Jayaswal Necom Industries Ltd. v. Union of India

2.23 The State Government, on 27.04.2006, informed the Ministry of Mines that if the Ministry of Mines considers it necessary to reserve the whole of deposit “F” for mining to be done by SAIL, the State Government has no objection to such re-reservation in favour of SAIL in view of commitment of Ministry of Steel vide their letter dated 17.1.2005, issued with the approval of Minister of Steel, to meet the requirement of iron ore of the petitioner.

2.24 SAIL vide its letter dated 16.06.2006, confirmed to IBM that Raodongri deposits need to be reserved only due to its geographical location otherwise operation in the remaining 6 blocks of Deposit „F‟ will become unviable. Accordingly, in view of the above assurances from the Ministry of Steel, SAIL and no objection from State, the Ministry of Mines, on 20.07.2006, in exercises of the powers conferred by sub-sec.(1A) of Sec.17A of the MMDR Act and in supersession of the notification dated 03.12.2004, re-reserved the iron W.P.(C) 78/2009 Page 20 ore „F‟ block deposits in Rowghat area in Kanker and Bastar districts for undertaking prospecting or mining operation through SAIL.

2.25 The petitioner has also additionally placed reliance on various internal note sheets of Ministry of Mines and Ministry of Steel and documents received by the petitioner on 24.08.2007, 07.09.2007 and 24.09.2007 from Ministry of Mines and Ministry of Steel under the Right to Information Act, 2005, pursuant to the orders of Central Information Commissioner on 06.08.2007. The Petitioner submits that the said internal note sheets and documents reveal how the Petitioner was deprived of its right over the mining area inspite of the express and written promise/commitment that SAIL/BSP would supply iron ore as per requirement of the Petitioner. However, the promise/commitment was not adhered by SAIL/BSP inspite of repeated reminders and requests by the Petitioner and the Ministry of Mines.

2.26 Thereafter, the Ministry of Mines on 30.08.2006 issued an office memorandum to Ministry of Steel regarding supply of iron ore by SAIL/BSP to the petitioner on cost plus basis in view of the letter of Ministry of Steel dated 17.01.2005. The petitioner on 07.09.2006 W.P.(C) 78/2009 Page 21 wrote to Joint Secretary, Ministry of Steel to advise BSP/SAIL to enter into a contract for supply of Iron Ore on cost plus 5% basis immediately from the existing mines of BSP till deposit „F‟ of Rowghat is developed and from deposit „F‟ of Rowghat once it gets developed.

2.27 The petitioner on 01.12.2006 wrote to Ministry of Mines with a request to impose a condition of supply of iron ore by BSP/SAIL to the petitioner from its existing mines till Deposit „F‟ is developed and from deposit „F‟ once it gets developed by BSP/SAIL on cost plus 5% basis while granting prior approval for mining lease in terms of Rule 27(3) of the Mineral Concession Rules, 1960.

2.28 The Petitioner on 27.12.2006, wrote to the Hon‟ble Minister, Ministry of Steel for advising BSP/SAIL to enter into a contract with Petitioner for supply of iron ore on cost plus 5% basis from the existing mines of BSP till deposit „F‟ of Rowghat is developed and from such deposit once it is developed. The petitioner wrote to the Under Secretary, Mineral Resources Department, Government of Chhattisgarh on 22.02.2007 requesting that the condition of supply of iron ore by BSP/SAIL to petitioner should be incorporated in the W.P.(C) 78/2009 Page 22 mining lease under Rule 27(3) of the Mineral Concession Rules,

1960.

2.29 The Joint Secretary, Mineral Resources Department, Government of Chhattisgarh on 23.02.2007 rejected the Mining Lease application for 195 Ha applied on 28.02.2001 taking into consideration the communication dated 17.01.2005 where under it was agreed that BSP/SAIL would supply iron ore as per the requirement of Petitioner at cost plus basis and the notification dated 20.07.2006 re-reserving the Rowghat Area in favour of SAIL. The Secretary, Ministry of Mines on 10.04.2007 wrote to Secretary, Ministry of Steel stating that vide letter dated 17.01.2005, Ministry of Steel has committed that SAIL would supply iron ore to JNIL based on which the entire area of Rowghat F deposit was reserved for SAIL and requested the Secretary, Ministry of Steel to take necessary action in this and impose Rule 27(3) condition in the mining lease to be executed in favour of SAIL.

2.30 The Secretary (Mines), Ministry of Mines, again on 19.07.2007 wrote to Secretary (Steel), Ministry of Steel for resolving the matter and supplying iron ore by SAIL/BSP to petitioner. The petitioner also W.P.(C) 78/2009 Page 23 made a representation to Ministry of Steel and SAIL on 29.07.2008 requesting supply of iron ore by SAIL/BSP. However, SAIL, vide its letter dated 22.08.2008, informed the petitioner that it is unable to commit supply of iron ore to the petitioner. In view of failure of Ministry of Steel to decide on the representation dated 29.07.2008, the petitioner filed Writ Petition being W.P.(C) 6751/2008, inter alia praying for direction to the Ministry of Steel to decide on the representation. Similarly, the Ministry of Steel, vide its letters dated 31.10.2008 and 12.11.2008, informed the petitioner that it cannot accept the request of the petitioner. Accordingly, in view of the decision of the Ministry of Steel the petitioner withdrew the W.P.(C) 6751/2008 and the petitioner has filed the present Writ Petition bearing W.P.(C) 78/2009, challenging the letter dated 22.08.2008 issued by SAIL and letters dated 31.10.2008 and 12.11.2008 issued by Ministry of Steel.

2.31 The petitioner has also placed reliance on the three legal opinions which were sought from the Ministry of Law & Justice, once by the Ministry of Mines and twice by the Ministry of Steel after the passing of order dated 16.09.2009 by this Court in the W.P.(C) 78/2009 Page 24 present writ petition. Sh. Rattan Singh, the learned Senior Counsel for petitioner has argued that in view of the Government of India (Allocation of Business) Rules, 1961, framed by the President of India under Article 77(3) of the Constitution of India and circulars issued by the Ministry of Law, the legal opinion given by the Ministry of Law is binding upon all the ministries. Resultantly, SAIL is bound by the directions of its administrative ministry i.e. the Ministry of Steel. The petitioner relies of the said legal opinions which are as hereunder: At the request of Ministry of Mines, Ministry of Law gave a legal opinion on 19.01.2010, to the Ministry of Mines that the petitioner is entitled to supply of iron ore by SAIL. At the request of Ministry of Steel, Ministry of Law gave a legal opinion on 23.08.2010 to the Ministry of Steel. It opined that, “JNL has legitimate expectation and the same may not be illogical. Therefore, the denial of the same after repeated assurances is prejudicial to the interest of the JNIL and may amount to breach of the implied promise made in this regard.” It further opined that, “it will not be unfair to conclude that there is an implied promise on the part of SAIL to supply the iron ore immediately.” It was also noted that, “The SAIL being a PSU under the administrative control of the ministry of steel, the central government can issue directions to it to adhere to the implied promise to make the supply of iron ore to JNL on cost plus basis.” W.P.(C) 78/2009 Page 25 Upon a request by the Ministry of Steel, the Ministry of Law on 26.05.2011 gave a second legal opinion re-affirming its earlier opinion. “The matter was perused once again. In this regard it is pertinent to mention that our earlier opinion dated 27.8.2010 has been recorded after considering all the relevant papers/material placed on the file including the opinion obtained by SAIL privately papers/material placed on the file including the opinion obtained by SAIL privately from the then Ld. ASG. Therefore, it may not be legally correct to say that our earlier opinion has been recorded without considering the relevant facts and material.”

2.32 Sh. Rattan Singh has also argued that the benefit under the said policy of exclusive reservation of Rowghat „F‟ deposit in favour of SAIL was given effect to by way of a Central Government notification under sec. 17A (1A). However, SAIL refused to adhere to this corresponding obligation on part of SAIL to supply iron ore to the petitioner, after securing the mining rights for the entire Rowghat „F‟ block including the mining area for which the Petitioner had prior approval under section 5 (1) of MMDR Act, 1957. The Petitioner thus has argued that SAIL/BSP in view of the aforesaid is under an obligation to supply iron ore to the Petitioner more particularly once it has taken the benefit of the policy by enjoying the reservation of the entire Rowghat „F‟ deposit including Raodongri (concerned area), it cannot retreat from its corresponding obligation attached to the W.P.(C) 78/2009 Page 26 benefit of the policy to supply iron ore to the Petitioner. Petitioner argues that a person cannot blow hot and cold or approbate and reprobate and has placed reliance on the decision of on R.N. Gosain V Yashpal Dhir, (1992) 4 SCC 683.

