MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA AND ORS.

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 777 AND ORS. [RM. LODHA, J.] position, the Court considered the question whether Rule 59 A was attracted or not. The High Court had accepted the argument of the respondents that the expression 'reserved for any purpose' in Rule 59 did not cover a case where the area was reserved for nistar purposes or for any purpose other than mining. This Court did not accept the High Court's view. While B construing Rule 59 as it originally existed and the amendment brought in Rule 59 by deleting the words, 'other than prospecting or mining for minerals', the Court said that the result of the amendment was to extend the rule and not to curtail its area of operation. It was held that words 'any purpose' was of wide c connotation and there was no reason to restrict its meaning.

118Copy pinpoint118. Janak La/,i in my opinion, does not help the contention canvassed on behalf of the appellants. The expression, 'other than prospecting or mining for minerals' that formed part of original Rule 59, in my view, was not of much significance and did not impede the State Government's authority to make reservation of any area for exploitation in public sector founded on its ownership over that area. It was because of this that this insignificant and inconsequential expression was later on deleted from Rule 59 in 1963. Rule 59, accordingly, continued to recognise the State Government's right to reserve any area for mining within its territory for any purpose including exploitation in public sector. In Amritlal Nathubhai Shahd, this position has been expressly affirmed when it said, "but quite apart from that, we find that Rule 59 of the Rules which have been made under Section 13 of the Act, clearly contemplates such reservation by an order of the State Government".

Repeal of Rule 58 and Section 17A

119Copy pinpoint119. Rule 58 was amended in 1980 whereby it expressly provided that the State Government may by Notification in the official gazette reserve any area for exploitation by the Government, a corporation established by the Central, State or Provincial Act or a Government company within the meaning of Section 617 of the Companies Act. Rule 58 has been H

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A omitted from 1960 Rules as the provision for reservation has now been expressly made by insertion of Section 17A in 1957 Act. According to Section 17A(2), the State Government with the approval of the Central Government may reserve any area not already held under any prospecting licence or mining lease B to undertake prospecting or mining operations through a Government company or a corporation owned or controlled by it. In terms of Section 17A(2), any reservation made by the State Government after coming into force of that Section must bear approval of the Central Government. c 120. From the above, it becomes clear that what was implied by the provisions originally contained in 1957 Act and 1960 Rules insofar as authority of the State Government to reserve any area within its territory for mining in public sector has been made explicit first by amendment in Rule 58 in 1980 D and later on by introduction of Section 17A in 1957 Act by virtue of amendment effective from 1987.

121Copy pinpoint121. It was also argued by Mr. C.A. Sundaram, learned senior counsel for one of the appellants that even if 1962 and E 1969 Notifications were held to be validly issued with proper authority of law at that point of time, the fact that Rule 58 was omitted in 1988 without any saving clause necessarily meant that these Notifications were no longer valid and could not be relied upon. He argued that current power of reservation F contained in Section 17A of 1957 Act is consistent with erstwhile Rules 58/59 since Section 17A expressly requires the approval of the Central Government before any State Government issues any notification for reservation of mining area in public sector.

122Copy pinpoint122. The impact of omission of Rule 58 in 1988 from 1960 Rules and the introduction of Section 17A in 1957 Act in the context of reservation of the mining area by the State Government for public sector exploitation came up for direct consideration by this Court in Indian Metals and Ferro Alloys H Ltd.P. In the earlier part of the judgment I have already quoted

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 779 AND ORS. [R.M. LODHA, J.] the relevant portion of the decision of this Court in Indian Metals A and Ferro Alloys Ltd.P. The Court referred to the relevant amendments in 1957 Act and 1960 Rules and categorically held that reservations made prior to insertion of Section 17A continue in force even after the introduction of Section 17A. The reservations made by the State Government in 1977 before B omission of Rule 58 and amendment in Rule 59 and insertion of Section 17A in 1957 Act were, thus, held to be unaffected.

123Copy pinpoint123. Having carefully considered Section 17A, I have no hesitation in holding that the said provision is prospective. There C is no indication in Section 17A or in terms of the Amending Act that by insertion of Section 17A the Parliament intended to alter the pre-existing state of affairs. The Parliament does not seem to have intended by bringing in Section 17A to undo the reservation of any mining area made by the State Government earlier thereto for exploitation in public sector. The Parliament D has no doubt plenary power of legislation within the field assigned to it to legislate prospectively as well as retrospectively. As early as in 1951 this Court in Keshavan Madhava Menon v. State of Bombay" had stated abo.ut a cardinal principle of construction that every statue is prima facie E prospective unless it 1s expressly or by necessary implication made to have retrospective operation. Unless there are words in the statute sufficient to show the intention of the Legislature to affect existing rights, it is deemed to be prospective only. In Principles of Statutory Interpretation (Seventh Edition, 1999) by F Justice G.P. Singh, the statement of Lord Blanesburg in Colonial Sugar Refining Co. v. lrvings• and the observations of Lopes, L.J. in Pu/borough Parish School Board Election, Bourke v. Nuftlt have been noted as follows : G "In the words of Lord Blanesburg, "provisions which touch

rr. AIR 1951 SC 128. ss. (1905) AC 369. tt. (1894) 1 QB 725, p. 737. H

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A a right in existence at the passing of the statute are not to be applied retrospectively in the absence of express enactment or necessary intendment." "Every statute, it has been said", observed Lopes, L.J., "which takes away or impairs vested rights acquired under existing laws, or B creates a new obligation or imposes a new duty, or attaches a new disability in respect of transactions already past, must be presumed to be intended not to have a retrospective effect".

124Copy pinpoint124. Where an issue arises before the Court whether a C statute is prospective or retrospective, the Court has to keep in mind presumption of prospectivity articulated in legal maxim nova constitutio futuris formam imponere debet non praeteritis, i.e., 'a new law ought to regulate what is to follow, not the past'. The presumption of prospectivity operates unless D shown to the contrary by express provision in the statute or is otherwise discernible by necessary implication.

125Copy pinpoint125. The aspects, namely, (i) 1993 mineral policy framed by the Central Government envisaged permission of captive E cons1:1mption of minerals across the country; (ii) in 1994 Central Government asked all the state governments to de-reserve 13 minerals including iron ore and directed them to take steps accordingly; (iii) confirmation by the Government of Bihar to the Central Government in 1994 that no mining areas were reserved for public sector undertaking in the then State of Bihar; (iv) confirmation by the State Government in 2001 to Central Government that there are no reserved areas in the State and (v) in 2004, the recommendation by the State Government in favour of the appellants to the Central Government for grant of prior approval and reminder in 2005, in my view, have no impact and effect on the validity of 1962 and 1969 Notifications. The above acts of the Government of Bihar and the Government of Jharkhand in ignorance of 1962 and 1969 Notifications cannot be used as a sufficient ground for invalidating these Notifications. If a state government has power to reserve H

MONNET ISPAl & ENERGY LTD. v. UNION OF INDIA 781 AND ORS. [R.M. LODHA, J.] mineral bearing area for exploitation in public sector - and I A have already held that the then Government of Bihar had such power - the act of reservation vide 1962 and 1969 Notifications is not rendered illegal or invalid. I am clearly of the view that lack of knowledge on the part of the State Government about the reservation of areas for exploitation in public sector vide B 1962 and 1969 Notifications does not affect in any manner the legality and validity of these Notifications once it has been found that these Notifications have been issued by the erstwhile State of Bihar in valid exercise of power which it had.

Validity of 2006 Notification c

126Copy pinpoint126. On October 27, 2006, the State Government issued a Notification declaring its decision that the iron ore deposits at Ghatkuri would not be thrown open for grant of prospecting licence, mining licence or otherwise for private parties. In the said Notification, it was noted that the deposits were at all material times kept reserved by 1962 and 1969 Notifications issued by the State of Bihar. It was further mentioned in the Notification that mineral reserved in Ghatkuri area has now been decided to be utilized for exploitation by public sector undertaking or joint venture project of the State Government as they would usher in maximum benefits to the State and would generate substantial amount of employment in the State. 2006 Notification states that it has been issued in the public interest and in the larger interest of the State for optimum utilization and exploitation of the mineral resources in the State and for establishment of mineral based industry with value addition thereon. It was argued that 2006 Notification is bad for the same reasons for which 1962 and 1969 Notifications are bad in law and invalid. The argument is noted to be rejected. For G 1962 and 1969 Notifications are not and have not been found by me to suffer from any legal infirmity. 2006 Notification mentions factum of reservation made by 1962 and 1969 Notifications. It is founded on the policy of the State Government that such reservation will usher in maximum benefits to the State H

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A and would also generate substantial amount of employment in the State. The public interest is, thus, paramount. The State Government had authority to do that under Section 17A(2) of 1957 Act read with Rule 59(1)(e) of 1960 Rules.

127Copy pinpoint127. It was, however, argued on behalf of the appellants 8 that 2006 Notification has attempted to reserve the area for exploitation by public sector undertaking or in joint venture project whereas Section 17A(2) of 1957 Act allows the State Government to reserve area for a government company or corporation owned or controlled by it and not in joint venture C project. The submission was that 2006 Notification is an attempt to bring in indirectly private companies through joint venture project although, Section 17A clearly does not envisage private participation.

128Copy pinpoint128. The mineral reserved in the said area by 2006 Notification has been decided to be utilized for exploitation by public sector undertaking or joint venture project of the State Government. 2006 Notification does mention reservation for joint venture project of the State Government but, in my opinion, the said expression must be understood to be confined to an instrumentality having the trappings and character of a government company or corporation owned or controlled by the State Government and not outside of such instrumentality.

