the State Government was set aside
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vide   order   dated   27th  September,2007   by   the
Revisional   Authority   as   all   mineral   concession
applications were not considered  simultaneously and
no orders were passed on those applications.  It was
directed that all pending applications be considered
simultaneously   and   inter   se   merit   be   examined   and
then order be passed as per law after affording an
opportunity   of   hearing   to   all   the   applicants.
Earlier   the   Central   Government   by   its   letter   dated
16.7.2007 had informed the State Government that the
recommendation   in   favour   of   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 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 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
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affects   the   preferential   rights   of   the   first   day
applicants   under   Section   11(2)   of   the   MM(D&R)   Act.
In the said Writ Petition No. 15315 of 2007, 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 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.  
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 63­A of the MC
Rules.     The   said   writ   petition   was   disposed   of   on
14th   July,   2008   by   the   Orissa   High   Court   with   a
direction   to   the   State   Government   to   consider   the
pending   PL/RP   applications   of   Geomin   Minerals   &
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Marketing (P) Ltd. preferably within a period of six
months without discrimination and in accordance with
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 Section 11(2)
of MM(D&R) Act was inserted as under:
“11.  Preferential right of certain persons.
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 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
purposes   of   assigning   priority   under
this sub­section.”
The non obstante clause i.e. Sub­section (4) of
Section 11 was re­numbered as Sub­section (5), and a
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new   Sub­section   (4)   was   introduced,   which   reads   as
“11.   (4)   Subject   to   the   provisions   of
sub­section   (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 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   matters
specified in sub­section (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 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.   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
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&   Marketing   (P)   Ltd.   filed   a   Writ   Petition   being
W.P(C) No.23 of 2009 inter alia with the following
“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.”
The Writ Petition was filed on 5th January, 2009
by   Geomin   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   &
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Marketing   (P)   Ltd.   by   filing   a   petition   for
9. On   hearing   the   parties,   the   High   Court   framed
the following issues for consideration: 
1.Whether   the   writ   petition   is
maintainable   due   to   availability   of
alternative remedy ?
2. Whether the writ petition is premature
3.   Whether   the   writ   petition   is
maintainable due to delay and laches ?
4. Whether the writ petition is barred by
res­judicata ?
5.   Whether   the   area   in   question   was
earlier reserved or it is a non­reserved
6.   Whether   the   petitioner   has   any
preferential   right   under   Section­11   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 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   pre­mature.     The
said   issue   was   answered   by   the   High   Court   in   a
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cryptic manner without any reason, as apparent from
its finding which is produced below.
 “Issue no.2,
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, is 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 SC­661).”
Issue Nos. 6 and 7 relate to preferential right
of   Geomin   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   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
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by   the   State   Government   under   Section   11   (5)   in
favour of POSCO is invalid.  
11. The   judgment   aforesaid   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
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 allow the
applications for intervention and impleadment. 
12. The   learned   counsel   for   the   parties   argued   in
detail   for   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.
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13. Learned   counsel   Mr.   K.K.Venugopal   appearing   on
behalf of POSCO India Pvt. Ltd. made the following
13.1 The recommendation in favour of POSCO India has
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
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   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
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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 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   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.
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
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public interest.   If the gap between POSCO and the
other   applicants,   even   in   regard   to   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   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.
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   )   dated
27.9.2007,   which was upheld by the High Court and
had become final,   and     simultaneously considered
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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
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   case   (which   order   attained
finality), that the State Government was required to
consider all pending applications 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   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).  
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13.7 The   High   Court   has   failed   to   point   out   as   to
what   would   amount   to     “special   reasons”.     The
Impugned Judgment also 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
13.8   POSCO   is   a   wholly   owned   subsidiary   of   M/s
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 value and  Asia’s most
profitable steel 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   authorised   share   capital   of   Rs.1,00,000/­
17Page 18
(Rupees one lakh), obviously 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   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 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 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   never­ending.     In   any
event, if in substance and in effect a totally new
18Page 19
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.
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   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   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
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Revisional   Authority,   which   was   upheld   by   the   High
Stand of Geomin Minerals & Marketing (P) Ltd.  
14. Learned   counsel   for   the   Geomin  Minerals   &
Marketing (P) Ltd.  made the following submissions:
14.1 A preferential right in the field of mining is
an important right. The preferential right conferred
under   un­amended   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 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
Karnataka   (2010)   13   SCC   1  will   apply.     The
consequence will be as follows:­
20Page 21
(a) Section   11(4)   of   the   amended   Section   will
(b) Section 11(5) will not be available.
(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
(d) Even   if   Section   11(5)   is   applied,   special
reasons 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
21Page 22
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   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
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. 