2.33 It was also argued by learned Senior Counsel that the action of the respondents in not supplying iron ore to the petitioner is hit by the doctrine of Legitimate Expectation. The total inaction of the BSP/SAIL as also the Ministry of Steel in commencing supply of iron ore to the petitioner makes it clear that after the issuance of the notification dated 20.07.2006, they have taken a stand of not supplying any iron ore to petitioner. The inaction of the Respondents with a purpose to either thwart or avoid such promise/assurance amounts to a denial of the Petitioner‟s legitimate expectation. The respondents accordingly are bound to act in accordance with and honour their assurance, promise and commitment. Sh. Rattan Singh, the learned Senior Counsel has placed reliance on the Union of India vs Hindustan Development Corporation, (1993) 3 SCC 499. It was also argued that petitioner that the actions of the respondents in not supplying iron ore to JNIL is hit by the doctrine of promissory W.P.(C) 78/2009 Page 27 estoppel and placed reliance on State of Punjab V Nestle India Ltd. & another, (2004) 6 SCC 465 and Motilal Padampat Sugar Mills V State of Uttar & others, (1979) 2 SCC 409, Manuelsons Hotel Pvt. Ltd. V State of Kerala & others, (2016) 6 SCC 766, State of Jharkhand V Brahmaputra Metallics Ltd. 2020 SCC Online Supreme Court 98 and State of Bihar V Kalyanpur Cements Ltd.,

2.34 The petitioner in view of the changed circumstances due to lapse of 15 years has prayed that the relief prayed in the writ petition be moulded. The petitioner has submitted that the total quantity to be supplied by SAIL is 80 million tones instead of 48 million tones agreed, as with the change in mining laws, i.e. Section 8A(3) of MMDR Act, 1957, inserted vide Amendment Act, 2015, the Mining Lease period has been extended from 30 years to 50 years. The petitioner‟s requirement of 48 MT was determined by SAIL by considering the grade of Iron Ore to be minimum of 63%. In view thereof, the Fe in iron ore should be minimum 63%, In case of lower than 63% Fe, pro-rata quantity to be increased. The petitioner relies on the decision of the Supreme Court in Vashisht Narayan Kumar W.P.(C) 78/2009 Page 28 V State of Bihar & others, 2024 SCC Online SC 2, Pr. 26. Accordingly, the Petitioner has sought for the following directions to be issued to the respondents: - Respondent No.4/SAIL to start immediate supply of minimum of 1.[6] million tonnes of Iron Ore per year for a period of 50 years totaling to 80 million tonnes of the grade agreed by SAIL in the letter dated 27.10.2003 on cost plus 5% basis ex mines from their existing Dalli / Rajhara mines and Rowghat mines in Chhattisgarh to Petitioner/JNIL in the same proportion of sized Ore and Ore fines being generated from the said mines. Declare that the supply of iron ore to JNIL will not amount to sale as SAIL would be supplying iron ore in view of the promises/ commitment made to JNIL as well as in consideration of JNIL giving up its mining rights. Pass a direction that the Petitioner reserves its right to separately claim its losses / damages suffered during last 20 years due to non-supply of committed iron ore by SAIL.

3. The Respondent No.1/ Ministry of Mines, has submitted that the issuance of Notification dated 20.7.2006 in supersession of Notification dated 03.12.2004, reserving an area of 2028.797 hect. covering seven sub blocks of „F‟ Block Deposit of Rowghat was based on the letter dated 27.04.2006 received from the State Government giving no objection and the Reservation was done over an area over which Prospecting license or Mining Lease was not held W.P.(C) 78/2009 Page 29 by any anyone before. The Respondent No.1 further submits that the commitment if made between two commercial parties if not part of the mining lease deed is not covered under the MMDR Act. The Respondent No.1 further submits that the commercial agreements lie between two commercial parties and the Respondent No.1 is agreeable to any directions passed by this Court.

4. The respondent No.2/ Ministry of Steel has submitted that the proposal of supply of iron ore by SAIL/BSP to the Petitioner never attained finality as quantity, quality, price and period for which the iron ore was to be supplied was never determined. The Respondent No.2, further submits that supply of iron ore to the Petitioner would be in contravention of Article 14 and 19 of the Constitution. The Respondent No.2, further submits that the Dalli-Rajhara iron ore mines which supplies iron ore to Respondent No.4, SAIL/BSP has dwindled and therefore in the face of the expansion plans of Respondent No.4, it is impossible for Respondent No.4 to supply iron ore to the Petitioner. The Respondent No.2, further submits that there can be no estoppel against the statutory power exercised under Section 17A (1A) of the MMDR Act. The Respondent No.2 further W.P.(C) 78/2009 Page 30 submits that the doctrine is not applicable as it is a policy decision in the wake of public interest.

5. The respondent No.3/ State of Chhattisgarh has submitted that a mining lease has been executed in favour of the Respondent No.4/SAIL for Rowghat Deposit F Area of 2028.797 ha on 21.10.2009 for 20 years. The respondent No.3 further submits that the mining leases granted/approved in favour of the Petitioner is sufficient to meet the requirement of the Petitioner. Further, the respondent no. 3 submits that the Petitioner is not a sick unit in 2010.

6. The respondent no.4/ Steel Authority of India has submitted as hereunder: a. Respondent No.4 has never given any assurances to supply iron ore to the Petitioner and as such there is no obligation of supply. The proposals of supply of iron ore never attained finality. The Reservation Notification dated 28.07.2006 did not encompass a condition wherein the Respondent has to supply iron ore to Petitioner. b. The relief claimed by the Petitioner is supposedly under Doctrine of Promissory Estoppel and Legitimate Expectation. The relief claimed is based on only two documents i.e. a Letter dated 17.01.2005 and an office memorandum of Ministry of Mines dated 30.08.2006. None of these documents suggest any certitude of cause of action in favour of the Petitioner. W.P.(C) 78/2009 Page 31 c. The court cannot go into the thicket of commercial transaction in a Writ Jurisdiction and the Writ Petition will not be maintainable in case of dispute question of facts. The Respondent relies on Shubhas Jain V Rajeshwari Shivam & others, (2021) 20 SCC 454. d. The Petitioner has sought quashing of the notification dated 20.07.2006, without challenging the notification being ultra vires. e. The said letter and office memorandum has not been sent by designated authority and hence of no value and placed reliance on Jasbir Singh Chhabra V State of Punjab (2010) 4 SCC 192. f. Interdepartmental communications and file notings in departmental files do not have sanction of law and there is always an exercise of review until a final decision is taken. The Respondent placed reliance on Union of India V Vartak Labour Union, (2011) 4 SCC 200, State of Uttaranchal V Sunil Kumar Vaish, (2011) 8 SCC 670. g. It was further submitted that the Legal Opinions of Ministry of Law which states that JNIL has Legitimate Expectation is perverse. h. It was further contended that there is no fundamental right in mining. Promissory Estoppel is not attracted due to Statutory Prohibition u/s 17A(1A) of the MMDR Act and there is no Public Interest in favour of the Petitioner for mining of Iron Ore. The Respondent placed reliance on the decision of Monnet Ispat V Union of India & others, (2012) 11 SCC 1. i. The Petitioner has not done any prospecting over the area, whereas, SAIL was granted prospecting license over the entire Rowghat Deposit „F‟ block. W.P.(C) 78/2009 Page 32 j. The mining lease granted to Respondent No.4 does not contain any condition to supply iron ore, therefore, the Respondent cannot sell iron ore to the Petitioner. k. It was also argued that there is changed in circumstances after 20 years and the issue has become academic. It was contended that (a) JNIL is no longer a sick company and is presently a profitable company (b) JNIL has two operational mines at the present and therefore it can meet its present requirement (c) There has been a change of law with enactment of Rule 12B(i) of the Mineral (Other than Atomic and Hydro Carbons Energy Mineral) Concession Rules, 2016 and Section 8(5) of MMDR Act, 1957 (d) Respondent No.4 has made substantial investments for exploration of Rowghat mines. l. It was further contended that if relief is granted in favour of the Petitioner, it would discriminate against others, hence it would be violative of Art. 14 & 19 of the Constitution.

