2013 (5) TMI 1021 - SC - Companies Law

Supreme Court overturns High Court ruling on POSCO approval, remits matter to Central Government for reconsideration

The Supreme Court set aside the High Court's judgment, emphasizing that the High Court should not have interfered with the State Government's ... - 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 res judicata.5. Status of the area in question as reserved or non-reserved.6. Preferential right under Section 11 of the MM(D&R) Act.7. Validity of the recommendation made by the State Government under Section 11(5) of the MM(D&R) Act in favor of POSCO.Summary:Issue 1: Maintainability of the writ petition due to availability of alternative remedyThe High Court did not explicitly address this issue in its judgment.Issue 2: Prematurity of the writ petitionThe High Court ruled that the writ petition was not premature, stating that 'the petitioner has approached this Court at a time when its right to be considered along with POSCO has been threatened to be infringed by the action of the State.' The Supreme Court, however, found that the High Court erred in this determination, emphasizing that the State Government's recommendation was not a final decision and that the Central Government's approval was still pending.Issue 3: Maintainability of the writ petition due to delay and lachesThe High Court did not explicitly address this issue in its judgment.Issue 4: Bar of res judicataThe High Court did not explicitly address this issue in its judgment.Issue 5: Status of the area in question as reserved or non-reservedThe High Court did not explicitly address this issue in its judgment.Issue 6: Preferential right under Section 11 of the MM(D&R) ActThe High Court held that Geomin Minerals & Marketing (P) Ltd. had a preferential right for the grant of license and lease under Section 11(2), (3), and (4) of the MM(D&R) Act. The Supreme Court, however, noted that the amended Section 11, effective from 20th December 1999, should apply, and that the Central Government should consider all applications simultaneously as per the amended provisions.Issue 7: Validity of the recommendation made by the State Government under Section 11(5) of the MM(D&R) Act in favor of POSCOThe High Court found the recommendation invalid, stating that 'special reasons' were not adequately recorded. The Supreme Court disagreed, noting that the State Government had conducted a thorough inter se merit evaluation and had validly invoked Section 11(5) for POSCO due to its significant merits, including advanced technology and substantial investment.Conclusion:The Supreme Court set aside the High Court's judgment, emphasizing that the High Court should not have interfered with the State Government's recommendation and that the matter should be decided by the Central Government. The case was remitted to the Central Government for consideration of approval under Section 5(1) of the MM(D&R) Act, taking into account the objections raised by the parties. The appeals were allowed with no order as to costs.