WP(C) 3397/2009 BEFORE HON’BLE MRS JUSTICE ANIMA HAZARIKA This petition under Article 226 of the Constitution of India has been filed by the petitioners praying for setting aside and quashing the Memora ndum of Understanding (’MoU’ for short) entered into between Assam Mineral Devel opment Corporation (’AMDC’ for short) (Respondent No. 6) and M/S Jayprakash Asso ciates Ltd. (Respondent No. 8) in so far as it relates to utilization of limesto ne and coal deposits available in the mines of the AMDC at New Umrangshu and Nor th Cachar Hills district and further for restraining the respondents from giving effect to the MoU entered into by the said Respondent No. 6 with Respondent No. 8 without first making available limestone and coal to the petitioners from the mines of AMDC at New Umrangshu and North Cachar Hills district on requirement b asis and also for direction to the respondents to make available limestone and c oal to the petitioners from the mines of AMDC at New Umrangshu and North Cachar Hills District respectively on requirement basis pursuant to the cabinet decisio n and commitments said to be made by the State Government. 2. Heard Mrs. M Hazarika, learned Senior counsel assisted by Ms. A Ajitsari a, learned counsel appearing for the petitioners. Also heard Mr. AK Phookan, lea rned Advocate General, Assam assisted by Ms. HM Phukan, learned State counsel ap pearing for the State respondents, i.e. respondent Nos.1, 2, 3, 4 and 5, Mr. M B huyan, learned counsel appearing for respondent Nos.6 and 7, Mr. AM Mazumdar and Mr. SK Upadhyaya, learned Senior counsel assisted by Mr. M Nath, learned counse l appearing for respondent No.8 and Mr. BD Das, learned counsel appearing for re spondent No.9 3. The pleaded case of the petitioners is that the petitioner No. 1 is a Pu blic Ltd. Company incorporated under the Companies Act and in terms of the MoU d ated 8.09.2004 entered into between Assam Industrial Development Corporation Ltd . (’AIDC’ for short) and another company namely Vinay Cement Ltd. for the purpos e of setting up a cement manufacturing project. At para 6.1 of Clause 6 of the M oU it was stipulated that AIDC would be the Co-Promoter in the proposed project to the extent of 10% of equity participation in the new company. Petitioner No. 2 is said to be the chief of Corporate Communication as well as a shareholder an d authorised signatory of the petitioner No. 1 company. It is the case of the petitioners that pursuant to discussions held betw een the authorities of Government of Assam as well as the various instrumentalit ies under it and the Vinay Cement Ltd. a MoU was entered into between AIDC and V inay Cement Ltd. on 8.09.2004 for setting up a 4-5 million metric tons per annum capacity cement manufacturing plant on the terms and conditions enumerated ther ein. 4. The petitioners have also annexed a copy of the Cabinet Memorandum as An nexure-3 to the writ petition which is said to be adopted by the Cabinet in conn ection with the joint venture envisaged under the aforesaid MoU dated 8.09.2004. Clauses 11 & 12 of the said Cabinet Memorandum which was pointed out and presse d on behalf of the petitioners in course of argument being relevant are quoted h ereunder : 11. CCIL also wanted to avail limestone and other mineral ad ditives including higher-grade limestone with a total limestone deposit of 400 M T for CCIL project. The matter was taken up with the Mines & Minerals Department . Their views are reproduced below vide their letter No.PEM.88/05/33, dated 16.1 1.2005- ’The mining lease area of AIDC will be sufficient to cater to th e need of CCIL project at present.’ 12. Further, CCIL requested that the existing coalmines of Assam Mineral Dev elopment Corporation (AMDC) in Umrangshu should be allowed to be operated by Job Sirdars as is being done now with a condition that CCIL will buy 80% of this co al at reasonable rates fixed mutually between Mines & Minerals Department and CC IL. Further, CCIL requested permission to operate captive coalmines from new coa l deposits. The matter was also taken up with Mines & Minerals Department. They have given their views as below vide their letter PEM.88/05/33, dated 16.11.2005 - ’CCIL may purchase coal from Assam Mineral Development Corporation Ltd. on long term agreement basis on mutually agreed terms based on reasonable prices and a firm time schedule indicating clear requirements of coal over a period of time so as to enable appropriate capital investment. CCIL may be considered for grant of mining lease for coals with the approval of the Govt. of India to meet the additional requirements of its own project only in case mineable reserve of coal of suitable grade is identified in North Cachar Hills District of Assam in future in the course of investigation for coal carried out by the Directorate o f Geology & Mining, Assam. At present, CCIL may procure coal from Assam Mineral Development Corporation Ltd., on mutually agreed terms, which is producing coal form its mines in North Cachar Hills District. 