M/S. GEOMYSORE SERVICES (I) PVT. LTD. & ANR.V. M/S. HUTTI GOLDMINES CO. LTD. & ORS.versusM/S. HUTTI GOLDMINES CO. LTD. & ORS

                        [2018] 6 S.C.R. 533                              533


     M/S. GEOMYSORE SERVICES (I) PVT. LTD. & ANR.                        A
                                  v.
          M/S. HUTTI GOLDMINES CO. LTD. & ORS.
                   (Civil Appeal No. 2537 of 2017)
                           MAY 08, 2018                                  B
      [MADAN B. LOKUR AND DEEPAK GUPTA, JJ.]
Mines and Minerals (Development and Regulation) Act, 1957:
       ss. 11(1) and 17A(2) – Reservation of mining area u/s. 17A(2)
– Permissibility – Grant of Reconnaissance Permit (RP) in favour         C
of two private Companies (appellants) – Reconnaissance conducted
by them – On the basis of reconnaissance report, further applied
for grant of Prospecting Licence (PL) u/s. 11(1) – Thereafter,
respondent (a Government Company) sought reservation u/s. 17A(2)
in respect of the areas for which the appellant-Companies were
                                                                         D
granted RP – State Government sought approval for reservation –
Central Government rejected the proposal of State Government and
directed the State to consider the PL applications of the appellants
– Writ petition filed by respondent-Company allowed by High Court
– On appeal, held: s. 11(1) and s. 17A(2) operate in different fields
and have no connection with each other – State Government has            E
power to reserve an area u/s. 17A(2) with the approval of Central
Government – An RP holder is entitled to preference for grant of
PL u/s. 11(1)– But, there is no bar in reserving the land u/s. 17A(2),
if the land is covered under RP – Central Government while
considering the request for reservation u/s. 17A(2), can take into
                                                                         F
consideration various factors which are relevant for deciding the
issue of reservation – Grant of RP though cannot be the sole ground
to reject the proposal for reservation, but the same can be one of
the factors along with other factors for deciding the issue of
reservation – Unless reservation takes place, a private company
stand on the same footing as a Government Company – In the present       G
case, the factors taken into consideration while deciding the issue
of reservation were relevant and germane to the issues – Appellants
were entitled to preference u/s. 11(1) – Central Government was
justified in rejecting the proposal of the State Government for
reservation u/s. 17A(2).
                                                                         H
                                  533
534           SUPREME COURT REPORTS                     [2018] 6 S.C.R.


A          Allowing the appeals, the Court
            HELD: 1. State is the owner of the land and minerals.
      However, the control and regulation of mines and development
      of minerals are in the domain of the Union Government. The
      State Government is denuded of its legislative power to make
B     any law in respect of regulation of mines and mineral development
      in so far as that field is covered by the provisions of the Mines
      and Minerals (Development and Regulation) Act, 1957. It is only
      if the field is vacant that the State can exercise its legislative
      powers. Otherwise, it has to exercise its power strictly in
      accordance with the powers specifically conferred on the State
C     Government by the Act and the Minerals Concession Rules, 1960.
      While exercising the powers of reservation vested in Section
      17A(2) of the Act, the State Government has to take approval of
      the Central Government. [Para 39] [556-D-F]
            2. Section 17A(2) of the Act clearly provides that the State
D     Government can reserve any area for undertaking prospecting
      or mining operations through a Government company or
      corporation with the approval of the Central Government. The
      Act does not lay down the parameters which the Central
      Government is required to follow. Therefore, the Central
E     Government can take all the factors which are relevant for the
      purpose of deciding whether reservation should be made or not.
      The National Mineral Policy 2008 (NMP 2008) being a policy of
      the country, can definitely be taken into consideration while
      considering such a request. [Para 40] [557-B-C]

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

H
    M/S. GEOMYSORE SERVICES (I) PVT. LTD. & ANR. v.                    535
         M/S. HUTTI GOLDMINES CO. LTD. & ORS.

      4. Section 11(1) and Section 17A(2) of the Act have no           A
connection with each other. Section 11(1) of the Act deals with
preference to be given to Reconnaissance Permit (RP) holder
and Prospecting Licence (PL) holder while considering their case
for grant of PL and Mining Lease (ML) respectively. This has
nothing to do with reservation of land under Section 17A(2) of
                                                                       B
the Act. The only connection, if it can be called that, is that if a
land is held under a PL or ML, then action under Section 17A(2)
of the Act cannot be initiated. Under Section 11(1) of the Act, an
RP holder, who has carried out reconnaissance, is entitled for
preference when his case is being considered for grant of PL.
However, in Section 17A(2) of the Act, the bar to reservation is       C
only in those cases where the land is held under a PL or ML.
When any land is held under PL or ML, then the said land cannot
even be considered for reservation. If the land sought to be
reserved is not under PL or ML, then the State can make a
proposal to reserve the land. If the land sought to be reserved is
                                                                       D
covered by an RP there is no bar to reserve the land for
exploitation by State Government undertakings. This, however,
does not mean that while dealing with the proposal of the State,
the Central Government must make the reservation. The Central
Government while granting approval, has to independently apply
its mind and while doing so, there is nothing which debars the         E
Central Government from taking into consideration the fact that
some entity was granted RP and the effect thereof. No doubt,
the Central Government cannot reject the proposal only on the
ground that RP was issued since that would run counter to the
provisions of Section 17A(2) of the Act. However, this is a fact
                                                                       F
which along with other facts can be taken into consideration while
deciding the issue of reservation of land. [Paras 42 and 46] [557-
F-H; 558-A-B; 559-F-G]
      5. In the present case, the Central Government took into
consideration various factors and noted that PL applications had
already been filed by Appellant Nos. 1 and 2 pursuant to RPs. It       G
virtually held that the request of the State Government was at a
belated stage and was against the provisions of the NMP, 2008,
the emphasis in which was to provide a regulatory environment
which is conducive to private investment. It may be true that the
                                                                       H
536            SUPREME COURT REPORTS                      [2018] 6 S.C.R.


