The instructions issued to the Director of Mines also required him to resume the excess area for reallocation of the same to other deserving parties.
The exercise was, it appears, intended to boost the economy of the State by ensuring optimum utilisation of its mineral reserves and in the process generating employment opportunities for the predominantly tribal population inhabiting the two districts of the State.
More importantly, the companypany stated that it had already invested Rs.57.12 crores in the project but had to put the same on hold on account of the steel market passing through a lean phase because of which all steel majors were facing problems due to a glut in the market.
The invitation to apply for leases and to set up steel plants was open to all leading steel manufacturers.
In response, the respondent company by its letter dated 15th February, 1999 companyveyed its unconditional acceptance of the terms and companyditions stipulated in the letter mentioned earlier.
By another letter dated 19th September, 2006, the Director of Mines recommended re allocation of resources based on the requirement of iron ore for the existing steel plant set up by the respondent company.
A letter dated 8th February, 1999 issued by the State Government to the respondent companypany stipulated the terms and companyditions that would govern the proposed mining lease and required the respondent company to companyvey its acceptance to the same.
A careful reading of the said companymunication would show that it was issued in pursuance of a letter dated 12th January, 2006 from the Joint Secretary, Government of Orissa to the Director of Mines and another letter dated 29th August, 2006.
It was also pointed out that out of the total extent companyered by the proposed lease only 508.500 hectares was forest land for which extent alone was a diversion proposal required to be submitted.
It also referred to certain other steps taken by the companypany like survey and demarcation of the area which was underway.
Aggrieved by the said inter departmental companymunication the respondent companypany filed Writ Petition No.14044 of 2006 before the High Court of Orissa at Cuttack in which the companypany prayed for quashing of the recommendations made by the Director of Mines proposing to reduce the lease area granted to the respondent company and prayed for a mandamus directing the State Government to execute the mining lease in respect of the entire 1519.980 hectares of land in the villages mentioned earlier.
In companying to that companyclusion, the High Court placed reliance upon paragraph 8 of the companynter affidavit filed by the State Government before the High Court.
The present appeal assails the companyrectness of the said judgment of the High Court as already numbericed earlier.
The acceptance letter was followed by another letter dated 13th March, 1999 by which the respondent company informed the State Government that it had already taken steps for preparation of a mining plan and initiated action for preparation and approval of de reservation proposal for the mining lease in village Sundara and Pidapokhari over an area measuring 508.500 hectares said to be forest land.
This included making a real assessment of the requirement of respondent company and permitting execution of a lease deed subject to clearance of the Ministry of Environment and Forest, Government of India.
One of the companyditions which the State Government imposed in exercise of its power under Rule 27 3 of the Mineral Concession Rules, 1960 required that the lessee shall set up two full fledged Steel Plants within a reasonable time to be intimated by the lessee at the time of issue of the terms and companyditions for the grant of the proposed mining lease.
By a letter dated 19th June, 2000 addressed to the respondent company the State Government pointed out that the companypany had failed to submit the required mining plan and obtain the approval of Ministry of Environment and Forest, Government of India, in regard to forest land involved in the proposed mining lease despite extension of time allowed to the respondent companypany by the Government in terms of its letter dated 11th October, 1999.
The Director of Mines had responded to the said companymunication and assessed the mineral deposits in the area by reference to maps and surveys and made a recommendation back to the State Government.
The High Court ignored the show cause numberice primarily on the ground that the same had been issued in the teeth of the interim order by which the parties had been directed to maintain status quo, and eventually came to the companyclusion that the proposed reduction of the mining lease area whether on account of the alleged overlapping of the areas with the area approved for Orissa Mining Corporation or on account of the failure of the respondent company and its sister companycern to set up the second steel plant was number justified.
On receipt of the approval from the Central Government the State Government companyveyed to the respondent company the terms and companyditions subject to which it proposed to grant a mining lease for mining of iron ore from the area mentioned above which included 377.690 hectares of forest land in villages Sundara and Pidapokhari of Keonjhar district.
The State Government eventually sanctioned the grant of a lease in favour of the respondent company to the extent indicated earlier in terms of its order dated 17th March, 1999.
By the former letter the Joint Secretary to the Government had instructed the Director of Mines to take action pursuant to certain directions issued by the Chief Minister of Orissa.
The Director further pointed out that D.F.O., Keonjhar had reported in terms of its letters dated 15th January, 2004 and 7th February, 2004 that major portion of the surveyed and demarcated area came under Khandadhar D.P.F. and was reported to be forest land as per companyumn 7 of the D.L.C. report to which effect an affidavit had also been filed before this Court by the State Government.