5. It is the further case of the petitioners that on 6.05.2005 another agre ement was entered into between the petitioner No.1 and the Government of Assam r epresented by the Additional Chief Secretary to the Government of Assam, Departm ent of Industries and Commerce wherein the following were agreed between the par ties : i) AIDC would be the Co-Promoter in the proposed project to the ext ent of 10% of equity participation in CCIL. Govt. of Assam would provide necessa ry fund to AIDC through budgetary support. ii) The Govt. of Assam/AIDC would assist CCIL in making available su itable land measuring about 850 Bighas for establishing the project under refere nce. The location would be decided based on techno economic feasibility, infrast ructure support and other related aspects. iii) The Assam Industrial Development Corporation Ltd. will be the re quiring department for the purpose of acquisition of land and Vinay Cements Ltd or CCIL would assist in the acquisition process. CCIL would bear the expenditure to be incurred by AIDC in the process of acquisition of land totaling about 850 bighas. iv) The mining lease held by AIDC at Umrangshu would be transferred to CCIL. CCIL would compensate AIDC for the past expenditure made by AIDC on the said mining lease. A Chartered Valuer would be engaged to assess the present va lue of the works carried out by AIDC in the past. CCIL would immediately make th e necessary payment of the ’dead rent’ for starting the process of transfer of m ining lease. v) The Government of Assam would extend cooperation in granting add itional mining leases in New Umrangshu area in order to enhance the production c apacity to 5 million metric tones and to sustain the quality of cement manufactu red. vi) CCIL would seek due cooperation from the State Government in for mulating a special package for making the Project competitive to investments com ing up in neighbouring States. vii) The land affected people would be suitably compensated by the CC IL as per the provisions of Land Acquisition Act, 1894. viii) AIDC with the support of the Govt. of Assam shall endeavour to e xtend all necessary support for getting clearances in an expeditious manner for ensuring timely completion of the Project. ix) AIDC would draw a suitable rehabilitation programme for the fami lies to be displaced as a result of acquisition, in consultation with the State Government. & & & & & & & & & & & & & & & It has further been stipulated in the aforesaid agreement that the agree ment would remain valid for a period of 3 years and can be further extended on m utually agreed terms. In fact, the validity of this agreement dated 6.05.2005 wa s extended by further period of 3 years by the agreement dated 31.07.2008, a cop y of which is annexed as Annexure-35 to the writ petition. The Mining Lease of t he AMDC mines stood transferred to the petitioner No. 1 on 7.01.2009 upon paymen t of assessment amount by the authorities in terms of the subsisting agreement b etween the petitioner No. 1 and AIDC. The petitioners claim that by means of a l etter dated 20.06.2005 (Annexure-6) addressed to the Principal Secretary to the Government of Assam, Department of Mines & Minerals, it proposed that AMDC has a deposit of high grade limestone located next to the deposit of the petitioner which was of medium grade and as AMDC mines were opened with a view to cater to the limestone needs of Paper Mills and others but as these have not worked out a nd for a number of years there are practically no operations in the mines, the p etitioner company should be allowed to get into a partnership with AMDC which in the words of the petitioners &.will go a long way in the development of the re gion as well as revival of AMDC’s limestone mining operation in Umrangshu & 6. In connection with the aforesaid proposal of the petitioners the Managin g Director of AMDC wrote a letter dated 9.08.2005 (Annexure-7) to the Additional Chief Secretary to the Government of Assam, Industries & Commerce Department re questing the Government to take necessary decisions for proposal of partnership with AMDC on limestone mining. This was followed up by another letter dated 18.0 8.2005 (Annexure-8) to the same context. The petitioners have annexed a copy of the minutes of meeting of the Public Investment