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2010 (7) TMI 1186

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..... he fact that the petitioner's applications have been filed on the first date of availability and eligibility. Issue a writ of prohibition or any other appropriate writ, order or direction restraining the opposite parties from considering applications for Mineral Concessions of later applicants to the petitioner until the applications of the petitioner are first considered and disposed of by according priority or preferential right based on the petitioner being a first day applicant having applied for the concerned Mineral Concessions set out in the petition on the first date of availability and eligibility.' 2. The facts of the case are as given hereinbelow: 2.1 On 29.10.1991, the petitioner-company filed several applications for grant of Prospecting Licence and Mining Lease. According to .the petitioner, it has the preferential right for consideration of such applications for grant of Prospecting Licence and Mining Lease on account of the fact that it had filed the applications on the 1 st day of availability and eligibility in pursuance of a notification dated 23.8.1991 issued by the Govt. of Orissa in the Department of Steel and Mines, (O.P.1), which was published in th .....

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..... te party No.1 would recommend to the Central Government (O.P.2) for grant of mineral concession and use its best efforts to obtain approval from opposite party No.2. After filing of the writ petition, on 9.1.2009, opposite party No.1 finally asked opposite party No.2 to accord prior approval for grant of mineral concession to POSCO opposite party No.3 purportedly under Section 11(5) of the Mines and Minerals (Development and Regulation) Act, 1957 (in short 'M.M.(D&R) Act') but without following proper procedure. 3. According to the petitioner, the area of 186 hects. in village Rantha in the district of Sundergarh applied for by it for Prospecting Lincence vide application no. 1334 dated 29.10.1991 for Iron Ore and Manganese Ore, is overlapping with the area applied for by POSCO. 3.1 The petitioner further submitted that the recommendation made in favour of POSCO was challenged by one Dhananjay Kumar Dagara before this Court in W.P.(C) No. 15315 of 2007 (hereinafter 'Dagara's case') wherein it was pleaded that the petitioner therein was entitled to preferential consideration on account of the date on which he had filed application for Mineral Concession which was m .....

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..... 0.1.2001 and the petitioner attended the personal hearing. The said action taken by the Government in 2001 has not been challenged by the petitioner. Thus the said action of the Government in 2001 cannot be collaterally challenged in this writ petition in 2007. Such collateral and stale challenge without any explanation for the delay is not maintainable. In any event, the appropriate authority of the Government has not taken any final decision after the matter has been remanded by the revisional authority for hearing by the State. Hearing is continuing. It is open to the petitioner to appear before the Secretary in connection with his application for hearing. No final decision has been taken by the Secretary. So going by these facts, it cannot be said that the petitioner's case at the moment is ripe for interference by this Court. However, this Court considered all the points discussed above, since questions were raised about the competence and legality of the hearing process. 43. For the reasons discussed above, this Court is of the opinion that there is no merit in this writ petition and all the contentions of the writ petitioner fail. The writ petition is dismissed. There woul .....

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..... ay. In view of the above submission, we do not want to keep the writ petition pending and hence dispose of the same with a request to Opp. Party No.1 to consider the application of the petitioner for mineral concession by passing a speaking order within a period of three months from today.' Thereafter an application was filed by the State for extension of time to comply with the order of this Court dated 12.11.2008 and this Court by order dated 30.3.2009 passed in Misc. Case No. 2165 of 2009 extended the period by three months from the date of the order, i.e. 30.3.2009. 5.2 The petitioner by letter dated 28.11.2008 requested the State Government to consider its Mineral Concession applications in accordance with law as per the direction of this Court dated 12.11.2008. When the petitioner did not get any response to the said letter, it sent a reminder on 19.12.2008, but to no effect. Thereafter, when the petitioner came to know that the State Government is not going to accord priority or restrict the invocation of Section 11 (5) of the M.M.(D & R) Act to unique cases, as set out in the earlier petition, the petitioner flied the present writ petition on the ground that it is ent .....