A     Central Government was influenced by the fact that the appellants,
      pursuant to the RPs, had completed the reconnaissance and
      submitted their consolidated reports, but there were other
      relevant factors also which were taken into consideration such
      as that the appellants had already applied for grant of PL and no
      security consideration or public interest was involved in making
B
      reservation for respondent No. 1. Therefore, the factors taken
      into consideration by the Central Government are relevant and
      germane to the issues and cannot be said to be such factors which
      are extraneous or could not have been taken into consideration.
      [Para 43] [558-C-E]
C            6. Section 17A(2) of the Act envisages four conditions, viz.
      (a) The land is not held under prospecting licence or mining lease;
      (b) there is approval by the Central Government; (c) a notification
      is issued in the Official Gazette specifying the boundaries of such
      area; and (d) such notification should identify the mineral or
D     minerals in respect of which such areas are sought to be reserved.
      In the present case, only the first condition was fulfilled. None of
      the other conditions were satisfied. Therefore, the State of
      Karnataka could not have issued recommendation in favour of
      respondent No. 1 on 27.12.2008. Unless reservation takes place,
      a private company stands on the same footing as a Government
E     company and in that eventuality, Section 11 of the Act would be
      applicable and the appellants being the RP holders and also being
      earlier PL applicants, had to be given preference. The Central
      Government was justified in rejecting the request of the State of
      Karnataka in reserving the land in question. [Paras 45 and 46]
F     [558-G-H; 559-A-C, G-H]
            Indian Charge Chrome Ltd. & Anr. v. Union of India &
            Ors. (2006) 12 SCC 331 : [2006] 10 Suppl. SCR 640 ;
            Monnet Ispat & Energy Ltd. v. Union of India & Ors
            (2012) 11 SCC 1: [2012] 7 SCR 644 ; Amritlal
G           Nathubhai Shah and Others v. Union Government of
            India and Another (1976) 4 SCC 108 : [1977] 1 SCR
            372 ; State of T.N. v. M/s Hind Stone and Others
            (1981) 2 SCC 205 : [1981] 2 SCR 742 ; Indian Metals
            and Ferro Alloys Ltd. v. Union of India & Ors. (1992) 1

H
    M/S. GEOMYSORE SERVICES (I) PVT. LTD. & ANR. v.                      537
         M/S. HUTTI GOLDMINES CO. LTD. & ORS.

      Suppl. SCC 91 : [1990] 2 Suppl. SCR 27 ; State of T.N.             A
      v. M.P.P. Kavery Chetty (1995) 2 SCC 402 : [1995] 1
      SCR 441 ; Sandur Manganese and Iron Ores Ltd. v.
      State of Karnataka & Ors. (2010) 13 SCC 1 : [2010]
      11 SCR 240 ; State of Kerala and Ors. v. Kerala Rare
      Earth & Minerals Ltd. & Ors. (2016) 6 SCC 323 :
                                                                         B
      [2016] 5 SCR 515 – referred to.
                        Case Law Reference
[2006] 10 Suppl. SCR 640          referred to           Para 8
[2012] 7 SCR 644                  referred to           Para 25
                                                                         C
[1977] 1 SCR 372                  referred to           Para 28
[1981] 2 SCR 742                  referred to           Para 29
[1990] 2 Suppl. SCR 27            referred to           Para 31
[1995] 1 SCR 441                  referred to           Para 32
                                                                         D
[2010] 11 SCR 240                 referred to           Para 36
[2016] 5 SCR 515                  referred to           Para 38


      CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2537               E
of 2017.
      From the Judgment and Order dated 03.04.2012 of the High Court
of Karnataka at Bangalore in Writ Petition No. 25899 of 2011
                                WITH
                                                                         F
      Civil Appeal No. 2538 of 2017.
       Maninder Singh, ASG, A. K. Panda, Ms. Meenakshi Arora,
C.S. Vaidyanathan, C. U. Singh, Jaideep Gupta, Basava Prabhu S. Patil,
Sr. Advs., S. A. Haseeb, T. A. Khan, Mrs. Manita Verma, Prabhas
Bajaj, Akshay Amritanshu, Raj Bahadur Yadav, Mrs. Anil Katiyar,
G.S. Makker, Arun Mani, Naveen Kumar, Nishi Kant Singh, Abhinav          G
Raghuvanshi, Naveen R. Nath, MRC Ravi, Darpan K.M.,
V. N. Raghupathy, Chinmay Deshpande, Parikshit Angadi, Ms. Rachita,
Advs. for the appearing parties.

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538            SUPREME COURT REPORTS                          [2018] 6 S.C.R.


A           The Judgment of the Court was delivered by
             DEEPAK GUPTA J. 1. What is the role and power of the
      Central Government while dealing with the request of a State
      Government for reservation of lands for government companies or
      corporations owned and controlled by the State Government under section
B     17A (2) of the Mines and Minerals (Development and Regulations) Act,
      1957 (hereinafter referred to as “the Act”), is the main issue involved in
      this case.
            THE FACTUAL BACKGROUND
             2. This case has a long and chequered history. There are gold
C     mines in the State of Karnataka and parties are litigating in respect of
      their rights to exploit those mines. We have two appellants before us,
      M/s. Geomysore Services (India) Pvt. Ltd., Appellant No.1 (hereinafter
      referred to as “Geomysore”) and Deccan Gold Exploration Services
      Pvt. Ltd., Appellant No. 2 (hereinafter referred to as “Deccan”).
D            3. On 01.04.2000 Geomysore applied for grant of Reconnaissance
      Permit (for short ‘RP’) for 315 sq. kms. of land in Hutti South Belt Gold
      Mines area. After approval by the Central Government, the State
      Government granted RP on 03.11.2000 for a period of 3 years. Similarly,
      Deccan was granted RP in Northern part of Hutti Gold Mines for an
E     area measuring 501.48 sq. kms. for a period of 3 years on 09.01.2003
      after completing all formalities. The respondent no. 1 i.e. M/s Hutti Gold
      Mines Co. Ltd. (hereinafter referred to as “HGML”) did not file any
      application for grant of RP for either of the two areas.
             4. Geomysore conducted the reconnaissance and submitted a
F     consolidated report on 30.11.2003. Deccan submitted its consolidated
      report on 21.04.2006. Both the Companies found evidence to suggest
      the existence of gold deposits and need to carry out further prospecting
      in certain areas. On the basis of the results of the reconnaissance,
      Geomysore filed 4 applications for grant of Prospecting Licence (for
      short ‘PL’) under Section 11(1) of the Act. Deccan filed 7 applications
G     for grant of PL with regard to the area where it had conducted
      reconnaissance.
           5. On 28.11.2006, HGML sent a letter to the Commissioner,
      Geological Resources Development and Director, Department of Mines

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 M/S. GEOMYSORE SERVICES (I) PVT. LTD. & ANR. v. M/S.                       539
 HUTTI GOLDMINES CO. LTD. & ORS. [DEEPAK GUPTA, J.]

and Geology, Bangalore praying for reservation of area for the purpose      A
of conservation exclusively for public sector undertakings under Section
17A(2) of the Act. It was stated that HGML was keen to continue
prospecting investigations in the area in question. It was submitted that
grant of Mining Lease (for short ‘ML’) to different organizations would
create severe problems including safety hazards and as such it was
                                                                            B
prayed that the entire area, including the area for which RP had been
granted to Geomysore and Deccan, be reserved under Section 17A(2)
of the Act. It appears that Geomysore came to know about this proposal
and it sent a letter on 28.11.2006 itself to the Government of India and
opposed the contemplated action of the State of Karnataka to forward a
proposal to the Ministry of Mines for reservation of the mining area.       C
      6. In the meantime, two other developments took place. The
Ministry of Mines published the National Mineral Policy, 2008 (for short
‘the NMP 2008’) and the Government of Karnataka released the
Karnataka Mineral Policy, 2008 (for short ‘the KMP, 2008) in consonance
with NMP, 2008 to which we shall advert later.                              D
       7. On 27.12.2008, the Government of Karnataka wrote to
Government of India for reservation of area in favour of HGML and
recommended that 161 sq. kms. of land be allocated to HGML for mining.
This covered the areas for which RPs had been granted to Geomysore
and Deccan and, therefore, Geomysore and Deccan filed revision              E
petitions before the Central Government. The main challenge to the
decision of the State Government was that the appellants were entitled
to preference while considering their application for grant of PL and
also their PL applications have been filed earlier in time. It was also
urged that in terms of the NMP, 2008 and the KMP, 2008 reservation
could not be made. The Central Government allowed the revision petitions    F
and directed the State of Karnataka to consider the PL applications filed
by Geomysore as well as Deccan.
       8. Thereafter, HGML filed a writ petition in the Karnataka High
Court. The High Court held that the reservation of the area had not yet
taken place and since the Central Government was still to take a decision   G
on the request of the State Government, it was not necessary to determine
whether the preferential right claimed by Geomysore and Deccan under
Section 11 of the Act could defeat the right of the State Government to