Board dated 6.12.2005 (Annexure- 10), contents whereof do not reveal any intelligible nexus to the issue of grant of AMDC’s Mining Lease to the petitioners. The petitioners have annexed copy of another letter dated 18.02.2006 (Annexure-11) issued by Additional Chief Secret ary, Industries & Commerce Dept, to the Principal secretaries of Public Enterpri ses Dept, Power Dept and Mines & Minerals Dept, Commissioner & Secretary Finance (Taxation) Dept & Managing Director, AIDC, inter alia stating that Government h ave approved the proposals mentioned in the letter for Industry linked policy in itiatives with special reference to Large Cement project being setup by Calcom C ement India Ltd. The proposals, so approved, relevant to the case in hand are qu oted hereinbelow: &....(viii) Grant of mining lease area of AIDC to the unit was noted. L imestone from AMDC mines will be made available on requirement basis and on mutu ally agreed terms. (ix) The unit may purchase coal from AMDC in the manner indicated by Pow er Deptt. vide their Letter No.PEM.88/05/33, dated 16.11.2005 & &. 7. The contents of another letter dated 3.06.2006 (Annexure-13) issued by t he Managing Director, AMDC to the petitioner No. 1 Company on the subject of sup ply of limestone and coal to the petitioner No. 1 company, is reproduced hereund er : & & &This is to acknowledge with thanks the receipt of your above letter on 29th May, 2006. In this context, I would like to refer to the Govt. letter No . MI.59/2005/74, dated 18th February, 2006 through which Govt. of Assam conveyed its approval on following : I. Limestone from AMDC’s mine will be made available on requirement basis and on mutually agreed terms to Calcom Cement India Ltd. II. M/s. Calcom Cement India Ltd. may purchase Coal from AMDC @ 80% of its total produced from its two collieries. It may be mentioned that AMDC has not received any directives from Govt. so far for sub-leasing of its mine to M/s. Calcom Cement India Ltd. So, AMDC is not in a position to take any action on your draft Agreement at this stage. & & & & & & & & &. 8. Meanwhile through various letters including the one dated 21.08.2006 (An nexure-14) the petitioner company kept on urging the AMDC for long term partners hip in respect of limestone and coal to which the Managing Director, AMDC wrote back to the petitioner company on 24.08.2006 (Annexure-15) asking the company to intimate its requirement of limestone and coal along with lifting schedule urge ntly for further necessary action. The content of this letter dated 24.08.2006 i s in parity with the subsequent letters dated 19.09.2006 (Annexure-16) and 7.11. 2006 (Annexure-17) issued respectively by the Joint Secretary Industries & Comme rce Department and Managing Director, AMDC wherein it was reiterated that limest one from AMDC mines will be made available to the petitioners on requirement bas is and on mutually agreed terms, rates whereof were being re-assessed by the AMD C. The contents of these letters are reproduced hereinbelow: Letter dated 24.08.2006 : ........In inviting a reference to above, I would like to request you t o intimate your requirement of limestone and coal along with lifting schedule ur gently for further necessary action from ours end. Letter dated 19.09.2006 : & & &With reference to your letter cited above on the subject, I am dire ted to enclose herewith the extract of Cabinet Memorandum pertaining to the prop osal for Industry linked policy initiatives with special reference to large ceme nt project being set up by Calcom Cement India Ltd. The Cabinet in its meeting held on 27-1-2006 had approved, inter alia, t he following clauses of the memorandum :- (a) Grant of Mining lease area of AIDC unit was noted. Limestone fro m AMDC Mines will be made available on requirement basis and on Mutually agreed terms. (b) The Unit may purchase Coal from AMDC in the manner indicated by the Power Department vide their letter NO. PEM.88/05/33, dated 16-11-2005. & & & & Letter dated 7.11.2006 : & & &This is to acknowledge with thanks the receipt to your above letter dated 21st Aug. 2006. In this context, I would like to confirm that we would be able to supply your required quantity of limestone with an average quality of 46 .5% CaO which may be the best quality for manufacturing cement. As you are aware that the current base price of our R.O.M. cement grade limestone is fixed at Rs . 140/- per MT at pit head which you intend to procure at a landed price of Rs. 159.26 at your factory site that includes Base price, Loading Charges, Transport ation from pit head, Royalty and VAT. So, we are re-assessing our rates consider ing those parameters with your bulk quantity requirements. The rates being intimated to you after confirmation. & & &. 