M/S Geomysore Services(I) Pvt. ... vs M/S Hutti Goldmines Co. Ltd. .

2. This case has a long and chequered history. There are gold 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”).

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 area measuring 501.48 sq. kms. for a period of 3 years on 09.01.2003 after completing all formalities. The respondent 3 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 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 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 and Geology, Bangalore praying for reservation of area for the purpose of conservation exclusively for public sector undertakings under Section 17A(2) of the Act. It was stated that HGML was keen to continue prospecting 4 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 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.

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.

7. On 27.12.2008, the Government of Karnataka wrote to Government of India for reservation of area in favour of HGML 5 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 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 and directed the State of Karnataka to consider the PL applications filed by Geomysore as well as Deccan.

46. In view of the above discussion, our answers to the four questions are as follows:

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.

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 44 case of Geomysore and Deccan for grant of PL 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.