                                                                            H
540               SUPREME COURT REPORTS                          [2018] 6 S.C.R.


A     seek reservation of the area under Section 17A(2) of the Act. The High
      Court, after considering the judgment of this Court in the case of Indian
      Charge Chrome Ltd. & Anr. v. Union of India & Ors. 1 held
      as follows:
               “10. Having held so, the Hon’ble Court has further held that the
B              power under Section 17A(2) is the statutory power and normally
               there could be no estoppel against the exercise of statutory power
               and upheld the recommendation of the State Government seeking
               for approval of the Central Government. It is clear that, in the
               instant case, the undisputed fact is that the contesting respondents
               in any event have not been granted the prospecting licence or
C              mining lease and as such the area in question is not the one which
               is already held under a prospecting licence or mining lease.
               Therefore, if the above decision is kept in view, the State
               Government was well within its powers to seek approval of the
               Central Government to reserve the area in question. In any event,
D              the Central Government before granting its approval would have
               to consider all these aspects of the matter and any such
               consideration by the Central Government could not have been
               stifled by the contesting respondents in the form of revision
               application and the revision authority was also not justified in
               interfering. The preferential right claimed by the contesting
E              respondents cannot be accepted at this stage and a direction could
               not have been issued to consider the applications of the contesting
               respondents by setting aside the communication dated 27.12.2008.
               The appropriate procedure would be to allow the Central
               Government to take a decision on the approval sought by the State
F              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
G              such situation if the applications remain open for consideration,
               then and only then the question of preferential right would arise
               for consideration.”

      1
          (2006) 12 SCC 331
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 M/S. GEOMYSORE SERVICES (I) PVT. LTD. & ANR. v. M/S.                          541
 HUTTI GOLDMINES CO. LTD. & ORS. [DEEPAK GUPTA, J.]

       9. Consequently, the orders passed by the Central Government            A
were set aside and the matter was remanded to the Central Government
to take decision on the recommendation made by the State Government
with a direction to dispose of the same in accordance with law. The
Central Government examined the matter and rejected the proposal of
the State Government for reservation of land under Section 17A(2) of
                                                                               B
the Act for Government undertakings. The order notes that Geomysore
and Deccan had already filed PL applications after completing
reconnaissance pursuant to the RPs granted to them. Instead of dealing
with the PL applications of Geomysore and Deccan, the State
Government suddenly decided to make a request to the Central
Government to reserve the land. The Central Government held that the           C
action of the State Government is against the stated purpose of Para 3.3
of the NMP, 2008 which provides that there should a regulatory
environment conducive to private investment; that the procedure for
grant of concession should be transparent and seamless transition shall
be guaranteed to the concessionaires; that the action of the State
                                                                               D
Government was not transparent or fair; that land could only be reserved
where private players are not holding the land or have not applied for
exploration or mining unless security considerations or specific public
interests are involved; that since Geomysore and Deccan had completed
their RPs and applied for seamless transition to PL, the proposal of the
State Government to reserve the land in favour of HGML was neither             E
in public interest nor in terms of the NMP, 2008 and, therefore, proposal
of the State Government to reserve land was rejected and again a
direction was issued that the request of Geomysore and Deccan for
grant of PL be considered expeditiously.
        10. HGML then filed another writ petition challenging the order        F
of the Central Government dated 31.05.2011. Geomysore and Deccan
filed a joint reply in the writ petition and the High Court allowed the writ
petition vide the impugned judgment, which is under challenge before
us.
      11. The main factor which weighed with the High Court in allowing        G
the writ petition was that whereas under Section 11 of the Act, a party
which had carried out reconnaissance pursuant to RP, was entitled to
preference at the time of granting PL, under Section 17A(2) of the Act,
the words “reconnaissance permit” do not find mention. The Court

                                                                               H
542            SUPREME COURT REPORTS                          [2018] 6 S.C.R.


A     further held that in its earlier judgment dated 18.02.2011, it had been
      held that while taking a decision under section 17A(2) of the Act, the
      preferential right under Section 11 of the Act had no role to play and,
      therefore, the claim of the State Government could not be defeated on
      this ground. Since the judgment had attained finality, the matter should
      not be reopened. It further held that the NMP, 2008 cannot overrule the
B
      provisions of Section 17A of the Act. The Court further held that the
      policy has to give way to the statutory provisions. It was held that the
      second order passed by the Central Government contains the same flaws
      which were there in the earlier order and hence the writ petition was
      allowed and the order of the Central Government refusing to reserve
C     the land was quashed.
            THE LEGAL PROVISIONS
            12. At the outset, we may point out that as far as this case is
      concerned, we are dealing with the Act prior to its amendment in the
      year 2015. Sub-sections (ha) and (hb) of Section 3 of the Act were
D     introduced w.e.f. 18.12.1999 and define ‘reconnaissance operations’ and
      ‘reconnaissance permit’ respectively. The same read as follows:
            “(ha) “reconnaissance operations” means any operations
            undertaken for preliminary prospecting of a mineral through
            regional, aerial, geophysical or geochemical surveys and geological
E           mapping, but does not include pitting, trenching, drilling (except
            drilling of boreholes on a grid specified from time to time by the
            Central Government) or sub-surface excavation;
            (hb) “reconnaissance permit” means a permit granted for the
            purpose of undertaking reconnaissance operations;”
F
            13. A reconnaissance permit allows the permit holder to carry out
      reconnaissance operations. A reconnaissance permit holder carries out
      operations to determine whether the area is fit for mining only by way of
      non-invasive techniques, except for some minimal drilling. Normally,
      reconnaissance permits are granted for huge areas of land.
G
            14. Sub-sections (g) and (h) of Section 3 of the Act define
      ‘prospecting licence’ and ‘prospecting operations’ respectively. The same
      read as follows:
            “(g) “prospecting licence” means a licence granted for the purpose
            of undertaking prospecting operations;
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 M/S. GEOMYSORE SERVICES (I) PVT. LTD. & ANR. v. M/S.                        543
 HUTTI GOLDMINES CO. LTD. & ORS. [DEEPAK GUPTA, J.]

