Priority for minor mineral lease turns on an industry being fully set up at the date applications are considered.

Priority under Rule 6(6-a)(i) of the Orissa Minor Mineral Concession Rules, 1990 depends on the applicant having already set up an industry for processing the relevant minerals when the applications are considered; preparatory steps such as purchasing land or ordering machinery are insufficient. On the facts, the respondent's unit had already been taken over and was being run, so it qualified for first priority, while the appellant did not. Separate reasons were not required for preference under Rule 6(6-a)(i) because the rule itself fixes the priority hierarchy; the distinct reason-recording requirement in Rule 6(5-a) did not apply.

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Issues: (i) Whether priority under Rule 6(6-a)(i) of the Orissa Minor Mineral Concession Rules, 1990 could be claimed only if the applicant had already set up an industry for processing decorative, industrial or export minerals on the date of consideration of the applications. (ii) Whether the grant of priority under Rule 6(6-a)(i) required separate reasons to be recorded, as in Rule 6(5-a).

Issue (i): Whether priority under Rule 6(6-a)(i) of the Orissa Minor Mineral Concession Rules, 1990 could be claimed only if the applicant had already set up an industry for processing decorative, industrial or export minerals on the date of consideration of the applications.

Analysis: The priority scheme under Rule 6 contains different categories. Under sub-rule (6-a), in respect of decorative and similar rocks, the first preference is given to a person who has already set up an industry for processing such minor minerals in the State. The expression "set up" denotes establishment of the industry and not merely preparatory steps for starting it. Priority is to be judged when the applications are considered, and the relevant factual position is the one existing on that date. Since the record showed that the unit had already been taken over and was being run by the respondent, the respondent fell within the first priority category. The appellant had only entered into an agreement to purchase land and placed orders for machinery, which did not amount to setting up an industry.

Conclusion: Priority under Rule 6(6-a)(i) was rightly held to be in favour of the respondent and not the appellant.

Issue (ii): Whether the grant of priority under Rule 6(6-a)(i) required separate reasons to be recorded, as in Rule 6(5-a).

Analysis: Rule 6(5-a) expressly requires the State Government to record reasons because it authorises preference to a later application on the basis of an objective opinion that such preference is necessary in the interest of mineral development. Rule 6(6-a), by contrast, itself embodies the order of priority and supplies the rationale for preferring one class of applicants over another. No separate reasons are required where the statute has already fixed the priority hierarchy.

Conclusion: Separate recording of reasons was not required for priority under Rule 6(6-a)(i).

Final Conclusion: The challenge to the grant of quarry lease failed, and the judgment of the High Court was left undisturbed.

Ratio Decidendi: For priority under Rule 6(6-a)(i), the decisive date is the date of consideration of the application, and an industry is "set up" only when it is established and ready for operation; where the rule itself fixes the priority order, no additional recorded reasons are necessary.

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