The demands raised by the Deputy Director of Mines were found to be unsustainable in the eye of law, in view of the law laid down in National Mineral Development Corporation Limited v. State of M.P., (2004) 6 SCC 281.

JUDGMENT :

B.R. SARANGI, J.

The Petitioners, by way of this writ petition, seek to quash the letters dated 20.01.2004, 06.04.2004, 29.08.2008, 04.10.2008 and 15.04.2011 as at Annexures-1, 3, 7, 8 and 12 respectively issued by the Deputy Director Mines, Joda, Keonjhar, directing the Petitioner-Company to pay a sum of Rs.6,93,99,308/- towards loss of royalty and Rs.7,07,44,492/- as interest thereon due to beneficiations of high grade lump iron ore for the period from October, 1994 to September, 2000, and to issue direction to the Opposite Parties to grant “Mining Dues Clearance Certificate” in favour of the Petitioner- Company without any further delay.

2. The factual matrix of the case, in brief, is that Petitioner No.1, being a Company registered under the Companies Act, 1956 and a manufacturer of iron and steel in the country, has set up an integrated steel plant at Jamshedpur. Petitioner No.2 is the Chief Resident Executive of Petitioner No.1 Company and is authorized to file the writ petition by virtue of the Board Resolution dated 07.04.2008 of Petitioner No.1-Company. As such, it is an old Mining Company in the country and owns mineral rights of various minerals like iron ore, chromite, limestone, dolomite, manganese, coal etc.

2.1 Petitioner-Company was granted the mining lease in the name of Joda East Iron and Manmore Manganese in the year 1925 by the then Maharaja of Keonjhar Estate over an area of 2.59 sq. mile for a period of 30 years from 01.07.1925 to 30.06.1955 vide Registered Deed No.9 of 1926 dated 28.04.1926. Two subsequent renewals for 30 years each were also granted by the Mining & Geology Department, Govt. of Orissa for the period from 01.07.1955 to 30.06.1985 vide Registered Lease Deed No.1487 dated 19.07.1965 and from 01.07.1985 to 30.06.2005 vide Registered Lease Deed No.23 dated 20.01.1998 respectively. During the 1st renewal period, Joda East Iron and Manmora Manganese were bifurcated and formed a separate lease for Manmora Manganese lease over 16.350 ha. As per the provision under Rule-24A (1) of Mineral Concession Rules, 1960, Petitioner-Company had applied for its 3rd renewal on 27.04.2004.

2.2 When the matter stood thus, Petitioner- Company set up a beneficiation plant of iron ore within its leasehold area of Joda East Iron Mines. The ore is extracted by open cast method of mining for which mining benches are prepared. Firstly, holes are drilled on the benches covering entire height of the bench at regular distance depending on ore types. After charging of the holes with explosives the portion of the bench is blasted. The blasted materials, which are known as Run of Mines (of grade from 58% Fe to 65% Fe), consist of boulders, fragments, fines and other extraneous material transported to the processing plant for crushing, screening and washing. Usable products of more than 0.15 mm are recovered as size and fines ore. The minus 0.15 mm fraction in the form of slime (mixed with washed water and impurities) are stored in the slime dam inside the leasehold area. The water is recovered and reused after settling of slime.

2.3 Petitioner-Company has been regularly submitting its return in Form-A and A-1 in respect of production, dispatch of iron from its Joda East Iron Mines and also paying the royalty in due time as prescribed under the provisions of Mines and Minerals (Regulation and Development) Act, 1957 and Rules made thereunder.

2.4. The Deputy Director of Mines, Joda-Opposite Party No.3 wrote vide letter dated 20.01.2004 to the Petitioner-Company stating inter alia as follows:-

“From No.A-1 submitted by you are in a consolidated form pertaining to whole year, from there it is observed that some loss of iron ore has been shown while processing of High grade Lump Iron Ore produced from your mines and fed to the crusher in operation in the leasehold area. The total quantity of unprocessed run of mine ore co