129Copy pinpoint129. The types of reservation under Section 17A and their scope have been considered by this Court in Indian Metals and Ferro Alloys Ltd.Pin paragraphs 45 and 46 (pgs. 136-139) of the Report. I am in respectful agreement with that view. However, it was argued that Section 17A(2) requires prior approval of the Central Government before reservation of any area by the State Government for the public sector undertaking. The argument is founded on incorrect reading of Section 17A(2). This provision does not use the expression, 'prior approval' which has been used in Section 11. On the other hand, Section 17A(2) uses the words, 'with the approval of the H Central Government'. These words in Section 17A(2) can not

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 783 AND ORS. [R.M. LODHA, J.] be equated with prior approval of the Central Government. A According to me, the approval contemplated in Section 17A may be obtained by the State Government before the exercise of power of reservation or after exercise of such power. The approval by the Central Government contemplated in Section 17A(2) may be express or implied. In a case such as the present B one where the Central Government has relied upon 2006 Notification while rejecting appellants' application for grant of mining lease, it necessarily implies that the Central Government has approved reservation made by State Government in 2006 Notification otherwise it would not have acted on the same. In c any case, the Central Government has not disapproved reservation made by the State Government in 2006 Notification.

130Copy pinpoint130. Two more contentions advanced on behalf of the appellants, one, with regard to 2006 Notification and the other with regard to 1962 and 1969 Notifications may be briefly D noticed. As regards 2006 Notification it was contended that it was not legally valid as it has been made operative with retrospective effect. In respect of 1962 and 1969 Notifications, it was argued that the State Government had never adopted these Notifications and, accordingly, these Notifications lapsed. E None of these two arguments has any merit. 2006 Notification has not been given retrospective operation as contended on behalf of the appellants. I have already held that 2006 Notification is prospective. Mere reference to 1962 and 1969 Notifications in 2006 Notification does not make 2006 F Notification retrospective.

131Copy pinpoint131. The other argument that 1962 and 1969 Notifications had lapsed as the State Government never adopted them is also without any merit and substance. The new State of Jharkhand was carved out of the erstwhile State of Bihar and G it came into existence by virtue of the Bihar Reorganisation Act, 2000. Section 85 of that Act provides that the appropriate Government may before expiration of two years adapt and/or modify the law and every such law shall have effect subject to adaptation and modification so made until altered, repealed or H

784 SUPREME COURT REPORTS [2012] 7 S.C.R.

A amended by a competent Legislature. In light of Section 85 of the Bihar Reorganisation Act read with Sections 84 and 86 thereof, position that emerges is that the existing law shall have effect until it is altered, repealed and/or amended. Since the new State of Jharkhand had not altered, repealed and/or s amended 1962 and 1969 Notifications issued by the erstwhile State of Bihar, it cannot be said that 1962 and 1969 Notifications had lapsed. Moreover, in 2006 Notification, 1962 and 1969 Notifications and their effect have been mentioned and that also shows that 1962 and 1969 Notifications continued c to operate. The expression, 'the deposit was at all material times kept reserved vide Gazette Notification No. NMM-40510/ 62-6209/M dated 21st December, 1962 and No. B/M-6-1019/ 68-1564/M dated 28th February, 1969 of the State of Bihar' leaves no manner of doubt that 1962 and 1969 Notifications D continued to operate and did not lapse.

Principles of promissory estoppal

132Copy pinpoint132. The doctrine of promissory estoppel is now firmly established and is well accepted in India. Its nature, scope and extent have come up for consideration before this Court time and again. One of the leading cases of this Court on the doctrine of promissory estoppel is the case of Motila/ Padampat Sugar Mills' . In that case, the Court elaborately and extensively considered diverse facets and aspects of doctrine of promissory estoppel. That was a case where the appellant was primarily engaged in the business of manufacture and sale of sugar and it had also a cold storage plant and a steel foundry. On October 10, 1968 a news item was carried in the newspaper/s that the State of Uttar Pradesh had decided to give exemption from sales tax for a period of three years under G Section 4-A of the U.P. Sales Tax Act to all new industrial units in the State with a view to enabling them, "to come on firm footing in developing stage". Motilal Padampat Sugar Mills' on the basis of the above news, addressed a letter to the Director of the Industries stating that in view of the Sales Tax H

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 785 AND ORS. [R.M. LODHA, J.] Holiday announced by the Government, it intended to set up a A hydrogeneration plant for manufacture of vanaspati and sought confirmation whether proposed industrial unit would be entitled to sales tax holiday for a period of three years from the date it commenced production. Tl1e Director of Industries replied that there would be no sales tax for three years on the finished B product of the vanaspati from the date it got power connection for commencing production. Motilal Padampat Sugar Mills' then started taking steps for establishment of the factory. It entered into agreement for procuring plant and machinery and also took diverse steps and considerable progress in the c setting up of the vanaspati factory took place. Later on, the State Government had a second thought on the question of exemption of sales tax and, ultimately, the government took a policy decision that new vanaspati units in the State which go into commercial production by September 30, 1970 would be given only partial concession in sales tax for a period of three years. Motilal Padampat Sugar Mills' took up the matter with the Government and in the meanwhile its production started on July 2, 1970 which was also intimated to the functionaries of the State. Having been denied total sales tax holiday 31though promised earlier by the Director of Industries, it filed a writ petition before the High Court. The principal argument advanced on behalf of Motilal Padampat Sugar Mills' was that on a categorical assurance of the State Government that it would be exempted from payment of sales tax for a period of three years from the date of commencement of production that it established a hydrogeneration plant for manufacture of vanaspati. The assurance was given by the State Government intending or knowing that it would be acted on by it and in fact by acting on it, it altered its position and, therefore, the State Government was bound on the principle of promissory estoppel to honour the as~urance and exempt it from sales tax for a period of three years. In backdrop of these facts, when the matter reached this Court, the Court considered the nature, scope and extent of the doctrine of promissory estoppel. In paragraph 8 of the Report, the Court considered the view of H

786 SUPREME COURT REPORTS [2012] 7 S.C.R.

A Justice Denning, as he then was, in the Central London Property Trust Ltd. v. High Trees House Ltd. uu wherein Denning, J. had considered Jorden v. Money"'. This Court also referred to in paragraph 8, the opinions in Hughes v. Metropolitan Railway Company-, Birmingham and District B Land Co., v. London and North Western Rail Co.xx which were considered by Justice Denning in the High Trees"" case. The Court also considered the decisions in Durham Fancy Goods Ltd. v. Michael Jackson (Fancy Goods) Ltd.YY, Evenden v. Guildford City Association Football Club Ltd. zz and Crabb v. C Arun District Council••• and culled out the legal position as follows:

"8 ....... The true principle of promissory estoppel, therefore, seems to be that where one party has by his words or conduct made to the other a clear and unequivocal promise which is intended to create legal relations or affect a legal relationship to arise in the future, knowing or intending that it would be acted upon by the other party to whom the promise is made and it is in fact so acted upon by the other party, the promise would be binding on the party making it and he would not be entitled to go back upon it, if it would be inequitable to allow him to do so having regard to the dealings which have taken place between the parties, and this would be so irrespective of whether there is any pre-existing relationship between the parties or not."

Then in para 9, the Court stated that it was a doctrine evolved by equity in order to prevent injustice. The Court pointed out uu. (1956) 1 All ER 256. G w. (1854) 5 HLC 185. ww. (1877) 2 AC 439. xx. (1889) 40 Ch D 268. Y'f· (1968) 2 All ER 987. zz (1975) 3 All ER 269. H aaa. (1975) 3 All ER 865.

MONNET !SPAT & ENERGY LTD. v. UNION OF INDIA 787 AND ORS. [R.M. LODHA, J.) that where promise is made by a person knowing that it would A be acted on by the person to whom it is made and in fact it is so acted on, it is inequitable to allow the party making the promise to go back upon it.

133Copy pinpoint133. In para 13, the development of doctrine of promissory 8 estoppel in England was noticed by observing, "that even in England where the Judges, apprehending that if a cause of action is allowed to be founded on promissory estoppel it would considerably erode, if not completely overthrow, the doctrine of consideration, have been fearful to allow promissory estoppel to be used as a weapon of offence, it is interesting to find that promissory estoppel has not been confined to a purely defensive role".

134Copy pinpoint134. In Motilal Padampat Sugar Mills', the Court also referred to American law on the subject. In para 14 after observing, 'the doctrine of promissory estoppel has displayed remarkable vigour and vitality in the hands of American Judges and it is still rapidly developing and expanding in the United States", the Court referred to Article 90 of Americ.an Law lnstitute's "Restatement of the Law of Contracts" and the statement at page 657 of Volume 19 of American Jurisprudence.

135Copy pinpoint135. The Court then considered the view of Justice Cardozo in Allengheny College v. National Chautauque F County BanJ<bbb and Drennan v. Star Paving Companyxc and noted as follows :

"14. There are also numerous cases where the doctrine of promissory estoppel has been applied against the Government where the interest of justice, morality and G common fairness clearly dictated such a course. We shall refer to these cases when we discuss the applicability of the doctrine of equitable estoppel against the Government. bbb. 57 ALR 980. CCC. (1958) 31 Cal 2d 409. H

788 SUPREME COURT REPORTS [2012] 7 S.C.R.

A Suffice it to state for the present that the doctrine of promissory estoppel has been taken much further in the United States than in English and Commonwealth ·jurisdictions and in some States at least, it has been used to reduce, if not to destroy, the prestige of consideration B as an essential of valid contract. Vide Spencer Bower and Turner's Estoppel by Representation (2d) p. 358.

136Copy pinpoint136. The Court then considered to what extent the doctrine of promissory estoppel was applicable against the C Government. After referring to few decisions of the English courts and the American courts, the decisions of this Court in Union of India v. lndo-Afghan Agenciesddd, Collector of Bombay v. Municipal Corporation of the City of Bombaye••, Century Spinning and Manufacturing Co. Ltd. v. Ulhasnagar Municipal Council'", M. Ramanatha Pillai v. State of D Keralaggg' Assistant Custodian v. Brij Kishore Agarwa/ahhh, State of Kera/av. Gwalior Rayon Silk Manufacturing Co. Ltd.iii, Excise Commissioner, UP., Allahabad v. Ram Kumariil, Bihar Eastern Gangetic Fishermen Co-operative Society Ltd. v.

Sipahi Singhkkk and Radhakrishna Agarwal v. State of Bihar 11

E were considered.

