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661).” Issue Nos. 6 and 7 relate to preferential right of Geomin Minerals & Marketing (P) Ltd. under Section 11 of the MM (D&R) Act and validity of recommendation made by the State Government under Section 11(5) of the said Act in favour of POSCO. Both the issues were determined by the High Court in favour of Geomin Minerals & Marketing (P) Ltd., and against the POSCO. Referring to Section 11(2), (3) and (4) the High Court held that the Geomin Minerals & Marketing (P) Ltd. has preferential right for grant of licence and lease and that the recommendation made by the State Government under Section 11 (5) in favour of POSCO is invalid.

Stand of Geomin Minerals & Marketing (P) Ltd.

14. Learned counsel for the Geomin Minerals & Marketing (P) Ltd. made the following submissions:

14.1 A preferential right in the field of mining is an important right.

The preferential right conferred under un-amended Section 11 upto 1999 cannot be curtailed under amended Section 11. Since Geomin Minerals & Marketing (P) Ltd. applied on 29th October, 1991 the law that was applicable on the said date of application i.e. an amended Section 11 shall be applicable for consideration of application filed by Geomin Minerals & Marketing (P) Ltd.

27. The State of Orissa and some others have taken plea that amended Section 11, as amended by Act 38 of 1999 w.e.f. 20th December, 1999, would apply.
28. According to the State of Orissa the preferential right envisaged in Section 11(1) is considerably distinct from the preference envisaged by Section 11(2). It is only in the case of Section 11(1) where a person has already held a reconnaissance permit or a prospective licence that he gets a preferential right for obtaining a prospecting licence or mining lease.

It may be seen that Section 11(5) is subject to the provisions of sub- section (1) and, therefore, the State Government has no authority to give special reasons for overriding the preference. Further, Section 11(5) is notwithstanding Section 11(2), thus the preference under Section 11(2) can be overridden by special reasons.

29. Another distinction is that while Section 11(1) uses the expression "shall have a preferential right for obtaining", Section 11(2) uses the expression "shall have the preferential right to be considered for grant". Thus, under Section 11(2), the preferential right is only in relation to consideration. The preference envisaged under Section 11(2) does not mean that the other applicants are not to be considered. It could only mean that if on an inter se consideration, the applicants are at par, then the prior application may be given a preference.