The Supreme Court affirmed that no vested right to lease renewal exists without compliance with statutory requirements, emphasizing discretionary powers of the state.

1. The petitioner was admittedly granted mining lease to excavate iron ore in S. Nos. 342 / A and 343 at Sarfarajapuram village, Ganitattu Hill in Emboyee R. F., P.O. Velaurthi in Kurnool District for a period of 30 years with effect from 31-10-1953. The lease expired by 30-10-1983. The petitioner applied for renewal of the lease for a further period of 30 years, on 23-9-1982. The State Government did not take any action within a period of two months as required under R.28 of the Mineral Concession R.1960 (for short "the Rules"). As a result, under the deeming provisions, it must have been rejected. On that premise, the petitioner filed a revision to the Central Government. The Central Government by an order dt. 3-11-1983, dismissed that revision on the ground that it was premature as the Rules provide an interregnum of 6 months for disposal of the petitioner's application by the State Government. As a result, the petitioner was granted breathing time to continue the mining operations. The petitioners, therefore, filed this writ petition on 25-4-1984 and obtained interim direction on 26-4-1984 to carry on mining operations. Meanwhile, the petitioner also filed on 6-7-1984 another revision before the Central Government. As the application for renewal of lease was not either ordered or rejected by the State Government, the Central Government, by an order dt.16-8-1984, disposed of that revision directing the State Government to dispose of the petitioner's application for renewal of lease within a period not exceeding 200 days from the date of receipt of, that order. But, the application was not disposed of.

2. The petitioner contends that the petitioner has got a statutory right of renewal of lease and that, therefore, the authorities ought to have renewed his application as a matter of course.

3. The Government have filed their counter - affidavit. In the counter - affidavit, it is stated that is the mine is situated in the Reserve Forest area, the renewal cannot be granted and that since the writ petition is pending the application has not been rejected. Obviously, the renewal was rejected because of the pendency of the writ petition.

4. Sri S. Surya Prakasa Rao, learned counsel for the petitioner, contends that the authorities have initially recommended that the mine is not in the Reserve Forest area, but the Forest Department now as per its counter - affidavit appears to have recommended that the mine is situated in the Reserve Forest area and that the State Government cannot have any power to reject the application but have power only to recommend to the Central Government whether it should be granted or refused by operation of S.2 of the Forest (Conservation) Act 1980 (for short "the Act").

5. The question is, therefore, whether the petitioner is entitled to be considered for grant of renewal of lease under the Rules.

6. The counter - affidavit discloses that the mine is situated in the Reserve Forest area. Whether renewal is to be granted or not is exclusively for the State Government to consider. In M/s. Anupama Minerals v. Union of India , AIR 1986 AP 225 , a Division Bench of this Court has held that under the Act, S.2 makes it clear that neither the State Government nor any other authority can permit any forest land to be used for a non - forest purpose except with the prior approval of the Central Government R.4 of 1981 Rules provides that the State Government or other authority seeking prior approval shall send the proposal for approval to the Central Government along with the particulars specified in the pro forma given in Annexure to the 1981 Rules including the specific opinion