2010 (7) TMI 1186 - HC - Companies Law

Summary

Issues Involved:
1. Maintainability of the writ petition due to availability of alternative remedy.
2. Prematurity of the writ petition.
3. Maintainability of the writ petition due to delay and laches.
4. Bar of the writ petition by res judicata.
5. Status of the area in question as reserved or non-reserved.
6. Preferential right of the petitioner under Section 11 of the M.M. (D&R) Act.
7. Validity of the recommendation made by the State Government under Section 11(5) of the M.M. (D&R) Act in favor of POSCO.

Detailed Analysis:

1. Maintainability of the writ petition due to availability of alternative remedy:
The Court held that the writ petition is maintainable despite the availability of an alternative remedy under Section 30 of the M.M. (D&R) Act, 1957 read with Rule 54 of M.C. Rules, 1960. The Court emphasized that no order had been passed on the petitioner's applications, and the recommendation in favor of POSCO could not be construed as an order attracting the provisions of Rule 54. The Court referenced the Supreme Court's decision in Whirlpool Corporation v. Registrar of Trade Marks, which allows writ petitions in cases involving violation of natural justice, jurisdictional issues, constitutionality of state action, or fundamental rights.

2. Prematurity of the writ petition:
The Court found the writ petition to be not premature. It noted that the petitioner approached the Court when its right to be considered along with POSCO was threatened. The Court referenced the principle from Bengal Immunity Co. Ltd. v. State of Bihar, which allows for preemptive action to prevent harm.

3. Maintainability of the writ petition due to delay and laches:
The Court rejected the argument of delay and laches. It noted that the petitioner had been actively pursuing its applications and had approached the Court at appropriate times, including filing intervention applications and previous writ petitions. The Court referenced the communication from the Directorate of Mines dated 5.11.2004, which indicated that the petitioner's applications were under consideration, thus negating the argument of inaction.

5. Status of the area in question as reserved or non-reserved:
The Court held that the area in question was non-reserved. It found that the 1962 notifications lost their force after Rule 58 of the M.C. Rules was omitted in 1988 and further due to the incorporation of Section 17-A of the M.M. (D&R) Act in 1987, which required Central Government approval for reservations. The Court referenced the Supreme Court's decision in M.A. Tulloch, which emphasized that repealed provisions without saving clauses lose their validity.

6. Preferential right of the petitioner under Section 11 of the M.M. (D&R) Act:
The Court held that the petitioner was entitled to a preferential right of consideration over later applicants whose applications were filed after 29.10.1991. It referenced the Supreme Court's decision in Indian Metals & Ferro Alloys Ltd. v. Union of India, which upheld the principle of preferential right for earlier applicants, subject to the conditions under Section 11(5) of the Act.

7. Validity of the recommendation made by the State Government under Section 11(5) of the M.M. (D&R) Act in favor of POSCO:
The Court found the recommendation in favor of POSCO invalid. It noted that the State Government failed to provide "special reasons" as required under Section 11(5) and that the reasons cited were similar to those under Section 11(3), which are not sufficient for invoking Section 11(5). The Court referenced the Central Government's guidelines, which emphasized that "special reasons" must be stronger and exceptional.

Conclusion:
The writ petition was allowed, and the recommendation made by the State Government in favor of POSCO was set aside. The State Government was directed to take a fresh decision in accordance with the order of the Revisional Authority and the guidelines issued by the Ministry of Mines, Government of India, ensuring the petitioner's preferential right of consideration. The entire exercise was to be completed within four months. The intervention application of M/s VISA Steel Ltd. was rejected, with the option to file an independent writ application if advised. No order as to costs was made.