Case: M/S GEOMYSORE SERVICES(I) PVT. LTD.&ANR Vs. M/S HUTTI GOLDMINES CO. LTD.


Decision reasoning: 1[ds]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 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. 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 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 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 been addressed to suggest that the Central Government can only take 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 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.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 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 securityThese 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 11(1) of the Act, an RP holder, who has carried out reconnaissance, is entitled for preference when his case is being considered for grant of PL. However, in Section 17A(2) of the Act, the bar to reservation is only in those cases where the land is held under a PL or ML. When any land is held under PL or ML, then the said land cannot even be considered for reservation. If the land sought to be reserved is not under PL or ML, then the State can make a proposal to reserve the land. If the land sought to be reserved is covered by an RP there is no bar to reserve the land for exploitation by State Government undertakings. This, however, does not mean that while dealing with the proposal of the State, the Central Government must make the reservation. The Central Government while granting approval, has to independently apply its mind and while doing so, there is nothing which debars the Central Government from taking into consideration the fact that some entity was granted RP and the effect thereof. No doubt, the Central Government cannot reject the proposal only on the ground that RP was issued since that would run counter to the provisions of Section 17A(2) of the Act. However, this is a fact which along with other facts can be taken into consideration while deciding the issue of reservation of land.43. As far as the present case is concerned, the Central Government took into consideration various factors and notes that PL 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 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 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, 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.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 boundaries of such area; and(d) such notification should identify the mineral or minerals in respect of which such areas are sought to be reserved.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 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.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 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 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 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 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.In view of the above discussion, we are clearly of the view that the Karnataka High Court erred in allowing the writ petition.