      (h) “prospecting operations” means any operations undertaken           A
      for the purpose of exploring, locating or proving mineral deposits;”
      15. Normally, after reconnaissance is done, a party would
determine which is the best part of the huge area fit for prospecting to
determine with greater exactitude the location of mineral deposits. Thus,
PL is granted for an area which is much less than that of the RP area.       B
During prospecting, invasive methods can be used to the extent allowed
under law for determining the extant mineral deposits and whether they
can be exploited commercially.
       16. After prospecting is done, comes the stage of grant of mining
lease. ‘Mining lease’ and ‘mining operations’ are defined in sub-            C
sections (c) and (d) of Section 3 of the Act respectively. The same read
as under:
      “(c) “mining lease” means a lease granted for the purpose of
      undertaking mining operations, and includes a sub-lease granted
      for such purpose;                                                      D
      (d) “mining operations” means any operations undertaken for the
      purpose of winning any mineral;”
       17. Investments during reconnaissance or prospecting are very
large. These are not small investments. Therefore, a person who had
conducted reconnaissance is given preference for grant of PL and a           E
person who had conducted prospecting is given preference while being
considered for grant of ML. In this behalf we may refer to Section 11
(1) of the Act which reads as follows:
      “11. Preferential right of certain persons.- (1) Where a
      reconnaissance permit or prospecting licence has been granted in       F
      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        G
      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;
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544            SUPREME COURT REPORTS                          [2018] 6 S.C.R.


A           (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
B           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.”
             18. The purpose of the aforesaid Section is that in view of the
      money, effort and time spent in undertaking reconnaissance or prospecting
C     operations and preparation of detailed reports of the mineral discoverable
      or likely to be discovered pursuant to such operations, such RP or PL
      holder would get a preferential right for undertaking the next stage of
      operations.
            19. Section17A of the Act reads as follows:
D
            “17A. Reservation of area for purposes of conservation.-
            (1) The Central Government, with a view to conserving any
            mineral and after consultation with the State Government, may
            reserve any area not already held under any prospecting licence
            or mining lease and, where it proposes to do so, it shall, by
E           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.
            (1A) The Central Government may in consultation with the State
            Government, reserve any area not already held under any
F           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.]
G
            (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
H
 M/S. GEOMYSORE SERVICES (I) PVT. LTD. & ANR. v. M/S.                        545
 HUTTI GOLDMINES CO. LTD. & ORS. [DEEPAK GUPTA, J.]

      corporation owned or controlled by it and where it proposes to do      A
      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 areas will be reserved.
      (3) Where in exercise of the powers conferred by sub-section
      (1A) or sub-section (2) the Central Government or the State            B
      Government, as the case may be, undertakes prospecting or mining
      operations in any area in which the minerals vest in a private
      person, it shall be liable, to pay prospecting fee, royalty, surface
      rent or dead rent, as the case may be, from time to time at the
      same rate at which it would have been payable under this Act if
      such prospecting or mining operations had been undertaken by a         C
      private person under prospecting licence or mining lease.”
       20. Though, in this case we are dealing mainly with Section 17A(2),
we feel that it would be appropriate to analyze the provisions of the
various parts of Section 17A of the Act. Under Section 17A(1), the
Central Government has the power to reserve any area to conserve any         D
mineral. The Central Government has to exercise this power after
consultation with the State Government. There is, however, one caveat,
which is, that if a PL or ML for the said area is held by any person then
the Central Government cannot reserve the area. Under sub-section
(1A) of Section 17A, the Central Government has similar power to             E
reserve areas for undertaking prospecting or mining operations through
Government companies, but again, such areas should not have been
held under any PL or ML. As far as Section 17A(2) is concerned, this
provision gives power to the State Government to reserve an area not
held under a PL or ML for prospecting or mining by State Government
owned companies. However, this can be done only with the approval of         F
the Central Government and the area so reserved should be notified in
the official gazette along with the mineral and minerals for which the
area has been reserved. Though we are not directly concerned with
sub-section (3) of Section 17A of the Act in this case, the said sub-
section provides that where the Central Government or the State              G
Government, as the case may be, undertakes prospecting or mining
operations in any area in which mineral vests in the private person, then
the Central Government or the State Government concerned shall be
liable to pay prospecting fee, royalty, surface rent, dead rent etc..

                                                                             H
546            SUPREME COURT REPORTS                           [2018] 6 S.C.R.


A          21. We may also, at this stage, refer to Section 2 of the Act,
      which reads as follows:
            “2. Declaration as to the expediency of Union control. – It is
            hereby declared that it is expedient in the public interest that the
            Union should take under its control the regulation of mines and
B           the development of minerals to the extent hereinafter provided.”
            CONTENTIONS
             22. Mr. Maninder Singh, learned Additional Solicitor General
      appearing for the Union of India, submitted that Section 17A(2) of the
      Act empowers the State Government to reserve any area not held under
C     PL or ML for any State Government undertaking. However, this is
      subject to the prior approval of the Central Government. It is his
      contention that the State Government cannot reserve an area (not held
      under a PL or ML) without obtaining the prior approval of the Central
      Government. He further submits that the Central Government, while
D     considering the request of the State Government, has to apply its mind
      independently and while dealing with the request, it can take into
      consideration the mineral policy. Therefore, according to him, the High
      Court erred in holding that the Union could not take into consideration
      the parameters set out in the mineral policy. According to him, the absence
      of the words ‘reconnaissance permit’ from Section 17A(2) of the Act
E     only indicates that whereas for those areas for which PL or ML has
      been granted, there is an absolute bar, but where only RP is granted,
      there is no bar and the State Government can, with the approval of the
      Central Government, reserve that area.
             23. Ms. Meenakshi Arora, learned senior counsel appearing for
F     the appellants adopted the arguments of Mr. Maninder Singh, but she
      also urged that in view of the huge investments required to be made by
      the RP holder, it is his legitimate expectation under Section 11 of the Act
      that he would get the PL. She further submits that HGML had not
      submitted any application for grant of RP or PL. Therefore, the
G     applications of Geomysore and Deccan being prior in time, should have
      been considered. She has referred to various provisions of the Act both
      prior to and after its amendment in the year 2015 to emphasize that the
      intention of the Government is to encourage private investment in the
      industry and to ensure that such private investors are not left in lurch
      after investing huge amount and there is seamless transition from the
H     stage of reconnaissance to prospecting and then to mining.
    M/S. GEOMYSORE SERVICES (I) PVT. LTD. & ANR. v. M/S.                    547
    HUTTI GOLDMINES CO. LTD. & ORS. [DEEPAK GUPTA, J.]

