Judgment:
VIKRAMAJIT SEN, CJ.
1. We have heard the learned counsel for the parties in full detail. The Petitioner prays for a writ or direction in the nature of certiorari quashing the order of the Central Government dated 31.05.2011 rejecting the request of the State Government for seeking approval for reservation of 16109.61 hectares in Raichur district (henceforward called the ‘said land’) Under Section 17A (2) of the Mines and Minerals (Development and Regulation) Act, 1957 [‘MMDR Act’ for brevity]. This request was held to be devoid of merit and accordingly was rejected. The State Government was to consider the pending requests of the contesting respondents’ application for grant of a Prospecting Licence expeditiously. The litigation comes with a jural history, inasmuch as, the very same parties were before the Division Bench in Writ Petition No. 39969/2010 connected with Writ Petition No. 39970/2010, field by the Petitioner. By the Judgment dated 18.02.2011, the Union of India was directed to reconsider the communication dated 27.12.2008 of the Government of Karnataka seeking to reserve the said land under Section 17A (2) of the MMDR Act.
2. The contesting Respondents 4 and 5 have contented that they had been granted Reconnaissance Permit pursuant to which they have already incurred considerable expenses for locating gold/minerals deposit and therefore they are entitled to preferential right as envisaged in Section 11 of the MMDR Act.
3. Revision Applications came to be field by Respondents 4 and 5 challenging the communication of the Government of Karnataka dated 27.12.2008 addressed to the Secretary (Mines) Government of India under Section 17A (2) of the MMRD Act which were allowed by orders dated 22.10.2010. The Revisional Authority pointedly exercised jurisdiction under Section 30 of the MMRD Act which states that the “Central Government may, of its own motion or on an application made .. by an aggrieved party, revise any order made by a State Government … in exercise of the powers … under this Act”. It is certainly debatable that the Revision Applications at the instance of Respondents 4 and 5 were not maintainable, since at that stage all that the State Government had decided to do was to seek the approval of the Central Government to its plan to reserve lands, as postulated in Section 17A (2), which being a statutory right cannot but be beyond Section 30 of the grant or refusal of such ‘approval’ is amenable to a Revision and at whose instance. This question had not been raised before the Court in the previsions round of litigation and need not further engage our attention since the Order assailed before us is not predicated on Section 30.
4. The Revisional Authority had held in its Order dated 22.10.2010 that the Government of Karnataka was not entitled under Section 17A(2) of the MMDR Act to reserve to itself the said land, and directed it to give due consideration to the contesting Respondents’ application for grant of a Prospecting Licence. It was those Orders which are set aside by the Division Bench in W.P.No.39969/2010. It is subsequent thereto that the impugned Order dated 31.05.2011 has been passed by the Cental Government which reads as follows:
“No.16/157/2006-M.VI
Government of India
Ministry of Mines
New Delhi, the 31st May 2011
To
The Secretary,
(Mines, SSI and Textiles)
Commerce and Industries Department,
Government of Karnataka,
VikasaSoudha,
Bangalore– 560 001.
Subject: Reservation of area in favour of M/s. Hutti Gold Mines Company Limited (HGML) – reg.
Sir,
I am directed to refer to State Government of Karnataka letter No.CI.10:MMM.2007 dated 27.12.2008 seeking approval of Central Government for reserving 16109.61 hectares under Section 17A(2) of Mines and Minerals (Development and Regulations) Act, 1957 (MMDR Act) in favour of M/s. Hutti Gold Mines Company Limited (HGML) at South Hutti, Raichur District, Karnataka.
The matter has been examined in the Ministry and it is observed that M/s. Geo Mysore Services (India) Pvt. Ltd. Though its sister company M/s. Deccan Gold Exploration Services Pvt Ltd (earlier known as M/s. Indophil Resources Exploration Services (India) Pvt Ltd) filed for Prospecting Licenses in portion of said area after completing Reconnaissance Permit in a portion of the area proposed for reservation vide RP No.4/2000 executed by State Government on 3.11.2000. It is further observed that instead of processing the PL applications, the State Government has suddenly decided to take into consideration HGML request and consider reservation of the area. It is held that this action of the State Government goes against the principles enshrined in the MMP,2008, which categorically states in para 3.3 that in order to make regulatory environment conductive to private investment the procedures for grant of concessions shall be transparent and seamless transition shall be guaranteed to the concessionaires. Further, the NMP 2008 states in para 4 that there shall be transparency fair play in reservation of ore bodies to the State agencies on such areas where private players are not holding or have not applied for exploration or mining, unless security considerations or specific public interest are involved. In the present case, since M/s. Geo Mysore have completed their RP and have filed for seamless transition to PL, the intention of State Govt. to reserve the area in favour of HGML is not in terms of the NMP 2008, more so considering the fact that no specific security considerations or public interest are involved in undertaking such reservation.