137Copy pinpoint137. After entering into detailed consideration as noted above, in Moti/al Padampat Sugar Mills2, this Court exposited the legal position that the doctrine of promissory estoppel may F be applied against the State even in its governmental, public

ddd. (1968) 2 SCR 366. eee. (1952) SCR 43. fff. (1970) 1 sec 582. G ggg. (1974) 1 SCR 515. hhh. (1975) 1sec 21. iii. (1973) 2 sec 713. iii· (1976) 3 sec 540. kkk. (1977) 4 sec 145.

H 111. (1977) 3 sec 457.

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 789 AND ORS. [R.M. LODHA, J.] or sovereign capacity where it is necessary to prevent fraud or A manifest injustice. The following position was culled out:

''The promissory estoppel cannot be invoked to compel the Government or even a private party to do an act prohibited by law. B To invoke the doctrine of promissory estoppel it is not necessary for the promisee to show that he suffered any detriment as a result of acting in reliance on the promise. The detriment is not some prejudice suffered by the promisee by acting on the promise but the prejudice which would be caused to the promisee, if the promiser were allowed to go back on the promise.

Whatever be the nature of function which the Government is discharging, the Government is subject to the rule of promissory estoppel and if the essential ingredients of this rule are satisfied the Government can be compelled to carry out the promise made by it."

138Copy pinpoint138. In Union of India and Others v. Godfrey Philips India Limitedmmm (para 9, page 383 of the Report), this Court stated as follows:

"9. Now the doctrine of promissory estoppel is well established in the administrative law of India. It represents a principle evolved by equity to avoid injustice and, though commonly named promissory estoppel, it is neither in the realm of contract nor in the realm of estoppel. The basis of this doctrine is the interposition of equity which has always, true to its form, stepped in to mitigate the rigour of strict law. This doctrine, though of ancient vintage, was rescued from obscurity by the decision of Mr. Justice Denning as he then was, i.n his celebrated judgment in Central London Property Trust Ltd. v. High Trees House

mmm.(1985) 4 sec 369. H

790 SUPREME COURT REPORTS [2012] 7 S.C.R.

A Ltd. The true principle of promissory estoppel is that where one party has by his word or conduct made to the other a clear and unequivocal promise or representation which is intended to create legal relations or effect a legal relationship to arise in the future, knowing or intending that B it would be acted upon by the other party to whom the promise or representation is made and it is in fact so acted upon by the other party, the promise or representation would be binding on the party making it and he would not be entitled to go back upon it, if it would be inequitable to allow him to do so, having regard to the dealings which c have taken place between the parties. It has often been said in England that the doctrine of promissory estoppel cannot itself be the basis of an action: it can only be a shield and not a sword: but the law in India has gone far ahead of the narrow position adopted in England and as D a result of the decision of this Court in Motilal Padampat Sugar Mills v. State of U.P. it is now well settled that the doctrine of promissory estoppel is not limited in its application only to defence but it can also found a cause of action. The decision of this Court in Motilal Sugar Mills E case contains an exhaustive discussion of the doctrine of promissory estoppel and we find ourselves wholly in agreement with the various parameters of this doctrine outlined in that decision."

139Copy pinpoint139. The doctrine of promissory estoppel also came up for consideration before this Court in Delhi Cloth and General Mills Limited v. Union of lndiannn_ In para 18 (page 95) of the Report the Court stated as follows :

"18. Here the Railways Rates Tribunal apparently, appears to have gone off the track. The doctrine of promissory estoppel has not been correctly understood by the Tribunal. It is true, that in the formative period, it was generally said that the doctrine of promissory estoppel cannot be invoked nnn. (1988) 1 sec 86.

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 791 AND ORS. [R.M. LODHA, J.] by the promisee unless he has suffered "detriment" or A "prejudice". It was often said simply, that the party asserting the estoppel must have been induced to act to his detriment. But this has now been explained in so many decisions all over. All that is now required is that the party asserting the estoppel must have acted upon the B assurance given to him. Must have relied upon the representation made to him. It means, the party has changed or altered the position by relying on the assurance or the representation. The alteration of position by the party is the only indispensable requirement of the c doctrine. It is not necessary to prove further any damage, detriment or prejudice to the party asserting the estoppel. The court, however, would compel the opposite party to adhere to the representation acted upon or abstained from acting. The entire doctrine proceeds on the premise that D it is reliance based and nothing more."

140Copy pinpoint140. A two-Judge Bench of this Court in Amrit Banaspati Company Limitedaa entered into consideration of the extent and applicability of doctrine of promissory estoppel and after considering earlier decisions of this Court in lndo-Afghan E Agenciesddd, Motilal Padampat Sugar Mil/S', Godfrey Philips India Limitecrmm and Delhi Cloth and General Mills Limited""" culled out the legal position that if a representation was made by an official on behalf of the Government then unless such representation is established to be beyond scope of authority F it should be held binding on the Government. However, if such representation was contrary to law then such representation was unenforceable. Then the Court stated (para 10, page 424) as follows: G "10. But promissory estoppel being an extension of principle of equity, the basic purpose of which is to promote justice founded on fairness and relieve a promisee of any injustice perpetrated due to promisor's going back on its promise, is incapable of being enforced H

792 SUPREME COURT REPORTS [2012] 7 S.C.R.

A in a court of law if the promise which furnishes the cause of action or the agreement, express or implied, giving rise to binding contract is statutorily prohibited or is against public policy ...... "

141Copy pinpoint141. In Kasinka Trading & Anr. v. Union of India and 8 Anr. , the Court was principally concerned with the invocation 000

of the doctrine of promissory estoppel in the facts and circumstances of the case obtaining therein. The Court considered the decision of this Court in Inda-Afghan C Agencies<Jdd and the successive decisions. The Court held in (paras 11-12, pages 283-284) as under:

"11. The doctrine of promissory estoppel or equitable estoppel is well established in the administrative law of the country. To put it simply, the doctrine represents a principle evolved by equity to avoid injustice. The basis of the doctrine is that where any party has by his word or conduct made to the other party an unequivocal promise or representation by word or conduct, which is intended to create legal relations or effect a legal relationship to arise in the future, knowing as well as intending that the representation, assurance or the promise would be acted upon by the other party to whom it has been made and has in fact been so acted upon by the other party, the promise, assurance or representation should be binding on the party making it and that party should not be permitted to go back upon it, if it would be inequitable to allow him to do so, having regard to the dealings, which have taken place or are intended to take place between the parties.

12. It has been settled by this Court that the doctrine of promissory estoppel is applicable against the Government also particularly where it is necessary to prevent fraud or manifest injustice. The doctrine, however, cannot be pressed into aid to compel the Government or the public

H ooo. 1995 (1) sec 274.

MONNET !SPAT & ENERGY LTD. v. UNION OF INDIA 793 AND ORS. [R.M. LODHA, J.]

authority "to carry out a representation or promise which is contrary to law or which was outside the authority or power of the officer of the Government or of the public authority to make". There is preponderance of judicial opinion that to invoke the doctrine of promissory estoppel clear, sound and positive foundation must be laid in the petition itself by the party invoking the doctrine and that bald expressions, without any supporting material, to the effect that the doctrine is attracted because the party invoking the doctrine has altered its position relying on the assurance of the Government would not be sufficient to c press into aid the doctrine. In our opinion, the doctrine of promissory estoppel cannot be invoked in the abstract and the courts are bound to consider all aspects including the results sought to be achieved and the public good at large, because while considering the applicability of the doctrine, the courts have to do equity and the fundamental principles of equity must for ever be present to the mind of the court, while considering the applicability of the doctrine. The doctrine must yield when the equity so demands if it can be shown having regard to the facts and circumstances of the case that it would be inequitable to hold the Government or the public authority to its promise, assurance or representation."

Then in paragraph 20 of the Report while distinguishing the facts under consideration which were not found to be analogous to the facts in Inda-Afghan Agencies<Jdd and Matilal Padampat Sugar Mills, the Court stated (Para 20-21, pages 287-288) as follows:

"20. The facts of the appeals before us are not analogous to the facts in Inda-Afghan Agencies or M.P. Sugar Mills. In the first case the petitioner therein had acted upon the unequivocal promises held out to it and exported goods on the specific assurance given to it and it was in that fact situation that it was held that Textile Commissioner who H

794 SUPREME COURT REPORTS [2012] 7 S.C.R.

A had enunciated the scheme was bound by the assurance thereof and obliged to carry out the promise made thereunder. As already noticed, in the present batch of cases neither the notification is of an executive character nor does it represent a scheme designed to achieve a B particular purpose. It was a notification issued in public interest and again withdrawn in public interest. So far as the second case (M.P. Sugar Mills case) is concerned the facts were totally different. In the correspondence exchanged between the State and the petitioners therein it was held out to the petitioners that the industry would be c exempted from sales tax for a particular number of initial years but when the State sought to levy the sales tax it was held by this Court that it was precluded from doing so because of the categorical representation made by it to the petitioners through letters in writing, who had relied upon the same and set up the industry.

21. The power to grant exemption from payment of duty, additional duty etc. under the Act, as already noticed, flows from the provisions of Section 25( 1) of the Act. The power to exempt includes the power to modify or withdraw the same. The liability to pay customs duty or additional duty under the Act arises when the taxable event occurs. They are then subject to the payment of duty as prevalent on the date of the entry of the goods, An exemption notification issued under Section 25 of the Act had the effect of suspending the collection of customs duty. It does not make items which are subject to levy of customs duty etc. as items not leviable to such duty. It only suspends the levy and collection of customs duty, etc., wholly or partially and subject to such conditions as may be laid down in the notification by the Government in "public interest". Such an exemption by its very nature is susceptible of being revoked or modified or subjected to other conditions. The supersession or revocation of an exemption notification in the "public interest" is an exercise of the statutory power H

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 795 AND ORS. [R.M. LODHA, J.] of the State under the law itself as is obvious from the A language of Section 25 of the Act. Under the General Clauses Act an authority which has the power to issue a notification has the undoubted power to rescind or modify the notification in a like manner. From the very nature of power of exemption granted to the Government under B Section 25 of the Act, it follows that the same is with a view to enabling the Government to regulate, control and promote the industries and industrial production in the country. Notification No. 66 of 1979 in our opinion, was not designed or issued to induce the appellants to import c PVC resin. Admittedly, the said notification was not even intended as an incentive for import. The notification on the plain language of it was conceived and issued on the Central Government "being satisfied that it is necessary in the public interest so to do". Strictly speaking, therefore, the notification cannot be said to have extended any 'representation' much less a 'promise' to a party getting the benefit of it to enable it to invoke the doctrine of promissory estoppel against the State. It would bear repetition that in order to invoke the doctrine of promissory estoppel, it is necessary that the promise which is sought to be enforced must be shown to be an unequivocal promise to the other party intended to create a legal relationship and that it was acted upon as such by the party to whom the same was made. A notification issued under Section 25 of the Act cannot be said to be holding out of any such unequivocal promise by the Government which was intended to create any legal relationship between the Government and the party drawing benefit flowing from of the said notification. It is, therefore, futile to contend that even if the public interest so demanded and the Central Government was satisfied that the exemption did not require to be extended any further, it could still not withdraw the exemption."