       24. Mr. Basava Prabhu S. Patil, learned senior counsel appearing     A
for the State of Karnataka, submitted that it is the State which is the
owner of the minerals and keeping in view the federal structure of our
country, the Union cannot override the power of the State. According to
him, Section 2 of the Act does not empower the Union to reject the
claim of the State Government on grounds which are not provided for in
                                                                            B
the statute itself. He also submits that the judgment rendered by the
Karnataka High Court in the first Writ Petition No.39969/39970 of 2010
decided the issues between the parties and that will operate as res-
judicata. He submits that in the earlier judgment the High Court had
clearly held that the preferential right claimed by Geomysore and Deccan
cannot override the power of the State Government under Section 17A(2)      C
of the Act. He submits that the grounds taken in both the orders passed
by the Central Government are virtually identical. According to him,
since the words ‘reconnaissance permit’ have been omitted from Section
17A(2) of the Act, the Central Government could not have rejected the
claim of the State Government on grounds which are directly related to
                                                                            D
the fact that Geomysore and Deccan had carried out reconnaissance in
furtherance of such reconnaissance permit. He further submits that the
NMP, 2008 was not binding and has made reference to clause 3.2 of the
NMP, 2008, which indicates that what is set out in the policy are the
goals and that the Act, the Mineral Concessions Rules and the Mineral
Concessions Development Rules will be amended in line with the policy.      E
He submits that these amendments took place in the year 2015 and,
therefore, the policy could not have been resorted to by the Central
Government to reject the claim of the State.
       25. Mr. C.U. Singh and Mr. Jaideep Gupta, learned senior counsel,
appearing on behalf of HGML, submit that before Geomysore and               F
Deccan were granted RP, HGML had already done a lot of work in the
area. According to them, after the amendment of the Act, now these
mines can only be auctioned. Reliance has been placed on Para 160 of
Monnet Ispat & Energy Ltd. v. Union of India & Ors2. case. It was
urged that the factors taken into consideration by the Central Government
while rejecting the proposal of the State Government were not relevant      G
factors. According to them, the right of the State to reserve area under
Section 17A(2) flows from the paramount right of the State as owner of
the land and minerals.
2
    (2012) 11 SCC 1
                                                                            H
548            SUPREME COURT REPORTS                          [2018] 6 S.C.R.


A           THE ISSUES
            26. There are four main questions which need to be answered:
            (i) Whether the State Government being the owner of land and
            minerals can claim that its proposal to reserve such land for
            exploitation of minerals by its undertakings is virtually binding on
B           the Central Government?
            (ii) What are the considerations which can weigh with the Central
            Government while dealing with a request of the State Government
            for reservation of land under Section 17A(2) of the Act?

C           (iii) Whether Section 11(1) and Section 17A(2) of the Act operate
            in totally separate spheres and what is the effect of the right of
            preference granted to RP holder in terms of Section 11(1) of the
            Act while dealing with a matter under Section 17A(2) of the Act?
            (iv) Whether, in the present case, the Central Government is
D           justified in rejecting the proposal of the State of Karnataka?
             27. The Act was initially enacted as the Mines and Minerals
      (Regulation and Development) Act (for short ‘the MMRD Act’). At
      that time, there was no Section 17A in the MMRD Act, which was later
      introduced w.e.f. 10.02.1987. Section 17 of the MMRD Act dealt with
      those lands in which minerals vested with the State Government. Under
E
      sub-section (2), the Central Government was empowered to carry out
      prospecting or mining operations in any area not already held under any
      PL or ML. This could, however, be done only after consultation with the
      State Government concerned. Therefore, Section 17 of the MMRD
      Act empowered the Central Government to undertake prospecting
F     operations. Vide Act 38 of 1999 the name of the MMRD Act was
      changed from ‘The Mines and Minerals (Regulation and Development)
      Act’ to ‘The Mines and Minerals (Development and Regulation) Act’
      w.e.f. 18.12.1999. By the same Act, in Section 17 of the Act, the words
      ‘reconnaissance’ and ‘reconnaissance permit’ were introduced w.e.f.
      18.12.1999. Prior to that, there was no concept of reconnaissance.
G
      Under the provisions of the Act, prior to the introduction of Section 17A,
      there was no statutory provision which empowered the State Government
      to reserve any land. However, under the Mineral Concession Rules,
      1960, (hereinafter referred to as the ‘Rules’) there was a provision in
      Rule 58, empowering the State Government to reserve such lands. After
H     Section 17A was introduced on 10.02.1987, Rule 58 was omitted on
    M/S. GEOMYSORE SERVICES (I) PVT. LTD. & ANR. v. M/S.                        549
    HUTTI GOLDMINES CO. LTD. & ORS. [DEEPAK GUPTA, J.]

13.04.1988. We are pointing out these facts because some of the                 A
judgments cited, being prior to introduction of Section 17A, have to be
read in the context of Rule 58 of the Rules.
        28. In Amritlal Nathubhai Shah and Others v. Union
Government of India and Another 3, this Court held that the State
being the owner of the land, was entitled to reserve the land and, therefore,   B
was justified in rejecting the applications of the private parties. This
judgment was delivered in the context of Rule 58 of the Rules, as it
existed at that time.
       29. In State of T.N. v. M/s Hind Stone and Others 4, the State
of Tamil Nadu formulated the Tamil Nadu Minor Mineral Concession                C
Rules. Under Rule 8-C, the right to quarry black granite, a minor mineral,
was reserved in favour of the State Government and its Corporations
etc.. The validity of this Rule was challenged on various grounds including
the ground that the MMRD Act, 1957 did not empower the State
Government to make such a reservation. This Court rejected this
submission on the ground that the State was the owner of the land and           D
minerals and also that minor minerals vest in the State Government.
The Court held as follows:
          “6. Rivers, Forests, Minerals and such other resources constitute
          a nation’s natural wealth. These resources are not to be frittered
          away and exhausted by any one generation. Every generation            E
          owes a duty to all succeeding generations to develop and conserve
          the natural resources of the nation in the best possible way. It is
          in the interest of mankind. It is in the interest of the
          nation……………… In the case of minor minerals, the State
          Government is similarly empowered, after consultation with the        F
          Central Government. The public interest which induced Parliament
          to make the declaration contained in Section 2 of the Mines and
          Minerals (Regulation and Development) Act, 1957, has naturally
          to be the paramount consideration in all matters concerning the
          regulation of mines and the development of minerals. Parliament’s
          policy is clearly discernible from the provisions of the Act. It is   G
          the conservation and the prudent and discriminating exploitation
          of minerals, with a view to secure maximum benefit to the
          community. There are clear signposts to lead and guide the
3
    (1976) 4 SCC 108
4
    (1981) 2 SCC 205                                                            H
550               SUPREME COURT REPORTS                            [2018] 6 S.C.R.


A              subordinate legislating authority in the matter of the making of
               rules. Viewed in the light shed by the other provisions of the Act,
               particularly Sections 4-A, 17 and 18, it cannot be said that the rule
               making authority under Section 15 has exceeded its powers in
               banning leases for quarrying black granite in favour of private
               parties and in stipulating that the State Government themselves
B
               may engage in quarrying black granite or grant leases for quarrying
               black granite in favour of any corporation wholly owned by the
               State Government…….”
             It would be pertinent to point out that in this very case this Court,
      in the opening para, held as follows:
C
               “……..It is now common ground between the parties that as a
               result of the declaration made by Parliament, by Section 2 of the
               Act, the State legislatures are denuded of the whole of their
               legislative power with respect to regulation of mines and mineral
               development and that the entire legislative field has been taken
D              over by Parliament……”
             30. It would also be pertinent to point out that both Amritlal
      Nathubai Shah (supra) and Hind Stone (supra) were decided before
      the introduction of Section 17A in the Act.

