JUDGMENT

P. N. BHAGWATI, J.:—This appeal can be disposed of on a very narrow point and we will, therefore, set out only so much of the facts giving rise to the appeal as bear on this point and omit what is unnecessary.

2. Since 23rd December, 1959 the appellants had a sub-lease from the Receiver in Suit No. 203 of 1905 for extracting phosphate from an area of 400 hectares situate in Singhbhum District in the State of Bihar. This sub-lease, according to the State of Bihar, came to an end from 1st September, 1964 and the appellants, therefore, made an application to the State of Bihar on 22nd/24th March, 1965 for a grant of fresh mining lease for extraction of apatite and phosphate from the same area under Rule 22 of the Mineral Concession Rules, 1960 made by the Central Government under Section 13 of the Mines and Minerals (Regulation and Development) Act, 1957. The State Government failed to dispose of the application within a period of nine months from the date of its receipt and hence under R. 24 (3) of the Mineral Concession Rules, 1960 the application was deemed to have been refused by the State Government. The appellants preferred a revision application to the Central Government on 16th February, 1966 against the deemed refusal of their application under Rule 54 of the Mineral Concession Rules, 1960. The Central Government disposed of the revision application by an order dated 31 st December, 1966 directing the State Government to consider the application of the appellants and to decide it on merits. The State Government thereafter by an order dated 9th February, 1967 rejected the application of the appellants on the ground that the State Government had already taken a decision not to grant lease for phosphate ore to any individual or private party as it had decided "to work this mineral in the public sector." The appellants again filed a revision application to the Central Government against the order of the State Government rejecting their application. The Central Government invited comments of the State Government on the revision application and on the comments submitted by the State Government, the appellants were given an opportunity to submit the cross-comments which they did on 8th August, 1967. Whilst the revision application was pending, the appellants read 1526 an advertisement in the issue of Statesman dated 13th September, 1967 to the following effect;

" "Government of Bihar

Department of Mines and Geology, Patna.

Mining and beneficiation of low grade apatite of Singhbhum.

A reserve of a little over 1 million tonnes of low grade Apatite Mineral with average 16 per cent P. O. has been proved in a belt consisting of several mouzas in the Singhbhum District of Bihar. The representative bulk samples of the minerals have laboratory Jamshedpur, (sic) and it has been found that the mineral can be suitably upgraded by beneficiation to yield Apatite concentrate with 36% to 40% P. O., suitable for use as raw material for the manufacture of Phosphate fertiliser. Report of economic feasibility studies available. The State Government may consider giving tax holidays for a fixed period and also may guarantee the safety of the investment interested parties capable of making investment to the tune of 40 to 50 lakhs in undertaking to above project may obtain further particulars from the Mines Commissioner, Department of Mines and Geology, Government of Bihar, Patna.

Sd/- K. Abraham,

Commissioner of Mines and Geology."

The appellant immediately addressed a communication dated 26th September, 1967 to the Central Government enclosing a copy of the advertisement and pointing out that it was clear from the advertisement that the State Government has abandoned the idea of working apatite and phosphate in the public sector and that the ground for rejecting the application of the appellants for mining lease no longer existed. The Central Government, however, by an order dated 2nd December, 1967 rejected the revision application stating that:

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