3. I am further directed to state that considering the above facts, the request of the State Govt. for reservation of 16109.61 hectares under section 17A (2) of the MMDR Act in favour of HGNL in South Hutti, Raichur district, Karnataka is devoid of any specific merits and accordingly rejected by the Central Government with direction to State Govt. to consider the pending requests for grant of Prospecting Licence in South Hutti field expeditiously.
4. It is requested that action taken in this regard may kindly be intimated to the Ministry.
Yours faithfully,
SD/-
(Anil Subramaniam)
Under Secretary to the Government of India,
Tel No.23383946
Copy to:
1. The Director, M/s Geo Mysore Services (India) Pvt Ltd., #12, SBI Colony, 7th Main, 3rd Block, Koramangala, Bangalore – 560 034 w.r.t their letter dated 28.11.2006.
2. The Managing Director, The Hutti Gold Mines Company Limited, 3rd Floor, KHB Shopping Complex, National Games Village, Koramangala, Bangalore-560 047 w.r.t their letter No.9/RO/2011/21 dated 10th March, 2011.
Sd/-
(Anil Subramaniam)
Under Secretary to the Government of India.”
5. Mr. D.L.N. Rao, learned Senior Advocate for the Petitioner, has argued that the impugned order is not in consonance with the Judgment dated 18.02.2011 of Division Bench of this Court and quite palpably, according to him, ignores the directions contained in the said Judgment of the Division Bench. He reiterates that it is well settled that the orbit of Section 11 is entirely distinct from that of Section 17A(2) of the MMDR Act; that the respective oribits do not converge at any point. At this juncture, we may peruse Section 11 and 17A(2) of the MMDR Act.
“11. Preferential right of certain persons
(1) Where a reconnaissance permit or prospecting licence has been granted in respect of any land, the permit holder or the licensee shall have a preferential right for obtaining a prospecting licence or mining lease, as the case may be, in respect of that land over any other person:
PROVIDED that the State Government is satisfied that the permit holder or the licensee, as the case may be, -
(a) has undertaken reconnaissance operations or prospecting operations, as the case may be, to establish mineral resources in such land;
(b) has not committed any breach of the terms and conditions of the reconnaissance permit or the prospecting licence;
(c) has not become ineligible under the provisions of this Act; and
(d) has not failed to apply for grant of prospecting licence or mining lease, as the case may be, within three months after the expiry of reconnaissance permit or prospecting licence, as the case may be, or within such further period, as may be extended by the said government.
(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 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 applications 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.
(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 applicant;
(c) the nature and quality of the technical staff employed or to be employed by the applicant;
(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 ay be prescribed.
(4) Subject to the provisions of sub-section (1), where the State Government notifies in the official Gazette an area fore 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 application 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.
(5) Notwithstanding anything contained in sub-section (2), but subject to the provisions of sub-section (1), the state Government may, for any special reasons to be recorded, grant a reconnaissance permit, prospecting licence or mining lease , as the case may be, to an applicant whose application was received later in preference to an application 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 sub-section.
17A. Reservation of area for purpose of conservation
xxx
(2) The State Government may, with the approval of the Central Government, reserve any area not already held under any prospecting licence or mining lease, for undertaking prospecting or mining operations through a government company or corporation owned or controlled by it, and where it proposes to do so, it shall, by notification in the Official Gazette, specify the boundaries of such area and the mineral or minerals in respect of which such area will be reserved.”
Thus it is at once obvious that whilst Section 11 grants preferential right/treatment to the holder of a Reconnaissance Permit, Section 17A(2) does not even make any reference to it, and this absence is indeed conspicuous.
6. Learned counsel for the Petitioner has placed reliance on the decision of the Apex Court in Sandur Manganese and Iron Ores Limited vs. State of Karnataka, (2010 (13) SCC 1). In that case, the Government of Karnataka had bestowed preferential treatment to two companies on the basis of the investments already made by them in the State. The Supreme Court held that the State Government was circumscribed and confined to the criteria contained in the MMDR Act and the Mineral Concession Rules, 1960 (MC Rules for short) and could not justify preferential treatment on any other consideration dehors these two provisions. Their Lordships further reiterated the well entrenched principles of law that “equities stands excluded when the matter is governed by statute”. The legal conundrum concerning the interplay between Section 11 and 17A(2) of the MMDR Act has been cogitated upon in Indian Charge Chrome Limited vs. Union of India, (2006 (12) SCC 331) and their Lordship have clarified that the later operates independently of the former. We must keep in perspective that Section 17A came to be introduced into the MMDR Act by an amending Central Act No.37 of 1987. Thus, Section 17A is a pandect dealing with the reservations of lands to the Central Government or the State Government for the purposes of “conservation of minerals”. The first sub-section postulate the reserving of any area by the Central Government in consultation with the State Government with an intention of conserving mineral wealth. Section 17A (1A) similarly empowers the Central Government, in consultation with the State Government, to reserve any area for undertaking prospecting or mining operation through a Government company/corporation controlled by the State Government. Sub-section (2)reposes similar powers with the State Government, however with the “approval” in contradistinction to “consultation” of the Central Government. As already noticed, the absence of any mention of Reconnaissance Permits is conspicuous by its absence and is of great significance so far as the case in hand is concerned. There is a perceptible hierarchy or rights and activities relating to exploitation of mineral wealth. Reconnaissance Permit is at the nadir, prospecting in the middle, and mining at the zenith.