The Court went on to observe (paras 24 and 25, pages 289- 290) as under: H

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A "24. It needs no emphasis that the power of exemption under Section 25(1) of the Act has been granted to the Government by the Legislature with a view to enabling it to regulate, control and promote the industries and industrial productions in the country. Where the B Government on the basis of the material available before it, bona fide, is satisfied that the "public interest" would be served by either granting exemption or by withdrawing, modifying or rescinding an exemption already granted, it should be allowed a free hand to do so. We are unable to c agree with the learned counsel for the appellants that Notification No. 66 of 1979 could not be withdrawn before 31 ··3-1981. First, because the exemption notification having been issued under Section 25(1) of the Act, it was implicit in it that it could be rescinded or modified at any time if the public interest so demands and secondly it is not permissible to postpone the compulsions of "public interest" till after 31-3-1981 if the Government is satisfied as to the change in the circumstances before that date. Since, the Government in the instant case was satisfied that the very public interest which had demanded a total exemption from payment of customs duty now demanded that the exemption should be withdrawn it was free to act in the manner it did. It would bear a notice that though Notification No. 66of1979 was initially valid only up to 31- 3-1979 but that date was extended in "public interest", we see no reason why it could not be curtailed in public interest. Individual interest must yield in favour of societal interest.

25. In our considered opinion therefore the High Court was perfectly right in holding that the doctrine of promissory estoppel had no application to the impugned notification issued by the Central Government in exercise of its powers under Section 25(1) of the Act in view of the facts and circumstances, as established on the record." H

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 797 AND ORS. [R.M. LODHA, J.]

142Copy pinpoint142. In State of Orissa and Ors. v. Mangalam Timber A Products LimitedPPP, this Court held that to attract applicability of the principle of estoppel it was not necessary that there must be a contract in writing entered into between the parties. Having regard to the facts of the case under consideration, the Court held that it was not satisfied even prima facie that it was a case B of an error committed by the State Government of which it was not aware. While observing that the State cannot take advantage of its own omission, the Court held that having persuaded the respondent therein to establish an industry and that party having acted on the solemn promise of the State c Government, purchased the raw material at a fixed price and also sold its products by pricing the same taking into consideration the price of the raw material fixed by the State Government, the State Government cannot be permitted to revise the terms for supply of raw material adversely to the D interest of that party.

143Copy pinpoint143. In Nestle India Limitecft>b, the applicability of doctrine of promissory estoppel again came up for consideration before this Court. Inter alia, the Court considered the earlier decisions of this Court in Inda-Afghan Agenciesddd, Motilal Padampat E Sugar Mills', Godfrey Philips India Limitedmmm, Mangalam Timber Products LimitedPPP, Amrit Banaspati Company Limited"" and Kasinka Trading" 00 • The Court followed Godfrey Philips India Limitecrmm which was found to be close to the facts of that case. The Court did not accept the argument F canvassed on behalf of the State of Punjab that the overriding public interest would make it inequitable to enforce the estoppel against the State Government.

144Copy pinpoint144. In Bannari Amman Sugars Ltd. v. Commercial Tax G Officer & Ors. qqq, the development of doctrine of promissory estoppel was noted (paras 5-7, pages 631-633) and it was held as under: ppp. (2004) 1 sec 139. qqq. c2005) 1 sec 625. H

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A "5. Estoppel is a rule of equity which has gained new dimensions in recent years. A new class of estoppel has come to be recognised by the courts in this country as well as in England. The doctrine of "promissory estoppel" has assumed importance in recent years though it was dimly B noticed in some of the earlier cases. The leading case on the subject is Central London Property Trust Ltd. v. High Trees House Ltd., (1947) 1 K.B. 130 The rule laid down in High Trees case again came up for consideration before the King's Bench in Combe v. Combe [(1951) 2 KB 215]. Therein the Court ruled that the principle stated in c High Trees case is that, where one party has, by his words or conduct, made to the other a promise or assurance which was intended to affect the legal relations between them and to be acted on accordingly, then, once the other party has taken him at his word and acted on it, the party who gave the promise or assurance cannot afterwards be allowed to revert to the previous legal relationship as if no such promise or assurance had been made by him, but he must accept their legal relations subject to the qualification which he himself has so introduced, even though it is not supported in point of law by any consideration, but only by his word. But that principle does not create any cause of action, which did not exist before; so that, where a promise is made which is not supported by any consideration, the promise cannot bring an action on the basis of that promise. The principle enunciated in High Trees case was also recognised by the House of Lords in Tool Metal Mfg. Co. Ltd. v. Tungsten Electric Co. Ltd. [(1955) 2 All ER 657]. That principle was adopted by this Court in Union of India v. Anglo Afghan Agencies (AIR G 1968 SC 718) and Turner Morrison and Co. Ltd. v. Hungerford Investment Trust Ltd.[(1972) 1 SCC 857]. Doctrine of "promissory estoppel" has been evolved by the courts, on the principles of equity, to avoid injustice. "Promissory estoppel" is defined in Black's Law Dictionary H as an estoppel.

MONNET !SPAT & ENERGY LTD. v. UNION OF INDIA 799 AND ORS. [R.M. LODHA, J.] "which arises when there is a promise which promisor should reasonably expect to induce action or forbearance of a definite and substantial character on part of promisee, and which does induce such action or forbearance, and such promise is binding if injustice can be avoided only by enforcement of promise".

So far as this Court is concerned, it invoked the doctrine in Anglo Afghan Agencies case in which it was, inter alia, laid down that even though the case would not fall within the terms of Section 115 of the Indian Evidence Act, 1872 (in short "the Evidence Act") which enacts the rule of estoppel, it would still be open to a party who had acted on a representation made by the Government to claim that the Government should be bound to carry out the promise made by it even though the promise was not recorded in the form of a formal contract as required by Article 299 of the Constitution. [See Century Spg. & Mfg. Co. Ltd. v. Ulhasnagar Municipal Council, ((1970) 1 SCC 582]. Radhakrishna Agarwal v. State of Bihar, [(1977)3 SCC 457], Motilal Padampat Sugar Mills Co. Ltd. v. State of E UP., [(1979) 2 SCC 409], Union of India v. Godfrey Philips India Ltd. [(1985) 4 SCC 369] and Ashok Kumar Maheshwari (Dr.) v. State of U.P. [(1998) 2 SCC 502].

6. In the backdrop, let us travel a little distance into the past to understand the evolution of the doctrine of "promissory estoppel". Dixon, J., an Australian jurist, in Grundt v. Great Boulder Gold Mines Pty. Ltd. [(1939) 59 CLR 641 (Aust HC) laid down as under:

"It is often said simply that the party asserting the estoppel must have been induced to act to his detriment. Although substantially such a statement is correct and leads to no misunderstanding, it does not bring out clearly the basal purpose of the doctrine. That purpose is to avoid or prevent a H

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A detriment to the party asserting the estoppel by compelling the opposite party to adhere to the assumption upon which the former acted or abstained from acting. This means that the real detriment or harm from which the law seeks to give B protection is that which would flow from the change of position if the assumptions were deserted that led to it."

The principle, set out above, was reiterated by Lord Denning in High Trees case. This principle has been c evolved by equity to avoid injustice. It is neither in the realm of contract nor in the realm of estoppel. Its object is to interpose equity shorn of its form to mitigate the rigour of strict law, as noted in Anglo Afghan Agencies case and Sharma Transport v. Govt. of A.P. [(2002) 2 SCC 188] D

7. No vested right as to tax-holding is acquired by a person who is granted concession. If any concession has been given it can be withdrawn at any time and no time-limit should be insisted upon before it was withdrawn. The rule E of promissory estoppel can be invoked only if on the basis of representation made by the Government, the industry was established to avail benefit of exemption. In Kasinka Trading v. Union of India [(1995) 1 SCC 274] it was held _ that the doctrine of promissory estoppel represents a principle evolved by equity to avoid injustice." F

145Copy pinpoint145. In M.P. Mathurcc"c, the Court was concerned with the question whether on the facts of the case, the plaintiffs could compel transfer of tenements in their favour on the basis of promissory estoppel. The Court (para 14, page 716 of the G Report) observed as follows :

" ......... The term "equity" has four different meanings, according to the context in which it is used. Usually it means "an equitable interest in property". Sometimes, it means "a mere equity", which is a procedural right ancillary

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 801 AND ORS. [RM. LODHA, J.] to some right of property, for example, an equitable right to have a conveyance rectified. Thirdly, it may mean "floating equity", a term which may be used to describe the interest of a beneficiary under a will. Fourthly, "the right to obtain an injunction or other equitable remedy". In the present case, the plaintiffs have sought a remedy which is discretionary. They have instituted the suit under Section 34 of the 1963 Act. The discretion which the court has to exercise is a judicial discretion. That discretion has to be exercised on well-settled principles. Therefore, the court has to consider-the nature of obligation in respect of which c performance is sought, circumstances under which the decision came to be made, the conduct of the parties and the effect of the court granting the decree. In such cases, the court has to look at the contract. The court has to ascertain whether there exists an element of mutuality in the contract. If there is absence of mutuality the court will not exercise discretion in favour of the plaintiffs. Even if, want of mutuality is regarded as discretionary and not as an absolute bar to specific performance, the court has to consider the entire conduct of the parties in relation to the subject-matter and in case of any disqualifying circumstances the court will not grant the relief prayed for (Snell's Equity, 31st Edn., p. 366) ........ "

146Copy pinpoint146. In my view, the following principles must guide a Court where an issue of applicability of promissory estoppel arises: F

(i) Where one party has by his words or conduct made to the other clear and unequivocal promise which is intended to create legal relations or affect a legal relationship to arise in the future, knowing or G intending that it would be acted upon by the other party to whom the promise is made and it is, in fact, so acted upon by the other party, the promise would be binding on the party making it and he would not be entitled to go back upon it, if it would be H

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A inequitable to allow him to do so having regard to the dealings which have taken place between the parties, and this would be so irrespective of whether there is any pre-existing relationship between the parties or not. B (ii) The doctrine of promissory estoppel may be applied against the Government where the interest of justice, morality and common fairness dictate such a course. The doctrine is applicable against the State even in its governmental, public or c sovereign capacity where it is necessary to prevent fraud or manifest injustice. However, the Government or even a private party under the doctrine of promissory estoppel cannot be asked to do an act prohibited in law. The nature and function which the Government discharges is not very relevant. The Government is subject to the rule of promissory estoppel and if the essential ingredients of this doctrine are satisfied, the Government can be compelled to carry out the promise made by it.