7. The Rowghat „F‟ Block deposit, iron ore mines are situated at Rowghat Hills, Malta Reserve Forest, situated in Naraynapur Forest Range, District Kanker in the State of Chhattisgarh (hereinafter referred as the „Rowghat „F‟ Block‟) and has a total of 7 iron ore reserves. There are three reserves in the Northern portion of the Rowghat „F‟ Block known as Raodongri, „A‟ Block and Tarhur and four reserves in the Southern portion known as Anjrel, Kargaon, Khakagaon and Tarkel. It is not in dispute that SAIL has made an W.P.(C) 78/2009 Page 33 application for mining lease of 500 ha of Northern portion of Rowghat „F‟ Block and whereas the Petitioner has made an application for 195 ha of Southern portion of Rowghat „F‟ Block was pending consideration. It has also not been disputed that the petitioner was sole and only applicant over the 195 ha. of Southern portion of Rowghat „F‟ Block which is evident from the content of minutes of the meeting dated 04.05.2001. The respondent No.1/Ministry of Mines has also affirmed in counter affidavit that no Prospecting License or Mining Lease was held by anyone with respect to the area in which the petitioner had filed its Mining Lease application. It is apparent that SAIL had never applied for Mining Lease for the area for which the petitioner had given its application for Mining Lease and vice versa. Thus, under the legal regime which existed prior to the MMDR, Amendment Act, 2015, which was based on the „first come first serve basis‟, a preferential right under section 11(2) of the MMDR Act, 1957, existed in favour of the petitioner.

8. While the aforesaid applications for Mining Lease of the Petitioner and SAIL were pending consideration, there were discussions with regards to the mining in the Rowghat iron ore reserve on the basis of W.P.(C) 78/2009 Page 34 cluster mining approach by giving mining operation to a single entity/SAIL so that there shall be minimum loss to the forest and at the same time mining activities can start in Rowghat area. However, in order to safeguard the interest of the private entities, in line with the National Mineral Policy, discussions also happened with regards to condition of supply of the iron ore by SAIL to private entities so that the mining rights of private entities are not affected and there is no accumulation of the minerals in the hands of the single entity.

9. It is in this backdrop that various communications and meetings were held between 04.05.2001 to 07.06.2002, which is evident from minutes of meeting dated 04.05.2001, 11.10.2001, letter dated 25.11.2001, 10.05.2002, 14.05.2002 and 07.06.2002 with all concerned which ultimately led to notification dated 16.07.2002, under sec. 17A(1A) of the MMDR Act, reserving the entire Rowghat „F‟ deposit containing all the seven blocks in favour of SAIL. In the meeting dated 11.10.2001, the Chairman SAIL had admitted that SAIL can start supplying iron ore to the petitioner from the day Mining Lease is granted to SAIL. The State Government of Chhattisgarh, on 25.11.2001 wrote to the Ministry of Mines and W.P.(C) 78/2009 Page 35 proposed that iron ore of Rowghat „F‟ deposits may be reserved for SAIL for BSP and Mining Lease sanctioned to them so that SAIL may start supplying iron ore to the petitioner. Moreover, SAIL vide its letter 07.06.2002 to Ministry of Mines asserted its need for reserving all the seven sub-blocks in „F‟ block of Rowghat area and assured that with the opening of the new mine at Deposit „F‟ of Rowghat, SAIL will be able to „meet the full requirement of iron ore‟ to Petitioner. The respondents did not dispute these correspondences or letters, therefore, the respondent No.4/SAIL or Respondent No.3/Ministry of Steel was not correct to contend that assurance of supply of iron ore to the petitioner was never given by them.

10. SAIL besides aforesaid letters in its counter affidavit filed on 11.02.2009 has also admitted in clear and express terms that the request by the Petitioner for supply of iron ore by SAIL on cost plus basis was contingent on immediate grant of mining lease to SAIL at Rowghat. It is an admitted position that mining lease was executed in favour of SAIL on 21.10.2009. It is therefore incorrect on behalf of the Respondent No.4/SAIL to contend that assurance of supply of iron ore was never given by SAIL. Rather, Respondent No.4/SAIL W.P.(C) 78/2009 Page 36 has not been able to explain what precluded the Respondent No.4/SAIL to honour its commitment of supplying iron ore to Petitioner upon grant of mining lease on 21.10.2009.

11. There cannot be any gainsaying that while SAIL had applied for Mining Lease of only 500 ha of Northern portion of Rowghat F Block, in view of the aforesaid policy decision which included the condition of the supply of iron ore to the Petitioner, SAIL vide the notification dated 16.07.2002, became beneficiary of the entire 2028.797 ha of Rowghat „F‟ Block containing all the seven blocks. It is relevant to note that above referred communications which are undisputed also reveals an important aspect that the entire iron ore mineral as contained in the entire 2028.797 ha of Rowghat „F‟ deposit was not required by SAIL as on 07.06.2002 and for the same reason SAIL clearly promised and committed that it will „meet the full requirement of iron ore‟ of the Petitioner, which is evident from communication dated 07.06.2002.

12. The fact that the reservation in favour of SAIL vide notification dated 16.07.2002 under sec. 17A(1A) of the MMDR Act, was with W.P.(C) 78/2009 Page 37 an understanding that SAIL/BSP will start supplying iron ore to the petitioner is also clear from the letters of Ministry of Mines, dated 12.11.2002 and 13.12.2002 to Ministry of Steel, which again has not been disputed by either of the respondents. Resultantly, when SAIL/BSP failed to bear the condition attached to the reservation of the entire Rowghat „F‟ deposits by way notification dated 16.07.2002, of supplying iron ore to the Petitioner, various meetings and correspondences ensued from 16.08.2002 to 03.12.2004 namely 12.11.2002, 13.12.2002, 28.02.2003, 06.03.2003, 23.04.2004, 09.06.2003, 16.06.2003, 14.08.2003 27.10.2003 which ultimately led to the de-reservation notification dated 03.12.2004 by the Ministry of Mines, by which the area of Rowghat F Block reserved in favour of the SAIL was reduced as a result of which certain portion of the Rowghat F was opened up so that Petitioner could be granted mining lease over the same. The respondents did not dispute these correspondences and have also been acted upon by them to secure the mining rights over entire Rowghat F block. It is relevant to note that the said understanding is not only evident from these correspondences but also from the various internal notings dated W.P.(C) 78/2009 Page 38 10.07.2003, 17.07.2003 13.09.2003, 31.10.2003, 18.12.2003, 15.01.2004 and 27.05.2004 received by the petitioner from the Ministry of Mines on 07.09.2007 and Ministry of Steel on 24.09.2007.

13. It is also relevant to note that the General Manager (Mines), BSP, on 27.10.2003, with the approval of Managing Director, BSP, wrote to the Director (Technical & Finance), SAIL confirming that it has been decided by BSP that instead of Koregaon block as suggested by the State Government, the block located at one side of deposit “F” i.e. Rowdongri along with a part of Block-A should be given to the Petitioner. Upon examination of the report of IBM, it was also stated that the petitioner‟s 30 years iron ore requirement was also assessed at 48 million tons (1.[6] MT x 30 years) which could be met with the de-reserved mine area. BSP had also stated that the actual requirement of iron ore for 1 million tones (MT) Hot Metal production for 30 as hereunder: Iron Ore Requirement 1 x 1.[6] = 1.[6] MTPA W.P.(C) 78/2009 Page 39 Requirement of ore for 30 years 1.[6] x 30 = 48.00 MT Geological Reserve of Raodongri = 47.42 MT Mineable Reserve @ 90% of Geological Reserve = 47.42 x

0.90 = 42.68 MT at 61.40% Fe Beneficiation losses (@ 14% = 5.98 MT The upgradation on beneficiation is likely to be around 2% i.e. from 61.40% to 63.40% Fe. Thus, Iron ore reserve available for hot metal production = 36.70 MT at 63.40% Fe The balance quantity required for JNL = 48.0 - 36.[7] = 11.30 MT The available reserve in cross section AA & BB of Block - A: Section AA = 2.035 MT Fe 61.58% Section BB = 12.097 MT Fe 64% TOTAL = 14.132 MT Fe 63.65% W.P.(C) 78/2009 Page 40

14. Therefore, SAIL/BSP has assessed the requirement of quality, actual quantity of iron ore for 1 million tones of Hot metal production by the petitioner for 30 years. As per SAIL/BSP, Iron ore required by the petitioner was calculated at 48 million tones with 63.40% Fe content. Accordingly, BSP/SAIL, proposed that said requirement of the Petitioner could be met if reserves of Raodongri and cross section AA & BB of Block – A is de-reserved. It is also relevant to note that the Respondent No.4/SAIL in its counter affidavit also admits the fact that the petitioner‟s existing capacity of steel production is 1 million tones. Furthermore, the internal notings dated 31.10.2003, received by the Petitioner from the Ministry of Steel on 24.09.2007 and the internal notings dated 27.05.2004 received by the Petitioner from the Ministry of Mines on 07.09.2007, shows that the Ministry of Steel had also agreed for de reservation of iron ore available in Raodongri and Cross AA & BB of Block – A. Therefore, the argument of SAIL and Ministry of Steel that the quality, quantity and period of iron ore reserve required by the petitioner was not finalized or crystalized is incorrect and contrary to communication and documents which are not disputed by SAIL/Ministry of Steel. Rather, W.P.(C) 78/2009 Page 41 the requirement of the Petitioner was first assessed by the Respondent No.4/SAIL and was agreed to be given up by way of dereservation of certain portion of mining area already reserved in favour of the Respondent No.4. Finally, this led to de-reservation notification dated 03.12.2004, by which the area reserved in favour of SAIL was reduced to 1702.700 hectares. Therefore, it is clear that dereservation vide notification dated 03.12.2004 under sec. 17A(1A) of the MMDR Act, 1957, was with a clear understanding that since SAIL/BSP has failed to supply iron ore to the Petitioner. Further, prior to issuance of 03.12.2024 de-reservation notification, the areas which can be de-reserved were identified by SAIL after assessing the requirement of Petitioner.

