Court affirmed that governmental compliance with judicial orders is mandatory, but eligibility for mining leases can be affected by subsequent legislative amendments.

1.The erstwhile Bhushan Ltd. (predecessor - in - interest of the petitioner) had proposed setting up of plant in some identified villages in the district of Sambalpur, Odisha. For this purpose, it had made a request for acquisition of land, measuring 1250 acres, which was acquired for Bhushan Ltd. It had also applied for grant of lease of mining of iron ore for use in the proposed plant. These applications were favourably considered by the State of Odisha (hereinafter referred to as the 'State Government') which agreed to accord due priority to Bhushan Ltd. for grant of suitable iron ore areas and also agreed to recommend the proposal to the Government of India for grant of a coal block. Even a MoU was entered into between the State Government and Bhushan Ltd. containing the commitment of the State Government to recommend to the Central Government, grant of iron ore mines for its use in the proposed plant. For this purpose, area earmarked for recommendation were Thakurani area with 96 million tonnes iron ore reserves and Keora area, District Sundargarh for additional 128 million tonnes of iron ore; both for 50 years' requirement of the plant. Though various statutory and other permissions required for setting up of the plant were granted and the plant was also set up, but due to some in - fight between the family members who owned Bhushan Ltd., it faced difficulties in getting the grant of iron ore lease.

2. Insofar as granting of mining lease of iron ore reserves in the aforesaid areas is concerned, it fell into rough weather. It resulted into show - cause notice dated January 18, 2006 by the State Government which led to the decision that mining lease over the Thakurani area could not be allowed on various grounds and the application made by Bhushan Ltd. was premature. Thereafter, the Government of Orissa made a recommendation to the Central Government on February 09, 2006 to grant mining lease in favour of one M/s Neepaz Metallics (P) Ltd. in relaxation of R.59(1) of the Mining Rules, for a period of 30 years. Challenging these orders, Bhushan Ltd. filed Writ Petition (Civil) No. 6646 of 2006 in the High Court on May 08, 2006. This writ petition was dismissed by the High Court on December 14, 2007 and challenging this decision a special leave petition was filed in which leave was granted, thereby converting the special leave petition into Civil Appeal No. 2790 of 2012. This appeal was allowed by this Court vide judgment dated March 14, 2012, which was reported as Bhushan Power & Steel Ltd. v. State of Orissa, 2012 (4) SCC 246 with the following directions: (SCC p. 256, paras 41-42)
"41...Accordingly, we allow the appeal and set aside the judgment and order of the High Court of Orissa and also the decision of the State Government dated 9-2-2006, rejecting the appellant's claim for grant of mining lease.
42. During the course of hearing, we have been informed that Thakurani Block A has large reserves of iron ore, in which the appellants can also be accommodated. We, accordingly, direct the State of Orissa to take appropriate steps to act in terms of the MoU dated 15-5-2002, as also its earlier commitments to recommend the case of the appellants to the Central Government for grant of adequate iron ore reserves to meet the requirements of the appellants in their steel plant at Lapanga."

3. It would be pertinent to mention that the State of Odisha had filed a review petition seeking review of this judgment but the same was rejected vide order dated