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..... by this Court on 30.3.2009, the present writ petition has been flied on 5.1.2009, by which date the State had not taken any decision on the same. The writ petition is therefore premature and does not merit consideration of this Court in exercise of its extraordinary jurisdiction under Article 226 of the Constitution of India. As this Court has already directed the State to pass a speaking order, the petitioner could have waited till passing of such an order and if aggrieved, it could have challenged the said order before the Central Government by filing Revision Petition as prescribed under Section 30 of the M.M. (D&R) Act read with Rule-54 of the M.C. Rules. 6.2 As to the contentions of the petitioner in regard to the amended provisions of Section-11 of the M.M.(D&R) Act, it is averred that after the amendment, the preferential claim of the petitioner is not sustainable as it is contrary to the scheme of the Act and contrary to the clear language of the provisions. The applicability of Section-11 of the Act, as it stood before amendment, is totally misconceived. Further it relied upon the judgment passed by this Court on 2.5.2008 in W.P.(C) No. 15315 of 2007 (Dagara's case) wher .....

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..... f sections 11 (2), (3), (4) and (5) of the M.M. (D&R) Act. The State has further indicated that the mineral concession can be given to a later applicant out of turn under the provision of section 11 (5) of the Act. Therefore, according to the opposite party-State, the allegation of the petitioner that it has been discriminated in not considering its application is not correct. 6.6 So far as the interest of POSCO is concerned, it is indicated that the State is always entitled to override the preferential rights to earlier applicants subject to recording of special reasons under sub section (5) of Section-11 of the M.M.(D&R) Act. Thus, from time to time, considering the applications of the applicants, the State Government has either granted mineral concessions to an applicant basing on the date of filing or for special reasons, in accordance with the provisions of Section-11 and keeping the State's interest in view. 6.7 Regarding the specific allegation of the petitioner about the recommendation of P.L. application of M/s. Action Ispat & Power (P) Ltd., it is indicted that the area applied for by the petitioner for P.L./M.L. is different from that of M/s. Action Ispat & Power (P) L .....

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..... mately when this Court passed order dated 13.5.2009 to the effect that 'if the Union of India fails to file counter affidavit by 10.6.2009, this Court will proceed with the matter in absence of any counter affidavit', the Union of India flied its counter affidavit. In the said counter affidavit the stand taken by the Union of India was that in terms of the provisions of M.M.(D&R) Act, 1957 and M.C. Rules, 1960, applications for grant of Mineral Concessions including Reconnaissance Permit, Prospecting Licence and Mining Lease are filed with the State Government, which is the owner of the minerals. The State Government evaluates the proposal in terms of the provisions of the M.M.(D&R) Act and M.C. Rules and accords preferential rights in terms of Section-11 of the M.M.(D&R) Act read with Rule-35 of M.C. Rules for grant of Mineral Concession to an applicant. Only in case of a mineral listed in the First Schedule to the M.M.(D&R) Act, prior approval of the Central Government is obtained by the State Government before granting the Mineral Concession. Thereafter in the counter affidavit, the Union of India ultimately explains the different procedures of M.M.(D&R) Act and further .....

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..... rown open for re-grant vide notification No. SRO 647/1991 dated 23.8.1991 published in Official Gazette dated 13.9.1991 issued under Rule 59 of the M.C.Rules. Pursuant to the said notification dated 23.8.1991, a number of applications have been filed for grant of Prospecting Licence and Mining Lease over the said area and the State Government after considering all the applications found POSCO to be the most meritorious amongst all the applicants and recommended its case to the Central Government for prior approval under Section 11 (5) of the M.M.(D& R) Act vide its letter dated 19.12.2006. The recommendation dated 19.12.2006 made by the State Government was challenged by Kudremukh Iron Ore Company Ltd (in short 'KIOCL') before this Court in W.P.(C) No. 1775 of 2007 and this Court by order dated 16.4.2007 disposed of the writ petition filed by KIOCL and directed the KIOCL to approach the Revisional Tribunal established under Section 30 of the M.M.(D&R) Act. The Revisional Application of the KIOCL was disposed of on 27.9.2007. Thereafter the State Government acting in compliance with the directions of the Revisional Authority issued notices under Rules 12 and 26 of the M.C.Rules to t .....