E           31. In Indian Metals and Ferro Alloys Ltd. v. Union of India
      & Ors.5, this Court was dealing with Section 17A of the Act. Following
      observations are pertinent:
               “46. Before leaving this point, we may only refer to the position
               after 1986. Central Act 37 of 1986 inserted sub-section (2) which
               empowers the State Government to reserve areas for exploitation
F
               in the public sector. This provision differs from that in Rule 58 in
               some important respects—
                   (i) the reservation requires the approval of the C.G.;
                   (ii) the reservation can only be of areas not actually held under
                   a PL or ML;
G                  (iii) the reservation can only be for exploitation by a government
                   company or a public sector corporation (owned or controlled
                   by the S.G. or C.G.) but not for exploitation by the government
                   as such.
      5
          1992 Supp.(1 ) SCC 91
H
    M/S. GEOMYSORE SERVICES (I) PVT. LTD. & ANR. v. M/S.                              551
    HUTTI GOLDMINES CO. LTD. & ORS. [DEEPAK GUPTA, J.]

         Obviously, Section 17-A (2) and Rule 58 could not stand together             A
         as Section 17-A empowers the S.G. to reserve only with the
         approval of the C.G. while Rule 58 contained no such restriction.
         There was also a slight difference in their wording…..”
     32. In State of T.N. v. M.P.P. Kavery Chetty6, dealing with Section
17A(2) of the Act, this Court held as follows:                                        B
         “15………Section 17-A(2) applies when an area is sought to be
         reserved by the State Government for undertaking mining
         operations exclusively through a Government company or
         corporation. When such area is notified the mineral or minerals in
         respect of which it is notified must also be stated. Such reservation        C
         cannot be made without the approval of the Central
         Government…….”
       33. The High Court has placed reliance on a judgment of this
Court delivered by a three-Judge Bench in Indian Charge Chrome
(supra). Dealing with the interplay between Section 11 and Section 17A                D
of the Act, this Court held as follows:
            “16. As we see it, the power under Section 17-A is an
         independent power. It is not related to the power available under
         Section 11 of the Act. It is open to the Central Government to
         reserve an area in terms of Section 17-A(1) if it is thought                 E
         expedient and it is in the interests of the nation or that it is necessary
         to conserve a particular metal or ore or the area producing it. It is
         also open to the Central Government to decide that such area
         should be exploited by a company or corporation owned or
         controlled by it. Of course, that situation has not arisen in this
         case. Under sub-section (2) of Section 17-A, with the approval of            F
         the Central Government, the State Government may reserve any
         area not already held under any prospecting licence or mining
         lease for undertaking the exploitation through a government
         company or corporation owned or controlled by it and on fulfilling
         the conditions referred to in sub-section (2) and in an appropriate          G
         case, also the conditions of sub-section (3). Again, the exercise of
         power by the State Government under sub-section (2) of Section
         17-A has no reference to the entertaining of applications under
         Section 11 or the preferences available thereunder…..”
6
    (1995) 2 SCC 402
                                                                                      H
552             SUPREME COURT REPORTS                           [2018] 6 S.C.R.


A            34. In Indian Charge Chrome (supra), an area of 1812.993
      hectares of land was granted to Tata Iron and Steel Company Ltd.
      (TISCO) for mining of chromite ore. Initially, lease was granted in 1952,
      which was renewed in 1972. However, at the time of renewal, the area
      was reduced to 1261.476 hectares. In 1991, TISCO again applied for
      renewal of lease but the renewal was granted only in respect of 650
B
      hectares. TISCO challenged the said reduction in its area. In the
      meantime, various private companies challenged renewal of lease in
      favour of TISCO. The High Court allowed the writ petition and directed
      reconsideration of the matter. Appeal filed by TISCO in this Court was
      dismissed. The Union Government, on reconsideration, renewed lease
C     in favour of TISCO for 406 hectares and directed that the balance area
      of 855.476 hectares be distributed by way of lease amongst other
      claimants. Subsequently, the State Government made a recommendation
      to the Union Government that half of the area of 855.476 hectares be
      reserved under Section 17A(2) of the Act and the remaining half could
      be allotted to the 4 applicants who had filed writ petitions in the Court.
D
      Thereafter, some other parties filed writ petitions in the High Court
      claiming that they should also be given mining rights. The Orissa
      Government then decided to grant the balance land to the extent to
      436.295 hectares on lease to the State public sector undertaking i.e.,Orissa
      Mining Corporation Ltd. (hereinafter referred to as “OMC”). This action
E     of the State Government was set aside by the High Court. This Court in
      Indian Charge Chrome (supra) was dealing with the appeals filed by
      those applicants other than the 4 who had been granted mining leases
      and also the appeal filed by OMC and the State Government. This
      Court came to the conclusion that the Central Government had not taken
      a decision on the request of the State Government to reserve the area
F
      under Section 17A(2) and finally directed the Central Government to
      first consider the request of the State Government for reservation of
      land and held that this contingency of the private applicants being granted
      mining leases would only arise in case the Central Government does not
      grant approval to the request of the State Government under Section
G     17A(2) of the Act. This Court held as follows :-
            “32. ………This contingency may arise only if the Central
            Government does not grant approval to the request of the State
            Government under Section 17-A(2) of the Act……”
           35. This clearly envisages that this Court held that the State
H     Government could not make a reservation without approval of the Central
    M/S. GEOMYSORE SERVICES (I) PVT. LTD. & ANR. v. M/S.                        553
    HUTTI GOLDMINES CO. LTD. & ORS. [DEEPAK GUPTA, J.]

Government. It would be pertinent to mention here that this Court               A
directed the State Government to make a fresh request to the Central
Government and further directed that prior directions of this Court or
the High Court cannot and do not stand in the way of the Central
Government in applying its mind to exercise its power under Section
17A(2) of the Act and in taking an independent decision.
                                                                                B
       36. In the case of Sandur Manganese and Iron Ores Ltd. v.
State of Karnataka & Ors.7, dealing with the powers of the State, this
Court held that in view of Section 2 of the Act, the State is denuded of its
accepted power with regard to the matters which fall within the domain
of the Central Government. It further held that the State Government
has to act and justify its actions only in accordance with the Act and the      C
Rules, and the State Government cannot be permitted to justify its actions
on criteria de hors the Act and the Rules. Dealing with Section 11 of
the Act, the Court held that an RP holder or PL holder will have a
preferential right to get a PL or ML as the case may be. The following
observations of the Court are relevant:                                         D
       “80. It is clear that the State Government is purely a delegate of
       Parliament and a statutory functionary, for the purposes of Section
       11(3) of the Act, hence it cannot act in a manner that is inconsistent
       with the provisions of Section 11(1) of the MMDR Act in the
       grant of mining leases. Furthermore, Section 2 of the Act clearly
       states that the regulation of mines and mineral development comes        E
       within the purview of the Union Government and not the State
       Government. As a matter of fact, the respondents have not been
       able to point out any other provision in the MMDR Act or the MC
       Rules permitting grant of mining lease based on past commitments.
       As rightly pointed out, the State Government has no authority            F
       under the MMDR Act to make commitments to any person that it
       will, in future, grant a mining lease in the event that the person
       makes investment in any project. Assuming that the State
       Government had made any such commitment, it could not be
       possible for it to take an inconsistent position and proceed to notify
       a particular area. Further, having notified the area, the State          G
       Government certainly could not thereafter honour an alleged
       commitment by ousting other applicants even if they are more
       deserving on the merit criteria as provided in Section 11(3).”

