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22. The procedure for obtaining reconnaissance permits, prospecting licences or mining leases in respect of land in which the minerals vest in the Government is contained in Sections 10, 11 and 12 of the Act. Section 10 of the Act provides for making of an application for reconnaissance permits, prospecting licences or mining leases. Section 11 of the Act deals with preferential right of certain persons.

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11. Preferential right of certain persons (1) Where a reconnaissance permit or prospecting licence has been granted in respect of any land, the permit holder or the licensee shall have a preferential right for obtaining a prospecting licence or mining lease, as the case may be, in respect of that land over any other person:

Sub-section (1) of Section 11 declares, where a reconnaissance permit or prospecting licence has been granted in respect of any land, such permit holders or licensee shall have a preferential right for obtaining a prospecting licence or mining lease, in respect of that land over any other parson. Sub-section (2) of Section 11 of the Act deals with persons who do not possess such permits or licence. It is in three parts. The first part deals with a case to which the Sub-section (1) is not applicable and where the State Government has not notified in the Official Gazette the area for grant of reconnaissance permits or prospecting licence or mining lease. In respect of such land if two or more persons apply for a permit, licence or a lease in respect of any land in such area, the applicant whose application was received earlier, shall have the preferential right to be considered for grant of reconnaissance permit, prospecting licence or mining lease over the applicant whose application was received latter. Thus, a preferential right is created in favour of an applicant who has made an application at an earlier point of time to the applicant who has made an application later, Sub-section (5) however makes it clear that notwithstanding this preferential right, created in favour of an applicant who has made an application at an earlier point of time, the State Government may, for any special reasons to be recorded, grant a reconnaissance permit, prospecting licence or mining lease, to an applicant whose application was received later in preference to an Page 0179 application whose application was received earlier. Thus, after recognizing the preferential right of an applicant, the State has reserved the right to ignore the said right for special reasons to be recorded. In other words, the intention of the legislature was not to completely wipe out such preferential right which is vested in an applicant, by virtue of filing an application at an earlier point of time in respect of a land which is not notified in the Official Gazette. Thereafter, the first proviso to Sub-section (2) of Section 11 of the Act provides, where an area is available for a grant of reconnaissance permit, prospecting licence or mining lease and the State Government invites applications by notification in the official Gazette for grant of such permit, licence or lease, all the applications received during the period specified in such notification and the applications which had been received prior to the publication of such notification in respect of the lands within such area and had not been disposed of, shall be deemed to have been received on the same day for the purposes of assigning priority under this sub-section. Thus, once a notification is issued under this proviso calling for applications, persons who have made applications prior to the notification would loose their preferential right and their applications would be considered along with the applicants who filed application in pursuance of the notification. This first proviso to Sub-section (2) of Section 11 of the Act was introduced by way of Amendment Act, 1999 w.e.f. 18.12.1999.
23. Therefore, the question for consideration is whether this proviso is prospective and it would take away the right of the preferential right provided under first part of Sub-section (2) of Section 11 of the Act by those applicants who had filed applications prior to coming into force of this provision.
24. Neither under the Act nor under the Rules till 1980 there was any provision which conferred any power on the State Government to reserve any area. The said provision was introduced for the first time in the year 1980. In terms of the said provision for reserving any area a notification has to be issued which is to be duly published in the official gazette. Admittedly no such notification reserving any area has been issued by the State Government, at any rate in respect of the lands in question. Therefore, in the absence of reservation the question of dereserving it under Rule 59 would not arise. The notifications reserving the land in question was issued somewhere in 1959, 1961 and 1965. The impugned notifications are issued denotifying the land on the assumption that these lands are notified by the aforesaid notifications of 1959, 1961 and 1965. During that period the Government had no power to issue such notification. Therefore, even if such notifications are there they are issued without authority of law and do not carry any weight. Accordingly, the notifications issued dereserving such lands has no legal effect. The net effect of the denotification is it is as if these lands were never reserved. In respect of such lands Section 11(2) of the MMRD Act confers preferential rights on applicants, on the basis of seniority. The lands which are now notified for such grant were admittedly not granted to any person so far. There is no cancellation of such grants. It is not a case of the lessee dying before the lease could be executed and the land being available Page 0180 for fresh grant. It is not a land reserved by the State for exploitation by itself or by the State company, in respect of such land the Government could not have issued any notification purported to be under Rule 59 of the Rules. Therefore the effect of the impugned notification is, these petitioners who had a preferential right by virtue of Sub-section (2) of Section 11 are denied such preferential rights.
26. The impugned notification dated 17.2.2003 makes it clear that an area of 11,620.56 sq. Kms. in extent which was reserved for state exploitation of various minerals in the past now stands dereserved. In pursuance of the dereservation the said area is thrown open for consideration of grant of mineral concessions as per Rule 59 of the Rules by the competent authority. It is in pursuance of the aforesaid notification the other impugned notification dated 15.3.2003 is issued calling for applications for grant of mining lease. The said notification made it clear that the availability of the area published is subject to the clearance from the revenue department for mining activities and compliance of MM(D&R) Act, 1957 and the M.C. Rules and all other relevant Acts and Rules by the applicants. It was further made clear that if the area is found to consist of forest lands, the clearance from the Forest Department under Section 2 of the Forest Conservation Act, 1980 for utilizing the area for non-forest activities should be obtained by the applicants. The lands which are the subject matter of the applications filed by the petitioners to these proceedings is now the subject matter of the notification. These petitioners in the absence of this notification, had a preferential right of consideration of their applications over the applicants, who have made applications subsequent to the date of their application. The effect of this notification is these petitioners have lost that preferential right. Notwithstanding the fact that these petitioners are waiting in the queue for decades, after complying with various requirements of law, now they are made to stand along with applicants, who may make an application in pursuance of the impugned notifications. No doubt as held by the Supreme Court no person has any right to exploit the minerals otherwise than in accordance with the provisions of the Act and the Rules. State Government is the owner of the minerals within its territory and the minerals vest in it. The State Government had the inherent right to reserve any particular area for exploitation in the public sector. But, the claim of the petitioners is also in accordance with the rules only. They have made applications in accordance with the Rules and Rule 11(2) confers a preferential right in favour of these petitioners who have made the applications at an earlier point of time. However, the said preferential right is not absolute. Sub-section (5) provides that, for Page 0181 any special reasons to be recorded the State Government may grant a lease to an applicant whose application was received later in preference to an application received earlier. Subject to the same, the Rules recognize a preferential right.