In Brief
Geomysore Services and Deccan Gold were granted reconnaissance permits to explore gold mining areas in Karnataka. They conducted reconnaissance and applied for prospecting licences (PL). Hutti Gold Mines (HGML) then requested the State Government to reserve the same areas for itself as a government undertaking. The Central Government rejected this reservation request. The Karnataka High Court quashed the rejection, holding that reservation under Section 17A(2) is separate from preferential rights under Section 11. The Supreme Court allowed the appeals, holding that while the State owns minerals, the Union controls their regulation. The Central Government can consider all relevant factors—including the prior PL applications and national investment policy—when approving reservations. Section 11 and Section 17A(2) operate in separate spheres. The Central Government was justified in rejecting the reservation request.
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