State reservation of mineral-bearing land upheld where applications for prospecting and mining were premature under the rules.
The Supreme Court of India stated that Parliament's declaration under the Mines and Minerals (Regulation and Development) Act, 1957 did not divest the State Government of its proprietary interest in minerals within its territory. Reading sections 4 and 10 with rules 58, 59 and 60 of the Mineral Concession Rules, 1960, the Court noted that the State may entertain, grant, refuse, and keep land out of the pool of grantable areas by reserving it for a lawful purpose, including public sector exploitation. Applications for prospecting licences or mining leases over such reserved land are premature until the land is notified as available. On that construction, the refusals were consistent with the statutory scheme.
Issues: Whether the State Government, as owner of minerals within its territory, could reserve mineral-bearing land for exploitation in the public sector and, on that basis, refuse applications for prospecting licences or mining leases under the Mines and Minerals (Regulation and Development) Act, 1957 and the Mineral Concession Rules, 1960.
Analysis: Parliament's declaration under section 2 of the Act placed regulation of mines and mineral development within the statutory framework of the Act and the Rules, but it did not divest the State of its proprietary interest in minerals vesting in it within its territory. Sections 4 and 10 of the Act show that prospecting and mining rights can arise only in accordance with the Act and the Rules, and that the State Government has the authority to entertain, grant, or refuse such applications. The scheme of rules 58, 59 and 60 recognises that land may be kept out of the pool of grantable areas where the State Government has refused grant on the ground of reservation for a purpose, and that applications for such reserved areas are premature until the land is again notified as available. The references in section 17(2) and 17(4) did not exhaust the State Government's ability to reserve land for itself. On that construction, the refusals were not extraneous and the revisional orders were justified.
Conclusion: The State Government was competent to reserve the areas for public sector exploitation and to refuse the applications as premature; the challenge to the refusals failed.
Final Conclusion: The appeals were rejected because the impugned reservation and refusal of mineral concessions were consistent with the statutory scheme governing mineral regulation and availability of land for grant.
Ratio Decidendi: A State Government may reserve mineral-bearing land for a lawful purpose, including public sector exploitation, and may refuse prospecting or mining applications for such reserved land until it is notified as available under the governing rules.
TaxTMI 
AI Drafter ✕
TaxTMI 
