( 1 ) THE present writ petition has been filed by a Government Company (hereinafter the 'company') for issuance of a writ of prohibition restraining the Government of Karnataka and/or its Officers from interfering with its mining operations.

( 2 ) THE Company is owned, managed and controlled by the Government of India with its 98. 5% subscribed share capital. It is engaged in the business of mining in various minerals, more particularly iron are.

( 3 ) IT is not in dispute that the Company was granted a mining lease being ML. No. 839 for mining of iron ore over an area of 2013. 35 hectares situated in Donimalai, Sandoor Taluka, Bellary District. The said lease was granted by the Government of Karnataka under and in accordance with the provisions of Mines and Minerals (Regulation and Development) Act, 1957 and The Mineral Concession Rules. 1960 (hereinafter in short 'mineral Act' and 'mineral Rules' respectively ). The lease was for a period of 20 years commencing from 4-11-1968. Therefore, it was to expire on 4-11-1988.

( 4 ) BEFORE the expiry of the said lease, as required under Rule 24a of the Mineral Rules, the Company made an application on 3-4-1987 for renewal thereof for another period of 10 years. Since for one or the other reason, the State Government did not dispose of the said renewal application, therefore, pursuant to the working permits granted to it by the State Government from time to time, the Company continued with the mining operations till up to 16-9-1992. But since thereafter the State Government refused to grant even the working permits, the Company filed a writ petition being W. P. No: 27644/92 before this Court, wherein interim orders dated 16/25-9-1992 were passed permitting the Company to continue with the mining operations till further order. Copies of the said interim orders dt. 16-9-1992 and 25-9-1992 have been filed as annexures 'a' and 'b' respectively.

( 5 ) IT appears that in the mean time the State Government under its letter No: AHFF 17 FFM 90 Dt. 11-4-1991 had sought the prior approval of the Central Government in order to renew the mining lease of the Company as required under Section 2 of the Forest (Conservation) Act, 1980 (in short the Conservation Act ). Pursuant to the said request, 'the Centrat Government in its Ministry of Environment and Forest under communication dt. 22-10-1992 (Annexure 'b') intimated its agreement in principle to the State Government for approval for diversion of 608. 00 ha. of forest land in the District of Bellary for renewal of mining lease as proposed subject to the following conditions-" (I) The State Government should take immediate action for transfer and mutation of non-forest land equal to the area to be broken up afresh, in favour of the State Forest Department. (ii) The user agency will transfer in favour of the State Forest Department the cost of (a) compensatory afforestation for (i) above, and, (b) penal compensatory afforestation over degraded forest land twice in extent to the area to be broken up afresh. (iii) Funds for fencing, protection and regeneration of safety zone area and the cost of afforestation over one and half times of the safety zone area in the degraded forest elsewhere, will be provided by the user agency. "

( 6 ) IN para 3 of the said communication at Annexure 'b', it was further observed by the Central Government that-"after receipt of compliance report on the fulfilment of the above conditions from the State Government, formal approval will be issued in this regard under Section 2 of the Forest (Conservation) Act, 1980. Transfer of forest land to user agency should not be effected by the State Government till formal order approving diversion of forest are issued by the Central Government. "

( 7 ) IT is a matter of record that the Company being the 'user agency' has already deposited the required cost assessed by the State Government for compensatory afforestation being Rs. 94,87,500/- at the rate of Rs. 25,000/- p