Proceedings vide letter No.M&S/BAR-BENF/IBC/11, dated 9-11-2011 of the respondent, whereby it has rejected the request of the petitioner for supply of low grade (C+D+Waste) varieties of Barytes as per the rates fixed under agreement dated 18-6-2008, is assailed in this Writ Petition.

2. The facts leading to the filing of the Writ Petition are as follows:

By G.O.Ms.No.27, Industries & Commerce (M-III) Department, dated 7-1-1974, the Government of Andhra Pradesh has reserved exploitation of Barytes mineral exclusively for the public sector. Such exploitation by the respondent and other companies permitted by it has left huge quantity of dumps containing low grade mineral deposited in the area around Mangampet, in which the mining area is located. As the accumulated low grade mineral has posed serious ecological and environmental problems, proposal for setting up beneficiation plants was mooted. Accordingly, the respondent has issued notification dated 28-7-2006 inviting Expression of Interest (EOI) for establishment of the plants under joint venture to beneficiate the low grade Barytes. Four companies, including the petitioner, have responded to the said notification. Three out of the four companies, including the petitioner, were qualified for establishment of the beneficiation plants at Mangampet.

3. The State Government has issued G.O.Ms.No.38, Industries and Commerce (M.III) Department, dated 7-3-2007, according permission for setting up of the beneficiation plants to the three qualified companies, including the petitioner, with capacity not exceeding 2 lakh Metric Tons (M.T.) each per annum, under joint venture with the respondent-Corporation. Accordingly, on 18-6-2008, the respondent entered into agreement with the petitioner. The relevant terms and conditions of the agreement will be adverted to at a later stage. However, for the present, it will suffice to note that under Clause 2(i) of the agreement, the Investor/JVC shall complete the establishment of the beneficiation plant within two years from the date of the agreement. It was agreed that the respondent-Corporation, being a partner in the JVC, shall extend co-operation and assistance wherever possible in obtaining clearances and infrastructure amenities. Under Clause 2(ii), the Corporation shall consider extension of the time frame only on valid grounds to its satisfaction. Under Clause 9(i), the Corporation undertook to supply a quantity not exceeding 2 lakh M.Ts. of low grade Barytes (C+D+Waste grade) to the JVC on Ex-Mangampet Barytes mine, on as is where is basis as per the usual sales and terms and conditions of the Corporation. Under sub-clause (ii) thereof, the sale price is Rs.221/- per M.T. (loose) on Ex-Mangampet mine, exclusive of the statutory levies etc. The said Clause envisaged increase in the sale price every year by 4% over the price of the previous year. As per the agreement, the plant must commence its operations from June 2010.

4. As the petitioner could not complete the establishment of the plant within the prescribed time, it has approached the respondent for extension of time. A meeting was held between the parties on 25-3-2010 wherein the petitioner has informed the respondent that it will be commencing civil works from 1-4-2010 and that it requires 1½ years’ time to complete the work in all respects. Accordingly, the petitioner requested for extension of time till April 2011. The respondent has accepted the petitioner’s request for extension, subject to the latter continuing to purchase 2 lakh M.Ts. of Barytes of C+D+Waste grades with effect from 1-7-2010 in monthly lots of 16,667 M.Ts. and quarterly lots of 50,000 M.Ts. at the sale price of Rs.394/- per M.T. (loose), Ex-Mangampet mine/stock yard basis, exclusive of the statutory levies like royalty, sales tax etc. The respondent also stipulated a condition that the petitioner shall pay Rs.10/- per M.T. towards development of infrastructure in the local areas.

5. The petitioner p