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..... licants. 8.2 The further ground taken in the counter is that the manner of disposal of applications over the Khandadhar area was the subject matter of challenge in Dagara's case, wherein this Court has in no uncertain terms ruled that the applications for the areas notified under Rule 59 of the MC Rules deserve simultaneous consideration and that no applicant can have any preferential right of prior consideration solely on account of the fact that his application was filed on the first available date or a prior date. It is indicated that the principle of 'first come first serve' is not absolute and also does not apply to the areas notified in the Official Gazette. 8.3 The sum and substance of the contentions of POSCO is that no preferential right is available to the petitioner as claimed and the said position has already been clarified by this Court in the judgment rendered in Dagara's case as the preferential right of the first applicant does not survive after 1999 amendment. 8.4 It is further submitted that if at all the petitioner in any manner is aggrieved by the action of the State Government in recommending the case of POSCO under section 11 (5) of the M.M.(D & R) .....

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..... tioner does not have an alternative remedy. Learned counsel further submitted that no order whatsoever on the petitioner's P.L. application or in respect of opposite party No.3's application for grant of mineral concession has been passed till date, giving any scope to the petitioner to approach the Revisional Authority and several applications filed by different parties for P.L. and M.L. application over the area are pending for consideration of the State Government and no order has been passed. So the question of alternative remedy does not arise. According to him, the recommendation dated 9.1.2009 in favour of POSCO, could not have been the subject-matter of revision before the Central Government because even the said recommendation has not been produced before this Court by any of the opposite parties. The petitioner could only know about the alleged recommendation from the averments made in the counter affidavit filed by O.P.3 and according to it at best it can be said to be an application by the State Government to the Central Government in order to seek the Central Government's prior approval under section 11 (5) of the M.M.(D&R) Act to enable the State Government to pass .....

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..... ment has also taken the same stand so far as availability of alternative remedy is concerned. 11.6 Perused the decisions reported in AIR 1995 SC-333 and AIR 2008 SC-1840 (supra) and more particularly the observations made in paragraph-6 of the latter judgment, which is not applicable to the facts and circumstances of the present case as in that case rejection order had been passed and communicated to A.H.Jaffar & Sons and no constitutional or other issues were raised for consideration of the Court. We may also refer to the decision of the Apex Court in the case of Whirlpool Corporation v. Registrar of Trade Marks, (1998) 8 SCC-1. In paragraph-15 of the said judgment it was observed thus: 'Under Article 226 of the Constitution, the High Court, having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. But the High Court has imposed upon itself certain restrictions one of which .is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by this Court not to operate as a bar in at least three contingencies, namely, .....

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..... 39; in terms of section 11(5). Even the Central Government in its Policy formulated in June 2009 has made it clear to the State Governments that 'special reasons' under Section 11 (5) cannot be the same as indicated in Section 11 (3) but must be much stronger reasons. Paragraph 8.13 of that policy is quoted herein below: 'It has been generally noticed that the State Government~ have been invoking the parameters given in Section 11(3) of MMDR Act while giving priority to later applicants under Section 11(5) of MMDR Act. It is pointed out that conditions at Section 11(3) are appropriate to choose from amongst applicants applying on the same day [real or deemed under Section 11(2)], and the conditions under Section 11(3) are not the same as the 'special reasons' mentioned in Section 11(5) of the Act. Xxx xxx xxx and these special reasons have to be stronger than the matters referred to in Section 11(3) of die MMDR Act. Moreover, 'special reasons' have to be exceptional by their very nature and not routine or obvious'. In our considered opinion, the writ petition is maintainable. This answers the issue no. 1. 12. Issue no.2, Whether the writ petition is premature? .....

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..... t considering his disentitlement for such relief due to his blameworthy conduct of undue delay or laches in claiming the same, such a direction, order or writ becomes unsustainable as that not made judiciously and reasonably in exercise of its sound judicial discretion, but as that made arbitrarily'. 13.2 Learned counsel for the Union of India submitted that the petitioner has invoked the writ jurisdiction after inordinate delay of over one and a half decades, which is not justified. So the writ petition should not be entertained. Learned counsel placing reliance on the decision in Dagara's case submitted that the petitioner is not entitled to any relief whatsoever and his further contention was that though the petitioner has flied applications on 29.10.1991, admittedly it did not do anything till 2004 save and except sending representations, as stated by the petitioner, to the State Government for consideration of its applications. The petitioner did not do anything till 1999, when Section 11 of the M.M.(D&R) Act was amended. Therefore, if at all any preferential right was in existence in favour of the petitioner on the strength of its application dated 29. 10. 1991, the same .....