15. In furtherance to the aforesaid decision of the State Government as well as the Central Government to grant mining lease for iron ore in sub-block Rowdongri of Rowghat deposit “F” to the Petitioner, the State Government recommended the case of the Petitioner for grant of Prior Approval under section 5(1) of MMDR Act, 1957, for grant of mining lease. Accordingly, the Ministry of Mines on 06.12.2004 conveyed the approval of the Central Government under Section 5(1) W.P.(C) 78/2009 Page 42 of Mines and Minerals (Development & Regulation) Act, 1957, for grant of mining lease. The grant of prior approval in favour of the Petitioner for grant of mining lease has also not been disputed by the Respondents. Based on the S.5(1) approval, the Petitioner got a vested right for grant of mining lease in its favour as under the earlier regime of MMDR Act, 1957, once S. 5(1) approval was granted by the Ministry of Mines, on the recommendation of the State Govt. thereafter there was no impediment for grant of mining lease in favour of the petitioner.

16. The Supreme Court in the matter of Bhushan Power & Steel Limited vs Mr. S.L. Seal, Add. Secretary, Government of Odisha & others, (2017) 2 SCC 125, while dealing with the provisions of MMDR Amendment Act, 2015, has held that by insertion of Section 10A a right vested in 3 categories of applicant were protected. The relevant portion of the decision is reproduced as hereunder:

22. Newly inserted provisions of the Amendment Act, 2015 are to be examined and interpreted keeping in view the aforesaid method of allocation of mineral resources through auctioning, that has been introduced by the Amendment Act, 2015. Amended Section 11 now makes it clear that the mining leases are to be granted by auction. It W.P.(C) 78/2009 Page 43 is for this reason that sub-section (1) of Section 10A mandates that all applications received prior to January 12,2015 shall become ineligible. Notwithstanding, subsection (2) thereof carves out exceptions by saving certain categories of applications even filed before the Amendment Act, 2015 came into operation. Three kinds of applications are saved. …………

22.3. Third category is that category of applicants where the Central Government had already communicated previous approval under Section 5(1) of the Act for grant of mining lease or the State Government had issued Letter of Intent to grant a mining lease before coming into force of the Amendment Act, 2015. Here again, the raison d'etre is that certain right had accrued to these applicants inasmuch as all the necessary procedures and formalities were complied with under the unamended provisions and only formal lease deed remained to be executed. It would, thus, be seen that in all the three cases, some kind of right, in law, came to be vested in these categories of cases which led the Parliament to make such a provision saving those rights, and understandably so.”

17. The said decision is also followed by the Hon'ble Supreme Court of India in the matter of State of West Bengal & another V M/s Chiranjilal (Mineral) Industries of Bagandih & another, 2023 SCC OnLine SC 1149. W.P.(C) 78/2009 Page 44

18. Barely after a month of issuance of the above notification, and after the Petitioner getting prior approval over the area de-reseved, there was change of stand on part of the Respondent No.3/ Ministry of Steel. The Ministry of Steel on 17.01.2005, with the approval of Minister of Steel, wrote to Ministry of Mines that the entire Rowghat “F” block deposit may be reserved in favour of SAIL and whatever iron ore is required by the petitioner would be supplied by BSP on cost plus basis. Moreover, SAIL vide its letter dated 16.06.2006 confirmed to IBM that Raodongri deposits need to be reserved only due to its geographical location otherwise operation in the other blocks will become unviable. Further, this fact was also confirmed by the Ministry of Mines in its affidavit that the SAIL has conducted a survey in April, 2006 and it was found that the Raodongri sub block is geographically placed at the entrance of the deposit F and the only existing approach road to the other six sub blocks passes through Raodongri sub block and any other approach road would be circuitous and not feasible and would increase the transportation cost.

19. Ministry of Mines in its counter affidavit has also confirmed that the re-reservation of the entire area by the Ministry of Mines, on W.P.(C) 78/2009 Page 45 20.07.2006, in exercise of the powers conferred by sub-sec.(1A) of Sec.17A of the MMDR Act, was based on the no objection letter dated 27.04.2006, received from the State Government. From the perusal of the letter dated 27.04.2006, it is clear that the State Government had given its no objection for re-reservation of Rowghat “F” block deposit area based on the communication dated 17.01.2005, of the Ministry of Steel which mentions that SAIL would supply iron ore at cost plus basis to the Petitioner as per Petitioner‟s requirement. All the respondents were well aware of the fact that based on commitment by the Ministry of Steel for supply of iron ore on cost plus basis to the petitioner the State Government gave no objection to the Ministry of Mines to re-reserve the entire area of Rowghat F block in favour of SAIL/BSP. Further, based on no objection of the State Government, the Ministry of Mines, issued fresh Notification on 27.04.2006, re-reserving the entire Rowghat F block in favour of the SAIL.

20. It is thus clear from the various documents on record that reservation of the entire Rowghat F Block deposit in favour of SAIL, was done in view of commitment made by Ministry of Steel that W.P.(C) 78/2009 Page 46 whatever iron ore will be required by Petitioner shall be supplied by SAIL/BSP on cost plus 5% basis. However, upon reservation when SAIL failed to supply the iron ore to Petitioner, certain area i.e. Raodongri subblock was de-reserved vide notification dated 03.12.2004. Further, immediately after de-reservation, prior approval under Section 5(1) of MMDR Act, 1957, was granted in favour of the Petitioner for an area admeasuring 175 ha. However, when the Ministry of Steel vide its letter dated 17.01.2005, assured that if the entire Rowghat “F” block deposit is reserved in favour of SAIL then whatever iron ore is required by the petitioner will be supplied by BSP on cost plus basis then, on the said assurance, Ministry of Mines, which had earlier de-reserved the said area, re-reserved the entire area in favour of SAIL. Therefore, the condition of supply of iron ore to the Petitioner upon reservation of the entire Rowghat F Block in favour of SAIL was clear and explicit. Further, it can also be seen that State Government had rejected Mining Lease application of the petitioner on 23.02.2007, taking into consideration the communication dated 17.01.2005. Thus, the petitioner has altered its position by giving up its vested rights for grant of mining lease for W.P.(C) 78/2009 Page 47 Raodongri area on the assurance/commitment of supply of Iron Ore or cost plus basis by SAIL/BSP which is evident from all the above referred documents communication dated 17.01.2005.

21. The Ministry of Mines in its office memorandum dated 30.08.2006 addressed to Ministry of Steel had stated that the Ministry of Steel has decided that BSP/SAIL would supply iron ore to the Petitioner as per Petitioner‟s requirement on cost plus basis as intimated vide letter dated 17.01.2005 and forwarded the representation of the Petitioner for the needful. Similarly, the Ministry of Mines vide its letter dated 10.04.2007 requested the Ministry of Steel to look into the matter of imposing condition in the mining lease in terms of Rule 27(3) of the Mineral Concession Rules,

1960. However, SAIL vide its the letter dated 22.08.2008 and Ministry of Steel vide its letters dated 31.10.2008 and 12.11.2008 refused to supply iron ore to the Petitioner.

22. Therefore, it is clear from the above that there was an unconscionable departure by the Respondent No.4/SAIL and Respondent No.3/Ministry of Steel in not supplying iron ore to the W.P.(C) 78/2009 Page 48 Petitioner despite making such promises/commitment at various stages and despite availing the benefit out of the re-reservation of the entire Rowghat F block. Therefore, the actions of the Respondents is contrary to the well-established principles of doctrine of promissory estoppel.

23. Supreme Court of India in the matter of Motilal Padampat Sugar Mills Co. Ltd. v. State of U.P., (1979) 2 SCC 409 has held as

W.P.(C) 78/2009 Page 49 Bombay v. Secretary of State [(1905) ILR 29 Bom 580: 7 Bom LR 27].

