JUDGMENT

T.S. THAKUR, J.

1. Leave granted.

2. 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 communication 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.

3. 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. Applications were then invited from interested private parties in terms of Rule 59 of the Mineral Concession Rules, 1960 for grant of prospecting licenses and mining leases in respect of the said blocks. 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. The invitation to apply for leases and to set up steel plants was open to all leading steel manufacturers.

4. In response to the advertisement notice applications were received from different parties including one filed by respondent-Mesco Steels Ltd. These applications appear to have been evaluated, culminating in a conditional recommendation made by the State Government in favour of the respondent-company. One of the conditions 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 conditions for the grant of the proposed mining lease. The other condition 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 no commercial trading of the mining material shall be carried out by it.

5. By an order dated 7th January, 1999 the Government of India, Ministry of Steel and Mines, Department of Mines, conveyed 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 approval was subject to the State Government ensuring compliance 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.

6. On receipt of the approval from the Central Government the State Government conveyed to the respondent-company the terms and conditions 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. A letter dated 8th February, 1999 issued by the State Government to the respondent- company stipulated the terms and conditions that would govern the proposed mining lease and required the respondent-company to convey its acceptance to the same. In response, the respondent-company by its letter dated 15th February, 1999 conveyed its unconditional acceptance of the terms and conditions stipulated in the letter mentioned earlier. The acceptance letter was followed by another letter dated 13th March, 1999 by which the respondent-company informed the State Government that it