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..... R.F. of Sundergarh district. 13.5 Fact remains, though the above communication, is not related to Khandadhar block, which is the subject-matter of dispute in the present writ petition, from said document it is clearly evident that the applications of the petitioner for P.L. and M.L. were under consideration on 5.11.2004. That apart, this Court in its order passed on the intervention application filed by the petitioner in Dagara's case has categorically held that there is no cause of action for the intervener to file the intervention petition, but observed that the said order will not prevent the intervenor from taking steps independently in respect of his grievance, if any. The State Government was considering the applications of the petitioner. No adverse order was passed on its applications. The question of approaching the Court did not, therefore, arise then. That apart, a bare reference to the order passed by this Court in W.P.(C) No. 6484 of 2008, wherein the petitioner prayed for a writ of mandamus as against the opposite party- State to consider its P.L./R.P. applications, which were pending before the State since 1991, reveals that this Court, without expressing any opin .....

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..... einafter called '1962 Notifications') and the Notification bearing S.R.O. No. 647/91 dated 23.8.1991 published in the official gazette on 13.9.1991 (hereinafter called '1991 Notification') . 14.1 According to learned counsel for the petitioner, there is no reserved area in the eye of law because in 1962, when the notifications were issued, the State Government had no power or jurisdiction or authority to reserve the minerals over the areas either for itself or for exploitation in the public sector. 1962 notifications, according to the petitioner, are therefore, ultra vires of the M.M. (D & R) Act as it stood then. Since the 1962 notifications are void, the 1991 notification having been issued under Rule-35 could be of no effect. In order to substantiate its argument, the petitioner submitted that the M.M. (D & R) Act came into effect on 10.6.1958. It contained a declaration in Section 2 thereof, that the control of the regulation and development of mines and minerals had been taken over by the Central Government in public interest, and according to the petitioner, as a result of such declaration iri the light of Entry 54 of List I, the State Government was denuded .....

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..... the M.M. (D & R) Act, 1957 clearly states that the Act provides for the development and regulation of mines and minerals under the control of the Union. Section 2 of the M.M. (D & R) Act contains the declaration that in the 'public interest that the Union should take under its control the regulation of mines and the development of minerals to the extent hereinafter provided'. It is submitted by the learned counsel for the Union of India that from the scheme of M.M. (D & R) Act and MC Rules, it is abundantly clear that the State Government is the owner of the minerals. However the Union, in public interest, for the purpose of development and regulation of mines and mineral has retained control of itself in the matter of regulation of mines and development of minerals, where in respect of grant of a Reconnaissance Permit or licence for prospecting of Mineral or Mining Lease concerning specified in the First Schedule to MMDR Act, its previous approval is necessary and in respect of minor minerals and other major minerals, which have not been specified, the powers have been delegated to the State Government. It was further argued that as per Section-5 of the M.M. (D & R) Act, .....

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..... We have gone through Sub-Sections (2) and (4) of Section 17 of the Act to which our attention has been invited by Mr. Sen on behalf of the appellants for the argument that they are the only provisions for specifying the boundaries of the reserved areas, and as they relate to prospecting or mining operations to be undertaken by the Central Government, they are enough to show that the Act does not contemplate or provide for reservation by any other authority or for any other purpose. The argument is however untenable because the aforesaid Sub-Sections of Section 17 do not cover the entire field of the authority of refusing to grant a prospecting licence or a mining lease to anyone else, and .do not deal with the State Government's authority to reserve any area for itself. As has been stated, the authority to order reservation flows from the fact that the State is the owner of the mines and the minerals within its territory, which vest in it. But quite apart from that, we find that Rule 59 of the Rules, which have been made under Section 13 of the Act, clearly contemplates such reservation by an order of the State Government. That rule deals with the availability of areas for the gran .....

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..... g wiped out from the statute book, any action taken under it having not been saved, the 1962 notifications also lost their force after 13.4.1988. In this regard, we may refer to paragraph -19 of the decision of the Apex Court in the case of M.A. Tulloch (supra), which is quoted herein below: '19. Before proceeding further it will be convenient to clear the ground by adverting to two matters: (1) The effect of a Central Act under its exclusive legislative power which covers the field of an earlier State Act which was competent and valid when enacted is not open to doubt. The Parliamentary enactment supersedes the State law and thus it virtually effects a repeal, (2) the effect in law of a repeal, if it is not subject to a saving as is found in Section 6 of the General Clauses Act is also not a matter of controversy. Tindal, C.J. stated this in Kay v. Goodwin 4: 'I take the effect of repealing a statute to be to obliterate it as completely from the records of the Parliament as if it had never been passed; and it must be considered as a law that never existed except for the purpose of those actions which were commenced, prosecuted and concluded whilst it was an existing la .....

