(1) SPECIAL leave granted,

(2) M/S Straw Products Ltd. Respondent 1 in the appeal herein was granted a licence to cut, remove or sell bamboo from different forest divisions owned and controlled by the State government. The respondent was liable to pay royalty on the removal of the bamboo at the rates determined by the State Government from time to time. The State government by its letter dated February 13/16, 1981 determined the rates of royalty after taking into consideration the representation made by the respondent. The relevant clauses (vi) and (viii) are as under:

"(VI) A rebate of 0.30 (thirty) paise per unit (100 metres of bamboos) would be allowed from 10/10/1977 till expiry of the existing lease on 30/09/1989. (viii) the minimum royalty shall be fixed on the basis of 100% of minimum production during the preceding four years in respect of each division.

(3) THE above-quoted clauses were further clarified by the State government by its letter dated 8/04/1981. The operative part of the clarification is as under:

"I am directed to say that government, after careful consideration, have been pleased to order that the minimum royalty should be calcu