M. S. LIBERHAN, C. J.

( 1 ) THE appellant (hereinafter referred to as "the petitioner") impugned the order dated 14-7-1999 whereby its application for grant of prospecting licence for limestone in the areas in villages Kesavapalli, Alugupadu, Shankara-puram and Gokulapadu was rejected by the first respondent. The petitioner sought for the directions to the respondent to issue prospecting licence for mining lease.

( 2 ) THE petitioner is a public limited company claiming to be in the field of manufacturing cement. In the year 1987 the petitioner had applied for prospecting licence in respect of limestone in the areas in Kesavapalli, Alugumallipadu, Sankarapuram and Gogulapadu villages of Guntur District. It proclaimed the potentiality of manufacturing cement to the tune of 1. 1 million tonnes per annum. Prior to 1990 the Company became sick. It applied to the Board for Industrial and Financial Reconstruction (hereinafter referred to as "bifr") in the year 1990 for rehabilitation under the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as "act of 1985 ). The BIFR provided a rehabilitation scheme. Production was revived in December 1994 in terms of the rehabilitation scheme. Limestone mines on leases with the petitioner were claimed to be not of high grade. It was not able to improve the quality of the cement. Petitioner alleged to have located high-grade quarries of limestone as referred to above. It applied for prospecting mining licence according to the mines and Minerals (Regulation and Development) Act, 1957 (hereinafter referred to as "the Act") and the Minor Mineral Concession Rules, 1960 (hereinafter referred to as "the Rules") on 19-10-1994. The application for prospecting licence was in the form of bunch of applications i. e. , four individual applications.

( 3 ) THE first respondent issued a show cause notice dated 29-4-1999. Referring to the prospecting licence application dated 19-10-1994, the petitioner was informed that on the basis of the recommendation of the Director of Mines and Geology it is proposed to reject its application for grant of prospecting licence for limestone. The notice was with respect to over an area of 324. 3 hectares in S. Nos. 569 and 571/1 of Kasanapalli village. The proposed ground for declining the prospecting licence was that the applicant has already been recommended for renewal of five mining lease applications, and three mining licence applications. One more application was under process. Altogether covering a total area of 448. 72 hectares equivalent to 1108. 79 acres would be on lease with the petitioner. The reserves contained in these areas covered by its application for renewal are expected to be sufficient even taking into account its proposed expansion. Petitioner was asked to show cause in terms of Rule 12 (1) of the Rules as to why its application for prospecting licence dated 19-10-1994 should not be declined. Similar show cause notices were issued on the pari materia grounds with respect to Shankarapuram in S. No. 1002/2 and 1000/1, S. Nos. 14 and 15 of Gokulapadu, S. Nos. 92, 93 of Alugu-mallipadi, Explanation was offered on 17-5-1999 stating that the reserves contained in the leases or proposed leases expected to be sufficient was false. The Director of Mines and Geology s recommendation was made to wrongfully favour a third party.

( 4 ) THE petitioner filed a reply to the show cause notice. It is averred that the petitioner was the first applicant, in point of time. No limestone deposits, as alternative deposits are available for its plant. There are BIFR s binding directions that mining is not to be permitted to the third party near its plant. The recommendation is on account of vested interest to deprive the petitioner of its legitimate legal right. The Director of Mines and Geology neither considered its representation dated 28-1-1999 nor any reasons for rejecting the same were given. Facts contained in those representations were not

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