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.  
Stand of the State of Orissa:
22Page 23
15. Mr. Rakesh Dwivedi, learned  senior counsel for
the   State   of   Orissa   to   the   facts   as   noticed   above
contended as follows:
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 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   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 to all the applicants and had considered the
23Page 24
inter   se   merit   of   the   applicants.     An   overall
holistic   consideration   and   record   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 up one ore based steel complex of 12
MTPA   capacity   but   at   that   time   their   project   was
under   consideration   by   the   High   level   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   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
24Page 25
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 nor had applied for impleadment before the
High   Court.   It   has   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   possessing   outstanding   merit   in
comparison to all other applicants.  They proposed to
set   up   a   World’s   first   steel   plant   project   using
25Page 26
FINEX   technology   which   was   a   next   generation   eco­
friendly   process   which   allows   direct   use   of   cheap
iron ores fines and non­coking coal as feed stock and
has consequently 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 Part­F, Summary, it has been noted that  only
two   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   raw­material   linkage   to   their
proposed steel plant. It mentions “as far as relevant
merits are concerned in terms of proposed investment,
financial resources 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 other areas.   The “conclusion”
26Page 27
has been drawn and it has been specifically stated in
sub­para (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.   POSCO   India   taking   into   account   the
comprehensive advantage of POSCO in terms of revenue
and employment generation.   In sub­para (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 addition facilities including 12
MTPA steel plant based on eco­friendly 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.  
15.5. While considering the extent of area to be
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
27Page 28
POSCO to the Government of India for prior approval
for grant of PL.  Expressly invoking 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   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 conclusion that POSCO was more
meritorious from the point of scientific exploration
and mining, mobilization of financial resources, use
of   eco­friendly   and   resources   –   use   efficient
technology   investments   including   the   steel   plant
project   and   general   of   employment   and   revenue.   In
addition, the State Government has also invoked the
provisions of Section 11(5) of the Act. 
28Page 29
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 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 No.1334 dated 29.10.1991 is
overlapping.   Thus,   the   area   recommended   for   POSCO
includes about 186 hectares of area applied for by
15.7 The order of the High Court dated 14th July, 2008
had   been   passed   in   the   context   of   PL   Application
No.1338 in 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
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
29Page 30
and   sale   of   minerals   and   mineral   products.     The
affidavit   mentions   that   it   is   a   new   company   and
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 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   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
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
30Page 31
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
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   Geomin   has   now   entered   into   a
partnership with the Navyuga Group of companies who
are   a   large   conglomerate   with   interests   in
engineering,   exports,   mining,   ports,   power,   real
estate, I.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 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.  
31Page 32
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 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 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.
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.
32Page 33
In the case of  State of Tamil Nadu vs. Hind 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.  
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
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   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)/2009­RC­I   &   Revision   Application
No.22(7)/2009­RC­I   respectively.     The   Revisional
Authority vide final orders dated 23.8.2011, has been
pleased   to   allow   the   revision   applications   and   set
33Page 34
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 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)/2009­RC­I & Revision
Application   No.22(7)/2009­RC­I   respectively.     The
same is pending adjudication before the Orissa High
Court.   The   Company   is   not   aware   if   M/s.   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   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.
34Page 35
The Revisional Authority vide order dated 27.09.2007
had   directed   to   consider   all   applications
‘simultaneously’. Therefore, all the applications 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 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 ‘non­notified’ and the State Government has
for ‘special 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 notified, which is the present case.   The
35Page 36
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   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 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 pre­amended provisions  stands obliterated
after   the   amendment   came   into   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
36Page 37
prior approval under 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 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:
(i) The   Kudremukh   Company   is   a   public   sector
undertaking which is best suited to protect
national resources of the country.
(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   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 others, as it has special knowledge in
mining   operations,   the   nature   and   quality
of   the   technical   staff   and   adequate
financial   resources,   which   are   the
37Page 38
prescribed   considerations   in   Section   11(3)
of   the   Act.     As   far   as   the   so­called
proposed   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
merit has also been recognised by the State
Government, but it erroneously claimed that
POSCO is more meritorious on the ground of
the so­called proposed steel plant which is
yet to take off and the 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 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   Government   to   make
reservation and the 1962 notification issued by the
State   Government   reserving   certain   areas   fell   for
consideration before this Court in  Monnet Ispat and
Energy   Limited  v.   Union  of   India   &  Ors.   (2012)  11
38Page 39
SCC 1.   In the said case, this Court held that the
authority of the State Government 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 exclusive use and under its
dominance control, is an incident of sovereignty and
In   the   light   of   aforesaid   observation   made   by
this Court in  Monnet Ispat Energy v. Union of India
& Ors. (2012) 11 SCC 1  and in view of the relevant
facts of the present case, it is to be determined as
to whether the writ petition preferred by Geomin was
22. Under   Section  5   of  the   MM(D&R)   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 as quoted hereunder:
39Page 40
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 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 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
(a) is   an   Indian   national,   or   a
company as defined in sub­section (1) of
section 3 of the Companies Act, 1956 (1
of 1956); and
(b) satisfies such conditions as may
be prescribed:
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
40Page 41
11(5).    Notwithstanding   anything   contained
in   sub­section   (2),   but   subject   to   the
provisions   of   sub­section   (1),   the   State
Government may, for any special reasons to
be 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:
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 sub­section.”