9. The petitioners have annexed a number of letters issued by them to the v arious Government authorities repeating their prayer for long term partnership i n respect of supply of coal and lime stone with AMDC. However, the petitioners c ould not show any positive response in this connection from any authority of the Government on the basis of any document on record reflecting grant of such pray er for long term partnership with the petitioner in respect of supply of coal an d limestone from AMDC. Rather a letter dated 13.12.2006 (Annexure-19) issued by the Managing Director, AMDC to the petitioner Company only indicates a request t o the petitioner for a discussion regarding such long term supply of coal and li mestone from AMDC. 10. When the matter rested as thus the Government of Assam, Mines & Minerals Department issued a Notification No. PEM.33/2007/14 dated 12.06.2007 inter alia inviting Expression of Interest from investors for setting up mineral based ind ustries as a joint venture with AMDC. The mineral blocks involved are of coal, c ement grade limestone, kaolin (China Clay), granite etc. with their estimated re serve and location offered for allotment by the said notification were listed in the said notification itself. A limestone block of AMDC with an area of 2 squar e kilometer situated at N.C. Hills district with a reserve of 157.00 million ton ne located at & &lat 25’31’22 to 25’32’40 N and long 92’47’50 to 92’47’20 is enlisted at Block No. 4 of Serial No. 1 of the aforesaid list annexed to th e notification. The petitioner wrote to the Principal Secretary, Govt. of Assam, Department of M ines & Minerals on 6.08.2007 (Annexure-23) requesting for withdrawal of the word s limestone and coal from the aforesaid notification inviting Expression of Interest meaning thereby that the AMDC block of limestone and coal offered or allotment by the notification dated 12.06.2007 should be kept out of the purv iew of offer of allotment. Similar prayers were made to the Chief Secretary on 6 .08.2007, 10.08.2007, 25.09.2007 (Annexures-24, 25 and 26 respectively) as well as several other letters, copies of which are annexed to the writ petition. Howe ver, the only response in this subject is discernable from a letter dated 6.09.2 008 (Annexure-36) issued by the Commissioner & Secretary to the Government of As sam, Industries & Commerce Department addressed to the Chairman of the petitione r No. 1 company wherein at paragraph 7 it has been stated as follows: & &7. Grant of mining lease area of Assam Industrial Development Corpor ation Ltd. to the unit was noted. Lime stone from A.M.D.C. mines will be made av ailable on requirement basis and on mutually agreed terms &.. . 11. On the basis of the aforesaid pleadings, the petitioners claim that all along the Government of Assam has assured the petitioner No. 1 that the limeston e form AMDC mines would be made available to the petitioner No.1 and acting on s uch assurances of the State Government the petitioners took several steps includ ing ordering of machineries to be designed in a manner which requires the use of 25% of limestone from the AMDC mines and 75% from AIDC mines in order to provid e good quality cement, thus making the petitioner No. 1 changing its position to its detriment and expanded huge amount of time, money, labour and energy. The l earned Senior Counsel appearing for the petitioners endeavoured to make out a ca se of promissory estoppel against the respondent authorities for justifying the prayer made by the petitioner in the writ petition. To buttress the case of the petitioners reliance on following judgments of the Apex Court was placed by the learned Senior Counsel appearing on behalf of the petitioners : 1. (1979) 2 SCC 409. M/S Motilal Padampat Mills Co. Ltd. -vs- State of Uttar Pradesh & Others. 2. (1988) 1 SCC 86, Delhi Cloth and General Mills Ltd. -vs- Union of India. 3. (1988) 3 SCC 570, Assistant Commissioner of Commercial Taxes (Asst.) Dharwar and Others. -vs- Dhar mendra Trading Company and Others. 4. (1989) 3 SCC 115, M/S Vij Resins Pvt. Ltd. and Another -vs- State of Jammu and Kashmir. 5. (1992) 2 SCC 411, Amrit Banaspati Co. Ltd. and Another -vs- State of Punjab and Another. 6. (2004) 1 SCC 139, State of Orissa and Others. -vs- Mangalam Timber Products Ltd. 7. (2004) 6 SCC 465, State of Punjab -vs- Nestle India Ltd. and Another. 12. The petition has been contested by the respondents by filing their respe ctive affidavits. 