(iii) The doctrine of promissory estoppel is not limited in its application only to defence but it can also furnish a cause of action. In other words, the doctrine of promissory estoppel can by itself be the basis of action.

(iv) For invocation of the doctrine of promissory estoppel, it is necessary for the promisee to show that by acting on promise made by the other party, he altered his position. The alteration of position by the promisee is a sine qua non for the applicability of the doctrine. However, it is not necessary for him to prove any damage, detriment or prejudice because of alteration of such promise. H

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 803 AND ORS. [R.M. LODHA, J.] (v) In no case, the doctrine of promissory estoppel can A be pressed into aid to compel the Government or a public authority to carry out a representation or promise which is contrary to law or which was outside the authority or power of the officer of the Government or of the public authority to make. No B promise can be enforced which is statutorily prohibited or is against public policy.

(vi) It is necessary for invocation of the doctrine of promissory estoppel that a clear, sound and positive foundation is laid in the petition. Bald assertions, averments or allegations without any supporting material are not sufficient to press into aid the doctrine of promissory estoppel.

(vii) The doctrine of promissory estoppel cannot be invoked in abstract. When it is sought to be invoked, the Court must consider all aspects including the result sought to be achieved and the public good at large. The fundamental principle of equity must forever be present to the mind of the court. Absence E of it must not hold the Government or the public authority to its promise, assurance or representation.

Principles of legitimate expectation F

147Copy pinpoint147. As ther.e are parallels between the doctrines of promissory estoppel and legitimate expectation because both these doctrines are founded on the concept of fairness and arise out of natural justice, it is appropriate that the principles of legitimate expectation are also noticed here only to G appreciate the case of the appellants founded on the basis of doctrines of promissory estoppel and legitimate expectation.

148Copy pinpoint148. In Union of India and Others v. Hindustan H

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A Development Corporation and Others'", this Court had an occasion to consider nature, scope and applicability of the doctrine of legitimate expectation. The matter related to a government contract. This Court in paragraph 35 (Pgs. 548- 549) observed as follows : B "35. Legitimate expectations may come in various forms and owe their existence to different kind of circumstances and it is not possible to give an exhaustive list in the context of vast and fast expansion of the governmental activities. They shift and change so fast that the start of our list would c be obsolete before we reached the middle. By and large they arise in cases of promotions which are in normal course expected, though not guaranteed by way of a statutory right, in cases of contracts, distribution of largess by the Government and in somewhat similar situations. For D instance discretionary grant of licences, permits or the like, carry with it a reasonable expectation, though not a legal right to renewal or non-revocation, but to summarily - disappoint that expectation may be seen as unfair without the expectant person being heard. But there again the court has to see whether it was done as a policy or in the public interest either by way of G.O., rule or by way of a legislation. If that be so, a decision denying a legitimate expectation based on such grounds does not qualify for interference unless in a given case, the decision or action taken amounts to an abuse of power. Therefore the limitation is extremely confined and if the according of natural justice does not condition the exercise of the power, the concept of legitimate expectation can have no role to play and the court must not usurp the discretion of the public authority which is empowered to take the decisions under law and the court is expected to apply an objective standard which leaves to the deciding authority the full range of choice which the legislature is presumed

H rrr. (1993) 3 sec 499.

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 805 AND ORS. [R.M. LODHA, J.] to have intended. Even in a case where the decision is left entirely to the discretion of the deciding authority without any such legal bounds and if the decision is taken fairly and objectively, the court will not interfere on the ground of procedural fairness to a person whose interest based on legitimate expectation might be affected. For instance if an authority who has full discretion to grant a licence prefers an existing licence holder to a new applicant, the decision cannot be interfered with on the ground of legitimate expectation entertained by the new applicant applying the principles of natural justice. It can therefore c be seen that legitimate expectation can at the most be one of the grounds which may give rise to judicial review but the granting of relief is very much limited. It would thus appear that there are stronger reasons as to why the legitimate expectation should not be substantively protected than the reasons as to why it should be protected. In other words such a legal obligation exists whenever the case supporting the same in terms of legal principles of different sorts, is stronger than the case against it. As observed in Attorney General for New South Wales case: [(1990) 64 Aust LJR 327]: "To strike down the exercise of administrative power solely on the ground of avoiding the disappointment of the legitimate expectations of an individual would be to set the courts adrift on a featureless sea of pragmatism. Moreover, the notion of a legitimate expectation (falling short of a legal right) is too nebulous to form a basis for invalidating the exercise of a power when its exercise otherwise accords with law." If a denial of legitimate expectation in a given case amounts to denial of right guaranteed or is arbitrary, discriminatory, unfair or biased, gross abuse of power or violation of principles of natural justice, the same can be questioned on the weir-known grounds attracting Article 14 but a claim based on mere legitimate expectation without anything more cannot ipso facto give a right to invoke these principles. It can be one of the grounds to consider but the H

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A court must lift the veil and see whether the decision is violative of these principles warranting interference. It depends very much on the facts and the recognised general principles of administrative law applicable to such facts and the concept of legitimate expectation which is B the latest recruit to a long list of concepts fashioned by the courts for the review of administrative action, must be restricted to the general legal limitations applicable and binding the manner of the future exercise of administrative power in a particular case. It follows that the concept of c legitimate expectation is "not the key which unlocks the treasury of natural justice and it ought not to unlock the gates which shuts the court out of review on the merits", particularly when the element of speculation and uncertainty is inherent in that very concept. As cautioned in Attorney General for New South Wales case the courts should restrain themselves and restrict such claims duly to the legal limitations. It is a well-meant caution. Otherwise a resourceful litigant having vested interests in contracts, licences etc. can successfully indulge in getting welfare activities mandated by directive principles thwarted to further his own interests. The caution, particularly in the changing scenario, becomes all the more important."

While observing as above, the Court observed that legitimacy of an expectation could be inferred only if it was founded on the sanction of law or custom or an established procedure followed in regular and natural sequence. Every such legitimate expectation does not by itself fructify into a right and, therefore, it does not amount to a right in the conventional sense.

149Copy pinpoint149. A three-Judge Bench of this Court in P. T.R. Exports (Madras) Pvt. Ltd. & Ors. v. Union of India & Ors. sss while dealing with the doctrine of legitimate expectation in paras 3, 4 and 5 (Pages. 272-273) stated as follows :

H sss. (1996) s sec 268.

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 807 AND ORS. [R.M. LODHA, J.] "3 ......... The doctrine of legitimate expectation plays no role when the appropriate authority is empowered to take a decision by an executive policy or under law. The court leaves the authority to decide its full range of choice within the executive or legislative power. In matters of economic policy, it is a settled law that the court gives a large leeway to the executive and the legislature. Granting licences for import or export is by executive or legislative policy. Government would take diverse factors for formulating the policy for import or export of the goods granting relatively greater priorities to various items in the overall larger c interest of the economy of the country. It is, therefore, by exercise of the power given to the executive or as the case may be, the legislature is at liberty to evolve such policies.

4. An applicant has no vested right to have export or import licences in terms of the policies in force at the date of his making application. For obvious reasons, granting of licences depends upon the policy prevailing on the date of the grant of the licence or permit. The authority concerned may be in a better position to have the overall picture of diverse factors to grant permit or refuse to grant permission to import or export goods. The decision, therefore, would be taken from diverse economic perspectives which the executive is in a better informed position unless, as we have stated earlier, the refusal is mala fide or is an abuse of the power in which event it is for the applicant to plead and prove to the satisfaction of the court that the refusal was vitiated by the above factors.

5. It would, therefore, be clear that grant of licence depends upon the policy prevailing as on the date of the grant of the licence. The court, therefore, would not bind the Government with a policy which was existing on the date of application as per previous policy. A prior decision would not bind the Government for all times to come. When the Government is satisfied that change in the policy was H

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A necessary in the public interest, it would be entitled to revise the policy and lay down new policy. The court, therefore, would prefer to allow free play to the Government to evolve fiscal policy in the public interest and to act upon the same. Equally, the Government is left free to determine 8 priorities in the matters of allocations or allotments or utilisation of its finances in the public interest. It is equally entitled, therefore, to issue or withdraw or modify the export or import policy in accordance with the scheme evolved. We, therefore, hold that the petitioners have no vested or c accrued right for the issuance of permits on the MEE or NOE, nor is the Government bound by its previous policy. It would be open to the Government to evolve the new schemes and the petitioners would get their legitimate expectations accomplished in accordance with either of the two schemes subject to their satisfying the conditions D required in the scheme. The High Court, therefore, was right in its conclusion that the Government is not barred by the promises or legitimate expectations from evolving new policy in the impugned notification."