23. Iron ore is a major mineral specified in Para C
of   the   First   Schedule.   In   matters   of   such   major
mineral,   even   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, 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
exclusive   jurisdiction   of   the   Central   Government
under   the   MM(D&R)   Act,   1957   and   there   is   no   good
41Page 42
reason   for   pre­empting   the   Central   Government   from
considering the merits of the recommendation.
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 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 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   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. 
42Page 43
25. The   second   proviso   to   Rule   63A   also   provides
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 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.  
26. The next issue relates to application of Section
11   i.e.   whether   pre­amended   Section   11   or   post
amended Section 11 shall apply.
We   have   noticed   that   by   amending   Act,   First
Proviso to Section 11(2) was inserted.   Pre­amended
non obsente clause i.e. sub Section 4 of Section 11
was re­numbered as sub 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 (5) read as follows: 
43Page 44
Pre­amended   provisions   of   Section   11(2),
(3) and (4) are as follows:­
“11(2).  Subject   to   the   provisions   of   sub­
section (1), where 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 application was received
Provided   that   where   any   such   applications
are   received   on   the   same   day,   the   State
Government,after   taking   into   consideration
the   matters   specified   in   sub­section   (3),
may grant the prospecting licence on 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 following:­
(a) any special knowledge of, or experience
in,   prospecting   operations   or   mining
operations,   as   the   case   may   be,   possessed
by the applicant;
(b)   the   financial   resources   of   the
(c) the nature and quality of the technical
staff   employed   or   to   be   employed   by   the
(d)   such   other   matters   as   may   be
11(4).  Notwithstanding   anything   contained
in   subsection   (2)   but   subject   to   the
provisions   of   sub­section   (1),   the   State
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 earlier.
44Page 45
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 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   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   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 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 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   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.
45Page 46
11(3).  The   matters   referred   to   in   sub­
section (2) are the following: ­
(a)any special knowledge of, or experience
in,   reconnaissance   operations,   prospecting
operations   or   mining   operations,   as   the
case may be, possessed by the applicant;
(b)   the   financial   resources   of   the
(c) the nature and quality of the technical
staff   employed   or   to   be   employed   by   the
(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
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 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 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.
11(5).    Notwithstanding   anything   contained
in   sub­section   (2),   but   subject   to   the
provisions   of   sub­section   (1),   the   State
Government may, for any special reasons to
be 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
46Page 47
preference   to   an   applicant   whose
application was received earlier:
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 sub­section.”
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   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 lease.  It may be seen
that Section 11(5) is subject to the provisions of
sub­section (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   Section   11(2)   can   be   overridden   by   special
47Page 48
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
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.
30. On the other hand learned counsel for the Geomin
has submitted that pre­amended Section 11(2) shall be
31. In State of Tamil Nadu v. M/s Hind Stone, (1981)
2   SCC   205  similar   question   fell   for   consideration
before   this   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   8­C
should be confined, in considering applications for
grant   of   leases   in   the   first   instance.   This   Court
48Page 49
held that an application 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 8C is attracted.
32. 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,
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 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 received during the period specified in
such notification and the applications which had been
49Page 50
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   purposes   of
assigning   priority   under   said   sub­section.     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 priority under the said sub Section.  
33. According to us, this is not the stage to decide
as to whether in the present case the pre­amended or
amended Section 11(2) shall be applicable and thereby
priority   should   be   assigned   under   pre­amended   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 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   question   the   Central   Government   will
50Page 51
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 lease. In this connection one
may   refer   to   this   Court   decision   in  Monnet   Ispat
(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   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   law   instead   of   entertaining   a   pre­mature   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
51Page 52
more   meritorious   and   is   entitled   for   preferential
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 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   Government.     The   appeals
are   allowed   with   the   aforesaid   observation   and
direction, but there shall be no order as to costs.
( R.M. LODHA )
MAY 10, 2013.


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