13. The Respondent No. 2, i.e. the Principal Secretary to the Government of Assam, Department of Mines & Minerals has filed an affidavit-in-opposition takin g a categorical stand that the Government of Assam had never committed to the Pe titioner No, 1 company that the State will provide them monopolistic environment for cement manufacturing in the state of Assam. While taking a stand that as pe r the technical report submitted by the Directorate of the Geology and Mining, A ssam the quality of cement grade lime stone available in the AIDC Block of mines with a reserve of 390 million tones leased out to the Petitioner Company is at per in quality with the AMDC Block of minerals. It has further been contended th at the petitioner company has deliberately ignored the decision taken in the mee ting dated 29.03.2008 by the State Government in total concurrence and approval of their joint venture partner, AIDC, specifically in respect of their proposed cement project that the mineable reserve of limestone in the AIDC Block of mines leased out to the petitioner company would be able to sustain a cement plant of 5 million tonnes per annum capacity for a period of about 40 years. While setti ng out different technical details as well as the background of setting up of th e joint venture company, i.e. the petitioner No. 1 company, the Respondent No. 2 has stated that the total reserve of limestone available with the petitioner No . 1 company at the lease hold area of AIDC Block can sustain the proposed cement plant of the petitioner No. 1 company for a period of about 40 years. According ly, the State Government in the Mines & Minerals Department was of the clear vie w that there was absolutely no need to grant any additional mining lease of lime stone mines to the proposed cement plant of petitioner No. 1 company. The issue regarding grant of additional mining lease was in respect of coal only. The afor esaid stand taken by the Respondent No. 2 is also reflected in the minutes of me eting dated 29.03.2008 between the Chief Secretary, Government of Assam and the officers of Mines & Minerals Department and Industries Department. The pleading of Respondent No. 2 would reveal that the Petitioner No. 1 had never specificall y expressed any interest in respect of any of the blocks mentioned in the notifi cation dated 12.06.2007 and had never submitted any bid in terms of the notifica tion dated 12.06.2007. The Respondent No. 2 further contends that in response to the aforesaid Notification dated 12.06.2007 inviting ’Expression of Interest’, a number of parties had submitted their ’Expression of Interest’ for the followi ng limestone blocks, namely, Juripahar (A), Juripahar (B), Juripahar (C) and AMD C block and a total of 23 parties had submitted their bids for different mineral blocks notified for allotment vide Notification dated 12.06.2007. Amongst those who submitted their Expression of Interest for the aforesaid limestone blocks w ere, National Mining Company Limited, Jayprakash Associates Limited (respondent No. 8), Jindal Exports Limited, Meghabond Cements Limited, Birla Corporation Lim ited, Sainik Mining and Allied Services Limited, Transasia Drilling Internationa l Limited, Rohit Ferrotech Limited, North East Trade and Investment Pvt. Limited , South Asia Petrochem Limited, ACC, etc. Besides others, the respondent No. 8 h ad submitted its bid within the stipulated time in compliance of Notification da ted 12.06.2007 expressing their interest specifically for the AMDC mines limesto ne block as mentioned at Serial No. 1, Item No. 4 of the List of Mineral Blocks in Assam for Allotment, appended to the Notification having an area of 2.00 Sq. KM. with essential reserve of 175 million tones. 14. It has also been contended by respondent No. 2 that for comparative asse ssment and evaluation of the bids submitted in response to the Notification date d 12.06.2007, the State Government had constituted a Committee called Committee for Development of Mineral Resources of Assam. The prominent members of the sa id Committee headed by the Respondent No. 2, are the Principal Secretary to the Government of Assam, HAD Department; the Commissioner & Secretary to the Govt. o f Assam, P & D (PPP) Department, the Secretary to the Government of Assam, Finan ce Department; the Director of Geology & Mining, Government of Assam and the Man aging Director, AMDC. The Committee after detailed comparative assessment and ev aluation of the bids received in respect of the limestone block of the AMDC, men tioned at Serial No. 1, Item No. 4 of the List of Mineral Blocks in Assam for Al lotment, appended to the Notification dated 12.06.2007, had found the bid submit ted by the Respondent No. 8 as the best amongst the bid submitted for the