23. It was also contended on behalf of the Government that if the Government were held bound by every representation made by it regarding its intention, when the exporters have acted in the manner they were invited to act, the result would be that the Government would be bound by a contractual obligation even though no formal contract in the manner required by Article 299 was executed. But this contention was negatived and it was pointed out by this Court that the respondents “are not seeking to enforce any contractual right: they are seeking to enforce compliance with the obligation which is laid upon the Textile Commissioner by the terms of the Scheme, and we are of the view that even if the Scheme is executive in character, the respondents who were aggrieved because of the failure to carry out the terms of the Scheme were entitled to seek resort to the Court and claim that the obligation imposed upon the Textile Commissioner by the Scheme be ordered to be carried out”. It was thus laid down that a party who has, acting in reliance on a promise made by the Government, altered his position, is entitled to enforce the promise against the Government, even though the promise is not in the form of a formal contract as required by Article 299 and that Article does not militate against the applicability of the doctrine of promissory estoppel against the Government.

33. The State, however, contended that the doctrine of promissory estoppel had no application in the present case because the appellant did not suffer any detriment by acting on the representation made by the Government: the vanaspati factory set up by the appellant was quite a profitable concern and there was no prejudice caused to the appellant. This contention of the State is clearly W.P.(C) 78/2009 Page 50 unsustainable and must be rejected. We do not think it is necessary, in order to attract the applicability of the doctrine of promissory estoppel, that the promisee, acting in reliance on the promise, should suffer any detriment. What is necessary is only that the promisee should have altered his position in reliance on the promise. This position was impliedly accepted by Denning J., in the High Trees case when the learned Judge pointed out that the promise must be one “which was intended to create legal relations and which, to the knowledge of the person making the promise, was going to be acted on by the person to whom it was made and which was in fact acted on”, (emphasis supplied). If a promise is “acted on”, “such action, in law as in physics, must necessarily result in an alteration of position”. This was again reiterated by Lord Denning in W.J. Alan & Co. Ltd. v. El Nasr Export and Import Co. [(1972) 2 All ER 127, 140] where the learned Law Lord made it clear that alteration of position “only means that he (the promisee) must have been led to act differently from what he would otherwise have done. And, if you study the cases in which the doctrine has been applied, you will see that all that is required is that the one should have acted on the belief induced by the other party”. Viscount Simonds also observed in Tool Metal Manufacturing Co. Ltd. v. Tungsten Electric Co. Ltd. [(1955) 2 All ER 657] that “... the gist of the equity lies in the fact that one party has by his conduct led the other to alter his position”. The judgment of Lord Tucker in the same case would be found to depend likewise on a fundamental finding of alteration of position, and the same may be said of that of Lord Cohen. Then again in Emmanuel Ayodeji Ajayi v. Briscoe Lord Hodson said:“This equity is, however, subject to the qualification (1) that the other party has altered his position”. The same requirement was also emphasised by Lord Diplock in Kammins Ballrooms Co. Ltd. v. Zenith Investments (Terquay) Ltd. [(1970) 2 All ER 871] What is necessary, therefore, is no more than that there should be alteration of position on the part of the promisee. The W.P.(C) 78/2009 Page 51 alteration of position need not involve any detriment to the promisee. If detriment were a necessary element, there would be no need for the doctrine of promissory estoppel because, in that event, in quite a few cases, the detriment would form the consideration and the promise would be binding as a contract. There is in fact not a single case in England where detriment is insisted upon as a necessary ingredient of promissory estoppel. In fact, in W.J. Alan & Co. Ltd. v. El Nasr Export and Import Co., Lord Denning expressly rejected detriment as an essential ingredient of promissory estoppel, saying: “A seller may accept a less sum for his goods than the contracted price, thus inducing (his buyer) to believe that he will not enforce payment of the balance: see Central London Property Trust Ltd. v. High Trees House Ltd. and D. & C. Builders Ltd. v. Rees [(1956) 3 All ER 837]. In none of these cases does the party who acts on the belief suffer any detriment. It is not a detriment, but a benefit to him to have an extension of time or to pay less, or as the case may be. Nevertheless, he has conducted his affairs on the basis that he has had that benefit and it would not be equitable now to deprive him of it.” We do not think that in order to invoke the doctrine of promissory estoppel it is necessary for the promisee to show that he suffered detriment as a result of acting in reliance on the promise. But we may make it clear that if by detriment we mean injustice to the promisee which would result if the promisor were to recede from his promise, then detriment would certainly come in as a necessary ingredient. The detriment in such a case is not some prejudice suffered by the promisee by acting on the promise, but the prejudice which would be caused to the promisee, if the promisor were allowed to go back on the promise. The classic exposition of detriment in this sense is W.P.(C) 78/2009 Page 52 to be found in the following passage from the judgment of Dixon, J. in the Australian case of Grundt v. Great Boulder Pty. Gold Mines Ltd. [(1938) 59 CLR 641 (Aus)]: “... It is often said simply that the party asserting the estoppel must have been induced to act to his detriment. Although substantially such a statement is correct and leads to no misunderstanding, it does not bring out clearly the basal purpose of the doctrine. That purpose is to avoid or prevent a detriment to the party asserting the estoppel by compelling the opposite party to adhere to the assumption upon which the former acted or abstained from acting. This means that the real detriment or harm from which the law seeks to give protection is that which would flow from the change of position if the assumption were deserted that led to it. So long as the assumption is adhered to, the party who altered his situation upon the faith of it cannot complain. His complaint is that when afterwards the other party makes a different state of affairs the basis of an assertion of right against him then, if it is allowed, his own original change of position will operate as a detriment. His action or inaction must be such that, if the assumption upon which he proceeded were shown to be wrong, and an inconsistent state of affairs were accepted as the foundation of the rights and duties of himself and the opposite party, the consequence would be to make his original act or failure to act a source of prejudice.” If this is the kind of detriment contemplated, it would necessarily be present in every case of promissory estoppel, because it is on account of such detriment which the promisee would suffer if the promisor were to act differently from his promise, that the Court would consider it inequitable to allow the promisor to go back upon his promise. It would, therefore, be correct to say that in order to invoke the doctrine of promissory estoppel it is enough to W.P.(C) 78/2009 Page 53 show that the promisee has, acting in reliance on the promise, altered his position and it is not necessary for him to further show that he has acted to his detriment. Here, the appellant clearly altered its position by borrowing moneys from various financial institutions, purchasing plant and machinery from De Smet (India) Pvt. Ltd., Bombay and setting up a vanaspati plant, in the belief induced by the representation of the Government that sales tax exemption would be granted for a period of three years from the date of commencement of the production. The Government was, therefore, bound on the principle of promissory estoppel to make good the representation made by it. Of course, it may be pointed out that if the U.P. Sales Tax Act, 1948 did not contain a provision enabling the Government to grant exemption, it would not be possible to enforce the representation against the Government, because the Government cannot be compelled to act contrary to the statute, but since Section 4 of the U.P. Sales Tax Act, 1948 confers power on the Government to grant exemption from sales tax, the Government can legitimately be held bound by its promise to exempt the appellant from payment of sales tax. It is true that taxation is a sovereign or governmental function, but, for reasons which we have already discussed, no distinction can be made between the exercise of a sovereign or governmental function and a trading or business activity of the Government, so far as the doctrine of promissory estoppel is concerned. Whatever be the nature of the function which the Government is discharging, the Government is subject to the rule of promissory estoppel and if the essential ingredients of this rule are satisfied, the Government can be compelled to carry out the promise made by it. We are, therefore, of the view that in the present case the Government was bound to exempt the appellant from payment of sales tax in respect of sales of vanaspati effected by it in the State of Uttar Pradesh for a period of three years from the date of commencement of the production and was not entitled to recover such sales tax from the appellant.” W.P.(C) 78/2009 Page 54

24. The Supreme Court of India in the matter of Manuelsons Hotels (P) Ltd. V State of Kerala, (2016) 6 SCC 766 has held as

19. In fact, we must never forget that the doctrine of promissory estoppel is a doctrine whose foundation is that an unconscionable departure by one party from the subject-matter of an assumption which may be of fact or law, present or future, and which has been adopted by the other party as the basis of some course of conduct, act or omission, should not be allowed to pass muster. And the relief to be given in cases involving the doctrine of promissory estoppels contains a degree of flexibility which would ultimately render justice to the aggrieved party. The entire basis of this doctrine has been well put in a judgment of the Australian High Court in Commonwealth of Australia v. Verwayen [Commonwealth of Australia v. Verwayen, (1990) 170 CLR 394 (Aust)], by Deane, J. in the following words:

W.P.(C) 78/2009 Page 55 party's detriment if the assumption be not adhered to for the purposes of the litigation.