150Copy pinpoint150. In the case of M.P. Oil Extraction and Another v. State of M.P. and Ors. 111, this Court considered an earlier decision in Hindustan Development Corporation'" and in paragraph 44 (pg. 612) of the Report held that the doctrine of legitimate expectation had been judicially recognized. It F operates in the domain of public law and in an appropriate case, constitutes a substantive and enforceable right.

151Copy pinpoint151. In J.P. Bansal v. State of Rajasthan and Anr.""", it was stated that both doctrines - promissory estoppel and G legitimate expectation - require satisfaction of the same criteria and arise out of the principle of reasonableness.

152Copy pinpoint152. A note of caution sounded in Bannari Amman

ttt. (1997) 7 sec 592. H uuu. (2003) s sec 134.

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 809 AND ORS. [R.M. LODHA, J.] Sugars Ltd.qqq is worth noticing. The Court observed that A legitimate expectation was different from anticipation; granting relief on mere disappointment of expectation would be too nebulous a ground for setting aside a public exercise by law and it would be necessary that a ground recognized under Article 14 of the Constitution was made out by a litigant. B

153Copy pinpoint153. It is not necessary to multiply the decisions of this Court . Suffice it to observe that the following principles in relation to the doctrine of legitimate expectation are now well established: c (i) The doctrine of legitimate expectation can be invoked as a substantive and enforceable right.

(ii) The doctrine of legitimate expectation is founded on the principle of reasonableness and fairness. D The doctrine arises out of principles of natural justice and there are parallels between the doctrine of legitimate expectation and promissory estoppel.

(iii) Where the decision of an authority is founded in public interest as per executive policy or law, the court would be reluctant to interfere with such decision by invoking doctrine of legitimate expectation. The legitimate expectation doctrine cannot be invoked to fetter changes in administrative policy if it is in the public interest to do so.

(iv) The legitimate expectation is different from anticipation and an anticipation cannot amount to an assertible expectation. Such expectation should be justifiable, legitimate and protectable.

(v) The protection of legitimate expectation does not require the fulfillment of the expectation where an overriding public interest requires otherwise. In other words, personal benefit must give way to H

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A public interest and the doctrine of legitimate expectation would not be invoked which could block public interest for private benefit.

Whether doctrines of promissory estoppel and legitimate expectation attracted 8

154Copy pinpoint154. I may now examine whether the doctrines of promissory estoppel and the legitimate expectation help the appellants in obtaining the reliefs claimed by them and whether the actions of the State Government and the Central C Government are liable to be set aside by applying these doctrines.

155Copy pinpoint155. Each of the appellants has raised the pleas of promissory estoppel and legitimate expectation based on its 0 own facts. It is not necessary to narrate facts in each appeal with regard to these pleas as stipulations in the MOUs entered into between the respective appellants and the State Government are broadly similar. For the sake of convenience, the broad features in the matter of Adhunik may be considered. E The MOU was made between the State Government and Adhunik on February 26, 2004. Adhunik is involved in diversified activities such as production of sponge iron and steel, generating power etc. The preamble to the MOU states that the Government of Jharkhand is desirous of utilization of its natural resources and rapid industrialization of the State and has been making efforts to facilitate setting up of new industries in different locations in the State. It is stated in paragraph 2 of the MOU, "in this context the Government of Jharkhand is willing to extend assistance to suitable promoters to set up new industries" (emphasis supplied). Adhunik expressed desire of setting up manufacturing/generating facilities in the State of Jharkhand. Proposed Phase-I comprised of setting up Sponge Iron Plant and Pelletaisation Plant while Phase-II comprised of Sponge Iron Plant, Power Plant, Coal Washery, Mini Blast Furnace, Steel Melting/LO/IF and Iron Ore Mining and Phase- H

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 811 AND ORS. [R.M. LODHA, J.] Ill comprised of establishment of Power Plant. Para 4 of MOU A states that Adhunik requires help and cooperation of the State Government in several areas to enable them to construct, commission and operate the project. The State Government's willingness to extend all possible help and cooperation is stated in the above MOU. Para 4.3 of MOU records that the State B Government shall assist in selecting the area for Adhunik for iron ore and other minerals as per requirement of the company depending upon quality and quantity. The State Government also agreed to grant mineral concession as per existing Acts and Rules. c

156Copy pinpoint156. In pursuance of the above MOU, the State Government through its Deputy Secretary, Mining and Geology Department recommended to the Government of India through its Joint Director, Mining Ministry on August 4, 2004 to grant prior approval under Section 11 (5) and Section 5(1) of the 1957 D Act for grant of mining lease to Adhunik for a period of 30 years in the area of 426.875 hectares. The reasons for such recommendation were stated by the State Government in the above communication. In the above communication, it was stated that Adhunik had signed MOU with the State Government E for making a capital investment of Rs. 790 crores in establishment of an industry based on iron ore mineral in the State. The steps taken by Adhunik were also highlighted.

157Copy pinpoint157. Adhunik's case is that on the basis of definite commitment and firm promise made by the State Government for grant of captive mines as stipulated in the MOU and the State's Industrial Policy, it acted immediately on the MOU and has invested more than Rs. 100 crores to construct and commission the plant and facilities in Phase-I of the MOU and it has employed about 3500 people directly and indirectly for construction and operation of plant in Phase-I. According to Adhunik, it has ordered equipments and machinery for Phase- 11 and Phase-Ill at a cost of Rs. 25 crores and has also made further financial commitments for more than Rs. 1000 crore to H

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A set up the expansion. Adhunik claims to have also borrowed a sum of Rs. 60 crores from banks and financial institutions and invested that sum in the proposed project.

158Copy pinpoint158. According to Adhunik, no integrated steel plant can be viable in the State of Jharkhand without captive iron ore 8 mines and without the definite promise of the State Government to grant the captive mines and it would not have acted on the MOU to make such a huge investment if the State Government were not to make available captive iron ore mines. Adhunik has also stated that in the absence of grant of captive iron ore C mines, it has been suffering huge and irreparable losses due to (a) shortage in supply of iron ore due to poor availability, (b) it has to purchase from the market poor quality of iron ore and (c) extra cost due to abnormal market prices compared to the actual cost of captive iron ore. D

159Copy pinpoint159. What the State Government had expressed in MOU is its willingness to extend all possible help and cooperation in setting up the manufacturing/generating facilities by Adhunik. The clause in MOU states that the State Government shall assist in selecting the area for iron ore and other minerals as per requirement of the company depending upon quality and quantity. The State Government agreed to grant mineral concession as per existing Act and Rules. As a matter of fact, when the MOU was entered into, the State Government was not even aware about the reservation of the subject mining area · for exploitation in the public sector. It was on November 17, 2004 that the District Mining Officer, Chaibasa informed the Secretary, Department of Mines and Geology, Government of Jharkhand that certain portions of Mauza Ghatkuri and the adjoining areas were reserved for public sector under 1962 and 1969 Notifications issued by the erstwhile State of Bihar. The District Mining Officer suggested to the State Government that approval of the Central Government should be obtained for grant of leases to the concerned applicants. In his communication, he stated that the fact of reservation of the subject area in public H

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 813 AND ORS. [R.M. LODHA, J.) sector vide 1962 and 1969 Notifications was brought to the A knowledge of the Director of Mines, Jharkhand but he did not take any timely or adequate action in the matter. In view of the fact that the subject mining area had been reserved for exploitation in pubic sector under 1962 and 1969 Notifications, in my opinion, the stipulation in the MOU that the State s Government shall assist in selecting the area for iron ore and other minerals as per requirement of the company and the commitment to grant mineral concession cannot be enforced. For one, the stipulation in the MOU is not unconditional. The above commitment is dependent on availability and as per c existing law. Two, if the State Government is asked to do what it represented to do under the MOU then that would amount to asking the State Government to do something in breach of these two Notifications which continue to hold the field. The doctrine of promissory estoppel is not attracted in the present facts, particularly when promise was made - assuming that some of the clauses in the MOU amount to promise - in a mistaken belief and in ignorance of the position that the subject land was not avaiiable for iron ore mining in the private sector. I do not think that the State Government can be compelled to carry out what it cannot do in the existing state of affairs in view of 1962 and 1969 Notifications. In my opinion, the State Government cannot be held to be bound by its commitments or assurances or representations made in the MOU because by enforcement of such commitments or assurances or representations, the object sought to be achieved by reservation of the subject area is likely to be defeated and thereby affecting the public interest. The overriding public interest also persuades me in not invoking the doctrines of promissory estoppel and legitimate expectation. For the self- same reasons none of the appellants is entitled to any relief based on these doctrines; their case is no better.

160Copy pinpoint160. As a matter of fact, on coming to know of 1962 and 1969 Notifications, the State Government withdrew the proposals which it made to the appellants and reiterated the H

814 SUPREME COURT REPORTS [2012] 7 S.C.R.

A reservation by its Notification dated October 27, 2006 expressly "in public interest and in the larger interest of the State".

161Copy pinpoint161. The act of the State Government in withdrawing the recommendations made by it to the Central Government in the above factual and legal backdrop cannot be said to be bad in 8 law on the touchstone of doctrine of promissory estoppel as well as legitimate expectation. The act of the State Government is neither unfair nor arbitrary nor it suffers from the principles of natural justice. The Government of India upon examination of the proposals rejected them on the ground that subject area was under reservation and not available for exploitation by private parties. In these circumstances, if the clauses in the MOU are allowed to be carried out, it would tantamount to enforcement of promise, assurance or representation which is against law, public interest and public policy which ·I am afraid cannot be permitted.

162Copy pinpoint162. On behalf of the appellants, it was also argued that the 1962 and 1969 Notifications had remained in disuse for about 40 years and it is reasonable to infer that these two E Notifications no longer operated. In this regard, the doctrine of quasi repeal by desuetude was sought to be invoked.