7
    (2010) 13 SCC 1
                                                                                H
554            SUPREME COURT REPORTS                           [2018] 6 S.C.R.


A            37. In Monnet Ispat (supra), Justice Lodha, in his leading judgment
      held that Section 2 of the Act does not affect the State’s ownership of
      mines and minerals within its territory although the regulation of mines
      and development of minerals have been taken under the control of the
      Union. It was held that the Central Government may have taken over
      the power to regulate the mines and development of minerals but the
B
      State could not be denuded of its rights and followed the decision of this
      Court in the case of Amritlal Nathubhai Shah (supra) wherein it was
      held that “the authority to order reservation flows from the fact that the
      State is the owner of the mines and minerals within its territory”. Dealing
      with Section 17A of the Act, it was held that this section would have
C     prospective operation only and, therefore, it could not affect the earlier
      notifications. Thereafter, this Court in Para 160 of the judgment held as
      follows:
            “160. The types of reservation under Section 17-A and their scope
            have been considered by this Court in Indian Metals and Ferro
D           Alloys Ltd. in paras 45 and 46 (pp. 136-39) of the Report. I am in
            respectful agreement with that view. However, it was argued that
            Section 17-A(2) requires prior approval of the Central Government
            before reservation of any area by the State Government for the
            public sector undertaking. The argument is founded on an incorrect
            reading of Section 17-A(2). This provision does not use the
E           expression, “prior approval” which has been used in Section 11.
            On the other hand, Section 17-A(2) uses the words, “with the
            approval of the Central Government”. These words in Section
            17-A(2) cannot be equated with prior approval of the Central
            Government. According to me, the approval contemplated in
F           Section 17-A may be obtained by the State Government before
            the exercise of power of reservation or after exercise of such
            power. The approval by the Central Government contemplated in
            Section 17-A(2) may be express or implied. In a case such as the
            present one where the Central Government has relied upon the
            2006 Notification while rejecting the appellants’ application for
G           grant of mining lease, it necessarily implies that the Central
            Government has approved reservation made by the State
            Government in the 2006 Notification otherwise it would not have
            acted on the same. In any case, the Central Government has not
            disapproved reservation made by the State Government in the
H           2006 Notification.”
    M/S. GEOMYSORE SERVICES (I) PVT. LTD. & ANR. v. M/S.                           555
    HUTTI GOLDMINES CO. LTD. & ORS. [DEEPAK GUPTA, J.]

       38. In State of Kerala and Ors. v. Kerala Rare Earth &                      A
Minerals Ltd. & Ors.8, a three-Judge Bench of this Court again dealt
with the scope of Section 17A of the Act and per majority held as follows:
          “15. There is no gainsaying that the State Government can reserve
          any area not already held under any prospecting licence or mining
          lease for undertaking prospecting or mining operations through a         B
          government company or corporation owned or controlled by it,
          but, in terms of sub-section (2) of Section 17-A (supra) where the
          Government 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 areas will be reserved. Three
          distinct requirements emerge from Section 17-A(2) for a valid            C
          reservation viz.:
             (i) the reservation can only be with the approval of the Central
             Government and must confine to areas not already held under
             any prospecting licence or mining lease;
                                                                                   D
             (ii) the reservation must be made by a notification in the Official
             Gazette; and
             (iii) the notification must specify the boundaries of such areas
             and the mineral or minerals in respect of which such areas will
             be reserved.                                                          E
             xxx                          xxx                        xxx
             xxx                          xxx                        xxx
          “19. The upshot of the above discussion then is that while the
          State Government is the owner of the mineral deposits in the lands
                                                                                   F
          which vest in the Government as is the position in the case at
          hand, Parliament has by reason of the declaration made in Section
          2 of the 1957 Act acquired complete dominion over the legislative
          field covered by the said legislation. The Act does not denude the
          State of the ownership of the minerals situate within its territories
          but there is no manner of doubt that it regulates to the extent set      G
          out in the provisions of the Act the development of mines and
          minerals in the country. It follows that if the State Government
          proposes to reserve any area for exploitation by the State-owned
          corporation or company, it must resort to making of such reservation
8
    (2016) 6 SCC 323                                                               H
556             SUPREME COURT REPORTS                            [2018] 6 S.C.R.


A            in terms of Section 17-A with the approval of the Central
             Government and by a notification specifying boundaries of the
             area and mineral or minerals in respect of which such areas will
             be reserved. Inasmuch as the State Government has not so far
             issued any notification in terms of Section 17-A, the Industrial
             Policy, 2007 of the Kerala State Government does not have the
B
             effect of making a valid reservation within the comprehension of
             Section 17-A. The High Court was, therefore, justified in holding
             that there is no valid reservation as at present no matter the
             Government can make such a reservation if so advised in the
             manner prescribed by law. In other words, the dismissal of this
C            appeal shall not prevent the State from invoking its right under
             Section 17-A(2) of the Act by issuing notification in respect of the
             mineral deposits in question…..”
             39. On a careful perusal of the judgments aforesaid, it would be
      more than apparent that this Court has consistently held that the State is
D     the owner of the land and minerals. However, the control and regulation
      of mines and development of minerals are in the domain of the Union
      Government. The State Government is denuded of its legislative power
      to make any law in respect of regulation of mines and mineral development
      in so far as that field is covered by the provisions of the Act. It is only if
      the field is vacant that the State can exercise its legislative powers.
E     Otherwise, it has to exercise its power strictly in accordance with the
      powers specifically conferred on the State Government by the Act and
      the Rules. It is also a well settled position of law that while exercising
      the powers of reservation vested in Section 17A(2) of the Act, the State
      Government has to take approval of the Central Government. In this
F     case, we are not required to deal with the question of prior approval as
      there is no approval and, in fact, the request of the State has been rejected
      by the Central Government.
             40. In the light of what has been said in the aforesaid judgments,
      we have examined the facts of the instant case. The State Government
G     made a request to the Central Government for reservation. In the first
      round of litigation, the High Court directed the Central Government to
      first consider the request before considering the applications of
      Geomysore and Deccan. The Central Government rejected the proposal
      of the State Government on various grounds including the grounds
      enumerated earlier, which flow from the NMP, 2008. Arguments have
H
 M/S. GEOMYSORE SERVICES (I) PVT. LTD. & ANR. v. M/S.                         557
 HUTTI GOLDMINES CO. LTD. & ORS. [DEEPAK GUPTA, J.]