7. Parliament, in its wisdom, thought it appropriate and necessary to altogether ignore Reconnaissance Permit in Section 17A of the MMDR Act, unlike the position which obtains in Section 11 of the MMDR Act. In the Judgment dated 18.02.2011, between the very same parties before us, the Division Bench had prescribed that when a decision is to be taken in the context of Section 17A(2) of the MMDR Act, preferential rights recognized under Section 11 have no role to play and therefore, could not defeat the claim of the State Government. The statutory dispensation is that whilst the existence of a prospecting licence or mining lease may defeat the claim of State Government for its exclusivity in respect of lands notified or identified by it, the existence of Reconnaissance Permits granted in respect thereof would be of no avail. Our learned Brothers further held in the Judgment dated 18.02.2011, which has become final inter parties, that “the appropriate procedure would be to allow the Central Government to take a decision on the approval sought by the State Government by its communication dated 27.12.2008. Thereafter, the consideration or otherwise of the applications for prospecting licence by any other person including the contesting respondents would arise depending on the result of such consideration by the Central Government. If for any reason, the Central Government does not accede to the proposal of the State Government and in such situation if the applications remain open for consideration, then and only then the question of preferential right would arise for consideration.” We are in respectful agreement with this enunciation of law.
8. In Sandur Manganese, as we have already mentioned above, the legal position that the principles of equity stand excluded when the matter is governed by statute had been spelt out and has been reiterated. There can also be no cavil that in the same manner as governmental policy is normally impervious to jural interference, it is always subservient to the dictates of Parliament. We say this for the reason that the learned counsel for the contesting Respondents 4 and 5 has laid great stress on the National Mineral Policy 2008 (‘NMP 2008’ for short) of the Government of India, Ministry of Mines. Learned counsel has emphasized that the vision of the policy was to encourage the private investment in the Mining sector. In “the framework in the Regulations of Mining Development of all Minerals other than the Petroleum and Natural Gas”, the policy also envisages the co-operation between the State and Central Government, which at least so far as the factual matrix before us is concerned is totally missing. Most importantly, Section 3.2 of the National Mineral Policy, 2008 postulates the amendment of the MMDR Act and the MCDR to ensure that they conform to or are in line with the policy. This essential requirement of the necessity of an amendment exercise cannot be glossed over. In other words, had Section 17A not been in the statue book, we would have been loathe to interfere with adherence to the National Mineral Policy, especially since no Wednesbury unreasonableness has been detected therein.
9. It is in these circumstances, that we are of the firm and considered opinion that the impugned order does not conform to law and in fact falls into the same pit as to the earlier decision, and falls foul at the Judgment of the Division Bench dated 18.02.2011. We say this for the reasons that under Section 17A, the interests of the persons waiting in the wings (Respondents 4 and 5) by virtue of their holding Reconnaissance Permits are presently irrelevant. The need to consider their application for grant of Prospecting Licences would arise only in the event that the Central Government refuses its approval to the State Government’s decision to reserve lands under Section 17A (2) of the MMDR Act. It is only then that the next chapter, concerning Section 11, would open for being reads. Secondly, the impugned Order is replete with references to the National Mineral Policy 2008. It is therefore palpably clear that it is that Policy which has influenced, nay determined, the impugned order. There is no foundation or justification for the observations that “no specific security consideration or public interest are involved in undertaking such reservation.”
10. In these circumstances, we find that the Writ Petition is well founded. Since the Central Government has reiterated its previous decision, it may have been appropriate to issue a direction to the Central Government to accord approval to the request of the State Government. However, this is not the prayer in the Writ Petition and we shall therefore, confine ourselves to granting the prayer contained therein. Accordingly, a certiorari shall issue quashing the impugned order No.16/157/2006-M.VI dated 31.05.2011. A fresh decision shall be taken by the Central Government within three months from today.
The Petitioner shall be entitled to costs.