Doctrine of desuetude

163Copy pinpoint163. The doctrine of desuetude and its applicability in F Indian Jurisprudence have been considered by this Court on more than one occasion. In the case of State of Maharashtra v. Narayan Shamrao Puranik & Ors. wv, the Court noted the decision of Scrutton, L.J. in R. v. London County Councif'W'W and the view of renowned author Allen in "Law in the Making" G and observed that the rule concerning desuetude has always met with general disfavour. It was also held that a statute can be abrogated only by express or implied repeal; it cannot fall

WI. (1982) 3 sec 519. H WWW. LR (1931) 2 KB 215 (CA).

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 815 AND ORS. [R.M. LODHA, J.] into desuetude or become inoperative through obsolescence A or by lapse of time.

164Copy pinpoint164. In Bharat Forge Co. Ltd!, inter alia, the argument was raised that the Notifications of June 17, 1918 have not been implemented till date and therefore these Notifications were 8 dead letter and stood repealed "quasily". A three-Judge Bench of this Court entered into consideration of the doctrine of desuetude elaborately. After noticing the English law and Scots law in regard to the doctrine of desuetude, the Court noted the doctrine of desuetude explained in Francis Bennion's Statutory C Interpretation; Craies Statute Law (7th Edn.) and Lord Mackay's view in Brown v. Magistrate of Edinburghxxx.

165Copy pinpoint165. The Court also referred to "Repeal and Desuetude of Statutes", by Aubrey L. Diamond wherein a reference has been made to the view of Lord Denning, M.R. in Buckoke v. D Greater London Councif'!YY. Having noticed as above, the Court in paragraph 34 (pages 446-447) of the Report stated :

"34. Though in India the doctrine of desuetude does not appear to have been used so far to hold that any statute has stood repealed because of this process, we find no objection in principle to apply this doctrine to our statutes as well. This is for the reason that a citizen should know whether, despite a statute having been in disuse for long duration and instead a contrary practice being in use, he is still required to act as per the "dead letter". We would think it would advance the cause of justice to accept the application of doctrine of desuetude in our country also. Our soil is ready to accept this principle; indeed, there is need for its implantation, because persons residing in free India, who have assured fundamental rights including what has been stated in Article 21, must be protected from their being, say, prosecuted and punished for violation of a law

xxx. 1931 SLT (Scots Law limes Reports) 456, 458. YY'f· (1970) 2 All ER 193. H

816 SUPREME COURT REPORTS [2012] 7 S.C.R.

A which has become "dead letter". A new path is, therefore, required to be laid and trodden."

166Copy pinpoint166. In Cantonment Board, MHOW and Anr. v. M.P. State Road Transport Coroporationzzz, this Court had an 8 occasion to consider the doctrine of desuetude while considering the submission that the provisions of Madhya Pradesh Motor Vehicles Taxation Act, 1947 stood repealed having been in disuse. The Court considered the earlier decision in Bharat Forge Co. Ltd! and held that to apply C principle of desuetude it was necessary to establish that the statute in question had been in disuse for long and the contrary practice of some duration has evolved. It was also held that neither of these two facts has been satisfied in the case and therefore the doctrine of desuetude had no application.

167Copy pinpoint167. From the above, the essentials of doctrine of desuetude may be summarized as follows :

(i) The doctrine of desuetude denotes principle of quasi repeal but this doctrine is ordinarily seen with disfavour. E (ii) Although doctrine of desuetude has been made applicable in India on few occasions but for its applicability, two factors, namely, (i) that the statute or legislation has not been in operation for very considerable period and (ii) the contrary practice has been followed over a period of time must be clearly satisfied. Both ingredients are essential and want of anyone of them would not attract the doctrine of desuetude. In other words, a mere neglect of a statute or legislation over a period of time is not sufficient but it must be firmly established that not only the statute or legislation was completely neglected but also the practice

H zzz.. (1997) 9 sec 450.

MONNET !SPAT & ENERGY LTD. v. UNION OF INDIA 817 AND ORS. [R.M. LODHA, J.] contrary to such statute or legislation has been followed for a considerable long period.

Whether doctrine of desuetude attracted in respect of 1962 and 1969 Notifications

168Copy pinpoint168. Insofar as 1962 and 1969 Notifications are concerned, I am of the view that doctrine of desuetude is not attracted for more than one reason. In the first place, the Notifications are of 1962 and 1969 and non-implementation of such Notifications for 30-35 years is not that long a period which may satisfy the first requirement of the doctrine of desuetude, namely, that the statute or legislation has not been in operation for a very considerable period. Moreover, State of Jharkhand came into existence on November 15, 2000 and it can hardly be said that 1962 and 1969 Notifications remained neglected by the State Government for a very considerable period. As a D matter of fact, in 2006, the State Government issued a Notification mentioning therein about the reservation made by 1962 and 1969 Notifications. Thus, the first ingredient necessary for invocation of doctrine of desuetude is not satisfied. Secondly, and more importantly, even if it is assumed in favour of the appellants that 1962 and 1969 Notifications remained in disuse for a considerable period having not been implemented for more than 30-35 years, the second necessary ingredient that a practice contrary to the above Notifications has been followed for a considerable long period and such contrary practlce has been firmly established is totally absent. As a matter of fact, except stray grant of mining lease for a very small portion of the reserved area to one or two parties there is nothing to suggest much less establish the contrary usage or contrary practice that the reservation made in the two G Notifications has been given a complete go by.

Additional submissions on behalf of Monnet

169Copy pinpoint169. The main submissions raised on behalf of the appellants having been dealt with, I may now consider certain H

818 SUPREME COURT REPORTS [2012] 7 S.C.R.

A additional submissions made on behalf of Monnet. It was argued by Mr. Ranjit Kumar, learned senior counsel for Monnet that the State Government in its letter to recall the recommendation made in favour of the appellant set up the ground of overlapping with the lease of Rungta but it mala fide suppressed the fact of expiry of lease of Rungta in 1995 and also that the said area had been notified for regrant in the Official Gazette on July 3, 1996. He would contend that Rule 24A of the 1960 Rules provides for an application for renewal of lease to be made one year prior to the expiry of lease but no application for renewal was made by Rungta within this time and, therefore, Rungta had no legal right over the overlapping area.

170Copy pinpoint170. It was submitted by Mr. Ranjit Kumar that the appellant - Monnet had produced two maps before the High Court and this Court (one was prepared by the District Mining Officer in 2004) that depicted that the area recommended for grant to the appellant was not covered by 1962 or 1969 Notifications.

171Copy pinpoint171. It was submitted on behalf of Monnet that the case of E Monnet was identical to the case of M/s. Bihar Sponge Iron Ltd. and the State Government had discriminated against the appellant vis-a-vis the case of Mis. Bihar Sponge Iron Ltd.

172Copy pinpoint172. Mr. Ranjit Kumar also submitted that there has been violation of the statutory right of hearing in terms of Rule 26 of the 1960 Rules. He submitted that order was not communicated to Monnet by the State Government and thereby its remedy under Rule 54 of 1960 Rules was taken away. The violation of principles of natural justice goes to the root of the matter and on that ground alone the decision of the State Government to recall the recommendation and the decision of the Central Government in summarily rejecting and returning application are bad in law. Reliance in this regard was placed on a decision of Privy Council in Nazir Ahmad v. King-Emperor"""" and also

H aaaa. AIR 1936 PC 253.

MONNET !SPAT & ENERGY LTD. v. UNION OF INDIA 819 AND ORS. [R.M. LODHA, J.] a decision of this Court in Nagarjuna Construction Company A Ltd. v. Government of Andhra Pradesh & Ors.bbb

173Copy pinpoint173. Mr. Ranjit Kumar also argued that once recommendation was made by it to the Central Government, in view of proviso to Rule 63A of the 1960 Rules, the State B Government had become functus officio and ceased to have any power to recall the recommendation already made on any ground whatsoever. In this regard he relied upon Jayalakshmi Coelho v. Oswald Joseph Coelhocccc.

174Copy pinpoint174. Relying upon the decision of this Court in Mohinder C Singh Gill and Anr. v. The Chief Election Commissioner, New Delhi, & Ors., dddd it was submitted that the reasons originally given in an administrative order cannot be supplanted by other reasons in the affidavits or pleadings before the Court. He submitted that as regards Monnet, the initial reason by the D State Government was not founded on reservation but later on it tried to bring the ground of reservation in fore by supplanting reasons.

175Copy pinpoint175. Mr. Ranjit Kumar vehemently contended that as per E the State Government's own case initially, the land that was recommended for mining lease to Monnet was not under the reserved area and, therefore, Monnet's writ petition ought not to have been heard and decided with the group matters. He also referred to interim order passed by this Court on August F 18, 2008, the meeting that took place between the Central Government and the State Government pursuant thereto and the subsequent interim order of this Court dated December 15, 2008.

176Copy pinpoint176. I have carefully considered the submissions of Mr. G Ranjit Kumar. Most of the above submissions were not argued

bbbb. c2008) 16 sec 276. cccc. c2001 > 4 sec 181. dddd. (1978) 1 sec 405. H

820 SUPREME COURT REPORTS [2012] 7 S.C.R.

A on behalf of Monnet before the High Court. The submissions were confined to the issue of reservation, the legality and validity of 1962, 1969 and 2006 Notifications, consequent illegal action of the State Government in recalling the recommendation and of the Central Government in summarily rejecting the appellant's B application.

177Copy pinpoint177. In paragraph 17 of the impugned judgment, the arguments of the learned senior counsel for Monnet have been noticed. It transpires therefrom that many of the above arguments were not advanced including the issue of C overlapping with the area of Rungta. In the list of dates/synopsis of the special leave petition, Monnet has not raised any grievance that arguments made on its behalf before the High Court were not correctly recorded or the High Court failed to consider any or some of its arguments. Criticism of the High D Court judgment is thus not justified and I am not inclined to go into above submissions of Mr. Ranjit Kumar for the first time.

