The Supreme Court on Monday ordered that status quo be maintained on the Orissa High Court judgment cancelling the State's decision to grant prospective iron ore mining licence to the South Korean steel major, Posco, over the Kandadhar mines.A Bench of Justices R.V. Raveendran and A.K. Patnaik issued notices to the Centre, Geomin Minerals and Marketing (P) Ltd. and others, on cross appeals filed by the State, Posco and Geomin Minerals challenging the July 14 judgment, which also quashed the notification issued in 1962 on mining leases.

Acting on a petition from Geomin Minerals, the High Court had directed that the licence recommended by the State in 2009 to Posco be cancelled. It held that Geomin should have the preferential right as it had applied for licence way back in 1991. The High Court said the notification was violative of Section 11(5) of the Mines and Minerals (Development and Regulation) Act, 1957, as it failed to record a special reason why Posco, which applied last, should get the licence out of turn.In its special leave petition (SLP) against this judgment, the State said the December 6, 1962 notification (which was never placed before the High Court), declared unreserved those mineral areas which had otherwise been notified as reserved for exploitation in the public sector since 1962. It said the recommendation to award licence to Posco over previous applicants was not in anyway violative of the Mines and Minerals Act.

The State had additionally considered Posco's application under Section 11(3), which empowered it to look into the special knowledge and experience of the parties applying for licence, their financial resources, the nature and quality of technical staff employed and the investment they proposed to make in the mine or industry, while deciding in its (Posco's) favour, the SLP said.

The petition assailed the High Court judgment sitting in appeal on the government's policy decision. The court was not justified in quashing the notification of 1962, especially when it was settled that the State was the owner of such areas, and any grant would be subject to the Centre's approval, the petition said.

The State sought an immediate stay, contending that the judgment would jeopardise Posco's plans to set up a steel plant in the State. The licence would have empowered Posco to explore and mine the Kandahar hills for iron ore, the SLP said.

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