3. Since an estoppel will not arise unless the party claiming the benefit of it has adopted the assumption as the basis of action or inaction and thereby placed himself in a position of significant disadvantage if departure from the assumption be permitted, the resolution of an issue of estoppel by conduct will involve an examination of the relevant belief, actions and position of that party.

4. The question whether such a departure would be unconscionable relates to the conduct of the allegedly estopped party in all the circumstances. That party must have played such a part in the adoption of, or persistence in, the assumption that he would be guilty of unjust and oppressive conduct if he were now to depart from it. The cases indicate four main, but not exhaustive, categories in which an affirmative answer to that question may be justified, namely, where that party: (a) has induced the assumption by express or implied representation; (b) has entered into contractual or other material relations with the other party on the conventional basis of the assumption;

(c) has exercised against the other party rights which would exist only if the assumption were correct;

(d) knew that the other party laboured under the assumption and refrained from correcting him when it was his duty in conscience to do so. Ultimately, however, the question whether departure from the assumption would be unconscionable must be resolved not by reference to some preconceived formula framed to serve as a universal yardstick but by reference to all the circumstances of the case, including the reasonableness of the conduct of the other party in acting upon the W.P.(C) 78/2009 Page 56 assumption and the nature and extent of the detriment which he would sustain by acting upon the assumption if departure from the assumed state of affairs were permitted. In cases falling within Category (a), a critical consideration will commonly be that the allegedly estopped party knew or intended or clearly ought to have known that the other party would be induced by his conduct to adopt, and act on the basis of, the assumption. Particularly in cases falling within Category (b), actual belief in the correctness of the fact or state of affairs assumed may not be necessary. Obviously, the facts of a particular case may be such that it falls within more than one of the above categories.

5. The assumption may be of fact or law, present or future. That is to say, it may be about the present or future existence of a fact or state of affairs (including the state of the law or the existence of a legal right, interest or relationship or the content of future conduct).

6. The doctrine should be seen as a unified one which operates consistently in both law and equity. In that regard, “equitable estoppel” should not be seen as a separate or distinct doctrine which operates only in equity or as restricted to certain defined categories (e.g. acquiescence, encouragement, promissory estoppel or proprietary estoppel).

7. Estoppel by conduct does not of itself constitute an independent cause of action. The assumed fact or state of affairs (which one party is estopped from denying) may be relied upon defensively or it may be used aggressively as the factual foundation of an action arising under ordinary principles with the entitlement to ultimate relief being determined on the basis of the existence of that fact or state of affairs. In some cases, the estoppel may operate to fashion an assumed state of affairs which will found relief (under ordinary principles) which gives effect to the assumption itself (e.g. where the defendant in an action for a declaration of trust is estopped from denying the existence of the trust). W.P.(C) 78/2009 Page 57

8. The recognition of estoppel by conduct as a doctrine operating consistently in law and equity and the prevalence of equity in a Judicature Act system combine to give the whole doctrine a degree of flexibility which it might lack if it were an exclusively common law doctrine. In particular, the prima facie entitlement to relief based upon the assumed state of affairs will be qualified in a case where such relief would exceed what could be justified by the requirements of good conscience and would be unjust to the estopped party. In such a case, relief framed on the basis of the assumed state of affairs represents the outer limits within which the relief appropriate to do justice between the parties should be framed.” (emphasis supplied)

25. The benefit under the policy of exclusive reservation of Rowghat „F‟ deposit in favour of SAIL was given effect to by way of a notification under sec. 17A (1A) MMDR Act, 1957 with an understanding that SAIL will supply iron ore to the Petitioner. However, SAIL refused to adhere to this corresponding obligation on part of SAIL to supply iron ore to the Petitioner, after securing the mining rights for the entire Rowghat „F‟ block including the mining area for which the Petitioner had prior approval under section 5(1) of MMDR Act, 1957. Thus, SAIL/BSP is under an obligation to supply iron ore to Petitioner once it has taken the benefit of the policy by enjoying the reservation of the entire Rowghat „F‟ deposit including W.P.(C) 78/2009 Page 58 the area of Raodongri, it cannot thereafter retreat from its corresponding obligation attached to the benefit of the policy to supply iron ore to the Petitioner. It is well settled that a person cannot blow hot and cold or approbate and reprobate. The person in question, having a choice between two courses of conduct, is to be treated as having made an election from which he cannot resile. The Hon'ble Supreme Court of India in the matter of R.N. Gosain V Yashpal Dhir, (1992) 4 SCC 683 has held as hereunder:

26. The language of Sec. 17A (1A) of the MMDR Act, 1957 nowhere, either expressly or impliedly, mandates exclusive accrual of mineral so exploited to such reserved public sector undertaking. W.P.(C) 78/2009 Page 59 Further, the section nowhere prohibits usage of exploitation minerals by a third party. If the argument of the Ld. ASG is accepted then the provisions of Rule 27(3), MCR, 1960 would become completely otiose in situations where a notification under Sec. 17A(1A) of the MMDR Act, 1957 is issued. The entire purpose of such reservation is only to ensure a proper prospecting or mining of the area concerned and the end-use of the exploited mineral however is not covered under the reservation policy. Further, the end usage of the exploited mineral is governed by the terms and conditions of the mining lease.

27. This brings to next argument raised by Sh. Chetan Sharma, the learned ASG on the maintainability of the writ petition that the court cannot go into the thicket of commercial transaction in a writ Jurisdiction and the writ petition will not be maintainable in case of disputed question of facts. As discussed earlier, the present case is not a case of disputed fact and based on various primary documents and correspondences based on which the promises were made and benefits taken and when time came to meet the corresponding obligations attached to such benefits the beneficiary respondent conveniently resiled from the said promises. Neither the letters have W.P.(C) 78/2009 Page 60 been disputed nor have these letters been addressed. Even otherwise, the writ court can go into the disputed questions of facts and writ is maintainable in contractual obligation, disputed facts and grant of consequential monetary claim. Article 226 is a valuable safeguard against arbitrariness and misuse of authority. ABL International Ltd. V Export Credit Guarantee Corporation, (2004) 3 SCC 553 and Unitech Limited V. Telangana State Industrial Corporation (TSIIC), (2021) 16 SCC 35. Therefore, the argument of the Ld. ASG is untenable in the facts and circumstance of the present case as there are no disputed facts in the present case as explained above and further reliance placed on the decision of Shubhas Jain V Rajeshwari Shivam & others, (2021) 20 SCC 454, is completely misplaced and not applicable in the facts of the present case.

28. The Ld. ASG argued that the Letter dated 17.01.2005 is not addressed to Petitioner and no crystalized right can be created in favour of the Petitioner since it is only a suggestion and recommendation. In the present case this is not a standalone letter on which the Petitioner is claiming its right as already discussed above and this letter has to be read with the other letters. Be that as it may a W.P.(C) 78/2009 Page 61 bare perusal of the letter dated 17.01.2005 shows that the same is sent by the Deputy Secretary, Ministry of Steel to Director, Ministry of Mines with the approval of Minister of Steel. The said letter has not been disputed either by Ministry of Mines or Ministry of Steel or even SAIL. The said letter in very clear terms acknowledges right of the Petitioner and subsequently all the party acted in terms of this letter. Moreover, this very letter forms the basis for the State Government to give no objection for re-reservation on 27.04.2006 in favour of SAIL. Further, this letter also forms basis for the Ministry of Mines for revision of de-reservation notification dated 03.12.2004 and Reservation Notification dated 20.07.2006 in favour of SAIL. This has also been confirmed by the Ministry of Mines in its counter affidavit as already discussed above. Further, this letter also forms the basis for cancellation of prior approval in favour of the Petitioner and rejection of ML application of the Petitioner which the Petitioner decided not to challenge in view of the assurances of all the parties. Thus, the Petitioner had altered its position by giving up its vested rights for grant of mining lease for Raodongri area on the assurance/commitment of supply of iron ore on cost plus basis by W.P.(C) 78/2009 Page 62 SAIL/BSP which is evident from all the above discussed documents including the letter dated 17.01.2005. Further, the Ministry of Steel, which holds 75% stakes in SAIL, makes an unconscionable departure from its assurances contained in letter dated 17.01.2005 after being the beneficiary of the reservation of the entire Rowghat „F‟ Block deposit in favour of SAIL. Therefore, the argument of the Ld. ASG is untenable in the facts and circumstance of the present case more particularly when all the Respondents have acknowledged and acted on the communications exchanged during the course of discussion, including communication dated 17.01.2005. Thus, the Judgment of Jasbir Singh Chhabra V State of Punjab, (2010) 4 SCC 192 relied by the Ld. ASG is distinguishable on facts and has no application in the present set of facts.