178Copy pinpoint178. It is too late in the day for Monnet to contend that its case could not have been decided with group matters and in E any case the matter should be remanded to the High Court for reconsideration on the issues, namely, (a) whether the area recommended for the appellant was overlapping with Rungta only to the extent of 102.25 hectares out of total 705 hectares recommended for appellant; (b) whether after expiry of lease F Rungta's area was renotified for grant in 1996; (c) what was the reason for the State Government to withdraw the recommendation made in favour of the appellant when the alleged overlapping with Rungta was only to the extent of 102.25 hectares and (d) is withdrawal of appellant's G recommendation arbitrary when reservation vide 1962 Notification did not apply to the area recommended in favour of the appellants. Monnet's writ petition was decided by the High Court with group matters as the arguments advanced on its behalf were identical to the arguments which were canvassed on behalf of other writ petitioners. The State Government

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 821 AND ORS. [R.M. LODHA, J.]

recalled its recommendations by a common communication and the Central Government returned the recommendations and rejected applications for mining lease made by the writ petitioners by a common order.

179Copy pinpoint179. The State Government had full power to recall the recommendation made to the Central Government for some good reason. Once 1962 and 1969 Notifications issued by the erstwhile State of Bihar and 2006 Notification issued by the State of Jharkhand have been found by me to be valid and legal, the submissions of Mr. Ranjit Kumar noted above pale in insignificance and are not enough to invalidate the action of the State Government in recalling the recommendation made in favour of Monnet. The valid reservation of subject mining area for exploitation in public sector disentitles Monnet - as well as other appellants - to any relief. D

180Copy pinpoint180. It is well settled that no one has legal or vested right to the grant or renewal of a mining lease. Monnet cannot claim a legal or vested right for grant of the mining lease. It is true that by the MOU entered into between the State Government and Monnet certain commitments were made by the State E Government but firstly, such MOU is not a contract as contemplated under Article 299(1) of the Constitution of India and secondly, in grant of mining lease of a property of the State, the State Government has a discretion to grant or refuse to grant any mining lease. Obviously, the State Government is F required to exercise its discretion, subject to the requirement of law. In view of the fact that area is reserved for exploitation of mineral in public sector, it cannot be said that the discretion exercised by the State Government suffers from any legal flaw. G

181Copy pinpoint181. The case of discrimination vis-a-vis M/s Bihar Sponge Iron Limited argued on behalf of Monnet was not pressed before High Court and is not at all established. The argument with regard to violation of principles of natural justice is also H

822 SUPREME COURT REPORTS [2012] 7 S.C.R.

A devoid of any substance. The recommendation in favour of Monnet to the Central Government was simply a proposal with certain pre-conditions. For withdrawal of such proposal by the State Government, in my view, no notice was legally required to be given. Moreover, no prejudice has been caused to it by B not giving any notice before recalling the recommendation as it had no legal or vested right to the grant of mining lease. The area is not available for grant of mining lease in the private sector. For all these reasons, I do not find that the case of Monnet stands differently from the other appellants.

C Conclusion

182Copy pinpoint182. In view of the foregoing reasons, there is no merit in these appeals and they are dismissed. There shall be no order as to costs. D ORDER

I find from the proceedings that no notice has been issued in the contempt petition. The proceeding of January 28, 2009 reveals that the Court only ordered copy of the contempt E petition to be supplied to learned counsel appearing for the State of Jharkhand to enable it to file its response. In the order passed on January 28, 2009, the Court made it very clear that it was not inclined to issue any notice in the contempt petition. Now, since the appeal preferred by Abhijeet Infrastructure Ltd., F has been dismissed, the contempt petition is also liable to be dismissed and is dismissed.

H.L. GOKHALE J. 1. All these appellants claim to be companies interested in developing iron and steel projects, and G therefore sought grant of leases of iron-ore mines situated in the state of Jharkhand. Applications of ten such companies including the appellants were forwarded by the Government of Jharkhand sometime around August 2004 to the Union of India, for its consideration for grant of lease in certain areas. H

MONNET ISPAT & ENERGY LTD. v. UNION OF INDIA 823 AND ORS. [H.L. GOKHALE, J.] that those areas were reserved for exploitation in the public A sector, the State Government by its letter dated 13.09.2005, sought to withdraw nine of these proposals including those of all the appellants. The Central Government however, did not merely return the nine proposals, but rejected the same by its letter dated 6.3.2006 addressed to the Government of B Jharkhand. All these appellants therefore, along with some others filed writ petitions to challenge these two letters dated 13.9.2005 and 6.3.2006, and sought a direction to grant the mining leases to them in the proposed areas, and to seek appropriate reliefs. The Writ Petitions filed by the six appellants c herein were respectively bearing following nos. (1) W.P. (C) No. 4151 of 2006, (2) W.P. (C) No. 1769 of 2006, (3) W.P. (C) No. 2629 of 2006, (4) W.P. (C) No. 5527 of 2006, (5) W.P. (C) No. 7636 of 2006 and (6) W.P. (C) No. 7363 of 2006. All those writ petitions were dismissed by a Division Bench of the Jharkhand D High Court by a common judgment and order dated 4.4.2007. Being aggrieved by the same, six of them have filed these appeals to this Court.

2. An interim order came to be passed in these appeals on 7.5.2007, that until further orders no fresh leases shall be granted in respect of the disputed mining area. We may note that at one stage same workable arrangements were considered by this Court but they did not materialise. These appeals have been admitted thereafter on 30.4.2009. The Union of India and the State of Jharkhand are the main contestants in all these appeals, though a few other entities like the National Mineral Development Corporation (NMDC), Tata Iron Steel Company (TISCO) and Arclor Mittal (India) Ltd. have intervened to oppose them. Learned Senior Counsels Sarvashri C.A. Sunderam, Dr. Rajeev Dhawan, Ranjit Kumar, Dhruv G Mehta, Dr. Abhishek Manu Singhvi, L. Nageswara Rao, and G.C. Bharuka have appeared in support of these appeals. Senior Counsel Shri A.K. Sinha, and Shri Ashok Bhan have appeared for the State of Jharkhand, and Union of India respectively. Shri P.S. Narasimha, Senior counsel for NMDC, H

824 SUPREME COURT REPORTS (2012] 7 S.C.R.

A Shri Vikas Singh, Senior Counsel for TISCO, Shri Krishnan Venugopal, Senior counsel for Arclor Mittal (India) Ltd. and Shri J.K. Das, learned counsel for M/s Rungta Sons Pvt. Ltd., have appeared to oppose these appeals.

Facts leading to these appeals:- 8

3. The facts in all these appeals are by and large similar. We may refer to the facts of the first Civil Appeal in the case of M/s Monnet lspat and Energy Ltd. (for short 'Monnet') as somewhat representative. It is the case of Monnet that it wanted to set-up an iron and steel plant in the State of Jharkhand. It was ready to invest an amount of Rs.1400 crores on this project, and for that purpose it was interested in the allotment of iron and manganese ore mines situated in the Ghatkhuri Forest area of West Singhbhum District (which has its headquarters at Chaibasa). A high level meeting was held in Ranchi for that purpose on 7.7.2002 between the officers of Monnet and Jharkhand Government, subsequent to which, minutes of the meeting were drawn recording the discussion between the two parties. Thereafter, a memorandum of understanding (MOU) was arrived at between the Government of Jharkhand and Monnet on 5.2.2003, for the establishment of an integrated steel plant. The MOU reaffirmed the commitment of Monnet to establish the integrated steel plant, and that of the Government of Jharkhand to provide therefor the land containing iron and manganese ore mines, a coal block and other facilities. The MOU recorded that the plant will produce sponge iron of the capacity of 4 lac tonnes per annum, and mild steel of 2 lac tonnes and alloy steel of 2 lac tonnes. It was expected to provide employment to 10,000 persons. The G MOU recorded that the State Government agrees to recommend the proposal of Monnet to Government of India, for the allotment of areas containing iron ore and manganese ore deposits and coal blocks situated in Ghatkhuri Forest area of West Singhbhum District. This clause reads as follows:-

MONNET !SPAT & ENERGY LTD. v. UNION OF INDIA 825 AND ORS. [H.L. GOKHALE, J.]

Ill. MINES: A

COAL: ....... .

IRON ORE AND MANGANESE ORE: The State Government agrees to recommend to Government of India for the allotment of iron ore and manganese ore deposits expected to contain sufficient reserves to cater the needs of the project. The iron ore reserves suitable for sponge iron making as identified are Ghatkhuri area in Chaibasa District. The State Government also agrees to recommend to Government of India for allotment of additional mines able deposits in West Singhbhum area to cater the project need."

We may as well note that paragraph VII (d) of the MOU stated as follows:- D

In the event of non-implementation of the project, support/ commitment of the State Government in the MOU shall be deemed to be withdrawn.

4. Accordingly, the Jharkhand Government vide its letter dated 6.8.2004 recommended the proposal of Monnet to Union of India under Section 5 (1) and 11 (5) of the Mines and Minerals (Development and Regulation) Act, 1957 (hereinafter referred to "MMDR Act"). The letter stated that some 58 applications were received, seeking grant of the mining leases over an area of 3566.54 hectares in Ghatkhuri reserved forest. All applicants were given sufficient opportunity of hearing. As far as Monnet is concerned, State Government had recommended the amended area of 705 hectares for the consent of the Central Government for grant of lease under G Section 5 (1) of the Act. The letter also stated that priority was being given to Monnet in terms of Section 11 (3) of the Act on the basis of its technical mineral based industry and financial capacity. H

826 SUPREME COURT REPORTS [2012] 7 S.C.R.

6. It so happened that at that stage the District Mining D Officer of Chaibasa brought it to the notice of the concerned authorities of State Government, by his letter dated 17.11.2004, that the undivided state of Bihar (when Jharkhand was a part of it) had reserved certain areas for the exploitation of minerals in the public sector, by its notification dated 21.12.1962, and it included the recommended area of Singhbhum District. This notification had been followed by another notification of the undivided State of Bihar dated 28.2.1969 which reiterated that an area of 168.349 hectares in Ghatkhuri reserved forest block no.10 in district of Singhbhum was reserved for exploitation of minerals in public sector. A copy of the said notification had been marked to the District Mining Officer, Chhaibasa.

7. The two notifications read as follows:- (1) Government of Bihar G Department of Industries & Mines (Mines) NOTIFICATION: Patna, the 21 December, 1962 30th Agrahand, 1884-S