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..... e not binding. The question becomes academic. 15. Issue No.6, and 7 are:. Whether the petitioner has any preferential right under Section-11 of the M.M. (D & R) Act ? Whether recommendation made by the State Government under Section 11 of the M.M. (D&R) Act in favour of POSCO is valid? 15.1 According to the petitioner, it has applied for the area In question on 29.10.1991 and it stands on a better position so far as the merit is concerned in terms of the criteria set out under Section 11 (3) of the Act, read with Rule 35 of the M.C. Rules. 15.2 So far as preferential right, as claimed by the petitioner, is concerned, which it claims on the basis of its application made on 29.10.1991, was under the pre-amended provisions of Section 11 (2) (3) and (4). The pre-amended provisions of Section 11 (2) (3) (4) and the post amended provisions of 11 (2) (3) (4) are quoted hereinbelow. Pre-amended provisions of Section 11(2),(3) and (4) are as follows: 11(2). Subject to the provisions of Sub-Section (1), where two or more persons have applied for a prospecting licence or a mining lease in respect of the same land, the applicant whose application was received earlier shall have a pr .....

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..... had not been disposed of, shall be deemed to have been received on the same day, the State Government for the purposes of assigning priority under this sub section. Provided further that where any such application are received on the same day, the State Government, after taking into consideration the matter specified in sub section (3), may grant the reconnaissance permit, prospecting licence or mining lease, as the case may be, to such one of the applicants as it may deem fit. 11(3). The matters 'referred to in Sub-Section (2) are the following: (a) any special knowledge of, or experience in, reconnaissance operations, prospecting operations or mining operations, as the case may be, possessed by the applicant; (b) the financial resources of the applicant; (c) the nature and quality of the technical staff employed or to be employed by the applicant; (d) the investment which the applicant proposes to make in the mines and in the industry based on the minerals; (e) such other matters as may be prescribed. 11(4). Subject to the provisions of Sub-Section (1), where the State Government notifies in the Official Gazette an area for grant of reconnaissance permit, pro .....

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..... spect of the an area and whose application was received earlier, shall have preferential right for grant of Licence ~ Lease, as the case may be, over the applicant whose application was received later. Whereas, in the post amended section of 11 (2) as referred, the provision is that the applicant whose application was received earlier shall have preferential right to be considered for grant of R.P., P.L. and M.L. as the case may be. We, therefore hold that the petitioner is entitled to preferential right of consideration over later applicants whose applications were filed after 29.10. 1991. In this regard, we may refer to the decision of the Apex Court in the case of Indian Metals (supra). The relevant paragraph, i.e. Paragraph-16 of the said judgment, is quoted herein below: '16. Now, to turn to the contentions urged before us: Dr. Singhvi, who appeared for ORIND, vehemently contended that the rejection of the application of ORIND for a mining lease was contrary to the statutory mandate in S. 11(2); that, subject only to the provision contained in S.11(1) which had no application here, the earliest applicant was entitled to have a preferential right for the grant of a leas .....

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..... ' has not been defined in the M.M.(D&R) Act. As to what would constitute a 'special reason' for grant of mineral concession to a later day applicant in preference to an earlier day applicant must, therefore, be seen from the objects and reasons of the M.M.(D&R) Act. What is abundantly clear is that Section 11(5) provides for an exception from the general rule, that is, an earlier day applicant being given preference over a later day applicant. It also follows from the use of the term 'special' that the reasons must be out of the ordinary or exceptional as even mentioned by the Central Government in its Guidelines of June 2009, the relevant paragraph, i.e. paragraph-8.13 has already been quoted in this judgment in paragraph No. 11.10. 15.8 The term 'special reason' must necessarily have nexus with the objects of the M.M.(D&R) Act i.e. mineral development and/or its conservation. That 'special reasons' under Section 11(5) cannot be the same as Section 11(3) reasons is evident, as section 11(3) is the criteria for same day applicants' inter-se merit. Moreover, section 11(5) is an exception for later applicant to be given preference. Special reasons .....

