1976 (8) TMI 175 - SC - Indian Laws

Summary

Issues involved:
The issues involved in this case are the authority of the State Government to reserve land for exploitation of bauxite in the public sector, the refusal to grant mining leases based on such reservations, and the interpretation of the Mines and Minerals (Regulation and Development) Act, 1957 and the Mineral Concession Rules, 1960.

Authority of State Government to Reserve Land:
The State Government reserved certain areas for the exploitation of bauxite in the public sector, leading to the rejection of mining lease applications by the appellants. The Central Government upheld the State Government's right to reserve areas for public sector exploitation, citing the State Government's inherent right as the owner of minerals within its territory. The Act and Rules support the State Government's authority to reserve land for itself, preventing the grant of mining leases to other parties.

Interpretation of Mines and Minerals Act:
Section 10 of the Act exclusively grants the State Government the power to entertain applications for prospecting licenses and mining leases for minerals vested in the State. The Act specifies that no person can undertake mining operations without a license or lease granted under its provisions. Rule 59 of the Rules allows the State Government to reserve land for specific purposes, making it unavailable for mining lease grants until notified otherwise.

Legal Precedents:
In the case of State of Orissa v. Union of India, the Orissa High Court's view that reservation for public sector exploitation was not a valid purpose under Rule 59 was deemed incorrect. The court emphasized that the State Government retains ownership rights over minerals within its territory, despite the Act's exclusive legislation by Parliament. The Patna High Court, in S. Lal and Co. Ltd. v. Union of India, supported the Gujarat High Court's decision that the State Government has the power to reserve areas for exploitation by itself or statutory corporations. The Patna High Court's decision aligned with the Gujarat High Court's interpretation of the State Government's reservation authority.

Conclusion:
The Supreme Court dismissed the appeals, upholding the State Government's authority to reserve land for public sector exploitation and reject mining lease applications based on such reservations. The Court found no merit in the appeals and ordered them to be dismissed with costs.