Case: State Of Kerala  Vs. M/S Kerala Rare Earth &amp; Minerals Limited

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 private person under prospecting licence or mining lease." 14. 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 Government company or corporation owned or controlled by it, but, in terms of sub-Section(2) of Section 17A (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 17A(2) for a valid 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;(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. 15. Mr. Parasaran was unable to show us any notification issued by the Government under Section 17A (2) (supra) nor was it possible for him to exalt the States industrial policy extracted above to the status of a statutory reservation within the contemplation of Section 17A. The net result, therefore, is that while the power to reserve an area not already held under any prospecting licence or mining lease is squarely and specifically vested in the State Government, the exercise of that power is not demonstrable in the case at hand. It is common ground that there is no approval of the Central Government nor is there a notification duly published in the official gazette specifying boundaries of the reserved area and mineral or minerals in respect of which such area will be or has been reserved. 16. It is well settled that if the law requires a particular thing to be done in a particular manner, then, in order to be valid the act must be done in the prescribed manner alone [See: Commissioner of Income Tax, Mumbai v. Anjum M.H. Ghaswala and ors. (2002) 1 SCC 633 ; Captain Sube Singh and Ors. v. Lt. Governor of Delhi and Ors. (2004) 6 SCC 440 ; State of U.P. v. Singhara Singh AIR 1964 SC 358 ; and Mohinder Singh Gill v. Chief Election Commissioner (1978) 1 SCC 405 ]. Absence of the Central Governments approval to reservation and a notification as required by Section 17A, therefore, renders the State Governments claim of reservation untenable till such time a valid reservation is made in accordance with law. It is trite that the State Governments general executive power cannot be invoked to make a reservation dehors Section 17A. In Sandur Manganese and Iron Ores Ltd. v. State of Karnataka and Ors. (2010) 13 SCC 1 this Court held that the State Government is denuded of its executive power in the light of Section 2 of the aforementioned Act. To the same effect is the decision of this Court in Bharat Coking Coal Ltd. v. State of Bihar (1990) 4 SCC 557 , where this Court observed that the State is denuded of its executive power in regard to matters covered by the MMDR Act and the Rules. Reference may also be made to the decision of this Court in State of Tamil Nadu v. Hind Stone (1981) 2 SCC 205 where this Court observed: "10. ... The statute with which we are concerned, the Mines and Minerals (Development and Regulation) Act, is aimed ... at the conservation and the prudent and discriminating exploitation of minerals. Surely, in the case of a scarce mineral, to permit exploitation by the State or its agency and to prohibit exploitation by private agencies is the most effective method of conservation and prudent exploitation. If you want to conserve for the future, you must prohibit in the present." 17. The upshot of the above discussion then is that while the State Government is the owner of the mineral deposits in the lands which vest in the Government as is the position in the case at hand, the 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 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 in terms of Section 17A 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 have not so far issued any notification in terms of Section 17A, the Industrial Policy - 2007 of the Kerala State Government does not have the effect of making a valid reservation within the comprehension of Section 17A. 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 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. There is, in that view, no reason for us to interfere with the judgment and order passed by the High Court.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]while the State Government is the owner of the mineral deposits in the lands which vest in the Government as is the position in the case at hand, the 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 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 in terms of Section 17A 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 have not so far issued any notification in terms of Section 17A, the Industrial Policy - 2007 of the Kerala State Government does not have the effect of making a valid reservation within the comprehension of Section 17A. 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 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. There is, in that view, no reason for us to interfere with the judgment and order passed by the High Court.