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..... e the Secretary in connection with his application for hearing. No final decision has been taken by the Secretroy. So going by these facts, it cannot be said that the petitioner's case at the moment is ripe for interference by this Court. However, this Court considered all the points discussed above, since questions were raised about the competence and legality of the hearing process' 15.11 So, the matter was left to the State Government to carry out the direction of the Revisional Authority, wherein it was categorically directed to consider the pending applications simultaneously and examine inter-se merit of all the applications and then pass an order as per law after affording an opportunity of hearing to all the applicants. 15.12 The present petitioner also flied a writ petition earlier being W.P.(C) No. 6484 of 2008 inter alia with a prayer to direct the opposite parties for expeditious disposal of the pending applications for mineral concessions filed by the petitioner in accordance with law. This Court by order dated 14.7.2008 disposed of the writ petition, which has already been quoted in the foregoing paragraph. Subsequently, the petitioner flied a writ petition bein .....

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..... a 12 MTPA steel plant based on eco-friendly and resource-use efficient technology, that will generate high order revenue and employment deserves precedence over all other applications filed both for notified and non notified areas. Hence, it can be safely concluded that M/s POSCO India (P) Ltd. stands out as the most meritorious among all the MoU signed applicants as well as other non-MoU applicants. Further, none of the ML applicants (whether MOD signed or not) has submitted legally acceptable prospecting report. Therefore, all the ML applications filed over the area do not satisfy the condition as prescribed under section 5(2)(a) of the Act. Hence, all the applications are liable for rejection even when found meritorious otherwise'. Thereafter it was approved by the Government of Orissa for recommendation of Prospecting licence for a period of three years in favour of POSCO. 15.15 Now, let us look to the manner in which the comparative merit was dealt with as per the direction of the Central Government in file No. 11 (B) SM-4/2007 under the subject 'Determination of Relative merits of prior applications of the P.L. application dated 27.9.2005 of POSCO India (P) Ltd.& .....

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..... cation of M/s Bhushan Steel and Strips Ltd pursuant to 1991 notification for grant to the Central Government and the Central Government accorded its due approval. 18 Now in the present case, if we accept the statement made in the counter affidavit filed in the case of Shiv Kumar Agrawal (supra), 20.12.1999 being the closing date, then POSCO's application could not have been considered, which was filed on 27.9.2005. 19. We are unable to accept the contention of the learned Counsel for the State that the aforesaid statement made in the affidavit is a mistake committed by the officer and does not bind the Government. 20. This is not the only infirmity. The consistent argument of learned Counsel for the State as well as the Union of India is that no preferential right is available to the Petitioner. Though we have summed up the same in issue No. 6, we will be failing in our duty if we do not bring the materials available on the record produced by the State Government. As it appears, after 20.12.1999, which is stated to be the effective date of amendment, pursuant to the notification bearing S.R.O. No. 647 dated 23.8.1991, P.L and M.L. have been granted to 15 (fifteen) applicants .....

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..... eemed brother Hon'ble Justice Das. While I am in complete agreement with the conclusion reached by Hon'ble Justice Das, I feel it necessary to amplify in regard to issue No. 5. I have gone through the judgment of the Gujarat High Court in the case of Amritlal Nathubhai Shah v. Union Government of India and Anr. AIR 1973 Guj. 117 passed by the Hon'ble Chief Justice P.N. Bhagwati of the Gujarat High Court (as His Lordship the then was), which was affirmed by the constitutional Bench of the Apex Court and paragraph-11 of the judgment has noted the distinction of Rule-59 before 1963 amendment of M.C. Rules, 1960 and it would be profitable to quote the paragraph-11 of the said judgment. 11. There is also inherent evidence in the Mineral Concession Rules, 1960 which strongly supports this conclusion. Rule 59 contemplates a case where the State Government has refused to grant a prospecting licence or a mining lease on the ground "that the land should be reserved for any purpose" and thus clearly recognizes the executive power of the State Government to reserve land for any purpose. Prior to amendment of Rule 59 by the notification dated 9th July, 1963, the words us .....

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