29. This brings to next argument raised by the Ld. ASG that the there is no public interest in granting the iron ore to the private entity namely the Petitioner and therefore the doctrine of promissory estoppel has no application in the present case. I must say that it is in the public interest that the promises made by any „state‟ or any organ/entity of „state‟ including a public sector undertaking should be W.P.(C) 78/2009 Page 63 kept especially when it is a beneficiary of such promise. Be that as it may the argument of the Ld. ASG cannot be accepted in the present set of facts and circumstances as the condition of supply of iron ore at cost plus basis in favour of Petitioner, who had a prior approval under section 5(1) of the MMDR Act, 1957 for grant of mining lease, was on account of the larger public policy i.e. cluster mining approach for environment protection and National Mineral Policy for uniform distribution of minerals as already discussed above. It is under these circumstances that entire area of Rowghat F Block comprising of more than 2000 ha was reserved in favour of SAIL even when SAIL had applied only for 500 ha and even when SAIL did not require the entire mineral for its own use as already discussed above. Hence, now SAIL/BSP and Ministry of Steel cannot shun away from their commitment of supply of iron ore on cost plus 5% basis to the Petitioner more particularly when Petitioner‟s right of getting mining lease has been taken away with an express commitment of supply of iron on cost plus 5% basis by SAIL/BSP after securing the mining rights for the entire Rowghat „F‟ Block. W.P.(C) 78/2009 Page 64

30. This brings to next argument raised by the Ld. ASG that there is changed circumstances after 20 years and the issue has become academic. It was contended that (a) Petitioner is no longer a sick company and is presently a profitable company; (b) Petitioner has two operational mines at the present and therefore it can meet its present requirement; (c) subsequent Mining Lease granted to the SAIL on 21.10.2009 does not contain any condition to supply Iron Ore to the Petitioner on cost plus 5% basis therefore, SAIL cannot sell iron ore to Petitioner; (d) the existing mine i.e. Dalli-Rajahra group of mines was the only operational mine with balance reserve of 100MT and will only meet the requirements of SAIL for another 5-6 years and the present requirement of Iron Ore of BSP has increased manifold; (e) The relief claimed by the Petitioner cannot be granted in view of the change of law with the enactment of Rule 12B (i) of the Mineral (Other than Atomic and Hydro Carbons Energy Mineral) Concession Rules, 2016 and Section 8(5) of MMDR Act, 1957 (f) SAIL has made substantial investment of more than Rs.2300 Crores for development of Rowghat Mines including construction of railway line after the grant of mining lease. W.P.(C) 78/2009 Page 65

31. The petitioner is not claiming its right because it was a sick company. The Petitioner had a preferential right for grant of mining lease under Section 11(2) of the MMDR Act, 1957 and the Petitioner was also granted prior approval u/s 5(1) of the MMDR Act, 1957. Therefore, the present financial condition of the Petitioner has no bearing in the present case and the argument of Ld. ASG is rejected.

32. On a careful perusal of the records, after seeing the counter affidavit of the state, Additional Affidavit filed by the Petitioner and as also the written submission on behalf of SAIL, it is seen that on the date when promises were made, the Petitioner had already made pending applications for mines and was infact granted Mining lease for Metabodli (25Ha.) on 17.01.2002 and for Chotedonger (192.250 ha) on 05.05.2005. It is these mines which have become operational now. It is not the case of any of the respondent that the Petitioner has got any mining lease subsequent to this. Whereas, the Re-reservation in favour of SAIL happened much subsequently on 20.07.2006. Thus, it is clear that the promise of supplying 48 MT of Iron Ore to the Petitioner by SAIL/BSP had nothing to do with existing mining lease or pending Mining Lease applications or any iron ore mine which the W.P.(C) 78/2009 Page 66 Petitioner might get in future. The above referred promise was made in lieu of Petitioner‟s promise to give up its vested rights for Raodongri mines, which was granted to SAIL. SAIL had promised to give 48 MT of Iron Ore to the Petitioner. This promise was based on the fact that the annual requirement of iron ore of the Petitioner for 1 MT of hot metal production was at 1.[6] MT of Iron Ore. Thus, for 30 years the same was assessed at 48 MT. If the Petitioner would not have given up its claim over Raodongri Mines, SAIL could not have carried out mining activities in the Rowghat area as mining activity would only be through cluster mining approach and the Raodongri mines was located at the entrance of the Rowghat F block and geographically it would not be feasible for SAIL to mine in other blocks. Therefore, the argument of the Ld. ASG that the Petitioner has two operational mines which can meet the present requirement of the Petitioner has no relevance in the present case and is accordingly rejected.

33. The learned ASG also argued that the subsequent Mining Lease granted to the SAIL on 21.10.2009 does not contain any condition to supply Iron Ore to the Petitioner on cost plus 5% basis therefore, W.P.(C) 78/2009 Page 67 SAIL cannot sell iron ore to Petitioner. There is no prohibition under the statute in respect of the manner in which mineral would be used by the mining lease holder. Infact, whenever any lease is granted for captive consumption, there is always express provision to this effect in the lease deed. Admittedly, the Mining Lease granted in favour of SAIL has not been brought on record by SAIL. On the other hand petitioner claims that there is no clause of captive consumption in the executed mining lease in favour of SAIL. Since the Mining lease is undisputedly in the possession of SAIL and SAIL chose not to bring the same on record an adverse inference is drawn against SAIL that such condition exists in the Mining Lease. Even otherwise, irrespective of the same since there is no bar under the provisions of MMDR Act and Rules to this effect, even if the mining lease contains the stipulation of captive use of iron ore then also it would not have come in the way of fulfilling the promise of supply of Iron Ore on cost plus 5% basis to the Petitioner as the State Government and Ministry of Mines could have imposed additional condition in the mining lease in view of Rule 27(3) Mineral Concession Rules, 1960. Under Rule 27(3) Mineral Concession Rules, 1960, State Govt. either W.P.(C) 78/2009 Page 68 with the previous approval of the Central Govt., or, at the instance of the Central Govt., can impose further conditions in the interest of mineral development. Such condition was infact requested to be imposed, as mentioned in various documents including the internal notings of the Ministry of Mines and Ministry of Steel as discussed above to the effect that SAIL will supply iron ore to the Petitioner. Central Govt. through Ministry of Mines as well as Ministry of Steel was party to such approval. Area in question for which even Section 5(1) approval was granted by Central Govt., was subsequently reserved under Section 17A(1A) on the sole premise that SAIL will supply to the Petitioner iron ore at cost plus 5% basis. In fact, Ministry of Mines in its Counter Affidavit categorically mentions that the re-reservation was done on the basis of no-objection given by the State Govt. by way of its letter dated 27.04.2006. This letter dated 27.04.2006 was issued on the conditions as mentioned in the letter dated 17.01.2005 of Ministry of Steel, which letter categorically requires that SAIL will supply iron ore to the Petitioner. Moreover, despite the Legal opinions of Ministry of Law and Justice given to W.P.(C) 78/2009 Page 69 Ministry of Mines and Ministry of Steel also says that such a condition can be imposed considering the facts of the present case.

34. The learned ASG further argued that the existing mine i.e. Dalli- Rajahra group of mines was the only operational mine with balance reserve of 100MT and will only meet the requirements of SAIL for another 5-6 years and the present requirement of Iron Ore of BSP has increased manifold. A perusal of the counter affidavit filed by SAIL on 11.02.2009 reveals that SAIL made this statement almost 15 years ago. The Annual Report for period 2022-2023 of SAIL shows that SAIL is still mining this area and this group of mines alone is substantially meeting the existing requirement of BSP even after 15 years. Further, the said Annual Report also indicates that mining has started in only one portion of the Mining Lease area of Rowghat Deposit „F‟ that too at very low capacity in the mine (in Anjrel subblock). Moreover, obligation on SAIL to supply Iron Ore to the Petitioner has to be seen when the promise made through various discussions and communications till 16.06.2006 by Ministry of Steel and SAIL when Ministry of Steel on 17.01.2005 agreed to supply iron ore to the petitioner and SAIL on 16.06.2006 confirmed to IBM W.P.(C) 78/2009 Page 70 that SAIL requires Raodongri block of Rowghat Deposit F only for geographical convenience. It was under these circumstances that the entire Rowghat Deposit „F‟ area, including an area of 175 Ha. of Raodongri Sub-block, for which prior approval under Section 5(1) of MMDR Act was granted in favour of the Petitioner, was reserved in favour of SAIL on 20.07.2006. Therefore, even if the requirement of SAIL has changed subsequent to 20.07.2006, the same would have no bearing in view of the promises made by the Respondents. Therefore, the argument SAIL cannot be accepted.