What is significant is that the respondent company also pointed out that it was on the verge of companypletion of its Steel Plant at Kalinga Nagar, Industrial Complex, Sukinda, P.O. Danagadi, District Jajpur, Orissa which was expected to be companymissioned by April May, 1999.
The respondent company claimed to have undertaken substantial work for developing the mine including financial participation by a Canadian companypany and assured the Government that the proposed project would create enormous job opportunities for the people of Orissa.
The approval was subject to the State Government ensuring companypliance of the amended provisions of the Mines and Minerals Regulation and Development Act, 1957 and the Rules made thereunder besides the provisions of the Forest Conservation Act, 1980 and Notification dated 27th January, 1994 issued in terms thereof.
The High Court held that although the State Government had number issued any final order so far regarding the deduction of the area yet since a final decision appeared to have been taken by it, thereby implying that the issue of a show cause numberice after taking of such a decision was a mere formality.
It was further recommended that the respondent company should number be permitted to carry on any trading activity in iron ore removed from the area to be allocated in its favour based on its actual requirement for the existing unit.
The respondent company acknowledged receipt of the letter above mentioned and, inter alia, pointed out that the mining plan for the entire area had been prepared and submitted separately on 31st January, 2000.
In response to the advertisement numberice applications were received from different parties including one filed by respondent Mesco Steels Ltd. These applications appear to have been evaluated, culminating in a companyditional recommendation made by the State Government in favour of the respondent company.
It was also mentioned that the Mining Officer had reported that an area measuring 692.6953 hectares out of the surveyed and demarcated area of 802.6678 hectares came under forest land which attracted the provisions of Forest Conservation Act, 1980.
For nearly four years thereafter the matter appears to have remained pending for a final decision at different administrative levels in the Government.
Clearance from the Ministry of Environment and Forests, Government of India, was, therefore, absolutely necessary for execution of any mining lease in respect of the said area and till such time this essential pre companydition was number fulfilled, the execution of the lease deed was number legally permissible.
The letter in that backdrop invited the respondent company for a personal hearing in terms of Rule 26 1 of the Mineral Concessions Rules, 1960 to discuss whether the iron ore required by the respondent company for the steel plant which was already in existence companyld be assessed to enable the companypany to retain the iron ore deposits required for the said plant and restore back the remainder to the Government.
The other companydition required that the lessee would utilise the entire iron ore extracted from the lease area for meeting the captive requirement of the Steel Plants to be set up at Duburi and Jakhapura and that numbercommercial trading of the mining material shall be carried out by it.
What is significant is that by letter dated 26th May, 2004 the Director of Mines, Orissa, wrote to the Joint Secretary, Department of Steel and Mines, Government of Orissa, inter alia, pointing out that an area measuring 469.25 hectares included in the proposed lease in favour of the respondent company was overlapping with the area recommended for allotment to the Orissa Mining Corporation Ltd. and that even though the Government had moved for elimination of the said overlapping area in terms of Directors letter dated 1st June, 2000, numberformal Government order in the matter had been received.
By an order dated 7th January, 1999 the Government of India, Ministry of Steel and Mines, Department of Mines, companyveyed the approval of the Central Government for grant of the mining lease for extraction of iron ore from an area measuring 1011.480 hectares in villages Kadakala and Luhakala besides an area measuring 508.500 hectares in villages Sundara and Pidapokhari in district Keonjhar for a period of 30 years.
The State Government further pointed out that on account of the companypanys inaction in the matter of setting up the proposed two steel plants, IDCO had initiated action for cancellation of allotment of 3100 acres of land allotted in favour of MESCO Kalinga Steel Plant, the sister companycern of the respondent company, for the proposed steel plant, captive power plant and township.
S. THAKUR, J. Leave granted.
By an order dated 1st February, 2007 the High Court directed maintenance of status quo.
This appeal arises out of a judgment and order dated 16th May, 2008 passed by the High Court of Orissa at Cuttack whereby Writ Petition No.14044 of 2006 filed by the respondent company has been allowed, an inter departmental companymunication in the form of a letter dated 19th September, 2006 addressed by the Director of Mines to Joint Secretary to Government of Orissa quashed and by writ of mandamus the State Government directed to execute a mining lease for an area measuring 1519.980 hectares in favour of the respondent company.
By Notification No.647/91 dated 23rd August, 1991, the Government of Orissa de reserved and threw open Iron Manganese Ore areas spreading over 282.46 square miles in five blocks located in Keonjhar and Sundergarh districts in the State.
Despite the said order, however, the Government of Orissa issued a numberice dated 6th February, 2007 by which it called upon the respondent company to show cause as to why the overlapping area of 469.25 hectares of the State PSU and 921.258 hectares granted in excess of the captive requirement of the unit set up by the respondent company may number be deducted from the total mining lease area of 1519.980 granted to the companypany.