been addressed to suggest that the Central Government can only take           A
into consideration issues of national interest and security and cannot
look into the other aspects. We are not in agreement with this submission.
Section 17A(2) of the Act clearly provides that the State Government
can reserve any area for undertaking prospecting or mining operations
through a Government company or corporation with the approval of the
                                                                              B
Central Government. The Act does not lay down the parameters which
the Central Government is required to follow. In our view, the Central
Government can take all factors which are relevant for the purpose of
deciding whether reservation should be made or not. The NMP, 2008
being a policy of the country, can definitely be taken into consideration
while considering such a request.                                             C
       41. We may note that the policy of the Government can sometimes
be binding on the Government if the principles of promissory estoppel or
legitimate expectation come into play. We may make it clear that in this
case neither the principle of promissory estoppel nor the principle of
legitimate expectation is attracted. We are only making reference to          D
these principles to emphasize that a policy of a Government is an important
document. It cannot be brushed aside. The Central Government, while
considering the request of the State Government, can take into
consideration various factors which may include economic factors, the
factors reflecting the image of the country internationally to the global
world community and also other factors of national security etc.. These       E
are just illustrative and each case has to be decided on its own facts.
Therefore, we are not in agreement with the Karnataka High Court that
only those factors can be taken into consideration, which flow from the
Act or the Rules.
       42. Another important aspect of the matter is that under Section       F
11(1) of the Act, an RP holder, who has carried out reconnaissance, is
entitled for preference when his case is being considered for grant of
PL. However, in Section 17A(2) of the Act, the bar to reservation is
only in those cases where the land is held under a PL or ML. When any
land is held under PL or ML, then the said land cannot even be considered     G
for reservation. If the land sought to be reserved is not under PL or ML,
then the State can make a proposal to reserve the land. If the land
sought to be reserved is covered by an RP there is no bar to reserve the
land for exploitation by State Government undertakings. This, however,
does not mean that while dealing with the proposal of the State, the
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558             SUPREME COURT REPORTS                           [2018] 6 S.C.R.


A     Central Government must make the reservation. The Central Government
      while granting approval, has to independently apply its mind and while
      doing so, there is nothing which debars the Central Government from
      taking into consideration the fact that some entity was granted RP and
      the effect thereof. No doubt, the Central Government cannot reject the
      proposal only on the ground that RP was issued since that would run
B
      counter to the provisions of Section 17A(2) of the Act. However, this is
      a fact which along with other facts can be taken into consideration while
      deciding the issue of reservation of land.
             43. As far as the present case is concerned, the Central
      Government took into consideration various factors and notes that PL
C     applications had already been filed by Geomysore and Deccan pursuant
      to RPs. It virtually held that the request of the State Government was at
      a belated stage and was against the provisions of the NMP, 2008, the
      emphasis in which was to provide a regulatory environment which is
      conducive to private investment. It may be true that the Central
D     Government was influenced by the fact that Geomysore and Deccan,
      pursuant to the RPs, had completed the reconnaissance and submitted
      their consolidated reports, but there were other relevant factors also
      which were taken into consideration such as that Geomysore and Deccan
      had already applied for grant of PL and no security consideration or
      public interest was involved in making reservation for HGML. In our
E     view, the factors taken into consideration by the Central Government
      are relevant and germane to the issues and cannot be said to be such
      factors which are extraneous or could not have been taken into
      consideration.
             44. We may also add that as far as the present case is concerned,
F     when on 27.12.2008, the Government of Karnataka recommended that
      161 sq. kms. land be allotted to HGML, no reservation had taken place
      because approval of the Central Government had not come. In fact, the
      State of Karnataka had not even notified the area, which was sought to
      be reserved nor it identified the minerals for which reservation was sought.
G           45. Section 17A(2) of the Act envisages following four conditions:
            (a) The land is not held under prospecting licence or mining lease;
            (b) there is approval by the Central Government;
           (c) a notification is issued in the Official Gazette specifying the
H     boundaries of such area; and
 M/S. GEOMYSORE SERVICES (I) PVT. LTD. & ANR. v. M/S.                         559
 HUTTI GOLDMINES CO. LTD. & ORS. [DEEPAK GUPTA, J.]

      (d) such notification should identify the mineral or minerals in        A
respect of which such areas are sought to be reserved.
       Only the first condition was fulfilled. None of the other conditions
were satisfied. Therefore, the State of Karnataka could not have issued
recommendation in favour of HGML on 27.12.2008. The cart could not
have been put before the horse. Unless reservation takes place, a private     B
company stands on the same footing as a Government company and in
that eventuality, Section 11 of the Act would be applicable and Geomysore
and Deccan being the RP holders and also being earlier PL applicants,
had to be given preference.
      CONCLUSION                                                              C
      46. In view of the above discussion, our answers to the four
questions are as follows:
       (i) The State Government being the owner of the land and minerals,
has a right to make a proposal to the Central Government to reserve
lands not held under a prospecting licence or mining lease for exploitation   D
by the State Government companies or undertakings but approval of the
Central Government is necessary;
       (ii) The Central Government cannot be bound by any specific
parameters. Each case has to be decided on its own merits. However,
as indicated by us above, the Central Government can not only take into       E
consideration factors of national security or public interest but also
economic factors, the policy of the Government and all such other factors
which are relevant to decide the issue whether the land should be reserved
for exploitation only by State Government Undertakings;
       (iii) Section 11(1) and Section 17A(2) of the Act have no connection   F
with each other. Section 11(1) of the Act deals with preference to be
given to RP holder and PL holder while considering their case for grant
of PL and ML respectively. This has nothing to do with reservation of
land under Section 17A(2) of the Act. The only connection, if it can be
called that, is that if a land is held under a PL or ML, then action under
                                                                              G
Section 17A(2) of the Act cannot even be initiated;
     (iv) In view of the discussion held above, we feel that the Central
Government was justified in rejecting the request of the State of
Karnataka in reserving the land in question.
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560             SUPREME COURT REPORTS                       [2018] 6 S.C.R.


A           47. Before parting with the case, we may note that arguments
      were addressed before us on the effect of the amendments made in
      2015 to the MMDR Act especially with regard to Section 10A and Section
      10B. We are not dealing with these issues, as decision on them is not
      necessary to decide the present case.
B            48. In view of the above discussion, we are clearly of the view
      that the Karnataka High Court erred in allowing the writ petition.
      Accordingly, the judgment of the High Court passed in W.P. No.25899
      of 2011 on 03.04.2012 is set aside and the decision of the Central
      Government dated 31.05.2011 is upheld and the State of Karnataka is
      directed to consider the case of Geomysore and Deccan for grant of PL
C     in accordance with the provisions of the Act as they now stand amended
      in the year 2015.
             49. The appeals are allowed in the aforesaid terms with no order
      as to costs. Pending application(s), if any, stand(s) disposed of.
D
      Kalpana K. Tripathy                                      Appeals allowed.




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