35. The learned ASG also argued that there has been a change of law with the enactment of Rule 12B(i) of the Mineral (Other than Atomic and Hydro Carbons Energy Mineral) Concession Rules, 2016 and Section 8(5) of MMDR Act, 1957. Rule 12B(i) of the Mineral (Other than Atomic and Hydro Carbons Energy Mineral) Concession Rules, 2016 is infact enabling and permitting SAIL to sell iron ore. However, the present arrangement is not strictly in the nature of sale and rather an arrangement where SAIL would be transferring iron ore to the Petitioner at cost plus 5% basis as SAIL is effectively mining on behalf of the Petitioner. W.P.(C) 78/2009 Page 71

36. Further, Section 8(5) of MMDR Act, 1957 is not applicable as this section applies to minerals specified in Part A of First Schedule which is coal and lignite. The present dispute relates to supply of Iron Ore which falls under Part B of First Schedule. Even otherwise the provision will not be applicable as the transaction is not in the nature of sale. Moreover, the provisions of S. 8(5) of MMDR Act, 1957 and 8A (7A) of MMDR Act, 1957 would also not be applicable in the present case as the same is only applicable to minerals used for captive purposes and this court has already drawn an adverse inference against SAIL for not producing the Mining lease which is in its possession and the contents of which are in its special knowledge in so far as that minerals are for captive consumption alone. Thus, the argument of the Ld. ASG is rejected and there will be no impact of the change of law with the enactment of Rule 12B(i) of the Mineral (Other than Atomic and Hydro Carbons Energy Mineral) Concession Rules, 2016 and Section 8(5) of MMDR Act, 1957 on the present dispute.

37. The learned ASG also argued that SAIL has made substantial investment of more than Rs.2300 Crores for development of W.P.(C) 78/2009 Page 72 Rowghat Mines including construction of railway line after the grant of lease. The fact of investment is completely irrelevant to the adjudication of present dispute as the same was known to SAIL since the very beginning and were considered at the time of reservation. The investment in Railway line is for shifting of the Iron ore extracted from the entire Rowghat „F‟ Block of 2200 ha to the Plant of SAIL. Hence the argument of the Ld. ASG is rejected.

38. The learned ASG further argued that opinions of Ministry of Law and Justice, Department of Legal Affairs dated 19.01.2010 sought by Ministry of Mines and opinions dated 23.08.2010 and 26.05.2011 sought by Ministry of Steel is perverse and should not be considered. 38.[1] The President of India, in exercise of powers under Article 77(3) of the Constitution of India has framed, „The Government of India (Allocation of Business) Rules, 1961‟. Rule 3 of the said Rules provides that the distribution of subjects among the department shall be specified in the Second Schedule. The Second Schedule thereof provides that one of the essential functions of Department of Legal Affairs, Ministry of Law and Justice is to give “Advice to Ministries W.P.(C) 78/2009 Page 73 on legal matters including interpretation of constitution and the laws”. 38.[2] Moreover, a memorandum dated 03.09.2009 issued by the Department of Legal Affairs, Ministry of Law and Justice, Government of India clarifies the binding nature of such opinion. The relevant extract is reproduced as hereunder:

38.[3] The Department of Legal Affairs, Ministry of Law and Justice, after carefully going through all the documents, at the request of Ministry of Steel has opined on 23.08.2010 as hereunder:

W.P.(C) 78/2009 Page 74 explicitly deny to supply the iron ore to JNL, an implied promise to supply iron ore to JNL may be said to be in existence from the beginning. It is only in 2007 i.e. after issuance of the notification in 2006 when its obligations to supply iron ore commenced that SAIL decided to seek legal opinion from the then Ld. ASG (Shri K.P. Pathak) privately and not through the Ministry of Steel who was instrumental in getting the area re-reserved in its favor. On the strength of this opinion the SAIL/BSP is refusing to supply iron ore to JNL. 8………..It is difficult to accept the position that the SAIL/BSP are not aware about the various correspondence between the Ministry of Steel, the Ministry of Mines and the State Government about the de-reservation and rereservation of the area, in question as regards the SAIL/BSP. The conduct of the parties as reflected in such correspondence clearly reveals that the interest of JNL to continue its plant in the State will be safeguarded only by supply of iron ore by SAIL/BSP as promised. Hence, JNL has a legitimate expectation and the same may not be illogical. Therefore, denial of the same after repeated assurances is prejudicial to the interest of JNL and may amount to breach of the implied promise made in this regard………………

12. In the light of the aforesaid analysis, since there is no specific proof to indicate that SAIL/BSP has denied the proposal of supply of iron ore to JNL from the beginning and it has been assured vide its letters in 2002 onwards and also by the letter of Ministry of Steel dated 17.01.2005, it will not be unfair to conclude that there is an implied promise on the part of SAIL to supply the iron ore immediately. ………………………… W.P.(C) 78/2009 Page 75

14. The SAIL being a PSU under the administrative control of the Ministry of Steel, the Central Government can issue directions to it to adhere to the implied promise to make the supply of iron ore to JNL on cost plus basis. In addition to the above, in view of the National Litigation Policy of the Government whose aim is to transform Government into an efficient and responsible litigant and to eschew and condemn the approach of „Let the Court decide‟, it would be advisable to direct both the parties to enter into an agreement in the light of the background of which the 2006 Notification has been made not only to facilitate the interest of both the parties but also to safeguard the interest of the State Government and to avoid any embarrassing situation for the Government at a later stage.” 38.[4] It is relevant to note that the conclusion at Para 14 was also approved by the Minister of Law and Justice. Further, at the insistence of the Ministry of Steel, the Department of Legal Affairs reaffirmed its opinion on 26.05.2011. 38.[5] Thus, the Government of India (Allocation of Business) Rules, 1961 and the memorandum dated 03.09.2009 issued by the Ministry of Law, clearly prescribes that the legal opinion given by the Department of Legal Affairs, Ministry of Law is binding upon all the ministries. Accordingly, the Ministry of Mines as also the Ministry of SAIL were bound to follow the same. Accordingly, the argument of Ld. ASG so far as the non-binding nature of the legal opinion by the Department of Legal Affairs is untenable and rejected. W.P.(C) 78/2009 Page 76

39. The learned ASG argued that if relief is granted in favour of the Petitioner, it would discriminate against others hence it would be violative of Article 14 & 19 of the Constitution. The case of the Petitioner cannot be equated with others which are differently situated. Agreement between the petitioner and the respondents was based on a give and take. This give and take had happened on the basis of the obligation of the State to ensure supply of Iron Ore in lieu of the investment made by the petitioner in the state. This give and take has also happened because the Petitioner had got S.5(1) approval from the Central Government and had preferential right over the area for which said approval was granted. Accordingly, the argument of Ld. ASG is rejected.

40. The petitioner has prayed that in view of the changed circumstances the prayer in the writ petition be moulded. I have gone through the said prayer of the petitioner which cannot be accepted. In view of the above discussions, the present writ petition is allowed with the following directions: 42.[1] The letter dated 22.08.2008 issued by the Respondent No.4/Steel Authority of India Ltd., the letter dated W.P.(C) 78/2009 Page 77 31.10.2008 issued by the Respondent No.3/Ministry of Steel, Government of India and the letter dated 12.11.2008 issued by the Ministry of Steel, Government of India to the petitioner whereby the respondents denied supply of iron ore to the petitioner are hereby quashed. 42.[2] The respondent No.4/SAIL shall be supplying 1.[6] million tonnes of Iron Ore per year for a period of 30 years totaling to 48 million tonnes of the grade agreed by SAIL in the letter dated 27.10.2003 on cost plus 5% basis from their existing mines which are stated to be Dalli/Rajhara mines and Rowghat mines in Chhattisgarh to the Petitioner. The respondents may also consider while supplying iron ore to the petitioner that the petitioner stated to heve given up its right of mining. 43.[3] Further, to give effect to the directions contained above Respondent No.1/Ministry of Mines, Government of India and the Respondent No.2/State Government of Chhattisgarh are hereby directed to impose a suitable condition under Rule 27(3) of the Mineral Concession Rules, 1960 in the mining lease dated 21.10.2009 granted in favour of respondent no. 4 within a reasonable period not exceeding 3 months.

41. The pending application, if any, also stand disposed of.

SUDHIR KUMAR JAIN (JUDGE) NOVEMBER 08, 2024 AK/ABK